Document and Entity Information |
12 Months Ended |
|---|---|
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Dec. 31, 2017
shares
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| Document Information [Line Items] | |
| Document Type | 20-F/A |
| Amendment Flag | false |
| Document Period End Date | Dec. 31, 2017 |
| Document Fiscal Year Focus | 2017 |
| Document Fiscal Period Focus | FY |
| Trading Symbol | ERYP |
| Entity Registrant Name | ERYTECH PHARMA S.A. |
| Entity Central Index Key | 0001624422 |
| Current Fiscal Year End Date | --12-31 |
| Entity Well-known Seasoned Issuer | No |
| Entity Current Reporting Status | Yes |
| Entity Filer Category | Non-accelerated Filer |
| Entity Common Stock, Shares Outstanding | 17,937,559 |
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- Definition If the value is true, then the document is an amendment to previously-filed/accepted document. No definition available.
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- Definition End date of current fiscal year in the format --MM-DD. No definition available.
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- Definition This is focus fiscal period of the document report. For a first quarter 2006 quarterly report, which may also provide financial information from prior periods, the first fiscal quarter should be given as the fiscal period focus. Values: FY, Q1, Q2, Q3, Q4, H1, H2, M9, T1, T2, T3, M8, CY. No definition available.
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- Definition This is focus fiscal year of the document report in CCYY format. For a 2006 annual report, which may also provide financial information from prior periods, fiscal 2006 should be given as the fiscal year focus. Example: 2006. No definition available.
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- Definition Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table. No definition available.
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- Definition The end date of the period reflected on the cover page if a periodic report. For all other reports and registration statements containing historical data, it is the date up through which that historical data is presented. If there is no historical data in the report, use the filing date. The format of the date is CCYY-MM-DD. No definition available.
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- Definition The type of document being provided (such as 10-K, 10-Q, 485BPOS, etc). The document type is limited to the same value as the supporting SEC submission type, or the word "Other". No definition available.
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- Definition Indicate number of shares or other units outstanding of each of registrant's classes of capital or common stock or other ownership interests, if and as stated on cover of related periodic report. Where multiple classes or units exist define each class/interest by adding class of stock items such as Common Class A [Member], Common Class B [Member] or Partnership Interest [Member] onto the Instrument [Domain] of the Entity Listings, Instrument. No definition available.
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- Definition Indicate "Yes" or "No" whether registrants (1) have 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 registrants were required to file such reports), and (2) have been subject to such filing requirements for the past 90 days. This information should be based on the registrant's current or most recent filing containing the related disclosure. No definition available.
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- Definition Indicate whether the registrant is one of the following: (1) Large Accelerated Filer, (2) Accelerated Filer, (3) Non-accelerated Filer, (4) Smaller Reporting Company (Non-accelerated) or (5) Smaller Reporting Accelerated Filer. Definitions of these categories are stated in Rule 12b-2 of the Exchange Act. This information should be based on the registrant's current or most recent filing containing the related disclosure. No definition available.
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- Definition Indicate "Yes" or "No" if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Is used on Form Type: 10-K, 10-Q, 8-K, 20-F, 6-K, 10-K/A, 10-Q/A, 20-F/A, 6-K/A, N-CSR, N-Q, N-1A. No definition available.
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- Definition Trading symbol of an instrument as listed on an exchange. No definition available.
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Consolidated Statements of Income (Loss) - EUR (€) € in Thousands |
12 Months Ended | ||
|---|---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
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| Operating income | |||
| Revenues | € 0 | € 0 | € 0 |
| Other income | 3,364 | 4,138 | 2,929 |
| Total operating income | 3,364 | 4,138 | 2,929 |
| Operating expenses | |||
| Research and development expenses | (25,463) | (19,720) | (10,776) |
| General and administrative expenses | (8,791) | (6,808) | (7,736) |
| Total operating expenses | (34,254) | (26,528) | (18,512) |
| Operating loss | (30,889) | (22,390) | (15,583) |
| Financial income | 539 | 558 | 631 |
| Financial expenses | (3,183) | (70) | (64) |
| Financial income | (2,644) | 488 | 567 |
| Income tax | 3 | (10) | 3 |
| Net loss | € (33,530) | € (21,913) | € (15,013) |
| Basic / Diluted loss per share (€/share) | € (2.95) | € (2.74) | € (2.16) |
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- Definition Operating Expenses 1 [Abstract] No definition available.
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- Definition Operating Income abstract. No definition available.
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- Definition The amount of earnings per share when the basic and diluted measurements are equal. [Refer: Basic earnings (loss) per share; Diluted earnings (loss) per share] Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef
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- Definition The amount of costs associated with financing activities of the entity. Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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- Definition The amount of income associated with interest and other financing activities of the entity. Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef
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- Definition The amount of income or cost associated with interest and other financing activities of the entity. Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef
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- Definition The amount of expense relating to general and administrative activities of the entity. Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef
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- Definition The aggregate amount included in the determination of profit (loss) for the period in respect of current tax and deferred tax that relate to continuing operations. [Refer: Continuing operations [member]; Current tax expense (income); Deferred tax expense (income)] Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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- Definition The amount of all operating expenses. Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef
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- Definition The amount of operating income that the entity does not separately disclose in the same statement or note. Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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- Definition The total of income less expenses, excluding the components of other comprehensive income. [Refer: Other comprehensive income] Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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- Definition The profit (loss) from operating activities of the entity. [Refer: Profit (loss)] Reference 1: http://www.xbrl.org/2003/role/exampleRef
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- Definition The amount of expenditure directly attributable to research or development activities, recognised in profit or loss. Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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- Definition The income arising in the course of an entity's ordinary activities. Income is increases in economic benefits during the accounting period in the form of inflows or enhancements of assets or decreases of liabilities that result in an increase in equity, other than those relating to contributions from equity participants. Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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- Definition The aggregate amount of the entity's revenue and other operating income. [Refer: Revenue] Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef
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Consolidated Statements of Comprehensive Income (Loss) - EUR (€) € in Thousands |
12 Months Ended | ||
|---|---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
| Net loss | € (33,530) | € (21,913) | € (15,013) |
| Elements that may be reclassified subsequently to income (loss) | |||
| Foreign subsidiary - Currency translation adjustment | (38) | 21 | (9) |
| Elements that may not be reclassified subsequently to income (loss) | |||
| Actuarial gains on defined benefits liability | 8 | (30) | 8 |
| Tax effect | (3) | 10 | (3) |
| Other comprehensive income (loss) | (33) | 1 | (3) |
| Total comprehensive loss | € (33,563) | € (21,912) | € (15,017) |
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- Definition Other comprehensive income (loss). No definition available.
