What changed in this filing

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Item 2. Management’s Discussion and Analysis

2020-10-27 compared with 2020-07-30 · 152 added, 138 removed, 337 unchanged (46% of the section changed)

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We produce our AAV-based gene therapies in our own facilities with a proprietary, commercial-scale, current good manufacturing practices (“cGMP”)-compliant, manufacturing process.

We believe our Lexington, Massachusetts-based facility is one of the world's leading, most versatile, gene therapy manufacturing facilities .

We believe our Lexington, Massachusetts-based facility is one of the world's most versatile gene therapy manufacturing facilities .

Business Developments

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CSL Behring commercialization and license agreement

On June 24, 2020, uniQure biopharma B.V., our wholly-owned subsidiary of uniQure N.V., entered into a commercialization and license agreement (the “CSL Behring Agreement”) with CSL Behring LLC (“CSL Behring”) providing CSL Behring exclusive global rights to etranacogene dezaparvovec, our investigational gene therapy for patients with hemophilia B (the “Product”).

Under the terms of the CSL Behring Agreement, we will receive a $450 million upfront cash payment upon the closing of the CSL Behring Agreement and be eligible to receive up to $1.6 billion in payments based on regulatory and commercial milestones.

We will also be eligible to receive tiered double-digit royalties in a range of up to a low-twenties percent of net sales of the Product based on sales thresholds.

Pursuant to the CSL Behring Agreement, we will be responsible for the completion of the HOPE-B clinical trial, manufacturing process validation, and the manufacturing supply of Product until such time that these capabilities may be transferred to CSL Behring or its designated contract manufacturing organization.

Pursuant to a development and commercial supply agreement, we will supply Product to CSL Behring at an agreed-upon price per the contract.

We and CSL Behring executed the development and commercial supply agreement simultaneously with the CSL Behring Agreement.

Certain provisions will not become effective until after we receive regulatory approval to close the transaction.

On June 24, 2020, 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 LLC (“CSL Behring”) pursuant to which CSL Behring will receive exclusive global rights to etranacogene dezaparvovec, our investigational gene therapy for patients with hemophilia B (the “Product”).

Under the terms of the CSL Behring Agreement, we will receive a $450 million upfront cash payment upon the closing of the CSL Behring Agreement and be eligible to receive up to $1.6 billion in additional payments based on regulatory and commercial milestones.

The CSL Behring agreement also provides that we will be eligible to receive tiered double-digit royalties in a range of up to a low-twenties percent of net sales of the Product based on sales thresholds.

Pursuant to the CSL Behring Agreement, we will be responsible for the completion of the HOPE-B clinical trial, manufacturing process validation, and the manufacturing supply of the Product until such time that these capabilities may be transferred to CSL Behring or its designated contract manufacturing organization.

Concurrently with the execution of the CSL Behring Agreement we and CSL Behring entered into a development and commercial supply agreement, pursuant to which, among other things, we will supply the Product to CSL Behring at an agreed-upon price.

Clinical development and regulatory activities performed by us pursuant to the CSL Behring Agreement will be reimbursed by CSL Behring.

CSL Behring will be responsible for global regulatory submissions and commercialization requirements for Product.

CSL Behring will be responsible for global regulatory submissions and commercialization requirements for the Product.

The effectiveness of the transactions contemplated by the CSL Behring Agreement is contingent on completion of review under antitrust laws in the United States, Australia, and the United Kingdom and certain provisions of the CSL Behring Agreement will not become effective until after we receive such regulatory approvals.

Other than under the CSL Behring Agreement, neither we nor CSL Behring may perform any clinical trials, with the exception of trials required to extend the label or gain marketing authorization outside the United States or the European Union, for any gene therapy product, gene-editing product, or any other product comprising an AAV vector to conduct nucleotide transfer (including DNA and RNA) for the treatment, prevention, or cure of hemophilia B for a period commencing on June 24, 2020 and continuing for a period of four years following the first commercial sale of the Product in the United States, and neither we nor CSL Behring may commercialize such a product for a period commencing as of June 24, 2020 and continuing for a period of seven years following the first commercial sale of the Product in the United States.

This exclusivity commitment would not bind an acquirer of us that owns or controls such a product so long as certain precautions are followed to ensure that CSL Behring’s confidential information and our proprietary technology related to Product are not used or accessed by personnel of such acquirer who are developing or commercializing such competing product.

This exclusivity commitment would not bind an acquirer of us that owns or controls such a product so long as certain precautions are followed to ensure that CSL Behring’s confidential information and our proprietary technology related to the Product are not used or accessed by personnel of such acquirer who are developing or commercializing such competing product.

Unless earlier terminated as described below, the CSL Behring Agreement will continue on a country-by-country basis until expiration of the royalty term in a country.

The royalty term expires in a country on the later of (a) 15 years after the first commercial sale of Product in such country, (b) expiration of regulatory exclusivity for Product in such country and (c) expiration of all valid claims of specific licensed patents covering Product in such country.

The royalty term expires in a country on the later of (a) 15 years after the first commercial sale of the Product in such country, (b) expiration of regulatory exclusivity for the Product in such country and (c) expiration of all valid claims of specific licensed patents covering the Product in such country.

Either we or CSL Behring may terminate the CSL Behring Agreement for the other party’s material breach, if such breach is not cured within a specified cure period.

In addition, if CSL Behring fails to commercialize Product in any of a group of major countries for an extended period of time following the first regulatory approval of Product in any of such group of countries (other than due to certain specified reasons) and such failure has not been cured within a specified cure period, then we may terminate the CSL Behring Agreement.

In addition, if CSL Behring fails to commercialize the Product in any of a group of major countries for an extended period of time following the first regulatory approval of the Product in any of such group of countries (other than due to certain specified reasons) and such failure has not been cured within a specified cure period, then we may terminate the CSL Behring Agreement.

CSL Behring may also terminate the CSL Behring Agreement for convenience.

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In accordance with our existing license and other agreements, we are contractually required to pay in total a low to high single digit percentage of any upfront payment to our licensors and financial advisor (“License Fees”).

As of June 30, 2020, we concluded we have no enforceable right to receive any of the upfront payment, the regulatory and sales milestone payments or the royalties (together “CSL License Revenue”) that we may receive in accordance with the CSL Behring Agreement, as all payments are contingent upon the successful completion of reviews under antitrust laws in the United States, Australia and the United Kingdom.

