Exhibit 99.1

 

INFLARX N.V.

 

 

FINANCIAL STATEMENTS – SEPTEMBER 30, 2024

 

These unaudited condensed financial statements are consolidated financial statements for the group consisting of InflaRx N.V. and its wholly owned subsidiaries InflaRx GmbH, Jena, Germany, and InflaRx Pharmaceuticals Inc., Ann Arbor, Michigan, United States (together, the “Group”). The financial statements are presented in euros (€).

 

InflaRx N.V. is a company limited by shares, incorporated and domiciled in Amsterdam, The Netherlands.

Its registered office and principal place of business is in Germany, Jena, Winzerlaer Str. 2.

Index to unaudited condensed consolidated financial statements

for the three and nine months ended September 30, 2024

 

Unaudited condensed consolidated statements of operations and comprehensive

loss for the three and nine months ended September 30, 2024 and 2023

 

Unaudited condensed consolidated statements of financial position as

of September 30, 2024 and December 31, 2023

 

 

 

Unaudited condensed consolidated statements of changes in shareholders’ equity for

the nine months ended September 30, 2024 and 2023

 

*unaudited

 

Unaudited condensed consolidated statements of cash flows for the

nine months ended September 30, 2024 and 2023

 

 

Notes to the unaudited condensed consolidated financial statements

 

 

 

InflaRx N.V. (the “Company” or “InflaRx”) is a Dutch public company with limited liability (naamloze vennootschap) with its corporate seat in Amsterdam, the Netherlands, and is registered in the Commercial Register of the Netherlands Chamber of Commerce Business Register under CCI number 68904312. The Company’s registered office is at Winzerlaer Straße 2 in 07745 Jena, Germany. Since November 10, 2017, InflaRx N.V.’s ordinary shares have been listed on the Nasdaq Global Select Market under the symbol IFRX.

 

InflaRx is a biopharmaceutical company pioneering anti-inflammatory therapeutics targeting the complement system by focusing on applying its proprietary anti-C5a and C5aR technologies to discover, develop and commercialize first-in-class, potent and specific inhibitors of the complement activation factor known as C5a and its receptor C5aR. On April 4, 2023, the U.S. Food and Drug Administration issued an Emergency Use Authorization (the “EUA”) for GOHIBIC (vilobelimab), for the treatment of COVID-19 in critically ill, invasively mechanically ventilated hospitalized adults. These consolidated financial statements of InflaRx comprise the Group.

 

 

These interim condensed consolidated financial statements for the nine-month reporting period ended September 30, 2024, and 2023 have been prepared in accordance with IAS 34 Interim Financial Reporting. These condensed consolidated financial statements do not include all the information and disclosures required in the annual financial statements. Accordingly, this report is to be read in conjunction with the financial statements in the Company’s annual report for the year ended December 31, 2023 on form 20–F.

 

The interim condensed consolidated financial statements were authorized for issue by the board of directors of the Company (the “Board of Directors”) on November 7, 2024.

 

The financial statements are presented in euros (€). The euro is the functional currency of InflaRx N.V. and InflaRx GmbH. The functional currency of InflaRx Pharmaceuticals Inc. is the U.S. dollar.

 

All financial information presented in euros have been rounded to the nearest euro. Accordingly, numerical figures shown as totals in some tables may not be an arithmetic aggregation of the figures that precede them or may deviate from other tables.

 

The accounting policies adopted are consistent with those followed in the preparation of the Group’s annual consolidated financial statements for the year ended December 31, 2023, except for the adoption of new standards effective as of January 1, 2024, as set out below. The Group has not adopted any other standard, interpretation or amendment that has been issued but is not yet effective early.

 

The following amendments were adopted effective January 1, 2024, and do not have a material impact on the consolidated financial statements of the Group:

 

 

 

 

The following standards issued will be adopted in a future period, and the potential impact, if any, they will have on the Group’s consolidated financial statements is being assessed:

 

 

 

 

For the three months ended September 30, 2024, the Company realized revenues from the product sales of GOHIBIC (vilobelimab) in the amount of €124 thousand. For the nine months ended September 30, 2024, the Company realized revenues from GOHIBIC (vilobelimab) product sales in the amount of €166 thousand.

 

 

 

The cost of sales during nine months ended September 30, 2024 was primarily related to write-downs of short-lived inventories. The Company adjusts its inventory write-downs on a quarterly basis based on its rolling sales forecast. The € 0.5 million includes both write-downs and reversals of previous write-downs. Cost of sales during the three months ended September 30, 2024 was primarily related to a reversal of a previous write-down in the amount of €75 thousand due to a change in estimate of sales of goods prior to expiry of their shelf life.

