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Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark one)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2022

Or

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                 to               

Commission file number 001-37558

Nabriva Therapeutics plc

(Exact name of registrant as specified in its charter)

Ireland

Not applicable

(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)

25-28 North Wall Quay

IFSC, Dublin 1, Ireland

Not applicable

(Address of principal executive offices)

(Zip Code)

+353 1 649 2000

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

    

Trading Symbol (s)

    

Name of each exchange
on which registered

Ordinary Shares, nominal value $0.01 per share

NBRV

The Nasdaq Capital Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes    No  

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes    No  

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. 

Indicate by check mark whether the registrant is a shell company (as defined in Rule12b-2 of the Exchange Act). Yes    No  

As of October 31, 2022, the registrant had 3,063,947 ordinary shares outstanding.

Table of Contents

NABRIVA THERAPEUTICS plc

INDEX TO REPORT ON FORM 10-Q

Page

PART I — FINANCIAL INFORMATION

Item 1:

Financial Statements

7

Consolidated Balance Sheets as of September 30, 2022 and December 31, 2021 (unaudited)

7

Consolidated Statements of Operations for the three months and nine months ended September 30, 2022 and 2021 (unaudited)

8

Consolidated Statements of Changes in Stockholders’ Equity for the three months and nine months ended September 30, 2022 and 2021 (unaudited)

9

Consolidated Statements of Cash Flows for the nine months ended September 30, 2022 and 2021 (unaudited)

10

Notes to the Unaudited Consolidated Financial Statements

11

Item 2:

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

27

Item 3:

Quantitative and Qualitative Disclosures About Market Risk

40

Item 4:

Controls and Procedures

41

PART II — OTHER INFORMATION

Item 1:

Legal Proceedings

42

Item 1A:

Risk Factors

42

Item 2:

Unregistered Sales of Equity Securities and Use of Proceeds

107

Item 3:

Defaults Upon Senior Securities

108

Item 4:

Mine Safety Disclosures

108

Item 5:

Other Information

108

Item 6:

Exhibits

109

SIGNATURES

110

1

Table of Contents

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements that involve substantial risks and uncertainties. All statements contained in this Quarterly Report, other than statements of historical fact, including statements regarding our strategy, future operations, future financial position, future revenues, projected costs, prospects, plans, and objectives of management, are forward-looking statements. The words “anticipate,” “around,” “believe,” “estimate,” “expect,” “intend,” “may,” “plan,” “predict,” “project,” “target,” “potential,” “will,” “would,” “could,” “should,” “continue,” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. The forward-looking statements in this report include, among other things, statements about:

our ability to successfully commercialize SIVEXTRO and realize value from our agreement with Merck & Co., Inc.;
our ability to successfully commercialize XENLETA (lefamulin) for the treatment of community-acquired bacterial pneumonia, or CABP, including the availability of and ease of access to XENLETA through hospital formularies, managed care plans and major U.S. specialty distributors;
our expectations regarding how far into the future our cash on hand and anticipated revenues from product sales will fund our ongoing operations and the continued availability and cost of capital to sustain our operations on a longer term basis or at all;
our ability to adequately secure additional financing;
our ability to meet the minimum listing requirements for listing on The Nasdaq Capital Market;
our sales, marketing and distribution capabilities and strategy;
the potential extent of revenues from future sales of SIVEXTRO, XENLETA and/or CONTEPO, if approved;
our ability to build, manage and maintain a sales force for the commercialization of SIVEXTRO, XENLETA and CONTEPO, if approved;
our ability to resolve the matters set forth in the Complete Response Letter we received from the U.S. Food and Drug Administration, or FDA, in connection with our New Drug Application, or NDA, for CONTEPO for the treatment of complicated urinary tract infections, or cUTIs, including acute pyelonephritis;
the timing of and our ability to resubmit the NDA for CONTEPO for the treatment of cUTIs and potential marketing approval of CONTEPO and other product candidates, including the completion of any post marketing requirements with respect to XENLETA for CABP and any other product candidates we may develop or obtain;
our plans to pursue development of other product candidates including XENLETA for the treatment of infections in patients with cystic fibrosis;
our expectations regarding our strategy to expand our product pipeline through opportunistically in-licensing or acquiring the rights to complementary products, product candidates and technologies for the treatment of a range of infectious diseases or other products, including additional community products;
our ability to comply with the restrictive covenants under our debt facility with Hercules Capital, Inc., or Hercules, including but not limited to the ability to maintain minimum cash balance requirements;

