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Interim Condensed Financial Statements (Unaudited)
Interim Condensed Financial
Statements (Unaudited) (IFRS) as of and for the three and nine months ended September 30, 2018
EPFL Innovation Park
| Note | As of September 30, 2018 | As of December 31, 2017 | ||||
| in CHF thousands | ||||||
| ASSETS | ||||||
| Non-current assets | ||||||
| Property, plant and equipment | 5 | 3,317 | 2,353 | |||
| Financial assets | 210 | 126 | ||||
| Total non-current assets | 3,527 | 2,479 | ||||
| Current assets | ||||||
| Prepaid expenses | 6 | 2,685 | 1,440 | |||
| Accrued income | 3 | 2,603 | 2,799 | |||
| Finance receivable | 7 | 49 | - | |||
| Other current receivables | 8 | 738 | 918 | |||
| Cash and cash equivalents | 199,122 | 124,377 | ||||
| Total current assets | 205,197 | 129,534 | ||||
| Total assets | 208,724 | 132,013 | ||||
| SHAREHOLDERS' EQUITY AND LIABILITIES | ||||||
| Shareholders' equity | ||||||
| Share capital | 1,351 | 1,147 | ||||
| Share premium | 298,077 | 188,299 | ||||
| Accumulated losses | (107,452) | (72,607) | ||||
| Total shareholders' equity | 191,976 | 116,839 | ||||
| Non-current liabilities | ||||||
| Accrued interest - long-term | 7 | 136 | 99 | |||
| Long-term financing obligation | 7 | 592 | 395 | |||
| Net employee defined benefit liabilities | 5,339 | 4,926 | ||||
| Total non-current liabilities | 6,067 | 5,420 | ||||
| Current liabilities | ||||||
| Trade and other payables | 515 | 1,092 | ||||
| Accrued expenses | 10,124 | 8,307 | ||||
| Deferred income | 3 | 42 | 355 | |||
| Total current liabilities | 10,681 | 9,754 | ||||
| Total liabilities | 16,748 | 15,174 | ||||
| Total shareholders' equity and liabilities | 208,724 | 132,013 |
notes form an integral part of these Interim Condensed Financial Statements (Unaudited).
| For the Three Months Ended September 30, | For the Nine Months Ended September 30, | |||||||||
| Note | 2018 | 2017 | 2018 | 2017 | ||||||
| in CHF thousands except for share and per share amounts | ||||||||||
| Revenue | ||||||||||
| Contract revenue | 3 | 2,305 | 1,074 | 5,791 | 3,834 | |||||
| Total revenue | 2,305 | 1,074 | 5,791 | 3,834 | ||||||
| Operating expenses | ||||||||||
| Research & development expenses | (11,546) | (8,195) | (32,150) | (22,508) | ||||||
| General & administrative expenses | (2,930) | (2,519) | (8,703) | (7,053) | ||||||
| Total operating expenses | (14,476) | (10,714) | (40,853) | (29,561) | ||||||
| Operating loss | (12,171) | (9,640) | (35,062) | (25,727) | ||||||
| Finance income / (expense), net | (1,314) | 858 | (1,149) | (4,762) | ||||||
| Interest income | - | - | 3 | - | ||||||
| Interest expense | (31) | (11) | (66) | (86) | ||||||
| Finance result, net | 9 | (1,345) | 847 | (1,212) | (4,848) | |||||
| Loss before tax | (13,516) | (8,793) | (36,274) | (30,575) | ||||||
| Income tax expense | - | - | - | - | ||||||
| Loss for the period | (13,516) | (8,793) | (36,274) | (30,575) | ||||||
| Loss per share (EPS): | 4 | |||||||||
| Basic and diluted loss for the period attributable to equity holders | (0.21) | (0.15) | (0.61) | (0.54) |
| Statements of Comprehensive Loss | For the Three months Ended September 30, | For the Nine Months Ended September 30, | ||||||
| 2018 | 2017 | 2018 | 2017 | |||||
| in CHF thousands | ||||||||
| Loss for the period | (13,516) | (8,793) | (36,274) | (30,575) | ||||
| Other comprehensive loss not to be reclassified to income or loss in subsequent periods (net of tax): | ||||||||
| Re-measurement losses on defined benefit plans | - | - | - | - | ||||
| Total comprehensive loss, net of tax | (13,516) | (8,793) | (36,274) | (30,575) |
The accompanying notes form an integral
part of these Interim Condensed Financial Statements (Unaudited).