 

 

Sales and marketing expenses incurred for the three months ended September 30, 2024 increased by €0.1 million compared to the three months ended September 30, 2023. For the nine months ended September 30, 2024, these expenses increased by €3.2 million compared to the nine months ended September 30, 2023. This increase is primarily due to increased sales and marketing activities incurred during the nine months ended September 30, 2024 in the US, driven primarily by GOHIBIC (vilobelimab).

 

 

Research and development expenses incurred for the three months ended September 30, 2024 increased by €3.8 million compared to the three months ended September 30, 2023. For the nine months ended September 30, 2024 these expenses decreased by €4.5 million compared to the nine months ended September 30, 2023.

 

The increase for the three months ended September 30, 2024 is primarily due to higher third-party expenses incurred in connection with the company’s efforts to develop INF904.

 

The decrease for the nine months ended September 30, 2024 is primarily due to higher third-party expenses incurred during the first three quarters of 2023 in connection with the company’s efforts to develop the commercial manufacturing process, and to obtain an EUA, for GOHIBIC (vilobelimab).

 

 

Other income for the three months ended September 30, 2024 amounted to €0.1 million (2023: €0.8 million) and for the nine months ended September 30, 2024 amounted to €0.2 million (2023: €13.4 million). There was no income from government grants in 2024 due to the end of the grant (i.e. German government grant for the development of vilobelimab for the treatment of critically ill COVID-19 patients) period on June 30, 2023.

 

 

Net financial result decreased by €5.8 million to a loss of €2.1 million for the three months ended September 30, 2024 from a gain of €3.7 million for the three months ended September 30, 2023. This decrease is mainly attributable to a decrease of the foreign exchange result by €5.1 million due to the weakening of the U.S. dollar during the three months ended September 30, 2024 and a decrease of interest income on marketable securities by €0.4 million, in each case, compared to the three months ended September 30, 2023.

 

Net financial result decreased by €2.6 million to €2.3 million for the nine months ended September 30, 2024. This decrease was mainly attributable to a decrease of the foreign exchange result by €2.2 million, compared to the nine months ended September 30, 2023.

 

 

As of September 30, 2024, inventory amounted to €9.7 million compared to €11.4 million as of December 31, 2023. As of September 30, 2024 the Group recorded in total write downs of raw materials and supplies of €0.3 million and write downs of finished goods of €0.4 million. These write-downs were due to the expected expiry of the shelf life of GOHIBIC (vilobelimab) related inventories. For more information we refer to Note 3 “cost of sales”. Additionally, during the nine months ended September 30, 2024, unfinished inventory decreased as €1.2 million was recorded as research and development expense for use in clinical studies.

 

As of September 30, 2024, prepayments on research and development projects amounted to €2.8 million compared to €3.7 million as of December 31, 2023, and consist of prepayments on clinical contracts, primarily for INF904.

 

Prepaid expenses consist mainly of prepaid D&O insurance expense for the year 2024, which will be recognized into general and administrative expenses pro rata over the year.

 

The category “others” primarily relate to prepayments on commercial production.

 

 

As of September 30, 2024, tax receivables amounted to €2.2 million compared to €3.8 million as of December 31, 2023. The decrease is mainly attributable to VAT refunds for Q2 2023 and Q3 2023 received during the nine months ended September 30, 2024.

 

 

Set out below is an overview of financial assets and liabilities, other than cash and cash equivalents, held by the Group as of September 30, 2024 and December 31, 2023:

 

As of September 30, 2024, the fair value of current and non-current financial assets (primarily quoted debt securities) amounted to €36.1 million (Level 1). The Group’s debt instruments at amortized cost consist solely of quoted securities that are graded highly by credit rating agencies such as S&P Global and, therefore, are considered low credit risk investments.

 

As of September 30, 2024, current and non-current financial assets decreased by €50.2 million to €36.4 million compared to €86.6 million as of December 31, 2023. The decrease is mainly due to the maturity of financial assets, and their subsequent reinvestment into interest bearing bank deposits, which are accounted for as part of cash and cash equivalents.

 

As of September 30, 2024, trade and other payables decreased by €3.0 million to €11.7 million compared to €14.7 million as of December 31, 2023. As of December 31, 2023 the Company temporarily had higher trade payables from CDMO’s, that arose in connection with the manufacturing of commercial products.

 

Trade receivables arose from GOHIBIC (vilobelimab) product deliveries to end customers (hospitals) through a subsidiary of Cencora, which acts as the U.S. distributor for the Company.

 

 

As of September 30, 2024, a subsidiary of Cencora which acts as the U.S. distributor for the Company, returned products to the Company and the Company repaid funds previously paid by Cencora, thereby extinguishing liabilities to commercial partners.

 

In accordance with IFRS 15, InflaRx recognizes revenue when control of product is transferred to end customers (hospitals). Therefore, InflaRx recognizes an amount in liabilities to commercial partner, when the product is in the distributor’s warehouse until the product is sold to an end customer.

