UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

 

FORM 6-K

 

REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13A-16 OR 15D-16 UNDER
THE SECURITIES EXCHANGE ACT OF 1934

For the month of November 2023

Commission File Number: 001-40010

 

 

Pharvaris N.V.

 

(Translation of registrant’s name into English)

 

Emmy Noetherweg 2

 

2333 BK Leiden

 

The Netherlands
(Address of principal executive office)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F ☒ Form 40-F ☐

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ☐

Note: Regulation S-T Rule 101(b)(1) only permits the submission in paper of a Form 6-K if submitted solely to provide an attached annual report to security holders

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ☐

 

Note: Regulation S-T Rule 101(b)(7) only permits the submission in paper of a Form 6-K if submitted to furnish a report or other document that the registrant foreign private issuer must furnish and make public under the laws of the jurisdiction in which the registrant is incorporated, domiciled or legally organized (the registrant’s “home country”), or under the rules of the home country exchange on which the registrant’s securities are traded, as long as the report or other document is not a press release, is not required to be and has not been distributed to the registrant’s security holders, and, if discussing a material event, has already been the subject of a Form 6-K submission or other Commission filing on EDGAR.

 

 

 

 

---

 

PHARVARIS N.V.

On November 2, 2023, Pharvaris N.V. (the "Company") issued a press release reporting financial results and other business updates for the three and nine months ended September 30, 2023. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated by reference herein. Exhibit 99.1 to this Report on Form 6-K shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended or the Exchange Act. Exhibits 99.2 and 99.3 to this Report on Form 6-K shall be deemed to be incorporated by reference into the registration statements on Form F-3 (Registration Number 333-273757 and 333-263198) and Form S-8 (Registration Number 333-252897) of Pharvaris N.V. and to be a part thereof from the date on which this report is filed, to the extent not superseded by documents or reports subsequently filed or furnished.

 

 

 

---

 

EXHIBIT INDEX

 

Exhibit No.		Description
99.1		Press Release, dated November 2, 2023, (Financial results).
99.2		Management’s Discussion and Analysis of Financial Condition and Results of Operations as of and for the Three and Nine Months Ended September 30, 2023 and 2022.
99.3		Unaudited Condensed Consolidated Interim Financial Statements as of and for the Three and Nine Months Ended September 30, 2023 and 2022 and for year ended December 31, 2022.

 

 

---

 

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

	PHARVARIS N.V.
Date: November 2, 2023	By:	/s/ Berndt Modig
	Name:	Berndt Modig
	Title:	Chief Executive Officer

 

 

---

Exhibit 99.1

 

 

 

Pharvaris Reports Third Quarter 2023 Financial Results and Provides Business Update

Zug, Switzerland, November 2, 2023 – Pharvaris (Nasdaq: PHVS), a clinical-stage company developing novel, oral bradykinin-B2-receptor antagonists to treat and prevent hereditary angioedema (HAE) attacks, today reported financial results for the third quarter ended September 30, 2023 and provided a business update.

“We appreciate the FDA’s ongoing communication and collaboration, including our recent productive End-of-Phase 2 meeting, and anticipate initiating RAPIDe-3, our global Phase 3 on-demand study of PHVS416, within the first half of 2024,” said Berndt Modig, Chief Executive Officer of Pharvaris. “Pharvaris remains committed to resolving the U.S. clinical hold on deucrictibant for the prophylactic treatment of HAE, and we are on track to submit the non-clinical rodent data to the FDA by the end of the year. Top-line data from CHAPTER-1, a Phase 2 proof-of-concept study of deucrictibant, potentially the first B2-receptor antagonist for long-term prophylaxis in HAE, is anticipated to be announced by the end of the year. Pharvaris’ financial position allows us to continue to operate with a disciplined approach as we aspire to bring best-in-class oral therapies to the HAE community."

Recent Business Updates

 

 

---

 

Third Quarter 2023 Financial Results

Upcoming Events

American College of Allergy, Asthma & Immunology (ACAAI) 2023 Annual Scientific Meeting. Anaheim, CA, November 9-13, 2023. Two abstracts have been accepted for ePoster presentation with accompanying audio voiceover. Details are as follows:

 

Note on International Financial Reporting Standards (IFRS)

Pharvaris is a Foreign Private Issuer and prepares and reports consolidated financial statements and financial information in accordance with IFRS as issued by the International Accounting Standards Board. Pharvaris maintains its books and records in the Euro currency.

 

 

 

 

---

 

About PHVS416 (immediate-release deucrictibant capsules)

PHVS416 (immediate-release deucrictibant capsules) is an investigational drug intended to treat attacks of hereditary angioedema (HAE) containing deucrictibant, a highly potent, specific, and orally bioavailable competitive antagonist of the bradykinin B2 receptor. Pharvaris aims to develop this formulation to provide rapid and reliable symptom relief, through rapid exposure of attack-mitigating therapy in an easy-to-administer, small oral dosage form.

 

About PHVS719 (extended-release deucrictibant tablets)

PHVS719 (extended-release deucrictibant tablets) is an investigational drug intended to prevent attacks of hereditary angioedema (HAE) containing deucrictibant, a highly potent, specific, and orally bioavailable competitive antagonist of the bradykinin B2 receptor. Pharvaris is developing this formulation to provide sustained exposure of attack-preventing medicine in an easy to administer, small oral dosage form. PHVS719 is currently in Phase 1 clinical development for the prophylactic treatment of HAE. In healthy volunteers, a single dose of PHVS719 was well tolerated with an extended-release profile supporting once-daily dosing.

 

About Pharvaris

Building on its deep-seated roots in HAE, Pharvaris is a clinical-stage company developing novel, oral bradykinin B2 receptor antagonists to treat and prevent HAE attacks. By directly pursuing this clinically proven therapeutic target with novel small molecules, the Pharvaris team aspires to offer people with all sub-types of HAE efficacious, safe, and easy-to-administer alternatives to treat attacks, both on-demand and prophylactically. The company brings together the best talent in the industry with deep expertise in rare diseases and HAE. For more information, visit https://pharvaris.com/.

Forward-Looking Statements

This press release contains certain forward-looking statements that involve substantial risks and uncertainties. All statements contained in this press release that do not relate to matters of historical fact should be considered forward-looking statements, including, without limitation, statements relating to our future plans, studies and trials, and any statements containing the words “believe,” “anticipate,” “expect,” “estimate,” “may,” “could,” “should,” “would,” “will,” “intend” and similar expressions. These forward-looking statements are based on management’s current expectations, are neither promises nor guarantees, and involve known and unknown risks, uncertainties and other important factors that may cause Pharvaris’ actual results, performance or achievements to be materially different from its expectations expressed or implied by the forward-looking statements. Such risks include but are not limited to the following: uncertainty in the outcome of our interactions with regulatory authorities, including the FDA with respect to the clinical hold on prophylactic deucrictibant in the U.S.; the expected timing, progress, or success of our clinical development programs, especially for PHVS416 (immediate-release deucrictibant capsules) and PHVS719 (extended-release deucrictibant tablets), which are in mid-stage global clinical trials; risks arising from epidemic diseases, such as the COVID-19 pandemic, which may adversely impact our business, nonclinical studies, and clinical trials; the expected timing and results of the rodent toxicology study and our ability to resolve any issues to the satisfaction of the FDA or any regulatory agency in a timely manner; the timing of regulatory approvals; the value of our ordinary shares; the timing, costs and other limitations involved in obtaining regulatory approval for our product candidates PHVS416 and PHVS719, or any other product candidate that we may develop in the future; our ability to establish commercial capabilities or enter into agreements with third parties to market, sell, and distribute our product candidates; our ability to compete in the pharmaceutical industry and with competitive generic products; our ability to market, commercialize and achieve market acceptance for our product candidates; our ability to raise capital when needed and on acceptable terms; regulatory developments in the United States, the European Union and other jurisdictions; our ability to protect our intellectual

 

 

---

 

property and know-how and operate our business without infringing the intellectual property rights or regulatory exclusivity of others; our ability to manage negative consequences from changes in applicable laws and regulations, including tax laws, our ability to successfully remediate the material weaknesses in our internal control over financial reporting and to maintain an effective system of internal control over financial reporting; changes and uncertainty in general market, political and economic conditions, including as a result of inflation and the current conflict between Russia and Ukraine and the Hamas attack against Israel and the ensuing war; and the other factors described under the headings “Cautionary Statement Regarding Forward-Looking Statements” and “Item 3. Key Information—D. Risk Factors” in our Annual Report on Form 20-F and other periodic filings with the U.S. Securities and Exchange Commission. These and other important factors could cause actual results to differ materially from those indicated by the forward-looking statements made in this press release. Any such forward-looking statements represent management’s estimates as of the date of this press release. New risks and uncertainties may emerge from time to time, and it is not possible to predict all risks and uncertainties. While Pharvaris may elect to update such forward-looking statements at some point in the future, Pharvaris disclaims any obligation to do so, even if subsequent events cause its views to change. These forward-looking statements should not be relied upon as representing Pharvaris’ views as of any date subsequent to the date of this press release.

