PART I. FINANCIAL INFORMATION This section presents unaudited financial statements and management's discussion of financial condition and operations Item 1. Financial Statements (Unaudited) Unaudited condensed consolidated financial statements for Q1 2023, covering balance sheets, operations, equity, cash flows, and notes - Financial statements are unaudited and prepared in conformity with GAAP for interim financial information32 Condensed Consolidated Balance Sheets Summarizes the company's financial position, detailing assets, liabilities, and equity for Q1 2023 and year-end 2022 Balance Sheet Highlights (in thousands) | Metric | March 31, 2023 | December 31, 2022 | Change | | :-------------------------------- | :------------- | :---------------- | :----- | | Cash and cash equivalents | $68,784 | $115,516 | $(46,732) | | Accounts receivable - related party | $36,298 | $21,334 | $14,964 | | Total Current Assets | $121,481 | $154,339 | $(32,858) | | Total Assets | $288,140 | $318,237 | $(30,097) | | Total Current Liabilities | $81,104 | $82,072 | $(968) | | Total Liabilities | $197,918 | $200,499 | $(2,581) | | Total Shareholders' Equity | $90,222 | $117,738 | $(27,516) | Condensed Consolidated Statements of Operations and Comprehensive Loss Details financial performance, including revenues, expenses, and net loss for Q1 2023 and 2022 Statements of Operations Highlights (in thousands) | Metric | 3 Months Ended March 31, 2023 | 3 Months Ended March 31, 2022 | Change | | :------------------------------------ | :----------------------------- | :----------------------------- | :----- | | License revenue - related party | $3,334 | $5,633 | $(2,299) | | General and administrative expenses | $12,772 | $11,268 | $1,504 | | Research and development expenses | $22,322 | $23,099 | $(777) | | Total operating expenses | $35,094 | $34,367 | $727 | | Loss from operations | $(31,760) | $(28,734) | $(3,026) | | Foreign currency gain (loss) | $3,857 | $(2,647) | $6,504 | | Net loss | $(30,364) | $(31,045) | $681 | | Basic and diluted net loss per ordinary share | $(0.62) | $(0.70) | $0.08 | - Weighted-average number of ordinary shares outstanding increased to 48,638,151 in Q1 2023 from 44,501,314 in Q1 202224 Condensed Consolidated Statement of Shareholders' Equity (March 31, 2023) Outlines changes in shareholders' equity for Q1 2023, including capital, accumulated loss, and comprehensive income Shareholders' Equity Changes (in thousands) | Metric | Balance at Dec 31, 2022 | Share-based compensation activity | Other comprehensive loss | Net loss | Balance at Mar 31, 2023 | | :-------------------------- | :---------------------- | :------------------------------ | :--------------------- | :------- | :---------------------- | | Capital in Excess of Par Value | $581,893 | $5,201 | — | — | $587,094 | | Accumulated Other Comprehensive (Loss) Income | $6,047 | — | $(2,353) | — | $3,694 | | Accumulated Deficit | $(470,204) | — | — | $(30,364) | $(500,568) | | Total Shareholders' Equity | $117,738 | $5,201 | $(2,353) | $(30,364) | $90,222 | Condensed Consolidated Statement of Shareholders' Equity (March 31, 2022) Outlines changes in shareholders' equity for Q1 2022, including capital, accumulated loss, and comprehensive income Shareholders' Equity Changes (in thousands) | Metric | Balance at Dec 31, 2021 | Share-based compensation activity | Other comprehensive income | Net loss | Balance at Mar 31, 2022 | | :-------------------------- | :---------------------- | :------------------------------ | :----------------------- | :------- | :---------------------- | | Capital in Excess of Par Value | $528,659 | $4,996 | — | — | $533,655 | | Accumulated Other Comprehensive (Loss) Income | $(2,671) | — | $1,932 | — | $(739) | | Accumulated Deficit | $(340,589) | — | — | $(31,045) | $(371,634) | | Total Shareholders' Equity | $185,401 | $4,996 | $1,932 | $(31,045) | $161,284 | Condensed Consolidated Statements of Cash Flows Presents cash flow activities, detailing cash used in operating, investing, and financing for Q1 2023 and 2022 Cash Flow Summary (in thousands) | Cash Flow Activity | 3 Months Ended March 31, 2023 | 3 Months Ended March 31, 2022 | Change | | :-------------------------------- | :----------------------------- | :----------------------------- | :----- | | Net cash used in operating activities | $(37,392) | $(8,298) | $(29,094) | | Net cash used in investing activities | $(8,605) | $(12,460) | $3,855 | | Net cash used in financing activities | $(1,231) | $(2,582) | $1,351 | | Net decrease in cash and cash equivalents | $(47,228) | $(23,340) | $(23,888) | | Cash and cash equivalents at end of period | $68,784 | $113,781 | $(44,997) | Notes to Condensed Consolidated Financial Statements Detailed explanatory notes to the financial statements, covering accounting policies, related-party transactions, and debt Note 1. Organization