On March 30, 2023 EDAP TMS SA (Nasdaq: EDAP) (the "Company"), a global leader in robotic energy-based therapies, reported unaudited financial results for the fourth quarter and full-year 2022 and announced a change in its leadership, effective May 1, 2023 (Press release, EDAP TMS, MAR 30, 2023, View Source [SID1234629619]).

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In line with EDAP’s Global Group Strategy, and its focus on expansion in the United States and rest of world markets, the Board of Directors has decided to embark on a new era of leadership for the Company. The Board has therefore unanimously appointed Ryan Rhodes Chief Executive Officer of EDAP TMS effective May 1, 2023 to lead, strengthen and accelerate the Company’s development. Marc Oczachowski will continue to serve as Chairman of the Board of the Company.

Mr. Rhodes has over 30 years of leadership experience in market development in the medical device industry, including 20 years dedicated to medical robotics. Prior to joining EDAP, he served as Chief Executive Officer of Restoration Robotics, where he led the company to a successful merger with Venus Concept Inc. in 2019. He also held leadership positions at Intuitive Surgical, and Ethicon Inc., a Johnson & Johnson Company.

Marc Oczachowski, EDAP’s Chairman and Chief Executive Officer, said: "In 2022, EDAP delivered another strong year of financial and operational performance, achieving record revenue and more than doubling worldwide Focal One sales compared to 2021. With EDAP experiencing strong positive HIFU momentum, particularly in the U.S., we have now reached a key inflection point to make this transition and to further accelerate our global expansion. I have enjoyed working with Ryan for almost two years. His leadership and knowledge of the industry, combined with his acute understanding of global commercial market development, are excellent assets for EDAP. I have complete confidence in Ryan’s ability to continue to accelerate the growth and development of the Company in support of its ongoing strategic objectives."

Ryan Rhodes, Chief Executive Officer of EDAP US, stated, "During the fourth quarter, we achieved a record of nine Focal One transactions in the U.S., reflecting the growing appreciation for the clinical value of Focal One by both large academic healthcare institutions as well as local community hospitals. 2022 was a critical year in the adoption of Focal One robotic HIFU and the growth of this therapeutic option as part of the comprehensive management of prostate cancer. The number of U.S. sites selecting Focal One doubled over the previous year, and we saw positive momentum in the advancement of U.S. society guidelines with focal ablation. Our team and capacity have grown to be well positioned to drive even greater clinical and market expansion in 2023."

Ryan Rhodes added: "I am very pleased to be appointed Chief Executive Officer of the EDAP TMS group, and I am grateful to both Marc and the EDAP Board for their continued confidence in my abilities. I am excited to lead EDAP’s global strategy to a new era of growth as we continue to build and expand our winning organization across the U.S. and international markets."

Full-Year 2022 Results

Total revenue for the full year 2022 was EUR 55.1 million ($58.0 million), representing an increase of 25.1% over full-year 2021 total revenue of EUR 44.1 million ($51.9 million).

Total revenue in the HIFU business for the full year 2022 was EUR 15.6 million (USD 16.4 million), an increase of 57.7% as compared to EUR 9.9 million (USD 11.7 million) for the full year 2021.

Total revenue in the LITHO business for the full year 2022 was EUR 11.6 million (USD 12.2 million), an increase of 5.0% from EUR 11.0 million (USD 13.0 million) for the full year 2021.

Total revenue in the Distribution business for the full year 2022 was EUR 27.9 million (USD 29.4 million), a 20.6% increase compared to EUR 23.1 million (USD 27.3 million) for the full year 2021.

Gross profit for the twelve months ended December 31, 2022, was EUR 24.2 million (USD 25.4 million), compared to EUR 18.4 million (USD 21.7 million) for the year-ago period. Gross profit margin on net sales was 43.9% for the twelve months ended December 31, 2022, compared to 41.8% for the comparable period in 2021. The increase in gross profit year-over-year was due to higher sales effect on fixed costs, particularly in the HIFU business.

Operating expenses were EUR 28.5 million (USD 29.90 million) for the twelve months ended December 31, 2022, compared to EUR 20.0 million (USD 23.6 million) for the same period in 2021.

Operating loss for the twelve months ended December 31, 2022, was EUR 4.3 million (USD 4.5 million), compared to an operating loss of EUR 1.6 million (USD 1.9 million) for the twelve months ended December 31, 2021.

