Item 2. Management’s Discussion and Analysis
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is intended to help the reader understand our results of operations and financial condition. This MD&A is provided as a supplement to, and should be read in conjunction with, our unaudited consolidated financial statements and the accompanying notes thereto and other disclosures included in this Quarterly Report on Form 10-Q, including the disclosures under Part II, Item 1A “Risk Factors,” and our audited financial information and the notes thereto included in our Annual Report on Form 10-K (the “Annual Report”) . Our unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the U.S. (“U.S. GAAP”) and unless otherwise indicated are presented in U.S. dollars.
Overview
We are a leader in the field of gene therapy, seeking to deliver to patients suffering from rare and other devasting diseases single treatments with potentially curative results. We are advancing a focused pipeline of innovative gene therapies, including our clinical candidates for the treatment of Huntington’s disease and amyotrophic lateral sclerosis (“ALS”), as well as preclinical product candidates including candidates for the treatment of refractory temporal lobe epilepsy (“rTLE”) and Fabry disease. In November 2022 and February 2023, our internally developed HEMGENIX®, a gene therapy for the treatment of hemophilia B, was approved for commercialization by the United States Food and Drug Administration (the “FDA”) and the European Medicines Agency (“EMA”), respectively. In June 2020, we agreed to license HEMGENIX® to CSL Behring LLC (“CSL Behring”), pursuant to a commercialization and license agreement (the “Commercialization and License Agreement”), which is now responsible for commercialization of HEMGENIX®. We are manufacturing HEMGENIX® for CSL Behring and are entitled to specific milestone payments and royalties on net sales under the Commercialization and License Agreement. In May 2023, one of our wholly-owned subsidiaries entered into a royalty purchase agreement (the “Royalty Purchase Agreement”) with HemB SPV, L.P. (the “Purchaser”) for the sale of a portion of the royalty rights due to us from CSL Behring under the Commercialization and License Agreement. In August 2023, the FDA cleared the Investigational New Drug (“IND”) application for AMT-260, our gene therapy candidate for refractory mesial temporal lobe epilepsy (“MTLE”). On October 5, 2023, we announced a Reorganization (see definition below) of our research and technology programs.
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 Adeno-associated virus (“AAV”) based gene therapies in our own facilities with a proprietary, commercial-scale, current good manufacturing practices compliant, manufacturing process. We believe our Lexington, Massachusetts-based facility is one of the world’s leading, most versatile, gene therapy manufacturing facilities.
Business developments
Below is a summary of our recent significant business developments:
Reorganization
On October 5, 2023, we announced that we are implementing a reorganization plan (the “Reorganization”). As a result of the Reorganization, we will be discontinuing investments in more than half of our research, including AMT-210 for the treatment of Parkinson’s disease, and technology projects. Following the Reorganization, we intend to prioritize advancing our clinical-stage programs, including AMT-130 for the treatment of Huntington’s disease, AMT-260 for the treatment of refractory mesial temporal lobe epilepsy, AMT-162 for the treatment of SOD1 amyotrophic lateral sclerosis and AMT-191 for the treatment of Fabry disease to proof of concept.
As a result of the Reorganization, we will eliminate approximately 20% of our total workforce and close our research laboratory in Lexington, MA. We expect to complete the Reorganization by the end of fiscal year 2023 and expect to incur costs of approximately $2.3 million, consisting primarily of cash expenditures related to employee severance costs. We also anticipate that there could be costs associated with the lab to be closed in Lexington and associated fixed assets if the carrying value is determined to not be recoverable as of the cease-use date, which is expected to be later in the fourth quarter of 2023. As part of the Reorganization we will also consolidate all good manufacturing practices (“GMP”) manufacturing into our Lexington, MA manufacturing facility and consolidate process and analytical development into our Amsterdam, Netherlands facility.
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As a result of the significant reduction in research activities, Ricardo Dolmetsch, Ph.D., departed as Chief Scientific Officer, effective October 4, 2023. Dr. Dolmetsch will serve as a scientific consultant through the end of the year. In connection with Dr. Dolmetsch’s transition, the Board of Directors of the Company have appointed Richard Porter, Ph.D., our current Chief Business Officer, to serve as the Company’s Chief Business and Scientific Officer, effective as of October 5, 2023.
Temporal lobe epilepsy program (AMT-260)
In August 2023, the FDA cleared the IND application for AMT-260, our gene therapy candidate for refractory MTLE. AMT-260 comprises an AAV9 vector that locally delivers two engineered micro ribonucleic acids (“miRNAs”) designed to degrade the GRIK2 gene and suppress the aberrant expression of glutamate receptor subtype GLUK2 that is believed to trigger seizures in patients with refractory MTLE. We acquired AMT-260 as part of our acquisition of uniQure France SAS (formerly Corlieve Therapeutics) in July 2021.
In September 2023, following the IND clearance, we paid EUR 10.0 million ($10.6 million) to the former shareholders of uniQure France SAS (formerly Corlieve Therapeutics SAS), to settle a milestone payment owed in relation to our 2021 acquisition.
Huntington’s disease program (AMT-130)
AMT-130 is our novel gene therapy candidate for the treatment of Huntington’s disease that 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 randomized, controlled, and blinded Phase I/II clinical trial for AMT-130 in the U.S. The low-dose cohort of this trial includes 10 patients, of which six patients received treatment with AMT-130 and four patients received imitation surgery. The high-dose cohort includes 16 patients, of which 10 patients received treatment with AMT-130 and six patients received imitation surgery. Patients in the high-dose cohort that received imitation surgery had the option to cross over after 12 months if they met the inclusion criteria for the study. We are also conducting an open-label Phase Ib/II study in the EU, which includes six patients in the low-dose cohort and seven patients in the high-dose cohort. All 13 patients enrolled in the EU study received AMT-130. Two remaining patients initially scheduled for the EU open-label study will now be enrolled in Cohort 3, which is expected to start enrolling in the fourth quarter of 2023 and will be comprised of up to 12 patients.
On March 21, 2022, we announced that we completed the enrollment of all 26 patients in the first two cohorts of our Phase I/II clinical trial of AMT-130 in the U.S. In July 2022, we began crossing over patients in the high-dose cohort who received the imitation surgical procedure. Four of the six control patients in the high-dose cohort have been crossed over to treatment (three patients received the high dose and one patient received the low dose). The remaining two control patients in the high-dose cohort did not meet all the inclusion criteria for the study and were not eligible for crossover. All four crossover patients received a short course of immunosuppression therapy concurrent with the administration of AMT-130.