 

 

As of September 30, 2024, cash and cash equivalents increased by €13.4 million to €26.2 million compared to €12.8 million as of December 31, 2023. The increase is mainly due to certain financial assets having reached their maturity, and the subsequent reinvestment into interest bearing bank deposits, which are classified as cash and cash equivalents.

 

 

 On June 30, 2023, the Company filed a form F-3 with the United States Securities and Exchange Commission (the “SEC”) with respect to the offer and sale of up to $250.0 million of securities of the Company.

 

On June 28, 2024, the Company entered into a Sales Agreement with Leerink Partners LLC, or Leerink, to sell ordinary shares of the Company from time to time through an at-the-market, or ATM, equity offering program of up to $75.0 million under which Leerink will act as sales agent. As of the date of this report, the Company had not issued any ordinary shares under such ATM program.

 

 

 

InflaRx GmbH granted options under the 2012 Stock Option Plan. Those InflaRx GmbH options were converted into options for ordinary shares of InflaRx N.V. at the time of its IPO in November 2017:

 

Under the terms and conditions of the share option plan 2016, InflaRx GmbH granted rights to subscribe for InflaRx GmbH’s ordinary shares to directors, senior management, and key employees. Those InflaRx GmbH options were converted into options for ordinary shares of InflaRx N.V. at the time of its IPO in November 2017:

 

InflaRx also granted share options under the 2017 LTIP subsequently to its IPO in November 2017. The total number of share options granted during the nine months ended September 30, 2024 under the 2017 LTIP was as follows:

 

The number of share options granted during the nine months ended September 30, 2024 under the 2017 LTIP was as follows:

 

Share options granted 2024		Number				Fair value per option				FX rate as of grant date				Fair value per option				Share price at grant date / Exercise price				Expected volatility				Expected life (midpoint based)				Risk-free rate (interpolated, U.S. sovereign strips curve)
January 05			2,245,000			$	1.65				0.916			€	1.51			$	1.79				1.47				5.30-5.50				4.023%-4.025	%
February 21			30,000			$	1.40				0.925			€	1.30			$	1.51				1.47				5.50				4.308	%
			2,275,000

Of the 2,275,000 options granted in the nine months ended September 30, 2024 (ended September 30, 2023: 1,735,750), 1,615,000 options (September 30, 2023: 1,396,000) were granted to members of the executive management or Board of Directors.

 

Expected dividends are nil for all share options listed above.

 

 

For the nine months ended September 30, 2024, the Company has recognized €3.7 million (2023: €3.0 million) of share-based payment expense in the statements of operations and comprehensive loss.

 

None of the share-based payment awards were dilutive in determining earnings per share due to the Group’s loss position.

 

 

During the nine months ended September 30, 2024, no shares (2023: 105,327) were issued upon the exercise of share options, resulting in no proceeds to the Company (nine months ended September 30, 2023: €98). All share options exercised in 2023 were granted under the 2017 LTIP.

 

 

According to the articles of association of the Company, up to 147,200,000 ordinary shares and up to 147,200,000 preferred shares with a nominal value of €0.12 per share are authorized to be issued. All shares are registered shares. No share certificates shall be issued.

 

In order to deter acquisition bids, the Company’s general meeting of shareholders approved the right of an independent foundation under Dutch law, or protective foundation, to exercise a call option pursuant to the call option agreement, upon which preferred shares will be issued by the Company to the protective foundation of up to 100% of the Company’s issued capital held by others than the protective foundation, minus one share. The protective foundation is expected to enter into a finance arrangement with a bank or, subject to applicable restrictions under Dutch law, the protective foundation may request the Company to provide, or cause the Company’s subsidiaries to provide, sufficient funding to the protective foundation to enable it to satisfy its payment obligation under the call option agreement.

 

These preferred shares will have both a liquidation and dividend preference over the Company’s ordinary shares and will accrue cash dividends at a pre-determined rate. The protective foundation would be expected to require the Company to cancel its preferred shares once the perceived threat to the Company and its stakeholders has been removed or sufficiently mitigated or neutralized. The Company believes that the call option does not represent a significant fair value based on a level 3 valuation since the preferred shares are restricted in use and can be cancelled by the Company.

 

During the nine months ended September 30, 2024, the Company expensed €38 thousand (2023: €60 thousand) of ongoing costs to reimburse expenses incurred by the protective foundation.

 

F-14

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Exhibit 99.2

MANAGEMENT’S DISCUSSION AND ANALYSIS

 

This management’s discussion and analysis is designed to provide you with a narrative explanation of our financial condition and results of operations. We recommend that you read this discussion together with our unaudited interim condensed consolidated financial statements, including the notes thereto, for the three and nine months ended September 30, 2024 and 2023, respectively, included as Exhibit 99.1 to the report on Form 6-K to which this discussion is attached as Exhibit 99.2. We also recommend that you read our “ITEM 5. Operating and financial review and prospects” and our audited consolidated financial statements for fiscal year 2023, and the notes thereto, which appear in our Annual Report on Form 20-F for the year ended December 31, 2023, or the Annual Report, filed with the U.S. Securities and Exchange Commission, or the SEC. In addition, we recommend that you read any public announcements made by InflaRx N.V.

