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 devastating 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, amyotrophic lateral sclerosis (“ALS”), refractory mesial temporal lobe epilepsy (“MTLE”) and Fabry disease. Our internally developed HEMGENIX®, a gene therapy for the treatment of hemophilia B, has been approved for commercialization by the United States Food and Drug Administration (the “FDA”) in November 2022 and the European Medicines Agency (“EMA”) in February 2023. The approval of HEMGENIX® follows more than a decade of research and clinical development, represents a major milestone in the field of gene therapy and ushers in a new treatment approach for patients living with hemophilia B. We license HEMGENIX® to CSL Behring LLC (“CSL Behring”), which is responsible for its commercialization. We are manufacturing HEMGENIX® for CSL Behring and are entitled to specific milestone payments and royalties on net sales of the product, a portion of which we sold to a royalty acquisition company in 2023 in exchange for up-front cash.
We believe our validated technology platform and manufacturing capabilities provide us with distinct competitive advantages, including the potential to reduce development risk, cost, and time to market. We produce our adeno-associated virus-based gene therapies in our own facilities with a proprietary, current good manufacturing practices (“GMP”) -compliant manufacturing process. We believe our Lexington, Massachusetts-based facility is one of the world’s leading, most versatile, gene therapy manufacturing facilities.
Recent Product Candidate Developments
Huntington’s disease program (AMT-130)
AMT-130 is our novel gene therapy candidate for the treatment of Huntington’s disease, which 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 multi-center randomized, controlled, and blinded Phase I/II clinical trial for AMT-130 in the U.S. (“US study”) as well as an open-label Phase Ib/II study in Europe with the same early-manifest criteria for Huntington’s disease as the U.S. study (“European study”). We completed the enrollment of all 26 patients in the first two cohorts of our US study in March 2022 and the enrollment of 13 patients in the two cohorts of our European study in June 2023.
In November 2023, we initiated patient dosing in a third cohort of up to 12 patients to further investigate both doses of AMT-130 in combination with perioperative immunosuppression. Patient enrollment is ongoing in this cohort with a focus on evaluating near-term safety and tolerability.
In June 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. In December 2023, we announced updated interim data, including up to 30-month follow-up from the 26 patients enrolled in the ongoing US study as well as the 13 patients enrolled in the European study.
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We plan to initiate interactions with the FDA in the second quarter of 2024. The goal of these interactions is to define the future clinical and regulatory pathway for AMT-130 and is expected to include discussions of the data from the ongoing Phase I/II trials and the potential to leverage robust natural history comparators and long-term clinical data from the Phase I/II studies.
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 are initiating a Phase I/IIa clinical trial that will be conducted in the United States and consist of two parts. The first part is a multicenter, open-label trial with two dosing cohorts of six patients each to assess safety, tolerability, and first signs for efficacy of AMT-260 in patients with refractory MTLE. The second part is expected to be a randomized, controlled trial to generate proof of concept (“POC”) data.
Fabry disease program (AMT-191)
AMT-191 is our 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. In November 2023 we announced that the FDA had cleared the IND application for AMT-191.
We are initiating a first-in-human Phase I/IIa clinical trial that will be conducted in the United States. The multicenter, open-label clinical trial consists of two dose-escalating cohorts of up to three adult male patients each to assess safety, tolerability, and early signs of efficacy of AMT-191 in patients with Fabry disease. Three patients will be dosed in the initial dose. If no dose-limiting toxicology is identified, the dose will be escalated. If dose-limiting toxicology occurs in one of the three initial patients, three additional patients will be enrolled at the same dose level. If no additional patients in the cohort experience a dose-limiting toxicology, the dose will be escalated. Assessments will be made at three- and six-months post-treatment.
Amyotrophic Lateral Sclerosis (AMT-162)
AMT-162 is our gene therapy candidate 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. Mutations in the SOD1 gene of ALS account for approximately one-fifth of all inherited forms of this fatal disease. AMT-162 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. The FDA has cleared the IND application for AMT-162 and has granted Orphan Drug and Fast Track designation.