On June 21, 2023, we announced interim data, including up to 24-month follow-up, from 26 patients enrolled in the ongoing U.S. Phase I/II clinical trial of AMT-130. Efficacy and biomarker data from the crossover patients are not included in the summary below.
Safety and tolerability
We believe AMT-130 was generally well-tolerated, with a manageable safety profile in patients treated with the lower dose of 6x10 12 vector genomes and the higher dose of 6x10 13 vector genomes. The most common adverse events in the treatment groups were related to the surgical procedure. No treatment emergent adverse events led to discontinuation of patient follow-up.
As previously reported, there were two serious adverse events (“SAEs”) unrelated to AMT-130 (post-operative delirium and major depression) in the low-dose cohort, one SAE in the high-dose cohort (back pain), and one SAE (deep vein thrombosis) in the control group. In addition, there were two suspected unexpected serious adverse events (severe headache, central nervous system inflammation) in the high-dose cohort. All the events have resolved to our knowledge.
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Exploratory efficacy data
We believe early interim clinical data demonstrate promising trends. Compared to baseline measurements, clinical function was generally preserved at 24 months for patients in the low-dose cohort and at 12 months for patients in the high-dose cohort.
Compared to natural history, patients in both dose cohorts demonstrated benefits in each of Total Motor Score (“TMS”), Total Functional Capacity (“TFC”) and the composite Unified Huntington’s Disease Rating Scale (“cUHDRS”). Compared to natural history:
● TMS of patients in the lower dose cohort demonstrated a mean improvement of 1.8 points at 24 months and patients in the higher dose cohort demonstrated a mean improvement of 2.7 points at 12 months;
● TFC of patients in the lower dose cohort demonstrated a mean 0.8 point improvement at 24 months and patients in the higher dose cohort demonstrated a mean 0.5 point improvement at 12 months; and
● the cUHDRS of patients in the lower dose cohort demonstrated a mean 0.9 point improvement in cUHDRS at 24 months and patients in the higher dose cohort demonstrated a mean 1.0 point improvement at 12 months.
Patients in the control group appear to experience a worsening of TMS at 12 months compared to baseline and natural history. TFC and cUHDRS was preserved in control patients at 12 months.
Exploratory Biomarkers
Patients experienced a transient increase in neurofilament lights chain in the cerebral spinal fluid (“CSF NfL”) related to the procedure that peaked at approximately one month after administration. These transient increases were not dose-dependent, and all patients experienced subsequent declines in CSF NfL. Mean CSF NfL for the lower dose cohort was 12.9% below baseline compared to a predicted 22.9% increase in the natural history, with four of the five patients in the lower dose cohort having CSF NfL levels below baseline. CSF NfL levels in the higher dose cohort were more variable through 12 months, with a mean increase of 51.5% compared to baseline. Four of the eight patients in the higher dose cohort with at least 12 months of follow-up had CSF NfL levels below baseline. Two patients in the higher dose cohort with 18 months of follow-up demonstrated a continued decline in CSF NfL to 27.4% above baseline. In the control group, mean CSF NfL was relatively stable and was 6.83% below baseline at 12 months.
Mutant huntingtin protein in the cerebral spinal fluid (“CSF mHTT”) for patients in the lower dose cohort remained below baseline with a mean reduction of 8.1% at 24 months. CSF mHTT for patients in the higher dose cohort was more variable with a mean increase of 39.7% above baseline at 12 months compared to a 4.7% increase in the control group. Three of nine evaluable patients in the higher dose cohort had CSF mHTT reduction below baseline at their last measurement. The mean total brain volume for the control, lower dose and higher dose cohorts declined 0.74%, 1.02% and 1.23%, respectively at 12 months and were not significantly different from each other or from the natural history.
The mean total brain volume for the control, low-dose and high-dose cohorts declined 0.74%, 1.02% and 1.23%, respectively at 12 months and did not appear to be significantly different from each other or from the natural history.
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Amyotrophic Lateral Sclerosis (AMT-162)
On January 31, 2023, we announced that we had entered into a global licensing agreement with Apic Bio, Inc. (“Apic Bio”) for a one-time, intrathecally administered investigational gene therapy for ALS caused by mutations in superoxide dismutase 1 (“SOD1”), a rapidly progressing, rare motor neuron disease that leads to loss of everyday functions and is uniformly fatal. With this agreement, we have added to our pipeline of gene therapies to treat neurological disorders. The FDA has cleared the IND application for APB-102 and has granted Orphan Drug and Fast Track designation. We expect to initiate patient screening in the fourth quarter of 2023 with the first patient dosing occurring in the first quarter of 2024. Mutations in the SOD1 gene of ALS account for approximately one-fifth of all inherited forms of this fatal disease. APB-102 is comprised of a recombinant AAVrh10 vector that expresses a miRNA designed to knock down the expression of SOD1 with the goal of slowing down or potentially reversing the progression of ALS in patients with SOD1 mutations.
We made an initial cash payment in February 2023 of $10.0 million to Apic Bio that was recognized as a research and development expense. We owe up to $43.0 million in milestone payments to Apic Bio if AMT-162 is approved for commercialization in the U.S. and Europe.
Fabry disease program (AMT-191)
AMT-191 is our novel gene therapy candidate for the treatment of Fabry disease. AMT-191 comprises of an AAV5 capsid that incorporates the α-galactosidase A (“GLA”) transgene and a proprietary, highly potent, liver-specific promoter. We expect to submit an IND in the fourth quarter of 2023 and to begin patient dosing in 2024.
CSL Behring commercialization and license agreement
In June 2023, the first sale of HEMGENIX® in the U.S. occurred, and in July 2023 we collected the $100.0 million owed to us under the CSL Behring Agreement.
Financing
Royalty Financing Agreement
On May 12, 2023, we entered into the Royalty Financing Agreement with the Purchaser. Under the terms of the Royalty Financing Agreement, we received an upfront payment of $375.0 million in exchange for the Purchaser’s rights to the lowest royalty tier on CSL Behring’s worldwide net sales of HEMGENIX® for certain current and future royalties due to us. We are also eligible to receive an additional $25.0 million milestone payment under the Royalty Financing Agreement if 2024 net sales of HEMGENIX® exceed a pre-specified threshold. The Purchaser will receive 1.85 times the upfront payment (or $693.8 million) and 1.85 times the $25.0 million milestone payment (if paid) until June 30, 2032 (“First Hard Cap Date”) or, if such cap is not met by June 30, 2032, up to 2.25 times the upfront and milestone payment (if paid) through December 31, 2038. If 2024 net sales do not exceed a pre-specified threshold, we will be obligated to pay $25.0 million to the Purchaser but only to the extent that we achieve a future sales milestone under the CSL Behring Agreement. If such milestone payment is not due from CSL Behring, we are not obligated to pay any amounts to the Purchaser.
