UNIQURE N.V. The following Management's Discussion and Analysis of Financial Condition and
Results of Operations ("MD&A") is intended to help the reader understand our
results of operations and financial condition. This MD&A is provided as a
supplement to, and should be read in conjunction with, our unaudited
consolidated financial statements and the accompanying notes thereto and other
disclosures included in this Quarterly Report on Form 10-Q, including the
disclosures under Part II, Item 1A "Risk Factors," and our audited financial
information and the notes thereto included in our Annual Report . Our
unaudited consolidated financial statements have been prepared in accordance
with generally accepted accounting principles in the
Overview
We are a leader in the field of gene therapy and seek to deliver to patients
suffering from rare and other devastating diseases single treatments with
potentially curative results. We are advancing a pipeline of innovative gene
therapies, including product candidates for the treatment of
Business Developments
Below is a summary of our recent significant business developments:
AMT-130 is our novel gene therapy candidate for the treatment of
In
On
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CSL Behring collaboration
On
In
Preclinical programs
On
Covid pandemic
The coronavirus disease ("Covid") caused by the severe acute respiratory
syndrome coronavirus 2 ("Sars-CoV 2 virus") was characterized as a pandemic by
the
a) Workplace and employees
Throughout the pandemic, we have been implementing measures to address the
impact of Covid on our business. We have implemented a series of protocols
governing the operations of our
Effective
Effective
b) Business impact
The broader implications of Covid, including the implications from the various variants, on our results of
operations and overall financial performance remain uncertain. We have experienced increased lead times in the delivery of equipment and disposables that we use to manufacture materials for our various programs. Currently, these have not materially impacted our development timelines and we continue to adapt to the current environment to minimize the effect to our business. However, we may experience more pronounced disruptions in our operations in the future.
Russian-Ukrainian war
Our business is not directly impacted by the war as we do not operate in either
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Intellectual Property
On
Financial Overview
Key components of our results of operations include the following:
Three months ended March 31,
2022 2021
(in thousands)
Total revenues $ 1,792 $ 454
Research and development expenses (45,003) (32,656)
Selling, general and administrative expenses (10,987) (12,376)
Net loss (46,678) (41,556)
As of
We anticipate that our expenses will increase substantially as we:
? advance the clinical development of AMT-130 for our
therapy program;
? advance multiple research programs related to gene therapy candidates targeting
liver-directed and CNS diseases;
? continue to expand our employee base to support research and development, as
well as general and administrative functions;
? acquire or in-license rights to new therapeutic targets or product candidates;
continue to expand, enhance and optimize our technology platform, including our
? manufacturing capabilities, next-generation viral vectors and promoters, and
other enabling technologies;
? maintain, expand, and protect our intellectual property portfolio, including
in-licensing additional intellectual property rights from third parties; and
? make potential future milestone payments related to the acquisition of
Corlieve, if any.
See "Results of Operations" below for a discussion of the detailed components and analysis of the amounts above.
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Critical Accounting Policies and Estimates
In preparing our consolidated financial statements in accordance with
Research and development expenses
We expense research and development ("R&D") expenses as incurred. Our R&D expenses generally consist of costs incurred for the development of our target candidates, which include:
? employee-related expenses, including salaries, benefits, travel and share-based
compensation expense;
costs incurred for laboratory research, preclinical and nonclinical studies,
? clinical trials, statistical analysis and report writing, and regulatory
compliance costs incurred with clinical research organizations and other
third-party vendors;
? costs incurred to conduct characterization, consistency and comparability
studies;
? costs incurred for the development and improvement of our manufacturing
processes and methods;
costs associated with research activities for enabling technology platforms,
? such as next-generation vectors, promoters and re-administration of gene
therapies;
? costs associated with the rendering of collaboration services as well as the
continued development of Product between the Signing Date and Closing;
facilities, depreciation, and other expenses, which include direct and
? allocated expenses for rent and maintenance of facilities, insurance, and other
supplies; and
? changes in the fair value of liabilities recorded in relation to our
acquisition of Corlieve.
Our research and development expenses may vary substantially from period to period based on the timing of our research and development activities, including manufacturing campaigns, regulatory submissions and enrollment of patients in clinical trials. The successful development of our product candidates is highly uncertain. Estimating the nature, timing or cost of the development of any of our product candidates involves considerable judgement due to numerous risks and uncertainties associated with developing gene therapies, including the uncertainty of:
? the scope, rate of progress and expense of our research and development
activities;
? our ability to successfully manufacture and scale-up production;
? clinical trial protocols, speed of enrollment and resulting data;
? the effectiveness and safety of our product candidates;
? the timing of regulatory approvals; and
? our ability to agree to ongoing development budgets with collaborators
share the costs of our development programs.
A change in the outcome of any of these variables with respect to our product candidates that we may develop, including as a result of the Covid pandemic, could mean a significant change in the expenses and timing associated with the development of such product candidate.
