10-Q 1 qure-20220930x10q.htm 10-Q
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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington D.C. 20549

FORM 10-Q

(Mark One)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2022

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: 001-36294

uniQure N.V.

(Exact name of Registrant as specified in its charter)

The Netherlands

(State or other jurisdiction of incorporation or organization)

Not applicable

(I.R.S. Employer Identification No.)

Paasheuvelweg 25

1105 BP Amsterdam, The Netherlands

(Address of principal executive offices) (Zip Code)

+31-20-240-6000

(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

Ordinary Shares, par value €0.05

QURE

The Nasdaq Global Select Market

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.    Yes No .  

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).    Yes No .  

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  

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 No

As of October 28, 2022, the registrant had 46,815,109 ordinary shares, par value €0.05, outstanding.

TABLE OF CONTENTS

    

    

Page

PART I – FINANCIAL INFORMATION

Item 1

Financial Statements

2

Item 2

Management’s Discussion and Analysis of Financial Condition and Results of Operations

19

Item 3

Quantitative and Qualitative Disclosures About Market Risk

37

Item 4

Controls and Procedures

37

PART II – OTHER INFORMATION

Item 1

Legal Proceedings

37

Item 1A

Risk Factors

38

Item 2

Unregistered Sales of Equity Securities and Use of Proceeds

69

Item 3

Defaults Upon Senior Securities

69

Item 4

Mine Safety Disclosures

69

Item 5

Other Information

69

Item 6

Exhibits

69

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 related to our collaboration and license agreements, our cash runway, the advancement of our clinical trials, and the impact of regulatory actions on our regulatory submission and approval timelines.

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 (“SEC”), including our most recent Annual Report on Form 10-K filed with the SEC on February 25, 2022 (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 for the quarter ended September 30, 2022, 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 of 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

September 30, 

December 31, 

    

2022

    

2021

(in thousands, except share and per share amounts)

Current assets

Cash and cash equivalents

$

440,313

$

556,256

Accounts receivable and contract asset

3,603

58,768

Inventories

4,075

-

Prepaid expenses

13,692

10,540

Other current assets and receivables

2,894

2,675

Total current assets

464,577

628,239

Non-current assets

Property, plant and equipment, net of accumulated depreciation of $40.5 million as of September 30, 2022 and $36.9 million as of December 31, 2021

47,886

43,505

Operating lease right-of-use assets

27,804

25,573

Intangible assets, net, including an in-process research and development asset of $52.5 million as of September 30, 2022 and $60.8 million as of December 31, 2021

53,837

62,686

Goodwill

23,418

27,633

Deferred tax assets, net

14,627

15,647

Other non-current assets

6,085

5,897

Total non-current assets

173,657

180,941

Total assets

$

638,234

$

809,180

Current liabilities

Accounts payable

$

7,566

$

2,502

Accrued expenses and other current liabilities

26,437

28,487

Current portion of contingent consideration

23,537

Current portion of operating lease liabilities

6,434

5,774

Total current liabilities

63,974

36,763

Non-current liabilities

Long-term debt

102,394

100,963

Operating lease liabilities, net of current portion

29,893

28,987

Contingent consideration, net of current portion

9,158

29,542

Deferred tax liability, net

8,592

12,913

Other non-current liabilities

3,053

4,236

Total non-current liabilities

153,090

176,641

Total liabilities

217,064

213,404

Commitments and contingencies

Shareholders' equity

Ordinary shares, €0.05 par value: 80,000,000 shares authorized as of September 30, 2022 and December 31, 2021 and 46,815,109 and 46,298,635 ordinary shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively

2,830

2,802

Additional paid-in-capital

1,100,078

1,076,972

Accumulated other comprehensive loss

(93,000)

(28,856)

Accumulated deficit

(588,738)

(455,142)

Total shareholders' equity

421,170

595,776

Total liabilities and shareholders' equity

$

638,234

$

809,180

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) INCOME

Three months ended September 30, 

Nine months ended September 30, 

    

2022

    

2021

    

2022

    

2021

(in thousands, except share and per share amounts)

(in thousands, except share and per share amounts)

License revenues

$

$

$

$

462,400

Collaboration revenues

1,449

1,989

3,738

3,911

Total revenues

1,449

1,989

3,738

466,311

Operating expenses:

Cost of contract revenues

(23,178)

Cost of contract manufacturing

(861)

(1,693)

Research and development expenses

(48,068)

(36,432)

(139,263)

(101,209)

Selling, general and administrative expenses

(13,324)

(12,023)

(36,802)

(42,323)

Total operating expenses

(62,253)

(48,455)

(177,758)

(166,710)

Other income

1,485

1,680

4,981

9,622

Other expense

(199)

(214)

(621)

(673)

(Loss) / income from operations

(59,518)

(45,000)

(169,660)

308,550

Interest income

39

46

117

123

Interest expense

(3,069)

(1,924)

(8,279)

(5,377)

Foreign currency gains, net

14,362

10,436

42,328

21,645

Other non-operating (losses) / gains, net

635

(Loss) / income before income tax benefit / (expense)

$

(48,186)

$

(36,442)

$

(134,859)

$

324,941

Income tax benefit / (expense)

329

(89)

1,263

(3,560)

Net (loss) / income

$

(47,857)

$

(36,531)

$

(133,596)

$

321,381

Other comprehensive loss:

Foreign currency translation adjustments

(25,370)

(13,288)

(64,144)

(27,790)

Total comprehensive (loss) / gain

$

(73,227)

$

(49,819)

$

(197,740)

$

293,591

Earnings per ordinary share - basic

Basic net (loss) / income per ordinary share

$

(1.02)

$

(0.79)

$

(2.86)

$

7.00

Earnings per ordinary share - diluted

Diluted net (loss) / income per ordinary share

$

(1.02)

$

(0.79)

$

(2.86)

$

6.87

Weighted average shares - basic

46,772,430

46,152,404

46,680,667

45,888,769

Weighted average shares - diluted

46,772,430

46,152,404

46,680,667

46,780,963

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-MONTH PERIOD ENDED SEPTEMBER 30, 2022 AND 2021

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 June 30, 2021

46,050,250

$

2,788

$

1,062,234

$

(4,595)

$

(426,819)

$

633,608

Loss for the period

(36,531)

(36,531)

Other comprehensive loss

(13,288)

(13,288)

Exercise of share options

84,811

5

909

914

Restricted share units distributed during the period

69,165

4

(4)

Share-based compensation expense

5,955

5,955

Issuance of ordinary shares relating to employee stock purchase plan

3,550

97

97

Balance at September 30, 2021

46,207,776

$

2,797

$

1,069,191

$

(17,883)

$

(463,350)

$

590,755

Balance at June 30, 2022

46,684,583

$

2,823

$

1,092,176

$

(67,630)

$

(540,881)

$

486,488

Loss for the period

(47,857)

(47,857)

Other comprehensive loss

(25,370)

(25,370)

Exercise of share options

47,290

2

258

260

Restricted and performance share units distributed during the period

79,821

4

(4)

Share-based compensation expense

7,608

7,608

Issuance of ordinary shares relating to employee stock purchase plan

3,415

1

40

41

Balance at September 30, 2022

46,815,109

$

2,830

$

1,100,078

$

(93,000)

$

(588,738)

$

421,170

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 NINE-MONTH PERIOD ENDED SEPTEMBER 30, 2022 AND 2021

Accumulated

Additional

other

Total

Ordinary shares

paid-in

comprehensive

Accumulated 

shareholders’

No. of shares   

    

Amount   

    

capital      

    

income / (loss)

    

deficit

    

equity

(in thousands, except share and per share amounts)

Balance at December 31, 2020

44,777,799

$

2,711

$

1,016,018

$

9,907

$

(784,731)

$

243,905

Income for the period

321,381

321,381

Other comprehensive loss

(27,790)

(27,790)

Issuance of ordinary shares

921,730

55

29,510

29,565

Income tax benefit of past share issuance cost

2,977

2,977

Exercises of share options

156,787

10

1,814

1,824

Restricted and performance share units distributed during the period

346,736

21

(21)

Share-based compensation expense

18,747

18,747

Issuance of ordinary shares relating to employee stock purchase plan

4,724

146

146

Balance at September 30, 2021

46,207,776

$

2,797

$

1,069,191

$

(17,883)

$

(463,350)

$

590,755

Balance at December 31, 2021

46,298,635

$

2,802

$

1,076,972

$

(28,856)

$

(455,142)

$

595,776

Loss for the period

(133,596)

(133,596)

Other comprehensive loss

(64,144)

(64,144)

Exercise of share options

119,884

6

707

713

Restricted and performance share units distributed during the period

387,285

21

(21)

Share-based compensation expense

22,290

22,290

Issuance of ordinary shares relating to employee stock purchase plan

9,305

1

130

131

Balance at September 30, 2022

46,815,109

$

2,830

$

1,100,078

$

(93,000)

$

(588,738)

$

421,170

The accompanying notes are an integral part of these unaudited consolidated financial statements.