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- Definition The amount of change in equity resulting from transactions and other events, other than those changes resulting from transactions with owners in their capacity as owners. Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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- Definition The amount of income tax relating to amounts recognised in other comprehensive income in relation to remeasurements of defined benefit plans. [Refer: Other comprehensive income; Reserve of remeasurements of defined benefit plans; Defined benefit plans [member]] Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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- Definition The amount of other comprehensive income, before tax, related to gains (losses) on remeasurements of defined benefit plans, which comprise actuarial gains and losses; the return on plan assets, excluding amounts included in net interest on the net defined benefit liability (asset); and any change in the effect of the asset ceiling, excluding amounts included in net interest on the net defined benefit liability (asset). [Refer: Other comprehensive income, before tax; Defined benefit plans [member]; Plan assets [member]; Net defined benefit liability (asset)] Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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- Definition The amount of other comprehensive income, net of tax, related to exchange differences when financial statements of foreign operations are translated. [Refer: Other comprehensive income] Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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- Definition The total of income less expenses, excluding the components of other comprehensive income. [Refer: Other comprehensive income] Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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- Definition The amount of resources: (a) controlled by the entity as a result of past events; and (b) from which future economic benefits are expected to flow to the entity. Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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- Definition A component of equity representing the capital reserves. Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef
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- Definition The amount of cash on hand and demand deposits, along with short-term, highly liquid investments that are readily convertible to known amounts of cash and that are subject to an insignificant risk of changes in value. [Refer: Cash; Cash equivalents] Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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- Definition The amount of assets that the entity (a) expects to realise or intends to sell or consume in its normal operating cycle; (b) holds primarily for the purpose of trading; (c) expects to realise within twelve months after the reporting period; or (d) classifies as cash or cash equivalents (as defined in IAS 7) unless the asset is restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period. [Refer: Assets] Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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- Definition The amount of current financial liabilities. [Refer: Financial liabilities] Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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- Definition The amount of liabilities that: (a) the entity expects to settle in its normal operating cycle; (b) the entity holds primarily for the purpose of trading; (c) are due to be settled within twelve months after the reporting period; or (d) the entity does not have an unconditional right to defer settlement for at least twelve months after the reporting period. Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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- Definition The amount of current provisions. [Refer: Provisions] Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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- Definition The amount of residual interest in the assets of the entity after deducting all its liabilities. Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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- Definition The amount of the entity's equity and liabilities. [Refer: Equity; Liabilities] Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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- Definition The amount of identifiable non-monetary assets without physical substance. This amount does not include goodwill. [Refer: Goodwill] Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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- Definition The amount of current inventories. [Refer: Inventories] Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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- Definition The nominal value of capital issued. Reference 1: http://www.xbrl.org/2003/role/exampleRef
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- Definition The amount of deferred tax liabilities net of deferred tax assets, when the absolute amount of deferred tax liabilities is greater than the absolute amount of deferred tax assets. [Refer: Deferred tax assets; Deferred tax liabilities] Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef
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- Definition The amount of assets that do not meet the definition of current assets. [Refer: Current assets] Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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- References No definition available.
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- Definition The amount of non-current financial liabilities. [Refer: Financial liabilities] Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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- Definition The amount of liabilities that do not meet the definition of current liabilities. [Refer: Current liabilities] Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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- Definition The amount of non-current provisions. [Refer: Provisions] Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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- Definition The amount of current assets that the entity does not separately disclose in the same statement or note. [Refer: Current assets] Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef
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- Definition The amount of current liabilities that the entity does not separately disclose in the same statement or note. [Refer: Current liabilities] Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef
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- Definition The amount of non-current financial assets that the entity does not separately disclose in the same statement or note. [Refer: Other financial assets] Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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- Definition The amount of tangible assets that: (a) are held for use in the production or supply of goods or services, for rental to others, or for administrative purposes; and (b) are expected to be used during more than one period. Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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- Definition A component of equity representing exchange differences on translation of financial statements of foreign operations recognised in other comprehensive income and accumulated in equity. [Refer: Other comprehensive income] Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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- Definition A component of equity representing the entity's cumulative undistributed earnings or deficit. Reference 1: http://www.xbrl.org/2003/role/exampleRef
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- Definition The amount received or receivable from the issuance of the entity's shares in excess of nominal value. Reference 1: http://www.xbrl.org/2003/role/exampleRef
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- Definition The amount of current trade payables and current other payables. [Refer: Current trade payables; Other current payables] Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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- Definition The amount of current trade receivables and current other receivables. [Refer: Current trade receivables; Other current receivables] Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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- Definition Adjustments for increase (decrease) in current provisions No definition available.
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- Definition Adjustments for non-current provisions. No definition available.
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- Definition Increase (decrease) in capital net of transaction costs. No definition available.
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- Definition Supplemental Disclosure Of Cash Flow Information [abstract] No definition available.
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- Definition Adjustments for decrease (increase) in inventories to reconcile profit (loss) to net cash flow from (used in) operating activities. [Refer: Inventories; Profit (loss)] Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef
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- Definition Adjustments for decrease (increase) in other current assets to reconcile profit (loss) to net cash flow from (used in) operating activities. [Refer: Other current assets; Profit (loss)] Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef
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- Definition Adjustments for decrease (increase) in trade and other receivables to reconcile profit (loss) to net cash flow from (used in) operating activities. [Refer: Trade and other receivables; Profit (loss)] Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef
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- Definition Adjustments for depreciation and amortisation expense to reconcile profit (loss) to net cash flow from (used in) operating activities. [Refer: Depreciation and amortisation expense; Profit (loss)] Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef
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- Definition Adjustments for income tax expense to reconcile profit (loss) to net cash flow from (used in) operating activities. [Refer: Profit (loss)] Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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- Definition Adjustments for increase (decrease) in other current liabilities to reconcile profit (loss) to net cash flow from (used in) operating activities. [Refer: Other current liabilities; Profit (loss)] Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef
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- Definition Adjustments for increase (decrease) in trade accounts payable to reconcile profit (loss) to net cash flow from (used in) operating activities. [Refer: Profit (loss)] Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef
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- Definition Adjustments for increase (decrease) in trade and other payables to reconcile profit (loss) to net cash flow from (used in) operating activities. [Refer: Trade and other payables; Profit (loss)] Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef
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- Definition Adjustments for interest expense to reconcile profit (loss) to net cash flow from (used in) operating activities. [Refer: Interest expense; Profit (loss)] Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef
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- References No definition available.
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- Definition Adjustments for share-based payments to reconcile profit (loss) to net cash flow from (used in) operating activities. [Refer: Profit (loss)] Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef
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- Definition Adjustments for unrealised foreign exchange losses (gains) to reconcile profit (loss) to net cash flow from (used in) operating activities. [Refer: Profit (loss)] Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef
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- Definition The amount that has been withdrawn from an account in excess of existing cash balances. This is considered a short-term extension of credit by the bank. [Refer: Cash and cash equivalents] Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef
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- Definition The amount of cash on hand and demand deposits, along with short-term, highly liquid investments that are readily convertible to known amounts of cash and that are subject to an insignificant risk of changes in value. [Refer: Cash; Cash equivalents] Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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- References No definition available.
