What changed in this filing

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Item 2. Management’s Discussion and Analysis

2021-05-10 compared with 2020-10-27 · 220 added, 321 removed, 168 unchanged (76% of the section changed)

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GAAP”) and unless otherwise indicated are presented in U.S.

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 (as defined below), and Huntington’s disease.

We are a leader in the field of gene therapy and seek to deliver to patients suffering from rare and other devastating diseases single treatments with potentially curative results.

We are advancing a focused pipeline of innovative gene therapies, including product candidates for the treatment of hemophilia B, which effective May 6, 2021, we licensed to CSL Behring pursuant to the CSL Behring Agreement (as defined below), 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, current good manufacturing practices (“cGMP”)-compliant, manufacturing process.

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

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

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Below is a summary of our recent significant business developments:

As of December 31, 2020, a $35.0 million term loan was outstanding in accordance with the Second Amended and Restated Loan and Security Agreement (the “2018 Amended Facility”) between us and Hercules.

On January 29, 2021, we and Hercules amended the 2018 Amended Facility (“2021 Amended Facility”).

Pursuant to the 2021 Amended Facility, Hercules agreed to an additional Facility of $100.0 million (“Tranche B”) increasing the aggregate principal amount of the term loan facilities from $35.0 million to up to $135.0 million.

On January 29, 2021, we drew down $35.0 million of the Tranche B.

We may draw down the remaining $65.0 million under the Tranche B in a series of one or more advances of not less than $20.0 million each until December 15, 2021.

Advances under Tranche B 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 Tranche B is due on June 1, 2023, which date may be extended by us by up to two twelve-month periods.

Advances under the 2021 Amended Facility may not be prepaid until July 29, 2021, following which we may prepay all such advances without charge.

In addition to Tranche B, the 2021 Amended Facility 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 Amended Facility range from 1.65% to 6.85%, depending on the maturity date.

The 2021 Amended Facility extended the funding of our operations until the second half of 2022.

On March 1, 2021, we entered into a Sales Agreement with SVB Leerink LLC (“SVB Leerink”) with respect to an at-the-market (“ATM”) offering program, under which we may, from time to time in our sole discretion, offer and sell through SVB Leerink, acting as agent, our ordinary shares, up to an aggregate offering price of $200.0 million.

We will pay SVB Leerink a commission equal to 3% of the gross proceeds of the sales price of all ordinary shares sold through it as a sales agent under the Sales Agreement.

In March 2021, we issued 0.9 million ordinary shares at a weighted average price of $33.42 per share, with net proceeds of $27.6 million, after deducting underwriting discounts and net of offering expenses.

This further extended the funding of our operations until the end of 2022.

CSL Behring commercialization and license agreement

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

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

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

Under the terms of the CSL Behring Agreement, we are entitled to receive a $450.0 million upfront cash payment upon the closing of the CSL Behring Agreement and will 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.

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

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

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

This exclusivity commitment would not bind an acquirer of us that owns or controls such a product so long as certain precautions are followed to ensure that CSL Behring’s confidential information and our proprietary technology related to 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 of time following the first regulatory approval of the Product in any of such group of countries (other than due to certain specified reasons) and such failure has not been cured within a specified cure period, then we may terminate the CSL Behring Agreement.

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

Closing of the CSL Behring Agreement is contingent on the successful completion of reviews under antitrust laws in the United States, Australia, and the United Kingdom, which has not occurred to date.

Closing of the transaction is dependent on the timing, extent, and result of the regulatory review process.

We do not believe that the consummation of the transaction will result in a violation of any applicable antitrust laws.

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

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

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

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

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

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

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

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

We have historically recorded a full valuation allowance against our net deferred tax assets.

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

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

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

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

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

The effectiveness of the transaction contemplated by the CSL Behring Agreement was contingent on completion of review under antitrust laws in the United States, Australia, and the United Kingdom.

As of March 31, 2021, the transaction had been cleared by the Australian and United Kingdom antitrust authorities and on May 6, 2021, the CSL Behring Agreement became fully effective after the expiration of the waiting period under the HSR Act on May 5, 2021.

