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Item 1A. Risk Factors

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An investment in our ordinary shares involves a high degree of risk.

You should carefully consider the following information about these risks, together with the other information appearing elsewhere in this Quarterly Report on Form 10-Q, including our financial statements and related notes thereto, and the risk factors discussed in Part I, Item 1A “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2020, filed with the SEC on March 1, 2021 , before deciding to invest in our ordinary shares.

You should carefully consider the following information about these risks, together with the other information appearing elsewhere in this Quarterly Report on Form 10-Q, including our financial statements and related notes thereto, and the risk factors discussed in Part I, Item 1A “Risk Factors” in our Annual Report , before deciding to invest in our ordinary shares.

We operate in a dynamic and rapidly changing industry that involves numerous risks and uncertainties.

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The following is a summary of the principal risks associated with an investment in our ordinary shares:

● We may encounter substantial delays in, and impediments to the progress of our clinical trials or fail to demonstrate the safety and efficacy of our product candidates.

● Our business and operations have been, and may continue to be, materially and adversely affected by the ongoing Covid pandemic.

● We cannot predict when or if we will obtain marketing approval to commercialize any of our product candidates, or whether they will be commercially successful once approved.

● We may not be successful in our efforts to use our gene therapy technology platform to build a pipeline of additional product candidates.

● We may not be successful in our efforts to in-license or acquire product candidates that align with our research and development strategy.

● Our business, operations and supply chain have been, and may continue to be, materially and adversely affected by the ongoing Covid pandemic.

● We have encountered, and may continue to encounter, delays in, and impediments to the progress of our clinical trials or fail to demonstrate the safety and efficacy of our product candidates.

● We may not be successful in our efforts to use our gene therapy technology platform to build a pipeline of additional product candidates, and we may not be successful in our efforts to create innovative programs, platform technologies or other technologies to be competitive with others.

● We may not be successful in our efforts to in-license or acquire product candidates that align with our research and development strategy, and any such transactions may not achieve the expected cash flows or could result in additional costs and challenges.

● Our manufacturing facility is subject to significant government regulations and approvals.

If we fail to comply with these regulations or to maintain these approvals our business could be materially harmed.

● Our resources might be adversely affected if we are unable to meet our product development and supply needs and obligations, including our ability to complete the validation of our existing manufacturing processes as well as to develop larger scale manufacturing processes, which could adversely affect our ability to sufficiently meet our future production needs or regulatory filing timelines.

● Our resources might be adversely affected if we are unable to successfully complete pre-approval inspections required by regulators or meet our supply needs and obligations, which could adversely affect our ability to sufficiently meet our future production needs or regulatory filing or approval timelines.

● We cannot predict when or if we will obtain marketing approval to commercialize any of our product candidates, or whether they will be commercially successful once approved.

If we are unable to successfully commercialize our product candidates or experience significant delays in doing so, our business could be materially harmed.

● We are exposed to a number of external factors such as competition, insurance coverage of and pricing and reimbursement for our product candidates that may adversely affect our product revenue and that may cause our business to suffer.

We also have experienced and could continue to experience increased competition for, and compensation expenses associated with employee recruiting and employee retention, which could adversely affect our business.

● We rely, and expect to continue to rely, on third parties to conduct, supervise, and monitor our preclinical studies and clinical trials, and those third parties may not perform satisfactorily, including failing to meet deadlines for the completion of such trials or failing to comply with regulatory requirements.

● We rely on licenses of intellectual property from third parties, and such licenses may not provide adequate rights or may not be available in the future on commercially reasonable terms or at all, and our licensors may be unable to obtain and maintain patent protection for the technology or products that we license from them.

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The implementation of such data protection regimes is complex, and should we fail to fully comply, we may be subject to penalties that may have an adverse effect on our business, financial condition, and results of operations.

● Our internal computer systems, or those of our collaborators or other contractors or consultants, may fail or suffer security breaches, which could result in a material disruption of our product development programs.

● Our internal computer systems, or those of our collaborators or other contractors or consultants, may fail or suffer security breaches or other errors or disruptions, which could result in a material disruption of our product development programs, such as potential issues with data integrity or loss of data.

● If we fail to maintain an effective system of internal controls, we may be unable to accurately report our results of operations or prevent fraud or fail to meet our reporting obligations, and investor confidence and the market price of our ordinary shares may be materially and adversely affected.

Risks Related to the Current Covid Pandemic

Our business and operations have been, and may continue to be, materially and adversely affected by the ongoing Covid pandemic.

The ongoing outbreak of Covid originated in Wuhan, China, in December 2019 and has since spread to multiple countries, including the United States and the Netherlands.

On March 11, 2020, the WHO declared the outbreak a pandemic.

Our business, operations, human resources and supply chain have been, and may continue to be, materially and adversely affected by the ongoing Covid pandemic.

On March 11, 2020, the WHO declared the ongoing outbreak of Covid a pandemic.

The Covid pandemic is affecting the United States and global economies and has affected and may continue to affect our operations and those of third parties on which we rely.

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In addition, the Covid pandemic has affected and may continue to affect the operations of the FDA, EMA, and other health authorities, which could result in delays of reviews and approvals, including with respect to our product candidates.

As evidenced by the postponement of procedures for two patients in our Phase I/II clinical study of AMT-130, the evolving Covid pandemic has impacted the pace of enrollment and procedures in our clinical trials, as well as caused challenges in scheduling follow-up visits and managing other aspects of our clinical trials.

We may in the future be affected by similar delays as patients may avoid or may not be able to travel to healthcare facilities and physicians’ offices unless due to a health emergency and clinical trial staff can no longer get to the clinic.

As evidenced by the postponement of procedures for two patients in our Phase I/II clinical study of AMT-130 in 2020, the evolving Covid pandemic has impacted the pace of enrollment and procedures in our clinical trials, as well as caused challenges in scheduling follow-up visits and managing other aspects of our clinical trials.