and Basis of Presentation Describes MeiraGTx's business, structure, and financial statement basis, including its liquidity outlook - MeiraGTx is a vertically integrated, clinical-stage gene therapy company with six clinical programs and a broad preclinical pipeline, focusing on ocular, neurodegenerative, and severe xerostomia diseases30 - The company operates a cGMP multi-product, multi-viral vector manufacturing facility in London, UK, and acquired a second cGMP viral vector manufacturing facility and a cGMP plasmid and DNA production facility in Shannon, Ireland in January 202130 - The company had an accumulated deficit of $500.6 million at March 31, 2023, and used $37.4 million in cash from operations for the three months ended March 31, 20233435 - Cash and cash equivalents were $68.8 million as of March 31, 2023. The company estimates that its cash, related-party receivables ($36.3 million from Janssen), and proceeds from a May 2023 Private Placement ($62.0 million gross) will be sufficient to fund operations into Q2 202536144 Note 2. Summary of Significant Accounting Policies and Recent Accounting Pronouncements Outlines key accounting policies and impact of recent accounting pronouncements on financial statements - The condensed consolidated financial statements include the accounts of Meira Holdings and its wholly-owned subsidiaries, with all intercompany balances and transactions eliminated404243 - Management applies significant judgment in areas such as collaboration revenue, research and development costs, share-based compensation, leases, asset retirement obligations, and tax incentive receivable44 - The company adopted ASU 2016-13 (Financial Instruments – Credit Losses) effective January 1, 2023, which did not have an impact on its consolidated financial statements92 - Collaboration revenue from the Janssen agreement is recognized over time using a cost-to-cost input method, with variable consideration subject to constraints7172119 Note 3. Equity Method and Other Investments Details the company's equity method and other investments, including ownership percentages and carrying values Equity Investments (in thousands) | Investee | Investment Type | Ownership Percentage | Carrying Value | Cost Basis | | :------- | :-------------------- | :------------------- | :------------- | :--------- | | Visiogene LLC | Equity Method Investment | 25% | $5,156 | $5,165 | | Other | Equity Investment | 1.6% | $1,170 | $1,500 | | Total | | | $6,326 | $6,665 | Note 4. Accrued Expenses Provides a breakdown of accrued expenses, including clinical trial, R&D, compensation, and manufacturing costs Accrued Expenses (in thousands) | Category | March 31, 2023 | December 31, 2022 | Change | | :----------------------- | :------------- | :---------------- | :----- | | Clinical trial costs | $12,241 | $13,041 | $(800) | | Research and development | $6,644 | $7,400 | $(756) | | Compensation and benefits | $4,901 | $9,600 | $(4,699) | | Manufacturing costs | $2,712 | $4,326 | $(1,614) | | Professional fees | $1,716 | $732 | $984 | | Consulting | $1,365 | $694 | $671 | | Fixed assets | $1,167 | $3,093 | $(1,926) | | Other | $321 | $932 | $(611) | | Total | $31,067 | $39,818 | $(8,751) | Note 5. Share-Based Compensation Details share-based compensation plans, including expense recognition, outstanding options, and restricted share units Total Share-Based Compensation Expense (in thousands) | Category | 3 Months Ended March 31, 2023 | 3 Months Ended March 31, 2022 | Change | | :-------------------------- | :----------------------------- | :----------------------------- | :----- | | Research and development | $3,026 | $3,632 | $(606) | | General and administrative | $3,406 | $3,946 | $(540) | | Total | $6,432 | $7,578 | $(1,146) | - Share options outstanding increased from 6,858,409 at December 31, 2022, to 8,233,380 at March 31, 2023, with the weighted-average exercise price decreasing from $14.03 to $13.0997 - Restricted Share Units (RSUs) outstanding increased from 2,182,500 at December 31, 2022, to 2,738,750 at March 31, 2023101 - Unrecognized compensation expense for unvested options was $29.1 million and for RSUs was $31.8 million as of March 31, 2023, both expected to be realized over 3.9 years100103 Note 6. Income Taxes Explains income tax position, including no tax provision due to losses and valuation allowance on deferred tax assets - The company did not record a provision for income taxes for the three-month periods ended March 31, 2023 and 2022, due to generated losses107 - A full valuation allowance is maintained against deferred tax assets in the United States, United Kingdom, Ireland, and Netherlands, indicating uncertainty about their future realization108 Note 7. Related-Party Transactions Describes significant transactions with related parties, primarily the Janssen collaboration and debt financing - The