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Selling, general and administrative expenses
Our general and administrative expenses consist principally of employee, office, consulting, legal and other
professional and administrative expenses. We incurred expenses associated with
operating as a public company, including expenses for personnel, legal,
accounting and audit fees, board of directors' costs, directors' and officers'
liability insurance premiums, Nasdaq listing fees, expenses related to investor
relations and fees related to business development and maintaining our patent
and license portfolio. Our selling costs in the three months ended
Other items, net
Our other income primarily consists of income from the subleasing of our
Our other expense primarily consists of expenses we incur in relation to our subleasing income.
Results of Operations
Comparison of the three months ended
The following table presents a comparison of our results of operations for the
three months ended
Three months ended March 31,
2022 2021 2022 vs 2021
(in thousands)
Total revenues $ 1,792 $ 454 $ 1,338
Operating expenses:
Research and development expenses (45,003) (32,656) (12,347)
Selling, general and administrative expenses (10,987) (12,375) 1,388
Total operating expenses (55,990) (45,031) (10,959)
Other income 311 352 (41)
Other expense (193) (233) 40
Loss from operations (54,080) (44,458) (9,622)
Other non-operating items, net 6,786 3,115 3,671
Net loss before income tax income / (expense)
616 (213) 829
Net loss $ (46,678) $ (41,556) $ (5,122)
Revenue
Our collaboration revenue for the three months ended March 31, 2022 and 2021 was
as follows:
Three months ended March 31,
2022 2021 2022 vs 2021
(in thousands)
Collaboration revenue CSL Behring $ 1,436 $ - $ 1,436
Collaboration revenue BMS 356 454 (98)
Total revenues $ 1,792 $ 454 $ 1,338
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Research and development expenses
Research and development expenses for the three months ended
Three months ended March 31,
2022 2021 2022 vs 2021
(in thousands)
Huntington's disease (AMT-130) $ 5,217 $ 1,971 $ 3,246
Programs in preclinical development and platform
related expenses 4,552 2,289 2,263
Etranacogene dezaparvovec (AMT-060/061) 418 3,647 (3,229)
Total direct research and development expenses
Employee and contractor-related expenses 16,164 11,595 4,569 Facility expenses 5,299 4,624 675 Disposables 4,533 3,344 1,189 Share-based compensation expense 4,054 2,679 1,375 Other expenses 2,562 2,507 55 Fair value changes related to contingent consideration 2,204 - 2,204
Total other research and development expenses
Total research and development expenses$ 45,003 $ 32,656 $ 12,347
Direct research and development expenses
In the three months ended
Preclinical programs & platform development
In the three months ended
In the three months ended
Hemophilia B (AMT-060/061)
In the three months ended
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In the same period in 2021, we also incurred costs related to the long-term
follow-up of patients in our Phase I/II clinical trial of AMT-060 and our Phase
IIb clinical trial of etranacogene dezaparvovec. Our Phase IIb dose-confirmation
study was initiated in
Other research & development expenses
We incurred
period in 2021. The increase was primarily a result of the recruitment of
personnel to support the development of our product candidates;
We incurred
compared to
? We incurred
same period in 2021;
We incurred
2021. The increase was primarily a result of an increase in awards granted,
including those to newly recruited personnel;
? We incurred
2022, compared to
We incurred
with the acquisition of Corlieve Therapeutics SAS ("Corlieve"), compared to nil
for the same period in 2021.
Selling, general and administrative expenses
Selling, general and administrative expenses for the three months ended
We incurred
in 2021. The increase in the three months ended
recruitment of personnel;
We incurred
2021; and
We incurred
31, 2022, compared to
company. The decrease from the prior period is primarily related to a decrease
in professional fees related to the licensing transaction with
Other items, net
Other items, net for the periods presented primarily relate to income from the
subleasing of our
Other non-operating items, net
Our other non-operating items, net, for the three months endedMarch 31, 2022 and 2021 were as follows: Three months ended March 31, 2022 2021 2022 vs 2021 (in thousands) Interest income$ 42 $ 40 $ 2 Interest expense - Hercules long-term debt (2,515) (1,551) (964) Foreign currency gains, net 8,567 4,626 3,941 Other non-operating gains 692 - 692
Total other non-operating income, net
We recognize interest income associated with our cash and cash equivalents.
We hold monetary items and enter into transactions in foreign currencies,
predominantly in euros and
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We recognize fair value changes related to the derivative financial liability related to a contingent payment due to BMS upon the consummation of a change of control transaction ("CoC-payment") as described elsewhere in this Quarterly Report on Form 10-Q.