Contact
Maggie Beller

Executive Director, Head of External and Internal Communications

maggie.beller@pharvaris.com

 

 

 

---

Exhibit 99.2

Management’s Discussion and Analysis of Financial Condition and Results of Operations

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 condensed consolidated interim financial statements, including the notes thereto, for the three and nine months ended September 30, 2023 and 2022 included as Exhibit 99.3 to the Report on Form 6-K to which this discussion is attached as Exhibit 99.2. We also recommend that you read “Item 4. Information on the Company”, “Item 5. Operating and Financial Review and Prospects” and our audited consolidated financial statements for fiscal year 2022, and the notes thereto, which appear in our Annual Report on Form 20-F for the year ended December 31, 2022 (the “Annual Report”) filed with the U.S. Securities and Exchange Commission (the “SEC”). In addition, we recommend that you read any public announcements made from time to time by Pharvaris N.V.

The following discussion is based on our financial information prepared in accordance with the International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (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.

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—D Risk factors” in the Annual Report and under “Risk Factors” in any other periodic filings with the Securities and Exchange Commission.

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

Overview

We are a clinical-stage biopharmaceutical company focused on the development and commercialization of innovative therapies for rare diseases with significant unmet need, initially focused on angioedema and other bradykinin-mediated diseases. Our first molecule, deucrictibant (PHA121, PHA-022121), is a novel, small-molecule bradykinin B2-receptor antagonist for the treatment of hereditary angioedema, or HAE. Bradykinin-B2-receptor inhibition is a clinically validated mechanism for the treatment of HAE, as demonstrated by icatibant, which is a bradykinin B2-receptor antagonist approved in Europe in 2008 and in the United States in 2011 (as FIRAZYR®). We designed deucrictibant to improve upon the therapeutic profile of existing therapies and, through oral delivery, aim to provide patients with quality of life and ease-of-administration that is superior to current standard-of-care HAE treatments. We believe deucrictibant has the potential to provide a safe, effective and easy-to-administer option for both acute and prophylactic treatments of HAE, in the form of our PHVS416 (deucrictibant immediate-release – ‘IR’) on-demand rapid exposure product candidate, and for prophylaxis of HAE, in the form of our PHVS719 (deucrictibant extended-release – ‘XR’) small daily-dose extended-release product candidate. We believe that our product candidates may address a broader range of angioedema attacks than other available treatments since deucrictibant blocks the actual signal that leads to angioedema (the interaction of bradykinin, or BK, with the bradykinin B2 receptor), rather than an upstream process. By blocking the action of bradykinin, we can prevent its aberrant signaling regardless of the pathway that generates it.

In our completed Phase 1 trials to-date, we have observed that deucrictibant was orally bioavailable and well tolerated at all doses studied, with approximately dose-proportional exposure. We also have successfully demonstrated proof-of-mechanism through a clinical pharmacodynamics, or PD, assessment using a bradykinin challenge in healthy volunteers, which had been utilized as a validated surrogate assessment for dose selection in the icatibant development program. The data allowed us to compare the projected therapeutic performance of deucrictibant with that of icatibant. However, we have not conducted a head-to-head comparison of icatibant to deucrictibant in a clinical study.

We have demonstrated clinical efficacy and tolerability in a Phase 2 study (RAPIDe-1) treating attacks of HAE. We plan to efficiently progress deucrictibant through clinical development for on-demand and prophylactic use with our on-demand immediate-release product candidate, PHVS416, and prophylactic extended-release product candidate, PHVS719, respectively. We commenced our RAPIDe-1 Phase 2 clinical trial of PHVS416 in February 2021 and reported topline Phase 2 data for the acute treatment of patients with HAE attacks in December 2022. We also commenced the CHAPTER-1 Phase 2 clinical trial for prophylaxis in 2021 using twice-daily dosing of the PHVS416 soft capsules. Our primary objective with this trial is to assess the efficacy and safety profile of PHVS416 dose regimens for prophylactic treatments in HAE patients. We expect to have Phase 2 data from CHAPTER-1 by the end of 2023. In February 2022, we reported Phase 1 clinical data with PHVS719 demonstrating pharmacokinetics of the extended-release formulation in healthy volunteers and the potential for once-daily dosing. In healthy volunteers, a single dose of PHVS719 was well tolerated with an extended-release profile supporting once-daily dosing.

 

---

 

A wide variety of events beyond our control, including natural or man-made disasters, power shortages, fires, extreme weather conditions, pandemics, epidemics or outbreaks of infectious diseases, political instability or other events could disrupt our business or operations or those of our development partners, manufacturers, regulators or other third parties with whom we conduct business now or in the future. These events may cause businesses and government agencies to be shut down, supply chains to be interrupted, slowed, or rendered inoperable, and individuals to become ill, quarantined, or otherwise unable to work and/or travel due to health reasons or governmental restrictions.

In addition, the invasion of Ukraine and the retaliatory measures that have been taken, or could be taken in the future, by the United States, NATO, and other countries have created global security concerns that could result in a regional conflict and also adversely affect our ability to conduct ongoing and future clinical trials of our product candidates. For example, our RAPIDe-1 and CHAPTER-1 studies include a significant number of patients in Germany, Poland, and Bulgaria. A further escalation of the conflict in Ukraine may potentially impact our ability to complete our ongoing and planned clinical trials in these countries on a timely basis, or at all. Clinical trials in these countries could be suspended or terminated, and we may be prevented from obtaining data on patients already enrolled at affected sites. Any of the foregoing could impede the execution of our clinical development plans.

Furthermore, in August 2022, the U.S. Food and Drug Administration (the “FDA”) placed a hold on the clinical trials of deucrictibant in the U.S. based on its review of nonclinical data. The FDA requested that Pharvaris conduct an additional long-term rodent toxicology study and update the Investigator’s Brochure. Pharvaris participated in a Type A meeting with the FDA to discuss paths to address the on-demand and prophylactic holds. A protocol for a 26-week rodent toxicology study has been aligned with the FDA and the study has been initiated.

Pharvaris notified country-specific regulatory authorities in Canada, Europe, Israel, and the UK of the U.S. clinical holds. Outside the U.S., the regulatory status remains unchanged for the CHAPTER-1 study and other studies, including an open-label, long-term extension study (RAPIDe-2). Enrollment in the CHAPTER-1 clinical study has been completed.

In January 2023, the FDA agreed to partially lift the clinical hold for the Investigational New Drug ("IND") application for deucrictibant for the on-demand treatment of HAE to allow two remaining U.S. participants in RAPIDe-1 to complete treatment of a final HAE attack per protocol. In June 2023, the FDA lifted the hold on clinical trials under the on-demand IND following review of data from a planned interim analysis of the ongoing 26-week nonclinical rodent toxicology study. The lift of the clinical hold on the on-demand clinical trials enables Pharvaris to continue development of PHVS416 (deucrictibant immediate-release capsules) in the U.S., including resuming RAPIDe-2, a long-term extension study for acute treatment of attacks. Clinical studies of deucrictibant for prophylactic treatment of HAE are currently on hold in the U.S. Pharvaris expects to submit data from the completed 26-week nonclinical study by the end of 2023 to address the remaining hold on the IND application for deucrictibant for prophylactic treatment of HAE. However, we cannot provide any assurance that we will be able to resolve the clinical holds.

Financial Operations Overview

Revenues

We did not record any revenues during the period covered by the historical financial information included in this Report. We do not expect to recognize any revenues before we are able to commercialize our first product.

Research and development expenses

We are focused on the clinical development of deucrictibant. Since our inception, we have devoted substantially all of our resources to research and development efforts relating to the development of deucrictibant and our product candidates PHVS416 and PHVS719. We expect that we will continue to incur significant research and development expenses as we seek to complete the clinical development of, and achieve regulatory approval for, our product candidates PHVS416 and PHVS719, and in connection with discovery and development of any additional product candidates.

Research and development expenses consist of the following:

2

---

 

We anticipate that our total research and development expenses will continue to increase as we continue to progress PHVS416 and PHVS719 through clinical development.

There is a risk that any clinical development or product discovery program may not result in commercial approval. To the extent that we fail to obtain approval to commercialize our product candidate in a timely manner, we would need to continue to conduct nonclinical studies or clinical trials over a longer period of time, and we anticipate that our research and development expenses may further increase.

Clinical development timelines and associated costs may vary significantly and the successful development of our product candidate is highly uncertain. At this time, we cannot reasonably estimate the nature, timing and estimated costs of the efforts, including patient recruitment and selection that will be necessary to complete the development of, or the period, if any, in which material net cash inflows may commence from, our product candidates.