Net loss for the twelve months ended December 31, 2022, was EUR 2.9 million (USD 3.1 million), or EUR (0.09) per diluted share, as compared to net income of EUR 0.7 million (USD 0.8 million), or EUR 0.02 per diluted share in the year-ago period.

As of December 31, 2022, the company held cash, cash equivalents and short-term investments of EUR 63.1 million ($67.5 million), as compared to EUR 47.2 million (USD 53.4 million) as of December 31, 2021.

Fourth Quarter 2022 Results

Total revenue for the fourth quarter 2022 was EUR 15.7 million (USD 16.2 million), a 12.8% increase as compared to total revenue of EUR 14.0 million (USD 15.9 million) for the same period in 2021.

Total revenue in the HIFU business for the fourth quarter 2022 was EUR 5.4 million (USD 5.5 million), an increase of 27.9% as compared to EUR 4.2 million (USD 4.8 million) for the fourth quarter of 2021.

Total revenue in the LITHO business for the fourth quarter 2022 was EUR 3.6 million (USD 3.7 million), an increase of 7.5% as compared to EUR 3.3 million (USD 3.8 million) for the fourth quarter of 2021.

Total revenue in the Distribution business for the fourth quarter 2022 was EUR 6.7 million (USD 7.0 million), a 5.0% increase compared to EUR 6.4 million (USD 7.3 million) for the fourth quarter of 2021.

Gross profit for the fourth quarter 2022 was EUR 7.2 million (USD 7.4 million), compared to EUR 6.2 million (USD 7.1 million) for the year-ago period. Gross profit margin on net sales was 45.9% in the fourth quarter of 2022, compared to 44.5% in the year-ago period. The increase in gross profit year-over-year was driven by the higher sales effect on fixed costs.

Operating expenses were EUR 8.8 million (USD 9.1 million) for the fourth quarter of 2022, compared to EUR 5.8 million (USD 6.5 million) for the same period in 2021.

Operating loss for the fourth quarter of 2022 was EUR 1.6 million (USD 1.6 million), compared to an operating profit of EUR 0.5 million (USD 0.5 million) in the fourth quarter of 2021.

Net loss for the fourth quarter of 2022 was EUR 5.1 million (USD 5.3 million), or EUR (0.14) per diluted share, as compared to net income of EUR 1.4 million (USD 1.6 million), or EUR 0.04 per diluted share in the year-ago period.

Conference Call

An accompanying conference call and webcast will be conducted by management to review the results. The call will be held at 8:30 a.m. ET today, March 30th, 2023. Please refer to the information below for conference call dial-in information and webcast registration.

Conference Call & Webcast
Thursday, March 30th, 2023 @ 8:30 a.m. ET
Domestic: 877-451-6152
International: 201-389-0879
Passcode: 13736071
Webcast link: Here

Following the live call, a replay will be available on the Company’s website, www.edap-tms.com under "Investors Information."

On March 30, 2023 Y-mAbs Therapeutics, Inc. (the "Company" or "Y-mAbs") (Nasdaq: YMAB) a commercial-stage biopharmaceutical company focused on the development and commercialization of novel, antibody-based therapeutic products for the treatment of cancer, reported financial results for the fourth quarter and full year 2022 (Press release, Y-mAbs Therapeutics, MAR 30, 2023, View Source [SID1234629617]).

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"The fourth quarter of 2022 marked another period of significant progress for DANYELZA and set up 2023 to be a very productive year," said Thomas Gad, President and Interim Chief Executive Officer. "We are thrilled to report record DANYELZA net revenues of $16.4 million in the fourth quarter of 2022, a 31% sequential increase compared to the previous quarter. In addition, DANYELZA was conditionally approved in China, with a planned launch in the first half of 2023. We look forward to our partners’ continued efforts to expand DANYELZA globally to offer much-needed treatment for patients with relapsed/refractory high-risk neuroblastoma in the bone or bone marrow."

Mr. Gad continued, "We recently implemented a restructuring plan to prioritize resources on the DANYELZA franchise and development of our SADA technology in the fight against cancer. With a 35% reduction in force and an anticipated 28% reduction in annual operating expenses for 2023, we emerge leaner and supported by a robust balance sheet with $105.8 million in cash and cash equivalents as of December 31, 2022, which we estimate should support our business operations as currently planned into the first quarter of 2026. We achieved a major milestone of getting our first unique SADA IND cleared by the FDA and opening up our first ever SADA Phase I trial late in 2022. We are actively screening patients initially for Small Cell Lung Cancer, Sarcoma and Melanoma and are eventually planning to screen more broadly for GD2 positive solid tumors."