We retained the rights to all other royalties, as well as contractual milestones totaling up to $1.3 billion, under the terms of the CSL Behring Agreement.
Hercules Amendment
On May 12, 2023 we and Hercules Capital, Inc. (“Hercules”) amended the 2021 Restated Facility (“2023 Amended Facility”). The 2023 Amended Facility extends the maturity date and interest-only period from December 1, 2025 to January 5, 2027.
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Investment in debt securities
In July and September 2023, we invested $272.0 million and EUR 87.0 million (or a total of $366.4 million as of the investment dates) of our cash and cash equivalents into short-term U.S. and European government bonds that are U.S. dollar and euro denominated, respectively. Our investment policy requires us to invest in bonds with the highest investment grade credit rating. As of September 30, 2023, the bonds have remaining maturities ranging from one to ten months. We classify these bonds as held-to-maturity.
Financial Overview
Key components of our results of operations include the following:
Three months ended September 30,
Nine months ended September 30,
2023
2022
2023
2022
(in thousands)
(in thousands)
Total revenues
$
1,407
$
1,449
$
9,154
$
3,738
Cost of contract manufacturing revenues
(1,006)
(861)
(4,793)
(1,693)
Research and development expenses
(65,400)
(48,068)
(172,245)
(139,263)
Selling, general and administrative expenses
(18,074)
(13,324)
(57,103)
(36,802)
Net loss
(89,571)
(47,857)
(235,272)
(133,596)
As of September 30, 2023 and December 31, 2022, we had cash and cash equivalents and investment securities of $658.9 million and $392.8 million, respectively. We had a net loss of $89.6 million and $235.3 million in the three and nine months ended September 30, 2023, respectively, compared to net loss of $47.9 million and $133.6 million for the same period in 2022. As of September 30, 2023 and December 31, 2022, we had accumulated deficits of $817.2 million and $581.9 million, respectively.
Compared to the current period, we expect that our expenses will decline following the Reorganization, until which time we decide to advance one of our gene therapy product candidates into late stage clinical development.
See “Results of Operations” below for a discussion of the detailed components and analysis of the amounts above.
Critical Accounting Policies and Estimates
In preparing our consolidated financial statements in accordance with U.S. GAAP and pursuant to the rules and regulations promulgated by the Securities and Exchange Commission (the “SEC”) we make assumptions, judgments and estimates that can have a significant impact on our net loss and affect the reported amounts of certain assets, liabilities, revenue and expenses, and related disclosures. We base our assumptions, judgments and estimates on historical experience and various other factors that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not clear from other sources. Actual results may differ from these estimates under different assumptions or conditions. In making estimates and judgments, management employs critical accounting policies. A summary of our critical accounting policies as well as a discussion of our critical accounting estimates are presented in our Annual Report . There were no material changes to our critical accounting policies during the nine months ended September 30, 2023 or reasonably possible changes of our critical accounting estimates as of September 30, 2023 that could have had a material impact on our results of operations for the three and nine months ended September 30, 2023.
Cost of contract manufacturing
We entered into a development and commercial supply agreement with CSL Behring in June 2020. Since April 1, 2022, we recognize the cost to manufacture HEMGENIX® under such agreement as cost of contract manufacturing.
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Research and development expenses
We expense research and development (“R&D”) expenses as incurred. R&D expenses include costs which relate to our primary activities of biopharmaceutical research and development. Our R&D expenses generally consist of costs incurred for the development of our target candidates, which include:
● employee-related expenses, including salaries, benefits, travel and share-based compensation expense;
● costs incurred for laboratory research, preclinical and nonclinical studies, clinical trials, statistical analysis and report writing, and regulatory compliance costs incurred with clinical research organizations and other third-party vendors;
● costs incurred to conduct consistency and comparability studies;
● costs incurred for the development and improvement of our manufacturing processes and methods;
● 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;
● 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 marketing authorization application (“MAA”);
● facilities, depreciation, and other expenses, which include direct and allocated expenses for rent and maintenance of facilities, insurance, and other supplies; and
● changes in the fair value of liabilities recorded in relation to our acquisition of uniQure France SAS.
Our R&D expenses may vary substantially from period to period based on the timing of our research and development activities, including manufacturing campaigns, regulatory submissions, and enrollment of patients in clinical trials. The successful development of our product candidates is highly uncertain. Estimating the nature, timing, or cost of the development of any of our product candidates involves considerable judgement due to numerous risks and uncertainties associated with developing gene therapies, including the uncertainty of:
● the scope, rate of progress and expense of our research and development activities;
● our ability to successfully manufacture and scale-up production;
● clinical trial protocols, speed of enrollment and resulting data;
● the effectiveness and safety of our product candidates; and
● the timing of regulatory approvals.
A change in the outcome of any of these variables with respect to the product candidates that we may develop could mean a significant change in the expenses and timing associated with the development of such product candidate.
Selling, general and administrative expenses
Our general and administrative expenses consist principally of employee, office, consulting, legal and other professional and administrative expenses. We incurred expenses associated with operating as a public company, including expenses for personnel, legal, accounting and audit fees, board of directors’ costs, directors' and officers' liability insurance premiums, Nasdaq listing fees, expenses related to investor relations and fees related to business development and maintaining our patent and license portfolio. Our selling costs include advisory fees related to obtaining the CSL Behring Agreement.
Other items, net
Our other income primarily consists of payments received to subsidize our research and development efforts and income from the subleasing of our Amsterdam facility.
Our other expense primarily consists of expenses we incur in relation to our subleasing income.
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Results of Operations
Comparison of the three months ended September 30, 2023 and 2022
The following table presents a comparison of our results of operations for the three months ended September 30, 2023 and 2022.
Three months ended September 30,
2023
2022
2023 vs 2022
(in thousands)
Total revenues
$
1,407
$
1,449
$
(42)
Operating expenses:
Cost of contract manufacturing
(1,006)
(861)
(145)
Research and development expenses
(65,400)
(48,068)
(17,332)
Selling, general and administrative expenses
(18,074)
(13,324)
(4,750)
Total operating expenses
(84,480)
(62,253)
(22,227)
Other income
1,424
1,485
(61)
Other expense
(228)
(199)
(29)
Loss from operations
(81,877)
(59,518)
(22,359)
Other non-operating items, net
(7,763)
11,332
(19,095)
Net loss before income tax benefit
$
(89,640)
$
(48,186)
$
(41,454)
Income tax benefit
69
329
(260)
Net loss
$
(89,571)
$
(47,857)
$
(41,714)
Revenue
Our revenue for the three months ended September 30, 2023 and 2022 was as follows:
Three months ended September 30,
2023
2022
2023 vs 2022
(in thousands)
License revenues
$
497
$
—
$
497
Contract manufacturing revenues
349
—
349
Collaboration revenues
561
1,449
(888)
Total revenues
$
1,407
$
1,449
$
(42)
License revenues
We recognize license revenues from CSL Behring, related to royalty payments owed on HEMGENIX® sales, when earned. For the three months ended September 30, 2023, we recognized $0.5 million of license revenues (nil for the same period in 2022).
Contract manufacturing revenues
We recognize contract manufacturing revenues related to contract manufacturing HEMGENIX® for CSL Behring. Contract manufacturing revenues is realized when earned upon sales of HEMGENIX® drug product to CSL Behring. We recognized $0.3 million contract manufacturing revenues in the three months ended September 30, 2023, compared to nil for the same period in 2022. We did not recognize such revenues in the three months ended September 30, 2022, as we started contract manufacturing activities to supply CSL Behring with launch supplies of HEMGENIX® following their submission of a Biologics License Application (“BLA”) and MAA in the spring of 2022 .
Collaboration revenues
We provide services to CSL Behring in accordance with the CSL Behring Agreement.
We entered into collaboration, research, and license agreements with Bristol-Myers Squibb (“BMS”) in 2015 which were terminated on February 21, 2023.
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For the three months ended September 30, 2023, we recognized $0.6 million of collaboration revenue for CSL Behring. For the three months ended September 30, 2022, we recognized $1.5 million of collaboration revenue for CSL Behring and BMS.
Cost of contract manufacturing
We incurred $1.0 million of cost of contract manufacturing related to the manufacture of HEMGENIX® in the three months ended September 30, 2023, compared to $0.9 million cost of contract manufacturing in the three months ended September 30, 2022.
R&D expenses
R&D expenses for the three months ended September 30, 2023 were $65.4 million, compared to $48.1 million for the same period in 2022. Other research and development expenses are separately classified in the table below. These other expenses are not allocated as they are deployed across multiple projects under development.
Three months ended September 30,
2023
2022
2023 vs 2022
(in thousands)
Temporal lobe epilepsy (AMT-260)
$
4,662
$
2,499
$
2,163
Huntington's disease (AMT-130)
3,116
4,330
(1,214)
Amyotrophic lateral sclerosis (AMT-162)
2,420
—
2,420
Fabry disease (AMT-191)
358
549
(191)
Etranacogene dezaparvovec (AMT-060/061)
—
277
(277)
Programs in preclinical development and platform related expenses
3,104
886
2,218
Total direct research and development expenses
$
13,660
$
8,541
$
5,119
Employee and contractor-related expenses
19,431
15,553
3,878
Fair value changes related to contingent consideration
14,229
5,503
8,726
Facility expenses
6,652
6,482
170
Share-based compensation expense
5,638
3,730
1,908
Disposables
4,694
6,012
(1,318)
Other expenses
1,096
2,247
(1,151)
Total other research and development expenses
$
51,740
$
39,527
$
12,213
Total research and development expenses
$
65,400
$
48,068
$
17,332
Direct research and development expenses
Temporal lobe epilepsy (AMT-260)
In the three months ended September 30, 2023 and September 30, 2022, we incurred costs of $4.7 million and $2.5 million respectively, for the preclinical development of AMT-260.
Huntington’s disease (AMT-130)
In the three months ended September 30, 2023 and September 30, 2022, our external costs for the development of AMT-130 were primarily related to the execution of our Phase I/II clinical trials in the United States and in Europe.
Amyotrophic Lateral Sclerosis caused by mutations in SOD1 (AMT-162)
On January 31, 2023, we entered into a global licensing agreement with Apic Bio for AMT-162. In the three months ended September 30, 2023, we incurred $2.4 million of costs (nil in the prior period), related to our preclinical activities for AMT-162.
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Fabry disease (AMT-191)
In the three months ended September 30, 2023 and September 30, 2022, we incurred costs of $0.4 million and $0.5 million, respectively, related to our preclinical development of AMT-191.
Etranacogene dezaparvovec (AMT-060/061)
We have incurred external costs for our hemophilia B program related to the execution of our Phase III clinical trial and 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. Prior to the transition of these activities to CSL Behring in December 2022, we managed the trials and incurred related expenses. Direct research and development expenses related to clinical development and other regulatory activities and commercialization expenses incurred in the three months ended September 30, 2023 and September 30, 2022 are presented net of reimbursements due from CSL Behring and include settlement amounts from the transition.
Preclinical programs & platform development
In the three months ended September 30, 2023, and September 30, 2022, we incurred $3.1 million and $0.9 million of costs, respectively, primarily related to our preclinical activities associated with product candidates for various other research programs and technology innovation projects.
Other research & development expenses
● We incurred $19.4 million in personnel and contractor-related expenses in the three months ended September 30, 2023, compared to $15.6 million for the same period in 2022. The increase was primarily related to the hiring of personnel and contractors to support our clinical-stage programs and manufacturing operations, as well as an increase in severance costs;
● We incurred $14.2 million of expenses in the three months ended September 30, 2023 related to an increase in the fair value of contingent consideration associated with the acquisition of uniQure France SAS, compared to $5.5 million an increase in fair value for the same period in 2022. The change was primarily due to the increase in the probability of making a future milestone payment related to the first patient dosed in the Phase I/II clinical trial of AMT-260;
● We incurred $6.7 million in operating expenses and depreciation expenses related to our rented facilities in Amsterdam and Lexington, Massachusetts in the three months ended September 30, 2023, compared to $6.5 million in the same period in 2022;
● We incurred $5.6 million in share-based compensation expenses in the three months ended September 30, 2023, compared to $3.7 million for the same period in 2022. The increase was primarily a result of recognizing compensation cost related to performance share units granted in December 2021, for which achievement of related performance conditions was deemed probable in the three months ended September 30, 2023. Compensation cost was not recognized in the three months ended September 30, 2022 as achievement of related performance conditions was not deemed probable at this time;
● We incurred $4.7 million in disposable costs in the three months ended September 30, 2023, compared to $6.0 million for the same period in 2022; and
● We incurred $1.1 million of other expenses for the three months ended September 30, 2023, compared to $2.2 million for the same period in 2022.
Selling, general and administrative expenses
Selling, general and administrative expenses for the three months ended September 30, 2023 were $18.1 million, compared to $13.3 million for the same period in 2022.
