ProQR(PRQR) - 2022 Q2 - Quarterly Report

Unaudited Condensed Consolidated Financial Statements Unaudited Condensed Consolidated Statement of Financial Position As of June 30, 2022, ProQR Therapeutics N.V. reported a decrease in total assets and total equity compared to December 31, 2021, primarily driven by a reduction in cash and cash equivalents Condensed Consolidated Statement of Financial Position Highlights | Metric (in € thousands) | June 30, 2022 | December 31, 2021 | Change | % Change | |---|---|---|---|---| | Cash and cash equivalents | 156,402 | 187,524 | (31,122) | -16.59% | | Total assets | 179,053 | 209,579 | (30,526) | -14.56% | | Total equity | 86,974 | 113,229 | (26,255) | -23.19% | | Total liabilities | 92,079 | 96,350 | (4,271) | -4.43% | Unaudited Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income For the six months ended June 30, 2022, the company reported increased revenue but also significantly higher research and development and general and administrative costs, leading to a larger operating loss and net loss compared to the prior year period Condensed Consolidated Statement of Profit or Loss Highlights | Metric (in € thousands) | 3 Months Ended June 30, 2022 | 3 Months Ended June 30, 2021 | 6 Months Ended June 30, 2022 | 6 Months Ended June 30, 2021 | |---|---|---|---|---| | Revenue | 1,025 | 243 | 2,259 | 243 | | Research and development costs | (11,449) | (9,735) | (24,816) | (18,640) | | General and administrative costs | (5,412) | (4,122) | (10,320) | (7,461) | | Operating result | (15,737) | (13,203) | (32,677) | (25,306) | | Result for the period | (14,670) | (15,753) | (29,120) | (28,371) | | Basic loss per share (Euro) | (0.21) | (0.24) | (0.41) | (0.48) | Unaudited Condensed Consolidated Statement of Changes in Equity The company's total equity decreased from €113,229 thousand at January 1, 2022, to €86,974 thousand at June 30, 2022, primarily due to the net loss for the period Condensed Consolidated Statement of Changes in Equity Highlights | Metric (in € thousands) | Balance at January 1, 2022 | Result for the period | Other comprehensive income | Recognition of share-based payments | Share options exercised / RSUs vested | Balance at June 30, 2022 | |---|---|---|---|---|---|---| | Total Equity | 113,229 | (29,120) | 911 | 1,921 | 33 | 86,974 | | Accumulated Deficit | (317,770) | (29,329) | — | — | 256 | (346,463) | | Share Premium | 398,309 | — | — | — | 33 | 398,342 | Unaudited Condensed Consolidated Statement of Cash Flows For the six months ended June 30, 2022, the company experienced significant cash outflows from operating activities, a minor outflow from investing activities, and a net cash outflow from financing activities, leading to a substantial decrease in cash and cash equivalents Condensed Consolidated Statement of Cash Flows Highlights | Metric (in € thousands) | 3 Months Ended June 30, 2022 | 3 Months Ended June 30, 2021 | 6 Months Ended June 30, 2022 | 6 Months Ended June 30, 2021 | |---|---|---|---|---| | Net cash used in operating activities | (14,844) | (9,979) | (35,311) | (21,740) | | Net cash used in investing activities | (231) | (52) | (475) | (84) | | Net cash (used in)/generated by financing activities | (357) | 83,341 | (900) | 86,326 | | Net increase (decrease) in cash and cash equivalents | (15,432) | 73,310 | (36,686) | 64,502 | | Cash and cash equivalents at the end of the period | 156,402 | 139,442 | 156,402 | 139,442 | Notes to Unaudited Condensed Consolidated Financial Statements 1. General Information ProQR Therapeutics N.V. is a Netherlands-domiciled development-stage company focused on RNA-based therapeutic medicines, listed on NASDAQ since 2014, and operates with several wholly-owned subsidiaries and a minority stake in Yarrow Biotechnology, Inc - ProQR Therapeutics N.V. is a development-stage company focused on developing and commercializing novel therapeutic medicines[9] - The Company's ordinary shares are listed on the NASDAQ Global Market under ticker symbol PRQR since September 18, 2014[10] - ProQR Therapeutics N.V. is the ultimate parent company of several wholly-owned subsidiaries and holds a 5.1% minority shareholding in Yarrow Biotechnology, Inc[11][16] 2. Significant Accounting Policies The condensed consolidated financial statements are prepared in accordance with IFRS, with certain disclosures condensed or omitted per IAS 34, and the company operates in a single reportable segment focused on RNA-based therapeutics - Financial statements are prepared in accordance with IFRS, with certain disclosures condensed or omitted as per IAS 34 Interim Financial Statements[13] - The Company operates in one reportable segment: discovery and development of innovative, RNA-based therapeutics[14] - Financial results are expected to vary substantially from period to period and are not linked to any particular seasonal factors[14] 3. Adoption of New and Revised International Financial Reporting Standards The accounting policies applied are consistent with those of the prior annual financial statements, and new standards effective January 1, 2022, did not materially impact the condensed consolidated financial statements - New Standards and Interpretations effective as of January 1, 2022, did not have a material impact on the condensed consolidated financial statements[17] 4. Critical Accounting Estimates and Judgments Management makes significant judgments and estimates in applying accounting policies, particularly concerning revenue recognition from collaborations, the expensing of research and development costs, and the classification and valuation of convertible debt instruments - Management's significant judgments and key sources of estimation uncertainty remain consistent with those described in the annual financial statements for December 31, 2021[20] - Key areas requiring judgment include revenue recognition for the Eli Lilly collaboration, estimation of research and development expenditures, and the classification and fair value determination of convertible debt[21][25][27] Revenue Recognition for Eli Lilly Collaboration - The license granted to Eli Lilly is not considered distinct from other promises in the contract due to significant interdependencies with research and development services[21][24] - Revenue is recognized over time using an input method based on the percentage of labor hours incurred, which may be subject to material adjustments if R&D activity assumptions change[22] - The premium paid by Eli Lilly on its equity investment is considered part of the transaction price for the collaboration and license agreement[23] Research and Development Expenditures - Development expenditures are currently expensed to the income statement as the criteria for capitalization are not met[25] - Estimates for services performed by vendors and associated costs are made at each balance sheet date, with potential for reporting differences if actual timing or status varies[25][26] Convertible Debt - Convertible debt agreements are