As of September 30, 2020, we concluded that we have no enforceable right to receive any of the upfront payment, the regulatory and sales milestone payments or the royalties (together “CSL License Revenue”) that we may receive in accordance with the CSL Behring Agreement, as all payments are contingent upon the successful completion of reviews under antitrust laws in the United States, Australia and the United Kingdom.

Therefore, we determined we will not recognize any revenue in relation to the CSL License Revenue, in accordance with ASC 606.

We determined that in accordance with Dutch taw law we will recognize the CSL Behring License Revenue as well as the License Fees as taxable results as of the date on which we are contractually entitled to receive (or obligated to make) a payment under the CSL Behring Agreement.

We expect to continue to incur taxable losses in the Netherlands except for the period in which we receive the $450 million upfront payment.

In the event that we recognize the $450 million upfront payment in 2020, such payment will be subject to Dutch corporate income tax at a rate of 25.0%.

Any CSL License Revenue including the upfront payment that we recognize thereafter will be subject to Dutch corporate income tax at a rate of 21.7%.

We determined that in accordance with Dutch tax law we will recognize the CSL Behring License Revenue as well as the License Fees as taxable results as of the date on which we are contractually entitled to receive (or obligated to make) a payment under the CSL Behring Agreement.

We expect to continue to incur taxable losses in the Netherlands except for the period in which we receive the $450 million upfront payment under the CSL Behring Agreement.

In the event that we recognize the $450 million upfront payment in 2020, such payment is expected to be subject to Dutch corporate income tax at a rate of 25.0%.

However, we do not expect that we will be required to pay any income taxes in the period in which we recognize the $450 million upfront payment as taxable revenue, as such payment is not expected to exceed the net operating losses that we have carried forward in the Netherlands.

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Future taxable income or losses and a potential reversal of the valuation allowance will be impacted by a variety of factors, of which some are outside of our control.

Such factors include the outcome and timing of the reviews under antitrust laws in the United States, Australia, and the United Kingdom, the change in the Dutch corporate income tax rate in 2021, additional net operating losses we may generate in relation to the CSL Behring Agreement, and the amount of License Fees we are required to pay.

Such factors include the outcome and timing of the reviews under antitrust laws in the United States, Australia, and the United Kingdom, additional net operating losses we may generate in relation to the CSL Behring Agreement, and the amount of License Fees we are required to pay.

We recognize deferred tax assets to the extent that we determine that these assets are more likely than not to be realized.

In making such a determination, we weighed all available positive and negative evidence, including future income projections from the CSL Behring Agreement, and concluded that it is more likely than not that the deferred tax assets will not be realized.

Accordingly, we continued to record a full valuation allowance as of June 30, 2020.

Accordingly, we continued to record a full valuation allowance as of September 30, 2020.

Hemophilia B program – Etranacogene dezaparvovec (AMT-061)

Etranacogene dezaparvovec is our lead gene therapy candidate and includes an AAV5 vector incorporating the FIX-Padua variant.

We are currently conducting a pivotal study in patients with severe and moderately-severe hemophilia B.

Etranacogene dezaparvovec has been granted Breakthrough Therapy Designation by the United States FDA and access to the PRIME initiative by the EMA.

In June 2018, we initiated our Phase III HOPE-B pivotal trial of etranacogene dezaparvovec (the “HOPE-B trial”).

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As set forth below, we have implemented and continue to implement various measures to allow us to closely monitor the trial within the guidance provided by the FDA regarding the impact of the COVID-19 coronavirus pandemic (“COVID-19”) in order to minimize any risk or disruption in patient follow-up visits.

In August 2018, we initiated a Phase IIb dose-confirmatory study of etranacogene dezaparvovec.

In August 2018, we initiated a Phase IIb dose-confirmation study of etranacogene dezaparvovec.

In December 2019, we presented 52-week follow-up data from the study showing that all three patients had stabilized and sustained FIX activity at therapeutic levels after a one-time administration of etranacogene dezaparvovec.

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The primary objective of the study is to evaluate the safety, tolerability, and efficacy of AMT-130 at two doses.

On September 25, 2020, we announced that the independent Data Safety Monitoring Board (DSMB) overseeing the Phase I/II clinical trial of AMT-130 for the treatment of Huntington’s disease has met and reviewed 90-day safety data from the first two patients enrolled in the trial.

No significant safety concerns were noted to prevent further dosing.

On October 13, 2020, we announced the completion of the third and fourth patient procedures in the Phase I/II clinical trial.

In accordance with the study protocol, patient enrollment is expected to continue after a DSMB meeting to review 90-day follow-up data on these two new patients and 6-month data on the first two patients.

AMT-150 for Spinocerebellar Ataxia type 3 (SCA3)

AMT-150 is our novel gene therapy candidate for the treatment of SCA3, also known as Machado-Joseph disease, which is caused by a CAG-repeat expansion in the ATXN3 gene that results in an abnormal form of the protein ataxin-3.

In May 2020, we presented preclinical data at the American Society of Gene and Cell Therapy (“ASGCT”) Annual Meeting, on our gene therapy candidate SCA3.

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Additionally, AMT-150 demonstrated ATXN3 knockdown in human neurons and various SCA3 mouse models with subsequent neuropathology improvement.

In September 2020, we initiated an IND-enabling safety and toxicology study of AMT-150 in non-human primates.

AMT-190 for Fabry disease

In May 2020, we presented preclinical data at the ASGCT Annual Meeting on our gene therapy candidate AMT-190 for Fabry disease.

In vivo studies in wild-type NHPs were conducted to assess expression of a proprietary, exclusively licensed modified NAGA (“ModNAGA”) upon AAV-injection.

These studies demonstrated that a single administration of AMT-190 resulted in ModNAGA expression in the liver and significant increases of GLA activity levels in the NHP plasma.

In September 2020, we selected a lead gene therapy candidate (AMT-190) for the treatment of

Fabry disease to advance into IND-enabling studies.

The lead candidate is a one-time administered AAV5 gene therapy incorporating the α-galactosidase A (GLA) transgene.

In preclinical studies comparing multiple product candidates, including constructs incorporating a modified alpha-N-acetylgalactosaminidase transgene (modNAGA), AMT-190 demonstrated the most robust and sustained increases in GLA activity.