Fourth Quarter 2022 and Recent Corporate Developments

● On February 2, 2023, Y-mAbs announced that the European Medicines Agency agreed to the Company’s Pediatric Investigational Plan for naxitamab

● On January 4, 2023, Y-mAbs announced a restructuring plan including a 35% reduction in workforce and an anticipated 28% reduction in annual operating expenses for 2023

● On December 21, 2022, Y-mAbs announced a partnership with WEP Clinical regarding early access program for DANYELZA (naxitamab-gqgk) in Europe

● On December 14, 2022, Y-mAbs announced a new SADA construct, CD38-SADA against non-Hodgkin’s Lymphoma

● On December 8, 2022, Y-mAbs announced that DANYELZA (naxitamab-gqgk) for the treatment of high-risk neuroblastoma was conditionally approved in China

On December 1, 2022, Y-mAbs announced that the Company had received a complete response letter for omburtamab BLA indicating that the FDA determined that it was unable to approve the BLA in its current form.

● On November 17, 2022, Y-mAbs activated its first ever SADA Phase I trial site and by March 11 Memorial Sloan Kettering was activated as the fourth clinical study site planned to enroll Small Cell Lung Cancer, Sarcoma and Melanoma patients

● On October 28, 2022, Y-mAbs announced the outcome of the FDA Oncologic Drugs Advisory Committee meeting, where the committee voted 16 to 0 that the Company had not provided sufficient evidence to conclude that omburtamab improves overall survival

● On October 3, 2022 Y-mAbs announced pivotal data from Study 101 for omburtamab in CNS/LM metastasis from neuroblastoma at the International Society of Pediatric Oncology ("SIOP") annual congress

Financial Results

Revenues

Y-mAbs reported net revenues of $31.5 million and $65.3 million for the fourth quarter 2022 and year ended December 31, 2022, which represented increases of 228% and 87%, respectively, over $9.6 million and $34.9 million in the comparable periods of 2021. Net revenues in the quarter and year ended December 31, 2022 included license revenue of $15.0 million and $16.0 million, respectively, compared to no license revenue in the fourth quarter ended December 31, 2021, and license revenue of $2.0 million for the year ended December 31, 2021. During the three months and year ended December 31, 2022, we recognized a regulatory-based milestone payment received of $15.0 million from SciClone Pharmaceuticals International Ltd. for the conditional approval of DANYELZA in China.

DANYELZA net product revenue for the fourth quarter of 2022 and year ended December 31, 2022, was $16.4 million and $49.3 million, respectively, which represented increases of 71% and 50%, respectively, over the corresponding periods in 2021 and an increase of 31% compared to the third quarter 2022 DANYELZA net product revenues of $12.5 million. The increase was primarily driven by an increase in the number of new U.S. patients in treatment during the fourth quarter of 2022.

As of December 31, 2022, Y-mAbs has delivered DANYELZA to 48 centers across the United States, corresponding to an increase of 12% in the number of centers since the third quarter of 2022. During the fourth quarter of 2022, approximately 53% of the vials sold in the United States were sold outside Memorial Sloan Kettering ("MSK"), an increase from the prior quarter as a result of the growth of new patients at institutions outside MSK outpacing MSK’s growth of new patients.

Operating Expenses

Research and Development

Research and development expenses were $19.8 million for the three months ended December 31, 2022, compared to $28.7 million for the three months ended December 31, 2021. The $8.9 million decrease reflects decreased spending for clinical trials, outsourced research and supplies, and costs for outsourced manufacturing services due to decreased clinical trial activities in 2022. Having completed the resubmission of the BLA for omburtamab in the first quarter of 2022, we are now focused on pipeline development programs for potential DANYELZA label expansion and advancing SADA constructs into the clinic.

Research and development expenses decreased by $1.6 million to $91.6 million during the year ended December 31, 2022, compared to the prior year period. The decrease mainly reflects decreased clinical trial activities in 2022

Selling, General, and Administration

Selling, general, and administrative expenses decreased by $4.3 million to $10.8 million for the three months ended December 31, 2022, compared to $15.1 million for the three months ended December 31, 2021. The decrease in selling, general and administrative expenses was primarily the result of a $1.8 million decrease in costs related to the commercialization of DANYELZA as there were heavy launch costs in the fourth quarter of 2021.