Moreover, we cannot assure that we will be able to successfully develop or commercialize our product candidates, if approved for marketing. This is due to numerous risks and uncertainties associated with developing drugs. See “Item 3. Key Information—D. Risk factors” in our Annual Report and under “Risk Factors” in any other periodic filings with the Securities and Exchange Commission for a discussion of these risks and uncertainties.

Selling and distribution expenses

Historically, we have not incurred any selling and distribution expenses. If our product candidates are approved for registration and marketing, we anticipate incurring substantial selling and distribution expenses in future periods in order to establish an infrastructure for marketing and distribution, obtain supplies of active pharmaceutical ingredients, and manufacture commercial quantities of our product candidate.

General and administrative expenses

We anticipate that we will continue to incur significant general and administrative expenses as we advance our research and development portfolio. General and administrative expenses consist of the following:

We anticipate that the continuing development of our business and the expense of maintaining directors’ and officers’ liability insurance, will contribute to future increase in general and administrative expenses. We also expect that general and administrative expenses will increase in the future as we incur additional costs associated with being a public company in the United States.

3

---

 

Share-based compensation expenses

In 2016, we implemented an Equity Incentive Plan, or the Plan, in order to advance the interests of our shareholders by enhancing our ability to attract, retain and motivate persons who are expected to make important contributions to us and by providing such persons with performance-based incentives that are intended to better align the interests of such persons with those of our shareholders. In order to incentivize our directors and employees, our Board adopted the Pharvaris N.V. 2021 Equity Incentive Plan (the “2021 Plan”) for employees, consultants and directors prior to the completion of our initial public offering (“IPO”). The 2021 Plan became effective upon our conversion from Pharvaris B.V. into Pharvaris N.V., which occurred prior to the consummation of our IPO. The 2021 Plan provides for the grant of options, stock appreciation rights, restricted stock, RSUs, performance stock awards, other stock-based awards, performance cash awards and substitute awards. The fair values of these instruments are recognized as personnel expenses in either research and development expenses or general and administrative expenses.

 

4

---

 

Result of operations

The financial information shown below was derived from our unaudited condensed consolidated interim financial statements for the three and nine months ended September 30, 2023 and 2022 included as Exhibit 99.3 to this Report on Form 6-K. The discussion below should be read along with these condensed consolidated interim financial statements, and it is qualified in its entirety by reference to them.

Comparison of the three months ended September 30, 2023 and September 30, 2022

 

 

		For the three months ended September 30,
		2023				2022				Change				%
		€				€				€
Research and development expenses			(18,535,782	)			(14,088,845	)			(4,446,937	)			32	%
General and administrative expenses			(7,665,484	)			(8,297,822	)			632,338				(8	)%
Total operating expenses			(26,201,266	)			(22,386,667	)			(3,814,599	)			17	%
Operating loss			(26,201,266	)			(22,386,667	)			(3,814,599	)			17	%
Finance income			2,748,943				11,494,934				(8,745,991	)			(76	)%
Loss before tax			(23,452,323	)			(10,891,733	)			(12,560,590	)			115	%
Income taxes			(146,273	)			2,403,929				(2,550,202	)			(106	)%
Loss for the period			(23,598,596	)			(8,487,804	)			(15,110,792	)			178	%

 

 

Revenues

We did not generate any revenues for the three months ended September 30, 2023 and September 30, 2022.

Research and development expenses

 

		For the three months ended September 30,
		2023				2022				Change				%
		€				€				€
Personnel expenses			(4,759,379	)			(3,692,003	)			(1,067,376	)			29	%
Clinical expenses			(8,897,295	)			(8,037,012	)			(860,283	)			11	%
Nonclinical expenses			(2,325,762	)			(862,643	)			(1,463,119	)			170	%
Manufacturing costs			(2,490,477	)			(1,437,370	)			(1,053,107	)			73	%
Intellectual Property costs			(62,869	)			(59,817	)			(3,052	)			5	%
Total research and development expenses			(18,535,782	)			(14,088,845	)			(4,446,937	)			32	%

 

 

Research and development expenses increased from €14,088,845 for the three months ended September 30, 2022 to €18,535,782 for the three months ended September 30, 2023. The increase in the research and development expenses is mainly driven by the advancing of the PHVS416 and PHVS719 development programs in the three months ended September 30, 2023.

 

Clinical expenses increased by €860,283 for the three months ended September 30, 2023, compared to the three months ended September 30, 2022, primarily due to the activities related to the startup of Phase 3 studies for on-demand and the continuing activities of the CHAPTER-1 prophylactic Phase 2 study which completed enrollment in the quarter. Nonclinical expenses increased by €1,463,119 for the three months ended September 30, 2023, compared to the three months ended September 30, 2022, primarily due to additional studies related to the 26-week rodent toxicology study intended to address the clinical hold in the U.S.

 

Manufacturing costs relating to the Active Pharmaceutical Ingredient ("API") and pharmaceutical development of PHVS416 and PHVS719 increased by €1,053,107 for the three months ended September 30, 2023 compared to the three months ended September 30, 2022 due to the current Good Manufacturing Practices ("cGMP"), API batches, pre-validation work on API processes as well as formulation activities.

 

5

---

 

In the personnel expenses for the three months ended September 30, 2023 and 2022 an amount of €1,356,111 and €1,433,123, respectively, was included which related to share-based compensation arrangements. The increase in the share-based compensation is due to the net effect of the new grants awarded in the three months ended September 30, 2023 and the cumulative charges of the awards already granted in the three months ended June 30, 2023 (vestings and forfeitures). The remaining increase in personnel expenses is driven by the growth of our organization resulting in additional employees hired, and yearly merit adjustments.

 

General and administrative expenses

 

		For the three months ended September 30,
		2023				2022				Change				%
		€				€				€
Personnel expenses			(3,529,687	)			(3,537,264	)			7,577				(0	)%
Consulting fees			(65,925	)			(246,269	)			180,344				(73	)%
Professional fees			(1,361,682	)			(1,379,416	)			17,734				(1	)%
Accounting, tax and auditing fees			(327,050	)			(444,057	)			117,007				(26	)%
Facilities, communication and office expenses			(1,577,375	)			(1,807,806	)			230,431				(13	)%
Travel expenses			(304,641	)			(379,369	)			74,728				(20	)%
Other expenses			(499,124	)			(503,641	)			4,517				(1	)%
Total general and administrative expenses			(7,665,484	)			(8,297,822	)			632,338				(8	)%

 

 

General and administrative expenses decreased from €8,297,822 for the three months ended September 30, 2022 to €7,665,484 for the three months ended September 30, 2023. The decrease in general and administrative expenses was mainly driven by lower consulting and accounting fees and decreased facility, communication and office expenses offset by the growth of the Company.

 

In the personnel expenses for the three months ended September 30, 2023 and 2022 an amount of €1,529,231 and €1,610,688 respectively, was included which related to share-based compensation arrangements.

 

The increase in the share-based compensation expenses is due to the net effect of the new grants (options and RSUs) made in the three months ended September 30, 2023 and the cumulative charges of the awards already granted in the three months ended June 30, 2023 and prior periods (vestings and forfeitures). The remaining increase in personnel expenses is driven by the growth of our organization resulting in additional employees hired, and yearly merit adjustments.

 

Finance income

Finance income for the three months ended September 30, 2023 and 2022 were €2,748,943 and €11,494,934, respectively. The amount mainly relates to unrealized foreign exchange (losses)/income, which is mostly the result of translating the Company’s bank balances held in USD to EUR.

 

Income taxes

 

Income taxes are accounted for in accordance with IAS 34. The interim period is considered part of a larger financial year, where the income tax is recognized in each interim period based on the best estimate of the weighted average annual income tax rate expected for the full financial year. The estimated tax expenses are determined based on a full-year basis and subsequently allocated using the expected full-year effective tax rate. The one-off items are recognized in full in the interim period in which they emerge. In the total interim tax charge, no distinction is made between current and deferred tax expenses/income.

 

The tax expense over the three months ended September 30, 2023 relates to the Company's U.S. and Dutch fiscal unity.

 

 

 

6

---

 

 

Comparison of the nine months ended September 30, 2023 and September 30, 2022

 

		For the nine months ended  September 30,
		2023				2022				Change				%
		€				€				€
Research and development expenses			(46,962,148	)			(41,324,971	)			(5,637,177	)			14	%
General and administrative expenses			(22,770,510	)			(21,822,960	)			(947,550	)			4	%
Total operating expenses			(69,732,658	)			(63,147,931	)			(6,584,727	)			10	%
Operating loss			(69,732,658	)			(63,147,931	)			(6,584,727	)			10	%
Finance (expense)/income			1,906,348				26,387,917				(24,481,569	)			(93	)%
Loss before tax			(67,826,310	)			(36,760,014	)			(31,066,296	)			85	%
Income taxes			(301,108	)			(375,888	)			74,780				(20	)%
Loss for the period			(68,127,418	)			(37,135,902	)			(30,991,516	)			83	%

 

 

Revenues

We did not generate any revenues for the nine months ended September 30, 2023 and September 30, 2022.