AMT-180 for Hemophilia A

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COVID-19 measures

In December 2019, COVID-19, a novel coronavirus disease, was reported and in January 2020, the World Health Organization (“WHO”) declared it a Public Health Emergency of International Concern.

On February 28, 2020, the WHO raised its assessment of the COVID-19 threat from high to very high at a global level due to the continued increase in the number of cases and affected countries, and on March 11, 2020, the WHO characterized COVID-19 as a pandemic.

In December 2019, COVID-19, a novel coronavirus disease, was reported and on March 11, 2020, the WHO characterized COVID-19 as a pandemic.

Starting March 2020, we implemented measures to address the impact of COVID-19 on our business.

As of March 13, 2020, we mandated a work-from-home policy for all non-essential employees at our Amsterdam and Lexington facilities.

We mandated a work-from-home policy for all non-essential employees at our Amsterdam and Lexington facilities when the pandemic began.

We supported our employees in setting up a healthy and efficient remote working environment.

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In addition, we conducted awareness training around cybersecurity for critical functions involved in making payments to vendors such as finance and supply chain.

As a biopharma research and development company, we are deemed to provide essential services under the “stay at home” advisory that was issued by the Governor of Massachusetts on March 23, 2020 and we are therefore maintaining our manufacturing operations at our Lexington site.

We adapted to operate our laboratories at our Amsterdam site to comply with social distancing rules and to ensure the health and wellbeing of our employees under the current circumstances.

We had discouraged our employees from using public transport and are accommodating them by arranging for alternative means of transport until June 1, 2020 in line with policies advised by the relevant Dutch authorities.

We continue to monitor local government rules and recommendations.

We conduct frequent status video-meetings of local management at our two sites as well as leadership-team video meetings to implement these measures and to monitor the evolving situation.

In addition, we inform our employees through periodic newsletters and have organized virtual local and global townhalls to share information and provide direction and support to our employees.

We have adapted our ongoing clinical research activities based on the directions and flexibility provided by the “FDA Guidance on Conduct of Clinical Trials of Medical Products during COVID-19 Pandemic” issued on March 18, 2020 in an attempt to minimize any risk, disruption or delay in either patient dosing or follow-up visits.

We are starting to reopen the Amsterdam and Lexington facilities in phases, in line with the reopening plans that are prescribed by the local government.

Starting June 1, 2020, we encouraged our Amsterdam employees to work a minimum of two days per week from the office and approximately 50% of local staff has been working on site since then.

We started to reopen the Amsterdam and Lexington facilities in phases, in line with the reopening plans that are prescribed by the local government.

Starting June 1, 2020, we encouraged our Amsterdam employees to work a minimum of two days per week from the office and approximately 50% of local staff was working on site since then.

As of September 29, 2020, we reinstated the mandatory work-from-home policy that was initiated in March in Amsterdam to align with the updated Dutch government’s measures.

Employees based in Amsterdam who cannot perform their duties outside of our Amsterdam facility will continue to work at our Amsterdam facility.

We adapted to operate our laboratories at our Amsterdam site to comply with social distancing rules and to ensure the health and wellbeing of our employees under the current circumstances.

All other employees in Amsterdam will work from home.

Our employees that cannot perform their duties outside of our Lexington facility continue to work at our Lexington facility.

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Our occupancy at the Lexington facility has been less than approximately 25% of our permitted occupancy during all phases of the Massachusetts reopening plan.

The broader implications of COVID-19 on our results of operations and overall financial performance remain uncertain.

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However, we may experience more pronounced disruptions in our operations in the future.

We believe our cash and cash equivalents as of June 30, 2020, will enable us to fund our operating expenses including our debt repayment obligations as they become due and capital expenditure requirements into 2022.

We believe our cash and cash equivalents as of September 30, 2020, will enable us to fund our operating expenses, including our debt repayment obligations, as they become due and capital expenditure requirements into 2022.

Upon the receipt of the $450 million payment due on the closing of the CSL Behring Agreement, we expect that our cash and cash equivalents will be sufficient to fund operations into the second half of 2024.

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The final resolution of these discussions may or may not result in material changes to our collaboration with BMS.

On August 26, 2020, we announced the appointment of Ricardo Dolmetsch, Ph.D.

as President, Research and Development, effective September 14, 2020.

Dolmetsch succeeded Sander van Deventer, M.D., Ph.D., our former Executive Vice President, Research and Product Development.

At the same time we announced that Robert Gut, M.D., Ph.D., will transition from his role as Chief Medical Officer on October 14, 2020, and we plan for Dr.

Gut to continue to serve on our Board of Directors by nominating him to serve as a non-executive director.

On June 17, 2020, our shareholders voted to approve the appointment of Leonard E.

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On July 13, 2020, the United States Patent and Trademark Office issued its decision to institute the Inter Partes Review .

We are in the process of preparing our response to the petition, which is due October 5, 2020 under the schedule set for the proceeding.

On October 13, 2020, we filed a motion to amend the patent claims at issue in the proceeding.

We expect that Pfizer will file a response to our motion in January 2021 pursuant to the current schedule for the proceeding.

Financial Overview

Key components of our results of operations include the following:

Three months ended June 30,

Six months ended June 30,

Three months ended September 30,

Nine months ended September 30,

(in thousands)

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Selling, general and administrative expenses

As of June 30, 2020, and December 31, 2019, we had cash and cash equivalents of $314.3 million and $377.8 million, respectively.

We had a net loss of $42.6 million and $70.6 million in the three and six months ended June 30, 2020, compared to $31.4 million and $59.2 million for the same period in 2019.

As of June 30, 2020, and December 31, 2019, we had accumulated deficits of $730.3 million and $659.7 million, respectively.

Our losses will be materially impacted by the amount of license revenue that we will recognize in accordance with ASC 606 following the potential closing of our collaboration and license agreement with CSL Behring.

As of September 30, 2020, and December 31, 2019, we had cash and cash equivalents of $279.5 million and $377.8 million, respectively.

We had a net loss of $53.8 million and $124.3 million in the three and nine months ended September 30, 2020, compared to $23.6 million and $82.8 million for the same period in 2019.

As of September 30, 2020, and December 31, 2019, we had accumulated deficits of $784.0 million and $659.7 million, respectively.