company entered into a Collaboration Agreement with Janssen Pharmaceuticals, Inc. on January 30, 2019, for the research, development, and commercialization of gene therapies for inherited retinal diseases (IRDs)109 - Under the Janssen Collaboration Agreement, the company received a $100.0 million upfront payment in March 2019 and a $30.0 million milestone payment in December 202136121 - Janssen pays 100% of clinical and commercialization costs for Clinical IRD Product Candidates, with MeiraGTx eligible for 20% royalties on net sales and up to $340.0 million in additional development and commercialization milestones115 - The company recognized $3.3 million in license revenue from deferred revenue in Q1 2023 (vs. $5.6 million in Q1 2022) and $22.6 million in reimbursement of R&D expenses in Q1 2023 (vs. $13.2 million in Q1 2022)122 - The company entered into a senior secured financing arrangement (Note Purchase Agreement) with Perceptive Credit Holdings III, LP, an affiliate of a greater than 10% shareholder, for an initial $75.0 million125126127 Note 8. Leases Details lease arrangements, including finance and operating lease costs, right-of-use assets, and liabilities Total Lease Cost (in thousands) | Category | 3 Months Ended March 31, 2023 | 3 Months Ended March 31, 2022 | Change | | :-------------------------- | :----------------------------- | :----------------------------- | :----- | | Finance lease cost | $281 | $294 | $(13) | | Operating lease cost | $1,361 | $1,315 | $46 | | Short-term lease cost | $39 | $38 | $1 | | Total lease cost | $1,681 | $1,647 | $34 | Lease Balances (in thousands) | Metric | March 31, 2023 | December 31, 2022 | | :-------------------------------- | :------------- | :---------------- | | Operating lease Right-of-Use asset | $19,427 | $20,109 | | Finance lease Right-of-Use asset | $24,851 | $24,718 | | Operating lease liabilities | $20,471 | $21,215 | - Weighted-average remaining lease term for operating leases was 5.4 years (5.6 years at Dec 31, 2022) and for finance leases was 175.6 years (175.8 years at Dec 31, 2022)131 Note 9. Debt Financing Outlines terms of the senior secured financing arrangement, including interest rates, covenants, and warrants - The company's Note Purchase Agreement provides for an initial $75.0 million (Tranche 1 Notes) and an option for an additional $25.0 million (Tranche 2) at Perceptive's discretion before August 2, 2024136 - The agreement matures on August 2, 2026, is interest-only during the term, and bears interest at 10.00% plus the one-month secured overnight financing rate (SOFR), subject to a 1.00% floor (14.34% at March 31, 2023)136 - The company's obligations are secured by its London and Shannon manufacturing facilities, $3.0 million of cash, and the equity interests of Subsidiary Guarantors137 - Covenants include enrolling in a Phase III trial for AAV-RPGR by June 30, 2023, and ensuring the Shannon manufacturing facility meets cGMP requirements by December 31, 2023138 - Warrants were granted to Perceptive to purchase 400,000 ordinary shares at $15.00 and 300,000 at $20.00, exercisable immediately and expiring August 2, 2027141 Note 10. Commitments and Contingencies Addresses material commitments or contingencies, confirming no new significant items for the reporting period - There were no new material commitments or contingencies entered into during the three-month period ended March 31, 2023143 Note 11. Subsequent Event Discloses significant events after the balance sheet date, specifically a private placement financing in May 2023 - On May 3, 2023, the company entered into a private placement agreement to issue 10,773,913 ordinary shares at a purchase price of $5.75 per share, raising gross proceeds of $62.0 million, which closed on May 5, 2023144 - In connection with the Private Placement, the company is obligated to file a registration statement to register for resale the shares on or prior to August 3, 2023145 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides management's perspective on the company's financial condition and operating results, highlighting its clinical-stage gene therapy focus, recent financial performance, and future outlook, including liquidity and capital needs - The discussion and analysis should be read in conjunction with the financial statements and related notes in this Quarterly Report on Form 10-Q and the Annual Report on Form 10-K for the year ended December 31, 2022147 - The section includes forward-looking statements that involve risks and uncertainties, as detailed in the 'Risk Factors' section147 Overview This note describes MeiraGTx's business, organizational structure, and the basis for preparing its financial statements, including liquidity outlook - MeiraGTx is a vertically integrated, clinical-stage gene therapy company with six clinical programs and a broad preclinical pipeline, focusing