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Item 7. Management’s Discussion and Analysis

2023-02-27 compared with 2022-02-25 · 308 added, 400 removed, 239 unchanged (75% of the section changed)

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The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is intended to help the reader understand our results of operations and financial condition.

Our consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“U.S.

This MD&A is provided as a supplement to, and should be read in conjunction with, our audited consolidated financial statements and the accompanying notes thereto and other disclosures included in this Annual Report on Form 10-K, including the disclosures under “Risk Factors.” Our consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the U.S.

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

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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 technology platform and manufacturing capabilities provide us distinct competitive advantages, including the potential to reduce development risk, cost, and time to market.

We are advancing a pipeline of innovative gene therapies, including our clinical candidates for the treatment of Huntington’s disease and ALS, as well as preclinical product candidates including candidates for the treatment of rTLE and Fabry disease.

In November 2022 and February 2023, our internally-developed HEMGENIX Ô , a gene therapy for the treatment of hemophilia B, was approved for commercialization by the FDA and the EMA, respectively.

In June 2020, we agreed to license HEMGENIX Ô to CSL Behring, which is now responsible for commercialization of HEMGENIX Ô .

We are manufacturing HEMGENIX Ô for CSL Behring and are entitled to specific milestone payments and royalties on net sales.

We believe our validated technology platform and manufacturing capabilities provide us distinct competitive advantages, including the potential to reduce development risk, cost, and time to market.

We produce our AAV-based gene therapies in our own facilities with a proprietary, commercial-scale, cGMP-compliant, manufacturing process.

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Below is a summary of our recent significant business developments:

CSL Behring collaboration

In June 2020 we entered into the CSL Behring Agreement pursuant to which CSL Behring received exclusive global rights to the Product.

The transaction became fully effective in May 2021.

In March and April 2022, CSL Behring submitted marketing applications for HEMGENIX Ô in the U.S.

In March and April 2022, we received the $55.0 million owed to us by CSL Behring related to submission of these marketing applications.

In November 2022, the FDA approved the marketing application for the U.S.

and in February 2023 the EMA approved the marketing application for the EU.

We are eligible to receive a $100.0 million payment from CSL Behring following the first sale of the Product in the U.S.

We are also eligible to receive a $75.0 million payment from CSL Behring following the first sale of the Product in any of five major European countries, namely France, Germany, Italy, Spain, and the United Kingdom, provided the first sale occurs prior to July 2, 2023.

We recorded the $100.0 million payment associated with the first sale in the U.S.

as license revenue in the year ended December 31, 2022 as we expect this event to occur in 2023.

We did not record license revenue related to a $75.0 million payment in the year ended December 31, 2022 as the accomplishment of this milestone prior to July 2, 2023 is contingent on factors outside of our control.

Concurrently with the execution of the CSL Behring Agreement, we and CSL Behring also entered into a development and commercial supply agreement, pursuant to which, among other things, we will supply the Product to CSL Behring at an agreed-upon price commensurate with the stand-alone selling price (“SSP”) until such time that these capabilities are transferred to CSL Behring or its designated contract manufacturing organization.

We completed the validation of the current manufacturing process and in July 2022, following a comprehensive multi-day facility inspection, the EMA notified us that GMP certification can be issued for our Lexington, Massachusetts-based manufacturing site to produce commercial supply of HEMGENIX Ô .

In August 2022, we completed the FDA pre-license inspection of the Lexington facility.

On September 6, 2022 CSL Behring notified us of its intent to transfer manufacturing technology related to the Product in the coming years to a third-party contract manufacturer designated by CSL Behring.

CSL Behring also informed us of its intent to retain us as a source for manufacturing after the completion of the technology transfer.

In August 2022, the GMP certification for the Amsterdam facility was amended to include release testing of the Product in the European Union following inspection by the IGJ.

W e recorded $1.7 million in revenue related to manufacturing the Product in the year ended December 31, 2022.

Huntington’s disease program (AMT-130)

On March 21, 2022, we announced that we have completed the enrollment of all 26 patients in the first two cohorts of our Phase I/II clinical trial of AMT-130 taking place in the U.S.

The low-dose cohort includes 10 patients, of which six patients received treatment with AMT-130 and four patients received imitation surgery.

The higher-dose cohort includes 16 patients, of which 10 patients received treatment with AMT-130 and six patients received imitation surgery.

In July 2022 we crossed over one of these six patients and treated the patient with the lower dose of AMT-130.

On June 23, 2022, we announced encouraging safety and biomarker data from the 10 patients enrolled in the low-dose U.S.

AMT-130 was generally well-tolerated with no serious adverse events related to AMT-130 reported in the treated patients.

In the four treated patients with evaluable data, mean levels of CSF mHTT declined at all timepoints compared to baseline and decreased by 53.8% at 12 months of follow-up.

In the six treated patients, measurements of CSF NfL initially increased as expected following the AMT-130 surgical procedure and declined thereafter, nearing baseline at 12 months of follow-up.

In August 2022, we announced a voluntary postponement of AMT-130 higher-dose procedures due to SUSARs reported in three of the 14 patients that were treated with the higher dose of AMT-130.

In October 2022, after completing a comprehensive safety investigation, the DSMB recommended resuming treatment at the higher dose of AMT-130 for the remaining five European patients and any patients in the U.S.

trial eligible to cross over from the control arm to the treatment.

All three patients have experienced full resolution of the reported SUSARs.

Acquisition of Corlieve Therapeutics

On June 21, 2021, we entered into a SPA to acquire all of outstanding ordinary shares of Corlieve.

The transaction closed on July 30, 2021.

On the Acquisition Date, we acquired 97.7% of the outstanding ordinary shares of Corlieve in return for EUR 44.9 million ($53.3 million as of the Acquisition Date).

As contractually required in the SPA, we acquired the remaining outstanding ordinary shares on February 9 2022.

We recorded a liability related to these Mandatorily Redeemable Shares for an amount of EUR 0.7 million ($0.9 million) as of the Acquisition Date.

On June 21, 2021, we entered into a Sale and Purchase Agreement (“SPA”) to acquire all outstanding ordinary shares of Corlieve SAS (“Corlieve”), a privately held French gene therapy company (the “Corlieve Transaction”).

Upon the closing of the Corlieve Transaction on July 30, 2021 (the “Acquisition Date”), we acquired 97.7% of the outstanding ordinary shares of Corlieve in return for EUR 44.9 million ($53.3 million as of the Acquisition Date).

We paid EUR 1.8 million ($1.9 million) to acquire the remaining shares of Corlieve in 2022.

We financed the Corlieve Transaction from cash on hand.

In addition to the payments to acquire 100% of the outstanding ordinary shares Corlieve’s former and remaining shareholders are eligible to receive up to EUR 35.8 million (or $40.6 million as of December 31, 2021) upon the achievement of development milestones through Phase I/II and EUR 143.1 million (or $162.3 million as of December 31, 2021) upon the achievement of milestones associated with Phase III development and obtaining approval to commercialize AMT-260 in the United States of America and the European Union.

We may elect to pay up to 25% of such milestone payments through the issuance of our ordinary shares.

We recorded a EUR 20.2 million ($24.0 million) liability related to these contingent consideration payments as of the Acquisition Date.

Total consideration of EUR 65.8 million ($78.1 million), which consisted of the cash paid upon the Acquisition Date, the payment for the Mandatorily Redeemable Shares and the contingent consideration payments, was allocated to identifiable intangible assets related to the IPR&D Intangible Asset.

The IPR&D Intangible Asset’s fair value has been determined at EUR 53.6 million ($63.6 million) as of the Acquisition Date.

We also recognized a EUR 13.4 million ($15.9 million as of the Acquisition Date) deferred tax liability in relation to this IPR&D Intangible Asset.

The total consideration in excess of the net assets acquired was EUR 23.9 million ($28.4 million as of the Acquisition Date) and was allocated to goodwill.

CSL Behring commercialization and license agreement

On June 24, 2020, uniQure biopharma B.V., a wholly owned subsidiary of uniQure N.V., entered into the CSL Behring Agreement with CSL Behring pursuant to which CSL Behring will receive exclusive global rights to etranacogene dezaparvovec, the Product.

The transaction became fully effective on May 6, 2021, one day after the waiting period under the HSR Act expired on May 5, 2021.

CSL Behring is responsible for the development and commercialization of the Product.

We agreed to complete the validation of the current manufacturing process as well as to the development and validation of a next generation manufacturing process.

We will be entitled to receive a development milestone payment if we complete these activities in accordance with an agreed development plan and timeline.

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

Certain clinical development and regulatory activities performed by us are reimbursed by CSL Behring.

On the Signing Date, we and CSL Behring also entered into a development and commercial supply agreement, pursuant to which, among other things, we will supply the Product to CSL Behring at an agreed-upon price commensurate with the SSP.

We will be responsible to supply the Product until such time that these capabilities may be transferred to CSL Behring or its designated contract manufacturing organization.

Following the closing of the CSL Behring Agreement, we recorded $462.4 million, including a $450.0 million upfront cash payment, as license revenue.

Upon closing, we contractually owed to our licensors $15.5 million of the upfront payment received from CSL Behring.

We are eligible to receive more than $0.3 billion in regulatory, development, 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.

As of December 31, 2021, we accrued revenue of $55.0 million related to milestone payments we expect to receive under the CSL Behring Agreement following the submissions of a BLA to the FDA and a MAA to the EMA, which are expected to be submitted during the first half of 2022.

Hemophilia B program – Etranacogene dezaparvovec (AMT-061)

In June 2018, we initiated our Phase III HOPE-B pivotal trial of etranacogene dezaparvovec.

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

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

Following a pre-BLA submission meeting with the FDA on June 4, 2021, the primary endpoint has been determined as a non-inferiority analysis of ABR at 18-months after the administration (approximately 52 weeks after steady-state is achieved).

On December 9, 2021, we announced the achievement of the pre-specified primary endpoint of non-inferiority in annualized bleeding rate (“ABR”) 18-months following administration compared to baseline Factor IX (“FIX”) prophylactic therapy in the HOPE-B Study.

The study also successfully achieved a secondary endpoint demonstrating statistical superiority in reduction of ABR compared to baseline FIX prophylactic therapy.

ABR for all bleeds after stable FIX expression, assessed at 18 months, was 1.51 compared with the ABR of 4.19 for the lead-in period of at least six months, achieving the primary non-inferiority endpoint and a secondary superiority endpoint (p=0.0002) in the HOPE-B Study.

ABR for investigator-adjudicated FIX-treated bleeds was 0.83 compared with lead-in ABR of 3.65 (p<0.0001).

All participants continued to demonstrate durable, sustained increases in FIX activity at 18-months post-infusion with a mean FIX activity of 36.9 percent of normal, as measured by a one-stage activated partial thromboplastin time-based (“aPTT-based”) clotting assay, compared to a mean FIX activity of 39.0 percent of normal at 26-weeks of follow-up.