We recognized a net foreign currency gain, related to our borrowings from
Hercules and our cash and cash equivalents as well as loans between entities
within the uniQure group, of
Income tax benefit / (expense)
We recognized
Financial Position, Liquidity and Capital Resources
As of
Debt
As of
Leases
We entered into lease arrangements for facilities, including corporate,
manufacturing and office space. As of
Commitments related to Corlieve acquisition (nominal amounts)
In relation to the Corlieve acquisition, we entered into commitments to make
payments to the former shareholders upon the achievement of certain contractual
milestones. The commitments include payments related to post-acquisition
services that we agreed to as part of the Stock Purchase Agreement between the
Company and Corlieve ("SPA"). As of
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Commitments related to licensors and financial advisors
We have obligations to make future payments to third parties that become due and
payable on the achievement of certain development, regulatory and commercial
milestones (such as the start of a clinical trial, filing of a BLA, approval by
the FDA or product launch) or as a result of collecting payments related to our
License Sale to
The table below summarizes our consolidated cash flow data for the three months
ended:
Three months ended March 31,
2022 2021
(in thousands)
Cash, cash equivalents and restricted cash at the
beginning of the period $ 559,353 $ 247,680
Net cash used in operating activities (25,711) (41,273)
Net cash used in investing activities (4,880) (3,876)
Net cash generated from financing activities 485 62,618
Foreign exchange impact (1,168) (1,620)
Cash, cash equivalents and restricted cash at the end of period
$ 528,079 $ 263,529
We had previously incurred losses and cumulative negative cash flows from
operations since our business was founded by our predecessor entity AMT
Therapeutics ("AMT")
Sources of liquidity
From our first institutional venture capital financing in 2006 through
On
On
We are subject to certain covenants under our 2021 Restated Facility and may
become subject to covenants under any future indebtedness that could limit our
ability to take specific actions, such as incurring additional debt, making
capital expenditures, or declaring dividends, which could adversely impact our
ability to conduct our business. In addition, our pledge of assets as collateral
to secure our obligations under the 2021 Restated Facility may limit our ability
to obtain debt financing. The 2021 Restated Facility permits us to issue up to
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To the extent we need to finance our cash needs through equity offerings or debt financings, such financing may be subject to unfavorable terms including without limitation, the negotiation and execution of definitive documentation, as well as credit and debt market conditions, and we may not be able to obtain such financing on terms acceptable to us or at all. If financing is not available when needed, including through debt or equity financings, or is available only on unfavorable terms, we may be unable to meet our cash needs. If we raise additional funds through collaborations, strategic alliances or marketing, distribution, or licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams or product candidates or grant licenses on terms that may not be favorable to us. 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 future commercialization efforts or grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves, which could have a material adverse effect on our business, financial conditions, results of operations and cash flows.
Net cash used in operating activities was
Net cash used in operating activities was
Net cash used in investing activities
In the three months ended
Three months ended March 31,
2022 2021
(in thousands)
Build out of Amsterdam site $ (3,740) (2,416)
Build out of Lexington site (318) (1,460)Acquisition of remaining outstanding ordinary shares related to Corlieve acquisition
(822) -
Total investments $ (4,880) $ (3,876) The build out of the
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Net cash generated from financing activities
In the three months ended
Three months ended March 31,
2022 2021
(in thousands)
Cash flows from financing activities Proceeds from issuance of shares related to employee stock option and purchase plans
$ 485 $ 442 Proceeds from loan increment, net of debt issuance costs - 34,603 Proceeds from issuance of ordinary shares, net of issuance costs - 27,573 Net cash generated from financing activities$ 485 $ 62,618
During the three months ended
In
We received net proceeds of
Funding requirements
Our future capital requirements will depend on many factors, including but not limited to:
achieving the first commercial sales milestones and royalties as defined within
the CSL Behring Agreement. Achieving the first commercial sales milestones
? amongst others are subject to
approvals, including MAA approval from the EMA, BLA approval from the FDA, and
approval of a diagnostic test for neutralizing antibodies from the FDA;
? the payment of milestone payments that we might owe to former shareholders of
Corlieve;
the repayments of the principal amount of our venture debt loan with Hercules,
which following the
? installments between
2025 if, prior to
the FDA or (b) AMT-130 is advanced into a pivotal trial;
? the scope, timing, results, and costs of our current and planned clinical
trials, including those for AMT-130 in
? the extent to which we acquire or in-license other businesses, products,
product candidates or technologies;
the amount and timing of revenue, if any, we receive from commercial sales of
? any product candidates for which we, or our collaboration partner, receives
marketing approval in the future;
? the amount and timing of revenue, if any, we receive from manufacturing
products for
? the scope, timing, results and costs of preclinical development and laboratory
testing of our additional product candidates;
? the need for additional resources and related recruitment costs to support the
preclinical and clinical development of our product candidates;
the need for any additional tests, studies, or trials beyond those originally
? anticipated to confirm the safety or efficacy of our product candidates and
technologies;
? the cost, timing and outcome of regulatory reviews associated with our product
candidates;
? our ability to enter into collaboration arrangements in the future;
the costs and timing of preparing, filing, expanding, acquiring, licensing,
? maintaining, enforcing, and prosecuting patents and patent applications, as
well as defending any intellectual property-related claims;
the costs associated with maintaining quality compliance and optimizing our
? manufacturing processes, including the operating costs associated with our
? the costs associated with increasing the scale and capacity of our
manufacturing capabilities.
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