on ocular, neurodegenerative, and severe xerostomia diseases148 - The company has incurred significant operating losses since inception, with a net loss of $30.4 million in Q1 2023 (vs. $31.0 million in Q1 2022) and an accumulated deficit of $500.6 million as of March 31, 2023150 - Operations have been financed primarily through equity offerings ($471.0 million gross), debt financing ($75.0 million), and the Janssen Collaboration Agreement ($130.0 million upfront/milestone payments, plus research funding)149 - Cash and cash equivalents were $68.8 million as of March 31, 2023, with $36.3 million in receivables from Janssen. A subsequent Private Placement in May 2023 raised $62.0 million gross proceeds149154 - The company estimates that current funds (cash, receivables, and PIPE proceeds) will be sufficient to fund operating expenses and capital expenditure requirements into Q2 2025156 Recent Development Highlights and Anticipated Milestones This section highlights recent clinical development progress and key anticipated milestones for the company's gene therapy programs - Dosing in the pivotal Phase 3 LUMEOS clinical trial of bota-vec for X-linked retinitis pigmentosa (XLRP) continues, with a Biologics License Application (BLA) submission on track for 2024164 - Positive clinical data from the AQUAx Phase 1 clinical trial for AAV-hAQP1 in radiation-induced xerostomia was reported in December 2022, with a randomized, double-blind, placebo-controlled Phase 2 study expected to initiate in Q2 2023164 - Patients are being dosed in the AAV-GAD clinical trial for Parkinson's disease under a new IND, with enrollment anticipated to complete in Q3 2023164 - The next-generation riboswitch-based gene regulation platform demonstrates precise, dose-responsive control of gene expression using novel, synthetic, orally delivered small molecules, with first GMP material for IND currently being manufactured164 - The company closed a private investment in public equity (PIPE) financing in May 2023, raising $62 million in aggregate gross proceeds163 Components of Our Results of Operations This section explains the key components contributing to the company's financial results, including revenue and expense categories - License revenue consists of the amortization of upfront and milestone payments received from the Collaboration Agreement166 - Operating expenses primarily comprise general and administrative (G&A) costs and research and development (R&D) costs, with R&D expenses charged as incurred167170 - G&A expenses are expected to increase due to personnel growth and public company costs, while R&D expenses are expected to increase substantially for clinical trials, partially offset by collaboration funding169171 - Other non-operating income (expense) includes foreign currency gains/losses from remeasurement of foreign subsidiary cash and intercompany balances, and other comprehensive (loss) income includes foreign currency translation adjustments177179 Critical Accounting Policies and Use of Estimates This section discusses the significant accounting policies and the use of estimates that are crucial to the preparation of the financial statements - The preparation of condensed consolidated financial statements requires significant estimates and judgments, particularly in areas such as collaboration revenue, share-based compensation, and accrued expenses180 - Estimates are based on historical experience, known trends, and various other factors, but actual results may differ materially from these estimates180 Results of Operations This section provides a detailed comparison of the company's financial performance for the three months ended March 31, 2023 and 2022 Financial Performance Comparison (in thousands) | Metric | 3 Months Ended March 31, 2023 | 3 Months Ended March 31, 2022 | Change | | :------------------------------------ | :----------------------------- | :----------------------------- | :----- | | License revenue - related party | $3,334 | $5,633 | $(2,299) | | General and administrative expenses | $12,772 | $11,268 | $1,504 | | Research and development expenses | $22,322 | $23,099 | $(777) | | Loss from operations | $(31,760) | $(28,734) | $(3,026) | | Foreign currency gain (loss) | $3,857 | $(2,647) | $6,504 | | Interest income | $545 | $16 | $529 | | Interest expense | $(3,060) | $(77) | $(2,983) | | Net loss | $(30,364) | $(31,045) | $681 | | Comprehensive loss | $(32,717) | $(29,113) | $(3,604) | - License revenue decreased by $2.3 million due to reduced amortization of upfront and milestone payments from the Janssen Collaboration Agreement183 - General and administrative expenses increased by $1.5 million, primarily due to higher legal and accounting fees, partially offset by lower share-based compensation and insurance costs184 - Research and development expenses decreased by $0.8 million, driven