 

The following discussion is based on our financial information prepared in accordance with IFRS as issued by the IASB, which may differ in material respects from generally accepted accounting principles in the United States and other jurisdictions. We maintain our books and records in euros. Unless otherwise indicated, all references to currency amounts in this discussion are in euros. We have made rounding adjustments to some of the figures included in this discussion and analysis. Accordingly, numerical figures shown as totals in some tables may not be arithmetic aggregations of the figures that precede them.

 

The following discussion includes forward-looking statements that involve risks, uncertainties and assumptions. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of many factors, including but not limited to those described under “ITEM 3. Key Information––Risk factors” in the Annual Report and risks described in our subsequent SEC filings.

 

Unless otherwise indicated or the context otherwise requires, all references to “InflaRx” or the “Company,” “we,” “our,” “ours,” “us” or similar terms refer to InflaRx N.V. and its subsidiaries InflaRx GmbH and InflaRx Pharmaceuticals, Inc.

 

Overview

 

We are a biopharmaceutical company pioneering anti-inflammatory therapeutics targeting the complement system by focusing on applying our proprietary anti-C5a and C5aR technologies to discover, develop and commercialize first-in-class, potent and specific inhibitors of the complement activation factor known as C5a and its receptor known as C5aR. C5a is a powerful inflammatory mediator involved in the progression of a wide variety of autoimmune and other inflammatory diseases. Our lead product candidate, vilobelimab, is a novel intravenously delivered first-in-class anti-C5a monoclonal antibody that selectively binds to free C5a and has demonstrated disease-modifying clinical activity and tolerability in multiple clinical settings. We are also developing INF904, an oral, small molecule drug candidate that targets the C5a receptor (C5aR).

 

Vilobelimab for the treatment of pyoderma gangrenosum

 

We are developing vilobelimab for the treatment of pyoderma gangrenosum, or PG. PG is a rare, chronic inflammatory form of neutrophilic dermatosis characterized by accumulation of neutrophils in the affected skin areas. The exact pathophysiology is not fully understood, but it is postulated that inflammatory cytokine production as well as neutrophil activation and dysfunction contribute to a sterile inflammation in the skin. PG often presents as painful pustule or papule, mainly on the lower extremities, which can rapidly progress to an extremely painful enlarging ulcer. Associated symptoms include fever, malaise, weight loss and myalgia. PG usually has a devastating effect on a patient’s life due to the severe pain and induction of significant movement impairment depending on lesions’ location. The exact prevalence of PG is not yet known but is estimated that up to 51,000 patients in the United States and Europe are affected by this disease.

 

Vilobelimab has been granted orphan drug designation for the treatment of PG by both the FDA in the United States and the European Medicines Agency, or EMA, in Europe as well as fast-track designation by the FDA.

 

In November 2023, we announced the enrollment of the first patient in the Phase 3 trial. The Phase 3 study is designed to enroll patients in the United States, Europe and selected countries in other regions. The study design is based on detailed feedback and recommendations from the FDA Division of Dermatology and Dentistry and was developed in close collaboration with the Company´s advisors from the United States, Europe and other regions. The multi-national, randomized, double-blind, placebo-controlled Phase 3 trial has two arms: vilobelimab (2,400mg every other week) plus a low dose of corticosteroids and placebo plus the same low dose of corticosteroids. In both arms, corticosteroid treatment will be initiated on day one and will be tapered off within the first eight weeks of the treatment period. The primary endpoint of the study will be complete closure of the target ulcer on two consecutive visits at any time up to 26 weeks after initiation of treatment. Treatment will be discontinued for patients whose disease progresses or fails to improve at defined time points during the study. The enrollment period is projected to last at least two years, and its overall period will depend on the total trial size after sample size adaptation

 

The study has an adaptive trial design with an interim analysis blinded for the sponsor and investigators (but unblinded for the independent data safety monitoring committee), which is planned when approximately 30 patients have been treated, divided equally between the two arms of the study. The interim analysis with a set of predefined rules will take into account the then-observed difference in complete target ulcer closure between the two arms and will then determine whether the trial sample size will be adapted or whether the trial should be stopped due to futility. As of November 2024, approximately 30 patients had initiated dosing in the trial. The interim analysis is expected to occur in the second quarter of 2025.