● We incurred $6.4 million in personnel and contractor-related expenses in the three months ended September 30, 2023, compared to $5.2 million in the same period in 2022;
● We incurred $5.1 million in share-based compensation expenses in the three months ended September 30, 2023, compared to $3.8 million in the same period in 2022. The increase was primarily a result of an increase in expense related to performance share units granted in 2021;
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● We incurred $2.8 million in professional fees in the three months ended September 30, 2023, compared to $1.6 million in the same period in 2022. We regularly incur accounting, audit and legal fees associated with operating as a public company; and
● We incurred $2. 8 million in other operating expenses in the three months ended September 30, 2023, compared to $2.0 million in the same period in 2022.
Other items, net
We recognized $1.4 million in other income from payments received from European authorities to subsidize our research and development efforts in the Netherlands in the three months ended September 30, 2023, compared to $1.3 million for the same period in 2022.
Other items, net for the periods presented primarily related to income from the subleasing of our Amsterdam facility and expenses we incur in relation to the subleasing facility.
Other non-operating items, net
Our other non-operating items, net, for the three months ended September 30, 2023 and 2022 were as follows:
Three months ended September 30,
2023
2022
2023 vs 2022
(in thousands)
Interest income
$
7,495
$
39
$
7,456
Interest expense
(15,444)
(3,069)
(12,375)
Foreign currency gains, net
186
14,362
(14,176)
Total non-operating (expense) / income, net
$
(7,763)
$
11,332
$
(19,095)
We recognize interest income associated with our cash and cash equivalents and investment securities. We recognized $7.5 million in interest income in the three months ended September 30, 2023, compared to $0.0 million in the same period in the prior year. Our interest income increased by $7.5 million due to the interest income earned on investment securities as well as cash on hand during the three months ended September 30, 2023.
We recognized $15.4 million in interest expense for the three months ended September 30, 2023 and $3.1 million for the three months ended September 30, 2022. Our interest expense in 2023 increased due to an increase in market interest rates related to the Hercules debt as well as the recognition of $11.8 million of interest expense related to the Royalty Financing Agreement that we entered into in May 2023.
We hold monetary items and enter into transactions in foreign currencies, predominantly in euros and U.S. dollars. We recognize foreign exchange results related to changes in these foreign currencies.
We recognized a net foreign currency gain, related to our borrowings from Hercules, the Royalty Financing Agreement and our cash and cash equivalents and investment securities as well as loans between entities within the uniQure group, of $0.2 million during the three months ended September 30, 2023, compared to a net gain of $14.4 million during the same period in 2022.
Income tax benefit
We recognized $0.1 million of deferred tax benefit in the three months ended September 30, 2023, and $0.3 million of deferred tax benefit for the same period in 2022.
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Comparison of the nine months ended September 30, 2023 and 2022
The following table presents a comparison of our results of operations for the nine months ended September 30, 2023 and 2022:
Nine months ended September 30,
2023
2022
2023 vs 2022
(in thousands)
Total revenues
$
9,154
$
3,738
$
5,416
Operating expenses:
Cost of contract manufacturing revenues
(4,793)
(1,693)
(3,100)
Research and development expenses
(172,245)
(139,263)
(32,982)
Selling, general and administrative expenses
(57,103)
(36,802)
(20,301)
Total operating expenses
(234,141)
(177,758)
(56,383)
Other income
4,537
4,981
(444)
Other expense
(673)
(621)
(52)
Loss from operations
(221,123)
(169,660)
(51,463)
Non-operating items, net
(15,262)
34,801
(50,063)
Loss before income tax benefit
$
(236,385)
$
(134,859)
(101,526)
Income tax benefit
1,113
1,263
(150)
Net loss
$
(235,272)
$
(133,596)
$
(101,676)
Revenue
Our revenue for the nine months ended September 30, 2023 and 2022 was as follows:
Nine months ended September 30,
2023
2022
2023 vs 2022
(in thousands)
License revenues
$
1,290
$
—
$
1,290
Contract manufacturing revenues
$
6,596
$
—
$
6,596
Collaboration revenues
1,268
3,738
(2,470)
Total revenues
$
9,154
$
3,738
$
5,416
License revenue
We recognize license revenues from CSL Behring related to royalty payments owed on HEMGENIX® sales, when earned. For the nine months ended September 30, 2023, we recognized $1.3 million of license revenue (nil for the same period in 2022).
Contract manufacturing revenues
We recognize contract manufacturing revenue related to contract manufacturing HEMGENIX® drug product for CSL Behring. Contract manufacturing revenues is realized when earned upon sales of HEMGENIX® to CSL Behring. We recognized $6.6 million contract manufacturing revenues in the nine months ended September 30, 2023, compared to nil for the same period in 2022. We did not recognize such revenues in the nine months ended September 30, 2022, as we started contract manufacturing activities to supply CSL Behring with launch supplies of HEMGENIX® following their submission of a BLA and MAA in the spring of 2022 .
Collaboration revenues
We provide services to CSL Behring in accordance with the CSL Behring Agreement.
We entered into collaboration, research, and license agreements with BMS in 2015 which were terminated on February 21, 2023.
For the nine months ended September 30, 2023, we recognized $1.3 million of collaboration revenue for CSL Behring. For the nine months ended September 30, 2022, we recognized $3.7 million of collaboration revenue for CSL Behring and BMS.
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Cost of contract manufacturing
We incurred $4.8 million of cost of contract manufacturing related to the manufacture of HEMGENIX® in the nine months ended September 30, 2023, compared to $1.7 million cost of contract manufacturing in the nine months ended September 30, 2022.
R&D expenses
R&D expenses for the nine months ended September 30, 2023 were $172.2 million, compared to $139.3 million for the same period in 2022. Other research and development expenses are separately classified in the table below. These other expenses are not allocated as they are deployed across multiple projects under development.
Nine months ended September 30,
2023
2022
2023 vs 2022
(in thousands)
Amyotrophic lateral sclerosis (AMT-162)
$
13,048
$
—
$
13,048
Temporal lobe epilepsy (AMT-260)
11,970
11,394
576
Huntington's disease (AMT-130)
11,093
15,721
(4,628)
Fabry disease (AMT-191)
1,846
1,664
182
Etranacogene dezaparvovec (AMT-060/061)
(1,336)
1,008
(2,344)
Programs in preclinical development and platform related expenses
7,246
3,919
3,327
Total direct research and development expenses
$
43,867
$
33,706
$
10,161
Employee and contractor-related expenses
55,894
46,786
9,108
Facility expenses
21,114
17,150
3,964
Share-based compensation expense
14,675
12,090
2,585
Disposables
14,475
15,077
(602)
Fair value changes related to contingent consideration
15,441
7,510
7,931
Other expenses
6,779
6,944
(165)
Total other research and development expenses
$
128,378
$
105,557
$
22,821
Total research and development expenses
$
172,245
$
139,263
$
32,982
Direct research and development expenses
Amyotrophic Lateral Sclerosis caused by mutations in SOD1 (AMT-162)
On January 31, 2023, we entered into a global licensing agreement with Apic Bio for AMT-162. We have incurred $13.0 million expenses recorded to research and development expense related to the acquisition, as well as for preclinical activities of AMT-162 during the nine-month period ended September 30, 2023.