We are initiating a first-in-human Phase I/II clinical trial that will be a U.S.-based, multi-center, open-label trial consisting of three cohorts with up to four patients each receiving a one-time intrathecal infusion with immunosuppression. Safety, tolerability and early signs of efficacy will be evaluated in the study.
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Financial Overview
Key components of our results of operations include the following:
Three months ended March 31,
2024
2023
(in thousands)
Total revenues
$
8,485
$
5,325
Cost of license revenues
(150)
—
Cost of contract manufacturing revenues
(9,076)
(2,435)
Research and development expenses
(40,692)
(60,809)
Selling, general and administrative expenses
(13,937)
(17,848)
Net loss
(65,618)
(77,227)
As of March 31, 2024 and December 31, 2023, we had cash and cash equivalents and investment securities of $555.7 million and $617.9 million, respectively. We had a net loss of $65.6 million in the three months ended March 31, 2024, compared to net loss of $77.2 million for the same period in 2023. As of March 31, 2024 and December 31, 2023, we had accumulated deficits of $956.0 million and $890.4 million, respectively.
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 three months ended March 31, 2024 or reasonably possible changes of our critical accounting estimates as of March 31, 2024 that could have had a material impact on our results of operations for the three ended March 31, 2024.
Cost of contract manufacturing
We entered into a development and commercial supply agreement with CSL Behring in June 2020. We recognize the cost to manufacture HEMGENIX® under such agreement as cost of contract manufacturing.
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;
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● 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 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.
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.
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 March 31, 2024 and 2023
The following table presents a comparison of our results of operations for the three months ended March 31, 2024 and 2023.
Three months ended March 31,
2024
2023
2024 vs 2023
(in thousands)
Total revenues
$
8,485
$
5,325
$
3,160
Operating expenses:
Cost of license revenues
(150)
—
(150)
Cost of contract manufacturing
(9,076)
(2,435)
(6,641)
Research and development expenses
(40,692)
(60,809)
20,117
Selling, general and administrative expenses
(13,937)
(17,848)
3,911
Total operating expenses
(63,855)
(81,092)
17,237
Other income
1,376
1,811
(435)
Other expense
(234)
(216)
(18)
Loss from operations
(54,228)
(74,172)
19,944
Other non-operating items, net
(10,734)
(4,262)
(6,472)
Net loss before income tax (expense) / benefit
$
(64,962)
$
(78,434)
$
13,472
Income tax (expense) / benefit
(656)
1,207
(1,863)
Net loss
$
(65,618)
$
(77,227)
$
11,609
Revenues
Our revenues for the three months ended March 31, 2024 and 2023 were as follows:
Three months ended March 31,
2024
2023
2024 vs 2023
(in thousands)
License revenues
$
1,202
$
—
$
1,202
Contract manufacturing revenues
3,990
4,937
(947)
Collaboration revenues
3,293
388
2,905
Total revenues
$
8,485
$
5,325
$
3,160
License revenues
We recognize license revenues from CSL Behring, related to royalty payments owed on HEMGENIX® sales, when earned. For the three months ended March 31, 2024, we recognized $1.2 million of license revenues (nil for the same period in 2023).
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 $4.0 million contract manufacturing revenues in the three months ended March 31, 2024 , compared to $4.9 million for the same period in 2023.
Collaboration revenues
We provide services to CSL Behring in accordance with the CSL Behring Agreement.
For the three months ended March 31, 2024 and 2023 we recognized $3.3 million and $0.4 million of collaboration revenue for CSL Behring, respectively.
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Cost of contract manufacturing
We incurred $9.1 million of cost of contract manufacturing related to the manufacture of HEMGENIX® in the three months ended March 31, 2024, compared to $2.4 million cost of contract manufacturing in the three months ended March 31, 2023. The increase in cost of $6.7 million in 2024 is primarily related to expensing costs previously capitalized as work in progress, including a write-down to lower net realizable value.