 

Research and development expenses

 

		For the nine months ended  September 30,
		2023				2022				Change				%
		€				€				€
Personnel expenses			(13,521,323	)			(9,282,210	)			(4,239,113	)			46	%
Clinical expenses			(21,395,174	)			(21,778,622	)			383,448				(2	)%
Non-clinical expenses			(6,744,771	)			(2,695,561	)			(4,049,210	)			150	%
Manufacturing costs			(5,133,990	)			(7,321,038	)			2,187,048				(30	)%
Intellectual Property costs			(166,890	)			(247,540	)			80,650				(33	)%
Total research and development expenses			(46,962,148	)			(41,324,971	)			(5,637,177	)			14	%

 

 

Research and development expenses increased from €41,324,971 for the nine months ended September 30, 2022 to €46,962,148 for the nine months ended September 30, 2023.

 

Clinical expenses decreased by €383,448 for the nine months ended September 30, 2023 compared to the nine months ended September 30, 2022, primarily due to the completion of the RAPIDe-1 on-demand study in December 2022. Nonclinical expenses increased by €4,049,210 for the nine months ended September 30, 2023 compared to the nine months ended September 30, 2022, primarily due to additional studies related to the 26-week rodent toxicology study intended to address the clinical hold in the U.S.

 

Manufacturing costs relating to the API and pharmaceutical development of PHVS416 and PHVS719 decreased by €2,187,048 for the nine months ended September 30, 2023 compared to the nine months ended September 30, 2022 due to reduction of costs as a result of the completion of synthesis of API intended for future development.

 

In the personnel expenses for the nine months ended September 30, 2023 and 2022 an amount of €3,843,288 and €3,829,551, respectively, was included related to the share-based compensation arrangements. The increase in the share-based compensation expenses is due to the new grants made during the period, and the cumulative charges for the grants up to September 30, 2022. The remaining increase in personnel expenses is driven by the growth of our organization resulting in additional employees hired, and yearly merit adjustments.

 

 

 

7

---

 

 

General and administrative expenses

 

		For the nine months ended  September 30,
		2023				2022				Change				%
		€				€				€
Personnel expenses			(10,265,614	)			(9,807,298	)			(458,316	)			5	%
Consulting fees			(370,241	)			(679,080	)			308,839				(45	)%
Professional fees			(3,538,857	)			(3,174,586	)			(364,271	)			11	%
Accounting, tax and auditing fees			(1,224,364	)			(1,038,714	)			(185,650	)			18	%
Facilities, communication and office expenses			(4,487,982	)			(5,054,636	)			566,654				(11	)%
Travel expenses			(1,083,091	)			(783,569	)			(299,522	)			38	%
Other expenses			(1,800,361	)			(1,285,077	)			(515,284	)			40	%
Total general and administrative expenses			(22,770,510	)			(21,822,960	)			(947,550	)			4	%

 

 

General and administrative expenses increased from €21,822,960 for the nine months ended September 30, 2022 to €22,770,510 for the nine months ended September 30, 2023. The increase in general and administrative expenses was mainly driven by the growth of our organization and increasing costs related to our commercial planning.

 

The increase in personnel expenses is driven by the growth of our organization resulting in additional employees hired, and yearly merit adjustments. In the personnel expenses for the nine months ended September 30, 2023 and 2022 an amount of €4,341,868 and €4,304,037, respectively, was included which related to share-based compensation arrangements. The remaining increase in personnel expenses is driven by the growth of our organization resulting in additional employees hired, and yearly merit adjustments.

 

Finance (expense)/income

 

Finance (expense)/income for the nine months ended September 30, 2023 and 2022 was €1,906,348 and €26,387,917 respectively, a change of €24,481,569. The change mainly relates to unrealized foreign exchange income, which is the result of translating the group’s bank balances held in USD to EUR.

 

Income taxes

 

Income taxes are accounted for in accordance with IAS 34. The interim period is considered part of a larger financial year, where the income tax is recognized in each interim period based on the best estimate of the weighted average annual income tax rate expected for the full financial year. The estimated tax expenses are determined based on a full-year basis and subsequently allocated using the expected full-year effective tax rate. The one-off items are recognized in full in the interim period in which they emerge. In the total interim tax charge, no distinction is made between current and deferred tax expenses/income.

 

The tax expenses over the nine months ended September 30, 2023 relate to the Company's U.S. and Dutch subsidiaries. For the nine months ended September 30, 2022, the tax expenses principally related to the Dutch fiscal unity mainly driven by foreign exchange gains. Following discussions with the Dutch tax authorities in November 2022, the Company concluded that foreign exchange results should be allocated to the principal Company in Switzerland. As a result, the foreign exchange results are allocated to the principal Company in Switzerland at that moment.

 

Liquidity and Capital Resources

 

Since inception, we have incurred significant operating losses. For the nine months ended September 30, 2023, and 2022 we incurred losses of €68,127,418 and €37,135,902, respectively. Since inception, we have not generated any revenues or net cash flows from sales. We will not receive any revenues or net cash flows from sales until we successfully develop a product candidate, obtain regulatory approval and successfully commercialize it. There is no assurance that we will be able to do so.

 

To date, we have relied solely on the issuance of equity securities to finance our operations and internal growth. On March 1, 2022, we entered into a sales agreement with Leerink Partners (formerly known as SVB Securities LLC), pursuant to which we may sell ordinary shares having an aggregate offering price of up to $75 million from time to

8

---

 

time through Leerink Partners. As of September 30, 2023, we have sold a total of 593,927 ordinary shares under the sales agreement generating total net proceeds of $9,826,427 (€9.3 million), after deducting $303,910 (€311,700), which was payable to Leerink Partners as commission in respect of such sales.

 

In June 2023, the Company sold a total of 6,951,340 ordinary shares, par value €0.12 per share, in a private placement at a purchase price of $10.07 per ordinary share. The sale generated total proceeds of approximately $70 million (€64.2 million).

 

As of September 30, 2023, we had cash and cash equivalents of €158,358,730. Of the cash on hand, €65,567 relates to guarantees. Our cash and cash equivalents consist solely of cash at bank.

 

We do not expect positive operating cash flows in the foreseeable future and remain dependent on additional financing to fund our research and development expenses, general and administrative expenses and financing costs. We believe that the available cash balances are sufficient to execute our operating plan and strategies and to meet the anticipated working capital requirements and settle all expected liabilities into the first quarter of 2025, which is at least twelve months from the issuance date of our unaudited condensed consolidated interim financial statements for the nine months ended September 30, 2023 and 2022. Accordingly, the unaudited condensed consolidated interim financial statements have been prepared on a going concern basis.

Our future viability is dependent on our ability to raise additional capital to finance operations. We will need to finance our operations through public or private securities offerings, debt financings or other sources, which may include licensing, collaborations or other strategic transactions or arrangements. Although we have been successful in raising capital in the past, there is no assurance that we will be successful in obtaining such additional financing on terms acceptable to us, if at all. If we are unable to obtain funding, we could be forced to delay, reduce, or eliminate some or all of our research and development programs for product candidates, product portfolio expansion or commercialization efforts, which could adversely affect our business prospects, or we may be unable to continue operations.

 

Our contractual obligations and commitments as of September 30, 2023 amounted to €42.0 million primarily related to research and development commitments.

 

Cash Flows

Comparison for the nine months ended September 30, 2023 and 2022.

The following table sets forth our primary sources and uses of our cash and cash equivalents for each of the periods set forth below:

 

	For the nine months ended  September 30,
	2023			2022			Change				%
	€			€			€
Net cash flows used in operating activities		(69,240,196	)		(46,749,661	)		(22,490,535	)			48	%
Net cash flows used in investing activities		(61,604	)		(100,657	)		39,053				(39	)%
Net cash flows provided by financing activities		63,661,895			8,810,178			54,851,717				623	%
Net increase (decrease) in cash and cash equivalents		(5,639,905	)		(38,040,140	)		32,400,235				(85	)%
Cash and cash equivalents at the beginning of the period		161,837,429			209,353,132			(47,515,703	)			(23	)%
Effect of exchange rate changes		2,161,206			26,416,455			(24,255,249	)			(92	)%
Cash and cash equivalents at the end of the period		158,358,730			197,729,447			(39,370,717	)			(20	)%

 

Operating activities

Net cash flows used in operating activities, reflects our results for the period adjusted for, among other things, depreciation, unrealized foreign exchange results, share-based compensation arrangements, changes in working capital and accruals.