Our losses will be materially impacted by the amount of license revenue that we will recognize in accordance with ASC 606 in the event of closing of the transactions contemplated by the CSL Behring Agreement.

We anticipate that our expenses will increase substantially as we:

● Advance the clinical development of AMT-130 for our Huntington’s disease gene therapy program;

● Build-out our commercial and medical affairs infrastructure and seek marketing approval for any product candidates (including etranacogene dezaparvovec in case our collaboration and license agreement with CSL Behring would not close) that successfully complete clinical trials;

● Build-out our commercial and medical affairs infrastructure and seek marketing approval for any product candidates (including etranacogene dezaparvovec in the event that the transactions contemplated by the CSL Behring Agreement do not close) that successfully complete clinical trials;

● Advance multiple research programs related to gene therapy candidates targeting liver-directed and central nervous system (“CNS”) diseases;

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In making estimates and judgments, management employs critical accounting policies.

During the six months ended June 30, 2020, there were no material changes to our critical accounting policies as reported in our Annual Report on Form 10-K for the year ended December 31, 2019, which was filed with the SEC on March 2, 2020 .

During the nine months ended September 30, 2020, there were no material changes to our critical accounting policies as reported in our Annual Report on Form 10-K for the year ended December 31, 2019, which was filed with the SEC on March 2, 2020 .

We believe that the assumptions, judgments and estimates involved in the recognition of License Revenue in accordance with ASC 606, BMS warrants, share-based payments, corporate income taxes related to valuation allowance and accounting for operating leases under ASC 842 to be our critical accounting policies.

The preparation of our consolidated financial statements for the three- and six-month period ended June 30, 2020, required us to analyze the accounting treatment of the CSL Behring Agreement.

The preparation of our consolidated financial statements for the three- and nine-month period ended September 30, 2020, required us to analyze the accounting treatment of the CSL Behring Agreement.

This analysis required us to exercise judgement regarding the timing and the likelihood of closing the transaction.

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However, there can be no assurance that a challenge on antitrust grounds will not be made, or if such a challenge is made, what the result would be.

As of June 30, 2020, we concluded we have no enforceable right to receive any of CSL License Revenue that we may receive in accordance with the CSL Behring Agreement, as all payments are contingent upon the successful completion of reviews under antitrust laws in the United States, Australia and the United Kingdom.

As of September 30, 2020, we concluded that we have no enforceable right to receive any of CSL License Revenue that we may receive in accordance with the CSL Behring Agreement, as all payments are contingent upon the successful completion of reviews under antitrust laws in the United States, Australia and the United Kingdom.

Therefore, we determined we will not recognize any revenue in relation to the CSL License Revenue, in accordance with ASC 606.

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Accordingly, we continued to record a full valuation allowance as of June 30, 2020.

Accordingly, we continued to record a full valuation allowance as of September 30, 2020.

We recognize Collaboration Revenues associated with pre-clinical Collaboration Target specific, non-clinical, analytical and process development activities that are reimbursable by BMS under our collaboration and license agreement during the initial research term, which ended on May 21, 2019.

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Other items, net

Our other income consists of payments to subsidize our research and development efforts as well as income from the subleasing of our Amsterdam facility.

Our other expense consists of expenses we incur in relation to our subleasing income.

Our other income primarily consists of payments to subsidize our research and development efforts as well as income from the subleasing of our Amsterdam facility.

Our other expense primarily consists of expenses we incur in relation to our subleasing income.

Results of Operations

Comparison of the three months ended June 30, 2020 and 2019

The following table presents a comparison of the three months ended June 30, 2020 and 2019.

Three months ended June 30,

Comparison of the three months ended September 30, 2020 and 2019

The following table presents a comparison of our results of operations for the three months ended September 30, 2020 and 2019.

Three months ended September 30,

(in thousands)

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Other non-operating items, net

Our revenue for the three months ended June 30, 2020 and 2019 was as follows:

Three months ended June 30,

Our revenue for the three months ended September 30, 2020 and 2019 was as follows:

Three months ended September 30,

(in thousands)

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We recognize License Revenue related to upfront payments and target designation fees received from BMS in 2015.

We recognized $1.5 million License Revenue in the three months ended June 30, 2020, compared to $2.1 million for the same period in 2019.

The reduction in License Revenue is primarily a result of delays in development timelines due to our ongoing discussions surrounding the potential amendment of the BMS CLA.

Continuing these discussions to some extent was impacted by the parties’ focus to adjust their operations to COVID-19.

We recognized $0.0 million Collaboration Revenue in the three months ended June 30, 2020, compared to $0.4 million for the same period in 2019.

We recognized $1.8 million License Revenue in the three months ended September 30, 2020, compared to $0.8 million for the same period in 2019.

We recorded lower License Revenue in the three months ended September 30, 2019 as we had adjusted our estimates regarding the preclinical development timelines during the three months ended September 30, 2019.

We recognized $0.0 million Collaboration Revenue in the three months ended September 30, 2020, compared to $0.2 million for the same period in 2019.

The decrease in Collaboration Revenue was primarily related to the reduction of activities following the termination of the initial Research Term under the BMS CLA in May 2019.

Research and development expenses

Research and development expenses for the three months ended June 30, 2020 were $28.4 million, compared to $24.2 million for the same period in 2019.

Research and development expenses for the three months ended September 30, 2020 were $36.3 million, compared to $23.6 million for the same period in 2019.

Other research and development expenses are separately classified in the table below.

These are not allocated as they are deployed across multiple projects under development.

Three months ended June 30,

Three months ended September 30,

(in thousands)

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Etranacogene dezaparvovec (AMT-060/061)

In the three months ended June 30, 2020 and 2019, the external costs for our hemophilia B program were primarily related to the execution of our Phase III clinical trial.

In the three months ended September 30, 2020 and 2019, the external costs for our hemophilia B program were primarily related to the execution of our Phase III clinical trial.

We enrolled patients into a six-month lead in phase between January 2018 and September 2019 and dosed a total of 54 patients between January 2019 and March 2020.

Our expenses related to etranacogene dezaparvovec were largely unaffected by the COVID-19 pandemic as we completed enrollment immediately prior to the lockdowns in those countries in which we enroll patients.

We have implemented additional measures to minimize any risk, disruption or delay on follow-up visits.

We implemented additional measures to minimize any risk, disruption or delay on follow-up visits, and as of September 30, 2020, we completed almost all follow-up visits according to our initial plan.

In addition, we continue to incur costs for the long-term follow-up of patients in our Phase I/II clinical trial of AMT-060 and our Phase IIb clinical trial of etranacogene dezaparvovec.

Huntington disease (AMT-130)

In the three months ended June 30, 2020 and 2019, our external costs for the development of Huntington’s disease were primarily related to the execution of our Phase I/II clinical trial as well as expenses related to the procedures of the first two patients in June 2020.

The procedure-related expenses were delayed as a result of the temporary postponement of the procedures due to the COVID-19 related state of emergency declarations in the United States.

In the three months ended September 30, 2020 and 2019, our external costs for the development of Huntington’s disease were primarily related to the execution of our Phase I/II clinical trial.

Preclinical programs & platform development

In the three months ended June 30, 2020, we incurred $1.8 million of costs primarily related to our preclinical activities primarily associated with product candidates for Hemophilia A (AMT-180), SCA3 (AMT-150) and Fabry disease (AMT-190), as well as various other research programs and technology innovation projects, compared to $1.5 million in the same period in 2019.

In the three months ended September 30, 2020, we incurred $1.9 million of costs primarily related to our preclinical activities primarily associated with product candidates, SCA3 (AMT-150) and Fabry disease (AMT-190), as well as various other research programs and technology innovation projects, compared to costs of $0.8 million in the same period in 2019, which in addition included costs related to our product candidate for Hemophilia A (AMT-180).

Other research & development expenses

● We incurred $10.0 million in personnel and contractor related expenses in the three months ended June 30, 2020, compared to $8.2 million for the same period in 2019.

Our costs during the three months ended June 30, 2020 increased by $1.8 million as a result of the recruitment of personnel to support the development of our product candidates;

● We incurred $2.9 million in share-based compensation expenses in the three months ended June 30, 2020, compared to $2.1 million for the same period in 2019;

● We incurred $4.2 million in operating expenses and depreciation expenses related to our rented facilities in the three months ended June 30, 2020, compared to $3.6 million in the same period in 2019.

Our costs during the three months ended June 30, 2020, primarily increased as a result of extending and expanding (as from June 2019) the lease of our Lexington facility.

● We incurred $11.8 million in personnel and contractor related expenses in the three months ended September 30, 2020, compared to $8.7 million for the same period in 2019.

Our costs during the three months ended September 30, 2020 increased by $3.1 million as a result of the recruitment of personnel to support the development of our product candidates;

● We incurred $3.9 million in share-based compensation expenses in the three months ended September 30, 2020, compared to $1.9 million for the same period in 2019 primarily driven by grants to newly recruited personnel as well as share-based compensation expenses recorded in relation to the termination of one of our executives;

● We incurred $4.4 million in operating expenses and depreciation expenses related to our rented facilities in the three months ended September 30, 2020, compared to $4.0 million in the same period in 2019;

● We incurred $3.0 million of expenses related to license payments that have no alternative future use in the three months ended September 30, 2020, compared to nil for the same period in 2019.

Selling, general and administrative expenses

Selling, general and administrative expenses for the three months ended June 30, 2020 were $11.5 million, compared to $7.9 million for the same period in 2019.

● We incurred $2.9 million in personnel and contractor related expenses in the three months ended June 30, 2020, compared to $2.4 million in the same period in 2019;

● We incurred $2.8 million in share-based compensation expenses in the three months ended June 30, 2020, compared to $2.4 million in the same period in 2019;

● We incurred $3.0 million in professional fees in the three months ended June 30, 2020, compared to $1.3 million in the same period in 2019.

The increase was primarily driven by corporate initiatives.

Selling, general and administrative expenses for the three months ended September 30, 2020 were $10.8 million, compared to $8.9 million for the same period in 2019.

● We incurred $3.6 million in personnel and contractor related expenses in the three months ended September 30, 2020, compared to $2.5 million in the same period in 2019.

The increase in the three months ended September 30, 2020, relates to the recruitment of executives as well as the recruitment of personnel;

● We incurred $2.5 million in share-based compensation expenses in the three months ended September 30, 2020, compared to $1.9 million in the same period in 2019 primarily driven by newly recruited personnel;

● We incurred $2.0 million in professional fees in the three months ended September 30, 2020, compared to $2.2 million in the same period in 2019.

Our selling, general and administrative expenses were largely unaffected by the COVID-19 pandemic.

Other items, net

We recognized $0.3 million in income from payments received from European authorities to subsidize our research and development efforts in the Netherlands in the three months ended June 30, 2020, compared to $0.3 million for the same period in 2019.

We recognized $0.5 million in income from payments received from European authorities to subsidize our research and development efforts in the Netherlands in the three months ended September 30, 2020, compared to $0.1 million for the same period in 2019.

Other non-operating items, net

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We recognize changes in the fair value of these warrants within other non-operating (expense) / income.

Our other non-operating items, net, for the three months ended June 30, 2020 and 2019 were as follows:

Three months ended June 30,

Our other non-operating items, net, for the three months ended September 30, 2020 and 2019 were as follows:

Three months ended September 30,

(in thousands)

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Interest expense - Hercules long-term debt

Foreign currency losses, net

Other non-operating gains / (losses)

Foreign currency (losses) / gains, net

Other non-operating gains

Total other non-operating loss, net

We recognized a net foreign currency loss related to our borrowings from Hercules and our cash and cash equivalents of $3.6 million during the three months ended June 30, 2020, compared to a net loss of $1.3 million during the same period in 2019.

In the three months ended June 30, 2020, we recognized income of $0.2 million related to changes in the fair value of the BMS warrants compared to a loss of $0.6 million related to changes in the fair value of the BMS warrants for the same period in 2019.

Comparison of the six months ended June 30, 2020 and 2019

The following table presents a comparison of the six months ended June 30, 2020 and 2019.

Six months ended June 30,

We recognized a net foreign currency loss, related to our borrowings from Hercules and our cash and cash equivalents as well as loans between entities within the uniQure group, of $8.7 million during the three months ended September 30, 2020, compared to a net gain of $6.0 million during the same period in 2019.