Under the CSL Behring Agreement, the upfront payment of $450.0 million was paid to us on May 7, 2021.

We are also eligible to receive up to more than $300 million in regulatory and first commercial sale milestones, $1.3 billion in additional commercial milestones, and tiered double-digit royalties of up to a low-twenties percentage of net product sales arising from the collaboration.

We contractually owe a single-digit percentage of revenue from the collaboration to our licensors.

We expect to utilize a material portion of our net operating loss carryforwards in the Netherlands during 2021 as a result of closing the transaction.

The upfront payment, net of payments owed to licensors and other parties, is expected to extend the funding of our operations into the second half of 2024 (assuming a full repayment of funds borrowed from Hercules Growth Capital, Inc.

under our term loan facilities by 2023).

The receipt of the near-term milestones would further expand the funding of our operations.

However, we expect to continue to incur losses and to generate negative cash flows beyond 2021, the fiscal year in which we closed the transaction.

Hemophilia B program – Etranacogene dezaparvovec (AMT-061)

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

Etranacogene dezaparvovec is our lead gene therapy candidate and includes an AAV serotype 5 (together “AAV-5”) vector incorporating the functional human Factor IX (“FIX”) Padua variant.

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

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

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

The HOPE-B trial is a multinational, multi-center, open-label, single-arm study to evaluate the safety and efficacy of etranacogene dezaparvovec.

After a six-month lead-in period, patients received a single intravenous administration of etranacogene dezaparvovec.

The primary endpoint of the study is based on the FIX activity level achieved following the administration of etranacogene dezaparvovec, and the secondary endpoints are measuring annualized FIX replacement therapy usage, annualized bleed rates and safety.

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.

In March 2020, we completed dosing of 54 patients in the HOPE-B trial.

The targeted number of patients to be dosed per the clinical trial protocol was 50.

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

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

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

Mean FIX activity for the three patients at 52 weeks after administration was 41% of normal, with the first patient achieving FIX activity of 50% of normal, the second patient achieving FIX activity of 31% of normal and the third patient achieving FIX activity of 41% 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.

Etranacogene dezaparvovec has been granted Breakthrough Therapy Designation by the United States Food and Drug Administration (“FDA”) and access to the PRIME initiative by the European Medicines Agency (“EMA”).

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.

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;

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 U.S.

Food and Drug Administration (“FDA”) and the European Medicines Agency (“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 hepatocellular carcinoma (“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 hepatitis C, hepatitis B, 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.

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.

On March 26, 2021, we submitted the results of a comprehensive investigation into the case of HCC to the FDA.

The investigation found that it is highly unlikely the HCC was caused by etranacogene dezaparvovec.

Multiple analyses conducted by an independent laboratory and reviewed by leading external experts in the field show that AAV vector integration in the patient’s tissue sample was extremely rare and accounted for 0.027% of the cells in the sample.

The integration events were distributed randomly across the genome, and there was no evidence of clonal expansion or any dominant integration event.

Additionally, whole genome sequencing of the tumor confirmed that the patient had several genetic mutations that are characteristic of HCC and are independent of vector integration.

Finally, gene expression analysis of the tumor and adjacent tissue suggested a precancerous state in the liver consistent with several risk factors that predispose this patient to HCC.

On April 23, 2021, the FDA informed us that the clinical hold on our hemophilia B gene therapy program is removed after determining that we had satisfactorily addressed all issues identified.

Etranacogene dezaparvovec has been granted Breakthrough Therapy Designation by the FDA and access to the current priority medicines (“PRIME”) initiative by the EMA.

Huntington’s disease program (AMT-130)

AMT-130 is our novel gene therapy candidate for the treatment of Huntington’s disease.

AMT-130 utilizes our miQURE proprietary, gene-silencing platform and incorporates an AAV vector carrying a miRNA specifically designed to silence the huntingtin gene and the potentially highly toxic exon 1 protein fragment.

AMT-130 utilizes our proprietary, gene-silencing miQURE platform and incorporates an AAV vector carrying a miRNA specifically designed to silence the huntingtin gene and the potentially highly toxic exon 1 protein fragment.