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our ability to satisfy interest and principal payments under our debt facility with Hercules;
our ability to successfully maintain inventory levels to satisfy product demand, as well as limit the unrealizable value of inventory based on historical usage, known trends, inventory age and market conditions;
our ability to satisfy payments and comply with the terms of the Hovione Supply Agreement for the long-term commercial supply of the active pharmaceutical ingredient for XENLETA;
our expectations about the impact of the COVID-19 pandemic on our business operations, ongoing clinical trials and regulatory matters, including the ability of regulatory authorities to operate;
the uncertainties inherent in the initiation and conduct of clinical trials, availability and timing of data from clinical trials, and whether results of early clinical trials or preclinical studies in different disease indications will be indicative of the results of ongoing or future trials;
our plans and the related cost expectations to pursue development of XENLETA for additional indications other than CABP, and of CONTEPO for additional indications other than cUTI;
the future development and commercialization of XENLETA in the greater China region,Canada and Eastern Europe;
our expectations with respect to milestone payments pursuant to the Agreement and Plan of Merger, dated July 23, 2018, and expectations with respect to potential advantages of CONTEPO or any other product candidate that we acquired in connection with the acquisition of Zavante Therapeutics, Inc., or the Acquisition;
our ability to establish and maintain arrangements for manufacture of our product candidates;
the potential advantages of SIVEXTRO, XENLETA, CONTEPO, and our other product candidates;
our estimates regarding the market opportunities for SIVEXTRO, XENLETA, CONTEPO, and our other product candidates;
the rate and degree of market acceptance and clinical benefit of SIVEXTRO for acute bacterial skin and skin structure infections, XENLETA for CABP, CONTEPO for cUTI and our other product candidates, if approved;
our ability to establish and maintain collaborations including additional licensing agreements for XENLETA outside the United States, Canada, the greater China region, Bulgaria, Croatia, Czechia, Greece, Hungary, Poland, Romania, Slovakia and Slovenia;
the potential benefits under our license agreements with Sumitomo Pharmaceuticals (Suzhou), or the China Region License Agreement, with Sunovion Pharmaceuticals Canada Inc., or the Sunovion License Agreement, and with Er-Kim Pharmaceuticals, or the Er-Kim License Agreement;
our future intellectual property position;
our ability to maintain the level of our expenses consistent with our internal budgets and forecasts;
the demand for securities of pharmaceutical and biotechnology companies in general and our ordinary shares in particular;

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competitive factors;
risks of relying on external parties such as contract manufacturing and sales organizations;
compliance with current or prospective governmental regulation;
general economic and market conditions;
our ability to attract and retain qualified employees and key personnel;
our business and business relationships, including with employees and suppliers;
our ability to satisfy milestone, royalty and transaction revenue payments pursuant to the Stock Purchase Agreement between our wholly owned subsidiary Zavante Therapeutics, Inc. and SG Pharmaceuticals, Inc.; and
other risks and uncertainties, including those described in the ‘‘Risk Factors’’ section of this Quarterly Report on Form 10-Q.

We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements. Actual results or events could differ materially from the plans, intentions and expectations disclosed in the forward-looking statements we make.

You should refer to the “Risk Factor Summary” and “Risk Factors” sections of this Quarterly Report on Form 10-Q for a discussion of important factors that we believe could cause actual results or events to differ materially from the forward-looking statements that we make. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures or investments we may make. We do not assume any obligation to update any forward-looking statements, except as required by applicable law.

Throughout this Quarterly Report on Form 10-Q, unless the context requires otherwise, all references to “Nabriva,” “the Company,” “we,” “our,” “us” or similar terms refer to Nabriva Therapeutics plc, together with its consolidated subsidiaries.

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RISK FACTOR SUMMARY

Our business is subject to a number of risks of which you should be aware before making an investment decision. Below we summarize what we believe are the principal risk factors but these risks are not the only ones we face, and you should carefully review and consider the full discussion of our risk factors in the “Risk Factors” in Part II, Item 1A, together with the other information in this Quarterly Report.

We depend heavily on the success of SIVEXTRO, XENLETA and CONTEPO. The U.S. Food and Drug Administration, or FDA, has approved SIVEXTRO for oral and intravenous use by adults and adolescents for the treatment of acute bacterial skin and skin structure infections, or ABSSSI, and XENLETA for oral and intravenous use for the treatment of community-acquired bacterial pneumonia, or CABP. CONTEPO is being developed for complicated urinary tract infections, or cUTI. If we are unable to obtain marketing approval for CONTEPO, or if we fail in our commercialization efforts for SIVEXTRO and/or XENLETA, or experience significant delays in doing so, our business will be materially harmed and the value of our company may be depressed, which could impair our ability to raise capital or continue our operations. A decline in the value of our company could also cause our shareholders to lose all or part of their investment.
We have incurred significant losses since our inception and anticipate that we will incur losses for at least the next several years and may never generate profits from operations or maintain profitability.
We will need substantial additional funding. If we are unable to raise capital when needed or on acceptable terms, we could be forced to delay, reduce or eliminate our product development programs or commercialization efforts or pursue strategic transactions. If we are unable to raise capital when needed or enter into a strategic transaction, then we may be required to cease operations, which could cause our shareholders to lose all or part of their investment.
Our level of indebtedness and debt service obligations could adversely affect our financial condition and may make it more difficult for us to fund our operations. We may not have cash available to us in an amount sufficient to enable us to make interest or principal payments on our indebtedness when due or to comply with minimum cash balance requirements.
SIVEXTRO, XENLETA and any other product candidate that receives marketing approval may fail to achieve the degree of market acceptance by physicians, patients, third-party payors and others in the medical community necessary for commercial success and the market opportunity for such products and product candidates, if approved, may be smaller than we estimate.
We have entered into a Sales Promotion and Distribution Agreement with Merck & Co. related to the promotion, distribution and sale of SIVEXTRO. If our collaboration with Merck is not successful, we may incur significant expenses related to the distribution of SIVEXTRO without realizing adequate value from the agreement.
We have entered into and may enter into additional collaborations with third parties for the development or commercialization of XENLETA, CONTEPO and our other product candidates. If those collaborations are not successful, we may not be able to capitalize on the market potential of these products and product candidates.
If we are unable to obtain and maintain patent protection for our technology, products and product candidates, or if the scope of the patent protection is not sufficiently broad, our competitors could develop and commercialize technology, products and product candidates similar or identical to ours, and our ability to successfully commercialize our technology, products and product candidates may be adversely affected.

