Public limited company with a capital of 21,610,998.20 euros Headquarters: 49, boulevard du général Martial Valin - 75015 Paris RCS Paris 410 910 095
FULL-YEAR FINANCIAL REPORT 2024
Public limited company with a capital of 21,610,998.20 euros Headquarters: 49, boulevard du général Martial Valin - 75015 Paris RCS Paris 410 910 095
2024 ANNUAL FINANCIAL REPORT
DECLARATION OF THE PERSON IN CHARGE
"I hereby certify that, to the best of my knowledge, the financial statements have been prepared in accordance with the applicable accounting standards and give a true and fair view of the assets, liabilities, financial position and results of the company and all the companies included in the consolidation, and that the management report gives a true and fair view of the business performance, the results and the financial position of the company and all the companies included in the consolidation, and describes the main risks and uncertainties that they face."
Done in Paris, France, on July 9, 2025 Julien Miara, Chief Executive Officer
MANAGEMENT REPORT page 3
INCLUDING THE REPORT ON CORPORATE GOVERNANCE
CORPORATE ACCOUNTS page 56
CONSOLIDATED ACCOUNTS page 87
MANAGEMENT REPORT
INCLUDING THE CORPORATE GOVERNANCE REPORT
YEAR ENDING DECEMBER 31, 2024
SUMMARY
-
- MANAGEMENT REPORT
1.
SITUATION AND EVOLUTION OF THE COMPANY'S AND THE GROUP'S ACTIVITIES DURING
THE YEAR 6
1.1
SCOPE OF THE GROUP 7
1.2
BUSINESS TRENDS AND SIGNIFICANT EVENTS DURING THE YEAR 8
1.3
FUNDING 9
1.4
GOVERNANCE 9
1.5
CHRONOLOGICAL SUMMARY OF THE COMPANY'S PRESS RELEASES IN FISCAL YEAR 2024 10
1.6
SIGNIFICANT EVENTS AFTER DECEMBER 31, 2024 10
2.
RISK FACTORS 11
2.1
FINANCIAL RISKS 13
2.2
RISKS RELATED TO THE BUSINESS 17
2.3
LEGAL RISKS 21
2.4
RISKS RELATED TO THE COMPANY, ITS ORGANIZATION, AND ITS ENVIRONMENT 23
2.5
MAIN DISPUTES IN PROGRESS 25
3.
PRESENTATION OF VALERIO THERAPEUTICS'S FINANCIAL STATEMENTS AND ALLOCATION
OF EARNINGS 25
3.1
REVIEW OF ACCOUNTS AND RESULTS 25
3.2
ALLOCATION OF RESULTS 25
3.3
NON-TAX-DEDUCTIBLE EXPENSES 26
3.4
TABLE OF FINANCIAL RESULTS 26
3.5
ACQUISITIONS OF EQUITY INTERESTS AND CONTROLLING INTERESTS AT YEAR-END 26
3.6
AMOUNT OF LOANS UNDER THREE YEARS GRANTED BY THE COMPANY 26
3.7
TERMS OF PAYMENT STATEMENT 27
4.
PRESENTATION OF THE GROUP'S CONSOLIDATED ACCOUNTS 28
5
FINANCIAL POSITION IN RELATION TO THE VOLUME AND COMPLEXITY OF THE BUSINESS 28
6
FORESEEABLE DEVELOPMENTS AND PROJECTS 29
7
OTHER INFORMATION CONCERNING THE CAPITAL 29
7.1
CROSS-SHAREHOLDINGS AND TREASURY SHARES 29
7.2
ACQUISITION BY THE COMPANY OF ITS OWN SHARES DURING THE YEAR ENDED DECEMBER
31, 2024 29
8
EMPLOYEE SHAREHOLDING 30
9
TRANSACTIONS BY OFFICERS OR MEMBERS OF THE BOARD OF DIRECTORS IN THE
COMPANY'S SECURITIES 31
-
RISK MANAGEMENT AND INTERNAL CONTROL PROCEDURES IMPLEMENTED BY VALERIO THERAPEUTICS 31
-
COMPONENTS OF THE RISK MANAGEMENT PROCESS 31
-
GENERAL PRINCIPLES OF INTERNAL CONTROL 33
-
MAIN DEVELOPMENTS 35
-
-
-
- CORPORATE GOVERNANCE REPORT
-
COMPOSITION AND MISSIONS OF THE BOARD OF DIRECTORS 36
-
COMPOSITION OF THE BOARD OF DIRECTORS 36
-
MISSIONS OF THE BOARD OF DIRECTORS 37
-
CORPORATE GOVERNANCE CODE 37
-
AGREEMENTS REFERRED TO IN ARTICLE L. 225-37-4, 2° OF THE COMMERCIAL CODE 40
-
AGREEMENTS REFERRED TO IN ARTICLE L.225-38 OF THE COMMERCIAL CODE 40
-
-
CORPORATE MANDATES 40
-
EVOLUTION OF THE BOARD OF DIRECTORS 40
-
OFFICES AND POSITIONS HELD BY EACH OF THE COMPANY'S DIRECTORS 41
-
-
WARRANTS, STOCK OPTIONS AND FREE SHARES 45
-
CAPITAL STRUCTURE OF THE COMPANY 48
-
CAPITAL LIKELY TO BE SUBSCRIBED BY EMPLOYEES AND MANAGERS AND DILUTED CAPITAL
-
49
APPENDIX I - RESULTS OF THE LAST FIVE YEARS (STATUTORY ACCOUNTS) 52
APPENDIX II - SUMMARY TABLE OF CURRENT DELEGATIONS OF AUTHORITY GRANTED BY THE GENERAL MEETING TO THE BOARD OF DIRECTORS TO INCREASE THE SHARE CAPITAL _ 53
This report is prepared in accordance with Articles L. 225--100, L. 233--26 and L. 232--1 of the French Commercial Code and is available to shareholders. Its purpose is to present the evolution of the financial situation of Valerio Therapeutics, formerly Onxeo (hereinafter referred to as the "Company") and that of the group (hereinafter referred to as the "Group").
In accordance with the provisions of Article L. 225--37 paragraph 6 of the French Commercial Code; the corporate governance report (section II) is included in this management report.
I - MANAGEMENT REPORT
-
SITUATION AND EVOLUTION OF THE COMPANY'S AND THE GROUP'S ACTIVITIES DURING THE YEAR
Valerio Therapeutics (formerly Onxeo) is a clinical-stage biotechnology company developing innovative drug candidates using two proprietary platforms: the PlatON platform and its unique DNA decoy mechanism of action, and the V-Body platform generating single-domain therapeutic antibodies. The Company is focused on bringing early-stage first-in-class or disruptive compounds from translational research to clinical proof-of-concept, a value-creating inflection point appealing to potential partners.
Valerio Therapeutics is listed on Euronext Growth in Paris. The Company's portfolio includes:
-
platON™ is Valerio Therapeutics proprietary chemistry platform of DNA decoy therapeutics, which
generates new innovative compounds and broaden the Company's product pipeline.
-
AsiDNA™, the first compound from platON™, is a highly differentiated, clinical-stage first-in-class candidate in the field of DNA damage response (DDR) applied to oncology. Its DNA decoy therapeutic mechanism acting upstream of multiple DDR pathways results in distinctive antitumor properties, including the ability to prevent or abrogate tumor resistance to targeted therapies such as PARP inhibitors and strong synergy with tumor DNA-damaging agents such as. radiotherapy and chemotherapy. Clinical development of AsiDNA has been discontinued in order to redirect research and development efforts to next-generation drug candidates from both the PlatON and V-Body platforms.
-
VIO-01 (formerly OX425), the second compound from platON™, is a novel pan-DDR Decoy with high antitumor activity. It also mediates multiple immunostimulatory effects by activating the STING pathway. In 2024, VIO-01 underwent a first phase 1 clinical development trial in the United States. Clinical development of VIO-01 was halted in early 2025 in order to redirect research and development efforts to next-generation drug candidates from both the PlatON and V-Body platforms.
-
DecoyTAC : the 3rdgeneration platON™ platform, leveraging the unique MOA of DNA decoy therapeutics coupled to targeted protein degradation (PROTAC). This evolution expands the activity of platON™ platform beyond DNA repair by targeting other proteins such as transcription factors, in oncology and outside oncology for other diseases like inflammatory and muscular diseases. In 2024, a first proof of concept was generated by targeting the c-myc oncoprotein.
-
V-bodies Platform: The acquisition of Emglev Therapeutics (owned by Valour Bio, a subsidiary of Valerio Therapeutics) enabled the use of phage display technology to produce single-domain antibodies, called V-bodies, from proprietary synthetic libraries. These V-bodies differ from traditional antibodies in that they are significantly smaller, approximately one-tenth that of
conventional antibodies. This size advantage allows them to penetrate tissues more rapidly and reach targets that are typically difficult to access, while retaining the binding and/or neutralizing functions of a full-length antibody.
Furthermore, Valour Bio's proprietary libraries are humanized or fully human, meaning they have been engineered to reduce the potential for immunogenicity and toxicity. This humanization process improves their compatibility with the human immune system, potentially making them more tolerable as therapeutic agents for patients.