AMT-130 has received orphan drug and Fast Track designations from the FDA and Orphan Medicinal Product Designation from the EMA.

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.

In October 2020 we completed the third and fourth patients’ procedures.

In February 2021, the independent Data Safety Monitoring Board (“DSMB”) overseeing the Phase I/II clinical trial of AMT-130 for the treatment of Huntington’s disease met.

No significant safety concerns were noted to prevent further dosing.

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

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

AMT-150 for Spinocerebellar Ataxia type 3 (SCA3)

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

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

In an in vivo preclinical study, six non-human primates (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 induced pluripotent stem cell (“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 an IND-enabling safety and toxicology study of AMT-150 in non-human primates.

AMT-190 for Fabry disease

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

Fabry disease to advance into IND-enabling studies.

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

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

AMT-180 for Hemophilia A

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.

On April 5, 2021 we announced that we completed the procedures for the fifth to tenth patients completing the treatment of the first cohort.

On April 5, 2021 we also announced the initiation of a Phase 1b/II clinical trial in Europe.

The planned Phase Ib/II study is expected to begin enrolling patients in the second half of 2021.

This open-label study will enroll 15 patients with early manifest Huntington’s disease across two dose cohorts.

Together with the U.S.

study, the European study is intended to establish safety, proof of concept, and the optimal dose of AMT-130 to take forward into Phase III development or into a confirmatory study should an accelerated registration pathway be feasible.

COVID-19 measures

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

The coronavirus disease (“COVID-19) caused by the severe acute respiratory syndrome coronavirus 2 (“Sars-CoV 2 virus”) was characterized as a pandemic by the World Health Organization (“WHO”) on March 11, 2020.

During late 2020 various, potentially more infectious, variants of the Sars-CoV 2 virus causing COVID-19 were identified.

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 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 a number of information technology security measures such as dual factor authentication, to address the increased risks that we might be exposed to in conjunction with our employees working remotely.

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.

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.

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

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

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 continue to monitor local government rules and recommendations and office protocols will be aligned with these rules and recommendations.

To align with the Dutch government’s measures, we implemented a mandatory work-from-home policy in Amsterdam.

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.

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

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.

Other employees have returned to our Lexington facility on a limited basis, and all employees are encouraged to work from home to the extent possible.

To ensure adequate social distancing in our Lexington facility, our COVID-19 protocols currently limit occupancy to numbers below those allowed by the Massachusetts COVID-19 guidelines.

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

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.

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

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

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

The closing of the transactions contemplated by the CSL Behring agreement is contingent on the successful completion of reviews under antitrust laws in the United States, Australia, and the United Kingdom, which has not occurred to date.

The transactions contemplated by the CSL Behring Agreement are 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 outside the fiscal year in which we close the transactions contemplated by the CSL Behring Agreement.

We have no firm sources of additional funding.

Until such time, if ever, as we can generate substantial cash flows from successfully commercializing our proprietary product candidates, we expect to finance our cash needs through a combination of equity offerings, debt financings, collaborations, strategic alliances and marketing, distribution and licensing arrangements.

Similar to the other risk factors pertinent to our business, COVID-19 might unfavorably impact our ability to generate such additional funding.

BMS collaboration

We entered into a collaboration and license agreement with Bristol-Myers Squibb (“BMS”) in May 2015.

We have been supporting BMS in the discovery, non-clinical, analytical and process development efforts of our gene therapy technology platform for the research, development and commercialization of therapeutics aimed at multiple targets in cardiovascular and other diseases (“Collaboration Targets”).

For any Collaboration Targets that are advanced, we will be responsible for manufacturing of clinical and commercial supplies using our vector technologies and industrial, proprietary insect-cell based manufacturing platform.

BMS has reimbursed us for all our research and development costs in support of the collaboration during the initial research term.

BMS will lead the development, regulatory and commercial activities for all four currently active Collaboration Targets as well as additional Collaboration Targets that may be advanced.

In February 2019, BMS requested a one-year extension of the 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 research term.

Accordingly, the initial four-year research term under the collaboration terminated on May 21, 2019.

The Company has agreed to certain restrictions on its ability to work independently of the collaboration, either directly or indirectly through any affiliate or third party, on certain programs that would be competitive with the collaboration programs.