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Business interruptions resulting from the SARS-CoV-2 infection causing COVID-19 outbreak or similar public health crises have caused and could continue to cause a disruption of the commercialization of our products and the development of our product candidates and adversely impact our business.
If clinical trials of XENLETA, CONTEPO or any of our other product candidates fail to demonstrate safety and efficacy to the satisfaction of the FDA, regulatory authorities in the European Union, or other regulatory authorities or do not otherwise produce favorable results, we may incur additional costs or experience delays in completing, or ultimately be unable to complete, the development and commercialization of XENLETA, CONTEPO or any other product candidate.
If we experience delays or difficulties in the enrollment of patients in our clinical trials, our receipt of necessary marketing approvals could be delayed or prevented.
If serious adverse or undesirable side effects are identified in SIVEXTRO, XENLETA, or CONTEPO or any other product candidate that we develop or following their approval and commercialization, we may need to modify, abandon or limit our development or marketing of that product or product candidate.
We are a “smaller reporting company”, and the reduced disclosure requirements applicable to smaller reporting companies may make our ordinary shares less attractive to investors.
The rights of our shareholders may differ from the rights typically offered to shareholders of a U.S. corporation. We are incorporated as a public limited company under Irish law.
The intended efficiency of our corporate structure depends on the application of the tax laws and regulations in the countries where we operate, and we may have exposure to additional tax liabilities or our effective tax rate could change, which could have a material impact on our results of operations and financial position.
U.S. persons who own 10 percent or more of our shares may be subject to U.S. federal income taxation on certain of our foreign subsidiaries’ income even if such income is not distributed to such U.S. persons.
A transfer of our ordinary shares, other than a transfer effected by means of the transfer of book-entry interests in the Depository Trust Company, may be subject to Irish stamp duty.
We may be classified as a passive foreign investment company for one or more of our taxable years, which may result in adverse U.S. federal income tax consequence to U.S. holders.

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PART I

ITEM 1.  FINANCIAL STATEMENTS

NABRIVA THERAPEUTICS plc

Consolidated Balance Sheets (unaudited)

As of

As of

(in thousands, except share data)

    

September 30, 2022

December 31, 2021

Assets

 

  

 

  

Current assets:

 

  

 

  

Cash and cash equivalents

$

14,647

$

47,659

Restricted cash

121

175

Short-term investments

 

 

16

Accounts receivable, net and other receivables

12,388

12,751

Inventory

17,333

14,509

Prepaid expenses

 

3,074

 

5,155

Total current assets

 

47,563

 

80,265

Property and equipment, net

 

293

 

233

Intangible assets, net

 

7

 

31

Other non-current assets

 

377

 

380

Total assets

$

48,240

$

80,909

Liabilities and stockholders´ equity

 

 

Current liabilities:

 

 

Current portion of long-term debt

$

5,733

$

3,765

Accounts payable

3,895

4,372

Accrued expense and other current liabilities

 

12,012

 

13,829

Deferred revenue

 

 

374

Total current liabilities

 

21,640

 

22,340

Non-current liabilities:

Long-term debt

399

4,265

Other non-current liabilities

 

578

 

954

Total non-current liabilities

977

5,219

Total liabilities

22,617

27,559

Commitments and contingencies (Note 12)

 

 

Stockholders’ equity:

 

 

Ordinary shares, nominal value $0.01, 12,000,000 ordinary shares authorized at September 30, 2022; 3,021,368 and 2,268,612 issued and outstanding at September 30, 2022 and December 31, 2021, respectively

30

23

Preferred shares, nominal value $0.01, 100,000,000 shares authorized at September 30, 2022; None issued and outstanding

Additional paid in capital

 

655,649

 

648,976

Accumulated other comprehensive income

 

27

 

27

Accumulated deficit

 

(630,083)

 

(595,676)

Total stockholders’ equity

25,623

 

53,350

Total liabilities and stockholders’ equity

$

48,240

$

80,909

The accompanying notes form an integral part of these consolidated financial statements.

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NABRIVA THERAPEUTICS plc

Consolidated Statements of Operations (unaudited)

Three Months Ended

Nine Months Ended

September 30, 

September 30, 

(in thousands, except share and per share data)

    

2022

    

2021

    

2022

    

2021

Revenues:

 

  

 

  

 

  

 

  

Product revenue, net

$

8,643

$

7,858

$

24,363

$

14,928

Collaboration revenue

141

562

866

3,377

Research premium and grant revenue

369

442

1,135

1,329

Total revenues

9,153

8,862

26,364

19,634

Operating expenses:

 

 

 

 

Cost of revenues

(4,416)

(4,199)

(12,232)

(7,882)

Research and development expenses

(4,032)

(3,221)

(11,637)

(10,239)

Selling, general and administrative expenses

 

(11,907)

 

(12,256)

 

(35,654)

 

(37,157)

Total operating expenses

(20,355)

(19,676)

(59,523)

(55,278)

Loss from operations

(11,202)

(10,814)

(33,159)

(35,644)

Other income (expense):

 

 

 

 

Other income, net

 

354

 

131

 

570

 

479

Interest expense, net

 

(146)

 

(221)

 

(559)

 

(678)

Loss before income taxes

(10,994)

(10,904)

(33,148)

(35,843)

Income tax benefit (expense)

 

(520)

 

252

 

(1,259)

 

(544)

Net loss

$

(11,514)

$

(10,652)

$

(34,407)

$

(36,387)

Loss per share

    

    

    

    

Basic and diluted loss per share

$

(4.21)

$

(5.27)

$

(13.55)

$

(23.17)

Weighted average number of shares:

 

 

 

 

Basic and diluted

 

2,732,749

 

2,021,070

 

2,539,408

 

1,570,389

The accompanying notes form an integral part of these consolidated financial statements.

