uniQure N.V. — Q3 2019 Form 10-Q
Reporting period: Three and nine months ended September 30, 2019. The unaudited statements are prepared under U.S. GAAP. uniQure is a clinical-stage gene therapy company; it reported no product-sales revenue. Reported revenue came from its collaboration with Bristol Myers Squibb (BMS).
Financial highlights
| Metric | Q3 2019 | Q3 2018 | Nine months 2019 | Nine months 2018 |
|---|---|---|---|---|
| Revenue | $1.0m | $3.1m | $4.7m | $9.7m |
| Research and development expense | $23.6m | $20.5m | $68.2m | $56.1m |
| Selling, general and administrative expense | $8.9m | $5.9m | $24.9m | $18.1m |
| Loss from operations | $31.3m | $23.2m | $88.2m | $64.0m |
| Net loss | $23.6m | $22.0m | $82.8m | $61.4m |
| Basic and diluted loss per share | $0.58 | $0.59 | $2.14 | $1.75 |
- Revenue fell year over year, primarily because BMS-designated targets increased the expected services over which license revenue is recognized; collaboration revenue also declined following discontinuation of the S100A1 research program.
- Operating expenses rose with clinical and preclinical development, staffing, share-based compensation, expanded Lexington facilities and commercial-launch preparation for etranacogene dezaparvovec. Management expects operating losses to increase as development and commercialization preparations continue.
- Q3 net loss was partly offset by $6.0m of foreign-currency gains and $1.8m of other non-operating gains. Nine-month foreign-currency gains were $7.1m. These gains are not operating revenue and may fluctuate.
- Nine-month operating cash outflow was $72.7m, versus $58.0m in 2018; investing cash outflow was $4.7m versus $3.5m. Financing generated $247.5m, principally from the September 2019 follow-on offering.
- At September 30, cash and cash equivalents were $403.2m, restricted cash was $2.9m, and total assets were $471.6m. Total liabilities were $121.4m; shareholders’ equity was $350.2m. Current liabilities were $28.4m.
- Long-term debt was $35.9m on the balance sheet; $35.0m of principal was outstanding under the Hercules facility. The loan matures June 2023, with principal repayments scheduled to begin January 2022. The company was in compliance with its covenants.
Business developments, outlook and risks
- The Phase III HOPE-B hemophilia B trial completed enrollment of 62 patients in its lead-in phase in September 2019. The company reported three Phase IIb patients had sustained Factor IX activity through 36 weeks; these early results do not establish pivotal-trial outcomes or approval.
- For Huntington’s disease candidate AMT-130, screening began in October 2019; the company expected to enroll the first patient later in 2019 or early 2020. AMT-180, AMT-150 and AMT-190 remained in preclinical development.
- Management estimated cash and cash equivalents would fund operations, debt repayments and capital expenditures into mid-2022. The company expects continuing losses and negative operating cash flows and stated it had no firm additional funding sources.
- The BMS research term expired in May 2019. Restructuring discussions were ongoing, with uncertain outcome and potentially material changes to obligations, rights and economics. The company had agreed to continue preclinical support, with related costs reimbursed by BMS.
- Key risks include clinical-trial and regulatory uncertainty, gene-therapy safety and manufacturing challenges, dependence on third parties, reimbursement and commercialization uncertainty, and potential need for further financing. The filing also reports oppositions to a European Factor IX-Padua patent and an appeal of a refused divisional application.
- The company adopted ASC 842 lease accounting in 2019, recognizing operating lease assets and liabilities; prior-year comparatives were not recast. It reported no legal proceedings and no subsequent events.
Most important facts for investors to verify
- Progress, safety and efficacy results from HOPE-B and AMT-130, including timing of enrollment and future data releases.
- Cash runway assumptions, quarterly cash burn and the timing and terms of any future financing.
- Outcome of BMS restructuring discussions and resulting effects on revenue recognition, collaboration obligations and potential milestone or royalty economics.
- Hercules facility repayment terms, covenants and cash-location requirements, as well as lease and other contractual commitments.
- Progress of the Factor IX-Padua patent opposition and appeal, and any resulting impact on intellectual-property protection.