Savara Inc (SVRA)

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

Cautionary Statement Concerning Forward-Looking Statements

This Quarterly Report on Form 10-Q (“Quarterly Report”) contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Any statements contained herein that involve risks and uncertainties, such as Savara’s plans, objectives, expectations, intentions, and beliefs should be considered forward-looking statements. Savara’s actual results could differ materially from those discussed in these forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to the following: the ability to project future cash utilization and reserves needed for contingent future liabilities and business operations, the risks associated with the process of conducting clinical trials and developing, obtaining regulatory approval for and commercializing drug candidates that are safe and effective for use as human therapeutics, the timing and ability to raise additional capital as needed to fund continued operations, natural disasters, pandemics, geopolitical events (including the war in Iran, the war between Russia and Ukraine and ongoing conflicts in the Middle East), the Company’s ability to maintain compliance with its covenants under its long-term debt instruments and those risks and uncertainties discussed in the section entitled “Risk Factors” in this Quarterly Report and in our Annual Report on Form 10-K for the year ended December 31, 2025 filed with the Securities and Exchange Commission ("SEC") on March 13, 2026, all of which are difficult to predict.

Statements made herein are as of the date of the filing of this Quarterly Report with the SEC and should not be relied upon as of any subsequent date. We disclaim any obligation, except as specifically required by law and the rules of the SEC, to publicly update or revise any such statements to reflect any change in our expectations or in events, conditions or circumstances on which any such statements may be based or that may affect the likelihood that actual results will differ from those set forth in the forward-looking statements.

The following discussion and analysis of the financial condition and results of operations should be read in conjunction with the accompanying condensed consolidated financial statements and related notes included elsewhere in this Quarterly Report and the consolidated financial statements and related notes in our Annual Report on Form 10-K for the year ended December 31, 2025.

Overview

Savara Inc. (together with its subsidiaries “Savara,” the “Company,” “we,” “our” or “us”) is a clinical-stage biopharmaceutical company focused on rare respiratory diseases. Our sole program, MOLBREEVI[1], an inhaled biologic, is a granulocyte-macrophage colony-stimulating factor (“GM-CSF”) in development for autoimmune pulmonary alveolar proteinosis ("autoimmune PAP"). Savara previously announced positive topline results from IMPALA-2, the Phase 3 clinical trial of MOLBREEVI for the treatment of autoimmune PAP and the submission of the Biologics License Application ("BLA") to the FDA for MOLBREEVI in autoimmune PAP. In February 2026, the FDA formally filed the BLA for MOLBREEVI and granted Priority Review. In March 2026, the European Medicines Agency (“EMA”) validated the submission of the MOLBREEVI marketing authorization application (“MAA”) in autoimmune PAP which will be reviewed by the Committee for Medicinal Products for Human Use. In April 2026, Savara announced that the U.K. Medicines and Healthcare Products Regulatory Agency (“MHRA”) validated the submission of the MOLBREEVI MAA for the treatment of autoimmune PAP in the U.K. subject to Accelerated Review with a 150-day assessment duration. In April 2026, Savara announced that the FDA extended the review period for the MOLBREEVI BLA to allow the FDA additional time to complete their review. The FDA determined that the Company’s responses to recent information requests by the Agency during their review constituted a major amendment to the BLA, resulting in a three-month extension of the Prescription Drug User Fee Act ("PDUFA") target action date to November 22, 2026. MOLBREEVI for the treatment of autoimmune PAP has been granted Fast Track and Breakthrough Therapy Designations by the FDA, Orphan Drug Designation by the FDA and the EMA, as well as Innovation Passport ("IP") and Promising Innovative Medicine ("PIM") designations by the MHRA. Savara, together with its wholly-owned subsidiaries, which include Aravas Inc. and Savara ApS, operate in one segment with its principal office in Yardley, Pennsylvania, though a majority of our employees work remotely.

Since inception, we have devoted our efforts and resources to identifying and developing our product candidates, recruiting personnel, and raising capital. We have incurred operating losses and negative cash flow from operations and have no product revenue from inception to date. From inception to June 30, 2026, we have raised net cash proceeds of approximately $738.1 million, primarily from underwritten offerings of our common stock, private placements of common stock, and debt financings.

[1] MOLBREEVI is the proposed trade name for molgramostim inhalation solution. It is not approved in any indication. MOLBREEVI is a trademark of Savara Inc.