In the three months ended September 30, 2020, we recognized income of $0.3 million related to changes in the fair value of the BMS warrants compared to income of $1.8 million related to changes in the fair value of the BMS warrants for the same period in 2019.

Comparison of the nine months ended September 30, 2020 and 2019

The following table presents a comparison of our results of operations for the nine months ended September 30, 2020 and 2019.

Nine months ended September 30,

(in thousands)

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Non-operating items, net

Our revenue for the six months ended June 30, 2020 and 2019 was as follows:

Six months ended June 30,

Our revenue for the nine months ended September 30, 2020 and 2019 was as follows:

Nine months ended September 30,

License revenue

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We recognize License Revenue related to upfront payments and target designation fees received from BMS in 2015.

We recognized $1.6 million License Revenue in the six months ended June 30, 2020, compared to $2.7 million for the same period in 2019.

The reduction in License Revenue is primarily a result of delays in development timelines due to our ongoing discussions surrounding the potential amendment of the BMS CLA as well as COVID-19.

Continuing these discussions to some extent was impacted by the parties’ focus to adjust their operations to COVID-19.

We recognized $0.1 million Collaboration Revenue in the six months ended June 30, 2020, compared to $0.9 million for the same period in 2019.

We recognized $3.4 million License Revenue in the nine months ended September 30, 2020, compared to $3.5 million for the same period in 2019.

We recognized $0.1 million Collaboration Revenue in the nine months ended September 30, 2020, compared to $1.1 million for the same period in 2019.

The decrease in Collaboration Revenue was primarily related to the reduction of activities following the termination of the initial Research Term under the BMS CLA in May 2019.

Research and development expenses

Research and development expenses for the six months ended June 30, 2020 were $54.4 million, compared to $44.7 million for the same period in 2019.

Research and development expenses for the nine months ended September 30, 2020 were $90.7 million, compared to $68.2 million for the same period in 2019.

Other research and development expenses are separately classified in the table below.

These are not allocated as they are deployed across multiple projects under development.

Six months ended June 30,

Nine months ended September 30,

(in thousands)

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Hemophilia B (AMT-060/061)

In the six months ended June 30, 2020 and 2019, the external costs for our hemophilia B program were primarily related to the execution of our Phase III clinical trial.

In the nine months ended September 30, 2020 and 2019, the external costs for our hemophilia B program were primarily related to the execution of our Phase III clinical trial.

We enrolled patients into a six-month lead in phase between January 2018 and September 2019 and dosed a total of 54 patients between January 2019 and March 2020.

We have implemented additional measures to minimize any risk, disruption or delay on follow-up visits.

We implemented additional measures to minimize any risk, disruption or delay on follow-up visits, and as of September 30, 2020, we completed almost all follow-up visits according to our initial plan.

In addition, we continue to incur costs for the long-term follow-up of patients in our Phase I/II clinical trial of AMT-060 and our Phase IIb clinical trial of etranacogene dezaparvovec.

Huntington disease (AMT-130)

In the six months ended June 30, 2020 and 2019, our external costs for the development of Huntington’s disease were primarily related to the execution of our Phase I/II clinical trial as well as expenses related to the procedures of the first two patients in June 2020.

The procedure-related expenses were delayed as a result of the temporary postponement of the procedures due to the COVID-19 related state of emergency declarations in the United States.

In the nine months ended September 30, 2020 and 2019, our external costs for the development of Huntington’s disease were primarily related to the execution of our Phase I/II clinical trial as well as expenses related to the procedures of the first two patients in June 2020.

Preclinical programs & platform development

In the six months ended June 30, 2020, we incurred $3.2 million of costs primarily related to our preclinical activities associated with product candidates for Hemophilia A (AMT-180), SCA3 (AMT-150) and Fabry disease (AMT-190), as well as various other research programs and technology innovation projects, compared to $2.4 million in the same period in 2019.

In the nine months ended September 30, 2020, we incurred $4.7 million of costs primarily related to our preclinical activities associated with product candidates for Hemophilia A (AMT-180), SCA3 (AMT-150) and Fabry disease (AMT-190), as well as various other research programs and technology innovation projects, compared to costs of $3.2 million in the same period in 2019.

Other research & development expenses

● We incurred $19.3 million in personnel and contractor related expenses in the six months ended June 30, 2020, compared to $16.5 million for the same period in 2019.

Our costs during the six months ended June 30, 2020 increased by $2.8 million as a result of the recruitment of personnel to support the development of our product candidates;

● We incurred $5.3 million in share-based compensation expenses in the six months ended June 30, 2020, compared to $4.1 million for the same period in 2019;

● We incurred $8.2 million in operating expenses and depreciation expenses related to our rented facilities in the six months ended June 30, 2020, compared to $6.9 million in the same period in 2019.

Our costs during the six months ended June 30, 2020 primarily increased as a result of extending and expanding (as from June 2019) the lease of our Lexington facility.

● We incurred $31.1 million in personnel and contractor related expenses in the nine months ended September 30, 2020, compared to $25.1 million for the same period in 2019.

Our costs during the nine months ended September 30, 2020 increased by $6.0 million as a result of the recruitment of personnel to support the development of our product candidates;

● We incurred $9.2 million in share-based compensation expenses in the nine months ended September 30, 2020, compared to $6.1 million for the same period in 2019.

Our costs during the nine months ended September 30, 2020, increased by $3.1 million primarily as a result of the recruitment of personnel during the last 12 months as well as share-based compensation expenses recorded in relation to the termination of one of our executives in September 2020;

● We incurred $12.6 million in operating expenses and depreciation expenses related to our rented facilities in the nine months ended September 30, 2020, compared to $10.9 million in the same period in 2019.

Our costs during the nine months ended September 30, 2020 primarily increased as a result of extending and expanding (as from June 2019) the lease of our Lexington facility;

● We incurred $3.0 million of expenses related to license payments that have no alternative future use in the nine months ended September 30, 2020, compared to nil for the same period in 2019.

Selling, general and administrative expenses

Selling, general and administrative expenses for the six months ended June 30, 2020 were $20.6 million, compared to $15.9 million for the same period in 2019.

● We incurred $6.1 million in personnel and contractor related expenses in the six months ended June 30, 2020, compared to $5.1 million in the same period in 2019;

● We incurred $4.8 million in share-based compensation expenses in the six months ended June 30, 2020, compared to $4.8 million in the same period in 2019;

● We incurred $4.2 million in professional fees in the six months ended June 30, 2020, compared to $2.9 million in the same period in 2019.

The decrease was primarily driven by timing of various corporate initiatives.

Selling, general and administrative expenses for the nine months ended September 30, 2020 were $31.4 million, compared to $24.9 million for the same period in 2019.

● We incurred $9.7 million in personnel and contractor related expenses in the nine months ended September 30, 2020, compared to $7.6 million in the same period in 2019.

Our costs during the nine months ended September 30, 2020, increased by $2.1 million primarily as a result of the recruitment of personnel;

● We incurred $7.2 million in share-based compensation expenses in the nine months ended September 30, 2020, compared to $6.7 million in the same period in 2019;

● We incurred $6.2 million in professional fees in the nine months ended September 30, 2020, compared to $5.1 million in the same period in 2019.

Our professional fees in the nine months ended September 30, 2020, increased by $1.1 million primarily as we incurred significant professional fees in relation to our licensing transaction with CSL Behring.

Our selling, general and administrative expenses were largely unaffected by the COVID-19 pandemic.

Other items, net

We recognized $0.5 million in income from payments received from European authorities to subsidize our research and development efforts in the Netherlands in the six months ended June 30, 2020, compared to $0.3 million for the same period in 2019.

We recognized $1.0 million in income from payments received from European authorities to subsidize our research and development efforts in the Netherlands in the nine months ended September 30, 2020, compared to $0.4 million for the same period in 2019.

Other non-operating items, net

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Following the exercise of the warrants by Hercules in February 2019 we no longer recognize changes in the fair value of these warrants within other non-operating (expense) / income.

Our other non-operating items, net, for the six months ended June 30, 2020 and 2019 were as follows:

Six months ended June 30,

Our other non-operating items, net, for the nine months ended September 30, 2020 and 2019 were as follows:

Nine months ended September 30,

(in thousands)

1 unchanged sentence

Interest expense

Foreign currency gains, net

Foreign currency (losses) / gains, net

Other non-operating gains / (losses), net

Total non-operating income / (loss), net

We recognized a net foreign currency gain related to our borrowings from Hercules and our cash and cash equivalents of $1.0 million during the six months ended June 30, 2020, compared to a net gain of $1.0 million during the same period in 2019.

In the six months ended June 30, 2020, we recognized income of $2.2 million related to changes in the fair value of the Hercules and BMS warrants compared to a loss of $2.6 million for the same period in 2019.

We recognized a net foreign currency loss, related to our borrowings from Hercules and our cash and cash equivalents as well as loans between entities within the uniQure group, of $7.7 million during the nine months ended September 30, 2020, compared to a net gain of $7.1 million during the same period in 2019.

In the nine months ended September 30, 2020, we recognized income of $2.5 million related to changes in the fair value of the Hercules and BMS warrants compared to a loss of $0.9 million for the same period in 2019.

Changes in the fair value of the Hercules and BMS warrants are primarily impacted by changes in our share price, whereby a decrease in share price generally results in a decrease of the fair value.

Financial Position, Liquidity and Capital Resources

As of June 30, 2020, we had cash, cash equivalents and restricted cash of $316.9 million.

As of September 30, 2020, we had cash, cash equivalents and restricted cash of $282.2 million.

We currently expect that our cash and cash equivalents will be sufficient to fund operations into 2022.

The table below summarizes our consolidated cash flow data for the six months ended June 30, 2020, and 2019.

Six months ended June 30,

The table below summarizes our consolidated cash flow data for the nine months ended September 30, 2020, and 2019.

Nine months ended September 30,

(in thousands)

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We have incurred losses and cumulative negative cash flows from operations since our business was founded by our predecessor entity AMT Therapeutics (“AMT”) Holding N.V.

We had a net loss of $42.6 million and $70.6 million during the three and six months ended June 30, 2020, compared to a net loss of $31.4 million and $59.2 million during the same periods in 2019.

As of June 30, 2020, we had an accumulated deficit of $730.3 million.

We had a net loss of $53.8 million and $124.3 million during the three and nine months ended September 30, 2020, compared to a net loss of $23.6 million and $82.8 million during the same periods in 2019.

As of September 30, 2020, we had an accumulated deficit of $784.0 million.

Sources of liquidity

From our first institutional venture capital financing in 2006 through June 30, 2020, we funded our operations primarily through private and public placements of equity securities and convertible and other debt securities as well as payments from our collaboration partners.

From our first institutional venture capital financing in 2006 through September 30, 2020, we funded our operations primarily through private and public placements of equity securities and convertible and other debt securities as well as payments from our collaboration partners.

On September 10, 2019, we completed a follow-on public offering of 4,891,305 ordinary shares at a public offering price of $46.00 per ordinary share, and on September 13, 2019, we completed the sale of an additional 733,695 ordinary shares at a public offering price of $46.00 per ordinary share pursuant to the exercise by the underwriters of the option to purchase additional ordinary shares, resulting in total gross proceeds to us of $258.8 million.

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At signing, we drew down an additional $15 million, for a total outstanding amount of $35 million.

We have the right to draw another $15 million through June 30, 2020 subject to the terms of the 2018 Amended Facility.

The 2018 Amended Facility extends the loan’s maturity date until June 1, 2023.

The 2018 Amended Facility extended the loan’s maturity date until June 1, 2023.

The interest-only period was initially extended from November 2018 to January 1, 2021.

The interest-only period was further extended to January 1, 2022 as a result of raising more than $90.0 million in equity financing in September 2019.

As of June 30, 2020, $35 million was outstanding under the 2018 Amended Facility (December 31, 2019:

As of September 30, 2020, $35 million was outstanding under the 2018 Amended Facility (December 31, 2019:

$35 million).

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The $450 million upfront payment we expect to receive on the closing of the CSL Behring Agreement is expected to fund operations into the second half of 2024.

Closing of the transaction is expected to materially impact our profitability and cash flows.

The closing of the transaction is expected to materially impact our profitability and cash flows.

We expect to generate positive cash flows in the period of closing and to recognize material revenue related to the CSL Behring Agreement.

