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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM 10-K
(Mark One)
☒
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2020
OR
For the transition period from to
Commission file number: 001-36294
uniQure N.V.
(Exact name of Registrant as specified in its charter)
The Netherlands
(Jurisdiction of incorporation or organization)
Paasheuvelweg 25a,
1105 BP Amsterdam, The Netherlands
(Address of principal executive offices) (Zip Code)
+31-20-240-6000
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class
Ordinary shares, par value €0.05 per share
Trading Symbol(s)
QURE
Name of Each Exchange on Which Registered
The Nasdaq Stock Market LLC (The Nasdaq Global Select Market)
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☒ No ☐
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒
Securities registered under Section 12(g) of the Act: None
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90
days. Yes ⌧ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-
T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging
growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the
Exchange Act.
Large accelerated filer ☒
Accelerated filer ☐
Non-accelerated filer ☐
Smaller reporting company ☐
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised
financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over
financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act.) Yes ☐ No ⌧
The aggregate market value of the voting and non-voting ordinary shares held by non-affiliates of the registrant as of June 30, 2020 was $2,002.7 million, based on
the closing price reported as of June 30, 2020 on the NASDAQ Global Select Market.
As of February 25, 2021, the registrant had 44,993,987 ordinary shares, par value €0.05, outstanding.
The documents incorporated by reference are as follows:
Portions of the registrant's definitive Proxy Statement for its 2021 Annual Meeting of Shareholders to be filed with the Securities and Exchange Commission no later
than April 30, 2021 and to be delivered to shareholders in connection with the 2021 Annual Meeting of Shareholders, are herein incorporated by reference in Part III of this
Annual Report on Form 10-K.
Table of Contents
TABLE OF CONTENTS
PART I
SPECIAL CAUTIONARY NOTICE REGARDING FORWARD-LOOKING STATEMENTS
Business
Item 1
Item 1A Risk Factors
Item 1B Unresolved Staff Comments
Item 2
Item 3
Item 4 Mine Safety Disclosures
Properties
Legal Proceedings
Item 5 Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of
PART II
Equity Securities
Selected Financial Data
Item 6
Item 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations
Item 7A Quantitative and Qualitative Disclosures About Market Risk
Item 8
Item 9
Item 9A Controls and Procedures
Item 9B Other Information
Financial Statements and Supplementary Data
Changes in and Disagreements With Accountants on Accounting and Financial Disclosure
PART III
Item 10 Directors, Executive Officers and Corporate Governance
Item 11
Item 12
Executive Compensation
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder
Matters
Item 13 Certain Relationships and Related Transactions, and Director Independence
Item 14
Principal Accounting Fees and Services
Item 15 Exhibits, Financial Statement Schedules
Item 16
Form 10-K Summary
PART IV
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SPECIAL CAUTIONARY NOTICE REGARDING FORWARD-LOOKING STATEMENTS
This Annual Report on Form 10-K contains “forward-looking statements” as defined under federal securities laws.
Forward-looking statements are based on our current expectations of future events and many of these statements can be
identified using terminology such as “believes,” “expects,” “anticipates,” “plans,” “may,” “will,” “projects,” “continues,”
“estimates,” “potential,” “opportunity” and similar expressions. These forward-looking statements, which include, but are
not limited to, statements related to the COVID-19 coronavirus pandemic, our collaboration and license agreement with
CSL Behring LLC and the timing of the completion of the transactions contemplated thereby, our beliefs about our
competitive advantage and the capabilities of our manufacturing facility, our cash runway, the advancement of our clinical
trials, our intellectual property portfolio, and the impact of regulatory actions on our regulatory submission timelines, may
be found in Part I, Item 1 “Business,” Part 1, Item 1A “Risk Factors,” Part II, Item 7 “Management’s Discussion and
Analysis of Financial Condition and Results of Operations” and other sections of this Annual Report on Form 10-K.
Forward-looking statements are only predictions based on management’s current views and assumptions and
involve risks and uncertainties, and actual results could differ materially from those projected or implied. The most
significant factors known to us that could materially adversely affect our business, operations, industry, financial position
or future financial performance include those discussed in Part I, Item 1A “Risk Factors,” as well as those discussed in Part
II, Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and elsewhere in this
Annual Report on Form 10-K, as well as other factors which may be identified from time to time in our other filings with
the Securities and Exchange Commission (“SEC”), or in the documents where such forward-looking statements appear.
You should carefully consider that information before you make an investment decision.
You should not place undue reliance on these statements, which speak only as of the date that they were made.
Our actual results or experience could differ significantly from those anticipated in the forward-looking statements and
from historical results, due to the risks and uncertainties described in this Annual Report on Form 10-K including in “Part
I, Item 1A. “Risk Factors,” as well as others that we may consider immaterial or do not anticipate at this time. These
cautionary statements should be considered in connection with any written or oral forward-looking statements that we may
make in the future or may file or furnish with the SEC. We do not undertake any obligation to release publicly any
revisions to these forward-looking statements after completion of the filing of this Annual Report on Form 10-K to reflect
later events or circumstances or to reflect the occurrence of unanticipated events. All forward-looking statements
attributable to us are expressly qualified in their entirety by these cautionary statements.
In addition, with respect to all our forward-looking statements, we claim the protection of the safe harbor for
forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.
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An investment in our ordinary shares involves significant risks. You should carefully consider the information set
forth under “Risk Factors” before deciding to invest in our ordinary shares. The following is a summary of the principal
risks associated with an investment in our ordinary shares:
Summary Risk Factors
● We and CSL Behring may be unable to close the transaction contemplated by the CSL Behring Agreement, and
any delay in closing the transaction could diminish the anticipated benefits of the transaction or result in increased
costs. Failure to close the transaction could adversely impact the market price of our ordinary shares as well as
our business and operating results, cash flows and results of operations.
● We may encounter substantial delays in, and impediments to the progress of our clinical trials or fail to
demonstrate the safety and efficacy of our product candidates, and our clinical trials for AMT-061 are currently
on clinical hold and could remain on clinical hold indefinitely.
● Our business and operations have been, and may continue to be, materially and adversely affected by the ongoing
COVID-19 pandemic.
● We may not be successful in our efforts to use our gene therapy technology platform to build a pipeline of
additional product candidates.
● We may not be successful in our efforts to in-license or acquire product candidates that align with our research
and development strategy.
● Our manufacturing facility is subject to significant government regulations and approvals. If we fail to comply
with these regulations or to maintain these approvals our business could be materially harmed.
● Our resources might be adversely affected if we are unable to meet our product development and supply needs
and obligations, including our ability to complete the validation of our existing manufacturing processes as well
as to develop larger scale manufacturing processes, which could adversely affect our ability to sufficiently meet
our future production needs or regulatory filing timelines.
● Our resources might be adversely affected if we are unable to meet our product supply needs and obligations.
● We cannot predict when or if we will obtain marketing approval to commercialize a product candidate.
● We are exposed to a number of external factors such as competition, insurance coverage of and pricing and
reimbursement for our product candidates that may adversely affect our product revenue and that may cause our
business to suffer.
● We rely on licenses of intellectual property from third parties, and such licenses may not provide adequate rights
or may not be available in the future on commercially reasonable terms or at all, and our licensors may be unable
to obtain and maintain patent protection for the technology or products that we license from them.
● If we are unable to obtain and maintain patent protection for our technology and products, or if the scope of the
patent protection is not sufficiently broad, our ability to successfully commercialize our products may be
impaired.
● Our reliance on third parties may require us to share our trade secrets, which could increase the possibility that a
competitor will discover them or that our trade secrets will be misappropriated or disclosed.
● We will likely need to raise additional funding, which may not be available on acceptable terms, or at all. Failure
to obtain capital when needed may force us to delay, limit or terminate our product development efforts or other
operations which could have a material adverse effect on our business, financial condition, results of operations,
and cash flows.
● Our relationships with customers and third-party payers will be subject to applicable anti-kickback, anti-bribery,
fraud and abuse and other laws and regulations, which, if we are found in violation thereof, could expose us to
criminal sanctions, civil penalties, contractual damages, reputational harm and diminished profits and future
earnings.
● We are subject to laws governing data protection in the different jurisdictions in which we operate. The
implementation of such data protection regimes is complex, and should we fail to fully comply, we may be
subject to penalties that may have an adverse effect on our business, financial condition, and results of operations.
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● Our internal computer systems, or those of our collaborators or other contractors or consultants, may fail or suffer
security breaches, which could result in a material disruption of our product development programs.
● If we fail to maintain an effective system of internal controls, we may be unable to accurately report our results of
operations or prevent fraud or fail to meet our reporting obligations, and investor confidence and the market price
of our ordinary shares may be materially and adversely affected.
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Unless the context requires otherwise, references in this report to “uniQure,” “Company,” “we,” “us” and “our”
and similar designations refer to uniQure N.V. and our subsidiaries.
Part I
Item 1. Business.
Overview
We are a leader in the field of gene therapy, seeking to develop single treatments with potentially curative results
for patients suffering from genetic and other devastating diseases. We are advancing a focused pipeline of innovative gene
therapies, including product candidates for the treatment of hemophilia B, which we intend to license to CSL Behring
pursuant to the CSL Behring Agreement (as defined below), and Huntington’s disease. We believe our validated
technology platform and manufacturing capabilities provide us distinct competitive advantages, including the potential to
reduce development risk, cost, and time to market. We produce our Adeno-associated virus (“AAV”) -based gene therapies
in our own facilities with a proprietary, commercial-scale, current good manufacturing practices (“cGMP”)-compliant,
manufacturing process. We believe our Lexington, Massachusetts-based facility is one of the world’s most versatile gene
therapy manufacturing facilities.
Key events
CSL Behring commercialization and license agreement
On June 24, 2020, uniQure biopharma B.V., a wholly-owned subsidiary of uniQure N.V., entered into a
commercialization and license agreement (as amended, the “CSL Behring Agreement”) with CSL Behring LLC (“CSL
Behring”) pursuant to which CSL Behring will receive exclusive global rights to etranacogene dezaparvovec, our
investigational gene therapy for patients with hemophilia B (the “Product”).
Under the terms of the CSL Behring Agreement, we will receive a $450.0 million upfront cash payment upon the
closing of the CSL Behring Agreement and be eligible to receive up to $1.6 billion in additional payments based on
regulatory and commercial milestones. The CSL Behring agreement also provides that we will be eligible to receive tiered
double-digit royalties in a range of up to a low-twenties percent of net sales of the Product based on sales thresholds.
Pursuant to the CSL Behring Agreement, we will be responsible for the completion of the HOPE-B clinical trial,
manufacturing process validation, and the manufacturing supply of the Product until such time that these capabilities may
be transferred to CSL Behring or its designated contract manufacturing organization. Concurrently with the execution of
the CSL Behring Agreement, we and CSL Behring entered into a development and commercial supply agreement, pursuant
to which, among other things, we will supply the Product to CSL Behring at an agreed-upon price. Clinical development
and regulatory activities performed by us pursuant to the CSL Behring Agreement will be reimbursed by CSL Behring.
CSL Behring will be responsible for global regulatory submissions and commercialization requirements for the Product.
Other than under the CSL Behring Agreement, neither we nor CSL Behring may perform any clinical trials, with
the exception of trials required to extend the label or gain marketing authorization outside the United States or the
European Union, for any gene therapy product, gene-editing product, or any other product comprising an AAV vector to
conduct nucleotide transfer (including deoxyribonucleic acid (“DNA”) and ribonucleic acid (“RNA”)) for the treatment,
prevention, or cure of hemophilia B for a period commencing on June 24, 2020 and continuing for a period of four years
following the first commercial sale of the Product in the United States, and neither we nor CSL Behring may
commercialize such a product for a period commencing as of June 24, 2020 and continuing for a period of seven years
following the first commercial sale of the Product in the United States. This exclusivity commitment would not bind an
acquirer of us that owns or controls such a product so long as certain precautions are followed to ensure that CSL Behring’s
confidential information and our proprietary technology related to the Product are not used or accessed by personnel of
such acquirer who are developing or commercializing such competing product.
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Unless earlier terminated as described below, the CSL Behring Agreement will continue on a country-by-country
basis until expiration of the royalty term in a country. The royalty term expires in a country on the later of (a) 15 years after
the first commercial sale of the Product in such country, (b) expiration of regulatory exclusivity for the Product in such
country and (c) expiration of all valid claims of specific licensed patents covering the Product in such country. Either we or
CSL Behring may terminate the CSL Behring Agreement for the other party’s material breach if such breach is not cured
within a specified cure period. In addition, if CSL Behring fails to commercialize the Product in any of a group of major
countries for an extended period of time following the first regulatory approval of the Product in any of such group of
countries (other than due to certain specified reasons) and such failure has not been cured within a specified cure period,
then we may terminate the CSL Behring Agreement. CSL Behring may also terminate the CSL Behring Agreement for
convenience.
The effectiveness of the transactions contemplated by the CSL Behring Agreement is contingent on completion of
review under antitrust laws in the United States, Australia, and the United Kingdom, and certain provisions of the CSL
Behring Agreement will not become effective until after we receive all such regulatory approvals.
On November 11, 2020, the Australian Competition and Consumer Commission (“ACCC”) determined, pursuant
to section 50 of the Competition and Consumer Act 2010 of Australia, that it will not intervene in the CSL Behring
Agreement. Thus, the ACCC has completed its review of the CSL Behring Agreement, and the transactions contemplated
by the CSL Behring Agreement may close from the perspective of the Australian competition authority.
On November 24, 2020, the Competition and Markets Authority in the United Kingdom (the “CMA”) adopted a
decision not to refer the CSL Behring Agreement for proceedings under section 33 of the Enterprise Act 2002 of the United
Kingdom. The decision was made public by the CMA on January 6, 2021. Thus, the CMA has completed its review of the
CSL Behring Agreement, and the transactions contemplated by the CSL Behring Agreement may close from the
perspective of the United Kingdom competition authority.
On December 3, 2020, we and CSL Behring filed a premerger notification and report form under the Hart-Scott-
Rodino Antitrust Improvements Act of 1976 (the “HSR Act”). On January 4, 2021, the United States Federal Trade
Commission (“FTC”) issued to us a request for additional information and documentary material (a “Second Request”)
under the HSR Act. The FTC similarly issued a Second Request to CSL Behring also with respect to the antitrust review of
the CSL Behring Agreement. The effect of the Second Request is to extend the waiting period imposed under the HSR Act
until 30 days after all parties to the CSL Behring Agreement have substantially complied with the requests unless the
waiting period is terminated earlier by the FTC or voluntarily extended by the parties. We do not believe that the FTC will
determine that the consummation of the transaction will result in a violation of the HSR Act. However, there can be no
assurance as to the outcome of the Second Request.
Closing of the transaction is expected to materially impact our profitability and cash flows. Receipt of the $450.0
million payment due on closing would extend the funding of our operations into the second half of 2024 (assuming a full
repayment of funds borrowed from Hercules Capital Inc. (“Hercules”) under our term loan facility by 2023). However, we
expect to continue to incur losses and to generate negative cash flows beyond the fiscal year in which we would close the
transaction.
Hemophilia B program – Etranacogene dezaparvovec (AMT-061)
Etranacogene dezaparvovec is our lead gene therapy candidate and includes an Adeno-associated virus (“AAV”)
serotype 5 (together “AAV-5”) vector incorporating the functional human Factor IX (“FIX”) Padua variant. We are
currently conducting a pivotal study in patients with severe and moderately-severe hemophilia B.
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In August 2018, we initiated a Phase IIb dose-confirmation study of etranacogene dezaparvovec and in September
2018, we completed the dosing for that study. In February, May, July, and December 2019, and in December 2020, we
presented updated data from the Phase IIb dose-confirmation study of etranacogene dezaparvovec. The most recent data
that we announced from the Phase IIb study of etranacogene dezaparvovec show that all three patients experienced
increasing and sustained FIX levels after a one-time administration of etranacogene dezaparvovec. Mean FIX activity was
44.2% of normal two years after administration, exceeding threshold FIX levels generally considered sufficient to
significantly reduce the risk of bleeding events. The first patient achieved FIX activity of 44.7% of normal, the second
patient was 51.6% of normal and the third patient was 36.3% of normal. The second and third patients had previously
screen-failed and were excluded from another gene therapy study due to pre-existing neutralizing antibodies to a different
AAV vector. At two years after dosing, two of the three participants remain free from bleeds and use of FIX replacement
therapy. A single bleed has been reported in one participant, who has used a total of two FIX infusions (excluding surgery).
All patients have remained free of prophylaxis in the two years since receiving etranacogene dezaparvovec.
In June 2018, we initiated the six-month lead-in period of our Phase III HOPE-B pivotal trial of etranacogene
dezaparvovec (the “HOPE-B trial”). The HOPE-B trial is a multinational, multi-center, open-label, single-arm study to
evaluate the safety and efficacy of etranacogene dezaparvovec. After the six-month lead-in period, patients received a
single intravenous administration of etranacogene dezaparvovec. Patients enrolled in the HOPE-B trial were tested for the
presence of pre-existing neutralizing antibodies to AAV5 but not excluded from the trial based on their titers.
The primary endpoints of the study are based on the FIX activity level achieved following the administration of
etranacogene dezaparvovec after 26 weeks and 52 weeks after dosing as well as annualized bleed rates during the 52 weeks
after dosing.
In March 2020, we completed dosing of the 54 patients in the HOPE-B trial. The targeted number of patients to be
dosed per the clinical trial protocol was 50. As set forth below, we have implemented and continue to implement various
measures to allow us to closely monitor the trial within the guidance provided by the U.S. Food and Drug Administration
(“FDA”) regarding the impact of the COVID-19 coronavirus pandemic (“COVID-19”) to minimize any risk or disruption
in patient follow-up visits.
In December 2020, we announced top-line data from the HOPE-B trial. The 26-week follow-up date from the trial
showed that FIX activity in the 54 patients increased after dosing from ≤ 2% to a mean of 37.2% at 26 weeks, meeting a
first primary endpoint of the HOPE-B trial. No correlation between pre-existing neutralizing antibodies and FIX activity
was found in patients with neutralizing antibody titers up to 678.2, a range expected to include more than 95% of the
general population; one patient with a neutralizing antibody titer of 3,212.3 did not show an increase in FIX activity. Less
than 1% of the general population is expected to have neutralizing antibody titers of greater than 3,000.
During the 26-week period after dosing, 15 patients (28%) reported a total of 21 bleeding events, representing a
reduction of 83% compared to the 123 bleeding events reported by 38 patients (70%) during the observational lead-in
phase of the trial. Total bleeds include any bleeding event reported after the treatment of etranacogene dezaparvovec,
including spontaneous, traumatic, and those associated with unrelated medical procedures, whether or not FIX treatment
was required. Of the total bleeding events reported during the 26-week period after dosing, only three were classified as
spontaneous bleeds requiring treatment, representing a reduction of 92% compared to the 37 such bleeding events reported
during the observational lead-in phase. Mean annualized usage of FIX replacement therapy, a secondary endpoint in the
clinical trial, declined by 96% during the 26-week period after dosing compared to the observational lead-in phase.
Etranacogene dezaparvovec was generally well-tolerated. As of the November 2020 cut-off date, most adverse events were
classified as mild (81.5%). The most common events included transaminase elevation treated with steroids per protocol (9
patients; 17%), infusion-related reactions (7 patients; 13%), headache (7 patients; 13%) and influenza-like symptoms (7
patients; 13%). Liver enzyme elevations resolved with a tapering course of corticosteroids and FIX activity remained in the
mild range in the steroid treated patients. No relationship between safety and neutralizing antibody titers was observed.
Based on interactions with the FDA and the European Medicines Agency (“EMA”), we plan to incorporate FIX activity
and bleeding rates at 52 weeks as additional co-primary endpoints in the study.
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On December 21, 2020, our clinical trials of etranacogene dezaparvovec, including our HOPE-B trial, were placed
on clinical hold by the FDA. The clinical hold was initiated following the submission of a safety report in mid-December
relating to a possibly related serious adverse event associated with a preliminary diagnosis of hepatocellular carcinoma
(“HCC”), a form of liver cancer, in one patient in the HOPE-B trial that was treated with etranacogene dezaparvovec in
October 2019. The patient has multiple risk factors associated with HCC, including a twenty-five-year history of hepatitis
C (“HCV”), hepatitis B virus (“HBV”), evidence of non-alcoholic fatty liver disease and advanced age. Chronic infections
with hepatitis B and C have been associated with approximately 80% of HCC cases.
The liver lesion was detected during a routine abdominal ultrasound conducted as part of the required study
assessments in patients at one-year post dosing. A surgical resection of the lesion has occurred, and an analysis of the tissue
samples was initiated in early 2021. On February 19, 2021, we reported initial results from this analysis to the FDA in
accordance with pharmacovigilance requirements. We are gathering final data from these molecular analyses and will be
preparing a detailed response to the FDA’s clinical hold questions regarding this event. Currently, we do not have adequate
data to determine a possible causal relationship, especially in the context of the other known risk factors. We currently do
not anticipate any impact on our regulatory submission timelines, including the filing of a BLA.
No other cases of HCC have been reported in our clinical trials conducted in more than 67 patients in hemophilia
B, with some patients dosed more than 5 years ago.
Etranacogene dezaparvovec has been granted Breakthrough Therapy Designation by the FDA and access to the
current priority medicines (“PRIME”) initiative by the EMA.
Huntington’s disease program (AMT-130)
AMT-130 is our novel gene therapy candidate for the treatment of Huntington’s disease. AMT-130 utilizes our
proprietary, gene-silencing miQURE platform and incorporates an AAV vector carrying an miRNA specifically designed to
silence the huntingtin gene and the potentially highly toxic exon 1 protein fragment. AMT-130 has received orphan drug
and Fast Track designations from the FDA and Orphan Medicinal Product Designation from the EMA.
In June 2020, we announced the completion of the first two patient procedures in the Phase I/II clinical trial of
AMT-130 for the treatment of Huntington’s disease. These procedures occurred after a postponement that resulted from the
COVID-19 pandemic and the associated states of emergency declarations in the United States. The Phase I/II protocol is a
randomized, imitation surgery-controlled, double-blinded study conducted at three surgical sites, and multiple referring,
non-surgical sites in the U.S. The primary objective of the study is to evaluate the safety, tolerability, and efficacy of AMT-
130 at two doses.
On September 25, 2020, we announced that the independent Data Safety Monitoring Board (“DSMB”) overseeing
the Phase I/II clinical trial of AMT-130 for the treatment of Huntington’s disease had met and reviewed 90-day safety data
from the first two patients enrolled in the trial. No significant safety concerns were noted to prevent further dosing.
On October 13, 2020, we announced the completion of the third and fourth patient procedures in the Phase I/II
clinical trial.
On February 8, 2021, we announced that the DSMB had met and reviewed the six-month safety data from the first
two enrolled patients and the 90-day safety data from the next two enrolled patients in the study. No significant safety
concerns were noted to prevent further dosing, and the final six patients in the first cohort are now cleared for enrollment.
BMS collaboration
We and Bristol-Myers Squibb (“BMS”) entered into a collaboration and license agreement in May 2015 (“BMS
CLA”). BMS had initially designated four Collaboration Targets in 2015 and in accordance with the terms of the BMS
CLA could have designated a fifth to tenth Collaboration Target.
In February 2019, BMS requested a one-year extension of the initial research term. In April 2019, following an
assessment of the progress of this collaboration and our expanding proprietary programs, we notified BMS that we did not
intend to agree to an extension of the initial research term. Accordingly, the initial four-year research term under the
collaboration terminated on May 21, 2019.
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On December 1, 2020, we and BMS amended the BMS CLA (“amended BMS CLA”). Following the amendment
BMS is no longer entitled to designate a fifth to tenth Collaboration Target and as such we are no longer entitled to receive
an aggregate $16.5 million in target designation payments for research, development, and regulatory milestone payments
related to the fifth and tenth Collaboration Targets. For a period of one-year from the effective date of the amended BMS
CLA, BMS may replace up to two of the four active Collaboration Targets with two new targets in the field of
cardiovascular disease. We continue to be entitled to receive up to $217.0 million for each of the four Collaboration Targets
if defined milestones are achieved, as well as royalties on net sales associated with any Collaboration Target. On December
17, 2020, BMS designated one of the four Collaboration Targets as a candidate to advance into IND-enabling studies
entitling us to receive a $4.4 million research milestone payment. We recorded the $4.4 million as License Revenue in the
twelve-month period ended December 31, 2020.
The amended BMS CLA does not extend the initial research term. BMS may place purchase orders to provide
limited services primarily related to analytical and development efforts in respect of the four Collaboration Targets. BMS
may request such services for a period not to exceed the earlier of (i) the completion of all activities under a Research Plan
and (ii) either (A) three years after the last replacement target has been designated by BMS during the one-year
replacement period following the amended BMS CLA effective date or (B) three years if no replacement targets are
designated during this one-year period and BMS continues to reimburse us for these services.
For as long as any of the four Collaboration Targets are being advanced, BMS may place a purchase order to be
supplied with research, clinical and commercial supplies. Subject to the terms of the amended BMS CLA, BMS has the
right to terminate the research, clinical and commercial supply relationships, and has certain remedies for failures of
supply, up to and including technology transfer for any such failure that otherwise cannot be reasonably resolved. Both we
and BMS may agree to a technology transfer of manufacturing capabilities pursuant to the terms of the amended BMS
CLA.
We have agreed to certain restrictions on our ability to work independently of the collaboration, either directly or
indirectly through any affiliate or third party, on certain programs that would be competitive with a Collaboration Target.
We have agreed to indication exclusivity for the current four Collaboration Targets. BMS may add or change the exclusive
indications in the process of replacing Collaboration Targets as described above. We can opt out of the indication
exclusivity by giving up certain economic rights under the amended BMS CLA for each such indication that is affected by
us opting out. If we opt out of an exclusive indication, we could pursue other targets for such indication other than a
Collaboration Target.
The amended BMS CLA also terminated two warrants to increase BMS ownership in the Company up to 19.9%
through purchasing a specific number of our ordinary shares following the designation of a seventh, and a tenth
Collaboration Target, respectively. We and BMS agreed that upon the consummation of a change of control transaction of
uniQure that occurs prior to the earlier of (i) December 1, 2026 and (ii) BMS’ delivery of a target cessation notice for all
four Collaboration Targets, uniQure (or its third party acquirer) shall pay to BMS a one-time, non-refundable, non-
creditable cash payment of $70.0 million, provided that (x) if $70.0 million is greater than five percent of the net proceeds
(as contractually defined) from such change of control transaction, the payment shall be an amount equal to five percent of
such net proceeds, and (y) if $70.0 million is less than one percent of such net proceeds, the change of control payment
shall be an amount equal to one percent of such net proceeds. We have not consummated any change of control transaction
as of December 31, 2020 that would obligate us to make a payment to BMS.
The amended BMS CLA did not change any of the provisions of the Investor Agreement with BMS that we
entered into in 2015. We have granted BMS certain registration rights that allow BMS to require us to register our
securities beneficially held by BMS under the U.S. Securities Exchange Act of 1934, as amended (“Exchange Act”). BMS
may make up to two such demands for us to register the shares, provided that we may deny such demand if (i) the market
value of the shares to be registered is less than $10.0 million (provided however, if BMS holds less than $10.0 million
worth of our shares, we must comply with their demand for registration), (ii) we certify to BMS that we plan to effect a
registration within 120 days of their demand or we are engaged in a transaction that would be required to be disclosed in a
registration statement and that is not reasonably practicable to be disclosed at that time, or (iii) we have already effected
one registration statement within the twelve months preceding BMS’s demand for registration. In addition, independent of
their demand registration rights, upon the occurrence of certain events, we must also provide BMS the opportunity to
include their ordinary shares in any registration statement that we effect.
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We also continue to grant BMS certain information rights under the Investor Agreement, although these
requirements may be satisfied by our public filings required by U.S. securities laws.
BMS also continues to be subject to a lock up pursuant to the Investor Agreement for as long as BMS holds more
than 4.9% of our ordinary shares (as of December 31, 2020 BMS holds 5.3%). Without our prior consent, BMS may not
sell or dispose any of its current ordinary shares.
The Investor Agreement also continues to require BMS to vote all of our ordinary shares it beneficially holds in
favor of all items on the agenda for the relevant general meeting of shareholders of our company as proposed on behalf of
our company, unless, in the context of a change of control or similar transaction, BMS has itself made an offer to our
company or our board in connection with the transaction that is the subject of the vote, in which case it is free to vote its
shares at its discretion. This voting provision will terminate upon the later of the date on which BMS no longer beneficially
owns at least 4.9% of our outstanding ordinary shares, the closing of a transaction that provides BMS exclusive and
absolute discretion to vote our shares it beneficially holds, or the termination of the amended BMS CLA for breach by us.
Term loan facility
As of December 31, 2020, a $35.0 million term loan was outstanding in accordance with the Second Amended
and Restated Loan and Security Agreement (“2018 Amended Facility”) between us and Hercules.
On January 29, 2021 we and Hercules entered into amendments to the 2018 Amended Facility (the “2021
Amended Facility”). Pursuant to the 2021 Amended Facility, Hercules agreed to make additional term loans in the
maximum aggregate amount of $100.0 million (the “2021 Term Loan”), increasing the aggregate principal amount of the
term loan facility from $35.0 million to up to $135.0 million. On January 29, 2021 we drew down $35.0 million of the
2021 Term Loan. We may draw down the remaining $65.0 million under the 2021 Term Loan in a series of one or more
advances of not less than $20.0 million each until December 15, 2021. Advances under the 2021 Term Loan bear interest at
a rate equal to the greater of (i) 8.25% or (ii) 8.25% plus the prime rate, less 3.25% per annum. The principal balance and
all accrued but unpaid interest on advances under the 2021 Term Loan is due on June 1, 2023, which date may be extended
by us by up to two twelve-month periods. Advances under the 2021 Term Loan may not be prepaid until six-months after
the Closing Date, following which we may prepay all such advances without charge.
In addition to the 2021 Term Loan, the amendment also extends the interest only payment period of the
previously funded $35.0 million term loan from January 1, 2022 to June l, 2023.
COVID-19 measures
The coronavirus disease (“COVID-19) caused by the severe acute respiratory syndrome coronavirus 2 (“Sars-
CoV 2 virus) was characterized as a pandemic by the World Health Organization (“WHO”) on March 11, 2020. During late
2020 various, potentially more infectious, variants of the Sars-CoV 2 virus causing COVID-19 were identified.
Starting March 2020, we implemented measures to address the impact of COVID-19 on our business. We
mandated a work-from-home policy for all non-essential employees at our Amsterdam and Lexington facilities when the
pandemic began. We implemented a series of protocols governing the operations of our Lexington facility to comply with
the requirements of the various orders and guidance from the Commonwealth of Massachusetts and other related orders,
guidance, laws, and regulations. We supported our employees in setting up a healthy and efficient remote working
environment. In conjunction with implementing this policy, we accelerated the roll-out of several information technology
security measures, such as dual factor authentication, to address the increased risks to which we might be exposed as a
result of remote working conditions. In addition, we conducted awareness training around cybersecurity for critical
functions involved in making payments to vendors such as finance and supply chain. We continue to monitor local
government rules and recommendations and office protocols will be aligned with these rules and recommendations.
We conduct frequent status video-meetings of local management at our two sites as well as leadership-team video
meetings to implement these measures and to monitor the evolving situation. In addition, we inform our employees through
periodic newsletters and have organized virtual local and global townhalls to share information and provide direction and
support to our employees.
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We started to reopen the Amsterdam and Lexington facilities in phases, in line with the reopening plans that are
prescribed by the local government. Between June 1, 2020 until September 29, 2020, we encouraged our Amsterdam
employees to work a minimum of two days per week from the office, and approximately 50% of local staff worked on site
during that period. As of September 29, 2020, we reinstated the mandatory work-from-home policy that was initiated in
March in Amsterdam to align with the updated Dutch government’s measures. Employees based in Amsterdam who cannot
perform their duties outside of our Amsterdam facility will continue to work at our Amsterdam facility. We adapted to
operate our laboratories at our Amsterdam site to comply with social distancing rules and to ensure the health and
wellbeing of our employees under the current circumstances. All other employees in Amsterdam will work from home
through at least the end of August 2021, partly in conjunction with the ongoing expansion of our laboratory space.
As a biopharma research and development company, we were deemed to provide essential services under the
“stay at home” advisory that was issued by the Governor of Massachusetts on March 23, 2020 and we therefore have
maintained our manufacturing operations at our Lexington site. To ensure adequate social distancing in our Lexington
facility, our COVID-19 protocols generally have limited occupancy to numbers below those allowed by the Massachusetts
COVID-19 guidelines. In our Lexington facility, we currently have implemented an occupancy limitation of approximately
25%. Our employees that cannot perform their duties outside of our Lexington facility continue to work at our Lexington
facility. All other employees are required to work remotely to the extent possible through at least the end of the second
quarter of 2021. Our actual occupancy at the Lexington facility has been less than approximately 25% of our permitted
occupancy during all phases of the Massachusetts reopening plan. We have also implemented a mandatory COVID-19 PCR
testing protocol effective February 11, 2021 that requires employees to have tested negative for COVID-19 prior to
entering the Lexington facility.
We have adapted our ongoing clinical research activities based on the directions and flexibility provided by the
“FDA Guidance on Conduct of Clinical Trials of Medical Products during COVID-19 Pandemic” issued on March 18,
2020 and updated throughout the pandemic to minimize any risk, disruption, or delay in either patient dosing or follow-up
visits. These procedures occurred after a postponement that resulted from the COVID-19 pandemic and the associated
states of emergency declarations in the United States.
The broader implications of COVID-19 on our results of operations and overall financial performance remain
uncertain. The COVID-19 pandemic and its adverse effects have become more prevalent in the locations where we, and
our third-party business partners conduct business. While we have experienced disruptions in our operations as a result of
COVID-19, we are adapting to the current environment to minimize the effect to our business. However, we may
experience more pronounced disruptions in our operations in the future.
Organization
On September 14, 2020, we appointed Ricardo Dolmetsch, Ph.D. as President, Research and Development. Dr.
Dolmetsch succeeded Sander van Deventer, M.D., Ph.D., our former Executive Vice President, Research and Product
Development. On October 14, 2020, our Chief Medical Officer, Robert Gut, M.D., Ph.D., resigned to allow him to return
as a non-executive director on our Board of Directors. Dr. Gut was appointed to our Board of Directors as a non-executive
director at an extraordinary meeting of shareholders on December 1, 2020.
On June 17, 2020, our shareholders voted to approve the appointment of Leonard E. Post, Ph.D. as a non-
executive director of the Board of Directors. Dr. Post replaced Dr. David Schaffer, whose term as a non-executive director
of the Board of Directors ended on the same date. Dr. Post has also assumed the role of chair of our Research &
Development Committee of the Board of Directors.
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Our Mission and Strategy
Our mission is to build an industry-leading, fully integrated, and global company that leverages its validated
technology and manufacturing platform to deliver transformative gene therapy products to patients with serious unmet
medical needs.
Our strategy to achieve this mission is to:
Advance the development of etranacogene dezaparvovec (AMT-061), a potentially best-in-class treatment of
hemophilia B. Etranacogene dezaparvovec combines the potential advantages of AAV5 with an enhanced Padua-FIX
transgene, and may provide optimized clinical and tolerability benefits to all, or nearly all patients with hemophilia B. In
March 2020, we completed dosing of 54 patients in our Phase III HOPE-B pivotal study.
Maintain our leadership position in commercial-scale AAV manufacturing. We have established cGMP,
commercial-scale manufacturing capabilities for AAV-based gene
in our state-of-the-art Lexington,
Massachusetts facility. We believe the modularity of our platform provides us with distinct advantages, including the
potential for reduced development risk and faster times to market.
therapies
Build a pipeline of gene therapy programs focused on rare and orphan diseases targeting liver-directed and
central-nervous system (“CNS”) diseases. Beyond our lead clinical program for hemophilia B and our Huntington’s
disease program, we have a pipeline of additional AAV-based gene therapy programs in various stages of preclinical
development. We are leveraging our leading technology platform, which includes novel vectors, promoters, and
manufacturing capabilities, to develop gene therapies primarily focused on rare, monogenic liver-directed, and CNS
disorders as well as cardiovascular diseases.
Leverage the favorable immunogenicity profile of AAV5-based gene therapies to develop multiple products. We
have developed extensive experience with our AAV5-based gene therapies, including in five clinical trials in multiple liver-
directed and CNS diseases. During these clinical trials, no patient treated with AAV5-based gene therapies experienced a
confirmed immune response to the AAV5 capsid or complications associated with T-cell activation. Additionally, the
AAV5 capsid has demonstrated a low avidity to pre-existing neutralizing antibodies (“Nab”), which may enable all, or
nearly all patients to be eligible for treatment with AAV5-based gene therapies.
Invest in next-generation technologies with the goal of enhancing safety, improving efficacy, and expanding
the applicability of gene therapy to patients. We are developing proprietary technologies that have the potential to
augment the safety and efficacy of our product candidates and broaden the applicability of our gene therapies to a wider
range of diseases and patients. These technologies include (i) miQURE, our one-time administered gene silencing platform,
(ii) tailored vectors, promoters, and other enhancers; (iii) optimized delivery and administration techniques; and (iv) novel
transgenes. These technologies are developed both in-house by our experienced research team in Amsterdam, the
Netherlands, as well as via collaborations with third parties.
Continue to expand our intellectual property portfolio. We have established what we believe is a leading
intellectual property portfolio covering various aspects of our technology and programs, including (i) elements of our gene
therapy constructs, such as AAV vectors, promoters and transgenes, including the novel Padua-FIX gene we utilize in
etranacogene dezaparvovec for hemophilia B; (ii) innovative delivery technologies, such as re-administration of AAV gene
therapy; and (iii) proprietary manufacturing processes covering key components of our upstream and downstream
capabilities. We expect to continue to expand our intellectual property portfolio by aggressively seeking patent protection
for promising aspects of our technology platform and product candidates.
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Our Product Candidates
A summary of our key development programs is provided below:
Liver-directed diseases
Hemophilia B (etranacogene dezaparvovec)
Hemophilia B Disease and Market Background
Hemophilia B is a serious and rare inherited disease in males characterized by insufficient blood clotting. The
condition can lead to repeated and sometimes life-threatening episodes of external and internal bleeding following
accidental trauma or medical interventions. Severe hemophilia is characterized by recurrent episodes of spontaneous joint
bleeds that cause long-term damage to the joints resulting in disabling arthropathy. Bleeds may be fatal if they occur in the
brain. The deficient blood clotting results from the lack of functional human Factor IX (“hFIX”). Treatment of hemophilia
B today consists of prophylactic or on-demand protein replacement therapy, in which one to three times weekly
intravenous administrations of plasma-derived or recombinant hFIX are required to prevent bleeding and once daily
infusions in case bleeding occurs. Hemophilia B occurs in approximately 1 out of 30,000 live male births.
CSL Behring collaboration
On June 24, 2020, we entered into the CSL Behring Agreement pursuant to which CSL Behring would receive
exclusive global rights to etranacogene dezaparvovec. Pursuant to the CSL Behring Agreement, we would be responsible
for the completion of the HOPE-B clinical trial, manufacturing process validation, and the manufacturing supply of
etranacogene dezaparvovec until such time that these capabilities may be transferred to CSL Behring or its designated
contract manufacturing organization. Concurrently with the execution of the CSL Behring Agreement we and CSL Behring
entered into a development and commercial supply agreement, pursuant to which, among other things, we would supply
etranacogene dezaparvovec to CSL Behring at an agreed-upon price. Clinical development and regulatory activities
performed by us pursuant to the CSL Behring Agreement would be reimbursed by CSL Behring. CSL Behring would be
responsible for global regulatory submissions and commercialization requirements for etranacogene dezaparvovec. The
CSL Behring Agreement continues to be subject to antitrust review in the U.S. and as such is not yet effective.
Our Development of etranacogene dezaparvovec for Hemophilia B
We are currently developing etranacogene dezaparvovec, a gene therapy for patients with hemophilia B that is
designed to restore FIX activity, an essential protein for blood clotting. Etranacogene dezaparvovec includes an AAV5
vector incorporating the FIX-Padua variant (“FIX-Padua”). Etranacogene dezaparvovec is identical in structure to our first-
generation hemophilia B product candidate, AMT-060, apart from two nucleotide substitutions in the coding sequence for
FIX. The FIX-Padua variant expresses a protein with a single amino acid substitution that has been reported in multiple
preclinical and nonclinical studies to provide an approximate eight-to nine-fold increase in FIX activity compared to the
wild-type FIX protein, which was incorporated in AMT-060. All other critical quality attributes of AMT-061 are expected
to be comparable to those of AMT-060, as AMT-061 utilizes the same AAV5 capsid and proprietary insect cell-based
manufacturing platform.
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Etranacogene dezaparvovec
is
intended
to be delivered by
intravenous
(“IV”)-infusion, without
immunosuppressant therapy, through the peripheral vein in a single treatment session for approximately 30 minutes.
Our goal for etranacogene dezaparvovec is to develop a gene therapy with the following profile:
-
-
-
-
long-term safety, including a favorable immunogenicity profile;
predictable, sustained and potentially curative increases in FIX activity;
significant reductions in both bleeding rates and the need for FIX replacement therapy; and
broad patient eligibility, including the potential to treat all or nearly all patients with hemophilia B.
AAV5-based gene therapies have been used in a multitude of clinical trials, including five clinical trials conducted
by us in patients with hemophilia B and other disorders. No patient treated in clinical trials with our AAV5-based gene
therapies has experienced any confirmed, cytotoxic T-cell-mediated immune response to the capsid. An independent
clinical trial has demonstrated that AAV5 has the lowest prevalence of pre-existing neutralizing antibodies compared to
other AAV vectors. Data from our clinical, preclinical, and nonclinical studies suggest that all, or nearly all patients may be
eligible for treatment with etranacogene dezaparvovec.
The FDA has agreed that etranacogene dezaparvovec will fall under the existing Breakthrough Therapy
Designation and IND for AMT-060, and the EMA has also agreed that etranacogene dezaparvovec will fall under the
PRIME designation.
In June 2018, we initiated our Phase III HOPE-B pivotal trial of etranacogene dezaparvovec. The trial is a
multinational, multi-center, open-label, single-arm study to evaluate the safety and efficacy of etranacogene dezaparvovec.
In March 2020, we completed dosing of the 54 patients in the HOPE-B trial. The targeted number of patients to be
dosed per the clinical trial protocol was 50. As set forth previously, we have implemented and continue to implement
various measures to allow us to closely monitor the trial within the guidance provided by the FDA regarding the impact of
the COVID-19 coronavirus pandemic to minimize any risk or disruption in patient follow-up visits. The adult hemophilia B
patients, who were classified as severe or moderately severe, were enrolled in a six-month observational period prior to
dosing during which time they continued to use their current standard of care to establish a baseline control. After the six-
month lead-in period, patients received a single IV-administration of etranacogene dezaparvovec. Patients enrolled in the
HOPE-B trial were tested for the presence of pre-existing neutralizing antibodies to AAV5 but not excluded from the trial
based on their titers. The primary endpoints of the study are based on the FIX activity level achieved following the
administration of etranacogene dezaparvovec after 26 weeks and 52 weeks after dosing as well as annualized bleed rates
during the 52 weeks after dosing.
In December 2020, we announced top-line data from the HOPE-B trial. The 26-week follow-up date from the trial
showed that FIX activity in the 54 patients increased after dosing from ≤ 2% to a mean of 37.2% at 26 weeks, meeting a
first primary endpoint of the HOPE-B trial. No correlation between pre-existing neutralizing antibodies and FIX activity
was found in patients with neutralizing antibody titers up to 678.2, a range expected to include more than 95% of the
general population; one patient with a neutralizing antibody titer of 3,212.3 did not show an increase in FIX activity. Less
than 1% of the general population is expected to have neutralizing antibody titers of greater than 3,000.
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During the 26-week period after dosing, 15 patients (28%) reported a total of 21 bleeding events, representing a
reduction of 83% compared to the 123 bleeding events reported by 38 patients (70%) during the observational lead-in
phase of the trial. Total bleeds include any bleeding event reported after the treatment of etranacogene dezaparvovec,
including spontaneous, traumatic, and those associated with unrelated medical procedures, whether or not FIX treatment
was required. Of the total bleeding events reported during the 26-week period after dosing, only three were classified as
spontaneous bleeds requiring treatment, representing a reduction of 92% compared to the 37 such bleeding events reported
during the observational lead-in phase. Mean annualized usage of FIX replacement therapy, a secondary endpoint in the
clinical trial, declined by 96% during the 26-week period after dosing compared to the observational lead-in phase.
Etranacogene dezaparvovec was generally well-tolerated. As of the November 2020 cut-off date, most adverse events were
classified as mild (81.5%). The most common events included transaminase elevation treated with steroids per protocol (9
patients; 17%), infusion-related reactions (7 patients; 13%), headache (7 patients; 13%) and influenza-like symptoms (7
patients; 13%). Liver enzyme elevations resolved with a tapering course of corticosteroids and FIX activity remained in the
mild range in the steroid treated patients. No relationship between safety and neutralizing antibody titers was observed.
Based on interactions with the FDA and the EMA, we plan to incorporate FIX activity and bleeding rates at 52 weeks as
additional co-primary endpoints in the study.
On December 21, 2020, our clinical trials of etranacogene dezaparvovec, including our HOPE-B trial were placed
on clinical hold by the FDA. The clinical hold was initiated following the submission of a safety report in mid-December
relating to a possibly related serious adverse event associated with a preliminary diagnosis of HCC, a form of liver cancer,
in one patient in the HOPE-B trial that was treated with etranacogene dezaparvovec in October 2019. The patient has
multiple risk factors associated with HCC, including a twenty-five-year history of HCV, HBV, evidence of non-alcoholic
fatty liver disease and advanced age. Chronic infections with hepatitis B and C have been associated with approximately
80% of HCC cases.
The liver lesion was detected during a routine abdominal ultrasound conducted as part of the required study
assessments in patients at one-year post dosing. A surgical resection of the lesion has occurred, and an analysis of the tissue
samples was initiated in early 2021. On February 19, 2021, we reported initial results from this analysis to the FDA in
accordance with pharmacovigilance requirements. We are gathering final data from these molecular analyses and will be
preparing a detailed response to the FDA’s clinical hold questions regarding this event. Currently, we do not have adequate
data to determine a possible causal relationship, especially in the context of the other known risk factors. We currently do
not anticipate any impact on our regulatory submission timelines, including the filing of a BLA.
No other cases of HCC have been reported in our clinical trials conducted in more than 67 patients in hemophilia
B, with some patients dosed more than 5 years ago.
In September 2018, we completed the dosing of a Phase IIb dose-confirmation study of etranacogene
dezaparvovec. The Phase IIb study is an open-label, single-dose, single-arm, multi-center trial being conducted in the
United States. The objective of the study was to evaluate the safety and tolerability of etranacogene dezaparvovec and
confirm the dose based on FIX activity at six weeks after administration. Three patients with severe hemophilia were
enrolled in this study and received a single intravenous infusion of 2x1013 genome copies per kilogram (“gc/kg”). Patients
were evaluated for the presence of pre-existing neutralizing antibodies to AAV5 but were not excluded from the trial on
this basis. We have followed the patients for more than two years to assess FIX activity, bleeding rates and usage of FIX
replacement therapy, and will monitor the three patients for a total of five years to evaluate the safety of etranacogene
dezaparvovec.
In December 2018, the study’s Data Monitoring Committee evaluated initial data from the Phase IIb study and
confirmed the dose of 2x1013 gc/kg for the Phase III pivotal trial.
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In February, May, July, and December 2019, and in December 2020, we presented updated data from the Phase
IIb dose-confirmation study of etranacogene dezaparvovec. The most recent data that we announced in December 2020
from the Phase IIb study of etranacogene dezaparvovec show that all three patients experienced increasing and sustained
FIX levels after a one-time administration of etranacogene dezaparvovec. Mean FIX activity was 44.2% of normal two
years after administration, exceeding threshold FIX levels generally considered sufficient to significantly reduce the risk of
bleeding events. The first patient achieved FIX activity of 44.7% of normal, the second patient was 51.6% of normal and
the third patient was 36.3% of normal. The second and third patients had previously screen-failed and were excluded from
another gene therapy study due to pre-existing neutralizing antibodies to a different AAV vector. At two years after dosing,
two of the three participants remain free from bleeds and use of FIX replacement therapy. A single bleed has been reported
in one participant, who has used a total of two FIX infusions (excluding surgery). All patients have remained free of
prophylaxis in the two years since receiving etranacogene dezaparvovec.
Intellectual Property for etranacogene dezaparvovec
In 2017, we acquired intellectual property from Professor Paolo Simioni (“Dr. Simioni”), a hemophilia expert at
the University of Padua, Italy. The intellectual property includes U.S. Patent Number 9,249,405, which covers
compositions of FIX-Padua nucleic acids and polypeptides (proteins), as well as their therapeutic uses.
On May 29, 2018, the U.S. Patent and Trademark Office (“USPTO”) granted us a second patent, U.S. Patent
Number 9,982,248, which covers methods of treating coagulopathies (bleeding disorders), including hemophilia B, using
AAV-based gene therapy with nucleic acid encoding the hyperactive FIX Padua variant. The FIX Padua variant is a FIX
protein carrying a leucine at the R338 position, often called the "FIX-Padua" or "Padua mutant".
On November 5, 2019, the USPTO granted us a third patent, U.S. Patent Number 10,465,180, which covers any
AAV comprising a nucleic acid encoding a FIX-Padua protein, and promoter sequences, transcription termination and
control elements. The claims also cover FIX-Padua variants with at least 70% sequence identity to FIX-R338L.
In addition to the U.S. patents, on February 20, 2018, the Canadian Intellectual Property Office granted Patent
Number 2,737,094, which covers FIX-Padua nucleic acids for use in gene therapy and FIX-Padua polypeptides for use in
FIX replacement therapy.
On June 13, 2018, we were granted European Patent 2337849 directed to a FIX polypeptide protein. The
opposition period with respect to such patent expired on March 13, 2019, by which time five parties had filed an
opposition. On July 25, 2019, we submitted responses to such oppositions with the European Patent Office (“EPO”). Oral
proceedings were scheduled for June and July 2020 but were postponed due to COVID-19. New dates for virtual oral
proceedings have been set for May 2021. In addition, on May 15, 2019, a divisional European patent application in the
FIX-Padua family, EP 3252157, was refused. In September 2019, we filed a notice of appeal with respect to such refusal.
We are also pursuing a European divisional patent application that was filed on May 14, 2019. Both in the U.S. and in
Europe, we have pending divisional applications still in prosecution phases. The appeal process has been delayed as a
result of the COVID-19 pandemic, and we do not currently know when the appeal is likely to be resolved.
On January 4, 2020, a petition seeking Inter Partes Review of U.S. Patent No. 9,249,405 (the “’405 Patent”) was
filed by Pfizer, Inc. (the “IPR Proceeding”). The petition sought to invalidate claims 6 and 9-15 of the ‘405 Patent. On
April 17, 2020, we filed our preliminary response to the petition, disclaiming claims 6 and 9-13 of the ‘405 patent and
otherwise requesting the denial of the petition. On July 13, 2020, the United States Patent and Trademark Office issued its
decision to institute the Inter Partes Review. On October 13, 2020, we filed a motion to amend the patent claims at issue in
the proceeding. On January 13, 2021, Pfizer filed a brief in opposition to our motion to amend the claims. On February 3,
2021 the Patent Appeals Board of the USPTO (the “PTAB”) provided its preliminary guidance with respect to the proposed
amended claims, which stated among other things that the proposed amended claims were not anticipated but were obvious
in light of the cited prior art. On February 16, 2021 and in response to the preliminary guidance, we moved to dismiss our
motion to amend the claims before the PTAB and requested an adverse judgement in the IPR Proceeding. As a result, we
expect to maintain the currently issued and unchallenged claims of the ‘405 Patent and pursue additional claims based on
our proposed amended claims in continuation applications before the USPTO.
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Phase I/II Clinical Trial of AMT-060
In the third quarter of 2015, we initiated a Phase I/II clinical trial of AMT-060, our first-generation hemophilia B
product candidate, in patients with severe or moderately-severe hemophilia B. AMT-060 consists of an AAV5 vector
carrying a codon-optimized, wild-type, human FIX gene cassette licensed from St. Jude Children’s Research Hospital. The
study is a five-year, open-label, uncontrolled, single-dose, dose-ascending multi-center trial that includes two cohorts, with
the low-dose cohort using a treatment of 5x1012 gc/kg and the second-dose cohort using 2x1013 gc/kg. We enrolled five
patients into the low dose cohort in the third quarter of 2015. Another five patients were enrolled into the high dose cohort
between March and May 2016.
In December 2020, we presented five-year follow-up data related to this Phase I/II clinical trial. All 10 patients
enrolled continue to show long-term clinical benefit, including sustained increases in FIX activity, reduced usage of FIX
replacement therapy, and decreased bleeding frequency. At up to five years of follow-up, AMT-060 continues to be well-
tolerated, with no new treatment-related adverse events since the last reported data and no development of inhibitors during
the study.