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- Definition The cash flows from (used in) investing activities, which are the acquisition and disposal of long-term assets and other investments not included in cash equivalents. Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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- Definition The cash from (used in) the entity's operations. Reference 1: http://www.xbrl.org/2003/role/exampleRef
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- Definition The cash inflow (outflow) from the entity's operations before changes in working capital. Reference 1: http://www.xbrl.org/2003/role/exampleRef
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- Definition The effect of exchange rate changes on cash and cash equivalents held or due in a foreign currency. [Refer: Cash and cash equivalents] Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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- Definition The cash flows from income taxes paid or refunded, classified as financing activities. [Refer: Income taxes paid (refund)] Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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- Definition The increase (decrease) in cash and cash equivalents. [Refer: Cash and cash equivalents] Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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- Definition The increase (decrease) in working capital. Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef
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- Definition The cash outflow for interest paid, classified as financing activities. Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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- Definition The cash inflow from borrowings obtained. [Refer: Borrowings] Reference 1: http://www.xbrl.org/2003/role/exampleRef
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- Definition The cash inflow from sales of long-term assets that the entity does not separately disclose in the same statement or note, classified as investing activities. [Refer: Assets] Reference 1: http://www.xbrl.org/2003/role/exampleRef
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- Definition The cash inflow from sales of property, plant and equipment, classified as investing activities. [Refer: Property, plant and equipment] Reference 1: http://www.xbrl.org/2003/role/exampleRef
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- Definition The total of income less expenses, excluding the components of other comprehensive income. [Refer: Other comprehensive income] Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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- Definition The cash outflow for the purchases of intangible assets, classified as investing activities. [Refer: Intangible assets other than goodwill] Reference 1: http://www.xbrl.org/2003/role/exampleRef
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- Definition The cash outflow for the purchases of long-term assets that the entity does not separately disclose in the same statement or note, classified as investing activities. [Refer: Assets] Reference 1: http://www.xbrl.org/2003/role/exampleRef
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- Definition The cash outflow for the purchases of property, plant and equipment, classified as investing activities. [Refer: Property, plant and equipment] Reference 1: http://www.xbrl.org/2003/role/exampleRef
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- Definition The decrease in equity resulting from the purchase of treasury shares. [Refer: Treasury shares] Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef
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- Definition The cash outflow to settle borrowings, classified as financing activities. [Refer: Borrowings] Reference 1: http://www.xbrl.org/2003/role/exampleRef
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Description of the Business |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||
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| Description of the Business | 1. DESCRIPTION OF THE BUSINESS ERYTECH Pharma S.A. (“ERYTECH” together with its subsidiary the “Company”) is incorporated in Lyon, France, and was founded in 2004 to develop and market innovative therapies for acute leukemia and other orphan diseases. The Company’s most advanced product candidates are being developed for the treatment of pancreatic cancer, acute lymphoblastic leukemia, or ALL, and acute myeloid leukemia, or AML. The Company completed its initial public offering on Euronext Paris in May 2013, raising €17.7 million and a follow-on offering of €30.0 million (on a gross basis before deducting offering expenses), in October 2014. The initial public offering triggered the conversion of the totality of the convertible bonds previously issued. Two private placements of respectively 940,000 ordinary and 793,877 ordinary shares for €25.4 million and €9.9 million (on a gross basis before deducting offering expenses) were completed in December 2015 and 2016 with institutional investors in the United States and in Europe. In April 2017, the Company completed a follow-on offering of €70.5 million (on a gross basis before deducting offering expenses). The Company completed an initial public offering on the Nasdaq Global Select Market raising €124 million ($144 million on a gross basis before deducting offering expenses) (see below “Major events of 2017”). The Company has incurred losses and negative cash flows from operations since its inception and had shareholders’ equity of €181,419 thousand as at December 31, 2017 as a result of several financing rounds, including an initial public offering. The Company anticipates incurring additional losses until such time, if ever, that it can generate significant revenue from its product candidates in development. Substantial additional financing will be needed by the Company to fund its operations and to commercially develop its product candidates. The Company’s future operations are highly dependent on a combination of factors, including: (i) the success of its research and development; (ii) regulatory approval and market acceptance of the Company’s proposed future products; (iii) the timely and successful completion of additional financing; and (iv) the development of competitive therapies by other biotechnology and pharmaceutical companies. As a result, the Company is and should continue, in the short to mid-term, to be financed through partnership agreements for the development and commercialization of its drug candidates and through the issuance of new equity instruments. The accompanying consolidated financial statements and related notes (the “Consolidated Financial Statements”) present the operations of ERYTECH Pharma S.A. and its subsidiary, ERYTECH Pharma, Inc., incorporated in April 2014, which headquarters are in Cambridge, Massachusetts – United States of America. The activity of this subsidiary had no material impact on any of the years presented.
Major events of 2017 Eryaspase The Company announced positive topline results from its Phase 2b clinical study evaluating its product candidate, eryaspase (GRASPA®), in combination with chemotherapy for the treatment of second-line metastatic pancreatic cancer. The multicenter, randomized Phase 2b study met its prespecified co-primary endpoints, and showed improvement in both progression-free survival (PFS) and overall survival (OS) in patients treated with eryaspase combined with chemotherapy compared to chemotherapy alone. The Phase 2b study evaluated eryaspase, L-asparaginase encapsulated in red blood cells, as a second-line treatment in combination with chemotherapy in patients with metastatic pancreatic cancer. In this 141patient study, conducted in France, eryaspase was added to the standard of care (gemcitabine or FOLFOX) and compared to the standard of care alone in a 2-to-1 randomization. The Company has resubmitted to the European Medicine Agency (EMA) its Marketing Authorization Application (MAA) for eryaspase (GRASPA®) for the treatment of patients with relapsed or refractory (R/R) acute lymphoblastic leukemia (ALL). The MAA resubmission includes the data from ERYTECH’s GRASPALL 2009-06 Phase 2/3 clinical trial in children and adults with R/R ALL as well as additional data to address the outstanding questions of the Committee for Medicinal Products for Human Use (CHMP) of the EMA. An investigator-initiated clinical trial has been launched to evaluate eryaspase, also known by the trade name GRASPA®, in patients with acute lymphoblastic leukemia (ALL). The study takes place in seven Nordic countries and is being conducted in collaboration with the Nordic Society of Pediatric Hematology and Oncology (NOPHO). This clinical trial is co-financed by ERYTECH Pharma and Orphan Europe. The open-label, randomized, multi-center clinical study, evaluated eryaspase in newly diagnosed AML patients over the age of 65 and unfit for intensive chemotherapy. The study enrolled a total of 123 patients at 30 European sites. The median age of the patients was 78 years. Patients were randomized two-to-one to receive eryaspase in combination with low-dose cytarabine (LDAC) versus LDAC alone. The primary endpoint in this proof-of concept study was overall survival (OS). The key secondary endpoints included progression free survival, overall response and toxicity. The study was performed in collaboration with Orphan Europe (Recordati Group), ERYTECH’s partner for the anticipated commercialization of GRASPA® for the treatment of ALL and AML in Europe. The study did not meet its primary endpoint of overall survival (OS). The recommended pivotal Phase 3 dosing from its U.S. Phase 1 dose escalation study with eryaspase (GRASPA®) has been determined in first line treatment of adult ALL patients.
Erymethionase The Company pursues the development of its second product-candidate erymethionase also based on the ERYCAPS technology and with methioninase as the active drug substance. The Company presented preclinical data on its erymethionase product candidate at the American Society of Clinical Oncology’s Gastrointestinal Cancers Symposium in January 2017 and at the American Association for Cancer Research’s Annual Meeting in April 2017. Based on these preclinical studies, we believe that erymethionase represents a promising new treatment approach against a broad range of cancers that rely on methionine metabolism. We expect to commence a Phase 1 clinical trial in Europe by the end of 2018. The development of this product-candidate is part of the TEDAC research program and reached the milestone n°4 in 2016 which allowed the payment of subsidies and conditional advances. The Company has initiated a project of change in manufacturing process. The project has reached the milestone n°3 of the development and capitalized €766 thousand which amounted to a cumulated total asset of €1,596 thousand as of December 31, 2017. Funds raised and Global Offering In April 2017, the Company issued an aggregate of 3,000,000 ordinary shares in an offering to institutional investors in the United States and in Europe, at an issue price of €23.50 per share, including share premium, for a total amount subscribed of €70.5 million (gross amount before deducting offering expenses), representing approximately 25.55% of the share capital of the Company. The issue price of the new shares represented a discount of 5.62% from the closing price on April 12, 2017 and 6.37% from the weighted average share price of the Company’s shares on the regulated market of Euronext Paris during the 20 trading days preceding the determination of the issue price on April 12, 2017. The Company completed an offering in November 2017 on the Nasdaq Global Select Market and Euronext Paris for an aggregate gross proceeds of 144 million (€124 million), in the context of an initial public and a follow-on offering to specified categories of investors of an aggregate of 5,374,033 new ordinary shares, comprising an offer of 4,686,106 ordinary shares in the form of American Depositary Shares, each representing one ordinary share (“ADSs”), in the United States at an offering price of $23.26 (€20) per ADS and a concurrent private placement in Europe (including France) and other countries outside of the United States and Canada of 687,927 ordinary shares at the corresponding offering price of $23.26 (€20) per ordinary share (together, the “Global Offering”), for aggregate gross proceeds of $124 million (€108 million) before deducting underwriting commissions and estimated expenses payable by the Company. By virtue of the delegation of authority granted by the Company’s annual general meeting of June 27, 2017, the Board at a meeting held on November 6, 2017 approved the offering which was executed by the CEO on November 9, 2017. In addition, ERYTECH had granted the underwriters a 30-day option to purchase up to 806,104 additional ADSs and/or ordinary shares on the same terms and conditions, representing 15% of the ADSs and/or ordinary shares to be issued by the Company in the Global Offering. The gross proceeds of the additional offering amounted to $19 million (€16 million). The offering price per ADS in the U.S. offering corresponds to the offering price of €20 per ordinary share (based on the November 9, 2017 exchange rate of €1.00 = $1.163). The offering price represented a discount of 9.79% from the volume-weighted average price of the Company’s ordinary shares on the regulated market of Euronext Paris during the three trading days preceding the date of determination of the offering price on November 9, 2017 (i.e. November 7, 8 and 9, 2017).