by a $9.3 million increase in research funding reimbursement from Janssen, partially offset by an $8.4 million increase in clinical trial expenses (especially bota-vec Phase 3 and AAV-hAQP1 trials) and $1.6 million in manufacturing expenses188190 - A foreign currency gain of $3.9 million was recorded in Q1 2023 (vs. $2.6 million loss in Q1 2022) due to an unrealized gain on intercompany payables/receivables from the weakening of the U.S. dollar191 - Interest expense increased by $3.0 million, primarily due to interest accrued and amortization of the debt discount in connection with the debt financing193 Liquidity and Capital Resources This section discusses the company's financial liquidity, capital needs, and how it plans to fund its operations and future growth - The company has incurred significant operating losses since inception and expects to continue incurring substantial expenses, necessitating additional capital from equity, debt, or collaborations196198 - As of March 31, 2023, cash and cash equivalents totaled $68.8 million. With expected research funding and proceeds from the May 2023 Private Placement, funds are estimated to be sufficient into Q2 2025200201 - Net cash used in operating activities increased significantly to $37.4 million in Q1 2023 (from $8.3 million in Q1 2022), primarily due to the net loss and an increase in operating assets202203 - Net cash used in investing activities was $8.6 million in Q1 2023 (vs. $12.5 million in Q1 2022) for property and equipment purchases204205 - Net cash used in financing activities was $1.2 million in Q1 2023 (vs. $2.6 million in Q1 2022), primarily for tax withholding obligations on restricted share unit awards206207 - The company is an 'emerging growth company' and will remain so until December 31, 2023, benefiting from reduced disclosure requirements and an extended transition period for accounting standards209 Item 3. Quantitative and Qualitative Disclosures About Market Risk The company is exposed to foreign currency exchange risk due to international operations and interest rate risk from its variable-rate debt. A 10% unfavorable movement in foreign currency could result in a $25.4 million loss, and a 1% increase in SOFR could increase annual interest expense by $0.8 million - The company is exposed to foreign currency exchange rate fluctuations, primarily between the U.S. Dollar and the British pound sterling and euro, due to operations in the United States, United Kingdom, Netherlands, Ireland, and Belgium212 - A 10% unfavorable movement in foreign currency exchange rates is estimated to create an additional foreign currency loss of approximately $25.4 million for the three months ended March 31, 2023212 - The company is exposed to market risk from changes in interest rates applicable to borrowings under its Note Purchase Agreement, which bears interest at a fluctuating rate (14.34% at March 31, 2023)213 - A hypothetical 1% increase in the secured overnight financing rate (SOFR) would increase annual interest expense by approximately $0.8 million, assuming no change in outstanding borrowings213 Item 4. Controls and Procedures Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective at a reasonable assurance level as of March 31, 2023. No material changes in internal control over financial reporting occurred during the quarter - Management, with the participation of the Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of disclosure controls and procedures as of March 31, 2023215 - It was concluded that the disclosure controls and procedures were effective at the reasonable assurance level215 - No changes in internal control over financial reporting occurred during the quarter ended March 31, 2023, that have materially affected, or are reasonably likely to materially affect, internal control over financial reporting216 PART II. OTHER INFORMATION This section provides additional information, including legal proceedings, risk factors, equity sales, defaults, and exhibits Item 1. Legal Proceedings The company is not currently subject to any material legal proceedings - The company is not subject to any material legal proceedings217 Item 1A. Risk Factors Details risks associated with investing, covering financial, development, regulatory, manufacturing, and market factors - Investing in the company's ordinary shares involves a high degree of risk218 - If any of the described risks occur, the company's business, financial condition, results of operations, and future growth prospects could be materially and adversely affected, potentially leading to a decline in the market price of ordinary shares218 Risks Related to Our Financial Position and Need for Additional Capital Highlights financial risks, including significant losses, need for capital, and covenants from debt financing - The company has incurred significant losses since inception, with