The versatility of V-bodies allows them to target a wide range of antigens, expanding their therapeutic applicability. Single-domain antibodies (Sd-Abs) have demonstrated strong potential in various pathologies, including autoimmune diseases, inflammatory conditions, and cancer. Their ability to efficiently bind to a variety of targets makes them valuable tools for the development of antibody-based therapies for the most complex diseases.
V-bodies can be used in several therapeutic formats, such as bispecific T-cell engagers (BiTEs), antibody-drug conjugates (ADCs), and chimeric antigen receptor (CAR-T) cells engrafted into T cells. Antibody-drug conjugates are particularly noteworthy because they can deliver various types of payloads, including radioisotopes, chemotherapeutic agents, small molecules, or oligonucleotides. This diversity of payloads expands the potential applications for different patient populations, making V-bodies a promising platform in biomedicine. Furthermore, V-bodies can potentially be administered via various routes, such as subcutaneous, inhaled, oral, or intravenous, offering a significant improvement over traditional antibodies, which generally require intravenous administration. Overall, Valour Bio's approach with V-bodies represents a major advancement in the field of antibody-based therapies, providing potential solutions to the critical limitations of conventional antibodies.
Optimizing the PlatON Platform with V-bodies:
The main challenges faced by the PlatON platform's DNA decoys are their short half-life and specific delivery. Combining the V-body platform with the PlatON platform will leverage these two innovations by:
-
Extending half-life with an anti-albumin V-body conjugated to the DNA decoys.
-
Increasing specificity by using V-bodies targeting tissue-specific receptors for delivery, conjugated to the DNA decoys.
The Company is convinced that these technologies have significant therapeutic potential and represent a disruptive innovation that could pave the way for a new paradigm of treatment of diseases in the field of oncology, rare diseases and inflammatory and autoimmune diseases
-
SCOPE OF THE GROUP
The Group comprises the Company which conducts most of its business, and its subsidiaries, most of which have limited activity:
-
Topotarget UK (liquidation 2024)
-
Valerio Therapeutics Inc. (in the process of liquidation)
-
Topotarget Switzerland
-
Valour Bio
-
Emglev Therapeutics
-
-
BUSINESS TRENDS AND SIGNIFICANT EVENTS DURING THE YEAR
-
VIO-01
VIO-01, formerly OX425, is a Pan-DDR DNA Decoy Targeting Multiple Proteins & Repair Pathways and represents the most optimal drug candidate selected to enter clinical development. VIO-01 traps several DDR Proteins Inhibiting Different DNA Repair Pathways. VIO-01 reaches the nucleus and acts as a decoy for several DNA repair enzymes. It has an increased resistance to nucleases and plasmatic stability.
VIO-01 underwent late-stage IND-enabling preclinical development in 2023, with the execution of regulatory toxicology and ADME/PK studies. This package allowed IND submission to FDA followed by approval to start first-in-human clinical trial which started in January 2024.
NEXT Oncology San Antonio, the first site for the Phase 1/2 study (VIO-01-101) of VIO-01, was activated and the first patient was treated in January 2024. In the first half of 2024, VIO-01 was evaluated in six patients at two different doses, with an encouraging safety profile.
Clinical development of VIO-01 was discontinued in early 2025 to redirect research and development efforts toward next-generation drug candidates based on the PlatON and V-Body platforms.
-
3RDGENERATION OF PLATON™ PLATFORM
Valerio Therapeutics continued to optimize the PlatON™ platform to develop more potent assets coupled to innovative technologies, with the objective to combine PlatON™ platform's DNA decoys with the targeted protein degradation strategy offered by PROTACs (PROteolysis-TArgeting Chimeras) technology. PROTACs technology and other tumor specific targeting options may be a novel class of hetero-bifunctional molecules that can selectively degrade target proteins within cells. This approach offers several advantages over the other molecules involved in modulating the DNA damage response, such as increased selectivity and reduced toxicity. This specific strategy involves generating DecoyTAC combining our vectorized DNA decoy molecules capable of efficient cell penetration with a linker+E3 ligand promoting the complete degradation of the target proteins, thereby presenting a novel mechanism of action.
The exploration of the convergence of PROTACs and DNA Decoys aims to not only propose new therapeutic modalities against DDR proteins but also against transcription factor proteins that are challenging to target. A first proof of concept was demonstrated by targeting the cMYC oncoprotein. Through these efforts, the Company strives to advance the field of drug development and contribute to the treatment of patients with pathologies with a real therapeutic need.
-
NEW V-BODY PLATFORM
Valour Bio's platform will enable the diversification and expansion of the company's portfolio into other oncology targets, as well as beyond oncology, particularly in autoimmune, inflammatory, and rare genetic diseases. The assets generated through the PlatON platform (DNA decoys), the V-body platform (bispecifics, ADCs, CAR-T), or both combined (V-body-oligonucleotide conjugates) will revolutionize our approach to these diseases and bring added value to the company by attracting diverse investors and facilitating future fundraising. The last quarter of 2024 allowed the internalization of the various expertise and technologies associated with this new platform and the initial proof-of-concept experiments to be conducted.
-
EVOLUTION OF THE R&D PORTFOLIO
Developments compared to the portfolio presented in the 2024 annual report are as follows:
-
Phase 1/2 of the VIO-01 clinical study in the United States began with the enrollment of six patients in the first half of 2024. Following the evolution of the R&D strategy, this study was closed in January 2025 to refocus the company on optimizing the new platforms.
-
Initial proofs of concept with DecoyTAC technology (3rd generation platON platform)
-
Internalization of the new V-body platform
As of the date of this document, the Company's R&D portfolio is as follows:
-
-
-
FUNDING
On April 30, 2024, Valerio Therapeutics has received a €5 million financing commitment from its main shareholders, Artal International inc. and Financière de la Montagne. This commitment was made in the form of a shareholder current account in May 2024, providing the Company with a cash flow horizon through the end of 2024.
Part of this financing was used by Valerio Therapeutics to complete the acquisition of Emglev Therapeutics, for an amount of 2.5 million euros.
Valerio Therapeutics used a portion of this financing to complete the acquisition of Emglev Therapeutics for
€2.5 million (a portion of which was paid in shares). The acquisition was made through its subsidiary Valour Bio. The remainder of the financing was used to cover Valerio Therapeutics' ongoing operations and the development of the new Emglev platform.
At the end of 2024, a reduction in the Company's operating expenses enabled it to extend its cash flow horizon by approximately three months. Furthermore, in 2025, in addition to reducing its expenses, the Company negotiated with various stakeholders and obtained an agreement to secure its financial and cash flow trajectory until at least the end of 2025.
-
GOVERNANCE
The Annual General Meeting of June 4, 2024 renewed the mandate of directors of Ms. Shefali Agarwal and Mr. Bryan Giraudo for a period of three years.
At a meeting held on November 13, 2024, the Board of Directors of Valerio Therapeutics decided to appoint Mr. Julien Miara as Chief Executive Officer and Chairman of the Board of Directors of Valerio Therapeutics, succeeding Ms. Shefali Agarwal.
At a meeting held on November 20, 2024, the Board of Directors of Valerio Therapeutics acknowledged the resignation of Mr. Robert L. Coleman from his position as director.
At a meeting held on November 21, 2024, the Board of Directors of Valerio Therapeutics decided to appoint Mr. Antoine Barouky as Deputy Chief Executive Officer of the Company.
As of December 31, 2024, the Board of Directors was composed of 6 members, including 2 independent members.
As of the date of this report, the Board of Directors consists of five members, including one independent member (see Corporate Governance Report for the composition of the Board of Directors as of the date of this report).
-
CHRONOLOGICAL SUMMARY OF THE COMPANY'S PRESS RELEASES IN FISCAL YEAR 2024
The full text of these press releases can be accessed on the Company website at (https://www.valeriotx.com).
January 25, 2024
Half-yearly report on the liquidity contract of Valerio Therapeutics
February 5, 2024
Valerio Therapeutics announces capital reduction driven by losses through reduction in par value of company shares
April 30, 2024
Availability of the 2023 annual report
May 22, 2024
Valerio Therapeutics Provides Clinical Development Update on its Phase 1/2 VIO-01 Clinical Trial
September 29, 2024
Half-yearly report on the liquidity contract entered into with Kepler Cheuvreux
September 30, 2024
Valerio Therapeutics Announces First Half 2024 Financial Results and Provides Business Update
September 30, 2024
Valerio Therapeutics Acquires Emglev Therapeutics, a Single Domain Antibody Therapies Company
November 15, 2024
Valerio Therapeutics S.A. Board of Directors Meeting of November 13, 2024
-
SIGNIFICANT EVENTS AFTER DECEMBER 31, 2024
On February 3, 2025, the Company announced the strategic decision to discontinue all clinical trials and related activities, including the ongoing VIO-01 trial. This decision was made by the Board of Directors in response to the Company's financing challenges. The completion of clinical trials will allow the Company to focus exclusively on early-stage drug development, ensuring efficient use of available capital while maintaining a strong focus on innovation. As part of this transition, the Company will cease its oncology clinical-stage activities and close its U.S. office in Lexington, MA.