Temporal lobe epilepsy (AMT-260)
In the nine months ended September 30, 2023 and September 30, 2022, we incurred costs of $12.0 million and $11.4 million, respectively, for the preclinical development of AMT-260.
Huntington’s disease (AMT-130)
In the nine months ended September 30, 2023 and September 30, 2022, our external costs for the development of AMT-130 were primarily related to the execution of our Phase I/II clinical trials in the U.S. and in Europe.
Fabry disease (AMT-191)
In the nine months ended September 30, 2023 and September 30, 2022, we incurred costs of $1.8 million and $1.7 million, respectively, related to our preclinical development of AMT-191.
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Etranacogene dezaparvovec (AMT-060/061)
We have incurred external costs for our hemophilia B program related to the execution of our Phase III clinical trial and 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. Prior to the transition of these activities to CSL Behring in December 2022, we managed the trials and incurred related expenses. Direct research and development expenses related to clinical development and other regulatory activities and commercialization expenses incurred in the nine months ended September 30, 2023 and September 30, 2022 are presented net of reimbursements due from CSL Behring and include settlement amounts from the transition.
Preclinical programs & platform development
In the nine months ended September 30, 2023, and September 30, 2022, we incurred costs of $7.2 million and $3.9 million, respectively, primarily related to our preclinical activities associated with product candidates for various other research programs and technology innovation projects.
Other research & development expenses
● We incurred $55.9 million in personnel and contractor-related expenses in the nine months ended September 30, 2023, compared to $46.8 million for the same period in 2022. The increase was primarily related to the hiring of personnel and contractors to support our clinical-stage programs and manufacturing operations, as well as an increase in severance costs;
● We incurred $21.1 million in operating expenses and depreciation expenses related to our rented facilities in Amsterdam and Lexington, Massachusetts in the nine months ended September 30, 2023, compared to $17.2 million in the same period in 2022. The increase primarily related to operating expenses and depreciation expense incurred from additional sites in Lexington which commenced in May and November 2022;
● We incurred $15.4 million of expenses in the nine months ended September 30, 2023 related to an increase in the fair value of contingent consideration associated with the acquisition of uniQure France SAS, compared to $7.5 million for the same period in 2022. The change was primarily due to the increase in the probability of making a future milestone payment related to the first patient dosed in the Phase I/II clinical trial of AMT-260;
● We incurred $14.7 million in share-based compensation expenses in the nine months ended September 30, 2023, compared to $12.1 million for the same period in 2022. The increase was primarily a result of an increase in awards granted as well as from recognizing compensation cost related to performance share units granted in December 2021, for which achievement of related performance conditions was deemed probable in the nine months ended September 30, 2023. Compensation cost was not recognized in the nine months ended September 30, 2022 as achievement of related performance conditions was not deemed probable at this time;
● We incurred $14.5 million in disposable costs in the nine months ended September 30, 2023, compared to $15.1 million for the same period in 2022; and
● We incurred $6.8 million of other expenses for the nine months ended September 30, 2023, compared to $6.9 million for the same period in 2022. There was an increase related to contractual payments of $3.1 million which we owed to a licensor upon the Europeans Medicines Agency approval of HEMGENIX® in February 2023, which were offset by a reduction in consultant-related expenses.
Selling, general and administrative expenses
Selling, general and administrative expenses for the nine months ended September 30, 2023 were $57.1 million, compared to $36.8 million for the same period in 2022.
● We incurred $18.8 million in personnel and contractor-related expenses in the nine months ended September 30, 2023, compared to $14.8 million in the same period in 2022. The increase was primarily related to the hiring of personnel and contractors to support our business operations;
● We incurred $12.9 million in share-based compensation expenses in the nine months ended September 30, 2023, compared to $9.9 million in the same period in 2022. The increase was primarily a result of an increase in awards grants and from recognizing compensation cost for performance share units granted in December 2021 that were deemed probable in the nine months ended September 30, 2023;
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● We incurred $8.5 million in professional fees in the nine months ended September 30, 2023, compared to $4.3 million in the same period in 2022. We regularly incur accounting, audit and legal fees associated with operating as a public company. The increase from the prior period includes an increase in professional fees related to our global licensing agreement with Apic Bio and other corporate initiatives;
● We incurred $3.8 million in financial advisory fees in relation to our licensing transaction with CSL Behring in the nine months ended September 30, 2023 (nil in prior period);
● We incurred $3.3 million in intellectual property fees including registration and professional fees in the nine months ended September 30, 2023 compared to $1.2 million in the same period in 2022. The increase mainly related to an increase in professional fees; and
● We incurred $9.0 million in other operating expenses in the nine months ended September 30, 2023, compared to $6.0 million in the same period in 2022. The increase was primarily a result of an increase in information technology expenses.
Other items, net
We recognized $3.9 million in other income from payments received from European authorities to subsidize our research and development efforts in the Netherlands in the nine months ended September 30, 2023, compared to $3.9 million for the same period in 2022.
Other items, net for the periods presented, primarily related to income from the subleasing of our Amsterdam facility and expenses we incur in relation to the subleasing facility.
Other non-operating items, net
Our other non-operating items, net, for the nine months ended September 30, 2023 and 2022 were as follows:
Nine months ended September 30,
2023
2022
2023 vs 2022
(in thousands)
Interest income
$
12,393
$
117
$
12,276
Interest expense
(25,846)
(8,279)
(17,567)
Foreign currency (losses) / gains, net
(1,809)
42,328
(44,137)
Other non-operating gains
—
635
(635)
Total non-operating (expense) / income, net
$
(15,262)
$
34,801
$
(50,063)
We recognize interest income associated with our cash and cash equivalents and investment securities. We recognized $12.4 million in interest income in the nine months ended September 30, 2023, compared to $0.1 million in the same period in the prior year. Our interest income increased by $12.3 million due to the interest income earned on investment securities as well as cash on hand during the nine months ended September 30, 2023.
We recognized $25.8 million in interest expense for the nine months ended September 30, 2023 and $8.3 million for the nine months ended September 30, 2022. Our interest expense in 2023 increased due to an increase in market interest rates related to the Hercules debt as well as the recognition of $14.9 million of interest expense related to the Royalty Financing Agreement that we entered into in May 2023.