Etranacogene dezaparvovec was generally well-tolerated with over 80% of adverse events considered mild.

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 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.

We are currently conducting a Phase I/II clinical trial for AMT-130 in the U.S.

and a Phase Ib/II study in the EU.

Together, these studies are 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.

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

On April 5, 2021, we announced the completion of enrollment of the low-dose cohort of the U.S.

Phase I/II study of AMT-130.

The low-dose cohort includes 10 patients, of which six patients received treatment with AMT-130 and four patients received Sham surgery.

Phase I/II clinical trial is a randomized, controlled, double-blinded, dose-escalation study of AMT-130.

On June 13, 2021, we announced the enrollment of the first two patients in the high-dose cohort of a U.S.

Phase I/II study.

The high- dose cohort is planned to include 16 patients, of which 10 patients will receive treatment with AMT-130 and six patients will receive Sham surgery.

The initiation of patient enrollment in the high-dose cohort followed a meeting of the trial’s independent DSMB that reviewed safety data for the fully enrolled first cohort of 10 patients.

On December 16, 2021, we announced initial 12-month observations on the first four patients enrolled in the low-dose cohort of the U.S.

Phase I/II study.

Two of the four enrolled patients received AMT-130, and two patients received Sham surgery as a control.

AMT-130 was generally well tolerated in the treated patients, with no serious adverse events related to AMT-130.

NfL, a biomarker of injury in the brain, increased as expected immediately following the surgical procedure and returned to baseline in the treated patients.

NfL remained relatively constant in the two untreated control patients.

Structural magnetic resonance imaging did not reveal any clinically meaningful safety findings in either treated or control patients at one year of follow-up.

Measurements of total and mutant HTT protein in the cerebral spinal fluid of the four patients were highly variable and inconclusive.

As of December 31, 2021, 19 patients have been enrolled in the clinical trial to date, including nine of 16 in the high-dose cohort.

Also on December 16, 2021, we announced the initiation of patient screening in our 15 patient, open-label, Phase Ib/II study of AMT-130 in the EU, as well our plans to initiate a third cohort in the ongoing U.S.

Phase I/II clinical trial.

The third cohort, which will include up to 18 additional randomized patients receiving the higher dose, will explore the use of alternative stereotactic navigation systems to simplify placement of catheters for infusions of AMT-130.

BMS collaboration

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

BMS had initially designated four Collaboration Targets in 2015 and in accordance with the terms of the BMS CLA could have designated a fifth to tenth Collaboration Target.

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

In April 2019, following an assessment of the progress of this collaboration and our expanding proprietary programs, we notified BMS that we did not intend to agree to an extension of the initial research term.

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

On December 1, 2020, we and BMS amended the BMS CLA (“amended BMS CLA”).

For a period of one-year from the effective date of the amended BMS CLA, BMS was able to replace up to two of the four active Collaboration Targets with two new targets in the field of cardiovascular disease.

We are entitled to receive up to $217.0 million for each of the four Collaboration Targets if defined milestones are achieved, as well as royalties on net sales associated with any Collaboration Target.

On December 17, 2020, BMS designated one of the four Collaboration Targets as a candidate to advance into IND-enabling studies entitling us to receive a $4.4 million research milestone payment.

We recorded the $4.4 million as License Revenue in the twelve-month period ended December 31, 2020.

In addition to the payments to acquire 100% of the outstanding ordinary shares, Corlieve’s former and remaining shareholders are eligible to receive up to EUR 40.0 million (or $42.8 million as of December 31, 2022) upon the achievement of development milestones through Phase I/II and EUR 160.0 million (or $171.3 million as of December 31, 2022) upon the achievement of milestones associated with Phase III development and obtaining approval to commercialize AMT-260 in the U.S.

W e expect these obligations will become payable between 2023 and 2031.

If and when due, w e may elect to pay up to 25% of such milestone payments through the issuance of our ordinary shares.

Termination of Bristol-Myers Squibb Agreement

In May 2015 we and BMS entered the BMS CLA.

The initial four-year research term under the collaboration terminated in May 2019.

On December 1, 2020, we and BMS amended the BMS CLA.

As a result of the Amended BMS CLA, we recognized the remaining balance of license revenue of $27.8 million not previously recognized during the year ended December 31, 2020.

The Amended BMS CLA did not extend the initial research term.

BMS may place purchase orders to provide limited services primarily related to analytical and development efforts in respect of the four Collaboration Targets.

BMS may request such services for a period not to exceed the earlier of (i) the completion of all activities under a Research Plan and (ii) either (A) three years after the last replacement target has been designated by BMS during the one-year replacement period following the amended BMS CLA effective date or (B) three years if no replacement targets are designated during this one-year period and BMS continues to reimburse us for these services.

For as long as any of the four Collaboration Targets are being advanced, BMS may place a purchase order to be supplied with research, clinical and commercial supplies.

Subject to the terms of the amended BMS CLA, BMS has the right to terminate the research, clinical and commercial supply relationships, and has certain remedies for failures of supply, up to and including technology transfer for any such failure that otherwise cannot be reasonably resolved.

Both we and BMS may agree to a technology transfer of manufacturing capabilities pursuant to the terms of the amended BMS CLA.

We have agreed to certain restrictions on our 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 a Collaboration Target.

We have agreed to indication exclusivity for the current four Collaboration Targets.

BMS may add or change the exclusive indications in the process of replacing Collaboration Targets as described above.

We can opt out of the indication exclusivity by giving up certain economic rights under the amended BMS CLA for each such indication that is affected by us opting out.

If we opt out of an exclusive indication, we could pursue other targets for such indication other than a Collaboration Target.

The amended BMS CLA also terminated two warrants to increase BMS ownership in the Company up to 19.9% through purchasing a specific number of our ordinary shares following the designation of a seventh, and a tenth Collaboration Target, respectively.

We and BMS agreed that upon the consummation of a change of control transaction of uniQure that occurs prior to the earlier of (i) December 1, 2026 and (ii) BMS’ delivery of a target cessation notice for all four Collaboration Targets, uniQure (or its third party acquirer) shall pay to BMS a one-time, non-refundable, non-creditable cash payment of $70.0 million, provided that (x) if $70.0 million is greater than five percent of the net proceeds (as contractually defined) from such change of control transaction, the payment shall be an amount equal to five percent of such net proceeds, and (y) if $70.0 million is less than one percent of such net proceeds, the change of control payment shall be an amount equal to one percent of such net proceeds.

We have not consummated any change of control transaction as of December 31, 2021 that would obligate us to make a payment to BMS.

The amended BMS CLA did not change any of the provisions of the Investor Agreement with BMS that we entered into in 2015.

We have granted BMS certain registration rights that allow BMS to require us to register our securities beneficially held by BMS under the U.S.

Securities Exchange Act of 1934, as amended (“Exchange Act”).

BMS may make up to two such demands for us to register the shares, provided that we may deny such demand if (i) the market value of the shares to be registered is less than $10.0 million (provided however, if BMS holds less than $10.0 million worth of our shares, we must comply with their demand for registration), (ii) we certify to BMS that we plan to effect a registration within 120 days of their demand or we are engaged in a transaction that would be required to be disclosed in a registration statement and that is not reasonably practicable to be disclosed at that time, or (iii) we have already effected one registration statement within the twelve months preceding BMS’s demand for registration.

For a period of one-year from the effective date of the Amended BMS CLA, BMS was able to replace up to two of the four active collaboration targets with two new targets in the field of cardiovascular disease.

BMS did not replace any of the active collaboration targets.

On December 17, 2020, BMS designated one of the four collaboration targets as a candidate to advance into Investigational New Drug-enabling studies (“IND-enabling studies”) entitling us to receive a $4.4 million research milestone payment.

We recorded the $4.4 million as license revenue in the year ended December 31, 2020.

On November 21, 2022 we received the Termination Notice whereby the Amended BMS CLA terminated on February 21, 2023.

The Amended BMS CLA terminated two warrants that, when in effect, provided BMS the right to increase its ownership in the Company up to 19.9% upon the exercise of both warrants, with the exercise of such warrants being conditioned on the designation of a seventh, and a tenth Collaboration Target, respectively.

In the Amended BMS CLA, we and BMS agreed that upon the consummation of a change of control transaction of uniQure that occurs prior to the earlier of (i) December 1, 2026 and (ii) BMS’ delivery of a target cessation notice for all four Collaboration Targets, we (or our third party acquirer) would pay to BMS a one-time, non-refundable, non-creditable cash payment of $70.0 million, provided that (x) if $70.0 million is greater than five percent of the net proceeds (as contractually defined) from such change of control transaction, the payment would be an amount equal to five percent of such net proceeds, and (y) if $70.0 million is less than one percent of such net proceeds, the change of control payment would be an amount equal to one percent of such net proceeds.

We had not consummated any change of control transaction as of the Termination Notice and as of December 31, 2022, assessed the probability as of the Termination Date and released the liability related to the change of control payment to other income during the year ended December 31, 2022.

The Termination Notice did not change any of the provisions of the Investor Agreement with BMS that we entered into in 2015, but various provisions of the Investor Agreement have been terminated.

We have granted BMS certain registration rights that allow BMS to require us to register our securities beneficially held by BMS under the Securities Act.

BMS may make up to two such demands for us to register the shares, subject to customary limitations.

In addition, independent of their demand registration rights, upon the occurrence of certain events, we must also provide BMS the opportunity to include their ordinary shares in any registration statement that we effect.

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securities laws.

BMS also continues to be subject to a lock up pursuant to the Investor Agreement for as long as BMS holds more than 4.9% of our ordinary shares (as of December 31, 2021 BMS holds 5.2%).

BMS also continues to be subject to a lock up pursuant to the Investor Agreement for as long as BMS holds more than 4.9% of our ordinary shares (as of December 31, 2022 BMS held 5.08%).

Without our prior consent, BMS may not sell or dispose any of its current ordinary shares.

The Investor Agreement also continues to require BMS to vote all of our ordinary shares it beneficially holds in favor of all items on the agenda for the relevant general meeting of shareholders of our company as proposed on behalf of our company, unless, in the context of a change of control or similar transaction, BMS has itself made an offer to our company or our board in connection with the transaction that is the subject of the vote, in which case it is free to vote its shares at its discretion.

This voting provision will terminate upon the later of the date on which BMS no longer beneficially owns at least 4.9% of our outstanding ordinary shares, the closing of a transaction that provides BMS exclusive and absolute discretion to vote our shares it beneficially holds, or the termination of the amended BMS CLA for breach by us.

We have recognized license revenues associated with the amortization of the non-refundable upfront payment and target designation fees we received from BMS in accordance with the BMS CLA.

We evaluated our outstanding performance obligation following the amendment of the BMS CLA on December 1, 2020 and determined that our remaining performance obligation related to license revenues is immaterial.

We updated our measure of progress accordingly and amortized the remaining balance of unrecognized revenue as of November 30, 2020.

We recorded no such license revenue for the year ended December 31, 2021.

