Item 7. Management’s Discussion and Analysis
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is intended to help the reader understand our results of operations and financial condition. This MD&A is provided as a supplement to, and should be read in conjunction with, our audited consolidated financial statements and the accompanying notes thereto and other disclosures included in this Annual Report on Form 10-K, including the disclosures under “Risk Factors”. Our consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”) and unless otherwise indicated are presented in U.S. dollars.
Except for the historical information contained herein, the matters discussed in this MD&A may be deemed to be forward-looking statements. Forward-looking statement are only predictions based on management’s current views and assumptions and involve risks and uncertainties, and actual results could differ materially from those projected or implied. We make such forward-looking statements pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and other federal securities laws. Words such as “may,” “expect,” “anticipate,” “estimate,” “intend,” and similar expressions (as well as other words or expressions referencing future events, conditions or circumstances) are intended to identify forward-looking statements.
Our actual results and the timing of certain events may differ materially from the results discussed, projected, anticipated, or indicated in any forward-looking statements. We caution you that forward-looking statements are not guarantees of future performance and that our actual results of operations, financial condition and liquidity, and the development of the industry in which we operate may differ materially from the forward-looking statements contained in this MD&A. In addition, even if our results of operations, financial condition and liquidity, and the development of the industry in which we operate are consistent with the forward-looking statements contained in this MD&A, they may not be predictive of results or developments in future periods.
We caution readers not to place undue reliance on any forward-looking statements made by us, which speak only as of the date they are made. We disclaim any obligation, except as specifically required by law and the rules of the SEC, to publicly update or revise any such statements to reflect any change in our expectations or in events, conditions, or circumstances on which any such statements may be based, or that may affect the likelihood that actual results will differ from those set forth in the forward-looking statements.
Overview
We are a leader in the field of gene therapy, seeking to develop single treatments with potentially curative results for patients suffering from genetic and other devastating diseases. We are advancing a focused pipeline of innovative gene therapies, including product candidates for the treatment of hemophilia B, which we intend to license to CSL Behring pursuant to the CSL Behring Agreement, and Huntington’s disease. We believe our validated technology platform and manufacturing capabilities provide us distinct competitive advantages, including the potential to reduce development risk, cost, and time to market. We produce our AAV-based gene therapies in our own facilities with a proprietary, commercial-scale, cGMP-compliant, manufacturing process. We believe our Lexington, Massachusetts-based facility is one of the world’s most versatile gene therapy manufacturing facilities.
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Business developments
Below is a summary of our recent significant business developments:
CSL Behring commercialization and license agreement
On June 24, 2020, uniQure biopharma B.V., a wholly owned subsidiary of uniQure N.V., entered into the CSL Behring Agreement with CSL Behring pursuant to which CSL Behring will receive exclusive global rights to etranacogene dezaparvovec, the Product.
Under the terms of the CSL Behring Agreement, we will receive a $450.0 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 the Product.
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 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 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 the Product in any of a group of major countries for an extended period 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.
On November 11, 2020, the ACCC determined, pursuant to section 50 of the Competition and Consumer Act 2010 of Australia, that it will not intervene in the CSL Behring Agreement. Thus, the ACCC has completed its review of the CSL Behring Agreement, and the transactions contemplated by the CSL Behring Agreement may close from the perspective of the Australian competition authority.
On November 24, 2020, the Competition and Markets Authority in the United Kingdom (the “CMA”) adopted a decision not to refer the CSL Behring Agreement for proceedings under section 33 of the Enterprise Act 2002 of the United Kingdom. The decision was made public by the CMA on January 6, 2021. Thus, the CMA has completed its review of the CSL Behring Agreement, and the transactions contemplated by the CSL Behring Agreement may close from the perspective of the United Kingdom competition authority.
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On December 3, 2020, we and CSL Behring filed a premerger notification and report form under the HSR Act. On January 4, 2021, the FTC issued a Second Request under the HSR Act. The FTC similarly issued a Second Request to CSL Behring also with respect to the antitrust review of the CSL Behring Agreement. The effect of the Second Requests is to extend the waiting period imposed under the HSR Act until 30 days after all parties to the CSL Behring Agreement have substantially complied with the requests unless the waiting period is terminated earlier by the FTC or voluntarily extended by the parties.
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. Regulatory approval in the United States has not occurred to date.
Closing of the transaction is expected to materially impact our profitability and cash flows. Receipt of the $450.0 million payment due on closing would extend the funding of our operations from the second half of 2022 into the second half of 2024 (assuming a full repayment of funds borrowed from Hercules under our term loan facility by 2023). However, we expect to continue to incur losses and to generate negative cash flows beyond the fiscal year in which we would close the transaction.
BMS collaboration
We and Bristol-Myers Squibb entered into a collaboration and license agreement in May 2015. BMS initially designated four Collaboration Targets in 2015 and in accordance with the terms of the BMS CLA could have designated a fifth to tenth Collaboration Target.
In February 2019, BMS requested a one-year extension of the initial research term. In April 2019, following an assessment of the progress of this collaboration and our expanding proprietary programs, we notified BMS that we did not intend to agree to an extension of the initial research term. Accordingly, the initial four-year research term under the collaboration terminated on May 21, 2019.
On December 1, 2020, we and BMS amended the BMS CLA. Following the amendment BMS is no longer entitled to designate a fifth to tenth Collaboration Target and as such we are no longer entitled to receive an aggregate $16.5 million in target designation payments for the research, development, and regulatory milestone payments related to the fifth to tenth Collaboration Targets. For a period of one year from the effective date of the amended BMS CLA, BMS may replace up to two of the four active Collaboration Targets with two new targets in the field of cardiovascular disease. We continue to be entitled to receive up to $217.0 million for each of the four Collaboration Targets if defined milestones are achieved, as well as royalties on net sales associated with any Collaboration Target. On December 17, 2020, BMS designated one of the four Collaboration Targets as a candidate to advance into IND-enabling studies entitling the Company to receive a $4.4 million research milestone payment. The Company recorded the $4.4 million as License Revenue in the twelve-month period ended December 31, 2020.
The amended BMS CLA does not extend the initial research term. BMS may place purchase orders to provide limited services primarily related to analytical and development efforts in respect of the four Collaboration Targets. BMS may request such services for a period not to exceed the earlier of (i) the completion of all activities under a Research Plan and (ii) either (A) three years after the last replacement target has been designated by BMS during the one-year replacement period following the amended BMS CLA effective date or (B) three years if no replacement targets are designated during this one-year period and BMS continues to reimburse us for these services.
For as long as any of the four Collaboration Targets are being advanced, BMS may place a purchase order to be supplied with research, clinical and commercial supplies. Subject to the terms of the amended BMS CLA, BMS has the right to terminate the research, clinical and commercial supply relationships, and has certain remedies for failures of supply, up to and including technology transfer for any such failure that otherwise cannot be reasonably resolved. Both we and BMS may agree to a technology transfer of manufacturing capabilities pursuant to the terms of the amended BMS CLA.
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The amended BMS CLA also terminated two warrants to increase BMS ownership in the Company to up to 19.9% through purchasing a specific number of our ordinary shares following the designation of a seventh and a tenth Collaboration Target, respectively. We and BMS agreed that upon the consummation of a change of control transaction of uniQure that occurs prior to the earlier of (i) December 1, 2026 and (ii) BMS’ delivery of a target cessation notice for all four Collaboration Targets, we (or our third party acquirer) shall pay to BMS a one-time, non-refundable, non-creditable cash payment of $70.0 million, provided that (x) if $70.0 million is greater than five percent of the net proceeds (as contractually defined) from such change of control transaction, the payment shall be an amount equal to five percent of such net proceeds, and (y) if $70.0 million is less than one percent of such net proceeds, the change of control payment shall be an amount equal to one percent of such net proceeds. We have not consummated any change of control transaction as of December 31, 2020 that would obligate us to make a payment to BMS.
