uniQure(QURE) - 2023 Q3 - Quarterly Report

PART I – FINANCIAL INFORMATION Financial Statements The unaudited consolidated financial statements for uniQure N.V. as of September 30, 2023, show increased total assets and a widened net loss due to higher expenses and a new royalty financing liability Consolidated Balance Sheet Highlights (in thousands) | Balance Sheet Items | Sep 30, 2023 (in thousands) | Dec 31, 2022 (in thousands) | | :--- | :--- | :--- | | Cash and cash equivalents | $229,484 | $228,012 | | Total current assets | $693,626 | $476,774 | | Total assets | $871,550 | $704,964 | | Total current liabilities | $68,607 | $75,919 | | Liability from royalty financing agreement | $383,711 | - | | Total liabilities | $602,766 | $228,955 | | Total shareholders' equity | $268,784 | $476,009 | Consolidated Statements of Operations Highlights (in thousands) | Income Statement Items | Nine months ended Sep 30, 2023 (in thousands) | Nine months ended Sep 30, 2022 (in thousands) | | :--- | :--- | :--- | | Total revenues | $9,154 | $3,738 | | Research and development expenses | ($172,245) | ($139,263) | | Selling, general and administrative expenses | ($57,103) | ($36,802) | | Loss from operations | ($221,123) | ($169,660) | | Interest expense | ($25,846) | ($8,279) | | Net loss | ($235,272) | ($133,596) | | Net loss per ordinary share | ($4.94) | ($2.86) | Consolidated Statements of Cash Flows Highlights (in thousands) | Cash Flow Items | Nine months ended Sep 30, 2023 (in thousands) | Nine months ended Sep 30, 2022 (in thousands) | | :--- | :--- | :--- | | Net cash used in operating activities | ($96,388) | ($90,380) | | Net cash used in investing activities | ($265,248) | ($14,522) | | Net cash generated from financing activities | $362,675 | $844 | | Net increase / (decrease) in cash | $1,463 | ($115,934) | - In May 2023, the company entered into a Royalty Financing Agreement, selling certain royalty rights on HEMGENIX® net sales to HemB SPV for an upfront payment, accounted for as debt[36] - On October 5, 2023, the company announced a reorganization plan to reduce its global workforce by approximately 20% and discontinue over half of its research and technology projects, with an estimated cost of approximately $2.3 million in employee severance[86] Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the company's gene therapy leadership, strategic reorganization, key clinical program advancements, and financial performance, including a widened net loss and extended cash runway Business Developments The company underwent a major reorganization to prioritize clinical programs like AMT-130, AMT-260, AMT-162, and AMT-191, secured $375 million from a royalty financing agreement, and received FDA clearance for AMT-260 IND - The company announced a reorganization to eliminate ~20% of its workforce, close a research lab, and discontinue over half of its research and technology projects to prioritize advancing clinical-stage programs, with expected costs of ~$2.3 million for severance[91][92] - The FDA cleared the Investigational New Drug (IND) application for AMT-260, a gene therapy candidate for refractory mesial temporal lobe epilepsy (MTLE), in August 2023[89][95] - Interim data from the Phase I/II trial of AMT-130 for Huntington's disease showed the treatment was generally well-tolerated with a manageable safety profile, and clinical function was generally preserved at 24 months (low-dose) and 12 months (high-dose) compared to baseline[100][101][103] - The company entered into a royalty financing agreement, receiving an upfront payment of $375.0 million in exchange for rights to the lowest royalty tier on HEMGENIX® worldwide net sales[114] Results of Operations Total revenues increased to $9.2 million, but net loss widened to $235.3 million due to higher R&D expenses, increased SG&A costs, and a surge in interest expense from the new royalty financing agreement Comparison of Operations (Nine Months Ended Sep 30, in thousands) | Line Item | 2023 (in thousands) | 2022 (in thousands) | Change (in thousands) | | :--- | :--- | :--- | :--- | | Total revenues | $9,154 | $3,738 | $5,416 | | R&D expenses | ($172,245) | ($139,263) | ($32,982) | | SG&A expenses | ($57,103) | ($36,802) | ($20,301) | | Loss from operations | ($221,123) | ($169,660) | ($51,463) | | Net loss | ($235,272) | ($133,596) | ($101,676) | Revenue Breakdown (Nine Months Ended Sep 30, in thousands) | Revenue Source | 2023 (in thousands) | 2022 (in thousands) | Change (in thousands) | | :--- | :--- | :--- | :--- | | License revenues | $1,290 | $0 | $1,290 | | Contract manufacturing revenues | $6,596 | $0 | $6,596 | | Collaboration revenues | $1,268 | $3,738 | ($2,470) | | Total revenues | $9,154 | $3,738 | $5,416 | Direct R&D Expenses by Program (Nine Months Ended Sep 30, in thousands) | Program | 2023 (in thousands) | 