Selling, general, and administrative expenses increased by $6.3 million to $60.9 million for the year ended December 31, 2022, compared to $54.6 million for the year ended December 31, 2021. The increase in selling, general, and administrative expenses was primarily attributable to a $7.8 million increase in severance and share-based compensation expense related to the termination of our former chief executive officer.

Net Loss

We reported net income for the fourth quarter ended December 31, 2022, of $1.2 million, or $0.03 per basic and diluted share, compared to a net loss of $36.9 million, or $0.85 per basic and diluted share, for the quarter ended December 31, 2021. The favorable change to net income in 2022 was primarily driven by the license revenues of $15.0 million, the positive gross profit impact from increased DANYELZA revenues and the decreased research and development expenses in 2022.

We reported a net loss for the year ended December 31, 2022, of $95.6 million, or $2.19 per basic and diluted share, compared to a net loss of $55.3 million, or $1.28 per basic and diluted share, for the year ended December 31, 2021. Net loss in the year ended December 31, 2021, included a $62.0 million net gain from the sale of our DANYELZA Priority Review Voucher, after sharing 40% of the net proceeds from the sale with MSK, pursuant to the terms of our license agreement with MSK. The increase in net loss for the year ended December 31, 2022, also reflects the impact of contractual severance-related benefits for our former chief executive officer, as noted above, partially offset by the gross profit impact of DANYELZA’s revenue growth and 2022 license revenues.

Cash and Cash Equivalents

We had approximately $105.8 million in cash and cash equivalents as of December 31, 2022, and we expect a full-year 2023 cash burn of $50-55 million. Our existing cash and cash equivalents, when combined with anticipated DANYELZA revenues, which are assumed to increase by 10% each year for the purpose of our analysis of runway, is expected to be sufficient to fund our operations into the first quarter of 2026. In terms of development activities, we have assumed that our prioritized programs will be advanced at our own expense and no new programs are assumed at this point. We assume no new partnerships or other new business development, and no further development of the omburtamab program.

This estimate reflects our current business plan that is supported by assumptions that may prove to be inaccurate, such that we could use our available capital resources sooner than we currently expect.

Financial Guidance

Management reiterated its 2023 financial guidance including:

● Anticipated DANYELZA net product revenues of $60-$65 million;

● Anticipated operating expenses of $115-120 million;

● Anticipated total annual cash burn of $50-55 million; and

● Cash and cash equivalents anticipated to support operations as currently planned into the first quarter of 2026

Webcast and Conference Call

Y-mAbs will host a conference call on Friday, March 31, 2023, at 9 a.m. Eastern Time. To participate in the call, please use the following dial-in information.

Investors (domestic): 877-407-0792
Investors (international): 201-689-8263
Conference ID: 13736579

To access a live webcast of the update, please use this link.

On March 30, 2023 Fresh Tracks Therapeutics, Inc. (the "Company" or "Fresh Tracks") (Nasdaq: FRTX), a clinical-stage pharmaceutical company striving to transform patient lives by developing innovative and differentiated prescription therapeutics for the treatment of autoimmune, inflammatory, and other debilitating diseases, reported financial results for the fourth quarter and full year ended December 31, 2022 and provided a corporate update (Press release, Vical, MAR 30, 2023, View Source [SID1234629616]).