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.

We recognize collaboration revenues associated with Collaboration Target-specific pre-clinical analytical development and process development activities that are reimbursable by BMS under the BMS CLA and the amended BMS CLA as well as other related agreements.

Collaboration revenue related to these contracted services is recognized when performance obligations are satisfied.

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 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.

Advances under Tranche B bore 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 of $70.0 million and all accrued but unpaid interest on advances under Tranche B was due on June 1, 2023.

The back-end fee in respect of advances under the 2021 Amended Facility ranged from 1.65% to 6.85%, depending on the repayment date.

In addition to Tranche B, the 2021 Amended Facility also extended the interest only payment period of the previously funded $35.0 million term loan (“Tranche A”) from January 1, 2022 to June l, 2023.

On December 15, 2021, we and Hercules amended and restated the 2021 Amended Facility (“2021 Restated Facility”).

Pursuant to the 2021 Restated Facility, Tranche A and Tranche B of the 2021 Amended Facility with a total outstanding balance of $70.0 million were consolidated into one tranche with a total commitment of $100.0 million.

We drew down an additional $30.0 million, resulting in total principal outstanding as of December 31, 2021 of $100.0 million.

The 2021 Restated Facility extended the loan’s maturity date from June 1, 2023 until December 1, 2025.

The interest-only period is extended from January 1, 2023 to December 1, 2024, or December 1, 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.

The interest rate is adjustable and is the greater of (i) 7.95% and (ii) 7.95% plus the prime rate less 3.25% per annum.

Under the 2021 Restated Facility, we owe a back-end fee of 4.85% of the outstanding debt.

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.

We continue to owe a $2.5 million back-end fee related to the 2021 Amended Facility which is due on June 1, 2023.

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 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 and April of 2021, we issued 921,730 ordinary shares at a weighted average price of $33.52 per ordinary share, with net proceeds of $29.6 million, after deducting underwriting discounts and net of offering expenses.

This voting provision will terminate upon the later of the date on which BMS no longer beneficially owns at least 4.9% of our outstanding ordinary shares or the closing of a transaction that provides BMS exclusive and absolute discretion to vote our shares it beneficially holds.

Investment in debt securities

In December 2022, we invested $100.0 million and EUR 80.0 million (or total of $183.9 million as of investment date) of our cash on hand into short-term and long-term euro and dollar denominated sovereign bonds.

The bonds have remaining maturities ranging from two to 14 months.

We classify these bonds as held-to-maturity.

We made no such investments in 2021 and 2020.

Covid pandemic

The coronavirus disease (“Covid”) 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.

Since then, various, potentially more infectious, variants of the Sars-CoV 2 virus causing Covid have been identified.

Throughout the pandemic, we have been implementing measures to address the impact of Covid on our business.

We have 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.

Accordingly, we had mandated a work-from-home policy since March 2020 for all non-essential employees at our Amsterdam and Lexington facilities and had implemented additional protocols for our essential employees.

Effective May 29, 2021, Massachusetts lifted all industry restrictions, with the exceptions of remaining face-covering requirements for all public and private transportation systems and facilities housing vulnerable populations, and capacity has been increased to 100% for all industries.

Furthermore, the state of emergency was lifted on June 15, 2021.

Implementation of adequate cleaning and hygiene protocols are still encouraged.

We have implemented a mandatory Covid PCR testing protocol in our Lexington facility effective February 2021 that requires employees to have tested negative for Covid prior to entering the facility.

Effective April 2021, we implemented a policy whereby no employee or contractor may enter the Lexington facility unless they are either:

(i) fully vaccinated;

or (ii) have taken an approved test for Covid and obtained a negative result.

All employees that are not essential employees, however, will continue to work remotely until at least June 30, 2022 to reduce the spread of Covid within the facility.

As a result, we have been operating our Lexington facility with attendance significantly below 100% capacity.

From November 1, 2021, employees were expected to be required to work on-site at our Amsterdam office at least one day a week under our new remote working policy.

However, the Company adjusted the policy for Dutch government updates.

Between November 12, 2021 and the filing date of this Form 10-K the Dutch government continuously updated the Covid-related measures to mitigate the impact of the latest Covid variant.

We continue to comply with these measures, which amongst others is recommended to work from the office no more than half the time for nonessential employees.

The broader implications of Covid, including the implications from the various variants, on our results of operations and overall financial performance remain uncertain.

We have experienced increased lead times in the delivery of equipment and disposables that we use to manufacture materials for our various programs.

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

Since then, various variants of the Sars-CoV 2 virus causing Covid have been identified.

The broader implications of Covid, including the implications from the various variants, on our results of

operations and overall financial performance remain uncertain.

We have experienced and continue to experience increased lead times in the delivery of equipment and disposables that we use to manufacture materials for our various programs.

Currently, these have not materially impacted our development timelines and we continue to adapt to the current environment to minimize the effect to our business.

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

Related party transaction

On December 1, 2020, we and BMS entered into the amended BMS CLA.

All transactions subsequent to the effective date of the amended BMS CLA are considered to no longer be with a related party.

Russian-Ukrainian war

Our business is not directly impacted by the war as we do not operate in either Russia or the Ukraine.

However, the war might potentially amplify the disruptive impact of the Covid pandemic.

Financial Highlights

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Total revenues

Cost of contract revenue

Cost of revenues

Research and development expenses

Selling, general and administrative expenses

Net income / (loss)

As of December 31, 2021, we had cash and cash equivalents of $556.3 million (December 31, 2020:

$244.9 million).

We had a net income of $329.6 million in 2021, and a net loss of $125.0 million in 2020 and a net loss of $124.2 million in 2019.

Net (loss) / income

As of December 31, 2022, we had $392.8 million in cash and cash equivalents and investment securities (December 31, 2021:

$556.3 million cash and cash equivalents).

We had a net loss of $126.8 million in 2022, and net income of $329.6 million in 2021 and a net loss of $125.0 million in 2020.

As of December 31, 2022, we had an accumulated deficit of $581.9 million (December 31, 2021:

$455.1 million).

We recorded net income in the year ended December 31, 2021 as a result of closing the CSL Behring transaction 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;

● advance multiple research programs related to gene therapy candidates targeting liver-directed and CNS diseases;

● 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;

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

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

● make potential future milestone payments related to the acquisition of Corlieve, if any.

We anticipate that our expenses will increase for the foreseeable future and will include costs related to:

● advancing AMT-130 for our Huntington’s disease gene therapy program into phase III clinical study;

● advancing our gene therapy programs rTLE, SOD1-ALS and Fabry disease into Phase I/II clinical studies;

● potentially acquiring or in-licensing rights to new therapeutic targets, product candidates and technologies;

● making potential future milestone payments related to the acquisition of Corlieve, if any;

● advancing preclinical research and development for gene therapy product candidates targeting other diseases;

● continuing to invest in expanding, developing and optimizing our manufacturing capabilities and other enabling technologies, such as next-generation viral vectors, promoters and re-dosing.

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

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In preparing our consolidated financial statements in accordance with U.S.

GAAP and pursuant to the rules and regulations promulgated by the SEC we make assumptions, judgments and estimates that can have a significant impact on our net income/loss and affect the reported amounts of certain assets, liabilities, revenue and expenses, and related disclosures.

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 loss/income and affect the reported amounts of certain assets, liabilities, revenue and expenses, and related disclosures.

On an ongoing basis, we evaluate our assumptions, estimates and judgments, including those related to what we believe to be our critical accounting policies.

Refer to Note 2 “Summary of significant accounting policies” for a summary of our significant accounting policies.

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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We also discuss our critical accounting estimates with the Audit Committee of our Board of Directors.

We consider the following to be our critical accounting policies and estimates:

● ASC 805 Business Combinations in relation to the IPR&D Intangible Asset and Contingent Consideration recorded in relation to the Corlieve business combination;

● ASC 606 R evenue from Contracts with Customers as it relates to the recognition of revenue including the CSL Behring milestones in relation to the CSL Behring Agreements;

● ASC 740 Income Taxes as it relates to the Dutch valuation allowance and the U.S.

valuation allowance;

● ASC 606 Revenue from Contracts with Customers as it relates to recognition of License Revenue in relation to amended BMS CLA.

Business combination

The preparation of our consolidated financial statements for the year ended December 31, 2021, required us to analyze the accounting treatment for the Corlieve Transaction.

In connection with this analysis, we first applied a screen test to determine if substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets.

We analyzed whether the acquired inputs and processes that have the ability to create outputs would meet the definition of a business and determined that the screen test was not met.

In the event the screen test had been met, we would have been required to account for the Corlieve Transaction as an asset acquisition.

In this case, among others, we would not have recorded any goodwill and expensed all identifiable intangible assets without alternative future use in accordance with ASC 805, Business Combinations .

We identified various licenses that combined with the results of the research and development activities conducted in relation to AMT-260 since formation of Corlieve in 2019 constitute an IPR&D Intangible Asset.

The IPR&D Intangible Asset was measured at its fair value as of the Acquisition Date.

The fair value of EUR 53.6 million ($63.6 million) of the IPR&D Intangible Asset accounted for 83.4% of the identifiable assets included within the screen test as of the Acquisition Date.

We calculated the fair value of the IPR&D Intangible Asset using a present value model based on expected cash flows.

Estimating the amounts and timing of cash flows required to complete the development of AMT-260 as well as net sales, cost of goods sold, and sales and marketing costs involved considerable judgment and uncertainty.

The expected cash flows are materially impacted by the probability of successfully completing the various stages of development (i.e., dosing of first patient in clinical trial, advancing into late-stage clinical development and obtaining approval to commercialize the product candidate) as well as the weighted average cost of capital of 10.4% used to discount the expected cash flows.

We developed the estimated probabilities of successfully completing the various stages of development using data from external studies regarding average likelihoods of completing these stages of development.

We increased the probability for the TLE-program to advance into clinical development derived from such external studies from 33% to 40%.

Following the completion of certain studies management in late October 2021 designated a lead candidate for the program and based on data from external studies subsequently increased the likelihood to advance into clinical development to 55%.

Application of this probability as of the Acquisition Date would have changed the outcome of the screen test and we would have been required to treat the Corlieve Transaction as an asset acquisition.

If all other assumptions and estimates remained unchanged this would have required us to expense any identifiable intangible assets without alternative future use.

However, the outcome of the screen test would not have been altered for as long as the probability of advancing into clinical development remained below 43%.

We derived the weighted average cost of capital of 10.4% from external market data for a selected peer group of companies.

We included a 0.2% country risk premium related to the European markets in our weighted average cost of capital.

Not including this risk premium would not have changed the outcome of the screen test.

Changing the outcome of the screen test would have required a reduction of the weighted average cost of capital by 0.5%.

This would have required us to expense all identifiable intangible assets without an alternative future use.

The determination of the fair values of assets acquired and liabilities assumed has been completed as of December 31, 2021.