Statements of Changes in Equity
| Note | Share capital | Share premium | Accumulated losses | Total | ||||||
| in CHF thousands | ||||||||||
| Balance as of January 1, 2017 | 1,135 | 188,166 | (46,921) | 142,380 | ||||||
| Net loss for the period | - | - | (30,575) | (30,575) | ||||||
| Other comprehensive loss | - | - | - | - | ||||||
| Total comprehensive loss | - | - | (30,575) | (30,575) | ||||||
| Share-based payments | - | - | 824 | 824 | ||||||
| Issuance of shares: | ||||||||||
| restricted share awards | - | 14 | (14) | - | ||||||
| exercise of options | 8 | 35 | - | 43 | ||||||
| Balance as of September 30, 2017 | 1,143 | 188,215 | (76,686) | 112,672 |
| Share capital | Share premium | Accumulated losses | Total | |||||||
| in CHF thousands | ||||||||||
| Balance as of January 1, 2018 | 1,147 | 188,299 | (72,607) | 116,839 | ||||||
| Net loss for the period | - | - | (36,274) | (36,274) | ||||||
| Other comprehensive loss | - | - | - | - | ||||||
| Total comprehensive loss | - | - | (36,274) | (36,274) | ||||||
| Proceeds from public offerings, net of underwriting fees | 10 | 200 | 111,329 | - | 111,529 | |||||
| Transaction offering costs | 10 | - | (2,016) | - | (2,016) | |||||
| Share-based payments | - | - | 1,897 | 1,897 | ||||||
| Issuance of shares: | ||||||||||
| restricted share awards | 1 | 468 | (468) | 1 | ||||||
| exercise of options | 3 | 18 | - | 21 | ||||||
| Transaction costs | - | (21) | - | (21) | ||||||
| Balance as of September 30, 2018 | 1,351 | 298,077 | (107,452) | 191,976 |
The accompanying notes form an integral
part of these Interim Condensed Financial Statements (Unaudited).
Statements of Cash Flows
| For the Nine Months Ended September 30, | ||||||
| Note | 2018 | 2017 | ||||
| in CHF thousands | ||||||
| Operating activities | ||||||
| Net loss for the period | (36,274) | (30,575) | ||||
| Adjustments to reconcile net loss for the period to net cash flows: | ||||||
| Depreciation of property, plant and equipment | 5 | 695 | 400 | |||
| Finance result, net | 9 | 1,212 | 4,776 | |||
| Share-based compensation expense | 1,897 | 824 | ||||
| Changes in net employee defined benefit liability | 413 | 267 | ||||
| Accrued interest on long-term debt | 7 | 37 | 86 | |||
| Changes in working capital: | ||||||
| Increase in prepaid expenses | 6 | (1,245) | (706) | |||
| Decrease in accrued income | 3 | 196 | 60 | |||
| Decrease / (increase) in other current receivables | 8 | 171 | (2,143) | |||
| Increase in accrued expenses | 1,595 | 1,459 | ||||
| Decrease in deferred income | 3 | (321) | (481) | |||
| Decrease in trade and other payables | (600) | (2,601) | ||||
| Increase in long-term financing obligation | 7 | - | 189 | |||
| Cash used in operating activities | (32,224) | (28,445) | ||||
| Interest income | 9 | 3 | - | |||
| Financial costs | 9 | (101) | (8) | |||
| Net cash flows used in operating activities | (32,322) | (28,453) | ||||
| Investing activities | ||||||
| Purchases of property, plant and equipment | 5 | (1,625) | (1,795) | |||
| Rent deposit | (84) | (40) | ||||
| Net cash flows used in investing activities | (1,709) | (1,835) | ||||
| Financing activities | ||||||
| Proceeds from public offerings of common shares, net of underwriting fees | 10 | 111,529 | - | |||
| Transaction costs on public offerings of common shares | 10 | (1,801) | - | |||
| Proceeds from issuance of common shares - option plan | 21 | 43 | ||||
| Transaction costs on issuance of common shares - option plan | (21) | - | ||||
| Proceeds from restricted shares | 1 | - | ||||
| Proceeds from long-term financing | 7 | 148 | 100 | |||
| Net cash flows provided by financing activities | 109,877 | 143 | ||||
| Net increase / (decrease) in cash and cash equivalents | 75,846 | (30,145) | ||||
| Cash and cash equivalents at January 1 | 124,377 | 152,210 | ||||
| Exchange loss on cash and cash equivalents | (1,101) | (4,855) | ||||
| Cash and cash equivalents at September 30 | 199,122 | 117,210 | ||||
| Net increase / (decrease) in cash and cash equivalents | 75,846 | (30,145) |
Additional Information:
Non Cash transactions:
The Company incurred CHF 0.2 million in non-cash transaction costs recorded within trade and other payables and accrued expenses.
An increase to long-term financing obligation totaling CHF 49 thousand was recognized with a corresponding increase to finance
receivable. The acquisition of less than CHF 0.1 million of property, plant and equipment purchases was non-cash and recorded within
trade and other payables and accrued expenses. Furthermore, the Company wrote off fixed assets with a net book value of nil.
The accompanying notes
form an integral part of these Interim Condensed Financial Statements (unaudited).