All five patients in the second dose cohort of 2x1013 gc/kg (the same dose being studied in the Phase III HOPE-B
study of etranacogene dezaparvovec) continue to be free of routine FIX replacement therapy at four-and-a-half years after
treatment. Based on the six months of data collected during the fifth year of follow-up, the mean annualized bleeding rate
was zero compared to an average of four bleeds during the year prior to treatment, representing a 100% reduction. During
this same period, the usage of FIX replacement therapy declined to zero compared to 354,800 IU in the year prior to
treatment, representing a 100% reduction. Mean FIX activity over 4.5 years was 7.4% (compared to 7.5% at three and a
half years, 7.9% in the third year, 8.4% in the second year and 7.1% in the first year), while in the lower dose cohort, mean
FIX activity was 5.2% over 5 years since treatment.
Fabry disease program (AMT-190)
Fabry Disease and Market Background
Fabry disease is a progressive, inherited, multisystemic lysosomal storage disease characterized by specific
neurological, cutaneous, renal, cardiovascular, cochleo-vestibular, and cerebrovascular manifestations. Fabry disease is
caused by a defect in a gene that encodes for a protein called α-galactosidase A (“GLA”). The GLA protein is an essential
enzyme required to breakdown globotriaosylsphingosine (“Gb3”) and lyso-globotriaosylsphingosine (“lyso-Gb3”). In
patients living with Fabry disease, Gb3 and lyso-Gb3 accumulate in various cells throughout the body causing progressive
clinical signs and symptoms of the disease. Current treatment options, which consist of bi-weekly intravenous enzyme
replacement therapy, typically have no therapeutic benefit in patients with advanced renal or cardiac disease. Studies have
also shown that a majority of male patients develop antibodies that inhibit the GLA protein and interfere with therapeutic
efficacy.
Fabry disease has two major disease phenotypes: the type 1 “classic” and type 2 “later-onset” subtypes. Both lead
to renal failure, and/or cardiac disease, and early death. Type 1 males have little or no functional a-Gal A enzymatic
activity (<1% of normal mean) and marked accumulation of GL-3/Gb3 and related glycolipids in capillaries and small
blood vessels which cause the major symptoms in childhood or adolescence. In contrast, males with the type 2 “later-
onset” phenotype (previously called cardiac or renal variants) have residual a-Gal A activity, lack GL-3/Gb3 accumulation
in capillaries and small blood vessels, and do not manifest the early manifestations of type 1 males. They experience an
essentially normal childhood and adolescence. They typically present with renal and/or cardiac disease in the third to
seventh decades of life. Most type 2 later-onset patients have been identified by enzyme screening of patients in cardiac,
hemodialysis, renal transplant, and stroke clinics and recently by newborn screening. Fabry disease occurs in all racial and
ethnic populations and affects males and females. It is estimated that type 1 classic Fabry disease affects approximately one
in 40,000 males. The type 2 later-onset phenotype is more frequent, and in some populations may occur as frequently as
about 1 in 1,500 to 4,000 males.
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Our Development of AMT-190 for Fabry Disease
In September 2020, we selected a lead gene therapy candidate (AMT-190) for the treatment of Fabry disease to
advance into IND-enabling studies. The lead candidate is a one-time administered AAV5 gene therapy incorporating the
GLA transgene. In preclinical studies comparing multiple product candidates, including constructs incorporating a
modified alpha-N-acetylgalactosaminidase transgene (modNAGA), AMT-190 demonstrated the most robust and sustained
increases in GLA activity.
Hemophilia A program (AMT-180)
In June 2020, we announced that we plan to de-prioritize our research program of AMT-180 for patients with
hemophilia A, as part of our effort to focus on those gene therapy programs that have the greatest potential to improve
patients’ lives and generate long-term value for shareholders.
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Central Nervous System diseases
Huntington’s Disease
Huntington’s Disease and Market Background
Huntington’s disease is a severe genetic neurodegenerative disorder causing loss of muscle coordination,
behavioral abnormalities, and cognitive decline, often resulting in complete physical and mental deterioration over a 12 to
15-year period. The median survival time after onset is 15 to 18 years (range: 5 to >25 years). Huntington’s disease is
caused by an inherited defect in a single gene that codes for a protein called Huntingtin (“HTT”). The prevalence of
Huntington’s disease is three to seven per 100,000 in the general population, similar in men and women, and it is therefore
considered a rare disease. Despite the ability to identify Huntington’s disease mutation carriers decades before onset, there
is currently no available therapy that can delay onset or slow progression of the disease. Although some symptomatic
treatments are available, they only are transiently effective despite significant side effects.
Our Development of AMT-130 for Huntington’s Disease
AMT-130 is our gene therapy candidate targeting Huntington’s disease that utilizes an AAV vector carrying an
engineered micro ribonucleic acid (“miRNA”) designed to silence HTT and exon 1 HTT, a potentially highly toxic protein
fragment that may also contribute to disease pathology. AMT-130 comprises a recombinant AAV5 vector carrying a
deoxyribonucleic acid (“DNA”) cassette, encoding a miRNA that non-selectively lowers or knocks-down HTT and exon 1
HTT in Huntington’s disease patients. AMT-130 was developed using our miQURE technology, a proprietary, one-time
administered gene silencing platform. AMT-130 has received orphan drug designation from the FDA and Orphan
Medicinal Product Designation from the EMA. AMT-130 is intended to be administered directly into the brain via a
stereotactic, magnetic resonance imaging guided catheter.
Our goal for AMT-130 is to develop a gene therapy with the following profile:
(1) One-time administration of disease-modifying therapy into the striatum, the area of the brain where
Huntington’s disease is known to manifest;
(2) Biodistribution of the therapy in both the deep and cortical structures of the brain via transport of the AAV
vector and through secondary exosome-mediated delivery; and
(3) Safe, on-target and durable knockdown of HTT and exon 1 HTT.
In April 2018, we presented an overview of preclinical data establishing proof-of-concept for AMT-130 at the
2018 American Academy of Neurology Annual Meeting in Los Angeles, California. Data from multiple studies in
Huntington's disease animal models across three different species showed that a single intraparenchymal administration of
AMT-130 into the striatum, resulted in a dose-dependent and sustained reduction of mutant huntingtin protein (“mHTT”) in
both the deep structures of the brain and the cortex. Specifically, we presented data from the ongoing preclinical study in
transgenic minipigs, one of the largest Huntington's disease animal models available, demonstrating significant reductions
in human mHTT by a median of 68% in the striatum and a median of 47% in the frontal cortex at 6 months after
administration of AMT-130.
In January 2019, our IND application for AMT-130 was cleared by the FDA and in the fourth quarter of 2019 we
initiated patient screening for a Phase I/II study. The Phase I/II protocol is a randomized, imitation surgery-controlled,
double-blinded study conducted at three surgical sites, and multiple referring, non-surgical sites in the U.S. The primary
objective of the study is to evaluate the safety, tolerability and efficacy of AMT-130 at two doses.
In February 2019, we presented new preclinical data at the 14th Annual CHDI Huntington’s disease Therapeutics
Conference that illustrate the therapeutic potential of AMT-130 in restoring function of damaged brain cells in
Huntington’s disease. In that study, AMT-130 was generally well-tolerated and resulted in a sustained reduction of mutant
huntingtin protein.
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In June 2020, we announced the completion of the first two patient procedures in the Phase I/II clinical trial of
AMT-130 for the treatment of Huntington’s disease. These procedures occurred after a postponement that resulted from the
COVID-19 pandemic and the associated states of emergency declarations in the United States. The Phase I/II protocol is a
randomized, imitation surgery-controlled, double-blinded study conducted at three surgical sites, and multiple referring,
non-surgical sites in the U.S. The primary objective of the study is to evaluate the safety, tolerability, and efficacy of AMT-
130 at two doses.
On September 25, 2020, we announced that the independent DSMB overseeing the Phase I/II clinical trial of
AMT-130 for the treatment of Huntington’s disease had met and reviewed 90-day safety data from the first two patients
enrolled in the trial. No significant safety concerns were noted to prevent further dosing.
On October 13, 2020, we announced the completion of the third and fourth patient procedures in the Phase I/II
clinical trial.
On February 8, 2021, we announced that the DSMB had met and reviewed the six-month safety data from the
first two enrolled patients and the 90-day safety data from the next two enrolled patients in the study. No significant safety
concerns were noted to prevent further dosing, and the final six patients in the first cohort are now cleared for enrollment.
Spinocerebellar Ataxia Type 3 program
Spinocerebellar Ataxia type 3 and Market Background
Spinocerebellar Ataxia type 3 (“SCA3”), also known as Machado-Joseph disease, is a central nervous system
disorder caused by a cytosine-adenine-guanine (“CAG”)-repeat expansion in the ATXN3 gene that results in an abnormal
form of the protein ataxin-3. Patients with SCA3 experience brain degeneration that results in movement disorders, rigidity,
muscular atrophy, and paralysis. There is currently no treatment available that slows the progressive course of this
potentially lethal disease.
Prevalence of SCA3 is estimated to be one to two per 100,000 with significant geographical and ethnic
variations, with the highest prevalence rates observed in the Azores (Flores Island (1/239)), the intermediate prevalence
rates observed in Portugal, Germany, the Netherlands, China and Japan, and the lower prevalence observed in North
America, Australia, and India. SCA3 is the most common form of autosomal dominant cerebellar ataxia (“ADCA”) type 1
in most genetically characterized populations.
Our preclinical SCA3 program (AMT-150)
AMT-150 is a one-time, intrathecally-administered, AAV gene therapy incorporating our proprietary miQURE
silencing technology that is designed to halt ataxia in early manifest SCA3 patients. In an in-vitro study with human
induced pluripotent stem (“IPS”) derived neurons, AMT-150 has been shown to lower the human ataxin-3 protein by 65%,
without any off-target effects. We also performed a proof-of-concept in-life study in SCA3 mice demonstrating that AMT-
150 was able to lower toxic ataxin-3 protein by up to 53% in the cerebellum and up to 65% in the brain stem after a single
administration. Further studies in non-human primates (“NHP”) demonstrate the ability to distribute and express a reporter
gene in the most degenerated brain regions in SCA3. In these preclinical studies, a single administration of AMT-150
resulted in sustained expression and efficient processing with on-target engagement. Additionally, AMT-150 lacked off-
target activity in these studies.
At the 2019 American Academy of Neurology Annual Meeting, we presented preclinical data on AMT-150
demonstrating mechanistic proof-of-concept of the non-allele-specific ataxin-3 protein-silencing approach by using
artificial miRNA candidates engineered to target the ataxin-3 gene in a SCA3 knock-in mouse model. In this proof-of-
concept study, a single AMT-150 injection in the cerebrospinal fluid resulted in AAV transduction and mutant ataxin-3
lowering at the primary sites of disease neuropathology, the cerebellum (up to 53%) and the brainstem (up to 65%).
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In May 2020, we presented preclinical data at the American Society of Gene and Cell Therapy (“ASGCT”)
Annual Meeting, on our gene therapy candidate SCA3. In an in vivo preclinical study, six NHP received a one-time
injection of AMT-150 via the cisterna magna to assess expression and distribution. Samples taken after eight weeks
showed widespread transduction of the brain and spinal cord, with the highest genome copies found in the posterior fossa
and cortical regions. In other preclinical studies, researchers evaluated AMT-150 in SCA3 mouse models, as well as human
induced pluripotent stem cell (“iPSC”)-derived neurons and astrocytes, to investigate potential off-target effects of AAV5-
micro ataxin type 3 (“miATXN3”). The iPSC-derived cell cultures, which were derived from two SCA3 patients, represent
the most disease-relevant cell type for therapeutic targeting of AMT-150. A clear dose-dependent expression of miATXN3
was observed in the iPSC-derived neurons and astrocytes transduced with AMT-150. Mature miATXN3 molecules were
also associated with extracellular vesicles that strongly correlated with the dose and miATXN3 expression, suggesting the
potential therapeutic spread of the engineered miATXN3. Additionally, AMT-150 demonstrated ATXN3 knockdown in
human neurons and various SCA3 mouse models with subsequent neuropathology improvement.
In September 2020, we initiated a safety and toxicology study of AMT-150 in NHP.
New Technology Development
We are seeking to develop next-generation technologies with the goal of further improving the potential of AAV-
based gene therapies to treat patients suffering from debilitating diseases.
We are focused on innovative technologies across each of the key components of an AAV-based gene therapy,
including: (i) the capsid, or the outer viral protein shell that encloses the target DNA; (ii) the promoter, or the DNA
sequence that drives the expression of the transgene; and (iii) the transgene, or therapeutic gene.
We dedicate significant effort to designing and screening novel AAV capsids with the potential for (i) higher
biological potency; (ii) increased specificity and penetration of specific tissue types; and (iii) enhanced safety. We believe
we have significant expertise in vector engineering and have created promising genetically engineered capsids using a
“rational design” approach.
In addition to the directed evolution approach where we screen a library of AAV mutants, we are also rationally
engineering the AAV capsids to target them to specific cells and/or tissues. Using such engineered AAV capsids will ensure
selected transduction of the targeted, desired cell type. The strategy will diminish potential off target effects.
We work extensively on designing synthetic promoters with the potential of enabling higher levels of protein
expression in specific tissue types. A “promoter” is an essential component of a gene therapy construct that controls
expression of a therapeutic protein. Synthetic promoters, which do not exist in nature, are optimally tailored to drive gene
expression at a desired level and specificity.
To further tailor gene therapies to optimally address certain disorders we may also incorporate specific
modifications into the transgenes of our gene therapy constructs. For example, we incorporated the Padua-FIX variant into
our hemophilia B gene therapy to substantially increase the resulting FIX activity and potentially improve clinical
outcomes. For other programs, such as our gene therapy construct for Fabry disease, we have also utilized modified
transgenes with the goal of enhancing efficacy, durability, and safety, as well as expanding the access of gene therapies to
patients with inhibitors.
We have also demonstrated the ability to deliver engineered DNA constructs that can silence or suppress disease-
causing genes. Our miQURE gene silencing platform, based on exclusively licensed technology from Cold Spring Harbor
Laboratory (“CSHL”), is designed to degrade mutated genes without off-target toxicity and induce silencing of the mutated
gene in the entire target organ through secondary exosome-mediated delivery. miQURE-based gene therapy candidates,
such as AMT-130, incorporate proprietary, therapeutic miRNA constructs that can be delivered using AAVs to potentially
provide long-lasting activity. Preclinical studies of miQURE-based gene therapies have demonstrated several important
advantages, including enhanced tissue-specificity, improved nuclear and cytoplasmic gene lowering and no off-target
effects associated with impact to the cellular miRNA or messenger RNA transcriptome.
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Commercial-Scale Manufacturing Capabilities
The ability to reliably produce at a high quality and at commercial scale is a critical success factor in AAV gene
therapy. We produce our gene therapies at our state-of-the-art, Lexington, Massachusetts-based manufacturing facility
using a proprietary baculovirus expression vector system.
We believe our integrated manufacturing capabilities provide us several potential advantages, including:
(1) Know-how. Since our founding in 1998, we have invested heavily in developing optimized processes and methods
to reliably and reproducibly manufacture AAV-based gene therapies at commercial scale. During this time, we
have accumulated significant internal experience and knowledge of the underlying production technology and
critical quality attributes of our products. These learnings have been essential in developing a modular, third
generation production system that can be used to produce all our gene therapy products.
(2) Flexibility. Controlling cGMP manufacturing allows us to rapidly adapt our production schedule to meet the
needs of our business. By controlling our manufacturing, we do not rely on contract manufacturers, nor do we
require costly and time-consuming technology transfers to third parties. Our facility is designed to commercially
supply multiple products and are flexibly designed to accommodate expansion and scale up as our needs change.
(3) Faster Path to Market. We believe our manufacturing platform enables us to rapidly produce new products for
clinical investigation, minimize time between clinical phases and complete scale-up as product candidates
advance into late-stage development and commercialization. For example, in transitioning our hemophilia B
program from AMT-060 to AMT-061, we were able to rapidly demonstrate manufacturing comparability and
produce clinical material for our ongoing Phase III pivotal study, thereby accelerating our time to market.
(4) High Purity. The baculovirus system eliminates the risk of introducing mammalian cell derived impurities.
(5) Scalability. We have demonstrated our manufacturing process is reproducible at volumes ranging from 2 liters to
500 liters and believe it is possible to achieve higher scale production with our insect-cell, baculovirus system.
(6) Low Cost of Goods. We believe our ability to scale production has the potential to significantly reduce unit costs.
Our manufacturing process also utilizes fully disposable components, which enables faster change-over times
between batches and lower costs associated with cleaning and sterilization. Additionally, our production system
does not require the use of plasmids, which can be a costly raw material.
Intellectual Property
Introduction
We strive to protect the proprietary technologies that we believe are important to our business, including seeking
and maintaining patent protection in the United States, Europe, and other countries for novel components of gene therapies,
the chemistries, and processes for manufacturing these gene therapies, the use of these components in gene therapies, our
technology platform, and other inventions and related technology. We also rely on trade secrets, security measures and
careful monitoring of our proprietary information to protect aspects of our business that are not amenable to, or that we do
not consider appropriate for, patent protection.
We expect that our probability of success will be significantly enhanced by our ability to obtain and maintain
patent and other proprietary protection for commercially important technology, inventions and know-how related to our
business, defend and enforce our patents, maintain our licenses to use intellectual property owned by third parties, preserve
the confidentiality of our trade secrets and operate without infringing the valid and enforceable patents and other
proprietary rights of third parties. We also rely on know-how, continuing technological innovation and in-licensing
opportunities to develop, strengthen and maintain our proprietary position in the field of AAV-based gene therapies.
In some cases, we are dependent on the patented or proprietary technology of third parties to develop and
commercialize our products. We must obtain licenses from such third parties on commercially reasonable terms, or our
business could be harmed, possibly materially. For example, we license from third parties essential parts of the therapeutic
gene cassettes as well as the principal AAV vectors we use and key elements of our manufacturing process. We anticipate
that we will require additional licenses in the future.
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Because most patent applications throughout the world are confidential for 18 months after the earliest claimed
priority date, and since the publication of discoveries in the scientific and patent literature often lags actual discoveries, we
cannot be certain that we were the first to invent or file applications for the inventions covered by our pending patent
applications. Moreover, we may have to participate in post-grant proceedings in the patent offices of the United States or
foreign jurisdictions, such as oppositions, reexaminations, or interferences, in which the patentability or priority of our
inventions are challenged. Such proceedings could result in substantial cost, even if the eventual outcome is favorable to
us.
Our intellectual property portfolio consists of owned and in-licensed patents, copyrights, licenses, trademarks,
trade secrets and other intellectual property rights.
Patent Portfolio
Our gene therapy programs are protected by patents and patent applications directed to various aspects of our
technology. For example, our gene therapy programs are protected by patents and patent applications with composition-of-
matter or method of use claims that cover the therapeutic gene, the promoter, the viral vector capsid, or other specific parts
of these technologies. We also seek protection of core aspects of our manufacturing process, particularly regarding our
baculovirus expression system for AAV vectors in insect cells. In addition, we have filed manufacturing patent applications
with claims directed to alternative compositions-of-matter and manufacturing processes to seek better protection from
competitors.
We file the initial patent applications for our commercially important technologies in both Europe and the United
States. For the same technologies, we typically file international patent applications under the PCT within a year. We also
may seek, usually on a case-by-case basis, local patent protection in Canada, Australia, Japan, China, India, Israel, South
Africa, New Zealand, South Korea, and Eurasia, as well as South American jurisdictions such as Brazil and Mexico.
As of December 31, 2020, our intellectual property portfolio included 99 issued or granted patents and 121
pending patent applications. The geographic breakdown of our owned and exclusively in-licensed patent portfolio was as
follows:
● 26 issued U.S. patents;
● 13 granted European patents;
● 7 pending PCT patent applications;
● 18 pending U.S. patent applications;
● 20 pending European patent applications; and
● 83 pending and 60 granted patent applications in other jurisdictions.
These patents relate to a variety of technologies including our product candidates that are in development and our
manufacturing and technology platform.
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Our Patent Portfolio Related to Certain Development Programs
Hemophilia B (AMT-061)
We own a patent family, including patents and patent applications, directed to the use of the Padua mutation in
hFIX for gene therapy in etranacogene dezaparvovec. A PCT application was filed on September 15, 2009, and patents
have been issued in the United States, Europe, and Canada. Further applications are pending in the United States (three
issued patents), Europe, and Hong Kong. The issued patents include claims directed to FIX protein with a leucine at the
R338 position of the protein sequence, nucleic acid sequences coding for this protein, and therapeutic applications,
including gene therapy. The standard 20-year patent term of patents in this family will expire in 2029.
On June 13, 2018, we were granted European Patent 2337849 directed to a polypeptide protein. The opposition
period with respect to such patent expired on March 13, 2019, by which time five parties had filed an opposition. On July
25, 2019, we submitted responses to such oppositions with the EPO and oral proceedings with respect to such oppositions
were scheduled for June and July 2020 but were postponed due to COVID-19. New dates for virtual oral proceedings have
been set for May 2021. In addition, on May 15, 2019, a divisional European patent application in the FIX-Padua family, EP
3252157, was refused. In September 2019, we filed a notice of appeal with respect to such refusal. We are also pursuing a
European divisional patent application that was filed on May 14, 2019. Both in the U.S. and in Europe, we have pending
divisional applications still in prosecution phases. The appeal process has been delayed as a result of the COVID-19
pandemic, and we do not currently know when the appeal is likely to be resolved.
On November 5, 2019, the USPTO granted us a third patent, U.S. Patent Number 10,465,180, which covers any
AAV comprising a nucleic acid encoding a FIX-Padua protein, and promoter sequences, transcription termination and
control elements. The claims also cover FIX-Padua variants with at least 70% sequence identity to FIX-R338L.
On January 4, 2020, the IPR Proceeding was filed by Pfizer, Inc. The petition sought to invalidate claims 6 and 9-
15 of the ‘405 Patent. On April 17, 2020, we filed our preliminary response to the petition, disclaiming claims 6 and 9-13
of the ‘405 patent and otherwise requesting the denial of the petition. On July 13, 2020, the United States Patent and
Trademark Office issued its decision to institute the Inter Partes Review. On October 13, 2020, we filed a motion to amend
the patent claims at issue in the proceeding. On January 13, 2021, Pfizer filed its opposition to our motion to amend the
claims. On February 3, 2021 the PTAB provided its preliminary guidance with respect to the proposed amended claims,
which stated among other things that the proposed amended claims were not anticipated but were obvious in light of the
cited prior art. On February 16, 2021 and in response to the preliminary guidance, we moved to dismiss our motion to
amend the claims before the PTAB and requested an adverse judgement in the IPR Proceeding. As a result, we expect to
maintain the currently issued and unchallenged claims of the ‘405 Patent and pursue additional claims based on our
proposed amended claims in continuation applications before the USPTO.
Huntington’s disease (AMT-130)
We own a patent family directed to gene therapy treatment of Huntington’s disease within AMT-130. This family
includes an issued patent in the United States and pending patent applications in the US, Europe, and other jurisdictions.
The standard 20-year term of patents in this family will expire in 2035.
In May 2019, we announced the issuance of two new patents covering AMT-130, U.S. Patent 10,174,321 and
European Patent EP 3237618 B1. The claims as granted cover the RNA constructs specifically designed to target exon1
and the embedding of these Huntington’s disease RNA sequences into the miR451 scaffold, which is exclusively licensed
to us from CSHL. The claims also cover certain expression cassettes comprising the RNA constructs and the use of gene
therapy vectors including AAV vectors encompassing the described expression cassettes. In addition, this patent family has
multiple pending family members, including pending applications in U.S. and Europe.
AMT-130 incorporates our proprietary miQURE gene silencing technology platform, which is designed to
degrade disease-causing genes, without off-target toxicity, and induce silencing of the entire target organ through secondary
exosome-mediated delivery. We have filed additional patent applications related to this technology generally and AMT-
130, specifically which will potentially provide further patent protection for our Huntington’s disease clinical candidate
AMT-130.
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Licenses
We have obtained exclusive or non-exclusive rights from third parties under a range of patents and other
technology that we use in our product and development programs, as described below. Our agreements with these third
parties generally grant us a license to make, use, sell, offer to sell, and import products covered by the licensed patent rights
in exchange for our payment of some combination of an upfront amount, annual fees, royalties, a percentage of amounts
we receive from our licensees and payments upon the achievement of specified development, regulatory or commercial
milestones. Some of the agreements specify the extent of the efforts we must use to develop and commercialize licensed
products. The agreements generally expire upon expiration of the last-to-expire valid claim of the licensed patents. Each
licensor may terminate the applicable agreement if we materially breach our obligations and fail to cure the breach within a
specified cure period.
Technology Used for Multiple Programs
We are exploiting technology from third-party sources described below in more than one of our programs.
Cold Spring Harbor Laboratory
In 2015, we entered into a license agreement with CSHL in which CSHL granted to us an exclusive, sublicensable
license to develop and commercialize certain of CSHL’s patented RNAi-related technology for use in connection with the
treatment or prevention of Huntington’s disease. The standard 20-year patent term for the licensed patents expires in 2031.
In 2018, we entered into an amendment of the license agreement with CSHL that expanded the license to include
the diagnosis, treatment, or prevention of all CNS diseases in the Field, including but not limited to Huntington’s disease.
In addition, under the amended license agreement CSHL granted to us an exclusive license for a three-year term to develop
and commercialize therapeutic products for the additional disease classifications in the Field of liver diseases,
neuromuscular diseases, and cardiovascular diseases. If we meet certain diligence milestones during the initial three-year
development term, we may include exclusively additional disease classifications within the additional Fields on similar
terms and conditions as the CNS diseases. We are currently using the technology in our Huntington’s disease and SCA 3
programs.
Under this license agreement, annual fees, development milestone payments and future single-digit royalties on
net sales of a licensed product are payable to CSHL.
Protein Sciences
In 2016, we revised our existing license contract with Protein Sciences Corporation for the use of its expresSF+
insect cell line and associated technology for human therapeutic and prophylactic uses (except influenza) to provide us
with a royalty free, perpetual right and license to the licensed technology in the field of AAV-based gene therapy.
Technology Used for Specific Development Programs
Hemophilia B
National Institutes of Health—AAV production
In 2007, we entered into a non-exclusive license agreement with the NIH, which we amended in 2009 and 2013.
The patents under this license cover technology to produce AAV vectors in insect cells. We may only grant sublicenses
under this agreement with the NIH’s consent, which may not be unreasonably withheld. The standard 20-year term for the
underlying patents will expire in 2022.
Payment obligations to the NIH under this license agreement include a low single-digit percentage royalty on the
net sales of licensed products by us or on our behalf; development and regulatory milestone payments; and an annual
maintenance fee creditable against royalties. We do not have to pay royalties or milestone fees under this agreement if we
must pay royalties or milestone fees under our 2011 agreement with the NIH, described below, for the same product. Under
the license agreement, we have agreed to meet benchmarks in our development efforts, including as to development events,
clinical trials, and marketing approval, within specified timeframes.
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The NIH may terminate this agreement in specified circumstances relating to our insolvency or bankruptcy. We
may terminate this agreement for any reason, in any territory, subject to a specified notice period.
National Institutes of Health—AAV5
In 2011, we entered into another license agreement with the NIH, superseding an earlier agreement. This
agreement was amended in 2016. Under this agreement, the NIH granted us an exclusive, worldwide license to patents
relating to AAV5 for use in therapeutic products to be delivered to the brain or liver for treatment of human diseases
originating in the brain or liver but excluding arthritis-related diseases, and a non-exclusive, worldwide license to patents
relating to AAV5 for all other diseases. The license technology under the patents of this license is also used in connection
with the Huntington’s disease program. We refer to the products licensed under this agreement as AAV5 products. We may
grant sublicenses under this agreement only with the NIH’s consent, which may not be unreasonably withheld. The
standard 20-year term for the underlying patents expired in 2019, but there are U.S. patents still in force of which the latest
will expire in 2021.
Payment obligations to the NIH under this license agreement include royalties equal to a low single-digit
percentage of net sales of AAV5 products; development and regulatory milestone payments; and an annual maintenance fee
creditable against royalties. If an AAV5 product is also covered by our 2007 agreement with the NIH, our obligation to pay
royalties on net sales and our obligation to pay milestone fees only apply under this 2011 agreement and not the 2007
agreement. We have agreed to meet benchmarks in our development efforts, including as to development events, clinical
trials, and marketing approval, within specified timeframes.
The NIH may terminate this agreement in specified circumstances relating to our insolvency or bankruptcy. We
may terminate this agreement for any reason, in any country or territory, subject to a specified notice period.
Padua
On April 17, 2017, we entered into an Assignment and License Agreement with Dr. Simioni (the “Padua
Assignment”). Pursuant to the Padua Assignment, we acquired from Dr. Simioni all right, title and interest in a patent
family covering the variant of the FIX gene, carrying an R338L mutation (FIX-Padua; “Padua IP”). Under the Padua
Assignment, we have also licensed certain know-how included in the Padua IP. We will provide Dr. Simioni with an initial
license fee and reimbursement of past expenses, as well as payments that may come due upon the achievement of certain
milestone events related to the development of the Padua IP and may also include royalties on a percentage of certain
revenues. We have granted a license of the Padua IP back to Dr. Simioni for therapeutic or diagnostic use of a modified
Factor IX protein (other than in connection with gene therapy) and any application for non-commercial research purposes.
We have agreed to indemnify Dr. Simioni for claims arising from our research, development, manufacture, or
commercialization of any product making use of the Padua IP, subject to certain conditions. The Padua Assignment will
remain in effect, unless otherwise terminated pursuant to the terms of the Padua Assignment, until the later of (i) the
expiration date of the last of the patents within the Padua IP and (ii) the expiration of the payment obligations under the
Padua Assignment.
St. Jude Children’s Research Hospital
In 2008, we entered into a license agreement with St. Jude, which we amended in 2012. Under this license
agreement, St. Jude has granted us an exclusive license, with a right to sublicense, to patent rights relating to expression of
hFIX in gene therapy vectors, to make, import, distribute, use, and commercialize products containing hFIX covered by a
valid patent claim in the field of gene therapy for treatment or prophylaxis of hemophilia B. In addition, we have a first
right of negotiation regarding any patent applications that are filed by St. Jude for any improvements to the patent rights
licensed to us. The U.S. patent rights will expire in 2028 and the European patents will expire in 2025.
We have agreed to pay St. Jude a royalty equal to a low single-digit percentage of net sales, if any, by us or our
sublicensees of products covered by the licensed patent rights, and a portion of certain amounts we receive from
sublicensees ranging from a mid-single digit to a mid-teen double-digit percentage of such amounts. We have also agreed
to pay St. Jude one-time milestone fees totaling $6.5 million upon the achievement of specified development and
regulatory milestones, and an annual maintenance fee creditable against royalties and milestones in the same year. We have
agreed to use commercially reasonable efforts to diligently develop and commercialize products licensed under this
agreement.
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The agreement will remain in effect until no further payment is due relating to any licensed product under this
agreement or either we or St. Jude exercise our rights to terminate it. St. Jude may terminate the agreement in specified
circumstances relating to our insolvency. We may terminate the agreement for convenience at any time subject to a
specified notice period.
Trade Secrets
In addition to patents and licenses, we rely on trade secrets and know-how to develop and maintain our
competitive position. For example, significant aspects of the process by which we manufacture our gene therapies are
based on unpatented trade secrets and know-how. We seek to protect our proprietary technology and processes and obtain
and maintain ownership of certain technologies, in part, through confidentiality agreements and invention assignment
agreements with our employees, consultants, scientific advisors, contractors and commercial collaborator. We also seek to
preserve the integrity and confidentiality of our data, trade secrets and know-how by maintaining physical security of our
premises and physical and electronic security of our information technology systems.
Trademarks
We have a number of material registered trademarks, including “uniQure”, that we have registered in various
jurisdictions including the United States and the European Union. We may seek trademark protection for other product
candidates and technologies as and when appropriate.
Competition
The biotechnology and pharmaceutical industries, including in the gene therapy field, are characterized by rapidly
advancing technologies, intense competition, and a strong emphasis on intellectual property. We face substantial
competition from many different sources, including large and specialty pharmaceutical and biotechnology companies,
academic research institutions and governmental agencies and public and private research institutions.
We are aware of numerous companies focused on developing gene therapies in various indications, including
Applied Genetic Technologies Corp., Abbvie, Abeona Therapeutics, Adverum Biotechnologies, Ally Therapeutics, Apic
Bio, Asklepios BioPharmaceutical, Astellas, AVROBIO, Bayer, Biogen, BioMarin, bluebird bio, CRISPR Therapeutics,
Editas Medicine, Expression Therapeutics, Fate, Freeline Therapeutics, Generation Bio, Genethon, GlaxoSmithKline,
Homology Medicines, Intellia Therapeutics, Johnson & Johnson, Krystal Biotech, Lexeo Therapeutics, LogicBio
Therapeutics, Lysogene, MeiraGTx, Milo Biotechnology, Mustang Bio, Novartis, Orchard Therapeutics, Oxford
Biomedica, Passage Bio, Pfizer, REGENXBIO, Renova Therapeutics, Roche, Rocket Pharmaceuticals, Sangamo
Therapeutics, Sanofi, Selecta Biosciences, Sarepta Therapeutics, Sio Therapeutics, Solid Biosciences, SwanBio, Takeda,
Taysha Gene Therapies, Ultragenyx, Vivet Therapeutics, and Voyager Therapeutics, as well as several companies
addressing other methods for modifying genes and regulating gene expression. We may also face competition with respect
to the treatment of some of the diseases that we are seeking to target with our gene therapies from protein, nucleic acid,
antisense, RNAi and other pharmaceuticals under development or commercialized at pharmaceutical and biotechnology
companies such as Alnylam Pharmaceuticals, Bayer, BioMarin, CSL Behring, Dicerna Pharmaceuticals, Ionis
Pharmaceuticals, Novartis, Novo Nordisk, Pfizer, Translate Bio, Roche, Sanofi, Sobi, Takeda, WaVe Life Sciences, and
numerous other pharmaceutical and biotechnology firms.
We also compete with existing standards of care, therapies, and symptomatic treatments, as well as any new
therapies that may become available in the future for the indications we are targeting.
Many of our current or potential competitors, either alone or with their collaborators, have significantly greater
financial resources and expertise in research and development, manufacturing, preclinical testing, conducting clinical trials
and marketing approved products than we do. Mergers and acquisitions in the pharmaceutical, biotechnology and gene
therapy industries may result in even more resources being concentrated among a smaller number of our competitors.
Smaller or early-stage companies may also prove to be significant competitors, particularly through collaborative
arrangements with large and established companies. These competitors also compete with us in recruiting and retaining
qualified scientific and management personnel and establishing clinical trial sites and patient registration for clinical trials,
as well as in acquiring technologies complementary to, or necessary for, our programs.
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The key competitive factors affecting the success of all our programs are likely to be their efficacy, safety,
convenience, price, and the availability of reimbursement from government and other third-party payers. We also believe
that, due to the small size of the patient populations in the orphan indications we target, being first to market will be a
significant competitive advantage. We believe that our advantages in vector and manufacturing technology will allow us to
reach market in a number of indications ahead of our competitors, and to capture the markets in these indications.
Government Regulation and Reimbursement
Government authorities in the United States, European Union and other countries extensively regulate, among
other things, the approval, research, development, preclinical and clinical testing, manufacture (including any
manufacturing changes), packaging, storage, recordkeeping, labeling, advertising, promotion, distribution, marketing, post-
approval monitoring and reporting, reimbursement, and import and export of pharmaceutical products, biological products,
and medical devices. We believe that all our product candidates will be regulated as biological products, or biologics, and
in particular, as gene therapies, and will be subject to such requirements and regulations under U.S. and foreign laws. For
other countries outside of the United States and the European Union, marketing approval and pricing and reimbursement
requirements vary from country to country. If we fail to comply with applicable regulatory requirements, we may be
subject to, among other things, fines, refusal to approve pending applications, suspension or withdrawal of regulatory
approvals, product recalls, seizure of products, operating restrictions, and criminal prosecution.
Regulation in the United States
In the United States, the FDA regulates biologics under the Public Health Service Act (“PHSA”) and the Federal
Food, Drug, and Cosmetic Act (“FDCA”) and regulations and guidance implementing these laws. These laws and
regulatory guidance are continually evolving. By example, in March 2020, the U.S. Congress passed the Coronavirus Aid,
Relief, and Economic Security Act, or CARES Act, which includes various provisions regarding FDA drug shortage
reporting requirements, as well as provisions regarding supply chain security, such as risk management plan requirements,
and the promotion of supply chain redundancy and domestic manufacturing. The FDA has also issued a number of
guidance documents concerning how sponsors and investigators may address COVID-19 challenges, including challenges
specific to gene therapies. These guidance documents are continually evolving.
Obtaining regulatory approvals and ensuring compliance with applicable statutes and regulatory requirements
entails the expenditure of substantial time and financial resources, including payment of user fees for applications to the
FDA. All our current product candidates are subject to regulation by the FDA as biologics. An applicant seeking approval
to market and distribute a new biologic in the United States must typically undertake the following:
● completion of preclinical laboratory tests, animal studies and formulation studies in compliance with the
FDA’s current Good Laboratory Practice regulations;
● submission to the FDA of an IND application which allows human clinical trials to begin unless the FDA
objects within 30 days; the sponsor of an IND or its legal representative must be based in the United States
● approval by an independent institutional review board (“IRB”) and Institutional Biosafety Committee
(“IBC”) before each clinical trial may be initiated;
● performance of adequate and well-controlled human clinical trials in accordance with the FDA’s current good
clinical practices (“cGCP”) to establish substantial evidence of the proposed biological product for each
indication;
● preparation and submission to the FDA of a Biologics License Application (“BLA”);
● satisfactory completion of one or more FDA inspections of the manufacturing facility or facilities at which
the product, or components thereof, are produced to assess compliance with cGMP requirements and to
assure that the facilities, methods, and controls are adequate to preserve the product’s identity, strength,
quality, and purity, as well as selected clinical trial sites and investigators to determine cGCP compliance;
● approval of the BLA by the FDA, in consultation with an FDA advisory committee, if deemed appropriate by
the FDA; and
● compliance with any post-approval commitments, including Risk Evaluation and Mitigation Strategies
(“REMS”), and post-approval studies required by the FDA.
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Human Clinical Studies in the United States under an IND
Before initiating clinical studies in the United States or under an IND, investigational product sponsors must first
complete pre-clinical studies. Preclinical studies include laboratory evaluation of chemistry, pharmacology, toxicity, and
product formulation, as well as animal studies to assess potential safety and efficacy. Such studies must generally be
conducted in accordance with the FDA’s Good Laboratory Practices (“GLPs”).
Clinical trials involve the administration of the investigational biologic to human subjects under the supervision of
qualified investigators in accordance with current GCP requirements, which includes requirements for informed consent,
study conduct, and IRB review and approval. A protocol for each clinical trial and any subsequent protocol amendments
must be submitted to the FDA as part of an IND. INDs include preclinical study reports, together with manufacturing
information, analytical data, any available clinical data, or literature, and proposed clinical study protocols among
other things. A clinical trial may not proceed in the United States unless and until an IND becomes effective, which is
30 days after its receipt by the FDA. The FDA may raise concerns or questions related to one or more components of an
IND and place the IND on clinical hold if during its review the FDA determines that study subjects would be exposed to
significant risk of illness or injury the trial may be put on clinical hold. In such a case, the IND sponsor and the FDA must
resolve any outstanding concerns before the clinical trial can begin. Clinical holds also may be imposed by the FDA at any
time before or during trials due to safety concerns or non-compliance.
The protocol and informed consent documents, as well as other subject communications must also be approved by
an IRB that continues to oversee that trial. In the case of gene therapy studies, an IBC at the local level must also review
and maintain oversight over the particular study, in addition to the IRB. The FDA, an IRB, and IBC, or the sponsor may
suspend or terminate a clinical trial at any time on various grounds, including a finding that the research subjects are being
exposed to an unacceptable health risk or that research requirements are not being met. Information about certain clinical
trials, including results, must be submitted within specific timeframes for listing on the ClinicalTrials.gov website.
Sponsors or distributors of investigational products for the diagnosis, monitoring, or treatment of one or more serious
diseases or conditions must also have a publicly available policy on evaluating and responding to requests for expanded
access requests. Investigators must also provide certain information to the clinical trial sponsors to allow the sponsors to
make certain financial disclosures to the FDA.
Subsequent clinical protocols and amendments must also be submitted to an active IND but are not subject to the
30-day review period imposed on an original IND. Progress reports detailing the results of the clinical trials must also be
submitted at least annually to the FDA and the IRB and more frequently if serious adverse events or other significant safety
information is found. There is a risk that once a new protocol or amendment is submitted to an active IND there may be an
extended period before the FDA may comment or provide feedback. This may result in a need to modify an ongoing
clinical trial to incorporate this feedback or even a clinical hold of the trial. There is also risk that FDA may not provide
comments or feedback but may ultimately disagree with the design of the study once a BLA is submitted.
Human clinical trials are typically conducted in three sequential phases, which may overlap or be combined:
● Phase I: The biological product is initially introduced into healthy human subjects or patients with the target
disease or condition and tested for safety, dosage tolerance, absorption, metabolism, distribution, excretion
and, if possible, to gain an early understanding of its effectiveness.
● Phase II: The biological product is administered to a limited patient population to further identify possible
adverse effects and safety risks, to preliminarily evaluate the efficacy of the product for specific targeted
diseases and to determine dosage tolerance and optimal dosage.
● Phase III: The biological product is administered to an expanded patient population, generally at
geographically dispersed clinical trial sites, in adequate and well-controlled clinical trials to generate
sufficient data to statistically confirm the potency and safety of the product for approval, to establish the
overall risk-benefit profile of the product and to provide adequate information for the labelling of the
product. Typically, two Phase 3 trials are required by the FDA for product approval. Under some limited
circumstances, however, the FDA may approve a BLA based upon a single Phase 3 clinical study plus
confirmatory evidence or a single large multicenter trial without confirmatory evidence.
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In addition, under the Pediatric Research Equity Act, or PREA, a BLA or BLA supplement for a new active
ingredient, indication, dosage form, dosage regimen, or route of administration, must contain data that are adequate to
assess the safety and effectiveness of the product for the claimed indications in all relevant pediatric subpopulations, and to
support dosing and administration for each pediatric subpopulation for which the product is safe and effective. The FDA
may, on its own initiative or at the request of the applicant, grant deferrals for submission of some or all pediatric data until
after approval of the product for use in adults, or full or partial waivers from the pediatric data requirements. Orphan
products are also exempt from the PREA requirements.
The manufacture of investigational drugs and biologics for the conduct of human clinical trials is subject to cGMP
requirements. Investigational drugs and biologics and active ingredients and therapeutic substances imported into the
United States are also subject to regulation by the FDA. Further, the export of investigational products outside of the
United States is subject to regulatory requirements of the receiving country as well as U.S. export requirements under the
FDCA.
Concurrent with clinical trials, companies usually complete additional animal studies and must also develop
additional information about the chemistry and physical characteristics of the product candidate as well as finalize a
process for manufacturing the product in commercial quantities in accordance with cGMP requirements. The
manufacturing process must be capable of consistently producing quality batches of the product candidate and,
among other things, manufacturers must develop methods for testing the identity, strength, quality, potency, and
purity of the final product. Additionally, appropriate packaging must be selected and tested, and stability studies must
be conducted to demonstrate that the product candidate does not undergo unacceptable deterioration over its shelf
life.
FDA Guidance Governing Gene Therapy Products
The FDA has issued various guidance documents regarding gene therapies that outline additional factors that the
FDA will consider at each of the above stages of development and which relate to, among other things, the proper
preclinical assessment of gene therapies; the chemistry, manufacturing, and control information that should be included in
an IND application; the design and analysis of shedding studies for virus or bacteria based gene therapies; the proper
design of tests to measure product potency in support of an IND or BLA application; and measures to observe delayed
adverse effects in subjects and patients who have been exposed to gene therapies via long-term follow-up with associated
regulatory reporting.
Compliance with cGMP Requirements
Manufacturers of biologics must comply with applicable cGMP regulations, including quality control and quality
assurance and maintenance of records and documentation. Manufacturers and others involved in the manufacture and
distribution of such products must also register their establishments with the FDA and certain state agencies, and provide
the FDA a list of products manufactured at the facilities. Recently, the information that must be submitted to the FDA
regarding manufactured products was expanded through the Coronavirus Aid, Relief, and Economic Security, or CARES,
Act to include the volume of drugs produced during the prior year. Establishments may be subject to periodic unannounced
inspections by government authorities to ensure compliance with cGMPs and other laws. Discovery of non-compliance
may result in the FDA placing restrictions on a product, manufacturer, or holder of an approved BLA, and may extend to
requiring withdrawal of the product from the market, among other consequences. The FDA will not approve an application
unless it determines that the manufacturing processes and facilities are in compliance with cGMP requirements and
adequate to assure consistent production of the product within required specifications.
FDA Programs to Expedite Product Development
The FDA has several programs to expedite product development, including fast track designation and
breakthrough therapy designation. These are outlined in specific FDA guidance. Under the fast track program, the sponsor
of a biologic candidate may request the FDA to designate the product for a specific indication as a fast track product
concurrent with or after the filing of the IND for the product candidate. To be eligible for a fast track designation, the FDA
must determine that a product candidate is intended to treat a serious or life-threatening disease or condition and
demonstrates the potential to address an unmet medical need. This may be demonstrated by clinical or nonclinical data. If
granted, the benefits include greater interactions with the FDA and rolling review of sections of the BLA. In some cases, a
fast track product may be eligible for accelerated approval or priority review.
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Moreover, under the provisions of the Food and Drug Administration Safety and Innovation Act, enacted in 2012,
a sponsor can request designation of a product candidate as a breakthrough therapy. A breakthrough therapy is defined as a
product that is intended, alone or in combination with one or more other products, to treat a serious or life-threatening
disease or condition, and preliminary clinical evidence indicates that the product may demonstrate substantial improvement
over existing therapies on one or more clinically significant endpoints, such as substantial treatment effects observed early
in clinical development. Products designated as breakthrough therapies are eligible for rolling review, intensive guidance
on an efficient development program beginning as early as Phase 1 trials, and a commitment from the FDA to involve
senior managers and experienced review staff in a proactive collaborative, cross disciplinary review.
Biologics studied for their safety and effectiveness in treating serious or life-threatening illnesses and that
provide meaningful therapeutic benefit over existing treatments may receive accelerated approval, which means the
FDA may approve the product based upon a surrogate endpoint that is reasonably likely to predict clinical benefit, or
on a clinical endpoint that can be measured earlier than irreversible morbidity or mortality, that is reasonably likely to
predict an effect on irreversible morbidity or mortality or other clinical benefit, taking into account the severity, rarity,
or prevalence of the condition and the availability or lack of alternative treatments. A biologic candidate approved on
this basis is subject to rigorous post-marketing compliance requirements, including the completion of Phase 4 or post-
approval clinical trials to confirm the effect on the clinical endpoint. Failure to conduct required post-approval studies,
or confirm a clinical benefit during post-marketing studies, will allow the FDA to withdraw the drug or biologic from
the market on an expedited basis. All promotional materials for drug or biologic candidates approved under accelerated
regulations are subject to prior review by the FDA.
Even if a product qualifies for one or more of these programs, the FDA may later decide that the product no
longer meets the conditions for qualification or decide that the time period for FDA review or approval will not be
shortened.
Submission of a BLA
The results of the preclinical and clinical studies, together with detailed information relating to the product’s
chemistry, manufacture, controls, and proposed labeling, among other things, are submitted to the FDA as part of a BLA
requesting a license to market the product for one or more indications. The submission of a BLA is subject to an
application user fee, products with orphan designation are exempt from the BLA filing fee. The sponsor of an approved
BLA is also subject to annual program user fees for each. Orphan products may also be exempt from program fees
provided that certain criteria are met. These fees are typically increased annually. Under the Prescription Drug User Fee
Act (“PDUFA”) the FDA has agreed to specified performance goals in the review of BLAs.
Most such applications are meant to be reviewed within ten months from the filing acceptance date (typically
60 days after date of filing), and most applications for priority review products are meant to be reviewed within six months
of the filing acceptance date (typically 60 days after date of filing). Priority review designation may be assigned to
product candidates that are intended to treat serious conditions and, if approved, would provide significant
improvements in the safety or effectiveness of the treatment, diagnosis, or prevention of the serious condition.
The FDA may refuse to file an application and request additional information. In this event, the application must
be refiled with the additional information. The refiled application is also subject to assessment of content before the FDA
accepts it for review. Once the submission is accepted, the FDA begins an in-depth substantive review. The FDA will
assign a date for its final decision for the product (the PDUFA action date) but can extend this date to complete review of a
product application. The PDUFA action date is only a goal, thus, the FDA does not always meet its PDUFA dates.
The FDA may also refer certain applications to an advisory committee. Before approving a product candidate for
which no active ingredient (including any ester or salt of active ingredients) has previously been approved by the FDA, the
FDA must either refer that product candidate to an external advisory committee or provide in an action letter, a summary of
the reasons why the FDA did not refer the product candidate to an advisory committee. The FDA may also refer other
product candidates to an advisory committee if the FDA believes that the advisory committee’s expertise would be
beneficial. An advisory committee is typically a panel that includes clinicians and other experts, which review, evaluate,
and make a recommendation as to whether the application should be approved and under what conditions. The FDA is not
bound by the recommendations of an advisory committee, but it considers such recommendations carefully when making
decisions.
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The FDA reviews applications to determine, among other things, whether a product candidate meets the
agency’s approval standards and whether the manufacturing methods and controls are adequate to assure and
preserve the product’s identity, strength, quality, potency, and purity. Before approving a marketing application, the
FDA typically will inspect the facility or facilities where the product is manufactured, referred to as a Pre-Approval
Inspection. The FDA will not approve an application unless it determines that the manufacturing processes and
facilities, including contract manufacturers and subcontractors, are in compliance with cGMP requirements and
adequate to assure consistent production of the product within required specifications. Additionally, before
approving a marketing application the FDA will inspect one or more clinical trial sites to assure compliance with
GCPs.
After evaluating the marketing application and all related information, including the advisory committee
recommendation, if any, and inspection reports regarding the manufacturing facilities and clinical trial sites, the FDA may
issue an approval letter or a complete response letter. An approval letter authorizes commercial marketing of the biological
product with specific prescribing information for specific indications. A complete response letter generally outlines the
deficiencies in the submission and may require substantial additional testing or information for the FDA to reconsider the
application. Even with submission of this additional information, the FDA ultimately may decide that the application does
not satisfy the regulatory criteria for approval. If and when those deficiencies have been addressed to the FDA’s satisfaction
in a resubmission of the BLA, the FDA will issue an approval letter. Many drug applications receive complete response
letters from the FDA during their first cycle of FDA review.
If the FDA approves a product, it may limit the approved indications for use of the product; require that
contraindications, warnings, or precautions be included in the product labeling, including boxed warnings; require that
post-approval studies, including Phase IV clinical trials, be conducted to further assess a biologic’s efficacy and safety after
approval; or require testing and surveillance programs to monitor the product after commercialization. The FDA may
prevent or limit further marketing of a product based on the results of post-market studies or surveillance programs. The
FDA may also not approve label statements that are necessary for successful commercialization and marketing.
In addition to the above conditions of approval, the FDA also may require submission of a REMS to ensure that
the benefits of the product candidate outweigh the risks. The REMS plan could include medication guides, physician
communication plans, and elements to assure safe use, such as restricted distribution methods, patient registries, or other
risk minimization tools. An assessment of the REMS must also be conducted at set intervals. Following product approval, a
REMS may also be required by the FDA if new safety information is discovered, and the FDA determines that a REMS is
necessary to ensure that the benefits of the product outweigh the risks. In guidance, FDA stated that during the review of a
BLA for a gene therapy, it will assess whether a REMS is necessary. Several gene therapy products that have been
approved by FDA have required substantial REMS, which included requirements for dispensing hospital and clinic
certification, training, adverse event reporting, documentation, and audits and monitoring conducted by the sponsor, among
other conditions. REMS, such as these, can be expensive and burdensome to implement, and burdensome for hospitals,
clinics, and health care providers to comply with.
Biosimilars and Exclusivity
The Biologics Price Competition and Innovation Act of 2009 (“BPCIA”) which amended the PHSA authorized
the FDA to approve biosimilars under Section 351(k) of the PHSA. Under the BCPIA, a manufacturer may submit an
application for licensure of a biologic product that is biosimilar to or interchangeable with a previously approved biological
product or reference product. For the FDA to approve a biosimilar product, it must find that it is highly similar to the
reference product notwithstanding minor differences in clinically inactive components and that there are no clinically
meaningful differences between the reference product and proposed biosimilar product in safety, purity or potency. A
finding of interchangeability requires that a product is determined to be biosimilar to the reference product, and that the
product can be expected to produce the same clinical results as the reference product and, for products administered
multiple times, the biologic and the reference biologic may be switched after one has been previously administered without
increasing safety risks or risks of diminished efficacy relative to exclusive use of the reference biologic.
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An application for a biosimilar product may not be submitted to the FDA until four years following approval of
the reference product, and it may not be approved until 12 years thereafter. These exclusivity provisions only apply to
biosimilar companies and not companies that rely on their own data and file a full BLA. Moreover, this exclusivity is not
without limitation. Certain changes and supplements to an approved BLA, and subsequent applications filed by the same
sponsor, manufacturer, licensor, predecessor in interest, or other related entity do not qualify for the twelve-year exclusivity
period. Further, the twelve-year exclusivity market period in the U.S. for biologics has been controversial and may be
shortened in the future.
The PHSA also includes provisions to protect reference products that have patent protection. The biosimilar
product sponsor and reference product sponsor may exchange certain patent and product information for the purpose
of determining whether there should be a legal patent challenge. Based on the outcome of negotiations surrounding
the exchanged information, the reference product sponsor may bring a patent infringement suit and injunction
proceedings against the biosimilar product sponsor. The biosimilar applicant may also be able to bring an action for
declaratory judgment concerning the patent.
To increase competition in the drug and biologic product marketplace, Congress, the executive branch, and the
FDA have taken certain legislative and regulatory steps. By example, in 2020 the FDA finalized a guidance to facilitate
biologic product importation. Moreover, the 2020 Further Consolidated Appropriations Act included provisions requiring
that sponsors of approved biologic products, including those subject to REMS, provide samples of the approved products
to persons developing biosimilar products within specified timeframes, in sufficient quantities, and on commercially
reasonable market-based terms. Failure to do so can subject the approved product sponsor to civil actions, penalties, and
responsibility for attorney’s fees and costs of the civil action. This same bill also includes provisions with respect to shared
and separate REMS programs for reference and generic drug products.
Orphan Drug Exclusivity
Under the Orphan Drug Act of 1983, the FDA may designate a biological product as an orphan drug if it is
intended to treat a rare disease or condition that affects fewer than 200,000 individuals in the United States, or more in
cases in which there is no reasonable expectation that the cost of developing and making a biological product available in
the United States for treatment of the disease or condition will be recovered from sales of the product. Additionally,
sponsors must present a plausible hypothesis for clinical superiority to obtain orphan drug designation if there is a product
already approved by the FDA that is considered by the FDA to be the same as the already approved product and is intended
for the same indication. This hypothesis must be demonstrated to obtain orphan exclusivity. If a product with orphan
designation receives the first FDA approval, it will be granted seven years of marketing exclusivity, which means that the
FDA may not approve any other applications for the same product for the same indication for seven years, unless clinical
superiority is demonstrated. Competitors may receive approval of different products for the indication for which the orphan
product has exclusivity and may obtain approval for the same product but for a different indication. Orphan product
designation does not convey any advantage in or shorten the duration of the regulatory review and approval process. The
FDA has granted orphan drug designation to AMT-130 for the treatment of Huntington’s disease as well as for
etranacogene dezaparvovec; meaning that they would receive orphan drug exclusivity if they are the first products
approved for their respective indications. Orphan product sameness decisions are an evolving space when it comes to gene
therapies. Specifically, the FDA has issued guidance regarding how it will determine whether a gene therapy product is the
same as another product for the purpose of the agency’s orphan drug regulations. Any of the FDA sameness determinations
could impact our ability to receive approval for our product candidates and to obtain or retain orphan drug exclusivity.
Pediatric Exclusivity
Under the Pediatric Research Equity Act of 2003, pediatric exclusivity provides for the attachment of an
additional six months of marketing protection to the term of any existing regulatory exclusivity in the US, including orphan
exclusivity and exclusivity against biosimilars. This six-month exclusivity may be granted if the FDA issues a written
request to the sponsor for the pediatric study, the sponsor submits a final study report after receipt of the written request
and meets the terms and timelines in the FDA’s written request.
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Regenerative Advanced Therapy Designation
The 21st Century Cures Act became law in December 2016 and created a new program under Section 3033 in
which the FDA has authority to designate a product as a regenerative medicine advanced therapy (“RMAT”). A drug is
eligible for a RMAT designation if: 1) it is a regenerative medicine therapy which is a cell therapy, therapeutic tissue
engineering product, human cell and tissue product, or any combination product using such therapies or products, except
those products already regulated under Section 361 of the PHSA; 2) the drug is intended to treat, modify, reverse, or cure a
serious or life-threatening disease or condition; and 3) preliminary clinical evidence indicates that the drug has the potential
to address unmet medical needs for such disease or condition. A RMAT must be made with the submission of an IND or as
an amendment to an existing IND. FDA will determine if a product is eligible for RMAT designation within 60 days of
submission. Advantages of the RMAT designation include all the benefits of the fast track and breakthrough therapy
designation programs, including early interactions with the FDA. These early interactions may be used to discuss potential
surrogate or intermediate endpoints to support accelerated approval. In 2019 the FDA stated in guidance that human gene
therapies, including genetically modified cells, that lead to a sustained effect on cells or tissues, may meet the definition of
a regenerative therapy.
FDA Regulation of Companion Diagnostics and Other Combination Products
We may seek to develop companion diagnostics for use in identifying patients that we believe will respond to our
gene therapies. Similarly, our product candidates may require delivery devices. A biologic product may be regulated as a
combination product if it is intended for use in conjunction with a medical device, such as a drug delivery device or in vitro
diagnostic device. For combination products, the biologic and device components must, when used together, be safe and
effective and the product labeling must reflect their combined use. In some cases, the medical device component may
require a separate premarket submission. Moreover, clinical trial sponsors using investigational devices in their studies
must comply with FDA’s investigational device exemption regulations. Once approved or cleared, the device component
sponsor (or the combination product sponsor, if both components are covered by one application) must comply with the
FDA’s post-market device requirements, including establishment registration, device listing, device labeling, unique device
identifier, quality system regulation, medical device reporting, and reporting of corrections and removals requirements.
If the safety or effectiveness of a biologic product is dependent on the results of a diagnostic, the FDA may
require that the in vitro companion diagnostic device and biologic product be contemporaneously approved, with labeling
that describes the use of the two products together. The type of premarket submission required for a companion diagnostic
device will depend on the FDA device classification. A premarket approval (“PMA”), application is required for high risk
devices classified as Class III; a 510(k) premarket notification is required for moderate risk devices classified as Class II;
and a de novo request may be used for novel devices not previously classified by the FDA that are low or moderate risk.
Except in some limited circumstances, the FDA generally will not approve a biologic that is dependent upon the use of a
companion diagnostic device if the device is not contemporaneously FDA-approved or -cleared.
Post-approval Requirements
Any products manufactured or distributed pursuant to the FDA approvals are subject to pervasive and continuing
regulation by the FDA, including, among other things, requirements related to manufacturing, recordkeeping, and
reporting, including adverse experience reporting, deviation reporting, shortage reporting, and periodic reporting, product
sampling and distribution, advertising, marketing, promotion, certain electronic records and signatures, and post-approval
obligations imposed as a condition of approval, such as Phase 4 clinical trials, REMS, and surveillance to assess safety
and effectiveness after commercialization.
After approval, most changes to the approved product, such as adding new indications or other labeling
claims, are subject to prior FDA review and approval. There also are continuing annual program user fee
requirements for approved products, excluding orphan products. Regulatory authorities may withdraw product
approvals, require label modifications, or request product recalls, among other actions, if a company fails to comply
with regulatory standards, if it encounters problems following initial marketing, or if previously unrecognized
problems are subsequently discovered.
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Changes to the manufacturing process are strictly regulated and often require prior FDA approval or notification
before being implemented. FDA regulations also require investigation and correction of any deviations from cGMP and
specifications and impose reporting and documentation requirements upon the sponsor and any third-party manufacturers
that the sponsor may decide to use. Accordingly, manufacturers must continue to expend time, money, and effort in
production and quality control to maintain cGMP compliance.
The FDA also strictly regulates marketing, labeling, advertising, and promotion of products that are placed on
the market. A company can make only those claims relating to a product that are approved by the FDA. Physicians, in
their independent professional medical judgment, may prescribe legally available products for unapproved indications
that are not described in the product’s labeling and that differ from those tested and approved by the FDA.
Biopharmaceutical companies, however, are required to promote their products only for the approved indications and
in accordance with the provisions of the approved label. The FDA and other agencies actively enforce the laws and
regulations prohibiting the promotion of off-label uses, and a company that is found to have improperly promoted off-
label uses may be subject to significant liability, including, but not limited to, criminal and civil penalties under the
FDCA and False Claims Act, exclusion from participation in federal healthcare programs, mandatory compliance
programs under corporate integrity agreements, suspension and debarment from government contracts, and refusal of
orders under existing government contracts.
In addition, the distribution of prescription biopharmaceutical samples is subject to the Prescription Drug
Marketing Act (the “PDMA”), which regulates the distribution of samples at the federal level. Both the PDMA and state
laws limit the distribution of prescription biopharmaceutical product. Certain reporting related to samples is also required
samples and impose requirements to ensure accountability in distribution. Free trial or starter prescriptions provided
through pharmacies are also subject to regulations under the Medicaid Drug Rebate Program and potential liability under
anti-kickback and false claims laws.
Moreover, the enacted Drug Quality and Security Act (“DQSA”), imposes obligations on sponsors of
biopharmaceutical products related to product tracking and tracing. Among the requirements of this legislation,
sponsors are required to provide certain information regarding the products to individuals and entities to which
product ownership is transferred, are required to label products with a product identifier, and are required to keep
certain records regarding the product. The transfer of information to subsequent product owners by sponsors is also
required to be done electronically. Sponsors must also verify that purchasers of the sponsors’ products are
appropriately licensed. Further, under this legislation, manufactures have product investigation, quarantine,
disposition, and notification responsibilities related to counterfeit, diverted, stolen, and intentionally adulterated
products that would result in serious adverse health consequences of death to humans, as well as products that are the
subject of fraudulent transactions or which are otherwise unfit for distribution such that they would be reasonably
likely to result in serious health consequences or death. Similar requirements additionally are and will be imposed
through this legislation on other companies within the biopharmaceutical product supply chain, such as distributors
and dispensers, as well as certain sponsor licensees and affiliates.
Later discovery of previously unknown problems with a product, including adverse events of unanticipated
severity or frequency, or with manufacturing processes, or failure to comply with regulatory requirements before or
after approval, may result in significant regulatory actions. Such actions may include refusal to approve pending
applications, license or approval suspension or revocation, imposition of a clinical hold or termination of clinical
trials, warning letters, untitled letters, cyber letters, modification of promotional materials or labeling, provision of
corrective information, imposition of post-market requirements including the need for additional testing, imposition
of distribution or other restrictions under a REMS, product recalls, product seizures or detentions, refusal to allow
imports or exports, total or partial suspension of production or distribution, FDA debarment, injunctions, fines,
consent decrees, corporate integrity agreements, suspension and debarment from government contracts, and refusal
of orders under existing government contracts, exclusion from participation in federal and state healthcare programs,
restitution, disgorgement, or civil or criminal penalties, including fines and imprisonment, and adverse publicity,
among other adverse consequences.
Additional controls for biologics
To help reduce the increased risk of the introduction of adventitious agents, the PHSA emphasizes the
importance of manufacturing controls for products whose attributes cannot be precisely defined. The PHSA also
provides authority to the FDA to immediately suspend licenses in situations where there exists a danger to public
health, to prepare or procure products in the event of shortages and critical public health needs, and to authorize the
creation and enforcement of regulations to prevent the introduction or spread of communicable diseases in the United
States and between states.
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After a BLA is approved, the product may also be subject to official lot release as a condition of approval.
As part of the manufacturing process, the manufacturer is required to perform certain tests on each lot of the product
before it is released for distribution. If the product is subject to official release by the FDA, the manufacturer submits
samples of each lot of product to the FDA together with a release protocol showing the results of all the
manufacturer’s tests performed on the lot. The FDA may also perform certain confirmatory tests on lots of some
products before releasing the lots for distribution by the manufacturer.
In addition, the FDA conducts laboratory research related to the regulatory standards on the safety, purity,
potency, and effectiveness of biological products.
Certain gene therapy studies are also subject to the National Institutes of Health’s Guidelines for Research
Involving Recombinant DNA Molecules, (“NIH Guidelines”). The NIH Guidelines include the review of the study
by an IBC. The IBC assesses the compliance of the research with the NIH Guidelines, assesses the safety of the
research and identifies any potential risk to public health or the environment. The FDA has also issued guidance
with respect to gene therapies, such as guidance concerning preclinical studies, chemistry manufacturing and
controls, potency testing, and long-term patient and clinical study subject follow up and regulatory reporting. The
FDA further issued a draft guidance specific to the development of gene therapy products for neurodegenerative diseases
as such products may face special challenges.
Patent Term Restoration
If approved, biologic products may also be eligible for periods of U.S. patent term restoration. If granted,
patent term restoration extends the patent life of a single unexpired patent, that has not previously been extended, for
a maximum of five years. The total patent life of the product with the extension also cannot exceed fourteen years
from the product’s approval date. Subject to the prior limitations, the period of the extension is calculated by adding
half of the time from the effective date of an IND to the initial submission of a marketing application, and all the time
between the submission of the marketing application and its approval. This period may also be reduced by any time
that the applicant did not act with due diligence.
Anti-Kickback Provisions and other Fraud and Abuse Requirements
The federal Anti-Kickback Statute prohibits, among other things, knowingly and willfully offering, paying,
soliciting, or receiving remuneration directly or indirectly, overtly or covertly, in cash or in kind, to induce or in return for
purchasing, leasing, ordering, or arranging for the purchase, lease or order of any healthcare item or service reimbursable
under Medicare, Medicaid or other federally financed healthcare programs, in whole or in part. This statute has been
interpreted to apply to arrangements between pharmaceutical manufacturers on the one hand and prescribers, purchasers
and formulary managers on the other. The term “remuneration” has been interpreted broadly to include anything of value.
The Anti-Kickback Statute has been interpreted to apply to arrangements between biopharmaceutical industry members on
one hand and prescribers, purchasers, formulary managers, and beneficiaries on the other. There are certain statutory
exceptions and regulatory safe harbors protecting some common activities from prosecution. The exceptions and safe
harbors are drawn narrowly, and practices that involve remuneration that may be alleged to be intended to induce
prescribing, purchases, or recommendations may be subject to scrutiny if they do not qualify for an exception or safe
harbor. Failure to meet all the requirements of a particular applicable statutory exception or regulatory safe harbor does not
make the conduct per se illegal under the Anti-Kickback Statute. Instead, the legality of the arrangement will be evaluated
on a case-by-case basis based on a cumulative review of all its facts and circumstances.
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The Department of Health and Human Services (“HHS”) recently promulgated a regulation with respect to the
safe harbors that is effective in two phases. First, the regulation excludes from the definition of “remuneration” limited
categories of (a) Pharmacy Benefit Manager (“PBM”) rebates or other reductions in price to a plan sponsor under Medicare
Part D or a Medicaid Managed Care Organization plan reflected in point-of sale reductions in price and (b) PBM service
fees. Second, as amended, effective January 1, 2023, the regulation expressly provides that rebates to plan sponsors under
Medicare Part D either directly to the plan sponsor under Medicare Part D, or indirectly through a pharmacy benefit
manager will not be protected under the anti-kickback discount safe harbor. Several courts have interpreted the statute’s
intent requirement to mean that if any one purpose of an arrangement involving remuneration is to induce referrals of
federal healthcare covered business, including purchases of products paid by federal healthcare programs, the statute has
been violated. The Patient Protection and Affordable Care Act, of 2010, as amended, (the “ACA”) modified the intent
requirement under the Anti-Kickback Statute to a stricter standard, such that a person or entity no longer needs to have
actual knowledge of the statute or specific intent to violate it to have committed a violation. In addition, the ACA also
provided that a violation of the federal Anti-Kickback Statute is grounds for the government or a whistleblower to assert
that a claim for payment of items or services resulting from such violation constitutes a false or fraudulent claim for
purposes of the federal civil False Claims Act.
Federal civil false claims laws prohibit any person from knowingly presenting, or causing to be presented, a false
or fraudulent claim for payment to, or approval by, the federal government, knowingly making, using, or causing to be
made or used a false record or statement material to a false or fraudulent claim to the federal government, or avoiding,
decreasing, or concealing an obligation to pay money to the federal government. A claim includes “any request or demand”
for money or property presented to the U.S. government. The civil False Claims Act has been used to assert liability on the
basis of kickbacks and other improper referrals, improperly reported government pricing metrics such as Best Price or
Average Manufacturer Price, improper use of Medicare provider or supplier numbers when detailing a provider of services,
improper promotion of off-label uses not expressly approved by the FDA in a product’s label, and allegations as to
misrepresentations with respect to products, contract requirements, and services rendered. In addition, private payers have
been filing follow-on lawsuits alleging fraudulent misrepresentation, although establishing liability and damages in these
cases is more difficult than under the FCA. Intent to deceive is not required to establish liability under the civil False
Claims Act. Rather, a claim may be false for deliberate ignorance of the truth or falsity of the information provided or acts
in reckless disregard of the truth or falsity of that information. Civil False Claims Act actions may be brought by the
government or may be brought by private individuals on behalf of the government, called “qui tam” actions. If the
government decides to intervene in a qui tam action and prevails in the lawsuit, the individual will share in the proceeds
from any fines or settlement funds. If the government declines to intervene, the individual may pursue the case alone. The
civil FCA provides for treble damages and a civil penalty for each false claim, such as an invoice or pharmacy claim for
reimbursement, which can aggregate into millions of dollars. For these reasons, since 2004, False Claims Act lawsuits
against biopharmaceutical companies have increased significantly in volume and breadth, leading to several substantial
civil and criminal settlements, as much as $3.0 billion, regarding certain sales practices and promoting off label uses. Civil
False Claims act liability may further be imposed for known Medicare or Medicaid overpayments, for example,
overpayments caused by understated rebate amounts, that are not refunded within 60 days of discovering the overpayment,
even if the overpayment was not caused by a false or fraudulent act. In addition, conviction, or civil judgment for violating
the FCA may result in exclusion from federal health care programs, and suspension and debarment from government
contracts, and refusal of orders under existing government contracts. The majority of states also have statutes or regulations
similar to the federal anti-kickback law and false claims laws, which apply to items and services reimbursed under
Medicaid and other state programs, or, in several states, apply regardless of the payer.
The government may further prosecute conduct constituting a false claim under the criminal False Claims Act.
The criminal False Claims Act prohibits the making or presenting of a claim to the government knowing such claim to be
false, fictitious, or fraudulent and, unlike the civil False Claims Act, requires proof of intent to submit a false claim.
The civil monetary penalties statute is another potential statute under which biopharmaceutical companies may be
subject to enforcement. Among other things, the civil monetary penalties statue imposes fines against any person who is
determined to have knowingly presented, or caused to be presented, claims to a federal healthcare program that the person
knows, or should know, is for an item or service that was not provided as claimed or is false or fraudulent.
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Payment or reimbursement of prescription therapeutics by Medicaid or Medicare requires sponsors to
submit certified pricing information to Centers of Medicare and Medicaid Services (“CMS”). The Medicaid Drug
Rebate statute requires sponsors to calculate and report price points, which are used to determine Medicaid rebate
payments shared between the states and the federal government and Medicaid payment rates for certain
therapeutics. For therapeutics paid under Medicare Part B, sponsors must also calculate and report their Average
Sales Price, which is used to determine the Medicare Part B payment rate. In addition, therapeutics covered by
Medicaid are subject to an additional inflation penalty which can substantially increase rebate payments. For
products approved under a BLA (including biosimilars), the Veterans Health Care Act, (the “VHCA”), requires
sponsors to calculate and report to the Veterans Administration, or VA, a different price called the Non-Federal
Average Manufacturing Price, which is used to determine the maximum price that can be charged to certain federal
agencies, referred to as the Federal Ceiling Price, (“FCP”). Like the Medicaid rebate amount, the FCP includes an
inflation penalty. A Department of Defense regulation requires sponsors to provide this discount on therapeutics
dispensed by retail pharmacies when paid by the TRICARE Program. All these price reporting requirements create
risk of submitting false information to the government, potential FCA liability and exclusion from certain of these
programs.
The VHCA also requires sponsors of covered therapeutics participating in the Medicaid program to enter
into Federal Supply Schedule contracts with the VA through which their covered therapeutics must be sold to certain
federal agencies at FCP. This necessitates compliance with applicable federal procurement laws and regulations,
including submission of commercial sales and pricing information, and subjects companies to contractual remedies as
well as administrative, civil, and criminal sanctions. In addition, the VHCA requires sponsors participating in
Medicaid to agree to provide different mandatory discounts to certain Public Health Service grantees and other safety
net hospitals and clinics under the 340B program based on the sponsor’s reported Medicaid pricing information. The
340B program has its own regulatory authority to impose sanctions for non-compliance and adjudicate overcharge
claims against sponsors by the purchasing entities and, impose civil monetary penalties for instances of overcharging.
The federal Health Insurance Portability and Accountability Act of 1996, (“HIPAA”), also created federal
criminal statutes that prohibit, among other actions, knowingly and willfully executing, or attempting to execute, a
scheme to defraud or to obtain, by means of false or fraudulent pretenses, representations or promises, any of the
money or property owned by, or under the custody or control of, a healthcare benefit program, regardless of whether
the payor is public or private, in connection with the delivery or payment for health care benefits, knowingly and
willfully embezzling or stealing from a health care benefit program, willfully obstructing a criminal investigation of a
health care offense and knowingly and willfully falsifying, concealing, or covering up by any trick or device a
material fact or making any materially false statements in connection with the delivery of, or payment for, healthcare
benefits, items, or services relating to healthcare matters. Additionally, the ACA amended the intent requirement of
certain of these criminal statutes under HIPAA so that a person or entity no longer needs to have actual knowledge of
the statute, or the specific intent to violate it, to have committed a violation.
In addition, as part of the ACA, the federal government enacted the Physician Payment Sunshine Act.
Manufacturers of drugs biologics and devices for which payment is available under Medicare, Medicaid, or the Children’s
Health Insurance Program (with certain exceptions) are required to annually report to CMS payments and transfers of value
made to or at the request of covered recipients, such as, but not limited to, physicians, physician assistants, nurse
practitioners, clinical nurse specialists, and certified registered nurse anesthetists and teaching hospitals, as well as
ownership and investment interests held by physicians and their immediate family. Payments made to physicians and
certain research institutions for clinical trials are also included within this law. Reported information is made publicly
available by CMS. Failure to submit required information may result in civil monetary penalties. If not preempted by this
federal law, several states currently also require reporting of marketing and promotion expenses, as well as gifts and
payments to healthcare professionals. State legislation may also prohibit various other marketing related activities or
require the public posting of information. Certain states also require companies to implement compliance programs.
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Further, we may be subject to data privacy and security regulation by both the federal government and the
states in which we conduct our business. HIPAA, as amended by the Health Information Technology for Economic and
Clinical Health Act, (“HITECH Act”), and their respective implementing regulations impose certain requirements on
covered entities relating to the privacy, security, and transmission of individually identifiable health information,
known as protected health information. Among other things, the HITECH Act, through its implementing regulations,
makes HIPAA’s security standards and certain privacy standards directly applicable to business associates, defined as a
person or organization, other than a member of a covered entity’s workforce, that creates, receives, maintains, or
transmits protected health information on behalf of a covered entity for a function or activity regulated by HIPAA.
The HITECH Act also strengthened the civil and criminal penalties that may be imposed against covered entities,
business associates, and individuals, and gave state attorneys general new authority to file civil actions for damages or
injunctions in federal courts to enforce the federal HIPAA laws and seek attorneys’ fees and costs associated with
pursuing federal civil actions. In addition, other federal and state laws, such as the California Consumer Privacy Act,
may govern the privacy and security of health and other information in certain circumstances, many of which differ
from each other in significant ways and may not be preempted by HIPAA, thus complicating compliance efforts.
Many states have also adopted laws similar to each of the above federal laws, which may be broader in scope
and apply to items or services reimbursed by any third-party payor, including commercial insurers. Certain state laws
also regulate sponsors’ use of prescriber-identifiable data. Certain states also require implementation of commercial
compliance programs and compliance with the pharmaceutical industry’s voluntary compliance guidelines and the
applicable compliance guidance promulgated by the federal government, or otherwise restrict payments or the
provision of other items of value that may be made to healthcare providers and other potential referral sources; impose
restrictions on marketing practices; or require sponsors to track and report information related to payments, gifts, and
other items of value to physicians and other healthcare providers. Recently, states have enacted or are considering
legislation intended to make drug prices more transparent and deter significant price increases. These laws may affect
our future sales, marketing, and other promotional activities by imposing administrative and compliance burdens.
If our operations are found to be in violation of any of the laws or regulations described above or any other laws
that apply to us, we may be subject to penalties or other enforcement actions, including criminal and significant civil
monetary penalties, damages, fines, disgorgement, imprisonment, exclusion from participation in government healthcare
programs, corporate integrity agreements, suspension and debarment from government contracts, and refusal of orders
under existing government contracts, reputational harm, diminished profits and future earnings, and the curtailment or
restructuring of our operations, any of which could adversely affect our business.
U.S. Foreign Corrupt Practices Act
The U.S. Foreign Corrupt Practices Act, to which we are subject, prohibits corporations and individuals from
engaging in certain activities to obtain or retain business or to influence a person working in an official capacity. It is illegal
to pay, offer to pay or authorize the payment of anything of value to any foreign government official, government staff
member, political party, or political candidate in an attempt to obtain or retain business or to otherwise influence a person
working in an official capacity.
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Coverage, Pricing and Reimbursement
The containment of healthcare costs has become a priority of federal, state, and foreign governments, and the
prices of drugs have been a focus in this effort. Third-party payers and independent non-profit healthcare research
organizations such as the Institute for Clinical and Economic Review are also increasingly challenging the prices charged
for medical products and services and examining the medical necessity, budget-impact, and cost-effectiveness of medical
products and services, in addition to their safety and efficacy. If these third-party payers do not consider a product to be
cost-effective compared to other available therapies and/or the standard of care, they may not cover the product after
approval as a benefit under their plans or, if they do, measures including prior authorization and step-throughs could be
required, manufacturer rebates may be negotiated or required and/or the level of payment may not be sufficient to allow a
company to sell its products at a profit. The U.S. federal and state governments and foreign governments have shown
significant interest in implementing cost containment programs to limit the growth of government-paid health care costs,
including price controls, restrictions on coverage and reimbursement and requirements for substitution of generic products
for branded prescription drugs. In this regard, for example, on November 27, 2020, CMS issued an interim final rule
implementing a Most Favored Nation payment model under which reimbursement for certain Medicare Part B drugs and
biologicals will be based on a price that reflects the lowest per capital Gross Domestic Product-adjusted (“GDP-adjusted”)
price of any non-U.S. member country of the Organization for Economic Co-operation and Development (“OECD”) with a
GDP per capita that is at least sixty percent of the U.S. GDP per capita. Adoption of additional healthcare reform controls
and measures and tightening of restrictive policies in jurisdictions with existing controls and measures, could limit
payments for pharmaceuticals.
As a result, the marketability of any product which receives regulatory approval for commercial sale may suffer if
the government and third-party payers choose to provide low coverage and reimbursement. In addition, an increasing
emphasis on managed care in the United States has increased and will continue to increase the pressure on drug pricing.
Coverage policies, third party reimbursement rates and drug pricing regulation may change at any time. In particular, the
ACA contains provisions that may reduce the profitability of drug products, including, for example, increased rebates for
drugs sold to Medicaid programs, extension of Medicaid rebates to Medicaid managed care plans, mandatory discounts for
certain Medicare Part D beneficiaries and annual fees based on pharmaceutical companies’ share of sales to federal health
care programs. Multiple other current and proposed legislative and regulatory efforts require and likely will in the future
require payment of increased manufacturer rebates and implement mechanisms to reduce drug prices. Even if favorable
coverage and reimbursement status is attained for one or more products that receive regulatory approval, less favorable
coverage policies and reimbursement rates may be implemented in the future.
Regulation in the European Union
Product development, the regulatory approval process and safety monitoring of medicinal products and their
manufacturers in the European Union proceed broadly in the same way as they do in the United States. Therefore, many of
the issues discussed above apply similarly in the context of the European Union. In addition, drugs are subject to the
extensive price and reimbursement regulations of the various EU member states. The Clinical Trials Directive 2001/20/EC,
as amended (“CTD”) (and to be replaced by the Clinical Trial Regulation EU 536/2014) (“CTR”) (it is anticipated by
December 2021), provides a system for the approval of clinical trials in the European Union via (in the case of the CTD)
implementation through national legislation of the member states. The CTR is directly applicable in all member states
without the need for national implementation. Under this system, approval must be obtained from the competent national
authority of an EU member state in which the clinical trial is to be conducted. Once the CTR comes into effect however, it
will be possible within the EU to make a single harmonized electronic submission and have a single assessment process for
clinical trials conducted in multiple member states. Furthermore, a clinical trial may only be started after a competent
ethics committee has issued a favorable opinion on the clinical trial application (“CTA”), which must be supported by an
investigational medicinal product dossier with supporting information prescribed by the CTD and corresponding national
laws of the member states and further detailed in applicable guidance documents. In the case of Advanced Therapy
Investigational Medical Products (“ATIMPs”) consisting of or containing Genetically Modified Organisms (“GMOs”), as
is the case for uniQure’s products, an additional approval for the environmental and biosafety aspects of the use and release
of the GMO is required by the GMO competent authorities and GMO directives have been implemented in different ways
by Member States; either following the directive for “Contained use” (Directive 2009/41/EC) or “deliberate release”
(Directive2001/18/EC). This results in some EU member states, the GMO application must be approved before the Clinical
Trial Application (CTA) is submitted, in some after approval of the CTA and in some parallel.
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The sponsor of a clinical trial, or its legal representative, must be based in the European Economic Area (“EEA”).
European regulators and ethics committees also require the submission of adverse event reports during a study and a copy
of the final study report. When the CTR comes into force member states may dispense with the requirement for a legal
representative for a non-EU resident sponsor provided there is a contact person based in the EEA.
Marketing approval
Marketing approvals under the European Union regulatory system may be obtained through a centralized or
decentralized procedure. The centralized procedure results in the grant of a single marketing authorization that is valid for
all—currently 28—EU member states. Pursuant to Regulation (EC) No 726/2004, as amended, the centralized procedure is
mandatory for drugs developed by means of specified biotechnological processes, and advanced therapy medicinal
products as defined in Regulation (EC) No 1394/2007, as amended. Drugs for human use containing a new active
substance for which the therapeutic indication is the treatment of specified diseases, including but not limited to acquired
immune deficiency syndrome, neurodegenerative disorders, auto-immune diseases and other immune dysfunctions, as well
as drugs designated as orphan drugs pursuant to Regulation (EC) No 141/2000, as amended, also fall within the mandatory
scope of the centralized procedure. Because of our focus on gene therapies, which fall within the category of advanced
therapy medicinal products (“ATMPs”) and orphan indications, our products and product candidates will need to go
through the centralized procedure.
In the marketing authorization application (“MAA”) the applicant must properly and sufficiently demonstrate the
quality, safety, and efficacy of the drug. Guidance on the factors that the EMA will consider in relation to the development
and evaluation of ATMPs have been issued and include, among other things, the preclinical studies required to characterize
ATMPs; the manufacturing and control information that should be submitted in a MAA; and post-approval measures
required to monitor patients and evaluate the long-term efficacy and potential adverse reactions of ATMPs. Although these
guidelines are not legally binding, we believe that our compliance will effectively be necessary to gain and maintain
approval for any of our product candidates. The maximum timeframe for the evaluation of an MAA under the centralized
procedure is 210 days after receipt of a valid application subject to clock stops during which the applicant deals with EMA
questions.
Market access can be expedited through the grant of conditional authorization for a medicine that may fulfil unmet
needs which may be granted provided that the benefit-risk balance of the product is positive. The benefit-risk balance is
likely to be positive if the applicant can provide comprehensive data and the benefit to public health of the medicinal
product's immediate availability on the market outweighs the risks due to need for further data. Such authorizations are
valid for one year and can be renewed annually. The holder will be required to complete specific obligations (ongoing or
new studies, and in some cases additional activities) with a view to providing comprehensive data confirming that the
benefit-risk balance is positive. Once comprehensive data on the product have been obtained, the marketing authorization
may be converted into a standard marketing authorization (not subject to specific obligations). Initially, this is valid for 5
years, but can be renewed for unlimited validity. Applicants for conditional authorizations can benefit from early dialogue
with EMA through scientific advice or protocol assistance and discuss their development plan well in advance of the
submission of a marketing-authorization application. Other stakeholders (e.g., health technology assessment bodies) can be
included.
In addition, the priority medicines (PRIME) scheme for medicines that may offer a major therapeutic advantage
over existing treatments, or benefit patients without treatment options based on early clinical data, is intended to support
the development of medicines that target an unmet medical need. This voluntary scheme is based on enhanced interaction
and early dialogue with developers of promising medicines, to optimize development plans and speed up evaluation so
these medicines can reach patients earlier. Early dialogue and scientific advice also ensure that patients only participate in
trials designed to provide the data necessary for an application, making the best use of limited resources.
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The European Union also provides for a system of regulatory data and market exclusivity. According to
Article 14(11) of Regulation (EC) No 726/2004, as amended, and Article 10 of Directive 2001/83/EC, as amended, upon
receiving marketing authorization, new chemical entities approved on the basis of complete independent data package
benefit from eight years of data exclusivity and an additional two years of market exclusivity. Data exclusivity prevents
regulatory authorities in the European Union from referencing the innovator’s data to assess a generic (abbreviated)
application during the eight-year period from when the first placement of the product on the EEA market. During the
additional two-year period of market exclusivity, a generic marketing authorization can be submitted, and the innovator’s
data may be referenced, but no generic medicinal product can be marketed until the expiration of the market exclusivity.
The overall ten-year period will be extended to a maximum of eleven years if, during the first eight years of those ten
years, the marketing authorization holder obtains an authorization for one or more new therapeutic indications which,
during the scientific evaluation prior to their authorization, are held to bring a significant clinical benefit in comparison
with existing therapies. Even if a compound is considered to be a new chemical entity and the innovator can gain the period
of data exclusivity, another company nevertheless could also market another version of the drug if such company obtained
marketing authorization based on an MAA with a complete independent data package of pharmaceutical test, preclinical
tests, and clinical trials. The EMA has also issued guidelines for a comprehensive comparability exercise for biosimilars,
and for specific classes of biological products.
Under Regulation (EC) No 141/2000 article 3 as amended (Orphan Drug Regulation, (“ODR”)) a product can
benefit from orphan drug status if it is intended for the diagnosis, prevention, or treatment of a life-threatening or
chronically debilitating condition affecting not more than five in 10,000 people in the European Community (EC) when the
application is made. The principal benefit of such status is 10 years’ market exclusivity once they are approved preventing
the subsequent approval of similar medicines with similar indications although this may be reduced to six years under
certain circumstances including if the product is sufficiently profitable not to justify maintenance of market exclusivity.
Additional rules apply to medicinal products for pediatric use under Regulation (EC) No 1901/2006, as amended.
Potential incentives include a six-month extension of any supplementary protection certificate granted pursuant to
Regulation (EC) No 469/2009, however not in cases in which the relevant product is designated as an orphan medicinal
product pursuant to the ODR. Instead, medicinal products designated as orphan medicinal product may enjoy an extension
of the ten-year market exclusivity period granted under Regulation (EC) No 141/2000, as amended, to twelve years subject
to the conditions applicable to orphan drugs.
Manufacturing and promotion
Pursuant to Commission Directive 2003/94/EC as transposed into the national laws of the member states, the
manufacturing of investigational medicinal products and approved drugs is subject to a separate manufacturer’s license and
must be conducted in strict compliance with cGMP requirements, which mandate the methods, facilities, and controls used
in manufacturing, processing, and packing of drugs to assure their safety and identity. Manufacturers must have at least one
qualified person permanently and continuously at their disposal. The qualified person is ultimately responsible for
certifying that each batch of finished product released onto the market has been manufactured in accordance with cGMP
and the specifications set out in the marketing authorization or investigational medicinal product dossier. cGMP
requirements are enforced through mandatory registration of facilities and inspections of those facilities. Failure to comply
with these requirements could interrupt supply and result in delays, unanticipated costs, and lost revenues, and subject the
applicant to potential legal or regulatory action, including but not limited to warning letters, suspension of manufacturing,
seizure of product, injunctive action, or possible civil and criminal penalties.
Advertising
In the European Union, the promotion of prescription medicines is subject to intense regulation and control,
including a prohibition on direct-to-consumer advertising. All medicines advertising must be consistent with the product’s
approved summary of products characteristics, factual, accurate, balanced and not misleading. Advertising of medicines
pre-approval or off-label is prohibited. Some jurisdictions require that all promotional materials for prescription medicines
be subjected to either prior internal or regulatory review & approval.
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Other Regulatory Requirements
A holder of a marketing authorization for a medicinal product is legally obliged to fulfill several obligations by
virtue of its status as a marketing authorization holder (“MAH”). The MAH can delegate the performance of related tasks
to third parties, such as distributors or marketing collaborators, provided that this delegation is appropriately documented
and the MAH maintains legal responsibility and liability.
The obligations of an MAH include:
● Manufacturing and Batch Release. MAHs should guarantee that all manufacturing operations comply with
relevant laws and regulations, applicable good manufacturing practices, with the product specifications and
manufacturing conditions set out in the marketing authorization and that each batch of product is subject to
appropriate release formalities.
● Pharmacovigilance. MAHs are obliged to establish and maintain a pharmacovigilance system, including a
qualified person responsible for oversight, to submit safety reports to the regulators and comply with the
good pharmacovigilance practice guidelines adopted by the EMA.
● Advertising and Promotion. MAHs remain responsible for all advertising and promotion of their products,
including promotional activities by other companies or individuals on their behalf and in some cases, must
conduct internal or regulatory pre-approval of promotional materials.
● Medical Affairs/Scientific Service. MAHs are required to disseminate scientific and medical information on
their medicinal products to healthcare professionals, regulators, and patients.
● Legal Representation and Distributor Issues. MAHs are responsible for regulatory actions or inactions of
their distributors and agents.
● Preparation, Filing and Maintenance of the Application and Subsequent Marketing Authorization. MAHs
must maintain appropriate records, comply with the marketing authorization’s terms and conditions, fulfill
reporting obligations to regulators, submit renewal applications and pay all appropriate fees to the authorities.
We may hold any future marketing authorizations granted for our product candidates in our own name or appoint
an affiliate or a collaborator to hold marketing authorizations on our behalf. Any failure by an MAH to comply with these
obligations may result in regulatory action against an MAH and ultimately threaten our ability to commercialize our
products.
Reimbursement
In the European Union, the pricing and reimbursement mechanisms by private and public health insurers vary
largely by country and even within countries. In respect of the public systems, reimbursement for standard drugs is
determined by guidelines established by the legislature or responsible national authority. Some jurisdictions operate
positive and negative list systems under which products may only be marketed once a reimbursement price has been
agreed. Other member states allow companies to determine the prices for their medicines but monitor and control company
profits and may limit or restrict reimbursement and can include retrospective rebates to the Government. The downward
pressure on healthcare costs in general, particularly prescription drugs, has become very intense. As a result, increasingly
high barriers are being erected to the entry of new products and some of EU countries require the completion of studies that
compare the cost-effectiveness of a particular product candidate to currently available therapies to obtain reimbursement or
pricing approval. Special pricing and reimbursement rules may apply to orphan drugs.
Inclusion of orphan drugs in reimbursement systems tend to focus on the medical usefulness, need, quality and
economic benefits to patients and the healthcare system as for any drug. Acceptance of any medicinal product for
reimbursement may come with cost, use and often volume restrictions, which again can vary by country. In addition,
results-based rules or agreements on reimbursement may apply. Recently, a process has been formalized that allows
sponsors to receive parallel advice from EMA and relevant national health technology assessment (“HTA”) bodies for
pivotal clinical studies designed to support marketing approval. This process was followed for etranacogene dezaparvovec.
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Orphan Drug Regulation
We have been granted orphan drug exclusivity for etranacogene dezaparvovec for the treatment of hemophilia B
as well as for AMT-130 for the treatment of Huntington’s disease subject to the conditions applicable to orphan drug
exclusivity in the European Union. Regulation (EC) No 141/2000, as amended, states that a drug will be designated as an
orphan drug if its sponsor can establish:
● that it is intended for the diagnosis, prevention or treatment of a life-threatening or chronically debilitating
condition affecting not more than five in ten thousand persons in the Community when the application is
made, or that it is intended for the diagnosis, prevention or treatment of a life-threatening, seriously
debilitating or serious and chronic condition in the European Union and that without incentives it is unlikely
that the marketing of the drug in the European Union would generate sufficient return to justify the necessary
investment; and
● that there exists no satisfactory method of diagnosis, prevention, or treatment of the condition in question that
has been authorized in the European Union or, if such method exists, that the drug will be of significant
benefit to those affected by that condition.
Regulation (EC) No 847/2000 sets out further provisions for implementation of the criteria for designation of a
drug as an orphan drug. An application for the designation of a drug as an orphan drug must be submitted at any stage of
development of the drug before filing of a marketing authorization application.
If an EU-wide community marketing authorization in respect of an orphan drug is granted pursuant to Regulation
(EC) No 726/2004, as amended, the European Union and the member states will not, for a period of 10 years, accept
another application for a marketing authorization, or grant a marketing authorization or accept an application to extend an
existing marketing authorization, for the same therapeutic indication, in respect of a similar drug.
This period may however be reduced to six years if, at the end of the fifth year, it is established, in respect of the
drug concerned, that the criteria for orphan drug designation are no longer met, in other words, when it is shown on the
basis of available evidence that the product is sufficiently profitable not to justify maintenance of market exclusivity.
Notwithstanding the foregoing, a marketing authorization may be granted, for the same therapeutic indication, to a similar
drug if:
● the holder of the marketing authorization for the original orphan drug has given its consent to the second
applicant;
● the holder of the marketing authorization for the original orphan drug is unable to supply sufficient quantities
of the drug; or
● the second applicant can establish in the application that the second drug, although similar to the orphan drug
already authorized, is safer, more effective, or otherwise clinically superior.
Regulation (EC) No 847/2000 lays down definitions of the concepts similar drug and clinical superiority, which
concepts have been expanded upon in subsequent Commission guidance. Other incentives available to orphan drugs in the
European Union include financial incentives such as a reduction of fees or fee waivers and protocol assistance. Orphan
drug designation does not shorten the duration of the regulatory review and approval process.
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Human Capital Resources
As of December 31, 2020, we had a total of 332 employees, 162 of whom are based in Amsterdam, The
Netherlands, and 170 in Lexington, Massachusetts, United States of America. As of December 31, 2020, 62 of our
employees had an M.D. or Ph.D. degree, or the foreign equivalent. During 2017, we established a works council in the
Netherlands. None of our employees are subject to collective bargaining or other labor organizations. We believe that we
have good relations with all our employees and with the works council in the Netherlands.
Our values are to:
● Be passionate about the patient;
● Act with integrity and respect;
● Take ownership and act with urgency;
● Collaborate for success;
● Innovate every day; and
● Focus relentlessly on quality.
Development of our culture is reflected as part of our annual corporate goals. We invest in numerous learning
opportunities focused on individual, management and team development and other initiatives to support our employees and
build our culture.
Corporate Information
uniQure B.V. (the “Company”) was incorporated on January 9, 2012 as a private company with limited liability
(besloten vennootschap met beperkte aansprakelijkheid) under the laws of the Netherlands. We are a leader in the field of
gene therapy and seek to deliver to patients suffering from rare and other devastating diseases single treatments with
potentially curative results. Our business was founded in 1998 and was initially operated through our predecessor company,
Amsterdam Molecular Therapeutics Holding N.V (“AMT”). In 2012, AMT undertook a corporate reorganization, pursuant
to which uniQure B.V. acquired the entire business and assets of AMT and completed a share-for-share exchange with the
shareholders of AMT. Effective February 10, 2014, in connection with the initial public offering, we converted into a
public company with limited liability (naamloze vennootschap) and changed its legal name from uniQure B.V. to uniQure
N.V.
We are registered in the trade register of the Dutch Chamber of Commerce (Kamer van Koophandel) under
number 54385229. Our headquarters are in Amsterdam, the Netherlands, and its registered office is located at
Paasheuvelweg 25a, Amsterdam 1105 BP, the Netherlands and its telephone number is +31 20 240 6000.
From our initial public offering until December 31, 2018, we were an emerging growth company, as defined in the
Jumpstart Our Business Startups Act of 2012. On the last business day of our second quarter in fiscal year 2018 the
aggregate worldwide market value of ordinary shares held by our non-affiliate shareholders exceeded $700.0 million. As a
result, as of December 31, 2018, we were considered a large accelerated filer and as a consequence lost our status as an
emerging growth company.
Our website address is www.uniqure.com. We make available free of charge through our Internet website our
annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K, and any amendments to
these reports, as soon as reasonably practicable after we electronically file such material with, or furnish such material to,
the SEC. Also available through our website’s “Investors & Newsroom: Corporate Governance” page are charters for the
Audit, Compensation and Nominations and Corporate Governance committees of our board of directors and our Code of
Business Conduct and Ethics. We are not including the information on our website as a part of, nor incorporating it by
reference into, this report.
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Item 1A. Risk Factors
An investment in our ordinary shares involves a high degree of risk. You should carefully consider the following
information about these risks, together with the other information appearing elsewhere in this Annual Report on Form 10-
K, including our financial statements and related notes thereto, before deciding to invest in our ordinary shares. We
operate in a dynamic and rapidly changing industry that involves numerous risks and uncertainties. The risks and
uncertainties described below are not the only ones we face. Other risks and uncertainties, including those that we do not
currently consider material, may impair our business. If any of the risks discussed below actually occur, our business,
financial condition, operating results, or cash flows could be materially adversely affected. This could cause the value of
our securities to decline, and you may lose all or part of your investment.
Risks Related to the CSL Behring Collaboration and License Transaction
In June 2020, uniQure biopharma B.V., our wholly-owned subsidiary, entered into the CSL Behring Agreement
with CSL Behring providing CSL Behring exclusive global rights to etranacogene dezaparvovec.
We and CSL Behring may be unable to close the transaction contemplated by the CSL Behring Agreement, and
any delay in completing the transaction could diminish the anticipated benefits of the transaction or result in increased
costs. Failure to close the transaction could adversely impact the market price of our shares as well as our business and
operating results, cash flows and results of operations.
The closing of the transaction contemplated by the CSL Behring Agreement is contingent on completion of the
successful review by the FTC under antitrust laws in the United States, including the expiration of the waiting period under
the HSR Act by a certain date. On January 4, 2021, we received a Second Request from the FTC, the effect of which is the
extension of the waiting period imposed under the HSR Act until 30 days after all parties to the CSL Behring Agreement
have substantially complied with the requests (unless the waiting period is terminated earlier by the FTC or voluntarily
extended by the parties). We cannot make any assurances as to the timing of the closing of the transaction or whether the
transaction will be closed at all, or that, as part of the regulatory review process, additional conditions or terms will not be
required.
The requirement to receive these clearances before the closing of the transaction could delay the transaction or
result in an inability to complete the transaction if such clearances are not timely obtained or not obtained at all. Any delay
in the completion of the transaction could diminish the anticipated benefits of the transaction, including a realization of the
expected benefits of partnering, or result in additional transaction costs, loss of revenue or other effects associated with
uncertainty about the transaction and could disrupt our regular operations by diverting the attention of our workforce and
management team. Any such delay could also delay the timelines associated with our commercialization of etranacogene
dezaparvovec, including the filing of a biologics licensing application with the FDA, and such delays could cause us to
bring etranacogene dezaparvovec to market after a similar competitive product has emerged in the United States, Europe or
in other markets.
We will need to fund investments into the development and preparation of the commercial launch of etranacogene
dezaparvovec for as long as regulatory reviews continue. The completions of these reviews could require significant time
and/or might result in modifications to or even denial of the transaction. These factors could adversely impact the cash
flows and results that we are able to generate in relation to etranacogene dezaparvovec. Additionally, any uncertainty over
the ability of us and CSL Behring to complete the transaction could make it more difficult for us to retain certain key
employees or attract new talent or to pursue business strategies and parties with whom we have business relationships
related to etranacogene dezaparvovec, either contractual or operational in nature, may experience uncertainty as to the
future or desirability of such relationships and may delay or defer certain business decisions, seek alternative relationships
with third parties or seek to alter their present business relationships with us.
To the extent that the market price of our ordinary shares reflects positive market assumptions that the transaction
will close within a certain time frame, or at all, or that the transaction is advantageous to us, the price of such shares may
decline if the transaction does not close for any reason or in a timely manner.
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Risks Related to the Current COVID-19 Pandemic
Our business and operations have been, and may continue to be, materially and adversely affected by the
ongoing COVID-19 pandemic.
The ongoing outbreak of COVID-19 originated in Wuhan, China, in December 2019 and has since spread to
multiple countries, including the United States and the Netherlands. On March 11, 2020, the WHO declared the outbreak a
pandemic. The COVID-19 pandemic is affecting the United States and global economies and has affected and may
continue to affect our operations and those of third parties on which we rely. The COVID-19 pandemic has caused and may
continue to cause disruptions in our raw material supply, our commercial-scale manufacturing capabilities for AAV-based
gene therapies, the development of our product candidates, employee productivity and the conduct of current and future
clinical trials. In addition, the COVID-19 pandemic has affected and may continue to affect the operations of the FDA,
EMA, and other health authorities, which could result in delays of reviews and approvals, including with respect to our
product candidates.
As evidenced by the postponement of procedures for two patients in our Phase I/II clinical study of AMT-130, the
evolving COVID-19 pandemic has impacted the pace of enrollment and procedures in our clinical trials, as well as caused
challenges in scheduling follow-up visits and managing other aspects of our clinical trials. We may be affected by similar
delays as patients may avoid or may not be able to travel to healthcare facilities and physicians’ offices unless due to a
health emergency and clinical trial staff can no longer get to the clinic. Such facilities and offices have been and may
continue to be required to focus limited resources on non-clinical trial matters, including treatment of COVID-19 patients,
thereby decreasing availability, in whole or in part, for clinical trial services. In addition, employee disruptions and remote
working environments related to the COVID-19 pandemic, and federal, state, and local public health measures designed to
mitigate the spread of the virus, have impacted and could continue to negatively impact the efficiency and pace with which
we work and develop our product candidates and our manufacturing capabilities. Further, while the potential economic
impact brought by, and the duration of, the COVID-19 pandemic is difficult to assess or predict, the impact of the COVID-
19 pandemic on global financial markets may reduce our ability to access capital, which could negatively impact our short-
term and long-term liquidity. The ultimate impact of the COVID-19 pandemic is highly uncertain and subject to change.
We do not yet know the full extent of potential delays or impacts on our business, financing, or clinical trial activities or on
healthcare systems or the global economy as a whole. However, these negative effects could have a material impact on our
liquidity, capital resources, operations, and business and those of the third parties on whom we rely.
Risks Related to the Development of Our Product Candidates
None of our product candidates have been approved for commercial sale and they might never receive
regulatory approval or become commercially viable. We have never generated any revenues from product sales and may
never be profitable.
All our product candidates are in research or development. We have not generated any revenues from the sale of
products or manufacturing of our product for a licensee and do not expect to generate any such revenue before 2022. Our
lead product candidates, etranacogene dezaparvovec (also known as AMT-061) and AMT-130, and any of our other
potential product candidates will require extensive preclinical and/or clinical testing, manufacture development and
regulatory approval prior to commercial use. Our research and development efforts may not be successful. Even if our
clinical development efforts result in positive data, our product candidates may not receive regulatory approval or be
successfully introduced and marketed at prices that would permit us to operate profitably.
We may encounter substantial delays in and impediments to the progress of our clinical trials or fail to
demonstrate the safety and efficacy of our product candidates.