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"We are pleased with the progress made in advancing our development of FRTX-02 over the past year. The results from Part 1 of our first-in-human Phase 1 study demonstrate the potential of FRTX-02 as a generally safe and well-tolerated, once-daily oral treatment for a broad range of autoimmune and inflammatory diseases," commented Andrew Sklawer, President and Chief Executive Officer of Fresh Tracks. "We believe the Phase 1 topline results support the continued development of FRTX-02. As we plan out our path forward, we have initiated the comprehensive process previously disclosed, to explore and evaluate strategic options to progress the development of our novel pipeline of potential treatments for autoimmune, inflammatory, and other diseases, including FRTX-02, with the goal of maximizing shareholder value."
Research and Development Highlights
FRTX-02: a potential first-in-class DYRK1A inhibitor for the treatment of autoimmune and inflammatory diseases
•Announced in early March 2023 positive topline results from Part 1 of the Phase 1 clinical trial of FRTX-02, which is a randomized, double-blind, placebo-controlled study designed to evaluate the safety, tolerability, pharmacokinetics, and pharmacodynamics of FRTX-02 capsules in healthy subjects, which included single and multiple ascending dose assessments of FRTX-02 or placebo in healthy adult subjects.
•Topline results support the continued development of FRTX-02 as a potential first-in-class, once-daily oral treatment for atopic dermatitis and/or other autoimmune diseases.
FRTX-10: a covalent Stimulator of Interferon Genes (STING) inhibitor candidate for the potential treatment of autoimmune, inflammatory, and rare genetic diseases
•Continued to progress the preclinical IND-enabling development activities of FRTX-10.
Recent Corporate Highlights
Evaluation of Strategic Options
As previously announced on March 7, 2023, the Company’s board of directors ("Board") and executive management team have approved and are conducting a comprehensive process to explore and evaluate strategic options to progress the development of its novel pipeline of potential treatments for autoimmune, inflammatory, and other diseases with the goal of maximizing shareholder value. Potential strategic options to be explored or evaluated as part of this process may include, but are not limited to, a financing, sale or licensing of assets, acquisition, merger, business combination, and/or other strategic transaction or series of related transactions involving the Company. Fresh Tracks does not expect to disclose developments with respect to this process until the evaluation of strategic options has been completed or until the Board has concluded disclosure is appropriate

or legally required. MTS Health Partners, LP has been retained as the Company’s exclusive financial advisor to assist in this review process.
Sales of Common Stock
In March 2023, the Company sold 2,887,535 shares of its common stock under an at-the-market equity offering program ("ATM") at a weighted-average price of $2.34 per share, for aggregate net proceeds of approximately $6.6 million.
Sofpironium Bromide
In the second quarter of 2022, Fresh Tracks entered into an asset purchase agreement ("APA") with Botanix SB Inc., a subsidiary of Botanix Pharmaceuticals Limited ("Botanix"). Under the terms of the APA, Botanix acquired and assumed control of rights, title, and interests to assets primarily related to the proprietary compound sofpironium bromide that were owned and/or licensed by us or Brickell Subsidiary, Inc. in exchange for an upfront payment, near-term regulatory milestone payments, and sales-based milestone payments, as well as tiered earnout payments on net sales of sofpironium bromide gel. In connection with the sale of sofpironium bromide, Fresh Tracks and Botanix entered into a transition services agreement ("TSA") whereby Fresh Tracks provides consulting services as an independent contractor to Botanix in support of and through filing and approval of the U.S. new drug application ("NDA") for sofpironium bromide gel, 15%.
In December 2022, the U.S. Food and Drug Administration ("FDA") accepted the NDA submission by Botanix for sofpironium bromide gel, 15%, which was a milestone upon which Fresh Tracks received a milestone payment of $2.0 million from Botanix. In November 2022, Fresh Tracks paid its former licensor of sofpironium bromide $1.0 million in cash in lieu of issuing $1.0 million in shares of its common stock as originally provided for under a license agreement. In March 2023, Botanix reported that the FDA’s mid-cycle review is expected to be completed soon and that it expects the FDA’s decision on the NDA submission in the third quarter of 2023.
Fourth Quarter and Full Year 2022 Financial Results
The Company reported cash and cash equivalents of $8.7 million as of December 31, 2022, compared to $26.9 million as of December 31, 2021. The Company expects its cash and cash equivalents as of December 31, 2022, combined with $6.6 million in net proceeds received in March 2023 from sales of the Company’s common stock under its ATM program, will be sufficient to fund its operations for at least the next 12 months.
Revenue was $2.1 million for the fourth quarter of 2022, compared to $0.1 million for the fourth quarter of 2021. Revenue was $6.9 million for the year ended December 31, 2022, compared to $0.4 million for the year ended December 31, 2021. Revenue in 2022 primarily consisted of contract revenue recognized under the APA and TSA with Botanix, while revenue in 2021 was driven by royalty revenue earned on a percentage of net sales of ECCLOCK (sofpironium bromide gel, 5%) in Japan under a licensing agreement with Kaken Pharmaceutical Co., Ltd. Contract revenue in 2022 consisted of upfront payment of $3.0 million, a milestone payment of $2.0 million, fees for consulting services the Company provided to Botanix of $0.8 million, reimbursed development expenditures of $0.6 million, and sublicense income of $0.4 million.
Research and development expenses were $2.6 million for the fourth quarter of 2022, compared to $3.1 million for the fourth quarter of 2021. Research and development expenses were $14.0 million for the year ended December 31, 2022, compared to $28.2 million for the year ended December 31, 2021, which was driven primarily by lower clinical expenses of $16.6 million related to sofpironium bromide and lower personnel and other unallocated expenses of $0.5 million, partially offset by increased costs related to our STING inhibitor platform of $2.2 million and increased costs related to our DYRK1A inhibitor program of $0.7 million.
General and administrative expenses were $4.0 million for the fourth quarter of 2022, compared to $3.3 million for the fourth quarter of 2021. General and administrative expenses were $14.4 million for the year ended December 31, 2022, compared to $12.4 million for the year ended December 31, 2021. The annual increase of $2.0 million was primarily related to increased expenses in 2022 of $1.9 million in payments to a former licensor and higher legal and compliance fees of $0.4 million, partially offset by lower compensation-related expenses of $0.2 million and lower other general administrative expenses of $0.1 million.
The Company’s net loss was $4.5 million for the fourth quarter of 2022 compared to $6.1 million for the fourth quarter of 2021. Net loss was $21.1 million for the year ended December 31, 2022, compared to $39.5 million for the year ended December 31, 2021.