Hemophilia B program – Etranacogene dezaparvovec (AMT-061)
In August 2018, we initiated a Phase IIb dose-confirmation study of etranacogene dezaparvovec and in September 2018, we completed the dosing for that study. In February, May, July, and December 2019, and in December 2020, we presented updated data from the Phase IIb dose-confirmation study of etranacogene dezaparvovec. The most recent data that we announced from the Phase IIb study of etranacogene dezaparvovec show that all three patients experienced increasing and sustained FIX levels after a one-time administration of etranacogene dezaparvovec. Mean FIX activity was 44.2% of normal two years after administration, exceeding threshold FIX levels generally considered sufficient to significantly reduce the risk of bleeding events. The first patient achieved FIX activity of 44.7% of normal, the second patient was 51.6% of normal and the third patient was 36.3% of normal. The second and third patients had previously screen-failed and were excluded from another gene therapy study due to pre-existing neutralizing antibodies to a different AAV vector. At two years after dosing, two of the three participants remain free from bleeds and use of FIX replacement therapy. A single bleed has been reported in one participant, who has used a total of two FIX infusions (excluding surgery). All patients have remained free of prophylaxis in the two years since receiving etranacogene dezaparvovec.
In June 2018, we initiated the six-month lead-in period of our HOPE-B trial. The HOPE-B trial is a multinational, multi-center, open-label, single-arm study to evaluate the safety and efficacy of etranacogene dezaparvovec. After the six-month lead-in period, patients received a single intravenous administration of etranacogene dezaparvovec. Patients enrolled in the HOPE-B trial were tested for the presence of pre-existing neutralizing antibodies to AAV5 but not excluded from the trial based on their titers.
The primary endpoints of the study are based on the FIX activity level achieved following the administration of etranacogene dezaparvovec after 26 weeks and 52 weeks after dosing as well annualized bleed rates during the 52 weeks after dosing.
In March 2020, we completed dosing of the 54 patients in the HOPE-B trial. The targeted number of patients to be dosed per the clinical trial protocol was 50. In December 2020, we announced top-line data from the HOPE-B trial. The 26-week follow-up date from the trial showed that FIX activity in the 54 patients increased after dosing from ≤ 2% to a mean of 37.2% at 26 weeks, meeting a first primary endpoint of the HOPE-B trial. No correlation between pre-existing neutralizing antibodies and FIX activity was found in patients with neutralizing antibody titers up to 678.2, a range expected to include more than 95% of the general population; one patient with a neutralizing antibody titer of 3,212.3 did not show an increase in FIX activity. Less than 1% of the general population is expected to have neutralizing antibody titers of greater than 3,000.
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During the 26-week period after dosing, 15 patients (28%) reported a total of 21 bleeding events, representing a reduction of 83% compared to the 123 bleeding events reported by 38 patients (70%) during the observational lead-in phase of the trial. Total bleeds include any bleeding event reported after the treatment of etranacogene dezaparvovec, including spontaneous, traumatic, and those associated with unrelated medical procedures, whether or not FIX treatment was required. Of the total bleeding events reported during the 26-week period after dosing, only three were classified as spontaneous bleeds requiring treatment, representing a reduction of 92% compared to the 37 such bleeding events reported during the observational lead-in phase. Mean annualized usage of FIX replacement therapy, a secondary endpoint in the clinical trial, declined by 96% during the 26-week period after dosing compared to the observational lead-in phase. Etranacogene dezaparvovec was generally well-tolerated. As of the November 2020 cut-off date, most adverse events were classified as mild (81.5%). The most common events included transaminase elevation treated with steroids per protocol (9 patients; 17%), infusion-related reactions (7 patients; 13%), headache (7 patients; 13%) and influenza-like symptoms (7 patients; 13%). Liver enzyme elevations resolved with a tapering course of corticosteroids and FIX activity remained in the mild range in the steroid treated patients. No relationship between safety and neutralizing antibody titers was observed. Based on interactions with the FDA and the EMA, we plan to incorporate FIX activity and bleeding rates at 52 weeks as additional co-primary endpoints in the study.
On December 21, 2020, our clinical trials of etranacogene dezaparvovec, including our HOPE-B trial were placed on clinical hold by the FDA. The clinical hold was initiated following the submission of a safety report in mid-December relating to a possibly related serious adverse event associated with a preliminary diagnosis of HCC, a form of liver cancer, in one patient in the HOPE-B trial that was treated with etranacogene dezaparvovec in October 2019. The patient has multiple risk factors associated with HCC, including a twenty-five-year history of HCV, HBV, evidence of non-alcoholic fatty liver disease and advanced age. Chronic infections with hepatitis B and C have been associated with approximately 80% of HCC cases.
The liver lesion was detected during a routine abdominal ultrasound conducted as part of the required study assessments in patients at one-year post dosing. A surgical resection of the lesion has occurred, and an analysis of the tissue samples was initiated in early 2021. On February 19, 2021, we reported initial results from this analysis to the FDA in accordance with pharmacovigilance requirements. We are gathering final data from these molecular analyses and will be preparing a detailed response to the FDA’s clinical hold questions regarding this event. Currently, we do not have adequate data to determine a possible causal relationship, especially in the context of the other known risk factors. We currently do not anticipate any impact on our regulatory submission timelines, including the filing of a BLA.
No other cases of HCC have been reported in our clinical trials conducted in more than 67 patients in hemophilia B, with some patients dosed more than 5 years ago.
Phase I/II Clinical Trial of AMT-060
In the third quarter of 2015, we initiated a Phase I/II clinical trial of AMT-060, our first-generation hemophilia B product candidate, in patients with severe or moderately-severe hemophilia B. We enrolled five patients into a low dose cohort in the third quarter 2015. Another five patients were enrolled into a high dose cohort between March and May 2016.
In December 2020, we presented five-year follow-up data related to this Phase I/II clinical trial. All 10 patients enrolled continue to show long-term clinical benefit, including sustained increases in FIX activity, reduced usage of FIX replacement therapy, and decreased bleeding frequency. At up to five years of follow-up, AMT-060 continues to be well-tolerated, with no new treatment-related adverse events since the last reported data and no development of inhibitors during the study.
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Huntington’s disease program (AMT-130)
AMT-130 is our gene therapy candidate targeting Huntington’s disease that utilizes an AAV vector carrying an engineered miRNA designed to silence HTT and exon 1 HTT, a potentially highly toxic protein fragment that may also contribute to disease pathology. AMT-130 comprises a recombinant AAV5 vector carrying a DNA cassette, encoding a miRNA that non-selectively lowers or knocks-down HTT and exon 1 HTT in Huntington’s disease patients.
In January 2019, our IND application for AMT-130 was cleared by the FDA, thereby enabling us to initiate our planned Phase I/II clinical study. The primary objective of the study is to evaluate the safety, tolerability, and efficacy of AMT-130 at two doses.
In June 2020, we announced the completion of the first two patient procedures in the Phase I/II clinical trial of AMT-130 for the treatment of Huntington’s disease. These procedures occurred after a postponement that resulted from the COVID-19 pandemic and the associated states of emergency declarations in the United States. The Phase I/II protocol is a randomized, imitation surgery-controlled, double-blinded study conducted at three surgical sites, and multiple referring, non-surgical sites in the U.S. 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.
On February 8, 2021, we announced that the DSMB met and reviewed the six-month safety data from the first two enrolled patients and the 90-day safety data from the next two enrolled patients in the study. No significant safety concerns were noted to prevent further dosing, and the final six patients in the first cohort are now cleared for enrollment.
Preclinical programs
Spinocerebellar Ataxia Type 3 program (AMT-150)
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. AMT-150 is a one-time, intrathecally-administered, AAV gene therapy incorporating our proprietary miQURE silencing technology that is designed to halt ataxia in early manifest SCA3 patients.
At the 2019 American Academy of Neurology Annual Meeting, we presented preclinical data on AMT-150 demonstrating mechanistic proof-of-concept of the non-allele-specific ataxin-3 protein-silencing approach by using artificial miRNA candidates engineered to target the ataxin-3 gene in a SCA3 knock-in mouse model. In this proof-of-concept study, a single AMT-150 injection in the cerebrospinal fluid resulted in AAV transduction and mutant ataxin-3 lowering at the primary sites of disease neuropathology, the cerebellum (up to 53%) and the brainstem (up to 65%).
In May 2020, we presented preclinical data at the ASGCT Annual Meeting, on our gene therapy candidate SCA3. In an in vivo preclinical study, six NHP received a one-time injection of AMT-150 via the cisterna magna to assess expression and distribution. Samples taken after eight weeks showed widespread transduction of the brain and spinal cord, with the highest genome copies found in the posterior fossa and cortical regions. In other preclinical studies, researchers evaluated AMT-150 in SCA3 mouse models, as well as human iPSC-derived neurons and astrocytes, to investigate potential off-target effects of AAV5-miATXN3. The iPSC-derived cell cultures, which were derived from two SCA3 patients, represent the most disease-relevant cell type for therapeutic targeting of AMT-150. A clear dose-dependent expression of miATXN3 was observed in the iPSC-derived neurons and astrocytes transduced with AMT-150. Mature miATXN3 molecules were also associated with extracellular vesicles that strongly correlated with the dose and miATXN3 expression, suggesting the potential therapeutic spread of the engineered miATXN3. Additionally, AMT-150 demonstrated ATXN3 knockdown in human neurons and various SCA3 mouse models with subsequent neuropathology improvement.