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Net Cash used in operating activities

Net cash used in operating activities was $62.9 million for the six months ended June 30, 2020, and consisted of a net loss of $70.6 million adjusted for non-cash items, including depreciation and amortization expense of $3.5 million, share-based compensation expense of $10.1 million, fair value gains on derivative financial instruments of $2.2 million, unrealized foreign exchange gain of $0.9 million, and an decrease in unamortized deferred revenue of $1.6 million.

Net cash used in operating activities also included unfavorable changes in operating assets and liabilities of $1.3 million.

These changes primarily related to a net decrease in accounts receivable and accrued income, prepaid expenses and other current assets of $1.1 million and a net decrease in accounts payable, accrued expenses and other liabilities of $2.3 million.

Net cash used in operating activities was $50.7 million for the six months ended June 30, 2019, and consisted of a net loss of $59.2 million adjusted for non-cash items, including depreciation and amortization expense of $3.2 million, share-based compensation expense of $8.9 million, fair value losses on derivative financial instruments of $2.6 million, unrealized foreign exchange gain of $0.4 million, and a decrease in unamortized deferred revenue of $2.7 million.

Net cash used in operating activities also included unfavorable changes in operating assets and liabilities of $3.1 million.

These changes primarily related to a net increase in accounts receivable and accrued income, prepaid expenses and other current assets of $2.8 million primarily driven by an increase in prepaid expenses related to our etranacogene dezaparvovec and AMT-130 trials.

Net cash used in operating activities was $97.7 million for the nine months ended September 30, 2020, and consisted of a net loss of $124.3 million adjusted for non-cash items, including depreciation and amortization expense of $8.4 million, share-based compensation expense of $16.5 million, fair value gains on derivative financial instruments of $2.5 million, unrealized foreign exchange losses of $7.8 million, and a decrease in unamortized deferred revenue of $2.1 million.

Net cash used in operating activities also included changes in operating assets and liabilities of $1.3 million.

These changes primarily related to a net increase in accounts receivable and accrued income, prepaid expenses, and other current assets and receivables of $1.2 million and a net decrease in accounts payable, accrued expenses, other liabilities and operating leases of $0.1 million.

Net cash used in operating activities was $72.7 million for the nine months ended September 30, 2019, and consisted of a net loss of $82.8 million adjusted for non-cash items, including depreciation and amortization expense of $4.9 million, share-based compensation expense of $12.8 million, fair value losses on derivative financial instruments of $0.9 million, unrealized foreign exchange gain of $6.7 million, and a decrease in unamortized deferred revenue of $3.4 million.

Net cash used in operating activities also included changes in operating assets and liabilities of $1.6 million.

These changes primarily related to a net increase in accounts receivable and accrued income, prepaid expenses, and other current assets of $2.9 million and a net increase in accounts payable, accrued expenses, other liabilities and operating leases of $4.5 million primarily related to our etranacogene dezaparvovec and AMT-130 trials.

Net cash used in investing activities

In the six months ended June 30, 2020, we used $4.6 million in our investing activities compared to $2.4 million for the same period in 2019.

Six months ended June 30,

In the nine months ended September 30, 2020, we used $6.8 million in our investing activities compared to $4.7 million for the same period in 2019.

Nine months ended September 30,

(in thousands)

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Net cash generated from financing activities

During the six months ended June 30, 2020, we received $3.5 million from the exercise of options to purchase ordinary shares in relation to our share incentive plans compared to $2.7 million in the same period 2019.

During the nine months ended September 30, 2020, we received $3.7 million from the exercise of options to purchase ordinary shares in relation to our share incentive plans compared to $4.0 million for the same period in 2019.

We received net proceeds of $243.0 million associated with our follow-on public offering in September 2019.

Funding requirements

We believe our cash and cash equivalents as of June 30, 2020 will enable us to fund our operating expenses including our debt repayment obligations as they become due and capital expenditure requirements into 2022.

We believe our cash and cash equivalents as of September 30, 2020 will enable us to fund our operating expenses including our debt repayment obligations as they become due and capital expenditure requirements into 2022.

The $450 million upfront payment we expect to receive on the closing of the CSL Behring Agreement would provide us with additional funding into the second half of 2024.

Our future capital requirements will depend on many factors, including but not limited to:

● the closing of our collaboration and license transaction with CSL Behring as well as achieving milestones and royalties as defined in the CSL Behring Agreement;

● the closing of the transaction contemplated by the CSL Behring Agreement as well as achieving the milestones and royalties as defined therein;

● the cost and timing of future commercialization activities, including product manufacturing, marketing, sales and distribution of any of our product candidates for which we receive marketing approval in the future;

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● the costs and timing of preparing, filing, expanding, acquiring, licensing, maintaining, enforcing and prosecuting patents and patent applications, as well as defending any intellectual property-related claims;

● the repayments of the principal amount of our venture debt loan with Hercules, which will contractually start in January 2022 and will run through June 2023;

● the repayments of the principal amount of our venture debt loan with Hercules, which will contractually start in January 2022 and will run through June 2023, and the back-end fee due thereunder;

● the extent to which we acquire or in-license other businesses, products, product candidates or technologies;

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● the costs associated with increasing the scale and capacity of our manufacturing capabilities;

● the costs associated in preparing for the Biologics License Application (“BLA”) submission of etranacogene dezaparvovec, including process validation, inspection readiness and other regulatory expenses in the event that our collaboration and license agreement with CSL Behring would not close.

Contractual obligations and commitments

The table below sets forth our contractual obligations and commercial commitments as of June 30, 2020, that are expected to have an impact on liquidity and cash flows in future periods.

The table below sets forth our contractual obligations and commercial commitments as of September 30, 2020, that are expected to have an impact on liquidity and cash flows in future periods.

(in thousands)

1 unchanged sentence

Operating lease obligations

We also have obligations to make future payments to third parties that become due and payable on the achievement of certain development, regulatory and commercial milestones (such as the start of a clinical trial, filing of a Biologics License Application, approval by the FDA or product launch).

We have not included these commitments on our balance sheet or in the table above because the achievement and timing of these milestones is not fixed and determinable.

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Off-Balance Sheet Arrangements

As of June 30, 2020, we did not have any off-balance sheet arrangements as defined in Item 303(a)(4) of Regulation S-K.

As of September 30, 2020, we did not have any off-balance sheet arrangements as defined in Item 303(a)(4) of Regulation S-K.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis