UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
For the quarterly period ended | |
OR | |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
For the transition period from _______ to _______ | |
Commission file number: |
(Exact name of Registrant as specified in its charter)
The (State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
(Address of principal executive offices) (Zip Code)
+
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class: | Trading Symbol(s) | Name of each exchange on which registered | ||
The Nasdaq Stock Market LLC ( |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer” “accelerated filer” and “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer ◻ | |
Non-accelerated filer ◻ | Smaller reporting company Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13 (a) of the Exchange Act ◻
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act.) Yes
As of July 29, 2024, the registrant had
TABLE OF CONTENTS
SPECIAL CAUTIONARY NOTICE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q contains “forward-looking statements” as defined under federal securities laws. Forward-looking statements are based on our current expectations of future events and many of these statements can be identified using terminology such as “believes,” “expects,” “anticipates,” “plans,” “may,” “will,” “projects,” “continues,” “estimates,” “potential,” “opportunity” and similar expressions. These forward-looking statements, include, but are not limited to, statements concerning: our ability to fund our future operations; our financial position, revenues, costs, expenses, uses of cash and capital requirements; our need for additional financing or the time period for which our existing cash resources will be sufficient to meet our operating requirements; the success, progress, number, scope, cost, duration, timing or results of our research and development activities, preclinical and clinical trials, including the timing for initiation or completion of or availability of results from any preclinical studies and clinical trials or for the submission, review or approval of any regulatory filing; the timing of, and our ability to, obtain and maintain regulatory approvals for any of our product candidates; the potential benefits that may be derived from any of our product candidates; our strategies, prospects, plans, goals, expectations, forecasts or objectives; our collaboration, royalty financing and license agreements; our ability to identify and develop new product candidates and technologies; our intellectual property position; our commercialization, marketing and manufacturing capabilities and strategy; our estimates regarding future expenses and needs for additional financing; our restructuring efforts and the results of our strategic review, including the divestment of our Lexington facility; our ability to identify, recruit and retain key personnel; our financial performance; and our liquidity and working capital requirements.
Forward-looking statements are only predictions based on management’s current views and assumptions and involve risks and uncertainties, and actual results could differ materially from those projected or implied. The most significant factors known to us that could materially adversely affect our business, operations, industry, financial position or future financial performance include those discussed in Part II, Item 1A “Risk Factors,” as well as those discussed in Part I, Item 2 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and elsewhere in this Quarterly Report on Form 10-Q, as well as other factors which may be identified from time to time in our other filings with the Securities and Exchange Commission (the “SEC”), including our most recent Annual Report on Form 10-K filed with the SEC on February 28, 2024 (the “Annual Report”), or in the documents where such forward-looking statements appear. You should carefully consider that information before you make an investment decision.
You should not place undue reliance on these forward-looking statements, which speak only as of the date that they were made. Our actual results or experience could differ significantly from those anticipated in the forward-looking statements and from historical results, due to the risks and uncertainties described in this Quarterly Report on Form 10-Q and in our Annual Report, including in “Part I, Item 1A. Risk Factors,” as well as others that we may consider immaterial or do not anticipate at this time. These cautionary statements should be considered in connection with any written or oral forward-looking statements that we may make in the future or may file or furnish with the SEC. We do not undertake any obligation to release publicly any revisions to these forward-looking statements after completion of the filing of this Quarterly Report on Form 10-Q to reflect later events or circumstances or to reflect the occurrence of unanticipated events. All forward-looking statements attributable to us are expressly qualified in their entirety by these cautionary statements.
In addition, with respect to all our forward-looking statements, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.
1
Part I – FINANCIAL INFORMATION
Item 1.Financial Statements
uniQure N.V.