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NABRIVA THERAPEUTICS plc

Consolidated Statements of Changes in Stockholders’ Equity (unaudited)

Accumulated

Additional

other

Total

Ordinary shares

paid in

comprehensive

Accumulated

stockholders’

(in thousands)

Number of shares

    

Amount

    

capital

    

income

    

deficit

    

equity

January 1, 2021

843

$

8

$

579,326

$

27

$

(546,226)

$

33,135

Issuance of ordinary shares

 

572

 

6

37,234

 

 

37,240

Shares issued in connection with the vesting of restricted share units

2

1

1

Equity transaction costs

 

 

(2,325)

 

 

(2,325)

Stock-based compensation expense

 

 

921

 

 

921

Net loss

 

 

 

 

(13,981)

(13,981)

March 31, 2021

 

1,417

14

615,157

27

(560,207)

54,991

Issuance of ordinary shares

 

573

6

26,133

26,139

Equity transaction costs

(992)

(992)

Stock-based compensation expense

817

817

Net loss

(11,754)

(11,754)

June 30, 2021

1,990

20

641,115

27

(571,961)

69,201

Issuance of ordinary shares

157

2

4,302

4,304

Shares issued in connection with the vesting of restricted stock units

1

1

1

Equity transaction costs

25

(343)

(343)

Stock-based compensation expense

779

779

Net loss

(10,652)

(10,652)

September 30, 2021

2,173

$

22

$

645,854

$

27

$

(582,613)

$

63,290

Accumulated

Additional

other

Total

Ordinary shares

paid in

comprehensive

Accumulated

stockholders’

(in thousands)

    

Number of shares

    

Amount

    

capital

    

income

    

deficit

    

equity

January 1, 2022

2,269

$

23

$

648,976

$

27

$

(595,676)

$

53,350

Issuance of ordinary shares

 

198

2

2,219

2,221

Shares issued in connection with the vesting of restricted share units

3

Equity transaction costs

 

(127)

(127)

Stock-based compensation expense

 

1,000

1,000

Net loss

 

(11,819)

(11,819)

March 31, 2022

 

2,470

25

652,068

27

(607,495)

44,625

Issuance of ordinary shares

114

1

817

818

Shares issued in connection with the vesting of restricted share units

1

1

Equity transaction costs

(82)

(82)

Stock-based compensation expense

317

317

Net loss

(11,074)

(11,074)

June 30, 2022

2,584

26

653,121

27

(618,569)

34,605

Issuance of ordinary shares

432

4

2,161

2,165

Shares issued in connection with the vesting of restricted stock units

5

Equity transaction costs

(82)

(82)

Stock-based compensation expense

449

449

Net loss

(11,514)

(11,514)

September 30, 2022

3,021

$

30

$

655,649

$

27

$

(630,083)

$

25,623

The accompanying notes form an integral part of these consolidated financial statements.

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NABRIVA THERAPEUTICS plc

Consolidated Statements of Cash Flows (unaudited)

Nine Months Ended September 30, 

(in thousands)

    

2022

2021

Cash flows from operating activities

  

Net loss

$

(34,407)

$

(36,387)

Adjustments to reconcile net loss to net cash used in operating activities:

 

Non-cash other income (expense), net

 

(3)

77

Non-cash interest income

 

(7)

Non-cash interest expense

 

215

310

Depreciation and amortization expense

 

192

270

Amortization of right-of-use assets

281

Stock-based compensation

 

1,832

2517

Other, net

 

34

14

Changes in operating assets and liabilities:

 

(Increase) decrease in other non-current assets

 

3

(10)

(Increase) decrease in accounts receivable, net and other receivables and prepaid expenses

 

2,444

(10,852)

Increase in inventory

(2,824)

(9,758)

Decrease in accounts payable

 

(443)

(1,301)

Increase (decrease) in accrued expenses and other liabilities

 

(1,920)

1,980

Decrease in deferred revenue

(374)

(375)

Increase (decrease) in other non-current liabilities

 

30

(205)

Increase in income tax liabilities

 

142

Net cash used in operating activities

 

(35,086)

(53,439)

Cash flows from investing activities

 

Purchases of equipment and intangible assets

 

(202)

(17)

Changes in restricted cash

(54)

(52)

Net cash used in investing activities

 

(256)

(69)

Cash flows from financing activities

 

Proceeds from issuance of common stock and warrants

2,123

25,462

Proceeds from at-the-market facility

3,080

42,280

Repayments of warrants

(406)

Repayments of long-term borrowings

 

(1,923)

Equity transaction costs

 

(364)

(3,514)

Net cash provided by financing activities

 

2,510

64,228

Effects of exchange rate changes on the balance of cash held in foreign currencies

 

(234)

(136)

Net increase/(decrease) in cash, cash equivalents and restricted cash

 

(33,066)

10,584

Cash, cash equivalents, and restricted cash at beginning of period

 

47,834

41,590

Cash, cash equivalents and restricted cash at end of period

$

14,768

$

52,174

Supplemental disclosure of cash flow information:

 

Interest paid

$

247

$

409

Taxes paid

$

1,008

$

Equity transaction costs included in accounts payable and accrued expenses

$

639

$

923

The accompanying notes form an integral part of these consolidated financial statements.

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NABRIVA THERAPEUTICS plc

Notes to the Unaudited Consolidated Financial Statements

1.           Organization and Business Activities

Nabriva Therapeutics plc, or Nabriva Ireland, together with its wholly owned and consolidated subsidiaries, Nabriva Therapeutics GmbH, or Nabriva Austria, Nabriva Therapeutics US, Inc., Zavante Therapeutics, Inc., or Zavante, and Nabriva Therapeutics Ireland DAC, collectively, Nabriva, or the Company, is a biopharmaceutical company engaged in the commercialization and development of novel anti-infective agents to treat serious infections. The Company’s headquarters are located at 25-28 North Wall Quay, Dublin, Ireland.

