uniQure N.V. — Q2 2019 Form 10-Q
Reporting period: Quarter and six months ended June 30, 2019. Amounts are in U.S. dollars unless noted. uniQure is a clinical-stage gene-therapy company; it reported no product-sale revenue. Reported revenue came from its Bristol Myers Squibb (BMS) collaboration.
Financial performance and position
| Metric | Q2 2019 | Q2 2018 | Six months 2019 | Six months 2018 |
|---|---|---|---|---|
| Revenue | $2.5 million | $3.1 million | $3.6 million | $6.5 million |
| Research and development expense | $24.2 million | $18.5 million | $44.7 million | $35.6 million |
| Selling, general and administrative expense | $7.9 million | $5.9 million | $15.9 million | $12.2 million |
| Operating loss | $29.3 million | $21.2 million | $56.8 million | $40.8 million |
| Net loss | $31.4 million | $20.6 million | $59.2 million | $39.4 million |
| Net loss per share | $0.83 | $0.57 | $1.57 | $1.16 |
Revenue declined about 19% year over year in Q2 and 45% for the first half. First-half operating expenses increased about 27%, and net loss widened about 50%. R&D growth reflected AMT-061 clinical work, AMT-130 development, increased staffing and facility costs. No gross margin is presented.
- Cash and liquidity: Cash and cash equivalents were $184.1 million at June 30, down from $234.9 million at year-end 2018; cash, cash equivalents and restricted cash totaled $187.0 million. Current assets were $188.5 million and current liabilities $23.4 million.
- Cash flow: First-half operating cash use was $50.7 million, versus $38.0 million a year earlier; investing cash use was $2.4 million. Financing provided $3.2 million, compared with $141.5 million in 2018, which included proceeds from a public offering.
- Debt and obligations: $35.0 million principal was outstanding under the Hercules facility, with a stated 8.85% minimum variable rate and maturity in June 2023. Principal repayments are scheduled to begin in January 2021. The balance sheet reported $35.8 million of long-term debt. Operating lease liabilities totaled $36.1 million.
- Equity: Accumulated deficit was $594.7 million. There were 37.84 million ordinary shares outstanding at June 30, 2019.
Material changes and business developments
- BMS license revenue was $2.1 million in Q2 and $2.7 million in the first half, compared with $2.1 million and $4.6 million in the respective 2018 periods. Collaboration revenue fell to $0.4 million in Q2 and $0.9 million in the first half, primarily following discontinuation of the S100A1 program.
- The BMS collaboration’s initial research term ended May 21, 2019. uniQure declined BMS’s requested one-year extension and was discussing possible amendments; terms and outcome were uncertain. BMS designated a replacement cardiovascular target in April. No manufacturing revenue had been generated.
- AMT-061: the pivotal Phase III HOPE-B trial was underway. In the three-patient Phase IIb dose-confirmation study, mean FIX activity was 45% of normal at 36 weeks; no patient reported bleeding or required FIX replacement for bleeding through that follow-up. These early results do not establish pivotal-trial outcomes.
- AMT-130 received FDA fast-track designation, and the FDA had cleared its IND in January, enabling a planned Phase I/II study. Other programs, including AMT-180, AMT-150, AMT-160 and AMT-190, remained at the preclinical stage described in the filing.
Outlook, risks and unusual items
- Management expected cash and cash equivalents to fund operating expenses, debt obligations and capital expenditures into early 2021. It anticipated operating losses would increase as clinical trials, manufacturing capabilities and other development programs advanced. No product revenue guidance was provided.
- The company stated it had no firm source of additional funding and may need equity, debt or collaboration financing. Financing may be unavailable or dilutive or require concessions; failure to obtain it could force delays, reductions or termination of programs.
- Key risks include clinical and regulatory failure or delay, gene-therapy safety and durability uncertainty, manufacturing and cGMP compliance, limited rare-disease patient populations, reimbursement and pricing uncertainty, competition, intellectual-property disputes, and reliance on collaborators.
- First-half non-operating expense included a $2.6 million warrant fair-value loss; foreign-currency results were a $1.0 million gain for the first half but a $1.3 million loss in Q2. The company adopted ASC 842 leases in January 2019, recognizing operating lease assets and liabilities; prior-year figures were not recast.
- Management reported effective disclosure controls as of June 30, 2019, and no material second-quarter change in internal control over financial reporting. The filing reported no legal proceedings or subsequent events.
Important facts for investors to verify
- Updated HOPE-B enrollment, safety and efficacy data, and whether AMT-061 results hold up in the larger pivotal trial and over longer follow-up.
- Progress and timing of AMT-130’s planned clinical study and the development status of other pipeline programs.
- Outcome and financial consequences of BMS discussions, including future collaboration activity and the timing of deferred license revenue recognition.
- Actual cash burn and runway versus management’s early-2021 estimate, and availability and terms of additional financing.
- Hercules loan covenants, repayment schedule and any conditions for drawing the remaining facility commitment.