The IPR&D Intangible Asset is accounted for as indefinite-lived intangible asset and is measured at the fair value of the incomplete research project acquired as of the Acquisition Date.

The IPR&D Intangible Asset is considered to be indefinite-lived until the completion or abandonment of the associated research and development efforts and is not amortized.

If and when development is complete, which generally occurs when regulatory approval to market a product is obtained, the associated assets would be deemed finite-lived and would then be amortized based on an estimate of its remaining useful life.

In case of abandonment, the IPR&D Intangible Asset would be written-off.

As of the Acquisition Date we recorded contingent consideration related to amounts potentially payable to Corlieve’s former shareholders.

The amounts payable in accordance with the SPA are contingent upon realization of certain milestones associated with the TLE research program.

Contingent consideration was measured at fair value at the Acquisition Date with changes in fair value recognized in the consolidated statements of operations in research and development expenses.

Changes in contingent consideration can result from changes in the assumed achievement and timing of estimated milestones and the discount rate used to estimate the fair value of the liability:

● We believe that as of December 31, 2021 it is not reasonably possible that changes in market interest rate or our credit profile would change the discount rate in a manner that would result in a material change of the fair value of the contingent liability.

Any increase in the discount rate would reduce the fair value of the contingent consideration liability whereas any decrease in the discount rate would increase the fair market value of the contingent consideration liability.

● Similarly, we do not believe that as of December 31, 2021 it is reasonably possible that a change in development timelines and accordingly the timing of milestone payments would result in a material change of the fair value of the contingent liability.

An achievement of a milestone at a later than currently expected date would reduce the fair value of the contingent consideration liability whereas an achievement at an earlier than currently expected date would increase the fair value of the contingent consideration liability.

● We initially recorded the contingent consideration liability on the Acquisition Date assuming a 40% probability of advancing the TLE research program into clinical development.

We developed this estimate using data from an external study regarding the average likelihood of advancing into clinical development at a certain stage or preclinical development.

Following the designation of a lead candidate by us in late October 2021 we subsequently increased the probability to 55% and consequently recorded a $5.8 million loss within research and development expenses in the year ended December 31, 2021, to increase the fair value of the contingent consideration liability accordingly.

The fair value of the contingent consideration liability as of December 31, 2021 amounts to $29.5 million.

If as of December 31, 2021 we had assumed TLE was certain (i.e.

100% probability) to advance into clinical development, then the fair value of the contingent consideration liability would have increased to $47.0 million.

If as of December 31, 2021 we had assumed that we would discontinue development of the TLE program, then we could have released the contingent consideration liability to income.

We consider the following to be our critical accounting estimates:

● Recognition of revenue including the CSL Behring milestones in relation to the CSL Behring Agreement;

● Contingent consideration recorded in relation to the Corlieve business combination;

● Valuation allowance related to Dutch and U.S.

deferred tax assets.

Revenue recognition related to CSL Behring milestones

On June 24, 2020 (the “Signing Date”) we entered into the CSL Behring Agreement.

The transaction became effective on May 6, 2021 (“Closing”).

On the Signing Date we entered into the CSL Behring Agreement.

The transaction became effective on Closing.

As of Closing, we identified two material performance obligations related to the CSL Behring Agreement:

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(ii) Generate information to support the regulatory approval of the current and next generation manufacturing process of Product and to provide any such information generated to CSL Behring (“Manufacturing Development”).

We determined that the fixed upfront payment of $450.0 million and the $12.4 million that we received in relation to the Additional Covenants should be allocated to the License Sale.

In addition, we concluded that variable milestone payments, sales milestone payments and royalties should be allocated to the License Sale performance obligation as well.

We determined that the fixed upfront payment of $450.0 million and the $12.4 million that we received in relation to the certain reimbursable activities to fulfill the transfer of global rights (“Additional Covenants”) in the year ended December 31, 2021 should be allocated to the License Sale.

In addition, we concluded that $255.0 million of variable milestone payments, sales milestone payments and royalties should be allocated to the License Sale performance obligation as well.

We determined that the License Sale was completed on May 6, 2021, when we transferred the license and CSL Behring assumed full responsibility for the development and commercialization of the Product.

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We will include payments related to sales milestones in the transaction price when their achievement becomes probable, and we will include royalties on the sale of Product once these have been earned.

We determined that achievement of a total of $55.0 million of milestone payments related to the submissions of a BLA and MAA is probable as of the time of filing this Annual Report on Form 10-K and hence recorded these as license revenue in the year ended December 31, 2021.

In making this determination we considered that after Closing we believe to successfully have completed the validation of our manufacturing process for the Product in December 2021 and that CLS Behring announced the accomplishment of the primary clinical endpoint for the Product in December 2021.

We continue to believe that the achievement of first-sales milestones of $175.0 million are not probable as of the date of the filing of this Annual Report on Form 10-K as these milestones require regulatory approvals, as well as a sale of Product by CSL Behring.

Additionally, the first sale milestone in a major European country needs to be achieved prior to a contractually agreed date.

In March and April 2022, we collected the $55.0 million of variable milestone payments related to the submissions of a BLA and MAA which we had recorded as license revenue in the year ended December 31, 2021.

During the year ended December 31, 2022, we recorded $100.0 million of variable milestone revenue related to a first sale of HEMGENIX™ in the U.S.

as we consider this to be probable following the November 2022 FDA approval of HEMGENIX™.

Despite the approval of the MAA for HEMGENIX™ by the EMA in February 2023, we did not record the $75.0 million variable milestone payment related to a first sale of HEMGENIX™ in the one of five major European countries, namely France, Germany, Italy, Spain, and the United Kingdom, as license revenue in the year ended December 31, 2022 as the payment is contingent on the milestone being achieved prior to July 2, 2023, which is contingent on factors outside our control.

Contingent consideration

On the Acquisition Date of Corlieve we recorded contingent consideration related to amounts potentially payable to Corlieve’s former shareholders.

The amounts payable in accordance with the SPA are contingent upon realization of certain milestones associated with the TLE research program.

Contingent consideration was measured at fair value at the Acquisition Date with changes in fair value recognized in the consolidated statements of operations in research and development expenses.

Changes in contingent consideration can result from changes in the assumed achievement and timing of estimated milestones and the discount rate used to estimate the fair value of the liability:

● We had used discount rates ranging from 10.9% to 11.9% to calculate the contingent consideration as of December 31, 2021.

As of December 31, 2022 we increased the interest rates to a range of 14.0% to 14.4% to reflect increases in market interest rates.

An increase in the discount rate reduces the fair value of the contingent consideration liability whereas a decrease in the discount rate increases the fair market value of the contingent consideration liability.

● As of December 31, 2021, we had estimated that AMT-260 would advance into the clinical development by early 2024, and as of December 31, 2022, we revised that estimate to late 2023.

An achievement of a milestone at a later than currently expected date reduces the fair value of the contingent consideration liability whereas an achievement at an earlier than currently expected date increases the fair value of the contingent consideration liability.

● We initially recorded the contingent consideration liability on the Acquisition Date assuming a 40% probability of advancing the TLE research program into clinical development.

We developed this estimate using data from an external study regarding the average likelihood of advancing into clinical development at a certain stage or preclinical development.

For the year ended December 31, 2021, we had increased the probability to 55.0% following the designation of a lead candidate by us in late October 2021.

During the year ended December 31, 2022 we increased the probability to 66.0% following the commencement of toxicology studies for the TLE program.

The increase in probabilities resulted in a $4.4 million expense in the year ended December 31, 2022 and a $5.8 million expense in the year ended December 31, 2021.

The fair value of the contingent consideration liability as of December 31, 2022 was $35.3 million and as of December 31, 2021 was $29.5 million.

The increase was primarily driven by an increase in the probability of the TLE program advancing into clinical development.

If as of December 31, 2022 we had assumed TLE was certain (i.e.

100% probability) to advance into clinical development, then the fair value of the contingent consideration liability would have increased from $35.3 million to $48.8 million.

If as of December 31, 2022 we had assumed that we would discontinue development of the TLE program, then we could have released the contingent consideration liability to income.

Valuation allowance related to Dutch and U.S.

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We have been incurring net operating losses in accordance with the corporate tax laws in almost all years since we founded our business.

As of December 31, 2020, the total amount of net operating losses carried forward under the Dutch tax regime was $588.2 million.

As of December 31, 2020 we reassessed the need for a full valuation allowance in conjunction with entering into the CSL Behring Agreement.

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

Regulatory approval in the United States had not occurred at the time of filing our Annual Report on Form 10-K for the year ended December 31, 2020.

At that time we weighed all available positive and negative evidence, including future income projections from the CSL Behring Agreement, and concluded that it was not more likely than not that the deferred tax assets will not be realized.

Accordingly, we continued to record a full valuation allowance as of December 31, 2020 in the Netherlands.

As of December 31, 2020, our valuation allowance amounted to $150.1 million (2019:

As of December 31, 2022, the total amount of net operating losses carried forward under the Dutch tax regime was $264.0 million (December 31, 2021:

$228.5 million).

If we had determined that it had been more likely than not that the deferred tax asset would be realized, then we could have recorded up to $61.9 million of deferred tax income in the year ended December 31, 2020 from releasing our valuation allowance and would have recorded deferred tax income for the same amount in the year ended December 31, 2021 from utilizing the deferred tax asset on closing of the CSL Behring transaction in May 2021.

We are also subject to corporate taxes in the United States.

While our operations in the United States had initially been incurring net operating tax losses, our subsidiary in the United States generated taxable income in the fiscal years 2018, 2019 and 2020.

Based on the design of our worldwide operations, we determined as of December 31, 2020 that we expect to continue to generate taxable income in the United States.

during the foreseeable future and therefore determined that it had become more likely than not that our United States deferred tax assets will be realized.

Accordingly, we recorded $16.4 million of deferred tax income in the year ended December 31, 2020 from releasing the full valuation allowance against our net deferred tax assets in the United States.

We generated taxable income in the United States during the year ended December 31, 2021 and therefore continue to expect that it is more likely than not that our United States deferred tax assets will be realized.

We have historically recorded a full valuation allowance.

We evaluate all positive and negative evidence including future income from the CSL Behring Agreement in assessing the need for such a full valuation allowance.

We concluded that as of December 31, 2022 it is more likely than not that the remaining deferred tax assets will not be realized.

If we would have released the full valuation allowance as of December 31, 2022, then we would have recorded up to $74.5 million of deferred tax income during the year ended December 31, 2022.

We are also subject to corporate taxes in the U.S..

While our operations in the U.S.

had initially been incurring net operating tax losses, our subsidiary in the U.S.

generated taxable income in the past few years starting with 2018.

Based on the design of our worldwide operations, we determined as of December 31, 2020 that we expect to continue to generate taxable income in the U.S.

during the foreseeable future and therefore determined that it had become more likely than not that our U.S.

deferred tax assets will be realized.

Accordingly, we recorded $16.4 million of deferred tax income in the year ended December 31, 2020 from releasing the full valuation allowance against our net deferred tax assets in the U.S..