Such facilities and offices have been and may continue to be required to focus limited resources on non-clinical trial matters, including treatment of Covid patients, thereby decreasing availability, in whole or in part, for clinical trial services.

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However, these negative effects could have a material impact on our liquidity, capital resources, operations, and business and those of the third parties on whom we rely.

Global supply chains have been disrupted, causing shortages, which could further impact our clinical trials.

This disruption of our employees, distributors and suppliers has historically impacted and may continue to impact our future operating results.

Additionally, to the extent that inspections of facilities by governmental authorities are required, the review of our marketing applications or supplements may further be delayed as regulatory authorities, such as FDA, have significantly limited facility inspections during the pandemic.

We may also be subject to further laws, regulations, guidelines, executive orders and other requirements at the federal, state and local levels related to the pandemic, which we may be required to undertake or that we choose to undertake.

Any such requirements or guidelines that we adopt could have a material impact on our business operations.

Risks Related to the Development of Our Product Candidates

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All of our product candidates are in research or development.

We have not generated any revenues from the sale of products or manufacturing of our product for a licensee and do not expect to generate any such revenue before 2022.

We have not generated any revenues from the sale of products or manufacturing of a product for a third party and do not expect to generate any such revenue until this year, at the earliest.

Our product candidates including AMT-130 and any of our other potential product candidates will require extensive preclinical and/or clinical testing, manufacture development and regulatory approval prior to commercial use.

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● regulatory authority requirements to perform additional or unanticipated clinical trials;

● changes in standards of care which may necessitate the modification of our clinical trials or the conduct of new trials;

● regulatory authority refusal to accept data from foreign clinical study sites;

● disagreements with regulatory authorities regarding our study design, including endpoints, our chosen indication, or our interpretation of data from preclinical studies and clinical trials or a finding that a product candidate’s benefits do not outweigh its safety risks;

● delays in obtaining or failure to obtain required approvals from a DSMB or other required approvals;

● recommendations from DSMBs to discontinue, pause, or modify the trial;

● imposition of a clinical hold by regulatory agencies after an inspection of our clinical trial operations or trial sites;

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● occurrence of serious adverse events or other undesirable side effects associated with a product candidate that are viewed to outweigh its potential benefits;

● disagreements with regulatory authorities regarding the interpretation of our clinical trial data and results, or the emergency of new information about or impacting our product candidates;

● disagreements with regulatory authorities regarding the interpretation of our clinical trial data and results, or the emergence of new information about or impacting our product candidates;

● determinations that there are issues with our manufacturing facility or process;

● changes in regulatory requirements and guidance, as well as new, revised, postponed, or frozen regulatory requirements, especially in light of the change in the United States administration, that require amending or submitting new clinical protocols, undertaking additional new tests or analyses, or submitting new types or amounts of clinical data.

● changes in regulatory requirements and guidance, as well as new, revised, postponed, or frozen regulatory requirements (such as the forthcoming EU Clinical Trials Regulation), that require amending or submitting new clinical protocols, undertaking additional new tests or analyses, or submitting new types or amounts of clinical data.

Before obtaining marketing approval from regulatory authorities for the sale of our product candidates, we must conduct extensive clinical trials to demonstrate the safety and efficacy of the product candidates in humans.

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In addition, if we make manufacturing or formulation changes to our product candidates, including changes in the vector or manufacturing process used, we may need to conduct additional studies to bridge our modified product candidates to earlier versions.

It is also possible that any such manufacturing of formulation changes may have an adverse impact on the performance of the product candidate.

It is also possible that any such manufacturing or formulation changes may have an adverse impact on the performance of the product candidate.

Clinical trial delays could also shorten any periods during which we may have the exclusive right to commercialize our product candidates or allow our competitors to bring products to market before we do, which could impair our ability to successfully commercialize our product candidates and may materially harm our business, financial condition, and results of operations.

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Changes to product candidates may also impact their performance in subsequent studies.

By example, our initial clinical trials in hemophilia B were conducted with AMT-060.

Following these studies, we made modifications to AMT-060, substituting two nucleotides in the coding sequence for FIX.

This modified product candidate is etranacogene dezaparvovec.

In 2017, we announced our plans to advance etranacogene dezaparvovec, which includes an AAV5 vector carrying the FIX-Padua transgene, into a pivotal study.

While we believe etranacogene dezaparvovec and AMT-060, our product candidate that was previously studied in a Phase I/II study, have been demonstrated to be materially comparable in nonclinical studies and manufacturing quality assessments, it is possible that ongoing or future clinical studies of etranacogene dezaparvovec may show unexpected differences from AMT-060.

Should these differences have an unfavorable impact on clinical outcomes, or should they not have their intended effect of increasing the product candidate’s FIX activity, they may adversely impact our ability to achieve regulatory approval or market acceptance of etranacogene dezaparvovec .

We may also need to conduct additional or longer-term studies, which may delay regulatory submissions or approvals and which the regulatory authorities may ultimately not accept or approve.

In our Phase I/II clinical study of AMT-060, we screened patients for pre-existing anti-AAV5 antibodies to determine their eligibility for the trial.

Three of the ten patients screened for the study tested positive for anti-AAV5 antibodies on reanalysis using a more sensitive antibody assay.

Since we did not observe any ill-effects or correlation between the level of anti-AAV5 antibodies and clinical outcomes, patients who have anti-AAV5 antibodies are permitted to enroll in our planned pivotal study of etranacogene dezaparvovec.

Since we only have been able to test a limited number of patients and have limited clinical and pre-clinical data, it is possible that ongoing or future clinical studies may not confirm these results, and if so, negatively impact the outcome of our study.

In advance of treating patients in the pivotal study of etranacogene dezaparvovec, we conducted a short study to confirm the dose expected to be used in the pivotal trial.

The dose-confirmation study enrolled three patients, who were administered a single dose of 2x10 13 gc/kg.

We have relied on the short-term data from this study, including FIX activity and safety outcomes during the weeks following administration of etranacogene dezaparvovec, to confirm the dose to be used in the pivotal study.