Net cash used in operating activities was €69,240,196 for the nine months ended September 30, 2023, an increase of €22,490,535 compared to €46,749,661 for the nine months ended September 30, 2022, primarily due to an increase in net loss reflecting the increase in research and development expenses and other operating expenses, due to progression made in the clinical development programs and additional studies to address the clinical hold in the U.S., and the growth of our organization in 2023. Operating cash is adjusted for non-cash items such as the

9

---

 

decrease in share-based compensation of €0.5 million, a decrease of €24.7 million in net foreign exchange gains, an increase in depreciation expense of €0.1 million and an increase in finance income of €0.3 million. Working capital increased by €15.6 million, in part due to the change of current assets by €3.3 million, current liabilities of €6.9 million and accrued liabilities of €5.5 million.

Investing activities

Net cash flows used in investing activities decreased by €39,053 from €100,657 for the nine months ended September 30, 2022, to €61,604 for the nine months ended September 30, 2023, primarily as a result of decreased capital expenditure on office equipment in 2023.

Financing activities

Net cash flows provided by financing activities increased by €54,851,717 from €8,810,178 for the nine months ended September 30, 2022, to €63,661,895 for the nine months ended September 30, 2023. The cash inflow in the nine months ended September 30, 2023 relates mainly to the private placement financing that closed in the second quarter of 2023.

Off-Balance Sheet Arrangements

As of September 30, 2023, we did not have any off-balance sheet arrangements other than the disclosed commitments.

Quantitative and Qualitative Disclosures About Market Risk

During the nine months ended September 30, 2023, there were no significant changes to our quantitative and qualitative disclosures about market risk from those reported in “Item 11. Quantitative and Qualitative Disclosures About Market Risk” in the Annual Report.

Critical Accounting Estimates and Judgments

There have been no material changes to the significant accounting policies and estimates described in Note 2.19 to our consolidated financial statements in the Annual Report.

 

Cautionary Statement Regarding Forward-Looking Statements

Certain statements in this management’s discussion and analysis are or may be forward-looking statements with respect to us, our industry and our business that involve substantial risks and uncertainties. All statements other than statements of historical fact contained in this management’s discussion and analysis, including statements regarding our future financial condition, results of operations and/or business achievements, including, without limitation, statements containing the words “believe,” “anticipate,” “expect,” “estimate,” “may,” “could,” “should,” “would,” “will,” “intend” and similar expressions are forward-looking statements. We have based these forward-looking statements largely on our current expectations and projections about future events and trends that we believe may affect our financial condition, results of operations, business strategy and financial needs. Such forward-looking statements involve unknown risks, uncertainties and other factors which may cause our actual results, financial condition, performance or achievements, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements.

Factors that might cause such a difference include, but are not limited to:

 

10

---

 

 

 

You should refer to “ITEM 3. Key information—D. Risk factors.” section of our Annual Report and under “Risk Factors” in any other periodic filings with the Securities and Exchange Commission for a discussion of important factors that may cause our actual results to differ materially from those expressed or implied by our forward-looking statements. As a result of these factors, we cannot assure you that the forward-looking statements in this

11

---

 

management’s discussion and analysis will prove to be accurate. Furthermore, if our forward-looking statements prove to be inaccurate, the inaccuracy may be material.

In light of the significant uncertainties in these forward-looking statements, you should not regard these statements as a representation or warranty by us or any other person that we will achieve our objectives and plans in any specified time frame or at all.

We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

In addition, statements that “we believe” and other similar statements reflect our belief and opinions on the relevant subject. These statements are based upon information available to us as of the date of this management’s discussion and analysis, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements.

 

 

12

---

Exhibit 99.3

 

Pharvaris N.V.

Unaudited Condensed Consolidated Interim Financial Statements

As of and for the three and nine months ended September 30, 2023

 

 

 

---

 

Contents

 

Unaudited condensed consolidated statements of Loss and Other Comprehensive Loss	3
Unaudited condensed consolidated statements of financial position	4
Unaudited condensed consolidated statements of changes in equity	5
Unaudited condensed consolidated statements of cash flows	6
Notes to the unaudited condensed consolidated interim financial statements	7

 

 

2

---

 

Unaudited condensed consolidated statements of loss and other comprehensive loss

 

				Three months ended September 30,						Nine months ended September 30,
				2023			2022			2023			2022
	Notes			€			€			€			€
Research and development expenses		3			(18,535,782	)		(14,088,845	)		(46,962,148	)		(41,324,971	)
General and administrative expenses		4			(7,665,484	)		(8,297,822	)		(22,770,510	)		(21,822,960	)
Total operating expenses					(26,201,266	)		(22,386,667	)		(69,732,658	)		(63,147,931	)
Finance income/(expense)		6			2,748,943			11,494,934			1,906,348			26,387,917
Loss before income tax					(23,452,323	)		(10,891,733	)		(67,826,310	)		(36,760,014	)
Income taxes		7			(146,273	)		2,403,929			(301,108	)		(375,888	)
Net Loss					(23,598,596	)		(8,487,804	)		(68,127,418	)		(37,135,902	)
Other comprehensive income (Loss)
Exchange gains/(losses) arising on translation of foreign operations					(2,623	)		208,615			(31,508	)		128,204
Total comprehensive loss attributable to:
Equity holders of the Company					(23,601,219	)		(8,279,189	)		(68,158,926	)		(37,007,698	)
Loss per share attributable to the equity holders of the Company during the periods
Basic and diluted loss per share:	19				(0.58	)		(0.25	)		(1.87	)		(1.11	)

 

The accompanying notes are an integral part of these unaudited condensed consolidated interim financial statements.

 

3

---

 

Unaudited condensed consolidated statements of financial position

 

						September 30, 2023				December 31, 2022
		Notes				€				€
Assets
Non-current assets
Property, plant and equipment			8				211,969				193,474
Right of use assets			9				283,988				432,965
Deferred tax assets			7				302,650				259,803
Current assets
Receivables			10				308,845				382,468
Other current assets			11				9,852,089				4,626,844
Cash and cash equivalents			12				158,358,730				161,837,429
Current tax receivable							21,154				—
Total assets							169,339,425				167,732,983
Equity and liabilities
Equity
Share capital			13				4,918,041				4,057,976
Share premium							354,631,449				289,177,197
Other reserves							26,180,298				20,169,459
Currency translation reserve							11,782				43,290
Accumulated loss							(232,612,994	)			(164,188,892	)
Total equity							153,128,576				149,259,030
Long term liabilities
Non-current lease liability			9				96,007				249,418
Current liabilities
Trade and other payables			14				4,434,246				6,685,080
Accrued liabilities			15				11,485,255				10,890,749
Current lease liability			9				195,341				187,404
Current tax payable							—				461,302
Total liabilities							16,210,849				18,473,953
Total equity and liabilities							169,339,425				167,732,983

 

The accompanying notes are an integral part of these unaudited condensed consolidated interim financial statements.

 

 

4

---

 

Unaudited condensed consolidated statements of changes in equity

For the nine months ended September 30, 2023 and September 30, 2022

 

 

						Share capital				Share premium				Other reserves				Currency translation reserve				Accumulated losses				Total Equity
		Notes				€				€				€				€				€				€
Balance at January 1, 2022							3,978,226				278,742,900				9,774,416				25,928				(87,568,401	)			204,953,069
Net Loss						—				—				—				—					(37,135,902	)			(37,135,902	)
Issue of share capital			13				70,572				9,464,901			—				—				—					9,535,473
Transaction costs on issue of shares						—					(307,710	)		—				—				—					(307,710	)
Currency translation reserve						—				—				—					128,204			—					128,204
Share-based payments			18			—				—					8,133,588			—				—					8,133,588
Settlement of share-based payments							5,731				561,481				(492,821	)			—				(209,636	)			(135,245	)
Balance at September 30, 2022							4,054,529				288,461,572				17,415,183				154,132				(124,913,939	)			185,171,477
Balance at January 1, 2023							4,057,976				289,177,197				20,169,459				43,290				(164,188,892	)			149,259,030
Net Loss							—				—				—				—				(68,127,418	)			(68,127,418	)
Issue of share capital			13				834,852				63,366,151				—				—				—				64,201,003
Transaction costs on issue of shares							—				(372,654	)			—				—				—				(372,654	)
Currency translation reserve							—				—				—				(31,508	)			—				(31,508	)
Settlement of share-based payments							25,213				2,460,755				(2,174,317	)			—				(296,684	)			14,967
Share-based payments			18				—				—				8,185,156				—				—				8,185,156
Balance at September 30, 2023							4,918,041				354,631,449				26,180,298				11,782				(232,612,994	)			153,128,576

 

The accompanying notes are an integral part of these unaudited condensed consolidated interim financial statements.