We generated taxable income in the U.S.

during the years ended December 31, 2021 and December 31, 2022 and therefore continue to expect that it is more likely than not that our U.S.

deferred tax assets will be realized.

We would be required to record deferred tax expense to recognize a valuation allowance on a portion of or possibly even our full U.S.

deferred tax asset of $21.1 million as of December 31, 2022, if we would expect not to meet the above threshold.

Revenue recognition in accordance with the amended BMS CLA

In May 2015, we entered into a collaboration and license agreement and various related agreements with BMS, which we collectively refer to as the BMS CLA, which provided BMS with exclusive access to our gene therapy technology platform for the research, development and commercialization of therapeutics aimed at up to ten targets in cardiovascular and other diseases.

On December 1, 2020, we and BMS amended the BMS CLA.

For a period of one-year from the effective date of the amended BMS CLA, BMS was able to replace up to two of the four then active Collaboration Targets with two new targets in the field of cardiovascular disease.

However, BMS was no longer entitled to add up to six additional Collaboration Targets.

During the year ended December 31, 2020 we evaluated the impact the amendment of the BMS CLA had in relation to our performance obligation related to:

- providing access to our technology and know-how in the field of gene therapy as well as actively contributing to the target selection, the collaboration as a whole, the development during the target selection, the pre-clinical and clinical phase through participating in joint steering committee and other governing bodies (“License Revenue”)

We did not identify any new distinct performance obligations and determined the amended BMS CLA did not represent a separate contract in accordance with ASC 606.

We evaluated the effect the modification had on our measure of progress towards the completion of our performance obligation in relation to License Revenue and recognized the remaining unrecognized License Revenue as of November 30, 2020.

The amount of services we expected to provide was significantly impacted by the number of Collaboration Targets that we estimated BMS would pursue.

Based on this we concluded that our remaining performance obligation was immaterial as of December 1, 2020 and adjusted our measure of progress accordingly.

As such we recognized the remaining balance of unrecognized License Revenue as of November 30, 2020 of $27.8 million in profit and loss during the year ended December 31, 2020 as License Revenue from a related party.

Recent Accounting Pronouncement Not Yet Effective

Recently Adopted Accounting Pronouncements

Government Assistance

In November 2018, the FASB issued ASU 2021-10, Government Assistance (Topic 832) which discusses the requirements for disclosures related to transactions with a government.

In November 2018, the Financial Accounting Standards Board (“FASB”) issued ASU 2021-10, Government Assistance (Topic 832) which discussed the requirements for disclosures, to be applied prospectively or retrospectively, related to transactions with a government.

ASU 2021-10 is effective for fiscal years beginning after December 15, 2021.

The new disclosure requirements will require disclosures around 1) information about the nature of the transactions and the related accounting policy used to account for the transactions, 2) the line items on the balance sheet and income statement that are affected by the transactions, and the amounts applicable to each financial statement line item, and 3) significant terms and conditions of the transactions, including commitments and contingencies.

An entity should apply the updates prospectively or retrospectively.

We currently include information on government grants and do not expect this amendment to have a material impact on our consolidated financial statements.

The new disclosure requirements required disclosures around 1) information about the nature of the transactions and the related accounting policy used to account for the transactions, 2) the line items on the balance sheet and income statement that are affected by the transactions, and the amounts applicable to each financial statement line item, and 3) significant terms and conditions of the transactions, including commitments and contingencies.

The Company currently includes information on government grants and the adoption of ASU 2021-10 on January 1, 2022 has not had a material impact on the Company’s consolidated financial statements.

Results of Operations

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Operating expenses:

Cost of contract revenues

Cost of revenues

Research and development expenses

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Other expense

Income / (loss) from operations

(Loss) / income from operations

Non-operating items, net

Income / (loss) before income tax expense

Income tax expense

Net income / (loss)

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 until December 1, 2020.

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.

We will recognize revenue from these payments when earned or as sales occur.

Following the Closing of the CSL Behring agreement, we recognize license revenue related to the License Sale of the global rights to the Product.

We determined that our performance obligation related to the License Sale was satisfied on Closing and recognized $462.4 million license revenue.

We will recognize additional license revenue in relation to the License Sale when it becomes probable that regulatory and sales milestone events will be achieved as well as when royalties on sales of Product have been earned.

We determined that as of the filing date of this Form 10-K, achievement of a total of $55.0 million of payments related to the submission of a BLA and MAA for the Product was probable and accordingly recorded license revenue in relation to these milestone payments.

We recognize collaboration revenues associated with Manufacturing Development.

We will recognize collaboration revenue related to a contractual development milestone when it becomes probable the milestone will be achieved.

We recognize collaboration revenues associated with development services that will be reimbursed by CSL Behring relating to clinical development activities.

These services are provided by our employees.

Collaboration revenue related to these contracted services is recognized when the performance obligations are satisfied.

Our revenue for the years ended December 31, 2021, 2020 and 2019 was as follows:

(Loss) / income before income tax benefit / (expense)

Income tax benefit / (expense)

Net (loss) / income

Revenues and cost of revenues

Our revenue and associated costs for the years ended December 31, 2022, 2021 and 2020 was as follows:

Year ended December 31,

(in thousands)

License revenue

Collaboration revenue

License revenues

Collaboration revenues

Contract manufacturing revenues

Total revenues

We recognized $517.4 million, $37.3 million, and $5.0 million of license revenue for the years ended December 31, 2021, 2020 and 2019, respectively.

The license revenue recognized in 2021 of $517.4 million resulted from the fixed upfront payment of $450.0 million, the $12.4 million we received in relation to the Additional Covenants allocated to License sale that we recognized after the Closing of the CSL Behring Agreement on May 6, 2021 as well as a total of $55.0 million of payments related to the CSL Behring Agreement BLA and MAA submission milestones that we consider probable as of the filing of these financial statements.

We did not recognize any license revenue related to the CSL Behring Agreement during the years ended December 31, 2020 and 2019.

The increase in license revenue in 2020 of $32.2 million compared to 2019 primarily resulted from $27.8 million of license revenue that we recognized as of December 1, 2020 from the amended BMS CLA as well as $4.4 million research milestone payment that we recorded in December 2020 following the designation by BMS of one of the four Collaboration Targets as a candidate to advance into IND-enabling studies.

Cost of license revenues

Cost of contract manufacturing revenues

We recognize license revenue in relation to the License Sale when it becomes probable that regulatory and sales milestone events will be achieved as well as when royalties on sales of Product have been earned.

We recognized $100.0 million and $517.4 million of license revenue for the years ended December 31, 2022 and 2021.

We recognized $100.0 million of license revenue in 2022 related to a milestone payment we expect to collect following the first sale of HEMGENIX™ in the U.S.

We recognized $517.4 million license revenue in 2021 related to the fixed upfront payment of $450.0 million and the $12.4 million we received in relation to the Additional Covenants after the Closing as well as a total of $55.0 million of payments related to milestone payments owed on submission of the MAA in March 2022 and the BLA in April 2022, which we had considered probable as of the February 25, 2022 filing of the 2021 financial statements.

We expense contract fulfillment costs associated with license revenue recognized as costs of license contract revenues.

These expenses primarily consist of payments we owe to our licensors in relation to license payments we receive from CSL Behring.

We incurred $1.3 million and $25.0 million of such cost in the years ended December 31, 2022 and 2021, respectively.

We did not incur such costs in the years ended December 31, 2020.

We recognize collaboration revenues associated with services rendered in relation to completing the HOPE-B clinical trial on behalf of CSL Behring between Closing and December 2022, when CSL Behring fully assumed these activities as well as in relation to additional development services that CSL Behring requests.

These services are provided by our employees.

Collaboration revenue related to these contracted services is recognized when the performance obligations are satisfied.

We recognized $3.0 million, $2.4 million, and nil of collaboration revenue for the years ended December 31, 2022, 2021 and 2020, respectively.

The increase in collaboration revenue in 2022 of $0.6 million compared to 2021 was primarily related to revenues related to full-time-employee (“FTE”) recharges of $3.0 million recognized from the CSL Behring agreement as a result of additional development services that CSL Behring requested.

We recognize contract manufacturing revenue related to contract manufacturing HEMGENIX TM for CSL Behring.

Contract manufacturing revenue is realized when earned upon sales of HEMGENIX TM to CSL Behring.

We recognized $1.7 million contract manufacturing revenues in the year ended December 31, 2022.

We did not recognize such revenues in 2021 and 2020, as we started contract manufacturing activities to supply CSL Behring with launch supplies of HEMGENIX TM following their submission of a BLA and MAA in the spring of 2022.

We incurred $2.1 million of cost of contract manufacturing revenues related to the manufacture of the Product in the year ended December 31, 2022, compared to nil cost of contract manufacturing revenues in the years ended December 31, 2021 and 2022, respectively.

We recognized license revenues associated with the amortization of the non-refundable upfront payment and target designation fees we received from BMS in 2015 until December 1, 2020.

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 of $27.8 million as of December 1, 2020 as license revenue from a related party.

On December 17, 2020 BMS designated one of the four Collaboration Targets as a candidate to advance into IND-enabling studies under the amended BMS CLA entitling us to receive a $4.4 million research milestone payment, which we recorded as license revenue in the year ended December 31, 2020.

We recognized no license revenues in the years ended December 31, 2022 and December 31, 2021.

We recognized collaboration revenues associated with Collaboration Target-specific pre-clinical analytical development and process development activities that were reimbursable by BMS under the BMS CLA and the amended BMS CLA as well as other related agreements.

Collaboration revenue related to these contracted services were recognized when performance obligations were satisfied.

We recognized $1.8 million, $4.2 million and, $0.2 million of collaboration revenue for the years ended December 31, 2022, 2021 and 2020, respectively.

The increase in collaboration revenue in 2021 of $6.4 million compared to 2020 was primarily related to the revenues related to FTE recharges of $2.4 million recognized from the CSL Behring Agreement and $4.2 million recognized from the amended BMS CLA.

The decrease in collaboration revenue in 2020 of $2.1 million compared to 2019 was primarily related to the reduction of activities between the termination of the initial research term under the BMS CLA in May 2019 and the amendment in December 2020.

Cost of Contract revenues

We expense contract fulfillment costs associated with license revenue recognized under the CSL Behring Agreement as costs of contract revenues.

These expenses primarily consist of payments we owe to our licensors in relation to license payments we received from CSL Behring.

We incurred $25.0 million of such cost in the year ended December 31, 2021.

We did not incur such costs in the years ended December 31, 2020 and 2019.

Research and development expenses

Following the termination of the amended BMS CLA on February 22, 2023 we do not expect to recognize any further revenue for services rendered in accordance with the BMS CLA.

Res e arch and development expenses

We expense R&D as incurred.