We are currently in discussions with BMS potentially to amend the collaboration and license agreement and other related agreements following the expiration of the research term.

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

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

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

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

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

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

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

as a non-executive director of the Board of Directors.

Post replaced Dr.

David Schaffer, whose term as a non-executive director of the Board of Directors ended on the same date.

Intellectual Property

On January 4, 2020, a petition seeking Inter Partes Review of U.S.

9,249,405 (the “’405 Patent”) was filed by Pfizer, Inc.

The petition sought to invalidate claims 6 and 9-15 of the ‘405 Patent.

On April 17, 2020, we filed our preliminary response to the petition, disclaiming claims 6 and 9-13 of the ‘405 patent and otherwise requesting the denial of the petition.

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

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

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

In February 2021 we commenced the expansion of our Amsterdam site to build additional laboratories to support the expansions of our research and development activities as well the construction of a cleanroom designed to be capable of manufacturing cGMP materials at a 500-liter scale.

In May 2021 we entered into a sublease agreement to let an additional approximately 1,080 square meters of office space to accommodate the hiring of additional full-time employees.

The lease expires in October 2028 and includes a break option until October 2023.

Financial Overview

Key components of our results of operations include the following:

Three months ended September 30,

Nine months ended September 30,

(in thousands)

Three months ended March 31,

(in thousands)

2 unchanged sentences

Selling, general and administrative expenses

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

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

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

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

As of March 31, 2021, and December 31, 2020, we had cash and cash equivalents of $260.8 million and $244.9 million, respectively.

We had a net loss of $41.6 million in the three months ended March 31, 2021, compared to $28.0 million for the same period in 2020.

As of March 31, 2021, and December 31, 2020, we had accumulated deficits of $826.3 million and $784.7 million, respectively.

Our losses will be materially impacted by the amount of license revenue that we will recognize in accordance with ASC 606 as a result of the closing of the transaction contemplated under the CSL Behring Agreement, which became fully effective on May 6, 2021.

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 central nervous system (“CNS”) diseases;

● Acquire or in-license rights to new therapeutic targets or product candidates;

● Continue to expand, enhance and optimize our technology platform, including our manufacturing capabilities, next-generation viral vectors and promoters, and other enabling technologies;

● Continue to expand our employee base to support research and development, as well as general and administrative functions;

● Acquire or in-license rights to new therapeutic targets or product candidates;

● Maintain, expand, and protect our intellectual property portfolio, including in-licensing additional intellectual property rights from third parties;

● Build out our commercial and medical affairs infrastructure and seek marketing approval for any product candidates.

See “Results of Operations” below for a discussion of the detailed components and analysis of the amounts above.

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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 implementation of ASC 842 Leases, recognition of License Revenue in accordance with ASC 606, BMS warrants, share-based payments and corporate income taxes related to valuation allowance.

On an ongoing basis, we evaluate our estimates and judgments, including those related to the treatment of the CSL Behring Agreement, our arrangements with Bristol-Myers Squibb (“BMS”), including the amended collaboration and license agreement that we entered into with BMS in December 2020 (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.

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

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

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

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

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

Closing of the transaction is dependent on the timing, extent and result of the regulatory review process.

We do not believe that the consummation of the transaction will result in a violation of any applicable antitrust laws.

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

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

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

During the three months ended March 31, 2021, there were no material changes to our critical accounting policies as reported in our Annual Report on Form 10-K for the year ended December 31, 2020, which was filed with the SEC on March 1, 2021 .

We believe that the assumptions, judgments, and estimates 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 to be our critical accounting policies.

The preparation of our consolidated financial statements for the three-month period ended March 31, 2021, required us to analyze the accounting treatment of the CSL Behring Agreement.

The effectiveness of the transaction contemplated by the CSL Behring Agreement was contingent on completion of review under antitrust laws in the United States, Australia, and the United Kingdom.

The review processes in Australia and the United Kingdom were completed prior to January 6, 2021.

As of March 31, 2021, regulatory approval in the United Sates had not occurred.

On May 5, 2021, the waiting period under the HSR Act expired and the transaction became fully effective on May 6, 2021.

As of March 31, 2021, we concluded that we had no enforceable right to receive the $450.0 million upfront payment, in accordance with the CSL Behring Agreement as payment was contingent upon the successful completion of reviews under the HSR Act and the reviews were not completed by March 31, 2021.

Therefore, we determined we would 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 during the three-month period ended March 31, 2021.

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

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

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

We are currently in discussions with BMS potentially to amend the BMS CLA and other related agreements following the expiration of the research term.

During these discussions, which may be terminated by us or BMS at any time, we have agreed, subject to certain conditions, to continue providing limited support of the pre-clinical Collaboration Targets, and any related costs will be reimbursed by BMS.

We recognize License Revenues associated with the amortization of the non-refundable upfront payment, target designation fees and research and development milestone payments we received or might receive from BMS.

The timing of these cash payments may differ from the recognition of revenue, as revenue is deferred and recognized over the duration of the performance period.

We recognize other revenue, such as sales milestone payments, when earned.

We determined that recognition of the CSL Behring License Revenue in 2021 will consume a material portion of our net operating loss carryforwards in the Netherlands.

However, we expect to continue to record operating losses in the years thereafter.

Accordingly, we expect to continue to record a full valuation allowance in relation to our net operating loss carryforwards in the Netherlands as of the end of the current fiscal year.

We determined the impact which recognition of CSL Behring License Revenue is estimated to have, with regards to the expected effective tax rate of 0% that was applied with respect to our Dutch operations as of March 31, 2021, is immaterial.

Accordingly, we continued to record a full valuation allowance as of March 31, 2021, in relation to our net operating loss carryforwards in the Netherlands.

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 (as defined below) and the amended BMS 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.

Research and development expenses

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Results of Operations

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

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

Three months ended September 30,

Comparison of the three months ended March 31, 2021 and 2020

The following table presents a comparison of our results of operations for the three months ended March 31, 2021 and 2020.

Three months ended March 31,

(in thousands)

7 unchanged sentences

Other non-operating items, net

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

Three months ended September 30,

Net loss before income tax expense

Income tax expense

Our revenue for the three months ended March 31, 2021 and 2020 was as follows:

Three months ended March 31,

(in thousands)

2 unchanged sentences

Total revenues

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

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

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

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

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

We recognized $0.0 million License Revenue related to upfront payments and target designation fees received from BMS in 2015 under the BMS CLA for the period ended March 31, 2020.

We did not recognize any License Revenue from the December 1, 2020 amended BMS CLA for the period ended March 31, 2021.

We recognized $0.5 million Collaboration Revenue in the three months ended March 31, 2021, compared to $0.1 million for the same period in 2020.

Research and development expenses

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

Research and development expenses for the three months ended March 31, 2021 were $32.7 million, compared to $26.0 million for the same period in 2020.

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

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

Three months ended September 30,

Three months ended March 31,

(in thousands)

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Employee and contractor-related expenses

Share-based compensation expense

Facility expenses

Share-based compensation expense

Other expenses

3 unchanged sentences

Etranacogene dezaparvovec (AMT-060/061)

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

In the three months ended March 31, 2021 and 2020, the external costs for our hemophilia B program were primarily related to the execution of our Phase III clinical trial.

Following the completion of patient enrollment into our HOPE-B trial we also started incurring costs related to preparation of a Biologics License Application (“BLA”) and marketing authorization application (“MAA”) and for commercialization of etranacogene dezaparvovec.

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

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

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

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.

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

Huntington disease (AMT-130)

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

In the three months ended March 31, 2021 and March 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.

Preclinical programs & platform development

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

In the three months ended March 31, 2021, we incurred $2.3 million of costs primarily related to our preclinical activities primarily associated with product candidates, SCA3 (AMT-150) and Fabry disease (AMT-190), as well as various other research programs and technology innovation projects, compared to costs of $1.5 million in the same period in 2020, which included costs related to our product candidate for Hemophilia A (AMT-180) that was subsequently deprioritized in June 2020.

Other research & development expenses

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

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

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

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

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

● We incurred $11.6 million in personnel and contractor related expenses in the three months ended March 31, 2021, compared to $9.3 million for the same period in 2020.

Our costs during the three months ended March 31, 2021 increased by $2.3 million as a result of the recruitment of personnel to support the development of our product candidates;

● We incurred $2.7 million in share-based compensation expenses in the three months ended March 31, 2021, compared to $2.4 million for the same period in 2020 primarily driven by increase in awards granted, including those to newly recruited personnel;

● We incurred $4.6 million in operating expenses and depreciation expenses related to our rented facilities in the three months ended March 31, 2021, compared to $4.0 million in the same period in 2020;

● We incurred $2.5 million in other costs in the three months ended March 31, 2021, compared to $0.8 million for the same period in 2020 related to miscellaneous other costs we incur as a result of expanding our organization.

Selling, general and administrative expenses

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

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

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

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

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

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

Selling, general and administrative expenses for the three months ended March 31, 2021 were $12.4 million, compared to $9.1 million for the same period in 2020.

● We incurred $3.9 million in personnel and contractor related expenses in the three months ended March 31, 2021, compared to $3.2 million in the same period in 2020.

The increase in the three months ended March 31, 2021, relates to the recruitment of personnel;

● We incurred $3.1 million in share-based compensation expenses in the three months ended March 31, 2021, compared to $1.9 million in the same period in 2020 primarily driven by increase in awards granted, including those to newly recruited personnel;

● We incurred $2.9 million in professional fees in the three months ended March 31, 2021, compared to $1.2 million in the same period in 2020.

We regularly incur accounting, audit and legal fees associated with operating as a public company.

Additionally, in the three months ended March 31, 2021, we incurred professional fees in relation to our licensing transaction with CSL Behring.

Other items, net

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

We recognized $0.0 million in income from payments received from European authorities to subsidize our research and development efforts in the Netherlands in the three months ended March 31, 2021, compared $0.2 million for the same period in 2020.

Other non-operating items, net

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We issued warrants to BMS in 2015.

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

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

Three months ended September 30,

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 a contingent payment due to BMS upon the consummation of a change of control transaction (“CoC-payment”) as described elsewhere in the Quarterly Report on Form 10-Q .

Our other non-operating items, net, for the three months ended March 31, 2021 and 2020 were as follows:

Three months ended March 31,

(in thousands)

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Interest expense - Hercules long-term debt

Foreign currency (losses) / gains, net

Foreign currency gains, net

Other non-operating gains

Total other non-operating loss, net

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

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

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

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

Nine months ended September 30,

(in thousands)

Total revenues

Operating expenses:

Research and development expenses

Selling, general and administrative expenses

Total operating expenses

Other expense

Loss from operations

Non-operating items, net

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

Nine months ended September 30,

License revenue

Collaboration revenue

Total revenues

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

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

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

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

Research and development expenses

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

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

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

Nine months ended September 30,

(in thousands)

Etranacogene dezaparvovec (AMT-060/061)

Huntington's disease (AMT-130)

Programs in preclinical development and platform related expenses

Total direct research and development expenses

Employee and contractor-related expenses

Share-based compensation expense

Facility expenses

Other expenses

Total other research and development expenses

Total research and development expenses

Direct research and development expenses

Hemophilia B (AMT-060/061)

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

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

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

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

Huntington disease (AMT-130)

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

Preclinical programs & platform development

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

Other research & development expenses

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

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

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

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

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

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

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

Selling, general and administrative expenses

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

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

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

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

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

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

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

Other items, net

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

Other non-operating items, net

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.

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 (expense) / income.

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

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

Nine months ended September 30,

(in thousands)

Interest income

Interest expense

Foreign currency (losses) / gains, net

Other non-operating gains / (losses), net

Total non-operating income / (loss), net

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

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

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

Total other non-operating income, net

We recognized a net foreign currency gain, related to our borrowings from Hercules and our cash and cash equivalents as well as loans between entities within the uniQure group, of $4.6 million during the three months ended March 31, 2021, compared to a net gain of $4.6 million during the same period in 2020.

