Quarterly Report for Quarter Ending June 30, 2025 (Form 10-Q)

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 between Russia and Ukraine and the war in the Middle East), the Company's ability to maintain compliance with its covenants under its long-term debt instruments and those 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, 2024 filed with the Securities and Exchange Commission ("SEC") on March 27, 2025, 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, 2024.

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 top-line 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 ("RTF") letter from the FDA. The RTF was not the result of safety concerns, and the FDA did not request or recommend additional efficacy studies. The Company plans to resubmit the BLA in December 2025 and request Priority Review. 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 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, 2025, we have raised net cash proceeds of approximately $597.9 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 every year since inception. Our net losses for the three months ended June 30, 2025 and 2024 were $30.4 million and $22.2 million, respectively, and our net losses for the six months ended June 30, 2025 and 2024 were $57.0 million and $42.6 million, respectively. The net loss for the year ended December 31, 2024 was $95.9 million. As of June 30, 2025, we had an accumulated deficit of approximately $546.3 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, 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, 2025, we had cash and cash equivalents of $17.4 million and short-term investments of $129.0 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. 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

Refusal To File Letter

On May 27, 2025, Savara received an RTF letter from the FDA for the BLA of MOLBREEVI as a therapy to treat patients with autoimmune PAP. Upon preliminary review, the FDA determined that the BLA submitted in March 2025 was not sufficiently complete to permit substantive review and requested additional data related to Chemistry, Manufacturing, and Controls. The RTF was not the result of safety concerns, and the FDA did not request or recommend additional efficacy studies.

The RTF does not impact previous designations granted by regulators for MOLBREEVI in autoimmune PAP. 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).

Resubmission of BLA

As a result of the RTF, Savara recently held a Type A meeting with the FDA. Following the meeting, the Company reached alignment with the Agency on information needed for resubmission the BLA with FujiFilm Diosynth as Savara's drug substance manufacturer. Savara plans on resubmitting the BLA in December of 2025 and will request Priority Review.

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:

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 clinical 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 related costs for personnel in executive, finance and accounting, legal, and investor relations; as well as professional and consulting fees for accounting, legal, investor relations, business development, human resources, and information technology services. Other G&A expenses include facility lease and insurance costs.

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 Facilityin 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 equivalent, 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, 2025, 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, 2024. Please read Part II, Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations - Critical Accounting Policies and Estimatesin our Annual Report on Form 10-K for the year ended December 31, 2024, for further description of our critical accounting policies.

Results of Operations - Comparison of Three Months Ended June 30, 2025 and 2024

Research and Development

Research and development expenses increased by $3.1 million, or 17.8%, to $20.8 million for the three months ended June 30, 2025 from $17.6 million for the three months ended June 30, 2024. This increase is primarily due to the performance of tasks related to our MOLBREEVI program, which includes approximately $3.3 million of costs related to our chemistry, manufacturing, and controls activities, primarily driven by initiatives to establish our additional drug substance manufacturer, $1.1 million of costs related to regulatory affairs and quality assurance, partially offset by $1.3 million of clinical costs.

General and Administrative

General and administrative expenses increased by $5.1 million, or 92.3%, to $10.7 million for the three months ended June 30, 2025 from $5.5 million for the three months ended June 30, 2024. The increase is primarily attributable to the strategic addition of personnel and related costs of $2.5 million, certain commercial activities of $1.5 million, and other departmental overhead of $1.1 million.

Other Income, Net

There was no significant changes in Other income, net for the three months ended June 30, 2025 and the three months ended June 30, 2024.

Results of Operations - Comparison of Six Months Ended June 30, 2025 and 2024

Research and Development

Research and development expenses increased by $5.5 million, or 15.9%, to $39.9 million for the six months ended June 30, 2025 from $34.4 million for the six months ended June 30, 2024. This increase is primarily due to the performance of tasks related to our MOLBREEVI program, which includes approximately $3.8 million of costs related to our chemistry, manufacturing, and controls activities, primarily driven by initiatives to establish our additional drug substance manufacturer, $3.4 million of costs related to regulatory affairs and quality assurance, $0.1 million other departmental overhead, partially offset by $1.8 million of clinical costs.

General and Administrative

General and administrative expenses increased by $8.7 million, or 78.1%, to $19.9 million for the six months ended June 30, 2025 from $11.2 million for the six months ended June 30, 2024. The increase is primarily attributable to the strategic addition of personnel and related costs of $4.9 million, certain commercial activities of $2.3 million, and other departmental overhead of $1.5 million.