No Quarterly Conference Call
In consideration of the Board and management team’s ongoing process of exploring and evaluating strategic options to progress the development of the Company’s novel pipeline, Fresh Tracks’ management has decided not to host a conference call to discuss its fourth quarter and full year 2022 financial results. Additional details regarding the financial results for the full year 2022 and corporate update can be found in the Company’s Annual Report on Form 10-K.

On March 30, 2023 Selvita S.A. [WSE: SLV] – one of the largest CRO (Contract Research Organization) companies in Europe reported that it has published a full-year report for 2022* (Press release, Selvita, MAR 30, 2023, View Source [SID1234629615]). The Group reported record results for 2022, in excess of meeting the objectives of its ambitious development strategy for 2022-2025. In 2023 the Company is strengthening the base for further dynamic growth of its business scale.

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In 2022 Selvita (excl. Ardigen) generated EUR 75.4 million in revenue from commercial services, marking an increase of 29% y/y. EBITDA profit reached EUR 22.7 million, 41% higher than in 2021 (EBITDA margin reached 30.0%, 2.6 p.p. higher y/y).
At the end of March, Selvita announced that it had completed construction of its new research space in Krakow, to which it is moving part of its high-margin drug discovery services business. Selvita’s new research center is capable of providing workspace for approximately 250 scientists, marking a significant milestone in the Company’s development and laying the foundation for the Company’s continued organic growth.
Selvita’s backlog for 2023 reached EUR 43.3 million (as of March 28, 2023) and is 7% higher than the value reported a year earlier (as of March 24, 2022), despite a very high base. There are many indications that in 2023 the dynamics of contracting between quarters will be different than usual. The company is observing an increased caution from its customers, resulting in contracting for shorter periods, which makes it possible to count on extensions in subsequent quarters of 2023.
Due to investments in infrastructure and team development, the Company entered 2023 with a higher cost base, which taking into account slowing growth rates, is putting pressure on margins. Today, Selvita is fundamentally positioned for continued strong growth, and the Management Board’s priority is to return to high revenue growth and margin levels.
Selvita is actively responding to this situation, focusing on identifying markets and customers with the largest research budgets, significantly intensifying sales activities in selected areas – primarily in the US market and towards big pharma. The Company is already observing the first effects of these activities and expects further positive results from the tactics adopted in the coming months.
In parallel, the Company is taking advantage of this more challenging period to identify areas where optimizations can be made, and is improving its savings policies, which should have a positive impact on margins both in the coming quarters and in the long term.

Boguslaw Sieczkowski, co-founder, major shareholder and Chief Executive Officer at Selvita, comments:

– 2022 was a record year for us. We made good use of several years of excellent economic conditions, growing more than three times faster than our environment and more than quadrupling the scale of the business between 2019 and 2022. At the same time, we have built a solid base for further dynamic growth and are now focusing on increasing and diversifying our revenue base. There are many indications that this year the distribution of backlog between quarters will be different than usual. Thus, we expect growth rates to increase and margins to improve in the second half of 2023. Returning to the high dynamics of revenues and margin levels that we got our investors accustomed to is our top priority at the moment.