In July 2022, the Company entered into an exclusive Distribution Agreement with Er-Kim Pharmaceuticals, or Er-Kim, for the oral and intravenous formulations of XENLETA. Under the terms of the agreement, Er-Kim gains exclusive rights to distribute XENLETA in nine countries, including Bulgaria, Croatia, Czechia, Greece, Hungary, Poland, Romania, Slovakia and Slovenia. Er-Kim also may distribute XENLETA to an additional five countries through a Named Patient Usage (NPU) program. The Company will be the exclusive supplier of XENLETA to Er-Kim.

On April 22, 2022, the Company agreed to an extension of the Sales Promotion and Distribution Agreement with MSD International GmbH and Merck Sharp & Dohme Corp. for exclusive distribution of SIVEXTRO® for injection, intravenous use and oral use, in the SIVEXTRO Territory (as defined below) through at least December 31, 2026. SIVEXTRO is an oxazolidinone-class antibacterial indicated in adults and pediatric patients 12 years of age and older for the treatment of ABSSSI caused by certain susceptible Gram-positive microorganisms.

In September 2021, Sumitomo Pharmaceuticals (Suzhou) and the Company announced the approval received by Sumitomo Pharmaceuticals (Suzhou) to market oral and intravenous formulations of XENLETA for the treatment of community-acquired pneumonia in adults in Taiwan.

In September 2020, the Centers for Medicare & Medicaid Services, or CMS, granted a new technology add-on payment, or NTAP, for XENLETA® (lefamulin) for injection, when administered in the hospital inpatient setting. Both the intravenous, or IV, and oral formulations of XENLETA were granted Qualified Infectious Disease Product, or QIDP, and Fast Track designation by the U.S. Food and Drug Administration, or FDA. NTAP was also granted for CONTEPO™ (fosfomycin for injection, previously referred to as ZTI-01 and ZOLYD), making it the first QIDP antibiotic to be granted conditional NTAP approval prior to receiving FDA approval. CONTEPO was granted QIDP and Fast Track Designation by the FDA for the treatment of complicated urinary tract infections, or cUTIs, including acute pyelonephritis.

In July 2020, the Company announced that the European Commission, or EC, issued a legally binding decision for approval of the marketing authorization application for XENLETA™ (lefamulin) for the treatment of community-acquired pneumonia, or CAP, in adults following a review by the European Medicines Agency, or EMA. The EMA approval of XENLETA in CAP patients when it is considered inappropriate to use antibacterial agents that are commonly recommended for initial treatment or when these agents have failed paves the way for the launch of XENLETA across the European Economic Area, or EEA, and United Kingdom, or U.K. The EC approved XENLETA for all countries of the EEA and U.K. Nabriva intends to work with a commercial partner to make XENLETA available to patients in the EEA and U.K.

In July 2020, the Company announced that Sunovion Pharmaceuticals Canada Inc., or Sunovion, received approval from Health Canada to market oral and IV formulations of XENLETA® (lefamulin) for the treatment of CAP in adults, with the Notice of Compliance from Health Canada dated July 10, 2020. Nabriva entered into a license and commercialization agreement in March 2019 with Sunovion Pharmaceuticals Canada Inc. for XENLETA in Canada.

In July 2020, the Company announced that it entered into a Sales Promotion and Distribution Agreement, or the Distribution Agreement, with MSD International GmbH, or MSD, and Merck Sharp & Dohme Corp., or Supplier, each a subsidiary of Merck & Co. Under the Distribution Agreement, MSD appointed the Company as its sole and exclusive

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distributor of certain products containing tedizolid phosphate as the active ingredient previously marketed and sold by Supplier and MSD under the trademark SIVEXTRO® for injection, intravenous use and oral use in the United States and its territories. SIVEXTRO is an oxazolidinone-class antibacterial indicated in adults and patients 12 years of age and older for the treatment of acute bacterial skin and skin structure infections caused by certain susceptible Gram-positive microorganisms. Nabriva has also engaged Amplity Health, a leading pharmaceutical contract commercial organization, to provide community-based commercial and sales services for SIVEXTRO and XENLETA® in the United States.

In June 2020 the Company announced that WE Pharma Ltd., or WEP Clinical, a specialist pharmaceutical services company, had signed an exclusive agreement with the Company to supply XENLETA® (lefamulin) on a named patient or expanded access basis in certain countries outside of the US, China and Canada. The Named Patient Program, or NPP, is designed to ensure that physicians, contingent on meeting the necessary eligibility criteria and receiving approval, can request IV or oral XENLETA on behalf of patients who live in certain countries where it is not yet available and have an unmet medical need.

In September 2019, the Company announced that the oral and IV formulations of XENLETA (lefamulin) are available in the United States for the treatment of community-acquired bacterial pneumonia, or CABP, through major specialty distributors. This followed the approval by the FDA of the Company’s New Drug Application, or NDA, for XENLETA on August 19, 2019 for the treatment of adults with CABP. XENLETA is the first oral and IV treatment in the pleuromutilin class of antibiotics available for the systematic administration in humans.

Liquidity

Since its inception, the Company has incurred net losses and generated negative cash flows from its operations which has resulted in a significant accumulated deficit to date. The Company has financed its operations through the sale of equity securities, convertible and term debt financings and research and development support from governmental grants and proceeds from its licensing agreements and XENLETA and SIVEXTRO product sales. As of September 30, 2022, the Company had cash, cash equivalents and restricted cash of $14.8 million.