Other Income, Net

Other income, net decreased by $0.2 million to $2.8 million for the six months ended June 30, 2025 from $3.1 million for the six months ended June 30, 2024. The decrease is primarily related to a loss on extinguishment of debt partially offset by a gain on foreign currency translation rates.

Liquidity and Capital Resources

As of June 30, 2025, we had $17.4 million of cash and cash equivalents, $129.0 million in short-term investments, and an accumulated deficit of approximately $546.3 million. As discussed in Note 6. Debt Facilityin the notes to the condensed consolidated financial statements included in this Quarterly Report, on March 26, 2025, we entered into the Hercules Loan Agreement which provides for a loan facility of up to $200 million. Proceeds from the initial $30 million tranche drawn under the Hercules Loan Agreement were used to repay all outstanding obligations under the SVB Loan, with a carrying value of $26.7 million, to pay certain expenses incurred in connection with the financing, and for general corporate purposes. Subject to satisfaction of certain conditions, including attainment of FDA approval of MOLBREEVI for the treatment of autoimmune PAP, we may draw future tranches under the Hercules Loan Agreement to fund our ongoing business operations including the development, regulatory approval, marketing and commercialization of MOLBREEVI.

Further, on March 31, 2025, pursuant to Section 12(b) of the ATM Agreement, the Company delivered written notice to Evercore that it was terminating the ATM Agreement, effective April 2, 2025.

We have used and intend to use our liquidity and capital 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 our product candidate and general and administrative expenses. As we continue to progress on the IMPALA-2 trial, pursue regulatory approval, and invest in pre-commercial activities, we will continue to monitor our liquidity and capital requirements.

Cash Flows

The following table summarizes our cash flows for the periods indicated:

Cash flows from operating activities

Cash used in operating activities for the six months ended June 30, 2025 was $53.5 million, consisting of a net loss of $57.0 million and net $1.0 million in changes due to operating assets and liabilities. This was partially offset by approximately $4.5 million of net noncash charges (comprised of depreciation and amortization including right-of-use assets, amortization of debt issuance costs, loss on extinguishment of debt, accretion on discount to short-term investments, and stock-based compensation).

Cash flows from investing activities

Cash used in investing activities of $53.7 million for the six months ended June 30, 2025 was primarily associated with proceeds from maturities of short-term investments partially offset by purchases of short-term investments.

Cash flows from financing activities

Cash provided by financing activities of $2.3 million for the six months ended June 30, 2025 was primarily the result of net proceeds from the Hercules Loan Agreement partially offset by repayment of the SVB Loan.

Future Funding Requirements

We have not generated any revenue from product sales. We do not know when, or if, we will generate any revenue from product sales. We do not expect to generate any revenue from product sales unless and until we obtain regulatory approval for and commercialize our product candidate. At the same time, we expect our expenses to increase in connection with our ongoing development and manufacturing activities, particularly as we continue the research, development, manufacture, and clinical trials of, and seeking regulatory approval for, our product candidate. In addition, subject to obtaining regulatory approval of our product candidate, we anticipate we may need additional funding in connection with our continuing operations.

As of June 30, 2025, we had cash, cash equivalents, and short-term investments of approximately $146.4 million. Although we have sufficient capital to fund our planned activities, including those discussed in Note 9. Commitments - Manufacturing and Other Commitments and Contingencies, in the notes to the condensed consolidated financial statements included in this Quarterly Report, we may need to raise additional capital to further fund the development of, and seek regulatory approvals for, our product candidate and to begin commercialization of 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.

Although we believe we are well capitalized based on our current operations, until we can generate a sufficient amount of product revenue to finance our cash requirements, we may finance our future cash needs primarily through the issuance of additional equity securities and potentially through borrowings, grants, and strategic alliances with partner companies. If we are unable to raise additional funds through equity or debt financings when needed, we may be required to delay, limit, reduce, or terminate our product development or commercialization efforts or grant rights to develop and market our product candidate to third parties that we would otherwise prefer to develop and market ourselves.

Critical Accounting Policies and Estimates

Except as set forth in Note 2. Summary of Significant Accounting Policies - Recent Accounting Pronouncementsof the condensed consolidated financial statements in this Quarterly Report, there have been no material changes in our critical accounting policies and use of estimates during the six months ended June 30, 2025 as compared to those disclosed in "Part II, Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations-Critical Accounting Policies and Estimates" in the our Annual Report on Form 10-K for the year ended December 31, 2024.