UNAUDITED CONSOLIDATED BALANCE SHEETS
June 30, | December 31, | |||||
| 2024 |
| 2023 | |||
(in thousands, except share and per share amounts) | ||||||
Current assets | ||||||
Cash and cash equivalents | $ | | $ | | ||
Current investment securities | | | ||||
Accounts receivable | | | ||||
Inventories, net | — | | ||||
Prepaid expenses | | | ||||
Assets held for sale | | — | ||||
Other current assets and receivables | | | ||||
Total current assets | | | ||||
Non-current assets | ||||||
Property, plant and equipment, net of accumulated depreciation of $ | | | ||||
Operating lease right-of-use assets | | | ||||
Intangible assets, net, including in-process research and development asset of $ | | | ||||
Goodwill | | | ||||
Deferred tax assets, net | | | ||||
Other non-current assets | | | ||||
Total non-current assets | | | ||||
Total assets | $ | | $ | | ||
Current liabilities | ||||||
Accounts payable | $ | | $ | | ||
Accrued expenses and other current liabilities | | | ||||
Current portion of contingent consideration | | | ||||
Current portion of operating lease liabilities | | | ||||
Liabilities held for sale | | — | ||||
Total current liabilities | | | ||||
Non-current liabilities | ||||||
Long-term debt | | | ||||
Liability from royalty financing agreement | | | ||||
Operating lease liabilities, net of current portion | | | ||||
Contingent consideration, net of current portion | | | ||||
Deferred tax liability, net | | | ||||
Other non-current liabilities | | | ||||
Total non-current liabilities | | | ||||
Total liabilities | | | ||||
Commitments and contingencies | ||||||
Shareholders' equity | ||||||
Ordinary shares, € | | | ||||
Additional paid-in-capital | | | ||||
Accumulated other comprehensive loss | ( | ( | ||||
Accumulated deficit | ( | ( | ||||
Total shareholders' equity | | | ||||
Total liabilities and shareholders' equity | $ | | $ | | ||
The accompanying notes are an integral part of these unaudited consolidated financial statements.
2
uniQure N.V.
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS AND
COMPREHENSIVE LOSS
Three months ended June 30, | Six months ended June 30, | |||||||||||
| 2024 |
| 2023 |
| 2024 |
| 2023 | |||||
(in thousands, except share and per share amounts) | (in thousands, except share and per share amounts) | |||||||||||
License revenues | $ | | $ | | $ | | $ | | ||||
Contract manufacturing revenues | | | | | ||||||||
Collaboration revenues | | | | | ||||||||
Total revenues | | | | | ||||||||
Operating expenses: | ||||||||||||
Cost of license revenues | ( | — | ( | — | ||||||||
Cost of contract manufacturing revenues | ( | ( | ( | ( | ||||||||
Research and development expenses | ( | ( | ( | ( | ||||||||
Selling, general and administrative expenses | ( | ( | ( | ( | ||||||||
Total operating expenses | ( | ( | ( | ( | ||||||||
Other income | | | | | ||||||||
Other expense | ( | ( | ( | ( | ||||||||
Loss from operations | ( | ( | ( | ( | ||||||||
Interest income | | | | | ||||||||
Interest expense | ( | ( | ( | ( | ||||||||
Foreign currency losses, net | ( | | ( | ( | ||||||||
Loss before income tax (expense) / benefit | $ | ( | $ | ( | $ | ( | $ | ( | ||||
Income tax (expense) / benefit | ( | ( | ( | | ||||||||
Net loss | $ | ( | $ | ( | $ | ( | $ | ( | ||||
Other comprehensive (loss) / income: | ||||||||||||
Foreign currency translation (loss) / gains, net | ( | | ( | | ||||||||
Defined benefit pension gain, net of taxes | | — | | — | ||||||||
Total comprehensive loss | $ | ( | $ | ( | $ | ( | $ | ( | ||||
Basic and diluted net loss per ordinary share | ( | ( | ( | ( | ||||||||
Weighted average shares used in computing basic and diluted net loss per ordinary share | | | | | ||||||||
The accompanying notes are an integral part of these unaudited consolidated financial statements.
3
uniQure N.V.
UNAUDITED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
FOR THE THREE MONTHS ENDED JUNE 30, 2024 AND 2023
Accumulated | ||||||||||||||||
Additional | other | Total | ||||||||||||||
Ordinary shares | paid-in | comprehensive | Accumulated | shareholders’ | ||||||||||||
No. of shares |
| Amount |
| capital |
| loss |
| deficit |
| equity | ||||||
(in thousands, except share and per share amounts) | ||||||||||||||||
Balance at March 31, 2023 | | $ | | $ | | $ | ( | $ | ( | $ | | |||||
Loss for the period | — | — | — | — | ( | ( | ||||||||||
Other comprehensive income | — | — | — | | — | | ||||||||||
Exercises of share options | | — | | — | — | | ||||||||||
Restricted share units distributed during the period | | | ( | — | — | — | ||||||||||
Share-based compensation expense | — | — | | — | — | | ||||||||||
Issuance of ordinary shares relating to employee stock purchase plan | | — | | — | — | | ||||||||||
Balance at June 30, 2023 | | $ | | $ | | $ | ( | $ | ( | $ | | |||||
Balance at March 31, 2024 | | $ | | $ | | $ | ( | $ | ( | $ | | |||||
Loss for the period | — | — | — | — | ( | ( | ||||||||||
Other comprehensive loss, net | — | — | — | ( | — | ( | ||||||||||
Restricted share units distributed during the period | | | ( | — | — | — | ||||||||||
Share-based compensation expense | — | — | | — | — | | ||||||||||
Issuance of ordinary shares relating to employee stock purchase plan | | | | — | — | | ||||||||||
Balance at June 30, 2024 | | $ | | $ | | $ | ( | $ | ( | $ | | |||||
The accompanying notes are an integral part of these unaudited consolidated financial statements.