 

5

---

 

Unaudited condensed consolidated statements of cash flows

For the nine months ended September 30,

 

 

				2023				2022
		Notes		€				€
Operating activities
Loss before tax					(67,826,310	)			(36,760,014	)
Non-cash adjustments to reconcile loss before tax to net cash flows from operations:
Share-based payment expense		18			8,185,156				8,133,588
Depreciation expense		4			191,526				106,767
Net foreign exchange gain		6			(1,759,432	)			(26,492,975	)
Finance (income)/expense		6			(146,917	)			105,058
Changes in working capital:
Decrease in receivables					73,623				295,924
Increase in other current assets					(5,225,243	)			(2,192,198	)
(Decrease) increase trade and other payables					(2,250,834	)			4,605,286
Increase in accrued liabilities					237,109				5,787,859
Income taxes paid					(830,568	)			(200,041	)
Received (Paid) interest					111,694				(138,915	)
Net cash flows used in operating activities					(69,240,196	)			(46,749,661	)
Investing activities
Purchase of property, plant and equipment		8			(61,604	)			(100,657	)
Net cash flows used in investing activities					(61,604	)			(100,657	)
Financing activities
Proceeds from issue of shares		13			64,201,004				9,609,865
Transaction costs on issue of shares					(373,257	)			(726,367	)
Payment of principal portion of lease liabilities		9			(165,852	)			(73,320	)
Net cash flows provided by financing activities					63,661,895				8,810,178
Net decrease in cash and cash equivalents					(5,639,905	)			(38,040,140	)
Cash and cash equivalents at the beginning of the period					161,837,429				209,353,132
Effect of exchange rate changes					2,161,206				26,416,455
Cash and cash equivalents at the end of the period		12			158,358,730				197,729,447

 

The accompanying notes are an integral part of these unaudited condensed consolidated interim financial statements

6

---

 

Notes to the unaudited condensed consolidated interim financial statements

1. Corporate and Group information

This section provides general corporate and group information about Pharvaris N.V. and its subsidiaries.

1.1 Corporate information

Pharvaris N.V. was incorporated on September 30, 2015 and is based in Leiden, the Netherlands.

The Company’s registered office is located at Emmy Noetherweg 2, Leiden. It has been registered at the Chamber of Commerce under file number 64239411.

Pharvaris is a clinical-stage biopharmaceutical company focused on the development and commercialization of innovative therapies for rare diseases with significant unmet need, initially focused on angioedema and other bradykinin-mediated diseases.

The unaudited condensed consolidated interim financial statements of Pharvaris N.V. (the “Company” or “Pharvaris”) and its subsidiaries (collectively, “The Group”) as of September 30, 2023, and December 31, 2022, and for the three and nine months ended September 30, 2023 and 2022 were authorized for issue in accordance with a resolution of the directors on November 2, 2023.

1.2 Group information

Subsidiaries

The unaudited condensed consolidated interim financial statements of the Group include:

 

				Country of		% of equity interest as September 30,
Name		Legal seat		incorporation		2023		2022
Pharvaris Holdings B.V.		Leiden		The Netherlands		100%		100%
Pharvaris Netherlands B.V.		Leiden		The Netherlands		100%		100%
Pharvaris GmbH		Zug		Switzerland		100%		100%
Pharvaris, Inc.		Delaware		United States of America		100%		100%

The ultimate parent company

The ultimate parent company of the Group is Pharvaris N.V., which is based in the Netherlands.

 

 

 

2. Summary of significant accounting policies

2.1 Basis of preparation

The unaudited condensed consolidated interim financial statements have been prepared in accordance with IAS 34 Interim Financial Reporting as issued by the International Accounting Standards Board (IASB) and should be read in conjunction with the Group’s annual consolidated financial statements for the year ended December 31, 2022 (“last annual financial statements”). These unaudited condensed consolidated interim financial statements do not include all the information required for a complete set of financial statements prepared in accordance with IFRS as issued by the IASB.

However, selected explanatory notes are included to explain events and transactions that are significant to an understanding of the changes in the Group’s financial position and performance since the last annual financial statements.

The unaudited condensed consolidated interim financial statements have been prepared on a historical cost basis. Unless otherwise stated, the unaudited condensed consolidated interim financial statements are presented in euros and all values are rounded to the nearest EUR (€), except per share amounts.

 

2.2 Going concern

Pharvaris is a clinical-stage biopharmaceutical company focused on the development and commercialization of innovative therapies for rare diseases with significant unmet need, initially focused on angioedema and other bradykinin-mediated diseases. These therapies will need to go through clinical development trials to achieve regulatory approval for commercialization. Therefore, Pharvaris is incurring annual research and development and other operating costs, and has no revenues to date. As such, Pharvaris anticipates on-going negative operating cash flows for the foreseeable future before the Company has a product candidate ready for commercialization, if at all.

7

---

 

This makes the Group dependent on external capital sources, debt capital and equity capital. Historically, the Group has obtained financing primary through the offering of equity securities.

As of September 30, 2023 and December 31, 2022 the Group had cash and cash equivalents of €158.4 million and €161.8 million, respectively. The Group incurred net losses of €68.1 million in the nine months ended September 30, 2023 and €37.1 million in the same period in 2022 and negative operating cash flows of €69.2 million and €46.7 million in the nine months ended September 30, 2023 and 2022, respectively.

In June 2023, the Company sold a total of 6,951,340 ordinary shares, par value €0.12 per share, in a private placement at a purchase price of $10.07 per ordinary share. The sale generated total proceeds of approximately $70 million (€64.2 million).

The Group does not expect positive operating cash flows in the foreseeable future and remains dependent on additional financing to fund its research and development expenses, general and administrative expenses and financing costs. The Group believes that the available cash balances are sufficient to execute the Group’s operating plan and strategies and to meet the anticipated working capital requirements and settle all expected liabilities into the first quarter of 2025, which is at least twelve months from the issuance date of these unaudited interim financial statements. Accordingly, the unaudited interim financial statements have been prepared on a going concern basis.

The future viability of the Group is dependent on its ability to successfully develop and commercialize its products and its ability to raise additional capital to finance its operations. The Group will need to finance its operations through public or private securities offerings, debt financings or other sources, which may include licensing, collaborations or other strategic transactions or arrangements. Although the Group has been successful in raising capital in the past, there is no assurance that it will be successful in obtaining such additional financing on terms acceptable to the Group, if at all. If the Group is unable to obtain funding, the Group could be forced to delay, reduce, or eliminate some or all of its research and development programs for product candidates, product portfolio expansion or commercialization efforts, which could adversely affect its business prospects, or the Group may be unable to continue operations.

2.3 Use of judgements and estimates

In preparing these unaudited condensed consolidated interim financial statements, management has made judgements and estimates that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates.

The significant judgements made by management in applying the Group’s accounting policies and the key sources of estimation uncertainty were the same as those described in the last annual financial statements.

2.4 Change in significant accounting policies

The accounting policies applied in these unaudited condensed consolidated interim financial statements are the same as those applied in the consolidated financial statements for the year ended December 31, 2022.

3. Research and development expenses

 

		For the three months ended September 30,						For the nine months ended September 30,
		2023			2022			2023			2022
		€			€			€			€
Personnel expenses (Note 5)			(4,759,379	)		(3,692,003	)		(13,521,323	)		(9,282,210	)
Clinical expenses			(8,897,295	)		(8,037,012	)		(21,395,174	)		(21,778,622	)
Nonclinical expenses			(2,325,762	)		(862,643	)		(6,744,771	)		(2,695,561	)
Manufacturing costs			(2,490,477	)		(1,437,370	)		(5,133,990	)		(7,321,038	)
Intellectual Property costs			(62,869	)		(59,817	)		(166,890	)		(247,540	)
			(18,535,782	)		(14,088,845	)		(46,962,148	)		(41,324,971	)

 

Development expenses are currently not capitalized but are recorded in the unaudited condensed consolidated statements of profit or loss and other comprehensive income because the recognition criteria for capitalization are not met.

Clinical expenses include costs of conducting and managing our sponsored clinical trials, including clinical investigator cost, costs of clinical sites, and costs for CRO’s assisting with our clinical development programs.

Nonclinical expenses include costs of our outsourced discovery, preclinical and nonclinical development studies.

Manufacturing expenses include costs related to manufacturing of active pharmaceutical ingredients and manufacturing of the products used in our clinical trials and research and development activities.