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We have never been profitable and have incurred operating losses every year since inception. Our net losses for the three months ended June 30, 2026 and 2025 were $40.2 million and $30.4 million, respectively. The net loss for the year ended December 31, 2025 was $118.8 million. As of June 30, 2026, we had an accumulated deficit of approximately $685.6 million. Our operating losses primarily resulted from expenses attributed to our research and development programs and from general and administrative costs associated with our operations.

We have chosen to operate by outsourcing our manufacturing and most of our clinical operations. We expect to incur significant additional expenses and continue to incur operating losses for at least the next several years as we continue the clinical development of, and seek regulatory approval for, and prepare for the commercialization of our primary product candidate. We expect that our operating losses will fluctuate significantly from quarter to quarter and year to year due to the timing of clinical development programs and efforts to achieve regulatory approval.

As of June 30, 2026, we had cash and cash equivalents of $41.8 million and short-term investments of $131.2 million. We will continue to require additional capital to continue our clinical development and potential commercialization activities. Although we have sufficient capital to fund many of our planned activities, we may need to continue to raise additional capital to further fund the development of, and seek regulatory approvals for, our product candidate and begin to commercialize any approved product. The amount and timing of our future funding requirements will depend on many factors, including the pace and results of our clinical development efforts and regulatory and commercial variability. Failure to raise capital as and when needed, on favorable terms or at all, would have a negative impact on our financial condition and our ability to develop our product candidate.

Financial Operations Overview

Research and Development Expenses

We recognize all research and development costs as they are incurred. Research and development expenses consist primarily of the following:

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expenses incurred under agreements with contract research organizations (“CROs”), consultants, and clinical trial sites that conduct research and development activities on our behalf;

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laboratory and vendor expenses related to the execution of our clinical trials;

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contract manufacturing expenses, primarily for the production of clinical supplies; and

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internal costs that are associated with activities performed by our research and development organization, consisting primarily of:

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personnel costs, which include salaries, benefits, and stock-based compensation expense;

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facilities and other expenses, which include expenses for maintenance of facilities and depreciation expense; and

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regulatory expenses and technology license fees related to development activities.

We expect research and development expenses will remain significant in the future as we advance our MOLBREEVI product candidate through clinical trials and pursue regulatory approvals, which will require a significant increased investment in regulatory support and contract manufacturing activities, including investing in the development of a second source manufacturer and CMC supplies.

The process of conducting clinical trials necessary to obtain regulatory approval is costly and time consuming. We may never succeed in timely developing and achieving regulatory approval for our product candidate. The probability of success of our product candidate may be affected by numerous factors, including clinical data, competition, intellectual property rights, manufacturing capability, and commercial viability. As a result, we are unable to accurately determine the duration and completion costs of our development projects or when and to what extent we will generate revenue from the commercialization and sale of MOLBREEVI.

General and Administrative Expenses

General and administrative ("G&A") expenses consist primarily of salaries, benefits and other related costs, including stock-based compensation, for our non-employee directors and employees primarily serving in our executive, finance, legal, commercial and human resources functions. G&A expenses also include but are not limited to professional fees for legal services, insurance, facility lease, investor relations, business development, board of director fees, consulting services, including information technology and tax and accounting services.

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Other Income (Expense), Net

Other income (expense) includes amortization expense related to capitalized debt issuance costs and debt discount under our loan agreements. Refer to Note 6. Debt Facility in the notes to the condensed consolidated financial statements included in this Quarterly Report. Interest expense is typically reported net of interest income which includes interest earned on our cash, cash equivalents, and short-term investment balances. Other income (expense) also includes net unrealized and realized gains and losses from foreign currency transactions, loss on extinguishment of debt, refundable tax credits generated by some of our foreign subsidiaries, and securities subject to fair value accounting as well as any other non-operating gains and losses.

Critical Accounting Policies and Estimates

There have not been any material changes during the six months ended June 30, 2026, to the methodology applied by management for critical accounting policies previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2025. Please read Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations – Critical Accounting Policies and Estimates in our Annual Report on Form 10-K for the year ended December 31, 2025, for further description of our critical accounting policies.

Results of Operations – Comparison of Three Months Ended June 30, 2026 and 2025

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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the consolidated financial statements and related notes appearing elsewhere in this report. In addition to historical information, this discussion and analysis contains forward-looking statements that involve risks, uncertainties, and assumptions. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of certain factors, including but not limited to those identified under Item 1A. Risk Factors in this report.