5

uniQure N.V.

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

Nine months ended September 30, 

        

2022

        

2021

        

(in thousands)

Cash flows from operating activities

Net (loss) / income

$

(133,596)

$

321,381

Adjustments to reconcile net (loss) / income to net cash (used in) / generated from operating activities:

Depreciation and amortization expense

6,206

5,447

Share-based compensation expense

22,290

18,747

Deferred tax (income) / expense

(1,263)

3,560

Changes in fair value of contingent consideration and derivative financial instrument, net

6,875

416

Unrealized foreign exchange gains, net

(36,390)

(23,242)

Other non-current assets, net

(581)

(2,862)

Changes in operating assets and liabilities:

Accounts receivable and contract asset, prepaid expenses, and other current assets and receivables

41,992

(1,993)

Inventories

(4,075)

-

Accounts payable

4,529

2,003

Accrued expenses, other liabilities, and operating leases

3,633

11,592

Net cash (used in) / generated from operating activities

(90,380)

335,049

Cash flows from investing activities

Purchases of property, plant, and equipment

(12,622)

(13,885)

Acquisition of Corlieve, net of cash acquired

(1,900)

(49,949)

Net cash used in investing activities

(14,522)

(63,834)

Cash flows from financing activities

Proceeds from issuance of ordinary shares related to employee stock option and purchase plans

844

1,971

Proceeds from loan increment, net of debt issuance costs

-

34,603

Proceeds from issuance of ordinary shares

-

30,899

Share issuance costs from issuance of ordinary shares

-

(1,334)

Repayment of debt acquired through acquisition of Corlieve

-

(1,175)

Net cash generated from financing activities

844

64,964

Currency effect on cash, cash equivalents and restricted cash

(11,876)

(2,589)

Net (decrease) / increase in cash, cash equivalents and restricted cash

(115,934)

333,590

Cash, cash equivalents and restricted cash at beginning of period

559,353

247,680

Cash, cash equivalents and restricted cash at the end of period

$

443,419

$

581,270

Cash and cash equivalents

$

440,313

$

578,464

Restricted cash related to leasehold and other deposits

3,106

2,806

Total cash, cash equivalents and restricted cash

$

443,419

$

581,270

Supplemental cash flow disclosures:

Cash paid for interest

$

(6,410)

$

(4,503)

Non-cash (decrease) / increase in accounts payables and accrued expenses and other current liabilities related to purchases of property, plant, and equipment

$

1,766

$

415

The accompanying notes are an integral part of these unaudited consolidated financial statements.

6

1General business information

uniQure (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 (AMT) 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 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 25, 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 of America (“U.S. GAAP”) and applicable rules and regulations of 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 (“ASU”) of the Financial Accounting Standards Board (“FASB”).

The unaudited consolidated financial statements are presented in 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 nine months ended September 30, 2022, are not necessarily indicative of the results to be expected for the full year ending December 31, 2022, 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.

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 periods. Actual results could differ from those estimates.

7

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, 2021, and the notes thereto, which are included in the Company’s Annual Report. There have been no material changes in the Company’s significant accounting policies during the nine months ended September 30, 2022, except as noted below.

Inventories

The Company started producing commercial materials in April 2022 to supply CSL Behring LLC (“CSL Behring”) with etranacogene dezaparvovec (the “Product”) in accordance with the June 2020 Development and Commercial Supply Agreement between the Company and CSL Behring. From this date onwards, the Company presents the costs associated with the aforementioned activities as cost of contract manufacturing. The Company capitalizes inventory to be sold to CSL Behring to the extent it expects to generate probable future benefits from such sales. Refer to Note 3, “CSL Behring collaboration” for further detail.