In September 2020, we initiated a safety and toxicology study of AMT-150 in NHP.
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Fabry disease program (AMT-190)
AMT-190 is our novel gene therapy candidate for the treatment of Fabry disease. AMT-190 is a one-time, IV-administered, AAV5-based gene therapy.
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.
Hemophilia A program (AMT-180)
In June 2020, we announced that we plan to de-prioritize our research program of AMT-180 for patients with hemophilia A, as part of our effort to focus on those gene therapy programs that have the greatest potential to improve patients’ lives and generate long-term value for shareholders.
Term loan facility
As of December 31, 2020, a $35.0 million term loan was outstanding in accordance with the 2018 Amended Facility between us and Hercules.
On January 29, 2021 we and Hercules entered into the 2021 Amended Facility. Pursuant to the 2021 Amended Facility, Hercules agreed to the 2021 Term Loan, increasing the aggregate principal amount of the term loan facility from $35.0 million to up to $135.0 million. On January 29, 2021 we drew down $35.0 million of the 2021 Term Loan. We may draw down the remaining $65.0 million under the 2021 Term Loan in a series of one or more advances of not less than $20.0 million each until December 15, 2021. Advances under the 2021 Term Loan bear interest at a rate equal to the greater of (i) 8.25% or (ii) 8.25% plus the prime rate, less 3.25% per annum. The principal balance and all accrued but unpaid interest on advances under the 2021 Term Loan is due on June 1, 2023, which date may be extended by us by up to two twelve-month periods. Advances under the 2021 Term Loan may not be prepaid until six months after the Closing Date, following which we may prepay all such advances without charge.
In addition to the 2021 Term Loan, the amendment also extends the interest only payment period of the previously funded $35.0 million term loan from January 1, 2022 to June l, 2023. End of term charges in respect of advances under the 2021 Term Loan range from 1.65% to 6.85%, depending on the maturity date.
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COVID-19 measures
Starting March 2020, we implemented measures to address the impact of COVID-19 on our business. We mandated a work-from-home policy for all non-essential employees at our Amsterdam and Lexington facilities when the pandemic began. We implemented a series of protocols governing the operations of our Lexington facility to comply with the requirements of the various orders and guidance from the Commonwealth of Massachusetts and other related orders, guidance, laws, and regulations. We supported our employees in setting up a healthy and efficient remote working environment. In conjunction with implementing this policy, we accelerated the roll-out of several information technology security measures such as dual factor authentication, to address the increased risks that to which we might be exposed as a result of remote working conditions. In addition, we conducted awareness training around cybersecurity for critical functions involved in making payments to vendors such as finance and supply chain. We continue to monitor local government rules and recommendations and office protocols will be aligned with these 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 started to reopen the Amsterdam and Lexington facilities in phases, in line with the reopening plans that are prescribed by the local government. Between June 1, 2020 until September 29, 2020, we encouraged our Amsterdam employees to work a minimum of two days per week from the office, and approximately 50% of local staff worked on site during that period. 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 through at least the end of August 2021, partly in conjunction with the ongoing expansion of our laboratory space.
As a biopharma research and development company, we were 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 therefore have maintained our manufacturing operations at our Lexington site. To ensure adequate social distancing in our Lexington facility, our COVID-19 protocols generally have limited occupancy to numbers below those allowed by the Massachusetts COVID-19 guidelines. In our Lexington facility, we currently have implemented an occupancy limitation of approximately 25%. Our employees that cannot perform their duties outside of our Lexington facility continue to work at our Lexington facility. All other employees are required to work remotely to the extent possible through at least the end of the second quarter of 2021. Our actual occupancy at the Lexington facility has been less than approximately 25% of our permitted occupancy during all phases of the Massachusetts reopening plan. We have also implemented a mandatory COVID-19 PCR testing protocol effective February 11, 2021 that requires employees to have tested negative for COVID-19 prior to entering the Lexington facility.
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 and updated throughout the pandemic to minimize any risk, disruption or delay in either patient dosing or follow-up visits. These procedures occurred after a postponement that resulted from the COVID-19 pandemic and the associated states of emergency declarations in the United States.
The broader implications of COVID-19 on our results of operations and overall financial performance remain uncertain. The COVID-19 pandemic and its adverse effects have become more prevalent in the locations where we, and our third-party business partners conduct business. While we have experienced disruptions in our operations as a result of COVID-19, we are adapting to the current environment to minimize the effect to our business. However, we may experience more pronounced disruptions in our operations in the future.
Related party transaction
On December 1, 2020, we and BMS entered into the amended BMS CLA. All transactions subsequent to the effective date of the amended BMS CLA are considered to no longer be with a related party.
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2020 Financial Highlights
Key components of our results of operations include the following:
Year ended December 31,
2020
2019
2018
(in thousands)
Total revenues
$
37,514
$
7,281
$
11,284
Research and development expenses
(122,400)
(94,737)
(74,809)
Selling, general and administrative expenses
(42,580)
(33,544)
(25,305)
Net loss
(125,024)
(124,201)
(83,304)
As of December 31, 2020, we had cash and cash equivalents of $244.9 million (December 31, 2019: $377.8 million). We had a net loss of $125.0 million in 2020, $124.2 million in 2019 and $83.3 million in 2018. As of December 31, 2020, we had an accumulated deficit of $784.7 million (December 31, 2019: $659.7 million).
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 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 CNS diseases;
● Continue to expand, enhance, and optimize our technology platform, including our manufacturing capabilities, next-generation viral vectors and promoters, and other enabling technologies;
● Acquire or in-license rights to new therapeutic targets or product candidates; and
● Maintain, expand, and protect our intellectual property portfolio, including in-licensing additional intellectual property rights from third parties.
See “Results of Operations” below for a discussion of the detailed components and analysis of the amounts above.
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Critical Accounting Policies and Estimates
In preparing our consolidated financial statements in accordance with U.S. GAAP and pursuant to the rules and regulations promulgated by the SEC we make assumptions, judgments and estimates that can have a significant impact on our net income/loss and affect the reported amounts of certain assets, liabilities, revenue and expenses, and related disclosures. On an ongoing basis, we evaluate our estimates and judgments, including those related to the treatment of the CSL Behring Agreement, the amended BMS CLA, share-based payments, corporate income taxes related to valuation allowance and accounting for operating leases under ASC 842. We base our assumptions, judgments and estimates on historical experience and various other factors that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not clear from other sources. Actual results may differ from these estimates under different assumptions or conditions. In making estimates and judgments, management employs critical accounting policies. We also discuss our critical accounting policies and estimates with the Audit Committee of our Board of Directors.
We believe that the assumptions, judgments, and estimates involved in the treatment of the CSL Behring Agreement, the amended BMS CLA, share-based payments, corporate income taxes related to valuation allowance and accounting for operating leases under ASC 842 to be our critical accounting policies. Historically, our assumptions, judgments and estimates relative to our critical accounting policies have not differed materially from actual results.
CSL Behring Agreement
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 all such regulatory approvals. We obtained regulatory approvals in Australia and the United Kingdom prior to January 6, 2021. We received a Second Request from the FTC on January 4, 2021, and as such, regulatory approval in the United States has not occurred to date. We do not believe that the FTC will determine that the consummation of the transaction will result in a violation of the HSR Act. However, there can be no assurance as to the outcome of the Second Request.
As of December 31, 2020, we concluded that we have no enforceable right to receive the $450.0 million upfront payment, in accordance with the CSL Behring Agreement as payment is contingent upon the successful completion of reviews under the HSR Act. Therefore, we determined we will not recognize any revenue in relation to the upfront payment, the regulatory and sale milestone payments, or the royalties (together “CSL Behring License Revenue”) in accordance with ASC 606. We incurred $2.1 million of expenses related to obligations related to the CSL Behring Agreement that had not been satisfied as of December 31, 2020. We capitalized these expenses as we believe these qualify as contract fulfillment costs. As of December 31, 2020, we also recognized a $2.1 million receivable from CSL Behring for expenses for which we have a right of reimbursement as well as a contract liability for the same amount. In accordance with ASC 606, we cannot recognize any revenue in connection with the CSL Behring Agreement as of this date.
