uniQure N.V. — Q1 2020 Form 10-Q
Reporting period: Three months ended March 31, 2020. The unaudited consolidated statements are presented in U.S. dollars. uniQure is a gene-therapy developer focused on rare and serious diseases; it had no approved products and reported no material product-sales revenue.
Financial performance and liquidity
| Metric | Q1 2020 | Q1 2019 or comparison |
|---|---|---|
| Total revenue | $0.1 million | $1.1 million; down $1.0 million |
| Research and development expense | $26.0 million | $20.5 million |
| Selling, general and administrative expense | $9.1 million | $8.1 million |
| Loss from operations | $34.5 million | $27.5 million |
| Net loss | $28.0 million | $27.8 million |
| Net loss per ordinary share, basic and diluted | $0.63 | $0.74 |
| Net cash used in operating activities | $33.0 million | $26.4 million |
- Revenue comprised $47,000 of license revenue and $57,000 of collaboration revenue, primarily associated with the BMS collaboration. The filing does not report a meaningful gross margin; revenue was minimal relative to operating expenses.
- Cash and cash equivalents were $342.0 million at March 31, 2020, down from $377.8 million at December 31, 2019. Cash, cash equivalents and restricted cash totaled $345.0 million. Management said available cash was expected to fund operating expenses, debt repayments and capital expenditures into 2022.
- Operating cash use increased year over year. Investing activities used $2.9 million, mainly for intangible assets and property and equipment; financing activities generated $1.0 million, principally from employee equity plans. Foreign exchange reduced cash by $0.9 million.
- Long-term debt was $36.2 million on the balance sheet; principal outstanding under the Hercules facility was $35.0 million. The facility matures June 1, 2023, with principal repayments scheduled to begin in January 2022. The company had a right, subject to facility terms, to draw a further $15 million through June 30, 2020. It reported compliance with all covenants.
- Total current assets were $349.6 million and total current liabilities were $27.1 million at quarter-end. Operating lease liabilities totaled $36.4 million; contractual debt and lease obligations were reported at $107.2 million in aggregate.
Material changes versus Q1 2019
- Revenue fell from $1.1 million to $0.1 million. License revenue declined as development timelines were affected by BMS restructuring discussions and COVID-19; collaboration revenue fell following the end of the BMS initial research term in May 2019.
- R&D expense rose $5.5 million, reflecting higher program, personnel, facility and other development costs. SG&A expense increased $1.0 million.
- Despite a $7.0 million deterioration in loss from operations, net loss was nearly unchanged. Higher foreign-currency gains and a $2.0 million gain from the fair-value change in BMS warrants offset much of the increased operating loss. These items are not necessarily indicative of recurring operating performance.
- Operating cash use increased by $6.5 million. Cash, cash equivalents and restricted cash were $345.0 million, compared with $211.7 million at March 31, 2019; the prior-year comparison reflects intervening financing, including the September 2019 equity offering.
Outlook, developments and key risks
- Management expects continuing losses and negative cash flows and anticipates operating losses will increase as it advances clinical programs, develops manufacturing and commercial capabilities, and invests in its technology platform. The company reported no firm additional funding sources and expects it may need equity, debt, collaboration or other financing.
- The Phase III HOPE-B hemophilia B study completed dosing 54 patients in March 2020, exceeding its protocol target of 50. The filing reports no pivotal-trial results. Etranacogene dezaparvovec had FDA Breakthrough Therapy Designation and EMA PRIME access.
- For AMT-130, the first two patients were enrolled in the Phase I/II Huntington’s disease study, but planned procedures were temporarily postponed because of COVID-19. The company said it would resume treatment when clinically appropriate.
- COVID-19 had prompted remote work for non-essential staff, operational changes at research sites and adaptations to clinical-trial activities. Management warned that further disruption could affect trials, manufacturing, supply, regulatory timelines and access to capital; the extent of the impact was uncertain.
- The BMS research term had expired, and discussions to restructure or amend the collaboration remained unresolved. Any changes could affect obligations, exclusivity, manufacturing responsibilities, economic rights, milestones and warrants; the company had not incorporated potential changes into its revenue-recognition estimates.
- Key risks include clinical or regulatory failure or delay, gene-therapy safety and manufacturing challenges, competition, reimbursement uncertainty, reliance on third parties and intellectual property, and the need for additional capital. The filing reported no legal proceedings and no subsequent events.
Important facts for investors to verify
- Whether HOPE-B follow-up data support safety and efficacy, and what regulatory and filing milestones are expected.
- When AMT-130 procedures resume and whether COVID-19 causes further delays to clinical trials, manufacturing or supply.
- Whether uniQure and BMS reach revised collaboration terms, and how any agreement affects revenue recognition, future payments, exclusivity and warrants.
- Cash burn and runway relative to the stated expectation of funding into 2022, including the timing and availability of any additional financing.
- Hercules facility terms, covenant compliance, the additional borrowing option and scheduled principal repayments beginning in 2022.