Evaxion Announces Business Update and First Quarter 2024 Financial Results
Evaxion Biotech (NASDAQ: EVAX) released its first-quarter 2024 financial results and business update. Key highlights include a net income of $1.2 million, a significant improvement from a $6.2 million loss in Q1 2023, primarily due to the remeasurement of derivative liabilities. The company's cash position improved to $11.7 million from $5.6 million at year-end 2023. Operational highlights include advancements in their AI-Immunology™ platform and upcoming milestones for their vaccine candidates. However, Evaxion received a Nasdaq equity deficiency letter due to IFRS accounting treatment of investor warrants. The company addressed this by converting warrant exercise prices from USD to DKK, eliminating the derivative liability. Despite the positive financial turnaround, Evaxion needs additional funding to sustain operations beyond Q1 2025.
- Net income of $1.2 million in Q1 2024 compared to a $6.2 million loss in Q1 2023.
- Cash position improved to $11.7 million from $5.6 million as of December 31, 2023.
- Significant decrease in R&D expenses to $2.8 million from $3.9 million in Q1 2023.
- General and Administrative expenses reduced to $1.6 million from $2.5 million in Q1 2023.
- Remeasurement of derivative liabilities positively impacted financial results.
- Advancements in AI-Immunology™ platform and pipeline assets.
- Upcoming milestone achievements planned throughout 2024.
- Agreement reached to convert warrant exercise prices from USD to DKK, removing derivative liability.
- Received Nasdaq equity deficiency letter due to IFRS accounting treatment of investor warrants.
- Significant doubt about the ability to continue as a going concern without additional funding.
- Operating loss of $4.4 million despite improvements.
- Revenue of only $51,000, indicating sales or commercial income.
- Reliance on business development income to cover a $14 million cash burn for 2024, with no assurances of achieving this.
Insights
Evaxion Biotech's Q1 2024 financial results show a notable improvement in net income compared to the previous year, mainly driven by remeasurement of derivative liabilities resulting from investor warrants. The company's net income stood at
The reduction in research and development expenses to
Accounting for investor warrants as derivative liabilities due to their exercise price in USD versus the company’s functional currency in DKK created a temporary drag on equity. With the recent agreement to convert the exercise price into DKK, this liability will be reversed in Q2 2024, improving the overall financial position.
Despite the improved short-term financial snapshot, Evaxion still faces significant challenges. The company’s cash position was
Evaxion's multi-partner approach and progress in AI-Immunology™ powered vaccines development positions it uniquely within the biotech market. The conclusion of the EVX-B1 antigen MTA study and ongoing discussions with potential partners indicate strategic advancements, but details on tangible outcomes are sparse.
The upcoming EVX-01 Phase 2 data presentation at the annual ASCO meeting is a significant milestone. Positive data could validate their AI-Immunology™ platform, potentially attracting more partnerships and investments. However, this remains speculative until concrete data is presented.
The development of the EDEN™ model version 5.0 and proof-of-concept achievements in their pipeline (EVX-B2-mRNA, Precision ERV cancer vaccines) are promising. However, the biotech field is highly competitive and the success of these developments hinges on clinical efficacy and market acceptance.
While the strategic direction is promising, investors should be cautious about the timing and certainty of these milestones translating into revenue. The company's ambition to generate business development income equal to the cash burn of
The Nasdaq equity deficiency letter received on May 7, 2024, was a notable regulatory challenge arising from the IFRS accounting treatment of investor warrants. The company's quick response to convert the exercise price from USD to DKK for warrants from the February public offering mitigated this issue effectively. This conversion eliminates the derivative liability, stabilizing the equity position and potentially improving investor confidence.
However, the proposal to execute a similar conversion for warrants from the December private placement remains uncertain. This uncertainty could pose a risk if the company fails to secure agreements with the warrant holders, potentially impacting future financial statements.