Notes to the Interim Condensed Financial Statements (Unaudited)
(in CHF thousands, except share and per share amounts)
Immune SA (the "Company," or "AC Immune," "ACI," "we," "our," "ours,"
"us") is a clinical stage biopharmaceutical company leveraging our two proprietary technology platforms to discover,
design and develop novel, proprietary medicines for prevention, diagnosis and treatment of neurodegenerative diseases associated
with protein misfolding. Misfolded proteins are generally recognized as the leading cause of neurodegenerative diseases, such as
Alzheimer's disease, or AD, and Parkinson's disease, or PD, with common mechanisms and drug targets, such as Abeta,
tau and alpha-synuclein. Our corporate strategy is founded upon a three-pillar approach that targets Alzheimer's disease,
non-Alzheimer's neurodegenerative diseases including neuro-orphan indications and diagnostics. Our lead product candidate
is crenezumab, a humanized, monoclonal, conformation-specific anti-Abeta antibody that we developed using our proprietary SupraAntigen
platform. The two Phase 3 clinical studies for crenezumab were commenced in early 2016 and in February 2017, respectively and were
fully recruited in the fourth quarter of 2017 and third quarter of 2018, respectively. We use our two unique proprietary platform
technologies, SupraAntigen (conformation-specific biologics) and Morphomer
(conformation-specific small molecules), to discover, design and develop medicines and diagnostics
to target misfolded proteins.
The Interim Condensed
Financial Statements of AC Immune SA as of and for the three and nine months ended September 30, 2018 were authorized for issuance
by the Company's Audit and Finance Committee on November 2, 2018.
Statement of compliance
These Interim Condensed
Financial Statements as of and for the three and nine months ended September 30, 2018 have been prepared in accordance with International
Accounting Standard 34 (IAS 34), Interim Financial Reporting, and such financial information should be read in conjunction
with the audited financial statements in the Company's Annual Report on Form 20-F for the year ended December 31, 2017, and
any public announcements made by the Company during the interim reporting period.
Basis of measurement
The financial statements
have been prepared under the historical cost convention.
Financial assets and liabilities
financial assets and liabilities are comprised of receivables, cash and cash equivalents, trade and other payables and a long-term
financing obligation. The carrying amount for these financial assets and liabilities approximates fair value.
1, 2018, the Company adopted IFRS 15 Revenue from Contracts with Customers, without though deeming any adjustments necessary
in the transition to the new standard. This standard applies to all contracts with customers, except for contracts that are within
the scope of other standards, such as leases, insurance, collaboration arrangements and financial instruments. Under IFRS 15, an
entity recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration
which the entity expects to receive in exchange for those goods or services. To determine revenue recognition for arrangements
that an entity determines are within the scope of IFRS 15, the entity performs the following five steps: (i) identify the contract(s)
with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate
the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies
a performance obligation. The Company only applies the five-step model to
contracts when it is probable that the
entity will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. At
contract inception, once the contract is determined to be within the scope of IFRS 15, the Company assesses the goods or services
promised within each contract and determines those that are performance obligations, and assesses whether each promised good or
service is distinct. The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective
performance obligation when (or as) the performance obligation is satisfied. For a complete discussion of accounting for contract
revenue, see Note 3, "Revenues."
Critical judgments and accounting estimates
the Company's interim condensed financial statements in conformity with IAS 34 requires management to make judgments, estimates
and assumptions that affect the amounts reported in the interim condensed financial statements and accompanying notes and the related
application of accounting policies as it relates to the reported amounts of assets, liabilities, income and expenses.
Immune has had to make judgments, estimates and assumptions relate to (i) revenue recognition from contracts with customers, (ii)
clinical development accruals, (iii) net employee defined benefit liability, (iv) income taxes, and (v) share-based compensation.
Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions
to accounting estimates are recognized in the period in which the estimates are revised.
losses that can generally be carried forward for a period of 7 years from the period the loss was incurred. These tax losses represent
potential value to the Company to the extent that the Company is able to create taxable profits before the expiry period of these
tax losses. Consistent with prior years, the Company has not recognized any deferred tax assets relating to tax losses available
as the recognition criteria have not been met at the balance sheet date.
expense for the three and nine months ended September 30, 2018 is zero. The estimated tax expense is based on the best estimate
of the weighted average annual income tax rate expected for the full financial year to December 31, 2018. As we expect to incur
a loss for the full year, we do not anticipate any income tax expense.
Accounting policies, new standards, interpretations and
amendments adopted by the Company
The accounting policies
adopted in the preparation of the interim condensed financial statements are consistent with those followed in the preparation
of the Company's annual financial statements for the year ended December 31, 2017, except for the adoption of new standards
and interpretations effective as of January 1, 2018. The Company has not adopted any other standard, interpretation or amendment
that has been issued but is not yet effective.
Recent accounting pronouncements
The following pronouncements
from the IASB will become effective for future financial reporting periods and have not yet been adopted by AC Immune.
provides a new model for lessee accounting in which all leases, other than short-term and small-ticket-item leases, will be accounted
for by the recognition on the balance sheet of a right-to-use asset and a lease liability, and the subsequent amortization of the
right-to-use asset over the lease term. IFRS 16 will be effective for annual periods beginning on or after January 1, 2019 with
early adoption permitted. AC Immune is currently assessing the impact of this standard on its financial statements and intends