Executive Summary

Q2 2019 was dominated by Molgradex aPAP outcomes: IMPALA narrowly missed the primary endpoint (A-aDO2), but delivered statistically significant improvements in SGRQ and DLCO, supporting a continued regulatory path; management is preparing for a Type C FDA response in October and anticipates filing for Breakthrough Designation .
Financially, net loss widened to $(21.9)M and EPS to $(0.57), driven by a $7.4M non-cash goodwill impairment and higher G&A; cash/short-term investments were $111.7M with ~$24.8M debt, supporting runway into 2021 .
AeroVanc AVAIL guidance was pushed: enrollment completion now expected 1H 2020 (from Q3 2019) and top-line results late 2020/early 2021 (from Q2 2020), reflecting persistent pediatric screening failures and exacerbations; amikacin/fosfomycin was deprioritized to conserve resources .
Wall Street consensus (S&P Global) was unavailable due to data-access limits; estimate comparisons could not be assessed this quarter. Values retrieved from S&P Global were unavailable due to service limits.

What Went Well and What Went Wrong

What Went Well

Statistically significant patient-reported quality-of-life improvement: SGRQ improvement of 12.3 points vs 4.7 on placebo (Δ=7.6; p=0.01), approximately twice the clinically meaningful threshold, underscoring tangible clinical benefit .
Gas exchange improvement evidenced by DLCO: +11.6% predicted vs +3.9% on placebo (Δ=7.9%; p=0.007); management emphasized the “totality of data” and dose-frequency dependence across endpoints and biology .
Operational resilience and runway: cash/short-term investments of $111.7M, debt ~$24.8M, with management reiterating runway into 2021 even after cost actions and portfolio prioritization .
Quote: “We remain optimistic that IMPALA can serve as a registrational study... we hope to get a better understanding of the agency’s sentiments... this October” — CEO Rob Neville .

What Went Wrong

Primary endpoint miss: A-aDO2 treatment difference of 4.6 mmHg (12.1 improvement continuous vs 8.8 placebo; p=0.17) did not reach statistical significance, raising regulatory uncertainty and potential need for an additional Phase 3 .
AVAIL timeline slippage: enrollment completion pushed to 1H 2020 from Q3 2019; top-line results late 2020/early 2021 vs prior Q2 2020, due to ~50% pediatric screening failure and exacerbations before randomization .
Non-cash impairment and higher OpEx: $7.4M goodwill impairment following IMPALA results and increased G&A to $4.2M drove the widened net loss/EPS vs prior periods .

Financial Results

P&L comparison

Metric	Q2 2018	Q1 2019	Q2 2019
Net Loss ($USD Millions)	$11.6	$12.1	$21.9
EPS ($USD)	$(0.37)	$(0.34)	$(0.57)
R&D ($USD Millions)	$9.3	$10.0	$10.5
G&A ($USD Millions)	$2.5	$2.8	$4.2
Goodwill Impairment ($USD Millions)	$0.0	$0.0	$7.4
Total Operating Expenses ($USD Millions)	$11.9	$12.9	$22.2
Loss from Operations ($USD Millions)	$(11.9)	$(12.9)	$(22.2)
Other Income, net ($USD Millions)	$0.313	$0.808	$0.215

Note: Savara did not report product revenues; P&L reflects operating expenses and other income items .

Balance sheet snapshot

Metric	Dec 31, 2018	Mar 31, 2019	Jun 30, 2019
Cash, Cash Equivalents & Short-Term Investments ($USD Millions)	$110.8	$105.2	$111.7
Debt ($USD Millions)	$24.5	$24.7	$24.8
Stockholders’ Equity ($USD Millions)	$108.2	$101.8	$112.8
Total Assets ($USD Millions)	$152.3	$148.3	$147.3
Total Liabilities ($USD Millions)	$44.1	$46.5	$34.5

Clinical KPIs (IMPALA ITT, 24 weeks)

KPI	Q2 2019
A-aDO2 improvement (mmHg)	12.1 continuous vs 8.8 placebo; Δ=4.6 (p=0.17)
DLCO improvement (% predicted)	+11.6% continuous vs +3.9% placebo; Δ=7.9% (p=0.007)
SGRQ improvement (points)	12.3 continuous vs 4.7 placebo; Δ=7.6 (p=0.01)
6-minute walk distance (meters)	+39.6 continuous vs +6.0 placebo
Whole lung lavage (count)	9 continuous; 7 intermittent; 17 placebo during treatment period

Estimate comparisons

Metric	Q1 2019 Consensus	Q1 2019 Actual	Beat/Miss	Q2 2019 Consensus	Q2 2019 Actual	Beat/Miss
EPS ($USD)	N/A (unavailable)	$(0.34)	N/A	N/A (unavailable)	$(0.57)	N/A
Revenue ($USD Millions)	N/A (unavailable)	N/A (no product revenue reported)	N/A	N/A (unavailable)	N/A (no product revenue reported)	N/A

Estimates were unavailable due to S&P Global request limits; comparisons could not be assessed this quarter.

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
AVAIL enrollment completion	AeroVanc Phase 3	Q3 2019	1H 2020	Lowered/pushed out
AVAIL top-line results	AeroVanc Phase 3	Q2 2020	Late 2020 or early 2021	Lowered/pushed out
IMPALA regulatory next step (aPAP)	Molgradex	BLA submission H1 2020 (anticipated pre-readout)	Type C written FDA response expected Oct 2019; anticipate Breakthrough Designation filing; BLA timing TBD	Reset to regulatory dialogue; timing uncertain
Amikacin/Fosfomycin program	Exploratory pipeline	Phase 2 start late 2019/early 2020	Deprioritized; to be considered later	Lowered/prioritized out
Cash runway	Corporate	Not specified	Into 2021	Added runway clarity

Earnings Call Themes & Trends

Topic	Previous Mentions (Q4 2018, Q1 2019)	Current Period (Q2 2019)	Trend
Regulatory path for Molgradex (aPAP)	Targeting BLA submission in H1 2020 contingent on positive IMPALA	Missed A-aDO2; leveraging “totality of data”; Type C written FDA response Oct; potential Breakthrough filing	From confident launch prep to data-informed regulatory dialogue
Clinical efficacy signals	Interim NTM results encouraging; IMPALA-X enrollment strong	Significant SGRQ and DLCO improvements; endpoints moved in sync; IMPALA-X: 32/35 enrolled, no WLLs to date	Strengthened non-primary efficacy narrative
Cash runway	Raised capital in 2018; strong cash at YE18 ($110.8M)	$111.7M cash; runway into 2021	Stable; reinforced
AVAIL enrollment dynamics	153 enrolled; completion Q3 2019; top-line Q2 2020	168 enrolled; pediatric screening failures ~50%; completion 1H 2020; top-line late 2020/early 2021	Delayed; acknowledging execution headwinds
Portfolio prioritization	Amikacin/fosfomycin Phase 2 planning	Deprioritized to focus on later-stage programs	Resource reallocation

Management Commentary

“Our highest corporate priority continues to be the Molgradex aPAP program... the totality of the efficacy data are encouraging... We are proceeding with regulatory interactions... preparing for an additional Phase 3 study should that be required.” — Rob Neville, CEO .
“Seven key factors underpin our optimism... removal of surfactant linked to improved gas exchange (A-aDO2, DLCO), correlated with clinical endpoints (SGRQ, 6MWD), with dose-frequency dependence supporting true biological effect.” — Taneli Jouhikainen, COO .
“As of June 30th 2019, we had cash, cash equivalents and short term investments of $111.7 million and approximately $25 million in debt... sufficient funds to get us into 2021.” — Dave Lowrance, CFO .
“We remain encouraged about IMPALA... significant improvement in SGRQ... favorable safety profile... preparing to meet with FDA and EMA to determine options to seek approval and potentially conduct an additional study.” — Rob Neville, CEO .

Q&A Highlights

Breakthrough Designation timing: plan to seek breakthrough soon after receiving FDA Type C written response in October; date not fully committed .
Europe path: will follow customary EMA sequence, likely behind FDA due to resource considerations .
Preparedness for additional Phase 3: company is ready if required; learnings from IMPALA inform more efficient design, with better understanding of effect size and sample size .
Cash prioritization: focus on Molgradex aPAP and AeroVanc Phase 3; revisiting forecasts with each new data point to protect key assets and extend runway .
IMPALA open-label (Period 2) and IMPALA-X: preliminary indications of reduced WLL frequency as treatment continues; will share details after completion of open-label period .

Estimates Context

S&P Global consensus estimates for EPS and revenue in Q2 2019 and Q1 2019 were unavailable due to service request limits; as a result, beat/miss analysis versus consensus could not be performed this quarter. Values retrieved from S&P Global were unavailable due to service limits.
Given the development-stage profile and absence of reported product revenue, near-term estimate revisions are likely to focus on R&D/OpEx trajectory, timing of AeroVanc milestones, and regulatory probabilities for Molgradex rather than revenue forecasting .

Key Takeaways for Investors

The core clinical narrative is shifting to the “totality of data”: while IMPALA missed A-aDO2, significant SGRQ and DLCO improvements, dose-frequency signals, and safety profile support continued pursuit of approval via FDA dialogue; outcome of the October Type C written response is a near-term catalyst .
Expectation reset on AeroVanc timelines: enrollment completion to 1H 2020 and top-line late 2020/early 2021 reflect pediatric screening dynamics, affecting valuation timing for this asset; monitor quarterly enrollment progress .
Cash runway into 2021 provides flexibility to engage regulators and, if necessary, execute an additional Molgradex Phase 3 without immediate capital needs; cost discipline includes deprioritization of exploratory programs .
Watch for regulatory signals: breakthrough designation filing and FDA response may materially influence probability of success, program design requirements, and investor sentiment; EMA path likely follows FDA .
Clinical KPIs point to patient benefit beyond oxygenation metrics: SGRQ and DLCO improvements, 6MWD trend, and lower WLL counts in active arms may resonate with patient-focused regulators and KOLs, supporting approvability narratives .
Non-cash goodwill impairment and higher G&A widened GAAP loss; future quarters should be evaluated for OpEx normalization versus incremental costs to support regulatory dossiers or potential confirmatory studies .
Trading lens: the October FDA written response and any breakthrough designation news are likely stock-moving events; AeroVanc enrollment updates and CF infection management context could also drive sentiment on the secondary asset .

Savara Inc (SVRA)·Q2 2019 Earnings Summary