Following the results of this study, our Data Monitoring Committee confirmed the dose of 2x10 13 gc/kg for administration in the pivotal study.

Given the limited number of patients and short follow-up period, data from this study may differ materially from the future results of our planned pivotal study of etranacogene dezaparvovec.

A number of companies in the pharmaceutical and biotechnology industries have suffered significant setbacks in later-stage clinical trials even after achieving promising results in early-stage clinical trials.

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Failure to confirm favorable results from earlier trials by demonstrating the safety and effectiveness of our products in later-stage clinical trials with larger patient populations could have a material adverse effect on our business, financial condition, and results of operations.

Additionally, where there are differences in the early-stage and late-stage trials, such as the differences between AMT-060 and AMT-061, regulatory authorities may require additional or longer-term data in late-stage trials as compared to early-stage trials, which may delay regulatory submissions or approvals and which the regulatory authorities may ultimately not accept or approve.

Fast track product, breakthrough therapy, priority review, or Regenerative Medicine Advanced Therapy (“RMAT”) designation by the FDA, or access to the PRIME scheme by the EMA, for our product candidates may not lead to faster development or regulatory review or approval process, and it does not increase the likelihood that our product candidates will receive marketing approval.

Fast track product, breakthrough therapy, priority review, or RMAT designation by the FDA, or access to the PRIME scheme by the EMA, for our product candidates may not lead to faster development or regulatory review or approval process, and it does not increase the likelihood that our product candidates will receive marketing approval.

We have obtained and may in the future seek one or more of fast track designation, breakthrough therapy designation, RMAT designation, PRIME scheme access or priority review designation for our product candidates.

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A small number of patients have experienced serious adverse events during our clinical trials of either AMT-060 (our first-generation hemophilia B gene therapy) or etranacogene dezaparvovec.

In each instance of a serious adverse event, whether or not attributed to one of our product candidates, the issues resolved without delay in the respective clinical trial.

However, adverse events in our clinical trials or those conducted by other parties (even if not ultimately attributable to our product candidates), and the resulting publicity, could result in delay, a hold or termination of our clinical trials, increased governmental regulation, unfavorable public perception, failure of the medical community to accept and prescribe gene therapy treatments, potential regulatory delays in the testing or approval of our product candidates, stricter labeling requirements for those product candidates that are approved and a decrease in demand for any such product candidates.

If any of these events should occur, it may have a material adverse effect on our business, financial condition and results of operations.

Certain of our product candidates may require medical devices for product administration and/or diagnostics, resulting in our product candidates being deemed combination products.

Certain of our product candidates may require medical devices for product administration and/or diagnostics, resulting in our product candidates being deemed combination products or otherwise being dependent upon additional regulatory approvals.

This may result in the need to comply with additional regulatory requirements.

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Other of our product candidates may also require the use of a companion diagnostic device to confirm the presence of specific genetic or other biomarkers.

This may result in our product candidates being deemed to be combination products, potentially necessitating compliance with the FDA’s investigational device regulations, separate marketing application submissions for the medical device component, a demonstration that our product candidates are safe and effective when used in combination with the medical devices, cross labeling with the medical device, and compliance with certain of the FDA’s device regulations.

We currently expect that a diagnostic test will be required to determine the levels of neutralizing antibodies present in a patient seeking treatment with etranacogene dezaparvovec, and that regulatory approval of such a diagnostic test will be required.

The approval could adversely affect the timing of a first commercial sale of etranacogene dezaparvovec if it does not occur, or if it occurs after or delays regulatory approval of etranacogene dezaparvovec.

Currently, CSL Behring is working directly with a third-party provider to gain regulatory health approval of such a diagnostic test, which is based on the clinical diagnostic test used during the development of etranacogene dezaparvovec.

It is also possible that our product candidates would be deemed to be combination products, potentially necessitating compliance with the FDA’s investigational device regulations, separate marketing application submissions for the medical device component, a demonstration that our product candidates are safe and effective when used in combination with the medical devices, cross labeling with the medical device, and compliance with certain of the FDA’s device regulations.

If we are not able to comply with the FDA’s device regulations, if we are not able to effectively partner with the applicable medical device manufacturers, if we or any partners are not able to obtain any required FDA clearances or approvals of the applicable medical devices, or if we are not able to demonstrate that our product candidates are safe and efficacious when used with the applicable medical devices, we may be delayed in or may never obtain FDA approval for our product candidates, which would materially harm our business.

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Our manufacturing facility is subject to significant government regulations and approvals.

If we fail to comply with these regulations or maintain these approvals our business will be materially harmed.

Our manufacturing facility in Lexington is subject to ongoing regulation and periodic inspection by the FDA, EMA, and other regulatory bodies to ensure compliance with current cGMP.

If we fail to comply with these regulations or maintain these approvals our business could be materially harmed.

Our manufacturing facility in Lexington is subject to ongoing regulation and periodic inspection by the FDA, EU member state, and other regulatory bodies to ensure compliance with current cGMP requirements.

Moreover, before approving a BLA for any product candidate, the FDA will inspect our manufacturing facility and processes.

Any failure to follow and document our adherence to such cGMP regulations or other regulatory requirements may lead to significant delays in the availability of products for commercial sale or clinical study, may result in the termination of or a hold on a clinical study, or may delay or prevent filing or approval of marketing applications for our products.

Failure to comply with applicable regulations could also result in the FDA, EMA, or other applicable authorities taking various actions, including levying fines and other civil penalties;

Failure to comply with applicable regulations could also result in the FDA, EU member state, or other applicable authorities taking various actions, including levying fines and other civil penalties;

imposing consent decrees or injunctions;

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If we cannot produce an adequate amount of our product candidates in compliance with the applicable regulatory requirements, we may need to contract with a third party to do so, in which case third party manufacturers may not be available or available on favorable terms.

The addition of a new manufacturer may also require FDA approvals, which we may not be able to obtain.

The addition of a new manufacturer may also require FDA, EMA, EU and other regulatory authority approvals, which we may not be able to obtain.

Gene therapies are complex and difficult to manufacture.

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Additionally, we may not be able to scale up some or all of our manufacturing processes, that may result in delays in regulatory approvals or otherwise adversely affect our ability to manufacture sufficient amounts of our products.

Many factors common to the manufacturing of most biologics and drugs could also cause production interruptions, including raw materials shortages, raw material failures, growth media failures, equipment malfunctions, facility contamination, labor problems, natural disasters, disruption in utility services, terrorist activities, or cases of force majeure and acts of god (including the effects of the Covid pandemic) beyond our control.

Many factors common to the manufacturing of most biologics and drugs could also cause production interruptions, including raw materials shortages, raw material failures, growth media failures, equipment malfunctions, facility contamination, labor problems, natural disasters, disruption in utility services, terrorist activities, war or cases of force majeure and acts of god (including the effects of the Covid pandemic) beyond our control.

We also may encounter problems in hiring and retaining the experienced specialized personnel needed to operate our manufacturing process, which could result in delays in our production or difficulties in maintaining compliance with applicable regulatory requirements.

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These problems include difficulties with production costs and yields, quality control, including stability and potency of the product, quality assurance testing, operator error, shortages of qualified personnel, as well as compliance with strictly enforced federal, state and foreign regulations.

In the past, we have manufactured certain batches of etranacogene dezaparvovec, and other product candidates, intended for nonclinical, clinical and process validation purposes that have not met all of our pre-specified quality parameters.

To meet our expected future production needs and our regulatory filing timelines for etranacogene dezaparvovec, as well as other gene therapy product candidates, we will need to complete the validation of our existing manufacturing processes as well as to develop larger scale manufacturing processes.

If we are unable to consistently manufacture etranacogene dezaparvovec, or other gene therapy product candidates, in accordance with our pre-specified quality parameters and applicable regulatory standards, it could adversely impact our ability to validate our manufacturing processes, to meet our production needs, to file our BLA or other regulatory submissions, to develop our other proprietary programs, to conserve our cash, or to receive financial payments pursuant to our agreements with third parties, including with CSL Behring in return for supplying etranacogene dezaparvovec following regulatory approval.

In the past, we have manufactured certain batches of product candidates, intended for nonclinical, clinical and process validation purposes that have not met all of our pre-specified quality parameters.

To meet our expected future production needs and our regulatory filing timelines for gene therapy product candidates we will need to complete the validation of our manufacturing processes, and we may need to develop and validate new or larger scale manufacturing processes.

If we are unable to consistently manufacture our gene therapy product candidates or any approved products in accordance with our pre-specified quality parameters and applicable regulatory standards, it could adversely impact our ability to validate our manufacturing processes, to meet our production needs, to file a BLA or other regulatory submissions, to develop our other proprietary programs, to conserve our cash, or to receive financial payments pursuant to our agreements with third parties.

Risks Related to Regulatory Approval of Our Products

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Changes in marketing approval policies during the development period, changes in or the enactment of additional statutes or regulations, or changes in regulatory review for each submitted product application, may cause delays in the approval or rejection of an application.

Regulatory authorities may also be delayed in completing their review of any marketing applications submitted by us or our partners.

By example, due to the ongoing COVID-19 pandemic, regulatory authorities may not be able to complete the pre-approval inspections that are required for approval of a marketing application.

Regulatory authorities have substantial discretion in the approval process and may refuse to accept any application, may decide that our data are insufficient for approval, may require additional preclinical, clinical, or other studies and may not complete their review in a timely manner.

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In the United States, there have been a number of recent changes relating to gene therapy development.

By example, FDA issued a number of new guidance documents on human gene therapy development, one of which was specific to human gene therapy for hemophilia and another of which was specific to rare diseases.

By example, FDA issued a number of new guidance documents, and continues to issue guidance documents, on human gene therapy development, one of which was specific to human gene therapy for hemophilia, one that was specific to neurodegenerative diseases, and another of which was specific to rare diseases.

Moreover, the European Commission conducted a public consultation in early 2013 on the application of EU legislation that governs advanced therapy medicinal products, including gene therapy products, which could result in changes in the data we need to submit to the EMA for our product candidates to gain regulatory approval or change the requirements for tracking, handling and distribution of the products which may be associated with increased costs.

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Additionally, regulatory criteria with respect to orphan products is evolving, especially in the area of gene therapy.

By example, in the United States, whether two gene therapies are considered to be the same for the purpose of determining clinical superiority is subject to change, and depends on a number of factors, including the expressed transgene, the vector, and other product or product candidate features.

By example, in the United States, whether two gene therapies are considered to be the same for the purpose of determining clinical superiority was recently updated via a final guidance document specific to gene therapies, and depends on a number of factors, including the expressed transgene, the vector, and other product or product candidate features.

Depending on the products, whether two products are ultimately considered to be the same may be determined by FDA on a case-by-case basis, making it difficult to make predictions regarding when FDA might be able to make an approval of a product effective and whether periods of exclusivity will effectively block competitors seeking to market products that are the same or similar to ours for the same intended use.

Accordingly, whether any of our product candidates will be deemed to be the same as another product or product candidate is uncertain.

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If we do not obtain or maintain periods of market exclusivity, we may face competition sooner than otherwise anticipated.

For instance, in the United States, this could mean that a competing biosimilar product may be able to submit an application to the FDA and obtain approval.

This may require that we undertake costly and time-consuming patent litigation, to the extent available, or defend actions brought by the biosimilar applicant for declaratory judgement.

For instance, in the United States, this could mean that a competing biosimilar product may be able to submit an application to the FDA and obtain approval either as a biosimilar to one of our products or even as an interchangeable product.

This may require that we undertake costly and time-consuming patent litigation, to the extent available, or defend actions brought by the biosimilar applicant for declaratory judgment.

If a biosimilar product does enter the market, it is possible that it could be substituted for one of our product candidates, especially if it is available at a lower price.