We hold monetary items and enter into transactions in foreign currencies, predominantly in euros and U.S. dollars. We recognize foreign exchange results related to changes in these foreign currencies.
We recognized a net foreign currency loss, related to our borrowings from Hercules, the Royalty Financing Agreement and our cash and cash equivalents and investment securities as well as loans between entities within the uniQure group, of $1.8 million during the nine months ended September 30, 2023, compared to a net gain of $42.3 million during the same period in 2022.
Income tax benefit
We recognized $1.1 million of deferred tax benefit in the nine months ended September 30, 2023, and $1.3 million of deferred tax benefit for the same period in 2022.
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Financial Position, Liquidity and Capital Resources
As of September 30, 2023, we had cash and cash equivalents, restricted cash, and investment securities of $662.1 million. U ntil 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, royalty monetization financings, distribution, and licensing arrangements. Based on our current operating plan, research and development plans and our timing expectations related to the progress of our programs and following the Reorganization, we believe that our cash and cash equivalents and investment securities will fund our operations into the second quarter of 2027. We have based this estimate on assumptions that may prove to be wrong, and we could exhaust our available capital resources sooner than we expect. We expect that we will require additional funding if we decide to advance AMT-130 for our Huntington’s disease gene therapy program or any of our other product candidates into late stage clinical development. Our material cash requirements include the following contractual and other obligations:
Debt
As of September 30, 2023, we had an outstanding loan amount owed to Hercules Capital, Inc. (“Hercules”) for an aggregate principal amount of $100.0 million. Future interest payments and financing fees associated with the loan total $50.9 million, with $13.4 million payable within 12 months. We are contractually required to repay the $100.0 million in full in January 2027.
Royalty Financing Agreement
In May 2023, we entered into the Royalty Financing Agreement with the Purchaser. Under the Royalty Financing Agreement, we received an upfront cash payment of $375.0 million in exchange for the lowest royalty tier on CSL Behring’s worldwide net sales of HEMGENIX® for certain current and future royalties due to us, up to 1.85 times (or $693.8 million) of this upfront cash payment until June 30, 2032 or, if such cap is not met by June 30, 2032, up 2.25 times the upfront cash payment (or $843.8 million) through December 31, 2038.
We are eligible to receive an additional $25.0 million milestone payment if 2024 net sales of HEMGENIX® exceed a pre-specified level.
If 2024 net sales do not exceed the pre-specified threshold, we will be obligated to pay $25.0 million to the Purchaser but only to the extent that we achieve future sales milestones under the CSL Behring Agreement.
Leases
We entered into lease arrangements for facilities, including corporate, manufacturing and office space. As of September 30, 2023, we had fixed lease payment obligations of $54.8 million, with $8.3 million payable within 12 months.
Commitments related to uniQure France SAS acquisition (nominal amounts)
In relation to the uniQure France SAS acquisition, we entered into commitments to make payments to the former shareholders upon the achievement of certain contractual milestones. The commitments include payments related to post-acquisition services that we agreed to as part of the transaction. In September 2023, we made a payment of EUR 10.0 million ($10.6 million) to the former shareholders of uniQure France SAS following the FDA’s clearance of the IND application for AMT-260. As of September 30, 2023, our remaining commitment amounts include a EUR 30.0 million ($31.7 million) milestone payment due upon treating the first patient in Phase I/II clinical trial and EUR 160.0 million ($169.2 million) in potential milestone payments associated with Phase III development and the approvals of AMT-260 in the U.S. and European Union. 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 September 30, 2023, of $1.06/€1.00. As of September 30, 2023, we expect these obligations will become payable between early 2024 and 2031. If and when due, up to 25% of the milestone payments can be settled with our ordinary shares.
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Commitments related to licensors and financial advisors
We have obligations to make future payments to third parties that become due and payable on the achievement of certain development, regulatory and commercial milestones (such as the start of a clinical trial, filing of a BLA, approval by the FDA or product launch) or because of collecting payments related to our sale of the exclusive global rights to the Product to CSL Behring. We also owe payments to a financial advisor related to certain payments we will collect under the CSL Behring Agreement.
The table below summarizes our consolidated cash flow data for the nine months ended:
Nine months ended September 30,
2023
2022
(in thousands)
Cash, cash equivalents and restricted cash at the beginning of the period
$
231,173
$
559,353
Net cash used in operating activities
(96,388)
(90,380)
Net cash used in investing activities
(265,248)
(14,522)
Net cash generated from financing activities
362,675
844
Foreign exchange impact
424
(11,876)
Cash, cash equivalents and restricted cash at the end of period
$
232,636
$
443,419
We had previously incurred losses and cumulative negative cash flows from operations since our business was founded by our predecessor entity AMT Therapeutics Holding N.V. (“AMT”) in 1998, except for generating income in 2021 after receiving the upfront payment upon closing of the CSL Behring Agreement in 2021. We continue to incur losses in the current period. We recorded a net loss of $89.6 million and $235.3 million in the three and nine months ended September 30, 2023, respectively, compared to a net loss of $47.9 million and $133.6 million during the same period in 2022. As of September 30, 2023, we had an accumulated deficit of $817.2 million.
Sources of liquidity
From our first institutional venture capital financing in 2006 through the current period, we funded our operations primarily through private and public placements of equity securities, debt securities, payments from our collaboration partners as well as from selling a portion of royalties due from our collaboration partner CSL Behring. In May 2021, we received a $462.4 million cash payment due from CSL Behring. We have collected $55.0 million related to CSL Behring’s global regulatory submissions for etranacogene dezaparvovec in March and April 2022, and $100.0 million in July 2023 related to the first sale milestone of HEMGENIX® in the U.S., and are eligible to receive additional milestone payments, as well as royalties (to the extent not owed to settle the liability from royalty financing) on net sales of HEMGENIX®.
On May 12, 2023 we and Hercules amended the 2021 Restated Facility. The 2023 Amended Facility extends the maturity date and interest-only period from December 1, 2025 to January 5, 2027.
We are required to repay the entire principal balance of $100.0 million on the maturity date. The interest rate is adjustable and is the greater of (i) 7.95% or (ii) 7.95% plus the prime rate less 3.25% per annum. Under the 2023 Amended Facility, we owe a back-end fee of $4.9 million on December 1, 2025 and a back-end fee of $1.3 million on the maturity date.