The Company expects to seek additional funding in future periods to fund its operations. While the Company has raised capital in the past, its ability to raise capital in future periods is not considered probable, as defined under the accounting standards. As such, under the requirements of Accounting Standards Codification, or ASC, Topic 205-40, Presentation of Financial StatementsGoing Concern, or ASC 205-40, management may not consider the potential for future capital raises in their assessment of the Company’s ability to meet its obligations for the next twelve months. It is also uncertain when, if ever, the Company will generate sufficient revenues from product sales to achieve profitability.

The Company follows the provisions of Financial Accounting Standards Board, or FASB, ASC 205-40, which requires management to assess the Company’s ability to continue as a going concern for one year after the date the consolidated financial statements are issued. As a result, based on the Company’s available cash and cash equivalents and restricted cash, the minimum cash required under the Loan and Security Agreement (the “Loan Agreement”) with Hercules Capital, Inc., and in accordance with the requirements of ASC 205-40, management has concluded that substantial doubt exists about the Company’s ability to continue as a going concern for one year from the date these consolidated financial statements are issued. A failure to raise additional funding or to effectively implement cost reductions could harm the Company’s business, results of operations and future prospects. If the Company is not able to secure adequate additional funding in future periods, the Company would be forced to make additional reductions in certain expenditures. This may include liquidating assets and suspending or curtailing planned programs. The Company may also have to delay, reduce the scope of, suspend or eliminate one or more research and development programs or its commercialization efforts or pursue potential strategic transactions. If the Company is unable to raise capital when needed or enter into a strategic transaction, then the Company may be required to cease operations, which could cause its shareholders to lose all or part of their investment.

In May 2021, the Company entered into an Open Market Sale AgreementSM, or the Sale Agreement, with Jefferies, as agent, pursuant to which the Company may offer and sell ordinary shares from time to time through Jefferies, by any method permitted that is deemed an “at the market offering” as defined in Rule 415(a)(4) promulgated under the Securities Act of 1933, as amended. As of September 30, 2022, the Company has issued and sold an aggregate

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of 1,249,898 ordinary shares pursuant to the Sale Agreement and received gross proceeds of $33.5 million and net proceeds of $32.2 million, after deducting commissions to Jefferies and other offering expenses. From October 1, 2022 and through the date of this filing, the Company did not sell any shares under the Sale Agreement. As of the date of this filing, the Company may issue and sell ordinary shares for gross proceeds of up to $8.0 million under the Sale Agreement.

In September 2021, the Company entered into a purchase agreement, or Purchase Agreement, with Lincoln Park Capital Fund, LLC, or Lincoln Park, which, subject to the terms and conditions, provides that the Company has the right to sell to Lincoln Park and Lincoln Park is obligated to purchase up to $23.0 million of its ordinary shares. In addition, under the Purchase Agreement, the Company agreed to issue a commitment fee of 25,298 ordinary shares, or the Commitment Shares, as consideration for Lincoln Park entering into the Purchase Agreement and for the payment of $0.01 per Commitment Share. Under the Purchase Agreement, the Company may from time to time, at its discretion, direct Lincoln Park to purchase on any single business day, or a Regular Purchase, up to (i) 16,000 ordinary shares if the closing sale price of its ordinary shares is not below $0.25 per share on Nasdaq, (ii) 24,000 ordinary shares if the closing sale price of its ordinary shares is not below $50.00 per share on Nasdaq or (iii) 32,000 ordinary shares if the closing sale price of its ordinary shares is not below $75.00 per share on Nasdaq. Notwithstanding the foregoing, the Company may direct Lincoln Park to purchase on any single business day ordinary shares with a purchase price equal to or greater than $200,000 irrespective of the number of ordinary shares required to approximate that amount. In addition to Regular Purchases, the Company may also direct Lincoln Park to purchase other amounts as accelerated purchases or as additional accelerated purchases on the terms and subject to the conditions set forth in the Purchase Agreement. In any case, Lincoln Park’s commitment in any single Regular Purchase may not exceed $2.5 million absent a mutual agreement to increase such amount. As of September 30, 2022, the Company has issued and sold an aggregate of 320,000 ordinary shares pursuant to the Purchase Agreement and received net proceeds of $4.6 million. From October 1, 2022 and through the date of this filing, the Company did not sell any shares under the Purchase Agreement. As of the date of this filing, the Company may issue and sell ordinary shares for gross proceeds of up to $18.5 million under the Purchase Agreement, subject to the Nasdaq rules which may limit the Company’s ability to make sales of its ordinary shares to Lincoln Park in excess of a specified amount without prior shareholder approval.

Based on its current operating plans, the Company expects that its existing cash, cash equivalents and restricted cash as of the filing date of this Quarterly Report on Form 10-Q together with its anticipated SIVEXTRO and XENLETA commercial sales receipts will be sufficient to enable the Company to fund its operating expenses, debt service obligations and capital expenditure requirements into the first quarter of 2023. The Company has based this estimate on assumptions that may prove to be wrong, and the Company could use its capital resources sooner than expected. This estimate assumes, among other things, that the Company does not obtain any additional funding through grants and clinical trial support, collaboration agreements or equity or debt financings. This estimate also assumes that the Company remains in compliance with the covenants and no event of default occurs under the Loan Agreement. The consolidated financial statements have been prepared assuming the Company will continue as a going concern, which contemplates the continuity of operations, the realization of assets and the satisfaction of liabilities and commitments in the normal course of business.

2.            Summary of Significant Accounting Policies

Basis of Preparation

The unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America, or US GAAP, for interim financial information, and US Securities and Exchange Commission, or SEC, regulations for quarterly reporting. The unaudited consolidated financial statements include the accounts of Nabriva Therapeutics plc and its wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation.