4
uniQure N.V.
UNAUDITED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
FOR THE SIX MONTHS ENDED JUNE 30, 2024 AND 2023
Accumulated | |||||||||||||||||
Additional | other | Total | |||||||||||||||
Ordinary shares | paid-in | comprehensive | Accumulated | shareholders’ | |||||||||||||
No. of shares |
| Amount |
| capital |
| loss |
| deficit |
| equity | |||||||
(in thousands, except share and per share amounts) | |||||||||||||||||
Balance at December 31, 2022 | | $ | | $ | | $ | ( | $ | ( | $ | | ||||||
Loss for the period | — | — | — | — | ( | ( | |||||||||||
Other comprehensive income | — | — | — | | — | | |||||||||||
Exercises of share options | | | | — | — | | |||||||||||
Restricted and performance share units distributed during the period | | | ( | — | — | — | |||||||||||
Share-based compensation expense | — | — | | — | — | | |||||||||||
Issuance of ordinary shares relating to employee stock purchase plan | | — | | — | — | | |||||||||||
Balance at June 30, 2023 | | $ | | $ | | $ | ( | $ | ( | $ | | ||||||
Balance at December 31, 2023 | | $ | | $ | | $ | ( | $ | ( | $ | | ||||||
Loss for the period | — | — | — | — | ( | ( | |||||||||||
Other comprehensive loss, net | — | — | — | ( | — | ( | |||||||||||
Restricted share units distributed during the period | | | ( | — | — | — | |||||||||||
Share-based compensation expense | — | — | | — | — | | |||||||||||
Issuance of ordinary shares relating to employee stock purchase plan | | | | — | — | | |||||||||||
Balance at June 30, 2024 | | $ | | $ | | $ | ( | $ | ( | $ | | ||||||
The accompanying notes are an integral part of these unaudited consolidated financial statements.
5
uniQure N.V.
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
Six months ended June 30, | ||||||
| 2024 |
| 2023 | |||
(in thousands) | ||||||
Cash flows from operating activities | ||||||
Net loss | $ | ( | $ | ( | ||
Adjustments to reconcile net loss to net cash used in operating activities: | ||||||
Depreciation and amortization | | | ||||
Amortization of discount on investment securities | ( | ( | ||||
Share-based compensation expense | | | ||||
Royalty financing agreement interest expense | | | ||||
Deferred tax expense / (income) | | ( | ||||
Changes in fair value of contingent consideration | ( | | ||||
Provision for inventory write-downs | | - | ||||
Unrealized foreign exchange losses, net | | | ||||
Other items, net | | | ||||
Changes in operating assets and liabilities: | ||||||
Accounts receivable, prepaid expenses, and other current assets and receivables | ( | | ||||
Inventories | ( | ( | ||||
Accounts payable | ( | ( | ||||
Accrued expenses, other liabilities, and operating leases | ( | ( | ||||
Net cash used in operating activities | ( | ( | ||||
Cash flows from investing activities | ||||||
Proceeds on maturity of debt securities | | | ||||
Investment in debt securities | ( | - | ||||
Purchases of property, plant, and equipment | ( | ( | ||||
Net cash generated from investing activities | | | ||||
Cash flows from financing activities | ||||||
Proceeds from royalty financing agreement | - | | ||||
Payment of debt issuance costs | - | ( | ||||
Proceeds from issuance of ordinary shares related to employee stock option and purchase plans | | | ||||
Net cash generated from financing activities | | | ||||
Currency effect on cash, cash equivalents and restricted cash | ( | | ||||
Net increase in cash, cash equivalents and restricted cash | | | ||||
Cash, cash equivalents and restricted cash at beginning of period | | | ||||
Cash, cash equivalents and restricted cash at the end of period | $ | | $ | | ||
Cash and cash equivalents | $ | | $ | | ||
Restricted cash related to leasehold and other deposits | | | ||||
Total cash, cash equivalents and restricted cash | $ | | $ | | ||
Supplemental cash flow disclosures: | ||||||
Cash paid for interest | $ | ( | $ | ( | ||
Non-cash decrease in accounts payables and accrued expenses and other current liabilities related to purchases of property, plant, and equipment | $ | ( | $ | ( | ||
The accompanying notes are an integral part of these unaudited consolidated financial statements.
6
uniQure N.V.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1General business information
uniQure N.V. (the “Company”) was incorporated on January 9, 2012, as a private company with limited liability (besloten vennootschap met beperkte aansprakelijkheid) under the laws of the Netherlands. The Company is a leader in the field of gene therapy and seeks to deliver to patients suffering from rare and other devastating diseases single treatments with potentially curative results. The Company’s business was founded in 1998 and was initially operated through its predecessor company, Amsterdam Molecular Therapeutics Holding N.V. (“AMT”). In 2012, AMT undertook a corporate reorganization, pursuant to which uniQure B.V. acquired the entire business and assets of AMT and completed a share-for-share exchange with the shareholders of AMT. Effective February 10, 2014, in connection with its initial public offering, the Company converted into a public company with limited liability (naamloze vennootschap) and changed its legal name from uniQure B.V. to uniQure N.V.
The Company is registered in the trade register of the Dutch Chamber of Commerce (Kamer van Koophandel) in Amsterdam, the Netherlands under number 54385229. The Company’s headquarters are in Amsterdam, the Netherlands, and its registered office is located at Paasheuvelweg 25a, Amsterdam 1105 BP, the Netherlands and its telephone number is +31 20 240 6000.
The Company’s ordinary shares are listed on the Nasdaq Global Select Market and trade under the symbol “QURE”.
2Summary of significant accounting policies
2.1Basis of preparation
The Company prepared these unaudited consolidated financial statements in compliance with generally accepted accounting principles in the United States (“U.S. GAAP”) and applicable rules and regulations of the United States Securities and Exchange Commission (the “SEC”) regarding interim financial reporting. Any reference in these notes to applicable guidance is meant to refer to authoritative U.S. GAAP as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Update of the Financial Accounting Standards Board.
The unaudited consolidated financial statements are presented in United States (“U.S.”) dollars, except where otherwise indicated. Transactions denominated in currencies other than U.S. dollars are presented in the transaction currency with the U.S. dollar amount included in parenthesis, converted at the foreign exchange rate as of the transaction date.
2.2Unaudited interim financial information
The interim financial statements and related disclosures are unaudited, have been prepared on the same basis as the annual financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary for a fair statement of the financial position, results of operations and changes in financial position for the period presented.
Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with U.S. GAAP have been omitted. The results of operations for the three and six months ended June 30, 2024, are not necessarily indicative of the results to be expected for the full year ending December 31, 2024, or for any other future year or interim period. The accompanying financial statements should be read in conjunction with the audited financial statements and the related notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 filed by the Company with the SEC on February 28, 2024 (the “Annual Report”).
7
2.3Use of estimates
The preparation of the financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
2.4Accounting policies
The principal accounting policies applied in the preparation of these unaudited consolidated financial
statements are described in the Company’s audited financial statements as of and for the year ended December 31, 2023, and the notes thereto, which are included in the Annual Report. There have been no material changes in the Company’s significant accounting policies during the six months ended June 30, 2024 except as described within Note 3 “Assets held for sale and divestiture of commercial manufacturing facilities”.
2.5Recent accounting pronouncements
There have been no new accounting pronouncements or changes to accounting pronouncements during the six months ended June 30, 2024, as compared to the recent accounting pronouncements described in Note 2.3.27 of the Annual Report, which could be expected to materially impact the Company’s unaudited consolidated financial statements.
3 | Assets held for sale and divestiture of commercial manufacturing activities |
Description of transaction
On June 29, 2024, the Company and its affiliates entered into various agreements with Genezen Holdings Inc. and its affiliate Genezen MA, Inc. (together “Genezen”) to sell its commercial manufacturing activities located in Lexington, MA (the “Lexington Facility”) (the “Lexington Transaction”). The transaction closed on July 22, 2024 (the “Closing”). As consideration, the Company received (i) shares of newly issued Series C preferred stock of Genezen Holdings Inc. valued at $
uniQure Inc. and uniQure biopharma B.V. (the “Sellers”), both wholly owned subsidiaries of the Company (together “Company”) entered into an asset purchase agreement (“APA”) with Genezen. Pursuant to the APA, Genezen agreed to acquire the manufacturing equipment and related manufacturing operations along with certain other assets associated with the Lexington Facility.
uniQure Inc., Genezen and the landlord of the Lexington Facility entered into an agreement for uniQure to assign and Genezen to assume the existing lease agreement between uniQure and the landlord. uniQure N.V. also amended its original July 2013 guarantee to continue guaranteeing rental payments owed by Genezen until the end of the current term on May 31, 2029. In the event of Genezen’s default related to rental payments owed to the landlord, uniQure is entitled to terminate the assignment agreement and step into the original lease agreement.
Genezen extended offers of employment to a significant majority of the Company’s employees located at the Lexington Facility, with the remaining employees terminated effective August 30, 2024.
Concurrent with entering into the APA, uniQure Inc. entered into a commercial supply agreement (“CSA”) with Genezen. Pursuant to the terms of the CSA, the Company subcontracted the manufacturing of HEMGENIX® to Genezen. The CSA includes a minimum term of
8
Additionally, uniQure biopharma B.V. entered into a development and other manufacturing services agreement (“DMSA”) with Genezen. Pursuant to the terms of the DMSA, the Company has preferred customer status to receive manufacturing and development services to support the Company’s investigational gene therapy programs and other services related to the manufacture of HEMGENIX® under the CSA. The DMSA has a minimum term of
The CSA and DMSA became effective at Closing.
On July 19, 2024, in connection with the closing of the Lexington Transaction, the Company prepaid $
Accounting as of June 30, 2024
The Company classified the following assets and liabilities as held for sale as of June 30, 2024:
(in thousands) | |||
$ | |||
Inventories, net | | ||
Prepaid expenses | | ||
Property, plant and equipment, net of accumulated depreciation | | ||
Operating lease right-of-use asset | | ||
Goodwill | | ||
Total assets held for sale | $ | | |
Operating lease liability | | ||
Total liabilities held for sale | $ | |
The Company recorded the assets at the lower of cost or fair market value.
The Company accrued $
Subsequent accounting at Closing
As of the Closing, the Company will record the sale of the net assets associated with the Lexington Facility as of Closing. The Company expects the fair market value of the consideration received less costs to sell to approximate the carrying amount of the net assets held for sale.
4 | CSL Behring collaboration |
On June 24, 2020, uniQure biopharma B.V. entered into a commercialization and license agreement with CSL Behring (the “CSL Behring Agreement”), pursuant to which CSL Behring received exclusive global rights to HEMGENIX®.
The transaction became fully effective on May 6, 2021.
License revenue
The Company recognized $
9
Collaboration revenue
The Company recognized $
Accounts receivable and contract asset
As of December 31, 2023, the Company recorded accounts receivable of $
As of June 30, 2024, the Company had accounts receivable of $
5 | Investment securities |
The following tables summarize the Company’s investments in sovereign debt as of June 30, 2024 and December 31, 2023:
At June 30, 2024 | ||||||||||||
Amortized cost | Gross unrealized holding gains | Gross unrealized holding losses | Estimated fair value | |||||||||
(in thousands) | ||||||||||||
Current investments: | ||||||||||||
Government debt securities (held-to-maturity) | $ | | $ | | $ | — | $ | | ||||
Total | $ | | $ | | $ | — | $ | | ||||
At December 31, 2023 | ||||||||||||
Amortized cost | Gross unrealized holding gains | Gross unrealized holding losses | Estimated fair value | |||||||||
(in thousands) | ||||||||||||
Current investments: | ||||||||||||
Government debt securities (held-to-maturity) | $ | | $ | | $ | — | $ | | ||||
Total | $ | | $ | | $ | — | $ | | ||||
The Company invests in short-term U.S. and European government bonds with the highest investment credit rating. The U.S. and European government bonds are U.S. dollar and euro denominated, respectively.
Investment securities with original maturities of less than 90 days when purchased are presented within cash and cash equivalents and measured at amortized cost (June 30, 2024: $
Inputs to the fair value of the investments are considered Level 2 inputs.
6 | Inventories, net |
The following table summarizes the inventories, net balances as of June 30, 2024 and December 31, 2023:
June 30, | December 31, | |||||
| 2024 |
| 2023 | |||
(in thousands) | ||||||
Raw materials | $ | — | $ | | ||
Work in progress | — | | ||||
Finished goods | — | | ||||
Inventories | $ | — | $ | | ||
10
The Company recorded write downs to net realizable value of $
As of June 30, 2024, $
7 | Fair value measurement |
The Company measures certain financial assets and liabilities at fair value, either upon initial recognition or for subsequent accounting or reporting. ASC 820, Fair Value Measurements and Disclosures requires disclosure of methodologies used in determining the reported fair values and establishes a hierarchy of inputs used when available. The three levels of the fair value hierarchy are described below:
Level 1 – Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities that the Company can access at the measurement date.
Level 2 – Valuations based on quoted prices for similar assets or liabilities in markets that are not active or models for which the inputs are observable, either directly or indirectly.
Level 3 – Valuations that require inputs that reflect the Company’s own assumptions that are both significant to the fair value measurement and are unobservable.
To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised by the Company in determining fair value is greatest for instruments categorized as Level 3. A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement.
The carrying amount of cash and cash equivalents, accounts receivable from licensing and collaboration partners, other assets, accounts payable, accrued expenses and other current liabilities reflected in the consolidated balance sheets approximate their fair values due to their short-term maturities.
The following table sets forth the Company’s assets and liabilities that are required to be measured at fair value on a recurring basis as of June 30, 2024 and December 31, 2023:
| Quoted prices |
| Significant |
| Significant |
| Total |
| Classification in Consolidated | |||||
(in thousands) | ||||||||||||||
At December 31, 2023 | ||||||||||||||
Assets: | ||||||||||||||
Cash and cash equivalents | $ | | $ | — | $ | — | $ | | Cash and cash equivalents | |||||
Restricted cash | | — | — | | Other non-current assets | |||||||||
Total assets | $ | | $ | — | $ | — | $ | | ||||||
Liabilities: | ||||||||||||||
Contingent consideration | — | — | | | Contingent consideration | |||||||||
Consideration for post-acquisition services | — | — | | | Other non-current liabilities | |||||||||
Total liabilities | $ | — | $ | — | $ | | $ | | ||||||
At June 30, 2024 | ||||||||||||||
Assets: | ||||||||||||||
Cash and cash equivalents | $ | | $ | — | $ | — | $ | | Cash and cash equivalents | |||||
Restricted cash | | — | — | | Other non-current assets | |||||||||
Total assets | $ | | $ | — | $ | — | $ | | ||||||
Liabilities: | ||||||||||||||
Contingent consideration | — | — | | | Contingent consideration | |||||||||
Consideration for post-acquisition services | — | — | | | Other non-current liabilities | |||||||||
Total liabilities | $ | — | $ | — | $ | | $ | | ||||||
11
Contingent consideration
The Company is required to pay up to EUR
The fair value of the contingent consideration as of June 30, 2024 was $
If, as of June 30, 2024, the Company had assumed a
The following table presents the changes in fair value of contingent consideration between December 31, 2023 and June 30, 2024:
Amount of | ||
contingent | ||
consideration | ||
2024 | ||
(in thousands) | ||
Balance at December 31, 2023 | $ | |
Change in fair value (presented within research and development expenses) | ( | |
Currency translation effects | ( | |
Balance at June 30, 2024 | $ | |
As of June 30, 2024, the Company classified $
Investment securities
Refer to Note 5 “Investment securities” for the fair value of the investment securities as of June 30, 2024 and December 31, 2023.
8 | Accrued expenses and other current liabilities |
Accrued expenses and other current liabilities include the following items:
June 30, | December 31, | |||||
| 2024 |
| 2023 | |||
(in thousands) | ||||||
Personnel related accruals and liabilities | $ | | $ | | ||
Accruals for goods received from and services provided by vendors-not yet billed | | | ||||
Liability owed to the Purchaser pursuant to the Royalty Financing Agreement | | | ||||
Total | $ | | $ | | ||
9Long-term debt
On June 14, 2013, the Company entered into a venture debt loan facility with Hercules Capital, Inc. (formerly known as Hercules Technology Growth Capital, Inc.) (“Hercules”). The facility was amended and restated in 2014, 2016, 2018, January 2021, December 2021 (the “2021 Restated Facility”), May 12, 2023 (the “2023 Amended Facility”) and June 28, 2024 (the “2024 Amended Facility”).
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The 2023 Amended Facility extended the maturity date and interest-only period from December 1, 2025 to January 5, 2027 (the “Maturity Date”).
The total principal outstanding as of June 30, 2024 under the 2023 Amended Facility was $
The Company is required to repay the residual principal balance of $
The amortized cost (including interest due presented as part of accrued expenses and other current liabilities) of the 2023 Amended Facility was $
Interest expense associated with the 2023 Amended Facility during the three and six months ended June 30, 2024 was $