On February 27, 2025, the Company announced that it had terminated the liquidity agreement entered into on October 29, 2018, with KEPLER CHEUVREUX. The termination took effect on February 19, 2025. This termination was decided as part of the savings realized by the Company given its cash position. The Company does not plan to enter into another liquidity agreement at this stage.
On May 5, 2025, the Company announced the postponement of the publication of its 2024 annual financial report, initially scheduled for April 30, 2025, and of the closing and approval of its 2024 statutory and consolidated financial statements, due in particular to significant difficulties in accessing the accounting elements of its subsidiary in the United States, Valerio Therapeutics Inc.
Although the assets relating to this subsidiary are depreciated in the Company's statutory financial statements and it ceased all activity at the end of 2024, this delay in the accounting treatment of Valerio Therapeutics Inc. does not allow the Company to finalize its statutory and, a fortiori, consolidated financial statements.
Consequently, the Company's 2024 consolidated and statutory accounts and the publication of the 2024 annual financial report will not be able to take place before the end of July 2025. The Company's 2024 annual accounts will be approved in September 2025.
On June 12, 2025, the Company announced, regarding the development of its financial situation, that it had finalized an agreement to extend the maturity of its bank debts and to reduce or stagger its debts to its main suppliers.
The Company's main shareholders, Artal International Inc. and Financière de la Montagne, have made advances that should be incorporated into the capital in the amount of five million five hundred thousand euros in order to meet the Company's short-term needs and finance its activities at least until the end of 2025 (it being specified that part of this envelope has already been used to settle the Company's debts). The Company's financial situation remains precarious, however, and a long-term and sustainable financing solution is still being sought.
On June 24, 2025, the Company announced the temporary suspension of trading of its shares on Euronext as of June 17, 2025, following the delay in the publication of the annual financial report for the year ended December 31, 2024. The Company reminds its shareholders that the publication of the 2024 annual financial report has been postponed due to significant difficulties in accessing the accounting information of its U.S. subsidiary, Valerio Therapeutics Inc. Valerio Therapeutics is currently finalizing its statutory and consolidated financial statements. The report will be published after the certification of the accounts by the statutory auditors.
Trading in Valerio Therapeutics shares on Euronext Growth in Paris is expected to resume after publication of this report. The Company will inform the market as soon as possible of the new publication date of the 2024 annual financial report, the final date of the General Meeting, and the effective date of resumption of trading.
-
-
RISK FACTORS
The Group operates in a constantly changing environment, which entails numerous risks, some of which are beyond its control. Before subscribing to or acquiring shares in the Company, investors are invited to review all the information contained in this Report, including the risks described below.
The Company has examined the risks to which it is exposed and presents in this section those which, in its opinion, as of the date of this Report, are likely to have a significant adverse effect on its business, prospects, financial situation, results and growth, and which, in this context, are important in making any investment decision. As of the date of this Report, the Company is not aware of any significant risks other than those presented in this section.
Investors' attention is drawn to the fact that, pursuant to Article 16 of the Prospectus Regulation, the list of risks presented in this section is not exhaustive and that other risks, currently unknown or deemed unlikely, as of the date of this Report, to have a material adverse effect on the Company, may exist or could arise.
In order to identify and assess the risks likely to have an adverse impact on the Group's business, prospects, financial situation, results (or its ability to achieve its objectives) and development, the Company periodically draws up a map of these risks.
Every identified risk is assessed in terms of probability of occurrence and potential impact, accounting for the possible consequences, from a financial, legal and reputational point of view, as well as on the achievement of the Group's objectives.
Risk mapping is thus a management tool that makes it possible, where appropriate, to define and monitor the preventive or corrective mitigation measures to be implemented in connection with the various risks
identified. The associated action plan specifies the actions to be carried out, who is responsible, who is involved, the deadlines to be met and the budget associated with each action.
The risk management process and risk mapping are presented annually to the audit committee as part of its mission to monitor and control the effectiveness of the internal control and risk management systems.
Risk mapping updated as of the date of this Report has enabled the Company to identify 20 risk factors. The probability of occurrence of each risk is assessed on five levels (from 1 - unlikely, to 5 - probable) and their potential negative impact is assessed on five levels (from 1 - limited, to 5 - major).
Multiplying the two criteria gives an overall criticality score for each risk, making it possible to group the risks into three main groups: acceptable, strong, or major.
The matrix below graphically presents the 20 risk factors identified according to their probability of occurrence and their potential impact. The numbers correspond to the risk factors listed in the following table, grouped into 4 categories according to their nature, with for each of them the section of this URP where they are described.
Within each of the four categories mentioned above, risks were ranked in order of criticality, with the risks with the highest probability of occurrence and the highest potential impact placed first, on a "net risk" basis, i.e., after accounting for preventive or mitigating measures. The occurrence of new events, either internal or external to the Group, may change this order of importance in the future.
Important note
As of the date of this Report, the Company considers that it has limited exposure to risks on its operations due to the Russian-Ukrainian conflict or the Israeli-Palestinian conflict.
However, it does not rule out the possibility that the sanctions enacted against Russia or a worsening of the Israeli-Palestinian conflict, or a wider extension of these conflicts involving other countries, could affect the smooth running of its subcontracted activities, particularly the conduct of clinical trials and production operations. In addition, the effect of these events on the world's financial markets could have a short-term impact on its ability to finance itself on the capital markets and, consequently, on the conduct of its business. The Company has identified four risks that are likely to be aggravated by this context: they are indicated by an asterisk (*) in the matrix and table below, and the circumstances of aggravation are detailed in the corresponding section.
RISK MATRIX
4
3
2
7 - 8
16
17
1
6 - 11
5-12-15-16
10-14-18
9 - 13
5
PROBABILITY
4
3
2
1
1 2 3 4 5
NEGATIVE IMPACT
Key: Acceptable risk Significant risk Major risk
Category/ Number
Risk factor
Section
I
Financial risks
2.1
1
Liquidity risk
2.1.1
2
Risk related to the evolution of the Company's shares
2.1.2
3
Risks related to the Research Tax Credit
2.1.3
4
Risk of dilution
2.1.4
5
Risk of not carrying forward tax losses
2.1.5
6
Foreign exchange risk
2.1.6
II
Risks related to the business
2.2
7
Risk related to the highly innovative nature of the Company's products and the early stage of their development
2.2.1
8
Risk of major delays in development
2.2.2
9
Risk of clinical trial failure
2.2.3
10
Risks related to a restrictive and evolving legal and regulatory framework
2.2.4
11
Risks related to competition
2.2.5
12
Risk related to industrial and commercial partnerships
2.2.6
III
Legal Risks
2.3
13
Risks related to industrial protection
2.3.1
14
Risk of legal disputes
2.3.2
15
Risk related to the control regime for foreign investments in France
2.3.3
IV
Risks related to the Company, its organization and its environment
2.4
16
Risk of dependence on third parties and failure of a subcontractor
2.4.1
17
Risk of loss of key employees
2.4.2
18
Risk associated with the use of hazardous chemicals and biological materials
2.4.3
-
FINANCIAL RISKS
-
LIQUIDITY RISK
The Company's cash and cash equivalents were 1.2 million euros on December 31, 2024. The Company relies on leading financial institutions for its cash investments and believes that it does not bear significant credit risk on its treasury.
The Company's main shareholders, Artal International Inc. and Financière de la Montagne, have provided advances which should be incorporated into the capital in the amount of five million five hundred thousand euros in order to meet the Company's short-term needs and finance its activities at least until the end of 2025 (it being specified that part of this envelope has already been used to settle the Company's debts).
Beyond this horizon, the advancement of the Company's research and development programs will continue to generate significant funding requirements. The Company's profitability depends primarily on its ability to enter into collaboration or licensing agreements for its drug candidates with industrial partners, which generate upfront and milestone payments and royalties on sales, after market authorization. These processes are lengthy and the Company, which has recorded net operating losses since the beginning of its research and development activities, anticipates further losses in the coming years as its operations continue.
The level of funding requirements and their timing depend on factors largely beyond Valerio Therapeutics control, such as:
-
higher costs for the products, raw materials, and consumables it needs, which are billed back to it by its service providers (pass-through costs), leading to a risk of expenditure spiraling out of control,
-
higher costs and slower progress than were anticipated by the Company for the preclinical and clinical development of its products,
-
the costs of preparing, filing, defending, and maintaining its patents and other intellectual property rights,
-
the scope of prior research work and the time frames required to sign license agreements with industrial partners,
-
significant delays in the negotiation of new partnerships,
-
new opportunities for developing new products or acquiring technologies, products, or companies.
Like most companies, the Company is impacted by inflation rates, higher than long term averages, resulting in higher prices for the products, raw materials, and consumables it needs, as well as an increase in the cost of services relating to its R&D activities. This has caused a significant increase in the Company's expenses that is not offset by revenues or the possibility of passing these costs on to other parties, given the absence of products commercialized by the Company.
The Company may not be able to raise additional capital when required, or this capital may not be available on financial terms acceptable to the Company. Interest rates held above long-term averages may affect the availability of capital in the biotech industry. Capital may be deployed to less risky financial products compared to investing in the biotech industry. The Company's access to capital may be adversely affected as a result.