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● costs associated with research activities for enabling technology platforms, such as next-generation vectors, promoters and re-administration of gene therapies;

● costs associated with the rendering of collaboration services as well as the continued development of Product between the Signing Date and Closing;

● costs associated with the rendering of collaboration services as well as the continued development of the Product;

● payments related to identifiable intangible assets without an alternative future use;

● payments to our licensors for milestones that have been achieved related to our product candidates, including approval of the BLA;

● facilities, depreciation, and other expenses, which include direct and allocated expenses for rent and maintenance of facilities, insurance, and other supplies;

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Our research and development expenses primarily consist of costs incurred for the research and development of our product candidates, which include:

● AMT-130 (Huntington’s disease).

We have incurred costs related to preclinical and nonclinical studies of AMT-130 and have been incurring costs related to our Phase I/II trial since February 2019.

Since 2021, we have also incurred costs related to our Phase Ib/II clinical trial in Europe;

● AMT-260 (Temporal lobe epilepsy) .

We have incurred costs related the preclinical development of temporal lobe epilepsy, which we acquired from Corlieve on July 30, 2021;

● AMT-191 (Fabry disease) .

We have incurred costs related to the preclinical development of Fabry disease;

● Etranacogene dezaparvovec (hemophilia B) .

We have incurred costs related to the research, development, and production of etranacogene dezaparvovec for the treatment of hemophilia B.

In June 2018, we initiated a pivotal study.

We completed enrollment of the lead-in phase of the pivotal study in September 2019 and dosed a total of 54 patients between January 2019 and March 2020.

Following the completion of dosing we initiated activities related to the preparation of marketing authorization applications in the U.S.

and EU, as well as other related undertakings.

During 2020 and up to the Closing of the CSL Behring Agreement we also incurred costs related to the preparation of a BLA and MAA and for commercialization of the Product.

During 2020 and up to the Closing of the CSL Behring Agreement we incurred costs related to the preparation of a BLA and MAA and for commercialization of the Product.

We also incurred costs for manufacturing development.

After the Closing, CSL Behring is responsible for the clinical and regulatory development and commercialization of the Product;

● AMT-130 (Huntington’s disease).

We have incurred costs related to preclinical and nonclinical studies of AMT-130 and have been incurring costs related to our Phase I/II trial since February 2019.

Since 2021, we have also incurred costs related to our Phase Ib/II clinical trial in Europe;

● Preclinical research programs .

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● our ability to agree to ongoing development budgets with collaborators who share the costs of our development programs.

A change in the outcome of any of these variables with respect to our product candidates that we may develop, including as a result of the COVID-19 pandemic, could mean a significant change in the expenses and timing associated with the development of such product candidate.

A change in the outcome of any of these variables with respect to our product candidates that we may develop, could mean a significant change in the expenses and timing associated with the development of such product candidate.

Research and development expenses for the year ended December 31, 2022 were $197.6 million, compared to $143.5 million and $122.4 million for the years ended December 31, 2021 and 2020, respectively.

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(in thousands)

Etranacogene dezaparvovec (AMT-060/061)

Huntington's disease (AMT-130)

Temporal lobe epilepsy (AMT-260)

Fabry disease (AMT-191)

Hemophilia B (AMT-060/061)

Programs in preclinical development and platform related expenses

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Facility expenses

Share-based compensation expense

Fair value changes related to contingent consideration

Share-based compensation expenses

Other expenses

Fair value changes related to contingent consideration

Total other research and development expenses

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Direct research and development expenses

Huntington disease (AMT-130)

We incurred $19.8 million, $10.5 million and $6.9 million in the years ended December 2022, 2021 and 2020 respectively.

In the year ended December 31, 2022, our external costs for the development of AMT-130 were primarily related to the execution of our Phase I/II clinical trial in the U.S.

and in Europe.

In the years ended December 31, 2021 and December 31, 2020 our external costs for the development of AMT-130 were primarily related to the execution of our Phase I/II clinical trial in the U.S.

and in the year ended December 31, 2021, costs were incurred for the preparation of the Phase I/IIb clinical trial in Europe .

Temporal lobe epilepsy (AMT-260)

In years ended December 31, 2022, December 31, 2021 and December 31, 2020, we incurred $16.2 million, $0.9 million and nil, respectively, for the preclinical development of temporal lobe epilepsy, which we acquired from Corlieve on July 30, 2021.

The increase in development cost in the year ended December 31, 2022 related to cost incurred in relation to a toxicology study as well as manufacturing supplies for clinical development.

Fabry disease (AMT-191)

In the years ended December 31, 2022 December 31, 2021 and December 31, 2020, we incurred $2.9 million, $0.9 million and $0.7 million, respectively, primarily related to our preclinical activities for the treatment of Fabry disease (AMT-191).

Hemophilia B (AMT-060/061)

In the years ended December 31, 2021, 2020 and 2019, the external costs for our hemophilia B program were primarily related to the execution of our Phase III clinical trial.

During 2020 and up to the Closing of the CSL Behring Agreement we also incurred costs related to the preparation of a BLA and MAA and for commercialization of the Product.

We also incurred costs for Manufacturing Development.

After the Closing, CSL Behring is responsible for the clinical and regulatory development and commercialization of the Product.

Direct research and development expenses related to clinical development incurred in the year ended December 31, 2021 are presented net of reimbursements due from CSL Behring.

I n the same period, we also incurred costs related to 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.

In the years ended December 31, 2022, December 31, 2021 and December 31, 2020, the external costs for our hemophilia B program were primarily related to the execution of our Phase III clinical trial and Manufacturing Development.

During 2020 and up to the Closing of the CSL Behring Agreement in May 2021, we also incurred costs related to the preparation of the global regulatory submissions and to prepare for commercialization of the Product.

After the Closing, CSL Behring is responsible for the clinical and regulatory activities and commercialization of the Product.

We managed the existing trials on behalf of CSL Behring until December 2022, at which point the trials began to be managed by CSL Behring.

Direct research and development expenses related to clinical development incurred in the year ended December 31, 2022 and 2021 are presented net of reimbursements due from CSL Behring.

In the same periods , we also incurred costs related to the long-term follow-up of patients in our Phase I/II clinical trial of AMT-060 and our Phase IIb clinical trial of etranacogene dezaparvovec.

Our Phase IIb dose-confirmation study was initiated in January 2018 and dosing occurred in July and August 2018.

Patients were dosed as part of our Phase I/II clinical trial of AMT-060 in 2015 and 2016.

Huntington disease (AMT-130)

In the years ended December 31, 2021 and 2020, 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 United States as well as the preparation of a Phase I/IIb clinical trial in Europe .

In the year ended December 31, 2019, our external costs for the development of Huntington’s disease were primarily related to the preparation of our Phase I/II clinical trial in the United States.

These costs are presented net of reimbursements due from CSL Behring.

Preclinical programs & platform development

In the year ended December 31, 2021, we incurred $9.8 million of costs primarily related to our preclinical activities associated with product candidates for the treatment of SCA3 (AMT-150), Fabry disease (AMT-191) and temporal lobe epilepsy (AMT-260), as well as various other research programs and technology innovation projects.

In the year ended December 31, 2020, we incurred $6.5 million of costs related to related to our preclinical activities for product candidates including Hemophilia A (AMT-180), SCA3 (AMT-150) and Fabry disease (AMT-190), as well as various other research programs and technology innovation projects compared to $5.7 million in 2019.

These expenses for the year ended December 31, 2020 and 2019 include costs related to our product candidate for Hemophilia A (AMT-180), which was deprioritized in June 2020.

In the year ended December 31, 2022, we incurred $7.2 million of costs primarily related to our preclinical activities associated with product candidates for various other research programs and technology innovation projects.

In the year ended December 31, 2021, we incurred $8.0 million of costs related to related to our preclinical activities for product candidates including SCA3 (AMT-150) as well as various other research programs and technology innovation projects compared to $5.8 million in 2020.

Costs for the year ended December 31, 2020 also include costs for Hemophilia A (AMT-180), which was deprioritized in June 2020.

Other research & development expenses

● We incurred $64.9 million in employee and contractor expenses in the year ended December 31, 2022 compared to $55.7 million in 2021 and $41.7 million in 2020.

Our cost increased in 2021 by $14.0 million compared to 2020 as a result of the recruitment of personnel to support the preclinical and clinical development of our product candidates.

For the same reason our costs increased by $7.7 million in 2020 compared to 2019;

Our cost increased in 2022 by $9.2 million compared to 2021 primarily as a result of an increase in personnel and contractor related expenses to support our growth.

Costs increased by $14.0 million in 2021 compared to 2020 as a result of the recruitment of personnel to support the preclinical and clinical trial development of our product candidates;

● We incurred $23.6 million in operating expenses and depreciation expenses related to our rented facilities in the year ended December 31, 2022 compared to $18.8 million in 2021 and $17.4 million in 2020.

The increase in 2021 compared to 2020 of $1.4 million primarily related to the expansion of Amsterdam facility.

The increase in 2020 compared to 2019 of $2.2 million primarily relates to extending and expanding (as of June 2019) the lease of our Lexington facility;

● We incurred $14.7 million in disposables costs in the year ended December 31, 2021 compared to $10.2 million in the year ended December 31, 2020 and $8.8 million in the year ended December 31, 2019 related to miscellaneous other costs we incurred as a result of expanding our organization;

The increase in 2022 compared to 2021 of $4.8 million primarily related to additional sites in Lexington and increased depreciation expense related to the expansion of the Amsterdam facility in prior year.

The increase in 2021 compared to 2020 of $1.4 million primarily related to expansion of the Amsterdam facility;

● We incurred $17.8 million in disposables costs in the year ended December 31, 2022 compared to $14.7 million in the year ended December 31, 2021 and $10.2 million in the year ended December 31, 2020.

The increases are primarily related to the expansion of our activities to support the development of our product candidates;

● We incurred $18.4 million in share-based compensation expenses in the year ended December 31, 2022 compared to $12.8 million in 2021 and $12.0 million in 2020.

The increase in 2021 compared to 2020 of $0.8 million was primarily driven by grants to newly recruited personnel offset by share-based compensation expenses recorded in relation to the termination of one of our executives in 2020.

The increase in 2020 compared to 2019 of $3.9 million was driven primarily 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 $6.7 million of expenses for the year ended December 31, 2021 related to an increase in the fair value of contingent consideration associated with the Corlieve Transaction, compared to nil for the same periods in 2020 and 2019;

The increase in 2022 compared to 2021 of $5.6 million was primarily driven by the increase in awards granted, including those to newly recruited personnel as well as an increase in expense related to performance share units that were deemed probable.

The increase in 2021 compared to 2020 of $0.8 million was driven primarily by grants to newly recruited personnel offset by share-based compensation expenses recorded in relation to the termination of one of our executives in 2020;

● We incurred $17.2 million in other expenses in the year ended December 31, 2022 compared to $5.8 million in 2021 and $6.2 million in 2020.

The increase in 2022 compared to 2021 of $11.4 million is primarily due to $7.0 million of contractual payments we owed to licensors upon FDA approval of HEMGENIX™ and $1.1 million owed to a licensor for a valid patent claim granted within the EU.