net losses of approximately $30.4 million and $31.0 million for the three months ended March 31, 2023 and 2022, respectively, and an accumulated deficit of approximately $500.6 million as of March 31, 2023219 - The company anticipates continued losses for the foreseeable future and will require additional capital to fund its operations, which may not be available on acceptable terms, if at all219224 - The company's ability to fund operations into Q2 2025 is based on estimates that may prove wrong, and it could utilize available capital resources sooner than expected225 - The Note Purchase Agreement imposes covenants (e.g., Phase III trial for AAV-RPGR by June 30, 2023, Shannon facility cGMP by Dec 31, 2023) and restrictions on operations; non-compliance could lead to debt acceleration and material adverse effects230231233 - Future success is substantially dependent on the successful development, regulatory approval, and commercialization of its Most Advanced Product Candidates (bota-vec, AAV-GAD, AAV-CNGB3, AAV-CNGA3, AAV-RPE65, and AAV-hAQP1)235 Risks Related to Discovery, Development, Clinical Testing, Manufacturing and Regulatory Approval Covers risks in gene therapy development, clinical trials, manufacturing, and the evolving regulatory landscape - The company's novel gene therapy platform faces challenges in predicting development time and cost, with few gene therapies approved to date, and risks related to mechanism of action, safety, efficacy, and potential toxicities241242 - The regulatory landscape for gene therapy is uncertain and evolving, with potential for frequent changes in requirements, uncoordinated oversight, and longer, more expensive approval processes246247248 - Clinical trials are expensive, time-consuming, difficult to design, and have uncertain outcomes, with potential for substantial delays due to patient enrollment, regulatory agreements, third-party performance, or unforeseen adverse events252253255258261 - The COVID-19 pandemic has caused and may continue to cause delays in clinical trials, supply chain disruptions, and adverse impacts on global economic conditions and capital raising269272 - The company has received Fast Track, PRIME, and Orphan Drug designations for several product candidates, but these do not guarantee faster development, review, or approval, nor do they increase the likelihood of marketing approval or confer absolute market exclusivity278279290283291 - Manufacturing processes and facilities (internal and third-party) are subject to significant cGMP regulation, with risks of non-compliance, contamination, raw material shortages, and difficulties in expanding capacity, which could delay development and commercialization292293297298 - Product candidates may cause serious adverse events or undesirable side effects, which could interrupt, delay, or halt clinical trials, result in restrictive labels, or lead to denial of regulatory approval303304 Risks Related to Healthcare Laws and Other Legal Compliance Matters Addresses risks from healthcare legislation, fraud and abuse laws, data protection, and international compliance - Enacted and future healthcare legislation (e.g., ACA, Medicare payment reductions, state pricing controls) may increase the difficulty and cost of obtaining marketing approval and affect product pricing333337338 - The company's business operations are subject to broadly applicable fraud and abuse laws (e.g., U.S. federal Anti-Kickback Statute, False Claims Act, HIPAA) and other healthcare laws in the U.S., UK, and EU, with potential for significant penalties for non-compliance345348 - The company is subject to evolving global data protection laws (e.g., HIPAA, CCPA/CPRA, GDPR, UK data protection regime); compliance is complex and costly, and failure could result in significant penalties and reputational harm350352353357358 - Operations are subject to environmental, health, and safety laws regarding hazardous and biological materials, with risks of fines, sanctions, or production delays if regulations are not met or materials are restricted359 - International operations expose the company to anti-corruption laws (e.g., UK Bribery Act, FCPA) and Trade Control laws, with potential for civil or criminal penalties, remedial measures, and legal expenses for non-compliance361363364 Risks Related to Commercialization Details challenges in commercializing gene therapies, including competition, reimbursement, market acceptance, and third-party reliance - The development and commercialization of new gene therapy products is highly competitive, with major pharmaceutical and biotechnology companies possessing greater resources and expertise366369 - Competitors may achieve regulatory approval sooner or develop safer, more effective, or less expensive therapies, which could harm the company's financial condition and ability to commercialize its