R&D expenses
R&D expenses for the three months ended March 31, 2024 were $40.7 million, compared to $60.8 million for the same period in 2023. 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 March 31,
2024
2023
2024 vs 2023
(in thousands)
Huntington's disease (AMT-130)
$
2,426
$
3,733
$
(1,307)
Temporal lobe epilepsy (AMT-260)
2,254
4,320
(2,066)
Amyotrophic lateral sclerosis (AMT-162)
1,977
10,041
(8,064)
Fabry disease (AMT-191)
1,370
1,088
282
Programs in preclinical development and platform related expenses
449
1,885
(1,436)
Etranacogene dezaparvovec (AMT-060/061)
—
667
(667)
Total direct research and development expenses
$
8,476
$
21,734
$
(13,258)
Employee and contractor-related expenses
16,923
18,703
(1,780)
Facility expenses
7,095
6,786
309
Share-based compensation expense
3,425
4,305
(880)
Other expenses
2,687
4,400
(1,713)
Disposables
1,921
3,906
(1,985)
Fair value changes related to contingent consideration
165
975
(810)
Total other research and development expenses
$
32,216
$
39,075
$
(6,859)
Total research and development expenses
$
40,692
$
60,809
$
(20,117)
Direct research and development expenses
Huntington’s disease (AMT-130)
In the three months ended March 31, 2024 and March 31, 2023, we incurred costs of $2.4 million and $3.7 million respectively. 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. In the prior year, we had enrollment for the European clinical trial.
Temporal lobe epilepsy (AMT-260)
In the three months ended March 31, 2024 and March 31, 2023, we incurred costs of $2.3 million and $4.3 million respectively, for the development of AMT-260. In August 2023, the FDA cleared our IND application, and we started incurring costs for the preparation of a Phase I clinical trial.
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 March 31, 2024, we incurred $2.0 million of costs to initiate a Phase I/II clinical trial in 2024. In the three months ended March 31, 2023 we incurred $10.0 million of expenses related to the transaction.
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Fabry disease (AMT-191)
In the three months ended March 31, 2024 and March 31, 2023, we incurred costs of $1.3 million and $1.1 million, respectively, related to our development of AMT-191. In November 2023, the FDA cleared the IND application, and we started incurring additional costs for the Phase I/II clinical trial preparation.
Preclinical programs & platform development
In the three months ended March 31, 2024 and March 31, 2023, we incurred $0.4 million and $1.9 million of costs, respectively, primarily related to our preclinical activities associated with product candidates for various other research programs and technology innovation projects.
Etranacogene dezaparvovec (AMT-060/061)
We transitioned activities related to the clinical trial and long-term follow-up of patients to CSL Behring in December 2022. Direct research and development expenses related to clinical development and other regulatory activities and commercialization expenses incurred in the three months ended March 31, 2024 and March 31, 2023 are presented net of reimbursements due from CSL Behring and include settlement amounts from the transition.
Other research & development expenses
● We incurred $16.9 million in personnel and contractor-related expenses in the three months ended March 31, 2024 , compared to $18.7 million for the same period in 2023. The decrease was primarily related to the reduction in personnel and contractors as a result of the restructuring that occurred in October 2023;
● We incurred $7.1 million in operating expenses and depreciation expenses related to our rented facilities in Amsterdam and Lexington, Massachusetts in the three months ended March 31, 2024 , compared to $6.8 million in the same period in 2023;
● We incurred $3.4 million in share-based compensation expenses in the three months ended March 31, 2024 , compared to $4.3 million for the same period in 2023. The decrease was primarily a result of the reduction in expense from the restructuring that occurred in October 2023;
● We incurred $2.7 million of other expenses for the three months ended March 31, 2024 , compared to $4.4 million for the same period in 2023;
● We incurred $1.9 million in disposable costs in the three months ended March 31, 2024 , compared to $3.9 million for the same period in 2023. The decrease was primarily a result of the reduction in expense from the restructuring that occurred in October 2023; and
● We incurred $0.2 million of expenses in the three months ended March 31, 2024 related to an increase in the fair value of contingent consideration associated with the acquisition of uniQure France SAS, compared to $1.0 million increase in fair value for the same period in 2023.