Both biotechnology and pharmaceutical companies have high cash reserves and are gradually increasing their R&D spending, outsourcing an increasing portion of its activities. At the same time, access to new capital has been difficult for several quarters, making our clients more cautious with their budgets. This situation allows us to hope that as market sentiment improves, our clients will quickly return to bolder investments in R&D. In the long term, we operate in an attractive market, which gives us excellent prospects for growth.

While funding for the global biopharmaceutical sector more than doubled in the pandemic years – 2020-2021 – in 2022 it dropped to the 2019 levels, with the largest amount of capital (more than 70%) going to companies in the U.S. market. In Europe, the U.K. market stands out positively. Selvita is very active in both these markets, based on its local sales offices in major biotech centers.

Dr. Milosz Gruca, Executive Vice President and Chief Commercial Officer at Selvita, said:

– We are trying to play on our numerous competitive advantages and focus on the most attractive markets and customers at the moment. We took the first steps towards strengthening sales back in 2022, and since the beginning of this year we have significantly intensified these activities.

In 2022 Selvita completed the integration of Fidelta, the Croatian company, acquired in early 2021. Selvita has strengthened its market position, significantly increased its customer portfolio and introduced new high-margin services. At the same time, the Company continued to invest in team and infrastructure development. In March 2023, Selvita announced the completion of its new headquarters in Krakow, which constitutes nearly 4 000 sq. m. of new research space and can provide workspace for approximately 250 scientists.

FINANCIAL PERFORMANCE AND MARKET ENVIRONMENT

In 2022, Selvita’s drug discovery services generated EUR 63.7 million (up by 24% y/y) and accounted for 84% of Selvita’s commercial services revenue. Services in the area of regulatory research constituted the remaining part of commercial services revenues and amounted to EUR 11.7 million (up by 61% y/y).

Dr. Milosz Gruca adds:

– We are continuing very strong business development activities. While in 2022 we participated in more than 80 events, this year we plan to take part in more than 110 shows and conferences. We are working hard to strengthen our visibility and scientific recognition.

The bioinformatics segment (Ardigen) generated in 2022 EUR 10.2 million in external revenues, indicating a 51% year-on-year increase. EBITDA in this segment of the business amounted to EUR 1.3 million. The company continues its intensive development investments. Starting in 2023, Ardigen will not be consolidated in Selvita’s results.

For the full year 2022, Selvita Group generated EUR 88.8 million in revenue, showing an increase of 31% year-on-year. EBITDA amounted to EUR 24.0 million (stable profitability at 27.0%), a result which is 32% higher than a year earlier. Net profit reached EUR 13.5 million (up by 28% y/y, profitability of 15.2%).

In Q4 2022 alone, the Group generated EUR 23.1 million in revenue, up by 16% year-on-year. EBITDA amounted to EUR 5.6 million, and due to Ardigen’s intensive investments, remained at a similar level to a year earlier.

There are numerous indications that in 2023 the dynamics of contracting between quarters will be different than usual. Selvita’s backlog for 2023 reached EUR 43.3 million (as of March 28, 2023) and is 7% higher than the value reported a year earlier (as of March 24, 2022), despite a demanding market environment and a high base. The Company expects intensified contracting in the second part of the year.

The market in which Selvita operates is at the advanced stages of the longest and deepest cycle of restrictions on access to new financing seen in the last 15 years. Both biotech and pharma companies have high cash reserves, but due to heightened uncertainty, they are investing in R&D activities more cautiously, and what follows R&D outsourcing is also handled more cautiously. Selvita is expecting this situation to improve swiftly once market sentiment improves.

On March 30, 2023 SCYNEXIS, Inc. reported that it has entered into a license agreement (the "License Agreement") with GlaxoSmithKline Intellectual Property (No. 3) Limited ("GSK") (Filing, 8-K, Scynexis, MAR 30, 2023, View Source [SID1234629614]). Pursuant to the terms of the License Agreement, SCYNEXIS granted GSK an exclusive (even as to SCYNEXIS and its affiliates), royalty-bearing, sublicensable license for the development, manufacture, and commercialization of ibrexafungerp, including the approved product BREXAFEMME, for all indications, in all countries other than Greater China and certain other countries already licensed to third parties (the "GSK Territory"). If the existing licenses granted to or agreements with third parties are terminated with respect to any country, GSK will have an exclusive first right to negotiate with SCYNEXIS to add those additional countries to the GSK Territory.

