MeiraGTx(MGTX) - 2023 Q4 - Annual Report

Financial Performance - The company has incurred significant losses since inception and anticipates continued losses for the foreseeable future, with no guarantee of achieving profitability[16]. - The net loss for 2023 was $84,027,000, an improvement from a net loss of $129,615,000 in 2022, reflecting a reduction of 35.2%[688]. - The company's pre-tax loss for 2023 was $84,027 million, an improvement from a loss of $129,615 million in 2022[812]. - The Company reported a gain on the sale of nonfinancial assets amounting to $54,208,000 in 2023[688]. - The Company recorded basic and diluted net loss per ordinary share as the same due to anti-dilutive effects of additional ordinary share equivalents[774]. Revenue and Income - The company recognized deferred revenue of $36.9 million and a gain on the sale of non-financial assets amounting to $54.2 million as of December 31, 2023, due to agreements with Janssen Pharmaceuticals[681]. - The company recognized $70.4 million and $73.3 million related to the reimbursement of research and development expenses under the collaboration agreement for the years ended December 31, 2023, and 2022, respectively[834]. - The collaboration agreement with Janssen includes a 20% royalty on net sales of products and additional milestones up to $340.0 million[822]. - The Company received a non-refundable upfront cash payment of $65.0 million from Janssen Pharmaceuticals in December 2023 as part of an Asset Purchase Agreement[696]. - The Company received a non-refundable upfront fee of $100.0 million from Janssen under a collaboration agreement for gene therapies[819]. Assets and Liabilities - Total current assets increased to $159,622,000 in 2023 from $154,339,000 in 2022, representing a growth of 3.3%[687]. - The company’s total liabilities decreased to $188,567,000 in 2023 from $200,499,000 in 2022, a reduction of 5.9%[687]. - Cash and cash equivalents at the end of 2023 were $129,566,000, up from $115,516,000 at the end of 2022, indicating an increase of 12.1%[687]. - The Company recorded unrecognized tax positions of $2.0 million, up from $0.9 million in 2022[772]. - The balance of asset retirement obligations increased from $2,179,000 in 2022 to $2,401,000 in 2023, reflecting amortization of interest and exchange rate changes[734]. Expenses - Total operating expenses rose to $151,078,000 in 2023, compared to $132,275,000 in 2022, marking an increase of 14.2%[688]. - The Company recorded depreciation and amortization expense of $12,300,000 in 2023, up from $7,300,000 in 2022, marking an increase of approximately 68.8%[790]. - The total compensation expense related to unvested options as of December 31, 2023, was $18.3 million, expected to be recognized over 3.7 years[800]. - Total share-based compensation expense for 2023 was $27.716 million, a decrease of 3.2% from $28.623 million in 2022[804]. - The total rent expense recorded under leases was $5.5 million for the year ended December 31, 2023, compared to $5.3 million for 2022[839]. Cash Flow - The company’s cash flows from operating activities showed a net cash used of $105,365,000 in 2023, compared to $73,098,000 in 2022, indicating an increase in cash outflow[693]. - For the year ended December 31, 2023, the Company used $105.4 million in cash flows from operations, with no assurances of generating positive cash flows in the future[699]. - As of December 31, 2023, the Company had cash, cash equivalents, and restricted cash totaling $130.6 million, which is expected to cover expenses for at least the next twelve months[700]. Capital and Financing - The annual interest rate on borrowings under the Notes Purchase Agreement was 15.32% as of December 31, 2023, with an outstanding balance of $75.0 million[669]. - A hypothetical 1% increase in the secured overnight financing rate (SOFR) would increase annual interest expense by approximately $0.8 million for the year ended December 31, 2023[669]. - The outstanding balance of the Tranche 1 Notes was $75.0 million plus accrued interest of $3.0 million as of December 31, 2023[848]. - The Company recorded interest expense of $11.3 million for the year ended December 31, 2023, compared to $4.0 million for 2022[848]. - The Notes Purchase Agreement matures on August 2, 2026, and is interest-only during the term[848]. Research and Development - The Company is heavily dependent on the success of its product candidates, which are still in development, and if none receive regulatory approval, the business may be harmed[16]. - Clinical trials are expensive and time-consuming, with potential delays that could impact the company's operations[16]. - The Company recorded reductions to research and development expenses of $2.9 million and $6.8 million for the years ended December 31, 2023 and 2022, respectively, related to UK tax incentive programs[709]. - Research and development costs are charged to expense as incurred, including employee-related expenses and costs associated with clinical studies[767]. - The Company is focusing on developing a riboswitch platform for metabolic peptides and cell therapy for oncology and autoimmune diseases[694]. Regulatory and Market Risks - The company faces significant competition in a rapidly changing technological environment, which may affect its financial condition and ability to market products[23]. - The affected populations for the company's product candidates may be smaller than projected, impacting the addressable markets[16]. - The Company is subject to significant risks, including competition, regulatory challenges, and reliance on third parties for its operations[701]. - The UK corporation tax rate will increase from 19% to 25% effective April 1, 2023, impacting future accounting periods[815]. Shareholder and Equity Information - Shareholders' equity increased to $138,177,000 in 2023 from $117,738,000 in 2022, a rise of 17.3%[687]. - The total number of options outstanding increased from 6,858,409 in 2022 to 8,226,707 in 2023, a rise of about 20%[797]. - The weighted average grant date fair value of options granted in 2023 was $5.67, significantly lower than $12.81 in 2022[799]. - The Company issued 10,773,913 ordinary shares in a private placement in May 2023, raising approximately $62.0 million[807]. - In October 2023, the company issued 4,000,000 ordinary shares to Sanofi for gross proceeds of $30.0 million[808].