The accompanying consolidated financial information as of September 30, 2022 and for the three and nine months ended September 30, 2022 and 2021 are unaudited. The December 31, 2021 balance sheet was derived from audited consolidated financial statements but does not include all disclosures required by US GAAP. The interim

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unaudited consolidated financial statements have been prepared on the same basis as the annual audited consolidated financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary for the fair statement of the Company’s financial position as of September 30, 2022 and results of operations for the three and nine months ended September 30, 2022 and 2021. The financial data and other information disclosed in these notes related to the three and nine months ended September 30, 2022 and 2021 are not necessarily indicative of the results to be expected for the year ending December 31, 2022, any other interim periods or any future year or period. These unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto for the year ended December 31, 2021 contained in the Company’s Annual Report on Form 10-K, as filed with the SEC on March 29, 2022.

The Company’s significant accounting policies are described in Note 2 of the notes to the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021. Since the date of those financial statements, there have been no changes to the Company’s significant accounting policies.

Reverse Stock Split

On September 16, 2022, the Company filed an Amended and Restated Memorandum and Articles of Association of the Company with the Irish Companies Registration Office and effected, a one-for-twenty five reverse stock split (the “Reverse Stock Split”) of the Company’s ordinary shares. As a result of the Reverse Stock Split, every twenty five ordinary shares in the authorized and unissued and authorized and issued share capital of the Company were consolidated into one ordinary share. No fractional shares were issued in connection with the Reverse Stock Split. Shareholders who would otherwise be entitled to a fractional ordinary share were instead entitled to receive a proportional cash payment. All ordinary share, per share and related information presented in the consolidated financial statements and notes has been retroactively adjusted to reflect the Reverse Stock Split.

Recent Accounting Pronouncements

From time to time, new accounting pronouncements are issued by the FASB or other standard setting bodies that the Company adopts as of the specified effective date. The Company has not adopted any new accounting pronouncements for the nine months ended September 30, 2022.

3.            Inventory

Inventory is stated at the lower of cost or net realizable value. Inventory is valued on a first-in, first-out basis and consists primarily of material costs, third-party manufacturing costs, and related transportation costs along the Company’s supply chain. The Company capitalizes inventory upon regulatory approval when, based on management’s judgment, future commercialization is considered probable and the future economic benefit is expected to be realized; otherwise, such costs are recorded as research and development expense. Costs of drug product to be consumed in any current or future clinical trials will continue to be recognized as research and development expense and costs of sample inventory is recorded as selling, general and administrative expense. The Company reviews inventories for realization on a quarterly basis and records provisions for estimated excess, slow-moving and obsolete inventory, as well as inventory with a carrying value in excess of net realizable value when necessary. As of September 30, 2022, the Company had a $0.9 million non-cash reserve for excess and obsolete finished goods inventory due to the uncertainty of commercial

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activities underlying XENLETA product sales. Inventory reported at September 30, 2022 and December 31, 2021 consisted of the following:

  

As of

As of

  

September 30,

December 31,

(in thousands)

2022

2021

XENLETA raw materials

$

1,007

$

1,528

XENLETA work in process

 

8,920

 

9,142

XENLETA finished goods

775

18

Total XENLETA

10,702

10,688

SIVEXTRO finished goods

 

6,631

 

3,821

Total inventory

$

17,333

$

14,509

4.           Fair Value Measurement

US GAAP establishes a valuation hierarchy for disclosure of the inputs to valuation used to measure fair value. This hierarchy prioritizes the inputs into three broad levels as follows:

Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (as prices) or indirectly (as exchange rates).
Level 3: Valuation techniques that include inputs for the asset or liability that are not based on observable market data (those are unobservable inputs) and significant to the overall fair value measurement.

The following table presents the financial instruments measured at fair value and classified by level according to the fair value measurement hierarchy:

(in thousands)

    

Level 1

    

Level 2

    

Level 3

    

Total

September 30, 2022

Assets:

Cash equivalent:

Money market fund

$

3,066

$

$

 

$

3,066

Total assets

$

3,066

$

$

 

$

3,066

(in thousands)

    

Level 1

    

Level 2

    

Level 3

    

Total

December 31, 2021

Assets:

Cash equivalent:

Money market fund

$

8,050

$

$

 

$

8,050

Short-term investments:

Term deposits

 

16

 

 

 

16

Total assets

$

8,066

$

$

 

$

8,066

There were no transfers between levels in the nine months ended September 30, 2022 or the year ended December 31, 2021. There were no changes in valuation techniques during the nine months ended September 30, 2022.

As of September 30, 2022, and December 31, 2021, the Company did not hold any financial instruments as liabilities that were held at fair value. The Company believes that the carrying value of its long-term debt approximates fair value based on current interest rates. Receivables and accounts payable are carried at their historical cost which approximates fair value due to their short-term nature.

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5.           Accrued Expenses and Other Liabilities

Accrued expenses and other liabilities include the following:

As of

As of

September 30,

December 31,

(in thousands)

    

2022

2021

Research and development related costs

$

1,151

$

789

Payroll and related costs

 

3,797

 

5,085

Accounting, tax and audit services

 

1,052

 

736

Manufacturing and inventory

151

592

Product returns

958

2,282

Government rebates

1,941

1,751

Other accrued gross to net

1,742

1,090

Other

 

1,220

 

1,504

Total accrued expenses and other current liabilities

$

12,012

$

13,829

6.           Debt

In December 2018, the Company entered into the Loan Agreement by and among the Company, Nabriva Therapeutics Ireland DAC, and certain other subsidiaries of the Company and Hercules Capital, Inc., or Hercules, pursuant to which a term loan of up to an aggregate principal amount of $75.0 million was available to the Company. The Loan Agreement initially provided for an initial term loan advance of $25.0 million, which was funded in December 2018, and, at the Company’s option and subject to the occurrence of certain funding conditions, several additional tranches of which $10.0 million became available upon the approval by the FDA of the NDA for XENLETA, which was drawn down. The other tranches are no longer available as their contingencies were not achieved.