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SCYNEXIS retains rights to all other assets, with GSK receiving a right of first negotiation ("ROFN") to any other enfumafungin-derived compounds or products that SCYNEXIS may control.

Under the terms of the License Agreement, SCYNEXIS will receive an upfront payment of $90 million. SCYNEXIS is also eligible to receive potential:

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regulatory approval milestone payments of up to $70 million;
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commercial milestone payments of up to $115 million based on first commercial sale in invasive candidiasis (U.S./EU);
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and sales milestone payments of up to $242.5 million based on annual net sales, with a total of $77.5 million to be paid upon achievement of multiple thresholds up through $200 million; a total of $65 million to be paid upon achievement of multiple thresholds between $300 million and $500 million; and $50 million to be paid at each threshold of $750 million and $1 billion.

SCYNEXIS will be responsible for the execution and costs of the ongoing clinical studies of ibrexafungerp but will have the potential to receive up to $75.5 million in success-based development milestones, which are comprised of up to $65 million for the achievement of three interim milestones associated with SCYNEXIS’s continued performance of the ongoing MARIO Study and $10.5 million for the successful completion of the MARIO Study.

In the case of each of the above milestones, such milestone events are defined in the License Agreement.

GSK will also pay royalties based on cumulative annual sales to SCYNEXIS in the mid-single digit to mid-teen range. These royalty rates are subject to reduction, including in the event of third-party licenses, entry of a generic product, or the expiration of licensed patents.

A joint development committee will be established between GSK and SCYNEXIS to coordinate and review ongoing development activities of ibrexafungerp.

Unless earlier terminated, the License Agreement will expire on a product-by-product and country-by-country basis at the end of the royalty term for such product in such country.

SCYNEXIS has the right to terminate the License Agreement upon an uncured material breach by, or bankruptcy of, GSK. GSK has the right to terminate the License Agreement at any time for convenience in its entirety or on a product-by-product and country-by-country basis, upon an uncured material breach by, or bankruptcy of, SCYNEXIS, or for safety reasons.

The consummation of the transactions under the License Agreement is subject to the satisfaction of customary closing conditions, including the expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR Act"); provided, that either SCYNEXIS or GSK may terminate the License Agreement if expiration or termination of the applicable waiting period under the HSR Act has not occurred within nine months of the signing of the License Agreement. The parties expect the transactions contemplated by the License Agreement to close in the second quarter of 2023.

The foregoing is only a summary of the material terms of the License Agreement and does not purport to be a complete description of the rights and obligations of the parties thereunder and is qualified in its entirety by reference to the License Agreement, copies of which SCYNEXIS intends to file with its Quarterly Report on Form 10-Q for the fiscal quarter ending March 31, 2023, requesting confidential treatment for certain portions thereof.

Loan Agreement Amendment

SCYNEXIS, Hercules Capital, Inc. ("Hercules Capital") and Silicon Valley Bridge Bank, N.A. ("SVB") are party to a Loan and Security Agreement dated as of May 13, 2021 (the "Loan Agreement"), pursuant to which Hercules Capital, SVB and each of the other lenders from time-to-time party to the Loan and Security Agreement (collectively, the "Lenders") loaned to SCYNEXIS $35 million.

In connection with the entering into of the License Agreement, SCYNEXIS entered into a First Amendment and Consent to Loan and Security Agreement with the Lenders pursuant to which the Lenders consented to SCYNEXIS entering into the License Agreement and SCYNEXIS agreed to pay to the Lenders an amount equal to the sum of (i) all outstanding principal plus all accrued and unpaid interest with respect to the amounts loaned under the Loan Agreement (approximately $35.4 million), (ii) the prepayment fee payable under Loan Agreement ($262,500), (iii) the final payment payable under Loan Agreement ($1,382,500), and (iv) all other sums, if any, that shall have become due and payable with respect to loan advances under the Loan Agreement. These payments by SCYNEXIS will become due upon the earliest of (A) one business day following receipt by SCYNEXIS of the $90 million upfront payment payable to SCYNEXIS under the License Agreement, (B) June 1, 2023, or (C) the termination of the License Agreement.