Following the additional closing, aggregate net proceeds to ERYTECH, after deducting underwriting commissions and estimated offering expenses payable by ERYTECH, were $130 million (€112 million). Management The Board of Directors held on January 8, 2017 and the Chief Executive Officer granted share-based payments as follows:
The Board of Directors held on June 27, 2017 and the Chief Executive Officer granted share-based payments as follows:
By virtue of the delegation of authority granted by the Company’s annual general meeting of June 27, 2017, the Board at a meeting held on June 27, 2017 approved the following share-based payments:
By virtue of the delegation of authority granted by the Company’s annual general meeting of June 27, 2017, the Chief Executive Officer on October 3, 2017 approved the following share-based payments:
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- Definition Disclosure of description of business explanatory. No definition available.
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| Basis of Preparation | 2. BASIS OF PREPARATION The Consolidated Financial Statements as of December 31, 2015, 2016 and 2017 have been prepared under the responsibility of the management of the Company in accordance with the underlying assumptions of going concern as the Company’s loss-making situation is explained by the innovative nature of the products developed, therefore involving a multi-year research and development phase. The general accounting conventions were applied in compliance with the principle of prudence, in accordance with the underlying assumptions namely (i) going concern, (ii) permanence of accounting methods from one year to the next and (iii) independence of financial years, and in conformity with the general rules for the preparation and presentation of consolidated financial statements in accordance with IFRS, as defined below. All amounts are expressed in thousands of euros, unless stated otherwise. |
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| Statement of Compliance |
The Consolidated Financial Statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standard Board (“IASB”) and were approved and authorized for issuance by the Board of Directors of the Company on March 9, 2018. Due to the listing of ordinary shares of the Company on Euronext Paris and in accordance with the European Union’s regulation No. 1606/2002 of July 19, 2002, the Consolidated Financial Statements of the Company are also prepared in accordance with IFRS, as adopted by the European Union (EU). As of December 31, 2017, all IFRS that the IASB had published and that are mandatory are the same as those endorsed by the EU and mandatory in the EU, with the exception of IAS 39 Financial Instruments: Recognition and Measurement (revised December 2003), which the EU only partially adopted. The part not adopted by the EU has no impact on the Consolidated Financial Statements of the Company. As a result, the Consolidated Financial Statements comply with International Financial Reporting Standards as published by the IASB and as adopted by the EU. IFRS include International Financial Reporting Standards (IFRS), International Accounting Standards (“IAS”), as well as the interpretations issued by the Standing Interpretations Committee (“SIC”), and the International Financial Reporting Interpretations Committee (“IFRIC”). The main accounting methods used to prepare the Financial Statements are described below. These methods were used for all periods presented. The Group adopted the following standards, amendments and interpretations that are applicable as at January 1, 2017:
These new texts did not have any significant impact on the Group’s results or financial position. The standards and interpretations that are optionally applicable as at December 31, 2017 were not applied in advance. Recently issued accounting pronouncements that may be relevant to the Company’s operations but have not yet been adopted are as follows:
These new texts are not expected to have any significant impact on the Group’s results or financial position.
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- Definition The disclosure of notes and other explanatory information as part of a complete set of financial statements. Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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| Significant Accounting Policies |
4.1 Basis of consolidation In accordance with IFRS 10 Consolidated Financial Statements, an entity is consolidated when it is controlled by the Company. The Company controls an entity when it is exposed or has rights to variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. All intra-company balances, transactions, unrealized gains and losses resulting from intra-group transactions and dividends are eliminated in full. As of December 31, 2017, the Company has one subsidiary for which no non-controlling interest is recognized. Details of the Company’s subsidiary as of December 31, 2017 are as follows:
4.2 Intercompany transactions Transactions involving reciprocal assets and liabilities, as well as income and expense, between ERYTECH and ERYTECH Pharma, Inc. are eliminated in the Consolidated Financial Statements. 4.3 Foreign currencies Functional Currency and Translation of Financial Statements in Presentation Currency The Consolidated Financial Statements are presented in euros, which is also the functional currency of the parent company, ERYTECH Pharma S.A. (the “Parent Company”). The statements of financial position of the consolidated entity having a functional currency different from the euro are translated into euros at the closing exchange rate (spot exchange rate at the statement of financial position date) and the statements of income (loss), statements of comprehensive income (loss) and statements of cash flow of such consolidated entity are translated at the average exchange rate for the period, except if exchanges rates fluctuate significantly. The resulting translation adjustment is included in other comprehensive income (loss) as a cumulative translation adjustment.
Conversion of Foreign Currency Transactions Foreign currency transactions are converted to functional currency (euros) at the rate of exchange applicable on the transaction date. At period-end, foreign currency monetary assets and liabilities are converted at the rate of exchange prevailing on that date. The resulting exchange gains or losses are recorded in the Consolidated Statements of Income in “Financial income (loss)”. The loan in U.S. dollars from ERYTECH Pharma S.A. to ERYTECH Pharma, Inc. is considered as part of the net investment in a foreign operation. Exchange differences on this loan are recognized in other comprehensive income. 4.4 Consolidated statements of cash flows The consolidated statements of cash flows are prepared using the indirect method and separately present the cash flows associated with operating, investment, and financing activities. Operating activities correspond to the Company primary income-generating activities and all the other activities that do not meet the investment or financing criteria. The Company has decided to classify grants received such as the Research Tax Credit (Credit d’Impôt Recherche) as an operating activity in the consolidated statement of cash flows. Cash flows associated with investment activities correspond to cash flows associated with the purchase of property, plant and equipment, net of asset supplier payables, and with the disposal of assets and other investments. Financing activities are operations that result in changes in the amount and composition of the share capital and borrowings of the entity. Capital increases and the obtaining or repayment of loans are classified under this category. The Company has chosen to classify the conditional advances under this category. The increases in assets and liabilities with non-cash effects are eliminated. As such, the assets financed through a finance lease are not included in the investments for the period presented. The decrease in financial liability associated with leases is therefore included under the caption ‘repayment of borrowings’ for the period. 4.5 Use of estimates and judgments Preparation of the financial statements in accordance with the rules prescribed by the IFRS requires the use of estimates and the formulation of assumptions having an impact on the financial statements. These estimates can be revised where the circumstances on which they are based change. The actual results may therefore differ from the estimates initially formulated. The use of estimates and judgment relate primarily to the measurement of share-based payments (Note 4.15 and Note 5.3) and accruals of hospital costs. Hospital costs are estimated using revised budgets of clinical studies currently being completed, and also using information collected from hospital centers included in the clinical study.