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Future proposed budgets, international trade agreements and other arrangements or proposals may affect periods of exclusivity.

If any of our product candidates receive regulatory approval, we and/or our partners will be subject to extensive regulatory requirements.

Failure to fulfill and comply with the applicable regulatory requirements could result in regulatory enforcement actions that would be detrimental to our business.

Following any regulatory approval, the FDA and the EMA may impose certain post-approval requirements related to a product.

Specifically, any approved products will be subject to continuing and comprehensive regulation concerning the product’s design, testing, manufacture, safety, efficacy, recordkeeping, labeling, storage, approval, advertising, promotion, sale and distribution.

Regulatory authorities may also require post-marketing testing, known as Phase 4 testing, a risk evaluation and mitigation strategy, and surveillance to monitor the effects of an approved product or place conditions on an approval that could restrict the distribution or use of the product.

Failure to comply with any of these requirements could result in regulatory, administrative, or other enforcement action, that would be detrimental to our business.

For instance, the FDA and other government agencies closely regulate the post-approval marketing and promotion of approved products, including off-label promotion, industry-sponsored scientific and educational activities, and the Internet and social media.

Approved products may be marketed only for the approved indications and in accordance with the provisions of the approved labeling.

Failure to comply with regulatory promotional standards could result in actions being brought against us by these agencies.

Moreover, if a company obtains FDA approval for a product via the accelerated approval pathway, the company would be required to conduct a post-marketing confirmatory trial to verify and describe the clinical benefit in support of full approval.

An unsuccessful post-marketing study or failure to complete such a study could result in the expedited withdrawal of the FDA’s marketing approval for a product.

Changes to some of the conditions established in an approved application, including changes in labeling, indications, manufacturing processes or facilities, may require a submission to and approval by the FDA or the EMA, as applicable, before the change can be implemented.

A New Drug Application (“NDA”)/BLA or MAA supplement for a new indication typically requires clinical data similar to that in the original application.

The applicable regulatory authorities would review such supplement using similar procedures and actions as in reviewing NDAs/BLAs and MAAs.

Adverse event reporting and submission of periodic reports is required following marketing approval.

Regulatory authorities may withdraw product approvals or request product recalls, as well as impose other enforcement actions, if a company fails to comply with regulatory standards, if it encounters problems following initial marketing, or if previously unrecognized problems are subsequently discovered.

In addition, the manufacture, testing, packaging, labeling, and distribution of products after approval will need to continue to conform to cGMPs.

Drug and biological product manufacturers and certain of their subcontractors are subject to periodic unannounced inspections by the FDA or the EMA for compliance with cGMPs.

Accordingly, manufacturers must continue to expend time, money and effort in the areas of production and quality control to maintain compliance with cGMPs.

In addition, prescription drug manufacturers in the U.S.

must comply with applicable provisions of the Drug Supply Chain Security Act and provide and receive product tracing information, maintain appropriate licenses, ensure they only work with other properly licensed entities and have procedures in place to identify and properly handle suspect and illegitimate products.

Where we partner with third parties for the development, approval, and marketing of a product, such third parties will be subject to the same regulatory obligations as we will.

However, as we will not control the actions of the applicable third parties, we will be reliant on them to meet their contractual and regulatory obligations.

By example, the decisions associated with regulatory filings and approvals for AMT-061 have been, and will continue to be, largely controlled by CSL Behring, and we will not have final decision-making authority in that regard.

Accordingly, actions taken by any of our partners could materially and adversely impact our business.

Risks Related to Commercialization

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Patients that have pre-existing antibodies to a particular capsid may not be eligible for administration of a gene therapy that includes this particular capsid.

For example, etranacogene dezaparvovec, our gene therapy candidate for hemophilia B patients, incorporates an AAV5 capsid.

For example, etranacogene dezaparvovec, the gene therapy candidate for hemophilia B patients, incorporates an AAV5 capsid.

In our Phase I/II clinical study of AMT-060, we screened patients for pre-existing anti-AAV5 antibodies to determine their eligibility for the trial.

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Public perception may be influenced by claims that gene therapy is unsafe, and gene therapy may not gain the acceptance of the public or the medical community.

In particular, our success will depend upon physicians who specialize in the treatment of genetic diseases targeted by our product and product candidates, if approved, prescribing treatments that involve the use of our product and product candidates, if approved, in lieu of, or in addition to, existing treatments with which they are familiar and for which greater clinical data may be available.

Public and medical community adoption of any of our gene therapies will also depend on factors including the ease of administration in comparison to other therapeutics.

By example, the need for complex surgeries for the administration of a product candidate may impact the acceptance of a product.

In particular, our success will depend upon physicians who specialize in the treatment of genetic diseases targeted by our product and product candidates, prescribing treatments that involve the use of our product and product candidates, in lieu of, or in addition to, existing treatments with which they are familiar and for which greater clinical data may be available.

More restrictive government regulations or negative public opinion would have an adverse effect on our business, financial condition, results of operations and prospects and may delay or impair the development and commercialization of our product candidates or demand for any products we may develop.

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● business interruptions resulting from geopolitical actions, including war and terrorism or natural disasters including earthquakes, typhoons, floods, and fires.

In February 2022, armed conflict escalated between Russia and Ukraine.

The sanctions announced by the U.S.

and other countries following Russia’s invasion of Ukraine against Russia to date include restrictions on selling or importing goods, services or technology in or from affected regions and travel bans and asset freezes impacting connected individuals and political, military, business and financial organizations in Russia.

and other countries could impose wider sanctions and take other actions should the conflict further escalate.

It is not possible to predict the broader consequences of this conflict, which could include further sanctions, embargoes, regional instability, geopolitical shifts and adverse effects on macroeconomic conditions, currency exchange rates and financial markets, all of which could impact our business, financial condition and results of operations.

We face substantial competition, and others may discover, develop, or commercialize competing products before or more successfully than we do.

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In recent years, there has been a significant increase in commercial and scientific interest and financial investment in gene therapy as a therapeutic approach, which has intensified the competition in this area.

We are aware of numerous companies focused on developing gene therapies in various indications, including Applied Genetic Technologies Corp., Abbvie, Abeona Therapeutics, Adverum Biotechnologies, Ally Therapeutics, Apic Bio, Asklepios BioPharmaceutical, Astellas, AVROBIO, Bayer, Biogen, BioMarin, bluebird bio, CRISPR Therapeutics, Editas Medicine, Expression Therapeutics, Fate, Freeline Therapeutics, Generation Bio, Genethon, GlaxoSmithKline, Homology Medicines, Intellia Therapeutics, Johnson & Johnson, Krystal Biotech, Lexeo Therapeutics, LogicBio Therapeutics, Lysogene, MeiraGTx, Milo Biotechnology, Mustang Bio, Novartis, Orchard Therapeutics, Oxford Biomedica, Passage Bio, Pfizer, REGENXBIO, Renova Therapeutics, Roche, Rocket Pharmaceuticals, Sangamo Therapeutics, Sanofi, Selecta Biosciences, Sarepta Therapeutics, Sio Therapeutics, Solid Biosciences, SwanBio, Takeda, Taysha Gene Therapies, Ultragenyx, Vivet Therapeutics, and Voyager Therapeutics, as well as several companies addressing other methods for modifying genes and regulating gene expression.

We may also face competition with respect to the treatment of some of the diseases that we are seeking to target with our gene therapies from protein, nucleic acid, antisense, RNAi and other pharmaceuticals under development or commercialized at pharmaceutical and biotechnology companies such as Alnylam Pharmaceuticals, Bayer, BioMarin, CSL Behring, Dicerna Pharmaceuticals, Ionis Pharmaceuticals, Novartis, Novo Nordisk, Pfizer, Translate Bio, Roche, Sanofi, Sobi, Takeda, WaVe Life Sciences, and numerous other pharmaceutical and biotechnology firms.

We face worldwide competition from larger pharmaceutical companies, specialty pharmaceutical companies and biotechnology firms, universities and other research institutions and government agencies that are developing and commercializing pharmaceutical products.

Our key competitors focused on developing therapies in various indications, include among others, Pfizer, Freeline Therapeutics, Intellia Therapeutics, Sangamo Biosciences, Voyager Therapeutics, Passage Bio, Roche, PTC Therapeutics, Prilenia Therapeutics, Triplet Therapeutics, CombiGene, AvroBio, Caritas Therapeutics, and 4D Molecular Therapeutics.

Our commercial opportunity could be reduced or eliminated if our competitors develop and commercialize products that are safer, more effective, have fewer or less severe side effects, are more convenient or are less expensive than the products that we develop.

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For example, we will remain responsible for ensuring that each of our trials is conducted in accordance with the general investigational plan and protocols for the trial.

We must also ensure that our preclinical trials are conducted in accordance with GLPs, as appropriate.

Moreover, the FDA and comparable foreign regulatory authorities require us to comply with GCPs for conducting, recording, and reporting the results of clinical trials to assure that data and reported results are credible and accurate and that the rights, integrity, and confidentiality of trial participants are protected.

We must also ensure that our preclinical trials are conducted in accordance with good laboratory practices, as appropriate.

Moreover, the FDA and comparable foreign regulatory authorities require us to comply with good clinical practices (“GCPs”) for conducting, recording, and reporting the results of clinical trials to assure that data and reported results are credible and accurate and that the rights, integrity, and confidentiality of trial participants are protected.

Regulatory authorities enforce these requirements through periodic inspections of trial sponsors, clinical and preclinical investigators, and trial sites.

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Our acquisition strategy may not produce the cash flows expected or could result in additional costs and challenges.

Any acquisition, including the recent acquisition of Corlieve Therapeutics, could expose us to unknown liabilities and risks, and we may incur additional costs and expenses necessary to address an acquired company’s failure to comply with laws and governmental rules and regulations.

Any acquisition, including the recent acquisition of Corlieve Therapeutics SAS (“Corlieve”), could expose us to unknown liabilities and risks, and we may incur additional costs and expenses necessary to address an acquired company’s failure to comply with laws and governmental rules and regulations.

We could incur additional costs related to resources to align our business practices and operations.

Moreover, we cannot assure that the anticipated benefits of any acquisition would be realized in a timely manner, if at all.

In addition, the finalization of the valuation of the identifiable assets acquired in connection with the Corlieve Transaction could require us to expense all identifiable intangible assets without an alternative future use if we would determine that substantially all of the gross value of the assets is concentrated in a single identifiable asset or group of similar identifiable assets.

Additionally, the product candidate and intellectual property rights that we acquired in the Corlieve Transaction were developed and owned by Corlieve and its licensors and we have not yet demonstrated an ability to develop, advance, or run clinical trials with this product candidate.

Additionally, the product candidate and intellectual property rights that we acquired in the acquisition of Corlieve were developed and owned by Corlieve and its licensors and we have not yet demonstrated an ability to develop, advance, or run clinical trials with this product candidate.

As a result, we cannot ensure that we will be able to successfully advance this product candidate going forward.

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Additionally, in the United States and some foreign jurisdictions, pending or potential legislative and regulatory changes regarding the healthcare system and insurance coverage could result in more rigorous coverage criteria and downward pressure on drug prices, and may affect our ability to profitably sell any products for which we obtain marketing approval.

For example, on November 27, 2020, CMS issued an interim final rule implementing a Most Favored Nation payment model under which reimbursement for certain Medicare Part B drugs and biologicals will be based on a price that reflects the lowest per capita GDP-adjusted price of any non-U.S.

For example, on November 27, 2020, CMS issued an interim final rule implementing a Most Favored Nation (“MFN”) payment model under which reimbursement for certain Medicare Part B drugs and biologicals will be based on a price that reflects the lowest per capita GDP-adjusted price of any non-U.S.

member country of the OECD with a GDP per capita that is at least sixty percent of the U.S.

GDP per capita.

While this rule now has been rescinded, government negotiation of certain Medicare drug pricing continues to be the focus of recent proposed legislation.

The pricing review period and pricing negotiations for new medicines take considerable time and have uncertain results.

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Risks Related to Our Financial Position and Need for Additional Capital

We have incurred significant losses in prior years and expect to incur losses over the next several years and may never achieve or maintain profitability.

We had a net gain of $321.4 million in the nine months ended September 30, 2021, and a net loss of $125.0 million in the full year 2020 and $124.2 million in the full year 2019.

As of September 30, 2021, we had an accumulated deficit of $463.4 million.

We had a gain in the year ended December 31, 2021, but incurred significant losses in previous prior years and expect to incur losses over the next several years and may never achieve or maintain profitability.

We had a net loss of $46.7 million in the three months ended March 31, 2022, and a net gain of $329.6 million in the full year 2021.

As of March 31, 2022, we had an accumulated deficit of $501.8 million.

In the past, we have financed our operations primarily through the sale of equity securities and convertible debt, venture loans, upfront payments from our collaboration partners and, to a lesser extent, subsidies and grants from governmental agencies and fees for services.

We expect to finance our operations in 2021 and 2022 primarily from the $462.4 million payments we collected from CSL Behring in May 2021.

We expect to finance our operations in 2022 and 2023 primarily from payments we collected and expect to collect in relation to the CSL Behring Agreement.

We have devoted substantially all our financial resources and efforts to research and development, including preclinical studies and clinical trials.

We expect to continue to incur significant expenses and losses over the next several years, and our net losses may fluctuate significantly from quarter to quarter and year to year.

Our profit in the three and nine months ended September 30, 2021, was materially impacted by the amount of license revenue that we recognized as a result of the Closing of the transaction under the CSL Behring Agreement.

We anticipate that our expenses will increase substantially as we:

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Adequate capital may not be available to us when needed or may not be available on acceptable terms.

Our ability to obtain debt financing may be limited by covenants we have made the 2018 Amended Facility and our 2021 Amended Facility with Hercules and our pledge to Hercules of substantially all our assets as collateral.

Our ability to obtain debt financing may be limited by covenants we have made under our 2021 Restated Facility with Hercules and our pledge to Hercules of substantially all our assets as collateral.

If we raise additional capital through the sale of equity or convertible debt securities, our shareholders' ownership interest could be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of holders of our ordinary shares.

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Our existing and any future indebtedness could adversely affect our ability to operate our business.

As of September 30, 2021, we had $70.0 million of outstanding principal of borrowings under the 2018 Amended Facility and 2021 Amended Facility, which following our January 2021 amendment we are required to repay in June 2023.

As of March 31, 2022, we had $100.0 million of outstanding principal of borrowings under the 2021 Restated Facility, which we are required to repay in equal installments between December 2024 and December 2025 or in full in December 2025 if, prior to June 30, 2024, either (a) the BLA for AMT-061 is approved by the FDA or (b) AMT-130 is advanced into a pivotal trial.

We could in the future incur additional debt obligations beyond our borrowings from Hercules.

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Failure to make payments or comply with other covenants under our existing debt could result in an event of default and acceleration of amounts due.

Under the 2018 Amended Facility as well as the 2021 Amended Facility, the occurrence of an event that would reasonably be expected to have a material adverse effect on our business, operations, assets, or condition is an event of default.

Under the 2021 Restated Facility, the occurrence of an event that would reasonably be expected to have a material adverse effect on our business, operations, assets, or condition is an event of default.

If an event of default occurs and the lender accelerates the amounts due, we may not be able to make accelerated payments, and the lender could seek to enforce security interests in the collateral securing such indebtedness, which includes substantially all our assets.

Risks Related to Other Legal Compliance Matters

Our relationships with customers and third-party payers will be subject to applicable anti-kickback, anti-bribery, fraud and abuse and other laws and regulations, which, if we are found in violation thereof, could expose us to criminal sanctions, civil penalties, contractual damages, reputational harm and diminished profits and future earnings.

Healthcare providers, physicians and third-party payers will play a primary role in the recommendation and prescription of any products for which we obtain marketing approval.

Our future arrangements with third party payers and customers may expose us to broadly applicable anti-bribery laws, including the Foreign Corrupt Practices Act, as well as fraud and abuse and other healthcare laws and regulations that may constrain the business or financial arrangements and relationships through which we would be able to market, sell and distribute any products for which we obtain marketing approval.

Our relationships with customers and third-party payers will be subject to applicable anti-kickback, anti-bribery, fraud and abuse and other laws and regulations, which, if we are found in violation thereof, could expose us to criminal sanctions, civil and administrative penalties, contractual damages, reputational harm and diminished profits and future earnings.

Healthcare providers, physicians, other practitioners, and third-party payers will play a primary role in the recommendation and prescription of any products for which we obtain marketing approval.

Our future arrangements with third party payers and customers may expose us to broadly applicable anti-bribery laws, including the Foreign Corrupt Practices Act, as well as fraud and abuse and other US and international healthcare laws and regulations that may constrain the business or financial arrangements and relationships through which we would be able to market, sell and distribute any products for which we obtain marketing approval.

Efforts to ensure that our business arrangements with third parties will comply with applicable laws and regulations could involve substantial costs.

If our operations, or the activities of our collaborators, distributors or other third-party agents are found to be in violation of any of these laws or any other governmental regulations that may apply to us, we may be subject to significant civil, criminal, and administrative penalties, damages, fines, imprisonment, exclusion of products from government funded healthcare programs and the curtailment or restructuring of our operations.

If our operations, or the activities of our collaborators, distributors or other third-party agents are found to be in violation of any of these laws or any other governmental regulations that may apply to us, we may be subject to significant civil, criminal, and administrative penalties, damages, fines, imprisonment, exclusion from participation in government funded healthcare programs and the curtailment or restructuring of our operations.

The costs associated with any of these actions could be substantial and could cause irreparable harm to our reputation or otherwise have a material adverse effect on our business, financial condition, and results of operations.

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In addition, other legislative changes have been adopted since the PPACA was enacted.

These changes include aggregate reductions in Medicare payments to providers of 2% per fiscal year, which went into effect on April 1, 2013, and, following passage of the Bipartisan Budget Act of 2018, will remain in effect through 2027 unless additional Congressional action is taken.

These changes include aggregate reductions in Medicare payments to providers of 2% per fiscal year, which went into effect on April 1, 2013, Congress subsequently has extended the period over which these reductions are in effect.

While President Biden previously signed legislation temporarily to eliminate this reduction through the end of 2021, recent legislation will restart the reductions, which will thereafter remain in effect through 2031 unless additional congressional action is taken.

In January 2013, President Obama signed into law the American Taxpayer Relief Act of 2012, which, among other things, further reduced Medicare payments to several types of providers and increased the statute of limitations period for the government to recover overpayments to providers from three to five years.

These laws may result in additional reductions in Medicare and other healthcare funding, which could have a material adverse effect on our customers and, accordingly, our financial operations.

We anticipate that the PPACA, as well as other healthcare reform measures that may be adopted in the future, may result in more rigorous coverage criteria and additional downward pressure on the reimbursement our customers may receive for our products.

We anticipate that the PPACA, as well as other healthcare reform measures that may be adopted in the future, may result in more rigorous coverage criteria and additional downward pressure on pricing and the reimbursement our customers may receive for our products, and increased manufacturer rebates.

Further, there have been, and there may continue to be, judicial and Congressional challenges to certain aspects of the PPACA.

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The increased number of employees working remotely due to Covid might increase our vulnerability to the above risk.

While we have not experienced a system failure, accident, cyber-attack, or security breach that has resulted in a material interruption in our operations to date, we have experienced and addressed recent system failures, cyber-attacks, and security breaches.

While we have experienced and addressed system failures, cyber-attacks, and security breaches in the past, we have not experienced a system failure, accident, cyber-attack, or security breach that has resulted in a material interruption in our operations to date.

In the future, such events could result in a material disruption of our development programs and our business operations, whether due to a loss of our trade secrets, data, or other proprietary information or other similar disruptions.

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Risks Related to Employee Matters and Managing Growth

Our future success depends on our ability to retain key executives and technical staff and to attract, retain and motivate qualified personnel.

Our future success depends on our ability to retain key executives, technical staff, and other employees and to attract, retain and motivate qualified personnel.

Our future growth and success will depend in large part on our continued ability to attract, retain, manage and motivate our employees.

The loss of the services of any member of our senior management or the inability to hire or retain experienced management personnel could adversely affect our ability to execute our business plan and harm our operating results.

We are highly dependent on hiring, training, retaining and motivating key personnel to lead our research and development, clinical operations, and manufacturing efforts.

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Competition to hire from this limited pool is intense, and we may be unable to hire, train, retain or motivate these key personnel on acceptable terms.

If we are unable to continue to attract and retain high quality personnel, our ability to pursue our growth strategy will be limited.

The competition for qualified personnel in the pharmaceutical field is intense, and there is a limited pool of qualified potential employees to recruit.

Due to this intense competition, we may be unable to continue to attract and retain qualified personnel necessary for the development of our business or to recruit suitable replacement personnel.

If we are unable to continue to attract and retain high quality personnel, our ability to pursue our business may be harmed and our growth strategy may be limited.

Additionally, we are reliant on our employees, contractors, consultants, vendors and other parties with whom we have relationships to behave ethically and within the requirements of the law.

The failure of any employee or other such third parties to act within the bounds of the applicable laws, regulations, agreements, codes and other requirements, or any misconduct or illegal actions or omissions by such persons, could materially damage our business.

Risks Related to Our Ordinary Shares

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Our share price has been and may in the future be volatile.

From the start of trading of our ordinary shares on the Nasdaq Global Select Market on February 4, 2014 through October 21, 2021, the sale price of our ordinary shares ranged from a high of $82.49 to a low of $4.72.

The closing price on October 21, 2021, was $28.24 per ordinary share.

From the start of trading of our ordinary shares on the Nasdaq Global Select Market on February 4, 2014 through April 27, 2022, the sale price of our ordinary shares ranged from a high of $82.49 to a low of $4.72.

The closing price on April 27, 2022, was $15.15 per ordinary share.

The stock market in general and the market for smaller biopharmaceutical companies in particular, have experienced extreme volatility that has often been unrelated to the operating performance of particular companies.

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Our directors, executive officers, and major shareholders, if they choose to act together, will continue to have a significant degree of control with respect to matters submitted to shareholders for approval.

Our directors, executive officers and major shareholders holding more than 5% of our outstanding ordinary shares, in the aggregate, beneficially own approximately 54.8% of our issued shares (including such shares to be issued in relation to exercisable options to purchase ordinary shares) as at September 30, 2021.

Our directors, executive officers and major shareholders holding more than 5% of our outstanding ordinary shares, in the aggregate, beneficially own approximately 50.3% of our issued shares (including such shares to be issued in relation to exercisable options to purchase ordinary shares) as of March 31, 2022.

As a result, if these shareholders were to choose to act together, they may be able, as a practical matter, to control many matters submitted to our shareholders for approval, as well as our management and affairs.

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Based on our average value of our gross assets, our cash and cash equivalents as well as the price of our shares we qualified as a passive foreign investment company (“PFIC”) for U.S.

federal income tax for 2016 but not between 2017 and 2020.

federal income tax for 2016 but not for 2017 through 2021.

A corporation organized outside the United States generally will be classified as a PFIC for U.S.

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The rights and responsibilities of our shareholders and directors are governed by Dutch law and differ in some important respects from the rights and responsibilities of shareholders under U.S.

Although we now report as a U.S.

Although we report as a U.S.

domestic filer for SEC purposes, our corporate affairs are governed by our articles of association and by the laws governing companies incorporated in the Netherlands.

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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 1A. Risk Factors