We are subject to certain covenants under the 2023 Amended Facility and may become subject to covenants under any future indebtedness that could limit our ability to take specific actions, such as incurring additional debt, making capital expenditures, or declaring dividends, which could adversely impact our ability to conduct our business. In addition, our pledge of assets as collateral to secure our obligations under the 2023 Amended Facility may limit our ability to obtain debt financing. The 2023 Amended Facility permits us to issue up to $500.0 million of convertible debt.
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To the extent we need to finance our cash needs through equity offerings or debt financings, such financing may be subject to unfavorable terms including without limitation, the negotiation and execution of definitive documentation, as well as credit and debt market conditions, and we may not be able to obtain such financing on terms acceptable to us or at all. If financing is not available when needed, including through debt or equity financing, or is available only on unfavorable terms, we may be unable to meet our cash needs. If we raise additional funds through collaborations, strategic alliances or marketing, distribution, or licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams or product candidates or grant licenses on terms that may not be favorable to us. If we are unable to raise additional funds through equity or debt financings when needed, we may be required to delay, limit, reduce or terminate our product development or future commercialization efforts or grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves, which could have a material adverse effect on our business, financial conditions, results of operations and cash flows.
Net Cash used in operating activities
Net cash used in operating activities was $96.4 million for the nine months ended September 30, 2023 and consisted of net loss of $235.3 million adjusted for non-cash items, including depreciation and amortization expense of $7.7 million, amortization of the premium/discount on investment securities of $6.5 million, share-based compensation expense of $28.1 million, changes in the fair value of contingent consideration of $15.4 million, unrealized foreign exchange losses of $3.1 million, $14.9 million of interest expense related to the royalty financing and a change in deferred taxes of $1.1 million. Net cash used in operating activities also included favorable changes in operating assets and liabilities of $77.0 million. There was a net decrease in accounts receivable, prepaid expenses, and other current assets and receivables of $96.6 million, primarily related to the collection of the $100.0 million milestone due from CSL Behring in July 2023 . There was an increase in inventory balances of $8.7 million. There was a net decrease in accounts payable, accrued expenses, other liabilities, and operating leases of $10.8 million, primarily related to a decrease of $4.8 million in accounts payable and a decrease of $6.0 million related to various accruals. Net cash used in operating activities also includes a payment for a contingent consideration milestone of $1.9 million.
Net cash used in operating activities was $90.4 million for the nine months ended September 30, 2022 and consisted of a net loss of $133.6 million adjusted for non-cash items, including depreciation and amortization expense of $6.2 million, share-based compensation expense of $22.3 million, changes in the fair value of contingent consideration and the derivative financial liability of $6.9 million, unrealized foreign exchange gains of $36.4 million and a change in deferred taxes of $1.3 million. Net cash generated from operating activities also included favorable changes in operating assets and liabilities of $46.1 million. There was a net decrease in accounts receivable and contract asset, prepaid expenses, and other current assets and receivables of $42.0 million, primarily related to the collection of $55.0 million of the contract asset related to CSL milestones of $55.0 million in March 2022 and April 2022. There was an increase in inventories of $4.1 million related to the production of etranacogene dezaparvovec under the CSL Behring Agreement. These changes also relate to a net increase in accounts payable, accrued expenses, other liabilities, and operating leases of $8.2 million, primarily related to increase in accounts payable.
Net cash used in investing activities
In the nine months ended September 30, 2023, we used $265.2 million in our investing activities compared to using $14.5 million for the same period in 2022.
Nine months ended September 30,
2023
2022
(in thousands)
Investment in investment securities
$
(366,439)
$
—
Proceeds from maturity of investment securities
106,307
—
Build out of Amsterdam site
(2,161)
(8,265)
Build out of Lexington site
(2,955)
(4,357)
Acquisition of uniQure France SAS, net of cash acquired
—
(1,900)
Net cash used in investing activities
$
(265,248)
$
(14,522)
During the nine months ended September 30, 2023, we invested $366.4 million of our cash on hand into euro and U.S. dollar denominated government bonds (nil for the nine months ended September 30, 2022).
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During the nine months ended September 30, 2023, we received $106.3 million from the repayment of previous investments into euro and U.S. dollar denominated government bonds (nil for nine months ended September 30, 2022).
We invested $2.2 million and $3.0 million, respectively, into our Amsterdam, Netherlands and Lexington, Massachusetts sites consumed during the nine months ended September 30, 2023, compared to $8.3 million and $4.4 million for the same period in 2022.
Net cash generated from financing activities
In the nine months ended September 30, 2023, we generated $362.7 million from financing activities compared to $0.8 million for the same period in 2022.
Nine months ended September 30,
2023
2022
(in thousands)
Cash flows from financing activities
Proceeds from royalty financing agreement, net of debt issuance costs
$
370,062
$
-
Proceeds from issuance of shares related to employee stock option and purchase plans
262
844
Contingent consideration milestone payment
(7,649)
-
Net cash generated from financing activities
$
362,675
$
844
In June 2023, we received $370.1 million net proceeds from the Royalty Financing Agreement.
During the nine months ended September 30, 2023, we received $0.3 million from the exercise of options to purchase ordinary shares in relation to our 2014 Plans compared to $0.8 million for the same period in 2022.
In September 2023, following the FDA’s clearance of the IND application for AMT-260, we made a payment of $9.5 million to the former shareholders of uniQure France SAS to settle a portion of the contingent consideration based on contractually defined milestones, of which $7.6 million was classified as cash flows from financing activities and $1.9 million was classified as a net cash flow used in operating activities.
Funding requirements
Our future capital requirements will depend on many factors, including but not limited to:
● 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 uniQure France SAS, 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 scope, obligations and restrictions on our business related to our existing equity, debt or royalty monetization financings and underlying agreements;
● 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 manufacturing products for CSL Behring;
● the scope, timing, results and costs of preclinical development and laboratory testing of our additional product candidates;
● the need for additional resources and related recruitment costs to support the preclinical and clinical development of our product candidates;
● the need for any additional tests, studies, or trials beyond those originally anticipated to confirm the safety or efficacy of our product candidates and technologies;
● the cost, timing and outcome of regulatory reviews associated with our product candidates;
● our ability to enter into collaboration arrangements in the future;
● the costs and timing of preparing, filing, expanding, acquiring, licensing, maintaining, enforcing, and prosecuting patents and patent applications, as well as defending any intellectual property-related claims;
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● the costs associated with maintaining quality compliance and optimizing our manufacturing processes, including the operating costs associated with our Lexington, Massachusetts manufacturing facility;
● the financial impact of the Reorganization; and
● the costs associated with increasing the scale and capacity of our manufacturing capabilities.
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Text extracted from the filing as submitted to EDGAR. Formatting, tables and exhibits are simplified for reading; the original document is authoritative for anything you rely on.