2022 (in thousands) | Change (in thousands) | | :--- | :--- | :--- | :--- | | Amyotrophic lateral sclerosis (AMT-162) | $13,048 | $0 | $13,048 | | Temporal lobe epilepsy (AMT-260) | $11,970 | $11,394 | $576 | | Huntington's disease (AMT-130) | $11,093 | $15,721 | ($4,628) | | Fabry disease (AMT-191) | $1,846 | $1,664 | $182 | Financial Position, Liquidity and Capital Resources As of September 30, 2023, the company held $662.1 million in liquid assets, projecting funding into Q2 2027, supported by royalty financing proceeds and a milestone payment, while managing significant debt and lease obligations - The company believes its cash, cash equivalents, and investment securities of $662.1 million as of September 30, 2023, will fund operations into the second quarter of 2027[187] - Net cash used in operating activities was $96.4 million for the nine months ended Sep 30, 2023, compared to $90.4 million in the prior year period[202] - Net cash generated from financing activities was $362.7 million, primarily due to $370.1 million in net proceeds from the Royalty Financing Agreement[208][209] - Key contractual obligations include $100.0 million in principal debt to Hercules due in 2027, the royalty financing agreement liability, $54.8 million in lease payments, and up to EUR 190.0 million in potential milestone payments related to the uniQure France SAS acquisition[188][189][191][192] Quantitative and Qualitative Disclosures About Market Risk The company's market risks, including currency, price, and interest rate fluctuations, remain consistent with prior disclosures, with a focus on capital preservation and minimizing adverse financial market effects - The company's market risks, including currency, price, and interest rate risk, have not materially changed during the nine months ended September 30, 2023, from what was disclosed in the Annual Report[218] Controls and Procedures Management concluded that disclosure controls and procedures were effective as of September 30, 2023, with no material changes to internal control over financial reporting during the quarter - Based on an evaluation as of September 30, 2023, the CEO and CFO concluded that the company's disclosure controls and procedures were effective[219] - There were no changes in the company's internal control over financial reporting during the quarter that materially affected, or are reasonably likely to materially affect, internal controls[220] PART II – OTHER INFORMATION Legal Proceedings The company reported no legal proceedings during the period - None[223] Risk Factors The company faces significant risks including clinical trial delays, financial funding needs, operational dependencies, strategic reorganization effectiveness, and intellectual property protection challenges - Clinical Trial Risks: The company has encountered and may continue to encounter delays in clinical trials or fail to demonstrate the safety and efficacy of its product candidates[226] - Financial Risks: The company will likely need to raise additional funding, which may not be available, and the amount required depends on future payments from CSL Behring for HEMGENIX®[226] - Operational Risks: The company's manufacturing facility is subject to significant government regulations, and it also relies on third parties for preclinical studies and clinical trials, who may not perform satisfactorily[226] - Strategic Risks: Actions taken to restructure the business, including the recent Reorganization, may not be as effective as anticipated, and the company may also not be successful in its efforts to build a pipeline of additional product candidates[226][227] - Intellectual Property Risks: The company's ability to commercialize products may be impaired if it is unable to obtain and maintain patent protection for its technology and products[226] Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities The company reported no unregistered sales of equity securities, use of proceeds, or issuer purchases of equity securities during the period - None[434] Defaults Upon Senior Securities The company reported no defaults upon senior securities - None[435] Mine Safety Disclosures This item is not applicable to the company - Not applicable[436] Other Information No director or officer adopted or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during the third quarter of 2023 - No director or officer adopted or terminated a Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement during the three months ended September 30, 2023[437] Exhibits This section lists filed exhibits, including the Termination and Consulting Agreement with Dr. Ricardo Dolmetsch, CEO and CFO certifications, and iXBRL data files - Filed exhibits include CEO and CFO certifications (31.1, 31.2, 32.1) and the Termination and Consulting Agreement for Ricardo Dolmetsch, Ph.D. (10.1)[441]