The decrease in 2021 compared to 2020 of $0.4 million is a combination of not incurring any expenses related to license payments without an alternative future use like in 2020 ($3.4 million) offset by various increases, including increases in professional fees as a result of expanding the organization and to support the cGMP validation of our Lexington facility;

The increase in 2020 compared to 2019 of $4.2 million primarily relates to a $3.4 million expense recorded in 2020 related to license payments that have no alternative future use.

● We incurred $7.1 million of expenses for the year ended December 31, 2022 related to an increase in the fair value of contingent consideration associated with the Corlieve Transaction, compared to $6.7 million and nil for the same periods in 2021 and 2020.

Selling, general and administrative expenses

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● We incurred $21.1 million in personnel and contractor expenses in 2022 compared to $16.0 million in 2021 and $13.6 million in 2020.

The increase of $2.4 million in 2021 compared to 2020 was primarily related to the recruitment of personnel;

and the increase of $3.1 million in 2020 compared to 2019 was primarily driven by an increase in personnel and contractor related expenses to support our growth;

The increase in 2022 of $5.0 million, compared to 2021, and the increase in 2021 compared to 2020 of $2.4 million was primarily driven by an increase in personnel and contractor related expenses to support our growth;

● We incurred $15.5 million of share-based compensation expenses in 2022 compared to $12.8 million in 2021 and $9.8 million in 2020.

The increase in 2021 compared to 2020 of $3.0 million was primarily related to the increase in awards granted, including those to newly recruited personnel and the increase in 2020 compared to 2019 of $0.4 million was also primarily driven by the increase in awards granted including those to newly recruited personnel;

The increase in 2022 compared to 2021 of $2.7 million was primarily related to the increase in awards granted, including those to newly recruited personnel as well as an increase in expense related to performance share units that were deemed probable.

The increase in 2021 compared to 2020 of $3.0 million was also primarily driven by the increase in awards granted including those to newly recruited personnel;

● We incurred $7.1 million in professional fees in 2022 compared to $9.4 million in 2021 and $8.0 million in 2020.

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Additionally, in the years ended December 31, 2021 and December 31, 2020, we incurred professional fees in relation to our licensing transaction with CSL Behring and our acquisition of Corlieve;

● We incurred $5.1 million in financial advisory fees in relation to our licensing transaction with CSL Behring in the year ended December 31, 2021, compared to nil in the same period in 2020 and 2019.

● We incurred $1.0 million, $5.1 million and nil in financial advisory fees in relation to our licensing transaction with CSL Behring in the years ended December 31, 2022, December 31, 2021 and December 31, 2020.

These fees are calculated as a percentage of license revenue recognized under the CSL Behring Agreement.

Other items, net

We recognized $3.0 million in other income in relation to the equity stake received in VectorY B.V.

We recognized $0.3 million, $3.0 million and nil in other income in relation to the equity stake received in VectorY B.V.

in conjunction with a settlement agreement that the Company and VectorY B.V.

entered into in April 2021 in the year ended December 31, 2021, compared to no such income for the same periods in 2020 and 2019.

We recognized $2.6 million in other income of employee retention credit under the U.S.

CARES Act in the year ended December 31, 2021, compared to no such income for the same periods in 2020 and 2019.

entered into in April 2021 for the years ended December 31, 2022, 2021 and 2020, respectively.

We recognized nil in other income of employee retention credit under the U.S.

CARES Act in the year ended December 31, 2022, compared to $2.6 million and nil such income for the same periods in 2021 and 2020, respectively.

In 2022, we recognized $5.6 million in income related to payments received from European authorities to subsidize our research and development efforts in the Netherlands compared to $5.3 million in 2021 and $1.9 million in 2020.

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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 (losses) / gains.

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 (losses) / gains.

As of the same date, we recognized a derivative financial liability related to the CoC-payment.

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

Our non-operating items, net, for the years ended December 31, 2022, 2021 and 2020 were as follows:

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Foreign currency gains / (losses), net

Other non-operating (losses) / gains, net

Total non-operating income / (loss), net

Other non-operating gains / (losses)

Total non-operating income, net

We recognize interest income associated with our cash and cash equivalents and investment securities.

We recognized $0.6 million interest income in 2022, $0.2 million in 2021 and $0.9 million in 2020.

Our interest income decreased in 2021 by $0.7 million compared to 2020 and in 2020 decreased by $2.6 million compared to 2019 due to a reduction in market interest rates during 2020.

Our interest income increased in 2022 by $0.4 million compared to 2021 primarily due to the interest income earned on investment securities.

Interest income decreased by $0.7 million in 2021 compared to 2020 due to a changes in market interest rates during 2021.

We recognized $11.7 million interest expense in 2022, $7.5 million in 2021 and $3.8 million in 2020.

Our interest expense in 2021 primarily increased by $3.6 million compared to 2020 due to the additional $35.0 million we drew down on our loan facility from Hercules in January of 2021.

Our interest expense in 2020 was unchanged compared to 2019 as our outstanding debt remained unchanged.

In 2021, we recognized a net foreign currency gain of $29.7 million related to our borrowings from Hercules and our cash and cash equivalents as well as loans between entities within the uniQure group, compared to a net loss of $13.6 million in 2020 and a net loss of $0.3 million in 2019.

In 2021, we recognized a $0.2 million net loss within Other non-operating (losses) / gains related to an increase in the fair value market value of derivative financial liability related to the CoC-payment, compared to a net gain of $0.5 million in 2020 and a net loss of $2.5 million in 2019.

The increase in the fair market value of the derivative financial liability in 2021 primarily related to unwinding the discounting of the potential CoC-payment.

The changes in 2020 compared to 2019 result from a $3.1 million gain that we recognized related to fair value changes of the BMS warrants (compared to $2.5 million loss in 2019), which includes an $0.8 million gain that we recognized related to the termination of the BMS warrants in December 2020, and a loss of $2.6 million to recognize the derivative financial liability for the CoC-payment on December 1, 2020.

We recognized $3.2 million of deferred tax expenses in 2021, compared to $16.4 million of deferred tax income in 2020 and $0.0 million in 2019.

Our interest expense in 2022 primarily increased by $4.2 million compared to 2021 due to an increase in market interest rates in 2022.

Our interest expense in 2021 primarily increased by $3.6 million compared to 2020 due to the additional $35.0 million we drew down on our loan facility from Hercules in January 2021.

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.

In 2022, we recognized a net foreign currency gain of $23.2 million related to our borrowings from Hercules and our cash and cash equivalents and investment securities as well as loans between entities within the uniQure group, compared to a net gain of $29.7 million in 2021 and a net loss of $13.6 million in 2020.

In 2022, we recognized a $2.8 million net gain within Other non-operating gains / (losses) related to a decrease in the fair value market value of derivative financial liability related to the change of control payment (“CoC-payment”) compared to a net loss of $0.2 million in 2021 and a net gain of $0.5 million in 2020.

We recorded the net gain in 2022 as no change of control event had occurred as of the February 22, 2023 Termination Date of the amended BMS CLA.

We had recorded a net loss in 2021 of $0.2 million in 2021 for the increase in the fair market value of the derivative financial liability related to the CoC-payment.

We recorded a net gain $0.5 million in 2020 within Other non-operating gains / (losses) related to the net impact of terminating the BMS warrants and recognizing a derivative financial liability for the CoC-payment.

We recognized $1.5 million of deferred tax income in 2022, compared to $3.2 million of deferred tax expense in 2021 and $16.4 million of deferred tax income in 2020.

Deferred tax income recorded in 2022 results from deferred tax benefits recorded related to the buildup of net operating losses by the French entity which are partially offset by deferred tax expense recorded in the U.S.

as a result of the consumption of net operating losses as well as deferred tax expense resulting from the release of valuation allowance for the tax benefit of share issuance costs within the Netherlands.

Deferred tax expense recorded in 2021 results from the consumption of net operating tax losses by our U.S.

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Deferred tax income recorded in 2020 results from the release of the valuation allowance recorded for our net deferred tax assets by our U.S.

We did not record changes in valuation allowances in 2019.

Financial Position, Liquidity and Capital Resources

As of December 31, 2021, we had cash, cash equivalents and restricted cash of $559.4 million, which include payments received from CSL Behring following the Closing.

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

We believe that our cash and cash equivalents will fund our operations into the first half of 2025 assuming achievement of $230.0 million related to BLA and MAA submissions as well as first commercial sales milestones under the CSL Behring Agreement.

As of December 31, 2022, we had cash and cash equivalents, restricted cash and investment securities of $396.0 million.

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.

We believe that our cash and cash equivalents and investment securities will fund our operations into 2025 assuming the achievement of $100.0 million of first commercial sale milestone in the U.S.

and into the first half of 2025 if the $75.0 million first commercial sale milestone in any of the five contractually defined European countries would be achieved prior to July 2, 2023 under the CSL Behring Agreement.

Our material cash requirements include the following contractual and other obligations:

As of December 31, 2021, we had an outstanding loan amount owed to Hercules for an aggregate principal amount of $100.0 million, with $8.0 million payable within 12 months.

As of December 31, 2022, we had an outstanding loan amount owed to Hercules for an aggregate principal amount of $100.0 million.

Future interest payments and financing fees associated with the loan total $44.5 million, with $14.9 million payable within 12 months.

We are contractually required to repay the $100.0 million 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 are contractually required to repay the $100.0 million in full in December 2025.

We entered into lease arrangements for facilities, including corporate, manufacturing and office space.

As of December 31, 2022, we had fixed lease payment obligations of $60.6 million, with $8.3 million payable within 12 months.

The fixed lease payment obligations include payments owed under signed lease arrangements that are expected to commence in 2022.

Commitments related to Corlieve acquisition (nominal amounts)

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The commitments include payments related to post-acquisition services that we agreed to as part of the SPA.

As of December 31, 2021, our commitment amount is $229.1 million.

The timing of achieving these milestones and consequently the timing of payments, as well as whether the milestone will be achieved at all, is generally uncertain with the exception of a payment we made in February 2022 to acquire the remaining outstanding shares as well as certain payments for post-acquisition services in 2022.

As of December 31, 2022, our commitment amounts include up to $42.8 million in potential milestone payments through Phase I/II development and $171.3 million in potential milestone payments associated with Phase III development and the approvals of AMT-260 in the U.S.

The timing of achieving these milestones and consequently the timing of payments, as well as whether the milestone will be achieved at all, is generally uncertain.

These payments are owed in Euro and have been translated at the foreign exchange rate as of December 31, 2022, of $1.07/€1.00.

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Cash, cash equivalents and restricted cash at the beginning of the period

Net cash generated from / (used in) operating activities

Net cash (used in) / generated from operating activities

Net cash used in investing activities

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We had previously incurred losses and cumulative negative cash flows from operations since our business was founded by our predecessor entity AMT Holding N.V.