 

GOHIBIC (vilobelimab) for the treatment of critically ill, invasively mechanically ventilated COVID-19 patients

 

In April 2023, we received an Emergency Use Authorization, or the EUA, from the U.S. Food and Drug Administration, or FDA, for GOHIBIC (vilobelimab) for the treatment of critically ill, invasively mechanically ventilated COVID-19 patients. Specifically, we received the EUA for the treatment of COVID-19 in hospitalized adults when initiated within 48 hours of receiving invasive mechanical ventilation, or IMV, or extracorporeal membrane oxygenation, or ECMO. GOHIBIC (vilobelimab) is not FDA-approved for any indication, including for the treatment of COVID-19 in critically ill, invasively mechanically ventilated patients.

 

To achieve full commercial scale and successfully reach the full market potential of the product in the United States in the future, we also aspire to obtain full market approval for GOHIBIC (vilobelimab). We are therefore planning the submission of a Biologics License Applications, BLA, for full approval of GOHIBIC (vilobelimab) in our COVID-19 indication and potentially, in the future, in similar indications that may apply to other virally induced acute respiratory distress conditions. In October 2023, in furtherance of our continued efforts to obtain a BLA, we had an encouraging Type C meeting with the FDA. In that meeting, the FDA indicated their willingness to collaborate with us in identifying a development pathway towards a BLA for a broader acute respiratory distress syndrome, or ARDS, label. To achieve this, we would need to conduct an additional well-controlled and adequately powered study in a broader ARDS setting that demonstrates the safety and efficacy of vilobelimab.

 

In June 2023, we began the commercialization of GOHIBIC (vilobelimab) in the United States for the treatment of COVID-19 in hospitalized adults when initiated within 48 hours of receiving IMV or ECMO. We entered into agreements with certain subsidiaries of Cencora Inc. to act as our U.S. distributor and to make  GOHIBIC (vilobelimab) available for order by U.S. hospital customers under the EUA. Cencora provides cold storage, cold-chain distribution services, inventory management and secondary labeling/packaging, among other services. To support our commercial efforts, we have hired and are continuing to hire U.S. experts with relevant experience in the commercialization of medical products in the hospital market, including in the areas of sales, sales operations, marketing, market access, distribution, medical affairs and others. In addition, we are expanding the necessary infrastructure, including IT systems, supply chain, financial reporting systems and inventory management systems both, internally and with the assistance of external service providers.

 

In July 2023, we also submitted a Marketing Authorization Application, or MAA, for SARS-CoV-2 induced septic ARDS receiving IMV or ECMO to the EMA. The application is now under regulatory review by the European Committee for Medicinal Products for Human Use, or CHMP, under the centralized procedure, which applies to all 27 member states of the European Union, or EU. In October 2024, the CHMP convened to review the submitted MAA. The regulatory review process is ongoing, which has included discussions between the Company and the CHMP. A CHMP opinion is anticipated during Q4 of 2024.

 

In June 2024, InflaRx announced that GOHIBIC (vilobelimab) has been selected by the Biomedical Advanced Research and Development Authority, or BARDA, as one of three investigational therapies BARDA will assess in a Phase 2 clinical platform study exploring potential new options for the treatment of ARDS. The Company signed a Clinical Trial Collaboration Agreement with BARDA as funding party and PPD as study sponsor to agree upon rights and obligations regarding this study, including but not limited to the clinical supply of vilobelimab.

 

C5aR inhibitor INF904

 

Inhibition of the C5a/C5aR axis provides strong anti-inflammatory effects in a variety of diseases. Blockade of C5a using highly specific antibodies, such as vilobelimab, may offer a fast, effective, and safe way to control C5a-induced inflammation. In addition to this approach, inhibition of C5aR by oral small molecules may provide the ease of administration required for effective long-term treatment for more chronic inflammatory diseases. To expand the breadth of our anti-C5a/C5aR technologies, we are also developing INF904, an oral, small molecule drug candidate that targets C5aR. C5aR, a G-protein-coupled-receptor expressed primarily by granulocytes, mediates the pathophysiological effects of C5a. In INF904, we discovered a small molecule C5aR inhibitor that in pre-clinical studies has shown potential for superior characteristics to the only approved C5aR inhibitor, avacopan. INF904 has provided higher plasma exposure in animals, including non-human primates, and improved inhibitory activity in a hamster neutropenia model compared to avacopan. Furthermore, in contrast to avacopan, in vitro experiments showed INF904 has substantially less inhibition of the cytochrome P450 3A4/5 (CYP3A4/5) enzymes, which play an important role in the metabolism of a variety of drugs, including glucocorticoids. No obvious toxicological findings, even in the highest dose groups tested in required GLP toxicity analyses, were identified. INF904 demonstrated potential for anti-inflammatory therapeutic effects in several preclinical disease models.

 

We conducted the first part of a double-blind, placebo-controlled Phase 1 trial with INF904 from November 2022 to September 2023, which enrolled 62 healthy volunteers within six different dosing groups from 3 mg to 240 mg who were randomly assigned to receive INF904 or a placebo into the single ascending dose, or SAD, part of the trial. The results showed that INF904 was well tolerated in treated patients and resulted in no safety signals of concern in any of the doses tested. The overall percentage of adverse events (AEs) was lower in the INF904 treated patients compared to the placebo group, and no serious or severe AEs were observed at any dosing level. No related AEs were reported in conjunction with INF904 dosing. Analysis of INF904 PK in subject plasma samples revealed sustained exposure to INF904 with six hours to maximum concentration, or tmax. INF904 plasma levels were dose proportional for systemic exposure (AUClast) and nearly dose proportional for maximum concentration (Cmax) over the dose range used in the study. With the 30 mg dose, INF904 reached a Cmax of 289 ng/ml with an AUClast of 5197 h.ng/ml, which are approximately 3-fold and 10-fold, respectively, higher than the published Phase 1 data from the only marketed comparator, avacopan. Single doses of 30 mg or higher of INF904 achieved ≥90% blocking of C5a induced up-regulation of the activation marker CD11b on neutrophils in plasma samples from subjects ex vivo at 24 hours post dosing. This inhibition was achieved when 12.6 nM recombinant C5a was added as stimulus in this assay, a C5a concentration which can be observed in patients with severe inflammatory conditions such as the immuno-dermatological disease, hidradenitis suppurativa, or HS, or during life-threatening inflammation (e.g., in critically ill COVID-19 patients or septic patients). Thus, INF904 inhibition of C5a-induced neutrophil activation in human plasma achieved the set goal for effective C5aR control at disease relevant C5a levels.

 

In January 2024, we announced topline results from the multiple ascending dose, or MAD, part of the Phase 1 trial for INF904, which had been conducted between September 2023 and January 2024 with 24 participants who received multiple doses of INF904 for 14 days of either 30 mg once per day, or QD, 30 mg twice per day, or BID, or 90 mg BID. The PK and pharmacodynamic, or PD parameters confirm the favorable data we observed during the SAD part of the study, which provides support for the best-in-class potential of INF904. INF904 was well tolerated and there were no adverse safety events of concern after repeated dosing in participants over the entire tested dose range.

 

The safety analysis of INF904 in the MAD part of the Phase 1 study demonstrated that it was well tolerated in participants over the entire dose range and resulted in no safety signals of concern. The overall percentage of AEs in INF904 treated participants was 77.8%, which was lower than the 83.3% observed in the placebo group. There were no serious or severe AEs observed at any dosing level.

 

Analysis of the PK profile showed that potential target AUC0-12h, Cmax, and trough values were achieved rapidly within 14 days of 30 mg BID dosing. INF904 exposure further increased proportionally with dosing up to 90 mg BID. These results were demonstrated even when participants ingested the drug in a fasted state, suggesting that food is not required to achieve potentially therapeutic drug levels.

 

Analysis of the PD profile showed that the blocking activity of C5a-induced neutrophil activation by INF904 reached equal to or above 90% over the 14-day dosing period for all tested doses in an ex vivo challenge assay where physiological and disease- relevant levels of C5a were added to blood samples provided by the trial participants.

 

In parallel, we have progressed with the development of a commercially viable formulation of INF904 which we plan to introduce into Phase 2 development in Q4 2024.

 

We are currently also conducting additional required pre-clinical studies, including long-term chronic toxicology studies, to enable longer-term dosing of INF904 for chronic inflammatory diseases. We initially plan to develop INF904 for the treatment of two initial immuno-dermatology indications: HS and chronic spontaneous urticaria, or CSU. We plan to initiate an open-label Phase 2a “basket study” in Q4 2024 to explore at least three different doses of INF904 for a duration of four weeks and to assess PK and PD parameters in HS and CSU patients, as well as provide safety data and certain early efficacy readouts. Data from this Phase IIa study is expected to be available in 2025. Depending on the results of this study, we expect to initiate a larger and longer-term Phase 2b study in one or both indications in 2025 as well.

 

CSU and HS are chronic inflammatory skin conditions in which C5a has been suggested to play a significant role and where a high unmet need exists. Being an oral drug with a mechanism of action currently not addressed by other drugs in development for these indications, we see a unique opportunity to improve standard of care for patients with these conditions.

 

CSU is a debilitating and unpredictable skin disease characterized by intensely itchy hives / wheals and angioedema. The burden of this chronic disease is high and impacts sleep, mental health, quality of life and productivity due to absences from school and work. CSU is estimated to affect around 40 million people worldwide. CSU patients have been reported to show elevated C5a levels, a major activator of mast cells and basophils, which are thought to be significant contributors to CSU pathogenesis. In addition, studies suggest that complement activation (including C5a) in CSU can lead to histamine release. Current treatments are limited, and a significant unmet need exists in a sizable proportion of patients. As an orally available agent with a favorable PK / PD profile that could drive a broad dose range for systemic exposure, INF904 could find a differentiated position in the CSU market.

 

HS is a chronic, recurrent, debilitating neutrophil-driven inflammatory disease that can persist for years and tremendously impacts quality of life; it is characterized by abscesses, nodules and draining tunnels, or dTs, which can flare and cause scarring. INF904 inhibits the known C5a-induced effects on neutrophil activation and tissue accumulation of immune cells, including generation of tissue damaging mechanisms (enzyme release and oxidative radical formation) as well as induction of NETosis, which are mechanisms thought to be involved in HS progression and dT formation. Clinical evidence with existing C5a/C5aR inhibitors also supports that blocking this pathway reduces lesion counts. Patients’ responses to treatment with currently approved drugs are known to wane over time in a significant number of cases, and treatments with new mechanisms of action are needed for these patients.

 

Anti-C5a antibody IFX002

 

We are also developing IFX002 for the treatment of chronic inflammatory diseases. IFX002 is a highly potent anti- C5a antibody, which binds to the same domain of the C5a protein as vilobelimab, but which has a higher humanization grade and altered PK properties compared to vilobelimab. IFX002 is currently in preclinical development. We consider IFX002 to be a life-cycle management product to vilobelimab, given the long remaining patent life of IFX002.

 

Financial highlights

 

As of September 30, 2024, we had available funds amounting to €62.0 million, composed of €26.2 million in cash and cash equivalents and €35,8 million in marketable securities. From the €26.2 million cash and cash equivalent, 4.2 million are held in euros and 24.6 million are held in U.S. dollars, this is equivalent to €22.0 million at an exchange rate of 1.1196 on 30 September 2024. All marketable securities are held in U.S. dollars and have a nominal value of $40.5 million. We believe that our current funds on hand will be sufficient to fund our planned operations into 2026.

 

We anticipate that our expenses might increase if and as we:

 

 

 

 

 

 

 

 

 

 

 

Our ability to become and remain profitable depends on our ability to generate revenue. We do not expect to generate significant revenue unless and until we are, or any future collaborator is, able to obtain full marketing authorization or approval for, and successfully commercialize, one or more of our product candidates. Successful commercialization will require achievement of key milestones, including completing clinical trials of vilobelimab, INF904 and any other product candidates, obtaining marketing authorization or approval for these product candidates, manufacturing, marketing and selling those products for which we, or any of our future collaborators, may obtain marketing authorization or approval, satisfying any post-marketing requirements and obtaining reimbursement for our products from private insurance or government payors. Because of the uncertainties and risks associated with these activities, we are unable to accurately predict the timing and amount of revenues, and if or when we might achieve profitability. We and any future collaborators may never succeed in these activities and, even if we do, or any future collaborators do, we may never generate revenue that is large enough for us to achieve profitability. Even if we do achieve profitability, we may not be able to sustain or increase profitability on a quarterly or annual basis.

 

We expect our financial condition and operating results to continue to fluctuate from quarter to quarter and year to year due to a variety of factors, many of which are beyond our control. In order to succeed, we will need to transition from a company with a research and development focus to a company capable of undertaking commercial activities. We may encounter unforeseen expenses, difficulties, complications and delays, and may not be successful in such a transition.

 

Accordingly, we may seek to further fund our operations through public or private equity or debt financings or other sources, including strategic collaborations. We may, however, be unable to raise additional funds or enter into such other arrangements when needed on favorable terms or at all. Our failure to raise capital or enter into such other arrangements as and when needed would have a negative impact on our financial condition and our ability to develop vilobelimab or any additional product candidates.

 

Our failure to become and remain profitable could depress the market price of our ordinary shares and could impair our ability to raise capital, pay dividends, expand our business, diversify our product offerings or continue our operations. If we continue to suffer losses as we have in the past, investors may not receive any return on their investment and may lose their entire investment.

 

 

Research and development expenses have consisted principally of:

 

 

 

 

Our research and development expenses primarily relate to the following key programs:

 

 

 

 

 

In 2023, we incurred €41.0 million in research and development expenses. For the nine months ended September 30, 2024 and 2023, we incurred research and development expenses of €28.5 million and €33.0 million, respectively. The decrease in our research and development expenses was attributable to higher R&D expenses in the first nine months of 2023 for the completion of the development activities for vilobelimab for the treatment of critically ill COVID-19 patients, for which the FDA granted the EUA in April 2023. The 2023 expenses are comprised of costs attributable to the establishment of a commercial scale manufacturing process for vilobelimab and regulatory expenses in conjunction with the EUA filing and other regulatory activities, as well as for the manufacturing of clinical trial-related material.

 

We use our employee and infrastructure resources across multiple research and development programs directed toward developing our therapeutics in different indications and in our pre-clinical and clinical programs. We manage certain activities such as contract research and manufacturing of therapeutics and our discovery programs through our third-party vendors.