In addition, the impact of geopolitical instability on financial market volatility could significantly amplify this risk, making it more difficult or more expensive to raise funds.
The Company will therefore have to seek new sources of financing in the future, notably through new capital increases. It does not exclude taking advantage of financing opportunities depending on market conditions to strengthen its equity. The Company cannot guarantee that it will be able to obtain the additional financing required to continue its operations on acceptable financial terms. In addition, debt financing, to the extent available, could include commitments that are binding on the Company and its shareholders.
If the necessary funds are not available, the Company's business activities could be definitively discontinued or, at a minimum, the Company may have to:
-
delay, reduce or eliminate the number or scope of its development programs; and/or
-
license its technologies to partners or third parties on terms less favorable to it than those it might have been able to negotiate in a different context; and/or
-
enter new collaborative arrangements on terms that are less favorable to it than those it could have obtained in a different context.
Furthermore, if the Company raises capital by issuing new shares, the stakes of its shareholders may be diluted. In addition, debt financing, if available, could impose restrictive terms on the Group and its shareholders.
The occurrence of one or more of these risks could have a material adverse impact on the Group and its business, financial position, earnings, development, and prospects.
This risk is particularly sensitive to geopolitical risks, including financial market volatility. A continuation or increase of economic sanctions against Russia in the context of the Russian-Ukrainian conflict, or a worsening of the Israeli-Palestinian conflict, or a wider extension of these conflicts involving other countries, could significantly amplify this risk, reducing, delaying, or making it more difficult or costly for the Company to obtain financing in the markets.
-
-
RISK RELATED TO THE EVOLUTION OF THE COMPANY'S SHARES (VOLATILITY AND LIQUIDITY)
The Company's shares are listed on the Euronext Growth market in Paris.
The shares of biotech companies are particularly volatile, and this situation may continue. The market price of the Company's shares could be materially affected by numerous factors affecting the Company, its competitors, or general economic conditions and the biotechnology industry.
In addition to geopolitical or macro-economic events that may have a strong impact on the equity market, particularly for biotechnology companies, the following factors could have a significant influence on the volatility and share price in particular:
-
The company's ability to generate its own pipeline and/or to enter into partnership agreements;
-
proof of the safety and effectiveness of the Company's and/or its competitors' products;
-
regulatory decisions, in particular those governing the pharmaceutical industry, or their anticipation, due to political factors such as the upcoming presidential elections in Franc, in the EU, or in the US;
-
changes in the Company's prospects or those of its competitors from one period to the next;
-
the announcement by the Company or its competitors of technological innovations or the commercialization of new products;
-
developments of the Company or of companies competing with partner companies;
-
developments concerning the Company's patents or intellectual property rights or those of its competitors, including litigation;
-
partnership agreements, whether concluded or terminated, including in respect of litigation;
-
announcements concerning changes in the Company's shareholding structure;
-
announcements regarding changes in the Company's management team.
The sale of Company shares or the anticipation that such sales may occur may also have an adverse impact on the Company's share price. The Company cannot predict the possible effects on the market price of the shares should its shareholders sell their shares.
In addition, the terms of any financing may adversely affect the assets or rights of the Company's shareholders, and the issuance of additional securities, whether equity or debt, or the possibility of such issuance, could result in a decline in the Company's share price.
Price evolution and trading volumes
The tables below show the evolution of the share price and the volume of transactions on the Euronext Growth Paris market over the period from January 3 to December 31, 2024
Market capitalization in millions of euros as of December 31, 2024 11.58
Share price (in euros)
-
Highest 0.166
-
Lowest 0.0065
-
At the end of the period (December 31, 2024) 0.075
-
-
RISK RELATED TO THE RESEARCH TAX CREDIT
In France, the Company benefits from the Research Tax Credit ("RTC"), which consists of a tax credit offered by the French government to companies investing significantly in research and development.
Research expenses that are eligible for the RTC include, in particular, salaries and wages paid to researchers and research technicians, depreciation of non-current assets used for research purposes, services subcontracted to approved research organizations (public or private) and intellectual property costs. The RTC recorded for the year 2024 amounted to 954,000 euros.
The fluctuations in the research tax credit from one year to the next are due to variations in research costs, as well as the impact of the collection and repayment of public aid for innovation (grants or repayable advances).It cannot be ruled out that the tax authorities may challenge the methods used by the Company to calculate research and development expenses for the purpose of determining the amount of the research tax credit, even though the Company complies with the documentation and eligibility requirements for such expenses. Therefore, the risk of a challenge to these research tax credits cannot be precluded. It should be noted that the right to recapture the tax credit may be exercised until the end of the third year following the year in which the special form required to calculate the research tax credit is filed.
If such a situation were to occur, it could have an adverse effect on the Company's results and financial position.
Finally, as part of the 2025 Finance Bill, several reforms to the Research Tax Credit were adopted, although they had not yet entered into force at the end of the 2024 financial year. These changes include a reduction in the flat rate for operating costs from 43% to 40% and the elimination of the mechanism increasing personnel expenses related to the hiring of young doctors. These changes, which will come into force in 2025, are likely to reduce the amount of the CIR that can be used in the future and will require increased vigilance in justifying R&D expenses. They are part of a context of streamlining tax incentive schemes and encourage companies to strengthen their traceability and their technical and financial documentation. In addition, these reforms tend to strengthen documentary requirements and increase tax audits, making obtaining the CIR more complex and uncertain. In particular, increased attention is paid to the qualification of R&D work, the justification of its innovative nature, as well as the traceability of eligible expenses.
-
RISK OF DILUTION
The Company regularly finances itself on the market through capital increases, which can represent a significant dilution for shareholders.
In addition, as part of its policy of motivating its managers and employees and in order to attract skills, the Company regularly allocates stock warrants, stock options and free shares that have a potential dilutive effect.
There are 37,962,670 of potential new shares resulting from the exercise convertible bonds issued in April 2022.
-
RISK OF NOT CARRYING FORWARD TAX LOSSES
The Company accumulated tax loss carryforwards of 361 million euros at December 31, 2024.
In France, the deduction of these deficits is limited to 1 million euros, plus 50% of the fraction of profits exceeding this limit. The unused balance of the deficit can be carried forward to future years and is chargeable under the same conditions without a time limit. The amount of tax losses accumulated by Valerio Therapeutics therefore represents a significant financial issue in terms of reducing future income tax expense when the Company will record profits.
There can be no assurance that future changes in applicable tax laws and regulations will not remove or modify these or other provisions in a manner that is unfavorable to the Company.
If this situation were to occur, it could have an adverse impact on the Company's earnings.
-
FOREIGN EXCHANGE RISK
The Company incurred a portion of its expenses in currencies other than the euro, particularly in the context of its American subsidiary Valerio Therapeutics Inc. (formerly Onxeo US). However, the Company will cease its clinical oncology activities and close its US office in Lexington, MA in 2025.
In addition, the Company's asset development strategy is based on the signature of license agreements generally involving upfront and milestone payments as well as royalties on sales and it is possible that these agreements will be concluded with partners outside the Euro zone.
In the future, the Company's exposure to foreign exchange risk may vary depending on:
-
the currencies in which it receives its income;
-
the currencies chosen when signing the agreements, such as licensing or co-development agreements;
-
the location of R&D activities;
-
the Company's policy for hedging foreign exchange risk.
-
-
-
RISKS RELATED TO THE BUSINESS
-
RISK RELATED TO THE HIGHLY INNOVATIVE NATURE OF THE COMPANY'S PRODUCTS AND THE EARLY STAGE OF THEIR DEVELOPMENT
The risks associated with the failure to develop a drug candidate are closely linked to the maturity stage of the drug candidate. Given the relatively early stage of the preclinical drug candidates, for the PlatON (3rdgeneration DecoyTAC) and V-Body platforms, , there is a significant risk that some or all of the Company's drug candidates may not be developed, formulated or produced under acceptable economic conditions, may have their development interrupted, may not be the subject of partnership or licensing agreements, may not obtain regulatory approval or may never be commercialized.
Valerio Therapeutics is developing a novel therapeutic approach based on a decoy DNA mechanism of tumor DNA repair pathways, which could allow synergistic effect with other anti-cancer treatments and prevent or reverse tumor resistance to certain targeted therapies.
To date, however, no decoy DNA of tumor DNA repair pathways have been developed or approved for marketing in oncology by the relevant health authorities. The prospects for the development and profitability of Valerio Therapeutics most advanced drug candidate, the Company's ability to develop, formulate or produce it under economically acceptable conditions, its safety, efficacy and its acceptance by patients, healthcare prescribers and paying agencies are therefore still highly uncertain.
Given the highly innovative nature of the technologies on which it is based, the results of VIO-01 in Phase 1/2 trial, and more generally those relating to all existing or future drug candidates in the Company's portfolio or based on its technology in their research or preclinical phases, may or may not be confirmed by subsequent clinical trials. Such a situation would have a very significant adverse impact on the Company's business, results, financial position, and prospects.
The Company could also be exposed to liability risks during the clinical development of its products (in particular, product liability related to the testing of therapeutic products in humans and animals). Its liability could thus be incurred by patients participating in clinical trials in connection with the development of the therapeutic products tested and due in particular to the unexpected side effects that could result from the administration of these products. Such a situation would have a very significant adverse impact on the Company's business, results, financial position, and prospects.
