ProQR Therapeutics N.V. — FY2021 Form 20-F
Reporting period: Fiscal year ended December 31, 2021. The filing was signed April 29, 2022; it also describes material developments announced after year-end. Financial statements are audited and prepared under IFRS, with euro as the presentation currency. ProQR is a clinical-stage RNA therapeutics company with no marketed products.
Key financial metrics
| Metric | FY2021 | FY2020 |
|---|---|---|
| Revenue | €1.354 million | None |
| Other income | €1.043 million | €9.452 million |
| Research and development costs | €42.220 million | €38.135 million |
| General and administrative costs | €17.368 million | €13.685 million |
| Operating loss | €57.191 million | €42.368 million |
| Net loss | €61.680 million | €46.614 million |
| Net cash used in operating activities | €26.012 million | €47.060 million |
| Cash and cash equivalents at year-end | €187.524 million | €75.838 million |
| Borrowings at year-end | €44.090 million | €17.324 million |
Revenue came from collaboration and license arrangements, not product sales or royalties. The company reported an accumulated deficit of €317.770 million and basic and diluted loss per share of €0.96. A conventional operating margin is not meaningful given minimal collaboration revenue and ongoing development-stage losses.
Year-end current assets were €191.483 million and current liabilities were €27.596 million. Total liabilities were €96.350 million and total equity was €113.229 million. Lease liabilities were €16.282 million. The filing reports no cash dividends and no product revenue expected in the foreseeable future.
Changes versus the prior year
- Net loss widened by €15.066 million; operating loss widened by €14.823 million. R&D and G&A expenses both increased.
- Other income fell by €8.409 million. FY2020 included an €8.423 million gain from a government waiver of the innovation credit for the cystic fibrosis program.
- Operating cash use decreased by €21.048 million, primarily reflecting the Lilly upfront cash receipt and working-capital changes. Financing generated €136.832 million, mainly from the April share offering, Lilly share issuance and additional convertible borrowing; cash rose by €111.686 million.
- ProQR issued 15.923 million shares in an April 2021 offering, raising €82.616 million net, and issued 3.990 million shares to Lilly, generating €23.223 million. Year-end shares outstanding were 71,290,805.
Outlook, developments and risks
- Management estimated that cash and cash equivalents would fund anticipated operations into 2025, based on plans announced in April 2022. It cautioned that spending and runway depend on clinical progress, regulatory requirements, collaborations and other uncertain factors.
- In September 2021, ProQR entered a global Axiomer RNA-editing collaboration with Eli Lilly for up to five targets in liver and nervous-system disorders. The agreement includes a reported $50 million upfront amount, up to approximately $1.25 billion in potential milestones and royalties on potential sales. Most upfront and equity consideration remained deferred at year-end as revenue is recognized over the collaboration period.
- After year-end, ProQR reported that the sepofarsen Phase 2/3 Illuminate trial did not meet its Month 12 primary endpoint versus sham. Later post-hoc analyses suggested activity when comparing treated and contralateral eyes; regulatory discussions and further direction were pending. These analyses do not negate the primary-endpoint failure.
- The April 2022 strategy update focused development on ultevursen and the Axiomer platform, suspended QR-1123, QR-504a and other inherited retinal disease research, and announced an approximately 30% workforce reduction. ProQR planned to continue one ultevursen Phase 2/3 trial, potentially with an interim/futility analysis in 2023, subject to regulatory alignment.
- Key risks include clinical and regulatory failure or delay, the need for additional capital, dependence on third-party manufacturers and research organizations, intellectual-property and licensing exposure, and COVID-19 disruption. The company also disclosed Nasdaq minimum-bid-price risk: its shares had traded below $1 for 30 days and closed at $0.72 on April 26, 2022.
- Potential future obligations include up to $37.5 million in milestone payments to Foundation Fighting Blindness following first commercial sale of ultevursen, as well as possible milestone and royalty obligations under other licenses. No material legal proceedings were reported at December 31, 2021.
Important facts for investors to verify
- Review the complete audited statements and debt-note terms, including interest, maturity, conversion rights, warrants, covenants and collateral.
- Track cash burn and runway against the April 2022 plan, including restructuring costs and the timing and amount of collaboration revenue recognized from deferred balances.
- Verify regulatory feedback and the eventual design, enrollment, analysis plan and results for the continuing ultevursen trial; separately assess the implications of sepofarsen’s missed primary endpoint.
- Assess Lilly collaboration milestones, research obligations, potential royalties and the conditions for achieving payments; confirm how the workforce reduction affected execution and expenses.
- Monitor share dilution from options, warrants, convertible debt and potential equity issuance, as well as Nasdaq listing compliance.