 

Our research and development expenses may vary substantially from period to period based on the timing of our research and development activities, including due to timing of clinical trial initiation and conduct.

 

We expense research and development costs as incurred. We recognize costs for certain development activities, such as preclinical studies and clinical trials, based on an evaluation of the progress towards completion of specific tasks. We use information provided to us by our vendors such as patient enrollment or clinical site activations for services received and efforts expended. Research and development activities are central to our business model.

 

The successful development and commercialization of our product candidates is highly uncertain. We cannot reasonably and accurately predict the nature, timing and estimated costs of the efforts that will be necessary to complete the development of, or the period, if any, in which material net cash inflows may commence from, any of our product candidates. For a discussion of our other key financial statement line items, please see “ITEM 5. Operating and Financial Review and Prospects—Operating results” in the Annual Report.

 

 

We expect that our general and administrative expenses will increase in the future as our business expands. Such expenses relate primarily to personnel within administrative functions, legal and consulting fees, audit fees, directors’ and officers’ liability insurance premiums and costs associated with investor relations activities.

 

In 2023, we incurred €12.6 million in general and administrative expenses. For each of the nine months ended September 30, 2024 and 2023, we incurred general and administrative expenses of €9.6 million and €10.0 million, respectively.

 

 

Sales and marketing expenses include costs for commercial operations, distribution and logistics, sales, marketing and comparable activities. We incur these costs either directly through the employment of our own personnel and in-house activities, or through commissioning third parties to assist in different aspects of commercializing our products. For each of the nine months ended September 30, 2024 and 2023, we incurred sales and marketing expenses of €5.0 million and €1.8 million, respectively. We started with its commercialization activities in June 2023, after the EUA was granted in April 2023. Prior to that, no sales and marketing expenses had been incurred.

 

Results of operations

 

The information below was derived from our unaudited interim condensed consolidated financial statements included elsewhere herein. The discussion below should be read along with these unaudited interim condensed consolidated financial statements and our Annual Report.

 

 

Revenues

 

For the three months ended September 30, 2024, we realized revenues from the product sales of GOHIBIC (vilobelimab) in the amount of €124 thousand.

 

 

 

Cost of sales during the three months ended September 30, 2024 was related to a reversal of write-downs in the amount of €75 thousand as a consequence to an updated sales forecast.

 

 

Sales and marketing expenses incurred for the three months ended September 30, 2024 increased by €0.1 million compared to the three months ended September 30, 2023To support our commercial efforts, we have hired sales professionals with relevant experience in the hospital market. The reduction of third-party expenses in the period is mainly attributable to the in-sourcing of our sales staff which has previously been provided through a third party. Other expenses increased mainly due to the initiation of extensive marketing activities in the U.S. market for GOHIBIC (vilobelimab).

 

 

Research and development expenses incurred for the three months ended September 30, 2024 increased by €3.8 million compared to the three months ended September 30, 2023. This increase is primarily due to higher third-party expenses incurred in connection with the Company’s efforts to develop INF904.

 

 

General and administrative expenses amounted to €2.8 million for the three months ended September 30, 2024 and are nearly unchanged in comparison to the period in the previous year. Other expenses mainly relate to D&O insurance, Board of Directors' remuneration, IT expenses and travel.

 

 

Other income for the three months ended September 30, 2024 amounted to €0.1 million (2023: €0.8 million). There was no income from government grants in 2024 due to the end of the grant period (i.e. German government grant for the development of vilobelimab for the treatment of critically ill COVID-19 patients) on June 30, 2023.

 

 

Net financial result decreased by €5.8 million to a loss of €2.1 million for the three months ended September 30, 2024 from an gain of €3.7 million for the three months ended September 30, 2023. This decrease is mainly attributable to a decrease of the foreign exchange result by €5.1 million due to the weakening of the U.S. dollar during the three months ended September 30, 2024 and a decrease of interest income on marketable securities by €0.4 million, in each case, compared to the three months ended September 30, 2023. This decline is mainly due to a lower level of investment in marketable securities in 2024.

 

 

 

Revenues

 

For the nine months ended September 30, 2024, we realized revenues from product sales of GOHIBIC (vilobelimab) in the amount of €166 thousand. Revenues reported are sales to end customers (hospitals). Sales to distributors do not constitute revenue for the Company under IFRS 15. All revenues are attributed to sales made in the United States.

 

 

 

 

 

Sales and marketing expenses incurred for the nine months ended September 30, 2024 increased by €3.2 million compared to the nine months ended September 30, 2023. This increase is primarily due to the initialization of our commercialization of GOHIBIC (vilobelimab) in June 2023. Sales and marketing expenses were incurred for all of the nine months ended September 30, 2024. To support our commercial efforts, we have hired sales professionals with relevant experience in the hospital market. Other expenses increased mainly due to the initiation of extensive marketing activities in the U.S. market for GOHIBIC (vilobelimab).