-
RISK OF MAJOR DELAYS IN DEVELOPMENT
The development of a drug candidate is a long, costly, and uncertain process aimed at demonstrating the therapeutic benefit of a drug candidate that competes with existing products or those under development.
The clinical development of our product candidates could be delayed, suspended or canceled due to a number of factors, including the following:
-
delays or failures in reaching consensus with regulatory authorities on the clinical trial protocol;
-
delays in concluding an agreement on acceptable terms with a potential CRO and potential research sites, the terms of which may be subject to extensive negotiations and may vary significantly between different CROs and research sites;
-
the imposition of a temporary or permanent clinical suspension by the regulatory authorities, including following a new safety finding that presents an unreasonable risk to clinical trial participants, a negative finding resulting from an inspection of clinical trial operations or investigator sites, developments in trials conducted by competitors for related technologies that raise concerns for the regulatory authorities about the risks to patients of that technology in a broad sense or if a regulatory authority considers that the protocol or research plan clearly fails to meet the objectives set ;
-
delays in enrolling appropriate patients to participate in the Company's clinical trials, particularly in the case of patients with HRD and HRRm tumors for treatment with VIO-01 as part of the clinical trial VIO-01-101, which means that the potential patient population is limited;
-
difficulties in collaborating with patient groups and researchers;
-
delays in obtaining full participation of patients in a clinical trial or their return for post-treatment follow-up;
-
patients withdrawing from a clinical trial;
-
changes in regulations and regulatory directives requiring the amendment or submission of new clinical trial protocols;
-
feedback from regulatory authorities requiring changes to the protocols of ongoing clinical trials to take into account safety considerations;
-
disagreements with the relevant regulator on how the Company interprets clinical trial data or because the relevant regulator does not accept these therapeutic effects as valid parameters in clinical trials that are sufficient to grant marketing authorization, for example in orphan indications;
-
changes in the standard of care on which a clinical development plan is based, which may require new or additional clinical trials;
-
the fact that the cost of clinical trials of drug candidates is higher than anticipated;
-
Delays in clinical studies could also shorten the operating periods during which the Company's products are protected by patent(s) and allow its competitors to commercialize their products in the shorter term, which could adversely affect Valerio Therapeutics ability to license or successfully commercialize its drug candidates.
If a significant delay occurs in a trial during this discovery phase of new drug candidates and development times deviate significantly from estimates, the Company could be required to abandon the development of one or more of its product candidates and not be able to generate sufficient revenues through partnerships, which could have a negative impact on the Company's financial situation and development.
This risk is particularly sensitive to geopolitical risks, especially in relation to clinical trials and production operations. Although the trials conducted and planned by the Company in 2024 are not in these countries, a continuation or increase of economic sanctions against Russia in the context of the Russian-Ukrainian conflict, or a worsening of the Israeli-Palestinian conflict, or a wider extension of these conflicts involving other countries, could significantly amplify this risk, reducing, delaying, or making it more difficult or costly for the Company to develop its a drug candidate.
-
-
RISK OF CLINICAL TRIAL FAILURE
All clinical trials are currently being completed and will be definitively completed in the first half of 2025.
-
RISKS RELATED TO RESTRICTIVE AND EVOLVING LEGAL AND REGULATORY FRAMEWORK
One of the major challenges for a growth company like Valerio Therapeutics is to succeed in developing, with the help of partners, products that integrate its technologies in the context of an increasingly restrictive regulatory environment. The pharmaceutical industry is faced with a constantly changing legal and regulatory environment and increased scrutiny from competent authorities such as the French National Agency for the Safety of Medicines and Health Products ("ANSM"), the European Medicines Agency ("EMA") in Europe, the
U.S. Food and Drug Administration ("FDA") in the United States and other regulatory authorities in the rest of the world. At the same time, the public is demanding more assurances about the safety and effectiveness of drugs.
Health authorities oversee research and development studies, preclinical studies, clinical studies, the regulation of pharmaceutical establishments, and the manufacture and marketing of drugs. This strengthening of the legislative and regulatory framework is common throughout the world, although requirements vary from one country to another. In particular, health authorities, such as the ANSM, EMA and FDA, have imposed increasingly stringent requirements in terms of the volume of data requested in order to demonstrate the efficacy and safety of a product. These increased requirements have reduced the number of products authorized compared to the number of applications filed. In addition, marketed products are regularly re-evaluated for their benefit/risk ratio after their authorization. The late discovery of problems that were not detected at the research stage may lead to marketing restrictions, product suspension or withdrawal, and increased litigation risk.
Thus the authorization process is long and costly, and can take several years, with an unpredictable result.
Should new legal or regulatory provisions increase the cost of obtaining and maintaining marketing authorizations for products or limit the economic value of a new product for its inventor, the growth prospects of the pharmaceutical industry and of the Company could be reduced.
In addition, healthcare providers, physicians and other stakeholders play a key role in the clinical development, approval and, once obtained, the recommendation and prescription of Valerio Therapeutics' drug candidates. Its agreements with such persons and third-party payers, as well as its activities, could expose the Company to laws and regulations with a broad scope of application with respect to fraud and abuse, as well as other laws and regulations relating to health care, which could limit the commercial or financial agreements and relationships through which the Company researches, develops and, when authorizations are obtained, markets or distributes its products.
For example, the U.S. Physician Payments Sunshine Act, similar state or foreign laws and regulations, such as state "anti-gift" laws and laws relating to false claims, the "Bertrand Act" in France (Law No. 2011--2012 of December 29, 2011), require relevant manufacturers of covered drugs to periodically monitor and report contracts, payments and other transfers of value to physicians and certain property rights and investments held by physicians or their immediate family members or health care professionals.
In addition, the Company may collect, process, use or transfer personal data from persons located within the European Union in the course of its activities, in particular health data, in the context of clinical trials
conducted within the European Union. A significant portion of the personal data that the Company may use could be managed by third parties (mainly CROs in connection with clinical trials). The collection and use of personal health data within the European Union is governed by the provisions of the General Data Protection Regulation (EU) 2016/679 (GDPR). Failure to comply with the requirements of the GDPR and the national laws of the Member States of the European Union relating to data protection, including data managed by third parties, for which the Company is unable to ensure compliance with the GDPR, may result in substantial fines, other administrative sanctions, and civil actions against the Company, which could have a material adverse effect on its business, prospects, financial condition and results of operations.
-
RISKS RELATED TO COMPETITION
The market for biotechnology and pharmaceuticals, including oncology, is characterized by rapidly changing technologies, products protected by intellectual property rights and intense competition, and is subject to significant and rapid change as researchers learn more about diseases and develop new technologies and treatments.
Valerio Therapeutics faces potential competition from many different sources, including large pharmaceutical and biotechnology companies, academic institutions and government agencies, as well as public and private research institutes. All drug candidates that the Company or its partners will successfully develop will compete with existing treatments and new treatments that may become available in the future.
If competing products are marketed ahead of the Company's products, or at lower prices, or cover a broader therapeutic spectrum, or are found to be more effective or better tolerated, sales of the Company's products would be adversely affected. Although some of the Company's products are "first-in-class" due to their mechanism of action, many companies are targeting the same indications and have drug candidates in clinical development, in particular large international pharmaceutical companies.
Many of the competitors developing treatments in the field of oncology and rare diseases have resources and experience significantly greater than the Company's in research, access to patients for clinical trials, drug development, financing, manufacturing, marketing, technology, and personnel. In particular, large pharmaceutical companies have much more experience than Valerio Therapeutics in conducting clinical trials and obtaining regulatory approvals.
Mergers and acquisitions in the pharmaceutical, biotechnology and diagnostics industries may result in an even greater concentration of resources on a smaller number of competitors. Small or start-up companies can also be important competitors, particularly through collaborative arrangements with large, well-established companies.
The Company may also face competition to acquire rights to promising drug candidates and other complementary technologies, to establish clinical trial sites and compete with the Company in enrolling patients for clinical trials and acquiring technologies that are complementary or necessary for its programs, as well as to enter into collaborations with partners having access to innovative technologies.
In addition, the Company's marketed products could be subject to competition through the introduction on the market of comparable drugs, and/or upon expiration of their protection by property rights or market exclusivity, the development of generics, which would result in a decrease in prices and/or sales volume and could have an adverse effect on the Company's business and financial condition.
If the Company is unable to compete successfully with new or existing products, its ability to generate revenues from licensing agreements would suffer and it may never be profitable.
-
RISK RELATED TO INDUSTRIAL AND COMMERCIAL PARTNERSHIPS
The Company's profitability depends primarily on its ability to enter into collaboration or licensing agreements for its drug candidates with industrial partners, which generate upfront and milestone payments and royalties on sales, after market authorization. Indeed, the Group's strategy favors the conduct of advanced phases of clinical development (particularly phase 3 studies) and the commercialization of its products via partners, rather than directly, given the Group's current structure and the costs in time, energy and financial and human resources required for these activities.
The conclusion of such agreements is the result of negotiations that are often long and complex and could be delayed or called into question by numerous factors, including macroeconomic, political, and competitive factors, or by failures or delays in the development of the Company's products.
The Group cannot guarantee that, when the time comes, it will be able to identify a suitable partner or enter into a partnership on the most favorable commercial terms for it. The Company's inability to enter into agreements with one or more partners to pursue the development of its drug candidates would have a material adverse effect on its ability to generate future revenues, its financial position, and its development.
Moreover, once these partnerships are entered into, the Company cannot guarantee that they will be profitable for the Group. Even if the Group were able to establish a relationship of trust with partners, it has limited control over them. These partners could call into question or be in default in the performance of their obligations, not devote sufficient time or effort to the proper performance of the Group's activities or favor their interests or those of other partners over those of the Group. Thus, insufficient performance by a current or future partner could slow down product development and thus delay or limit revenues from milestone payments or royalty payments on sales of the Company's products.
-
-
LEGAL RISKS
-
RISKS RELATED TO INDUSTRIAL PROTECTION
The Company's ability to successfully commercialize its products will depend on its ability to obtain, maintain and protect its intellectual property rights. It is important for the success of our business that the Company be able to freely exploit its products without infringing on patents or other intellectual property rights and, conversely, without third parties infringing on its intellectual property rights or those of its partners and other licensors necessary for the development and operation of the R&D programs of the Company. As of the date of this Report, the Company has rights to a hundred and ten patents or published patent applications, of which ninety-three or 85%, have been granted in several major jurisdictions or countries, including the United States, Europe, China, and Japan.
In the pharmaceutical field, patent law (articles of law, implementing regulations, case law, etc.) continues to evolve and presents uncertainties. In particular, no uniform global policy has so far emerged on the content of patents granted in the fields of biotechnology or on the scope of permitted claims. Thus, for example, patents may be granted with claims of variable/different scope from one territory to another.
Although the Company implements a proactive "intellectual property" strategy, directly related to its research and development projects, both with respect to the detection of inventions, in order to multiply protection, and with respect to monitoring third-party publications and patent procedures, it cannot, however, guarantee:
-
That it will succeed in developing new inventions, methods and/or patentable compositions, in particular with regard to the state of the art that consists of scientific publications, published patent applications/patents and/or other types of disclosures by third parties or by the Company;
-
That it will not encounter difficulties in making all necessary or desirable filings, including in the examination procedures of its patent applications;
-
That it or its licensing or collaboration partners were the first to file patents on the technology;
-
That a failure to pay or to comply with certain requirements of the patent process may occur beyond its control or will, thereby resulting in the abandonment or lapse of a patent application or patent, and thus a partial or total loss of patent rights in the relevant jurisdiction;
-
That confidentiality agreements entered into with third parties in the context of collaborations, service or subcontracting agreements will not be breached and that results will not be disclosed by these third parties before patent applications are filed, thereby jeopardizing the Company's ability to obtain patent protection, or that the third parties concerned will not claim the benefit of intellectual property rights on the Company's inventions;
-
That the Company will be able to obtain, at a reasonable cost and on terms acceptable to it, exclusive licensing rights to patents held in co-ownership by the co-owners;
-
That the Company will be able to obtain licensing rights to patents owned by third parties on which its own patents or technologies would depend under financial terms and conditions acceptable to the Company. Otherwise, the Company may have to interrupt or modify certain activities or processes (development, sales, use), or even develop or obtain alternative technologies;
-
That all patent applications filed will be granted within a reasonable time, or that they will be granted with the scope necessary to protect the technology, in one or more jurisdictions, including in all territories identified as strategic by the Company;
-
That the scope of protection conferred by a patent will be sufficient to protect the Company against the risks associated with infringement, that the Company will be able to prevent or obtain compensation for misappropriation or unauthorized use of its products and technology;
-
That the patents issued will not be subject to claims by third parties for rights to patents, know-how or other intellectual property rights that the Company owns or licenses;
-
That the granted patents will not be contested by third parties (oppositions, nullity actions,
limitation actions) or will be respected (infringement, etc. …) by its competitors;
-
That third parties will not develop and market products that compete with the technology by falling outside the protection offered by patents;
-
That there are no trademark rights or other prior rights of third parties that may claim rights to the exploitation of the technology carried out by the Company or by a licensee or sub-licensee of the Company or that may give rise to an infringement action;
-
That the Company's domain names will not be subject to a UDRP (Uniform Dispute Resolution Policy) procedure by a third party.
If one or more of these circumstances were to occur, the Company could face significant costs to enforce its rights, could be required to significantly challenge the development strategy of its drug candidates or existing or future partnership agreements, which could have an adverse or negative impact on the Company's business and financial condition.
-
-
RISK OF LEGAL DISPUTES
The Company operates in compliance with applicable laws and regulations, with the support of its internal legal team and law firms. However, legal proceedings could be instituted against the Company by competitors, industrial or commercial partners, subcontractors or other third parties in the course of its activities.
As of the date of this Report, there are no governmental, legal or arbitration proceedings, including any proceedings of which the Company is aware, which are pending or of which the Group is threatened (with the exception of a disputed invoice sent by a service provider) that are likely to have or have had in the past 12 months a significant effect on the Group's financial situation or profitability.
However, it cannot be excluded that legal proceedings may be initiated against the Company. In particular, it may be held liable for the damaging and/or wrongful conduct of its employees, collaborators, service providers, sub-contractors or partners.
For example, if the Company has to stop or delay a study, or if the results of a study show a limited rationale for carrying on such study, the Company may have to halt, postpone, or stop such study which would have an impact on the subcontractors (CROs, manufacturers, etc.). Depending on the agreements signed with these counterparties, they may claim reimbursement of the costs and fees incurred and/or damages for the amount owed by the Company for work undone / until the end of the agreement. Even such legal proceedings would not result in a conviction to the detriment of the Company, these proceedings, and the time and resources required to resolve them, may force the Company to use resources that should have been allocated to the Company's business. It could also damage the Group's reputation.
The Company has purchased liability insurance. However, if the costs or expenses associated with this or any other litigation exceed its insurance coverage, the Company may be required to directly assume all or part of the costs. If, ultimately, the Company were to pay significant defense costs and/or damages, these payments could have an adverse effect on its business. If its liability or that of its partners, licensees and subcontractors were thus called into question, if it or its partners, licensees and subcontractors were unable to obtain and maintain appropriate insurance coverage at an acceptable cost, or if the Company were unable
to protect itself in any way against liability claims, this would seriously affect the marketing of the Company's products and, more generally, adversely affect its business, results, financial position and development prospects.
-
RISK RELATED TO THE CONTROL REGIME FOR FOREIGN INVESTMENTS IN FRANCE
The completion of any investment (i) by (a) an individual of foreign nationality, (b) any individual of French nationality not domiciled in France within the meaning of article 4B of the French General Tax Code, (c) any entity governed by foreign law, and (d) any entity governed by French law controlled by one or more of the entities referred to in (a) to (c), (ii) which would result in (a) the acquisition of control - within the meaning of article L. 233-3 of the French Commercial Code - of a French company, (b) acquiring all or part of a branch of activity of a French company, or (c) for individuals who are not nationals of a Member State of the European Union or of a State party to the Agreement on the European Economic Area that has entered into an administrative assistance agreement with France and/or are not domiciled in one of these States, or for legal entities of which at least one of the members of the control chain is not subject to the law of one of these States or is not a national and/or is not domiciled there, to cross the threshold of 25% of the voting rights of a French company listed on Euronext Growth Paris and (iii) whose activities relate, even occasionally, to the research and development of so-called critical technologies, such as biotechnologies, and considered essential to the protection of public health, is subject to prior authorization by the Minister of the Economy.
If an investment in the Company that requires the prior authorization of the Minister of the Economy is made without such authorization having been granted, the Minister of the Economy may cancel the transaction or order (possibly under penalty) the investor concerned (i) to submit an application for authorization, (ii) to have the previous situation restored at its own expense or (iii) to modify the investment. In addition, the Minister may impose undertakings and conditions on the investor (including regular reporting commitments). The investor concerned could also be declared criminally liable and be sanctioned, in particular, by exclusion from all public contracts or by a fine that may not exceed the highest of the following three amounts: (i) twice the amount of the relevant investment, (ii) 10% of the Company's annual pre-tax revenues and (iii) 5 million euros (for a company) or 1 million euros (for an individual).
The application of these regulations is likely to constitute a potential barrier to investments made by investors located outside the European Economic Area and could therefore limit access to financing sources for the Company. It is also difficult to predict whether this regulation will have an impact on the volatility of the Company's share price.
-
-
RISKS RELATED TO THE COMPANY, ITS ORGANIZATION, AND ITS ENVIRONMENT
-
RISK OF DEPENDENCE ON THIRD PARTIES AND IN PARTICULAR THE RISK OF FAILURE OF A SUBCONTRACTOR IMPORTANT
Due to its structure and size, Valerio Therapeutics relies on third parties located in France and abroad to conduct its activities, in particular for the manufacture of its products and for the preclinical and clinical trials it conducts. The Company may therefore be dependent on its subcontractors and service providers:
-
As regards preclinical and clinical trials, the quality of the trial results depends in particular on the quality of the services expected and their compliance with the specifications initially set and with the applicable standards. The failure of a subcontractor involved in a preclinical or clinical trial, loss of data, data processing delays or errors could adversely affect the validity of the trials and the compilation of regulatory files for the Company's products under development.
-
With respect to the manufacture of products under development, the unavailability of subcontractors to carry out a project, their failure, loss of data, delays or errors in data
processing could have an unfavorable effect on the development of products, their availability, or their compliance, thereby affecting the conduct of tests or procedures relating to them and, ultimately, the Company's ability to generate future revenues, its financial situation, and its development.
This risk is particularly sensitive to geopolitical risks, especially with respect to clinical trials (see paragraph 2.2.4 of the management report) and production operations. A continuation or increase in the economic sanctions against Russia in the context of the Russian-Ukrainian conflict, as well as the Israeli-Palestinian conflict, or a wider extension of these conflicts involving other countries, could significantly amplify this risk, for the Company directly or through the impact that this risk could have on its partners and sub-contractors.
-
-
RISK OF LOSS OF KEY EMPLOYEES
The Company may not be able to retain its key personnel and attract the new employees it will need for its development.
The Company's success depends largely on the work and expertise of its senior management and key personnel. The temporary or permanent unavailability of these key persons could impair the Company's ability to achieve its research, development, and marketing objectives, in particular by depriving it of their expertise and technical capabilities and could seriously harm the Company's ability to successfully implement its business strategy, even though the Company has taken out a "key person" insurance policy covering the risk of bodily injury to its executives.
In addition, the Company will need to recruit new senior managers and qualified scientific personnel for the development of its activities, particularly in areas requiring expertise that it does not have in-house. The Company competes with other companies, research organizations and academic institutions to recruit and retain highly qualified scientific, technical and management personnel. To the extent that this competition is very intense, the Company may not be able to attract or retain the required key personnel on economically acceptable terms.
-
RISK ASSOCIATED WITH THE USE OF HAZARDOUS CHEMICALS AND BIOLOGICAL MATERIALS
In its laboratory, the Company may use hazardous chemicals and biological materials in the course of its business and any claims relating to improper handling, storage or disposal of these materials could be time-consuming and costly.
Research and development processes involve the controlled use of hazardous materials, including chemical, biological and radioactive products. Valerio Therapeutics cannot eliminate the risk of accidental contamination or release and any injury resulting from accidental exposure to these materials.
The Company also processes genetically recombinant material, genetically modified species and pathological biological samples. Consequently, in France and in the countries where the Company operates, it is subject to environmental and safety laws and regulations governing the use, storage, handling, release and disposal of hazardous materials, including chemical and biological products and radioactive materials.
The Company imposes preventive and protective measures for the protection of its personnel and waste control management, in accordance with applicable laws. If Valerio Therapeutics or any of its partners fail to comply with applicable regulations, the Group could be subject to fines and be required to suspend all or part of its activities.
Compliance with environmental, health and safety regulations entails additional costs, and the Company could incur significant costs to comply with future laws and regulations in the relevant jurisdictions. Compliance with environmental laws and regulations may require the Company to purchase equipment, modify facilities and incur significant expenditures. The Company could be held liable for any inadvertent contamination, injury or damage that could harm its business and reputation, although Valerio Therapeutics has taken out an insurance policy covering certain risks inherent in its business.
-
-
MAIN DISPUTES IN PROGRESS
As of the date hereof, the Company is not aware of any ongoing litigation.
-
-
PRESENTATION OF VALERIO THERAPEUTICS'S FINANCIAL STATEMENTS AND ALLOCATION OF EARNINGS
The annual financial statements of the Company that we are submitting for your approval have been prepared in accordance with the presentation rules and valuation methods provided for by the regulations in force.
-
REVIEW OF ACCOUNTS AND RESULTS
During the year ended December 31, 2024, the Company did not record any revenue.
Other operating income totaled 1,709 thousand euros in 2024, compared with 1,587 thousand euros recorded in 2023. This item mainly consists of reversals of provisions, including a reversal of 1,690 thousand euros relating to a provision for litigation.
Operating expenses decreased from 23,178 thousand euros in 2023 to 20,700 thousand euros in 2024. This decrease is mainly due to the reduction in R&D subcontracting costs, which amounted to 9,969 thousand euros, compared with 15,555 thousand euros in the previous financial year.
The operating result is a loss of (18,991) thousand euros, compared to a loss of (21,591) thousand euros for fiscal year 2023.
The financial result is an income of 1,162 thousand euros, compared to a loss of (773) thousand euros for fiscal year 2023. Financial income of 1,486 thousand euros mainly comprises interest in intercompany current accounts of 1,206 thousand euros and foreign exchange gains of 280 thousand euros. Financial expenses of 324 thousand euros include foreign exchange losses or provisions for foreign exchange losses of 126 thousand euros and interest on loans of 198 thousand euros.
The current result before taxes is a loss of (17,829) thousand euros compared to a loss of (20,818) thousand euros for the year 2022.
The extraordinary result is an income of 6,154 thousand euros mainly relating to:
-
A reversal of provisions on securities held by the subsidiary Topotarget UK for 32,548 thousand euros;
-
A reversal of provisions on current accounts for 5,816 thousand euros;
-
An expense for the liquidation of securities held by the subsidiary Topotarget UK for 32,442 thousand euros.
The Company recorded a research tax credit of 954 thousand euros for the year ended December 31, 2024.
As a result of these various items of income and expense, the net result for the year is a loss of (10,721) thousand euros compared with a loss of (20,126) thousand euros for fiscal year 2023.
-
-
ALLOCATION OF RESULTS
We propose to allocate the loss for the year, which amounts to 10,721,021.15 euros, in its entirety to the "Retained Earnings" account, which would thus amount to a negative amount of 46,061,989.07 euros (taking into account the reduction in the nominal value of the shares from €0.25 to €0.14 carried out on 5 February 2024 by reducing the nominal value by €16,980,070.03, this amount having been definitively charged to the "Retained earnings" account).
It is specified that the Company plans, in the second half of 2025, to carry out a capital reduction motivated by losses through a reduction in the nominal value of the shares.
In accordance with the provisions of Article 243 bis of the French General Tax Code, we remind you that no dividend was distributed in the last three financial years.
-
NON-TAX-DEDUCTIBLE EXPENSES
In accordance with the provisions of Articles 223 quarter of the French General Tax Code, we inform you that no non-tax-deductible expenses were incurred during the year under review.
In addition, no overheads referred to in Articles 39--5 and 223 quinquies of the French General Tax Code that are not included in the special statement were incurred.
-
TABLE OF FINANCIAL RESULTS
A table showing the Company's results for the last five years is attached to this report in Appendix I, in accordance with Article R. 225-102 paragraph 2 of the French Commercial Code.
-
ACQUISITIONS OF EQUITY INTERESTS AND CONTROLLING INTERESTS AT YEAR-END
In accordance with the provisions of Article L. 2024233-6 of the French Commercial Code, we inform you that during the past financial year, the Company acquired Emglev Therapeutics, a biotechnology company specializing in the discovery of therapeutic products based on single domain antibodies. The transaction was finalized on September 29, 2024, and allowed the acquisition of Emglev's unique proprietary platform of fully synthetic single domain antibodies. Valour Bio, a subsidiary of Valerio Therapeutics, was created to focus on the discovery of single domain antibodies, sdAbs, as immuno/radio-drug conjugates, bispecific sdAbs, sdAb inhibitors, or for CAR-T application as drug candidates for multiple therapeutic areas, including autoimmune and inflammatory diseases as well as cancers. The acquisition is structured through a cash share sale and an in-kind contribution of Emglev shares for Valour Bio shares. As a result, Emglev shareholders became Valour Bio shareholders.
-
AMOUNT OF LOANS UNDER THREE YEARS GRANTED BY THE COMPANY
None.
Management report including the Corporate governance report 2024
Board of directors' meeting of July 8, 2025
-
TERMS OF PAYMENT STATEMENT
-
In accordance with the provisions of Article L. 441--14 of the French Commercial Code, the table below shows the payment terms of the Company's suppliers and customers for the last two years.
Invoices received and issued but not yet paid at the end of the fiscal year
|
Article D.441-6.1°: invoices received but not paid at the closing date of the financial year for which the term is due |
Article D.441 6-2°: invoices issued but not paid at the closing date of the financial year for which the term is due |
|||||||||||
|
0 days |
1 to 30 days |
31 to 60 days |
61 to 90 days |
91 days and over |
Total (1 day and over) |
0 days |
1 to 30 days |
31 to 60 days |
61 to 90 days |
91 days and over |
Total (1 day and over) |
|
|
(A) Late payment brackets |
||||||||||||
|
Number of invoices concerned |
75 |
481 |
1 |
|||||||||
|
Total amount of the invoices concerned including VAT. |
500 396 |
343 622 |
243 807 |
234 955 |
3 739 100 |
4 561 485 |
0 |
0 |
0 |
0 |
544 |
544 |
|
Percentage of total purchases including VAT for the year |
7.03% |
4.83% |
3.43% |
3.30% |
52.56% |
64.12% |
||||||
|
Percentage of sales including VAT for the year |
0.00% |
0.00% |
0.00% |
0.0% |
0.0% |
100,00% |
||||||
|
Number of excluded invoices |
0 |
0 |
||||||||||
|
Total amount of excluded invoices |
0 |
0 |
||||||||||
|
(C) Reference payment terms used (contractual or legal - Article L. 441-14 or Article L. 443-1 of the Commercial Code) |
||||||||||||
-
PRESENTATION OF THE GROUP'S CONSOLIDATED ACCOUNTS
Valerio Therapeutics group's consolidated financial statements, which we are submitting for your approval, have been prepared in accordance with International Financial Reporting Standards (IFRS).
The Group recorded revenue of 1,793 thousand euros corresponding to lump-sum royalties due from Biogen under a license agreement for a non-strategic product.
Operating expenses have decreased from 21,054 thousand euros in 2023 to 18,283 thousand euros. This variation comes mainly from the following two items:
-
Personnel costs decreased from 9,270 thousand euros in 2023 to 6,626 thousand euros due to staff reduction.
-
External expenses decreased from 10.298 thousand euros in 2023 to 7,323 thousand euros, due to the decreased in R&D expenses.
The financial result is a loss of (171) thousand euros.
After taking into account these various items of income and expense thousand euros, the net result is a loss of (23,919) thousand euros compared to a loss of 20,344 thousand euros recorded in the previous year.
The contribution of the consolidated companies to the overall result is as follows:
-
Valerio Therapeutics did not record any revenue. As it bears most of the Group's research and development costs and overheads, it posted a loss of 10,721 thousand euros.
-
The Swiss subsidiary Topotarget Suisse, which received license fees from its partner Biogen, generated a profit of 715 thousand euros.
-
The American subsidiary Valerio Therapeutics Inc. generated a profit of 78 thousand euros.
-
The French subsidiary Valour Bio did not record any revenue and posted a loss of 61 thousand euros. We submit these financial statements for your approval (Articles L. 225-100, L. 233-16, and R. 225-102 of the French Commercial Code).
-
-
FINANCIAL POSITION IN RELATION TO THE VOLUME AND COMPLEXITY OF THE BUSINESS
The Group had cash and cash equivalents of 1.2 million euros at the end of the 2024 fiscal year.
On February 5, 2024, the Board approved a reduction in the share capital on the grounds of losses by reducing the par value of the Company's shares from 0.25 euro to 0.14 euro. Given that Valerio Therapeutics showed a negative "Retained earnings" account of (17,245,545) euros as approved by the Annual General Meeting of 15 June 2022, the Board of directors approved the reduction of the nominal value by an amount of 16,980,070.03 euros, this amount being definitively charged to the "Retained earnings" account which moves from 32,105,120 euros to 15,125,250 euros. As a result, the share capital has been brought from 38,591,068.20 euros to 21,610,998.20 euros.
The Company's main shareholders, Artal International Inc. and Financière de la Montagne, provided advances in the first half of 2025 that should be incorporated into the capital in the amount of €5.5 million in order to meet the Company's short-term needs and finance its activities at least until the end of 2025 (it should be noted that part of this amount has already been used to settle the Company's debts). However, the Company's financial situation remains precarious, and a long-term, sustainable financing solution is still being sought.The Group contracted government-guaranteed loans and, in April 2022, issued convertible bonds with a total balance of 7.5 million euros at the end of 2024. During the financial year, the Company entered into shareholder loan agreements with Artal International Inc. and Financière de la Montagne for an amount of 5 million euros.
Valerio Therapeutics also has public reimbursable grants of 165 thousand euros, relating to the AsiDNA™® and VIO-01 projects, which will be fully repaid by 2027.
-
FORESEEABLE DEVELOPMENTS AND PROJECTS
In 2025, the Company will pursue its value creation strategy based on the development of its therapeutic innovations up to proof of concept in humans, with the following main steps:
-
V-Body: continued internalization of this new platform and discovery of new therapeutic modalities in the field of oncology, but also in the fields of inflammatory diseases and rare genetic diseases.
-
platON™®: Continued evaluation and optimization of new compounds from PlatON™ 3rdgeneration, DecoyTAC.
-
-
OTHER INFORMATION CONCERNING THE CAPITAL
-
CROSS-SHAREHOLDINGS AND TREASURY SHARES
We inform you that our Company has not carried out any of the transactions provided for in Articles L. 233--29 and L. 233-30 of the French Commercial Code.
-
ACQUISITION BY THE COMPANY OF ITS OWN SHARES DURING THE YEAR ENDED DECEMBER 31, 2024
-
OBJECTIVES OF THE BUYBACK PROGRAM AND USE OF THE REPURCHASED SECURITIES
We remind you that, in accordance with the provisions of Articles L. 225-209 et seq. of the French Commercial Code, the Company has been authorized by its shareholders to trade in its own shares, up to a maximum of 10% of the share capital. This authorization was granted for a period of eighteen months by the Ordinary General Meeting of Shareholders of June 15, 2022, under the terms of its eighth resolution, then renewed for a period of eighteen months by the Ordinary and Extraordinary General Meeting of Shareholders of June 6, 2023, under the terms of its eighth resolution.
During the year ended December 31, 2024, the Board of Directors successively implemented the program authorized by the Shareholders' Meetings of June 15, 2022, and June 6, 2023, which are identical.
The objectives of this buyback program concern, in decreasing order of priority, the following situations:
-
stimulation of the secondary market or the liquidity of the Company's shares by an investment services provider acting independently under a liquidity contract that complies with a code of ethics recognized by the Autorité des marchés financiers;
-
implementation of any Company stock option plan in accordance with the provisions of Articles L. 225-177 et seq. of the Commercial Code;
-
free allocation of shares to employees and corporate officers under the provisions of articles L. 225-197-1 et seq. of the French Commercial Code;
-
allocation of shares to employees and, where applicable, to corporate officers in connection with profit-sharing and the implementation of any company savings plan, in accordance with the conditions laid down by law, in particular Articles L. 3332-18 et seq. of the French Labor Code;
-
purchase of shares for retention and subsequent remittance in exchange or as payment in the context of external growth transactions, up to a limit of 5% of the share capital;
-
delivery of shares on the exercise of rights attached to securities that give access to the capital;
-
cancellation of the shares thus repurchased within the limits set by law.
The description of this share buyback program is available at the Company's headquarters and on its website.
-
-
IMPLEMENTATION OF THE SHARE BUYBACK PROGRAM
In accordance with the provisions of Article L. 225--211 of the French Commercial Code, we hereby report to you on the implementation of the share buyback program during the past year.
During fiscal year 2022, the share buyback program was used exclusively within the framework of a liquidity contract with the objective of stimulating the secondary market or the liquidity of the Company's shares, by an investment services provider.
On January 2, 2007, the Company entered into a liquidity agreement with CM-CIC Securities in accordance with the code of conduct of the French Financial Markets Association (AMAFI), which is recognized by the Autorité des Marchés Financiers (AMF), in compliance with the regulations in force, and in particular the provisions of European Regulation 2273/2003 of December 22, 2003.
Valerio Therapeutics has then entrusted Kepler Cheuvreux with the implementation of a liquidity contract for its ordinary shares, effective December 3, 2018, for a period of twelve months, and renewable by tacit agreement. This contract complies with the code of ethics of the Association Française des Marchés Financiers ("AMAFI").
For the implementation of this contract, 87,612 shares and 196,423 euros in cash were allocated to the liquidity account. The negotiation costs for this contract amount to 25,000 euros per year.
Under the liquidity contract entrusted by Valerio Therapeutics to Kepler Cheuvreux, as of December 31, 2024, the following resources were included in the liquidity account:
- 486 152 securities
- € 139 565.93 in cash
The 486 152 bearer shares held in treasury at December 31, 2024, with a par value of 0.148 euros (on the basis of a par value of €0.14), represented 0.24 % of the capital and were valued at 34,303.64euros at the share purchase price.
During the 2nd half of 2024, a total of:
BUY
344,028 securities
€ 26 652,96
211 transactions
SALE
250,241 securities
€ 20 149,32
152 transactions
As a reminder, at the time of the last half-yearly balance sheet as of June 30, 2024, the following resources were included in the liquidity account:
- 128,013 securities
- €15,133.69 in cash
BUY
128 013 securities
€ 258,705.74
108 transactions
SALE
103 822 securities
€ 402,719.91
95 transactions
In accordance with the requirements of Article 2 of AMF Decision No. 2018-01, the half-yearly and annual reports on the liquidity contract are available on the Company's website
As of December 31, 2024, the Company did not hold any treasury shares (other than those of the liquidity contract here-above).
The assignments of treasury shares under the liquidity contract generated a net capital loss of 6,503.64 euros in the year ended December 31, 2024.
-
-
-
EMPLOYEE SHAREHOLDING
In accordance with Article L. 225--102 of the French Commercial Code, we inform you that as of December 31, 2024, the Company's employees and officers did not hold any interests in the Company's share capital under collective management.
Attachments
Disclaimer
Valerio Therapeutics SA published this content on July 09, 2025, and is solely responsible for the information contained herein. Distributed via Public Technologies (PUBT), unedited and unaltered, on July 09, 2025 at 14:33 UTC.