In the three months ended March 31, 2021, we recognized income of nil as there was no change in the fair value of the BMS derivative financial liability for the CoC-payment, compared to income of $2.0 million during the same period in 2020 related to changes in the fair value of the BMS warrants from the BMS CLA.

We recognized $0.2 million of deferred tax expense for the period ended March 31, 2021 and nil in the same period ended 2020.

Financial Position, Liquidity and Capital Resources

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

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

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

Nine months ended September 30,

As of March 31, 2021, we had cash, cash equivalents and restricted cash of $263.5 million.

We believe our cash and cash equivalents as of March 31, 2021, 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 until the end of 2022.

Following the receipt of the $450.0 million upfront payment, which was paid to us on May 7, 2021, 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).

We are also eligible to receive up to $1.6 billion of milestones and tiered double-digit royalties in a range of up to a low-twenties percent of net sales of the Product based on sales thresholds, both of which are not included in the above guidance.

Three months ended March 31,

(in thousands)

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

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

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

We had a net loss of $41.6 million during the three months ended March 31, 2021, compared to a net loss of $28.0 million during the same period in 2020.

As of March 31, 2021, we had an accumulated deficit of $826.3 million.

Sources of liquidity

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

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

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 million credit facility and provided us with an additional unconditional commitment of $15 million as well as a conditional commitment of $15 million that expired on June 30, 2020.

From our first institutional venture capital financing in 2006 through March 31, 2021, we funded our operations primarily through private and public placements of equity securities and convertible and other debt securities as well as payments from our collaboration partners.

On March 1, 2021, we entered into a Sales Agreement with SVB Leerink with respect to an ATM offering program, under which we may, from time to time in our sole discretion, offer and sell through SVB Leerink, acting as agent, our ordinary shares, up to an aggregate offering price of $200.0 million.

We will pay SVB Leerink a commission equal to 3% of the gross proceeds of the sales price of all ordinary shares sold through it as a sales agent under the Sales Agreement.

In March 2021 we issued 0.9 million ordinary shares for net proceeds of $27.6 million.

On December 6, 2018, we signed 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 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.

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

$35 million).

We are required to repay the facility 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.

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

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 outside the fiscal year in which we close the transaction.

We have no firm sources of additional funding.

We are subject to covenants under our 2018 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 may limit our ability to obtain debt financing.

The interest-only period was again further extended to June 1, 2023 as a result of the 2021 Amended Facility.

The variable interest rate of the 2018 Amended Facility 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% at signing of the $35.0 million loan outstanding and will owe a back-end fee of 4.95% of the outstanding debt.

In addition, in May 2020, we paid a back-end fee of $1.0 million in relation to the 2016 Amended Facility.

On January 29, 2021, we and Hercules entered into the 2021 Amended Facility.

Pursuant to the 2021 Amended Facility, Hercules agreed to an additional Facility of $100.0 million (“Tranche B”), increasing the aggregate principal amount of the term loan facilities from $35.0 million to up to $135.0 million.

On January 29, 2021, we drew down $35.0 million of the Tranche B.

We may draw down the remaining $65.0 million under the Tranche B in a series of one or more advances of not less than $20.0 million each until December 15, 2021.

Advances under the Tranche B 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 Tranche B is due on June 1, 2023, which date may be extended by us by up to two twelve-month periods.

Advances under the Tranche B may not be prepaid until six-months after the Closing Date, following which we may prepay all such advances without charge.

As of March 31, 2021, $70.0 million was outstanding under the 2018 Amended Facility and the 2021 Amended Facility (December 31, 2020:

$35.0 million under the 2018 Amended Facility).

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.

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Net Cash used in operating activities

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

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

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

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

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

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

Net cash used in operating activities was $41.3 million for the three months ended March 31, 2021 and consisted of a net loss of $41.6 million adjusted for non-cash items, including depreciation and amortization expense of $1.9 million, share-based compensation expense of $5.8 million, unrealized foreign exchange gains of $5.3 million and deferred tax expense of $0.2 million.

Net cash used in operating activities also included unfavorable changes in operating assets and liabilities of $3.9 million.

These changes primarily related to a net increase in accounts receivable, prepaid expenses, and other current assets and receivables of $8.0 million primarily related to the increase in a contract asset and receivable recorded for CSL expenses to be reimbursed as well as an increase in various prepayments for the year and a net increase in accounts payable, accrued expenses, other liabilities, and operating leases of $5.8 million primarily related to an increase in contract liability for CSL expenses to be reimbursed and an increase in accruals for services provided by vendors not yet billed offset by the pay-out of employee bonuses.

Net cash used in operating activities was $33.0 million for the three months ended March 31, 2020 and consisted of a net loss of $28.0 million adjusted for non-cash items, including depreciation and amortization expense of $1.7 million, share-based compensation expense of $4.4 million, fair value gains on derivative financial instruments of $2.0 million, unrealized foreign exchange gain of $4.8 million, and an increase in unamortized deferred revenue of $0.3 million.

Net cash used in operating activities also included unfavorable changes in operating assets and liabilities of $4.5 million.

These changes primarily related to a net increase in accounts receivable, prepaid expenses, and other current assets of $1.3 million primarily as a result of increase in prepayments for the year and a net decrease in accounts payable, accrued expenses and other liabilities of $3.2 million primarily related to pay-out of employee bonuses.

Net cash used in investing activities

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

Nine months ended September 30,

In the three months ended March 31, 2021, we used $3.9 million in our investing activities compared to $2.9 million for the same period in 2020.

Three months ended March 31,

(in thousands)

Build out of Lexington site

Build out of Amsterdam site

Build out of Lexington site

Acquisition of licenses, patents, and other rights

Total investments

The build out of the Amsterdam site was $2.4 million for the three months ended March 31, 2021, compared to $0.4 million for the same period in 2020.

The increase is a result of the construction of additional laboratories to support the expansions of our research and development activities as well as the construction of a cleanroom designed to be capable of manufacturing cGMP materials at a 500-liter scale.

Net cash generated from financing activities

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

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

In the three months ended March 31, 2021, we generated $62.6 million in our financing activities compared to $1.0 million for the same period in 2020.

Three months ended March 31,

(in thousands)

Cash flows from financing activities

Proceeds from loan increment, net of debt issuance costs

Proceeds from issuance of ordinary shares

Share issuance costs from issuance of ordinary shares

Proceeds from issuance of shares related to employee stock option and purchase plans

Net cash generated from financing activities

We received proceeds of $28.7 million associated with our ATM offering in March 2021, offset by fees of $1.2 million.

In January 2021, we received $34.6 million net proceeds from the Hercules 2021 Amended Facility.

During the three months ended March 31, 2021, we received $0.4 million from the exercise of options to purchase ordinary shares in relation to our share incentive plans compared to $1.0 million for the same period in 2020.

Funding requirements

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

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

We believe our cash and cash equivalents as of March 31, 2021, combined with the $100.0 million 2021 Amended Facility as well as the upfront payment of $450.0 million that we became entitled to receive following the closing of our transaction with CSL Behring on May 6, 2021, 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 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;

● achieving the milestones and royalties as defined within the CSL Behring Agreement;

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

● 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 amount and timing of revenue, if any, we receive from manufacturing products from CSL Behring.

● the scope, timing, results, and costs of our current and planned clinical trials, including those for AMT-130 in Huntington’s disease;

● the scope, timing, results and costs of preclinical development and laboratory testing of our additional product candidates;

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

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

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

● 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 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;

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

● the costs associated with process validation and inspection readiness of etranacogene dezaparvovec.

Contractual obligations and commitments

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

The table below sets forth our contractual obligations and commercial commitments as of March 31, 2021, that are expected to have an impact on liquidity and cash flows in future periods.

(in thousands)

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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 also have obligations to make future payments that become due and payable upon the collection of 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 after the CSL Behring Agreement became fully effective on May 6, 2021.

We enter into contracts in the normal course of business with clinical research organizations (“CROs”) for preclinical research studies and clinical trials, research supplies and other services and products for operating purposes.

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Off-Balance Sheet Arrangements

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

As of March 31, 2021, we did not have any off-balance sheet arrangements as defined in Item 303(a)(4) of Regulation S-K.

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis