PROQR THERAPEUTICS ANNUAL REPORT 2023
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Table of Contents
Table of Contents
Table of Contents _____________________________________________________ 1
Message to Shareholders _____________________________________________ 2
Key Figures ____________________________________________________________ 4
Management Board ___________________________________________________ 5
Supervisory Board ____________________________________________________ 6
Management Board Report ___________________________________________ 9
Supervisory Board Report ___________________________________________ 21
Corporate Governance ______________________________________________ 25
Risk Management ___________________________________________________ 37
Financial Statements 2023 __________________________________________ 39
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Message to Shareholders
PROQR THERAPEUTICS ANNUAL REPORT 2023
Message to Shareholders
Over the past year, ProQR made important progress advancing our Axiomer™ RNA editing
technology platform and announced our first pipeline programs.
Our proprietary platform enables selective base editing in RNA, offering potential
treatments for previously untreatable diseases. ProQR invented the use of endogenous
ADAR in RNA editing with editing oligonucleotides (“EONs") in 2014 and has since advanced
the science and established a leading intellectual property estate. As we move forward,
given the broad potential applicability of this technology, we plan to not only further build
our own wholly owned pipeline, but to also selectively enter strategic partnerships. This
dual pillar strategic approach will enable our technology to be leveraged to its fullest
potential for the development of medicines targeting diseases outside of our primary focus.
In line with this strategy, in December 2023, we completed the divestment of late-stage
ophthalmic assets, sepofarsen and ultevursen, to Laboratoires Théa (“Théa”). Importantly,
Théa will continue the development of these potentially transformational therapies for
patients, as ProQR continues to focus exclusively on advancing our Axiomer RNA editing
platform.
In March 2023, we hosted a virtual R&D event announcing our initial pipeline programs
focused on diseases that originate in the liver. During the event, we unveiled AX-0810 for
Cholestatic diseases and AX-1412 for Cardiovascular disease, targeting NTCP and B4GALT1
respectively. These initial pipeline programs share several key characteristics including a
deep rooting in human genetics, the potential to have a major impact in indications with
high unmet medical need, the ability to leverage the existing proven delivery technology to
the liver, the opportunity to monitor early biomarkers to establish target engagement in
Phase I trials for human proof of concept, and the availability of well-defined clinical
endpoints.
Following our expanded partnership with Eli Lilly (“Lilly”) that we announced in late 2022, we
continue to execute and build on the successes achieved during the first two years of the
collaboration. The continued success of our collaboration with Lilly is a testament to the
strength of Axiomer and our leadership in ADAR-mediated RNA editing.
We will continue to opportunistically enter into additional strategic partnerships with other
parties, as we announced in January 2024 with the Rett Syndrome Research Trust (“RSRT”), a
leading patient advocacy group championing a cure for Rett syndrome. Our collaboration
with the RSRT focuses on the design and development of editing oligonucleotides (“EONs”)
using ProQR’s Axiomer technology platform targeting the transcription factor MECP2 and
correcting mutations of interest. This partnership expands the broad applicability of our
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Message to Shareholders
PROQR THERAPEUTICS ANNUAL REPORT 2023
Axiomer RNA editing technology to Rett syndrome, a rare neurodevelopment disorder with
significant unmet medical need.
Throughout the last year, ProQR further strengthened our leading global IP estate for
ADAR-mediated RNA editing including as announced in November 2023 a new patent from
the United States Patent and Trademark Office, which expanded our broad protection of
RNA editing using oligonucleotides to recruit endogenous ADAR. ProQR’s leading
intellectual property portfolio protects our Axiomer ADAR-mediated RNA editing platform
technology and more fundamentally the use of an oligonucleotide to recruit endogenous
deaminating enzymes in the cell. Separately, we also had multiple successful defenses
against oppositions, including in Europe and Japan. ProQR has extensive patent protection
related to its RNA editing platform, Axiomer, including more than 13 published patent
families, which currently comprise a total of 27 patents. We also have several unpublished
patent applications and continuously invest in expanding our IP estate around ADAR-
mediated RNA editing.
As we progress in 2024, we’re well positioned to continue to execute on our strategic
priorities with a strong cash position, which provides us with a runway to mid-2026. In
January, we presented new in vivo data for our proprietary Axiomer RNA editing technology
platform at the Deaminet 2024 meeting, demonstrating robust editing of ACTB in the liver
of non-human primates, as well as functional protein data with the liver target ANGPTL3 in
mice. We look forward to presenting additional platform data, as well as the first preclinical
data for our pipeline programs including in vitro and in vivo data for AX-0810 for Cholestatic
diseases targeting NTCP and AX-1412 for Cardiovascular disease targeting B4GALT1. As
part of our dual-pronged strategy, ProQR will also continue to execute on our partnership
with Lilly, potentially generating revenue from key milestones as early as 2024 and examine
opportunities for expansions, as well as the potential for new partnerships.
In closing, I want to offer a special thanks to our employees, our scientific collaborators, and
our shareholders for their support. We remain unwavering in our belief in the promise of
RNA therapies and will continue to work to make a meaningful impact in the lives of
patients.
Daniel A. de Boer
Founder and CEO, ProQR Therapeutics
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Key Figures
PROQR THERAPEUTICS ANNUAL REPORT 2023
Key Figures
Result from continued operations (in € 1,000)
Net revenue
Other income
Research and development costs
General and administrative costs
Operating result
Net result
Balance sheet information (in € 1,000)
Non-current assets
Current assets
Total assets
Total equity
Non-current liabilities
Current liabilities
Cash flows (in € 1,000)
Net cash generated by / (used in) operating activities
Net cash generated by / (used in) investing activities
Net cash used in financing activities
Ratio’s
Current ratio
Solvency (%)
Figures per share
Weighted average number of shares outstanding
Basic and diluted earnings per share (in €)
Cash flow per share (in €)
Employees
Average number of staff for the period
2023
2022
6,514
3,011
(25,148)
(16,236)
(31,859)
(27,735)
16,897
120,986
137,883
41,390
62,290
34,203
21,548
4,278
(2,275)
3.5
30.0%
3,594
765
(50,867)
(18,651)
(65,159)
(64,204)
16,861
154,460
171,321
66,681
83,652
20,988
(68,508)
(702)
(30,890)
7.4
38.9%
81,011,438
71,641,305
(0.35)
0.29
(0.90)
(1.40)
144
163
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Management Board
PROQR THERAPEUTICS ANNUAL REPORT 2023
Management Board
We have a two-tier board structure consisting of our Management Board (raad van bestuur) and a separate
Supervisory Board (raad van commissarissen). The Management Board operates under the chairmanship of
the Chief Executive Officer and shares responsibility for the deployment of ProQR’s strategy and policies, and
the achievement of its objectives and results.
Under Dutch Law, the Management Board has ultimate responsibility for the management and external
reporting of the Company and is answerable to shareholders at the General Meeting of Shareholders.
Pursuant to the two-tier corporate structure, the Management Board is accountable for its performance to a
separate and independent Supervisory Board.
The following table sets out information with respect to our Management Board members, their age, and
their position at the Company as of the date of this annual report.
Name
Gender
Date of Birth
Position
Date of
Appointment
Term
expires
Daniel de Boer
René Beukema
Male
Male
April 12, 1983
March 26, 1964
Chief Executive Officer
February 21, 2012
Chief Corporate Development
Officer and General Counsel
June 30, 2022
2026
2026
The following sets forth biographical information regarding our Management Board members.
Daniel de Boer is our Founder and Chief Executive Officer since our incorporation in 2012. Mr. de Boer is a
serial entrepreneur and passionate advocate for rare disease patients. After one of his children was
diagnosed with a rare disease, he started ProQR to develop RNA therapies for rare diseases. Before founding
ProQR, Mr. de Boer was founder and Chief Executive Officer of several technology companies. He is also
strategic advisor at Hybridize Therapeutics, Meatable, Algramo, Xinvento, Avanzanite, BioColl Labs and a
member of the advisory board at the Termeer Foundation. In 2018 Mr. de Boer was named "Emerging
Entrepreneur of the Year" by EY. In 2019 Mr. de Boer was selected for the Young Global Leader program at
the World Economic Forum.
René Beukema rejoined ProQR in 2022 having previously served as the Company's Chief Corporate
Development Officer and General Counsel from 2013 to 2018. Mr. Beukema is a seasoned M&A and equity
capital markets executive and an experienced corporate lawyer. From 2019 until June 2022 Mr. Beukema held
the Position of Chief Corporate Development Officer & General Counsel at Frame Therapeutics, a neoantigen
immune-oncology biotechnology company. He was instrumental in financing Frame Therapeutics and selling
it to CureVac, a Nasdaq Listed biotechnology company. From 2021 to 2024 Mr. Beukema was a Board
Member of Fibriant BV, a biotechnology company focused on the development of technology and products
based on recombinant human fibrinogen and thrombin. Prior to his initial tenure at the Company, he served
as General Counsel and Corporate Secretary of Crucell for twelve years, following his positions as Senior
Legal Counsel at GE Capital / TIP Europe and Legal Counsel at TNT Express Worldwide. Mr. Beukema was also
a venture partner of Aescap Venture, a life sciences venture capital firm from 2011 to 2012 and is co-founder
of myTomorrows, a Dutch life sciences company. He holds a post-doctoral degree in corporate law from the
University of Nijmegen in co-operation with the Dutch Association of In-house Counsel (Nederlands
Genootschap van Bedrijfsjuristen) and a master's degree in Dutch law from the University of Amsterdam.
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Supervisory Board
PROQR THERAPEUTICS ANNUAL REPORT 2023
Supervisory Board
The Supervisory Board oversees the policies of the Management Board and the general course of affairs of
ProQR and advises the Management Board thereon. The Supervisory Board, in the two-tier corporate
structure under Dutch law, is a separate and independent corporate body.
The following table sets forth information with respect to each of our Supervisory Board members and their
respective dates of birth. The terms of office of all our Supervisory Board members expire according to a
rotation schedule drawn up by our Supervisory Board. All of our Supervisory Board members are
independent under applicable NASDAQ standards and under the Dutch Corporate Governance Code
(“DCGC”) with the exception of Theresa Heggie, who was prior to her appointment on the Supervisory Board
in 2023 employed by ProQR as Chief Commercial Officer and Chief Operations Officer.
Name
Gender Nationality
Date of Birth
Position
Date of Appointment Term expires
Dinko Valerio
Male
Alison F. Lawton
Female
NL
US
August 3, 1956 Chairman
January 1, 2014
September 26, 1961 Member
September 17, 2014
Theresa Heggie
Female
GB / US
November 17, 1960 Member
James Shannon
Bart Filius
Male
Male
Begoña Carreño
Female
GB
NL
ES
June 5, 1956 Member
July 5, 1970 Member
December 13, 1971 Member
May 18, 2023
June 21, 2016
May 21, 2019
May 18, 2023
2024
2026
2027
2024
2027
2027
The following sets forth biographical information regarding our Supervisory Board members.
Dinko Valerio is one of our founders and currently serves as the chairman of our supervisory board which he
joined in 2014. As a scientist and an experienced biotech entrepreneur Mr. Valerio is founder and former CEO
of Crucell N.V., and one of the founders of its spinout, Galapagos Genomics. He was founder and former
general partner of Aescap Venture, a life sciences venture capital firm and co-founder and current board
member of Leyden Laboratories. In 1992 Mr. Valerio was appointed professor of gene therapy at the
University of Leiden, where he also received his Ph.D. with honors.
Alison F. Lawton has served on our supervisory board since 2014. Ms. Lawton is an executive leader with more
than 35 years of experience in biopharma. Most recently, she served as President and CEO of Kaleido
Biosciences, Inc. Ms. Lawton previously served as Chief Operating Officer of Aura Biosciences, OvaScience
and X4 Pharmaceuticals. She worked at various positions of increasing responsibility at Genzyme, and
subsequently at Sanofi-Aventis, including as head of Genzyme Biosurgery and Global Market Access. Ms.
Lawton currently serves on the board of directors of public pharmaceutical companies X4 Pharmaceuticals,
and Dianthus Therapeutics, and the private companies AgBiome, SwanBio and BlueRock Therapeutics. She
previously served on the boards of Verastem, CoLucid until its acquisition by Eli Lilly and Cubist
Pharmaceuticals until its acquisition by Merck & Co. She is past President and Chair of the Board of
Regulatory Affairs Professional Society and past FDA Advisory Committee member for Cell and Gene Therapy
Committee. She earned her BSc in Pharmacology, with honors, from King’s College London.
Theresa Heggie was reappointed to ProQR’s Supervisory Board in 2023. Previously, Ms. Heggie served as the
Chief Operating Officer at ProQR, after originally joining the Management Team in 2021 as the Chief
Commercial Officer. Prior to ProQR, she served as Chief Executive Officer of Freeline Therapeutics. She had
senior commercial and operating roles at Alnylam Pharmaceuticals as Senior Vice President, Head of CEMEA
and Shire where she built the EMEA rare disease business. Earlier in her career, Ms. Heggie held increasingly
PROQR THERAPEUTICS ANNUAL REPORT 2023
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Supervisory Board
senior positions in the commercial organizations at Janssen Pharmaceuticals and Baxter Healthcare. She
currently serves on the Board of BioCryst and previously served on the ProQR Supervisory Board from 2019-
2021. She earned her BSc from Cornell University.
James Shannon has served on our supervisory board since June 2016 and has been Chair of our Scientific
Advisory Board since 2020. Mr. Shannon has had an extensive career in drug development and pharma. From
2012 until his retirement in 2015, he was Chief Medical Officer at GlaxoSmithKline. Prior to that he was Global
Head of Pharma Development at Novartis and Senior Vice-President, Clinical Development at Sterling
Winthrop Pharmaceuticals. He has previously held board positions at companies including Biotie, Circassia,
Crucell, Endocyte and Cerimon Pharmaceuticals. Mr. Shannon currently is Chairman of the Board at
Mannkind Corp and Kyowa Kirin NA and holds board positions at Horizon Pharma, myTomorrows and
Leyden Labs. He received his undergraduate and postgraduate degrees at Queen’s University of Belfast and
is a member of the Royal College of Physicians.
Bart Filius has served on our supervisory board since 2019. He is the former President and Chief Operating
Officer of Galapagos, a position he held from 2021 to June 2023. He joined Galapagos in 2014 as Chief
Financial Officer and added the role of Chief Operating Officer in 2017. Prior to joining Galapagos, Mr. Filius
held a variety of executive positions at Sanofi, where he was Vice President, Chief Financial Officer Europe,
Country manager for The Netherlands and Vice President for Mergers & Acquisitions. Prior to joining Sanofi,
Mr. Filius was a strategy consultant at Arthur D. Little. Mr. Filius has an MBA degree from INSEAD and a
bachelor’s degree in business from Nyenrode University.
Begoña Carreño, PhD joined the ProQR Supervisory Board in 2023. Dr. Carreño is currently the Chief Business
Development Officer at Vectura Fertin Pharma in Switzerland. Prior to this, she spent 18 years at Novartis
Pharma AG in the Corporate BD&L group, her last role being World Wide BD&L Head in the Ophthalmology
Franchise, based in Basel, Switzerland. Dr. Carreño has over 20 years Pharmaceutical Development
experience. She is a seasoned & energetic BD&L professional that has led the BD&L efforts at Novartis across
5 different therapeutic franchises in the last 15 years. She has proven track record in licensing deals, M&A as
well as developing collaborations within cross functional, multi-cultural, matrix environment at global,
regional and country level. Before joining Novartis, she was the Head of External Pharmaceutical projects at
Almirall (Barcelona, Spain). Dr. Carreño holds a PhD in Drug Delivery from the London School of Pharmacy
(UK) and a BSc in Biochemistry from Keele University (UK).
Additionally, John Maraganore, PhD joined as a strategic advisor to our Supervisory Board in March 2022. He
served as the founding CEO and a Director of Alnylam from 2002 to 2021, where he built the company from
early platform research on RNA interference through global approval and commercialization of the first four
RNAi therapeutic medicines, ONPATTRO®, GIVLAARI®, OXLUMO®, and Leqvio®. At Alnylam, he also led the
company’s value creation strategy, building $25B in market capitalization, and forming over 20 major
pharmaceutical alliances. He continues to serve on the Alnylam Scientific Advisory Board. Prior to Alnylam, he
served as an officer and a member of the management team for Millennium Pharmaceuticals, Inc., where he
was responsible for the company’s product franchises in oncology, and cardiovascular, inflammatory, and
metabolic diseases, in addition to leadership of M&A, strategy, and biotherapeutics functions. Before
Millennium, he served as Director of Molecular Biology and Director of Market and Business Development at
Biogen, Inc. where he invented and led the discovery and development of ANGIOMAX® (bivalirudin) for
injection. Previously, he was a scientist at ZymoGenetics, Inc. and the Upjohn Company. Mr. Maraganore
received his M.S. and Ph.D. in biochemistry and molecular biology at the University of Chicago. He is currently
a Venture Partner at ARCH Venture Partners, a Venture Advisor at Atlas Ventures, and an Executive Partner at
RTW Investments. He is also Chair of the Board of Directors of Hemab Therapeutics and a member of the
Board of Directors of Agios Pharmaceuticals, Beam Therapeutics, Kymera Therapeutics, and the
Biotechnology Industry Organization, where he was Chair from 2017-2019. In addition, he serves on the
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Board of the Termeer Foundation, as Chair of the n-Lorem Foundation Advisory Council, on the Advisory
Board of Ariadne Labs, and as a strategic advisor to several innovative companies.
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Management Board Report
PROQR THERAPEUTICS ANNUAL REPORT 2023
Management Board Report
The Company
ProQR Therapeutics N.V., or “ProQR” or the “Company”, is a biotechnology company dedicated to changing
lives by developing RNA therapies for severe rare and common diseases. We focus on advancing our
proprietary Axiomer RNA-editing platform technology.
ProQR was founded in 2012 by Daniel de Boer, Gerard Platenburg, the late Henri Termeer and Dinko Valerio.
Since September 18, 2014, our ordinary shares have been listed on Nasdaq. They are currently trading on
Nasdaq Capital Market under the ticker symbol “PRQR”. As of December 31, 2023, we had raised € 435 million
in gross proceeds from our public offerings of shares and private placements of equity securities. In addition,
we have received grants, loans and other funding from patient organizations and government institutions
supporting our programs, including from Foundation Fighting Blindness and the Dutch government under
the innovation credit program.
Our legal name is ProQR Therapeutics N.V. and we were incorporated in the Netherlands, on February 21,
2012. We reorganized from a private company with limited liability to a public company with limited liability
on September 23, 2014. Our company has its statutory seat in Leiden, the Netherlands. The address of its
headquarters and registered office is Zernikedreef 9, 2333 CK Leiden, the Netherlands, telephone number
+31 88 166 7000. Our US office is located at 245 Main Street, Cambridge, MA 02142, USA. The name and
address of our agent for service in the United States is Andrew Morris, 245 Main Street, Cambridge, MA
02142, USA.
We use various trademarks and tradenames, including without limitation “ProQR”, “Axiomer”, “Trident” and
our corporate logo, that we use in connection with the operation of our business. Other trademarks or trade
names of third parties referred to or incorporated by reference in this Annual Report are the property of their
respective owners. Solely for convenience, the trademarks and trade names in this Annual Report may be
referred to without the ®, ™ or SM symbols, but such references should not be construed as any indicator
that their respective owners will not assert, to the fullest extent permissible under applicable law, their rights
thereto. We do not intend to use or display other companies’ trademarks and trade names to imply a
relationship with, or endorsement or sponsorship of us, any other companies.
Operations
We are a biotechnology company dedicated to the creation of transformative RNA therapies to improve the
lives of patients and families affected by diseases with high unmet medical need. To achieve this, we are
advancing our proprietary Axiomer RNA-editing platform technology. Our product candidates are designed to
engage Adenosine Deaminase Acting on RNA (“ADAR”) to conduct targeted RNA editing which we believe have
the potential to become a new class of innovative medicines with applicability to a broad range of therapeutic
areas. Using our deep RNA expertise and our strong intellectual property position, we are advancing a
platform to develop these RNA editing therapeutics, which we call “Editing Oligonucleotides”, or EONs, for a
variety of human diseases.
Axiomer uses EONs to mediate single nucleotide changes to RNA in a highly specific and targeted way using
molecular machinery that is present in human cells called ADAR. Axiomer EONs are designed to recruit and
direct endogenously expressed ADARs to change an Adenosine (A) to an Inosine (I) in the RNA – an Inosine is
translated as a Guanosine (G). This approach can be used to correct an RNA with a disease-causing mutation
back to a normal (wild type) RNA, modulate protein expression, or alter a protein so that it will have a new
function that helps prevent or treat disease.
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Since discovering the Axiomer RNA editing technology in 2014, we have established a leading intellectual
property estate in the ADAR editing space, defined the design ground rules, and optimized chemistries for
therapeutic use.
Our research and development strategy focuses on the use of our Axiomer platform to develop novel RNA
editing therapeutics to address diseases with high unmet medical need. We are initially focused on diseases
originating in the liver and in the central nervous system (“CNS”) where research into human genetics has
shown us that changing the RNA or correcting pathogenic mutations via A-to-I editing may lead to a benefit
for patients. We prioritize areas with well-established biomarkers for the assessment of early clinical activity
and to establish proof of target engagement, established clinically relevant endpoints, and the ability to
leverage existing proven delivery technology. We are advancing AX-0810 for cholestatic diseases targeting Na-
taurocholate cotransporting polypeptide, or NTCP, and AX-1412 for cardiovascular disease (“CVDs”) targeting
Beta-1,4-galactosyltransferase 1, or B4GALT1, as our initial pipeline programs. In 2024, we announced a new
research partnership with the Rett Syndrome Research Trust (“RSRT”) focused on utilizing Axiomer to develop
EONs targeting an underlying genetic variant that causes Rett syndrome, a rare neurodevelopment disorder,
which is included on our pipeline as AX-2402.
In addition to advancing our wholly-owned pipeline programs, we entered into a global licensing and
research collaboration with Eli Lilly and Company in September 2021 where our Axiomer RNA editing
platform is being used to progress new drug targets for disorders toward clinical development and
commercialization. Initially focused on five targets, the partnership was expanded to ten targets in December
2022, with an option for further expansion to fifteen targets.
We believe the platform has significant potential to yield many additional therapeutic candidates. Thus, we
continuously evaluate further opportunities for beneficial collaborations or strategic partnerships to
efficiently advance product candidates with the goal of bringing medicines to patients.
We have other earlier stage RNA editing platform technologies, including our Trident platform. Our Trident
RNA pseudouridylation platform is designed to enable the suppression of nonsense mutations and
premature stop codons (“PTC”) that cause 11% of all human genetic diseases. Since all premature stop
codons contain uridine, pseudouridylation of that uridine converts those nonsense codons into sense
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PROQR THERAPEUTICS ANNUAL REPORT 2023
codons. The Trident technology harnesses the endogenously expressed pseudouridylation machinery with
guide RNAs to, amongst other potential functions, inhibit nonsense messenger RNA (“mRNA”)-mediated
decay (“NMD”) in a sequence-specific manner and promote PTC readthrough. The Trident technology has the
potential to be applied in genetic diseases caused by PTCs.
Both the Axiomer and Trident platforms are novel, proprietary RNA editing technologies invented at ProQR or
with our academic collaborators. We have built a broad intellectual property estate around these
technologies and together with the leading academic experts in the RNA field, we continue to advance these
technologies. RNA editing for therapeutic applications.
RNA antisense oligonucleotides (“AONs”) have been used as therapeutics for the last few decades. ProQR
scientists have invented entirely new ways of using the proven modality of oligonucleotides to recruit a novel
mechanism of action.
RNAs are produced in a process called transcription, where genetic information in DNA is copied into RNA.
The information in RNA then serves as a blueprint to produce a protein via a process called translation.
Before translation occurs, RNA can be processed in several ways. One way is RNA editing, which involves
changing specific nucleotides, or letters, in the RNA code. RNA editing is a naturally occurring process that
helps ensure that produced proteins function normally. It can also create slightly differently functioning
proteins.
One common type of RNA editing is A-to-I editing, where Adenosines (abbreviated as “A”), are changed into
Inosines (abbreviated as I), as shown in Figure 1. Nucleotides pair together to create double stranded
structures within the RNA. Double stranded RNA structures are found and bound to by ADAR, which is
naturally present in the cells. ADAR then can edit As into Is, which is read by a ribosome as a G, or guanosine.
This process is called “A to I” editing, which functionally enables changing an A into a G. In 2014, scientists at
ProQR invented Axiomer, which was conceived based on the idea of recruiting endogenous ADAR in humans
to make single A to I changes in RNA in a highly specific and targeted manner, using EONs as shown in Figure
1b.
Figure 1a (left): RNA editing is a naturally occurring process whereby ADARs perform A to I editing.
Figure 1b (right): ProQR’s Axiomer RNA editing technology platform uses EONs to recruit and direct
endogenously expressed ADARs to edit an A to an I in the RNA, which is then translated as a G,
allowing highly specific editing.
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There are over 16 million known locations in the RNA where ADARs perform A to I editing throughout the
body, which we believe represents a powerful potential therapeutic mechanism for multiple disease areas.
Axiomer could potentially yield a new class of medicines for both rare and prevalent diseases with unmet
need.
Our Strategy
We are advancing Axiomer as a platform to develop a new class of innovative medicines based on ADAR RNA
editing, which we believe has the potential to treat a broad range of diseases that currently lack adequate
treatment options. Our novel and proprietary RNA editing platform technologies, known as Axiomer and
Trident, are new ways to use oligonucleotides to edit single nucleotides in the RNA. We believe the Axiomer
technology may be applicable to thousands of disease-causing mutations by correcting RNA in genetic
diseases. Beyond mutation correction, Axiomer also has the potential to address unmet medical needs in
common conditions, by modulating protein expression or altering a protein so that it will have a new function
to help prevent or treat diseases. We intend to continue to optimize our platform as we advance to clinical
stage and beyond. Key elements of our strategy include:
•
Pipeline: We intend to use these platforms to develop novel therapies initially for targets related to liver-
and CNS-originating diseases, and beyond. With our Axiomer RNA-editing technology platform, we are
advancing AX-0810 for Cholestatic Diseases targeting NTCP and AX-1412 for CVDs targeting B4GALT1 as
our initial pipeline programs. In January 2024, we announced a partnership with the RSRT in which we
will develop EONs targeting an underlying genetic variant that causes Rett syndrome, a rare
neurodevelopment disorder, which is included on our pipeline as AX-2402.
•
Partnerships: We continue to validate and create value for these platforms by selectively pursuing
additional licensing, partnering, and other strategic relationships outside of our core focus area, such as
our partnership with Lilly, and the RSRT.
We seek to maximize the value of our pipeline by retaining development and commercialization rights to
those product candidates, indications and geographies that we believe we can independently develop, seek
approval for, and commercialize on our own. Beyond this, for other product candidates, such as those for
more prevalent indications, and other geographies, we plan to selectively and opportunistically seek potential
partnerships following early-stage clinical proof of concept.
Our Novel Axiomer RNA Editing Technology Platform
Antisense oligonucleotides, or AONs, have been used as therapeutics for decades. Our Axiomer RNA editing
technology is based on oligonucleotides that are called editing oligonucleotides, or EONs, designed to recruit
endogenous ADAR enzymes to make single adenosine-to-inosine (A-to-I) changes in the RNA in a highly
specific and targeted manner. This technology could correct thousands of G-to-A mutations in the human
population that cause diseases. In vitro and in vivo work indicates that the EONs are generally applicable for
the correction of RNA G-to-A mutations. The technology is also designed to modulate protein expression or
alter proteins to provide a new function to help prevent or treat disease. With this applicability, we believe
Axiomer has the potential to address hundreds of genetic and non-genetic diseases.
Across a range of targets, we have shown both in vitro and in vivo platform proof-of-concept for our Axiomer
RNA editing technology platform, in cell models, organoids, and animal models, including relevant higher
order species.
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Our Axiomer platform has demonstrated proof of concept across multiple models, as shown in Figure 2a and
2b reporting up to 70% editing of ACTB in the liver of non-human primates (“NHPs”) and mice and 50% editing
in the nervous system.
Figure 2a: Robust editing with Axiomer editing oligonucleotides reported in the nervous system across
different models and targets in vivo including non-human primates.
Figure 2b: Up to 70% editing of ACTB in the liver of non-human primates (NHPs) and mice.
Additionally, across EONs, preliminary nonclinical safety assessment showed a similar safety profile
compared to other single-stranded RNA oligonucleotides.
If translated in human testing, we believe the editing activity and safety profile supports the potential of our
technology and plan to advance product candidates based on our Axiomer platform to clinical stage.
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Our Pipeline Programs
We are advancing Axiomer as a platform to develop a new class of innovative medicines based on RNA
editing. Our initial pipeline targets focus on liver-originating and CNS diseases share several key
characteristics, including:
•
•
•
•
•
Population with unmet need
Target with deep roots in human genetics
Preclinical models with strong translatability into the clinic
Validated biomarkers to assess target engagement and the ability to have early insight into safety
Established disease-specific clinical endpoints
Our initial pipeline programs include AX-0810 for Cholestatic Diseases targeting NTCP and AX-1412 for CVDs
targeting B4GALT1. During 2024, we plan to present non-clinical proof-of-concept data for these programs
and anticipate providing an update on translational data to enable submission of Clinical Trial Application
(“CTA”). We expect to advance these programs to clinical trials in late 2024 / early 2025.
In January 2024, we announced a partnership with the RSRT in which we will develop EONs targeting an
underlying genetic variant that causes Rett syndrome, a rare neurodevelopment disorder, which is included
on our pipeline as AX-2402.
AX-0810 for Cholestatic Diseases targeting NTCP
Cholestatic Diseases overview
Cholestatic diseases are caused by a toxic buildup of bile acids in the liver due to bile duct dysfunction, which
causes liver cell damage. The consequences of these disorders can be devastating and significantly impact a
person's quality of life, including pruritus, dry skin, fatigue, pain, weight loss, and many others. Without
treatment, the damage progresses through various stages, from fibrosis to cirrhosis, ultimately leading to
liver failure and an increased risk of liver cancer. Liver transplants are often necessary for primary sclerosing
cholangitis (“PSC”) and biliary atresia (“BA”), two forms of cholestatic diseases with high unmet medical needs.
PSC is a condition that causes inflammation and is typically diagnosed in people aged 30 to 40, more
commonly affecting men (66%). It is estimated that 80,000 people in North America and Europe have PSC,
with a prevalence of 1 to 9 individuals per 100,000. This condition causes fibrosis and sclerosis of bile ducts,
leading to a toxic buildup of bile acids in the liver.
BA is a pediatric condition that affects newborns, resulting from the absence or defect of bile ducts. This
condition causes harmful bile acids to accumulate in the liver, leading to rapid progression to cirrhosis early
in life. It is estimated that 20,000 individuals in North America and Europe have BA, with a prevalence of 1 in
10,000 to 15,000 births in the western world.
Limitations of the Current Treatment Landscape
Currently, there are no approved drugs for treating PSC and BA. For PSC, liver transplantation is the only
treatment option with evidence to extend survival. However, PSC can return in 20 to 40% of patients who
undergo liver transplantation, and the median survival without a transplant is only 21 years. Surgery in the
first weeks of life for BA is the gold standard treatment. However, most patients who receive this surgery will
still require a liver transplant early in life.
AX-0810 for Cholestatic Diseases targeting NTCP
The liver cells mainly obtain bile acids from the enterohepatic reuptake cycle. The process is primarily carried
out by a transporter called Na-taurocholate transporting polypeptide (“NTCP, SLC10A1”), which takes bile
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acids from the portal circulation to the liver. Studies show that inhibiting NTCP can improve liver function by
reducing the levels of toxic bile acids, improving liver damage markers (fibrosis, cholangiocyte proliferation,
Alkaline phosphatase or ALP, alanine transaminase or ALT), and lowering inflammation biomarkers
(“cytokines”).
AX-0810, our Axiomer-targeted RNA editing oligonucleotide, aims to reduce the reuptake of bile acids in the
liver by inhibiting NTCP function. Variants in NTCP that change its capacity to recycle bile acid into the liver
naturally occur in some people without causing any symptoms associated with cholestasis. This finding
suggests that our approach is safe and may reduce the accumulation of toxic bile acids in the liver. Moreover,
such variants in NTCP also promote the elimination of bile acids from the body by increasing their excretion
in the feces and urine, a process called sulfation of bile acids, which enhances their solubility and reduces
their absorption in the intestines. Based on its mechanism of action, we believe AX-0810 may have the
potential to modify the course of cholestatic diseases, delay or prevent complications such as cirrhosis and
liver failure, and alleviate associated symptoms.
AX-1412 for Cardiovascular Disease targeting B4GALT1
Cardiovascular disease overview
Cardiovascular diseases (“CVDs”) are a group of health conditions that affect the heart and blood vessels,
such as atherosclerosis which can lead to severe problems like heart attacks, heart failure, and stroke. The
World Health Organization (“WHO”) has identified unhealthy diet, physical inactivity, tobacco use, and
excessive alcohol consumption as major behavioral risk factors for heart disease and stroke, increasing
intermediate risk factors including but not limited to high blood pressure, cholesterol, glucose levels, and
obesity.
CVDs are the leading cause of disability and death globally, becoming a significant health issue worldwide.
Approximately 18 million people die from CVDs each year, making up 32% of all global deaths, according to a
report by the World Health Organization in 2021. In the United States, the American Heart Association
estimates that by 2035, more than 130 million adults will have some form of CVD.
Current Treatment Landscape and Limitations
CVD treatment involves taking medications to lower cholesterol and blood pressure levels. The most common
drugs are statins, ezetimibe, and PCSK9 inhibitors. These medications are primarily used to lower LDL
cholesterol levels. Other treatments, such as ANGPTL3 inhibitors, decrease the residual risk of heart disease
in patients with high LDL cholesterol levels. However, even with these therapies, less than 35% of Americans
with high LDL cholesterol levels reach their target levels recommended by guidelines. CVD events still occur
even when LDL cholesterol levels meet clinical goals. Many patients also struggle to continue taking their
medications long-term, with less than 50% of patients taking their LDL-lowering medicines 2 years after a CVD
event. Additionally, 5 to 10% of patients cannot tolerate high doses of statins, primarily due to muscle aches.
AX-1412 for Cardiovascular Disease targeting B4GALT1
AX-1412 represents a potential targeted approach to RNA editing of B4GALT1 that leads to a promising
strategy for protecting against CVDs by simultaneously lowering levels of LDL-c and fibrinogen. Recent gene-
based analysis has shown that rare protective variants changing protein activity and predicted deleterious
missense variants in B4GALT1 are associated with a decreased risk of coronary artery disease. Additionally, a
particular missense variant (p.Asn352Ser) in the beta-1,4-galactosyltransferase 1 B4GALT1 gene is prevalent
in the Amish population and associated with lower levels of LDL-c and cardiovascular disease.
The beneficial effects of these genetic variations are due to the hypo-galactosylation of apolipoprotein B100
and fibrinogen, which are known to be independent drivers of an increased risk of CVDs, as well as
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immunoglobulin G and transferrin. However, it's important to note that studies have shown that B4GALT1
knockdown can lead to semi-lethality and severe developmental abnormalities in mice models and therefore
we believe B4GALT1 inhibition is not a feasible therapeutic approach for this purpose.
Although there are several approaches to lowering the risks of CVDs, including reducing LDL-c and ApoB
levels, reducing fibrinogen levels may offer additional benefits to patients with unmet medical needs in this
large population. Fibrinogen reduction can be used either as a stand-alone therapy or an adjunct therapy to
other treatments.
We are developing Axiomer targeted RNA EON AX-1412 to address CVD by editing B4GALT1. RNA editing to a
protective variant of B4GALT1 can have positive effect on CVDs risk factors by leading to hypo-galactosylation
of apolipoprotein B100 and fibrinogen. Based on its mechanism of action, we believe that AX-1412 is a novel
and unique approach to address CVD by lowering LDL-C and fibrinogen levels ultimately leading to a reduced
residual risk in CVDs.
We intend to advance AX-1412 targeting B4GALT1 to early clinical proof of concept stage, then would seek to
partner this program.
Our Earlier-Stage/Discovery Programs
In January 2024, we announced a partnership with the RSRT that will focus on the design and development of
EONs using our Axiomer technology platform targeting the transcription factor MECP2 and correcting
mutations of interest. AX-2402 is our program focusing on Rett syndrome, which is a progressive
neurodevelopmental disorder caused by genetic mutations in the Methyl CpG binding protein 2 (“MECP2”)
and diagnosed primarily in females. It is characterized by apparently normal psychomotor development
during the first six to 18 months after birth, followed by a period of developmental stagnation, then a
regression in language and motor skills, followed by long-term relative stability. During the phase of
regression, affected patients develop repetitive, stereotypic hand movements that replace purposeful hand
use. Additional symptoms include gait ataxia and apraxia, seizures, tremors, episodic apnea and/or
hyperpnea, gastrointestinal issues, scoliosis and musculoskeletal problems, anxiety and sleep issues and
bruxism.
In addition to AX-2402 for Rett syndrome, we have multiple other early-stage research programs ongoing that
target additional diseases with our Axiomer EON approach, including AX-1005 for undisclosed targets in CVD,
AX-2911 for nonalcoholic steatohepatitis (“NASH”), AX-0601 for obesity and Type 2 diabetes, AX-9115 for rare
metabolic condition, as well as multiple other targets in our discovery pipeline.
Our Partnership Strategy
Our business strategy is to develop and ultimately commercialize a broad pipeline of RNA therapies based on
our Axiomer RNA editing platform technology. We are initially focused on developing an internal pipeline
based on liver-originating diseases, including Cholestatic Diseases and CVD, among others. We believe there
is broad applicability of the platform beyond liver and as part of the strategy to advance Axiomer, we have
entered into, and expect to enter into additional collaboration and licencing agreements as a means of
obtaining funding and capabilities to advance programs based on Axiomer.
A global licensing and research collaboration with Eli Lilly and Company focuses on the discovery,
development, and commercialization of potential new medicines for genetic disorders using our Axiomer
RNA editing technology with a focus on CNS and peripheral nervous system (“PNS”). The partnership, formed
in 2021, initially focused on up to five targets. In December 2022, the partnership was expanded to up to ten
targets, with an option for an additional five targets. Under the terms of the agreements, we received $125
million upfront from Lilly and would be paid an additional $50 million if Lilly exercises the option for five
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additional targets. We are also eligible to receive up to approximately $3.75 billion in milestones, as well as
royalties on potential product sales.
In January 2024, we announced a collaboration with the RSRT, as described above. RSRT awarded ProQR
approximately $1 million as a research grant for the initial phase of the project, which will encompass editing
oligonucleotide design and optimization, including evaluation in in vivo models for editing efficacy and MECP2
protein recovery. It is the intent of the partnership to be continued by an expanded co-funding arrangement
following the initial discovery work. The co-funding of the next phase of the collaboration would enable
clinical development of an Axiomer-based therapeutic for Rett syndrome MECP2.
We believe the platform holds significant further potential for strategic transactions.
Ophthalmology Assets
In August 2022, we made the decision to exclusively focus our strategy on the advancement of our Axiomer
RNA editing technology and to partner our ophthalmology programs. In December 2023, we announced that
we had completed a transaction divesting the late stage ophthalmic assets sepofarsen and ultevursen to
Laboratoires Théa (“Théa”) who will continue the development of these therapies for patients with LCA10 and
Usher Syndrome. Under the terms of the agreement, ProQR received an initial payment of € 8 million and
may be eligible for up to € 165 million in further development, regulatory, and commercial earn-out
payments upon related achieved milestones, as well as double-digit royalties based on commercial sales in
the United States and EU.
Competition
The pharmaceutical industry is highly competitive and subject to rapid and significant technological change.
Our potential competitors include large pharmaceutical, biotechnology, specialty pharmaceutical, and generic
drug companies, academic institutions, government agencies and research institutions. Key competitive
factors affecting the commercial success of our product candidates are likely to be efficacy, safety and
tolerability profile, delivery, reliability, convenience of dosing, patient recruitment for clinical studies, price
and reimbursement. Many of our existing or potential competitors have substantially greater financial,
technical, and human resources than we do and significantly greater experience in the discovery and
development of product candidates, obtaining U.S. Food and Drug Administration (“FDA”), European
Medicines Agency (“EMA”) and other regulatory approvals of products and the commercialization of those
products. Mergers and acquisitions in the pharmaceutical and biotechnology industries may result in even
more resources being concentrated among a small number of our competitors. Accordingly, our competitors
may be more successful than we may be in obtaining FDA or EMA approval for therapies and achieving
widespread market acceptance. Our competitors’ products may be more effective, or more effectively
marketed and sold, than any product we may commercialize and may render our therapies obsolete or non-
competitive before we can recover development and commercialization expenses.
Our competitors are working on similar technologies in the field of RNA editing, but also in the field of gene
editing and gene therapy as well as other types of therapies, such as small molecules, protein replacement or
antibodies.
Main financial developments
Financial position
In 2023, our operating costs decreased compared to last year while our current ratio and solvency also
decreased. At December 31, 2023, ProQR’s cash and cash equivalents amounted to € 118,925,000 compared
to € 94,775,000 at December 31, 2022. Net cash generated by operating activities amounted to € 21,548,000
in the year ended December 31, 2023, whereas net cash used in operating activities amounted to
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€ 68,508,000 in the year ended December 31, 2022. The Company experienced a net positive cash flow from
operating activities in 2023 mainly because of the receipt of the Lilly up-front payment of € 56,412,000 in
February 2023. In addition, total operating costs decreased by € 28,134,000 in 2023 compared to 2022, which
had a further positive impact on net cash generated by operating activities.
Total equity decreased from € 66,681,000 to € 41,390,000 in the year ended December 31, 2023. At December
31, 2023, we had borrowings of € 4,292,000, which consisted of a loan from a government body. Based on the
current state of affairs and existing funding, taking into account our current cash position and projected cash
flows, it is justified that the financial statements are prepared on a going concern basis.
Income statement
We have generated losses since our inception in February 2012. For the years ended December 31, 2023 and
2022, we incurred net losses of € 27,735,000 and € 64,204,000, respectively. At December 31, 2023, we had an
accumulated deficit of € 400,850,000. We expect to continue incurring losses for the foreseeable future as we
invest in our Axiomer and Trident platforms and continue our (pre-)clinical studies of our product candidates.
In 2023 we realized revenue from our license and research collaboration agreement with Lilly amounting to
€ 6,514,000 (2022: € 3,237,000). The increase in Lilly revenue is due to new projects under the Lilly
collaboration that were started in 2023. In 2023 we realized no revenue from our license and research
collaboration agreement with Yarrow (2022: € 357,000). The decrease in Yarrow revenue is due to the
termination of the Yarrow collaboration in the second quarter of 2022.
In 2023, other income consisted primarily of the net proceeds from the Company’s divestment of its late-
stage ophthalmic intellectual property assets, sepofarsen and ultevursen, to Théa. No such income was
recognized in 2022. In 2022, other income included grant income from the Foundation Fighting Blindness
(“FFB”) for the purpose of developing ultevursen. FFB grant income amounted to € 594,000 in 2022 while no
such income was recognized in 2023.
Research and development costs amounted to € 25,148,000 for the year ended December 31, 2023
compared to € 50,867,000 for the year ended December 31, 2022. These costs were primarily related to the
development of our Axiomer platform, including costs incurred under the Lilly collaboration in 2023 and
2022. In 2022, the Company also incurred costs related to the sepofarsen and ultevursen clinical trials and
the wind-down of those ophthalmology programs. Our research and development expenses are highly
dependent on the development phases of our product candidates. Research and development expenses are
expected to increase as we continue our joint research projects with Lilly and our investments in the Axiomer
and Trident platforms, while progressing our internal pipeline targets towards clinical development.
The decrease in research and development costs in the year ended December 31, 2023 compared to the year
ended December 31, 2022 includes the effects of:
•
•
•
•
Lower costs of contract research organizations (“CROs”) for the Phase 2/3 clinical trials for ultevursen.
The trials were wound down in the second half of 2022 and wind-down costs were recognized in 2022.
The Company incurred very limited further wind-down costs in 2023;
Lower employee benefits (excluding share-based compensation) in 2023 compared to 2022, resulting
from the effects of a reorganization in 2022, partly offset by a company-wide inflationary correction on
salaries;
Advisory costs relating to the Phase 2/3 clinical trials for ultevursen that we incurred in 2022 but not in
2023;
The above effects are partly offset by increased expenses related to the development of our Axiomer
platform in 2023.
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General and administrative costs amount to € 16,236,000 for the year ended December 31, 2023 and
€ 18,651,000 for the year ended December 31, 2022. The decrease in general and administrative costs in the
year ended December 31, 2023 compared to the year ended December 31, 2022 includes the effects of:
•
•
Lower employee benefits (excluding share-based compensation) resulting from the effects of a
reorganization in 2022, partly offset by a company-wide inflationary correction on salaries;
The above effect is partly offset by increased share-based compensation, reflecting the higher value of
grants of share options to general and administrative staff.
Outlook
We expect to continue to spend substantial amounts of cash to conduct further research and development
and (pre-)clinical testing of our pipeline targets and to seek regulatory approvals for any current and future
product candidates. Based on our current operating plans, we believe that our existing cash and cash
equivalents will be sufficient to fund our anticipated level of operations into mid-2026. Given the
development stage of the Company, we do not anticipate revenues from product sales in the foreseeable
future.
Risks of fraud and non-compliance with laws and regulations
We are exposed to the risk of employee fraud or other misconduct. Misconduct by employees could include
intentional failures to comply with FDA or EMA regulations or similar regulations of other foreign regulatory
authorities, to provide accurate information to the FDA, the EMA or other foreign regulatory authorities, to
comply with certain manufacturing standards, to comply with U.S. federal and state healthcare fraud and
abuse laws and regulations and similar laws and regulations established and enforced by comparable foreign
regulatory authorities, to report financial information or data accurately or to disclose unauthorized activities
to us. In particular, sales, marketing and business arrangements in the healthcare industry are subject to
extensive laws and regulations intended to prevent fraud, kickbacks, self-dealing and other abusive practices.
These laws and regulations may restrict or prohibit a wide range of pricing, discounting, marketing and
promotion, sales commission, customer incentive programs and other business arrangements. Employee
misconduct could also involve the improper use of information obtained in the course of clinical trials, which
could result in regulatory sanctions and serious harm to our reputation. We have adopted and implemented
a Code of Business Conduct and Ethics, but it is not always possible to identify and deter employee
misconduct, and the precautions we take to detect and prevent this activity, such as employee training on
enforcement of the Code of Business Conduct and Ethics, may not be effective in controlling unknown or
unmanaged risks or losses or in protecting us from governmental investigations or other actions or lawsuits
stemming from a failure to be in compliance with such laws or regulations. If any such actions are instituted
against us, and we are not successful in defending ourselves or asserting our rights, those actions and any
imposition of significant fines or other sanctions could have a significant impact on our business and results
of operations.
We monitor and assess applicable Dutch and U.S. federal and state corporate governance codes, rules, and
regulations. We apply the 2022 Dutch Corporate Governance Code (the “Code”). We also are required to
comply with all applicable U.S. securities laws and regulations, including the rules and regulations
promulgated by the U.S. Securities and Exchange Commission (“SEC”) pursuant to the U.S. Exchange Act of
1934 and the U.S. Sarbanes-Oxley Act of 2002, as well as the U.S. Nasdaq Capital Market (“Nasdaq”) listing
rules.
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Our corporate governance structure is based on the requirements of the Dutch Civil Code, the company’s
Articles of Association and the rules and regulations applicable to companies listed on the Nasdaq. These
procedures include a risk management and control system, as well as a system of assurance of compliance
with laws and regulations.
Leiden, March 13, 2024
On behalf of the Management Board,
Daniel de Boer
CEO
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Supervisory Board Report
ProQR Therapeutics has chosen a so-called two-tier system for its governance structure. In such a structure,
the Supervisory Board supervises and advises the Management Board in performing their management tasks
and setting the strategy of the Company. The Supervisory Board as well as its individual members act in the
interests of the Company.
During the 2023 financial year, the Supervisory Board and its sub-committees held frequent and productive
interactions with the Management Board. Where required by ProQR’s articles of association, shareholder
approvals or Dutch law, Management Board decision making was approved or endorsed by the Supervisory
Board and matters of both short-term as well as long-term strategic importance were discussed in a
constructive and transparent manner. Below is a more specific description of the Supervisory Board’s
activities during 2023 and other relevant information on its functioning.
Activities of the Supervisory Board
The Supervisory Board and the Management Board held six meetings in 2023. During these meetings, the
Boards discussed, amongst other matters, the advancement of the Company’s proprietary Axiomer RNA-
editing platform technology, including our initial pipeline targets for internal development, ProQR’s
collaboration with Eli Lilly, the Company’s patent protection related to Axiomer, the strategic divestment of
our late-stage ophthalmic assets to Laboratoires Théa, as well as the Company’s strategy and funding. The
meetings were well attended with an average attendance rate of more than 98%. In addition, there were
various informal meetings between the Supervisory Board and the Management Board during the course of
2023. Furthermore, the committees reported back on their activities to the full Supervisory Board on a
regular basis.
Committees of the Supervisory Board
During 2023, the Supervisory Board had an audit committee, a compensation, nominating and corporate
governance committee and a research and development committee, each of which has an adopted charter.
Compensation, Nominating and Corporate Governance Committee
The compensation, nominating and corporate governance committee (or, the “compensation committee”)
met five times in 2023. The meetings had an attendance rate of 100%.
Compensation matters
Attraction and retention of world class talent is a prerequisite for the success of ProQR and competitive
compensation plays a vital role in our ability to achieve this. The compensation committee elected to offer
compensation for all employees, including the Management Board, in the form of a fixed annual salary
combined with variable, performance related, short- and long-term incentive elements. The compensation
policy is designed based on the following principles:
•
Three compensation pillars consisting of:
•
•
•
Annual base salary;
Short Term Incentive (annual cash bonus); and
Long Term Incentive (share-based compensation plan).
•
Flexibility: The compensation policy should provide flexibility to allow the Supervisory Board, acting on
the recommendation of the compensation committee, to reward the Management Board in a fair and
equitable manner;
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•
•
•
•
•
•
The compensation policy should drive the right kind of management behavior, discourage unjustified
risk taking and minimize any gaming opportunity;
The compensation policy should pay for performance, considering not only the measurable financial
performance of / or milestones achieved by the Company, but also, where appropriate, the efforts
made by the Management Board, individually and as a group, in managing the Company. For the
variable components, the compensation committee performs an analysis of the possible outcomes
under different scenarios;
Design of the compensation policy shall be based on current legislation applicable in the Netherlands;
The compensation policy shall foster alignment of interests with shareholders;
The pension of the Management Board shall be based on the defined contribution system; and
Pay differentials and position within the Company are considered and evaluated regularly.
Compensation report 2023
In line with the practice of regularly reviewing the Compensation Policy, the Compensation Committee
evaluated and reviewed the Compensation Policy in 2023. Based on the outcomes of the review no changes
were made to the Compensation Policy for the Management Board.
The following summarizes the decisions made with respect to the Management Board’s 2023 compensation:
Annual Base Salary
The compensation committee reviewed the annual base salary of the Management Board taking into
consideration the compensation reference group as contained in the compensation policy. Based on this
review the annual base salary level for 2023 has been set at € 485,000 for the CEO, Daniel de Boer and at
€ 380,000 for the Chief Corporate Development Officer and General Counsel, René Beukema.
Short Term Incentive
The compensation committee reviewed the performance of the Company during 2023 in comparison to the
objectives and reviewed the achievements of the Management Board versus the corporate goals. Based on
the recommendation of the compensation committee, the Supervisory Board decided in late 2023 that the
Company has achieved 125% of the objectives that had been set to determine the bonus awards for the year
2023. For 2023 the individual bonus amounted to € 643,000 for Mr. de Boer and € 481,000 for Mr. Beukema.
Mr. de Boer’s and Mr. Beukema’s bonuses were paid in cash partly in the fourth quarter of 2023 and partly in
the first quarter of 2024.
Long Term Incentive
Based on the recommendation of the compensation committee, the Supervisory Board decided to grant
stock options to Mr. de Boer and Mr. Beukema. Based on this decision, in 2023 stock options with an average
exercise price of $ 3.41 have been granted to Mr. de Boer with respect to 442,182 shares. Stock options with
an exercise price of $ 3.41 have been granted to Mr. Beukema with respect to 132,123 shares.
Pensions
The pension contributions for Mr. de Boer and Mr. Beukema paid during 2023 amount to € 27,000 and
€23,000, respectively.
Internal pay ratio
The internal pay ratio between the average pay of our employees and our Management Board is calculated
based on the average remuneration based on short term and long-term incentives. The pay ratio is 16:1 for
2023 (2022: 9:1).
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Supervisory Board remuneration
For 2023, members of our Supervisory Board received board fees of € 34,000 per year and the chairperson
received a fee of € 63,000 per year. In addition, audit committee members received a fee of € 7,000 and the
audit committee chairperson received a fee of € 15,000 per year; compensation committee members
received a fee of € 5,500 and the chairperson of this committee received a fee of € 12,000 per year, and
research and development committee members received a fee of € 5,500 and the chairperson of the
research and development committee received a fee of € 12,000 per year. Further, Supervisory Board
members were granted options, as set out in Note 27 to the financial statements.
Nominating and Corporate Governance Matters
With respect to nominating and corporate governance matters, the compensation committee assists our
Supervisory Board in selecting individuals qualified to become our Supervisory Board members and
Management Board members, in determining the composition of the Management Board, Supervisory Board
and its committees and our officers in developing and recommending a set of corporate governance
guidelines applicable to ProQR. In furtherance of this, the compensation committee is responsible for
recommending to the Supervisory Board persons to be nominated for election or re-election to the
Supervisory Board and the Management Board at any meeting of the shareholders; overseeing the
Supervisory Board’s annual review of its own performance and the performance of its committees; and
considering, preparing and recommending to the Supervisory Board a set of corporate governance
guidelines.
Research and Development Committee
The research and development committee met four times in 2023. The meetings had an attendance rate of
100%. The research and development committee assists the Supervisory Board in overseeing our product
pipeline and research and development strategy. The research and development committee is responsible
for, among other things, reviewing ProQR’s research and development strategy, including the long-term
strategy goals and objectives; reviewing and assessing quality of the research and development programs;
reviewing the progress of the product pipeline, including a review and analysis of the progress and results of
pre-clinical studies and clinical trials; reviewing and advising the Management Board about strategic
opportunities to enhance innovation and development; reviewing and assessing scientific activities critical to
the success of ProQR’s research and development strategy; and organizing and chairing meetings with
ProQR’s scientific advisory board for supporting its review and assessment ProQR’s research and
development strategy.
Audit Committee
The audit committee met four times in 2023. The meetings had an attendance rate of 92%. The main topics
that were addressed include the quarterly results, financial risk management, compliance (including SOx), the
audit plan, audit updates and audit report of the current external auditor, cash management, tax and
corporate governance.
The audit committee also reviewed ProQR’s annual financial statements, including non-financial information,
prior to publication thereof. The financial statements for 2023 have been audited and provided with an
unqualified opinion by our external auditor, KPMG Accountants N.V. (“KPMG”), and were extensively
discussed with the auditors in the meetings of the Supervisory Board, Audit Committee and Management
Board on March 12, 2024. The Supervisory Board is of the opinion that the 2023 Financial Statements meet all
the applicable requirements and recommends that the Annual General Meeting of Shareholders adopt the
financial statements and the appropriation of net result proposed by the Management Board.
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The Company’s external auditor attended all audit committee meetings. The audit committee evaluates the
performance of KPMG as independent external auditor annually. Due to the limited size of the Company, it
was concluded that there was currently no need to appoint an internal auditor.
The Supervisory Board is responsible for the quality of its own performance and it discusses, once a year on
its own, without the Management Board present, both its own functioning and that of the individual
members, and the functioning of the Management Board. The Supervisory Board discussed its functioning
and competencies and concluded that its functioning and competencies are appropriate for the current
phase of the company. The Supervisory Board continues to assess its composition and functioning on an
ongoing basis with the aim to ensure and maintain the requisite expertise, experience and diversity. The
performance and composition of the Management Board were also found to be adequate. We feel the
additional efforts of all staff at ProQR form a strong foundation for the success and growth of the Company
and all milestones reached this past year. Therefore, we would like to express our thanks to the Management
Board, senior management and all other employees for their contribution and performance during the year.
We thank our shareholders for their continued support.
Leiden, March 13, 2024
On behalf of the Supervisory Board,
Dinko Valerio
Chairman
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Corporate Governance
ProQR values the importance of complying with Corporate Governance regulations. At the same time, the
Board of Directors is of the opinion that certain deviations from the provisions of the Dutch Corporate
Governance Code 2022 (“DCGC” or “the Code”) are justified, in view of our activities, our size and the specific
circumstances in which we operate. In such cases, which are mentioned in this corporate governance
statement, we apply the “comply or explain” principle.
Deviations from certain aspects of the Code, when deemed necessary in the interests of the Company, will be
disclosed in the Annual Report. Most deviations are justified due to our Company being listed in the United
States with most of our investors being outside of the Netherlands, as well as to the international business
focus of our Company. As a Company listed on NASDAQ, we comply with NASDAQ’s corporate governance
listing standards, except for instances where we follow our home country’s corporate governance practices in
lieu of certain NASDAQ’s standards as explained below, as NASDAQ investors are more familiar with
NASDAQ’s rules than with the Code.
In this report, the Company addresses its overall corporate governance structure and states to what extent
and how it applies the principles and best practice provisions of the Code. This report also includes the
information which the Company is required to disclose pursuant to the Dutch governmental decree on Article
10 Takeover Directive and the governmental decree on Corporate Governance.
Substantial changes in the Company’s corporate governance structure and in the Company’s compliance with
the DCGC, if any, will be submitted to the General Meeting of Shareholders for discussion under a separate
agenda item. The Supervisory Board and the Management Board, which are responsible for the corporate
governance structure of the Company, are of the opinion that the principles and best practice provisions of
the DCGC that are addressed to the Management Board and the Supervisory Board, are interpreted and
implemented in line with the best practices followed by the Company, are being applied.
The full text of the DCGC can be found at the website of the Monitoring Commission Corporate Governance
Code (www.mccg.nl) and for an overview of our conformity with the Code the following documents are
available at our website (www.ProQR.com): audit committee charter, compensation committee charter,
nominating and corporate governance committee charter and our code of business conduct and ethics.
Management Board
ProQR is dedicated to improve the lives of patients and their loved ones through the development of RNA
therapies for severe genetic rare diseases. The expectations and interests of our stakeholders is a key
reference point in establishing our sustainable long term strategy.
The Management Board’s role is to develop sustainable long term value creation by means of a strategy to
pursue the sustainable long term success of ProQR, as further set out in the Message to Shareholders section.
The strategy contains multiple elements linked to the Corporate Governance Code:
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Implementation and feasibility;
Business model applied by the company;
Opportunities and risks;
Operational and financial objectives;
Interest of shareholders;
Impact in the field of sustainability, including the effects on people and the environment;
Paying a fair share of tax in the countries in which ProQR operates;
Impact of new technologies and changing business models;
Any other relevant aspects such as charity and patient organizations.
The Management Board executes the strategy by assuming the authority and responsibilities assigned to it by
Dutch corporate law and by combining expertise and experience with entrepreneurial leadership. The
Management Board operates under the supervision of the Supervisory Board. The Management Board is
required to:
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Keep the Supervisory Board informed in a timely manner in order to allow the Supervisory Board to
carry out its responsibilities;
Consult with the Supervisory Board on important matters; and
Submit important decisions to the Supervisory Board for its approval.
Our Management Board may perform all acts necessary or useful for achieving our corporate purposes,
other than those acts that are prohibited by law or by our articles of association. The Management Board as a
whole and any Management Board member individually, are authorized to represent us in dealings with third
parties.
Under our articles of association, the number of Management Board members is determined by the
Supervisory Board, and the Management Board must consist of at least one member. The Supervisory Board
elects a Chief Executive Officer (“CEO”) from among the members of the Management Board.
Members of the Management Board are appointed by the general meeting of shareholders upon a binding
nomination of the Supervisory Board. Our general meeting of shareholders may at all times deprive such a
nomination of its binding character by a resolution passed by at least two-thirds of the votes cast
representing more than 50% of our issued share capital, following which our Supervisory Board shall draw up
a new binding nomination.
Our Management Board rules provide that, unless the resolution appointing a Management Board member
provides otherwise, members of our Management Board will serve for a maximum term of four years. Our
articles of association provide that the Management Board members must retire periodically in accordance
with a rotation schedule adopted by the Management Board. A Management Board member who retires in
accordance with the rotation schedule may be reappointed immediately for a term of not more than four
years at a time.
Our Management Board currently consists of the CEO, Daniel de Boer, and the Chief Corporate Development
Officer and General Counsel, René Beukema. The Management Board is supported by senior management
consisting of the Chief Scientific Officer, the Chief Financial Officer, and the Chief People and Operations
Officer. The Supervisory Board monitors the composition of the Management Board and senior management
team on an ongoing basis to ensure the requisite expertise, experience and diversity is maintained.
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Supervisory Board
Our Supervisory Board is responsible for the supervision of the activities of our Management Board and our
Company’s general affairs and business. Our Supervisory Board may, also on its own initiative, provide the
Management Board with advice and may request any information from the Management Board that it deems
appropriate. In performing its duties, the Supervisory Board is required to act in the interests of our Company
(including its stakeholders) and its associated business as a whole. The members of the Supervisory Board
are not authorized to represent us in dealings with third parties.
Pursuant to Dutch law, members of the Supervisory Board must be natural persons. Under our articles of
association, the number of Supervisory Board members is determined by our Supervisory Board itself,
provided there will be at least three Supervisory Board members. Our articles of association provide that
members of the Supervisory Board are appointed by the general meeting of shareholders upon a binding
nomination by the Supervisory Board. Our general meeting of shareholders may at all times deprive such a
nomination of its binding character by a resolution passed by at least two-thirds of the votes cast
representing more than 50% of our issued share capital, following which our Supervisory Board shall draw up
a new binding nomination.
Our Supervisory Board rules provide that members of our Supervisory Board will serve for a maximum
duration of three terms of four years. Our articles of association provide that the Supervisory Board
members must retire periodically in accordance with a rotation schedule adopted by the Supervisory Board.
A Supervisory Board member who retires in accordance with the rotation schedule can be reappointed
immediately. The Supervisory Board appoints a chairman from among its members.
With the exception of Theresa Heggie, each member of our Supervisory Board has been and remains fully
independent within the meaning of Nasdaq Rule 5605(a)(2) and best practice provision 2.1.8 of the DCGC. Ms.
Heggie was, prior to her appointment on the Supervisory Board in 2023, employed by ProQR as Chief
Commercial Officer and Chief Operations Officer. Having been employed by the company within three years
prior to her appointment on the Supervisory Board, Ms. Heggie does not qualify as independent within the
meaning of Nasdaq Rule 5605(a)(2) and best practice provision 2.1.8 of the Code. We believe her membership
of the Supervisory Board is justified by her specific knowledge of and experience with our business and
company. Moreover, we do comply with best practice provision 2.1.7 of the DCGC, as only one out of 6
supervisory board members is not independent under best practice provision 2.1.8 of the Code and they are
so under different criteria of said provision 2.1.8.
Under our articles of association, the general meeting of shareholders may suspend or remove Supervisory
Board members at any time. A resolution of our general meeting of shareholders to suspend or remove a
Supervisory Board member may be passed by a simple majority of the votes cast, provided that the
resolution is based on a proposal by our Supervisory Board. In the absence of a proposal by our Supervisory
Board, a resolution of our general meeting of shareholders to suspend or remove a Supervisory Board
member shall require a majority of at least two-thirds of the votes cast representing more than 50% of our
issued share capital.
In a meeting of the Supervisory Board, each Supervisory Board member is entitled to cast one vote. A
Supervisory Board member may grant a written proxy to another Supervisory Board member to represent
him/her at a meeting of the Supervisory Board. All resolutions by our Supervisory Board are adopted by a
simple majority of the votes cast unless our Supervisory Board rules provide otherwise. In case of a tie in any
vote of the Supervisory Board, the chairman of the Supervisory Board shall have the casting vote. Our
Supervisory Board may also adopt resolutions outside a meeting, provided that such resolutions are adopted
in writing, all Supervisory Board members are familiar with the resolution to be passed and provided that no
Supervisory Board member objects to such decision-making process.
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A succession plan for Supervisory Board members is in place that is aimed at retaining the balance in the
requisite expertise, experience and diversity.
Committees of the Supervisory Board
In 2023, the Supervisory Board had an audit committee, a compensation, nominating and corporate
governance committee and a research and development committee. We adopted a charter for each of these
committees.
Audit Committee
Our audit committee consists of Bart Filius (chairman), Alison F. Lawton and Begoña Carreño (replacing
Antoine Papiernik per the AGM of 2023).
Each member satisfies the independence requirements of the NASDAQ listing standards / Rule 10A-3(b)(1)
under the Exchange Act, and each member meets the criteria for independence set forth in best practice
2.1.8 of the DCGC. Bart Filius qualifies as an “audit committee financial expert,” as defined by the SEC in
Item 16A: “Audit Committee Financial Expert” and as determined by our Supervisory Board. The audit
committee oversees our accounting and financial reporting processes and the audits of our financial
statements. The audit committee is responsible for, among other things:
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the operation of the internal risk management and control systems, including supervision of the
enforcement of relevant primary and secondary legislation, and supervising the operation of codes of
conduct;
the provision of financial information by the Company (choice of accounting policies, application and
assessment of the effects of new rules, information about the handling of estimated items in the
financial statements, forecasts, work of internal and external auditors, etc.);
compliance with recommendations and observations of internal and external auditors;
the policy of the company on tax planning;
relations with the external auditors, including, in particular, appointment of the external auditors, their
independence, remuneration and any non-audit services for the Company;
the financing of the Company;
the applications of information and communication technology, including risks relating to cyber
security;
annually reviewing the need for an internal audit function: the Supervisory Board has decided not to
create an internal audit function for the time being, since the current scope of the business does not
justify such a full-time role. The Supervisory Board has delegated an active role to its Audit Committee in
the design, implementation and monitoring of internal risk management and control system to manage
the significant risks to which the Company is exposed;
reviewing and approving all proposed related party transactions;
discussing the annual audited statutory financial statements with the Management Board; and
annually reviewing and reassessing the adequacy of our audit committee charter
Compensation, Nominating and Corporate Governance Committee
Our compensation, nominating and corporate governance committee consists of Theresa Heggie (chairman),
Dinko Valerio and James Shannon. With the exception of Theresa Heggie, each member satisfies the
independence requirements of the NASDAQ listing standards. In addition, with the exception of Theresa
Heggie each member meets the criteria for independence set forth in best practice provision 2.1.8 of the
DCGC. With respect to compensation matters, the compensation, nominating and corporate governance
committee assists our supervisory board in reviewing and approving or recommending our compensation
structure, including all forms of compensation relating to our supervisory board members, our Management
Board members and our officers. Members of our Management Board may not be present at any
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compensation, nominating and corporate governance committee meeting while their compensation is
deliberated. With respect to nominating and corporate governance matters, the compensation, nominating
and corporate governance committee assists our Supervisory Board in selecting individuals qualified to be
nominated as Supervisory Board members and Management Board members, in determining the
composition of the Management Board, Supervisory Board and its committees and our officers and in
developing, recommending and keeping up to date the corporate governance guidelines as adopted by the
Management Board and the Supervisory Board. Subject to and in accordance with the terms of the
compensation policies in place from time to time and as approved by our general meeting of shareholders,
as required by Dutch law, the compensation, nominating and corporate governance committee is responsible
for, among other things:
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reviewing and making recommendations to the supervisory board with respect to compensation of our
Management Board and Supervisory Board members;
reviewing and approving the compensation, including equity compensation, change-of-control benefits
and severance arrangements, of our officers (not part of our Management Board or Supervisory Board)
as it deems appropriate;
overseeing the evaluation of our Management Board members and our officers;
reviewing periodically and making recommendations to our Supervisory Board with respect to any
incentive compensation and equity plans, programs or similar arrangements;
exercising the rights of our Supervisory Board under any equity plans, except for the right to amend any
such plans unless otherwise expressly authorized to do so;
attending to such other matters as are specifically delegated to our compensation committee by our
Supervisory Board from time to time;
approving the compensation package for the officers;
periodically reviewing, in consultation with our CEO, our Management Board and our officers succession
planning;
recommending to the Supervisory Board persons to be nominated for election or re-election to the
Supervisory Board and the Management Board at any meeting of the shareholders;
overseeing the Supervisory Board’s annual review of its own performance and the performance of its
committees; and
considering, preparing and recommending to the Supervisory Board on the corporate governance
guidelines.
Our Supervisory Board may also delegate certain tasks and powers under our share-based compensation
plan to the compensation, nominating and corporate governance committee.
Research and Development Committee
Our research & development committee consists of James Shannon (chairman), Dinko Valerio and Alison F.
Lawton. Each member satisfies the independence requirements of the NASDAQ listing standards. In addition,
each member meets the criteria for independence set forth in best practice provision 2.1.8 of the DCGC. The
research & development committee assists the supervisory board in overseeing our product pipeline and
research and development strategy. The research & development committee is responsible for, among other
things:
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reviewing the Company’s research and development strategy, including the long-term strategy goals
and objectives;
reviewing and assessing quality of the research and development programs;
reviewing the progress of the platform development, product pipeline, including a review and analysis
of the progress and results of pre-clinical studies and clinical trials (if and when applicable);
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reviewing and advising the management board about strategic opportunities to enhance innovation and
development;
reviewing and assessing scientific activities critical to the success of the Company’s research and
development strategy; and
organizing and chairing meetings with the Company’s scientific advisory board for supporting its review
and assessment the company’s research and development strategy.
Insurance and Indemnification of Management Board and Supervisory Board Members
Under Dutch law, Management Board members, Supervisory Board members and certain other
representatives may be held liable for damages in the event of improper or negligent performance of their
duties. They may be held jointly and severally liable for damages to the Company for infringement of the
articles of association or of certain provisions of the Dutch Civil Code. They may also be liable towards third
parties for infringement of certain provisions of the Dutch Civil Code. In certain circumstances they may also
incur additional specific civil and criminal liabilities.
Our articles of association provide that we will indemnify our Management Board members, Supervisory
Board members, former Management Board members and former Supervisory Board members (each an
“Indemnified Person”) against (i) any financial losses or damages incurred by such Indemnified Person and
(ii) any expense reasonably paid or incurred by such Indemnified Person in connection with any threatened,
pending or completed suit, claim, action or legal proceedings, whether civil, criminal, administrative or
investigative and whether formal or informal, in which he or she becomes involved, to the extent this relates
to his or her position with the Company, in each case to the fullest extent permitted by applicable law. No
indemnification shall be given to an Indemnified Person (a) if a Dutch court has established, without
possibility for appeal, that the acts or omissions of such Indemnified Person that led to the financial losses,
damages, suit, claim, action or legal proceedings result from either an improper performance of his duties as
an officer of the Company or an unlawful or illegal act and (b) to the extent that his or her financial losses,
damages and expenses are covered by an insurance and the insurer has settled these financial losses,
damages and expenses (or has indicated that it would do so). Our Supervisory Board may stipulate additional
terms, conditions and restrictions in relation to such indemnification.
Composition of the boards and diversity
Our Supervisory Board has three male members and three female members. Our Management Board and
the senior management team are jointly comprised of five people, one female and four male members. We
support diversity of i.a. gender, cultural background and age in our Company. ProQR maintains a culture that
reflects that ProQR is a multicultural company representing employees from over twenty countries. The
culture is represented by the commitment to conducting our business ethically and to observing applicable
laws, rules and regulations. In this context the Code of Conduct and Whistleblowing policy are implemented
and strongly anchored in the organization. Effectiveness of the Code of Conduct is monitored periodically.
Our current Management Board and Supervisory Board members were selected based on the required
profile and talent and abilities of the members without positive or negative bias on gender, culture or age. In
the future, this will continue to be our basis for selection of new Board members or employees.
General Meeting of Shareholders
General meetings of shareholders can be held in Leiden, Amsterdam, Rotterdam, Schiphol Airport
(municipality Haarlemmermeer), The Hague, Oegstgeest, Leidschendam, Katwijk, Noordwijk or Wassenaar,
the Netherlands. All shareholders and others entitled to attend general meetings of shareholders are
authorized to attend the general meeting of shareholders, to address the meeting and, in so far as they have
such right, to vote, either in person or by proxy.
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Annually, at least one general meeting of shareholders shall be held, within six months after the end of our
financial year. A general meeting of shareholders shall also be held within three months after our
Management Board has considered it to be likely that the Company’s equity has decreased to an amount
equal to or lower than half of its paid up and called up capital. If the Management Board and Supervisory
Board have failed to ensure that such general meetings of shareholders as referred to in the preceding
sentences are held in a timely fashion, each shareholder and other person entitled to attend shareholders’
meetings may be authorized by the Dutch court to convene the general meeting of shareholders.
Our Management Board and our Supervisory Board may convene additional extraordinary general meetings
of shareholders whenever they so decide. Pursuant to Dutch law, one or more shareholders and/or others
entitled to attend general meetings of shareholders, alone or jointly representing at least ten percent of our
issued share capital may on their application, be authorized by the Dutch court to convene a general meeting
of shareholders. The Dutch court will disallow the application if it does not appear to it that the applicants
have previously requested that the Management Board or Supervisory Board convenes a shareholders’
meeting and neither the Management Board nor the Supervisory Board has taken the necessary steps so that
the shareholders’ meeting could be held within six weeks after the request.
General meetings of shareholders are convened by a notice which includes an agenda stating the items to be
discussed. For the annual general meeting of shareholders the agenda will include, among other things, the
adoption of our annual accounts, the appropriation of our profits or losses, discharge of the members of the
Management Board for their management, discharge of the members of the Supervisory Board for their
supervision on the management and proposals relating to the composition and filling of any vacancies of the
Management Board or Supervisory Board. In addition, the agenda for a general meeting of shareholders
includes such items as have been included therein by our Management Board or our Supervisory Board.
Pursuant to Dutch law, one or more shareholders and/or others entitled to attend general meetings of
shareholders, alone or jointly representing at least 3% of the issued share capital have the right to request
the inclusion of additional items on the agenda of shareholders’ meetings. Such requests must be made in
writing, substantiated, or by a proposal for a resolution and received by us no later than the sixtieth day
before the day the relevant general meeting is held. No resolutions will be adopted on items other than those
which have been included in the agenda.
We will give notice of each general meeting of shareholders by publication on our website and, to the extent
required by applicable law, in a Dutch daily newspaper with national distribution, and in any other manner
that we may be required to follow in order to comply with Dutch law, applicable stock exchange and SEC
requirements. We will observe the statutory minimum convening notice period for a general meeting of
shareholders.
Pursuant to our articles of association, our Management Board may determine a registration date
(“registratiedatum”) of 28 calendar days prior to a general meeting of shareholders to establish which
shareholders and others with meeting rights are entitled to attend and, if applicable, vote in the general
meeting of shareholders. The registration date, if any, and the manner in which shareholders can register and
exercise their rights will be set out in the convocation notice of the general meeting. Our articles of
association provide that a shareholder must notify the Company in writing of his or her identity and his or her
intention to attend (or be represented at) the general meeting of shareholders, such notice to be received by
us ultimately on the seventh day prior to the general meeting. If this requirement is not complied with or if
upon direction of the Company to that effect no proper identification is provided by any person wishing to
enter the general meeting of shareholders, the chairman of the general meeting of shareholders may, in his
or her sole discretion, refuse entry to the shareholder or his or her proxy holder.
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Pursuant to our articles of association, our general meeting of shareholders is chaired by the chairman of our
Supervisory Board. If the chairman of our Supervisory Board is absent and has not charged another person
to chair the meeting in his place, the Supervisory Board members present at the meeting shall appoint one of
them to be chairman. If no Supervisory Board members are present at the general meeting of shareholders,
the general meeting of shareholders will be chaired by our CEO or, if our CEO is absent, another Managing
Board member present at the meeting and, if none of them is present, the general meeting shall appoint its
own chairman. The person who should chair the meeting may appoint another person in his stead.
The chairman of the general meeting may decide at his discretion to admit other persons to the meeting. The
chairman of the general meeting shall appoint another person present at the shareholders’ meeting to act as
secretary and to minute the proceedings at the meeting. The chairman of the general meeting may instruct a
civil law notary to draw up a notarial report of the proceedings at the Company’s expense, in which case no
minutes need to be taken. The chairman of the general meeting is authorized to eject any person from the
general meeting of shareholders if the chairman considers that person to disrupt the orderly proceedings.
The general meeting of shareholders shall be conducted in the English language.
Voting Rights and Quorum Requirements
In accordance with Dutch law and our articles of association, each issued ordinary share and preferred share
confers the right on the holder thereof to cast one vote at the general meeting of shareholders. The voting
rights attached to any shares held by us or our direct or indirect subsidiaries are suspended as long as they
are held in treasury. Dutch law does not permit cumulative voting for the election of Management Board
members or Supervisory Board members.
Voting rights may be exercised by shareholders or by a duly appointed proxy holder (the written proxy being
acceptable to the chairman of the general meeting of shareholders) of a shareholder, which proxy holder
need not be a shareholder. Our articles of association do not limit the number of shares that may be voted by
a single shareholder.
Under our articles of association, blank votes, abstentions and invalid votes shall not be counted as votes
cast. Further, shares in respect of which a blank or invalid vote has been cast and shares in respect of which
the person with meeting rights who is present or represented at the meeting has abstained from voting are
counted when determining the part of the issued share capital that is present or represented at a general
meeting of shareholders. The chairman of the general meeting shall determine the manner of voting and
whether voting may take place by acclamation.
In accordance with Dutch law and generally accepted business practices, our articles of association do not
provide quorum requirements generally applicable to general meetings of shareholders. To this extent, our
practice varies from the requirement of NASDAQ Listing Rule 5620(c), which requires an issuer to provide in
its bylaws for a generally applicable quorum, and that such quorum may not be less than one-third of the
outstanding voting shares.
Resolutions of the general meeting of shareholders are adopted by a simple majority of votes cast without
quorum requirement, except where Dutch law or our articles of association provide for a special majority
and/or quorum in relation to specified resolutions.
Anti-takeover provisions
We have adopted several provisions that may have the effect of making a takeover of our Company more
difficult or less attractive, including:
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granting a perpetual and repeatedly exercisable call option to a protection foundation, which confers
upon the protection foundation the right to acquire, under certain conditions, the number of preferred
shares in the capital of the Company. The issuance of such preferred shares will occur upon the
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protection foundation’s exercise of the call option and will not require shareholder consent;
the staggered four-year terms of our Supervisory Board members, as a result of which only
approximately one-fourth of our Supervisory Board members will be subject to election in any one year;
a provision that our Management Board members and Supervisory Board members may only be
appointed upon a binding nomination by our Supervisory Board, which can be set aside by a two-thirds
majority of our shareholders representing more than half of our issued share capital;
a provision that our Management Board members and Supervisory Board members may only be
removed by our general meeting of shareholders by a two-thirds majority of votes cast representing
more than 50% of our issued share capital (unless the removal was proposed by the Supervisory Board);
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a requirement that certain matters, including an amendment of our articles of association, may only be
brought to our shareholders for a vote upon a proposal by our Management Board that has been
approved by our Supervisory Board.
Deviations from the Dutch Corporate Governance Code
The Code contains a “comply-or-explain” principle, offering the possibility to deviate from the Code as long as
any such deviations are explained. We acknowledge the importance of good corporate governance. However,
at this stage, we do not comply with all the provisions of the DCGC for specific reasons. The main deviations
from best practice provisions are listed below.
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Best practice provision 1.1.5 stipulates that a policy for dialogue with the relevant stakeholders on the
sustainability aspects of the strategy should be drawn up. The Company has not formulated such policy
as it believes this is already covered by our regular process for public disclosure of information.
Pursuant to the best practice provisions 3.1.2.vi and 3.1.2.vii of the DCGC, options granted to our
Management Board members should not be exercisable during the first three years after the date of
grant; shares granted to our Management Board members for no financial consideration should be
retained by them for a period of at least five years or until they cease to hold office, whichever is the
shorter period; and the number of options and/or shares granted to our management Board members
should be dependent on the achievement of pre-determined performance criteria. We do not intend to
comply with all of the above requirements as we believe it is in the best interest of the company to
attract and retain highly skilled Management Board members on conditions based on market
competitiveness.
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Pursuant to best practice provision 3.2.3 the remuneration of the Management Board in the event of
dismissal may not exceed one year’s salary. The management services agreements with our
Management Board members provide for a lump-sum equal to 24 months of the individual’s monthly
gross fixed salary in case of dismissal following a change of control. Based on the risk profile of the
Company and to be able to attract highly skilled management, we believe this period to be appropriate.
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Best practice provision 3.3.2 prohibits the granting of shares or rights to shares to members of the
Supervisory Board as compensation. It is common practice for companies listed on the NASDAQ Capital
Market to grant shares to the members of the Supervisory Board as compensation, in order to align the
interests of the members of the Supervisory Board with our interests and those of our shareholders,
and we have granted and expect to grant options to acquire ordinary shares to some of our Supervisory
Board members.
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Pursuant to best practice provision 3.3.3, any shares held by Supervisory Board members are long-term
investments. We do not request our Supervisory Board members to comply with this provision. We
believe it is in the best interest of the Company not to apply this provision in order to be able to attract
and retain highly skilled Supervisory Board members on internationally competitive terms.
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Best practice provision 4.2.2 stipulates that an outline policy on bilateral contacts with the shareholders
shall be formulated and published on the Company’s website. The Company has not formulated such
policy as it believes this is already covered by our regular process for public disclosure of information.
Best practice provision 4.2.3 stipulates that meetings with analysts, presentations to analysts,
presentations to investors and institutional investors and press conferences must be announced in
advance on the Company’s website and by means of press releases. Provision must be made for all
shareholders to follow these meetings and presentations in real time, for example by means of
webcasting or telephone. After the meetings, the presentations must be posted on the Company’s
website. We believe that enabling shareholders to follow in real time all the meetings with analysts,
presentations to analysts and presentations to investors, would create an excessive burden on our
resources and therefore, we do not intend to comply with all of the above requirements.
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Best practice provision 4.3.3 provides that the general meeting of shareholders may pass a resolution to
cancel the binding nature of a nomination for the appointment of a member of the Management Board
or of the Supervisory Board or a resolution to dismiss such member by an absolute majority of the
votes cast. It may be provided that such majority should represent a given proportion of the issued
capital, but this proportion may not exceed one third. In addition, best practice 4.3.3 provides that if
such proportion of the share capital is not represented at the meeting, but an absolute majority of the
votes cast is in favor of a resolution to cancel the binding nature of the nomination, a new general
meeting of shareholders will be convened where the resolution may be adopted by absolute majority,
regardless of the proportion of the share capital represented at the meeting. Our articles of association
provide that these resolutions can only be adopted with at least a 2/3 majority which must represent
more than 50% of our issued capital, and that no such second meeting will be convened, because we
believe that the decision to overrule a nomination by the Management Board or the Supervisory Board
for the appointment or dismissal of a member of our Management Board or of our Supervisory Board
must be widely supported by our shareholders.
Summary of significant corporate governance differences from NASDAQ Listing Standards
Our ordinary shares are listed on NASDAQ. The Sarbanes-Oxley Act of 2002, as well as related rules
subsequently implemented by the SEC, requires foreign private issuers, including our Company, to comply
with various corporate governance practices. As a foreign private issuer, subject to certain exceptions, the
NASDAQ listing standards permit a foreign private issuer to follow its home country practice in lieu of the
NASDAQ listing standards. Our corporate governance practices differ in certain aspects from those that U.S.
companies must adopt in order to maintain a NASDAQ listing. The home country practices followed by our
Company in lieu of NASDAQ rules are described below:
• We do not intend to follow NASDAQ’s quorum requirements applicable to meetings of shareholders. In
accordance with Dutch law and generally accepted business practice, our articles of association do not
provide quorum requirements generally applicable to general meetings of shareholders.
• We do not intend to follow NASDAQ’s requirements regarding the provision of proxy statements for
general meetings of shareholders. Dutch law does not have a regulatory regime for the solicitation of
proxies and the solicitation of proxies is not a generally accepted business practice in the Netherlands.
We do intend to provide shareholders with an agenda and other relevant documents for the general
meeting of shareholders and shareholders will be entitled to give proxies and voting instructions to us
and/or third parties.
• We do not intend to follow NASDAQ’s requirements regarding the independence of all members of the
compensation, nominating and corporate governance committee. Dutch law and the DCGC do not
require that the compensation, nominating and corporate governance committee be composed entirely
of independent directors and only requires a mere majority. In accordance with Dutch law and the
DCGC, our compensation, nominating and corporate governance committee consists of a majority of
members who qualify as independent under applicable NASDAQ standards and under the DCGC.
PAGE 35 / 101
Corporate Governance
PROQR THERAPEUTICS ANNUAL REPORT 2023
• We do not intend to follow NASDAQ’s requirements regarding NASDAQ Listing Rule 5605(b)(2), which
mandates that independent directors must meet at regularly scheduled executive sessions where only
independent directors are present. In accordance with Dutch law and the DCGC, our directors may
choose to meet in executive sessions at their discretion.
We intend to take all actions necessary for us to maintain compliance as a foreign private issuer under the
applicable corporate governance requirements of the Sarbanes-Oxley Act of 2002, the rules adopted by the
SEC and NASDAQ’s listing standards.
Controls and procedures
In accordance with the Dutch Corporate Governance Code, we have assessed the design and operational
effectiveness of our Risk & Control framework. Based on the activities performed during 2023, and in
accordance with provision 1.4.3, the Management Board considers that:
•
•
•
•
this report provides sufficient insights into any failings in the effectiveness of the internal risk
management and control systems;
the aforementioned systems provide reasonable assurance that the financial reporting does not contain
any material inaccuracies;
based on the current state of affairs, it is justified that the financial reporting is prepared on a going
concern basis; and
the report states those material risks and uncertainties that are relevant to the expectation of the
company’s continuity for the period of twelve months after the preparation of this report.
In accordance with the Dutch Financial Supervision Act, section 5.25c, the Management Board declares that,
to the best of its knowledge:
•
•
the financial statements for 2023 provide, in accordance with IFRS as endorsed by the EU, a true and fair
view of the consolidated assets, liabilities and financial position as at December 31, 2023, and of the
2023 consolidated income statement of ProQR Therapeutics N.V.;
the annual report provides a true and fair view of the situation as at December 31, 2023, and the state
of affairs during the financial year 2023, together with a description of the principal risks faced by the
Company.
Diversity
We value diversity as a way of recognizing and valuing the differences between individuals to come to the
most efficient and effective way to achieve our strategic objectives. For our Supervisory Board members, this
means that when making recommendations to the general meeting for the (re-)appointment of Supervisory
Board members, the Supervisory Board will aim for a diverse composition in terms of such factors as gender
and age, in accordance with our diversity policy as may be in force from time to time. Under Dutch law
reporting rules, we will be required to address diversity of our Supervisory Board members in our Annual
Report or in the report of the Supervisory Board (bestuursverslag): (i) composition of the Supervisory Board
by gender; (ii) objectives of the diversity policy; (iii) description of how the diversity policy is being
implemented and the results thereof and (iv) if there is no diversity policy, this should be explained.
Our policy is that we will balance our board of directors in terms of gender, age, background and nationality
as much as reasonably possible while still having our board composed of the best possible candidates
overall. Moreover, we strongly embrace the notion that diversity as a concept is not limited to the mere
parameters of e.g. gender and age and therefore we embrace a holistic perspective on diversity, to include
any kind of identity characteristic of an individual, including -but not limited to- sexual orientation, sexual
expression, gender expression and identity, disabilities, religious background, ethnicity, and disabilities. It has
PAGE 36 / 101
Corporate Governance
PROQR THERAPEUTICS ANNUAL REPORT 2023
been and will remain our priority to have the best available specialists on our board of directors, irrespective
of e.g. age, background, nationality, ethnicity and gender, who make a balanced panel of directors able to
advise and guide ProQR to further growth and success for all its stakeholders. This means we require a
number of specialties and character traits to be present. Taking into account the aforementioned and the
specialist nature of our business, we will actively seek to further improve diversity on our board if and when
proposing new appointments of directors, whilst acknowledging that diversity in all aspects are important,
but not the only factors relevant for the ultimate decision to select a board member. We are proud to have an
equal gender balance in our board of directors.
PROQR THERAPEUTICS ANNUAL REPORT 2023
PAGE 37 / 101
Risk Management
Risk Management
Our business is subject to numerous risks and uncertainties. In the table below, we focus on the key risks and
uncertainties the Company currently faces. For the avoidance of doubt, this does not mean that the risks
which were previously signaled and not described here are no longer relevant. For a complete understanding
of the risks that we face you should also read the full list of risks and uncertainties as disclosed in item 3.D
Risk Factors of the annual report on Form 20-F. Some of these risks and uncertainties are outside the control
of the Company, others may be influenced or mitigated. In 2015, we have implemented a Risk & Control
framework, based on the COSO 2013 internal control framework, for enhancing our control environment as
well as compliance with the U.S. SEC’s Sarbanes Oxley (SOx) Act of 2002, which we are required to do as a
company listed on the NASDAQ. As part of the SOx implementation program, our Risk & Control framework
was further enhanced in 2023, focusing on business process, IT and entity level controls. Improvement of our
Risk & Control framework is an ongoing effort of the Company.
We have defined our risk tolerance on a number of internal and external factors including:
•
•
•
•
•
•
•
Financial strength in the long run;
Liquidity in the short run;
Business performance measures;
Scientific risks and opportunities;
Compliance with relevant rules and regulations;
Turnover of staff;
Reputation.
The identification and analysis of risks is an ongoing process that is naturally a critical component of internal
control. On the basis of these factors and ProQR’s risk tolerance, improvement of our Risk & Control
framework and monitoring of the risks is an ongoing effort of the Company.
Our main risks are those that threaten the achievement of the Company’s corporate objectives, including
compliance. If any of these risks actually occurs, our business, prospects, operating results and financial
condition could suffer materially. These risks include, but are not limited to, the following:
Expected impact upon
materialization
We may never succeed in
developing a marketable product,
and as a consequence we may not
become profitable and the value
of our ordinary shares would
decline.
Risk mitigating actions
The Company reviews and
monitors the activities of
our research on RNA editing
closely at each stage in the
process.
Risk related to
Risk area
Our therapeutic
candidates are
based on a novel
mechanism of
action, which
makes it difficult
to develop a
marketable
product
Although we have discovered
and are developing our novel
Axiomer and Trident RNA
editing platforms and will
focus our resources
exclusively on these RNA
editing platforms as
announced during our
strategy update in August
2022, there can be no
assurance that we will be able
to leverage our technology to
create viable product
candidates to advance into
the clinic, or develop those
candidates to submit for
regulatory approval.
PAGE 38 / 101
Risk Management
PROQR THERAPEUTICS ANNUAL REPORT 2023
Risk related to
Risk area
Capital Needs and
Financial Position
The Company depends
largely on equity financing,
third party collaboration
agreements and government
subsidies.
Dependence on
Third Parties
Intellectual
Property
The Company relies upon
third-party contractors and
service providers for the
execution of several aspects
of its preclinical and clinical
development programs,
which include CRO’s, third
party manufacturers and
other service providers.
The Company has entered
into a partnership with Eli Lilly
and Company (Lilly) pursuant
to which Lilly is to further
develop and commercialize
select targets compounds or
products based on the
Company’s platform.
The Company is highly
dependent on its portfolio of
patents and other intellectual
property, proprietary
information and knowhow
and its ability to protect and
enforce these assets.
The Company is subject to
the risk of infringing third
party intellectual property
rights.
Expected impact upon
materialization
Risk-mitigating actions
Volatility of the Company’s share
price, failure to deliver under
collaboration agreements and/or
the reevaluation or withdrawal of
government subsidies may have a
negative impact on the Company's
ability to obtain future financing,
and with that continue research
and development activities.
The ability of third-party
financing is dependent on
external factors and is
therefore not entirely in the
Company’s control. The
Company monitors the
market conditions for
opportunities to add
additional capital.
Failure of third parties to provide
services of a suitable quality and
within acceptable timeframes may
cause delay or failure of the
Company's development
programs.
If Lilly decides to not further
pursue the development and
commercialization of the products
subject of the collaboration for any
reason, the Company will miss out
on significant revenue streams.
Inadequate intellectual property
protection or enforcement may
impede the Company’s ability to
compete effectively. If the
Company is not able to protect its
trade secrets, know-how or other
proprietary information, the value
of its technology could be
significantly diminished.
Intellectual property rights
conflicts may result in costly
litigation and could result in the
Company having to pay
substantial damages or limit the
Company’s ability to
commercialize its product
candidates.
The Company reviews and
monitors the activities of
the third parties. These
include setting contractual
deliverables, quality
assurance audits and
performance reports,
among other activities.
Development of own
product pipeline and
securing partnerships with
multiple partners.
The Company files and
prosecutes patent
applications to protect its
technologies to the best of
its knowledge and with
assistance from internal and
external counsel. Prior to
disclosing any confidential
information to third parties,
the Company maintains
strict confidentiality
standards and agreements
for collaborating parties.
In addition to the above key risks, the Company’s activities expose it to a variety of financial risks: market risk
(including currency risk, interest rate risk and price risk), credit risk and liquidity risk. Unfavorable exchange
rate developments and interest rates may impact the financial income of the Company. The Company has a
cash management policy in place to minimize potential adverse effects resulting from unpredictability of
financial markets on the Company’s financial performance. For additional details on the Company’s financial
risk management, reference is made to Note 5 to the consolidated financial statements.
PAGE 39 / 101
Financial Statements 2023
PROQR THERAPEUTICS ANNUAL REPORT 2023
Financial Statements 2023
Consolidated statement of financial position at December 31, 2023
Note
2023
€ 1,000
2022 (revised)
€ 1,000
ASSETS
Non-current assets
Property, plant and equipment
Investments in financial assets
Current assets
Other taxes
Prepayments and other receivables
Cash and cash equivalents
TOTAL ASSETS
EQUITY
Share capital
Share premium
Reserves
Accumulated deficit
Equity attributable to owners of the Company
Non-controlling interests
TOTAL EQUITY
LIABILITIES
Non-current liabilities
Borrowings
Lease liabilities
Deferred income
Current liabilities
Borrowings
Lease liabilities
Derivative financial instruments
Trade payables
Social securities and other taxes
Deferred income
Other current liabilities
TOTAL LIABILITIES
TOTAL EQUITY AND LIABILITIES
7
9
10
11
12
13
14
25
15
14
25
14
15
16
The accompanying notes form an integral part of these financial statements.
* Includes a retrospective adjustment as explained in Note 1 on pages 42 and 43.
16,897
—
16,897
523
1,538
118,925
120,986
137,883
3,370
412,894
25,976
(400,850)
41,390
—
41,390
4,292
13,828
44,170
62,290
—
1,614
311
1,541
1,659
20,569
8,509
34,203
96,493
137,883
16,240
621
16,861
607
59,078
94,775
154,460
171,321
3,370
412,540
30,264
(379,109)*
67,065
(384)
66,681
4,271
13,813
65,568*
83,652
2,500
1,387
1,263
392
1,118
5,641*
8,687
20,988
104,640
171,321
PAGE 40 / 101
Financial Statements 2023
PROQR THERAPEUTICS ANNUAL REPORT 2023
Consolidated statement of profit or loss and comprehensive income for the
year ended December 31, 2023
Revenue
Other income
Research and development costs
General and administrative costs
Total operating costs
Operating result
Financial income
Financial expense
Results related to financial liabilities measured at FVTPL
Results related to derecognition of financial liabilities
Results related to associates
Gain on disposal of subsidiary
Result before corporate income taxes
Corporate income taxes
Result for the year
Other comprehensive income
(attributable to equity holders of the Company)
Items that will never be reclassified to profit or loss
Fair value loss on investment in financial asset designated as at
FVTOCI
Items that are or may be reclassified to profit or loss
Note
2023
2022 (revised)
€ 1,000
€ 1,000
17
18
19
21
21
22
14
8
14
23
6,514
3,011
(25,148)
(16,236)
(41,384)
(31,859)
2,593
(1,458)
953
1,866
—
92
(27,813)
78
(27,735)
3,594*
765
(50,867)
(18,651)
(69,518)
(65,159)
4,863*
(5,127)
2,713
(1,390)
(8)
—
(64,108)
(96)
(64,204)
(621)
—
Foreign operations – foreign currency translation differences
(395)
782
Total comprehensive loss for the year
(28,751)
(63,422)
Result attributable to
Owners of the Company
Non-controlling interests
(28,119)
384
(27,735)
(64,424)
220
(64,204)
Share information
24
Weighted average number of shares outstanding1
81,011,438
71,641,305
Earnings per share attributable to the equity holders
of the Company (expressed in Euro per share)
Basic earnings per share1
Diluted earnings per share1
The accompanying notes form an integral part of these financial statements.
* Includes a retrospective adjustment as explained in Note 1 on pages 42 and 43.
(0.35)
(0.35)
(0.90)
(0.90)
1 Basic and diluted earnings are equal due to the anti-dilutive nature of the options outstanding since the Company is loss-
making.
PAGE 41 / 101
Financial Statements 2023
PROQR THERAPEUTICS ANNUAL REPORT 2023
Consolidated statement of changes in equity for the year ended December 31, 2023
Attributable to owners of the Company
Share
Capital
Share
Premium
Equity settled
employee
Benefit
reserve
Option
premium on
convertible
loan
Translation
Reserve
Accumulated
Deficit
Total
Non-
controlling
Interests
Total
Equity
€ 1,000
€ 1,000
€ 1,000
€ 1,000
€ 1,000
€ 1,000
€ 1,000
€ 1,000
€ 1,000
Balance at January 1, 2022 (revised)
2,995
398,309
28,443
1,426
430
(316,889)*
114,714
(604)
114,110
Result for the year
Other comprehensive income
Recognition of share-based payments
Issue of ordinary shares
Equity component of convertible loan
Share options lapsed
Share options exercised
—
—
—
375
—
—
—
—
—
—
14,197
—
—
34
—
—
2,869
—
—
(1,817)
(443)
Balance at December 31, 2022
(revised)
3,370
412,540
29,052
Result for the year
Other comprehensive loss
Recognition of share-based payments
Share options lapsed
Share options exercised
—
—
—
—
—
—
—
—
—
354
—
—
3,106
(6,280)
(719)
Balance at December 31, 2023
3,370
412,894
25,159
—
—
—
—
(1,426)
—
—
—
—
—
—
—
—
—
The accompanying notes form an integral part of these financial statements. Specific reference is made to note 13.
* Includes a retrospective adjustment as explained in Note 1 on pages 42 and 43.
—
782
—
—
—
—
—
(64,424)*
(64,424)
220
(64,204)
—
—
—
(56)
1,817
443
782
2,869
14,572
(1,482)
—
34
—
—
—
—
—
—
782
2,869
14,572
(1,482)
--
34
1,212
(379,109)
67,065
(384)
66,681
(28,119)
(28,119)
384
(27,735)
—
(395)
—
—
—
(621)
—
6,280
719
(1,016)
3,106
—
354
817
(400,850)
41,390
—
—
—
—
—
(1,016)
3,106
—
354
41,390
PAGE 42 / 101
Financial Statements 2023
PROQR THERAPEUTICS ANNUAL REPORT 2023
Consolidated statement of cash flows for the year ended December 31, 2023
Cash flow from operating activities
Result for the year
Adjustments for:
— Other income
— Depreciation
— Results related to associates
— Results on derecognition of subsidiary
— Share-based compensation
— Financial income and expense
— Results related to financial liabilities measured at FVTPL
— Results related to derecognition of financial liabilities
— Income tax expenses
Changes in working capital
Cash generated by / (used in) operations
Corporate income tax received / (paid)
Interest received
Interest paid
Note
2023
2022 (revised)
€ 1,000
€ 1,000
(27,735)
(64,204)
18
7
8
13
21
22
14
23
(3,011)
2,513
—
(131)
3,106
(1,135)
(953)
(1,866)
(78)
48,956
19,666
78
2,593
(789)
—
2,521
8
—
2,869
264*
(2,713)
1,390
96
(4,991)*
(64,760)
(96)
106
(3,758)
Net cash generated by / (used in) operating activities
21,548
(68,508)
Cash flow from investing activities
Purchases of property, plant and equipment
Disposals of property, plant and equipment
Proceeds from sale of intellectual property
Transaction costs on sale of intellectual property
(1,371)
60
7,940
(2,351)
(708)
6
—
—
Net cash generated by / (used in) investing activities
4,278
(702)
Cash flow from financing activities
Proceeds from issuance of shares, net of transaction costs
Proceeds from exercise of share options
Proceeds from borrowings
Repayment of (convertible) loans
Repayment of lease liability
Net cash generated by financing activities
Net increase/(decrease) in cash and cash equivalents
Currency effect cash and cash equivalents
Cash and cash equivalents at the beginning of the year
Cash and cash equivalents at the end of the year
13
14
14
25
12
12
—
354
—
(1,008)
(1,621)
14,122
34
—
(43,372)
(1,674)
(2,275)
(30,890)
23,551
(100,100)
599
94,775
118,925
7,351
187,524
94,775
The accompanying notes form an integral part of these financial statements.
* Includes a retrospective adjustment as explained in Note 1 on pages 42 and 43.
PAGE 43 / 101
Financial Statements 2023
PROQR THERAPEUTICS ANNUAL REPORT 2023
Notes to the consolidated financial statements for the year ended December
31, 2023
1. General Information
ProQR Therapeutics N.V., or “ProQR” or the “Company”, is a biotechnology company domiciled in the
Netherlands that primarily focuses on the discovery and development of novel therapeutic medicines.
Since September 18, 2014, the Company’s ordinary shares are listed on Nasdaq. They are currently trading at
Nasdaq Capital Market under ticker symbol PRQR.
The Company was incorporated in the Netherlands, on February 21, 2012 (Chamber of Commerce no.
54600790) and was reorganized from a private company with limited liability to a public company with limited
liability on September 23, 2014. The Company has its statutory seat in Leiden, the Netherlands and is
registered in the Trade Register at the Chamber of Commerce under number 54600790. The address of its
headquarters and registered office is Zernikedreef 9, 2333 CK Leiden, the Netherlands.
At December 31, 2023, ProQR Therapeutics N.V. is the ultimate parent company of the following entities:
•
•
•
•
•
•
•
•
•
•
•
ProQR Therapeutics Holding B.V. (the Netherlands, 100%);
ProQR Therapeutics I B.V. (the Netherlands, 100%);
ProQR Therapeutics II B.V. (the Netherlands, 100%);
ProQR Therapeutics III B.V. (the Netherlands, 100%);
ProQR Therapeutics IV B.V. (the Netherlands, 100%);
ProQR Therapeutics V B.V. (the Netherlands, 100%);
ProQR Therapeutics VI B.V. (the Netherlands, 100%);
ProQR Therapeutics VII B.V. (the Netherlands, 100%);
ProQR Therapeutics VIII B.V. (the Netherlands, 100%);
ProQR Therapeutics IX B.V. (the Netherlands, 100%);
ProQR Therapeutics I Inc. (United States, 100%);
ProQR Therapeutics N.V. is also statutory director of Stichting Bewaarneming Aandelen ProQR (“ESOP
Foundation”) and has full control over this entity.
As used in these consolidated financial statements, unless the context indicates otherwise, all references to
“ProQR”, the “Company” or the “Group” refer to ProQR Therapeutics N.V. including its subsidiaries and the
ESOP Foundation.
Revision of comparative figures
In the Company’s application of IAS 21 The Effects of Changes in Foreign Exchange Rates, certain deferred
income positions were incorrectly treated as monetary items in 2021 and 2022. To correct for the effects of
this error, which is immaterial for all affected prior periods, the comparative figures for the year ended
December 31, 2022 have been revised as follows:
•
•
In the Consolidated statement of financial position as at December 31, 2022, equity attributable to
owners of the Company increased by € 1,568,000 while total deferred income decreased by € 1,568,000.
In the Consolidated statement of profit or loss and other comprehensive income (“OCI”) for the year
ended December 31, 2022, revenue decreased by € 443,000 and financial income increased by
€ 1,130,000. Net loss for the year ended December 31, 2022 decreased by € 687,000.
PAGE 44 / 101
Financial Statements 2023
PROQR THERAPEUTICS ANNUAL REPORT 2023
•
•
•
•
•
•
In the Consolidated statement of changes in equity, accumulated deficit at January 1, 2022 decreased by
€ 881,000.
In the Consolidated statement of cash flows for the year ended December 31, 2022, in addition to the
above revisions in result for the year and net financial income and expense, changes in working capital
decreased by € 443,000. Net cash used in operating was not affected by the revision.
In disclosure note 5 Financial Risk Management to the Consolidated financial statements, under item (a)
market risk, our net position of assets and liabilities denominated in U.S. dollars increased by
€ 72,777,000 at December 31, 2022.
In the Company balance sheet, in the comparative figures as at December 31, 2022, the accumulated
deficit decreased by € 881,000 and the unappropriated loss decreased by € 687,000, while provisions
decreased by € 1,568,000.
In the Company income statement, in the comparative figures for the year ended December 31, 2022,
the share in the loss of participating interests after taxation decreased by € 687,000.
In disclosure note 36 Shareholder’s equity to the Company financial statements, the unappropriated loss
as at January 1, 2022 decreased by € 881,000.
2. Basis of preparation
(a) Statement of compliance
These consolidated financial statements have been prepared in accordance with IFRS accounting standards
as endorsed by the European Union (“EU-IFRS”).
With reference to the income statement of the Company, use has been made of the exemption pursuant to
Section 402 of Book 2 of the Netherlands Civil Code.
These financial statements were authorized for issue by the Company’s Management Board and its Senior
Management on March 13, 2024.
(b) Basis of measurement
The financial statements have been prepared on the historical cost basis except for financial instruments and
share-based payment obligations which have been based on fair value. Historical cost is generally based on
the fair value of the consideration given in exchange for assets.
(c) Functional and presentation currency
These consolidated financial statements are presented in Euro, which is the Company’s functional currency.
All amounts have been rounded to the nearest thousand, unless otherwise indicated.
(d) Going Concern
The management board of ProQR has, upon preparing and finalizing the 2023 financial statements, assessed
the Company’s ability to fund its operations for a period of at least one year after the date of signing these
financial statements. Management has not identified significant going concern risks.
The financial statements of the Company have been prepared on the basis of the going concern assumption
based on its existing funding, taking into account the Company’s current cash position and the projected cash
flows based on the activities under execution on the basis of ProQR’s business plan and budget.
(e) Use of critical estimates and judgements
In preparing these consolidated financial statements, management has made judgements, estimates and
assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities,
income and expenses. Actual results may differ from these estimates.
PAGE 45 / 101
Financial Statements 2023
PROQR THERAPEUTICS ANNUAL REPORT 2023
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates
are recognized in the period in which the estimate is revised if the revision affects only that period or in the
period of the revision and future periods if the revision affects both current and future periods.
Information about assumptions and estimation uncertainties that may have a significant risk of resulting in a
material adjustment is included below:
(i) Revenue recognition for the Eli Lilly research and collaboration agreement
a. Identification of the performance obligation
Note 17 to the financial statements describes the Company’s original research and collaboration agreement
with Eli Lilly and Company, and the amended and restated research and collaboration agreement
(collectively, the “Collaboration agreement”). Under the Collaboration agreement, ProQR provides Eli Lilly with
a license (with a right to sub-license) to exploit compounds resulting from the collaboration. A significant
amount of judgement is required to determine whether the license is distinct from the other promises in the
contract. The license was concluded not to be distinct from the other promises in the contract based on the
following considerations:
•
•
the license has no stand-alone value to Eli Lilly without the Company being involved in the research and
development collaboration, and;
there are significant interdependencies between the license and the research and development services
to be provided by the Company.
b. Determining the timing of satisfaction of performance obligations
Under the Collaboration agreement, the Company recognizes revenue over time, using an input method that
estimates the satisfaction of the performance obligation as the percentage of labor hours incurred compared
to the total estimated labor hours required to complete the promised services. As our estimate of the total
labor hours required is dependent on the evolution of the research and development activities, it may be
subject to change. If the progression and/or outcome of certain research and development activities would
be different from the assumptions that were made during the preparation of these financial statements, this
could lead to material adjustments to the total estimated labor hours, which might result in a reallocation of
revenue between current and future periods. Our total deferred revenue balance related to this Eli Lilly
performance obligation amounts to € 64,739,000 at December 31, 2023 (2022: € 71,209,000).
c. Determining the transaction price
The Company applied judgement to determine whether the equity investments made by Eli Lilly in ProQR are
part of the transaction price for the Collaboration agreement. The Company concluded that the differences
between the prices that Eli Lilly paid for the shares and the ProQR stock closing prices on the days of entering
into the equity investment agreements arose because of the Company’s existing obligations to deliver
research and development services to Eli Lilly under the terms of the Collaboration agreement. Therefore, the
above differences between the closing share prices on the agreement effective dates and the equity
investment prices paid by Lilly are considered to be part of the transaction price of the contract and are
initially allocated to deferred revenue.
The contract also includes variable consideration, but no variable consideration was included in the
transaction price, as it is not highly probable that a significant reversal in the amount of cumulative revenue
recognized will not occur when the uncertainty associated with the variable consideration is subsequently
resolved.
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(ii) Research and development expenditures
Research expenditures are reflected in the income statement. Development expenses are currently also
reflected in the income statement because the criteria for capitalization are not met. At each balance sheet
date, the Company estimates the level of service performed by the vendors and the associated costs incurred
for the services performed.
Although we do not expect the estimates to be materially different from amounts actually incurred, the
understanding of the status and timing of services performed relative to the actual status and timing of
services performed may vary and could result in reporting amounts that are too high or too low in any
particular period.
(f) Changes in accounting policies
The following standards, amendments to standards and interpretations became effective for annual
reporting periods beginning on or after January 1, 2023:
•
•
•
•
•
IFRS 17 Insurance contracts: This standard is aimed at reporting entities who are insurers.
IAS 12 Income taxes: Amendments clarifying how companies account for deferred tax on transactions
such as leases and decommissioning obligations.
IAS 8: Accounting policies, changes in accounting estimates and errors: Amendments enabling entities
to distinguish between accounting policies and accounting estimates.
IAS 1 Presentation of financial statements: Amendments clarifying which accounting policies and
accounting estimates preparers need to disclose.
IFRS 16 Leases: Amendments relating to sale and leaseback transactions.
In Note 23. Income taxes, we disclosed the impact of the amendments to IAS 12. None of the other new
standards, amendments to standards and interpretations had a material impact on our financial statements.
No changes in accounting policies occurred in 2023.
3. Significant Accounting Policies
The Company has consistently applied the following accounting policies to all periods presented in these
consolidated financial statements.
(a) Basis of consolidation
(i) Subsidiaries
Subsidiaries are entities controlled by the Company. The Company controls an entity when it has power over
the entity, is exposed to, or has rights to, variable returns from its involvement with the entity and has the
ability to affect those returns through its power over the entity. The Company reassesses whether or not it
controls an entity if facts and circumstances indicate that there are changes to one or more of these
elements. The financial statements of subsidiaries are included in the consolidated financial statements from
the date on which control commences until the date on which control ceases.
(ii) Non-controlling interests (“NCI”)
NCI are measured at their proportionate share of the acquiree's identifiable net assets at the acquisition
date. Changes in the Company's interest in a subsidiary that do not result in a loss of control are accounted
for as equity transactions.
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(iii) Loss of control
When the Company loses control over a subsidiary, it derecognizes the assets and liabilities of the subsidiary,
and any non-controlling interests and other components of equity. Any resulting gain or loss is recognized in
profit or loss. Any interest retained in the former subsidiary is measured at fair value when control is lost.
(iv) Transactions eliminated on consolidation
Intra-group balances and transactions, and any unrealized income and expenses arising from intra-group
transactions, are eliminated. Unrealized gains arising from transactions with equity-accounted investees are
eliminated against the investment to the extent of the Company’s interest in the investee. Unrealized losses
are eliminated in the same way as unrealized gains, but only to the extent that there is no evidence of
impairment.
(v) Associates
Associates are entities over which the Company has significant influence. Significant influence is the power to
participate in the financial and operating policy decisions of the investee but is not control or joint control
over those policies.
Investments in associates are accounted for in the consolidated financial statements using the equity method
of accounting. Equity accounting involves recording the investment in associates initially at cost, and
recognizing the Company’s share of the post-acquisition results of associates in the consolidated income
statement and the Company’s share of post-acquisition other comprehensive income in consolidated other
comprehensive income. The cumulative post-acquisition movements are adjusted against the carrying
amount of the investments in associates in the consolidated statement of financial position.
When the Company’s share of losses in an associate equals or exceeds its interest in the associate, the
Company does not recognize further losses unless it has incurred or guaranteed obligations in respect of the
associate.
(b) Classes of financial instruments
Financial instruments are both primary financial instruments, such as receivables and payables, and financial
derivatives. For the Company’s primary financial instruments, reference is made to the treatment per the
corresponding balance sheet item.
Financial derivatives are valued at fair value. Upon first recognition, financial derivatives are recognized at fair
value and then revalued as at balance sheet date. Changes in the fair value of derivatives are generally
recognized in profit or loss. If the Company is involved with hybrid contracts, the Company applies the
following with regard to the embedded derivatives in the hybrid contract. Embedded derivatives are
separated from the host contract and accounted for separately if the host contract is not a financial asset and
the following criteria are met:
•
•
•
the economic characteristics and risk of the embedded derivative are not closely related to the
economic characteristics and risks of the host contract;
a separate instrument with the same terms as the embedded derivative would meet the definition of a
derivate; and
the hybrid contract is not measured at fair value with changes in fair value recognized in profit or loss.
If an embedded derivative is separated from the hybrid contract, the host contract is accounted for in
accordance with the determined policies for such a contract. The embedded derivative is accounted for in
accordance with the Company’s principles for the applicable derivatives.
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(c) Foreign currencies
(i) Foreign currency transactions
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing
at the dates of the transactions.
Monetary assets and liabilities denominated in foreign currencies are translated into the functional currency
at the exchange rate at the reporting date. Non-monetary assets and liabilities denominated in foreign
currencies that are measured at fair value are translated into the functional currency at the exchange rate
when the fair value was determined. Foreign currency differences are generally recognized in profit or loss.
Non-monetary items that are measured based on historical cost in a foreign currency are translated at the
exchange rate prevailing at the date of the transaction.
(ii) Foreign operations
The assets and liabilities of foreign operations are translated into euro at exchange rates at the reporting
date. The income and expenses of foreign operations are translated into euros at the exchange rates at the
dates of the transactions. Foreign currency differences are recognized in OCI and accumulated in the
translation reserve, except to the extent that the translation difference is allocated to NCI.
(d) Revenue
Revenues to date have consisted principally of non-refundable upfront fees and research and development
service fees in connection with collaboration and license agreements. The Company recognizes revenue
when its customers obtain control of promised goods or services, in an amount that reflects the
consideration that the Company expects to receive in exchange for those goods and services. Revenue is
recognized for agreements that are in scope of IFRS 15 Revenue from contracts with customers, based on the
following five steps:
(i) Identify the contract
The Company entered into collaboration and license agreements in which the Company licenses its
intellectual property and/or provides research and development services. These arrangements include
upfront payments, milestone payments based on clinical and regulatory criteria, research and development
service fees and future sales-based milestones and sales-based royalties. In some cases, concurrently with
the collaboration and license agreements, the Company enters into share purchase agreements with the
customer. If this is the case, the Company analyzes whether the criteria to combine contracts, as set out by
IFRS 15, are met.
(ii) Identify performance obligations
Contracts with customers can have one or more distinct performance obligations under IFRS 15. Identifying
the performance obligations is based on an assessment of whether the promises in an agreement are
capable of being distinct and are distinct from the other promises to transfer goods and/or services in the
context of the contract. The Company assessed that there is one performance obligation in our material
ongoing collaboration and license agreements, for the transfer of a license combined with performance of
research and development services.
This is because the Company considers the two obligations cannot be distinct in the context of the contract as
the licenses have no stand-alone value without the Company being involved in the research and development
collaboration and that there is interdependence between the license and the research and development
services to be provided.
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(iii) Determine the transaction price
Our research and collaboration agreements include non-refundable upfront payments; equity components;
milestone payments, the receipt of which is dependent upon the achievement of certain clinical, regulatory or
commercial milestones; royalties on sales and research and development service fees.
a. Non-refundable upfront payments or license fees
If the license to the Company’s intellectual property is determined to be distinct from the other performance
obligations identified in the arrangement, the Company recognizes revenue from non-refundable upfront
fees allocated to this license at the point in time the license is transferred to the customer and the customer
has the right to use the license.
For all our material ongoing research and collaboration agreements, the Company considers the
performance obligations related to the transfer of the license as not distinct from the other promises to
transfer goods and/or services; the Company uses judgement to assess the nature of the combined
performance obligation to determine whether the combined performance obligation is satisfied over time or
at a point in time. If over time, revenue is then recognized based on a pattern that best reflects the transfer of
control of the service to the customer.
b. Milestone payments other than sales-based milestones
A milestone payment, being a variable consideration, is only included in the transaction price to the extent it
is highly probable that a significant reversal in the amount of cumulative revenue recognition will not occur
when the uncertainty associated with the variable consideration is subsequently resolved. The Company
estimates the amount to be included in the transaction price upon achievement of the milestone event. The
transaction price is then allocated to each performance obligation on a stand-alone selling price basis, for
which the Company recognizes revenue as or when the performance obligations under the contract are
satisfied. At the end of each reporting period, the Company re-evaluates the probability of achievement of
such milestones and any related constraint, and, if necessary, adjusts the estimate of the overall transaction
price. Any such adjustments are recorded on a cumulative catch-up basis, which would affect revenue and
earnings in the period of adjustment.
c. Research and development service fees
Our collaboration and license agreements may include reimbursement for research and development
services. R&D services are performed and satisfied over time because the customer simultaneously receives
and consumes the benefits provided by us. Revenue associated with such R&D service fees is then recognized
based on a pattern that best reflects the transfer of control of the service to the customer.
d. Sales based milestone payments and royalties
Our material collaboration and license agreements include sales-based royalties, including commercial
milestone payments based on the level of sales. The Company concluded that the licenses are not the
predominant items to which the royalties and commercial milestone payments relate. Related revenue will be
recognized as the subsequent underlying sales occur.
(iv) Allocate the transaction price
An entity shall allocate the transaction price to each performance obligation identified in a contract on a
relative stand-alone selling price basis. As our collaboration and license agreements only contain one single
performance obligation, the transaction price is entirely allocated to this single performance obligation.
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(v) Recognize revenue
Revenue is recognized when the customer obtains control of the goods and/or services as provided in the
research and collaboration agreements. Control can be transferred over time or at a point in time, which
results in the recognition of revenue either over time or at a point in time.
Our research and collaboration agreements only contain one performance obligation, for which the
Company’s performance creates and subsequently enhances assets (e.g. exploitable compounds) that the
customers control as the assets are created and/or enhanced. As such, the Company recognizes revenue
over time.
The recognition of revenue over time is based on a pattern that best reflects the satisfaction of the related
performance obligation, applying the input method. The input method estimates the satisfaction of the
performance obligation as the percentage of labor hours incurred compared to the total estimated labor
hours required to complete the promised services.
(e) Other income
Other income includes amounts earned from third parties and are recognized when earned in accordance
with the substance and under the terms of the related agreements and when it is probable that the economic
benefits associated with the transaction will flow to the Company and the amount of the income can be
measured reliably. The grants are recognized in other income on a systematic basis over the period the
Company recognizes as expenses the related costs for which the grants are expected to compensate.
(f) Government grants — WBSO
The WBSO (“afdrachtvermindering speur- en ontwikkelingswerk”) is a Dutch fiscal facility that provides
subsidies to companies, knowledge centers and self-employed people who perform research and
development activities (as defined in the “WBSO Act”). Under this Act, a contribution is paid towards the labor
costs of employees directly involved in research and development. The contribution is in the form of a
reduction of payroll taxes and social security contributions recognized on a net basis within the labor costs.
This reduction of payroll taxes and social security contributions is classified under research and
developments costs.
(Government) Grant income is not recognized until there is reasonable assurance that the Company will
comply with the conditions attached to them. (Government) Grants are recognized in profit or loss on a
systematic basis over the period the Company recognizes as expenses the related costs for which the grants
are intended to compensate.
(g) Employee benefits
(i) Short-term employee benefits
Short-term employee benefits are expensed as the related service is provided. A liability is recognized for the
amount expected to be paid if the Company has a present legal or constructive obligation to pay this amount
as a result of past service provided by the employee and the obligation can be estimated reliably.
(ii) Share-based payment transactions
The grant-date fair value of equity-settled share-based payment awards granted to employees is generally
recognized as an expense, with a corresponding increase in equity, over the vesting period of the awards. The
amount recognized as an expense is adjusted to reflect the number of awards for which the related service
and non-market performance conditions are expected to be met, such that the amount ultimately recognized
is based on the number of awards that meet the related service conditions at the vesting date. For share-
based payment awards with non-vesting conditions, the grant-date fair value of the share-based payment is
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measured to reflect such conditions and there is no true-up for differences between expected and actual
outcomes.
(iii) Pension obligations
The Company operates defined contribution pension plans for all employees funded through payments to
insurance companies. The Company has no legal or constructive obligation to pay further contributions once
the contributions have been paid. The contributions are recognized as employee benefit expense when
employees have rendered the service entitling them to the contributions. Prepaid contributions are
recognized as an asset to the extent that a cash refund or a reduction in the future payments is available.
(h) Taxation
Income tax expense represents the sum of the tax currently payable and deferred tax. It is recognized in
profit or loss except to the extent that it relates to a business combination, or items recognized directly in
equity or in OCI.
(i) Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from profit as reported
in the income statement because of items of income or expense that are taxable or deductible in other years
and items that are never taxable or deductible. The Company’s liability for current tax is calculated using tax
rates that have been enacted or substantively enacted by the end of the reporting period.
(ii) Deferred tax
Deferred tax is recognized on differences between the carrying amounts of assets and liabilities in the
financial statements and the corresponding tax bases used in the computation of taxable profit.
The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to
the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the
asset to be recovered. Since the Company does not expect to be profitable in the foreseeable future, its
deferred tax assets are valued at nil.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period in
which the liability is settled or the asset realized, based on tax rates (and tax laws) that have been enacted or
substantively enacted by the end of the reporting period. The measurement of deferred tax liabilities and
assets reflects the tax consequences that would follow from the manner in which the Company expects, at
the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax
assets against current tax liabilities and when they relate to income taxes levied by the same taxation
authority and the Company intends to settle its current tax assets and liabilities on a net basis.
(i) Property, plant and equipment
(i) Recognition and measurement
Items of property, plant and equipment are measured at cost less accumulated depreciation and any
accumulated impairment losses. If significant parts of an item of property, plant and equipment have
different useful lives, then they are accounted for as separate items (major components) of property, plant
and equipment. Any gain or loss on disposal of an item of property, plant and equipment is recognized in
profit or loss.
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(ii) Depreciation
Depreciation is calculated to write off the cost of items of property, plant and equipment less their estimated
residual values using the straight-line method over their estimated useful lives and is recognized in profit or
loss. Right-of-use assets are depreciated over the shorter of the lease term and their useful lives unless it is
reasonably certain that the Company will obtain ownership by the end of the lease term.
The estimated useful lives of property, plant and equipment for current and comparative periods are as
follows:
•
•
•
Buildings and leasehold improvements:
5 - 10 years;
Laboratory equipment:
Other:
5 years;
3 - 5 years.
Depreciation methods, useful lives and residual values are reviewed at each reporting date and adjusted if
appropriate.
(j) Intangible assets
Expenditure on research activities is recognized as an expense in the period in which it is incurred. An
internally-generated intangible asset arising from development (or from the development phase of an
internal project) is recognized if, and only if, all of the following have been demonstrated:
•
•
•
•
•
•
•
the technical feasibility of completing the intangible asset so that it will be available for use or sale;
the intention to complete the intangible asset and use or sell it;
the ability to use or sell the intangible asset;
how the intangible asset will generate probable future economic benefits;
the availability of adequate technical, financial and other resources to complete the development and to
use
or sell the intangible asset; and
the ability to measure reliably the expenditure attributable to the intangible asset during its
development.
The amount initially recognized for internally-generated intangible assets is the sum of the expenditure
incurred from the date when the intangible asset first meets the recognition criteria listed above. Where no
internally generated intangible asset can be recognized, development expenditures are recognized in the
consolidated statements of profit and loss and other comprehensive income in the period in which they are
incurred.
Due to uncertainties inherent to the development and registration with the relevant healthcare authorities of
its products, the Company estimates that the conditions for capitalization are not met until the regulatory
procedures required by such healthcare authorities have been finalized. The Company currently does not
own products that have been approved by the relevant healthcare authorities and this has resulted in all
development costs being recognized as an expense in the period in which they are incurred.
(k) Impairment of assets
At the end of each reporting period, the Company reviews the carrying amounts of its non-current assets,
including right-of-use assets, to determine whether there is any indication that those assets have suffered an
impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to
determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable
amount of an individual asset, the Company estimates the recoverable amount of the cash-generating unit to
which the asset belongs. Where a reasonable and consistent basis of allocation can be identified, corporate
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assets are also allocated to individual cash-generating units, or otherwise they are allocated to the smallest
group of cash-generating units for which a reasonable and consistent allocation basis can be identified.
The recoverable amount is the higher of fair value less costs of disposal and value in use. In assessing value in
use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that
reflects current market assessments of the time value of money and the risks specific to the asset for which
the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying
amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An
impairment loss is recognized immediately in profit or loss.
Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit)
is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount
does not exceed the carrying amount that would have been determined had no impairment loss been
recognized for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is
recognized immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which
case the reversal of the impairment loss is treated as a revaluation increase.
(l) Financial assets
All financial assets are recognized and derecognized on the trade date where the purchase or sale of a
financial asset is under a contract whose terms require delivery of the financial asset within the timeframe
established by the market concerned, and are initially measured at fair value and subsequently measured at
amortized cost or fair value on the basis of the entity’s business model for managing the financial assets and
the contractual cash flow characteristics of the financial assets.
Specifically:
•
•
debt instruments that are held within a business model whose objective is to collect the contractual
cash flows, and that have contractual cash flows that are solely payments of principal and interest on
the principal amount outstanding, are measured subsequently at amortized cost, and
all other debt investments and equity investments are measured subsequently at fair value through
profit or loss (“FVTPL”).
The Company applies the IFRS 9 simplified approach to measuring expected credit losses which uses a
lifetime expected loss allowance for all trade receivables. To measure the expected credit losses, trade
receivables have been grouped based on shared credit risk characteristics and the days past due. Trade
receivables are written off when there is no reasonable expectation of recovery. Indicators that there is no
reasonable expectation of recovery include, amongst others, the failure of a debtor to engage in a repayment
plan with the group, and a failure to make contractual payments for a period of greater than 120 days past
due. Impairment losses on trade receivables and contract assets are presented as net impairment losses
within operating profit. Subsequent recoveries of amounts previously written off are credited against the
same line item.
The Company derecognizes a financial asset when the contractual rights to the cash flows from the asset
expire, or the Company transfers the right to receive the contractual cash flows on the financial asset in a
transaction in which substantially all the risks and rewards of ownership of the financial asset are transferred.
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(m) Cash and cash equivalents
Cash and cash equivalents include cash on hand and all highly liquid investments with original maturities of
three months or less that are readily convertible to a known amount of cash and bear an insignificant risk of
change in value.
(n) Financial liabilities and equity instruments
Debt and equity instruments are classified as either financial liabilities or as equity in accordance with the
substance of the contractual arrangement.
(i) Equity instruments
An equity instrument is any contract that evidences a residual interest in the assets of an entity after
deducting all of its liabilities. Equity instruments issued by the Company are recognized at the proceeds
received, net of direct issue costs.
(ii) Compound financial instruments
Compound financial instruments issued by the Company comprise convertible notes denominated in euro
that can be converted to share capital at the option of the holder, when the number of shares to be issued is
fixed and does not vary with changes in fair value.
The component parts of convertible loan notes issued by the Group are classified separately as financial
liabilities and equity in accordance with the substance of the contractual arrangements and the definitions of
a financial liability and an equity instrument. A conversion option that will be settled by the exchange of a
fixed amount of cash or another financial asset for a fixed number of the Company’s own equity instruments
is an equity instrument. At the date of issue, the fair value of the liability component is estimated using the
prevailing market interest rate for a similar non-convertible instrument. This amount is recorded as a liability
on an amortized cost basis using the effective interest method until extinguished upon conversion or at the
instrument’s maturity date.
The conversion option classified as equity is determined by deducting the amount of the liability component
from the fair value of the compound instrument as a whole. This is recognized and included in equity, net of
income tax effects, and is not subsequently remeasured. In addition, the conversion option classified as
equity will remain in equity until the conversion option is exercised, in which case, the balance recognized in
equity will be transferred to share premium. Where the conversion option remains unexercised at the
maturity date of the convertible loan note, the balance recognized in equity will be transferred to
accumulated losses. No gain or loss is recognized in profit or loss upon conversion or expiration of the
conversion option.
Transaction costs that relate to the issue of the convertible loan notes are allocated to the liability and equity
components in proportion to the allocation of the gross proceeds. Transaction costs relating to the equity
component are recognized directly in equity. Transaction costs relating to the liability component are
included in the carrying amount of the liability component and are amortized over the lives of the convertible
loan notes using the effective interest method.
Interest related to the financial liability is recognized in profit or loss.
(iii) Financial liabilities at fair value through profit or loss
Financial liabilities held for trading are classified as at fair value through profit or loss (“FVTPL”). A financial
liability is classified as held for trading if it is a derivative (except for a derivative that is a financial guarantee
contract or a designated and effective hedging instrument).
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Financial liabilities at FVTPL are measured at fair value, with any gains or losses arising on changes in fair
value recognized in profit or loss. The net gain or loss recognized is included in the ‘results related to financial
liabilities measured at fair value through profit or loss’ line item in profit or loss.
Fair value is determined in the manner described in note 5.
(iv) Other financial liabilities
Other financial liabilities, including borrowings, are initially measured at fair value, net of transaction costs
incurred, and are subsequently measured at amortized cost using the effective interest method, with interest
expense recognized on an effective yield basis.
The effective interest method is a method of calculating the amortized cost of a financial liability and of
allocating interest expense over the relevant period. The effective interest rate is the rate that exactly
discounts estimated future cash payments through the expected life of the financial liability, or, where
appropriate, a shorter period.
Borrowings and other financial liabilities are classified as ‘non-current liabilities,’ other than liabilities with
maturities up to one year, which are classified as “current liabilities”.
The Company derecognizes financial liabilities when the liability is discharged, cancelled or expired. For all
financial liabilities, the fair value approximates its carrying amount.
(v) Offsetting
Financial assets and financial liabilities are offset and the net amount presented in the statement of financial
position when, and only when, the Company currently has a legally enforceable right to set off the amounts
and it intends either to settle them on a net basis or to realize the asset and settle the liability simultaneously.
(o) Leases
The Company assesses whether a contract is or contains a lease when it obtains the right to control the use
of an identified asset for a period of time, in exchange for consideration. The Company recognizes a right-of-
use asset and a corresponding lease liability with respect to all lease arrangements in which it is the lessee,
except for short-term leases (defined as leases with a lease term of 12 months or less) and leases of low value
assets (such as tablets and personal computers, small items of office furniture and telephones). For these
leases, the Company recognizes the lease payments in operating costs on a straight-line basis over the term
of the lease unless another systematic basis is more representative of the time pattern in which economic
benefits from the leased assets are consumed.
The lease liability is initially measured at the present value of the lease payments that are not paid at the
commencement date, discounted by using the interest rate implicit in the lease. When the interest rate
implicit in the lease cannot be readily determined, the Company uses its incremental borrowing rate.
Lease payments included in the measurement of the lease liability comprise:
•
•
•
•
Fixed lease payments (including in-substance fixed payments), less any lease incentives receivable;
Variable lease payments that depend on an index or rate, initially measured using the index or rate at
the commencement date;
The amount expected to be payable by the Company under residual value guarantees;
The exercise price of purchase options, if the Company is reasonably certain to exercise the options;
and
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•
Payments of penalties for terminating the lease, if the lease term reflects the exercise of an option to
terminate the lease.
The lease liability is presented as a separate line in the consolidated statement of financial position. In the
cash flow statement, repayments of the principal portion of the lease liability are included in financing
activities. Payments relating to the interest component of the lease liability are included in operating
activities. Short-term lease payments and payments for leases of low-value assets are included in operating
activities.
The lease liability is subsequently measured by increasing the carrying amount to reflect interest on the lease
liability (using the effective interest method) and by reducing the carrying amount to reflect the lease
payments made.
The Company remeasures the lease liability (and makes a corresponding adjustment to the related right-of-
use asset) whenever:
•
•
The lease term has changed or there is a significant event or change in circumstances resulting in a
change in the assessment of exercise of a purchase option, in which case the lease liability is
remeasured by discounting the revised lease payments using a revised discount rate.
The lease payments change due to changes in an index or rate or a change in expected payment under
a guaranteed residual value, in which cases the lease liability is remeasured by discounting the revised
lease payments using an unchanged discount rate (unless the lease payments change is due to a
change in a floating interest rate, in which case a revised discount rate is used).
•
A lease contract is modified and the lease modification is not accounted for as a separate lease, in which
case the lease liability is remeasured based on the lease term of the modified lease by discounting the
revised lease payments using a revised discount rate at the effective date of the modification.
The right-of-use asset comprises the initial measurement of the corresponding lease liability, lease payments
made at or before the commencement day, less any lease incentives received and any initial direct costs. It is
subsequently measured at cost less accumulated depreciation and impairment losses.
Whenever the Company incurs an obligation for costs to dismantle and remove a leased asset, restore the
site on which it is located or restore the underlying asset to the condition required by the terms and
conditions of the lease, a provision is recognized and measured under IAS 37. To the extent that the costs
relate to a right-of-use asset, the costs are included in the related right-of-use asset, unless those costs are
incurred to produce inventories.
Right-of-use assets are depreciated over the shorter period of lease term and useful life of the underlying
asset. If a lease transfers ownership of the underlying asset or the cost of the right-of-use asset reflects that
the Company expects to exercise a purchase option, the related right-of-use asset is depreciated over the
useful life of the underlying asset. The depreciation starts at the commencement date of the lease.
The right-of-use asset is presented under Property, Plant and Equipment in the consolidated statement of
financial position, in the category Buildings and leasehold improvements.
As a practical expedient, IFRS 16 permits a lessee not to separate non-lease components, and instead account
for any lease and associated non-lease components as a single arrangement. The Company has used this
practical expedient.
PAGE 57 / 101
Financial Statements 2023
PROQR THERAPEUTICS ANNUAL REPORT 2023
(p) Non-current assets held for sale
Non-current assets (and disposal groups) classified as held for sale are measured at the lower of carrying
amount and fair value less costs to sell.
Non-current assets and disposal groups are classified as held for sale if their carrying amount will be
recovered through a sale transaction rather than through continuing use. This condition is regarded as met
only when the sale is highly probable and the asset (or disposal group) is available for immediate sale in its
present condition. Management must be committed to the sale which should be expected to qualify for
recognition as a completed sale within one year from the date of classification.
When the Company is committed to a sale plan involving loss of control of a subsidiary, all of the assets and
liabilities of that subsidiary are classified as held for sale when the criteria described above are met,
regardless of whether the Company will retain a non-controlling interest in its former subsidiary after the
sale. When the Company is committed to a sale plan involving disposal of an investment in an associate or, a
portion of an investment in an associate, the investment, or the portion of the investment in the associate,
that will be disposed of is classified as held for sale when the criteria described above are met. The Company
then ceases to apply the equity method in relation to the portion that is classified as held for sale. Any
retained portion of an investment in an associate that has not been classified as held for sale continues to be
accounted for using the equity method.
4. New standards and interpretations not yet adopted
A number of new standards, amendments to standards and interpretations are effective for annual periods
beginning after January 1, 2024 and have not been applied in preparing these consolidated financial
statements. There are no standards that are not yet effective and that would be expected to have a material
impact on the Company in the current or future reporting periods and on foreseeable future transactions.
The Company does not plan to adopt these standards early.
5. Financial Risk Management
5.1. Financial risk factors
The Company’s activities expose it to a variety of financial risks: market risk (including currency risk, interest
rate risk and price risk), credit risk and liquidity risk. The Company’s overall financial risk management seeks
to minimize potential adverse effects resulting from unpredictability of financial markets on the Company’s
financial performance.
Financial risk management is carried out by the finance department. The finance department identifies and
evaluates financial risks and proposes mitigating actions if deemed appropriate.
(a) Market risk
Market risk is the risk that changes in market prices – such as foreign exchange rates, interest rates and
equity prices – will affect the Company’s income or the value of its holdings of financial instruments. The
objective of market risk management is to manage and control market risk exposures within acceptable
parameters, while optimizing the return.
Foreign exchange risk
Foreign exchange risk arises from future commercial transactions and recognized assets and liabilities in
foreign currencies, primarily with respect to the U.S. dollar. The Company has an exposure associated with
the time delay between entering into a contract, budget or forecast and the realization thereof. The Company
operates a foreign exchange policy to manage the foreign exchange risk against the functional currency
based on the Company’s cash balances and the projected future spend per major currency.
PAGE 58 / 101
Financial Statements 2023
PROQR THERAPEUTICS ANNUAL REPORT 2023
At year-end, a substantial amount of our cash balances are denominated in U.S. Dollars. This amount reflects
our current expectation of future expenditure in U.S. dollars.
At December 31, 2023 our net position of financial instruments denominated in U.S. dollars was a net liability
of € 726,000 (2022: net asset of € 78,630,000). Foreign currency denominated receivables and trade payables
are short term in nature (generally 30 to 45 days). As a result, the foreign exchange results recognized in 2023
and 2022 are mainly caused by the cash balance denominated in U.S. dollars.
A reasonably possible weakening of the U.S. dollar by 10% against the functional currency of the Company at
December 31, 2023 would have decreased our net loss by € 73,000 (2022: increased by € 7,863,000). A 10%
strengthening of the U.S. dollar against the functional currency of the Company would have an equal but
opposite effect on our net loss. The analysis assumes that all other variables, in particular interest rates,
remain constant.
Price risk
The market prices for the production of preclinical and clinical materials and services as well as external
contracted research may vary over time. Currently, the commercial prices of any of the Company’s future
product candidates is uncertain. When development products near the regulatory approval date or potential
regulatory approval date, the uncertainty of potential sales prices decreases. The Company is not exposed to
commodity price risk.
Furthermore, the Company does not hold investments designated for sale and is therefore not exposed to
equity securities price risk.
Cash flow and fair value Interest rate risk
The Company’s interest rate risk arises from current accounts and deposits and the sensitivity analysis below
has been determined based on the exposure to interest rates on these short-term maturity primary financial
instruments.
A 10 percent increase or decrease on actual interest rate is used when reporting interest rate risk internally to
key management personnel and represents management’s assessment of the reasonably possible change in
interest rates.
As of December 31, 2023, if interest rates had been 10 percent higher, then pre-tax earnings for the year
would have been € 259,000 higher, while if interest rates had been 10 percent lower, then pre-tax earnings
for the year would have been € 259,000 lower.
The Company’s exposure to interest rate risks on loans and leases is limited due to the use of fixed interest
rates. The Company has a loan with a fixed interest rate, totaling € 4,292,000 at December 31, 2023 (2022:
several loans with fixed interest rates totaling € 6,771,000). Details on the interest rates and maturities of
these loans are provided in Note 14.
(b) Credit risk
Credit risk represents the risk of financial loss caused by default of the counterparty. The Company has no
large receivables balances with external parties outside of cash and cash equivalents. Our cash management
policy is focused on preserving capital, providing liquidity for operations and optimizing yield while accepting
limited risk (Short-term credit ratings must be rated A 1/P 1/F1 at a minimum by at least one of the Nationally
Recognized Statistical Rating Organizations (“NRSROs”) specifically Moody’s, Standard & Poor’s or Fitch. Long-
term credit rating must be rated A2 or A at a minimum by at least one NRSRO). As of December 31, 2023, the
Company is in compliance with its cash management policy.
PAGE 59 / 101
Financial Statements 2023
PROQR THERAPEUTICS ANNUAL REPORT 2023
At December 31, 2023 and December 31, 2022, all of our cash and cash equivalents were held at four large
institutions, Rabobank, ABN Amro, BNP Paribas and Wells Fargo. All institutions are highly rated (Moody’s
long-term debt ratings of Aa2, Aa3, Aa2 and Aa2 for Rabobank, ABN Amro, BNP Paribas and Wells Fargo
respectively) with sufficient capital adequacy and liquidity metrics.
There are no financial assets past due date or impaired. No credit limits were exceeded during the reporting
period.
(c) Liquidity risk
Liquidity risk represents the risk that an entity will encounter difficulty in meeting obligations associated with
its financial liabilities. Prudent liquidity risk management implies ensuring sufficient availability of cash
resources for funding of operations and planning to raise cash if and when needed, either through issue of
shares or through credit facilities. Management monitors rolling forecasts of the Company’s liquidity reserve
on the basis of expected cash flow.
The table below analyzes ProQR’s undiscounted liabilities into relevant maturity groupings based on the
remaining period at year-end until the contractual maturity date:
dsssds
At December 31, 2023
Borrowings
Lease liabilities
Trade payables and other payables
At December 31, 2022
Borrowings
Lease liabilities
Trade payables and other payables
Less than
1 year
Between
1 and 2 years
Between
2 and 5 years
€ 1,000
€ 1,000
€ 1,000
—
2,288
11,709
13,997
4,583
2,496
—
7,079
—
7,487
—
7,487
Less than
1 year
Between
1 and 2 years
Between
2 and 5 years
€ 1,000
€ 1,000
€ 1,000
2,500
2,053
10,197
14,750
2,455
2,212
—
4,667
2,644
6,637
—
9,281
Over
5 years
€ 1,000
—
6,240
—
6,240
Over
5 years
€ 1,000
—
7,743
—
7,743
Our future capital requirements and the period for which our existing resources will support our operations
may vary significantly from what we expect. Our monthly spending levels will vary based on new and ongoing
development and corporate activities. Because the length of time and activities associated with successful
development of our product candidates is highly uncertain, we are unable to estimate the actual funds we
will require for development of our product candidates.
5.2. Capital risk management
The Company’s objectives when managing capital are to safeguard the Company’s ability to continue as a
going concern in order to provide returns for shareholders, benefits for other stakeholders and to maintain
an optimal capital structure to reduce the cost of capital.
PAGE 60 / 101
Financial Statements 2023
PROQR THERAPEUTICS ANNUAL REPORT 2023
In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to
shareholders (although at this time the Company does not have retained earnings and is therefore currently
unable to pay dividends), return capital to shareholders, issue new shares or sell assets to reduce debt.
The total amount of equity as recorded on the balance sheet is managed as capital by the Company.
5.3. Fair value measurement
For financial instruments that are measured on the balance sheet at fair value, IFRS 13 requires disclosure of
fair value measurements by level of the following fair value measurement hierarchy:
•
•
•
quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1);
inputs other than quoted prices included within level 1 that are observable for the asset or liability,
either directly (that is, as prices) or indirectly (that is, derived from prices) (level 2); and
inputs for the asset or liability that are not based on observable market data (that is, unobservable
inputs) (level 3).
Fair value of financial assets and liabilities that are measured at fair value on a recurring basis
Some of the Company’s financial assets and liabilities are measured at fair value at the end of each reporting
period. The following table gives information about how the fair values of these financial assets and liabilities
are determined (in particular, the valuation technique and inputs used).
PAGE 61 / 101
Financial Statements 2023
PROQR THERAPEUTICS ANNUAL REPORT 2023
Financial
assets and
liabilities
Investment in
Phoenicis
Therapeutics,
Inc.
Valuation technique and key inputs
Market comparison technique: The valuation model is
based on market multiples derived from quoted prices
of companies comparable to the investee, adjusted for
the effect of the non-marketability of the equity
securities, and the result of the investee. The estimate
is adjusted for the net debt of the investee.
Significant
unobservable
inputs
Adjusted
market multiple
Relationship and
sensitivity of significant
unobservable inputs to
fair value
The estimated fair value
would increase (decrease) if
the adjusted market
multiple were higher
(lower).
Investment in
Yarrow
Biotechnology,
Inc.
Market comparison technique: The valuation model is
based on market multiples derived from quoted prices
of companies comparable to the investee, adjusted for
the effect of the non-marketability of the equity
securities, and the result of the investee. The estimate
is adjusted for the net debt of the investee.
Adjusted
market multiple
The estimated fair value
would increase (decrease) if
the adjusted market
multiple were higher
(lower).
Warrants
Black-Scholes model. The following variables were
taken into consideration: current underlying price of
the Company's shares, options strike price, expected
life, historical volatility of ProQR share returns over a
period equal to the expected life, risk-free rate: based
on the US Treasury yield curve rates per the valuation
date (interpolated) for the expected life.
None
Not applicable
The investments in Phoenicis Therapeutics, Inc and Yarrow Biotechnology, Inc are measured using valuation
methods based on so-called Level 3 inputs. Level 3 inputs are unobservable inputs. Changing one or more of
the unobservable inputs to reflect reasonably possible alternative assumptions would not significantly
change the fair value determined for Phoenicis Therapeutics, Inc and Yarrow Biotechnology, Inc.
Warrants are measured using valuation methods based on so-called Level 2 inputs. Level 2 inputs are inputs
other than quoted prices that are observable for the liability, either directly or indirectly.
The carrying amount of all financial assets and financial liabilities is a reasonable approximation of the fair
value and therefore information about the fair values of each class has not been disclosed.
Share options and restricted stock units (“RSUs”) granted to employees and consultants are measured at the
fair value of the equity instruments granted. The fair value of options is determined through the use of an
option-pricing model considering, among others, the following variables:
•
•
•
•
•
•
the exercise price of the option;
the expected life of the option;
the current value of the underlying shares;
the expected volatility of the share price;
the dividends expected on the shares; and
the risk-free interest rate for the life of the option.
6. Segment Information
The Company operates in one reportable segment, which comprises the discovery and development of
innovative, RNA based therapeutics. The management board is identified as the chief operating decision
maker. The management board reviews the operating results regularly to make decisions about resources
and to assess overall performance.
PAGE 62 / 101
Financial Statements 2023
PROQR THERAPEUTICS ANNUAL REPORT 2023
Revenues are generated from external customers whose main registered offices are all geographically
located in the United States. Substantially all non-current assets of the Company are located in the
Netherlands. The amounts provided to the management board with respect to total assets and liabilities are
measured in a manner consistent with that of the financial statements.
7. Property, Plant and Equipment
dsssds
Balance at January 1, 2022
Cost
Accumulated depreciation
Carrying amount
Additions
Depreciation
Effect of lease modification (note 25)
Transfer
Disposals
Movement for the period
Balance at December 31, 2022
Cost
Accumulated depreciation
Carrying amount
Additions
Depreciation
Effect of lease modification (note 25)
Transfer
Disposals - cost
Accumulated depreciation on disposals
Movement for the period
Balance at December 31, 2023
Cost
Accumulated depreciation
Carrying amount
Buildings and
Leasehold
improvements
Laboratory
equipment
Other
Total
€ 1,000
€ 1,000
€ 1,000
€ 1,000
22,231
(6,217)
16,014
62
(1,852)
592
(22)
—
(1,220)
22,863
(8,069)
14,794
30
(1,951)
1,859
23
—
—
(39)
24,775
(10,020)
14,755
4,245
(2,813)
1,432
643
(660)
—
30
(6)
7
4,912
(3,473)
1,439
1,278
(546)
—
(30)
(252)
192
642
5,908
(3,827)
2,081
1,344
(1,323)
21
3
(9)
—
(8)
—
27,820
(10,353)
17,467
708
(2,521)
592
—
(6)
(14)
(1,227)
1,339
(1,332)
7
63
(16)
—
7
—
—
54
1,409
(1,348)
61
29,114
(12,874)
16,240
1,371
(2,513)
1,859
—
(252)
192
657
32,092
(15,195)
16,897
The depreciation charge for 2023 is included in research and development costs for an amount of € 1,994,000
(2022: € 2,088,000) and in general and administrative costs for an amount of € 519,000 (2022: € 433,000).
Buildings and leasehold improvements include a right-of-use asset relating to the lease of our Leiden office
and laboratory space, with a carrying amount of € 14,524,000 at December 31, 2023 (2022: € 14,484,000).
PAGE 63 / 101
Financial Statements 2023
PROQR THERAPEUTICS ANNUAL REPORT 2023
8. Investments in Associates
In May 2021, the Company obtained an 8% share in the common stock of Yarrow Biotechnology, Inc.
(“Yarrow”). ProQR’s share in Yarrow subsequently changed to 5.1%. Although ProQR only owns 5.1% of
Yarrow’s shares, the Company had significant influence over Yarrow by virtue of its right to appoint one of
Yarrow’s three board members, as well as its participation in Yarrow’s policy-making process, amongst other
factors. As such, our interest in Yarrow was initially recognized as an investment in associate.
In October 2023, Gerard Platenburg, Chief Scientific Officer at ProQR, ended his term on Yarrow’s board of
directors. From that moment onwards, ProQR no longer had significant influence over Yarrow. Yarrow was
therefore derecognized as an associate and was accounted for as a financial asset, as disclosed in Note 9.
As the carrying amount of our investment in Yarrow was € nil at December 31, 2022, ProQR did not recognize
any further share of Yarrow’s loss from continuing operations for the period from January through October
2023. The results related to associates amounting to € 8,000 for 2022 consisted of ProQR's share in the loss
of Yarrow.
dsssds
Balance at January 1, 2022
Share of loss from continuing operations
Balance at December 31, 2022
Derecognition of investment in associate (Yarrow Biotechnology, Inc.)
Balance at December 31, 2023
9. Investments in Financial Assets
Yarrow Biotechnology, Inc.
Investment in
associate
€ 1,000
8
(8)
—
—
—
As disclosed in Note 8, Gerard Platenburg, Chief Scientific Officer at ProQR, ended his term on Yarrow’s board
of directors in October 2023. From then on, ProQR no longer had significant influence over Yarrow. Yarrow
was therefore derecognized as an associate and was accounted for as a financial asset and measured at fair
value.
ProQR holds a 5.1% interest in Yarrow. The Company elected to recognize subsequent changes in the fair
value of its investment in Yarrow in Other Comprehensive Income. In October 2023, ProQR initially
recognized its investment in the Yarrow financial asset at € nil. As at December 31, 2023, the fair value of the
Yarrow financial asset amounted to € nil.
Phoenicis Therapeutics, Inc.
In May 2019, the Company acquired a non-controlling interest in Wings Therapeutics Inc. (“Wings”) as part of
the strategic spin out of its Dystrophic Epidermolysis Bullosa (“DEB”) activities. In January 2021, Wings merged
into Phoenicis Therapeutics Inc. (“Phoenicis”) by means of a non-cash transaction. Consequently, Wings
ceased to exist, and the related investment was derecognized. In 2021, a gain on disposal of associate was
recognized amounting to € 514,000, which consisted of the € 621,000 fair value of Phoenicis equity
instruments received by the Company, partly off-set by the derecognition of the carrying value of the
Company’s investment in Wings of € 107,000.
PAGE 64 / 101
Financial Statements 2023
PROQR THERAPEUTICS ANNUAL REPORT 2023
ProQR holds a 3.9% interest in Phoenicis. ProQR does not have significant influence in Phoenicis. The
Company elected to recognize subsequent changes in the fair value of its investment in Phoenicis in Other
Comprehensive Income. In September 2023, the investment was remeasured to nil, and ProQR recognized a
fair value loss of € 621,000 in other comprehensive income. As at December 31, 2023, the fair value of the
Phoenicis financial asset amounted to € nil (2022: € 621,000).
10. Other Taxes
dsssds
Value added tax
All receivables are considered short-term and due within one year.
11. Prepayments and Other Receivables
dsssds
Prepayments
Eli Lilly up-front receivable
Other receivables
December 31,
2023
December 31,
2022
€ 1,000
€ 1,000
523
523
607
607
December 31,
2023
December 31,
2022
€ 1,000
€ 1,000
793
—
745
1,538
2,449
56,254
375
59,078
All receivables are considered short-term and due within one year. At December 31, 2023 and 2022,
prepayments consisted principally of payments made by the Company for services not yet provided by
vendors. At December 31, 2023 and 2022, other receivables consisted principally of deposits. Note 17
Revenue describes the transaction related to the Eli Lilly up-front receivable.
12. Cash and Cash Equivalents
dsssds
Cash at banks
Deposits
December 31,
2023
December 31,
2022
€ 1,000
€ 1,000
59,775
59,150
118,925
94,775
—
94,775
The cash at banks is at full disposal of the Company. Deposits are fixed for at most 3 month periods at a time.
13. Shareholders’ Equity
(a) Share capital
dsssds
Balance at January 1
Issued for cash
Issued for services
Exercise of share options / vesting of RSUs
Treasury shares issued (transferred)
Balance at December 31
PAGE 65 / 101
Financial Statements 2023
PROQR THERAPEUTICS ANNUAL REPORT 2023
Number of ordinary shares
2023
2022
84,246,967
74,865,381
—
—
9,381,586
—
537,513
144,688
(536,096)
(144,688)
84,248,384
84,246,967
The authorized share capital of the Company amounting to € 13,600,000 consists of 170,000,000 ordinary
shares and 170,000,000 preference shares with a par value of € 0.04 per share. At December 31, 2023,
84,248,384 ordinary shares were issued. 81,354,592 ordinary shares were fully paid, and 2,893,792 ordinary
shares were held by the Company as treasury shares (2022: 3,429,888).
In April 2021, the Company consummated an underwritten public offering of 15,923,077 ordinary shares at
an issue price of $ 6.50 per share. The gross proceeds from this offering amounted to € 88,115,000 while the
transaction costs amounted to € 5,499,000, resulting in net proceeds of € 82,616,000.
In September 2021, the Company issued 3,989,976 shares to Eli Lilly and Company (“Lilly”) pursuant to the
licensing and research collaboration between the Company and Lilly, resulting in gross proceeds of €
25,270,000, with no significant transaction costs. This amount excludes a premium paid by Lilly that is
considered to be part of the transaction price of the Collaboration agreement (refer to Note 17).
In November, 2021, the Company filed a shelf registration statement, which permitted: (a) the offering,
issuance and sale by the Company of up to a maximum aggregate offering price of $ 300,000,000 of its
ordinary shares, warrants and/or units; and (b) as part of the $ 300,000,000, the offering, issuance and sale by
us of up to a maximum aggregate offering price of $ 75,000,000 of its ordinary shares that may be issued and
sold under a sales agreement with Cantor Fitzgerald & Co in one or more at-the-market offerings. In 2021 and
2022, no shares were issued pursuant to this ATM facility.
In December 2022, the Company issued 9,381,586 shares to Lilly pursuant to the amended and restated
licensing and research collaboration between the Company and Lilly, resulting in gross proceeds of €
14,122,000, with no significant transaction costs.
(b) Equity settled employee benefit reserve
The costs of share options and RSUs for employees, members of the Supervisory Board and members of the
Management Board are recognized in the income statement, together with a corresponding increase in
equity during the vesting period, taking into account (deferral of) corporate income taxes. The accumulated
expense of share-based compensation recognized in the income statement is shown separately in the equity
category ‘equity settled employee benefit reserve’ in the ‘statement of changes in equity’. On September 25,
2017, we established a Dutch foundation named Stichting Bewaarneming Aandelen ProQR for holding shares
in trust for employees, members of the Management Board and members of the Supervisory Board of the
Company and its group companies who from time to time could exercise options under the Company’s equity
incentive plans.
PAGE 66 / 101
Financial Statements 2023
PROQR THERAPEUTICS ANNUAL REPORT 2023
(c) Translation reserve
The translation reserve comprises all foreign currency differences arising from the translation of the financial
statements of foreign operations.
(d) Share options and restricted stock units
The Company operates an equity-settled share-based compensation plan which was introduced in 2013.
Options and RSUs may be granted to employees, members of the Supervisory Board, members of the
Management Board and consultants. The compensation expenses included in operating costs for this plan
were € 3,106,000 in 2023 (2022: € 2,869,000), of which € 2,629,000 (2022: € 1,982,000) was recorded in
general and administrative costs and € 477,000 (2022: € 887,000) was recorded in research and development
costs based on employee allocation.
Options granted under this stock option plan are exercisable once vested. Any vesting schedule may be
attached to the granted options and RSUs. Typical vesting periods are:
•
•
Four years, with 25% vesting after every year.
Four years, in thirteen tranches where the first tranche vests at the first anniversary of the grant date,
and the remaining options vest in twelve equal tranches of 6.25% each subsequent quarter until the
fourth anniversary of the grant date.
•
Two years, with 25% vesting after every six months.
The options expire ten years after date of grant. Options granted under the stock option plan are granted at
exercise prices which equal either the face value or the fair value of the ordinary shares of the Company at
the date of the grant. The fair value of the options is estimated at the date of grant using the Black-Scholes
option-pricing model, with on average the following assumptions:
dsssds
Risk-free interest rate
Expected dividend yield
Expected volatility
Expected life in years
Options
granted in 2023
Options
granted in 2022
3.960%
0%
105.6%
5 years
2.570%
0%
101.0%
5 years
The resulting weighted average grant date fair value of the options amounted to € 2.14 in 2023 (2022: € 0.67).
The stock options granted have a 10-year life following the grant date and are assumed to be exercised five
years from date of grant for all awards.
The fair value of RSUs is determined at the grant date by using the Company’s share price at the grant date.
The resulting weighted average grant date fair value of the RSUs amounted to € 2.76 in 2023 (2022: € 1.06).
Movements in the number of options outstanding and their related weighted average exercise prices are as
follows:
PAGE 67 / 101
Financial Statements 2023
PROQR THERAPEUTICS ANNUAL REPORT 2023
dsssds
2023
2022
Balance at January 1
Granted
Forfeited
Exercised
Expired
Balance at December 31
Number of
options
Average
exercise price
Number of
options
Average
exercise price
11,279,210
1,793,449
(276,272)
(337,746)
(1,272,401)
11,186,240
€ 3.66
€ 2.76
€ 4.62
€ 1.07
€ 7.80
€ 3.10
7,643,143
5,230,405
(1,177,622)
(1,590)
(415,126)
11,279,210
€ 6.13
€ 0.89
€ 5.84
€ 2.72
€ 7.94
€ 3.66
Exercisable at December 31
6,679,018
5,235,914
The options outstanding at December 31, 2023 had an exercise price in the range of € 0.60 to € 19.80 (2022:
€ 0.62 to € 20.51) and a weighted-average contractual life of 6.8 years (2022: 7.0 years). The weighted-average
share price at the date of exercise for share options exercised in 2023 was € 1.45 (2022: € 5.26).
Movements in the number of RSUs outstanding are as follows:
dsssds
Balance at January 1
Granted
Forfeited
Released
Balance at December 31
Number of
RSUs in 2023
Number of
RSUs in 2022
370,962
52,319
(66,881)
(190,094)
166,306
536,118
353,116
(371,102)
(147,170)
370,962
Please refer to note 27 for the share-based compensation granted to key management personnel.
14. Borrowings
dsssds
Innovation credit
Accrued interest on innovation credit
Convertible loans
Accrued interest on convertible loans
Total borrowings
Current portion
Non-current borrowings
December 31,
2023
December 31,
2022
€ 1,000
€ 1,000
2,899
1,393
—
—
4,292
—
4,292
3,907
1,035
1,369
460
6,771
(2,500)
4,271
Innovation credit (“Innovatiekrediet”)
On December 10, 2018 ProQR was awarded an Innovation credit for the sepofarsen program. Amounts were
drawn under this facility from 2018 through 2022. The credit of € 3,907,000 was used to conduct the Phase
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2/3 clinical study and efforts to obtain regulatory and ethical market approval (New Drug Applications
(“NDA”)/ Marketing Authorization Applications (“MAA”)) of sepofarsen for LCA10. In the fourth quarter of 2023,
ProQR made a partial repayment of the principal, amounting to € 1,008,000. The remaining amount payable
of € 2,899,000 is recognized under non-current borrowings at December 31, 2023.
In December 2023, ProQR received a conditional waiver of the € 4,292,000 remaining balance of the
Innovation credit including accrued interest. Consequently, the repayment of the total loan of € 4,292,000,
including interest, will be waived if conditions are met, which will be reviewed annually.
The amounts receivable relating to development & regulatory milestone payments under the Amended and
Restated Asset Purchase Agreement with Laboratoires Théa S.A.S. (“Théa”) are subject to a right of pledge for
the benefit of the Rijksdienst voor Ondernemend Nederland (“RVO”).
Convertible loans: Pontifax and Kreos
In July 2020, the Company entered into a convertible debt financing agreement with Pontifax Medison Debt
Financing. Under the agreement, the Company had access to up to $ 30 million in convertible debt financing
in three tranches of $ 10 million each that would mature over a 54-month period and had an interest-only
period of 24 months. One tranche of $ 10 million (€ 8.4 million) was drawn down over the course of the
agreement.
A second close of the convertible debt financing agreement was completed in August 2020 with Kreos Capital.
Under the second agreement, the Company had access to up to € 15 million in convertible debt financing in
three tranches of € 5 million each that would mature over a 54-month period and had an interest-only period
of 24 months. One tranche of € 5 million was drawn down over the course of the agreement.
In connection with the loan agreement, the Company issued to Pontifax and Kreos warrants to purchase up
to an aggregate of 302,676 shares of its common stock at a fixed exercise price.
On December 29, 2021, the Company amended its convertible debt financing agreement with the Lenders.
Under the amended agreement the Company drew down an additional $ 30 million (€ 26.5 million) that
would mature over a 54-month period and had an interest-only period of 33 months. The amendment
replaced the two undrawn tranches under the original convertible debt financing agreements.
In connection with the amended loan agreement, the Company issued to the Lenders warrants to purchase
up to an aggregate of 376,952 shares of its common stock at a fixed exercise price.
The convertible loans from Pontifax and Kreos bore an interest of 8.2% per annum.
In September 2022, ProQR extinguished its debt with Pontifax and Kreos by repaying all outstanding principal
amounts. In addition, an early repayment penalty was incurred. The financial liability relating to Pontifax’
conversion options was derecognized from derivative financial instruments. The option premium on
convertible loans relating to Kreos’ conversion options was derecognized from equity. The results related to
the derecognition of these financial liabilities are disclosed in the table further below in this note.
Pontifax’ and Kreos’ warrants remain in place until their five-year economic life expires. These warrants are
accounted for as embedded derivatives and were recognized separately from the host contract as derivative
financial liabilities at fair value through profit or loss.
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Financial Statements 2023
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Convertible loans: Amylon
Convertible loans amounting to € 2.3 million were issued to Amylon Therapeutics B.V. in 2018 and 2019 and
were interest-bearing at an average rate of 8% per annum. In 2022 and 2023, Amylon entered into waiver
agreements with its lenders. Such lenders’ loan agreements with Amylon are severed and any claims to
repayment of any outstanding debt and accumulated interest are renounced. The total amount of convertible
loans and accumulated interest waived under these agreements in 2023 is € 1,866,000 (2022: € 1,144,000).
The resulting gains are recognized as a gain on derecognition of financial liabilities.
In the third quarter of 2023, Amylon was legally dissolved. The effect of the resulting derecognition of
Amylon’s remaining assets and liabilities is included in profit and loss as ‘result on derecognition of
subsidiary’.
The results related to the derecognition of financial liabilities, as described above, are as follows:
dsssds
Gain on waiver of Amylon convertible loans
Loss on extinguishment of Pontifax and Kreos convertible loans
2023
€ 1,000
1,866
-
1,866
2022
€ 1,000
1,144
(2,534)
(1,390)
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Reconciliation of movements of liabilities to cash flows arising from financing activities:
dsssds
Balance at January 1, 2022
Changes from financing cash flows
Repayment of convertible loans
Repayment of lease liability
The effect of changes in foreign exchange rates
Other changes
Interest expense
Interest paid
Transaction costs
Repayments allocated to option premium on convertible loans
(equity)
Repayments recognized as result on derecognition of financial
liabilities
Effect of waived loan agreements
Effect of lease amendments
Balance at January 1, 2023
Changes from financing cash flows
Repayments
The effect of changes in foreign exchange rates
Other changes
Interest expense
Interest paid
Effect of waived loan agreements
Effect of lease amendments
Innovation
credit
Convertible
loans
Lease
liabilities
€ 1,000
4,552
€ 1,000
39,538
€ 1,000
16,282
—
—
—
391
—
—
—
—
—
—
(43,372)
—
—
(1,674)
—
—
—
—
—
—
1,771
3,537
(2,612)
94
1,482
2,534
(1,144)
—
592
4,943
1,828
15,200
(1,008)
—
357
—
—
—
—
—
38
—
(1,621)
—
—
—
(1,866)
—
1,863
Balance at December 31, 2023
4,292
—
15,442
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PROQR THERAPEUTICS ANNUAL REPORT 2023
15. Deferred Income
The following table summarizes details of deferred income at December 31, 2023 and December 31, 2022.
The nature of the deferred income relating to Eli Lilly is described in Note 17.
dsssds
Eli Lilly up-front payment and premium on equity consideration
Total deferred income
Current portion
Total non-current deferred income
December 31,
2023
December 31,
2022
€ 1,000
€ 1,000
64,739
64,739
(20,569)
44,170
71,209
71,209
(5,641)
65,568
The current portion of deferred income reflects the estimated value of the Company’s work under the Lilly
collaboration that is expected to be performed within one year after the balance sheet date.
The table below analyzes ProQR’s undiscounted deferred income into relevant maturity groupings based on
the remaining period at year-end until the contractual maturity date:
At December 31, 2022
Deferred income
Total
At December 31, 2023
Deferred income
Total
Less than
1 year
Between
1 and 2 years
Between
2 and 5 years
€ 1,000
€ 1,000
€ 1,000
Over
5 years
€ 1,000
20,569
20,569
27,950
27,950
16,220
16,220
5,641
5,641
17,817
17,817
47,751
47,751
—
—
—
—
16. Other Current Liabilities
At December 31, 2023, other current liabilities amount to € 8,509,000 (December 31, 2022: € 8,687,000). At
December 31, 2023 and December 31, 2022, other current liabilities consisted principally of accruals for
services provided by vendors not yet billed, payroll related accruals and other miscellaneous liabilities.
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Financial Statements 2023
PROQR THERAPEUTICS ANNUAL REPORT 2023
17. Revenue
The following table summarizes details of revenue recognized in the years ended December 31, 2023 and
2022 by collaboration agreement and by category of revenue: upfront payments, other research and
development service fees and equity consideration.
dsssds
Up-front payments
Eli Lilly
Yarrow
Other R&D services
Eli Lilly
Yarrow
Equity consideration
Eli Lilly
Yarrow
2023
€ 1,000
2022
€ 1,000
5,996
—
—
—
518
—
6,514
2,646
191
270
118
321
48
3,594
The table below summarizes the changes in current and non-current deferred revenue for the years ended
December 31, 2023 and 2022.
dsssds
Balance on January 1, 2022
Received or receivable
Upfront payment
Other R&D services
Equity consideration
Revenue recognition
Upfront payment
Other R&D services
Equity consideration
Foreign currency translation effects
Balance on December 31, 2022
Received or receivable
Upfront payment
Equity consideration
Revenue recognition
Upfront payment
Equity consideration
Foreign currency translation effects
Balance on December 31, 2023
Eli Lilly
€ 1,000
18,262
56,412
273
(451)
(2,646)
(270)
(321)
(50)
71,209
—
—
(5,996)
(518)
44
64,739
Yarrow
€ 1,000
73
—
256
—
(191)
(118)
(48)
28
—
—
—
—
—
—
—
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Financial Statements 2023
PROQR THERAPEUTICS ANNUAL REPORT 2023
Eli Lilly collaboration
In September 2021, the Company entered into a global licensing and research collaboration with Lilly focused
on the discovery, development, and commercialization of potential new medicines for genetic disorders in
the liver and nervous system. ProQR and Lilly will use ProQR’s proprietary Axiomer RNA editing platform to
progress new drug targets toward clinical development and commercialization.
Under the terms of the agreement, ProQR received an upfront payment and equity consideration, and is
eligible to receive milestone payments and royalties on the net sales of any resulting products. In September
2021, the Company issued 3,989,976 shares to Lilly, resulting in gross proceeds of $ 30,000,000
(€ 25,270,000). These shares were issued at a premium of $ 2,429,000 (€ 2,047,000), which was determined to
be part of the transaction price and as such was initially recognized as deferred revenue. An up-front
payment of $ 20,000,000 (€ 16,849,000) was received in October 2021.
With regard to its original collaboration with Lilly, the Company concluded as follows:
•
•
There is one performance obligation under IFRS 15, which is the transfer of a license combined with the
performance of research and development activities. The Company concluded that the license is not
capable of being distinct and is not distinct in the context of the contract.
The transaction price of this agreement currently only includes fixed components, consisting of an up-
front fee and an equity component. The agreement also contains variable components, but those are
not yet included in the transaction price. Milestone payments will only be included to the extent that it is
highly probable that a significant reversal in the amount of cumulative revenue recognized will not
occur when the uncertainty associated with the milestones is subsequently resolved. Sales-based
milestones and sales-based royalties will be included as the underlying sales occur.
•
The Company recognizes revenue over time, using an input method that estimates the satisfaction of
the performance obligation as the percentage of labor hours incurred compared to the total estimated
labor hours required to complete the promised services.
In December 2022, the Company and Lilly amended their research and collaboration agreement described
above, which expanded the collaboration. Under the amended and restated research and collaboration
agreement, Lilly will gain access to additional targets in the central nervous system and peripheral nervous
system with ProQR’s Axiomer platform.
As described under Note 13, pursuant to the amended and restated agreement, the Company issued
9,381,586 shares to Lilly in December 2022, resulting in gross proceeds of $ 15,000,000 (€ 14,122,000). These
shares were issued at a discount of $ 480,000 (€ 451,000), which is accounted for as a reduction of the
transaction price. In February 2023, ProQR also received an upfront payment of $ 60,000,000 (€ 56,412,000).
Lilly has the ability to exercise an option to further expand the partnership for a consideration of
$ 50,000,000.
With regard to the amended and restated research and collaboration agreement with Lilly, the Company
concluded as follows:
•
•
There is one performance obligation under IFRS 15, which is the transfer of a license combined with the
performance of research and development activities. The Company concluded that the license is not
capable of being distinct and is not distinct in the context of the contract.
The transaction price of this agreement currently only includes fixed components, consisting of an up-
front fee and an equity component (discount). The agreement also contains variable components, but
those are not yet included in the transaction price. Milestone payments will only be included to the
extent that it is highly probable that a significant reversal in the amount of cumulative revenue
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Financial Statements 2023
PROQR THERAPEUTICS ANNUAL REPORT 2023
recognized will not occur when the uncertainty associated with the milestones is subsequently resolved.
Sales-based milestones and sales-based royalties will be included as the underlying sales occur.
•
The Company recognizes revenue over time, using an input method that estimates the satisfaction of
the performance obligation as the percentage of labor hours incurred compared to the total estimated
labor hours required to complete the promised services.
Yarrow Biotechnology collaboration
In May 2021, the Company entered into an exclusive worldwide license and discovery collaboration for an
undisclosed target with Yarrow. Under the terms of the agreement, ProQR received an upfront payment,
equity consideration and reimbursement for ongoing R&D services. ProQR was also eligible to receive
milestone payments and royalties on the net sales of any resulting products. In May 2021, ProQR received an
up-front payment of € 419,000 and 8% of the shares of Yarrow’s common stock (see Note 8).
With regard to its collaboration with Yarrow, the Company concluded as follows:
•
•
There is one performance obligation under IFRS 15, which is the transfer of a license combined with the
performance of research and development activities. The Company concluded that the license is not
capable of being distinct and is not distinct in the context of the contract.
The transaction price of this agreement currently includes both fixed and variable components. The
fixed part consists of an up-front fee and an equity component. The variable part consists of a cost
reimbursement for research and development activities. The agreement also contains other variable
parts, but those are not yet included in the transaction price. Milestone payments will only be included
to the extent that it is highly probable that a significant reversal in the amount of cumulative revenue
recognized will not occur when the uncertainty associated with the milestones is subsequently resolved.
Sales-based milestones and sales-based royalties will be included as the underlying sales occur.
•
The Company recognizes revenue over time, using an input method that estimates the satisfaction of
the performance obligation as the percentage of labor hours incurred compared to the total estimated
labor hours required to complete the promised services.
The Yarrow collaboration was terminated in the third quarter of 2022.
18. Other income
dsssds
Net gain on divestment of intellectual property
Grant income
Other income
2023
€ 1,000
2,931
75
5
3,011
2022
€ 1,000
—
699
66
765
In 2023, ProQR completed the divestment of its late-stage ophthalmic intellectual property assets, sepofarsen
and ultevursen, to Théa. Under the terms of the agreement, ProQR received an initial payment of € 8,000,000.
The Company incurred costs directly associated to the transaction amounting to € 5,069,000. The net gain on
the divestment amounting to € 2,931,000 was recognized in other income. Costs directly associated to the
transaction include the partial repayment of grant income received from Foundation Fighting Blindness
(“FFB”) for the development of ultevursen (€ 1,117,000), financial advisory fees (€ 2,715,000), incentive
payments (€ 913,000), assignment and success fees (€ 260,000), and other costs (€ 64,000).
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Financial Statements 2023
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On February 9, 2018, the Company entered into a partnership agreement with FFB, under which FFB agreed
to provide funding of $ 7,500,000 for the preclinical and clinical development of ultevursen for Usher
syndrome type 2A targeting mutations in exon 13. FFB grant income amounted to € nil in 2023 compared to
€ 594,000 in 2022. Grant income in 2023 and 2022 further includes income from grants received from various
institutions.
19. Operating Costs
Total operating costs include the following expenses by nature.
dsssds
Employee benefits
External R&D costs
Laboratory costs and other consumables
Advisory and legal costs
Insurance costs
Depreciation
Patent and license expenses
Other
20. Employee Benefits
dsssds
Wages and salaries
Social security costs
Pension costs – defined contribution plans
Equity-settled share based payments
2023
€ 1,000
20,349
4,809
3,473
4,262
1,458
2,513
303
4,217
2022
€ 1,000
30,286
19,824
3,111
6,766
1,895
2,521
611
4,504
41,384
69,518
2023
€ 1,000
13,797
2,480
966
3,106
20,349
2022
€ 1,000
23,441
2,661
1,315
2,869
30,286
Average number of employees for the period
144
163
Employees per activity at December 31 (converted to FTE):
dsssds
Research and Development
General and Administrative
December 31,
2023
December 31,
2022
122.4
34.2
103.5
26.7
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Financial Statements 2023
PROQR THERAPEUTICS ANNUAL REPORT 2023
156.6
130.2
Of all employees 153.6 FTE are employed in the Netherlands (2022: 112.4 FTE).
Included in the wages and salaries for 2023 is a credit of € 1,170,000 (2022: € 792,000) with respect to WBSO
subsidies.
21. Financial Income and Financial Expense
dsssds
Interest income
Current accounts and deposits
Interest costs
Current accounts and deposits
Lease liability
Loans and borrowings
Foreign exchange result
Net foreign exchange benefit/(loss)
2023
€ 1,000
2022
€ 1,000
2,593
106
(31)
(774)
(398)
(406)
(793)
(3,928)
(255)
4,757
1,135
(264)
Financial income amounting to € 2,593,000 (2022: € 4,863,000) consists of interest income of € 2,593,000
(2022: € 106,000) and a net foreign exchange benefit of € 4,757,000 for the year ended December 31, 2022.
Financial expenses amounting to € 1,458,000 consist of interest costs of € 1,203,000 and net foreign
exchange costs of € 255,000. Financial expenses amounted to € 5,127,000 in 2022, and wholly consisted of
interest costs.
22. Results related to financial liabilities measured at fair value through profit or
loss
Results related to financial liabilities measured at fair value through profit or loss represent changes in the
fair value of derivative financial instruments since their initial recognition. These derivative financial
instruments consist of conversion options and warrants issued in connection with our convertible loans,
which are described in Note 14.
23. Income Taxes
The calculation of the tax charge is as follows:
dsssds
Consolidated result before corporate income taxes
Exclude: results related to associates
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Financial Statements 2023
PROQR THERAPEUTICS ANNUAL REPORT 2023
2023
€ 1,000
(27,813)
—
2022
€ 1,000
(64,108)
(8)
(27,813)
(64,100)
Income tax provision based on domestic rate (25.8%)
7,176
16,538
Tax effect of:
Different tax rates in foreign jurisdictions
Non-taxable gains / (Non-deductible expenses)
Current year losses for which no deferred tax asset was recognized
Change in unrecognized deductible temporary differences
True-up for prior year
Income tax charge
Effective tax rate
(8)
(289)
(6,820)
(67)
86
78
0%
10
133
(16,649)
(75)
(53)
(96)
0%
The Company recognizes deferred tax assets arising from unused tax losses, deductible temporary
differences or tax credits only to the extent that the Company has sufficient taxable temporary differences or
there is convincing evidence that sufficient taxable profit will be available against which the unused tax losses
or unused tax credits can be utilized. Management’s judgment is that such convincing evidence is currently
not sufficiently available and a deferred tax asset is therefore only recognized to the extent that the Company
has sufficient taxable temporary differences. Consequently, the Company has not recognized a deferred tax
asset related to operating losses.
A deferred tax liability amounting to € 3,747,000 (2022: € 3,737,000) arises due to a taxable temporary
difference associated with the Company’s right-of-use asset for the lease of its Leiden headquarters. A
deferred tax asset amounting to € 3,984,000 (2022: € 3,922,000) arises due to a deductible temporary
difference associated with the corresponding lease liability. As these deferred tax positions relate to income
taxes levied by the same taxation authority (namely that of the Netherlands), and there is a legally
enforceable right to offset current tax assets against current tax liabilities, and the Company intends to settle
its current tax assets and liabilities on a net basis, the deferred tax asset associated with the lease liability is
offset against the deferred tax liability associated with the right-of-use asset. The remaining balance of the
deferred tax asset is not recognized, as it is Management’s judgment that there is no sufficient convincing
evidence that sufficient taxable profit will be available against which the unused tax losses or unused tax
credits can be utilized.
As per December 31, 2023, the Company has a total amount of € 402.3 million (2022: € 376.9 million) tax loss
carry-forwards available for offset against future taxable profits, which may be carried forward indefinitely.
However, the offset of losses will be limited in a given year against the first € 1 million of taxable profit. For
taxable profit in excess of this amount, losses may only be offset up to 50% of this excess.
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Financial Statements 2023
PROQR THERAPEUTICS ANNUAL REPORT 2023
24. Earnings Per Share
(a) Basic and diluted earnings per share
Basic earnings per share are calculated by dividing the result attributable to equity holders of the Company
by the weighted average number of shares outstanding during the year.
dsssds
Result attributable to owners of the Company (€ 1,000)
Weighted average number of shares outstanding
Basic (and diluted) earnings per share (€ per share)
2023
2022
(28,119)
(64,424)
81,011,438
71,641,305
(0.35)
(0.90)
(b) Diluted earnings per share
For the periods included in these financial statements, the share options are not included in the diluted
earnings per share calculation as the Company was loss-making in all periods. Due to the anti-dilutive nature
of the outstanding options, basic and diluted earnings per share are equal.
(c) Dividends per share
The Company did not declare dividends for any of the years presented in these financial statements.
25. Leases
The Company leases office and laboratory facilities of 4,818 square meters at Zernikedreef in Leiden, the
Netherlands, where our headquarters and our laboratories are located. The current lease agreement for
these facilities terminates on June 30, 2031. The lease agreement contains no significant dismantling
requirements.
The initial 10-year lease agreement for the Leiden office and laboratory facilities was accounted for as of
commencement date July 1, 2020. This 10-year period was extended by 1 year to an 11-year period in
December 2020. The lease contract may be extended for subsequent 5-year periods. As the Company is not
reasonably certain to exercise these extension options, these are not included in the lease term.
The initially recognized lease liability and the corresponding right-of-use asset for this lease contract, on July
1, 2020, amounted to € 16,203,000 and € 16,332,000, respectively. A modification to reflect the additional 1
year lease period resulted in an increase in the carrying amounts of the lease liability and the right-of-use
asset in 2020 of € 1,260,000.
Annually in June, the lease price is amended to reflect an indexation. In June 2023, the lease liability was
remeasured, resulting in an increase in the carrying amounts of the lease liability and the right-of-use asset of
€ 1,863,000 (2022: € 592,000).
The following table summarizes the relevant disclosures in relation to our leases in 2023 and 2022:
dsssds
Depreciation charge for right-of-use asset
Interest expense on lease liability
Expense relating to short-term leases
Total cash outflow for leases
Additions to right-of-use assets during the period
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Financial Statements 2023
PROQR THERAPEUTICS ANNUAL REPORT 2023
2023
€ 1,000
1,833
774
28
2,423
1,863
2022
€ 1,000
1,737
793
94
2,701
592
The carrying amount of the right-of-use asset at the end of the reporting period is disclosed in Note 7
Property, Plant & Equipment.
A maturity analysis of our lease liability is included in Note 5 Financial Risk Management under (c) Liquidity
risk. The total undiscounted commitment for lease agreements to which the Company had committed at
December 31, 2023 amounts to € 18,511,000 (2022: € 18,646,000). This amount does not include potential
commitments that may arise from contractual extension options, as the Company is not reasonably certain
that any extension options will be exercised.
26. Commitments and Contingencies
(a) Claims
There are no claims known to management related to the activities of the Company.
(b) Patent license agreements
On October 29, 2018, ProQR signed an agreement with Ionis Pharmaceuticals (“Ionis”) to license QR-1123
(formerly “IONIS-RHO-2.5Rx”), an RNA medicine for autosomal dominant retinitis pigmentosa (“adRP”) caused
by the P23H mutation in the rhodopsin (“RHO”) gene. Under the terms of the agreement, ProQR was granted
an exclusive worldwide license to QR-1123 and relevant patents. In 2018, ProQR paid the first installment of
an upfront payment in ordinary shares in the aggregate amount of $ 2,500,000 at $ 22.23 per share, which
represents a 20% premium (based on the volume weighted average price of the previous 20 trading days) to
its common stock, to Ionis upon signing the agreement. In 2019, ProQR paid the second installment of the
upfront payment in ordinary shares in the aggregate amount of $ 3,501,000, at $ 9.43 per share. This license
agreement was terminated effective January 2024.
In April 2014, the Company entered into a Patent License Agreement with Radboud University Medical Center
(“Radboud”) in the field of antisense oligonucleotide-based therapy for Leber congenital amaurosis (“LCA”).
Under the terms of this license agreement, the Company has an exclusive, sublicensable, world-wide royalty-
bearing license under certain Radboud patent rights to develop, make, have made, use, sell, offer for sale and
import certain licensed products of Radboud for use in all prophylactic and therapeutic uses in the field of
LCA. This license is assigned in full per December 2023 as part of the divestment of the product sepofarsen.
In June 2015, the Company entered into another license agreement with Radboud. Under the terms of this
license agreement, the Company has an exclusive, sublicensable, world-wide royalty-bearing license under
certain Radboud patent rights to develop, make, have made, use, sell, offer for sale and import certain
licensed products of Radboud for use in all prophylactic and therapeutic uses in the field of Usher syndrome.
This license was assigned in full per December 2023 as part of the divestment of the product ultevursen.
In January 2018, the Company entered into a license agreement with Inserm Transfert SA and Assistance-
Publique-Hôpiteaux de Paris. Under the terms of the agreement, the Company has a world-wide, exclusive,
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Financial Statements 2023
PROQR THERAPEUTICS ANNUAL REPORT 2023
royalty-bearing license under patent rights belonging to Inserm Transfert SA and other co-owners to develop,
have developed, make, have made, use, have used and sell, have sold or otherwise distribute certain licensed
products related to antisense oligonucleotides for treating LCA and method of treatment claims relating to
modulation of the splicing of the CEP290 gene product. This license agreement is assigned per December
2023 in connection with the sale of the ophthalmology products, sepofarsen and ultevursen. In consideration
for the assignment, the Company has agreed to accept certain royalty obligations upon sepofarsen reaching
certain regulatory milestones and net sales of products sold.
In January 2017, the Company entered into an agreement with the Leiden University Medical Center (“LUMC”),
which gives us a world-wide, exclusive, royalty-bearing license in the field of Huntington’s disease, under
certain patent rights of LUMC regarding antisense oligonucleotide based therapies. This license agreement
contains certain diligence obligations for the Company coupled to milestone payments and complements the
Company’s intellectual property relating to the HD program. This license was terminated per July 2023.
In February 2019, the Company entered into an agreement with the University of Rochester, New York, which
gives us a world-wide, exclusive, royalty-bearing, sublicensable license in the field of antisense
oligonucleotides for use in nucleotide specific RNA editing through pseudouridylation, under certain patent
rights of University of Rochester. This license agreement contains certain diligence obligations for the
Company coupled to milestone payments and complements the Company’s intellectual property relating to
the Axiomer/pseudouridylation program.
In September 2020, the Company entered into an agreement with Vico Therapeutics B.V., which gives us a
world-wide, exclusive, royalty-bearing, sublicensable license in the field of the prophylactic and therapeutic
use of antisense oligonucleotide for the treatment of Fuch’s Endothelial Corneal Dystrophy caused by a
trinucleotide repeat, under certain patent rights of Vico Therapeutics B.V. In partial consideration of the rights
and licenses granted by the license agreement, the Company is required to make annual maintenance
payments. Unless terminated earlier in accordance with the terms of the license agreement, the agreement
will stay in effect until the expiration of all of the licensed patent rights. The license agreement may be
terminated by either party in the event of an uncured breach by the breaching party. Vico Therapeutics B.V.
may terminate the license agreement if the Company applies for an order or an order is made declaring the
Company bankrupt or granting the Company suspension of payments, or a liquidator is appointed for the
Company, or the Company is dissolved, liquidated, or ceases to carry on all or a substantial part of its
business or a decision is taken to that effect, or in the event uncured payment defaults. The development of
this candidate has been suspended per the strategic shift in focus as announced in August 2022.
(c) Clinical support agreements
On February 9, 2018, the Company entered into an agreement with FFB, under which FFB has provided
funding of $ 6.8 million (€ 6.3 million) to advance ultevursen into the clinic.
Pursuant to the terms of the agreement, we were obligated to make certain repayments to FFB subject to
development milestones. In December 2023, upon the occurrence of the sale of ultevursen to Théa, these
payables were settled by means of a lump-sum payment in the amount of € 1.1 million and a percentage of
earn-out payments for milestones and sales to be received by us from Théa, ranging from 5-10%.
(d) Research and development commitments
The Company has research and development commitments, mainly with CRO’s, amounting to € 8,893,000 at
December 31, 2023 (2022: € 8,030,000). Of these obligations an amount of € 7,162,000 is due in 2024, the
remainder is due in 2 to 5 years.
PAGE 81 / 101
Financial Statements 2023
PROQR THERAPEUTICS ANNUAL REPORT 2023
27. Related-Party Transactions
Details of transactions between the Company and related parties are disclosed below.
(a) Compensation of the Supervisory Board
The remuneration of the Supervisory Board members in 2023 is set out in the table below:
dsssds
2023
Mr. Dinko Valerio
Mr. Antoine Papiernik*
Ms. Alison F. Lawton
Mr. James Shannon
Mr. Bart Filius
Ms. Begoña Carreño**
Ms. Theresa Heggie***
Short term
employee
benefits
Post
employment
benefits
Share-based
payment
Total
€ 1,000
€ 1,000
€ 1,000
€ 1,000
74
—
50
56
49
50
30
309
—
—
—
—
—
—
—
—
76
—
76
76
78
34
241
581
150
—
126
132
127
84
271
890
* Mr. Papiernik stepped down from the supervisory board on May 18, 2023.
** Ms. Carreño was elected to the supervisory board on May 18, 2023. The remuneration set forth for Ms.
Carreño in the table above covers the period from May 18, 2023 to December 31, 2023.
*** Ms. Heggie was elected to the supervisory board on May 18, 2023. The remuneration set forth for Ms.
Heggie in the table above covers the period from May 18, 2023 to December 31, 2023. Ms. Heggie’s share-
based payments include the effects of options and RSUs that were granted to her before her reappointment
to the supervisory board on May 18, 2023.
The remuneration of the Supervisory Board members in 2022 is set out in the table below:
dsssds
2022
Mr. Dinko Valerio
Mr. Antoine Papiernik
Ms. Alison F. Lawton
Mr. James Shannon
Mr. Bart Filius
Short term
employee
benefits
Post
employment
benefits
Share-based
payment
Total
€ 1,000
€ 1,000
€ 1,000
€ 1,000
74
—
52
59
49
234
—
—
—
—
—
—
104
—
104
104
104
416
178
—
156
163
153
650
In 2023 and 2022, Mr. Papiernik waived his compensation.
PAGE 82 / 101
Financial Statements 2023
PROQR THERAPEUTICS ANNUAL REPORT 2023
As at December 31, 2023:
• Mr. Dinko Valerio holds 725,692 ordinary shares in the Company, as well as 192,964 options. These
options either vest in four annual equal tranches of 25% starting for the first time as of the first
anniversary of the date of grant, or in thirteen tranches where the first tranche vests at the first
anniversary of the grant date, and the remaining options vest in twelve equal tranches of 6.25% each
subsequent quarter until the fourth anniversary of the grant date. In 2023, Mr. Valerio was awarded
22,608 options to acquire ordinary shares at an exercise price of $ 3.41 per option. In 2022, Mr. Valerio
was granted 23,931 options to acquire ordinary shares at an exercise price of $ 8.01 per option.
• Mr. Antoine Papiernik does not hold any shares or options in the Company. As a managing partner of
Sofinnova Partners SAS, the management company of Sofinnova Capital VII FCPR, holder of 2,764,194
ordinary shares, Mr. Papiernik may be deemed to have share voting and investment power with respect
to such shares.
• Ms. Alison F. Lawton holds 205,784 options. These options either vest in four annual equal tranches of
25% starting for the first time as of the first anniversary of the date of grant, or in thirteen tranches
where the first tranche vests at the first anniversary of the grant date, and the remaining options vest in
twelve equal tranches of 6.25% each subsequent quarter until the fourth anniversary of the grant date.
In 2023, Ms. Lawton was granted 22,608 options to acquire ordinary shares at an exercise price of $ 3.41
per option. In 2022, Ms. Lawton was granted 23,931 options to acquire ordinary shares at an exercise
price of $ 8.01 per option.
• Mr. James Shannon holds 61,538 ordinary shares in the Company and 202,044 options. These options
either vest in four annual equal tranches of 25% starting for the first time as of the first anniversary of
the date of grant, or in thirteen tranches where the first tranche vests at the first anniversary of the
grant date, and the remaining options vest in twelve equal tranches of 6.25% each subsequent quarter
until the fourth anniversary of the grant date. In 2023, Mr. Shannon was granted 22,608 options to
acquire ordinary shares at an exercise price of $ 3.41 per option. In 2022, Mr. Shannon was granted
23,931 options to acquire ordinary shares at an exercise price of $ 8.01 per option.
• Mr. Bart Filius holds 107,148 options. These options either vest in four annual equal tranches of 25%
starting for the first time as of the first anniversary of the date of grant, or in thirteen tranches where
the first tranche vests at the first anniversary of the grant date, and the remaining options vest in twelve
equal tranches of 6.25% each subsequent quarter until the fourth anniversary of the grant date. In 2023,
Mr. Filius was granted 22,608 options to acquire ordinary shares at an exercise price of $ 3.41 per
option. In 2022, Mr. Filius was granted 23,931 options to acquire ordinary shares at an exercise price of
$ 8.01 per option.
• Ms. Begoña Carreño holds 26,468 options. These options vest in thirteen tranches where the first
tranche vests at the first anniversary of the grant date, and the remaining options vest in twelve equal
tranches of 6.25% each subsequent quarter until the fourth anniversary of the grant date. In 2023, Ms.
Carreño was granted 22,903 options to acquire ordinary shares at an exercise price of $ 3.41 per option.
In 2022, Ms. Carreño was granted 3,565 options to acquire ordinary shares at an exercise price of $ 0.95
per option.
• Ms. Theresa Heggie holds 26,499 ordinary shares in the Company and 334,756 options. These options
either vest in four annual equal tranches of 25% starting for the first time as of the first anniversary of
the date of grant, or in thirteen tranches where the first tranche vests at the first anniversary of the
grant date, and the remaining options vest in twelve equal tranches of 6.25% each subsequent quarter
until the fourth anniversary of the grant date. In 2023, Ms. Heggie was granted 14,418 options to
acquire ordinary shares at an exercise price of $ 1.74 per option. In 2022, Ms. Heggie was granted
159,150 options to acquire ordinary shares at an average exercise price of $ 0.84 per option.
PAGE 83 / 101
Financial Statements 2023
PROQR THERAPEUTICS ANNUAL REPORT 2023
(b) Compensation of key management
Our management board is supported by our officers, or senior management. Mr. Daniel de Boer and Mr.
Rene Beukema are the statutory directors of the Company. The total remuneration of the management
board and senior management in 2023 amounted to € 5,508,000 with the details set out in the table below.
dsssds
2023
Mr. D.A. de Boer1
Mr. R.K. Beukema1
Management Board
Senior Management
Short term
employee
benefits
Post
employment
benefits
Share-based
payment
Total
€ 1,000
€ 1,000
€ 1,000
€ 1,000
1,167
892
2,059
1,145
3,204
27
23
50
52
102
1,245
395
1,640
562
2,202
2,439
1,310
3,749
1,759
5,508
Short term employee benefits include bonuses for Mr. Daniel de Boer of € 643,000 and for Mr. Rene Beukema of
1
€ 481,000 based on goals realized in 2023.
The total remuneration of the management board and senior management in 2022 amounted to € 7,536,000
with the details set out in the table below:
dsssds
2022
Mr. D.A. de Boer1
Mr. R.K. Beukema1
Management Board
Senior Management
Short term
employee
benefits
Post
employment
benefits
Share-based
payment
Total
€ 1,000
€ 1,000
€ 1,000
€ 1,000
1,295
284
1,579
3,980
5,559
24
10
34
123
157
1,145
169
1,314
506
1,820
2,464
463
2,927
4,609
7,536
1
Short term employee benefits include a bonus for Mr. Daniel de Boer of € 791,000 and for Mr. Rene Beukema of
€ 84,000 based on goals realized in 2022. The remuneration set forth for Mr. Beukema in the table above covers the period
from July 1, 2022 to December 31, 2022.
As at December 31, 2023:
• Mr. Daniel de Boer holds 705,309 ordinary shares in the Company as well as 4,011,888 options. These
options either vest in four annual equal tranches of 25% starting for the first time as of the first
anniversary of the date of grant, or in thirteen tranches where the first tranche vests at the first
anniversary of the grant date, and the remaining options vest in twelve equal tranches of 6.25% each
subsequent quarter until the fourth anniversary of the grant date. In 2023, Mr. de Boer was awarded
442,182 options at an exercise price of $ 3.41 per option. In 2022, Mr. de Boer was awarded 1,650,051
options to acquire ordinary shares at an average exercise price of $ 0.76 per option. These options had
PAGE 84 / 101
Financial Statements 2023
PROQR THERAPEUTICS ANNUAL REPORT 2023
a remaining weighted-average contractual life of 6.7 years as at December 31, 2023. At December 31,
2023, Mr. de Boer had not exercised any of the options that were awarded to him.
• Mr. Rene Beukema holds 460,000 ordinary shares in the Company as well as 1,363,318 options. These
options either vest in four annual equal tranches of 25% starting for the first time as of the first
anniversary of the date of grant, or in thirteen tranches where the first tranche vests at the first
anniversary of the grant date, and the remaining options vest in twelve equal tranches of 6.25% each
subsequent quarter until the fourth anniversary of the grant date. In 2023, Mr. Beukema was awarded
132,123 options to acquire ordinary shares at an exercise price of $ 3.41 per option. In 2022, Mr.
Beukema was awarded 1,000,000 options to acquire ordinary shares at an exercise price of $ 0.66 per
option. These options had a remaining weighted-average contractual life of 7.6 years as at December
31, 2023. In 2023 and 2022, Mr. Beukema did not exercise any of the options that were awarded to him.
ProQR does not grant any loans, advance payments and guarantees to members of the Management and
Supervisory Board.
(c) Transactions with Yarrow Biotechnology, Inc.
As described in Note 8. Investments in Associates, the Company, as of October 2023, no longer has significant
influence over Yarrow Biotechnology, Inc. Yarrow is therefore, no longer considered a related party as of that
point onwards. The Company did not have any transactions with Yarrow in the year ended December 31,
2023. Transactions with Yarrow for the year ended December 31, 2022 are described in Note 17. Revenue.
28. Subsequent events
No significant events occurred after the balance sheet date.
Company balance sheet at December 31, 2023
PAGE 85 / 101
Financial Statements 2023
PROQR THERAPEUTICS ANNUAL REPORT 2023
(Before appropriation of result)
dsssds
ASSETS
Non-current assets
Participating interests
Receivables from group companies
Other investments in financial assets
Current assets
Other taxes
Prepayments and other receivables
Cash and cash equivalents
TOTAL ASSETS
EQUITY
Shareholders' equity
Share capital
Share premium reserve
Equity settled employee benefits reserve
Translation reserve
Accumulated deficit
Unappropriated result
LIABILITIES
Provisions
Current liabilities
Derivative financial instruments at fair value through profit or loss
Payables to group companies
Trade payables
Social securities and other taxes
Other current liabilities
TOTAL LIABILITIES
TOTAL EQUITY AND LIABILITIES
Note
December 31,
2023
December 31,
2022 (revised)
€ 1,000
€ 1,000
31
32
33
34
35
36
37
38
--
52,617
--
52,617
523
308
112,580
113,411
--
39,020
621
39,641
606
631
86,139
87,376
166,028
127,017
3,370
412,894
25,159
817
3,370
412,540
29,052
1,212
(371,192)
(312,272)*
(29,658)
41,390
(65,298)*
68,604
50,648
41,881*
311
72,251
22
336
1,070
73,990
1,263
14,484
12
47
726
16,532
124,638
166,028
58,413
127,017
The accompanying notes are an integral part of these financial statements.
* Includes a retrospective adjustment as explained in Note 1 on pages 42 and 43.
PAGE 86 / 101
Financial Statements 2023
PROQR THERAPEUTICS ANNUAL REPORT 2023
Company income statement for the year ended December 31, 2023
dsssds
Note
2023
2022 (revised)
€ 1,000
€ 1,000
Share in results of participating interests, after taxation
31
Other result after taxation
Net result for the year
(26,418)
(3,240)
(59,572)*
(5,726)
(29,658)
(65,298)
The accompanying notes are an integral part of these financial statements.
* Includes a retrospective adjustment as explained in Note 1 on pages 42 and 43.
PAGE 87 / 101
Financial Statements 2023
PROQR THERAPEUTICS ANNUAL REPORT 2023
Notes to the Company financial statements for the year ended December 31,
2023
29. General
The company financial statements are part of the 2023 financial statements of ProQR Therapeutics N.V. (the
‘Company’) and have been prepared in accordance with the legal requirements of Part 9, Book 2 of the
Netherlands Civil Code.
With reference to the income statement of the company, use has been made of the exemption pursuant to
Section 402 of Book 2 of the Netherlands Civil Code.
For information on risk exposure and risk management, see Note 5 to the consolidated financial statements.
30. Principles for the measurement of assets and liabilities and the determination
of the result
For setting the principles for the recognition and measurement of assets and liabilities and determination of
the result for its company financial statements, the Company makes use of the option provided in section
2:362(8) of the Netherlands Civil Code. This means that the principles for the recognition and measurement
of assets and liabilities and determination of the result (hereinafter referred to as principles for recognition
and measurement) of the company financial statements of the Company are the same as those applied for
the consolidated IFRS financial statements. See page 45 for a description of these principles.
Participating interests in group companies
Participating interests in group companies are valued using the equity method, applying the IFRS accounting
policies endorsed by the European Union. Following the adoption of IFRS 9 by the Company, and our
interpretation of the Dutch Accounting Standard 100.107A, the Company shall, upon identification of a credit
loss on an intercompany loan and/or receivable, eliminate the carrying amount of the intercompany loan
and/or receivable for the value of the identified credit loss.
Result of participating interests
The share in the result of participating interests consists of the share of the Company in the result of these
participating interests. Insofar as gains or losses on transactions involving the transfer of assets and liabilities
between the Company and its participating interests or between participating interests themselves can be
considered unrealized, they have not been recognised.
Provisions
Participating interests with a negative net asset value are valued at nil. This measurement also covers any
receivables provided to the participating interests that are, in substance, an extension of the net investment.
In particular, this relates to loans for which settlement is neither planned nor likely to occur in the
foreseeable future. A share in the profits of the participating interest in subsequent years will only be
recognised if and to the extent that the cumulative unrecognised share of loss has been absorbed. If the
Company fully or partially guarantees the debts of the relevant participating interest, or if has the
constructive obligation to enable the participating interest to pay its debts (for its share therein), then a
provision is recognised accordingly to the amount of the estimated payments by the Company on behalf of
the participating interest.
PAGE 88 / 101
Financial Statements 2023
PROQR THERAPEUTICS ANNUAL REPORT 2023
Corporate income taxes
ProQR Therapeutics N.V. is the head of the Dutch fiscal unity for corporate income taxes. The Company
recognizes the portion of corporate income tax that it would owe as an independent taxpayer, taking into
account the allocation of the advantages of the fiscal unity.
31. Participating interests
dsssds
Participating interests
December 31,
2023
December 31,
2022
€ 1,000
€ 1,000
--
--
--
--
At December 31, 2023, the Company, having its statutory seat in Leiden, the Netherlands, is the ultimate
parent company of the following consolidated participating interests:
Name
ProQR Therapeutics Holding B.V.
ProQR Therapeutics I B.V.
ProQR Therapeutics II B.V.
ProQR Therapeutics III B.V.
ProQR Therapeutics IV B.V.
ProQR Therapeutics V B.V.
ProQR Therapeutics VI B.V.
ProQR Therapeutics VII B.V.
ProQR Therapeutics VIII B.V.
ProQR Therapeutics IX B.V.
ProQR Therapeutics I Inc.
Location
Share in issued capital
Leiden, the Netherlands
Leiden, the Netherlands
Leiden, the Netherlands
Leiden, the Netherlands
Leiden, the Netherlands
Leiden, the Netherlands
Leiden, the Netherlands
Leiden, the Netherlands
Leiden, the Netherlands
Leiden, the Netherlands
Delaware, United States
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
ProQR Therapeutics Holding B.V. is an intermediate holding company and the only subsidiary owned directly
by ProQR Therapeutics N.V.
ProQR Therapeutics N.V. is also statutory director of Stichting Bewaarneming Aandelen ProQR (“ESOP
Foundation”). For details on accounts receivable from group companies and other receivables, reference is
made to notes 32 and 34.
32. Receivables from group companies
dsssds
Non-current receivables from group companies
December 31,
2023
December 31,
2022
€ 1,000
€ 1,000
52,617
52,617
39,020
39,020
33. Other Taxes
dsssds
Value added tax
All receivables are considered short-term and due within one year.
34. Prepayments and Other Receivables
dsssds
Prepayments
Other receivables
All receivables are considered short-term and due within one year.
35. Cash and Cash Equivalents
dsssds
Cash at banks
Deposits
PAGE 89 / 101
Financial Statements 2023
PROQR THERAPEUTICS ANNUAL REPORT 2023
December 31,
2023
December 31,
2022
€ 1,000
€ 1,000
523
523
606
606
December 31,
2023
December 31,
2022
€ 1,000
€ 1,000
63
245
308
577
54
631
December 31,
2023
December 31,
2022
€ 1,000
€ 1,000
53,430
59,150
112,580
86,139
--
86,139
The cash at banks is at full disposal of the Company. Deposits are fixed for at most 3 month periods at a time.
PAGE 90 / 101
Financial Statements 2023
PROQR THERAPEUTICS ANNUAL REPORT 2023
36. Shareholders’ equity
Share
Capital
Share
Premium
Equity
Settled
Employee
Benefit
Reserve
Option
premium
on
convertible
loan
Trans-
lation
Reserve
Accumu-
lated
Deficit
Unappro
-priated
result
Total
Equity
€ 1,000
€ 1,000
€ 1,000
€ 1,000
€ 1,000
€ 1,000
€ 1,000
€ 1,000
2,995
398,309
28,443
1,426
430
(253,739)
(60,737)
117,127
Balance at
January 1, 2022
Retained result
Foreign exchange
differences
Recognition of share-
based payments
Issue of ordinary
shares
Equity component
convertible loan
Share options lapsed
Share options
exercised
Result for the year
Balance at
December 31, 2022
Retained result
Other comprehensive
loss
Recognition of share-
based payments
Share options lapsed
Share options
exercised
Result for the year
--
--
--
--
--
--
375
14,197
--
--
--
--
--
--
34
--
--
--
2,869
--
--
(1,817)
(443)
--
3,370
412,540
29,052
--
--
--
--
--
--
--
--
--
--
--
--
3,106
(6,280)
354
(719)
--
--
Balance at
December 31, 2023
3,370
412,894
25,159
--
--
--
--
(1,426)
--
--
--
--
--
--
--
--
--
--
--
--
(60,737)
60,737
--
782
--
--
--
--
--
--
--
--
--
(56)
1,817
443
--
--
--
--
--
--
782
2,869
14,572
(1,482)
--
34
--
(65,298)
(65,298)
1,212
(312,272)
(65,298)
68,604
--
(65,298)
65,298
--
(395)
(621)
--
(1,016)
--
--
--
--
--
6,280
--
--
3,106
--
719
--
354
--
(29,658)
(29,658)
817
(371,192)
(29,658)
41,390
The 2022 result was added to the accumulated deficit in accordance with the resolution of the Annual
General Meeting of shareholders. At the upcoming Annual General Meeting of shareholders, it will be
proposed to add the 2023 result to the accumulated deficit. For more details we refer to Note 13 to the
consolidated financial statements.
PAGE 91 / 101
Financial Statements 2023
PROQR THERAPEUTICS ANNUAL REPORT 2023
Reconciliation of shareholders’ equity and net result per the consolidated financial
statements with shareholders’ equity and net result per the company financial
statements
dsssds
Shareholders’ equity according to the consolidated balance sheet
Share in results of participating interests with negative equity for which no
provision is recognized
December 31,
2023
December 31,
2022
€ 1,000
€ 1,000
41,390
--
66,681
1,923
Shareholders’ equity according to the company balance sheet
41,390
68,604
dsssds
Net result according to the consolidated profit and loss account
Effect of results of participating interests with negative equity for which no
provision is recognized
December 31,
2023
December 31,
2022
€ 1,000
€ 1,000
(27,735)
(1,923)
(64,204)
(1,094)
Net result according to the company profit and loss account
(29,658)
(65,298)
37. Provisions
dsssds
Provision for negative equity group company
Balance at January 1
Provisions made during the year
Balance at December 31
2023
€ 1,000
41,881
8,767
50,648
2022
€ 1,000
35,569
6,312
41,881
PAGE 92 / 101
Financial Statements 2023
PROQR THERAPEUTICS ANNUAL REPORT 2023
38. Payables to group companies
dsssds
Payables to group companies
39. Employee benefits
December 31,
2023
December 31,
2022
€ 1,000
€ 1,000
72,251
72,251
14,484
14,484
ProQR Therapeutics N.V. has two employees: Daniel de Boer and Rene Beukema. The disclosure of their
remuneration is included in Note 27 to the consolidated financial statements.
40. Commitments and Contingencies
(a) Claims
There are no claims known to management related to the activities of the Company.
(b) Several liability and guarantees
The Company has issued declarations of joint and several liabilities for debts arising from the actions of
Dutch consolidated participating interests, as meant in article 2:403 of the Netherlands Civil Code.
The Company constitutes a tax entity with its Dutch subsidiaries for corporate income tax purposes; the
standard conditions prescribe that all companies of the tax entity are jointly and severally liable for the
corporate income tax payable.
41. Auditor fees
The fees for services provided by our external auditor, KPMG Accountants N.V. for the years ended December
31, 2023 and 2022 are specified below for each of the financial years indicated:
dsssds
Audit fees
Audit-related fees
Tax fees
All other fees
2023
€ 1,000
2022
€ 1,000
588
--
--
--
588
512
32
--
--
544
Audit fees consist of aggregate fees for professional services provided in connection with the annual audit of
our financial statements. Audit-related fees consist of procedures relating to share offerings, such as comfort
letters, as well as consents and review of documents filed with the SEC.
PAGE 93 / 101
Financial Statements 2023
PROQR THERAPEUTICS ANNUAL REPORT 2023
Signing of the Annual Report
Leiden, March 13, 2024,
D.A. de Boer
D. Valerio
R.K. Beukema
A.F. Lawton
J.S.S. Shannon
B. Filius
T. Heggie
B. Carreño
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Other information
Independent auditor’s report
Reference is made to the independent auditor’s report as included hereinafter.
Statutory arrangement concerning the appropriation of the result
In the Company’s articles of association the following has been presented concerning the appropriation of
result:
1.
2.
The profit is at the free disposal of the General Meeting of Shareholders.
The Company may only distribute profits to shareholders and other recipients to distributable profits to
the extent that the equity exceeds the paid up capital plus the reserves required by law.
3. Distribution of profits shall take place after adoption of the annual accounts from which it becomes
clear that distribution is permissible.
4. When calculating the distribution of profits shares held by the Company shall be disregarded, unless
this shares has been encumbered with usufruct or right of pledge or certificates thereof are issued as a
result of which the entitlement to profits accrue to the usufructuary, pledgee or holder of the
certificates.
5.
Certificates held by the Company or whereon the Company holds limited rights as a result of which the
Company is entitled to distribution of profits shall also be disregarded when calculating the distribution
of profits.
6.
The Company may make interim distributions, only if the requirements in paragraph 2 are met.
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Independent auditor’s report
To the General Meeting of Shareholders and the Supervisory Board of ProQR Therapeutics N.V.
REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS 2023 INCLUDED IN THE ANNUAL
REPORT
Our opinion
In our opinion:
•
the accompanying consolidated financial statements give a true and fair view of the financial position of
ProQR Therapeutics N.V. as at December 31, 2023 and of its result and its cash flows for the year then
ended, in accordance with IFRS Accounting Standards as endorsed by the European Union (“EU-IFRS”)
and with Part 9 of Book 2 of the Dutch Civil Code.
•
the accompanying company financial statements give a true and fair view of the financial position of
ProQR Therapeutics N.V. as at December 31, 2023 and of its result for the year then ended, in
accordance with Part 9 of Book 2 of the Dutch Civil Code.
What we have audited
We have audited the financial statements 2023 of ProQR Therapeutics N.V. (the “Company”) based in Leiden,
the Netherlands. The financial statements comprise the consolidated financial statements and the company
financial statements.
The consolidated financial statements comprise:
1.
2.
3.
the consolidated statement of financial position as at December 31, 2023;
the following consolidated statements for 2023: the statements of profit or loss and comprehensive
income, changes in equity, and cash flows; and
the notes comprising a summary of the significant accounting policies and other explanatory
information.
The company financial statements comprise:
1.
2.
3.
the company balance sheet as at December 31, 2023;
the company income statement for the year ended December 31, 2023; and
the notes comprising a summary of the accounting policies and other explanatory information.
Basis for our opinion
We conducted our audit in accordance with Dutch law, including the Dutch Standards on Auditing. Our
responsibilities under those standards are further described in the ‘Our responsibilities for the audit of the
financial statements’ section of our report.
We are independent of ProQR Therapeutics N.V. in accordance with the ‘Wet toezicht
accountantsorganisaties’ (“Wta, Audit firms supervision act”), the 'Verordening inzake de onafhankelijkheid
van accountants bij assurance-opdrachten' (“ViO, Code of Ethics for Professional Accountants, a regulation
with respect to independence”) and other relevant independence regulations in the Netherlands.
Furthermore, we have complied with the 'Verordening gedrags- en beroepsregels accountants' (“VGBA, Dutch
Code of Ethics”).
We designed our audit procedures in the context of our audit of the financial statements as a whole and in
forming our opinion thereon. The information in respect of going concern, fraud and non-compliance with
laws and regulations and the key audit matter was addressed in this context, and we do not provide a
separate opinion or conclusion on these matters.
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We believe the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
Information in support of our opinion
Summary
Materiality
• Materiality of EUR 1.2 million
•
4% of result before corporate income taxes
Group audit
•
•
Audit coverage of 100% of result before corporate income taxes
Audit coverage of 100% of total operating costs
Risk of material misstatements related to Fraud, NOCLAR and Going Concern
•
Fraud & Non-compliance with laws and regulations (Noclar) related risks: presumed risk of fraud
identified with respect to management override of controls
•
Going concern related risks: no significant going concern risks identified
Key audit matters
•
Accounting for research and development costs
Materiality
Based on our professional judgement we determined the materiality for the financial statements as a whole
at EUR 1.2 million (2022: EUR 2 million). The materiality is determined with reference to result before
corporate income taxes (4%). We consider the result before corporate income taxes as the most appropriate
benchmark because this best reflects the nature of the entity being in the pre-clinical phase, including both
operating costs as well as revenue from collaboration agreements. We have also taken into account
misstatements and/or possible misstatements that in our opinion are material for the users of the financial
statements for qualitative reasons.
We agreed with the Audit Committee of the Supervisory Board that misstatements identified during our audit
in excess of EUR 55,000 would be reported to them, as well as smaller misstatements that in our view must
be reported on qualitative grounds.
Scope of the group audit
ProQR Therapeutics N.V. is at the head of a group of components. The financial information of this group is
included in the financial statements of ProQR Therapeutics N.V.
The financial administration for all group entities is centralized in the Netherlands. Consequently, we have
centralized our audit approach and we performed the audit procedures ourselves. By performing the
procedures ourselves, we have been able to obtain sufficient and appropriate audit evidence about the
group’s financial information to provide an opinion about the financial statements.
Audit response to the risk of fraud and non-compliance with laws and regulations
In chapter “Risks of fraud and non-compliance with laws and regulations” of the annual report, the
Management Board describes its procedures in respect of the risk of fraud and non-compliance with laws
and regulations.
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As part of our audit, we have gained insights into the Company and its business environment and the
Company’s risk management in relation to fraud and non-compliance. Our procedures included, among other
things, assessing the Company’s code of conduct, whistleblowing procedures, incidents register and its
procedures to investigate indications of possible fraud and non-compliance. Furthermore, we performed
relevant inquiries with the Management Board, Audit Committee of the Supervisory Board and other relevant
functions, such as Legal Counsel. We have also incorporated elements of unpredictability in our audit,
including selecting items for control testing outside our customary selection parameters.
As a result from our risk assessment, we identified the following laws and regulations as those most likely to
have a material effect on the financial statements in case of non-compliance:
•
•
•
•
FDA and EMA regulations
Anti-corruption laws
Intellectual property and information protection laws and regulations; and
U.S. securities laws and regulations
Further, we assessed the presumed fraud risk on revenue recognition as not significant, because the revenue
transactions are related to collaboration agreements and are not resulting from commercialization of
products. As such, the recurring entries related to amortization of deferred upfront payments are limited and
non-complex.
Based on the above and on the auditing standards, we identified the following fraud risk that is relevant to
our audit, and responded as follows:
Management override of controls (a presumed risk)
Risk:
• Management is in a unique position to manipulate accounting records and prepare fraudulent financial
statements by overriding controls that otherwise appear to be operating effectively.
Responses:
• We evaluated the design and the implementation and, where considered appropriate, tested the
operating effectiveness of internal controls that mitigate fraud risks, such as controls related to journal
entries.
• We performed a data analysis of high-risk journal entries and evaluated key estimates and judgments
for bias by the Company’s management. Where we identified instances of unexpected journal entries or
other risks through our data analytics, we performed additional audit procedures to address each
identified risk, including testing of transactions back to source information.
• We paid particular attention to unsupported journal entries manipulating the allocation of various costs
between R&D and general and administrative expenses from the basis that the external users of the
financial statements focus on its R&D. R&D costs consist principally of the costs associated with
research and development activities, conducting pre-clinical studies and clinical trials and activities
related to regulatory filings.
Our evaluation of procedures performed related to fraud did not result in an additional key audit matter.
We communicated our risk assessment, audit responses and results to the Management Board and the Audit
Committee of the Supervisory Board.
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Our audit procedures did not reveal indications and/or reasonable suspicion of fraud and non-compliance
that are considered material to our audit.
Audit response to going concern – no significant risk identified
As explained in Note 2(d) of the financial statements, the Management Board has performed its going
concern assessment and has not identified any going concern risks. To assess the Management Board’s
assessment, we have performed, inter alia, the following procedures:
•
•
•
we considered whether the management board’s assessment of the going concern risks includes all
relevant information of which we are aware as a result of our audit;
we analyzed the company’s financial and liquidity position as at year-end and compared it to the
previous financial year as well as expected research and development cash outflows in terms of
indicators that could identify significant going concern risks;
we compared the current financial year’s operating loss and the related cash outflows with the expected
current financial year’s operating loss and cash outflows.
The outcome of our risk assessment procedures did not give reason to perform additional audit procedures
on management’s going concern assessment.
Our key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our
audit of the financial statements. We have communicated the key audit matter to the Audit Committee of the
Supervisory Board. The key audit matter is not a comprehensive reflection of all matters discussed.
The key audit matter was addressed in the context of our audit of the financial statements as a whole and in
forming our opinion thereon, and we do not provide a separate opinion on this matter.
Accounting for research and development costs
Description
Research and development (“R&D”) expenses, amounting to EUR 25.1 million (2022: EUR 50.9 million), relate
to the development of the RNA editing platforms that form the primary business of the Company. The
treatment candidates are in the development phase and do not generate revenue from sales. The size of the
transactions and to a lesser extent the complexity of the recognition and measurement resulted in significant
audit effort. As such, we have considered the accounting for R&D expenses a key audit matter.
Our response
The following are the primary procedures we performed to address this key audit matter:
• We evaluated the design and implementation and tested the operating effectiveness of internal controls
related to the Company’s R&D expense process, including controls over the monthly accrual process.
Further, we performed test of details by validating R&D expenses to underlying support of the recorded
expenses and related accruals.
Among others, we have assessed the accounting for a selection of significant contracts of vendors and
•
•
suppliers.
Our observation
Overall, the results of our procedures performed on management’s accounting and disclosure for R&D
expenses in the financial statements are satisfactory.
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REPORT ON THE OTHER INFORMATION INCLUDED IN THE ANNUAL REPORT
In addition to the financial statements and our auditor’s report thereon, the annual report contains other
information.
Based on the following procedures performed, we conclude that the other information:
•
•
is consistent with the financial statements and does not contain material misstatements; and
contains all the information regarding the management report and other information as required by
Part 9 of Book 2 of the Dutch Civil Code.
We have read the other information. Based on our knowledge and understanding obtained through our audit
of the financial statements or otherwise, we have considered whether the other information contains
material misstatements.
By performing these procedures, we comply with the requirements of Part 9 of Book 2 of the Dutch Civil Code
and the Dutch Standard 720. The scope of the procedures performed is less than the scope of those
performed in our audit of the financial statements.
The Management Board is responsible for the preparation of the other information, including the
information as required by Part 9 of Book 2 of the Dutch Civil Code.
REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS
Engagement
We were initially appointed by the General Meeting of Shareholders as auditor of ProQR Therapeutics N.V. on
June 23, 2020, as of the audit for the year 2021 and have operated as statutory auditor ever since that
financial year.
DESCRIPTION OF RESPONSIBILITIES REGARDING THE FINANCIAL STATEMENTS
Responsibilities of the Management Board and the Supervisory Board for the financial statements
The Management Board is responsible for the preparation and fair presentation of the financial statements in
accordance with EU-IFRS and Part 9 of Book 2 of the Dutch Civil Code. Furthermore, the Management Board
is responsible for such internal control as the Management Board determines is necessary to enable the
preparation of the financial statements that are free from material misstatement, whether due to fraud or
error. In that respect the Management Board, under supervision of the Supervisory Board, is responsible for
the prevention and detection of fraud and non-compliance with laws and regulations, including determining
measures to resolve the consequences of it and to prevent recurrence.
As part of the preparation of the financial statements, the Management Board is responsible for assessing
the company’s ability to continue as a going concern. Based on the financial reporting frameworks
mentioned, the Management Board should prepare the financial statements using the going concern basis of
accounting unless the Management Board either intends to liquidate the Company or to cease operations, or
has no realistic alternative but to do so. The Management Board should disclose events and circumstances
that may cast significant doubt on the company’s ability to continue as a going concern in the financial
statements.
The Supervisory Board is responsible for overseeing the company’s financial reporting process.
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Our responsibilities for the audit of the financial statements
Our objective is to plan and perform the audit engagement in a manner that allows us to obtain sufficient
and appropriate audit evidence for our opinion.
Our audit has been performed with a high, but not absolute, level of assurance, which means we may not
have detected all material errors and fraud during our audit.
Misstatements can arise from fraud or errors and are considered material if, individually or in the aggregate,
they could reasonably be expected to influence the economic decisions of users taken on the basis of the
financial statements. The materiality affects the nature, timing and extent of our audit procedures and the
evaluation of the effect of identified misstatements on our opinion.
A further description of our responsibilities for the audit of the financial statements is included in the
appendix of this auditor’s report. This description forms part of our independent auditor's report.
Amstelveen, March 13, 2024
KPMG Accountants N.V.
B.S. Geerling RA
Appendix: Description of our responsibilities for the audit of the financial statements
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APPENDIX
Description of our responsibilities for the audit of the financial statements
We have exercised professional judgement and have maintained professional scepticism throughout the
audit, in accordance with Dutch Standards on Auditing, ethical requirements and independence
requirements. Our audit included among others:
•
identifying and assessing the risks of material misstatement of the financial statements, whether due to
errors or fraud, designing and performing audit procedures responsive to those risks, and obtaining
audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not
detecting a material misstatement resulting from fraud is higher than for one resulting from errors, as
fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of
internal control;
•
•
•
•
•
obtaining an understanding of internal control relevant to the audit in order to design audit procedures
that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Company’s internal control;
evaluating the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the Management Board;
concluding on the appropriateness of management's use of the going concern basis of accounting and
based on the audit evidence obtained, whether a material uncertainty exists related to events or
conditions that may cast significant doubt on the Company's ability to continue as a going concern. If we
conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to
the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our
opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's
report. However, future events or conditions may cause the company to cease to continue as a going
concern;
evaluating the overall presentation, structure and content of the financial statements, including the
disclosures; and
evaluating whether the financial statements represent the underlying transactions and events in a
manner that achieves fair presentation.
We are solely responsible for the opinion and therefore responsible to obtain sufficient appropriate audit
evidence regarding the financial information of the entities or business activities within the group to express
an opinion on the financial statements. In this respect we are also responsible for directing, supervising and
performing the group audit.
We communicate with those charged with governance regarding, among other matters, the planned scope
and timing of the audit and significant audit findings, including any significant findings in internal control that
we identify during our audit.
We provide the Audit Committee of the Supervisory Board with a statement that we have complied with
relevant ethical requirements regarding independence, and to communicate with them all relationships and
other matters that may reasonably be thought to bear on our independence, and where applicable, related
safeguards.
From the matters communicated with the Audit Committee of the Supervisory Board, we determine the key
audit matters: those matters that were of most significance in the audit of the financial statements. We
describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the
matter or when, in extremely rare circumstances, not communicating the matter is in the public interest.