Selling, general and administrative expenses
Selling, general and administrative expenses for the three months ended March 31, 2024 were $13.9 million, compared to $17.8 million for the same period in 2023.
● We incurred $6.2 million in personnel and contractor-related expenses in the three months ended March 31, 2024 , compared to $5.9 million in the same period in 2023;
● We incurred $3.4 million in share-based compensation expenses in the three months ended March 31, 2024 , compared to $3.7 million in the same period in 2023;
● We incurred $2.0 million in professional fees in the three months ended March 31, 2024 , compared to $3.2 million in the same period in 2023. We regularly incur accounting, audit and legal fees associated with operating as a public company. In the prior period, we incurred professional fees related to our global licensing agreement with Apic Bio; and
● We incurred $2.0 million in other expenses in the three months ended March 31, 2024, compared to $4.0 million in the same period in 2023. The $2.0 million decrease was primarily related to a decrease in intellectual property fees as well as a reduction of expenses for information technology.
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Other items, net
We recognized $1.3 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 March 31, 2024, compared to $1.3 million for the same period in 2023.
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 March 31, 2024 and 2023 were as follows:
Three months ended March 31,
2024
2023
2024 vs 2023
(in thousands)
Interest income
$
6,508
$
1,669
$
4,839
Interest expense
(16,097)
(3,562)
(12,535)
Foreign currency losses, net
(1,145)
(2,369)
1,224
Total non-operating expense, net
$
(10,734)
$
(4,262)
$
(6,472)
We recognize interest income associated with our cash and cash equivalents and investment securities. We recognized $6.5 million in interest income in the three months ended March 31, 2024, compared to $1.7 million in the same period in the prior year. Our interest income increased by $4.8 million due to the interest income earned on investment securities as well as cash on hand during the three months ended March 31, 2024.
We recognized $16.1 million in interest expense for the three months ended March 31, 2024 and $3.6 million for the three months ended March 31, 2023. Our interest expense in 2024 increased due to an increase in market interest rates related to the Hercules debt as well as the recognition of $12.4 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 $1.1 million during the three months ended March 31, 2024, compared to a net loss of $2.4 million during the same period in 2023.
Income tax benefit
We recognized $0.7 million of deferred tax expense in the three months ended March 31, 2024 , and $1.2 million of deferred tax benefit for the same period in 2023.
Financial Position, Liquidity and Capital Resources
As of March 31, 2024, we had cash and cash equivalents, restricted cash and investment securities of $558.9 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. 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 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:
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Debt
As of March 31, 2024, 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 $44.2 million, with $13.4 million payable within 12 months. We are contractually required to repay the $100.0 million in full in January 2027.
Leases
We entered into lease arrangements for facilities, including corporate, manufacturing and office space. As of March 31, 2024, we had fixed lease payment obligations of $50.7 million, with $8.4 million payable within 12 months.
Commitments related to uniQure France SAS acquisition (nominal amounts)
In relation to our acquisition of uniQure France SAS in 2021, 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 March 31, 2024, our remaining commitment amounts include a EUR 30.0 million ($32.4 million) milestone payment due upon treating the first patient in a Phase I/II clinical trial for AMT-260 and EUR 160.0 million ($172.7 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 March 31, 2024, of $1.08/€1.00. As of March 31, 2024, we expect these obligations will become payable between 2024 and 2031. If and when due, up to 25% of the milestone payments can be settled with our ordinary shares.