Clinical and non-clinical development is expensive, time-consuming, and uncertain as to outcome. Our product
candidates are in different stages of clinical or preclinical development, and there is a significant risk of failure or delay in
each of these programs. For example, on December 21, 2020, our clinical trials of etranacogene dezaparvovec, including
our HOPE-B trial, were put on clinical hold by the FDA. The clinical hold was initiated following the submission of a
safety report in mid-December 2020 relating to a possibly related serious adverse event associated with a preliminary
diagnosis of HCC, a form of liver cancer, in one patient in the HOPE-B trial that was treated with the etranacogene
dezaparvovec in October 2019. The clinical hold could be maintained for an extended period of time or indefinitely. We
cannot guarantee that any preclinical tests or clinical trials, including our clinical trials of etranacogene dezaparvovec, will
be completed as planned or completed on schedule, if at all. A failure of one or more preclinical tests or clinical trials can
occur at any stage of testing. Events that may prevent successful or timely completion of clinical development, as well as
product candidate approval, include, but are not limited to:
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● occurrence of serious adverse events associated with a product candidate that are viewed to outweigh its
potential benefits;
● delays in reaching a consensus with regulatory agencies on study design;
● delays in reaching agreement on acceptable terms with prospective clinical research organizations (“CROs”) and
clinical trial sites;
● delays in receiving regulatory authorization to conduct the clinical trials or a regulatory authority decision that
the clinical trial should not proceed;
● delays in obtaining or failure to obtain required IRB and IBC approval at each clinical trial site;
● requirements of regulatory authorities, IRBs, or IBCs to modify a study in such a way that it makes the study
impracticable to conduct;
● regulatory authority requirements to perform additional or unanticipated clinical trials;
● regulatory authority refusal to accept data from foreign clinical study sites;
● disagreements with regulatory authorities regarding our study design, including endpoints, our chosen indication,
or our interpretation of data from preclinical studies and clinical trials or a finding that a product candidate’s
benefits do not outweigh its safety risks;
● delays in obtaining or failure to obtain required approvals from a DSMB or other required approvals;
● imposition of a clinical hold by regulatory agencies after an inspection of our clinical trial operations or trial
sites;
● suspension or termination of clinical research for various reasons, including noncompliance with regulatory
requirements or a finding that the participants are being exposed to unacceptable health risks, undesirable side
effects, or other unexpected characteristics (alone or in combination with other products) of the product
candidate, or due to findings of undesirable effects caused by a chemically or mechanistically similar therapeutic
or therapeutic candidate;
● failure by CROs, other third parties or us to adhere to clinical trial requirements or otherwise properly manage
the clinical trial process, including meeting applicable timelines, properly documenting case files, including the
retention of proper case files, and properly monitoring and auditing clinical sites;
● failure of sites or clinical investigators to perform in accordance with Good Clinical Practice or applicable
regulatory guidelines in other countries;
● failure of patients to abide by clinical trial requirements;
● difficulty or delays in patient recruiting into clinical trials or in the addition of new investigators;
● the impact of the COVID-19 pandemic on the healthcare system or any clinical trial sites;
● delays or deviations in the testing, validation, manufacturing, and delivery of our product candidates to the
clinical sites;
● delays in having patients complete participation in a study or return for post-treatment follow-up;
● clinical trial sites or patients dropping out of a study;
● the number of patients required for clinical trials of our product candidates being larger than we anticipate;
● clinical trials producing negative or inconclusive results, or our studies failing to reach the necessary level of
statistical significance, requiring that we conduct additional clinical trials or abandon product development
programs;
● interruptions in manufacturing clinical supply of our product candidates or issues with manufacturing product
candidates that meet the necessary quality requirements;
● unanticipated clinical trial costs or insufficient funding, including to pay substantial application user fees;
● occurrence of serious adverse events or other undesirable side effects associated with a product candidate that are
viewed to outweigh its potential benefits;
● disagreements with regulatory authorities regarding the interpretation of our clinical trial data and results, or the
emergency of new information about or impacting our product candidates;
● determinations that there are issues with our manufacturing facility or process; or
● changes in regulatory requirements and guidance, as well as new, revised, postponed, or frozen regulatory
requirements, especially in light of the change in the United States administration, that require amending or
submitting new clinical protocols, undertaking additional new tests or analyses, or submitting new types or
amounts of clinical data.
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Before obtaining marketing approval from regulatory authorities for the sale of our product candidates, we must
conduct extensive clinical trials to demonstrate the safety and efficacy of the product candidates in humans. Such trials and
regulatory review and approval take many years. It is impossible to predict when or if any of our clinical trials will
demonstrate that product candidates are effective or safe in humans.
If the results of our clinical trials are inconclusive, or fail to meet the level of statistical significance required for
approval or if there are safety concerns or adverse events associated with our product candidates, we may:
● be delayed in or altogether prevented from obtaining marketing approval for our product candidates;
● obtain approval for indications or patient populations that are not as broad as intended or desired;
● obtain approval with labeling that includes significant use or distribution restrictions or safety warnings;
● be subject to changes with the way the product is administered;
● be required to perform additional clinical trials to support approval or be subject to additional post-marketing
testing requirements;
● have regulatory authorities withdraw their approval of the product or impose restrictions on its distribution in the
form of a modified risk evaluation and mitigation strategy;
● be subject to the addition of labeling statements, such as warnings or contraindications;
● be sued; or
● experience damage to our reputation.
Because of the nature of the gene therapies we are developing, regulators may also require us to demonstrate long-
term gene expression, clinical efficacy, and safety, which may require additional or longer clinical trials, and which may
not be able to be demonstrated to the regulatory authorities’ standards.
Our ability to recruit patients for our trials is often reliant on third parties, such as clinical trial sites. Clinical trial
sites may not have the adequate infrastructure established to handle gene therapy products or may have difficulty finding
eligible patients to enroll into a trial.
In addition, we, or any collaborators we may have may not be able to locate and enroll enough eligible patients to
participate in these trials as required by the FDA, the EMA or similar regulatory authorities outside the United States and
the European Union. This may result in our failure to initiate or continue clinical trials for our product candidates or may
cause us to abandon one or more clinical trials altogether. Because our programs are focused on the treatment of patients
with rare or orphan or ultra-orphan diseases, our ability to enroll eligible patients in these trials may be limited or slower
than we anticipate considering the small patient populations involved and the specific age range required for treatment
eligibility in some indications. In addition, our potential competitors, including major pharmaceutical, specialty
pharmaceutical and biotechnology companies, academic institutions and governmental agencies and public and private
research institutions, may seek to develop competing therapies, which would further limit the small patient pool available
for our studies. Also, patients may be reluctant to enroll in gene therapy trials where there are other therapeutic alternatives
available or that may become available, which may be for various reasons including uncertainty about the safety or
effectiveness of a new therapeutic such as a gene therapy and the possibility that treatment with a gene therapy therapeutic
could preclude future gene therapy treatments due to the formation of antibodies following and in response to the
treatment.
Any inability to successfully initiate or complete preclinical and clinical development could result in additional
costs to us or impair our ability to receive marketing approval, to generate revenues from product sales or obtain regulatory
and commercialization milestones and royalties. In addition, if we make manufacturing or formulation changes to our
product candidates, including changes in the vector or manufacturing process used, we may need to conduct additional
studies to bridge our modified product candidates to earlier versions. It is also possible that any such manufacturing of
formulation changes may have an adverse impact on the performance of the product candidate. Clinical trial delays could
also shorten any periods during which we may have the exclusive right to commercialize our product candidates or allow
our competitors to bring products to market before we do, which could impair our ability to successfully commercialize our
product candidates and may materially harm our business, financial condition, and results of operations.
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Our progress in early-stage clinical trials may not be indicative of long-term efficacy in late-stage clinical
trials, and our progress in trials for one product candidate may not be indicative of progress in trials for other product
candidates.
Study designs and results from previous studies are not necessarily predictive of our future clinical study designs
or results, and initial, top-line, or interim results may not be confirmed upon full analysis of the complete study data. Our
product candidates may fail to show the required level of safety and efficacy in later stages of clinical development despite
having successfully advanced through initial clinical studies. Changes to product candidates may also impact their
performance in subsequent studies.
By example, our initial clinical trials in hemophilia B were conducted with AMT-060. Following these studies, we
made modifications to AMT-060, substituting two nucleotides in the coding sequence for FIX. This modified product
candidate is etranacogene dezaparvovec. In 2017, we announced our plans to advance etranacogene dezaparvovec, which
includes an AAV5 vector carrying the FIX-Padua transgene, into a pivotal study. While we believe etranacogene
dezaparvovec and AMT-060, our product candidate that was previously studied in a Phase I/II study, have been
demonstrated to be materially comparable in nonclinical studies and manufacturing quality assessments, it is possible that
ongoing or future clinical studies of etranacogene dezaparvovec may show unexpected differences from AMT-060. Should
these differences have an unfavorable impact on clinical outcomes, or should they not have their intended effect of
increasing the product candidate’s FIX activity, they may adversely impact our ability to achieve regulatory approval or
market acceptance of etranacogene dezaparvovec. We may also need to conduct additional or longer-term studies, which
may delay regulatory submissions or approvals and which the regulatory authorities may ultimately not accept or approve.
In our Phase I/II clinical study of AMT-060, we screened patients for pre-existing anti-AAV5 antibodies to
determine their eligibility for the trial. Three of the ten patients screened for the study tested positive for anti-AAV5
antibodies on reanalysis using a more sensitive antibody assay. Since we did not observe any ill-effects or correlation
between the level of anti-AAV5 antibodies and clinical outcomes, patients who have anti-AAV5 antibodies are permitted to
enroll in our planned pivotal study of etranacogene dezaparvovec. Since we only have been able to test a limited number of
patients and have limited clinical and pre-clinical data, it is possible that ongoing or future clinical studies may not confirm
these results, and if so, negatively impact the outcome of our study.
In advance of treating patients in the pivotal study of etranacogene dezaparvovec, we conducted a short study to
confirm the dose expected to be used in the pivotal trial. The dose-confirmation study enrolled three patients, who were
administered a single dose of 2x1013 gc/kg. We have relied on the short-term data from this study, including FIX activity
and safety outcomes during the weeks following administration of etranacogene dezaparvovec, to confirm the dose to be
used in the pivotal study. Following the results of this study, our Data Monitoring Committee confirmed the dose of 2x1013
gc/kg for administration in the pivotal study. Given the limited number of patients and short follow-up period, data from
this study may differ materially from the future results of our planned pivotal study of etranacogene dezaparvovec.
A number of companies in the pharmaceutical and biotechnology industries have suffered significant setbacks in
later-stage clinical trials even after achieving promising results in early-stage clinical trials. If a larger population of
patients does not experience positive results during clinical trials, if these results are not reproducible or if our products
show diminishing activity over time, our product candidates may not receive approval from the FDA or EMA. Data
obtained from preclinical and clinical activities are subject to varying interpretations, which may delay, limit, or prevent
regulatory approval. In addition, we may encounter regulatory delays or rejections because of many factors, including
changes in regulatory policy during the period of product development. Failure to confirm favorable results from earlier
trials by demonstrating the safety and effectiveness of our products in later-stage clinical trials with larger patient
populations could have a material adverse effect on our business, financial condition, and results of operations.
Additionally, where there are differences in the early-stage and late-stage trials, such as the differences between
AMT-060 and AMT-061, regulatory authorities may require additional or longer-term data in late-stage trials, which may
delay regulatory submissions or approvals and which the regulatory authorities may ultimately not accept or approve.
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Fast track product, breakthrough therapy, priority review, or RMAT designation by the FDA, or access to the
PRIME scheme by the EMA, for our product candidates may not lead to faster development or regulatory review or
approval process, and it does not increase the likelihood that our product candidates will receive marketing approval.
We have obtained and may in the future seek one or more of fast track designation, breakthrough therapy
designation, RMAT designation, PRIME scheme access or priority review designation for our product candidates. A fast
track product designation is designed to facilitate the clinical development and expedite the review of drugs intended to
treat a serious or life-threatening condition and which demonstrate the potential to address an unmet medical need. A
breakthrough therapy is defined as a drug that is intended, alone or in combination with one or more other drugs, to treat a
serious or life-threatening disease or condition, where preliminary clinical evidence indicates that the drug may
demonstrate substantial improvement over existing therapies on one or more clinically significant endpoints, such as
substantial treatment effects observed early in clinical development. A RMAT designation is designed to accelerate
approval for regenerative advanced therapies. Priority review designation is intended to speed the FDA marketing
application review timeframe for drugs that treat a serious condition and, if approved, would provide a significant
improvement in safety or effectiveness. PRIME is a scheme provided by the EMA, similar to the FDA’s breakthrough
therapy designation, to enhance support for the development of medicines that target an unmet medical need.
For drugs and biologics that have been designated as fast track products, RMAT, or breakthrough therapies, or
granted access to the PRIME scheme, interaction and communication between the regulatory agency and the sponsor of the
trial can help to identify the most efficient path for clinical development. Sponsors of fast track products, RMAT products,
or breakthrough therapies may also be able to submit marketing applications on a rolling basis, meaning that the FDA may
review portions of a marketing application before the sponsor submits the complete application to the FDA, if the sponsor
pays the user fee upon submission of the first portion of the marketing application and the FDA approves a schedule for the
submission of the remaining sections. For products that receive a priority review designation, the FDA's marketing
application review goal is shortened to six months, as opposed to ten months under standard review.
Designation as a fast track product, breakthrough therapy, RMAT, PRIME, or priority review product is within the
discretion of the regulatory agency. Accordingly, even if we believe one of our product candidates meets the relevant
criteria, the agency may disagree and instead determine not to make such designation. In any event, the receipt of such a
designation for a product candidate may not result in a faster development process, review or approval compared to drugs
considered for approval under conventional regulatory procedures and does not assure ultimate marketing approval by the
agency. In addition, the FDA may later decide that the products no longer meet the applicable conditions for qualification
as either a fast track product, RMAT, or a breakthrough therapy or, for priority review products, decide that the period for
FDA review or approval will not be shortened.
We may not be successful in our efforts to use our gene therapy technology platform to build a pipeline of
additional product candidates.
An element of our strategy is to use our gene therapy technology platform to expand our product pipeline and to
progress these candidates through preclinical and clinical development ourselves or together with collaborators. Although
we currently have a pipeline of programs at various stages of development, we may not be able to identify or develop
product candidates that are safe and effective. Even if we are successful in continuing to build our pipeline, the potential
product candidates that we identify may not be suitable for clinical development. Research programs to identify new
product candidates require substantial technical, financial, and human resources. We or any collaborators may focus our
efforts and resources on potential programs or product candidates that ultimately prove to be unsuccessful. If we do not
continue to successfully develop and commercialize product candidates based upon our technology, we may face difficulty
in obtaining product revenues in future periods, which could result in significant harm to our business, results of operations
and financial position and materially adversely affect our share price.
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Our strategy of obtaining rights to key technologies through in-licenses may not be successful.
We seek to expand our product pipeline from time to time in part by in-licensing the rights to key technologies,
including those related to gene delivery, genes, and gene cassettes. The future growth of our business will depend in
significant part on our ability to in-license or otherwise acquire the rights to additional product candidates or technologies,
particularly through our collaborations with academic research institutions. However, we may be unable to in-license or
acquire the rights to any such product candidates or technologies from third parties on acceptable terms or at all. The in-
licensing and acquisition of these technologies is a competitive area, and many more established companies are also
pursuing strategies to license or acquire product candidates or technologies that we may consider attractive. These
established companies may have a competitive advantage over us due to their size, cash resources and greater clinical
development and commercialization capabilities. In addition, companies that perceive us to be competitors may be
unwilling to license rights to us. Furthermore, we may be unable to identify suitable product candidates or technologies
within our areas of focus. If we are unable to successfully obtain rights to suitable product candidates or technologies, our
business, financial condition, and prospects could suffer.
Negative public opinion and increased regulatory scrutiny of gene therapy and genetic research may damage
public perception of our product candidates or adversely affect our ability to conduct our business or obtain marketing
approvals for our product candidates.
Public perception may be influenced by claims that gene therapy is unsafe, and gene therapy may not gain the
acceptance of the public or the medical community. The risk of cancer remains a concern for gene therapy, and we cannot
assure that it will not occur in any of our planned or future clinical studies. In addition, there is the potential risk of delayed
adverse events following exposure to gene therapy products due to persistent biological activity of the genetic material or
other components of products used to carry the genetic material.
A small number of patients have experienced serious adverse events during our clinical trials of either AMT-060
(our first-generation hemophilia B gene therapy) or etranacogene dezaparvovec. Any adverse events in our clinical trials or
those conducted by other parties (even if not ultimately attributable to our product candidates), and the resulting publicity,
could result in delay, a hold or termination of our clinical trials, increased governmental regulation, unfavorable public
perception, failure of the medical community to accept and prescribe gene therapy treatments, potential regulatory delays
in the testing or approval of our product candidates, stricter labeling requirements for those product candidates that are
approved and a decrease in demand for any such product candidates. If any of these events should occur, it may have a
material adverse effect on our business, financial condition, and results of operations.
Certain of our product candidates may require medical devices for product administration and/or diagnostics,
resulting in our product candidates being deemed combination products. This may result in the need to comply with
additional regulatory requirements. If we are unable to meet these regulatory requirements, we may be delayed or not be
able to obtain product approval.
Certain of our product candidates, such as AMT-130, require medical devices, such as a stereotactic, magnetic
resonance imaging guided catheter, for product administration. Other of our product candidates may also require the use of
a companion diagnostic device to confirm the presence of specific genetic or other biomarkers. This may result in our
product candidates being deemed to be combination products, potentially necessitating compliance with the FDA’s
investigational device regulations, separate marketing application submissions for the medical device component, a
demonstration that our product candidates are safe and effective when used in combination with the medical devices, cross
labeling with the medical device, and compliance with certain of the FDA’s device regulations. If we are not able to
comply with the FDA’s device regulations, if we are not able to effectively partner with the applicable medical device
manufacturers, if we or any partners are not able to obtain any required FDA clearances or approvals of the applicable
medical devices, or if we are not able to demonstrate that our product candidates are safe and efficacious when used with
the applicable medical devices, we may be delayed in or may never obtain FDA approval for our product candidates, which
would materially harm our business.
Moreover, certain of our delivery modalities, such as direct delivery of product candidates to the brain, may
require significant physician ability and skill. If physicians are not able to effectively deliver our product candidates to the
applicable site of action or if delivery modalities are too difficult, we may never be able to obtain approval for our product
candidates, may be delayed in obtaining approval, or, following approval, physicians may not adopt our product
candidates, any of which may materially harm our business.
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Risks Related to Our Manufacturing
Our manufacturing facility is subject to significant government regulations and approvals. If we fail to comply
with these regulations or maintain these approvals our business could be materially harmed.
Our manufacturing facility in Lexington is subject to ongoing regulation and periodic inspection by the FDA,
EMA, and other regulatory bodies to ensure compliance with current cGMP. Moreover, before approving a BLA for any
product candidate, the FDA will inspect our manufacturing facility and processes. Any failure to follow and document our
adherence to such cGMP regulations or other regulatory requirements may lead to significant delays in the availability of
products for commercial sale or clinical study, may result in the termination of or a hold on a clinical study, or may delay or
prevent filing or approval of marketing applications for our products.
Failure to comply with applicable regulations could also result in the FDA, EMA, or other applicable authorities
taking various actions, including levying fines and other civil penalties; imposing consent decrees or injunctions; requiring
us to suspend or put on hold one or more of our clinical trials; suspending or withdrawing regulatory approvals; delaying or
refusing to approve pending applications or supplements to approved applications; requiring us to suspend manufacturing
activities or product sales, imports or exports; requiring us to communicate with physicians and other customers about
concerns related to actual or potential safety, efficacy, and other issues involving our products; mandating or
recommending product recalls or seizing products; imposing operating restrictions; and seeking criminal prosecutions,
among other outcomes. Poor control of production processes can also lead to the introduction of adventitious agents or
other contaminants, or to inadvertent changes in the properties or stability of a product candidate that may not be detectable
in final product testing and that could have an adverse effect on clinical studies, or patient safety or efficacy. Moreover, if
our manufacturing facility is not able to follow regulatory requirements, we may need to implement costly and time-
consuming remedial actions. Any of the foregoing could materially harm our business, financial condition, and results of
operations.
Moreover, if we are not able to manufacture a sufficient amount of our product candidates for clinical studies or
eventual commercialization, our development program and eventual commercial prospects will be harmed. If we cannot
produce an adequate amount of our product candidates in compliance with the applicable regulatory requirements, we may
need to contract with a third party to do so, in which case third party manufacturers may not be available or available on
favorable terms. The addition of a new manufacturer may also require FDA approvals, which we may not be able to
obtain.
Gene therapies are complex and difficult to manufacture. We could experience capacity, production or
technology transfer problems that result in delays in our development or commercialization schedules or otherwise
adversely affect our business.
The insect-cell based manufacturing process we use to produce our products and product candidates is highly
complex and in the normal course is subject to variation or production difficulties. Issues with any of our manufacturing
processes, even minor deviations from the normal process, could result in insufficient yield, product deficiencies or
manufacturing failures that result in adverse patient reactions, lot failures, insufficient inventory, product recalls and
product liability claims. Additionally, we may not be able to scale up some or all our manufacturing processes, which may
result in delays in obtaining regulatory approvals or otherwise adversely affect our ability to manufacture sufficient
quantities of our products.
Many factors common to the manufacturing of most biologics and drugs could also cause production
interruptions, including raw materials shortages, raw material failures, growth media failures, equipment malfunctions,
facility contamination, labor problems, natural disasters, disruption in utility services, terrorist activities, or cases of force
majeure and acts of god (including the effects of the COVID-19 pandemic) beyond our control. We also may encounter
problems in hiring and retaining the experienced specialized personnel needed to operate our manufacturing process, which
could result in delays in our production or difficulties in maintaining compliance with applicable regulatory requirements.
Any problems in our manufacturing processes or facilities could make us a less attractive collaborator for
academic research institutions and other parties, which could limit our access to additional attractive development
programs, result in delays in our clinical development or marketing schedules and materially harm our business.
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Our use of viruses, chemicals and other hazardous materials requires us to comply with regulatory
requirements and exposes us to significant potential liabilities.
Our development and manufacturing processes involve the use of viruses, chemicals, other (potentially) hazardous
materials and produce waste products. Accordingly, we are subject to national, federal, state, and local laws and regulations
in the United States and the Netherlands governing the use, manufacture, distribution, storage, handling, treatment, and
disposal of these materials. In addition to ensuring the safe handling of these materials, applicable requirements require
increased safeguards and security measures for many of these agents, including controlling access and screening of entities
and personnel who have access to them, and establishing a comprehensive national database of registered entities. In the
event of an accident or failure to comply with environmental, occupational health and safety and export control laws and
regulations, we could be held liable for damages that result, and any such liability could exceed our assets and resources,
and could result in material harm to our business, financial condition, and results of operations.
Our resources might be adversely affected if we are unable to validate our manufacturing processes or develop
new processes to meet our product supply needs and obligations.
The manufacture of our AAV gene therapies, including etranacogene dezaparvovec, is complex and requires
significant expertise. Even with the relevant experience and expertise, manufacturers of gene therapy products often
encounter difficulties in production, particularly in scaling out and validating initial production, and ensuring that the
product meets required specifications. These problems include difficulties with production costs and yields, quality control,
including stability and potency of the product, quality assurance testing, operator error, shortages of qualified personnel, as
well as compliance with strictly enforced federal, state and foreign regulations. In the past, we have manufactured certain
batches of etranacogene dezaparvovec, and other product candidates, intended for nonclinical, clinical and process
validation purposes that have not met all of our pre-specified quality parameters. To meet our expected future production
needs and our regulatory filing timelines for etranacogene dezaparvovec, as well as other gene therapy product candidates,
we will need to complete the validation of our existing manufacturing processes as well as to develop larger scale
manufacturing processes. If we are unable to consistently manufacture etranacogene dezaparvovec, or other gene therapy
product candidates, in accordance with our pre-specified quality parameters and applicable regulatory standards, it could
adversely impact our ability to validate our manufacturing processes, to meet our production needs, to file our BLA or
other regulatory submissions, to develop our other proprietary programs, to conserve our cash, or to receive financial
payments pursuant to our agreements with third parties, including with CSL Behring in return for supplying etranacogene
dezaparvovec following regulatory approval.
Risks Related to Regulatory Approval of Our Products
We cannot predict when or if we will obtain marketing approval to commercialize a product candidate.
The development and commercialization of our product candidates, including their design, testing, manufacture,
safety, efficacy, purity, recordkeeping, labeling, storage, approval, advertising, promotion, sale, and distribution, are subject
to comprehensive regulation by the FDA and other regulatory agencies in the United States, the EMA, and other regulatory
agencies of the member states of the European Union, and similar regulatory authorities in other jurisdictions. Failure to
obtain marketing approval for a product candidate in a specific jurisdiction will prevent us from commercializing the
product candidate in that jurisdiction.
The process of obtaining marketing approval for our product candidates in the United States, the European Union,
and other countries is expensive and may take many years, if approval is obtained at all. Changes in marketing approval
policies during the development period, changes in or the enactment of additional statutes or regulations, or changes in
regulatory review for each submitted product application, may cause delays in the approval or rejection of an application.
Regulatory authorities have substantial discretion in the approval process and may refuse to accept any application, may
decide that our data are insufficient for approval, may require additional preclinical, clinical, or other studies and may not
complete their review in a timely manner. Further, any marketing approval we ultimately obtain may be for only limited
indications or be subject to stringent labeling or other restrictions or post-approval commitments that render the approved
product not commercially viable.
If we experience delays in obtaining marketing approval for any of our product candidates in the United States,
the European Union, or other countries, the commercial prospects of our other product candidates may be harmed and our
ability to generate revenues will be materially impaired.
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The risks associated with the marketing approval process are heightened by the status of our products as gene
therapies.
We believe that all our current product candidates will be viewed as gene therapy products by the applicable
regulatory authorities. While there are a number of gene therapy product candidates under development, in the United
States, the FDA has only approved a limited number of gene therapy products, to date. Accordingly, regulators, like the
FDA, may have limited experience with the review and approval of marketing applications for gene therapy products.
Both the FDA and the EMA have demonstrated caution in their regulation of gene therapy treatments, and ethical
and legal concerns about gene therapy and genetic testing may result in additional regulations or restrictions on the
development and commercialization of our product candidates that are difficult to predict. The FDA and the EMA have
issued various guidance documents pertaining to gene therapy products, with which we likely must comply to gain
regulatory approval of any of our product candidates in the United States or European Union, respectively. The close
regulatory scrutiny of gene therapy products may result in delays and increased costs and may ultimately lead to the failure
to obtain approval for any gene therapy product.
Regulatory requirements affecting gene therapy have changed frequently and continue to evolve, and agencies at
both the U.S. federal and state level, as well as congressional committees and foreign governments, have sometimes
expressed interest in further regulating biotechnology. In the United States, there have been a number of recent changes
relating to gene therapy development. By example, FDA issued a number of new guidance documents on human gene
therapy development, one of which was specific to human gene therapy for hemophilia and another of which was specific
to rare diseases. Moreover, the European Commission conducted a public consultation in early 2013 on the application of
EU legislation that governs advanced therapy medicinal products, including gene therapy products, which could result in
changes in the data we need to submit to the EMA for our product candidates to gain regulatory approval or change the
requirements for tracking, handling and distribution of the products which may be associated with increased costs. In
addition, divergent scientific opinions among the various bodies involved in the review process may result in delays,
require additional resources, and ultimately result in rejection. The FDA, EMA, and other regulatory authorities will likely
continue to revise and further update their approaches to gene therapies in the coming years. These regulatory agencies,
committees and advisory groups and the new regulations and guidelines they promulgate may lengthen the regulatory
review process, require us to perform additional studies, increase our development costs, lead to changes in regulatory
positions and interpretations, delay or prevent approval and commercialization of our product candidates or lead to
significant post-approval limitations or restrictions. Delay or failure to obtain, or unexpected costs in obtaining, the
regulatory approval necessary to bring a potential product to market could decrease our ability to generate sufficient
product revenues to maintain our business.
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Our failure to obtain or maintain orphan product exclusivity for any of our product candidates for which we
seek this status could limit our commercial opportunity, and if our competitors are able to obtain orphan product
exclusivity before we do, we may not be able to obtain approval for our competing products for a significant period.
Regulatory authorities in some jurisdictions, including the United States and the European Union, may designate
drugs for relatively small patient populations as orphan drugs. While certain of our product candidates have received
orphan drug designation, there is no guarantee that we will be able to receive such designations in the future. The FDA
may grant orphan designation to multiple sponsors for the same compound or active molecule and for the same indication.
If another sponsor receives FDA approval for such product before we do, we would be prevented from launching our
product in the United States for the orphan indication for a period of at least seven years unless we can demonstrate clinical
superiority.
Moreover, while orphan drug designation neither shortens the development or regulatory review time, nor gives
the product candidate advantages in the regulatory review or approval process, generally, if a product with an orphan drug
designation subsequently receives the first marketing approval for the relevant indication, the product is entitled to a period
of market exclusivity, which precludes the FDA or the EMA from approving another marketing application for the same
drug for the same indication for that period. The FDA and the EMA, however, may subsequently approve a similar drug or
same drug, in the case of the United States, for the same indication during the first product's market exclusivity period if
the FDA or the EMA concludes that the later drug is clinically superior in that it is shown to be safer or more effective or
makes a major contribution to patient care. Orphan exclusivity in the United States also does not prevent the FDA from
approving another product that is considered to be the same as our product candidates for a different indication or a
different product for the same orphan indication. If another product that is the same as ours is approved for a different
indication, it is possible that third-party payors will reimburse for products off-label even if not indicated for the orphan
condition.
Orphan drug exclusivity may be lost if the FDA or the EMA determines that the request for designation was
materially defective, or if the manufacturer is unable to assure sufficient quantity of the drug to meet the needs of patients
with the rare disease or condition or if the incidence and prevalence of patients who are eligible to receive the drug in these
markets materially increase. The inability to obtain or failure to maintain adequate product exclusivity for our product
candidates could have a material adverse effect on our business prospects, results of operations and financial condition.
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Additionally, regulatory criteria with respect to orphan products is evolving, especially in the area of gene therapy.
By example, in the United States, whether two gene therapies are considered to be the same for the purpose of determining
clinical superiority is subject to change, and depends on a number of factors, including the expressed transgene, the vector,
and other product or product candidate features. Accordingly, whether any of our product candidates will be deemed to be
the same as another product or product candidate is uncertain.
As appropriate, we intend to seek all available periods of regulatory exclusivity for our product candidates.
However, there is no guarantee that we will be granted these periods of regulatory exclusivity or that we will be able to
maintain these periods of exclusivity.
The FDA grants product sponsors certain periods of regulatory exclusivity, during which the agency may not
approve, and in certain instances, may not accept, certain marketing applications for competing drugs. For example,
biologic product sponsors may be eligible for twelve years of exclusivity from the date of approval, seven years of
exclusivity for drugs that are designated to be orphan drugs, and/or a six-month period of exclusivity added to any existing
exclusivity period for the submission of FDA requested pediatric data. While we intend to apply for all periods of market
exclusivity that we may be eligible for, there is no guarantee that we will be granted any such periods of market exclusivity.
By example, regulatory authorities may determine that our product candidates are not eligible for periods of regulatory
exclusivity for various reasons, including a determination by the FDA that a BLA approval does not constitute a first
licensure of the product. Additionally, under certain circumstances, the FDA may revoke the period of market exclusivity.
Thus, there is no guarantee that we will be able to maintain a period of market exclusivity, even if granted. In the case of
orphan designation, other benefits, such as tax credits and exemption from user fees may be available. If we are not able to
obtain or maintain orphan drug designation or any period of market exclusivity to which we may be entitled, we could be
materially harmed, as we will potentially be subject to greater market competition and may lose the benefits associated
with programs. It is also possible that periods of exclusivity will not adequately protect our product candidates from
competition. For instance, even if we receive twelve years of exclusivity from the FDA, other applicants will still be able to
submit and receive approvals for versions of our product candidates through a full BLA.
If we do not obtain or maintain periods of market exclusivity, we may face competition sooner than otherwise
anticipated. For instance, in the United States, this could mean that a competing biosimilar product may be able to submit
an application to the FDA and obtain approval. This may require that we undertake costly and time-consuming patent
litigation, to the extent available, or defend actions brought by the biosimilar applicant for declaratory judgement. If a
biosimilar product does enter the market, it is possible that it could be substituted for one of our product candidates,
especially if it is available at a lower price.
It is also possible that, at the time we obtain approval of our product candidates, regulatory laws and policies
around exclusivities may have changed. For instance, there have been efforts to decrease the United States period of
exclusivity to a shorter timeframe. Future proposed budgets, international trade agreements and other arrangements or
proposals may affect periods of exclusivity.
Risks Related to Commercialization
If we are unable to successfully commercialize our product candidates or experience significant delays in doing
so, our business could be materially harmed.
Our ability to generate product revenues will depend on the successful development and eventual
commercialization of our product candidates. The success of our product candidates will depend on many factors,
including:
● closing and successful execution of our transaction with CSL Behring for the commercialization of etranacogene
dezaparvovec;
● successful completion of preclinical studies and clinical trials, and other work required by regulators;
● receipt and maintenance of marketing approvals from applicable regulatory authorities;
● our ability to timely manufacture sufficient quantities of our products according to required quality specifications;
● obtaining and maintaining patent and trade secret protection and non-patent, orphan drug exclusivity for our
product candidates;
● obtaining and maintaining regulatory approvals using our manufacturing facility in Lexington, Massachusetts;
● launch and commercialization of our products, if approved, whether alone or in collaboration with others;
● identifying and engaging effective distributors or resellers on acceptable terms in jurisdictions where we plan to
utilize third parties for the marketing and sales of our product candidates;
● acceptance of our products, if approved, by patients, the medical community, and third-party payers;
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● effectively competing with existing therapies and gene therapies based on safety and efficacy profiles;
● the strength of our marketing and distribution;
● achieve optimal pricing based on durability of expression, safety, and efficacy;
● the ultimate content of the regulatory authority approved label, including the approved clinical indications, and
any limitations or warnings;
● any distribution or use restrictions imposed by regulatory authorities;
● the interaction of our products with any other medicines that patients may be taking or the restriction on the use
of our products with other medicines;
● the standard of care at the time of product approval;
● the relative convenience and ease of administration of our products;
● obtaining and maintaining healthcare coverage and adequate reimbursement;
● any price concessions, rebates, or discounts we may need to provide;
● complying with any applicable post-approval requirements and maintaining a continued acceptable overall safety
profile; and
● obtaining adequate reimbursement for the total patient population and each subgroup to sustain a viable
commercial business model in U.S. and EU markets.
By example, even if our product candidates are approved, they may be subject to limitations that make
commercialization difficult. There may be limitations on the indicated uses and populations for which the products may be
marketed. They may also be subject to other conditions of approval, may contain significant safety warnings, including
boxed warnings, contraindications, and precautions, may not be approved with label statements necessary or desirable for
successful commercialization, or may contain requirements for costly post-market testing and surveillance, or other
requirements, including the submission of a risk evaluation and mitigation strategy, or REMS, to monitor the safety or
efficacy of the products. Failure to achieve or implement any of the above elements could result in significant delays or an
inability to successfully commercialize our product candidates, which could materially harm our business.
The affected populations for our gene therapies may be smaller than we or third parties currently project,
which may affect the size of our addressable markets.
Our projections of the number of people who have the diseases we are seeking to treat, as well as the subset of
people with these diseases who have the potential to benefit from treatment with our therapies, are estimates based on our
knowledge and understanding of these diseases. The total addressable market opportunities for these therapies will
ultimately depend upon many factors, including the diagnosis and treatment criteria included in the final label, if approved
for sale in specified indications, acceptance by the medical community, patient consent, patient access and product pricing
and reimbursement.
Prevalence estimates are frequently based on information and assumptions that are not exact and may not be
appropriate, and the methodology is forward-looking and speculative. The use of such data involves risks and uncertainties
and is subject to change based on various factors. Our estimates may prove to be incorrect and new studies may change the
estimated incidence or prevalence of the diseases we seek to address. The number of patients with the diseases we are
targeting may turn out to be lower than expected or may not be otherwise amenable to treatment with our products,
reimbursement may not be sufficient to sustain a viable business for all sub populations being studied, or new patients may
become increasingly difficult to identify or access, any of which could adversely affect our results of operations and our
business.
The addressable markets for AAV-based gene therapies may be impacted by the prevalence of neutralizing
antibodies to the capsids, which are an integral component of our gene therapy constructs. Patients that have pre-existing
antibodies to a particular capsid may not be eligible for administration of a gene therapy that includes this particular capsid.
For example, etranacogene dezaparvovec, our gene therapy candidate for hemophilia B patients, incorporates an AAV5
capsid. In our Phase I/II clinical study of AMT-060, we screened patients for pre-existing anti-AAV5 antibodies to
determine their eligibility for the trial. Three of the ten patients screened for the study tested positive for anti-AAV5
antibodies on reanalysis. Although we did not observe any ill-effects or correlation between the level of anti-AAV5
antibodies and clinical outcomes in these three patients, suggesting that patients who have anti-AAV5 antibodies may still
be eligible for AAV5-based gene therapies, since we only have been able to test a limited number of patients and have
limited clinical and pre-clinical data, we do not know if future clinical studies will confirm these results. This may limit the
addressable market for etranacogene dezaparvovec and any future revenues derived from the sale of the product, if
approved.
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Any approved gene therapy we seek to offer may fail to achieve the degree of market acceptance by physicians,
patients, third party payers and others in the medical community necessary for commercial success.
Doctors may be reluctant to accept a gene therapy as a treatment option or, where available, choose to continue to
rely on existing treatments. The degree of market acceptance of any of our product candidates that receive marketing
approval in the future will depend on many factors, including:
● the efficacy and potential advantages of our therapies compared with alternative treatments;
● our ability to convince payers of the long-term cost-effectiveness of our therapies and, consequently, the
availability of third-party coverage and adequate reimbursement;
● the cost of treatment with gene therapies, including ours, in comparison to traditional chemical and small-
molecule treatments;
● the limitations on use and label requirements imposed by regulators;
● the convenience and ease of administration of our gene therapies compared with alternative treatments;
● the willingness of the target patient population to try new therapies, especially a gene therapy, and of physicians
to administer these therapies;
● the strength of marketing and distribution support;
● the prevalence and severity of any side effects;
● limited access to site of service that can perform the product preparation and administer the infusion; and
● any restrictions by regulators on the use of our products.
A failure to gain market acceptance for any of the above reasons, or any reasons at all, by a gene therapy for
which we receive regulatory approval would likely hinder our ability to recapture our substantial investments in that and
other gene therapies and could have a material adverse effect on our business, financial condition, and results of operation.
If we are unable to expand our commercialization capabilities or enter into agreements with third parties to
market and sell any of our product candidates for which we obtain marketing approval, we may be unable to generate
any product revenue.
To successfully commercialize any products that may result from our development programs, we need to continue
to expand our commercialization capabilities, either on our own or with others. The development of our own market
development effort is, and will continue to be, expensive and time-consuming and could delay any product launch.
Moreover, we cannot be certain that we will be able to successfully develop this capability.
We may enter into collaborations regarding our other product candidates with other entities to utilize their
established marketing and distribution capabilities, but we may be unable to enter into such agreements on favorable terms,
if at all. If any current or future collaborators do not commit sufficient resources to commercialize our products, or we are
unable to develop the necessary capabilities on our own, we will be unable to generate sufficient product revenue to sustain
our business. We compete with many companies that currently have extensive, experienced and well-funded medical
affairs, marketing, and sales operations to recruit, hire, train and retain marketing and sales personnel. We also may face
competition in any search for third parties to assist us with the sales and marketing efforts of our product candidates.
Without an internal team or the support of a third party to perform marketing and sales functions, we may be unable to
compete successfully against these more established companies.
If the market opportunities for our product candidates are smaller than we believe they are, our product
revenues may be adversely affected, and our business may suffer.
We focus our research and product development on treatments for severe genetic and orphan diseases. Our
understanding of both the number of people who have these diseases, as well as the subset of people with these diseases
who have the potential to benefit from treatment with our product candidates, are based on estimates. These estimates may
prove to be incorrect and new studies may reduce the estimated incidence or prevalence of these diseases. The number of
patients in the United States, the EU and elsewhere may turn out to be lower than expected, may not be otherwise
amenable to treatment with our products or patients may become increasingly difficult to identify and access, any of which
could adversely affect our business, financial condition, results of operations and prospects.
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Further, there are several factors that could contribute to making the actual number of patients who receive other
potential products less than the potentially addressable market. These include the lack of widespread availability of, and
limited reimbursement for, new therapies in many underdeveloped markets. Further, the severity of the progression of a
disease up to the time of treatment, especially in certain degenerative conditions, could diminish the therapeutic benefit
conferred by a gene therapy. Lastly, certain patients’ immune systems might prohibit the successful delivery of certain gene
therapy products to the target tissue, thereby limiting the treatment outcomes.
Our gene therapy approach utilizes vectors derived from viruses, which may be perceived as unsafe or may
result in unforeseen adverse events. Negative public opinion and increased regulatory scrutiny of gene therapy may
damage public perception of the safety of our product and product candidates and adversely affect our ability to conduct
our business or obtain regulatory approvals for our product candidates.
Gene therapy remains a novel technology. Public perception may be influenced by claims that gene therapy is
unsafe, and gene therapy may not gain the acceptance of the public or the medical community. In particular, our success
will depend upon physicians who specialize in the treatment of genetic diseases targeted by our product and product
candidates, if approved, prescribing treatments that involve the use of our product and product candidates, if approved, in
lieu of, or in addition to, existing treatments with which they are familiar and for which greater clinical data may be
available. More restrictive government regulations or negative public opinion would have an adverse effect on our
business, financial condition, results of operations and prospects and may delay or impair the development and
commercialization of our product candidates or demand for any products we may develop. For example, earlier gene
therapy trials led to several well-publicized adverse events, including cases of leukemia and death seen in other trials using
other vectors. Serious adverse events in our clinical trials, or other clinical trials involving gene therapy products or our
competitors’ products, even if not ultimately attributable to the relevant product candidates, and the resulting publicity,
could result in increased government regulation, unfavorable public perception, potential regulatory delays in the testing or
approval of our product candidates, stricter labeling requirements for those product candidates that are approved and a
decrease in demand for any products for which we obtain marketing approval.
Ethical, legal, and social issues may reduce demand for any gene therapy products for which we obtain
marketing approval.
Prior to receiving certain gene therapies, patients may be required to undergo genetic testing. Genetic testing has
raised concerns regarding the appropriate utilization and the confidentiality of information provided by genetic testing.
Genetic tests for assessing a person’s likelihood of developing a chronic disease have focused public attention on the need
to protect the privacy of genetic information. For example, concerns have been expressed that insurance carriers and
employers may use these tests to discriminate on the basis of genetic information, resulting in barriers to the acceptance of
genetic tests by consumers. This could lead to governmental authorities restricting genetic testing or calling for limits on or
regulating the use of genetic testing, particularly for diseases for which there is no known cure. Any of these scenarios
could decrease demand for any products for which we obtain marketing approval.
If we obtain approval to commercialize any of our product candidates outside of the United States, a variety of
risks associated with international operations could materially adversely affect our business.
We expect that we will be subject to additional risks in commercializing any of our product candidates outside the
United States, including:
● different regulatory requirements for approval of drugs and biologics in foreign countries;
● reduced protection for intellectual property rights;
● unexpected changes in tariffs, trade barriers and regulatory requirements which may make it more difficult or
expensive to export or import products and supplies to or from the United States;
● economic weakness, including inflation, or political instability in particular foreign economies and markets;
● compliance with tax, employment, immigration, and labor laws for employees living or traveling abroad;
● foreign currency fluctuations, which could result in increased operating expenses and reduced revenues, and other
obligations incident to doing business in another country;
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● workforce uncertainty in countries where labor unrest is more common than in the United States;
● production shortages resulting from any events affecting raw material supply or manufacturing capabilities
abroad; and
● business interruptions resulting from geopolitical actions, including war and terrorism or natural disasters
including earthquakes, typhoons, floods, and fires.
We face substantial competition, and others may discover, develop, or commercialize competing products before
or more successfully than we do.
The development and commercialization of new biotechnology and biopharmaceutical products, including gene
therapies, is highly competitive. We may face intense competition with respect to our product candidates, as well as with
respect to any product candidates that we may seek to develop or commercialize in the future, from large and specialty
pharmaceutical companies and biotechnology companies worldwide, who currently market and sell products or are
pursuing the development of products for the treatment of many of the disease indications for which we are developing our
product candidates. Potential competitors also include academic institutions, government agencies and other public and
private research organizations that conduct research, seek patent protection, and establish collaborative arrangements for
research, development, manufacturing, and commercialization. In recent years, there has been a significant increase in
commercial and scientific interest and financial investment in gene therapy as a therapeutic approach, which has intensified
the competition in this area.
We are aware of numerous companies focused on developing gene therapies in various indications, including
Applied Genetic Technologies Corp., Abbvie, Abeona Therapeutics, Adverum Biotechnologies, Ally Therapeutics, Apic
Bio, Asklepios BioPharmaceutical, Astellas, AVROBIO, Bayer, Biogen, BioMarin, bluebird bio, CRISPR Therapeutics,
Editas Medicine, Expression Therapeutics, Fate, Freeline Therapeutics, Generation Bio, Genethon, GlaxoSmithKline,
Homology Medicines, Intellia Therapeutics, Johnson & Johnson, Krystal Biotech, Lexeo Therapeutics, LogicBio
Therapeutics, Lysogene, MeiraGTx, Milo Biotechnology, Mustang Bio, Novartis, Orchard Therapeutics, Oxford
Biomedica, Passage Bio, Pfizer, REGENXBIO, Renova Therapeutics, Roche, Rocket Pharmaceuticals, Sangamo
Therapeutics, Sanofi, Selecta Biosciences, Sarepta Therapeutics, Sio Therapeutics, Solid Biosciences, SwanBio, Takeda,
Taysha Gene Therapies, Ultragenyx, Vivet Therapeutics, and Voyager Therapeutics, as well as several companies
addressing other methods for modifying genes and regulating gene expression. We may also face competition with respect
to the treatment of some of the diseases that we are seeking to target with our gene therapies from protein, nucleic acid,
antisense, RNAi and other pharmaceuticals under development or commercialized at pharmaceutical and biotechnology
companies such as Alnylam Pharmaceuticals, Bayer, BioMarin, CSL Behring, Dicerna Pharmaceuticals, Ionis
Pharmaceuticals, Novartis, Novo Nordisk, Pfizer, Translate Bio, Roche, Sanofi, Sobi, Takeda, WaVe Life Sciences, and
numerous other pharmaceutical and biotechnology firms.
Our commercial opportunity could be reduced or eliminated if our competitors develop and commercialize
products that are safer, more effective, have fewer or less severe side effects, are more convenient or are less expensive
than the products that we develop. Our competitors also may obtain FDA, EMA, or other regulatory approval for their
products more rapidly than we do, which could result in our competitors establishing a strong market position before we
are able to enter the market. A competitor approval may also prevent us from entering the market if the competitor receives
any regulatory exclusivities that block our product candidates. Because we expect that gene therapy patients may generally
require only a single administration, we believe that the first gene therapy product to enter the market for a particular
indication will likely enjoy a significant commercial advantage and may also obtain market exclusivity under applicable
orphan drug regimes.
Many of the companies with which we are competing or may compete in the future have significantly greater
financial resources and expertise than we do in research and development, manufacturing, preclinical testing, conducting
clinical trials, obtaining regulatory approvals, and marketing approved products. Mergers and acquisitions in the
pharmaceutical and biotechnology industries may result in more resources being concentrated among a smaller number of
our competitors. Smaller and other early-stage companies may also prove to be significant competitors, particularly
through collaborative arrangements with large and established companies. These third parties compete with us in recruiting
and retaining qualified scientific and management personnel, establishing clinical trial sites and patient registration for
clinical trials, as well as in acquiring technologies complementary to, or necessary for, our programs.
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If we do not achieve our projected development goals in the timeframes we announce and expect, the
commercialization of our product candidates may be delayed and, as a result, our stock price may decline.
For planning purposes, we estimate the timing of the accomplishment of various scientific, clinical, regulatory,
and other product development goals, or development milestones. These development milestones may include the
commencement or completion of scientific studies, clinical trials, the submission of regulatory filings, and approval for
commercial sale. From time to time, we publicly announce the expected timing of some of these milestones. All these
milestones are based on a variety of assumptions. The actual timing of these milestones can vary dramatically compared to
our estimates, in many cases for reasons beyond our control. If we do not meet these milestones, including those that are
publicly announced, the commercialization of our products may be delayed and, as a result, our stock price may decline.
Risks Related to Our Dependence on Third Parties
We rely, and expect to continue to rely, on third parties to conduct, supervise, and monitor our preclinical
studies and clinical trials, and those third parties may not perform satisfactorily, including failing to meet deadlines for
the completion of such trials or failing to comply with regulatory requirements.
We rely on third parties, study sites, and others to conduct, supervise, and monitor our preclinical and clinical
trials for our product candidates and do not currently plan to independently conduct clinical or preclinical trials of any
other potential product candidates. We expect to continue to rely on third parties, such as CROs, clinical data management
organizations, medical and scientific institutions, and clinical and preclinical investigators, to conduct our preclinical
studies and clinical trials.
While we have agreements governing the activities of such third parties, we have limited influence and control
over their actual performance and activities. For instance, our third-party service providers are not our employees, and
except for remedies available to us under our agreements with such third parties we cannot control whether or not they
devote sufficient time and resources to our ongoing clinical, non-clinical, and preclinical programs. If these third parties do
not successfully carry out their contractual duties, meet expected deadlines or conduct our preclinical studies or clinical
trials in accordance with regulatory requirements or our stated protocols, if they need to be replaced or if the quality or
accuracy of the data they obtain is compromised due to the failure to adhere to our protocols, regulatory requirements or
for other reasons, our trials may be repeated, extended, delayed, or terminated, we may not be able to obtain, or may be
delayed in obtaining, marketing approvals for our product candidates, we may not be able to, or may be delayed in our
efforts to, successfully commercialize our product candidates, or we or they may be subject to regulatory enforcement
actions. As a result, our results of operations and the commercial prospects for our product candidates would be harmed,
our costs could increase and our ability to generate revenues could be delayed. To the extent we are unable to successfully
identify and manage the performance of third-party service providers in the future, our business may be materially and
adversely affected. Our third-party service providers may also have relationships with other entities, some of which may be
our competitors, for whom they may also be conducting trials or other therapeutic development activities that could harm
our competitive position.
Our reliance on these third-parties for development activities will reduce our control over these activities.
Nevertheless, we are responsible for ensuring that each of our studies is conducted in accordance with the applicable
protocol, legal, regulatory, and scientific standards, and our reliance on third parties does not relieve us of our regulatory
responsibilities. For example, we will remain responsible for ensuring that each of our trials is conducted in accordance
with the general investigational plan and protocols for the trial. We must also ensure that our preclinical trials are
conducted in accordance with GLPs, as appropriate. Moreover, the FDA and comparable foreign regulatory authorities
require us to comply with GCPs for conducting, recording, and reporting the results of clinical trials to assure that data and
reported results are credible and accurate and that the rights, integrity, and confidentiality of trial participants are protected.
Regulatory authorities enforce these requirements through periodic inspections of trial sponsors, clinical and preclinical
investigators, and trial sites. If we or any of our third-party service providers fail to comply with applicable GCPs or other
regulatory requirements, we or they may be subject to enforcement or other legal actions, the data generated in our trials
may be deemed unreliable and the FDA or comparable foreign regulatory authorities may require us to perform additional
studies.
In addition, we will be required to report certain financial interests of our third-party investigators if these
relationships exceed certain financial thresholds or meet other criteria. The FDA or comparable foreign regulatory
authorities may question the integrity of the data from those clinical trials conducted by investigators who may have
conflicts of interest.
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We cannot assure that upon inspection by a given regulatory authority, such regulatory authority will determine
that any of our trials complies with the applicable regulatory requirements. In addition, our clinical trials must be
conducted with product candidates that were produced under GMP conditions. Failure to comply with these regulations
may require us to repeat clinical trials, which would delay the regulatory approval process. We also are required to register
certain clinical trials and post the results of certain completed clinical trials on a government-sponsored database,
ClinicalTrials.gov, within specified timeframes. Failure to do so can result in enforcement actions and adverse publicity.
Agreements with third parties conducting or otherwise assisting with our clinical or preclinical studies might
terminate for a variety of reasons, including a failure to perform by the third parties. If any of our relationships with these
third parties terminate, we may not be able to enter into arrangements with alternative providers or to do so on
commercially reasonable terms. Switching or adding additional third parties involves additional cost and requires
management time and focus. In addition, there is a natural transition period when a new third party commences work. As a
result, if we need to enter into alternative arrangements, it could delay our product development activities and adversely
affect our business. Though we carefully manage our relationships with our third parties, there can be no assurance that we
will not encounter challenges or delays in the future or that these delays or challenges will not have a material adverse
impact on our business, financial condition and prospects, and results of operations.
We also rely on other third parties to store and distribute our products for the clinical and preclinical trials that we
conduct. Any performance failure on the part of our distributors could delay development, marketing approval, or
commercialization of our product candidates, producing additional losses and depriving us of potential product revenue.
We rely on third parties for important aspects of our development programs. If these parties do not perform
successfully or if we are unable to enter into or maintain key collaboration or other contractual arrangements, our
business could be adversely affected.
We have in the past entered into, and expect in the future to enter into, collaborations with other companies and
academic research institutions with respect to important elements of our development programs.
Any collaboration may pose several risks, including the following:
● collaborators have significant discretion in determining the efforts and resources that they will apply to these
collaborations;
● we may have limited or no control over the design or conduct of clinical trials sponsored by collaborators;
● we may be hampered from entering into collaboration arrangements if we are unable to obtain consent from our
licensors to enter into sublicensing arrangements of technology we have in-licensed;
● if any collaborator does not conduct the clinical trials they sponsor in accordance with regulatory requirements or
stated protocols, we will not be able to rely on the data produced in such trials in our further development efforts;
● collaborators may not perform their obligations as expected;
● collaborators may also have relationships with other entities, some of which may be our competitors;
● collaborators may not pursue development and commercialization of any product candidates or may elect not to
continue or renew development or commercialization programs based on clinical trial results, changes in the
collaborators' strategic focus or available funding, or external factors, such as an acquisition, that divert resources
or create competing priorities;
● collaborators may delay clinical trials, provide insufficient funding for a clinical trial program, stop a clinical
trial, or abandon a product candidate, repeat or conduct new clinical trials or require a new formulation of a
product candidate for clinical testing;
● collaborators could develop, independently or with third parties, products that compete directly or indirectly with
our products or product candidates, if, for instance, the collaborators believe that competitive products are more
likely to be successfully developed or can be commercialized under terms that are more economically attractive
than ours;
● our collaboration arrangements may impose restrictions on our ability to undertake other development efforts that
may appear to be attractive to us;
● product candidates discovered in collaboration with us may be viewed by our collaborators as competitive with
their own product candidates or products, which may cause collaborators to cease to devote resources to the
commercialization of our product candidates;
● a collaborator with marketing and distribution rights that achieves regulatory approval may not commit sufficient
resources to the marketing and distribution of such product or products;
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● disagreements with collaborators, including over proprietary rights, contract interpretation or the preferred course
of development, could cause delays or termination of the research, development or commercialization of product
candidates, lead to additional responsibilities for us, delay or impede reimbursement of certain expenses or result
in litigation or arbitration, any of which would be time-consuming and expensive;
● collaborators may not properly maintain or defend our intellectual property rights or may use our proprietary
information in such a way as to invite litigation that could jeopardize or invalidate our rights or expose us to
potential litigation;
● collaborators may infringe the intellectual property rights of third parties, which may expose us to litigation and
potential liability; and
● collaborations may in some cases be terminated for the convenience of the collaborator and, if terminated, we
could be required to expend additional funds to pursue further development or commercialization of the
applicable product or product candidates.
If any collaboration does not result in the successful development and commercialization of products or if a
collaborator were to terminate an agreement with us, we may not receive future research funding or milestone or royalty
payments under that collaboration, and we may lose access to important technologies and capabilities of the collaboration.
All the risks relating to product development, regulatory approval and commercialization described herein also apply to the
activities of any development collaborators.
Risks Related to Our Intellectual Property
We rely on licenses of intellectual property from third parties, and such licenses may not provide adequate
rights or may not be available in the future on commercially reasonable terms or at all, and our licensors may be unable
to obtain and maintain patent protection for the technology or products that we license from them.
We currently are heavily reliant upon licenses of proprietary technology from third parties that is important or
necessary to the development of our technology and products, including technology related to our manufacturing process,
our vector platform, our gene cassettes, and the therapeutic genes of interest we are using. These and other licenses may
not provide adequate rights to use such technology in all relevant fields of use. Licenses to additional third-party
technology that may be required for our development programs may not be available in the future or may not be available
on commercially reasonable terms, which could have a material adverse effect on our business and financial condition.
In some circumstances, we may not have the right to control the preparation, filing and prosecution of patent
applications, or to maintain the patents, covering technology that we license from third parties. In addition, some of our
agreements with our licensors require us to obtain consent from the licensor before we can enforce patent rights, and our
licensor may withhold such consent or may not provide it on a timely basis. Therefore, we cannot be certain that these
patents and applications will be prosecuted and enforced in a manner consistent with the best interests of our business. In
addition, if third parties who license patents to us fail to maintain such patents, or lose rights to those patents, the rights we
have licensed may be reduced or eliminated.
Our intellectual property licenses with third parties may be subject to disagreements over contract
interpretation, which could narrow the scope of our rights to the relevant intellectual property or technology or increase
our financial or other obligations to our licensors.
The agreements under which we license intellectual property or technology from third parties are complex, and
certain provisions in such agreements may be susceptible to multiple interpretations. The resolution of any contract
interpretation disagreement that may arise could narrow what we believe to be the scope of our rights to the relevant
intellectual property or technology, or increase what we believe to be our financial or other obligations under the relevant
agreement, either of which could have a material adverse effect on our business and financial condition.
If we fail to comply with our obligations in our intellectual property licenses with third parties, we could lose
rights that are important to our business.
Our licensing arrangements with third parties may impose diligence, development and commercialization
timelines, milestone payment, royalty, insurance, and other obligations on us. If we fail to comply with these obligations,
our counterparties may have the right to terminate these agreements either in part or in whole, in which case we might not
be able to develop, manufacture or market any product that is covered by these agreements or may face other penalties
under the agreements. Such an occurrence could materially adversely affect the value of the product candidate being
developed under any such agreement. Termination of these agreements or reduction or elimination of our rights under these
agreements may result in our having to negotiate new or amended agreements with less favorable terms or cause us to lose
our rights under these agreements, including our rights to important intellectual property or technology.
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If we are unable to obtain and maintain patent protection for our technology and products, or if the scope of
the patent protection is not sufficiently broad, our ability to successfully commercialize our products may be impaired.
We rely, in part, upon a combination of forms of intellectual property, including in-licensed and owned patents to
protect our intellectual property. Our success depends in a large part on our ability to obtain and maintain this protection in
the United States, the European Union, and other countries, in part by filing patent applications related to our novel
technologies and product candidates. Our patents may not provide us with any meaningful commercial protection, prevent
competitors from competing with us or otherwise provide us with any competitive advantage. For example, patents we own
currently are and may become subject to future patent opposition or similar proceedings, which may result in loss of scope
of some claims or the entire patent. Our competitors may be able to circumvent our owned or licensed patents by
developing similar or alternative technologies or products in a non-infringing manner.
Successful challenges to our patents may result in loss of exclusivity or freedom to operate or in patent claims
being narrowed, invalidated, or held unenforceable, in whole or in part, which could limit our ability to stop others from
using or commercializing similar or identical technology and products, or limit the duration of the patent protection of our
technology and products.
The patent prosecution process is expensive, time-consuming, and uncertain, and we may not be able to file and
prosecute all necessary or desirable patent applications at a reasonable cost or in a timely manner. It is also possible that we
will fail to identify patentable aspects of our research and development output before it is too late to obtain patent
protection. Additionally, given the amount of time required for the development, testing and regulatory review of new
product candidates, patents protecting such candidates might expire before or shortly after such candidates are
commercialized. As a result, our owned and licensed patent portfolio may not provide us with sufficient rights to exclude
others from commercializing products similar or identical to ours.
The patent position of biotechnology and pharmaceutical companies generally is highly uncertain, involves
complex legal and factual questions and has in recent years been the subject of much litigation. In addition, the laws of
foreign countries may not protect our rights to the same extent as the laws of the United States. For example, EU patent law
with respect to the patentability of methods of treatment of the human body is more limited than U.S. law. Publications of
discoveries in the scientific literature often lag the actual discoveries, and patent applications in the United States and other
jurisdictions are typically not published until 18 months after their priority date, or in some cases at all. Therefore, we
cannot know with certainty whether we were the first to make the inventions or that we were the first to file for patent
protection of the inventions claimed in our owned or licensed patents or pending patent applications. As a result, the
issuance, scope, validity, enforceability, and commercial value of our patent rights are highly uncertain. Our pending and
future patent applications may not result in patents being issued that protect our technology or products, in whole or in part,
or which effectively prevent others from commercializing competitive technologies and products. Changes in either the
patent laws or interpretation of the patent laws in the European Union, the United States or other countries may diminish
the value of our patents or narrow the scope of our patent protection. Our inability to obtain and maintain appropriate
patent protection for any one of our products could have a material adverse effect on our business, financial condition, and
results of operations.
We may become involved in lawsuits to protect or enforce our patents or other intellectual property, or third
parties may assert their intellectual property rights against us, which could be expensive, time consuming and
unsuccessful.
Competitors may infringe our owned or licensed patents or other intellectual property. To counter infringement or
unauthorized use, we may be required to file infringement claims, which can be expensive and time consuming. An
adverse result in any litigation proceeding could put one or more of our patents at risk of being invalidated, maintained in
more narrowly amended form or interpreted narrowly.
Even if resolved in our favor, litigation or other legal proceedings relating to intellectual property claims may
cause us to incur significant expenses, increase our operating losses, reduce available resources, and could distract our
technical and management personnel from their normal responsibilities. In addition, there could be public announcements
of the results of hearings, motions or other interim proceedings or developments, which could have an adverse effect on the
price of our ordinary shares.
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Third parties may initiate legal proceedings alleging that we are infringing their intellectual property rights, the
outcome of which would be uncertain and could have a material adverse effect on the success of our business. For
example, outside of the United States two of the patents we own are subject to patent opposition. If these or future
oppositions are successful or if we are found to otherwise infringe a third party's intellectual property rights, we could be
required to obtain a license from such third party to continue developing and marketing our products and technology. We
may not be able to obtain the required license on commercially reasonable terms or at all. Even if we could obtain a
license, it could be non-exclusive, thereby giving our competitors access to the same technologies licensed to us. We could
be forced, including by court order, to cease commercializing the infringing technology or product or otherwise to cease
using the relevant intellectual property. In addition, we could be found liable for monetary damages, including treble
damages and attorneys' fees if we are found to have willfully infringed a patent. A finding of infringement could prevent us
from commercializing our product candidates or force us to cease or materially modify some of our business operations,
which could materially harm our business. Claims that we have misappropriated the confidential information or trade
secrets of third parties could have a similar negative impact on our business.
For example, we are aware of patents owned by third parties that relate to some aspects of our programs that are
still in development. In some cases, because we have not determined the final methods of manufacture, the method of
administration or the therapeutic compositions for these programs, we cannot determine whether rights under such third-
party patents will be needed. In addition, in some cases, we believe that the claims of these patents are invalid or not
infringed or will expire before commercialization. However, if such patents are needed and found to be valid and infringed,
we could be required to obtain licenses, which might not be available on commercially reasonable terms, or to cease or
delay commercializing certain product candidates, or to change our programs to avoid infringement.
If we are unable to protect the confidentiality of our proprietary information and know-how, the value of our
technology and products could be adversely affected.
In addition to seeking patent protection, we also rely on other proprietary rights, including protection of trade
secrets, know-how and confidential and proprietary information. To maintain the confidentiality of our trade secrets and
proprietary information, we enter into confidentiality agreements with our employees, consultants, collaborators and other
third parties who have access to our trade secrets. Our agreements with employees also provide that any inventions
conceived by the individual while rendering services to us will be our exclusive property. However, we may not obtain
these agreements in all circumstances, and individuals with whom we have these agreements may not comply with their
terms. The assignment of intellectual property rights may not be self-executing, or the assignment agreements may be
breached, and we may be forced to bring claims against third parties, or defend claims that they may bring against us, to
determine the ownership of what we regard as our intellectual property. In addition, in the event of unauthorized use or
disclosure of our trade secrets or proprietary information, these agreements, even if obtained, may not provide meaningful
protection, particularly for our trade secrets or other confidential information. To the extent that our employees,
consultants, or contractors use technology or know-how owned by third parties in their work for us, disputes may arise
between us and those third parties as to the rights in related inventions.
Adequate remedies may not exist in the event of unauthorized use or disclosure of our confidential information
including a breach of our confidentiality agreements. Enforcing a claim that a party illegally disclosed or misappropriated a
trade secret is difficult, expensive, and time consuming, and the outcome is unpredictable. In addition, some courts in and
outside of the United States are less willing or unwilling to protect trade secrets. If any of our trade secrets were to be
lawfully obtained or independently developed by a competitor or other third party, we would have no right to prevent them
from using that technology or information to compete with us. The disclosure of our trade secrets or the independent
development of our trade secrets by a competitor or other third party would impair our competitive position and may
materially harm our business, financial condition, results of operations, stock price and prospects.
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Our reliance on third parties may require us to share our trade secrets, which could increase the possibility that
a competitor will discover them or that our trade secrets will be misappropriated or disclosed.
Because we collaborate from time to time with various organizations and academic research institutions on the
advancement of our gene therapy platform, we must, at times, share trade secrets with them. We seek to protect our
proprietary technology in part by entering into confidentiality agreements and, if applicable, materials transfer agreements,
collaborative research agreements, consulting agreements or other similar agreements with our collaborators, advisors, and
consultants prior to beginning research or disclosing proprietary information. These agreements typically limit the rights of
the third parties to use or disclose our confidential information, such as trade secrets. Despite the contractual provisions
employed when working with third parties, the need to share trade secrets and other confidential information increases the
risk that such trade secrets become known by our competitors, are inadvertently incorporated into the technology of others,
or are disclosed or used in violation of these agreements. Given that our proprietary position is based, in part, on our know-
how and trade secrets, a competitor's discovery of our trade secrets or other unauthorized use or disclosure would impair
our competitive position and may have a material adverse effect on our business.
In addition, these agreements typically restrict the ability of our collaborators, advisors, and consultants to publish
data potentially relating to our trade secrets. Our academic collaborators typically have rights to publish data, if we are
notified in advance and may delay publication for a specified time to secure our intellectual property rights arising from the
collaboration. In other cases, publication rights are controlled exclusively by us, although in some cases we may share
these rights with other parties. We also conduct joint research and development programs that may require us to share trade
secrets under the terms of our research and development partnerships or similar agreements.
Some courts inside and outside the United States are less willing or unwilling to protect trade secrets. If any of our
trade secrets were to be lawfully obtained or independently developed by a competitor, we would have no right to prevent
them, or those with whom they communicate, from using that technology or information to compete with us.
Risks Related to Pricing and Reimbursement
We face uncertainty related to insurance coverage of, and pricing and reimbursement for product candidates
for which we may receive marketing approval.
We anticipate that the cost of treatment using our product candidates will be significant. We expect that most
patients and their families will not be capable of paying for our products themselves. There will be no commercially viable
market for our product candidates without reimbursement from third party payers, such as government health
administration authorities, private health insurers and other organizations. Even if there is a commercially viable market, if
the level of third-party reimbursement is below our expectations, most patients may not be able to afford treatment with our
products and our revenues and gross margins will be adversely affected, and our business will be harmed.
Government authorities and other third-party payers, such as private health insurers and health maintenance
organizations, decide for which medications they will pay and, subsequently, establish reimbursement levels.
Reimbursement systems vary significantly by country and by region, and reimbursement approvals must be obtained on a
country-by-country basis. Government authorities and third-party payers have attempted to control costs by limiting
coverage and the amount of reimbursement for particular medications and procedures and negotiating or requiring payment
of manufacturer rebates. Increasingly, third party payers require drug companies to provide them with predetermined
discounts from list prices, are exerting influence on decisions regarding the use of particular treatments and are limiting
covered indications. Additionally, in the United States and some foreign jurisdictions, pending or potential legislative and
regulatory changes regarding the healthcare system and insurance coverage could result in more rigorous coverage criteria
and downward pressure on drug prices, and may affect our ability to profitably sell any products for which we obtain
marketing approval. For example, on November 27, 2020, CMS issued an interim final rule implementing a Most Favored
Nation payment model under which reimbursement for certain Medicare Part B drugs and biologicals will be based on a
price that reflects the lowest per capita GDP-adjusted price of any non-U.S. member country of the OECD with a GDP per
capita that is at least sixty percent of the U.S. GDP per capita.
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The pricing review period and pricing negotiations for new medicines take considerable time and have uncertain
results. Pricing review and negotiation usually begins only after the receipt of regulatory marketing approval, and some
authorities require approval of the sale price of a product before it can be marketed. In some markets, particularly the
countries of the European Union, prescription pharmaceutical pricing remains subject to continuing direct governmental
control and to drug reimbursement programs even after initial approval is granted and price reductions may be imposed.
Prices of medical products may also be subject to varying price control mechanisms or limitations as part of national health
systems if products are considered not cost-effective or where a drug company's profits are deemed excessive. In addition,
pricing and reimbursement decisions in certain countries can lead to mandatory price reductions or additional
reimbursement restrictions in other countries. Because of these restrictions, any product candidates for which we may
obtain marketing approval may be subject to price regulations that delay or prohibit our or our partners' commercial launch
of the product in a particular jurisdiction. In addition, we or any collaborator may elect to reduce the price of our products
to increase the likelihood of obtaining reimbursement approvals. If countries impose prices, which are not sufficient to
allow us or any collaborator to generate a profit, we or any collaborator may refuse to launch the product in such countries
or withdraw the product from the market. If pricing is set at unsatisfactory levels, or if the price decreases, our business
could be harmed, possibly materially. If we fail to obtain and sustain an adequate level of coverage and reimbursement for
our products by third party payers, our ability to market and sell our products could be adversely affected and our business
could be harmed.
Due to the generally limited addressable market for our target orphan indications and the potential for our
therapies to offer therapeutic benefit in a single administration, we face uncertainty related to pricing and
reimbursement for these product candidates.
The relatively small market size for orphan indications and the potential for long-term therapeutic benefit from a
single administration present challenges to pricing review and negotiation of our product candidates for which we may
obtain marketing authorization. Most of our product candidates target rare diseases with relatively small patient
populations. If we are unable to obtain adequate levels of reimbursement relative to these small markets, our ability to
support our development and commercial infrastructure and to successfully market and sell our product candidates for
which we may obtain marketing approval could be adversely affected.
We also anticipate that many or all our gene therapy product candidates may provide long-term, and potentially
curative benefit, with a single administration. This is a different paradigm than that of other pharmaceutical therapies,
which often require an extended course of treatment or frequent administration. As a result, governments and other payers
may be reluctant to provide the significant level of reimbursement that we seek at the time of administration of our gene
therapies or may seek to tie reimbursement to clinical evidence of continuing therapeutic benefit over time. Additionally,
there may be situations in which our product candidates will need to be administered more than once, which may further
complicate the pricing and reimbursement for these treatments. In addition, considering the anticipated cost of these
therapies, governments and other payers may be particularly restrictive in making coverage decisions. These factors could
limit our commercial success and materially harm our business.
Risks Related to Our Financial Position and Need for Additional Capital
We have incurred significant losses to date, expect to incur losses over the next several years and may never
achieve or maintain profitability.
We had a net loss of $125.0 million in the year ended December 31, 2020, $124.2 million in 2019 and $83.3
million in 2018. As of December 31, 2020, we had an accumulated deficit of $784.7 million. To date, we have financed our
operations primarily through the sale of equity securities and convertible debt, venture loans, upfront payments from our
collaboration partners and, to a lesser extent, subsidies and grants from governmental agencies and fees for services. We
have devoted substantially all our financial resources and efforts to research and development, including preclinical studies
and clinical trials. We expect to continue to incur significant expenses and losses over the next several years, and our net
losses may fluctuate significantly from quarter to quarter and year to year. Our losses will be materially impacted by the
amount of license revenue that we will recognize in accordance with ASC 606 in the event of the closing of the
transactions contemplated by the CSL Behring Agreement.
We anticipate that our expenses will increase substantially as we:
● Advance the clinical development of AMT-130, our Huntington’s disease gene therapy program;
● Build-out our commercial and medical affairs infrastructure and seek marketing approval for any product
candidates (including etranacogene dezaparvovec in the event that the transactions contemplated by the CSL
Behring Agreement do not close) that successfully complete clinical trials;
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● Advance multiple research programs related to gene therapy candidates targeting liver-directed and CNS
diseases;
● Continue to expand, enhance, and optimize our technology platform, including our manufacturing
capabilities, next-generation viral vectors and promoters, and other enabling technologies;
● Continue to expand our employee base to support research and development, as well as general and
administrative functions;
● Acquire or in-license rights to new therapeutic targets or product candidates; and
● Maintain, expand, and protect our intellectual property portfolio, including in-licensing additional intellectual
property rights from third parties.
We may never succeed in these activities and, even if we do, may never generate revenues that are sufficient to
achieve or sustain profitability. Our failure to become and remain profitable would depress the value of our company and
could impair our ability to expand our business, maintain our research and development efforts, diversify our product
offerings, or even continue our operations.
We will likely need to raise additional funding, which may not be available on acceptable terms, or at all.
Failure to obtain capital when needed may force us to delay, limit or terminate our product development efforts or other
operations which could have a material adverse effect on our business, financial condition, results of operations and
cash flows.
We expect to incur significant expenses in connection with our on-going activities and that we will likely need to
obtain substantial additional funding in connection with our continuing operations, in particular if the CSL Behring
transaction does not close. In addition, we have based our estimate of our financing requirements on assumptions that may
prove to be wrong, and we could use our capital resources sooner than we currently expect.
Adequate capital may not be available to us when needed or may not be available on acceptable terms. Our ability
to obtain debt financing may be limited by covenants we have made under our Second Amended and Restated Loan and
Security Agreement (as amended, the “2018 Amended Facility”) and our 2021 Amended Facility with Hercules and our
pledge to Hercules of substantially all our assets as collateral. If we raise additional capital through the sale of equity or
convertible debt securities, our shareholders' ownership interest could be diluted, and the terms of these securities may
include liquidation or other preferences that adversely affect the rights of holders of our ordinary shares.
If we raise additional funds through collaborations, strategic alliances, or marketing, distribution, or licensing
arrangements with third parties, we may have to issue additional equity, relinquish valuable rights to our technologies,
future revenue streams, products, or product candidates, or grant licenses on terms that may not be favorable to us. If we
are unable to raise capital when needed or on attractive terms, we could be forced to delay, reduce, or eliminate our
research and development programs or any future commercialization efforts, which would have a negative impact on our
financial condition, results of operations and cash flows.
Our existing and any future indebtedness could adversely affect our ability to operate our business.
As of December 31, 2020, we had $35.0 million of outstanding principal of borrowings under the 2018 Amended
Facility, which following our January 2021 amendment we are required to repay in June 2023. In January 2021 we drew
down a further $35.0 million from Hercules. We could in the future incur additional debt obligations beyond our
borrowings from Hercules. Our existing loan obligations, together with other similar obligations that we may incur in the
future, could have significant adverse consequences, including:
● requiring us to dedicate a portion of our cash resources to the payment of interest and principal, reducing money
available to fund working capital, capital expenditures, research and development and other general corporate
purposes;
● increasing our vulnerability to adverse changes in general economic, industry and market conditions;
● subjecting us to restrictive covenants that may reduce our ability to take certain corporate actions or obtain further
debt or equity financing;
● limiting our flexibility in planning for, or reacting to, changes in our business and the industry in which we
compete; and
● placing us at a disadvantage compared to our competitors that have less debt or better debt servicing options.
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We may not have sufficient funds, and may be unable to arrange for additional financing, to pay the amounts due
under our existing loan obligations. Failure to make payments or comply with other covenants under our existing debt
could result in an event of default and acceleration of amounts due. Under the 2018 Amended Facility as well as the 2021
Amended Facility, the occurrence of an event that would reasonably be expected to have a material adverse effect on our
business, operations, assets, or condition is an event of default. If an event of default occurs and the lender accelerates the
amounts due, we may not be able to make accelerated payments, and the lender could seek to enforce security interests in
the collateral securing such indebtedness, which includes substantially all our assets.
Risks Related to Other Legal Compliance Matters
Our relationships with customers and third-party payers will be subject to applicable anti-kickback, anti-
bribery, fraud and abuse and other laws and regulations, which, if we are found in violation thereof, could expose us to
criminal sanctions, civil penalties, contractual damages, reputational harm and diminished profits and future earnings.
Healthcare providers, physicians and third-party payers will play a primary role in the recommendation and
prescription of any products for which we obtain marketing approval. Our future arrangements with third party payers and
customers may expose us to broadly applicable anti-bribery laws, including the Foreign Corrupt Practices Act, as well as
fraud and abuse and other healthcare laws and regulations that may constrain the business or financial arrangements and
relationships through which we would be able to market, sell and distribute any products for which we obtain marketing
approval.
Efforts to ensure that our business arrangements with third parties will comply with applicable laws and
regulations could involve substantial costs. If our operations, or the activities of our collaborators, distributors or other
third-party agents are found to be in violation of any of these laws or any other governmental regulations that may apply to
us, we may be subject to significant civil, criminal, and administrative penalties, damages, fines, imprisonment, exclusion
of products from government funded healthcare programs and the curtailment or restructuring of our operations. The costs
associated with any of these actions could be substantial and could cause irreparable harm to our reputation or otherwise
have a material adverse effect on our business, financial condition, and results of operations.
We are subject to laws governing data protection in the different jurisdictions in which we operate. The
implementation of such data protection regimes is complex, and should we fail to fully comply, we may be subject to
penalties that may have an adverse effect on our business, financial condition, and results of operations.
Many national and state laws govern the privacy and security of health information and other personal and private
information. They often differ from each other in significant ways. For instance, the EU has adopted a comprehensive data
protection law called the General Data Protection Regulation (“GDPR”) that took effect in May 2018. The GDPR, together
with the national legislation of the EU member states governing the processing of personal data, impose strict obligations
and restrictions on the ability to collect, analyze and transfer personal data, including health data from clinical trials and
adverse event reporting. In particular, these obligations and restrictions concern the consent of the individuals to whom the
personal data relates, the information provided to the individuals, the transfer of personal data out of the EU, security
breach notifications, security and confidentiality of the personal data, and imposition of substantial potential fines for
breaches of the data protection obligations. The GDPR imposes penalties for non-compliance of up to the greater of EUR
20.0 million or 4% of worldwide revenue. Data protection authorities from the different EU member states may interpret
the GDPR and national laws differently and impose additional requirements, which add to the complexity of processing
personal data in the EU. Guidance on implementation and compliance practices are often updated or otherwise revised. The
significant costs of compliance with, risk of regulatory enforcement actions under, and other burdens imposed by the
GDPR as well as under other regulatory schemes throughout the world related to privacy and security of health information
and other personal and private data could have an adverse impact on our business, financial condition, and results of
operations.
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Product liability lawsuits could cause us to incur substantial liabilities and to limit commercialization of our
therapies.
We face an inherent risk of product liability related to the testing of our product candidates in human clinical trials
and in connection with product sales. If we cannot successfully defend ourselves against claims that our product candidates
or products caused injuries, we will incur substantial liabilities. Regardless of merit or eventual outcome, liability claims
may result in:
● decreased demand for any product candidates or products that we develop or sell;
● injury to our reputation and significant negative media attention;
● negative publicity or public opinion surrounding gene therapy;
● withdrawal of clinical trial participants or sites, or discontinuation of development programs;
● significant costs to defend the related litigation;
● substantial monetary awards to trial participants or patients;
● loss of revenue;
● initiation of investigations, and enforcement actions by regulators; and product recalls, withdrawals, revocation of
approvals, or labeling, marketing, or promotional restrictions;
● reduced resources of our management to pursue our business strategy; and
● the inability to further develop or commercialize any products that we develop.
Dependent upon the country where the clinical trial is conducted, we currently hold coverages ranging from EUR
500,000 to EUR 6,500,000 per occurrence and per clinical trial. Such coverage may not be adequate to cover all liabilities
that we may incur. We may need to increase our insurance coverage as we expand our clinical trials. In addition, insurance
coverage is increasingly expensive. We may not be able to maintain insurance coverage at a reasonable cost or in an
amount adequate to satisfy any liability that may arise. In the event insurance coverage is insufficient to cover liabilities
that we may incur, it could have a material adverse effect on our business, financial condition, and results of operations.
Healthcare legislative and regulatory reform measures may have a material adverse effect on our financial
operations.
Our industry is highly regulated and changes in law may adversely impact our business, operations, or financial
results. The Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act,
or the PPACA, is a sweeping measure intended to, among other things, expand healthcare coverage within the United
States, primarily through the imposition of health insurance mandates on employers and individuals and expansion of the
Medicaid program. Several provisions of the law may affect us and increase certain of our costs.
In addition, other legislative changes have been adopted since the PPACA was enacted. These changes include
aggregate reductions in Medicare payments to providers of 2% per fiscal year, which went into effect on April 1, 2013 and,
following passage of the Bipartisan Budget Act of 2018, will remain in effect through 2027 unless additional
Congressional action is taken. In January 2013, President Obama signed into law the American Taxpayer Relief Act of
2012, which, among other things, further reduced Medicare payments to several types of providers and increased the
statute of limitations period for the government to recover overpayments to providers from three to five years. These laws
may result in additional reductions in Medicare and other healthcare funding, which could have a material adverse effect on
our customers and, accordingly, our financial operations.
We anticipate that the PPACA, as well as other healthcare reform measures that may be adopted in the future, may
result in more rigorous coverage criteria and additional downward pressure on the reimbursement our customers may
receive for our products. Further, there have been, and there may continue to be, judicial and Congressional challenges to
certain aspects of the PPACA. For example, the U.S. Tax Cuts and Jobs Act of 2017 includes a provision repealing,
effective January 1, 2019, the tax-based shared responsibility payment imposed by the Affordable Care Act on certain
individuals who fail to maintain qualifying health coverage for all or part of a year that is commonly referred to as the
"individual mandate". Additional legislative and regulatory changes to the PPACA, its implementing regulations and
guidance and its policies, remain possible in the 117th U.S. Congress and under the Biden Administration. However, it
remains unclear how any new legislation or regulation might affect the prices we may obtain for any of our product
candidates for which regulatory approval is obtained. Any reduction in reimbursement from Medicare and other
government programs may result in a similar reduction in payments from private payers. The implementation of cost
containment measures or other healthcare reforms may prevent us from being able to generate revenue, attain profitability
or commercialize our products.
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Our internal computer systems, or those of our collaborators or other contractors or consultants, may fail or
suffer security breaches, which could result in a material disruption of our product development programs.
Our internal computer systems and those of our current and any future collaborators and other contractors or
consultants are vulnerable to damage from computer viruses, unauthorized access, natural disasters, terrorism, war and
telecommunication and electrical failures. The size and complexity of our information technology systems, and those of
our collaborators, contractors and consultants, and the large amounts of confidential information stored on those systems,
make such systems vulnerable to service interruptions or to security breaches from inadvertent or intentional actions by our
employees, third-party vendors and/or business partners, or from cyber-attacks by malicious third parties. Cyber-attacks are
increasing in their frequency, sophistication, and intensity, and have become increasingly difficult to detect. Cyber-attacks
could include the deployment of harmful malware, ransomware, denial-of-service attacks, social engineering, and other
means to affect service reliability and threaten the confidentiality, integrity, and availability of information. Cyber-attacks
also could include phishing attempts or e-mail fraud to cause payments or information to be transmitted to an unintended
recipient. The increased number of employees working remotely due to COVID-19 might increase our vulnerability to the
above risk.
While we have not experienced a system failure, accident, cyber-attack, or security breach that has resulted in a
material interruption in our operations to date, we have experienced and addressed recent system failures, cyber-attacks,
and security breaches. In the future, such events could result in a material disruption of our development programs and our
business operations, whether due to a loss of our trade secrets, data, or other proprietary information or other similar
disruptions. Additionally, any such event that leads to unauthorized access, use or disclosure of personal information,
including personal information regarding our patients or employees, could harm our reputation, cause us not to comply
with federal and/or state breach notification laws and foreign law equivalents and otherwise subject us to liability under
laws and regulations that protect the privacy and security of personal information. Security breaches and other
inappropriate access can be difficult to detect, and any delay in identifying them may lead to increased harm of the type
described above. While we have implemented security measures to protect our information technology systems and
infrastructure, there can be no assurance that such measures will prevent service interruptions or security breaches that
could adversely affect our business and the further development and commercialization of our product and product
candidates could be delayed.
Risks Related to Employee Matters and Managing Growth
Our future success depends on our ability to retain key executives and technical staff and to attract, retain and
motivate qualified personnel.
We are highly dependent on hiring, training, retaining, and motivating key personnel to lead our research and
development, clinical operations, and manufacturing efforts. Although we have entered into employment agreements with
our key personnel, each of them may terminate their employment on short notice. We do not maintain key person insurance
for any of our senior management or employees.
The loss of the services of our key employees could impede the achievement of our research and development
objectives and seriously harm our ability to successfully implement our business strategy. Furthermore, replacing senior
management and key employees may be difficult and may take an extended period because of the limited number of
individuals in our industry with the breadth and depth of skills and experience required to successfully develop gene
therapy products. Competition to hire from this limited pool is intense, and we may be unable to hire, train, retain or
motivate these key personnel on acceptable terms.
If we are unable to continue to attract and retain high quality personnel, our ability to pursue our growth strategy
will be limited.
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Risks Related to Our Ordinary Shares
The price of our ordinary shares has been and may in the future be volatile and fluctuate substantially.
Our share price has been and may in the future be volatile. From the start of trading of our ordinary shares on the
Nasdaq Global Select Market on February 4, 2014 through February 25, 2021, the sale price of our ordinary shares ranged
from a high of $82.49 to a low of $4.72. The closing price on February 25, 2021, was $37.00 per ordinary share. The stock
market in general and the market for smaller biopharmaceutical companies in particular, have experienced extreme
volatility that has often been unrelated to the operating performance of particular companies. The market price for our
ordinary shares may be influenced by many factors, including:
● the success of competitive products or technologies;
● results of clinical trials of our product candidates or those of our competitors;
● public perception of gene therapy;
● regulatory delays and greater government regulation of potential products due to adverse events;
● regulatory or legal developments in the European Union, the United States, and other countries;
● developments or disputes concerning patent applications, issued patents or other proprietary rights;
● the recruitment or departure of key personnel;
● the level of expenses related to any of our product candidates or clinical development programs;
● the results of our efforts to discover, develop, acquire or in-license additional product candidates or products;
● actual or anticipated changes in estimates as to financial results, development timelines or recommendations by
securities analysts;
● variations in our financial results or those of companies that are perceived to be similar to us;
● changes in the structure of healthcare payment systems;
● market conditions in the pharmaceutical and biotechnology sectors;
● mergers, acquisitions, licensing, and collaboration activity among our peer companies in the pharmaceutical and
biotechnology sectors; and
● general economic, industry and market conditions.
Our directors, executive officers, and major shareholders, if they choose to act together, will continue to have a
significant degree of control with respect to matters submitted to shareholders for approval.
Our directors, executive officers and major shareholders holding more than 5% of our outstanding ordinary shares,
in the aggregate, beneficially own approximately 50.3% of our issued shares (including such shares to be issued in relation
to exercisable options to purchase ordinary shares) as at December 31, 2020. As a result, if these shareholders were to
choose to act together, they may be able, as a practical matter, to control many matters submitted to our shareholders for
approval, as well as our management and affairs. For example, these persons, if they choose to act together, could control
the election of the board directors and the approval of any merger, consolidation, or sale of all or substantially all our
assets. These shareholders may have interests that differ from those of other of our shareholders and conflicts of interest
may arise.
Provisions of our articles of association or Dutch corporate law might deter acquisition bids for us that might
be considered favorable and prevent or frustrate any attempt to replace our board.
Certain provisions of our articles of association may make it more difficult for a third party to acquire control of
us or effect a change in our board. These provisions include:
● staggered terms of our directors;
● a provision that our directors may only be removed at a general meeting of shareholders by a two-thirds majority
of votes cast representing more than half of the issued share capital of the Company; and
● 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 board.
We do not expect to pay dividends in the foreseeable future.
We have not paid any dividends since our incorporation. Even if future operations lead to significant levels of
distributable profits, we currently intend that earnings, if any, will be reinvested in our business and that dividends will not
be paid until we have an established revenue stream to support continuing dividends. Accordingly, shareholders cannot rely
on dividend income from our ordinary shares and any returns on an investment in our ordinary shares will likely depend
entirely upon any future appreciation in the price of our ordinary shares.
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If we fail to maintain an effective system of internal controls, we may be unable to accurately report our results
of operations or prevent fraud or fail to meet our reporting obligations, and investor confidence and the market price of
our ordinary shares may be materially and adversely affected.
If we fail to maintain the adequacy of our internal control over financial reporting, we may not be able to conclude
on an ongoing basis that we have effective internal control over financial reporting. If we fail to maintain effective internal
control over financial reporting, we could experience material misstatements in our financial statements and fail to meet
our reporting obligations, which would likely cause investors to lose confidence in our reported financial information. This
could in turn limit our access to capital markets, harm our results of operations, and lead to a decline in the trading price of
our ordinary shares. Additionally, ineffective internal control over financial reporting could expose us to increased risk of
fraud or misuse of corporate assets and subject us to potential delisting from The Nasdaq Global Select Market, regulatory
investigations and civil or criminal sanctions. Our reporting and compliance obligations may place a significant strain on
our management, operational and financial resources, and systems for the foreseeable future.
Risks for U.S. Holders
We have in the past qualified and in the future may qualify as a passive foreign investment company, which
may result in adverse U.S. federal income tax consequence to U.S. holders.
Based on our average value of our gross assets, our cash and cash equivalents as well as the price of our shares we
qualified as a passive foreign investment company (“PFIC”) for U.S. federal income tax for 2016 but not in 2017, 2018,
2019 or 2020. A corporation organized outside the United States generally will be classified as a PFIC for U.S. federal
income tax purposes in any taxable year in which at least 75% of its gross income is passive income or on average at least
50% of the gross value of its assets is attributable to assets that produce passive income or are held to produce passive
income. Passive income for this purpose generally includes dividends, interest, royalties, rents and gains from commodities
and securities transactions. Our status in any taxable year will depend on our assets and activities in each year, and because
this is a factual determination made annually after the end of each taxable year, there can be no assurance that we will
continue to qualify as a PFIC in future taxable years. The market value of our assets may be determined in large part by
reference to the market price of our ordinary shares, which is likely to fluctuate, and may fluctuate considerably given that
market prices of biotechnology companies have been especially volatile. If we were considered a PFIC for the current
taxable year or any future taxable year, a U.S. holder would be required to file annual information returns for such year,
whether the U.S. holder disposed of any ordinary shares or received any distributions in respect of ordinary shares during
such year. In certain circumstances a U.S. holder may be able to make certain tax elections that would lessen the adverse
impact of PFIC status; however, to make such elections the U.S. holder will usually have to have been provided
information about the company by us, and we do not intend to provide such information.
The U.S. federal income tax rules relating to PFICs are complex. U.S. holders are urged to consult their tax
advisors with respect to the purchase, ownership and disposition of our shares, the possible implications to them of us
being treated as a PFIC (including the availability of applicable election, whether making any such election would be
advisable in their particular circumstances) as well as the federal, state, local and foreign tax considerations applicable to
such holders in connection with the purchase, ownership, and disposition of our shares.
Any U.S. or other foreign judgments may be difficult to enforce against us in the Netherlands.
Although we now report as a U.S. domestic filer for SEC reporting purposes, we are incorporated under the laws
of the Netherlands. Some of the members of our board and senior management reside outside the United States. As a result,
it may not be possible for shareholders to effect service of process within the United States upon such persons or to enforce
judgments against them or us in U.S. courts, including judgments predicated upon the civil liability provisions of the
federal securities laws of the United States. In addition, it is not clear whether a Dutch court would impose civil liability on
us or any of our Board members in an original action based solely upon the federal securities laws of the United States
brought in a court of competent jurisdiction in the Netherlands.
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The United States and the Netherlands currently do not have a treaty providing for the reciprocal recognition and
enforcement of judgments, other than arbitration awards, in civil and commercial matters. Consequently, a final judgment
for payment given by a court in the United States, whether or not predicated solely upon U.S. securities laws, would not
automatically be recognized or enforceable in the Netherlands. To obtain a judgment which is enforceable in the
Netherlands, the party in whose favor a final and conclusive judgment of the U.S. court has been rendered will be required
to file its claim with a court of competent jurisdiction in the Netherlands. Such party may submit to the Dutch court the
final judgment rendered by the U.S. court. If and to the extent that the Dutch court finds that the jurisdiction of the U.S.
court has been based on grounds which are internationally acceptable and that proper legal procedures have been observed,
the Dutch court will, in principle, give binding effect to the judgment of the U.S. court, unless such judgment contravenes
principles of public policy of the Netherlands. Dutch courts may deny the recognition and enforcement of punitive
damages or other awards. Moreover, a Dutch court may reduce the amount of damages granted by a U.S. court and
recognize damages only to the extent that they are necessary to compensate actual losses or damages. Enforcement and
recognition of judgments of U.S. courts in the Netherlands are solely governed by the provisions of the Dutch Civil
Procedure Code.
Therefore U.S. shareholders may not be able to enforce against us or our board members or senior management
who are residents of the Netherlands or countries other than the United States any judgments obtained in U.S. courts in
civil and commercial matters, including judgments under the U.S. federal securities laws.
The rights and responsibilities of our shareholders and directors are governed by Dutch law and differ in some
important respects from the rights and responsibilities of shareholders under U.S. law.
Although we now report as a U.S. domestic filer for SEC purposes, our corporate affairs are governed by our
articles of association and by the laws governing companies incorporated in the Netherlands. The rights of our shareholders
and the responsibilities of members of our board under Dutch law are different than under the laws of some U.S.
jurisdictions. In the performance of their duties, our board members are required by Dutch law to consider the interests of
uniQure, its shareholders, its employees, and other stakeholders and not only those of our shareholders (as would be
required under the law of most U.S. jurisdictions). As a result of these considerations our directors may take action that
would be different than those that would be taken by a company organized under the law of some U.S. jurisdictions.
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Item 1B. Unresolved Staff Comments.
None.
Item 2. Properties.
Lexington, Massachusetts / United States
We operate an 83,998 square feet GMP qualified manufacturing facility that we lease in Lexington,
Massachusetts. In November 2018, we extended and expanded the facility by leasing an additional 30,655 square feet (as
from June 1, 2019 onwards) of the same building. The expanded and extended lease for the facility terminates in June
2029, and subject to the provisions of the lease, may be renewed for two subsequent five-year terms.
Amsterdam / The Netherlands
In 2016, we entered into leases for a total of approximately 111,000 square feet facility in Amsterdam. The lease
for this facility terminates in 2032, with an option to extend in increments of five-year periods.
In December 2017, we entered into an agreement to sub-lease three of the seven floors of our Amsterdam facility
for a ten-year term ending on December 31, 2027, with an option for the sub-lessee to extend until December 31, 2031 as
well as an option that has expired to break the lease prior to December 31, 2020 subject to the lessee paying a penalty and
breaking certain financial covenants. In February 2020, we amended the sub-lease agreement to take back one of the three
floors effective March 1, 2020.
We believe that our existing facilities are adequate to meet current needs and that suitable alternative spaces will
be available in the future on commercially reasonable terms.
Item 3. Legal Proceedings.
On or about February 22, 2021, Pavlina Konstantinova, VectorY B.V., and Forbion International Management
B.V. commenced a summary proceeding in the Netherlands primarily seeking an order: (i) allowing VectorY and Dr.
Konstantinova to continue their employment relationship; (ii) suspending the non-competition agreement between uniQure
biopharma B.V. and Dr. Konstantinova; and (iii) precluding any monetary penalties pursuant to that non-competition
agreement. The complaint also seeks payment of the costs of legal proceedings and a monetary monthly payment to Dr.
Konstantinova in lieu of a promise by uniQure biopharma B.V. to release Dr. Konstantinova from her obligations under the
non-competition agreement. The proceeding stems from a dispute between us, Dr. Konstantinova, VectorY and Forbion
International Management B.V. over the hiring by VectorY of Dr. Konstantinova and several other former uniQure
employees, which we believe is in violation of the employment agreements of those employees and involves the
misappropriation of our proprietary resources. We believe that Forbion International Management B.V. is an affiliate of the
Forbion group of companies that collectively own more than five percent of our outstanding ordinary shares. We are
unable to express a view as to the likely outcome of this proceeding at this time.
Item 4. Mine Safety Disclosures.
Not applicable.
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Part II
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity
Securities
Our ordinary shares are listed on the Nasdaq Global Select Market under the symbol “QURE”. We have never
paid any cash dividends on our ordinary shares, and we do not anticipate paying cash dividends in the foreseeable future.
We anticipate that we will retain all earnings, if any, to support operations and to finance the growth and development of
our business for the foreseeable future.
Unregistered Sales of Equity Securities
During the period covered by this Annual Report on Form 10-K, we have not issued any securities that were not
registered under the Securities Act.
Issuer Share Repurchases
We did not make any purchases of our ordinary shares during the year ended December 31, 2020. Our affiliates
made purchases of our ordinary shares as described in “Unregistered Sales of Equity Securities” above.
Holders
As of February 25, 2021, there were approximately seven holders of record of our ordinary shares. The actual
number of shareholders is greater than this number of record holders, and includes shareholders who are beneficial owners,
but whose shares are held in street name by brokers and other nominees. This number of holders of record also does not
include shareholders whose shares may be held in trust by other entities.
Share Performance Graph
The following graph compares the performance of our ordinary shares (“QURE”) for the periods indicated with
the performance of the NASDAQ Composite Index (“˄IXIC”) and the Nasdaq biotechnology index (“˄NBI”). This graph
assumes an investment of $100 after market closed December 31, 2015 in each of our ordinary shares, the NASDAQ
Composite Index, and the NASDAQ Biotechnology Index, and assumes reinvestment of dividends, if any. The
performance of our ordinary shares shown on the graph below is not necessarily indicative of the future performance of our
ordinary shares. This graph is not “soliciting material”, is not deemed “filed” with the SEC and is not to be incorporated by
reference into any of our filings under the Securities Act, or the Exchange Act, whether made before or after the date
hereof and irrespective of any general incorporation language in any such filing.
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Item 6. Selected Financial Data
Not applicable.
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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following Management’s Discussion and Analysis of Financial Condition and Results of Operations
(“MD&A”) is intended to help the reader understand our results of operations and financial condition. This MD&A is
provided as a supplement to, and should be read in conjunction with, our audited consolidated financial statements and the
accompanying notes thereto and other disclosures included in this Annual Report on Form 10-K, including the disclosures
under “Risk Factors”. Our consolidated financial statements have been prepared in accordance with generally accepted
accounting principles in the United States (“U.S. GAAP”) and unless otherwise indicated are presented in U.S. dollars.
Except for the historical information contained herein, the matters discussed in this MD&A may be deemed to be
forward-looking statements. Forward-looking statement are only predictions based on management’s current views and
assumptions and involve risks and uncertainties, and actual results could differ materially from those projected or implied.
We make such forward-looking statements pursuant to the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995 and other federal securities laws. Words such as “may,” “expect,” “anticipate,” “estimate,” “intend,”
and similar expressions (as well as other words or expressions referencing future events, conditions or circumstances) are
intended to identify forward-looking statements.
Our actual results and the timing of certain events may differ materially from the results discussed, projected,
anticipated, or indicated in any forward-looking statements. We caution you that forward-looking statements are not
guarantees of future performance and that our actual results of operations, financial condition and liquidity, and the
development of the industry in which we operate may differ materially from the forward-looking statements contained in
this MD&A. In addition, even if our results of operations, financial condition and liquidity, and the development of the
industry in which we operate are consistent with the forward-looking statements contained in this MD&A, they may not be
predictive of results or developments in future periods.
We caution readers not to place undue reliance on any forward-looking statements made by us, which speak only
as of the date they are made. We disclaim any obligation, except as specifically required by law and the rules of the SEC, to
publicly update or revise any such statements to reflect any change in our expectations or in events, conditions, or
circumstances on which any such statements may be based, or that may affect the likelihood that actual results will differ
from those set forth in the forward-looking statements.
Overview
We are a leader in the field of gene therapy, seeking to develop single treatments with potentially curative results
for patients suffering from genetic and other devastating diseases. We are advancing a focused pipeline of innovative gene
therapies, including product candidates for the treatment of hemophilia B, which we intend to license to CSL Behring
pursuant to the CSL Behring Agreement, and Huntington’s disease. We believe our validated technology platform and
manufacturing capabilities provide us distinct competitive advantages, including the potential to reduce development risk,
cost, and time to market. We produce our AAV-based gene therapies in our own facilities with a proprietary, commercial-
scale, cGMP-compliant, manufacturing process. We believe our Lexington, Massachusetts-based facility is one of the
world’s most versatile gene therapy manufacturing facilities.
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Business developments
Below is a summary of our recent significant business developments:
CSL Behring commercialization and license agreement
On June 24, 2020, uniQure biopharma B.V., a wholly owned subsidiary of uniQure N.V., entered into the CSL
Behring Agreement with CSL Behring pursuant to which CSL Behring will receive exclusive global rights to etranacogene
dezaparvovec, the Product.
Under the terms of the CSL Behring Agreement, we will receive a $450.0 million upfront cash payment upon the
closing of the CSL Behring Agreement and be eligible to receive up to $1.6 billion in additional payments based on
regulatory and commercial milestones. The CSL Behring agreement also provides that we will be eligible to receive tiered
double-digit royalties in a range of up to a low-twenties percent of net sales of the Product based on sales thresholds.
Pursuant to the CSL Behring Agreement, we will be responsible for the completion of the HOPE-B clinical trial,
manufacturing process validation, and the manufacturing supply of the Product until such time that these capabilities may
be transferred to CSL Behring or its designated contract manufacturing organization. Concurrently with the execution of
the CSL Behring Agreement, we and CSL Behring entered into a development and commercial supply agreement, pursuant
to which, among other things, we will supply the Product to CSL Behring at an agreed-upon price. Clinical development
and regulatory activities performed by us pursuant to the CSL Behring Agreement will be reimbursed by CSL Behring.
CSL Behring will be responsible for global regulatory submissions and commercialization requirements for the Product.
Other than under the CSL Behring Agreement, neither we nor CSL Behring may perform any clinical trials, with
the exception of trials required to extend the label or gain marketing authorization outside the United States or the
European Union, for any gene therapy product, gene-editing product, or any other product comprising an AAV vector to
conduct nucleotide transfer (including DNA and RNA) for the treatment, prevention, or cure of hemophilia B for a period
commencing on June 24, 2020 and continuing for a period of four years following the first commercial sale of the Product
in the United States, and neither we nor CSL Behring may commercialize such a product for a period commencing as of
June 24, 2020 and continuing for a period of seven years following the first commercial sale of the Product in the United
States. This exclusivity commitment would not bind an acquirer of us that owns or controls such a product so long as
certain precautions are followed to ensure that CSL Behring’s confidential information and our proprietary technology
related to the Product are not used or accessed by personnel of such acquirer who are developing or commercializing such
competing product.
Unless earlier terminated as described below, the CSL Behring Agreement will continue on a country-by-country
basis until expiration of the royalty term in a country. The royalty term expires in a country on the later of (a) 15 years after
the first commercial sale of the Product in such country, (b) expiration of regulatory exclusivity for the Product in such
country and (c) expiration of all valid claims of specific licensed patents covering the Product in such country. Either we or
CSL Behring may terminate the CSL Behring Agreement for the other party’s material breach if such breach is not cured
within a specified cure period. In addition, if CSL Behring fails to commercialize the Product in any of a group of major
countries for an extended period following the first regulatory approval of the Product in any of such group of countries
(other than due to certain specified reasons) and such failure has not been cured within a specified cure period, then we
may terminate the CSL Behring Agreement. CSL Behring may also terminate the CSL Behring Agreement for
convenience.
On November 11, 2020, the ACCC determined, pursuant to section 50 of the Competition and Consumer Act
2010 of Australia, that it will not intervene in the CSL Behring Agreement. Thus, the ACCC has completed its review of
the CSL Behring Agreement, and the transactions contemplated by the CSL Behring Agreement may close from the
perspective of the Australian competition authority.
On November 24, 2020, the Competition and Markets Authority in the United Kingdom (the “CMA”) adopted a
decision not to refer the CSL Behring Agreement for proceedings under section 33 of the Enterprise Act 2002 of the United
Kingdom. The decision was made public by the CMA on January 6, 2021. Thus, the CMA has completed its review of the
CSL Behring Agreement, and the transactions contemplated by the CSL Behring Agreement may close from the
perspective of the United Kingdom competition authority.
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On December 3, 2020, we and CSL Behring filed a premerger notification and report form under the HSR Act. On
January 4, 2021, the FTC issued a Second Request under the HSR Act. The FTC similarly issued a Second Request to CSL
Behring also with respect to the antitrust review of the CSL Behring Agreement. The effect of the Second Requests is to
extend the waiting period imposed under the HSR Act until 30 days after all parties to the CSL Behring Agreement have
substantially complied with the requests unless the waiting period is terminated earlier by the FTC or voluntarily extended
by the parties.
The effectiveness of the transactions contemplated by the CSL Behring Agreement is contingent on completion of
review under antitrust laws in the United States, Australia, and the United Kingdom and certain provisions of the CSL
Behring Agreement will not become effective until after we receive such regulatory approvals. Regulatory approval in the
United States has not occurred to date.
Closing of the transaction is expected to materially impact our profitability and cash flows. Receipt of the $450.0
million payment due on closing would extend the funding of our operations from the second half of 2022 into the second
half of 2024 (assuming a full repayment of funds borrowed from Hercules under our term loan facility by 2023). However,
we expect to continue to incur losses and to generate negative cash flows beyond the fiscal year in which we would close
the transaction.
BMS collaboration
We and Bristol-Myers Squibb entered into a collaboration and license agreement in May 2015. BMS initially
designated four Collaboration Targets in 2015 and in accordance with the terms of the BMS CLA could have designated a
fifth to tenth Collaboration Target.
In February 2019, BMS requested a one-year extension of the initial research term. In April 2019, following an
assessment of the progress of this collaboration and our expanding proprietary programs, we notified BMS that we did not
intend to agree to an extension of the initial research term. Accordingly, the initial four-year research term under the
collaboration terminated on May 21, 2019.
On December 1, 2020, we and BMS amended the BMS CLA. Following the amendment BMS is no longer
entitled to designate a fifth to tenth Collaboration Target and as such we are no longer entitled to receive an aggregate
$16.5 million in target designation payments for the research, development, and regulatory milestone payments related to
the fifth to tenth Collaboration Targets. For a period of one year from the effective date of the amended BMS CLA, BMS
may replace up to two of the four active Collaboration Targets with two new targets in the field of cardiovascular disease.
We continue to be entitled to receive up to $217.0 million for each of the four Collaboration Targets if defined milestones
are achieved, as well as royalties on net sales associated with any Collaboration Target. On December 17, 2020, BMS
designated one of the four Collaboration Targets as a candidate to advance into IND-enabling studies entitling the
Company to receive a $4.4 million research milestone payment. The Company recorded the $4.4 million as License
Revenue in the twelve-month period ended December 31, 2020.
The amended BMS CLA does not extend the initial research term. BMS may place purchase orders to provide
limited services primarily related to analytical and development efforts in respect of the four Collaboration Targets. BMS
may request such services for a period not to exceed the earlier of (i) the completion of all activities under a Research Plan
and (ii) either (A) three years after the last replacement target has been designated by BMS during the one-year
replacement period following the amended BMS CLA effective date or (B) three years if no replacement targets are
designated during this one-year period and BMS continues to reimburse us for these services.
For as long as any of the four Collaboration Targets are being advanced, BMS may place a purchase order to be
supplied with research, clinical and commercial supplies. Subject to the terms of the amended BMS CLA, BMS has the
right to terminate the research, clinical and commercial supply relationships, and has certain remedies for failures of
supply, up to and including technology transfer for any such failure that otherwise cannot be reasonably resolved. Both we
and BMS may agree to a technology transfer of manufacturing capabilities pursuant to the terms of the amended BMS
CLA.
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The amended BMS CLA also terminated two warrants to increase BMS ownership in the Company to up to
19.9% through purchasing a specific number of our ordinary shares following the designation of a seventh and a tenth
Collaboration Target, respectively. We and BMS agreed that upon the consummation of a change of control transaction of
uniQure that occurs prior to the earlier of (i) December 1, 2026 and (ii) BMS’ delivery of a target cessation notice for all
four Collaboration Targets, we (or our third party acquirer) shall pay to BMS a one-time, non-refundable, non-creditable
cash payment of $70.0 million, provided that (x) if $70.0 million is greater than five percent of the net proceeds (as
contractually defined) from such change of control transaction, the payment shall be an amount equal to five percent of
such net proceeds, and (y) if $70.0 million is less than one percent of such net proceeds, the change of control payment
shall be an amount equal to one percent of such net proceeds. We have not consummated any change of control transaction
as of December 31, 2020 that would obligate us to make a payment to BMS.
Hemophilia B program – Etranacogene dezaparvovec (AMT-061)
In August 2018, we initiated a Phase IIb dose-confirmation study of etranacogene dezaparvovec and in
September 2018, we completed the dosing for that study. In February, May, July, and December 2019, and in December
2020, we presented updated data from the Phase IIb dose-confirmation study of etranacogene dezaparvovec. The most
recent data that we announced from the Phase IIb study of etranacogene dezaparvovec show that all three patients
experienced increasing and sustained FIX levels after a one-time administration of etranacogene dezaparvovec. Mean FIX
activity was 44.2% of normal two years after administration, exceeding threshold FIX levels generally considered
sufficient to significantly reduce the risk of bleeding events. The first patient achieved FIX activity of 44.7% of normal, the
second patient was 51.6% of normal and the third patient was 36.3% of normal. The second and third patients had
previously screen-failed and were excluded from another gene therapy study due to pre-existing neutralizing antibodies to a
different AAV vector. At two years after dosing, two of the three participants remain free from bleeds and use of FIX
replacement therapy. A single bleed has been reported in one participant, who has used a total of two FIX infusions
(excluding surgery). All patients have remained free of prophylaxis in the two years since receiving etranacogene
dezaparvovec.
In June 2018, we initiated the six-month lead-in period of our HOPE-B trial. The HOPE-B trial is a multinational,
multi-center, open-label, single-arm study to evaluate the safety and efficacy of etranacogene dezaparvovec. After the six-
month lead-in period, patients received a single intravenous administration of etranacogene dezaparvovec. Patients enrolled
in the HOPE-B trial were tested for the presence of pre-existing neutralizing antibodies to AAV5 but not excluded from the
trial based on their titers.
The primary endpoints of the study are based on the FIX activity level achieved following the administration of
etranacogene dezaparvovec after 26 weeks and 52 weeks after dosing as well annualized bleed rates during the 52 weeks
after dosing.
In March 2020, we completed dosing of the 54 patients in the HOPE-B trial. The targeted number of patients to be
dosed per the clinical trial protocol was 50. In December 2020, we announced top-line data from the HOPE-B trial. The
26-week follow-up date from the trial showed that FIX activity in the 54 patients increased after dosing from ≤ 2% to a
mean of 37.2% at 26 weeks, meeting a first primary endpoint of the HOPE-B trial. No correlation between pre-existing
neutralizing antibodies and FIX activity was found in patients with neutralizing antibody titers up to 678.2, a range
expected to include more than 95% of the general population; one patient with a neutralizing antibody titer of 3,212.3 did
not show an increase in FIX activity. Less than 1% of the general population is expected to have neutralizing antibody titers
of greater than 3,000.
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During the 26-week period after dosing, 15 patients (28%) reported a total of 21 bleeding events, representing a
reduction of 83% compared to the 123 bleeding events reported by 38 patients (70%) during the observational lead-in
phase of the trial. Total bleeds include any bleeding event reported after the treatment of etranacogene dezaparvovec,
including spontaneous, traumatic, and those associated with unrelated medical procedures, whether or not FIX treatment
was required. Of the total bleeding events reported during the 26-week period after dosing, only three were classified as
spontaneous bleeds requiring treatment, representing a reduction of 92% compared to the 37 such bleeding events reported
during the observational lead-in phase. Mean annualized usage of FIX replacement therapy, a secondary endpoint in the
clinical trial, declined by 96% during the 26-week period after dosing compared to the observational lead-in phase.
Etranacogene dezaparvovec was generally well-tolerated. As of the November 2020 cut-off date, most adverse events were
classified as mild (81.5%). The most common events included transaminase elevation treated with steroids per protocol (9
patients; 17%), infusion-related reactions (7 patients; 13%), headache (7 patients; 13%) and influenza-like symptoms (7
patients; 13%). Liver enzyme elevations resolved with a tapering course of corticosteroids and FIX activity remained in the
mild range in the steroid treated patients. No relationship between safety and neutralizing antibody titers was observed.
Based on interactions with the FDA and the EMA, we plan to incorporate FIX activity and bleeding rates at 52 weeks as
additional co-primary endpoints in the study.
On December 21, 2020, our clinical trials of etranacogene dezaparvovec, including our HOPE-B trial were placed
on clinical hold by the FDA. The clinical hold was initiated following the submission of a safety report in mid-December
relating to a possibly related serious adverse event associated with a preliminary diagnosis of HCC, a form of liver cancer,
in one patient in the HOPE-B trial that was treated with etranacogene dezaparvovec in October 2019. The patient has
multiple risk factors associated with HCC, including a twenty-five-year history of HCV, HBV, evidence of non-alcoholic
fatty liver disease and advanced age. Chronic infections with hepatitis B and C have been associated with approximately
80% of HCC cases.
The liver lesion was detected during a routine abdominal ultrasound conducted as part of the required study
assessments in patients at one-year post dosing. A surgical resection of the lesion has occurred, and an analysis of the tissue
samples was initiated in early 2021. On February 19, 2021, we reported initial results from this analysis to the FDA in
accordance with pharmacovigilance requirements. We are gathering final data from these molecular analyses and will be
preparing a detailed response to the FDA’s clinical hold questions regarding this event. Currently, we do not have adequate
data to determine a possible causal relationship, especially in the context of the other known risk factors. We currently do
not anticipate any impact on our regulatory submission timelines, including the filing of a BLA.
No other cases of HCC have been reported in our clinical trials conducted in more than 67 patients in hemophilia
B, with some patients dosed more than 5 years ago.
Phase I/II Clinical Trial of AMT-060
In the third quarter of 2015, we initiated a Phase I/II clinical trial of AMT-060, our first-generation hemophilia B
product candidate, in patients with severe or moderately-severe hemophilia B. We enrolled five patients into a low dose
cohort in the third quarter 2015. Another five patients were enrolled into a high dose cohort between March and May 2016.
In December 2020, we presented five-year follow-up data related to this Phase I/II clinical trial. All 10 patients
enrolled continue to show long-term clinical benefit, including sustained increases in FIX activity, reduced usage of FIX
replacement therapy, and decreased bleeding frequency. At up to five years of follow-up, AMT-060 continues to be well-
tolerated, with no new treatment-related adverse events since the last reported data and no development of inhibitors during
the study.
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Huntington’s disease program (AMT-130)
AMT-130 is our gene therapy candidate targeting Huntington’s disease that utilizes an AAV vector carrying an
engineered miRNA designed to silence HTT and exon 1 HTT, a potentially highly toxic protein fragment that may also
contribute to disease pathology. AMT-130 comprises a recombinant AAV5 vector carrying a DNA cassette, encoding a
miRNA that non-selectively lowers or knocks-down HTT and exon 1 HTT in Huntington’s disease patients.
In January 2019, our IND application for AMT-130 was cleared by the FDA, thereby enabling us to initiate our
planned Phase I/II clinical study. The primary objective of the study is to evaluate the safety, tolerability, and efficacy of
AMT-130 at two doses.
In June 2020, we announced the completion of the first two patient procedures in the Phase I/II clinical trial of
AMT-130 for the treatment of Huntington’s disease. These procedures occurred after a postponement that resulted from the
COVID-19 pandemic and the associated states of emergency declarations in the United States. The Phase I/II protocol is a
randomized, imitation surgery-controlled, double-blinded study conducted at three surgical sites, and multiple referring,
non-surgical sites in the U.S. The primary objective of the study is to evaluate the safety, tolerability, and efficacy of AMT-
130 at two doses.
On September 25, 2020, we announced that the independent Data Safety Monitoring Board (DSMB) overseeing
the Phase I/II clinical trial of AMT-130 for the treatment of Huntington’s disease has met and reviewed 90-day safety data
from the first two patients enrolled in the trial. No significant safety concerns were noted to prevent further dosing.
On October 13, 2020, we announced the completion of the third and fourth patient procedures in the Phase I/II
clinical trial.
On February 8, 2021, we announced that the DSMB met and reviewed the six-month safety data from the first
two enrolled patients and the 90-day safety data from the next two enrolled patients in the study. No significant safety
concerns were noted to prevent further dosing, and the final six patients in the first cohort are now cleared for enrollment.
Preclinical programs
Spinocerebellar Ataxia Type 3 program (AMT-150)
AMT-150 is our novel gene therapy candidate for the treatment of SCA3, also known as Machado-Joseph disease,
which is caused by a CAG-repeat expansion in the ATXN3 gene that results in an abnormal form of the protein ataxin-3.
AMT-150 is a one-time, intrathecally-administered, AAV gene therapy incorporating our proprietary miQURE silencing
technology that is designed to halt ataxia in early manifest SCA3 patients.
At the 2019 American Academy of Neurology Annual Meeting, we presented preclinical data on AMT-150
demonstrating mechanistic proof-of-concept of the non-allele-specific ataxin-3 protein-silencing approach by using
artificial miRNA candidates engineered to target the ataxin-3 gene in a SCA3 knock-in mouse model. In this proof-of-
concept study, a single AMT-150 injection in the cerebrospinal fluid resulted in AAV transduction and mutant ataxin-3
lowering at the primary sites of disease neuropathology, the cerebellum (up to 53%) and the brainstem (up to 65%).
In May 2020, we presented preclinical data at the ASGCT Annual Meeting, on our gene therapy candidate SCA3.
In an in vivo preclinical study, six NHP received a one-time injection of AMT-150 via the cisterna magna to assess
expression and distribution. Samples taken after eight weeks showed widespread transduction of the brain and spinal cord,
with the highest genome copies found in the posterior fossa and cortical regions. In other preclinical studies, researchers
evaluated AMT-150 in SCA3 mouse models, as well as human iPSC-derived neurons and astrocytes, to investigate
potential off-target effects of AAV5-miATXN3. The iPSC-derived cell cultures, which were derived from two SCA3
patients, represent the most disease-relevant cell type for therapeutic targeting of AMT-150. A clear dose-dependent
expression of miATXN3 was observed in the iPSC-derived neurons and astrocytes transduced with AMT-150. Mature
miATXN3 molecules were also associated with extracellular vesicles that strongly correlated with the dose and miATXN3
expression, suggesting the potential therapeutic spread of the engineered miATXN3. Additionally, AMT-150 demonstrated
ATXN3 knockdown in human neurons and various SCA3 mouse models with subsequent neuropathology improvement.
In September 2020, we initiated a safety and toxicology study of AMT-150 in NHP.
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Fabry disease program (AMT-190)
AMT-190 is our novel gene therapy candidate for the treatment of Fabry disease. AMT-190 is a one-time, IV-
administered, AAV5-based gene therapy.
In September 2020, we selected a lead gene therapy candidate (AMT-190) for the treatment of Fabry disease to
advance into IND-enabling studies. The lead candidate is a one-time administered AAV5 gene therapy incorporating the α-
galactosidase A (GLA) transgene. In preclinical studies comparing multiple product candidates, including constructs
incorporating a modified alpha-N-acetylgalactosaminidase transgene (modNAGA), AMT-190 demonstrated the most
robust and sustained increases in GLA activity.
Hemophilia A program (AMT-180)
In June 2020, we announced that we plan to de-prioritize our research program of AMT-180 for patients with
hemophilia A, as part of our effort to focus on those gene therapy programs that have the greatest potential to improve
patients’ lives and generate long-term value for shareholders.
Term loan facility
As of December 31, 2020, a $35.0 million term loan was outstanding in accordance with the 2018 Amended
Facility between us and Hercules.
On January 29, 2021 we and Hercules entered into the 2021 Amended Facility. Pursuant to the 2021 Amended
Facility, Hercules agreed to the 2021 Term Loan, increasing the aggregate principal amount of the term loan facility from
$35.0 million to up to $135.0 million. On January 29, 2021 we drew down $35.0 million of the 2021 Term Loan. We may
draw down the remaining $65.0 million under the 2021 Term Loan in a series of one or more advances of not less than
$20.0 million each until December 15, 2021. Advances under the 2021 Term Loan bear interest at a rate equal to the
greater of (i) 8.25% or (ii) 8.25% plus the prime rate, less 3.25% per annum. The principal balance and all accrued but
unpaid interest on advances under the 2021 Term Loan is due on June 1, 2023, which date may be extended by us by up to
two twelve-month periods. Advances under the 2021 Term Loan may not be prepaid until six months after the Closing
Date, following which we may prepay all such advances without charge.
In addition to the 2021 Term Loan, the amendment also extends the interest only payment period of the previously
funded $35.0 million term loan from January 1, 2022 to June l, 2023. End of term charges in respect of advances under the
2021 Term Loan range from 1.65% to 6.85%, depending on the maturity date.
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COVID-19 measures
Starting March 2020, we implemented measures to address the impact of COVID-19 on our business. We
mandated a work-from-home policy for all non-essential employees at our Amsterdam and Lexington facilities when the
pandemic began. We implemented a series of protocols governing the operations of our Lexington facility to comply with
the requirements of the various orders and guidance from the Commonwealth of Massachusetts and other related orders,
guidance, laws, and regulations. We supported our employees in setting up a healthy and efficient remote working
environment. In conjunction with implementing this policy, we accelerated the roll-out of several information technology
security measures such as dual factor authentication, to address the increased risks that to which we might be exposed as a
result of remote working conditions. In addition, we conducted awareness training around cybersecurity for critical
functions involved in making payments to vendors such as finance and supply chain. We continue to monitor local
government rules and recommendations and office protocols will be aligned with these rules and recommendations.
We conduct frequent status video-meetings of local management at our two sites as well as leadership-team video
meetings to implement these measures and to monitor the evolving situation. In addition, we inform our employees through
periodic newsletters and have organized virtual local and global townhalls to share information and provide direction and
support to our employees.
We started to reopen the Amsterdam and Lexington facilities in phases, in line with the reopening plans that are
prescribed by the local government. Between June 1, 2020 until September 29, 2020, we encouraged our Amsterdam
employees to work a minimum of two days per week from the office, and approximately 50% of local staff worked on site
during that period. As of September 29, 2020, we reinstated the mandatory work-from-home policy that was initiated in
March in Amsterdam to align with the updated Dutch government’s measures. Employees based in Amsterdam who cannot
perform their duties outside of our Amsterdam facility will continue to work at our Amsterdam facility. We adapted to
operate our laboratories at our Amsterdam site to comply with social distancing rules and to ensure the health and
wellbeing of our employees under the current circumstances. All other employees in Amsterdam will work from home
through at least the end of August 2021, partly in conjunction with the ongoing expansion of our laboratory space.
As a biopharma research and development company, we were deemed to provide essential services under the
“stay at home” advisory that was issued by the Governor of Massachusetts on March 23, 2020 and we therefore have
maintained our manufacturing operations at our Lexington site. To ensure adequate social distancing in our Lexington
facility, our COVID-19 protocols generally have limited occupancy to numbers below those allowed by the Massachusetts
COVID-19 guidelines. In our Lexington facility, we currently have implemented an occupancy limitation of approximately
25%. Our employees that cannot perform their duties outside of our Lexington facility continue to work at our Lexington
facility. All other employees are required to work remotely to the extent possible through at least the end of the second
quarter of 2021. Our actual occupancy at the Lexington facility has been less than approximately 25% of our permitted
occupancy during all phases of the Massachusetts reopening plan. We have also implemented a mandatory COVID-19 PCR
testing protocol effective February 11, 2021 that requires employees to have tested negative for COVID-19 prior to
entering the Lexington facility.
We have adapted our ongoing clinical research activities based on the directions and flexibility provided by the
“FDA Guidance on Conduct of Clinical Trials of Medical Products during COVID-19 Pandemic” issued on March 18,
2020 and updated throughout the pandemic to minimize any risk, disruption or delay in either patient dosing or follow-up
visits. These procedures occurred after a postponement that resulted from the COVID-19 pandemic and the associated
states of emergency declarations in the United States.
The broader implications of COVID-19 on our results of operations and overall financial performance remain
uncertain. The COVID-19 pandemic and its adverse effects have become more prevalent in the locations where we, and
our third-party business partners conduct business. While we have experienced disruptions in our operations as a result of
COVID-19, we are adapting to the current environment to minimize the effect to our business. However, we may
experience more pronounced disruptions in our operations in the future.
Related party transaction
On December 1, 2020, we and BMS entered into the amended BMS CLA. All transactions subsequent to the
effective date of the amended BMS CLA are considered to no longer be with a related party.
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2020 Financial Highlights
Key components of our results of operations include the following:
2020
Total revenues
Research and development expenses
Selling, general and administrative expenses
Net loss
2018
Year ended December 31,
2019
(in thousands)
7,281
$
(94,737)
(33,544)
(124,201)
$ 37,514
(122,400)
(42,580)
(125,024)
$ 11,284
(74,809)
(25,305)
(83,304)
As of December 31, 2020, we had cash and cash equivalents of $244.9 million (December 31, 2019:
$377.8 million). We had a net loss of $125.0 million in 2020, $124.2 million in 2019 and $83.3 million in 2018. As of
December 31, 2020, we had an accumulated deficit of $784.7 million (December 31, 2019: $659.7 million).
We anticipate that our expenses will increase substantially as we:
● Advance the clinical development of AMT-130 for our Huntington’s disease gene therapy program;
● Build-out our commercial and medical affairs infrastructure and seek marketing approval for any product
candidates (including etranacogene dezaparvovec in the event that the transactions contemplated by the CSL
Behring Agreement do not close) that successfully complete clinical trials;
● Advance multiple research programs related to gene therapy candidates targeting liver-directed and CNS
diseases;
● Continue to expand, enhance, and optimize our technology platform, including our manufacturing
capabilities, next-generation viral vectors and promoters, and other enabling technologies;
● Acquire or in-license rights to new therapeutic targets or product candidates; and
● Maintain, expand, and protect our intellectual property portfolio, including in-licensing additional intellectual
property rights from third parties.
See “Results of Operations” below for a discussion of the detailed components and analysis of the amounts above.
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Critical Accounting Policies and Estimates
In preparing our consolidated financial statements in accordance with U.S. GAAP and pursuant to the rules and
regulations promulgated by the SEC we make assumptions, judgments and estimates that can have a significant impact on
our net income/loss and affect the reported amounts of certain assets, liabilities, revenue and expenses, and related
disclosures. On an ongoing basis, we evaluate our estimates and judgments, including those related to the treatment of the
CSL Behring Agreement, the amended BMS CLA, share-based payments, corporate income taxes related to valuation
allowance and accounting for operating leases under ASC 842. We base our assumptions, judgments and estimates on
historical experience and various other factors that we believe to be reasonable under the circumstances, the results of
which form the basis for making judgments about the carrying values of assets and liabilities that are not clear from other
sources. Actual results may differ from these estimates under different assumptions or conditions. In making estimates and
judgments, management employs critical accounting policies. We also discuss our critical accounting policies and
estimates with the Audit Committee of our Board of Directors.
We believe that the assumptions, judgments, and estimates involved in the treatment of the CSL Behring
Agreement, the amended BMS CLA, share-based payments, corporate income taxes related to valuation allowance and
accounting for operating leases under ASC 842 to be our critical accounting policies. Historically, our assumptions,
judgments and estimates relative to our critical accounting policies have not differed materially from actual results.
CSL Behring Agreement
The effectiveness of the transactions contemplated by the CSL Behring Agreement is contingent on completion of
review under antitrust laws in the United States, Australia, and the United Kingdom and certain provisions of the CSL
Behring Agreement will not become effective until after we receive all such regulatory approvals. We obtained regulatory
approvals in Australia and the United Kingdom prior to January 6, 2021. We received a Second Request from the FTC on
January 4, 2021, and as such, regulatory approval in the United States has not occurred to date. We do not believe that the
FTC will determine that the consummation of the transaction will result in a violation of the HSR Act. However, there can
be no assurance as to the outcome of the Second Request.
As of December 31, 2020, we concluded that we have no enforceable right to receive the $450.0 million upfront
payment, in accordance with the CSL Behring Agreement as payment is contingent upon the successful completion of
reviews under the HSR Act. Therefore, we determined we will not recognize any revenue in relation to the upfront
payment, the regulatory and sale milestone payments, or the royalties (together “CSL Behring License Revenue”) in
accordance with ASC 606. We incurred $2.1 million of expenses related to obligations related to the CSL Behring
Agreement that had not been satisfied as of December 31, 2020. We capitalized these expenses as we believe these qualify
as contract fulfillment costs. As of December 31, 2020, we also recognized a $2.1 million receivable from CSL Behring for
expenses for which we have a right of reimbursement as well as a contract liability for the same amount. In accordance
with ASC 606, we cannot recognize any revenue in connection with the CSL Behring Agreement as of this date.
In accordance with our existing license and other agreements, we are contractually required to pay in total a low to
high single digit percentage of any upfront payment to our licensors and financial advisor (“License Fees”). We did not
record any License Fees in the year ended December 31, 2020, as we had not recognized the upfront payment as of this
date.
Amended BMS CLA
In May 2015, we entered into a collaboration and license agreement and various related agreements with BMS,
which we collectively refer to as the BMS CLA, which provided BMS with exclusive access to our gene therapy
technology platform for the research, development and commercialization of therapeutics aimed at multiple targets in
cardiovascular and other diseases. The BMS CLA provided that we and BMS could have potentially collaborated on up to
ten Collaboration Targets in total. The initial four-year research term under the collaboration terminated on May 21, 2019.
During the initial research term of the BMS CLA, BMS, at its option, could purchase non-clinical, analytical and process
development effort services. For any Collaboration Targets that might have been advanced, BMS could have purchased
clinical and commercial supplies from us. BMS reimbursed us for the services in support of the collaboration during the
initial research term, and leads the development, regulatory and commercial activities for any Collaboration Targets that are
advanced.
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On December 1, 2020, we and BMS amended the BMS CLA. Following the amendment BMS is no longer
entitled to designate a fifth to tenth Collaboration Target and as such we are no longer entitled to receive an aggregate
$16.5 million in target designation payments or research, development, and regulatory milestone payments related to the
fifth and tenth Collaboration Targets. For a period of one year from the effective date of the amended BMS CLA, BMS
may replace up to two of the four active Collaboration Targets with two new targets in the field of cardiovascular disease.
We continue to be entitled to receive up to $217.0 million for each of the four Collaboration Targets if defined milestones
are achieved, as well as royalties on net sales associated with any Collaboration Target.
We evaluated the impact of the amendment of the BMS CLA in relation to our performance obligation related to:
-
providing access to our technology and know-how in the field of gene therapy and participating in joint
steering committee and other governing bodies (materially satisfied as of December 1, 2020) (“License
Revenue”).
We did not identify any new distinct performance obligations and determined the amended BMS CLA did not
represent a separate contract in accordance with ASC 606. We evaluated the effect the modification has on our measure of
progress towards the completion of our performance obligation in relation to License Revenue and recorded an adjustment
to License Revenue as of December 1, 2020. The estimation of total services at the end of each reporting period involves
considerable judgement.
The amount of services we expect to provide is significantly impacted by the number of Collaboration Targets that
we estimate BMS would pursue. We considered that BMS may no longer designate potentially up to six Collaboration
Targets in addition to the currently four active targets. We evaluated our obligations with respect to the two replacement
cardiovascular indications that BMS might potentially designate until November 30, 2021, and the services we expected to
perform in relation to participating in joint steering committee and other governing bodies as well as the effort required to
actively contribute to the target selection process or the collaboration as a whole. Based on this we concluded that our
remaining performance obligation is immaterial and adjusted our measure of progress accordingly. As such we recognized
the remaining balance of unrecognized License Revenue as of November 30, 2020 of $27.8 million in profit and loss
during the year ended December 31, 2020 as License Revenue from a related party.
In 2015 we granted BMS two warrants, which were terminated in connection with the amendment to the BMS
CLA. We granted to BMS:
● A warrant that allowed BMS to purchase a specific number of our ordinary shares such that its ownership
would have equaled 14.9% immediately after such purchase (1st warrant”). The 1st warrant could have been
exercised on the later of (i) the date on which we received from BMS the Target Designation Fees (as defined
in the BMS CLA) associated with the first six new targets (a total of seven Collaboration Targets); and (ii)
the date on which BMS designated the sixth new target (the seventh Collaboration Target).
● A warrant that allowed BMS to purchase a specific number of our ordinary shares such that its ownership
would have equaled 19.9% immediately after such purchase (“2nd warrant” and together with the 1st warrant,
the “warrants”). The warrant could have been exercised on the later of (i) the date on which we received from
BMS the Target Designation Fees associated with the first nine new targets (a total of ten Collaboration
Targets); and (ii) the date on which BMS designated the ninth new target (the tenth Collaboration Target).
Pursuant to the terms of the BMS CLA the exercise price in respect of each warrant was equal to the greater of (i)
the product of (A) $33.84, multiplied by (B) a compounded annual growth rate of 10% (or approximately $57.32 as of
November 30, 2020) and (ii) the product of (A) 1.10 multiplied by (B) the volume weighted average price (“VWAP”) for
the 20 trading days ending on the date that is five trading days prior to the date of a notice of exercise delivered by BMS.
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We used Monte-Carlo simulations to determine the fair market value of the BMS warrants. The valuation model
incorporated several inputs, the risk-free rate adjusted for the period affected, an expected volatility based on our historical
volatility, the expected yield on any dividends and management’s expectations on the timelines of reaching certain defined
trigger events for the exercising of the warrants, as well as management’s expectations regarding the number of ordinary
shares that would be issued upon exercise of the warrants. All of these represent Level 3 inputs. Additionally, the model
assumed BMS would exercise the warrants only if it were financially rational to do so. The warrants could only have been
exercised following the occurrence of events contractually defined in the warrant agreements. The probability of the
occurrence of these events represented another significant unobservable input used in the calculation of the fair value of the
warrants. The fair value of the warrants as of December 31, 2019 was $3.1 million. During the year ended December 31,
2020, we recognized a $3.1 million gain in non-operating income / expense (December 31, 2019: $2.3 million loss;
December 31, 2018: $0.5 million gain) related to fair value changes of the BMS warrants. The gain recognized in the year
ended December 31, 2020 includes $0.8 million from the derecognition of the BMS warrants on December 1, 2020.
On December 1, 2020, we and BMS terminated the BMS warrants and agreed that upon the consummation of a
change of control transaction of uniQure that occurs prior to the earlier of (i) December 1, 2026 and (ii) BMS’ delivery of a
target cessation notice for all four Collaboration Targets, uniQure (or its third party acquirer) shall pay to BMS a one-time,
non-refundable, non-creditable cash payment of $70.0 million, provided that (x) if $70.0 million is greater than five percent
(5.0%) of the net proceeds (as contractually defined) from such change of control transaction, the payment shall be an
amount equal to five percent of such net proceeds, and (y) if $70.0 million is less than one percent of such net proceeds, the
change of control payment shall be an amount equal to one percent of such net proceeds (“CoC-payment”). We have not
consummated any change of control transaction as of December 31, 2020 that would obligate us to make a CoC-payment.
We determined that the CoC-payment should be recorded as a derivative financial liability as of December 1, 2020 and that
subsequent changes in the fair market value of this derivative financial liability should be recorded in profit and loss. The
fair market value of the derivative financial liability is materially impacted by probability that market participants assign to
the likelihood of the occurrence of a change of control transaction that would give rise to a CoC-payment. This probability
represents an unobservable input. We determined the fair market value of the derivative financial liability by using a
present value model based on expected cash flow. The expected cash flows are materially impacted by the probability that
market participants assign to the likelihood of the occurrence of a change of control event within the biotechnology
industry. We estimated this unobservable input using the best information available as of December 1, 2020 and December
31, 2020. We obtained reasonably available market information that we believe market participants would use in
determining the likelihood of the occurrence of a change-of control transaction within the biotechnology industry. Selecting
and evaluating market information involves considerable judgement and uncertainty. Based on all such information and our
judgment we estimated that the fair market value of the derivative financial liability (presented within “Other non-current
liabilities”) as of December 1, 2020 and December 31, 2020 was $2.6 million. We recorded a $2.6 million loss within
“other non-operating expenses” in the twelve-month period ended December 31, 2020 related to the initial recognition of
this derivative financial liability.
Share-based payments
We issue share-based compensation awards, in the form of options to purchase ordinary shares, restricted share
units and performance share units, to certain of our employees, executive and non-executive board members, and
consultants. We measure share-based compensation expense related to these awards by reference to the estimated fair value
of the award at the date of grant. The awards are subject to service and/or performance-based vesting conditions. The total
amount of the awards is expensed on a straight-line basis over the requisite vesting period.
We use a Hull & White option model to determine the fair value of option awards. The model captures early
exercises by assuming that the likelihood of exercise will increase when the share-price reaches defined multiples of the
strike price. This analysis is made over the full contractual term.
At each balance sheet date, we revise our estimate of the number of options that are expected to become
exercisable. We recognize the impact of the revision of original estimates, if any, in the statements of operations and
comprehensive loss and a corresponding adjustment to equity. We expect all vested options to be exercised over the
remainder of their contractual life. We consider the expected life of the options to be in line with the average remaining
term of the options post vesting.
We account for share options as an expense in the statements of operations and comprehensive loss over the
estimated vesting period, with a corresponding contribution to equity, as they are all equity-classified.
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Corporate income taxes
We are subject to corporate taxes in the Netherlands and the United States of America. Significant judgment is
required in determining the valuation allowance in relation to our net operating loss carry forwards. We have been
incurring net operating losses in accordance with the respective corporate tax laws in almost all years since we founded our
business. As of December 31, 2020, the total amount of net operating losses carried forward under the Dutch tax regime
was $588.2 million and $42.3 million in the United States of America.
We reassessed the need for a full valuation allowance in conjunction with entering into the CSL Behring
Agreement. The effectiveness of the transactions contemplated by the CSL Behring Agreement is contingent on
completion of review under antitrust laws in the United States, Australia, and the United Kingdom. Regulatory approval in
the United States has not occurred to date. We recognize deferred tax assets to the extent that we determine that these assets
are more likely than not to be realized. In making such a determination, we weighed all available positive and negative
evidence, including future income projections from the CSL Behring Agreement, and concluded that it is more likely than
not that the deferred tax assets will not be realized. Accordingly, we continued to record a full valuation allowance as of
December 31, 2020 in the Netherlands. As of December 31, 2020, our valuation allowance amounted to $150.1 million
(2019: $109.9 million).
We recorded $16.4 million of deferred tax income in the year ended December 31, 2020 from releasing the full
valuation allowance against our net deferred tax assets in the United States as of December 31, 2020. Our U.S. entity has
generated taxable income in the fiscal years 2018, 2019 and 2020. Based on the current design of our worldwide
operations, we expect to continue to generate taxable income in the U.S. during the foreseeable future and therefore
determined that it is more likely than not that our U.S. deferred tax assets will be realized. Our U.S. deferred tax assets as
of December 31, 2020 amount to $16.4 million.
Leases
On January 1, 2019, we adopted ASC 842, “Leases (Topic 842)”. We adopted the standard using the modified
retrospective approach with an effective date as of the beginning of our fiscal year, January 1, 2019, to operating leases that
existed on that date. Comparative financial information related to profit and loss and cash flows for the twelve-month
period ended December 31, 2018, was not recast under the new standard, and continues to be presented under ASC 840.
We measured the lease liability at the present value of the future lease payments as of January 1, 2019. We used an
incremental borrowing rate to discount the lease payments. We derived the discount rate, adjusted for differences such as in
the term and payment patterns, from our loan from Hercules Capital, which was refinanced immediately prior to the
January 1, 2019 adoption date in December 2018. We valued the right-of-use asset at the amount of the lease liability
reduced by the remaining December 31, 2018 balance of lease incentives received. The lease liability is subsequently
measured at the present value of the future lease payments as of the reporting date with a corresponding adjustment to the
right-to-use asset. Absent a lease modification, we will continue to utilize the January 1, 2019, incremental borrowing rate.
We recognize lease cost on a straight-line basis and present these costs as operating expenses within our
Consolidated statements of operations and comprehensive loss. We present lease payments and landlord incentive
payments within cash flows from operations within our Consolidated statements of cash flows.
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Recent Accounting Pronouncements
ASU 2018-13: Fair Value Measurement
In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820) which modifies the
disclosure requirements on fair value measurements. The effective date for the standard is fiscal years beginning after
December 15, 2019, which for us is January 1, 2020. Early adoption is permitted. The new disclosure requirements for
changes in unrealized gains and losses in other comprehensive income for recurring Level 3 measurements, the range and
weighted average of significant unobservable inputs and the amended requirements for the narrative description of
measurement uncertainty should be applied prospectively for only the most recent interim or annual period presented in the
initial fiscal year of adoption. All other amendments should be applied retrospectively. ASU 2018-13 did not have a
material impact on our consolidated financial statements.
Recent Accounting Pronouncements Not Yet Effective
None.
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Results of Operations
The following table presents a comparison of the twelve months ended December 31, 2020, 2019 and 2018.
Total revenues
Operating expenses:
Research and development expenses
Selling, general and administrative expenses
Total operating expenses
Other income
Other expense
Loss from operations
Non-operating items, net
Loss before income tax income / (expense)
Income tax income / (expense)
Net loss
Revenue
Year ended December 31,
2020
2019
2018
(in thousands)
2020 vs 2019
2019 vs 2018
$
37,514 $
7,281 $
11,284 $ 30,233
$
(4,003)
(122,400)
(42,580)
(164,980)
3,342
(1,302)
(125,426)
(16,017)
(94,737)
(33,544)
(128,281)
1,888
(2,028)
(121,140)
(3,061)
(74,809)
(25,305)
(100,114)
2,146
(1,548)
(88,232)
5,159
$ (141,443) $ (124,201) $ (83,073)
(231)
16,419
—
$ (125,024) $ (124,201) $ (83,304) $
(27,663)
(9,036)
(36,699)
1,454
726
(4,286)
(12,956)
(17,242)
16,419
(19,928)
(8,239)
(28,167)
(258)
(480)
(32,908)
(8,220)
(41,128)
231
(823) $ (40,897)
We recognize collaboration revenues associated with Collaboration Target-specific pre-clinical analytical
development and process development activities that are reimbursable by BMS under the BMS CLA and the amended
BMLS CLA as well as other related agreements. Collaboration Revenue related to these contracted services is recognized
when performance obligations are satisfied.
We recognized license revenues associated with the amortization of the non-refundable upfront payment and
target designation fees we received from BMS in 2015. We evaluated our outstanding performance obligation following the
amendment of the BMS CLA on December 1, 2020 and determined that our remaining performance obligation is
immaterial. We updated our measure of progress accordingly and amortized the remaining balance of unrecognized
revenue as of December 1, 2020. In accordance with the amended BMS CLA, we continue to be eligible to receive
research, development, and regulatory milestone payments as well as sales milestone payments and royalties for each of
the four active Collaboration Targets if defined milestones are achieved in relation to the license to our technology and
know-how. We will recognize revenue from these payments when earned or as sales occur.
Our revenue for the years ended December 31, 2020, 2019 and 2018 was as follows:
License revenue
Collaboration revenue
Total revenues
Year ended December 31,
2020
2019
2018
2020 vs 2019 2019 vs 2018
$ 37,319
195
$ 37,514
$
$
4,988
2,293
7,281
(in thousands)
$
7,528
3,756
$ 11,284
$ 32,331
(2,098)
$ 30,233
$
$
(2,540)
(1,463)
(4,003)
We recognized $37.3 million, $5.0 million, and $7.5 million of license revenue for the year ended December 31,
2020, 2019 and 2018, respectively. The increase in license revenue in 2020 of $32.2 million compared to 2019 primarily
resulted from $27.8 million of license revenue that we recognized as of the December 1, 2020 effective date of the
amended BMS CLA as well as $4.4 million research milestone payment that we recorded in December 2020 following the
designation of one of the four Collaboration Targets as a candidate to advance into IND-enabling studies. The decrease in
license revenue in 2019 of $2.5 million compared to 2018 resulted from the termination of the S100A1 Collaboration
Target and subsequent designation of a replacement target in 2019.
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We recognized $0.2 million, $2.3 million, and $3.8 million of collaboration revenue for the years ended December
31, 2020, 2019 and 2018, respectively. The decrease in collaboration revenue in 2020 of $2.1 million compared to 2019
was primarily related to the reduction of activities following the termination of the initial research term under the BMS
CLA in May 2019. The decrease in collaboration revenue in 2019 of $1.5 million compared to 2018 resulted from the
termination of the initial research term in May 2019 as well as the discontinuation of the S100A1 program in October
2018.
Research and development expenses
We expense research and development costs (“R&D”) as incurred. Our R&D expenses generally consist of costs
incurred for the development of our target candidates, which include:
● Employee-related expenses, including salaries, benefits, travel, and share-based compensation expense;
● Costs incurred for laboratory research, preclinical and nonclinical studies, clinical trials, statistical analysis and
report writing, and regulatory compliance costs incurred with clinical research organizations and other third-
party vendors;
● Costs incurred to conduct consistency and comparability studies;
● Costs incurred for the validation of our Lexington facility;
● Costs incurred for the development and improvement of our manufacturing processes and methods;
● Costs associated with our research activities for our next-generation vector and promoter platform;
● Changes in the fair value of the contingent consideration related to our acquisition of InoCard (up to September
30, 2018) as well as the impairment of in process research and development acquired in the three-month period
ended September 30, 2018;
● Facilities, depreciation, and other expenses, which include direct and allocated expenses for rent and
maintenance of facilities, insurance, and other supplies; and
Our research and development expenses primarily consist of costs incurred for the research and development of our
product candidates, which include:
● Etranacogene dezaparvovec (hemophilia B). We have incurred costs related to the research, development, and
production of etranacogene dezaparvovec for the treatment of hemophilia B. In June 2018, we initiated a pivotal
study. We completed enrollment of the lead-in phase of the pivotal study in September 2019 and dosed a total of
54 patients between January 2019 and March 2020. Following the completion of dosing we initiated activities
related to the preparation of marketing authorization applications in the U.S. and EU, as well as other related
undertakings. In September 2018, we completed patient dosing in our Phase IIb dose-confirmation study;
● AMT-130 (Huntington’s disease). We have incurred costs related to preclinical and nonclinical studies of AMT-
130 and have been incurring costs related to our Phase I/II trial since February 2019;
● Preclinical research programs. We incur costs related to the research of multiple preclinical gene therapy
product candidates with the potential to treat certain rare and other serious medical conditions; and
● Technology platform development and other related research. We incur significant research and development
costs related to manufacturing and other enabling technologies that are applicable across all our programs.
Our research and development expenses may vary substantially from period to period based on the timing of our
research and development activities, including manufacturing campaigns, regulatory submissions, and enrollment of
patients in clinical trials. The successful development of our product candidates is highly uncertain. Estimating the nature,
timing, or cost of the development of any of our product candidates involves considerable judgement due to numerous risks
and uncertainties associated with developing gene therapies, including the uncertainty of:
● the scope, rate of progress and expense of our research and development activities;
● our ability to successfully manufacture and scale-up production;
● clinical trial protocols, speed of enrollment and resulting data;
● the effectiveness and safety of our product candidates;
● the timing of regulatory approvals; and
● our ability to agree to ongoing development budgets with collaborators who share the costs of our
development programs.
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A change in the outcome of any of these variables with respect to our product candidates that we may develop,
including as a result of the COVID-19 pandemic, could mean a significant change in the expenses and timing associated
with the development of such product candidate.
Research and development expenses for the year ended December 31, 2020 were $122.4 million, compared to
$94.7 million and $74.8 million for the years ended December 31, 2019 and 2018, respectively. Other research and
development expenses are separately classified in the table below. These are not allocated as they are deployed across
multiple projects under development.
Etranacogene dezaparvovec (AMT-060/061)
Huntington's disease (AMT-130)
Programs in preclinical development and platform related
expenses
Total direct research and development expenses
Employee and contractor-related expenses
Share-based compensation expense
Facility expenses
Disposables
Other expenses
Termination benefits
Changes in fair value of contingent consideration
Impairment loss in process research and development
asset
Total other research and development expenses
2020
2019
2020 vs 2019
Year ended December 31,
2018
(in thousands)
$
$
8,677
5,862
4,605
2,779
$ 21,458
6,905
$ 16,853
4,126
6,518
$ 34,881
5,710
$ 26,689
2,491
$ 17,030
$
808
8,192
41,694
11,995
17,390
10,203
6,237
—
—
34,030
8,094
15,181
8,765
1,978
—
—
28,948
3,968
12,961
9,461
646
96
(3,800)
7,664
3,901
2,209
1,438
4,259
—
—
2019 vs 2018
$
$
8,176
(1,736)
3,219
9,659
5,082
4,126
2,220
(696)
1,332
(96)
3,800
—
$ 87,519
—
$ 68,048
5,499
$ 57,779
—
$ 19,471
(5,499)
$ 10,269
Total research and development expenses
$ 122,400
$ 94,737
$ 74,809
$ 27,663
$ 19,928
Direct research and development expenses
Hemophilia B (AMT-060/061)
In the year ended December 31, 2020, the external costs for our hemophilia B program were primarily related to
the execution of our Phase III clinical trial and the preparations related to submissions of marketing authorization
applications in the U.S. and EU. We enrolled patients into a six-month lead in phase between January 2018 and September
2019 and dosed a total of 54 patients between January 2019 and March 2020. Our expenses related to etranacogene
dezaparvovec were largely unaffected by the COVID-19 pandemic as we completed enrollment prior to the lockdowns in
those countries that we enroll patients. We implemented additional measures to minimize any risk, disruption, or delay on
follow-up visits, and as of September 2020, we completed almost all follow-up visits according to our initial plan.
In addition, we continue to incur costs for the long-term follow-up of patients in our Phase I/II clinical trial of
AMT-060 and our Phase IIb clinical trial of etranacogene dezaparvovec. Our Phase IIb dose-confirmation study was
initiated in January 2018 and dosing occurred in July and August 2018. Patients were dosed as part of our Phase I/II
clinical trial of AMT-060 in 2015 and 2016. In the years ended December 31, 2018 and 2019, our external costs for our
hemophilia B program were primarily related to the planning and execution of our Phase III and Phase IIb clinical trials.
Following the completion of patient enrollment into our HOPE-B trial we also started incurring costs related to
preparation of a BLA and MAA and for commercialization of etranacogene dezaparvovec.
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Huntington disease (AMT-130)
In the year ended December 31, 2020, our external costs for the development of Huntington’s disease were
primarily related to the execution of our Phase I/II clinical trial as well as expenses related to the procedures of the first two
patients in June 2020. In the year ended December 31, 2019, our external costs for the development of Huntington’s
disease were primarily related to the preparation of our Phase I/II clinical trial. During 2018, the majority of costs were
related to the planning and execution of a GLP toxicology study. In addition, we incurred cost related to the filing of our
IND in late 2018 and early 2019.
Preclinical programs & platform development
In the year ended December 31, 2020, we incurred $6.5 million of costs related to related to our preclinical
activities for product candidates including Hemophilia A (AMT-180), SCA3 (AMT-150) and Fabry disease (AMT-190), as
well as various other research programs and technology innovation projects compared to $5.7 million in 2019 and $2.5
million in 2018.
Other research & development expenses
● We incurred $41.7 million in employee and contractor expenses in the year ended December 31, 2020
compared to $34.0 million in 2019 and $28.9 million in 2018. Our cost increased in 2020 by $7.7 million
compared to 2019 as a result of the recruitment of personnel to support the preclinical and clinical
development of our product candidates. For the same reason our costs increased by $5.1 million in 2019
compared to 2018;
● We incurred $12.0 million in share-based compensation expenses in the year ended December 31, 2020
compared to $8.1 million in 2019 and $4.0 million in 2018. The increase in 2020 compared to 2019 of $3.9
million was primarily driven by grants to newly recruited personnel as well as share-based compensation
expenses recorded in relation to the termination of one of our executives. The increase in 2019 compared to
2018 of $4.1 million was driven primarily by the appreciation of our share price and increase in number of
grants;
● We incurred $17.4 million in operating expenses and depreciation expenses related to our rented facilities in
the year ended December 31, 2020 compared to $15.2 million in 2019 and $13.0 million in 2018. The
increase in 2020 compared to 2019 of $2.2 million primarily relates to extending and expanding (as of June
2019) the lease of our Lexington facility. The increase in 2019 compared to 2018 of $2.2 million also
primarily relates to extending and expanding (as of June 2019) the lease of our Lexington facility;
● We incurred $10.2 million in costs in the year ended December 31, 2020 compared to $8.8 million in the year
ended December 31, 2019 and $9.5 million in the year ended December 31, 2018 related to miscellaneous
other costs we incur as a result of expanding our organization;
● We incurred $6.2 million in other expenses in the year ended December 31, 2020 compared to $2.0 million in
2019 and $0.6 million in 2018. The increase in 2020 compared to 2019 of $4.2 million primarily relates to
license payments of $3.4 million that we determined during 2020 to have no alternative future use. The
increase in 2019 compared to 2018 of $1.4 million primarily relates to extending and expanding (as of June
2019) the lease of our Lexington facility;
● We recorded no results related to a change in the fair value of the contingent consideration owed to the sellers
of the InoCard business in the years ended December 31, 2020 and 2019 compared to a gain of $3.8 million
in 2018; and
● We incurred no impairment losses in the years ended December 31, 2020 and 2019 compared to an
impairment loss of $5.4 million on the in-process research and development asset acquired in the InoCard
business combination in 2018.
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Selling, general and administrative expenses
Our general and administrative expenses consist principally of employee, office, consulting, legal and other
professional and administrative expenses. We incur expenses associated with operating as a public company, including
expenses for personnel, legal, accounting and audit fees, board of directors’ costs, directors' and officers' liability insurance
premiums, Nasdaq listing fees, expenses related to investor relations and fees related to business development and
maintaining our patent and license portfolio. Our selling costs include employee expenses as well as professional fees
related to the preparation of a commercial launch of etranacogene dezaparvovec.
Selling, general and administrative expenses for the year ended December 31, 2020 were $42.6 million, compared
to $33.5 million and $25.3 million for the years ended December 31, 2019 and 2018, respectively.
● We incurred $13.6 million in personnel and consulting expenses in 2020 compared to $10.5 million in 2019
and $8.9 million in 2018. The increase of $3.1 million in 2020 compared to 2019 and the increase of $1.6
million in 2019 compared to 2018 was primarily driven by an increase in personnel and consulting related
expenses to support our growth;
● We incurred $9.8 million of share-based compensation expenses in 2020 compared to $9.4 million in 2019
and $6.7 million in 2018. The increase in 2020 compared to 2019 of $0.4 million was primarily driven by
newly recruited personnel and the increase in 2019 compared to 2018 of $2.7 million was primarily driven by
the appreciation of our share price and increase in number of grants;
● We incurred $8.0 million in professional fees in 2020 compared to $6.0 million in 2019 and $4.2 million in
2018. We regularly incur accounting, audit and legal fees associated with operating as a public company.
Additionally, in the year ended December 31, 2020, we incurred professional fees in relation to our licensing
transaction with CSL Behring.
Other items, net
In 2020, we recognized $1.9 million in income related to payments received from European authorities to
subsidize our research and development efforts in the Netherlands compared to $0.7 million in 2019 and $1.0 million in
2018.
In January 2018, we began recognizing other income from the subleasing of a portion of our Amsterdam facility.
We present expenses related to such income as other expense.
Other non-operating items, net
We recognize interest income associated with our cash and cash equivalents.
We hold monetary items and enter into transactions in foreign currencies, predominantly in euros and U.S. dollars.
We recognize foreign exchange results related to changes in these foreign currencies.
We issued warrants to Hercules in 2013 and to BMS in 2015. We recognize changes in the fair value of these
warrants within other non-operating income / (expense). Following the termination of the BMS warrants on December 1,
2020, we no longer recognize changes in the fair value of these warrants within other non-operating (expense) / income. As
of the same date, we recognized a derivative financial liability related to the CoC-payment. Following the exercise of the
warrants by Hercules in February 2019 we no longer recognize changes in the fair value of these warrants within other
non-operating (expense) / income.
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Our non-operating items, net, for the years ended December 31, 2020, 2019 and 2018 were as follows:
Year ended December 31,
2020
2019
2018
2020 vs 2019
2019 vs 2018
(in thousands)
Interest income
Interest expense
Foreign currency (losses) / gains, net
Other non-operating gains / (losses), net
Total non-operating income / (loss), net
$
938 $ 3,547 $ 2,729 $ (2,609) $
(3,825)
(13,613)
483
$ (16,017)
(3,810)
(268)
(2,530)
$ (3,061)
(2,160)
4,382
208
$ 5,159
(15)
(13,345)
3,013
$ (12,956)
818
(1,650)
(4,650)
(2,738)
$ (8,220)
We recognized $0.9 million interest income in 2020, $3.5 million in 2019 and $2.7 million in 2018. Our interest
income in 2020 decreased by $2.6 million compared to 2019 due to a reduction in market interest rates in 2020 as well as a
reduction in cash and cash equivalents. Our interest income in 2019 increased by $0.8 million as a result of an increase in
our cash and cash equivalents through our September 2019 $242.7 million public follow-on offering.
We recognized $3.8 million interest expense in 2020, $3.8 million in 2019 and $2.2 million in 2018. Our interest
income in 2020 was unchanged compared to 2019 as our outstanding debt remained unchanged. Our interest expense in
2019 increased by $1.6 million as we increased our outstanding debt from $20.0 million to $35.0 million on December 6,
2018.
In 2020, we recognized a net foreign currency loss of $13.6 million related to our borrowings from Hercules and
our cash and cash equivalents as well as loans between entities within the uniQure group, compared to a net loss of
$0.3 million in 2019 and a net gain of $4.4 million in 2018.
In 2020, we recognized a $0.5 million net gain related to fair value changes of derivative financial instruments,
compared to a net loss of $2.5 million in 2019 and a gain of $0.2 million in 2018. The changes in 2020 compared to 2019
result from a $3.1 million gain that we recognized related to fair value changes of the BMS warrants (compared to $2.5
million loss in 2019), which includes an $0.8 million gain that we recognized related to the termination of the BMS
warrants in December 2020, and a loss of $2.6 million to recognize the derivative financial liability for the CoC-payment
on December 1, 2020.
Income tax
We recognized $16.4 million of deferred tax income in 2020, $0.0 million in 2019 and income tax expense of $0.2
million in 2018. Deferred tax income recorded in 2020 results from the release of the valuation allowance recorded for our
net deferred tax assets by our U.S. entity. We did not record changes in valuation allowances in 2019 and 2018.
Financial Position, Liquidity and Capital Resources
As of December 31, 2020, we had cash, cash equivalents and restricted cash of $247.7 million. We believe our
cash and cash equivalents as of December 31, 2020, combined with the $100.0 million 2021 Amended Facility will enable
us to fund our operating expenses, including our debt repayment obligations, as they become due and capital expenditure
requirements into the second half of 2022. In the event that we receive the $450.0 million payment due on the closing of
the CSL Behring Agreement, we expect that our cash and cash equivalents will be sufficient to fund operations into the
second half of 2024 (assuming a full repayment of funds borrowed from Hercules under our term loan facility by 2023).
The table below summarizes our consolidated cash flow data for the years ended December 31:
Cash, cash equivalents and restricted cash at the beginning of the period
Net cash used in operating activities
Net cash used in investing activities
Net cash generated from financing activities
Foreign exchange impact
Cash, cash equivalents and restricted cash at the end of period
99
2020
2018
Year ended December 31,
2019
(in thousands)
$ 237,342
(98,684)
(6,647)
248,821
(106)
$ 380,726
$ 161,851
(76,037)
(4,245)
157,961
(2,187)
$ 237,342
$ 380,726
(134,828)
(9,484)
7,444
3,822
$ 247,680
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We have incurred losses and cumulative negative cash flows from operations since our business was founded by
our predecessor entity AMT in 1998. We had a net loss of $125.0 million in 2020, $124.2 million in 2019, and
$83.3 million in 2018. As of December 31, 2020, we had an accumulated deficit of $784.7 million.
Sources of liquidity
From our first institutional venture capital financing in 2006 through 2019, we funded our operations primarily
through private placements and public offerings of equity securities, convertible, and other debt securities and to a lesser
extent upfront, target designation or similar payments from our collaboration partners.
On September 10, 2019, we completed a follow-on public offering of 4,891,305 ordinary shares at a public
offering price of $46.00 per ordinary share, and on September 13, 2019, we completed the sale of an additional 733,695
ordinary shares at a public offering price of $46.00 per ordinary share pursuant to the exercise by the underwriters of the
option to purchase additional ordinary shares, resulting in total gross proceeds to us of $258.8 million. The net proceeds
from this offering were $242.7 million, after deducting underwriting discounts and commissions and other offering
expenses payable by us. We deducted $0.6 million of expenses incurred related to this offering from additional paid-in
capital in the accompanying consolidated balance sheets and reflected this within the proceeds from public offering of
shares, net of issuance costs within the cash flows from financing activities.
On December 6, 2018, we signed an amendment to the Second Amended and Restated Loan and Security
Agreement (the “2018 Amended Facility”) with Hercules that both refinanced our then-existing $20.0 million credit
facility and provided us with an additional unconditional commitment of $15.0 million as well as a conditional
commitment of $15.0 million that expired on June 30, 2020. At signing, we drew down an additional $15.0 million, for a
total outstanding amount of $35.0 million.
The 2018 Amended Facility extended the loan’s maturity date until June 1, 2023. The interest-only period was
initially extended from November 2018 to January 1, 2021. The interest-only period was further extended to January 1,
2022 as a result of raising more than $90.0 million in equity financing in September 2019. As of December 31, 2020, $35.0
million was outstanding under the 2018 Amended Facility (December 31, 2019: $35.0 million). We are required to repay
the facility in equal monthly installments of principal and interest between the end of the interest-only period and the
maturity date. The variable interest rate is equal to the greater of (i) 8.85% or (ii) 8.85% plus the prime rate less 5.50%.
Under the 2018 Amended Facility, we paid a facility fee equal to 0.50% of the $35,000,000 loan outstanding and will owe
a back-end fee of 4.95% of the outstanding debt.
On January 29, 2021 we and Hercules entered into the 2021 Amended Facility. Pursuant to the 2021 Amended
Facility, Hercules agreed to the 2021 Term Loan, increasing the aggregate principal amount of the term loan facility from
$35.0 million to up to $135.0 million. On January 29, 2021 we drew down $35.0 million of the 2021 Term Loan. We may
draw down the remaining $65.0 million under the 2021 Term Loan in a series of one or more advances of not less than
$20.0 million each until December 15, 2021. Advances under the 2021 Term Loan bear interest at a rate equal to the
greater of (i) 8.25% or (ii) 8.25% plus the prime rate, less 3.25% per annum. The principal balance and all accrued but
unpaid interest on advances under the 2021 Term Loan is due on June 1, 2023, which date may be extended by us by up to
two twelve-month periods. Advances under the 2021 Term Loan may not be prepaid until six-months after the Closing
Date, following which we may prepay all such advances without charge.
On May 7, 2018, we completed a follow-on public offering of 5,175,000 ordinary shares at a public offering price
of $28.50 per ordinary share, resulting in gross proceeds to us of $147.5 million. The net proceeds from this offering were
$138.4 million, after deducting underwriting discounts and commissions and other offering expenses payable by us. We
deducted $0.2 million of expenses incurred related to this offering from additional paid-in capital in the accompanying
consolidated balance sheet and reflected this within the proceeds from public offering of shares, net of issuance costs with
the cash flows from financing activities.
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The $450.0 million upfront payment we expect to receive on the closing of the CSL Behring Agreement would
fund operations into the second half of 2024 (assuming a full repayment of funds borrowed from Hercules under our term
loan facility by 2023). The closing of the transaction is expected to materially impact our profitability and cash flows. We
expect to generate positive cash flows in the period of closing and to recognize material revenue related to the CSL
Behring Agreement. However, we expect to continue to incur losses and to generate negative cash flows beyond the fiscal
year in which we close the transaction. Until such time, if ever, as we can generate substantial cash flows from successfully
commercializing our proprietary product candidates, we expect to finance our cash needs through a combination of equity
offerings, debt financings, collaborations, strategic alliances and marketing, distribution, and licensing arrangements.
We are subject to the same covenants under our 2018 Amended Facility and 2021 Amended Facility and may
become subject to covenants under any future indebtedness that could limit our ability to take specific actions, such as
incurring additional debt, making capital expenditures, or declaring dividends, which could adversely impact our ability to
conduct our business. In addition, our pledge of assets as collateral to secure our obligations under the 2018 Amended
Facility and 2021 Amended Facility may limit our ability to obtain debt financing. To the extent we need to finance our
cash needs through equity offerings or debt financings, such financing may be subject to unfavorable terms including
without limitation, the negotiation and execution of definitive documentation, as well as credit and debt market conditions,
and we may not be able to obtain such financing on terms acceptable to us or at all. If financing is not available when
needed, including through debt or equity financings, or is available only on unfavorable terms, we may be unable to meet
our cash needs. If we raise additional funds through collaborations, strategic alliances or marketing, distribution, or
licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue
streams or product candidates or grant licenses on terms that may not be favorable to us. If we are unable to raise additional
funds through equity or debt financings when needed, we may be required to delay, limit, reduce or terminate our product
development or future commercialization efforts or grant rights to develop and market product candidates that we would
otherwise prefer to develop and market ourselves, which could have a material adverse effect on our business, financial
conditions, results of operations and cash flows.
Net Cash used in operating activities
Cash flows from operating activities
Net loss
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation, amortization, and impairment losses
Share-based compensation expense
Change in fair value of derivative financial instruments and contingent
consideration
Unrealized foreign exchange losses / (gains)
Deferred tax (income) / expense
Change in lease incentives
Change in deferred revenue
Changes in operating assets and liabilities:
Accounts receivable and accrued income, prepaid expenses, and other
current assets
Accounts payable
Accrued expenses, other liabilities, and operating leases
Net cash used in operating activities
2020
Year ended December 31,
2019
(in thousands)
2018
$ (125,024)
$ (124,201)
$ (83,304)
10,648
21,831
(483)
14,730
(16,419)
-
(33,642)
6,669
17,533
2,530
891
-
-
(4,999)
12,415
10,708
(4,054)
(5,502)
231
(330)
(8,462)
(6,967)
(2,701)
3,199
$ (134,828)
(4,769)
1,652
6,010
$ (98,684)
1,578
1,065
(382)
$ (76,037)
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Net cash used in operating activities was $134.8 million for the annual period ended December 31, 2020, and
consisted of a net loss of $125.0 million adjusted for non-cash items, including depreciation and amortization expense of
$10.6 million, share-based compensation expense of $21.8 million, fair value gain of derivative financial instruments of
$0.5 million, unrealized foreign exchange loss of $14.7 million, a change in deferred tax income of $16.4 million and a
decrease in unamortized deferred revenue of $33.6 million. Net cash used in operating activities also included unfavorable
changes in operating assets and liabilities of $6.5 million. These changes primarily related to a net increase in accounts
receivable and accrued income, prepaid expenses, and other current assets of $7.0 million and a net increase in accounts
payable, accrued expenses, other liabilities, and operating leases of $0.5 million.
Net cash used in operating activities was $98.7 million for the annual period ended December 31, 2019, and
consisted of a net loss of $124.2 million adjusted for non-cash items, including depreciation and amortization expense of
$6.7 million, share-based compensation expense of $17.5 million, fair value loss of derivative financial instruments of $2.5
million, unrealized foreign exchange loss of $0.9 million, and a decrease in unamortized deferred revenue of $5.0 million.
Net cash used in operating activities also included changes in operating assets and liabilities of $2.9 million. These changes
primarily related to a net increase in accounts receivable and accrued income, prepaid expenses, and other current assets of
$4.8 million and a net increase in accounts payable, accrued expenses, other liabilities, and operating leases of $7.7 million
primarily related to our clinical trials and facilities.
Net cash used in operating activities was $76.0 million for the annual period ended December 31, 2018, and
consisted of a net loss of $83.3 million adjusted for non-cash items, including depreciation and amortization expense of
$12.4 million, share-based compensation expense of $10.7 million, fair value gain of derivative financial instruments and
contingent consideration of $4.1 million, unrealized foreign exchange loss of $5.5 million, deferred tax of $0.2 million, an
increase in lease incentives of $0.3 million, and a decrease in unamortized deferred revenue of $8.5 million. Net cash used
in operating activities also included changes in operating assets and liabilities of $2.3 million net.
Net cash used in investing activities
In 2020, we used $9.5 million in our investing activities compared to $6.6 million in 2019 and $4.2 million in
2018.
Build out of Lexington site
Build out of Amsterdam site
Acquisition of licenses, patents and other rights
Total investments
2018
2020
Year ended December 31,
2019
(in thousands)
$ (2,737) $ (4,164) $ (1,596)
(1,487)
(788)
(1,861)
(996)
$ (9,484) $ (6,647) $ (4,245)
(4,534)
(2,213)
In 2020, we invested $2.7 million in our facility in Lexington compared to $4.2 million in 2019 and $1.6 million
in 2018. Our investments in 2019 primarily relate to improvements we made to the additional space rented from June 1,
2019.
In 2020, we invested $4.5 million in our facility in Amsterdam compared to $1.5 million in 2019 and $0.8 million
in 2018. Our investments in 2020 primarily relate to the construction of additional laboratories to support the expansion of
our preclinical activities.
Net cash generated from financing activities
We received net proceeds of $242.7 million associated with our public follow-on offering in September 2019 and
$138.4 million associated with our public follow-on offering in May 2018.
We received net proceeds of $0.5 million associated with the exercise of the Hercules warrants by Hercules in
February 2019.
We received net proceeds of $14.8 million associated with the 2018 Amended Facility in December 2018.
In 2020, we received $7.4 million from the exercise of options to purchase ordinary shares issued in accordance
with our share incentive plans, compared to $5.6 million in 2019 and $4.8 million in 2018.
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Funding requirements
We believe our cash and cash equivalents as of December 31, 2020, combined with the $100.0 million 2021
Amended Facility, will enable us to fund our operating expenses, including our debt repayment obligations, as they become
due and capital expenditure requirements into the second half of 2022. In the event that we receive the $450.0 million
payment due on the closing of the CSL Behring Agreement, we expect that our cash and cash equivalents would be
sufficient to fund operations into the second half of 2024 (assuming a full repayment of funds borrowed from Hercules
under our term loan facility by 2023). Our future capital requirements will depend on many factors, including but not
limited to:
● the closing of the transaction contemplated by the CSL Behring Agreement as well as achieving the milestones
and royalties as defined therein;
● the cost and timing of future commercialization activities, including product manufacturing, marketing, sales,
and distribution of any of our product candidates for which we receive marketing approval in the future;
● the amount and timing of revenue, if any, we receive from commercial sales of any product candidates for which
we, or our collaboration partner, receives marketing approval in the future;
● the scope, timing, results, and costs of our current and planned clinical trials, including those for etranacogene
dezaparvovec in hemophilia B and AMT-130 in Huntington’s disease;
● the scope, timing, results and costs of preclinical development and laboratory testing of our additional product
candidates;
● the need for additional resources and related recruitment costs to support the preclinical and clinical development
of our product candidates;
● the need for any additional tests, studies, or trials beyond those originally anticipated to confirm the safety or
efficacy of our product candidates and technologies;
● the cost, timing and outcome of regulatory reviews associated with our product candidates;
● our ability to enter into collaboration arrangements in the future;
● the costs and timing of preparing, filing, expanding, acquiring, licensing, maintaining, enforcing, and prosecuting
patents and patent applications, as well as defending any intellectual property-related claims;
● the repayments of the principal and other fees associated with our venture debt loan with Hercules, which
following the January 29, 2021 amendment will be due in June 2023;
● the extent to which we acquire or in-license other businesses, products, product candidates or technologies;
● the costs associated with maintaining quality compliance and optimizing our manufacturing processes, including
the operating costs associated with our Lexington, Massachusetts manufacturing facility;
● the costs associated with increasing the scale and capacity of our manufacturing capabilities; and
● the costs associated in preparing for the BLA submission of etranacogene dezaparvovec, including process
validation, inspection readiness and other regulatory expenses in the event that our collaboration and license
agreement with CSL Behring does not close.
Contractual obligations and commitments
The table below sets forth our contractual obligations and commercial commitments as of December 31, 2020,
that are expected to have an impact on liquidity and cash flows in future periods. The obligations to repay debt do not
reflect the extension of the interest-only period that we and Hercules agreed upon on January 29, 2021.
Less than 1
year
Between 1
and 3 years
Between 3
and 5 years
(in thousands)
Over 5 years
Total
Debt obligations (including $7.4
million interest payments)
Operating lease obligations
Total
$
$
3,141
5,637
8,778
$
$
39,271
11,566
50,837
$
$
— $
12,977
12,977
$
— $
29,192
29,192
$
42,412
59,372
101,784
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We have obligations to make future payments to third parties that become due and payable on the achievement of
certain development, regulatory and commercial milestones (such as the start of a clinical trial, filing of a Biologics
License Application, approval by the FDA or product launch). We have not included these commitments on our balance
sheet or in the table above because the achievement and timing of these milestones is not fixed and determinable. We will
also have obligations to make future payments that become due and payable if we collect the upfront payment or milestone
payments from CSL Behring. We have not included these commitments on our balance sheet or in the table above because
these payments only become due and payable upon the closing of the transaction with CSL Behring.
We enter into contracts in the normal course of business with CROs for preclinical research studies and clinical
trials, research supplies and other services and products for operating purposes. These contracts generally provide for
termination on notice, and therefore are cancelable contracts and not included in the table of contractual obligations and
commitments.
Off-Balance Sheet Arrangements
As of December 31, 2020, we did not have any off-balance sheet arrangement as defined in Item 303(a)(4) of
Regulation S-K.
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Item 7A. Quantitative and Qualitative Disclosures About Market Risk
We are exposed to a variety of financial risks in the normal course of our business, including market risk
(including currency, price, and interest rate risk), credit risk and liquidity risk. Our overall risk management program
focuses on preservation of capital and the unpredictability of financial markets and has sought to minimize potential
adverse effects on our financial performance and position.
Market Risk
Currency risk
We are exposed to foreign exchange risk arising from various currencies, primarily with respect to the U.S. dollar
and euro and to a lesser extent to the British pound. As our U.S. operating entity primarily conducts its operations in U.S.
dollars, its exposure to changes in foreign currency is insignificant.
Our Dutch entities hold significant amounts of U.S. dollars in cash and cash equivalents, have debt and interest
obligations to Hercules denominated in U.S. dollars, generate collaboration revenue denominated in U.S. dollars, receive
services from vendors denominated in U.S. dollars and occasionally British Pounds and fund the operations of our U.S.
operating entity in U.S. dollars. Foreign currency denominated account receivables and account payables are short-term in
nature (generally 30 to 45 days).
Variations in exchange rates will impact earnings and other comprehensive income. On December 31, 2020, if the
euro had weakened 10% against the U.S. dollar with all other variables held constant, pre-tax earnings for the year would
have been $13.0 million higher (December 31, 2019: $24.7 million higher), and other comprehensive income would have
been $5.2 million higher (December 31, 2019: $31.9 million lower). Conversely, if the euro had strengthened 10% against
the U.S. dollar with all other variables held constant, pre-tax earnings for the year would have been $13.0 million lower
(December 31, 2019: $24.7 million lower), and other comprehensive income would have been $8.3 million lower
(December 31, 2019: $31.8 million higher).
We strive to mitigate foreign exchange risk through holding sufficient funds in euro and dollars to finance
budgeted cash flows for the next year.
The sensitivity in other comprehensive income to fluctuations in exchange rates primarily relates to the translation
of the net assets of our Dutch entities from their functional currency euro into our reporting currency U.S. dollar.
Price risk
The market prices for the provision of preclinical and clinical materials and services, as well as external
contracted research, may vary over time.
The commercial prices of any of our products or product candidates are currently uncertain.
We are not exposed to commodity price risk.
We do not hold investments classified as available-for-sale or at fair value through profit or loss; therefore, we are
not exposed to equity securities price risk.
Interest rate risk
Our interest rate risk arises from short- and long-term debt. In June 2013, we entered into the Hercules
Agreement, which was last amended and restated in December 2018, under which our borrowings bear interest at a
variable rate with a fixed floor. Long-term debt issued at fixed rates expose us to fair value interest rate risk. As of
December 31, 2020, the loan bore an interest rate of 8.85%.
As of December 31, 2020, if interest rates on borrowings had been 1.0% higher with all other variables held
constant, pre-tax earnings for the year would have been $0.3 million (2019: $0.3 million; 2018: $0.2 million) lower.
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Credit Risk
Credit risk is managed on a consolidated basis. Credit risk arises from cash and cash equivalents and deposits with
banks and financial institutions, outstanding receivables and committed transactions with collaboration partners and
security deposits paid to landlords. We currently have no wholesale debtors other than BMS.
We deposited funds as security to our landlords related to our facility in Lexington, Massachusetts, and our facility
in Amsterdam. We also deposited funds to the provider of our U.S. corporate credit cards. The deposits are neither
impaired nor past due.
Our cash and cash equivalents include bank balances, demand deposits and other short-term highly liquid
investments (with maturities of less than three months at the time of purchase) that are readily convertible into a known
amount of cash and are subject to an insignificant risk of fluctuation in value. Restricted cash includes deposits made in
relation to facility leases. Cash, cash equivalents and restricted cash were placed at the following banks:
As of December 31,
2020
2019
Amount
Credit rating
Amount
Credit rating
Bank
Bank of America
Rabobank
Citizens Bank
Total
$
$
73,922
173,758
—
247,680
(in thousands)
Aa2
Aa3
-
$
$
315,720
63,262
1,744
380,726
Aa2
Aa3
A1
Ratings are by Moody’s.
Liquidity Risk
We believe our cash and cash equivalents as of December 31, 2020, combined with the $100.0 million 2021
Amended Facility will enable us to fund our operating expenses, including our debt repayment obligations, as they become
due and capital expenditure requirements into the second half of 2022. In the event that we receive the $450.0 million
payment due on the closing of the CSL Behring Agreement, we expect that our cash and cash equivalents will be sufficient
to fund operations into the second half of 2024 (assuming a full repayment of funds borrowed from Hercules under our
term loan facility by 2023). We manage liquidity through a rolling forecast of our liquidity reserve based on expected cash
flows and raise cash if needed, either through the issuance of shares or credit facilities.
The table below analyzes our financial liabilities in relevant maturity groupings based on the length of time until
the contractual maturity date, as of the balance sheet date. Disclosed in the table below are the contractual undiscounted
cash flows. Balances due within 12 months equal their carrying value as the impact of discounting is not significant.
At December 31, 2019
Long-term debt
Accounts payable, accrued expenses and
other current liabilities
Derivative financial instruments
Total
At December 31, 2020
Long-term debt
Accounts payable, accrued expenses and
other current liabilities
Derivative financial instruments
Total
$
$
$
$
Undefined
Less than
1 year
Between
1 - 3 years
(in thousands)
Between
3 - 5 years
Over 5 years
— $
4,119
$
28,143
$
14,269
$
—
18,138
3,075
3,075
$
—
$
22,257
—
—
$
28,143
—
—
$
14,269
— $
3,141
$
39,271
$
— $
—
21,810
2,645
2,645
$
—
$
24,951
—
—
$
39,271
—
—
— $
—
—
—
—
—
—
—
—
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Due to uncertainty of timing of exercise of warrants by BMS, the amount owed to derivative financial instruments
was classified as undefined in time as of December 31, 2019. We derecognized the warrants on December 1, 2020 when
these were terminated by the amended BMS CLA. On December 1, 2020 we recognized a derivative financial liability
related to the CoC-payment. Generally, the CoC-payment would be due to BMS upon the consummation of a change in
control transaction prior to November 30, 2026 or BMS’s delivery of cessation notices for all four active Collaboration
Targets. The derivative financial liability therefore has no contractual maturity date.
Item 8. Financial Statements and Supplementary Data
Our consolidated financial statements and the notes thereto, included in Part IV, Item 15, are incorporated by
reference into this Item 8.
Selected quarterly financial data (unaudited)
You should read the following tables presenting our unaudited quarterly results of operations in conjunction with
the consolidated financial statements and related notes contained elsewhere in this Annual Report on Form 10-K. We have
prepared this unaudited information on the same basis as our audited consolidated financial statements. Our quarterly
operating results have fluctuated in the past and may continue to do so in the future as a result of several factors, including,
but not limited to, the timing and nature of research and development activities.
Summarized quarterly information for the two fiscal years ended December 31, 2020 and 2019, respectively, is as
follows:
For the Quarter Ended
(unaudited)
December 31,
2020
September 30,
2020
June 30,
2020
March 31,
2020
(in thousands, except per share data)
Revenue
Net loss
Basic net loss per ordinary share
$ 34,086 $
1,789 $ 1,535 $
(699)
(0.02)
(53,775)
(1.21)
(42,551)
(0.96)
$
$
$
104
(27,999)
(0.63)
$
Note: basic net loss per ordinary share for the four quarters in 2020 does not equal the annual reported amount due
to rounding.
For the Quarter Ended
(unaudited)
December 31,
2019
September 30,
2019
June 30,
2019
March 31,
2019
(in thousands, except per share data)
Revenue
Net loss
Basic net loss per ordinary share
$
2,625 $
(41,426)
(0.95)
$
$
1,046 $ 2,474 $ 1,136
(27,772)
(0.74)
$
(31,399)
(0.83)
$
(23,604)
(0.58)
Note: basic net loss per ordinary share for the four quarters in 2019 does not equal the annual reported amount due
to rounding.
Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure
None.
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Item 9A. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our chief executive officer (“CEO”), who also serves as our chief
financial officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and
15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of December 31, 2020. Based
on such evaluation, our CEO has concluded that as of December 31, 2020, our disclosure controls and procedures were
effective.
Management’s Annual Report on Internal Control Over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial
reporting, as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. This rule defines internal control over
financial reporting as a process designed by, or under the supervision of, a company’s chief executive officer and chief
financial officer and effected by our board of directors, management and other personnel, to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements for external purposes in
accordance with generally accepted accounting principles and includes those policies and procedures that (1) pertain to the
maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets
of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of
financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the
company are being made only in accordance with authorizations of management and directors of the company; and
(3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition
of our assets that could have a material effect on the financial statements.
We assessed the effectiveness of our internal control over financial reporting as of December 31, 2020. This
assessment was performed under the direction and supervision of our CEO and based on criteria established in Internal
Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway
Commission (“COSO”). Our management’s assessment of the effectiveness of our internal control over financial reporting
included testing and evaluating the design and operating effectiveness of our internal controls. In our management’s
opinion, we have maintained effective internal control over financial reporting as of December 31, 2020, based on criteria
established in the COSO 2013 framework.
Our independent registered public accounting firm, which has audited the consolidated financial statements
included in this Annual Report on Form 10-K, has also issued an audit report on the effectiveness of our internal control
over financial reporting as of December 31, 2020. Their report is filed within this Annual Report on Form 10-K.
Inherent Limitations of Internal Controls
Our management, including our CEO, does not expect that our disclosure controls and procedures or our internal
controls will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide
only reasonable, not absolute, assurance that the objectives of the control system are met. Because of the inherent
limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and
instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that
judgments in decision-making can be faulty, and that breakdowns can occur because of a simple error or mistake.
Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or
by management override of the control. The design of any system of controls also is based in part upon certain assumptions
about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated
goals under all potential future conditions. Over time, controls may become inadequate because of changes in conditions,
or the degree of compliance with the policies or procedures may deteriorate. Projections of any evaluation of effectiveness
to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the
degree of compliance with the policies or procedures may deteriorate. Because of its inherent limitations, internal control
over financial reporting may not prevent or detect misstatements due to error or fraud.
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Changes in internal control over financial reporting
During the fourth quarter of 2020, there were no changes in our internal control over financial reporting (as defined
in Rule 13a-15(f) under the Exchange Act) that materially affected, or are reasonably likely to materially affect, our
internal control over financial reporting. We have not experienced any material impact to our internal controls over
financial reporting even though a large group of our employees are working remotely due to the COVID-19 pandemic. We
are continually monitoring and assessing the impact COVID-19 has on the operating effectiveness of our internal controls.
Item 9B. Other Information
None.
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Item 10. Directors, Executive Officers and Corporate Governance
Part III
The information required by this Item regarding our directors, executive directors and corporate governance is
incorporated into this section by reference to our Proxy Statement for our 2021 Annual Meeting of Shareholders or will be
included in an amendment to this Annual Report on Form 10-K.
Item 11. Executive Compensation
The information required by this Item regarding executive compensation is incorporated into this section by
reference to our Proxy Statement for our 2021 Annual Meeting of Shareholders or will be included in an amendment to this
Annual Report on Form 10-K.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
The information required by this Item regarding security ownership of certain beneficial owners, management and
related stockholder matters, our equity compensation plans and securities under our equity compensation plans, is
incorporated into this section by reference to our Proxy Statement for our 2021 Annual Meeting of Shareholders or will be
included in an amendment to this Annual Report on Form 10-K.
Item 13. Certain Relationships and Related Transactions, and Director Independence
The information required by this Item regarding certain relationships and related transactions and director
independence is incorporated into this section by reference to our Proxy Statement for our 2021 Annual Meeting of
Shareholders or will be included in an amendment to this Annual Report on Form 10-K.
Item 14. Principal Accounting Fees and Services
The information required by this Item regarding our principal accountant fees and services is incorporated into
this section by reference to our Proxy Statement for our 2021 Annual Meeting of Shareholders or will be included in an
amendment to this Annual Report on Form 10-K.
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Item 15. Exhibits, Financial Statements Schedules
Exhibits, Financial Statements Schedules
Part IV
(a)
Financial Statements. The following consolidated financial statements of uniQure N.V. are filed as part
of this report:
Report of Independent Registered Public Accounting Firm – KPMG Accountants N.V.
Report of Independent Registered Public Accounting Firm – PricewaterhouseCoopers Accountants N.V.
Consolidated Balance Sheets as of December 31, 2020 and 2019
Consolidated Statements of Operations and Comprehensive Loss for the Years Ended December 31, 2020, 2019
and 2018
Consolidated Statements of Shareholders’ Equity for the Years Ended December 31, 2020, 2019 and 2018
Consolidated Statements of Cash Flows for the Years Ended December 31, 2020, 2019 and 2018
Notes to Consolidated Financial Statements for the Years Ended December 31, 2020, 2019 and 2018
Page
113
116
117
118
119
120
121
(b)
(c)
Financial Statements Schedules. Financial Statement Schedules have been omitted because of the
absence of conditions under which they are required or because the required information, where material,
is shown in the financial statements or notes.
Other Exhibits. The Exhibit Index immediately preceding the signature page of this Annual Report on
Form 10-K is incorporated herein by reference.
Item 16. Form 10-K Summary
Not applicable.
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INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2020, 2019 AND 2018
Report of Independent Registered Public Accounting Firm – KPMG Accountants N.V.
Report of Independent Registered Public Accounting Firm – PricewaterhouseCoopers Accountants N.V.
Consolidated Balance Sheets as of December 31, 2020 and 2019
Consolidated Statements of Operations and Comprehensive Loss for the Years Ended December 31, 2020, 2019
and 2018
Consolidated Statements of Shareholders’ Equity for the Years Ended December 31, 2020, 2019 and 2018
Consolidated Statements of Cash Flows for the Years Ended December 31, 2020, 2019 and 2018
Notes to Consolidated Financial Statements
Page
113
116
117
118
119
120
121
112
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Report of Independent Registered Public Accounting Firm
To the Shareholders and Board of Directors
uniQure N.V.:
Opinions on the Consolidated Financial Statements and Internal Control Over Financial Reporting
We have audited the accompanying consolidated balance sheets of uniQure N.V. and subsidiaries (the Company)
as of December 31, 2020 and 2019, the related consolidated statements of operations and comprehensive loss,
shareholders’ equity, and cash flows for the years then ended, and the related notes (collectively, the consolidated financial
statements). We also have audited the Company’s internal control over financial reporting as of December 31, 2020, based
on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring
Organizations of the Treadway Commission.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the
financial position of the Company as of December 31, 2020 and 2019, and the results of its operations and its cash flows
for the years then ended, in conformity with U.S. generally accepted accounting principles. Also in our opinion, the
Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2020
based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring
Organizations of the Treadway Commission.
Change in Accounting Principle
As discussed in Note 6, to the consolidated financial statements, the Company changed its method of accounting
for leases as of January 1, 2019 due to the adoption of ASC 842, Leases.
Basis for Opinions
The Company’s management is responsible for these consolidated financial statements, for maintaining effective
internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial
reporting, included in the accompanying Management’s Annual Report on Internal Control Over Financial Reporting. Our
responsibility is to express an opinion on the Company’s consolidated financial statements and an opinion on the
Company’s internal control over financial reporting based on our audits. We are a public accounting firm registered with
the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with
respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the
Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and
perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material
misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained
in all material respects.
Our audits of the consolidated financial statements included performing procedures to assess the risks of material
misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that
respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and
disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and
significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial
statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control
over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and
operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other
procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our
opinions.
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Definition and Limitations of Internal Control Over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements for external purposes in
accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes
those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly
reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are
recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting
principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of
management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection
of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial
statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect
misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls
may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures
may deteriorate.
Critical Audit Matters
The critical audit matter communicated below is a matter arising from the current period audit of the consolidated
financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to
accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially
challenging, subjective, or complex judgments. The communication of a critical audit matter does not alter in any way our
opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit
matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Assessment of the satisfaction of the license revenue performance obligation within the BMS collaboration and license
agreement
As discussed in Notes 2.3.18 and 3 to the consolidated financial statements, uniQure biopharma B.V., a subsidiary
of uniQure N.V. (the Company) entered into an amended collaboration and license agreement (CLA) with Bristol-Myers
Squibb Company (BMS) on December 1, 2020. Based on the terms of the amended agreement, the Company determined
that it materially satisfied its performance obligation in relation to the license revenue as of December 1, 2020, and as such
recorded the residual balance of unrecognized license revenue of $27.8 million in profit and loss as license revenues from
related party.
We identified the assessment of the satisfaction of the license revenue performance obligation as a critical audit
matter. A high degree of subjective, complex auditor judgement was required in assessing if the remaining rights of the
license revenue performance obligation were materially satisfied as of December 1, 2020.
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The following are the primary procedures we performed to address this critical audit matter:
- We evaluated the design and tested the operating effectiveness of an internal control related to the evaluation of
the performance obligation and when it was materially satisfied.
- In order to assess that the remaining rights of the license revenue performance obligation were materially
satisfied, we examined the amended collaboration and license agreement between the Company and BMS.
- In order to assess the satisfaction of the performance obligation, we examined minutes of joint steering committee
meetings between the Company and BMS, evaluated the services delivered and performed interviews with the Company’s
finance and business operations department.
/s/ KPMG Accountants N.V.
We have served as the Company’s auditor since 2019.
Amstelveen, The Netherlands
March 1, 2021
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Report of Independent Registered Public Accounting Firm
To the Management Board and Shareholders of uniQure N.V.:
Opinion on the Financial Statements
We have audited the consolidated statements of operations and comprehensive loss, of shareholders’ equity and of
cash flows of uniQure N.V. and its subsidiaries (the “Company”) for the year ended December 31, 2018, including the
related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial
statements present fairly, in all material respects, the results of operations and cash flows of the Company for the year
ended December 31, 2018 in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These consolidated financial statements are the responsibility of the Company's management. Our responsibility is
to express an opinion on the Company’s consolidated financial statements based on our audit. We are a public accounting
firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be
independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and
regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit of these consolidated financial statements in accordance with the standards of the PCAOB.
Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated
financial statements are free of material misstatement, whether due to error or fraud.
Our audit included performing procedures to assess the risks of material misstatement of the consolidated financial
statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included
examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our
audit also included evaluating the accounting principles used and significant estimates made by management, as well as
evaluating the overall presentation of the consolidated financial statements. We believe that our audit provides a reasonable
basis for our opinion.
/s/ R.M.N. Admiraal RA
PricewaterhouseCoopers Accountants N.V.
Amsterdam, the Netherlands
February 28, 2019
We served as the Company's auditor from 2006 to 2019.
116
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uniQure N.V.
CONSOLIDATED BALANCE SHEETS
December 31,
2020
December 31,
2019
(in thousands, except share and per share amounts)
Current assets
Cash and cash equivalents
Accounts receivables
Accounts receivable from related party
Prepaid expenses
Other current assets
Total current assets
Non-current assets
Property, plant and equipment, net
Operating lease right-of-use assets
Intangible assets, net
Goodwill
Restricted cash
Deferred tax asset
Total non-current assets
Total assets
Current liabilities
Accounts payable
Accrued expenses and other current liabilities
Current portion of operating lease liabilities
Current portion of deferred revenue
Total current liabilities
Non-current liabilities
Long-term debt
Operating lease liabilities, net of current portion
Deferred revenue, net of current portion
Derivative financial instruments related party
Other non-current liabilities
Total non-current liabilities
Total liabilities
Commitments and contingencies
Shareholders' equity
Ordinary shares, €0.05 par value: 60,000,000 shares authorized at
December 31, 2020 and December 31, 2019 and 44,777,799 and
43,711,954 ordinary shares issued and outstanding at December 31, 2020
and December 31, 2019, respectively
Additional paid-in-capital
Accumulated other comprehensive income / (loss)
Accumulated deficit
Total shareholders' equity
Total liabilities and shareholders' equity
$
$
$
$
$
$
$
244,932
6,618
—
4,337
3,024
258,911
32,328
26,086
3,361
542
2,748
16,419
81,484
340,395
3,772
18,038
5,524
—
27,334
35,617
30,403
—
—
3,136
69,156
96,490
377,793
—
947
4,718
748
384,206
28,771
26,797
5,427
496
2,933
—
64,424
448,630
5,681
12,457
5,865
7,627
31,630
36,062
31,133
23,138
3,075
534
93,942
125,572
2,711
1,016,018
9,907
(784,731)
243,905
340,395
$
2,651
986,803
(6,689)
(659,707)
323,058
448,630
The accompanying notes are an integral part of these consolidated financial statements.
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CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
uniQure N.V.
Year ended December 31,
2019
(in thousands, except share and per share amounts)
2018
2020
License revenues
License revenues from related party
Collaboration revenues
Collaboration revenues from related party
Total revenues
Operating expenses:
Research and development expenses
Selling, general and administrative expenses
Total operating expenses
Other income
Other expense
Loss from operations
Interest income
Interest expense
Foreign currency (losses) / gains, net
Other non-operating gains / (losses), net
Loss before income tax income / (expense)
Income tax income / (expense)
Net loss
Other comprehensive income / (loss):
Foreign currency translation adjustments net of tax impact of nil for the
year ended December 31, 2020 (2019: nil and 2018: $(0.2) million)
Total comprehensive loss
Basic and diluted net loss per ordinary share
Weighted average shares used in computing basic and diluted net loss
per ordinary share
$
$
$
$
4,352
32,967
59
136
37,514
(122,400)
(42,580)
(164,980)
3,342
(1,302)
(125,426)
938
(3,825)
(13,613)
483
(141,443) $
16,419
(125,024) $
—
4,988
—
2,293
7,281
(94,737)
(33,544)
(128,281)
1,888
(2,028)
(121,140)
3,547
(3,810)
(268)
(2,530)
(124,201)
—
(124,201)
16,596
(108,428) $
570
(123,631)
(2.81) $
(3.11)
$
$
$
$
—
7,528
—
3,756
11,284
(74,809)
(25,305)
(100,114)
2,146
(1,548)
(88,232)
2,729
(2,160)
4,382
208
(83,073)
(231)
(83,304)
(5,261)
(88,565)
(2.34)
44,466,365
39,999,450
35,639,745
The accompanying notes are an integral part of these consolidated financial statements.
118
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uniQure N.V.
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
Ordinary shares
No. of shares Amount
31,339,040
$ 1,947
(loss)/income
(in thousands, except share data)
$
$
566,530
(3,800) $ (475,318) $
deficit
Additional
paid-in
capital
Accumulated
other
comprehensive Accumulated
Total
shareholders’
equity
89,359
24,918
(83,304)
(5,261)
138,361
4,760
23,116
(83,304)
—
—
—
1,802
—
(5,261)
—
—
—
—
—
—
—
10,708
—
—
65
(7,259) $ (535,506) $ 179,606
(124,201)
(124,201)
—
570
242,674
—
1,273
—
5,235
—
—
570
—
—
—
—
—
—
—
—
17,533
—
—
368
(6,689) $ (659,707) $ 323,058
(125,024)
(125,024)
16,596
—
7,198
—
—
16,596
—
—
—
—
5,175,000
425,074
409,948
—
—
—
—
309
19
24
—
2,591
37,351,653
—
—
5,625,000
37,175
453,232
—
$ 2,299
—
—
311
2
25
235,692
—
14
—
9,202
43,711,954
—
—
498,678
—
$ 2,651
—
—
29
$
$
—
—
—
138,052
4,741
(24)
10,708
65
720,072
—
—
242,363
1,271
5,210
(14)
17,533
368
986,803
—
—
7,169
$
$
Balance at December 31, 2017
Cumulative effect of retroactive
implementation of ASC 606 Revenue
recognition
Loss for the period
Other comprehensive loss
Follow-on public offering
Exercises of share options
Restricted and performance share units
distributed during the period
Share-based compensation expense
Issuance of ordinary shares relating to
employee stock purchase plan
Balance at December 31, 2018
Loss for the period
Other comprehensive income
Follow-on public offering
Hercules warrants exercise
Exercise of share options
Restricted and performance share units
distributed during the period
Share-based compensation expense
Issuance of ordinary shares relating to
employee stock purchase plan
Balance at December 31, 2019
Loss for the period
Other comprehensive income
Exercise of share options
Restricted and performance share units
distributed during the period
Share-based compensation expense
Issuance of ordinary shares relating to
employee stock purchase plan
Balance at December 31, 2020
560,986
—
31
—
(31)
21,831
—
—
—
—
—
21,831
6,181
44,777,799
—
$ 2,711
246
$ 1,016,018
$
—
9,907
—
246
$ (784,731) $ 243,905
The accompanying notes are an integral part of these consolidated financial statements
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uniQure N.V.
CONSOLIDATED STATEMENTS OF CASH FLOWS
Cash flows from operating activities
Net loss
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation, amortization, and impairment losses
Share-based compensation expense
Change in fair value of derivative financial instruments and contingent
consideration
Unrealized foreign exchange losses / (gains)
Deferred tax (income) / expense
Change in lease incentives
Change in deferred revenue
Changes in operating assets and liabilities:
Accounts receivable and accrued income, prepaid expenses, and other current
assets
Accounts payable
Accrued expenses, other liabilities, and operating leases
Net cash used in operating activities
Cash flows from investing activities
Purchases of intangible assets
Purchases of property, plant, and equipment
Net cash used in investing activities
Cash flows from financing activities
Proceeds from issuance of shares related to employee stock option and purchase
plans
Proceeds from public offering of shares, net of issuance costs
Proceeds from loan increment
Proceeds from exercise of warrants
Net cash generated from financing activities
Currency effect on cash, cash equivalents and restricted cash
Net (decrease) / increase in cash, cash equivalents and restricted cash
Cash, cash equivalents and restricted cash at beginning of period
Cash, cash equivalents and restricted cash at the end of period
Cash and cash equivalents
Restricted cash related to leasehold and other deposits
Total cash, cash equivalents and restricted cash
Supplemental cash flow disclosures:
Cash paid for interest
Non-cash increase / (decrease) in accounts payables and accrued expenses and
other current liabilities related to purchases of intangible assets and property,
plant, and equipment
2020
Year ended December 31,
2019
(in thousands)
2018
$ (125,024)
$ (124,201)
$ (83,304)
10,648
21,831
(483)
14,730
(16,419)
-
(33,642)
(6,967)
(2,701)
3,199
(134,828)
(2,213)
(7,271)
(9,484)
6,669
17,533
2,530
891
-
-
(4,999)
(4,769)
1,652
6,010
(98,684)
(996)
(5,651)
(6,647)
12,415
10,708
(4,054)
(5,502)
231
(330)
(8,462)
1,578
1,065
(382)
(76,037)
(1,861)
(2,384)
(4,245)
7,444
-
-
-
7,444
3,822
(133,046)
380,726
$ 247,680
$ 244,932
2,748
$ 247,680
5,603
242,718
-
500
248,821
(106)
143,384
237,342
$ 380,726
$ 377,793
2,933
$ 380,726
4,825
138,361
14,775
-
157,961
(2,187)
75,491
161,851
$ 237,342
$ 234,898
2,444
$ 237,342
$
$
(4,131)
$
(3,117)
$
(2,141)
630
$
313
$
(48)
The accompanying notes are an integral part of these consolidated financial statements.
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uniQure N.V.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1.
General business information
uniQure (the “Company”) was incorporated on January 9, 2012 as a private company with limited liability
(besloten vennootschap met beperkte aansprakelijkheid) under the laws of the Netherlands. The Company is a leader in the
field of gene therapy and seeks to deliver to patients suffering from rare and other devastating diseases single treatments
with potentially curative results. The Company’s business was founded in 1998 and was initially operated through its
predecessor company, Amsterdam Molecular Therapeutics Holding N.V (“AMT”). In 2012, AMT undertook a corporate
reorganization, pursuant to which uniQure B.V. acquired the entire business and assets of AMT and completed a share-for-
share exchange with the shareholders of AMT. Effective February 10, 2014, in connection with its initial public offering,
the Company converted into a public company with limited liability (naamloze vennootschap) and changed its legal name
from uniQure B.V. to uniQure N.V.
The Company is registered in the trade register of the Dutch Chamber of Commerce (Kamer van Koophandel)
under number 54385229. The Company’s headquarters are in Amsterdam, the Netherlands, and its registered office is
located at Paasheuvelweg 25a, Amsterdam 1105 BP, the Netherlands and its telephone number is +31 20 240 6000. The
Company’s website address is www.uniqure.com.
The Company’s ordinary shares are listed on the Nasdaq Global Select Market and trades under the symbol
“QURE”.
2.
Summary of significant accounting policies
2.1 Basis of preparation
The Company prepared its consolidated financial statements in compliance with generally accepted accounting
principles in the United States (“U.S. GAAP”). Any reference in these notes to applicable guidance is meant to refer to
authoritative U.S. GAAP as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Update
(“ASU”) of the Financial Accounting Standards Board (“FASB”).
The consolidated financial statements have been prepared under the historical cost convention, except for
derivative financial instruments and contingent consideration, which are recorded at fair value through profit or loss.
The consolidated financial statements are presented in U.S. dollars, except where otherwise indicated.
Transactions denominated in currencies other than U.S. dollars are presented in the transaction currency with the U.S.
dollar amount included in parenthesis, converted at the foreign exchange rate as of the transaction date.
The consolidated financial statements presented have been prepared on a going concern basis based on the
Company’s cash and cash equivalents as of December 31, 2020 and the Company’s budgeted cash flows for the twelve
months following the issuance date.
2.2 Use of estimates
The preparation of consolidated financial statements, in conformity with U.S. GAAP and Securities and Exchange
Commission (“SEC”) rules and regulations, requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the consolidated
financial statements and reported amounts of revenues and expenses during the reporting period. Estimates and
assumptions are primarily made in relation to the treatment of the commercialization and license agreement entered into
between the Company and CSL Behring LLC (“CSL Behring Agreement”), the December 1, 2020, amendment (“amended
BMS CLA”) of the 2015 collaboration and license agreement (“BMS CLA”) between the Company and Bristol-Myers
Squibb (“BMS”), share-based payments, valuation allowances for deferred tax assets, and accounting for operating leases
under ASC 842. If actual results differ from the Company’s estimates, or to the extent these estimates are adjusted in future
periods, the Company’s results of operations could either benefit from, or be adversely affected by, any such change in
estimate.
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2.3 Accounting policies
The principal accounting policies applied in the preparation of these consolidated financial statements are set out
below. These policies have been consistently applied to all the years presented, unless otherwise stated.
2.3.1 Consolidation
The consolidated financial statements comprise the financial statements of the Company and its subsidiaries.
Subsidiaries are all entities over which the Company has a controlling financial interest either through variable interest or
through voting interest. Currently, the Company has no involvement with variable interest entities.
Inter-company transactions, balances, income, and expenses on transactions between uniQure entities are
eliminated in consolidation. Profits and losses resulting from inter-company transactions that are recognized in assets are
also eliminated. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the
policies adopted by the Company.
2.3.2 Current versus non-current classification
The Company presents assets and liabilities in the consolidated balance sheets based on current and non-current
classification.
The term current assets is used to designate cash and other assets, or resources commonly identified as those that
are reasonably expected to be realized in cash or sold or consumed during the normal operating cycle of the business. The
Company’s normal operating cycle is twelve months. All other assets are classified as non-current.
The term current liabilities is used principally to designate obligations whose liquidation is reasonably expected to
require the use of existing resources properly classifiable as current assets, or the creation of other current liabilities.
Current liabilities are expected to be settled in the normal operating cycle. The Company classifies all other liabilities as
non-current.
Deferred tax assets and liabilities are classified as non-current assets and liabilities, if any.
2.3.3 Foreign currency translation
The functional currency of the Company and each of its entities (except for uniQure Inc.) is the euro (€). This
represents the currency of the primary economic environment in which the entities operate. The functional currency of
uniQure Inc. is the U.S. dollar ($). The consolidated financial statements are presented in U.S. dollars.
Foreign currency transactions are measured and recorded in the functional currency using the exchange rates
prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such
transactions and from the re-measurement of monetary assets and liabilities denominated in foreign currencies at exchange
rates prevailing at balance sheet date are recognized in profit and loss.
Upon consolidation, the assets and liabilities of foreign operations are translated into the functional currency of
the shareholding entity at the exchange rates prevailing at the balance sheet date; items of income and expense are
translated at monthly average exchange rates. The consolidated assets and liabilities are translated from uniQure N.V.’s
functional currency, euro, into the reporting currency U.S. dollar at the exchange rates prevailing at the balance sheet date;
items of income and expense are translated at monthly average exchange rates. Issued capital and additional paid-in capital
are translated at historical rates with differences to the balance sheet date rate recorded as translation adjustments in other
comprehensive income / loss. The exchange differences arising on translation for consolidation are recognized in
“accumulated other comprehensive income / loss”. On disposal of a foreign operation, the component of other
comprehensive income / loss relating to that foreign operation is recognized in profit or loss.
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2.3.4 Fair value measurement
The Company measures certain assets and liabilities at fair value, either upon initial recognition or for subsequent
accounting or reporting. ASC 820, Fair Value Measurements and Disclosures requires disclosure of methodologies used in
determining the reported fair values and establishes a hierarchy of inputs used when available. The three levels of the fair
value hierarchy are described below:
● Level 1 - Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities that
the Company can access at the measurement date.
● Level 2 - Valuations based on quoted prices for similar assets or liabilities in markets that are not active or
models for which the inputs are observable, either directly or indirectly.
● Level 3 - Valuations that require inputs that reflect the Company’s own assumptions that are both significant
to the fair value measurement and are unobservable.
To the extent that valuation is based on models or inputs that are less observable or unobservable in the market,
the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised by the Company in
determining fair value is greatest for instruments categorized as Level 3. A financial instrument’s level within the fair value
hierarchy is based on the lowest level of any input that is significant to the fair value measurement.
Items measured at fair value on a recurring basis include financial instruments and contingent consideration (Note
4, “Fair value measurement”). The carrying amount of cash and cash equivalents, accounts receivable from collaborators,
prepaid expenses, other assets, accounts payable, accrued expenses and other current liabilities reflected in the consolidated
balance sheets approximate their fair values due to their short-term maturities.
2.3.5 Notes to the consolidated statements of cash flows
The consolidated statements of cash flows have been prepared using the indirect method. The cash disclosed in
the consolidated statements of cash flows is comprised of cash and cash equivalents. Cash and cash equivalents include
bank balances, demand deposits and other short-term highly liquid investments (with maturities of less than three months at
the time of purchase) that are readily convertible into a known amount of cash and are subject to an insignificant risk of
fluctuation in value.
Cash flows denominated in foreign currencies have been translated at the average exchange rates. Exchange
differences, if any, affecting cash and cash equivalents are shown separately in the consolidated statements of cash flows.
Interest paid and received, and income taxes are included in net cash (used in) provided by operating activities.
2.3.6 Segment information
Operating segments are identified as a component of an enterprise for which separate discrete financial
information is available for evaluation by the chief operating decision maker, or decision-making group, in making
decisions on how to allocate resources and assess performance. The Company views its operations and manages its
business as one operating segment, which comprises the discovery, development, and commercialization of innovative
gene therapies.
2.3.7 Net loss per share
The Company follows the provisions of ASC 260, Earnings Per Share. In accordance with these provisions, loss
per share is calculated by dividing net loss by the weighted average number of ordinary shares outstanding during the
period.
Diluted net loss per share reflects the dilution that would occur if share options or warrants to issue ordinary
shares were exercised, or performance or restricted share units were distributed. However, potential ordinary shares are
excluded if their effect is anti-dilutive. The Company currently has no dilutive securities due to the net loss position and as
such, basic and diluted net loss per share are the same for the periods presented.
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2.3.8 Impairment of long-lived assets
Long-lived assets, which include property, plant, and equipment and finite-lived intangible assets, are reviewed
for impairment whenever events or changes in circumstances indicate that the carrying value of an asset or asset group may
not be recoverable. Right-of-use assets are also reviewed for impairment in accordance with ASC 360. The recoverability
of the carrying value of an asset or asset group depends on the successful execution of the Company’s business initiatives
and its ability to earn sufficient returns on approved products and product candidates. When such events or changes in
circumstances occur, the Company assesses recoverability by determining whether the carrying value of such assets will be
recovered through the undiscounted expected future cash flows. If the future undiscounted cash flows are less than the
carrying amount of these assets, the Company recognizes an impairment loss based on the excess of the carrying value over
the fair value of the assets. Fair value is determined through various valuation techniques, including discounted cash flow
models, quoted market values, and third-party independent appraisals, as considered necessary.
Goodwill is not amortized but is evaluated for impairment within the Company’s single reporting unit on an
annual basis, during the fourth quarter, or more frequently if an event occurs or circumstances change that would more-
likely-than-not reduce the fair value of the Company’s reporting unit below its carrying amount. The Company performs
the same quantitative analysis discussed above for long-lived assets and finite-lived intangible assets.
2.3.9 Property, plant, and equipment
Property, plant, and equipment is comprised mainly of laboratory equipment, leasehold improvements,
construction-in-progress (“CIP”) and office equipment. All property, plant and equipment is stated at cost less accumulated
depreciation. CIP consists of capitalized expenses associated with construction of assets not yet placed into service.
Depreciation commences on CIP once the asset is placed into service based on its useful life determined at that time.
Maintenance and repairs that do not improve or extend the lives of the respective assets are expensed as incurred.
Upon disposal, the related cost and accumulated depreciation is removed from the accounts and any resulting gain or loss
on the transaction is recognized in the consolidated statements of operations and comprehensive loss.
Depreciation is calculated using the straight-line method over the estimated useful lives of the assets (or in the
case of leasehold improvements a shorter lease term), which are as follows:
· Leasehold improvements
· Laboratory equipment
· Office equipment
Between 10 – 15 years
5 years
Between 3 – 5 years
2.3.10 Leases
The Company adopted ASC 842 using the modified retrospective approach with an effective date as of the
beginning of the Company’s fiscal year, January 1, 2019, to operating leases that existed on that date. Comparative
financial information related to profit and loss and cash flows for the twelve-month period ended December 31, 2018, was
not recast under the new standard, and continues to be presented under ASC 840.
The Company measured lease liabilities at the present value of the future lease payments as of January 1, 2019.
The Company used an incremental borrowing rate to discount the lease payments. The Company derived the discount rate,
adjusted for differences such as in the term and payment patterns, from the Company’s loan from Hercules Technology
Growth Capital, Inc (“Hercules Capital”), which was refinanced immediately prior to the January 1, 2019 adoption date in
December 2018. The right-of-use asset is valued at the amount of the lease liability reduced by the remaining December
31, 2018 balance of lease incentives received. The lease liability is subsequently measured at the present value of the future
lease payments as of the reporting date with a corresponding adjustment to the right-to-use asset. Absent a lease
modification, the Company will continue to utilize the January 1, 2019, incremental borrowing rate.
The Company recognizes lease cost on a straight-line basis and presents these costs as operating expenses within
the Consolidated statements of operations and comprehensive loss. The Company presents lease payments and landlord
incentive payments within cash flows from operations within the Consolidated statements of cash flows.
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The financial results for the years ended December 31, 2020 and 2019 are presented in accordance with ASC 842,
while the financial results for the year ended December 31, 2018 are presented in accordance with the Company’s
historical accounting policy based on ASC 840.
2.3.11 Other (non) current assets
Deposits paid are either presented as other current assets or as other non-current assets based on duration of the
underlying contractual arrangement. Deposits are classified as restricted cash and primarily relate to facility leases.
Contract assets are presented in other current assets or as other non-current assets based on the timing of the right
to consideration.
2.3.12 Prepaid expenses
Prepaid expenses are amounts paid in the period, for which the benefit has not been realized, and include
payments made for insurance and research and clinical contracts. The related expense will be recognized in the subsequent
period as incurred.
2.3.13 Accounts receivable
Accounts receivables include amounts due from services provided to the Company’s collaboration partner as well
as unconditional rights to consideration from its collaboration partners.