From a regulatory and compliance perspective, the company's swift actions to address the deficiency demonstrate strong governance. However, ongoing vigilance is required to ensure compliance and maintain investor trust, especially considering the complex nature of financial instruments in the biotech sector.
COPENHAGEN, Denmark, May 28, 2024 (GLOBE NEWSWIRE) -- Evaxion Biotech A/S (NASDAQ: EVAX) ("Evaxion" or the "Company"), a clinical-stage TechBio company specializing in developing AI-Immunology™ powered vaccines, provides business update and announces first quarter 2024 financial results.
Business Highlights Since Last Quarterly Update
Since the 2023 full year financial results were released, the Company has continued to make progress on its three-pronged business model focusing on Targets, Pipeline, and Responders with a multi-partner approach. Key highlights include:
- Recent publications in peer-reviewed journals, including Journal of Cellular Immunology, Journal for ImmunoTherapy of Cancer, and Frontiers in Immunology
- Presentations at key scientific conferences, including World Vaccine Congress and Immuno 2024
- Conclusion of final EVX-B1 antigen MTA study with potential partner. Discussions around path forward ongoing
- Announcement of upcoming EVX-01 Phase 2 data presentation at the annual ASCO meeting
Christian Kanstrup, Chief Executive Officer at Evaxion, commented: “Only a couple of months has passed since we released our 2023 full year financial results on March 27, and I am incredibly pleased with the progress we have seen in our strategy execution. The strong external interest in our AI-Immunology™ platform and our capabilities in vaccine discovery, design, and development, particularly following our R&D Day in March this year, is truly rewarding. I am confident that our multi-partner approach will allow for strong value generation. We look forward to further advancing ongoing discussions around our AI-Immunology™ platform and pipeline assets and anticipate several important events ahead that will drive value generation.”
Anticipated 2024 Milestones
| Milestones | Target | |
| EVX-B1 | Conclusion of final MTA study with potential partner | Q1 2024 ✓ |
| AI-Immunology™ | Launch of EDEN™ model version 5.0 | Mid 2024 |
| EVX-B2-mRNA | EVX-B2-mRNA preclinical Proof-of-Concept obtained | Q3 2024 |
| EVX-01 | Phase 2 one-year readout | Q3 2024 |
| EVX-B3 | Conclusion of target discovery and validation work in collaboration with MSD (tradename of Merck & Co., Inc., Rahway, NJ, USA) | H2 2024 |
| Precision ERV cancer vaccines | Preclinical Proof-of-Concept obtained | H2 2024 |
| Funding | Ambition for full year 2024 is to generate business development income equal to 2024 cash burn (excluding financing activities) of | |
| *No assurances can be made that we will generate such business development income | ||
On May 7, 2024, the Company received a Nasdaq equity deficiency letter. This deficiency is partly a consequence of the IFRS accounting treatment of the Company’s investor warrants requiring treating these as a derivative liability, hence reducing shareholder’s equity. The derivative liability treatment is the result of the Company’s investor warrant’s exercise price being in USD while the Company’s share capital is in DKK. As communicated on May 24, the Company has subsequently agreed with the investor warrant holders from the February public offering to convert the exercise price from USD into DKK. This has eliminated the derivative liability resulting from the February public offering investor warrants. It’s the Company’s intention to execute a similar investor warrant exercise price currency conversion for the investor warrants from the December private placement, although no assurances can be made.