4.6 Intangible assets Internally generated intangible assets – Research and development costs In accordance with IAS 38 Intangible Assets (“IAS 38”), research expenditures are expensed in the period during which they are incurred. An internally generated intangible asset relating to a development project is recorded as an asset if, and only if, the following criteria are met: (a) it is technically feasible to complete the development project; (b) intention on the part of the Company to complete the project and to utilize it; (c) capacity to utilize the intangible asset; (d) proof of the probability of future economic benefits associated with the asset; (e) availability of the technical, financial, and other resources for completing the project; and (f) reliable evaluation of the development expenses. The initial measurement of the asset is the sum of expenses incurred starting on the date on which the development project meets the above criteria. Because of the risks and uncertainties related to regulatory authorizations and to the research and development process, the Company believes that the six criteria stipulated by IAS 38 have not been fulfilled to date and the application of this principle has resulted in all development costs being expensed as incurred in all periods presented. Other intangible assets The costs related to the acquisition of software licenses are recognized as assets on the basis of the costs incurred to acquire and to implement the software. They are amortized using the straight-line method over a period of one to five years depending on the anticipated period of use. An impairment is recorded when the asset’s carrying amount is greater than its recoverable value (see Note 4.8). 4.7 Property, plant and equipment Property, plant and equipment are recorded at their acquisition cost, comprised of their purchase price and all the direct costs incurred to bring the asset to the location and working condition for its use as intended by the company’s management. Property, plant, and equipment are depreciated on the basis of the straight-line method over the estimated useful life of the property. The fixtures of property rented are depreciated over the term of their own lifetime or of the term of the rental agreement, whichever is shorter. The depreciation periods used are the following:
The useful lives of property, plant and equipment as well as any residual values are reviewed at each year end and, in the event of a significant change, result in a prospective revision of the depreciation pattern. 4.8 Impairment tests According to IAS 36 Impairment of Assets (“IAS 36”), a loss in value must be recognized where the carrying value of an asset, or the cash generating unit to which the asset belongs (if it is not possible to estimate the recoverable amount of the individual asset), is lower than its recoverable value. The property, plant, and equipment and intangible assets that have a finite life are subject to an impairment test when the recoverability of their carrying value is called into question by the existence of indications of impairment. An impairment is recognized in the Consolidated Financial Statements up to the amount of the excess of the value over the recoverable value of the asset. The recoverable value of an asset corresponds to its fair value less costs to sell or its value in use, whichever is higher. 4.9 Financial assets and liabilities – Measurement and Presentation The valuation and the accounting treatment of the financial assets and liabilities are defined by IAS 39 Financial Instruments: Recognition and Measurement (“IAS 39”). The Company does not use derivative instruments to hedge its currency exposure. Loans and receivables These instruments are initially recognized in the Consolidated Financial Statements at their fair value and then at the amortized cost calculated with the effective interest rate (“EIR”) method. The short-term receivables without an interest rate are valued at the amount of the original invoice, unless the application of an implicit interest rate has a material effect. The loans and receivables are monitored for any objective indication of impairment. A financial asset is impaired if its carrying value is greater than its recoverable amount. The impairment is recognized in the statement of income (loss). Financial liabilities at the amortized cost Loans and other financial liabilities are initially measured at their fair value less transaction costs directly attributable, and then at the amortized cost, calculated using the EIR method. Presentation of financial assets and financial liabilities measured at fair value In accordance with IFRS 13 Fair Value Measurement, financial instruments are presented in three categories based on a hierarchical method used to determine their fair value:
4.10 Inventories In compliance with the IAS 2 Inventories, inventories are recognized at their cost or at their net realizable value, whichever is lower. Cost is determined on a First-In First-Out (FIFO) cost basis. Management periodically reviews the inventory for obsolescence and adjusts as necessary. 4.11 Cash and cash equivalents The item “cash and cash equivalents” in the consolidated statement of financial position includes bank accounts and highly liquid securities. They are readily convertible into a known amount of cash and are subject to a negligible risk of change in value. They are recorded as assets in Cash equivalents, measured at their fair value, and the changes in value are recognized through financial income or loss. The cash equivalents classification is made if the following criteria are fulfilled:
4.12 Provisions A provision is recognized where the Company has a current or implicit legal obligation resulting from a past event, where the obligation can be reliably estimated, and where it is probable that an outflow of resources representing economic benefits will be necessary to settle the obligation. The portion of a provision that become due in less than one year is recorded under current liabilities, and the balance under non-current liabilities. The provisions are discounted when the impact is material.
Provisions recognized in the consolidated statement of financial position mainly include obligations pertaining to retirement indemnities and provisions for risks. Disclosure is made in the detailed notes on any contingent assets and liabilities where the impact is expected to be material, except where the probability of occurrence is low. Provisions for retirement indemnities—defined benefit plans The employees of the Company receive the retirement benefits stipulated by law in France:
For the defined-benefit plans, the costs of the retirement benefits are estimated by using the projected credit unit method. According to this method, the cost of the retirement benefit is recognized in the statement of income (loss) so that it is distributed uniformly over the term of the services of the employees. The retirement benefit commitments are valued at the current value of the future payments estimated using, for discounting, the market rate for high quality corporate bonds with a term that corresponds to the estimated term for the payment of the benefits. The Company appoints external actuaries to conduct an annual review of the valuation of these plans. The difference between the amount of the provision at the beginning of a period and at the close of that period is recognized through profit or loss for the portion representing the costs of services rendered and the net interest costs, and through other comprehensive income for the portion representing the actuarial gains and losses. The Company’s payments for the defined-contribution plans are recognized as expenses on the statement of income (loss) of the period in which they become payable. Provisions for risks The provisions for risks correspond to the commitments resulting from litigations and various risks whose due dates and amounts are uncertain. The amount recognized in the Consolidated Financial Statements as a provision is the best estimate of the expenses necessary to extinguish the obligation. 4.13 Lease agreements The leases involving property, plant, and equipment are classified as finance lease agreements when the Company bears substantially all the benefits and risks inherent in the ownership of the property. The assets that are covered under finance lease agreements are capitalized as of the beginning date of the rental agreement on the basis of the fair value of the rented asset or the discounted values of the future minimum payments, whichever is lower. Each rental payment is distributed between the debt and the financial cost in such a manner to determine a constant interest rate on the principal that remains due. The corresponding rental obligations, net of the financial expenses, are classified as financial liabilities. The property, plant, or equipment acquired within the framework of a finance lease agreement is amortized over the useful life or the term of the lease agreement, whichever is shorter.