8

---

 

4. General and administrative expenses

 

		For the three months ended September 30,						For the nine months ended September 30,
		2023			2022			2023			2022
		€			€			€			€
Personnel expenses (Note 5)			(3,529,687	)		(3,537,264	)		(10,265,614	)		(9,807,298	)
Consulting fees			(65,925	)		(246,269	)		(370,241	)		(679,080	)
Professional fees			(1,361,682	)		(1,379,416	)		(3,538,857	)		(3,174,586	)
Accounting, tax and auditing fees			(327,050	)		(444,057	)		(1,224,364	)		(1,038,714	)
Facilities, communication & office expenses			(1,577,375	)		(1,807,806	)		(4,487,982	)		(5,054,636	)
Travel expenses			(304,641	)		(379,369	)		(1,083,091	)		(783,569	)
Other expenses			(499,124	)		(503,641	)		(1,800,361	)		(1,285,077	)
			(7,665,484	)		(8,297,822	)		(22,770,510	)		(21,822,960	)

 

In 2022 and 2021 the Group entered into a number of short-term rental arrangements, the expenses are included in "Other expenses".

Depreciation expense in the nine months of 2023 was €191,526 (2022: €68,195), which related to property, plant and equipment and leases and is included in the 'Other expenses' line. For the third quarter of 2023 a total of €67,933 (2022: €38,572) depreciation charge was included in the 'Other expenses'.

5. Personnel expenses

 

		For the three months ended September 30,						For the nine months ended September 30,
		2023			2022			2023			2022
		€			€			€			€
Wages and salaries			(4,605,929	)		(3,647,977	)		(13,429,175	)		(9,493,153	)
Pension charges			(288,788	)		(205,053	)		(848,811	)		(560,782	)
Other social security charges			(509,007	)		(332,426	)		(1,323,795	)		(901,985	)
Share-based payments			(2,885,342	)		(3,043,811	)		(8,185,156	)		(8,133,588	)
			(8,289,066	)		(7,229,267	)		(23,786,937	)		(19,089,508	)

 

The average number of staff (in FTEs) employed by the Group in the nine months ended September 30, 2023 was 70 (2022: 56).

6. Finance income/(expense)

 

 

		For the three months ended September 30,						For the nine months ended September 30,
		2023			2022			2023			2022
		€			€			€			€
Foreign exchange differences			2,687,200			11,520,977			1,759,432			26,492,975
Interest (expense)/income over bank balances			66,576			(25,863	)		161,942			(104,380	)
Other finance expenses			(4,833	)		(180	)		(15,026	)		(678	)
			2,748,943			11,494,934			1,906,348			26,387,917

 

7. Income taxes

Income taxes are accounted for in line with IAS 34. The interim period is considered part of a larger financial year, where the income tax is recognized in each interim period based on the best estimate of the weighted average annual income tax rate expected for the full financial year. The estimated tax expenses are determined based on a full-year basis (P&L) and subsequently allocated using the expected full year effective tax rate. The discrete items are recognized in full in the interim period in which they emerge. In the total interim tax charge, no distinction is made between current and deferred tax expenses/ income.

 

 

9

---

 

		For the three months ended September 30,								For the nine months ended September 30,
		2023				2022				2023				2022
		€				€				€				€
Income tax expense			(146,273	)			2,403,929				(301,108	)			(375,888	)
Income tax expense			(146,273	)			2,403,929				(301,108	)			(375,888	)

 

The tax expense over the nine months ended September 30, 2023 and 2022 relates to the Company's U.S. and Dutch subsidiaries as the result of a cost-plus agreement between the Company's principal entity and the U.S. and the Dutch subsidiaries, resulting in an estimated taxable profit in the U.S. and the Netherlands.

Reconciliation of income tax benefit at statutory tax rate and the income tax expense as reported in the unaudited condensed consolidated statement of profit or loss and other comprehensive income is as follows:

 

		For the three months ended September 30,						For the nine months ended  September 30,
		2023			2022			2023			2022
		€			€			€			€
Loss before income tax			(23,452,323	)		(10,891,733	)		(67,826,310	)		(36,760,014	)
Income tax against statutory rate in The Netherlands (25.8%)			6,050,699			2,810,068			17,499,188			9,484,084
Effect of tax rates in other countries			(3,264,971	)		613,514			(9,645,509	)		(5,403,944	)
Current period losses for which no deferred tax asset has been recognized			(2,830,006	)		(906,766	)		(7,819,144	)		(4,153,081	)
Non-deductible expenses			(101,995	)		(112,887	)		(335,643	)		(302,947	)
Total tax (charge)/credit			(146,273	)		2,403,929			(301,108	)		(375,888	)

 

Income tax expense is recognized based on management’s estimate of the weighted average effective annual income tax rate expected for the full financial year, bearing in mind the impact of non-discrete and discrete items. Non discrete items in the income tax expense are recognized based on management’s estimate of the weighted average effective annual income tax rate expected for the full financial year. Discrete items in the income tax expense are recognized at the applicable statutory tax rate.

The (estimated) average annual tax rate used for the nine months ended September 30, 2023 is (0.48)%, compared to (1.02)% for the nine months ended September 30, 2022. The estimated effective tax rate includes significant discrete tax effects relating to the tax impact (after utilization of DTAs previously not recognized) on foreign exchange gains. As foreign exchange results cannot be reliably forecasted, the effective tax rate at year end may deviate from the currently reflected estimated effective tax rate.

The current period losses for which no deferred tax asset has been recognized mainly consists of the unrecognized tax effect of losses incurred in Switzerland. The differences in the overseas tax rates are due to the lower tax rate in Switzerland and the higher tax rate in the U.S. compared to the statutory income tax rate in the Netherlands.

Pharvaris N.V. is the head of the fiscal unity including Pharvaris Netherlands B.V. and Pharvaris Holdings B.V.

Deferred tax

Deferred taxes have been recognized to the extent that management concludes that there is sufficient probability as per IAS 12 that there will be future taxable profits available in the foreseeable future against which the unused tax losses and deductible temporary differences can be utilized.

Deferred tax assets relating to losses carried forward have not been recognized, and deferred tax assets on deductible temporary differences in excess of deferred tax liabilities on taxable temporary differences have not been recognized in the consolidated statement of profit and loss and other comprehensive income for the Dutch fiscal unity.

8. Property, plant and equipment

10

---

 

 

		September 30, 2023				December 31, 2022
Net book value		€				€
Balance at beginning of period			193,474				108,098
Additions			61,603				124,296
Depreciation expenses			(43,108	)			(38,920	)
Balance at end of period			211,969				193,474
		September 30, 2023				December 31, 2022
Cumulative depreciation		€				€
Balance at beginning of period			(65,526	)			(26,606	)
Depreciation			(43,108	)			(38,920	)
Balance at end of period			(108,634	)			(65,526	)
		September 30, 2023				December 31, 2022
Cumulative Costs		€				€
Balance at beginning of period			259,000				134,704
Additions			61,603				124,296
Balance at end of period			320,603				259,000

 

During the nine months ended September 30, 2023, the Group acquired assets with a cost of €61,603 (2022: €100,657). The acquisitions were mainly related to equipment, tools and installations.

Depreciation expense related to property and equipment for the three and nine months ended September 30, 2023 was €28,947 and €43,108, respectively, and for the three and nine months ended September 30, 2022 was €10,738 and €26,730, respectively.

9. Leases

The following table provides information about the Group’s right-of-use assets:

 

		September 30, 2023				December 31, 2022
		€				€
Balance at beginning of period			432,965				243,251
Addition			—				303,734
Depreciation charges			(148,524	)			(114,020	)
Impact of transaction of foreign currency			(453	)			—
Balance at end of period			283,988				432,965

 

The following table provides information about the Group’s lease liabilities at September 30, 2023:

 

		September 30, 2023				December 31, 2022
		€				€
Office leases			(291,348	)			(436,822	)
Total lease liability			(291,348	)			(436,822	)
Current portion			(195,341	)			(187,404	)
Non-current portion			(96,007	)			(249,418	)

Office leases consist of a lease agreement entered into on June 1, 2021 for office space in Lexington, United States of America, and a lease entered into on December 1, 2022, for offices in Leiden, The Netherlands. Both leases have terms of three years and were assessed as being long-term.

The average incremental borrowing rate applied to the lease liabilities was 7.77% during the nine months ended September 30, 2023 (2022: 3.12%). Cash outflows related to leases during the three and nine months ended

11

---

 

September 30, 2023, were €81,945 and €187,629, respectively, and for the three and nine months ended September 30, 2022, were €34,892 and €73,320, respectively.

10. Receivables

 

		September 30, 2023				December 31, 2022
		€				€
VAT receivables			308,845				382,468
			308,845				382,468

 

11. Other current assets

 

		September 30, 2023				December 31, 2022
		€				€
Prepayments			8,992,217				4,044,255
Other assets			859,872				582,589
			9,852,089				4,626,844

 

Prepayments mainly relate to prepaid insurance, sign-on bonus to personnel, prepaid R&D expenses and rent.

Other assets mainly consist of deferred transaction costs related to the Group’s in-process equity financing. The Company defers the transaction costs related to any in-process financing. Upon recognition of the equity instruments, the related transaction costs are deducted from share premium.