First Quarter 2024 Financial Results
Cash position as of March 31, 2024, was
Research and Development expenses were
General and Administrative expenses were
Net income of
Total equity of
Evaxion Biotech A/S
Consolidated Statement of Financial Position Data (Unaudited)
(USD in thousands)
| Mar 31, 2024 | Dec 31, 2023 | ||||
| Cash and cash equivalents | $ | 11,731 | $ | 5,583 | |
| Total assets | 22,654 | 12,889 | |||
| Total liabilities | 20,050 | 17,618 | |||
| Share capital | 7,964 | 5,899 | |||
| Other reserves | 109,602 | 99,946 | |||
| Accumulated deficit | (112,033) | (107,860) | |||
| Total equity before derivative warrant liability | 5,533 | (2,015) | |||
| Effect from derivative liabilities from investor warrants | (2.929) | (2,714) | |||
| Total equity | 2,604 | (4,729) | |||
| Total liabilities and equity | $ | 22,654 | $ | 12,889 | |
Based on the Company’s current cash position with an expected cash runway into Q1 2025, income from Business Development deals and/or further funding is required to mitigate management’s conclusion that there is significant doubt about the Company’s ability to continue as a going concern. Please refer to the Form 20-F, filed March 27, 2024, for additional background on the Company.
Evaxion Biotech A/S
Consolidated Statement of Comprehensive Loss Data (Unaudited)
(USD in thousands, except per share data)
| Three Months Ended March 31, | |||||
| 2024 | 2023 | ||||
| Revenue | $ | 51 | $ | — | |
| Research and development | (2,836) | (3,852) | |||
| General and administrative | (1,611) | (2,452) | |||
| Operating loss | (4,396) | (6,525) | |||
| Finance income | 5,618 | 285 | |||
| Finance expenses | (246) | (326) | |||
| Net loss before tax | $ | 976 | $ | (6,435) | |
| Income tax benefit | 218 | 194 | |||
| Net result for the period | $ | 1,194 | $ | (6,241) | |
| Net result attributable to shareholders of Evaxion Biotech A/S | $ | 1,194 | $ | (6,241) | |
| Profit/loss per share – basic and diluted | $ | 0.03 | $ | (0.24) | |
| Number of shares used for calculation (basic and diluted) | 46,638,239 | 25,783,847 | |||
About EVAXION
Evaxion Biotech A/S is a pioneering TechBio company based upon its AI platform, AI-Immunology™. Evaxion's proprietary and scalable AI prediction models harness the power of artificial intelligence to decode the human immune system and develop novel immunotherapies for cancer, bacterial diseases, and viral infections. Based upon AI-Immunology™, Evaxion has developed a clinical-stage oncology pipeline of novel personalized vaccines and a preclinical infectious disease pipeline in bacterial and viral diseases with high unmet medical needs. Evaxion is committed to transforming patients' lives by providing innovative and targeted treatment options. For more information about Evaxion and its groundbreaking AI-Immunology™ platform and vaccine pipeline, please visit our website.
Forward-Looking Statement
This announcement contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The words "target," "believe," "expect," "hope," "aim," "intend," "may," "might," "anticipate," "contemplate," "continue," "estimate," "plan," "potential," "predict," "project," "will," "can have," "likely," "should," "would," "could," and other words and terms of similar meaning identify forward-looking statements. Actual results may differ materially from those indicated by such forward-looking statements as a result of various factors, including, but not limited to, risks related to: our financial condition and need for additional capital; our development work; cost and success of our product development activities and preclinical and clinical trials; commercializing any approved pharmaceutical product developed using our AI platform technology, including the rate and degree of market acceptance of our product candidates; our dependence on third parties including for conduct of clinical testing and product manufacture; our inability to enter into partnerships; government regulation; protection of our intellectual property rights; employee matters and managing growth; our ADSs and ordinary shares, the impact of international economic, political, legal, compliance, social and business factors, including inflation, and the effects on our business from the worldwide ongoing COVID-19 pandemic and the ongoing conflict in the region surrounding Ukraine and Russia and the Middle East; and other uncertainties affecting our business operations and financial condition. For a further discussion of these risks, please refer to the risk factors included in our most recent Annual Report on Form 20-F and other filings with the U.S. Securities and Exchange Commission (SEC), which are available at www.sec.gov. We do not assume any obligation to update any forward-looking statements except as required by law.
FAQ
What were Evaxion Biotech's Q1 2024 financial results?
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