product candidates371 - Successful commercialization depends on obtaining adequate coverage and reimbursement levels from governmental authorities and health insurers; failure to do so could limit market access and revenue generation372373 - Even if approved, product candidates may fail to achieve market acceptance by physicians, patients, and third-party payors due to factors like efficacy, cost, convenience, or competition379 - The company lacks its own sales, marketing, and distribution infrastructure and relies on collaborators; failure to establish or maintain effective collaborative arrangements could delay commercialization383384385387 - Commercialization outside the United States, UK, or EU involves additional risks, including differing regulatory requirements, intellectual property protection, reimbursement policies, and economic/political instability390 - Product candidates approved as biologics may face competition from biosimilars sooner than anticipated, potentially reducing market exclusivity and revenue392394 Risks Related to Our Dependence on Third Parties Examines risks from reliance on third-party manufacturers, suppliers, collaborators, and clinical research organizations - The company relies on its own cGMP manufacturing facilities and third-party suppliers for plasmid and other components; issues with these facilities or suppliers could lead to insufficient quantities, delays, or increased costs395396 - Reliance on third-party manufacturers entails risks such as breach of agreement, termination, regulatory non-compliance, quality issues, and supply chain disruptions (e.g., geopolitical actions, health emergencies)397399 - The company collaborates with third parties for development, manufacture, and commercialization of product candidates; failure to establish or maintain these relationships could significantly limit its ability to succeed402404407 - Reliance on CROs, clinical trial sites, and other vendors for preclinical studies and clinical trials means limited direct control over their performance, and unsatisfactory performance could harm business and delay development408412413 Risks Related to Intellectual Property Covers risks related to patent protection, licensing, infringement claims, and the protection of trade secrets - The company depends on proprietary technology licensed from others; loss of existing licenses or inability to acquire additional proprietary rights could prevent continued product candidate development414 - Failure to obtain and maintain sufficiently broad patent protection for technology and product candidates could impair competitive effectiveness, as the patent prosecution process is expensive, time-consuming, and uncertain418419 - Third parties may assert claims of patent infringement, or the company may need to defend or enforce its patents, leading to substantial costs, delays, or loss of productivity425426428430 - Changes in patent laws or jurisprudence (e.g., Leahy-Smith America Invents Act, U.S. Supreme Court rulings) could diminish the value of patents, impairing the ability to protect product candidates435438 - Limited geographical patent protection and inadequate patent terms (due to lengthy development and regulatory review) may expose the company to competition from generic versions439443444 - Reliance on trade secrets and confidential know-how carries risks of misappropriation or unauthorized disclosure, especially when shared with third parties, which could impair competitive position447449450 Risks Related to Employee Matters and Managing Growth Addresses risks from organizational growth, key personnel, product liability, cybersecurity, and Brexit impacts - The company expects to expand its organization, which may lead to difficulties in managing growth, identifying, hiring, and integrating new personnel, potentially disrupting operations454 - Future success depends on retaining key personnel (e.g., CEO, COO, CDO) and attracting qualified staff; loss of key individuals or inability to hire could seriously harm business strategy455456 - The use and sale of product candidates expose the company to product liability claims, which could result in substantial liabilities, costs, and limits on commercialization458 - Insurance policies are expensive and may not cover all business risks or be sufficient, leaving the company exposed to significant uninsured liabilities459 - Misconduct by employees or independent contractors (e.g., non-compliance with regulations, fraudulent data) could lead to regulatory sanctions, reputational harm, and financial penalties463 - The company's information technology systems are vulnerable to cybersecurity risks, including attacks, breaches, and data loss, which could disrupt operations, damage reputation, and delay product development464468 - The UK's withdrawal from the EU (Brexit) has resulted in regulatory changes and economic uncertainties, potentially impacting the company's business, supply chains, and ability to attract/retain employees469470474 Risks Related to Our Ordinary Shares Details risks concerning share price volatility, shareholder influence, reduced disclosure, anti-takeover, and tax implications - The market price of the company's ordinary shares is likely to be volatile due to various factors, including clinical trial results, competitive products, regulatory developments, and general market conditions476479 - Executive officers, directors, and principal shareholders (holding approximately 49.8% of outstanding shares as of May 8, 2023) have the ability to significantly influence all matters submitted to shareholders for approval480481 - As an 'emerging growth company' and 'smaller reporting company,' the company benefits from reduced disclosure requirements, which may make its ordinary shares less attractive to some investors and increase price volatility484486487 - Anti-takeover provisions in organizational documents and Cayman Islands law may discourage or prevent a change of control, even if beneficial to shareholders490 - There may be difficulties in enforcing foreign judgments against the company's management or the company itself, as a significant portion of assets and personnel are located outside the United States491492 - The rights of the company's shareholders differ from those typically offered to shareholders of a U.S. corporation, potentially making it more difficult to protect their interests493494 - The company may be classified as a Passive Foreign Investment Company (PFIC) for U.S. federal income tax purposes, or U.S. persons owning at least 10% of shares may be subject to Controlled Foreign Corporation (CFC) rules, leading to adverse U.S. federal income tax consequences498499 - Changes in tax laws or challenges to the company's tax position could adversely affect results; significant U.S. federal/state Net Operating Losses (NOLs) and UK carryforward tax losses may be restricted or unrealized500502503 General Risk Factors Covers general business risks including acquisitions, exchange rates, management discretion, public company costs, and ESG factors - The company may engage in acquisitions that could disrupt its business, cause dilution to shareholders, or reduce financial resources, and such acquisitions may not be on favorable terms or strengthen its competitive position504 - Exchange rate fluctuations, particularly between the U.S. dollar, pound sterling, and euro, may adversely affect the company's results of operations and financial condition, and it currently has no hedging arrangements in place505506 - Management has broad discretion over the use of net proceeds from financings, and these investments may not yield a favorable return or align with shareholder preferences507 - Operating as a public company incurs substantial costs and requires significant management time for compliance initiatives and corporate governance practices, especially if the company no longer qualifies as an emerging growth company or smaller reporting company508509 - If securities or industry analysts cease to publish research or issue adverse opinions about the company, its share price and trading volume could decline510512 - Expectations relating to environmental, social, and governance (ESG) factors may impose additional costs, expose the company to new risks, and affect investor attractiveness if policies and disclosures are deemed inadequate513 - The company does not anticipate paying any cash dividends on its ordinary shares in the foreseeable future, making capital appreciation the sole source of gain for investors514 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds There were no unregistered sales of equity securities or use of proceeds to report for the period - None515 Item 3. Defaults Upon Senior Securities There were no defaults upon senior securities to report for the period - None516 Item 4. Mine Safety Disclosures This item is not applicable to the company - Not applicable517 Item 5. Other Information There is no other information to report for the period - None518 Item 6. Exhibits Lists exhibits filed with the Form 10-Q, including certifications from executive officers and XBRL documents - Exhibits include certifications from the Principal Executive Officer (31.1, 32.1) and Principal Financial Officer (31.2, 32.2), and various Inline XBRL Instance Documents (101.INS, 101.SCH, 101.CAL, 101.DEF, 101.LAB, 101.PRE, 104)520 SIGNATURES Official signatures of the company's principal executive and financial officers, certifying the report - The report was duly signed on behalf of MeiraGTx Holdings plc by Alexandria Forbes (Chief Executive Officer) and Richard Giroux (Chief Financial Officer and Chief Operating Officer) on May 11, 2023524
MeiraGTx(MGTX) - 2023 Q1 - Quarterly Report