The rental agreements for which a significant portion of the risks and advantages is preserved by the lessor are classified as operating leases. The payments made for these operating leases, net of any incentive measures, are recognized as expenses on the consolidated statement of income (loss) on a straight-line basis over the term of the agreement. 4.14 Share capital Common shares are classified under shareholders’ equity. The costs of share capital transactions that are directly attributable to the issue of new shares or options are recognized in shareholders’ equity as a deduction from the proceeds from the issue, net of tax. 4.15 Share-based payment The Company has applied IFRS 2 Share-based payment (“IFRS 2”) to all equity instruments e.g. free shares (“AGAP”), stock options (“SO”), share subscription warrants (“BSA”) and founder subscription warrants (“BSPCE”) granted since inception to its employees, members of the Board of Directors or other individuals. Pursuant to IFRS 2, the cost of the remuneration paid with equity instruments is recognized as an expense in exchange for an increase in the shareholders’ equity for the vesting period during which the rights to be enjoyed from the equity instruments are acquired. As such, changes in value subsequent to the grant date have no effect on this initial measurement. Fair value is estimated using the Black & Scholes valuation model (for BSA, SO and BSPCE valuation), Monte-Carlo valuation model (for AGAP valuation) and Cox-Ross-Rubinstein valuation model (for 2016 and 2017 BSA valuation). These models allow the Company to take into account the characteristics of the plan (vesting price, vesting period), the market data at the grant date (volatility, expected dividends, repo margin), possible performance conditions attached to warrants and recipient behavior assumptions. 4.16 Other income Research tax credit The research tax credit (Crédit d’Impôt Recherche or “CIR”) (the “Research Tax Credit”) is granted to companies by the French tax authorities in order to encourage them to conduct technical and scientific research. Companies that prove that they have expenditures that meet the required criteria (research expenditures located in France or, since January 1, 2005, within the European Union or in another State that is a party to the Agreement on the European Economic Area that has concluded a tax treaty with France that contains an administrative assistance clause) receive a tax credit that can be used for the payment of the corporate tax due for the fiscal year in which the expenditures were made and the next three fiscal years, or, as applicable, can be reimbursed in cash. The expenses taken into account for the calculation of the Research Tax Credit involve only research expenses. The Company has received the Research Tax Credit since its inception. The receivable in the consolidated statement of financial position as at December 31, 2017 includes the CIR for 2017 (see Note 6.6).
The CIR is presented under other income in the consolidated statement of income (loss) as it meets the definition of government grant as defined in IAS 20 Accounting for Government Grants and Disclosure of Government Assistance. Subsidies and conditional advances Due to the innovative nature of its product candidate development programs, the Company has benefited from certain sources of financial assistance from Banque Publique d’Investissement (“BPI France”). BPI France provides financial assistance and support to emerging French enterprises to facilitate the development and commercialization of innovative technologies. The funds received by the Company are intended to finance its research and development efforts and the recruitment of specific personnel. The Company has received such funding in the form of non-refundable subsidies and conditional advances. Subsidies Subsidies received are grants that are not repayable by the Company and are recognized in the financial statements as operating income where there exists reasonable assurance that the Company will comply with the conditions attached to the subsidies and the subsidies will be received. Subsidies that are upfront payments are presented as deferred revenue and recognized ratably through income over the duration of the research program to which the subsidy relates. A public subsidy that is to be received either as compensation for expenses or for losses already incurred, or for immediate financial support of the Company without associated future costs, is recognized in the Consolidated Financial Statements as other income when there exists reasonable assurance that the subsidies will be received. Conditional advances Funds received from BPI France in the form of conditional advances are recognized as financial liabilities, as the Company has a contractual obligation to reimburse BPI France for such conditional advances in cash based on a repayment schedule provided the conditions are complied with. Each award of an advance is made to help fund a specific development milestone. The details concerning the conditional advances are provided in Note 6.10. Receipts or reimbursements of conditional advances are reflected as financing transactions in the statement of cash flows. The amount resulting from the benefit of conditional advances that do not bear interest at market rates is considered a subsidy. This benefit is determined by applying a discount rate equal to the rate the Company would have to pay for a bank borrowing over a similar maturity. The implicit interest rate resulting from taking into account all the repayments plus the additional payments due in case of commercial success as described in Note 6.10 is used to determine the amount recognized annually as a finance cost.
In the event of a change in payment schedule of the stipulated repayments of the conditional advances, the Company recalculates the net book value of the debt resulting from the discounting of the anticipated new future cash flows at the initial effective interest rate. The adjustment that results therefrom is recognized in the consolidated statement of income (loss) for the period during which the modification is recognized. The conditional advances that can be subject to this type of modification are the advances received from BPI France, presented in Note 6.10. Partnership with Orphan Europe AML clinical trial As a result of its partnership agreement with Orphan Europe related to the development of Acute Myeloid Leukemia (“AML”), the Company re-invoices, with no margin, certain clinical costs incurred and invoiced to the Company by external providers. In application of IAS 18 Revenue, the Company considers that, within the context of this partnership, it acts as agent regarding these reinvoiced external costs, as:
Within the context of this same agreement, the Company also invoiced certain internal clinical costs, such as personnel costs associated with the management of clinical trials, or personnel involved in the production of batches necessary for the AML clinical trial together with internal costs related to the AML clinical trial. Consequently, the re-invoicing of these external costs to Orphan Europe is presented as a decrease in corresponding research and development expenses incurred by the Company. For the year ended December 31, 2017 there was no re-invoicing in the context of the AML clinical trial. Partnership with Orphan Europe NOPHO clinical trial These invoiced external costs are classified by the Company as “other income” in the consolidated statement of income (loss) and within the context of this agreement, amounted to €177.5 thousand for the year ended December 31, 2017. 4.17 Financial income and expense Financial results relate to loans, gains and losses on exchange rate variations and other financial debts (notably overdrafts and finance leases) and includes interest expenses incurred on financial liabilities and the related amortization of debt issuance costs, and income received from cash and cash equivalents. For the year ended December 31, 2017 financial expenses are mainly composed of currency exchange losses.
4.18 Income taxes Current taxes Considering the level of tax loss carryforwards not recognized, no current tax expense is recognized. Deferred taxes Except in specific cases, deferred taxes are calculated for the temporary differences between the carrying value of an asset or a liability and its tax value. Changes in the tax rates are recorded in the results of the financial year during which the rate change is decided. Deferred tax assets resulting from temporary differences or tax losses carried forward are limited to the deferred tax liabilities with the same maturity, except where their allocation on future taxable income is probable. Deferred taxes are calculated based on the most recent tax rates adopted at the date of each financial year-end. Deferred tax assets and liabilities are not discounted and are classified in the consolidated statement of financial position under non-current assets and liabilities. In addition, the Parent Company, as an entity incorporated in France, is subject to the territorial economic contribution (Contribution Economique Territoriale—CET), which combines the corporate real estate contribution (cotisation foncière des entreprises—CFE) and the corporate value-added contribution (cotisation sur la valeur ajoutée des entreprises—CVAE):
In conformity with the provisions of IAS 12, qualification of the corporate value-added contribution as an income tax leads to the recognition of deferred taxes relative to temporary differences existing at year end, with a contra-entry of a net expense in that year’s statement of net income (loss). Where applicable, this deferred tax expense is presented on the line income tax. For the moment, the Company does not pay the CVAE. 4.19 Earnings per share The basic earnings per share are calculated by dividing the Company’s net income (loss) by the weighted average number of shares in circulation during the corresponding period. The diluted earnings per share are calculated by dividing the results by the weighted average number of common shares in circulation, increased by all dilutive potential common shares. The dilutive potential common shares include, in particular, the share subscription warrants, stock options, free shares and founder subscription warrants as detailed in note 5.3 and 6.8.