12. Cash and cash equivalents

Cash and cash equivalents comprise of cash in bank and are not subject to any restriction.

 

13. Equity

In June 30, 2023, the Company’s authorized share capital amounted to €14,100,000 divided into 58,750,000 ordinary shares and 58,750,000 preferred shares, each with a nominal value of €0.12. As of September 30, 2023 and 2022, the total number of ordinary shares issued was 40,983,675 and 33,787,740, respectively. As of December 31, 2022, the total number of issued shares was 33,816,459.

As of September 30, 2023, and 2022, the issued share capital totaled €4,918,041 and €4,054,529, respectively. On December 31, 2022, the issued share capital totaled €4,057,976.

Ordinary shares hold the right to one vote per share.

In March 2022, the Company filed a Form F-3 Registration Statement and prospectus with the Securities and Exchange Commission relating to an at-the-market program providing for the sales from time to time of up to $75 million of its ordinary shares pursuant to a Sales Agreement with Leerink Partners. As of September 30, 2023, the Company has sold a total of 593,927 ordinary shares under the sales agreement generating total net proceeds of $9,826,427 (€9.3 million), after deducting $303,910 (€311,700), which was payable to Leerink Partners as commission in respect of such sales.

In June 2023, the Company sold a total of 6,951,340 ordinary shares, par value €0.12 per share, in a private placement at a purchase price of $10.07 per ordinary share. The sale generated total proceeds of approximately $70 million (€64.2 million).

 

Issued shares

 

		September 30, 2023				December 31, 2022
		Number of shares				Number of shares
Ordinary shares			40,983,675				33,816,459
			40,983,675				33,816,459

 

12

---

 

14. Trade and other payables

 

		September 30, 2023				December 31, 2022
		€				€
Trade payables			3,605,346				5,979,168
Tax and social security liabilities			828,900				705,912
			4,434,246				6,685,080

 

15. Accrued liabilities

 

		September 30, 2023				December 31, 2022
		€				€
Consulting, professional and audit liability			425,405				642,662
Clinical accrued liabilities			4,162,560				3,824,468
Manufacturing accrued liabilities			1,955,124				2,285,584
Pre-clinical accrued liabilities			514,104				885,030
Personnel related accruals			3,950,045				2,971,068
Other accrued liabilities			478,017				281,937
			11,485,255				10,890,749

 

16. Risk management activities

The Group’s risk management activities are the same as disclosed in Note 17 of the consolidated financial statements for the year ended December 31, 2022.

17. Fair values

Fair values of cash and cash equivalents, trade receivables, trade payables, and other current liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments.

18. Share-based payments

In 2016, the Company implemented an Equity Incentive Plan (the “Plan”) in order to advance the interests of the Company’s shareholders by enhancing the Company’s ability to attract, retain and motivate persons who are expected to make important contributions to the Company and by providing such persons with performance-based incentives that are intended to better align the interests of such persons with those of the Company’s shareholders. This plan has been superseded by the 2021 long term incentive plan (“LTIP”).

Set out below is an overview of changes in the Stock Options and Restricted Stock Units (“RSUs”) during the nine months ended September 30, 2023.

 

		Stock Options								RSUs
		Outstanding options				Weighted average exercise price				Outstanding RSUs
						$
Outstanding January 1, 2023			3,181,538				10.95				795,694
Granted			846,000				8.05				500,930
Exercised			(129,114	)			17.82				(112,338	)
Forfeited			(62,315	)			11.45				(69,318	)
Outstanding September 30, 2023			3,836,109				10.58				1,114,968

 

On April 6, 2023, a total of 846,000 stock options were granted to members of the Board of Directors and Key management with an exercise price of $8.05 per share with a final exercise date of April 5, 2033, unless forfeited or exercised on an earlier date. 25% of the aggregate number of share options shall vest on April 5, 2024 and thereafter 1/48th of the aggregate number of share options shall vest on each subsequent monthly anniversary of the vesting commencement date until either the option is fully vested, or the option holders’ continuous service terminates.

13

---

 

As of September 30, 2023, a total number of 2,116,819 stock options are exercisable (September 30, 2022: 1,453,439).

During the nine months ended September 30, 2023 a total of 500,930 RSUs were granted to employees that joined the Group in the same period and to existing employees. The RSUs shall vest equally over a four-year period on each of the four anniversaries of the vesting start date until either the RSUs are fully vested or the RSUs holders’ continuous service terminates.

The fair value of the RSUs is determined based on the share value per ordinary share at the grant date (or at the first trading day after the grant date if the Nasdaq Stock Exchange is not open on this date). The grant dates and share closing price were February 1, 2023 ($9.50), March 1, 2023 ($8.29), April 1, 2023 ($7.82), April 6, 2023 ($8.05), May 1, 2023 ($9.25), July 1, 2023 ($14.84), July 14, 2023 ($15.61), August 1, 2023 ($17.05) and September 1, 2023 ($21.32), respectively.

For the nine months ended September 30, 2023, the Group recognized €8,185,156 of share-based payment expense in the unaudited condensed consolidated statement of income or loss and other comprehensive income (nine months ended September 30, 2022: €8,133,588). For the three months ended September 30, 2023, the Group recognized €2,885,342 of share-based payment expense in the unaudited condensed consolidated statement of income or loss and other comprehensive income (three months ended September 30, 2022: €3,043,811).

The inputs and outputs used in the measurement of the fair value per option at each grant/ measurement date using the Black-Scholes formula (including the related number of options and the fair value of the options) were as follows:

 

		April 6, 2023
Number of options			846,000
Fair value of the options		€	5.92
Fair value of the ordinary shares		€	7.38
Exercise price		€	7.38
Expected volatility (%)			100	%
Expected life (years)			6.1
Risk-free interest rate (%)			3.4	%
Expected dividend yield			—

 

19. Basic and diluted loss per share

Basic and diluted loss per share is calculated by dividing the loss attributable to equity holders of the Company by the weighted average number of issued and outstanding ordinary shares during the three and nine months ended September 30, 2023 and 2022.

All of the Company’s potential dilutive securities have been excluded from the computation of diluted net loss per share attributable to ordinary stockholders as the effect of including them would be antidilutive.

 

		For the three months ended September 30,							For the nine months ended September 30,
		2023				2022			2023			2022
		€				€			€			€
Net Loss			(23,598,596	)			(8,487,804	)		(68,127,418	)		(37,135,902	)
Weighted average number of ordinary shares outstanding			40,909,957				33,785,026			36,455,922			33,508,682
Basic and diluted loss per share			(0.58	)			(0.25	)		(1.87	)		(1.11	)

 

20. Commitments and Contingencies

Claims

There are no material claims known to management related to the activities of the Group.

Commitments

The Group’s contractual obligations and commitments as of September 30, 2023 amounted to €42.0 million, (December 31, 2022: €28 million) primarily related to research and development commitments.

The Group had no contingent liabilities and no contingent assets as of September 30, 2023 and 2022.

14

---

 

21. Related parties

Note 1.2 provides information about the Group’s structure, including details of the subsidiaries and the holding company. The following provides the total amount of transactions that have been entered into with related parties for the relevant financial period.

Key management personnel compensation

 

		For the three months ended September 30,						For the nine months ended September 30,
		2023			2022			2023			2022
		€			€			€			€
Short term employee benefits			1,111,573			829,616			3,287,755			2,350,022
Post employee benefits			49,582			30,228			143,103			108,787
Share-based payments			1,379,966			1,780,394			4,604,754			3,955,492
Total			2,541,121			2,640,238			8,035,612			6,414,301

 

A total number of 846,000 stock options and 15,000 RSUs are granted to key management during the nine months ended September 30, 2023. Refer to Note 18 for disclosures on the share-based payments.

The Group engages several management entities for the purpose of providing key management services to the Group. The aggregate value of transactions related to key management personnel, or entities which they control were €225,699 and €295,941 in the three months ended September 30, 2023 and 2022, respectively. The aggregate value of transactions related to key management personnel, or entities which they control were €769,565 and €834,685 in the nine months ended September 30, 2023 and 2022, respectively.

The outstanding balances payable to key management personnel, or entities which they control, as per September 30, 2023 and December 31, 2022 were €1,040,445 and €1,162,963, respectively.

22. Events after the reporting period

 

The Company has evaluated subsequent events through November 2, 2023, which is the date the condensed consolidated interim financial statements were authorized for issuance, and did not identify any significant event after reporting period that needs to be disclosed.

 

 

15

---

 

Signatories to the unaudited condensed consolidated interim financial statements

Leiden, November 2, 2023

 

 

Pharvaris N.V.

Board of Directors

 

 

 

 

B.A.E. Modig	R.H. Glassman

 

 

 

 

E. Björk	J.G.C.P. Schikan

 

 

 

 

D.P. Meeker	V. Monges

 

 

 

 

 

 

 

16

---