Overview

Savara Inc. (together with its subsidiaries “Savara,” the “Company,” “we,” “our” or “us”) is a clinical-stage biopharmaceutical company focused on rare respiratory diseases. Our sole program, MOLBREEVI, an inhaled biologic, is a granulocyte-macrophage colony-stimulating factor ("GM-CSF") in development for autoimmune pulmonary alveolar proteinosis ("autoimmune PAP"). Savara previously announced positive topline results from IMPALA-2, the Phase 3 clinical trial of MOLBREEVI in autoimmune PAP and the submission of the Biologics License Application ("BLA") to the FDA for MOLBREEVI in autoimmune PAP. In May 2025, Savara announced the Company had received a Refusal to File letter ("RTF") from the FDA. The Company resubmitted the BLA in December 2025 and requested Priority Review, and the FDA formally filed the BLA for MOLBREEVI in February 2026 and granted Priority Review. MOLBREEVI in autoimmune PAP has been granted Fast Track and Breakthrough Therapy Designations by the FDA, Orphan Drug Designation by the FDA and the European Medicines Agency ("EMA"), as well as Innovation Passport ("IP") and Promising Innovative Medicine ("PIM") designations by the UK’s Medicines and Healthcare Products Regulatory Agency ("MHRA"). Savara, together with its wholly-owned subsidiaries, which include Aravas Inc. and Savara ApS, operate in one segment with its principal office in Langhorne, Pennsylvania, though a majority of our employees work remotely.

Since inception, we have devoted substantially all of our efforts and resources to identifying and developing our product candidates, recruiting personnel, and raising capital. We have incurred operating losses and negative cash flow from operations and have no product revenue from inception to date. From inception to December 31, 2025, we have raised net cash proceeds of approximately $738.1 million, primarily from underwritten offerings of our common stock, private placements of common stock, and debt financings.

We have never been profitable and have incurred operating losses in each year since inception. Our net losses were $118.8 million and $95.9 million for the years ended December 31, 2025 and 2024, respectively. As of December 31, 2025, we had an accumulated deficit of $608.1 million. Our operating losses primarily resulted from expenses attributed to our research and development programs and from general and administrative costs associated with our operations.

We have chosen to operate by outsourcing our manufacturing and most of our clinical operations. We expect to incur significant additional expenses and continue to incur operating losses for at least the next several years as we initiate and continue the clinical development of, and seek regulatory approval for, our product candidate. We expect that our operating losses will fluctuate significantly from quarter to quarter and year to year due to timing of clinical development programs and efforts to achieve regulatory approval.

As of December 31, 2025, we had cash and cash equivalents of $33.2 million and short-term investments of $202.5 million. Although we have sufficient capital to fund many of our planned activities, we may need to continue to raise additional capital to further fund the development of, and seek regulatory approvals for, our product candidate and begin to commercialize any approved product. The amount and timing of our future funding requirements will depend on many factors, including the pace and results of our clinical development efforts. Failure to raise capital as and when needed, on favorable terms or at all, would have a negative impact on our financial condition and our ability to develop our product candidate.

Recent Events

BLA Submission Complete

On December 22, 2025, Savara announced that it had resubmitted the MOLBREEVI BLA to the FDA for the potential treatment of autoimmune PAP, a chronic and debilitating rare lung disease characterized by the abnormal build-up of surfactant in the alveoli. The Company requested Priority Review of the application. In February 2026, the FDA formally filed the BLA for MOLBREEVI and granted Priority Review.

October 2025 Underwritten Public Offering of Common Stock

On October 31, 2025, the Company sold pursuant to an underwritten public offering (i) an aggregate of 28,452,381 shares of the Company’s common stock for $4.20 per share, including 4,642,857 shares of common stock sold pursuant to the exercise in full by the underwriters of their option to purchase additional shares, and (ii) pre-funded warrants to purchase an aggregate of 7,142,857 shares of common stock at an exercise price of $0.001 per share (the “2025 Pre-Funded

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Warrants”) for $4.199 per pre-funded warrant (collectively, the “October 2025 Offering”). The October 2025 Offering was made pursuant to the Company’s shelf registration statement on Form S-3 (File No. 333-279274), which was previously filed with the Securities Exchange Commission on May 9, 2024 and declared effective on May 21, 2024, and a prospectus supplement filed with the SEC on October 30, 2025. The October 2025 Offering resulted in net proceeds to the Company of approximately $140.2 million, after deducting final underwriting discounts, commissions, and other estimated offering expenses. The Company intends to use the net proceeds for working capital and general corporate purposes, which include, but are not limited to, the funding of clinical development of and pursuing regulatory approval for MOLBREEVI, investing in our commercialization infrastructure and supply, commercial launch preparation activities in the United States and European Union and general and administrative expenses.

Royalty Purchase and Sale Agreement

On October 29, 2025, we entered into the Purchase Agreement, pursuant to which the Purchaser agreed to pay us $75.0 million upon approval of MOLBREEVI by the FDA on or before March 31, 2027 and subject to satisfaction of other customary closing conditions, in exchange for a true sale of assigned interests, including the right to receive royalty payments equal to a percentage of Net Sales (as defined in the Purchase Agreement) of MOLBREEVI in the United States.

Debt Financing

On January 26, 2026, we entered into the First Amendment to the Hercules Loan Agreement. As amended, the Hercules Loan Agreement provides for the Company to borrow up to an aggregate of $105 million of term loans.

The First Amendment reset the timing and conditions to the Company’s ability to draw up to $75 million of additional term loans under the Loan Agreement, subject in each case to FDA approval of the Company’s MOLBREEVI product candidate for the treatment of autoimmune PAP (the “Approval Milestone”).

Pursuant to the First Amendment, upon achievement of the Approval Milestone, the Company may borrow up to $75 million of additional term loans under the Loan Agreement, as follows:

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Up to $45 million through the earlier of (i) 120 days following the Approval Milestone or (ii) June 30, 2027 (the “First Post-Approval Tranche”).

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Beginning upon the earlier of the full draw or expiration of the First Post-Approval Tranche, up to $30 million through the earlier of (i) 120 days following the Approval Milestone or (ii) June 30, 2027.

Refer to Note 7. Debt Facility and Note 16. Subsequent Events in the notes to our consolidated financial statements in this annual report on Form 10-K for additional discussion.

Litigation Dismissal

On February 6, 2026, the co-lead plaintiffs of the securities class action claim filed against the Company on September 8, 2025, as described in Note 10. Commitments to our consolidated financial statements in this Annual Report on Form 10-K, voluntarily dismissed the action without prejudice as to all defendants. On February 12, 2026, the plaintiffs in the stockholder derivative action described in Note 10. Commitments to our consolidated financial statements in this Annual Report on Form 10-K voluntarily dismissed the action without prejudice as to all defendants.

Critical Accounting Policies and Estimates

Our management’s discussion and analysis of financial condition and results of operations is based on our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the U.S. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities and expenses. On an ongoing basis, we evaluate these estimates and judgments. We base our estimates on historical experience and on various assumptions that we believe to be reasonable under the circumstances. These estimates and assumptions form the basis for making judgments about the carrying values of assets and liabilities and the recording of expenses that are not readily apparent from other sources. Actual results may differ materially from these estimates. We believe that the accounting policies discussed below are critical to understanding our historical and future performance, as these policies relate to the more significant areas involving management’s judgments and estimates. Refer to Note 2. Summary of Significant Accounting Policies in the notes to our consolidated financial statements in this annual report on Form 10-K for additional discussion.

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Accrued Research and Development Expenses

We record the costs associated with research, nonclinical and clinical trials, and manufacturing development as incurred. These costs are a significant component of our research and development expenses, with a substantial portion of our on-going research and development activities conducted by third party service providers, including contract research, regulatory support, and manufacturing organizations.

We accrue for expenses resulting from obligations under agreements with CROs, CMOs, and other outside service providers for which payment flows do not match the periods over which materials or services are provided to us. Accruals are recorded based on estimates of services received and efforts expended pursuant to agreements established with CROs, CMOs, and other outside service providers. These estimates are typically based on contracted amounts applied to the activities performed and determined through analysis with internal personnel and external service providers as to the progress or stage of completion of the services. We make significant judgments and estimates in determining the accrual balance in each reporting period. In the event advance payments are made to a CRO, CMO, or outside service provider, the payments will be recorded as a prepaid asset which will be amortized or expensed as the contracted services are performed. As actual costs become known, we adjust our prepaids and accruals and related expense. Inputs, such as the services performed, the number of patients enrolled, or the trial duration, may vary from our estimates, resulting in adjustments to research and development expense in future periods. Changes in these estimates that result in material changes to our accruals could materially affect our results of operations. To date, we have not experienced any material deviations between accrued and actual research and development expenses.

Acquired IP

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