Dilution is defined as a reduction of earnings per share or an increase of loss per share. When the exercise of outstanding share options and warrants decreases loss per share, they are considered to be anti-dilutive and excluded from the calculation of loss per share. Thus, basic and diluted loss per share are equal as all equity instruments issued, representing 865,760 potential additional ordinary shares, have been considered anti-dilutive. 4.20 Segment reporting In accordance with IFRS 8 Operating Segments, reporting by operating segment is derived from the internal organization of the Company’s activities; it reflects management’s viewpoint and is established based on internal reporting used by the chief operating decision maker (the Chief Executive Officer and Chairman of the Board of Directors) to allocate resources and to assess performance. The Company operates in a single operating segment: the conducting of research and development in the area of treatment of acute leukemia and other orphan diseases in order to market them in the future. The assets, liabilities, and operating loss realized are primarily located in France. 4.21 Off-balance sheet commitments The Company has defined and implemented monitoring for its off-balance sheet commitments so as to know their nature and object. Off-balance sheet items identified mainly relate to:
4.22 Events After the Close of the Reporting Period The consolidated statement of financial position and the consolidated statement of income (loss) of the Company are adjusted to reflect the subsequent events that alter the amounts related to the situations that exist as of the closing date. Modifications can be made until the date the Consolidated Financial Statements are approved and authorized for issuance by the Board of Directors. By virtue of the delegation of authority granted by the Company’s annual general meeting of June 27, 2017, the Board at a meeting held on January 7, 2018 approved the following share-based payments:
By virtue of the delegation of authority granted by Board of Directors held on June 27, 2017, the Chief Executive Officer at a meeting held on January 7, 2018 approved the following share-based payments:
This event after the close of the reporting period did not lead to an adjustment of the consolidated financial statements. ERYTECH conducted a comprehensive evaluation to determine other potential solid-tumor indications for developing eryaspase. Metastatic Triple-Negative Breast Cancer (TNBC) has now been selected as the next indication to expand the potential use of eryaspase in solid tumors. TNBC is an aggressive and metabolically active form of breast cancer with high rates of symptomatic metastases. This event after the close of the reporting period did not lead to an adjustment of the consolidated financial statements. The Company evaluated subsequent events that occurred after December 31, 2017 through the date of approval and authorization of issuance of the Consolidated Financial Statements and determined that there are no significant events that require adjustments in such Consolidated Financial Statements. |
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- Definition The entire disclosure for significant accounting policies applied by the entity. Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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| Notes Related to the Consolidated Statement of Income (Loss) |
5.1 Operating income Operating income consists of the following:
The operating income was primarily generated by the CIR (research tax credit), and the subsidies associated with the pre-clinical research programs in partnership with BPI France. Other income totaled €341 thousand, €327 thousand and €178 thousand in 2015, 2016 and 2017, respectively, representing the re-invoicing of the internal costs incurred by the Company within the context of the AML study in 2015 and 2016 and within the context of the NOPHO study in 2017. The global amount financed by Orphan Europe is €600 thousand for the NOPHO study. The Research Tax Credit and the subsidies decreased in 2017 as compared to 2016. Clinical study expenses increased in 2017, but this increase is mainly related to vendors that are not eligible for the research tax credit, and therefore the increase in clinical study expenses does not result in an increase in the research tax credit in 2017. The increase in the research tax credit between 2015 and 2016 is related to the increase in clinical study expenses. The Company receives subsidies through the TEDAC project financed by BPI France; the decrease in subsidies is related to the technical milestone of the TEDAC program which is not reached as at December 31, 2017 and therefore the Company is not eligible to receive the subsidy for the 5th milestone of the project.
5.2 Operating expenses by nature
The increase in research and development expenses in 2017 for €5,743 thousand is primarily related to:
The increase in general and administrative expenses by €1,983 thousand is due to:
The increase in research and development expenses from 2015 to 2016 of €8,944 thousand is primarily related to
The decrease in General and Administrative expenses for an amount of €928 thousand between 2015 and 2016 is mainly due to a decrease in “Other” of €2,050 thousand, which is mainly related to warrants (BSA2014) granted to the Board of Directors, which amounted to €1,593 thousand in 2015.
5.3 Personnel expenses The personnel expenses are detailed as follows:
The increase in personnel expenses of €3,609 thousand between 2016 and 2017 is mainly due to:
The increase in personnel expenses of €2,392 thousand between 2015 and 2016 is mainly due to the increase in wages and salaries of the subsidiary ERYTECH Pharma Inc. in the amount of €1,194 thousand and the Parent Company in the amount of €1,198 thousand following the increase in headcount (73 employees in 2016 and 49 employees in 2015). The employee staff increased from 44 (weighted average full-time employees for the year) in 2015 to 66 into 2016 and to 98 into 2017. Share-based payments (IFRS 2) Share-based awards have been granted to the directors, to certain employees, as well as to members of the Board of Directors in the form of share subscription warrants (“BSA”), stock options (“SO”), free shares (“AGAP”) or founder subscription warrants (“BSPCE”). The Board of Directors has been authorized by the general meeting of the shareholders to grant warrants in the form of AGAP, SO, BSA and BSPCE through the following plans: “2012 Plan” Within the scope of the BSA2012 plan, the Board of Directors meeting of April 29, 2015 and August 3, 2015 allocated respectively 2,150 and 3,585 BSA2012 to the directors without acquisition conditions. Allocation of 2,150 BSA on April 29, 2015 The main assumptions used to determine the fair value are:
The fair value of warrants allocated in April 2015 in relation to the 2012 plan was valued at €512 thousand and was fully recognized in the consolidated statement of income (loss) for 2015 (G&A expenses) in the absence of vesting conditions. Allocation of 3,585 BSA on August 31, 2015. The main assumptions used to determine the fair value are:
The fair value of warrants allocated in April 2015 in relation to the 2012 plan was valued at €1,081 thousand and was fully recognized in the consolidated statement of income (loss) for 2015 (G&A expenses) in the absence of vesting conditions.
At the end of 2015, the subscription warrants for the 2012 plan are as follows:
“2014 Plan” On January 22, 2014, the Board of Directors used the delegation granted by the mixed general shareholders meeting of April 2, 2013, to grant a free allocation of 22,500 founder share subscription warrants (hereinafter entitled BSPCE2014) to ERYTECH senior management (12,000) and to certain employees (10,500). 3,000 BSPCE2014 were converted to BSA2014. Within the scope of the BSPCE2014 / BSA2014 plan, the Board of Directors meeting of May 6, 2016 allocated 5,000 BSPCE2014 to the employees. At the end of 2017, the subscription warrants for the 2014 plan are as follows:
In the event of a beneficiary departure from the Company for any reason whatsoever, this beneficiary shall retain the BSPCE2014 to which he subscribed prior to his departure. However, in the event of a beneficiary departure from the Company, for any reason whatsoever, prior to subscription of the BSPCE2014 to which the beneficiary has a right, the BSPCE2014 will be forfeited. In this situation, the BSPCE2014 not subscribed may be re-allocated to other beneficiaries within the same category and/or replacing the person who left the Company. Following the resignation of Yann Godfrin in January 2016, 1,000 BSPCE of the 3,000 BSPCE initially allocated have been forfeited and will not be granted. The main assumptions used to determine the fair value of the 5,000 BSPCE2014 allocated to employees are:
The residual fair value of the plan was estimated at €636 thousand. This expense will be recorded gradually over the duration of the 2-year plan in accordance with IFRS 2 (graded vesting method). A personnel expense of €245 thousand was recognized in the consolidated statement of income (loss) (R&D for €165 thousand and G&A for €81 thousand), for the year ended December 31, 2017, €498 thousand for the year ended December 31, 2016. €1,133 thousand were recognized for the year ended December 31, 2015 for the previous allocation. “2016 Plan” On October 3, 2016, the Board of Directors used the delegation granted by the mixed general shareholders meeting of June 24, 2016, to grant a free allocation including on a service condition of 111,261 free shares (hereinafter entitled AGAP2016) to ERYTECH Pharma S.A senior management and employees, 44,499 stock options (hereinafter entitled SO2016) to ERYTECH Pharma, Inc. and 45,000 share subscription warrants (hereinafter entitled BSA2016) to members of the Board of Directors. At the end of 2017, the subscription warrants for the 2016 plan are as follows:
Allocation of 111,261 free shares (AGAP2016) on October 3, 2016 The assumptions used to determine the fair value of these instruments are:
The fair value of the plan was estimated at €974 thousand. This expense will be recorded gradually over the duration of the 1-year, 2-year and 3-year plan in accordance with IFRS 2 (graded vesting method). An expense of €533 thousand was recognized in the consolidated statement of income (loss) under R&D personnel expenses for €217 thousand and under G&A personnel expenses for €316 thousand, for the year ended December 31, 2017. For 2016 an expense of €151 thousand was recognized in the consolidated statement of income (loss) under R&D personnel expenses for €61 thousand and under G&A personnel expense for €90 thousand.
Allocation of 44,499 stock options (SO2016) on October 3, 2016 The assumptions used to determine the fair value of these instruments are:
The fair value of the plan was estimated at €202 thousand. This expense will be recorded gradually over the duration of the 2-year and 3-year plan in accordance with IFRS 2 (graded vesting method). An expense of €90 thousand was recognized in the consolidated statement of income (loss) under R&D personnel expenses for the year ended December 31, 2017. An expense of €22 thousand was recognized in the consolidated statement of income (loss) under R&D personnel expenses for the year ended December 31, 2016. Allocation of 45,000 share subscription warrants (BSA2016) on October 3, 2016 The assumptions used to determine the fair value of these instruments are:
The fair value of the plan was estimated at €198 thousand. This expense will be recorded gradually over the duration of the 2-year plan in accordance with IFRS 2 (graded vesting method). An expense of €126 thousand was recognized in the consolidated statement of income (loss) under G&A expenses for the year ended December 31, 2017. An expense of €37 thousand was recognized in the consolidated statement of income (loss) under G&A expenses for the year ended December 31, 2016. Allocation of 16,650 free shares (AGAP2016) on October 3, 2017 The assumptions used to determine the fair value of these instruments are:
The fair value of the plan was estimated at €180 thousand. This expense will be recorded gradually over the duration of the 1-year, 2-year and 3-year plan in accordance with IFRS 2 (graded vesting method). An expense of €27 thousand was recognized in the consolidated statement of income (loss) under R&D personnel expenses for €22 thousand and under G&A personnel expenses for €5 thousand, for the year ended December 31, 2017. Allocation of 30,000 stock options (SO2016) on October 3, 2017 The assumptions used to determine the fair value of these instruments are:
The fair value of the plan was estimated at €208 thousand. This expense will be recorded gradually over the duration of the 2-year and 3-year plan in accordance with IFRS 2 (graded vesting method). An expense of €23 thousand was recognized in the consolidated statement of income (loss) under R&D personnel expenses for €9 thousand and under G&A personnel expenses for €14 thousand, for the year ended December 31, 2017. Allocation of 16,650 free shares (AGA2016) on October 3, 2017 The assumptions used to determine the fair value of these instruments are:
The fair value of the plan was estimated at €180 thousand. This expense will be recorded gradually over the duration of the 1-year, 2-year and 3-year plan in accordance with IFRS 2 (graded vesting method). An expense of €27 thousand was recognized in the consolidated statement of income (loss) under R&D personnel expenses for €22 thousand and under G&A personnel expenses for €5 thousand, for the year ended December 31, 2017. Allocation of 30,000 stock options (SO2016) on October 3, 2017 The assumptions used to determine the fair value of these instruments are:
The fair value of the plan was estimated at €208 thousand. This expense will be recorded gradually over the duration of the 2-year and 3-year plan in accordance with IFRS 2 (graded vesting method). An expense of €23 thousand was recognized in the consolidated statement of income (loss) under R&D personnel expenses for €9 thousand and under G&A personnel expenses for €14 thousand, for the year ended December 31, 2017. “2017 Plan” On June 27, 2017 and on October 3, 2017, the Board of Directors used the delegation granted by the mixed general shareholders meeting of June 27, 2017, to grant a free allocation including a service condition of 83,127 free shares (hereinafter entitled AGAP2017) to ERYTECH Pharma S.A senior management and employees, 40,200 stock options (hereinafter entitled SO2017) to ERYTECH Pharma, Inc. and 55,000 share subscription warrants (hereinafter entitled BSA2017) to members of the Board of Directors. At the end of 2017, the subscription warrants for the 2017 plan are as follows:
Allocation of 74,475 free shares (AGA2017) on June 27, 2017 The assumptions used to determine the fair value of these instruments are:
The fair value of the plan was estimated at €1,081 thousand. This expense will be recorded gradually over the duration of the 1-year, 2-year and 3-year plan in accordance with IFRS 2 (graded vesting method). An expense of €348 thousand was recognized in the consolidated statement of income (loss) under R&D personnel expenses for €180 thousand and under G&A personnel expenses for €168 thousand, for the year ended December 31, 2017. Allocation of 22,200 stock options (SO2017) on June 27, 2017 The assumptions used to determine the fair value of these instruments are:
The fair value of the plan was estimated at €308 thousand. This expense will be recorded gradually over the duration of the 3-year plan in accordance with IFRS 2 (graded vesting method). An expense of €65 thousand was recognized in the consolidated statement of income (loss) under R&D personnel expenses for €50 thousand and under G&A personnel expenses for €15 thousand, for the year ended December 31, 2017. Allocation of 55,000 share subscription warrants (BSA2017) on June 27, 2017 The assumptions used to determine the fair value of these instruments are:
The fair value of the plan was estimated at €394 thousand. This expense will be recorded gradually over the duration of the 2-year plan in accordance with IFRS 2 (graded vesting method). An expense of €165 thousand was recognized in the consolidated statement of income (loss) under G&A expenses for the year ended December 31, 2017.
Breakdown of allocations plan
5.4 Depreciation and amortization expense
5.5 Financial income and expense
Other finance expenses are related to foreign currency exchange losses related to the bank account in U.S. dollars and purchases of services in U.S. dollars. Finance income consists of interest accrued on short term deposits as well as foreign exchange gains related to purchases of services in U.S. dollars. Financial expenses increased significantly by €3,113 thousand as at December 31, 2017. These financial expenses are related mainly to the conversion into euros of the USD bank account as at December 31, 2017. The impact in the financial result is the difference of the exchange rate between the date of the global offering in the United States and a listing on Nasdaq (1€=1.1630$ on November 9, 2017) and the closing of the period (1€=1.1993$ on December 31, 2017).
5.6 Deferred tax balances Reconciliation of effective tax rate
As of December 31, 2015, 2016 and 2017, the amount of accumulated tax loss carryforwards since inception was €59,682 thousand, €80,281 thousand and €128,802 thousand respectively with no expiration date. The tax proof has been calculated based on the French tax rate which is 34.43%. |
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- Definition Disclosure of consolidated statement of income (Loss). No definition available.
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| Notes Related to the Consolidated Statements of Financial Position | 6 NOTES RELATED TO THE CONSOLIDATED STATEMENTS OF FINANCIAL POSITION 6.1 Intangible assets
6.2 Property, plant and equipment At December 31, 2017, property, plant and equipment are composed as follows:
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