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 as a result of collecting payments related to our sale of the exclusive global rights of HEMGENIX® 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 three months ended:
Three months ended March 31,
2024
2023
(in thousands)
Cash, cash equivalents and restricted cash at the beginning of the period
$
244,544
$
231,173
Net cash used in operating activities
(60,575)
(78,302)
Net cash generated from investing activities
63,985
2,988
Net cash generated from financing activities
—
131
Foreign exchange impact
(1,725)
1,034
Cash, cash equivalents and restricted cash at the end of period
$
246,229
$
157,024
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, 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 $65.6 million in the three months ended March 31, 2024, compared to a net loss of $77.2 million during the same period in 2023. As of March 31, 2024, we had an accumulated deficit of $956.0 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. We have collected $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®.
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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% and (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.
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 $60.6 million for the three months ended March 31, 2024 and consisted of net loss of $65.6 million adjusted for non-cash items, including depreciation and amortization expense of $2.6 million, amortization of the discount on investment securities of $3.7 million, share-based compensation expense of $7.2 million, changes in the fair value of contingent consideration of $0.2 million, unrealized foreign exchange losses of $1.4 million, $12.4 million of interest expense related to the royalty financing and a change in deferred taxes of $0.7 million. Net cash used in operating activities also included unfavorable changes in operating assets and liabilities of $18.4 million. There was a net increase in accounts receivable, prepaid expenses, and other current assets and receivables of $10.4 million. There was a decrease in inventory balances of $2.2 million. There was a net decrease in accounts payable, accrued expenses, other liabilities, and operating leases of $10.3 million, primarily related to a decrease of $6.7 million from personnel related accruals.
Net cash used in operating activities was $78.3 million for the three months ended March 31, 2023 and consisted of net loss of $77.2 million adjusted for non-cash items, including depreciation and amortization expense of $2.5 million, amortization of the discount on investment securities of $0.9 million, share-based compensation expense of $8.1 million, changes in the fair value of contingent consideration of $1.0 million, unrealized foreign exchange losses of $1.2 million and a change in deferred taxes of $1.2 million. Net cash generated from operating activities also included unfavorable changes in operating assets and liabilities of $12.2 million. There was a net increase in accounts receivable, prepaid expenses, and other current assets and receivables of $0.9 million. These changes also relate to a net decrease in accounts payable, accrued expenses, other liabilities, and operating leases of $10.7 million, primarily related to a decrease of $7.9 million from personnel related accruals.
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Net cash generated from investing activities
In the three months ended March 31, 2024, we generated $64.4 million in our investing activities compared to generating $3.0 million for the same period in 2023.
Three months ended March 31,
2024
2023
(in thousands)
Proceeds from maturity of investment securities
$
150,107
$
5,330
Investment in investment securities
(83,778)
—
Build out of Amsterdam site
(1,051)
(686)
Build out of Lexington site
(1,293)
(1,656)
Net cash generated from investing activities
$
63,985
$
2,988
During the three months ended March 31, 2024, we received $150.1 million from the repayment of previous investments into euro and U.S. dollar denominated government bonds ($5.3 million for three months ended March 31, 2023).
During the three months ended March 31, 2024, we invested $83.8 million of our cash on hand into euro denominated government bonds (nil for the three months ended March 31, 2023).
We invested $1.1 million and $1.3 million, respectively, into our Amsterdam, Netherlands and Lexington, Massachusetts sites during the three months ended March 31, 2024, compared to $0.7 million and $1.7 million for the same period in 2023.
Net cash generated from financing activities
In the three months ended March 31, 2024, we generated nil from financing activities compared to $0.1 million for the same period in 2023.
Three months ended March 31,
2024
2023
(in thousands)
Cash flows from financing activities
Proceeds from issuance of ordinary shares related to employee stock option and purchase plans
-
131
Net cash generated from financing activities
$
-
$
131
During the three months ended March 31, 2024, we received nil from the exercise of options to purchase ordinary shares in relation to our 2014 Plans, compared to $0.1 million for the same period in 2023.
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;
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● 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; and
● 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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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.