As a result of receiving the upfront payment upon Closing of the CSL Behring Agreement, we generated $288.0 million cash flows from operating activities during the year ended December 31, 2021.

We recorded net income of $329.6 for the year ended December 31, 2021, and a net loss of $125.0 million in 2020, and a net loss of $124.2 million in 2019.

in 1998, with the exception of generating income in 2021 after receiving the upfront payment upon Closing of the CSL Behring Agreement.

We continue to incur losses in the current period.

We recorded a net loss of $126.8 million for the year ended December 31, 2022, and net income of $329.6 million in 2021, and a net loss of $125.0 million in 2020.

As of December 31, 2022, we had an accumulated deficit of $581.9 million.

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In May 2021, we received a $462.4 million cash payment due from CSL Behring upon Closing.

We expect to collect $55.0 million from CSL Behring following the submissions of a BLA and MAA for AMT-061.

In addition, we could potentially receive regulatory, first commercial sales and development milestone payments as well as royalties and sales milestone payments from CSL Behring.

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.

During 2022 we collected the $55.0 million related to CSL Behring’s global regulatory submissions for etranacogene dezaparvovec in March and April 2022 and are eligible to receive additional milestone payments, as well as royalties on net sales, from CSL Behring.

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 the year ended December 30, 2021, we received net proceeds of $29.6 million from the issuance of 921,730 ordinary shares that took place during March and April of this year.

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 January 29, 2021, we drew down $35 million under our 2021 Amended Facility with Hercules.

We drew down a further $30 million under our 2021 Restated Facility with Hercules.

In the year ended December 30, 2021, we received net proceeds of $29.6 million from the issuance of 921,730 ordinary shares under the Sales Agreement that took place during March and April of that year.

We did not issue in ordinary shares under the Sales Agreement for the 12 month period ended December 31, 2022.

On January 29, 2021, we drew down $35 million under a facility agreement with Hercules.

We drew down a further $30 million under our 2021 Restated Facility with Hercules in December 2021.

We are subject to certain covenants under our 2021 Restated 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.

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If we are unable to raise additional funds through equity or debt financings when needed, we may be required to delay, limit, reduce or terminate our product development or future commercialization efforts or grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves, which could have a material adverse effect on our business, financial conditions, results of operations and cash flows.

Net Cash generated from / used in operating activities

Net Cash used in / generated from operating activities

Year ended December 31,

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Cash flows from operating activities

Net income / (loss)

Adjustments to reconcile net income, (net loss) to net cash generated from / (used in) operating activities:

Depreciation, amortization, and impairment losses

Share-based compensation expense

Change in fair value of derivative financial instruments and contingent consideration

Unrealized foreign exchange (gains) / losses

Deferred tax expense / (income)

Net (loss) / income

Adjustments to reconcile net (loss) /income to net cash (used in) / generated from operating activities:

Depreciation and amortization

Share-based compensation expenses

Deferred tax (income) / expense

Change in fair value of contingent consideration and derivative financial instruments, net

Unrealized foreign exchange (gains) / losses, net

Change in deferred revenue

Change in non-cash items, net

Other non-cash items, net

Changes in operating assets and liabilities:

Uncollected revenue related to CSL Behring milestone payments

Accounts receivable and accrued income, prepaid expenses, and other current assets and receivables

Accounts receivable, prepaid expenses, and other current assets and receivables

Contract asset related to CSL Behring milestone payments

Accounts payable

Accrued expenses, other liabilities, and operating leases

Net cash generated from / (used in) operating activities

Net cash (used in) / generated from operating activities

Net cash used in operating activities was $145.1 million for the year ended December 31, 2022, and consisted of a net loss of $126.8 million adjusted for non-cash items, including depreciation and amortization expense of $8.5 million, share-based compensation expense of $34.2 million, changes in the fair value of contingent consideration and the derivative financial liability of $4.3 million, unrealized foreign exchange gains of $22.1 million and a change in deferred taxes of $1.5 million.

Net cash generated from operating activities also included unfavorable changes in operating assets and liabilities of $43.4 million.

There was a net increase in accounts receivable, prepaid expenses, and other current assets and receivables of $4.1 million.

There was a net increase in contract assets related to CSL Behring milestone payments of $45.0 million.

The net increase related to $100.0 million recognized as a contract asset in the current period and collection of $55.0 million of the contract asset related to the CSL milestones of $55.0 million in March 2022 and April 2022.

There was an increase in inventories of $6.9 million related to the production of HEMGENIX TM under the CSL Behring Agreement.

These changes also relate to a net increase in accounts payable, accrued expenses, other liabilities, and operating leases of $12.6 million, primarily related to an increase in accounts payable.

Net cash generated from operating activities was $288.0 million for the year ended December 31, 2021, and consisted of net income of $329.6 million adjusted for non-cash items, including depreciation and amortization expense of $7.3 million, share-based compensation expense of $25.6 million, a change in fair value of contingent consideration of $6.8 million, unrealized foreign exchange gains of $31.3 million, a change in deferred taxes of $3.2 million and other non-cash items, net, of $2.8 million.

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Additionally, these changes also related to a net increase in accounts receivable, prepaid expenses, and other current assets and receivables of $4.0 million primarily related to an increase in various prepaids, including those related to clinical trials, partially offset by decrease in receivables as a result of collection of the BMS milestone that was recorded as of December 31, 2020 and collection of the CSL Behring receivables recorded as of December 31, 2020 for expenses for which we had a right of reimbursement and a net increase in accounts payable, accrued expenses, other liabilities, and operating leases of $8.5 million primarily related to an increase in various accruals for goods received from and services provided by vendors and an increase in personnel accrual s.

Net income primarily consisted of $462.4 million license revenue recognized on Closing and $55.0 million license revenue related to the submissions of a BLA and MAA that is considered probable as of the time of filing these financial statements.

Net income primarily consisted of $462.4 million license revenue recognized on Closing and $55.0 million license revenue related to CSL Behring’s global regulatory submissions for etranacogene dezaparvovec that occurred in March and April 2022 and were considered probable on December 31, 2021.

Net cash used in operating activities was $134.8 million for the annual period ended December 31, 2020, and consisted of a net loss of $125.0 million adjusted for non-cash items, including depreciation and amortization expense of $10.6 million, share-based compensation expense of $21.8 million, fair value gain of derivative financial instruments of $0.5 million, unrealized foreign exchange loss of $14.7 million, a change in deferred tax income of $16.4 million and a decrease in unamortized deferred revenue of $33.6 million.

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These changes primarily related to a net increase in accounts receivable and accrued income, prepaid expenses, and other current assets of $7.0 million and a net increase in accounts payable, accrued expenses, other liabilities, and operating leases of $0.5 million.

Net cash used in operating activities was $98.7 million for the annual period ended December 31, 2019, and consisted of a net loss of $124.2 million adjusted for non-cash items, including depreciation and amortization expense of $6.7 million, share-based compensation expense of $17.5 million, fair value loss of derivative financial instruments of $2.5 million, unrealized foreign exchange loss of $0.9 million, and a decrease in unamortized deferred revenue of $5.0 million.

Net cash used in operating activities also included changes in operating assets and liabilities of $2.9 million.

These changes primarily related to a net increase in accounts receivable and accrued income, prepaid expenses, and other current assets of $4.8 million and a net increase in accounts payable, accrued expenses, other liabilities, and operating leases of $7.7 million primarily related to our clinical trials and facilities.

Net cash used in investing activities

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(in thousands)

Acquisition of Corlieve, net of cash acquired

Investment in investment securities

Build out of Amsterdam site

Build out of Lexington site

Acquisition of Corlieve, net of cash acquired

Acquisition of licenses, patents, and other rights

Total investments

We paid EUR 42.1 million ($49.9 million), net of EUR 2.8 million ($3.3 million) of cash acquired, during the year ended December 31, 2021 to acquire 97.7% of the outstanding ordinary shares of Corlieve on July 30, 2021.

In 2022, we invested $163.1 million of our cash on hand into euro and dollar denominated government bonds.

We made no such investments in 2021 and 2020.

In 2022, we invested $11.9 million in the build out of our Amsterdam site compared to $12.4 million in 2021 and $4.5 million in 2020.

Our investments in 2021 primarily relate to the construction of additional laboratories to support the expansion 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.

Our investments in 2022 related to investments into equipment while in 2021 investments primarily related to the construction of additional laboratories to support the expansion 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.

In 2022, we invested $5.8 million in our facility in Lexington compared to $5.0 million in 2021 and $2.7 million in 2020.

Our investments in 2019 primarily relate to improvements we made to the additional space rented from June 1, 2019.

Our investments in 2022 increased as a result of the two new Lexington sites, which commenced in 2022.

We paid EUR 1.8 million ($1.9 million) to acquire the remaining outstanding shares of Corlieve in February, July and September 2022.

Net cash generated from financing activities

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Cash flows from financing activities

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

Proceeds from loan increment, net of debt issuance costs

Proceeds from issuance of ordinary shares, net of issuance costs

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

Repayment of debt assumed through Corlieve Transaction

Proceeds from exercise of warrants

Net cash generated from financing activities

In January 2021, we received $34.6 million net proceeds from the 2021 Amended Facility and in December 2021 we received $29.5 million net proceeds from the 2021 Restated Facility for combined net proceeds of $64.1 million.

We received net proceeds of $29.6 million associated with our ATM offering in March and April 2021 and $242.7 million associated with our public follow-on offering in September 2019.

In 2022, we received $1.4 million from the exercise of options to purchase ordinary shares issued in accordance with our share incentive plans, compared to $2.8 million in 2021 and $7.4 million in 2020.

We received net proceeds of $29.6 million associated with our ATM offering in March and April 2021.

No such proceeds were received in 2022 or 2020.

Upon the acquisition of Corlieve, Corlieve held loans with an outstanding amount equal to EUR 1.4 million ($1.6 million).

During the year ended December 31, 2021, the loans were repaid in their entirety.

We received net proceeds of $0.5 million associated with the exercise of the Hercules warrants by Hercules in February 2019.

Funding requirements

We believe our cash and cash equivalents as of December 31, 2021 will fund our operations into the first half of 2025 assuming achievement of $230.0 million related to BLA and MAA submissions as well as first commercial sales milestones under the CSL Behring Agreement.

We believe that our cash and cash equivalents and investment securities will fund our operations into 2025 assuming the achievement of $100.0 million of first commercial sale milestone in the U.S.

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

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

● the payment of milestone payments that we might owe to former shareholders of Corlieve;

● contractual milestone payments and royalties we might be owed in accordance with the CSL Behring Agreement;

● earnout payments we might owe the former shareholders of Corlieve, which are subject to the achievement of specific development and regulatory milestones;

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

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

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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 following the December 15, 2021 amendment will be due 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;

● the costs associated with maintaining quality compliance and optimizing our manufacturing processes, including the operating costs associated with our Lexington, Massachusetts manufacturing facility;

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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-K

Item 7. Management’s Discussion and Analysis