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”). We did not record any License Fees in the year ended December 31, 2020, as we had not recognized the upfront payment as of this date.
Amended BMS CLA
In May 2015, we entered into a collaboration and license agreement and various related agreements with BMS, which we collectively refer to as the BMS CLA, which provided BMS with exclusive access to our gene therapy technology platform for the research, development and commercialization of therapeutics aimed at multiple targets in cardiovascular and other diseases. The BMS CLA provided that we and BMS could have potentially collaborated on up to ten Collaboration Targets in total. The initial four-year research term under the collaboration terminated on May 21, 2019. During the initial research term of the BMS CLA, BMS, at its option, could purchase non-clinical, analytical and process development effort services. For any Collaboration Targets that might have been advanced, BMS could have purchased clinical and commercial supplies from us. BMS reimbursed us for the services in support of the collaboration during the initial research term, and leads the development, regulatory and commercial activities for any Collaboration Targets that are advanced.
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On December 1, 2020, we and BMS amended the BMS CLA. Following the amendment BMS is no longer entitled to designate a fifth to tenth Collaboration Target and as such we are no longer entitled to receive an aggregate $16.5 million in target designation payments or research, development, and regulatory milestone payments related to the fifth and tenth Collaboration Targets. For a period of one year from the effective date of the amended BMS CLA, BMS may replace up to two of the four active Collaboration Targets with two new targets in the field of cardiovascular disease. We continue to be entitled to receive up to $217.0 million for each of the four Collaboration Targets if defined milestones are achieved, as well as royalties on net sales associated with any Collaboration Target.
We evaluated the impact of the amendment of the BMS CLA in relation to our performance obligation related to:
- providing access to our technology and know-how in the field of gene therapy and participating in joint steering committee and other governing bodies (materially satisfied as of December 1, 2020) (“License Revenue”).
We did not identify any new distinct performance obligations and determined the amended BMS CLA did not represent a separate contract in accordance with ASC 606. We evaluated the effect the modification has on our measure of progress towards the completion of our performance obligation in relation to License Revenue and recorded an adjustment to License Revenue as of December 1, 2020. The estimation of total services at the end of each reporting period involves considerable judgement.
The amount of services we expect to provide is significantly impacted by the number of Collaboration Targets that we estimate BMS would pursue. We considered that BMS may no longer designate potentially up to six Collaboration Targets in addition to the currently four active targets. We evaluated our obligations with respect to the two replacement cardiovascular indications that BMS might potentially designate until November 30, 2021, and the services we expected to perform in relation to participating in joint steering committee and other governing bodies as well as the effort required to actively contribute to the target selection process or the collaboration as a whole. Based on this we concluded that our remaining performance obligation is immaterial and adjusted our measure of progress accordingly. As such we recognized the remaining balance of unrecognized License Revenue as of November 30, 2020 of $27.8 million in profit and loss during the year ended December 31, 2020 as License Revenue from a related party.
In 2015 we granted BMS two warrants, which were terminated in connection with the amendment to the BMS CLA. We granted to BMS:
● A warrant that allowed BMS to purchase a specific number of our ordinary shares such that its ownership would have equaled 14.9% immediately after such purchase (1 st warrant”). The 1 st warrant could have been exercised on the later of (i) the date on which we received from BMS the Target Designation Fees (as defined in the BMS CLA) associated with the first six new targets (a total of seven Collaboration Targets); and (ii) the date on which BMS designated the sixth new target (the seventh Collaboration Target).
● A warrant that allowed BMS to purchase a specific number of our ordinary shares such that its ownership would have equaled 19.9% immediately after such purchase (“2 nd warrant” and together with the 1 st warrant, the “warrants”). The warrant could have been exercised on the later of (i) the date on which we received from BMS the Target Designation Fees associated with the first nine new targets (a total of ten Collaboration Targets); and (ii) the date on which BMS designated the ninth new target (the tenth Collaboration Target).
Pursuant to the terms of the BMS CLA the exercise price in respect of each warrant was equal to the greater of (i) the product of (A) $33.84, multiplied by (B) a compounded annual growth rate of 10% (or approximately $57.32 as of November 30, 2020) and (ii) the product of (A) 1.10 multiplied by (B) the volume weighted average price (“VWAP”) for the 20 trading days ending on the date that is five trading days prior to the date of a notice of exercise delivered by BMS.
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We used Monte-Carlo simulations to determine the fair market value of the BMS warrants. The valuation model incorporated several inputs, the risk-free rate adjusted for the period affected, an expected volatility based on our historical volatility, the expected yield on any dividends and management’s expectations on the timelines of reaching certain defined trigger events for the exercising of the warrants, as well as management’s expectations regarding the number of ordinary shares that would be issued upon exercise of the warrants. All of these represent Level 3 inputs. Additionally, the model assumed BMS would exercise the warrants only if it were financially rational to do so. The warrants could only have been exercised following the occurrence of events contractually defined in the warrant agreements. The probability of the occurrence of these events represented another significant unobservable input used in the calculation of the fair value of the warrants. The fair value of the warrants as of December 31, 2019 was $3.1 million. During the year ended December 31, 2020, we recognized a $3.1 million gain in non-operating income / expense (December 31, 2019: $2.3 million loss; December 31, 2018: $0.5 million gain) related to fair value changes of the BMS warrants. The gain recognized in the year ended December 31, 2020 includes $0.8 million from the derecognition of the BMS warrants on December 1, 2020.
On December 1, 2020, we and BMS terminated the BMS warrants and agreed that upon the consummation of a change of control transaction of uniQure that occurs prior to the earlier of (i) December 1, 2026 and (ii) BMS’ delivery of a target cessation notice for all four Collaboration Targets, uniQure (or its third party acquirer) shall pay to BMS a one-time, non-refundable, non-creditable cash payment of $70.0 million, provided that (x) if $70.0 million is greater than five percent (5.0%) of the net proceeds (as contractually defined) from such change of control transaction, the payment shall be an amount equal to five percent of such net proceeds, and (y) if $70.0 million is less than one percent of such net proceeds, the change of control payment shall be an amount equal to one percent of such net proceeds (“CoC-payment”). We have not consummated any change of control transaction as of December 31, 2020 that would obligate us to make a CoC-payment. We determined that the CoC-payment should be recorded as a derivative financial liability as of December 1, 2020 and that subsequent changes in the fair market value of this derivative financial liability should be recorded in profit and loss. The fair market value of the derivative financial liability is materially impacted by probability that market participants assign to the likelihood of the occurrence of a change of control transaction that would give rise to a CoC-payment. This probability represents an unobservable input. We determined the fair market value of the derivative financial liability by using a present value model based on expected cash flow. The expected cash flows are materially impacted by the probability that market participants assign to the likelihood of the occurrence of a change of control event within the biotechnology industry. We estimated this unobservable input using the best information available as of December 1, 2020 and December 31, 2020. We obtained reasonably available market information that we believe market participants would use in determining the likelihood of the occurrence of a change-of control transaction within the biotechnology industry. Selecting and evaluating market information involves considerable judgement and uncertainty. Based on all such information and our judgment we estimated that the fair market value of the derivative financial liability (presented within “Other non-current liabilities”) as of December 1, 2020 and December 31, 2020 was $2.6 million. We recorded a $2.6 million loss within “other non-operating expenses” in the twelve-month period ended December 31, 2020 related to the initial recognition of this derivative financial liability.
Share-based payments
We issue share-based compensation awards, in the form of options to purchase ordinary shares, restricted share units and performance share units, to certain of our employees, executive and non-executive board members, and consultants. We measure share-based compensation expense related to these awards by reference to the estimated fair value of the award at the date of grant. The awards are subject to service and/or performance-based vesting conditions. The total amount of the awards is expensed on a straight-line basis over the requisite vesting period.
We use a Hull & White option model to determine the fair value of option awards. The model captures early exercises by assuming that the likelihood of exercise will increase when the share-price reaches defined multiples of the strike price. This analysis is made over the full contractual term.
At each balance sheet date, we revise our estimate of the number of options that are expected to become exercisable. We recognize the impact of the revision of original estimates, if any, in the statements of operations and comprehensive loss and a corresponding adjustment to equity. We expect all vested options to be exercised over the remainder of their contractual life. We consider the expected life of the options to be in line with the average remaining term of the options post vesting.
We account for share options as an expense in the statements of operations and comprehensive loss over the estimated vesting period, with a corresponding contribution to equity, as they are all equity-classified.
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Corporate income taxes
We are subject to corporate taxes in the Netherlands and the United States of America. Significant judgment is required in determining the valuation allowance in relation to our net operating loss carry forwards. We have been incurring net operating losses in accordance with the respective corporate tax laws in almost all years since we founded our business. As of December 31, 2020, the total amount of net operating losses carried forward under the Dutch tax regime was $588.2 million and $42.3 million in the United States of America.
We reassessed the need for a full valuation allowance in conjunction with entering into the CSL Behring Agreement. 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. Regulatory approval in the United States has not occurred to date. 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 December 31, 2020 in the Netherlands. As of December 31, 2020, our valuation allowance amounted to $150.1 million (2019: $109.9 million).
We recorded $16.4 million of deferred tax income in the year ended December 31, 2020 from releasing the full valuation allowance against our net deferred tax assets in the United States as of December 31, 2020. Our U.S. entity has generated taxable income in the fiscal years 2018, 2019 and 2020. Based on the current design of our worldwide operations, we expect to continue to generate taxable income in the U.S. during the foreseeable future and therefore determined that it is more likely than not that our U.S. deferred tax assets will be realized. Our U.S. deferred tax assets as of December 31, 2020 amount to $16.4 million.
Leases
On January 1, 2019, we adopted ASC 842, “Leases (Topic 842)”. We adopted the standard using the modified retrospective approach with an effective date as of the beginning of our fiscal year, January 1, 2019, to operating leases that existed on that date. Comparative financial information related to profit and loss and cash flows for the twelve-month period ended December 31, 2018, was not recast under the new standard, and continues to be presented under ASC 840.
We measured the lease liability at the present value of the future lease payments as of January 1, 2019. We used an incremental borrowing rate to discount the lease payments. We derived the discount rate, adjusted for differences such as in the term and payment patterns, from our loan from Hercules Capital, which was refinanced immediately prior to the January 1, 2019 adoption date in December 2018. We valued the right-of-use asset at the amount of the lease liability reduced by the remaining December 31, 2018 balance of lease incentives received. The lease liability is subsequently measured at the present value of the future lease payments as of the reporting date with a corresponding adjustment to the right-to-use asset. Absent a lease modification, we will continue to utilize the January 1, 2019, incremental borrowing rate.
We recognize lease cost on a straight-line basis and present these costs as operating expenses within our Consolidated statements of operations and comprehensive loss. We present lease payments and landlord incentive payments within cash flows from operations within our Consolidated statements of cash flows.
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Recent Accounting Pronouncements
ASU 2018-13: Fair Value Measurement
In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820) which modifies the disclosure requirements on fair value measurements. The effective date for the standard is fiscal years beginning after December 15, 2019, which for us is January 1, 2020. Early adoption is permitted. The new disclosure requirements for changes in unrealized gains and losses in other comprehensive income for recurring Level 3 measurements, the range and weighted average of significant unobservable inputs and the amended requirements for the narrative description of measurement uncertainty should be applied prospectively for only the most recent interim or annual period presented in the initial fiscal year of adoption. All other amendments should be applied retrospectively. ASU 2018-13 did not have a material impact on our consolidated financial statements.
Recent Accounting Pronouncements Not Yet Effective
None.
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Results of Operations
The following table presents a comparison of the twelve months ended December 31, 2020, 2019 and 2018.
Year ended December 31,
2020
2019
2018
2020 vs 2019
2019 vs 2018
(in thousands)
Total revenues
$
37,514
$
7,281
$
11,284
$
30,233
$
(4,003)
Operating expenses:
Research and development expenses
(122,400)
(94,737)
(74,809)
(27,663)
(19,928)
Selling, general and administrative expenses
(42,580)
(33,544)
(25,305)
(9,036)
(8,239)
Total operating expenses
(164,980)
(128,281)
(100,114)
(36,699)
(28,167)
Other income
3,342
1,888
2,146
1,454
(258)
Other expense
(1,302)
(2,028)
(1,548)
726
(480)
Loss from operations
(125,426)
(121,140)
(88,232)
(4,286)
(32,908)
Non-operating items, net
(16,017)
(3,061)
5,159
(12,956)
(8,220)
Loss before income tax income / (expense)
$
(141,443)
$
(124,201)
$
(83,073)
(17,242)
(41,128)
Income tax income / (expense)
16,419
—
(231)
16,419
231
Net loss
$
(125,024)
$
(124,201)
$
(83,304)
$
(823)
$
(40,897)
Revenue
We recognize collaboration revenues associated with Collaboration Target-specific pre-clinical analytical development and process development activities that are reimbursable by BMS under the BMS CLA and the amended BMLS CLA as well as other related agreements. Collaboration Revenue related to these contracted services is recognized when performance obligations are satisfied.
We recognized license revenues associated with the amortization of the non-refundable upfront payment and target designation fees we received from BMS in 2015. We evaluated our outstanding performance obligation following the amendment of the BMS CLA on December 1, 2020 and determined that our remaining performance obligation is immaterial. We updated our measure of progress accordingly and amortized the remaining balance of unrecognized revenue as of December 1, 2020. In accordance with the amended BMS CLA, we continue to be eligible to receive research, development, and regulatory milestone payments as well as sales milestone payments and royalties for each of the four active Collaboration Targets if defined milestones are achieved in relation to the license to our technology and know-how. We will recognize revenue from these payments when earned or as sales occur.
Our revenue for the years ended December 31, 2020, 2019 and 2018 was as follows:
Year ended December 31,
2020
2019
2018
2020 vs 2019
2019 vs 2018
(in thousands)
License revenue
$
37,319
$
4,988
$
7,528
$
32,331
$
(2,540)
Collaboration revenue
195
2,293
3,756
(2,098)
(1,463)
Total revenues
$
37,514
$
7,281
$
11,284
$
30,233
$
(4,003)
We recognized $37.3 million, $5.0 million, and $7.5 million of license revenue for the year ended December 31, 2020, 2019 and 2018, respectively. The increase in license revenue in 2020 of $32.2 million compared to 2019 primarily resulted from $27.8 million of license revenue that we recognized as of the December 1, 2020 effective date of the amended BMS CLA as well as $4.4 million research milestone payment that we recorded in December 2020 following the designation of one of the four Collaboration Targets as a candidate to advance into IND-enabling studies. The decrease in license revenue in 2019 of $2.5 million compared to 2018 resulted from the termination of the S100A1 Collaboration Target and subsequent designation of a replacement target in 2019.
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We recognized $0.2 million, $2.3 million, and $3.8 million of collaboration revenue for the years ended December 31, 2020, 2019 and 2018, respectively. The decrease in collaboration revenue in 2020 of $2.1 million compared to 2019 was primarily related to the reduction of activities following the termination of the initial research term under the BMS CLA in May 2019. The decrease in collaboration revenue in 2019 of $1.5 million compared to 2018 resulted from the termination of the initial research term in May 2019 as well as the discontinuation of the S100A1 program in October 2018.
Research and development expenses
We expense research and development costs (“R&D”) as incurred. Our R&D expenses generally consist of costs incurred for the development of our target candidates, which include:
● Employee-related expenses, including salaries, benefits, travel, and share-based compensation expense;
● Costs incurred for laboratory research, preclinical and nonclinical studies, clinical trials, statistical analysis and report writing, and regulatory compliance costs incurred with clinical research organizations and other third-party vendors;
● Costs incurred to conduct consistency and comparability studies;
● Costs incurred for the validation of our Lexington facility;
● Costs incurred for the development and improvement of our manufacturing processes and methods;
● Costs associated with our research activities for our next-generation vector and promoter platform;
● Changes in the fair value of the contingent consideration related to our acquisition of InoCard (up to September 30, 2018) as well as the impairment of in process research and development acquired in the three-month period ended September 30, 2018;
● Facilities, depreciation, and other expenses, which include direct and allocated expenses for rent and maintenance of facilities, insurance, and other supplies; and
Our research and development expenses primarily consist of costs incurred for the research and development of our product candidates, which include:
● Etranacogene dezaparvovec (hemophilia B) . We have incurred costs related to the research, development, and production of etranacogene dezaparvovec for the treatment of hemophilia B. In June 2018, we initiated a pivotal study. We completed enrollment of the lead-in phase of the pivotal study in September 2019 and dosed a total of 54 patients between January 2019 and March 2020. Following the completion of dosing we initiated activities related to the preparation of marketing authorization applications in the U.S. and EU, as well as other related undertakings. In September 2018, we completed patient dosing in our Phase IIb dose-confirmation study;
● AMT-130 (Huntington’s disease). We have incurred costs related to preclinical and nonclinical studies of AMT-130 and have been incurring costs related to our Phase I/II trial since February 2019;
● Preclinical research programs . We incur costs related to the research of multiple preclinical gene therapy product candidates with the potential to treat certain rare and other serious medical conditions; and
● Technology platform development and other related research . We incur significant research and development costs related to manufacturing and other enabling technologies that are applicable across all our programs.
Our research and development expenses may vary substantially from period to period based on the timing of our research and development activities, including manufacturing campaigns, regulatory submissions, and enrollment of patients in clinical trials. The successful development of our product candidates is highly uncertain. Estimating the nature, timing, or cost of the development of any of our product candidates involves considerable judgement due to numerous risks and uncertainties associated with developing gene therapies, including the uncertainty of:
● the scope, rate of progress and expense of our research and development activities;
● our ability to successfully manufacture and scale-up production;
● clinical trial protocols, speed of enrollment and resulting data;
● the effectiveness and safety of our product candidates;
● the timing of regulatory approvals; and
● our ability to agree to ongoing development budgets with collaborators who share the costs of our development programs.
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A change in the outcome of any of these variables with respect to our product candidates that we may develop, including as a result of the COVID-19 pandemic, could mean a significant change in the expenses and timing associated with the development of such product candidate.
Research and development expenses for the year ended December 31, 2020 were $122.4 million, compared to $94.7 million and $74.8 million for the years ended December 31, 2019 and 2018, respectively. 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.
Year ended December 31,
2020
2019
2018
2020 vs 2019
2019 vs 2018
(in thousands)
Etranacogene dezaparvovec (AMT-060/061)
$
21,458
$
16,853
$
8,677
$
4,605
$
8,176
Huntington's disease (AMT-130)
6,905
4,126
5,862
2,779
(1,736)
Programs in preclinical development and platform related expenses
6,518
5,710
2,491
808
3,219
Total direct research and development expenses
$
34,881
$
26,689
$
17,030
$
8,192
$
9,659
Employee and contractor-related expenses
41,694
34,030
28,948
7,664
5,082
Share-based compensation expense
11,995
8,094
3,968
3,901
4,126
Facility expenses
17,390
15,181
12,961
2,209
2,220
Disposables
10,203
8,765
9,461
1,438
(696)
Other expenses
6,237
1,978
646
4,259
1,332
Termination benefits
—
—
96
—
(96)
Changes in fair value of contingent consideration
—
—
(3,800)
—
3,800
Impairment loss in process research and development asset
—
—
5,499
—
(5,499)
Total other research and development expenses
$
87,519
$
68,048
$
57,779
$
19,471
$
10,269
Total research and development expenses
$
122,400
$
94,737
$
74,809
$
27,663
$
19,928
Direct research and development expenses
Hemophilia B (AMT-060/061)
In the year ended December 31, 2020, the external costs for our hemophilia B program were primarily related to the execution of our Phase III clinical trial and the preparations related to submissions of marketing authorization applications in the U.S. and EU. 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 prior to the lockdowns in those countries that we enroll patients. We implemented additional measures to minimize any risk, disruption, or delay on follow-up visits, and as of September 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. Our Phase IIb dose-confirmation study was initiated in January 2018 and dosing occurred in July and August 2018. Patients were dosed as part of our Phase I/II clinical trial of AMT-060 in 2015 and 2016. In the years ended December 31, 2018 and 2019, our external costs for our hemophilia B program were primarily related to the planning and execution of our Phase III and Phase IIb clinical trials.
Following the completion of patient enrollment into our HOPE-B trial we also started incurring costs related to preparation of a BLA and MAA and for commercialization of etranacogene dezaparvovec.
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Huntington disease (AMT-130)
In the year ended December 31, 2020, 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. In the year ended December 31, 2019, our external costs for the development of Huntington’s disease were primarily related to the preparation of our Phase I/II clinical trial. During 2018, the majority of costs were related to the planning and execution of a GLP toxicology study. In addition, we incurred cost related to the filing of our IND in late 2018 and early 2019.
Preclinical programs & platform development
In the year ended December 31, 2020, we incurred $6.5 million of costs related to related to our preclinical activities for product candidates including 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 $5.7 million in 2019 and $2.5 million in 2018.
Other research & development expenses
● We incurred $41.7 million in employee and contractor expenses in the year ended December 31, 2020 compared to $34.0 million in 2019 and $28.9 million in 2018. Our cost increased in 2020 by $7.7 million compared to 2019 as a result of the recruitment of personnel to support the preclinical and clinical development of our product candidates. For the same reason our costs increased by $5.1 million in 2019 compared to 2018;
● We incurred $12.0 million in share-based compensation expenses in the year ended December 31, 2020 compared to $8.1 million in 2019 and $4.0 million in 2018. The increase in 2020 compared to 2019 of $3.9 million was 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. The increase in 2019 compared to 2018 of $4.1 million was driven primarily by the appreciation of our share price and increase in number of grants;
● We incurred $17.4 million in operating expenses and depreciation expenses related to our rented facilities in the year ended December 31, 2020 compared to $15.2 million in 2019 and $13.0 million in 2018. The increase in 2020 compared to 2019 of $2.2 million primarily relates to extending and expanding (as of June 2019) the lease of our Lexington facility. The increase in 2019 compared to 2018 of $2.2 million also primarily relates to extending and expanding (as of June 2019) the lease of our Lexington facility;
● We incurred $10.2 million in costs in the year ended December 31, 2020 compared to $8.8 million in the year ended December 31, 2019 and $9.5 million in the year ended December 31, 2018 related to miscellaneous other costs we incur as a result of expanding our organization;
● We incurred $6.2 million in other expenses in the year ended December 31, 2020 compared to $2.0 million in 2019 and $0.6 million in 2018. The increase in 2020 compared to 2019 of $4.2 million primarily relates to license payments of $3.4 million that we determined during 2020 to have no alternative future use. The increase in 2019 compared to 2018 of $1.4 million primarily relates to extending and expanding (as of June 2019) the lease of our Lexington facility;
● We recorded no results related to a change in the fair value of the contingent consideration owed to the sellers of the InoCard business in the years ended December 31, 2020 and 2019 compared to a gain of $3.8 million in 2018; and
● We incurred no impairment losses in the years ended December 31, 2020 and 2019 compared to an impairment loss of $5.4 million on the in-process research and development asset acquired in the InoCard business combination in 2018.
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Selling, general and administrative expenses
Our general and administrative expenses consist principally of employee, office, consulting, legal and other professional and administrative expenses. We incur expenses associated with operating as a public company, including expenses for personnel, legal, accounting and audit fees, board of directors’ costs, directors' and officers' liability insurance premiums, Nasdaq listing fees, expenses related to investor relations and fees related to business development and maintaining our patent and license portfolio. Our selling costs include employee expenses as well as professional fees related to the preparation of a commercial launch of etranacogene dezaparvovec.
Selling, general and administrative expenses for the year ended December 31, 2020 were $42.6 million, compared to $33.5 million and $25.3 million for the years ended December 31, 2019 and 2018, respectively.
● We incurred $13.6 million in personnel and consulting expenses in 2020 compared to $10.5 million in 2019 and $8.9 million in 2018. The increase of $3.1 million in 2020 compared to 2019 and the increase of $1.6 million in 2019 compared to 2018 was primarily driven by an increase in personnel and consulting related expenses to support our growth;
● We incurred $9.8 million of share-based compensation expenses in 2020 compared to $9.4 million in 2019 and $6.7 million in 2018. The increase in 2020 compared to 2019 of $0.4 million was primarily driven by newly recruited personnel and the increase in 2019 compared to 2018 of $2.7 million was primarily driven by the appreciation of our share price and increase in number of grants;
● We incurred $8.0 million in professional fees in 2020 compared to $6.0 million in 2019 and $4.2 million in 2018. We regularly incur accounting, audit and legal fees associated with operating as a public company. Additionally, in the year ended December 31, 2020, we incurred professional fees in relation to our licensing transaction with CSL Behring.
Other items, net
In 2020, we recognized $1.9 million in income related to payments received from European authorities to subsidize our research and development efforts in the Netherlands compared to $0.7 million in 2019 and $1.0 million in 2018.
In January 2018, we began recognizing other income from the subleasing of a portion of our Amsterdam facility. We present expenses related to such income as other expense.
Other non-operating items, net
We recognize interest income associated with our cash and cash equivalents.
We hold monetary items and enter into transactions in foreign currencies, predominantly in euros and U.S. dollars. We recognize foreign exchange results related to changes in these foreign currencies.
We issued warrants to Hercules in 2013 and to BMS in 2015. We recognize changes in the fair value of these warrants within other non-operating income / (expense). Following the termination of the BMS warrants on December 1, 2020, we no longer recognize changes in the fair value of these warrants within other non-operating (expense) / income. As of the same date, we recognized a derivative financial liability related to the CoC-payment . 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.
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Our non-operating items, net, for the years ended December 31, 2020, 2019 and 2018 were as follows:
Year ended December 31,
2020
2019
2018
2020 vs 2019
2019 vs 2018
(in thousands)
Interest income
$
938
$
3,547
$
2,729
$
(2,609)
$
818
Interest expense
(3,825)
(3,810)
(2,160)
(15)
(1,650)
Foreign currency (losses) / gains, net
(13,613)
(268)
4,382
(13,345)
(4,650)
Other non-operating gains / (losses), net
483
(2,530)
208
3,013
(2,738)
Total non-operating income / (loss), net
$
(16,017)
$
(3,061)
$
5,159
$
(12,956)
$
(8,220)
We recognized $0.9 million interest income in 2020, $3.5 million in 2019 and $2.7 million in 2018. Our interest income in 2020 decreased by $2.6 million compared to 2019 due to a reduction in market interest rates in 2020 as well as a reduction in cash and cash equivalents. Our interest income in 2019 increased by $0.8 million as a result of an increase in our cash and cash equivalents through our September 2019 $242.7 million public follow-on offering.
We recognized $3.8 million interest expense in 2020, $3.8 million in 2019 and $2.2 million in 2018. Our interest income in 2020 was unchanged compared to 2019 as our outstanding debt remained unchanged. Our interest expense in 2019 increased by $1.6 million as we increased our outstanding debt from $20.0 million to $35.0 million on December 6, 2018.
In 2020, we recognized a net foreign currency loss of $13.6 million related to our borrowings from Hercules and our cash and cash equivalents as well as loans between entities within the uniQure group, compared to a net loss of $0.3 million in 2019 and a net gain of $4.4 million in 2018.
In 2020, we recognized a $0.5 million net gain related to fair value changes of derivative financial instruments, compared to a net loss of $2.5 million in 2019 and a gain of $0.2 million in 2018. The changes in 2020 compared to 2019 result from a $3.1 million gain that we recognized related to fair value changes of the BMS warrants (compared to $2.5 million loss in 2019), which includes an $0.8 million gain that we recognized related to the termination of the BMS warrants in December 2020, and a loss of $2.6 million to recognize the derivative financial liability for the CoC-payment on December 1, 2020.
Income tax
We recognized $16.4 million of deferred tax income in 2020, $0.0 million in 2019 and income tax expense of $0.2 million in 2018. Deferred tax income recorded in 2020 results from the release of the valuation allowance recorded for our net deferred tax assets by our U.S. entity. We did not record changes in valuation allowances in 2019 and 2018.
Financial Position, Liquidity and Capital Resources
As of December 31, 2020, we had cash, cash equivalents and restricted cash of $247.7 million. We believe our cash and cash equivalents as of December 31, 2020, combined with the $100.0 million 2021 Amended Facility will enable us to fund our operating expenses, including our debt repayment obligations, as they become due and capital expenditure requirements into the second half of 2022. In the event that we receive the $450.0 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 (assuming a full repayment of funds borrowed from Hercules under our term loan facility by 2023). The table below summarizes our consolidated cash flow data for the years ended December 31:
Year ended December 31,
2020
2019
2018
(in thousands)
Cash, cash equivalents and restricted cash at the beginning of the period
$
380,726
$
237,342
$
161,851
Net cash used in operating activities
(134,828)
(98,684)
(76,037)
Net cash used in investing activities
(9,484)
(6,647)
(4,245)
Net cash generated from financing activities
7,444
248,821
157,961
Foreign exchange impact
3,822
(106)
(2,187)
Cash, cash equivalents and restricted cash at the end of period
$
247,680
$
380,726
$
237,342
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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 in 1998. We had a net loss of $125.0 million in 2020, $124.2 million in 2019, and $83.3 million in 2018. As of December 31, 2020, we had an accumulated deficit of $784.7 million.
Sources of liquidity
From our first institutional venture capital financing in 2006 through 2019, we funded our operations primarily through private placements and public offerings of equity securities, convertible, and other debt securities and to a lesser extent upfront, target designation or similar 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. The net proceeds from this offering were $242.7 million, after deducting underwriting discounts and commissions and other offering expenses payable by us. We deducted $0.6 million of expenses incurred related to this offering from additional paid-in capital in the accompanying consolidated balance sheets and reflected this within the proceeds from public offering of shares, net of issuance costs within the cash flows from financing activities.
On December 6, 2018, we signed an amendment to the Second Amended and Restated Loan and Security Agreement (the “2018 Amended Facility”) with Hercules that both refinanced our then-existing $20.0 million credit facility and provided us with an additional unconditional commitment of $15.0 million as well as a conditional commitment of $15.0 million that expired on June 30, 2020. At signing, we drew down an additional $15.0 million, for a total outstanding amount of $35.0 million.
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 December 31, 2020, $35.0 million was outstanding under the 2018 Amended Facility (December 31, 2019: $35.0 million). We are required to repay the f acility in equal monthly installments of principal and interest between the end of the interest-only period and the maturity date. The variable interest rate is equal to the greater of (i) 8.85% or (ii) 8.85% plus the prime rate less 5.50%. Under the 2018 Amended Facility, we paid a facility fee equal to 0.50% of the $35,000,000 loan outstanding and will owe a back-end fee of 4.95% of the outstanding debt.
On January 29, 2021 we and Hercules entered into the 2021 Amended Facility. Pursuant to the 2021 Amended Facility, Hercules agreed to the 2021 Term Loan, increasing the aggregate principal amount of the term loan facility from $35.0 million to up to $135.0 million. On January 29, 2021 we drew down $35.0 million of the 2021 Term Loan. We may draw down the remaining $65.0 million under the 2021 Term Loan in a series of one or more advances of not less than $20.0 million each until December 15, 2021. Advances under the 2021 Term Loan bear interest at a rate equal to the greater of (i) 8.25% or (ii) 8.25% plus the prime rate, less 3.25% per annum. The principal balance and all accrued but unpaid interest on advances under the 2021 Term Loan is due on June 1, 2023, which date may be extended by us by up to two twelve-month periods. Advances under the 2021 Term Loan may not be prepaid until six-months after the Closing Date, following which we may prepay all such advances without charge.
On May 7, 2018, we completed a follow-on public offering of 5,175,000 ordinary shares at a public offering price of $28.50 per ordinary share, resulting in gross proceeds to us of $147.5 million. The net proceeds from this offering were $138.4 million, after deducting underwriting discounts and commissions and other offering expenses payable by us. We deducted $0.2 million of expenses incurred related to this offering from additional paid-in capital in the accompanying consolidated balance sheet and reflected this within the proceeds from public offering of shares, net of issuance costs with the cash flows from financing activities.
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The $450.0 million upfront payment we expect to receive on the closing of the CSL Behring Agreement would fund operations into the second half of 2024 (assuming a full repayment of funds borrowed from Hercules under our term loan facility by 2023). 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. However, we expect to continue to incur losses and to generate negative cash flows beyond the fiscal year in which we close the transaction. Until such time, if ever, as we can generate substantial cash flows from successfully commercializing our proprietary product candida tes, we expect to finance our cash needs through a combination of equity offerings, debt financings, collaborations, strategic alliances and marketing, distribution, and licensing arrangements.
We are subject to the same covenants under our 2018 Amended Facility and 2021 Amended Facility and may become subject to covenants under any future indebtedness that could limit our ability to take specific actions, such as incurring additional debt, making capital expenditures, or declaring dividends, which could adversely impact our ability to conduct our business. In addition, our pledge of assets as collateral to secure our obligations under the 2018 Amended Facility and 2021 Amended Facility may limit our ability to obtain debt financing. To the extent we need to finance our cash needs through equity offerings or debt financings, such financing may be subject to unfavorable terms including without limitation, the negotiation and execution of definitive documentation, as well as credit and debt market conditions, and we may not be able to obtain such financing on terms acceptable to us or at all. If financing is not available when needed, including through debt or equity financings, or is available only on unfavorable terms, we may be unable to meet our cash needs. If we raise additional funds through collaborations, strategic alliances or marketing, distribution, or licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams or product candidates or grant licenses on terms that may not be favorable to us. If we are unable to raise additional funds through equity or debt financings when needed, we may be required to delay, limit, reduce or terminate our product development or future commercialization efforts or grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves, which could have a material adverse effect on our business, financial conditions, results of operations and cash flows.
Net Cash used in operating activities
Year ended December 31,
2020
2019
2018
(in thousands)
Cash flows from operating activities
Net loss
$
(125,024)
$
(124,201)
$
(83,304)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation, amortization, and impairment losses
10,648
6,669
12,415
Share-based compensation expense
21,831
17,533
10,708
Change in fair value of derivative financial instruments and contingent consideration
(483)
2,530
(4,054)
Unrealized foreign exchange losses / (gains)
14,730
891
(5,502)
Deferred tax (income) / expense
(16,419)
-
231
Change in lease incentives
-
-
(330)
Change in deferred revenue
(33,642)
(4,999)
(8,462)
Changes in operating assets and liabilities:
Accounts receivable and accrued income, prepaid expenses, and other current assets
(6,967)
(4,769)
1,578
Accounts payable
(2,701)
1,652
1,065
Accrued expenses, other liabilities, and operating leases
3,199
6,010
(382)
Net cash used in operating activities
$
(134,828)
$
(98,684)
$
(76,037)
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Net cash used in operating activities was $134.8 million for the annual period ended December 31, 2020, and consisted of a net loss of $125.0 million adjusted for non-cash items, including depreciation and amortization expense of $10.6 million, share-based compensation expense of $21.8 million, fair value gain of derivative financial instruments of $0.5 million, unrealized foreign exchange loss of $14.7 million, a change in deferred tax income of $16.4 million and a decrease in unamortized deferred revenue of $33.6 million. Net cash used in operating activities also included unfavorable changes in operating assets and liabilities of $6.5 million. These changes primarily related to a net increase in accounts receivable and accrued income, prepaid expenses, and other current assets of $7.0 million and a net increase in accounts payable, accrued expenses, other liabilities, and operating leases of $0.5 million.
Net cash used in operating activities was $98.7 million for the annual period ended December 31, 2019, and
consisted of a net loss of $124.2 million adjusted for non-cash items, including depreciation and amortization expense of $6.7 million, share-based compensation expense of $17.5 million, fair value loss of derivative financial instruments of $2.5 million, unrealized foreign exchange loss of $0.9 million, and a decrease in unamortized deferred revenue of $5.0 million. Net cash used in operating activities also included changes in operating assets and liabilities of $2.9 million. These changes primarily related to a net increase in accounts receivable and accrued income, prepaid expenses, and other current assets of $4.8 million and a net increase in accounts payable, accrued expenses, other liabilities, and operating leases of $7.7 million primarily related to our clinical trials and facilities.
Net cash used in operating activities was $76.0 million for the annual period ended December 31, 2018, and
consisted of a net loss of $83.3 million adjusted for non-cash items, including depreciation and amortization expense of $12.4 million, share-based compensation expense of $10.7 million, fair value gain of derivative financial instruments and contingent consideration of $4.1 million, unrealized foreign exchange loss of $5.5 million, deferred tax of $0.2 million, an increase in lease incentives of $0.3 million, and a decrease in unamortized deferred revenue of $8.5 million. Net cash used in operating activities also included changes in operating assets and liabilities of $2.3 million net.
Net cash used in investing activities
In 2020, we used $9.5 million in our investing activities compared to $6.6 million in 2019 and $4.2 million in 2018.
Year ended December 31,
2020
2019
2018
(in thousands)
Build out of Lexington site
$
(2,737)
$
(4,164)
$
(1,596)
Build out of Amsterdam site
(4,534)
(1,487)
(788)
Acquisition of licenses, patents and other rights
(2,213)
(996)
(1,861)
Total investments
$
(9,484)
$
(6,647)
$
(4,245)
In 2020, we invested $2.7 million in our facility in Lexington compared to $4.2 million in 2019 and $1.6 million in 2018. Our investments in 2019 primarily relate to improvements we made to the additional space rented from June 1, 2019.
In 2020, we invested $4.5 million in our facility in Amsterdam compared to $1.5 million in 2019 and $0.8 million in 2018. Our investments in 2020 primarily relate to the construction of additional laboratories to support the expansion of our preclinical activities.
Net cash generated from financing activities
We received net proceeds of $242.7 million associated with our public follow-on offering in September 2019 and $138.4 million associated with our public follow-on offering in May 2018.
We received net proceeds of $0.5 million associated with the exercise of the Hercules warrants by Hercules in February 2019.
We received net proceeds of $14.8 million associated with the 2018 Amended Facility in December 2018.
In 2020, we received $7.4 million from the exercise of options to purchase ordinary shares issued in accordance with our share incentive plans, compared to $5.6 million in 2019 and $4.8 million in 2018.
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Funding requirements
We believe our cash and cash equivalents as of December 31, 2020, combined with the $100.0 million 2021 Amended Facility, will enable us to fund our operating expenses, including our debt repayment obligations, as they become due and capital expenditure requirements into the second half of 2022. In the event that we receive the $450.0 million payment due on the closing of the CSL Behring Agreement, we expect that our cash and cash equivalents would be sufficient to fund operations into the second half of 2024 (assuming a full repayment of funds borrowed from Hercules under our term loan facility by 2023). Our future capital requirements will depend on many factors, including but not limited to:
● 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;
● the amount and timing of revenue, if any, we receive from commercial sales of any product candidates for which we, or our collaboration partner, receives marketing approval in the future;
● the scope, timing, results, and costs of our current and planned clinical trials, including those for etranacogene dezaparvovec in hemophilia B and AMT-130 in Huntington’s disease;
● the scope, timing, results and costs of preclinical development and laboratory testing of our additional product candidates;
● the need for additional resources and related recruitment costs to support the preclinical and clinical development of our product candidates;
● the need for any additional tests, studies, or trials beyond those originally anticipated to confirm the safety or efficacy of our product candidates and technologies;
● the cost, timing and outcome of regulatory reviews associated with our product candidates;
● our ability to enter into collaboration arrangements in the future;
● 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 and other fees associated with our venture debt loan with Hercules, which following the January 29, 2021 amendment will be due in June 2023;
● the extent to which we acquire or in-license other businesses, products, product candidates or technologies;
● the costs associated with maintaining quality compliance and optimizing our manufacturing processes, including the operating costs associated with our Lexington, Massachusetts manufacturing facility;
● the costs associated with increasing the scale and capacity of our manufacturing capabilities; and
● the costs associated in preparing for the 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 does not close.
Contractual obligations and commitments
The table below sets forth our contractual obligations and commercial commitments as of December 31, 2020, that are expected to have an impact on liquidity and cash flows in future periods. The obligations to repay debt do not reflect the extension of the interest-only period that we and Hercules agreed upon on January 29, 2021.
Less than 1
Between 1
Between 3
year
and 3 years
and 5 years
Over 5 years
Total
(in thousands)
Debt obligations (including $7.4 million interest payments)
$
3,141
$
39,271
$
—
$
—
$
42,412
Operating lease obligations
5,637
11,566
12,977
29,192
59,372
Total
$
8,778
$
50,837
$
12,977
$
29,192
$
101,784
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We 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. We will also have obligations to make future payments that become due and payable if we collect the upfront payment or milestone payments from CSL Behring. We have not included these commitments on our balance sheet or in the table above because these payments only become due and payable upon the closing of the transaction with CSL Behring.
We enter into contracts in the normal course of business with CROs for preclinical research studies and clinical trials, research supplies and other services and products for operating purposes. These contracts generally provide for termination on notice, and therefore are cancelable contracts and not included in the table of contractual obligations and commitments.
Off-Balance Sheet Arrangements
As of December 31, 2020, we did not have any off-balance sheet arrangement as defined in Item 303(a)(4) of Regulation S-K.
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