The term loan bears interest at an annual rate equal to the greater of 9.80% or 9.80% plus the prime rate of interest minus 5.50%. Effective September 22, 2022 the prime rate increased to 6.25%, which increased the interest on the loan with Hercules to 10.55%. The Loan Agreement provided for interest-only payments through July 1, 2021 and repayment of the outstanding principal balance of the term loan thereafter in monthly installments through June 1, 2023, or the Maturity Date. In addition, the Company is required to pay a fee of 6.95% of the aggregate amount of advances under the Loan Agreement at the Maturity Date, or the End of Term Fee. At the Company’s option, the Company may elect to prepay any portion of the outstanding term loan that is greater than or equal to $5.0 million by paying such portion of the principal balance and all accrued and unpaid interest thereon plus a prepayment charge equal to the following percentage of the principal amount being prepaid, or the Prepayment Fee: (i) 3.0% if the term loan is prepaid during the first 12 months following the initial closing, (ii) 2.0% if the term loan is prepaid after 12 months following the initial closing but before 24 months following the initial closing and (iii) 1.0% if the term loan is prepaid any time thereafter but prior to the Maturity Date.

On March 11, 2020, the Company entered into an amendment, or the Third Amendment, to its Loan Agreement with Hercules. Pursuant to the Third Amendment, the Company repaid $30.0 million of the $35.0 million in aggregate principal amount of debt outstanding under the Loan Agreement, or the Prepayment. The Company determined to enter into the Third Amendment following the effectiveness of a performance covenant in February 2020 under which it became obligated to either (1) achieve 80% of its net product revenue sales target over a trailing six-month period, or (2) maintain an amount of cash and cash equivalents in accounts pledged to Hercules plus a specified amount of eligible accounts receivables equal to the greater of the amount outstanding under the Loan Agreement or $40.0 million, or the Liquidity Requirement. Under the Third Amendment, the Company and Hercules agreed to defer the end of term loan charge payment of $2.1 million that would have otherwise become payable on the date of the Prepayment and to reduce the Prepayment Fee with respect to the Prepayment from $600,000 to $300,000 and to defer its payment, in each case, until June 1, 2023 or such earlier date on which all loans under the Loan Agreement are repaid or become due and payable. The Third Amendment also reset the revenue performance covenant to 70% of targeted revenue based on a

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revised net product revenue forecast and lowered the minimum liquidity requirement to $3.0 million in cash and cash equivalents, in each case, following the Prepayment. The new minimum liquidity requirement will not apply if CONTEPO receives regulatory approval from the FDA and the Company achieves at least 70% of its revised net product revenue targets under the Loan Agreement.

On June 2, 2021, the Company entered into a further amendment, or the Fourth Amendment, to its Loan and Security Agreement with Hercules. Pursuant to the Fourth Amendment, the date on which the Company must commence repaying principal under the Loan Agreement was extended to April 1, 2022. The Company began making interest and principal payments in April 2022. In addition, pursuant to the Fourth Amendment, the minimum liquidity requirement of $3.0 million in cash and cash equivalents will be waived at any time the Company has recognized $15.0 million of net product revenue during the applicable trailing three months.

The Company’s obligations under the Loan Agreement are guaranteed by all current and future subsidiaries of the Company, and each of the Company and its subsidiaries has granted Hercules a security interest in all of their respective personal property, intellectual property and other assets owned or later acquired. The Loan Agreement also contains certain events of default, representations, warranties and covenants of the Company and its subsidiaries. For example, the Loan Agreement contains representations and covenants that, subject to certain exceptions, restrict the Company’s and its subsidiaries’ ability to do the following, among other things: declare dividends or redeem or repurchase equity interests; incur additional indebtedness and liens; make loans and investments; engage in mergers, acquisitions and asset sales; certain transactions with affiliates; undergo a change in control; and add or change business locations or settle in cash potential milestone payment obligations that may become payable by the Company in the future to former security holders of Zavante. The Company was in compliance with all of its Loan Agreement covenants at September 30, 2022.

The Loan Agreement also grants Hercules or its nominee an option to purchase up to an aggregate of $2.0 million of the Company’s equity securities, or instruments exercisable for or convertible into equity securities, sold to investors in any private financing upon the same terms and conditions afforded to such other investors for as long as there are amounts outstanding under the Loan Agreement.

The Company incurred $1.3 million of costs in connection with the Loan Agreement which along with the initial fee of $0.7 million paid to Hercules were recorded as debt issuance cost and are being amortized as interest expense using the effective interest method over the term of the loan. The carrying value of the term loan payable at September 30, 2022 includes the present value of the End of Term Fee and the Prepayment Fee. The End of Term Fee on the remaining $3.1 million principal balance is being accrued as additional interest expense using the effective interest method over the term of the loan.

Long-term debt as of September 30, 2022 and December 31, 2021 consisted of the following:

As of

As of

September 30,

December 31,

(in thousands)

    

2022

    

2021

Term loan payable

 

$

3,077

 

$

5,000

End of term fee

2,544

2,331

Unamortized debt issuance costs

 

(66)

 

(145)

Carrying value of term loan

5,555

7,186

Other long-term debt

577

844

Less: Amounts due within one year

(5,733)

(3,765)

Total long-term debt

 

$