Per ASC 330, Inventory, inventory is stated at the lower of cost or estimated net realizable value, on a first-in, first-out basis. The Company capitalizes raw materials to the extent these can be used in the manufacturing of the Product. The Company uses standard costs, approximating average costs to determine its cost basis for work in progress and finished goods. The Company’s assessment of recoverability value requires the use of estimates regarding the net realizable value of its inventory balances, including an assessment of excess or obsolete inventory. As applicable, write-downs resulting from adjustments to net realizable value will be recorded to cost of contract manufacturing.

2.5Recent accounting pronouncements

There have been no new accounting pronouncements or changes to accounting pronouncements during the nine months ended September 30, 2022, as compared to the recent accounting pronouncements described in Note 2.3.23 of the Company’s Annual Report, which could be expected to materially impact the Company’s unaudited consolidated financial statements.

8

3

CSL Behring collaboration

On June 24, 2020 (the “Signing Date”), uniQure biopharma B.V., a wholly owned subsidiary of uniQure N.V., entered into a commercialization and license agreement (the “CSL Behring Agreement”) with CSL Behring, pursuant to which CSL Behring received exclusive global rights to etranacogene dezaparvovec, the Company’s investigational gene therapy for patients with hemophilia B.

The transaction became fully effective on May 6, 2021, one day after the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (the “HSR Act”) expired on May 5, 2021 (“Closing”).

The Company, as of the effective date, identified two material performance obligations related to the CSL Behring Agreement:

(i)Sale of the exclusive global rights to the Product (“License Sale”); and
(ii)Generate information to support the regulatory approval of the current and next generation manufacturing process of the Product and to provide any such information generated to CSL Behring (“Manufacturing Development”).

License Sale

The Company continued to develop the Product between the Signing Date and Closing and performed certain reimbursable activities to fulfill the transfer of the global rights (“Additional Covenants” that are included as part of the “License Sale”). The Additional Covenants are not considered distinct from the performance obligation to sell the license to CSL Behring as CSL Behring could not benefit from the Additional Covenants on their own, or have these activities be performed with readily available resources.

The Company determined that the fixed upfront payment of $450.0 million and the $12.4 million that the Company received in relation to the Additional Covenants should be allocated to the License Sale. The Company determined that the License Sale was completed on May 6, 2021, when it transferred the license and CSL Behring assumed full responsibility for the development and commercialization of the Product. At Closing, the Company evaluated the amounts of potential payments and the likelihood that the payments will be received. The Company utilized the most likely amount method to estimate the variable consideration to be included in the transaction price. Since the Company cannot control the achievement of regulatory and first commercial sales milestones, the Company concluded that the potential payments are constrained as of Closing. The Company determined that it would recognize revenue related to these payments only to the extent that it becomes probable that no significant reversal of recognized cumulative revenue will occur thereafter. Similarly, the Company records expenses related to its existing license and other agreements as well as its financial advisor for a mid-single digit percentage of any such revenue recognized associated to meeting a milestone. The Company includes payments related to sales milestones in the transaction price when their achievement becomes probable, and it will include royalties on the sale of the Product once these have been earned. The Company recognized nil and $462.4 million of license revenue in the three and nine months ended September 30, 2021 related to the License Sale. During the three and nine months ended September 30, 2022, the Company did not recognize any license revenue.

Collaboration Services

The Company recognized $0.7 million and $2.1 million of collaboration revenue in the three and nine months ended September 30, 2022, compared to $0.5 and $0.9 million in the three and nine months ended September 30, 2021. The Company generates such collaboration revenue from services rendered in relation to completing the HOPE-B clinical trial on behalf of CSL Behring as well as additional development services that CSL Behring requested. These collaboration services are reimbursed at the pre-agreed full-time-employee rate (“FTE-rate”).

Contract Manufacturing

The Company commenced capitalizing inventory in April 2022 for the Product to be sold to CSL Behring.

9

On September 6, 2022, CSL Behring notified the Company of its intent to transfer manufacturing technology related to the Product to a third-party contract manufacturer designated by CSL Behring. CSL Behring also requested that the Company continue to serve as a manufacturer of the Product after the Company completes the technology transfer to a third party. The Company and CSL Behring are in the process of negotiating the terms of the transfer of manufacturing responsibility pursuant to the CSL Behring Agreement.

Accounts Receivable and Contract Asset

As of December 31, 2021, the Company recorded accounts receivable of $2.9 million from CSL Behring related to collaboration services as well as a contract asset of $55.0 million associated with milestone payments due upon CSL Behring’s global regulatory submissions for etranacogene dezaparvovec, which were deemed to be probable. In March and April 2022, CSL Behring submitted marketing applications in the United States and European Union, and as of March and April 2022, the Company had collected the $55.0 million owed. As of September 30, 2022, the Company had accounts receivable of $3.0 million from CSL Behring.

 

4

Inventories

The Company commenced capitalizing inventory in April 2022 when the Company started producing commercial materials to supply the Product to CSL Behring. The following table summarizes the inventory balances for the nine months ended September 30, 2022:

September 30, 

December 31, 

    

2022

    

2021

(in thousands)

Raw materials

$

1,447

$

Work in progress

2,178

Finished goods

450

Inventories

$

4,075

$

10

5

 Fair value measurement

The Company measures certain financial assets and liabilities at fair value, either upon initial recognition or for subsequent accounting or reporting. U.S. GAAP 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, prepaid expenses, 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 September 30, 2022, and December 31, 2021:

 

Quoted prices
in active
markets
(Level 1)

 

Significant
other
observable
inputs
(Level 2)

 

Significant
unobservable
inputs
(Level 3)

 

Total

 

Classification in Consolidated
balance sheets

(in thousands)

At December 31, 2021

Assets:

Cash and cash equivalents

$

556,256

$

$

$

556,256

Cash and cash equivalents

Restricted cash

3,097

3,097

Other non-current assets

Total assets

$

559,353

$

$

$

559,353

Liabilities:

Contingent consideration

29,542

29,542

Contingent consideration

Derivative financial instrument

2,805

2,805

Other non-current liabilities

Consideration for post-acquisition services

846

846

Other non-current liabilities

Total liabilities

$

$

$

33,193

$

33,193

At September 30, 2022

Assets:

Cash and cash equivalents

$

440,313

$

$

$

440,313

Cash and cash equivalents

Restricted cash

3,106

3,106

Other non-current assets

Total assets

$

443,419

$

$

$

443,419

Liabilities:

Contingent consideration

32,695

32,695

Current portion of contingent consideration; contingent consideration, net of current portion

Derivative financial instrument

2,171

2,171

Other non-current liabilities

Consideration for post-acquisition services

312

312

Other non-current liabilities

Total liabilities

$

$

$

35,178

$

35,178

11

Contingent consideration

The Company is required to pay up to EUR 178.8 million ($175.2 million) at September 30, 2022 to the former shareholders of Corlieve upon the achievement of contractually defined milestones in connection with the Company’s acquisition of Corlieve. The fair market value of the contingent consideration was determined using unobservable initial inputs with respect to (i) the probability of achieving the relevant milestones, or POS, (ii) the estimated timing of achieving such milestones, and (iii) the interest rate used to discount the payments. The Company determined the fair market value of the contingent consideration by calculating the probability-adjusted payments based on each milestone’s probability of achievement. The probability-adjusted payments were then discounted to present value using a discount rate representing the Company’s credit risk. The discount rate was determined using the effective interest rate of the Company’s existing debt facility adjusted for difference in maturity dates based on market data on effective yields for US bonds with a CCC credit rating.

The fair value of the contingent consideration as of September 30, 2022 was $32.7 million (December 31, 2021: $29.5 million) using discount rates of approximately 11.9% to 13.3% (December 31, 2021: 10.9% to 11.9%) as well as a 66.0% (December 31, 2021: 55.0%) likelihood of Corlieve’s target candidate for treatment of temporal lobe epilepsy (“AMT-260”) advancing into clinical development by no later than late 2023. If as of September 30, 2022 the Company had assumed a 100% likelihood of AMT-260 advancing into clinical development, then the fair value of the contingent consideration would have increased to $45.4 million. If as of September 30, 2022 the Company assumed that it would discontinue development of the AMT-260 program, then the contingent consideration would be released to income. Changes in fair value of the contingent consideration are recognized within research and development expenses in the consolidated statements of operations.

The following table presents the changes in fair value of contingent consideration between December 31, 2021 and September 30, 2022:

Amount of

contingent

consideration

2022

(in thousands)

Balance at December 31, 2021

$

29,542

Change in fair value (presented within research and development expenses)

7,510

Currency translation effects

(4,357)

Balance at September 30, 2022

$

32,695

As of September 30, 2022, the Company classified $23.5 million of the total contingent consideration of $32.7 million as current liabilities. The balance sheet classification between current and non-current liabilities is based upon the Company’s best estimate of the timing of settlement of the remaining relevant milestones.  

Derivative financial instrument

The Company issued a derivative financial instrument related to its collaboration with BMS.

On December 1, 2020, the Company and BMS agreed that upon the consummation of a change of control transaction of uniQure that occurs prior to December 1, 2026 or BMS’ delivery of a target cessation notice for all four collaboration targets, the Company (or its third party acquirer) shall pay to BMS a one-time, non-refundable, non-creditable cash payment of $70.0 million, provided that (x) if $70.0 million is greater than five percent (5.0%) of the net proceeds (as contractually defined) from such change of control transaction, the payment shall be an amount equal to five percent of such net proceeds, and (y) if $70.0 million is less than one percent of such net proceeds, the change of control payment shall be an amount equal to one percent of such net proceeds (“CoC-payment”). The Company has not consummated any change of control transaction as of September 30, 2022 that would obligate it to make a CoC-payment.

12

The Company determined that the CoC-payment should be recorded as a derivative financial liability as of December 1, 2020 and that subsequent changes in the fair market value of this derivative financial liability should be recorded in profit and loss. The fair market value of the derivative financial liability is materially impacted by probability that market participants assign to the likelihood of the occurrence of a change of control transaction that would give rise to a CoC-payment. This probability represents an unobservable input. The Company determines the fair market value of the derivative financial liability by using a present value model based on expected cash flow. The expected cash flows are materially impacted by the probability that market participants assign to the likelihood of the occurrence of a change of control transaction within the biotechnology industry. The Company estimated this unobservable input using the best information available as of September 30, 2022 and December 31, 2021. The Company obtained reasonably available market information that it believed market participants would use in determining the likelihood of the occurrence of a change-of control transaction within the biotechnology industry. Selecting and evaluating market information involves considerable judgement and uncertainty. Based on all such information and its judgment, the Company estimated that the fair market value of the derivative financial liability (presented within “Other non-current liabilities”) as of September 30, 2022 was $2.2 million and as of December 31, 2021 was $2.8 million. The change in the fair market value of the derivative financial liability was nil for the three months ended September 30, 2022 and was $0.6 million for the nine months ended September 30, 2022 related to a decrease in the fair market value (nil in the same periods in 2021). The decrease in fair market value for the nine months ended September 30, 2022 was recorded as a gain within Other non-operating (losses) / gains.  

6

Accrued expenses and other current liabilities

Accrued expenses and other current liabilities include the following items:

September 30, 

December 31, 

    

2022

    

2021

(in thousands)

Accruals for goods received from and services provided by vendors-not yet billed

$

13,497

$

13,012

Personnel related accruals and liabilities

12,940

12,603

Accrued contract fulfillment costs and costs to obtain a contract

2,872

Total

$

26,437

$

28,487

13

7Long-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 (“2018 Amended Facility”), January 2021 (“2021 Amended Facility”) and in December 2021 (“2021 Restated Facility”). On January 29, 2021, the Company drew down $35.0 million as part of the amendment of the facility at that time.

Pursuant to the 2021 Restated Facility, Tranche A and Tranche B of the 2021 Amended Facility with a total outstanding balance of $70.0 million were consolidated into one tranche with a total commitment of $100.0 million. The Company drew down an additional $30.0 million at the time of the December 2021 amendment, resulting in total principal outstanding as of September 30, 2022 of $100.0 million. The 2021 Restated Facility extended the loan’s maturity date from June 1, 2023 until December 1, 2025. The interest-only period was extended from January 1, 2023 to December 1, 2024, or December 1, 2025 if, prior to June 30, 2024, either (a) the Biologics License Application (“BLA”) for AMT-061 is approved by the U.S. Food and Drug Administration (“FDA”) or (b) AMT-130 is advanced into a pivotal trial. The interest rate is adjustable and is the greater of (i) 7.95% and (ii) 7.95% plus the prime rate less 3.25% per annum. Under the 2021 Restated Facility, the Company owes a back-end fee of 4.85% of the outstanding debt. The Company is required to repay the facility in equal monthly installments of principal and interest between the end of the interest-only period and the maturity date. The Company continues to owe a $2.5 million back-end fee related to the 2021 Amended Facility which is due on June 1, 2023.

The amortized cost (including interest due presented as part of accrued expenses and other current liabilities) of the 2021 Restated Facility was $103.3 million as of September 30, 2022, compared to $101.6 million as of December 31, 2021, and is recorded net of discount and debt issuance costs. The foreign currency loss on the facility in the three and nine months ended September 30, 2022 was $6.6 million and $15.0 million, respectively compared to a foreign currency loss of $1.8 million and $4.0 million during the same periods in 2021 for the 2018 Amended Facility and the 2021 Amended Facility.

Interest expense associated with the 2021 Restated Facility during the three and nine months ended September 30, 2022 was $3.0 million and $8.1 million, respectively compared to $1.9 million and $5.2 million, respectively, during the same periods in 2021 for the 2018 Amended Facility and the 2021 Amended Facility.

As a covenant in the 2021 Restated Facility the Company has periodic reporting requirements and is required to keep a minimum cash balance deposited in bank accounts in the United States equivalent to the lesser of (i) 65% of the outstanding balance of principal due or (ii) 100% of worldwide cash and cash equivalents. This restriction on cash and cash equivalents only relates to the location of the cash and cash equivalents, and such cash and cash equivalents can be used at the discretion of the Company. The Company, beginning on April 1, 2023, is also required to keep a minimum of unrestricted cash of at least 50% of the loan amount outstanding. If, prior to June 30, 2024, either (a) the BLA for AMT-061 is approved by the FDA or (b) AMT-130 is advanced into a pivotal trial, the minimum cash covenant will be lowered to at least 30% of the loan amount outstanding and its effectiveness will be deferred to April 1, 2024. In combination with other covenants, the 2021 Restated Facility restricts the Company’s ability to, among other things, incur future indebtedness and obtain additional debt financing, to make investments in securities or in other companies, to transfer assets, to perform certain corporate changes, to make loans to employees, officers, and directors, and to make dividend payments and other distributions to its shareholders. The Company secured the facilities by directly or indirectly pledging its total assets of $638.2 million, less $75.3 million of cash and cash equivalents and other current assets held by uniQure N.V. and $80.2 million of other current assets and investment held by Corlieve Therapeutics SAS.

The 2021 Restated Facility contains provisions that include the occurrence of a material adverse effect, as defined therein, which would entitle Hercules to declare all principal, interest and other amounts owed by the Company immediately due and payable. As of September 30, 2022, the Company was in material compliance with all covenants and provisions.

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8Share-based compensation

The Company’s share-based compensation plans include the 2014 Amended and Restated Share Option Plan (the “2014 Plan”) and inducement grants under Rule 5653(c)(4) of the Nasdaq Global Select Market with terms similar to the 2014 Plan (together the “2014 Plans”). At the annual general meeting of shareholders in June 2021, the Company’s shareholders approved an increase in the number of ordinary shares authorized for issuance under the 2014 Plan from 8,601,471 to 12,601,471.

In June 2018, the Company’s shareholders adopted and approved an employee share purchase plan (“ESPP”) allowing the Company to issue up to 150,000 ordinary shares. The ESPP is intended to qualify under Section 423 of the Internal Revenue Code of 1986. Under the ESPP, employees are eligible to purchase ordinary shares through payroll deductions, subject to any plan limitations. The purchase price of the ordinary shares on each purchase date is equal to 85% of the lower of the closing market price on the offering date and the closing market price on the purchase date of each three-month offering period.

2014 Plans and ESPP

Share-based compensation expense recognized by classification included in the Consolidated statements of operations and comprehensive loss in relation to the 2014 Plans and the ESPP for the periods indicated below was as follows:

    

Three months ended September 30, 

Nine months ended September 30, 

    

2022

    

2021

2022

2021

(in thousands)

(in thousands)

Research and development

$

3,730

$

3,249

$

12,090

$

9,222

Selling, general and administrative

3,758

2,707

9,932

9,525

Cost of contract manufacturing

120

268

Total

$

7,608

$

5,956

$

22,290

$

18,747

Share-based compensation expense recognized by award type of the 2014 Plans as well as the ESPP was as follows:

Three months ended September 30,