Savara Inc.

Savara reported Q2 2020 net loss attributable to common stockholders of $9.4 million, or $0.16 per share, versus a net loss of $21.9 million, or $0.57 per share, in Q2 2019. Research and development expenses fell 42% year over year to $6.1 million from $10.5 million, and general and administrative expenses declined 26% to $3.1 million from $4.2 million. Cash, cash equivalents and short-term investments were approximately $100 million at June 30, 2020, with $25 million of debt. On guidance, management said IMPALA 2 is expected to start in Q1 2021; the study will be 48 weeks placebo-controlled, with primary efficacy assessed at week 24, and Savara expects top-line AVAIL results in early 2021. The company also said it believes its current resources, including an anticipated second tranche of about $46 million from its December financing, are enough to fund planned operations.

Rob Neville sounded constructive and focused on execution, saying he was pleased with progress across the top line and that the company had finalized the IMPALA 2 design. He emphasized proactive steps to “COVID proof” the study, said manufacturing and supply are on track, and described the company as sufficiently resourced through the AVAIL and IMPALA 2 readouts. He also highlighted the strategic importance of Molgradex in aPAP, saying the program has a high likelihood of success and that the overall Savara investment thesis is strong.

Dave Lowrance said Savara had about $100 million in cash, cash equivalents and short-term investments at June 30, 2020, with $25 million of debt. He added that, under the current operating plan and including the anticipated second tranche of about $46 million from the December financing, the company believes it has enough capital to fund planned operations. On the income statement, he pointed to the narrower Q2 loss of $9.4 million and to lower R&D spending, down $4.4 million year over year to $6.1 million, driven mainly by lower AVAIL costs and reduced Molgradex program activity, plus G&A down $1.1 million to $3.1 million due to reduced commercial activity.

Analysts focused on IMPALA 2 geography, timing, and regulatory requirements, asking how many sites would be in Europe and Asia and whether the FDA/EMA would require full 48-week data before an application could be filed. Management said the U.S. and Canada would have about 20 sites, total sites would be about 15 countries, with roughly eight or nine EU countries plus Japan and Korea, and that the 48-week placebo-controlled period would drive submission timing. On the aPAP program, management said it hopes to begin FDA discussions as soon as feasible, ideally this year or early next year, and expects the study to run in parallel with IMPALA 2 once the design is finalized. In an emailed question, management addressed whether whole lung lavage’s impact on AA gradient also applies to DLCO, saying that while whole lung lavage is generally thought to improve gas transfer, that effect was not shown in IMPALA and they expect a different outcome in IMPALA 2.