2.3.14 Accounts payable and accrued expenses
Accounts payables are invoiced amounts related to obligations to pay for goods or services that have been
acquired in the ordinary course of business from suppliers. Accounts payables are recognized at the amounts invoiced by
suppliers.
Accrued expenses are recognized for goods or services that have been acquired in the ordinary course of business.
Contract liabilities are presented in accounts payable and accrued expenses.
2.3.15 Long-term debt
Long-term debt is initially recognized at cost and presented net of original issue discount or premium and debt
issuance costs on the consolidated balance sheets. Amortization of debt discount and debt issuance costs is recognized as
interest expense in profit and loss over the period of the debt, using the effective interest rate method.
2.3.16 Pensions and other post-retirement benefit plans
The Company has a defined contribution pension plan for all employees at its Amsterdam facility in the
Netherlands, which is funded by the Company through payments to an insurance company, with individual accounts for
each participants’ assets. The Company has no legal or constructive obligation to pay further contributions if the plan does
not hold sufficient assets to pay all employees the benefits relating to services rendered in the current and prior periods.
The contributions are expensed as incurred. Prepaid contributions are recognized as an asset to the extent that a cash refund
or a reduction in the future payments is available.
Starting in 2016, the Company adopted a qualified 401(k) Plan for all employees at its Lexington facility in the
USA, which offers both a pre-tax and post-tax (Roth) component. Employees may contribute up to 50% of their pre-tax
compensation, which is subject to IRS statutory limits for each calendar year. The Company matches $0.50 for every $1.00
contributed to the plan by participants up to 6% of base compensation. Employer contributions are recognized as they are
contributed, as long as the employee is rendering services in that period. If employer contributions are made in periods
after an individual retires or terminates, the estimated cost is accrued during the employee’s service period.
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2.3.17 Share-based compensation
The Company accounts for its share-based compensation awards in accordance with ASC 718, Compensation-
Stock Compensation.
All the Company’s share-based compensation plans for employees are equity-classified.
ASC 718 requires all share-based compensation to employees, including grants of employee options, restricted
share units, performance share units and modifications to existing instruments, to be recognized in the consolidated
statements of operations and comprehensive loss based on their grant-date fair values, net of an estimated forfeiture rate,
over the requisite service period. Forfeitures of employee options are recognized as they occur. The requirements of ASC
718 are also applied to nonemployee share-based payment transactions except for specific guidance on certain inputs to an
option-pricing model and the attribution of cost.
The Company uses a Hull & White option model to determine the fair value of option awards. The model captures
early exercises by assuming that the likelihood of exercises will increase when the share-price reaches defined multiples of
the strike price. This analysis is performed over the full contractual term.
2.3.18 Revenue recognition
The Company primarily generates revenue from its collaboration, research, and license agreements with its
collaboration partner BMS for the development and commercialization of product candidates. The Company initially
entered into these agreements in 2015 and amended them in 2020.
On January 1, 2018, the Company adopted new revenue recognition policies in accordance with ASC 606 using
the modified retrospective approach. The Company evaluated the initial BMS CLA and determined that its performance
obligations were as follows:
● Providing pre-clinical research activities (“Collaboration Revenue”);
● Providing clinical and commercial manufacturing services for products (“Manufacturing Revenue”); and
● Providing access to its technology and know-how in the field of gene therapy as well as actively contributing
to the target selection, the collaboration as a whole, the development during the target selection, the pre-
clinical and the clinical phase through participating in joint steering committee and other governing bodies
(“License Revenue”).
As further discussed in Note 3, “Collaboration arrangements and concentration of credit risk”, as a result of the
December 2020 amended BMS CLA, the Company’s performance obligation related to License Revenues was materially
completed as of the date of the amendment effective date of December 1, 2020. The Company may still be required to
provide pre-clinical research activities or clinical and commercial manufacturing services when BMS exercises its options
for those services.
License Revenue
Until the December 2020 amendment of the BMS CLA the Company recognized License Revenue over the
expected performance period based on its measure of progress towards the completion of certain activities related to its
services. Following the December 2020 amendment of the BMS CLA the Company’s performance was materially
completed and it had satisfied its performance obligation (see Note 3, “Collaboration arrangements and concentration of
credit risk”, for a detailed discussion).
Collaboration and Manufacturing Revenue
The Company recognizes Collaboration Revenues associated to optional work orders it receives from BMS to
provide analytical development and process development activities that are reimbursable by BMS in accordance with the
BMS CLA as well as the amended BMS CLA.
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BMS and the Company entered into a Master Clinical Supply Agreement in April 2017 for the Company to
supply gene therapy products during the clinical phase as well as into a binding term sheet to supply gene therapy products
during the commercial phase to BMS. In December 2020, BMS and the Company also entered into a Research Supply
Agreement. Revenues from product sales will be recognized when earned. The Company will provide these services as it
receives optional work orders from BMS in relation to such services.
2.3.19 Other income, other expense
The Company receives certain government and regional grants, which support its research efforts in defined
projects, and include contributions towards the cost of research and development. These grants generally provide for
reimbursement of approved costs incurred as defined in the respective grants and are deferred and recognized in the
statements of operations and comprehensive loss over the period necessary to match them with the costs they are intended
to compensate, when it is probable that the Company has complied with any conditions attached to the grant and will
receive the reimbursement.
The Company’s other income also consists of income from the subleasing of the Amsterdam facility while other
expense consists of expenses incurred in relation to the subleasing income.
2.3.20 Research and development expenses
Research and development costs are expensed as incurred. Research and development expenses generally consist
of laboratory research, clinical trials, statistical analysis, and report writing, regulatory compliance costs incurred with
clinical research organizations and other third-party vendors (including post-approval commitments to conduct consistency
and comparability studies). In addition, research and development expenses consist of start-up and validation costs related
to the Company’s Lexington facility and the development and improvement of the Company’s manufacturing processes
and methods. Furthermore, research and development costs include costs of materials and costs of intangible assets
purchased from others for use in research and development activities. The costs of intangibles that are purchased from
others for a particular research and development project and that have no alternative future uses (in other research and
development projects or otherwise) are expensed as research and development costs at the time the costs are incurred or at
the time when no alternative future use is identified.
2.3.21 Income taxes
Income taxes are recorded in accordance with ASC 740, Income Taxes, which provides for deferred taxes using an
asset and liability approach. The Company recognizes deferred tax assets and liabilities for the expected future tax
consequences of events that have been included in the financial statements or tax returns. Deferred tax assets and liabilities
are determined based on the difference between the financial statement carrying amount and the tax bases of assets and
liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Valuation
allowances are provided, if based upon the weight of available evidence, it is more-likely-than-not that some or all the
deferred tax assets will not be realized.
The benefits of tax positions are recognized only if those positions are more likely than not, based on the technical
merits, to be sustained upon examination. Recognized tax positions are measured at the largest amount of tax benefit that is
greater than 50 percent likely of being realized upon settlement. The determination as to whether the tax benefit will more-
likely-than-not be realized is based upon the technical merits of the tax position as well as consideration of the available
facts and circumstances. As of December 31, 2020, and 2019, the Company did not have any significant unrecognized tax
benefits.
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2.3.22 Recently Adopted Accounting Pronouncements
ASU 2018-13: Fair Value Measurement
In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820) which modifies the
disclosure requirements on fair value measurements. ASU 2018-13 is effective for fiscal years beginning after December
15, 2019, which for the Company was January 1, 2020. The new disclosure requirements for changes in unrealized gains
and losses in other comprehensive income for recurring Level 3 measurements, the range and weighted average of
significant unobservable inputs and the amended requirements for the narrative description of measurement uncertainty
should be applied prospectively for only the most recent interim or annual period presented in the initial fiscal year of
adoption. All other amendments should be applied retrospectively. ASU 2018-13 did not have a material impact on the
Company’s consolidated financial statements.
Recent Accounting Pronouncements Not Yet Effective
None.
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3. Collaboration arrangements and concentration of credit risk
CSL Behring collaboration
On June 24, 2020, uniQure biopharma B.V., a wholly-owned subsidiary of uniQure N.V., entered into the CSL
Behring Agreement with CSL Behring LLC, (“CSL Behring”), pursuant to which CSL Behring will receive exclusive
global rights to etranacogene dezaparvovec, the Company’s investigational gene therapy for patients with hemophilia B,
(the “Product”).
Under the terms of the CSL Behring Agreement, the Company will receive a $450.0 million upfront cash payment
upon the closing of the CSL Behring Agreement and be eligible to receive up to $1.6 billion in additional payments based
on regulatory and commercial milestones. The CSL Behring Agreement also provides that the Company will be eligible to
receive tiered double-digit royalties in a range of up to a low-twenties percent of net sales of the Product based on sales
thresholds.
Pursuant to the CSL Behring Agreement, the Company will be responsible for the completion of the HOPE-B
clinical trial, manufacturing process validation, and the manufacturing supply of the Product until such time that these
capabilities may be transferred to CSL Behring or its designated contract manufacturing organization. Concurrently with
the execution of the CSL Behring Agreement, the Company and CSL Behring entered into a development and commercial
supply agreement, pursuant to which, among other things, the Company will supply the Product to CSL Behring at an
agreed-upon price. Clinical development and regulatory activities performed by the Company pursuant to the CSL Behring
Agreement will be reimbursed by CSL Behring. CSL Behring will be responsible for global regulatory submissions and
commercialization requirements for the Product.
The effectiveness of the transactions contemplated by the CSL Behring Agreement is contingent on completion of
review under antitrust laws in the United States, Australia, and the United Kingdom, and certain provisions of the CSL
Behring Agreement will not become effective until after we receive all such regulatory approvals. As of December 31,
2020, such regulatory approvals had not been received in all jurisdictions.
As of December 31, 2020, the Company concluded it has no enforceable right to the upfront payment, the
regulatory and sale milestone payments, or the royalties (together “CSL Behring License Revenue”) that the Company may
receive in accordance with the CSL Behring Agreement, as all payments are contingent upon the successful completion of
reviews under the Hart-Scott-Rodino Antitrust Improvements Act of 1976. Therefore, the Company determined it will not
recognize any revenue in relation to the CSL Behring License Revenue, in accordance with ASC 606 during the year ended
December 31, 2020. In accordance with its existing license and other agreements, the Company is contractually required to
pay in total a low to high single digit percentage of any upfront payment to its licensors and financial advisor (“License
Fees”). The Company did not record any License Fees in the year ended December 31, 2020, as the Company had not
recognized the upfront payment as this date.
The Company incurred $2.1 million of expenses related to the obligations related to the CSL Behring Agreement
that had not been satisfied as of December 31, 2020. The Company capitalized these expenses as contract fulfillment costs
(presented within Other current assets). As of December 31, 2020, the Company also recognized a $2.1 million receivable
(presented within Accounts receivable) from CSL Behring for expenses for which it has a right of reimbursement as well
as a contract liability (presented within Accrued expenses and other current liabilities) for the same amount. In accordance
with ASC 606 it cannot recognize any CSL Behring License Revenue as of this date.
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Bristol-Myers Squibb collaboration
2015 Agreement
In May 2015, the Company entered into the BMS CLA and various related agreements with BMS, which the
Company collectively refers to as the BMS CLA, which provided BMS with exclusive access to the Company’s gene
therapy technology platform for the research, development and commercialization of therapeutics aimed at multiple
Collaboration Targets. The initial four-year research term under the collaboration terminated on May 21, 2019. During the
initial research term of the BMS CLA, the Company supported BMS in discovery, non-clinical, analytical and process
development efforts in respect of the Collaboration Targets. For any Collaboration Targets that may be advanced, the
Company will be responsible for manufacturing of clinical and commercial supplies. BMS reimbursed the Company for all
its research and development costs in support of the collaboration, and will lead development, regulatory and commercial
activities for any Collaboration Targets that may be advanced. The BMS CLA initially provided that the Company and
BMS could potentially have collaborated on up to ten Collaboration Targets in total.
BMS initially designated four Collaboration Targets, including S100A1 for congestive heart failure (“AMT-126”).
In October 2018, the Company and BMS completed a heart function proof-of-concept study of AMT-126 in a pre-clinical,
diseased animal model. The data did not show a benefit on heart function at six months and, consequently, work on
S100A1 was discontinued. The Company impaired a $5.4 million acquired research and development asset associated with
the program and released a contingent liability of $3.8 million related to the acquisition of the asset to income in the year
ended December 31, 2018. In April 2019, BMS designated a new cardiovascular Collaboration Target to replace S100A1.
As a result, BMS had designated a total of four Collaboration Targets as of December 31, 2019.
2020 Amendment
In February 2019, BMS requested a one-year extension of the initial research term. In April 2019, following an
assessment of the progress of the collaboration and the Company’s expanding proprietary programs, the Company notified
BMS that the Company did not intend to agree to an extension of the initial research term but rather preferred to restructure
or amend the collaboration to reduce or eliminate certain of the Company’s obligations under it.
On December 1, 2020, the Company and BMS entered into the amended BMS CLA. Under the amended BMS
CLA, BMS is limited to four Collaboration Targets. For a period of one-year from the effective date of the amended BMS
CLA, BMS may replace up to two of these four Collaboration Targets with up to two new targets in the field of
cardiovascular disease. The Company continues to be eligible to receive research, development, and regulatory milestone
payments of up to $217.0 million for each Collaboration Target, if defined milestones are achieved.
BMS is no longer entitled to designate the fifth to tenth Collaboration Targets and as such the Company’s
remaining obligations under the amended BMS CLA are substantially reduced. The Company is no longer entitled to
receive up to an aggregate $16.5 million in target designation payments for the research, development and regulatory
milestone payments associated with the fifth to tenth Collaboration Targets.
For as long as any of the four Collaboration Targets are being advanced, BMS may place a purchase order to be
supplied with research, clinical and commercial supplies. Subject to the terms of the amended BMS CLA, BMS has the
right to terminate the research, clinical and commercial supply relationships, and has certain remedies for failures of
supply, up to and including technology transfer for any such failure that otherwise cannot be reasonably resolved. Both
BMS and the Company may agree to a technology transfer of manufacturing capabilities pursuant to the terms of the
amended BMS CLA.
The amended BMS CLA does not extend the initial research term. BMS may place purchase orders to provide
limited services primarily related to analytical and development efforts in respect of the four Collaboration Targets. BMS
may request such services for a period not to exceed the earlier of (i) the completion of all activities under a Research Plan
and (ii) either (A) three years after the last replacement target has been designated by BMS during the one year
replacement period following the amended BMS CLA effective date or (B) three years if no replacement targets are
designated during this one year period and BMS continues to reimburse the Company for these services.
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The Company evaluated the impact of the amendment of the BMS CLA in relation to its performance obligation
related to:
– Providing access to its technology and know-how in the field of gene therapy and participating in joint steering
committee and other governing bodies (materially satisfied as of December 1, 2020) (“License Revenue”).
The Company did not identify any new distinct performance obligations and determined the amended BMS CLA
did not represent a separate contract in accordance with ASC 606. The Company evaluated the effect the modification has
on its measure of progress towards the completion of its performance obligation related to License Revenue and recorded
an adjustment to License Revenue as of December 1, 2020.
Services to BMS are rendered by the Dutch operating entity. Total collaboration and license revenue generated
with BMS are as follows (presented as revenue from a related party until November 30, 2020, and as revenue from
December 1, 2020 onwards):
Bristol Myers Squibb
Total
$
$
2020
Years ended December 31,
2019
(in thousands)
7,281
$
7,281
$
$
$
37,514
37,514
2018
11,284
11,284
Amounts owed by BMS in relation to the Collaboration and License Revenue are as follows (presented as
“Accounts receivables” as of December 31, 2020 and as “Accounts receivable from related party” as of December 31,
2019):
Bristol Myers Squibb
Total
Collaboration Revenue
December 31,
2020
December 31,
2019
(in thousands)
4,536
4,536
$
$
947
947
$
$
The Company recognizes collaboration revenues associated with Collaboration Target-specific pre-clinical
analytical development and process development activities that are reimbursable by BMS under the BMS CLA and the
amended BMS CLA as well as other related agreements. Collaboration Revenue related to these contracted services is
recognized when performance obligations are satisfied.
The Company generated $0.2 million collaboration revenue for the year ended December 31, 2020 (December 31,
2019: $2.3 million; December 31, 2018: $3.8 million).
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License Revenue
The Company recognized $33.0 million of License Revenue for the year ended December 31, 2020 (December
31, 2019: $5.0 million, December 31, 2018: $7.5 million).
On May 21, 2015, the Company recorded a $60.1 million upfront payment and in August 2015 it recorded a $15.0
million payment it received from BMS in relation to the designation of the second, third and fourth Collaboration Targets.
The Company recognizes License Revenue over the expected performance period based on its measure of progress towards
the completion of certain activities related to its services. The Company determines such progress by comparing activities
performed at the end of each reporting period with total activities expected to be performed. The Company estimates total
expected activities using several unobservable inputs, such as the probability of BMS designating additional targets, the
probability of successfully completing each phase and estimated time required to provide services during the various
development stages. The estimation of total services at the end of each reporting period involves considerable judgement.
The amount of services the Company expects to provide is significantly impacted by the number of Collaboration
Targets that it estimates BMS would pursue. As a result of the December 1, 2020 amendment of the BMS CLA the
Company no longer is required to potentially provide any services in relation to six additional targets that BMS might have
designated. The Company determined its remaining performance obligation is immaterial. The Company adjusted its
measure of progress towards the completion of its activities related to its services as of the December 1, 2020 modification
date accordingly. The Company recognized the remaining balance of unrecognized License Revenue as of November 30,
2020 of $27.8 million in profit and loss during the year ended December 31, 2020 as License Revenue from a related party.
The Company includes variable consideration related to any research, development, and regulatory milestone
payments, in the transaction price once it is considered probable that including these payments in the transaction price
would not result in the reversal of cumulative revenue recognized. Due to the significant uncertainty surrounding the
development of gene-therapy product candidates and the dependence on BMS’s performance and decisions, the Company
does not currently (with below exception) consider this probable.
On December 17, 2020 BMS designated one of the four Collaboration Targets as a candidate to advance into IND-
enabling studies entitling the Company to receive a $4.4 million research milestone payment. The Company recorded the
$4.4 million as License Revenue in the twelve-month period ended December 31, 2020.
The Company recognizes License Revenue related to product sales by BMS from any of the Collaboration Targets
when the sales occur. The Company is eligible to receive net sales-based milestone payments and tiered mid-single to low
double-digit royalties on product sales. The royalty term is determined on a licensed-product-by-licensed-product and
country-by-country basis and begins on the first commercial sale of a licensed product in a country and ends on the
expiration of the last to expire of specified patents or regulatory exclusivity covering such licensed product in such country
or, with a customary royalty reduction, ten years after the first commercial sale if there is no such exclusivity.
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4. Fair value measurement
The Company measures certain financial assets and liabilities at fair value, either upon initial recognition or for
subsequent accounting or reporting.
The carrying amount of cash and cash equivalents, accounts receivable from collaborators, prepaid expenses,
other assets, accounts payable, accrued expenses and other current liabilities reflected in the consolidated balance sheets
approximate their fair values due to their short-term maturities.
The Company’s only material financial assets measured at fair value using Level 1 inputs is cash and cash
equivalents.
The liability measured at fair value using Level 3 inputs as of December 31, 2020 was the derivative financial
instrument. The Company had recorded derivative financial instruments as of December 31, 2019, that were measured at
fair value using Level 3 inputs. Changes in Level 3 items during the years ended December 31, 2020, 2019 and 2018 are as
follows:
Contingent
Derivative
financial
consideration instruments
Total
Balance at December 31, 2017
Net gains recognized in profit or loss
Currency translation effects
Balance at December 31, 2018
Net losses recognized in profit or loss
Exercise of Hercules warrants
Currency translation effects
Balance at December 31, 2019
Net gains recognized in profit or loss
Derecognition of warrants
Recognition of derivative financial liability of CoC-payment
Currency translation effects
Balance at December 31, 2020
Derivative financial instruments
$
$
$
$
3,964
(3,846)
(118)
(in thousands)
1,635
$
(208)
(52)
1,375
2,530
(770)
(60)
3,075
(2,300)
(796)
2,613
53
2,645
— $
—
—
—
— $
—
—
—
—
— $
$
$
$
$
5,599
(4,054)
(170)
1,375
2,530
(770)
(60)
3,075
(2,300)
(796)
2,613
53
2,645
The Company issued derivative financial instruments related to its collaboration with BMS and in relation to the
issuance of the Hercules loan facility.
Derivative financial instruments BMS
Pursuant to the BMS CLA, the Company in 2015 granted BMS two warrants that were subsequently terminated in
connection with the amendment to the BMS CLA on December 1, 2020. The Company granted to BMS:
● A warrant that allowed BMS to purchase a specific number of the Company’s ordinary shares such that its
ownership would have equaled 14.9% immediately after such purchase (“1st warrant”). The 1st warrant could
have been exercised on the later of (i) the date on which the Company received from BMS the Target
Designation Fees (as defined in the BMS CLA) associated with the first six new targets (a total of seven
Collaboration Targets); and (ii) the date on which BMS designated the sixth new target (the seventh
Collaboration Target); and
● A warrant that allowed BMS to purchase a specific number of the Company’s ordinary shares such that its
ownership would have equaled 19.9% immediately after such purchase (“2nd warrant” and together with 1st
warrant, the “warrants”). The warrant could have been exercised on the later of (i) the date on which the
Company received from BMS the Target Designation Fees associated with the first nine new targets (a total
of ten Collaboration Targets); and (ii) the date on which BMS designated the ninth new target (the tenth
Collaboration Target).
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On December 1, 2020, the Company derecognized the warrants when these were terminated in accordance with
the amended BMS CLA.
Pursuant to the terms of the BMS CLA the exercise price in respect of each warrant was equal to the greater of (i)
the product of (A) $33.84, multiplied by (B) a compounded annual growth rate of 10% (or approximately $57.32 as of
November 30, 2020) and (ii) the product of (A) 1.10 multiplied by (B) the weighted average volume price (“VWAP”) for
the 20 trading days ending on the date that is five trading days prior to the date of a notice of exercise delivered by BMS.
The fair value of the warrants as of December 31, 2019 was $3.1 million. During the year ended December 31,
2020, the Company recognized a $3.1 million gain in non-operating income / expense (December 31, 2019: $2.3 million
loss; December 31, 2018: $0.5 million gain) related to fair value changes of the BMS warrants. The gain recognized in the
year ended December 31, 2020 includes $0.8 million from the derecognition of the BMS warrants on December 1, 2020.
The Company used Monte-Carlo simulations to determine the fair market value of the BMS warrants. The
valuation model incorporated several inputs, the risk-free rate adjusted for the period affected, an expected volatility based
on historical Company volatility, the expected yield on any dividends and management’s expectations on the timelines of
reaching certain defined trigger events for the exercising of the warrants, as well as management’s expectations regarding
the number of ordinary shares that would be issued upon exercise of the warrants. All of these represent Level 3 inputs.
Additionally, the model assumed BMS would exercise the warrants only if it was financially rational to do so.
The warrants could only have been exercised following the occurrence of events contractually defined in the
warrant agreements. The probability of the occurrence of these events represented another significant unobservable input
used in the calculation of the fair value of the warrants.
On December 1, 2020, the Company and BMS terminated the BMS warrants and agreed that upon the
consummation of a change of control transaction of uniQure that occurs prior to December 1, 2026 or BMS’ delivery of a
target cessation notice for all four Collaboration Targets, uniQure (or its third party acquirer) shall pay to BMS a one-time,
non-refundable, non-creditable cash payment of $70.0 million, provided that (x) if $70.0 million is greater than five percent
(5.0%) of the net proceeds (as contractually defined) from such change of control transaction, the payment shall be an
amount equal to five percent of such net proceeds, and (y) if $70.0 million is less than one percent of such net proceeds, the
change of control payment shall be an amount equal to one percent of such net proceeds (“CoC-payment”). The Company
has not consummated any change of control transaction as of December 31, 2020 that would obligate it to make a CoC-
payment. The Company determined that the CoC-payment should be recorded as a derivative financial liability as of
December 1, 2020 and that subsequent changes in the fair market value of this derivative financial liability should be
recorded in profit and loss. The fair market value of the derivative financial liability is materially impacted by probability
that market participants assign to the likelihood of the occurrence of a change of control transaction that would give rise to
a CoC-payment. This probability represents an unobservable input. The Company determined the fair market value of the
derivative financial liability by using a present value model based on expected cash flow. The expected cash flows are
materially impacted by the probability that market participants assign to the likelihood of the occurrence of a change of
control event within the biotechnology industry. The Company estimated this unobservable input using the best
information available as of December 1, 2020 and December 31, 2020. The Company obtained reasonably available
market information that it believed market participants would use in determining the likelihood of the occurrence of a
change-of control transaction within the biotechnology industry. Selecting and evaluating market information involves
considerable judgement and uncertainty. Based on all such information and its judgment the Company estimated that the
fair market value of the derivative financial liability (presented within “Other non-current liabilities”) as of December 1,
2020 and December 31, 2020 was $2.6 million. The Company recorded a $2.6 million loss within “Other non-operating
expenses” in the twelve-month period ended December 31, 2020 related to the initial recognition of this derivative
financial liability.
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Hercules loan facility
On June 14, 2013, the Company entered into a venture debt loan facility (the “Original Facility”) with Hercules
(see Note 8, “Long-term debt”) pursuant to a Loan and Security Agreement (the “Loan Agreement”), which included a
warrant maturing on February 5, 2019. The warrant was not closely related to the host contract and was accounted for
separately as a derivative financial liability measured at fair value though profit or loss. The warrant included in the
Original Facility remained in place following the 2014, 2016 and 2018 amendments of the loan. The Hercules warrants
were exercised as of February 1, 2019. The Company issued 37,175 ordinary shares at $34.25 following the exercise of all
Hercules warrants and receipt of $0.5 million from Hercules. During the year ended December 31, 2020, the Company
recognized no more gains or losses in other non-operating income / (expense) (December 31, 2019: $0.2 million loss;
December 31, 2018: $0.3 million loss) related to fair value changes of the Hercules warrants.
Contingent consideration
In connection with the Company’s acquisition of the InoCard business (“InoCard”) in 2014, the Company
recorded contingent consideration related to amounts potentially payable to InoCard’s former shareholders. The amounts
payable in accordance with the sale and purchase agreement (as amended in August 2017) were contingent upon
realization of milestones associated with its S100A1 protein research program. Following the discontinuation of the
research program the Company since 2018 no longer expects to realize those milestones and recorded a $3.8 million gain
within research and development expenses for the year ended December 31, 2018, to release the liability to profit and loss.
5. Property, plant, and equipment, net
The following table presents the Company’s property, plant, and equipment as of December 31:
Leasehold improvements
Laboratory equipment
Office equipment
Construction-in-progress
Total property, plant, and equipment
Less accumulated depreciation
Property, plant and equipment, net
December 31,
2020
December 31,
2019
(in thousands)
$
$
37,849
22,106
5,025
2,574
67,554
(35,226)
32,328
$
$
34,611
18,232
4,212
341
57,396
(28,625)
28,771
Total depreciation expense was $5.7 million for the year ended December 31, 2020 (December 31, 2019: $6.0
million, December 31, 2018: $6.5 million). Depreciation expense is allocated to research and development expenses to the
extent it relates to the Company’s manufacturing facility and equipment and laboratory equipment. All other depreciation
expenses are allocated to selling, general and administrative expense.
The following table summarizes property, plant, and equipment by geographic region.
Lexington, Massachusetts (United States of America)
Amsterdam (the Netherlands)
Total
135
December 31,
December 31,
2020
2019
(in thousands)
$
$
15,949
16,379
32,328
$
$
15,490
13,281
28,771
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6. Right-of-use asset and lease liabilities
The Company adopted ASU 2016-02 “Leases (Topic 842)” as well as ASU 2018-10 and ASU 2018-11, which
both relate to improvements to ASC 842. The Company adopted the standard using the modified retrospective approach
with an effective date as of the beginning of the Company’s fiscal year, January 1, 2019 (“new lease accounting standard”).
The standard requires the balance sheet recognition for leases. Prior years were not recast under the new standard and
therefore, those amounts are presented in accordance with the requirements of the previously effective lease standard ASC
840 (“historic lease accounting standard”). The Company elected to utilize practical expedients available for expired or
existing contracts which allowed the Company to carryforward historical assessments of (1) whether contracts are or
contain leases, (2) lease classification, and (3) initial direct costs.
The Company’s most significant leases relate to office and laboratory space under the following operating lease
agreements:
Lexington, Massachusetts / United States
In July 2013, the Company entered into a lease for a facility in Lexington, Massachusetts, United States. The term
of the lease commenced in November 2013, was set for 10 years starting from the 2014 rent commencement date and is
non-cancellable. Originally, the lease for this facility had a termination date of 2024. In November 2018, the term was
expanded by five years to June 2029. The lease continues to be renewable for two subsequent five-year terms.
Additionally, the lease was expanded to include an additional 30,655 square feet within the same facility and for the same
term. The lease of the expansion space commenced on June 1, 2019.
The contractually fixed annual increase of lease payments through 2029 for both the extension and expansion
lease have been included in the lease payments.
Amsterdam / The Netherlands
In March 2016, the Company entered into a 16-year lease for a facility in Amsterdam, the Netherlands and
amended this agreement in June 2016. The Company consolidated its three Amsterdam sites into the new site at the end of
May 2017. The lease for the new facility terminates in 2032, with an option to extend in increments of five-year periods.
The lease contract includes variable lease payments related to annual increases in payments based on a consumer price
index.
On December 1, 2017, the Company entered into an agreement to sub-lease three of the seven floors of its
Amsterdam facility for a ten-year term ending on December 31, 2027, with an option for the sub-lessee to extend until
December 31, 2031. In February 2020, the Company amended the agreement to sub-lease to take back one of the three
floors effective March 1, 2020. The fixed lease payments to be received during the remaining term under the agreement to
sub-lease amount to $6.6 million (EUR 5.4 million) as of December 31, 2020.
Operating lease liabilities
The components of lease cost in accordance with the new lease accounting standard were as follows:
Operating lease cost
Variable lease cost
Sublease income
Total lease cost
136
Year ended December 31,
2019
2020
(in thousands)
5,052
607
(904)
4,755
$
$
4,474
507
(1,053)
3,928
$
$
Table of Contents
The rent expense in accordance with the historical lease accounting standard for the year ended December 31,
2018, was calculated on a straight-line basis over the term of the lease and considered $12.2 million of lease incentives
received. Aggregate rent expense was as follows:
Rent expense - Lexington
Rent expense - Amsterdam
Total lease cost
Year ended December 31,
2018
(in thousands)
$
$
1,583
1,667
3,250
The table below presents the lease-related assets and liabilities recorded on the Consolidate balance sheets in
accordance with the new lease accounting standard.
Assets
Operating lease right-of-use assets
Liabilities
Current
Current operating lease liabilities
Non-current
Non-current operating lease liabilities
Total lease liabilities
Other information
December 31,
December 31,
2020
2019
(in thousands)
$
26,086
26,797
5,524
5,865
30,403
35,927
$
31,133
36,998
The weighted-average remaining lease term as of December 31, 2020, is 9.4 years, compared to 10.3 years as of
December 31, 2019, and the weighted-average discount rate as of December 31, 2020, is 11.37%, compared to 11.33% as
of December 31, 2019. The Company derived the weighted-average discount rate, adjusted for differences such as in the
term and payment patterns, from the Company’s loan from Hercules capital which was refinanced immediately prior to the
January 1, 2019, adoption date in December 2018.
The table below presents supplemental cash flow and non-cash information related to leases required in
accordance with the new lease accounting standard.
Operating cash flows for operating leases (1)
Year ended December 31,
2020
2019
(in thousands)
$
5,769
$
4,717
(1) The Company has received $1.5 million of landlord incentive payments for the year ended December 31,
2019, which are not included in the cash paid amounts.)
The Company did not obtain any right-of-use assets in exchange for the lease obligations during the year ended
December 31, 2020. Besides the initial recognition of operating right-of-use assets of $19.0 million upon adoption of the
new lease standards on January 1, 2019, the Company obtained $9.0 million of additional right-of-use assets in exchange
for lease obligations during the year ended December 31, 2019.
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Undiscounted cash flows
The table below reconciles the undiscounted cash flows as of December 31, 2020, for each of the first five years
and the total of the remaining years to the operating lease liabilities recorded on the Consolidated balance sheet as of
December 31, 2020 in accordance with the new lease accounting standard.
2021
2022
2023
2024
2025
Thereafter
Total lease payments
Less: amount of lease payments representing interest payments
Present value of lease payments
Less: current operating lease liabilities
Non-current operating lease liabilities
Lexington
3,455
3,552
3,650
4,146
4,465
16,279
35,547
Amsterdam(1)
(in thousands)
2,069
$
2,069
2,069
2,069
2,069
12,239
22,584
$
(12,576)
22,971
(3,455)
19,516
$
(9,628)
12,956
(2,069)
10,887
$
$
$
Total
5,524
5,621
5,719
6,215
6,534
28,518
58,131
(22,204)
35,927
(5,524)
30,403
$
$
$
(1) Payments are due in EUR and have been translated at the foreign exchange rate as of December 31, 2020, of
$1.23 / €1.00)
7. Intangible assets
a. Acquired licenses
The following table presents the Company’s acquired licenses as of December 31:
Licenses
Less accumulated amortization and impairment
Licenses, net
December 31, December 31,
2020
2019
(in thousands)
$
$
5,660
(2,299)
3,361
$
$
8,317
(2,890)
5,427
All intangible assets are owned by uniQure biopharma B.V, a subsidiary of the Company. The acquired licenses
have a weighted average remaining life of 8.5 years as of December 31, 2020.
During the year ended December 31, 2020, the Company capitalized $2.2 million of expenditures related to costs
incurred in relation to rights to exclusively evaluate certain technologies during a two-year period that commenced on
February 1, 2020. During the same period, the Company disposed of a number of licenses determined to have no
alternative future use. During the year ended December 31, 2019, the Company capitalized $1.0 million of expenditures
related to contractual milestone payments under existing license agreements.
As of December 31, 2020, the estimated future amortization expense for each of the five succeeding years and the
period thereafter is as follows:
Years
2021
2022
2023
2024
2025
Thereafter
Total
Amount
(in thousands)
1,277
427
144
144
144
1,225
3,361
$
$
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The amortization expense related to licenses for the year ended December 31, 2020 was $4.6 million (December
31, 2019: $0.6 million; December 31, 2018: $0.4 million). The impairment expense related to licenses for the year ended
December 31, 2020 was $0.3 million (December 31, 2019: $0.0 million; December 31, 2018 $0.1 million).
b. Acquired research and development
The Company acquired research and development assets as part of its acquisition of InoCard in July 2014. Based
on the review of pre-clinical data associated with those assets, the Company does not expect that it will pursue further
research related to those assets. Accordingly, the Company recorded a $5.4 million impairment loss within research and
development expenses in the year ended December 31, 2018, to reduce the asset’s carrying amount to its fair value of nil.
8. Accrued expenses and other current liabilities
Accrued expenses and other current liabilities include the following items:
Accruals for services provided by vendors-not yet billed
Personnel related accruals and liabilities
Contract liability (see Note 3. Collaboration arrangements)
Total
9. Long-term debt
December 31, December 31,
2020
2019
(in thousands)
$
$
8,269
7,687
2,082
18,038
$
$
5,425
7,032
—
12,457
On June 14, 2013, the Company entered into a venture debt loan facility with Hercules, which was amended and
restated on June 26, 2014, and again on May 6, 2016 (“2016 Amended Facility”). On December 6, 2018, the Company
signed an amendment to the Second Amended and Restated Loan and Security Agreement that both refinanced the then-
existing $20.0 million 2016 Amended Facility and provided an additional unconditional commitment of $15.0 million as
well as a conditional commitment of $15.0 million that expired on June 30, 2020 (the “2018 Amended Facility”). At
signing of the 2018 Amended Facility, the Company drew down an additional $15.0 million for a total of $35.0 million
outstanding. The 2018 Amended Facility extended the loan’s maturity date from May 1, 2020 until June 1, 2023. The
interest-only period was initially extended from November 2018 to January 1, 2021, and was further extended to January 1,
2022, as a result of meeting the provision in the 2018 Amended Facility of raising more than $90.0 million in equity
financing in September 2019. The Company is required to repay the facility in equal monthly installments of principal and
interest between the end of the interest-only period and the maturity date. The interest rate continues to be adjustable and is
the greater of (i) 8.85% or (ii) 8.85% plus the prime rate less 5.50% per annum.
Under the 2018 Amended Facility, the Company paid a facility fee of 0.50% of the $35.0 million outstanding as of
signing and owes a back-end fee of 4.95% of the outstanding debt. In addition, in May 2020 the Company paid a back-end
fee of $1.0 million in relation to the 2016 Amended Facility.
The amortized cost (including interest due presented as part of accrued expenses and other current liabilities) of
the 2018 Amended Facility was $35.9 million as of December 31, 2020, compared to $36.3 million as of December 31,
2019, and is recorded net of discount and debt issuance costs. The foreign currency gain on the loan was $3.1 million in
2020 (2019: loss of $0.7 million; 2018: loss of $0.9 million). The fair value of the loan approximates its carrying amount.
Inputs to the fair value of the loan are considered Level 3 inputs.
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Interest expense recorded during the years ended December 31 was as follows:
Years
2020
2019
2018
$
Amount
(in millions)
3.7
3.7
2.0
As a covenant in the 2018 Amended Facility, the Company has periodic reporting requirements and is required to
keep a minimum cash balance deposited in bank accounts in the United States, equivalent to the lesser of (i) 65% of the
outstanding balance of principal due or (ii) 100% of worldwide cash and cash equivalents. This restriction on cash and cash
equivalents only relates to the location of the cash and cash equivalents, and such cash and cash equivalents can be used at
the discretion of the Company. In combination with other covenants, the 2018 Amended Facility restricts the Company’s
ability to, among other things, incur future indebtedness and obtain additional debt financing, to make investments in
securities or in other companies, to transfer assets, to perform certain corporate changes, to make loans to employees,
officers, and directors, and to make dividend payments and other distributions. The Company secured the facilities by
directly or indirectly pledging its total assets of $340.4 million with the exception of $115.2 million of cash and cash
equivalents and other current assets held by uniQure N.V.
The 2018 Amended Facility contains provisions that include the occurrence of a material adverse effect, as
defined therein, which would entitle Hercules to declare all principal, interest and other amounts owed by the Company
immediately due and payable. As of December 31, 2020, the Company was in compliance with all covenants and
provisions.
The aggregate maturities of the loan, including $7.4 million of coupon interest payments and financing fees, for
each of the 29 months after December 31, 2020, are as follows (prior to the January 2021 loan amendment – see Note 18,
“Subsequent events”):
Years
2021
2022
2023
Total
10. Shareholders’ equity
Amount
(in thousands)
3,141
25,002
14,269
42,412
$
$
As of December 31, 2020, the Company’s authorized share capital is €3.0 million (or $3.7 million when translated
at an exchange rate as of December 31, 2020, of $1.23 / €1.00), divided into 60,000,000 ordinary shares, each with a
nominal value of €0.05. Under Dutch law, the authorized share capital is the maximum capital that the Company may issue
without amending its articles of association.
All ordinary shares issued by the Company were fully paid. Besides the minimum amount of share capital to be
held under Dutch law, there are no distribution restrictions applicable to the equity of the Company.
As of December 31, 2020, and 2019 and 2018 the Company’s reserves were restricted for payment of dividends
for an accumulated foreign currency translation gain of $9.9 million in 2020 and accumulated foreign currency translation
losses of $6.7 million and $7.3 million in 2019 and 2018, respectively.
On September 10, 2019, the Company completed a follow-on public offering of 4,891,305 ordinary shares at a
public offering price of $46.00 per ordinary share, and on September 13, 2019, the Company completed the sale of an
additional 733,695 ordinary shares at a public offering price of $46.00 per ordinary share pursuant to the exercise by the
underwriters of the option to purchase additional ordinary shares, resulting in total gross proceeds to the Company of
$258.8 million. The net proceeds to the Company from this offering were $242.7 million, after deducting underwriting
discounts and commissions and other offering expenses payable by the Company. The Company deducted $0.6 million of
expenses incurred related to this offering from additional paid-in capital in the accompanying consolidated balance sheets
and reflected this within the proceeds from public offering of shares, net of issuance costs within the cash flows from
financing activities.
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On May 7, 2018, the Company completed a follow-on public offering of 5,175,000 ordinary shares at a public
offering price of $28.50 per ordinary share, resulting in gross proceeds to the Company of $147.5 million. The net proceeds
to the Company from this offering were $138.4 million, after deducting underwriting discounts and commissions and other
offering expenses payable by the Company. The Company deducted $0.2 million of expenses incurred related to this
offering from additional paid-in capital in the accompanying consolidated balance sheet and reflected this within the
proceeds from public offering of shares, net of issuance costs within the cash flows from financing activities.
In February 2019, the Company issued 37,175 ordinary shares to Hercules pursuant to exercised warrants for $0.5
million in aggregate cash consideration. The Company deemed the sale and issuance of these shares to be exempt from
registration under the Securities Act in reliance on Regulation S of the Securities Act, as an offshore offering of securities
and such shares were issued as restricted shares. Hercules represented to us that they were in compliance with the
requirements of Regulation S.
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11. Share-based compensation
Share-based compensation expense recognized by classification included in the consolidated statements of
operations and comprehensive loss was as follows:
Research and development
Selling, general and administrative
Total
$
$
2020
Year ended December 31,
2019
(in thousands)
8,029
$
9,439
17,468
$
$
$
11,965
9,823
21,788
2018
3,994
6,699
10,693
Share-based compensation expense recognized by award type was as follows:
Award type
Share options
Restricted share units
Performance share units
Total
2020
Year ended December 31,
2019
(in thousands)
2018
$
$
11,434
7,364
2,990
21,788
$
$
7,896
4,117
5,455
17,468
$
$
4,766
3,020
2,907
10,693
As of December 31, 2020, the unrecognized compensation cost related to unvested awards under the various
share-based compensation plans were:
Award type
Share options
Restricted share units
Performance share units
Total
Unrecognized Weighted average
share-based
compensation
expense
remaining
period for
recognition
(in thousands)
(in years)
$
$
23,492
14,489
1,763
39,744
2.78
2.09
1.03
2.45
The Company satisfies the exercise of share options and vesting of Restricted Share Units (“RSUs”) and
Performance Share Units (“PSUs”) through newly issued shares.
The Company’s share-based compensation plans include the 2014 Amended and Restated Share Option Plan (the
“2014 Plan”) and inducement grants under Rule 5653(c)(4) of The Nasdaq Global Select Market with terms similar to the
2014 Plan (together the “2014 Plans”). The Company previously had a 2012 Equity Incentive Plan (the “2012 Plan”). As of
December 31, 2020, 14,000 fully vested share options are outstanding (December 31, 2019: 14,000) under the 2012 Plan.
At the general meeting of shareholders on January 9, 2014, the Company’s shareholders approved the adoption of
the 2014 Plan. At the annual general meetings of shareholders in June 2015, 2016 and 2018, uniQure shareholders
approved amendments of the 2014 Plan, increasing the shares authorized for issuance by 1,070,000 shares in 2015,
3,000,000 in 2016 and 3,000,000 shares in 2018, for a total of 8,601,471 shares.
Share options
Share options are priced on the date of grant and, except for certain grants made to non-executive directors, vest
over a period of four years. The first 25% vests after one year from the initial grant date and the remainder vests in equal
quarterly installments over years two, three and four. Certain grants to non-executive directors vest in full after one year.
Any options that vest must be exercised by the tenth anniversary of the initial grant date.
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2014 Plan
The following tables summarize option activity under the Company’s 2014 Plans for the year ended December 31,
2019:
Number of
ordinary shares
Weighted average
exercise price
Weighted average
remaining contractual life
Aggregate intrinsic
value
Options
Outstanding at December 31, 2019
Granted
Forfeited
Expired
Exercised
Outstanding at December 31, 2020
Thereof, fully vested and exercisable at
December 31, 2020
Thereof, outstanding and expected to vest
after December 31, 2020
$
2,683,104
653,852
$
(172,548) $
(6,451) $
(498,678) $
2,659,279
$
1,542,405
1,116,874
$
$
21.29
49.63
42.03
45.76
14.43
28.13
18.05
42.06
Outstanding and expected to vest at
December 31, 2019
1,346,337
$
28.76
in years
7.46
$
(in thousands)
135,238
7.18
6.15
8.61
32,729
29,161
3,568
Total weighted average grant date fair value of options issued
during the period (in $ millions)
Granted to directors and officers during the period (options,
grant date fair value $ in millions)
Proceeds from option sales during the period (in $ millions)
209,254
$
$
$
18.4
5.7
7.2
The following table summarizes information about the weighted average grant-date fair value of options during
the years ended December 31:
Granted, 2020
Granted, 2019
Granted, 2018
Vested, 2020
Forfeited, 2020
Weighted average
Options
653,852
647,526
937,832
713,924
(172,548)
grant‑date fair value
28.08
$
23.57
15.90
14.04
24.63
The following table summarizes information about the weighted average grant-date fair value of options at
December 31:
Outstanding and expected to vest, 2020
Outstanding and expected to vest, 2019
Options
1,116,874
1,346,337
Weighted average
grant‑date fair value
24.25
$
17.05
The fair value of each option issued is estimated at the respective grant date using the Hull & White option pricing
model with the following weighted-average assumptions:
Assumptions
Expected volatility
Expected terms
Risk free interest rate
Expected dividend yield
143
2020
70%
10 years
Year ended December 31,
2019
70% - 75%
10 years
0.76% - 1.44% 1.92% - 2.87% 2.67% - 3.20%
0%
2018
75% - 80%
10 years
0%
0%
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The Hull & White option model captures early exercises by assuming that the likelihood of exercises will increase
when the share price reaches defined multiples of the strike price. This analysis is performed over the full contractual term.
The following table summarizes information about options exercised during the years ended December 31:
2020
2019
2018
Restricted Share Units
Exercised
during the year
498,678
434,665
388,203
$
Intrinsic value
(in thousands)
11,927
17,700
7,515
The following table summarizes the RSU activity for the year ended December 31, 2020:
RSU
Weighted average
Non-vested at December 31, 2019
Granted
Vested
Forfeited
Non-vested at December 31, 2020
Number of
ordinary shares
370,830
376,799
(206,881)
(73,404)
467,344
Total weighted average grant date fair value of RSUs granted during the period (in $
millions)
Granted to directors and officers during the period (shares, $ in millions)
158,623
grant-date fair
value
28.62
48.18
24.18
46.41
43.56
18.2
7.4
$
$
$
$
$
$
$
The following table summarizes information about the weighted average grant-date fair value of RSUs granted
during the years ended December 31:
2020
2019
2018
Granted
during the year
376,799
198,504
262,599
Weighted average
grant‑date fair value
48.18
$
38.63
23.61
The following table summarizes information about the total fair value of RSUs that vested during the years ended
December 31:
2020
2019
2018
$
Total fair value
(in thousands)
12,156
10,152
8,546
RSUs generally vest over one to three years. RSUs granted to non-executive directors will vest one year from the
date of grant.
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Table of Contents
Performance Share Units
The following table summarizes the PSU activity for the year ended December 31, 2020:
Non-vested at December 31, 2019
Granted
Vested
Forfeited
Non-vested at December 31, 2020
PSU
Weighted average
Number of
ordinary shares
479,422
$
$
91,003
(354,105) $
(3,706) $
$
212,614
grant-date fair
value
21.17
57.56
17.44
57.56
42.32
Total weighted average grant date fair value of PSUs granted
during the period (in $ millions)
$
5.2
In January 2019, the Company awarded PSUs to its executives and other members of senior management.
These PSUs were earned in January 2020 based on the Board’s assessment of the level of achievement of agreed upon
performance targets through December 31, 2019. The PSUs awarded for the year ended December 31, 2019 will vest on
the third anniversary of the grant, subject to the grantee’s continued employment.
The following table summarizes information about the weighted average grant-date fair value, determined at of
the date these were earned, of PSUs granted during the years ended December 31:
2020
2019
2018
Granted
Weighted average
during the year
91,003
132,362
grant‑date fair value
57.56
$
31.71
$
—
— $
The following table summarizes information about the total fair value of PSUs that vested during the years ended
December 31:
2020
2019
2018
$
Total fair value
(in thousands)
21,852
1,056
1,350
Employee Share Purchase Plan (“ESPP”)
In June 2018, the Company’s shareholders adopted and approved an ESPP allowing the Company to issue up to
150,000 ordinary shares. The ESPP is intended to qualify under Section 423 of the Internal Revenue Code of 1986. Under
the ESPP, employees are eligible to purchase ordinary shares through payroll deductions, subject to any plan limitations.
The purchase price of the shares on each purchase date is equal to 85% of the lower of the closing market price on the
offering date or the closing market price on the purchase date of each three-month offering period. During the year ended
December 31, 2020, 6,181 shares have been issued (December 31, 2019: 9,202 and December 31, 2018: 2,591). As of
December 31, 2020, a total of 132,026 ordinary shares remains available for issuance under the ESPP plan.
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12. Expenses by nature
Operating expenses excluding expenses presented in other expenses included the following expenses by nature:
Employee-related expenses
Laboratory and development expenses
Office and housing expenses
Legal and advisory expenses
Depreciation, amortization, and impairment expenses
Patent and license expenses
Other operating expenses
Total
2018
2020
Years ended December 31,
2019
(in thousands)
59,130
$
30,130
10,588
11,297
6,669
1,654
8,813
$ 128,281
$
75,926
35,977
13,388
17,370
10,648
2,899
8,772
$ 164,980
$ 46,254
23,596
7,281
7,748
12,415
1,202
1,618
$ 100,114
Details of employee-related expenses for the years ended December 31 are as follows:
Wages and salaries
Share-based compensation expenses
Consultant expenses
Social security costs
Health insurance
Pension costs - defined contribution plans
Other employee expenses
Total
13. Other non-operating income / (expense)
$
$
2020
2018
Years ended December 31,
2019
(in thousands)
32,029
$
17,533
2,464
2,727
1,933
1,052
1,392
59,130
40,919
21,831
2,423
4,068
2,271
1,779
2,635
75,926
$
$ 26,646
10,708
2,974
2,231
1,471
907
1,317
$ 46,254
Other non-operating income / (expense) consists of changes in the fair value of derivative financial instruments
(see Note 4, “Fair value measurement”).
Other non-operating income:
Derivative gains
Total other non-operating income:
Other non-operating expense:
Derivative losses
Total other non-operating expense:
Other non-operating income / (expense), net
2020
Years ended December 31,
2019
(in thousands)
2018
$
$
483
483
—
—
483
$
$
— $
—
(2,530)
(2,530)
(2,530) $
208
208
—
—
208
The Company recorded a net gain of $0.5 million for the year ended December 31, 2020, compared to a net loss
of $2.3 million and a net gain of $0.5 million for the years ended December 31, 2019 and December 31, 2018, respectively,
related to the derivative financial instruments issued as part of its collaboration with BMS. The $0.5 million gain for the
year ended December 31, 2020 includes a $2.3 million gain related to the reduction of the fair market value of the BMS
warrants, a $0.8 million gain related to the derecognition of the BMS warrants on December 1, 2020 and a $2.6 million
loss related to the initial recognition of the derivative financial liability related to the CoC-payment. The Company
recorded a net loss of $0.2 million and $0.3 million for the years ended December 31, 2019 and December 31, 2018,
respectively, related to warrants issued to Hercules.
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14. Income taxes
a. Income tax benefit / (expense)
No current tax expense or liabilities were recorded in 2020 by the Company’s Dutch and U.S entities. Due to the
uncertainty surrounding the realization of favorable tax attributes in future tax returns, the Company has recorded a full
valuation allowance against the Company’s net deferred tax assets in the Netherlands. The Company released the full
valuation allowance against the Company’s net deferred tax assets in the United States as of December 31, 2020.
There are no significant unrecognized tax benefits as of December 31, 2020 and 2019.
For the years ended December 31, 2020, 2019 and 2018, loss before income taxes consists of the following:
Dutch operations
U.S. operations
Foreign operations
Total
2020
Years ended December 31,
2019
(in thousands)
2018
$
$
(130,493) $
(10,950)
—
(141,443) $
(111,820) $
(12,381)
—
(124,201) $
(85,721)
2,646
3
(83,073)
The income tax benefit / (expense) for the years ended December 31, 2020, 2019 and 2018, consists of the
following:
Current tax expense
Dutch operations
U.S. operations
Foreign operations
Total current tax expense
Deferred tax benefit / (expense)
Dutch operations
U.S. operations
Foreign operations
Total deferred tax benefit / (expense)
Total income tax benefit / (expense)
b. Tax rate reconciliation
2020
Years ended December 31,
2019
(in thousands)
2018
$
$
$
$
$
— $
—
—
— $
— $
16,419
—
$
$
16,419
16,419
— $
—
—
— $
— $
—
—
— $
— $
—
—
(22)
(22)
(209)
—
—
(209)
(231)
The reconciliation of the amount of income tax benefit / (expense) that would result from applying the Dutch
statutory income tax rate to the Company’s reported amount of income tax benefit / (expense) for the years ended
December 31, 2020, 2019 and 2018, is as follows:
Loss before income tax income / (expense) for the period
Expected income tax benefit at the tax rate enacted in the Netherlands (25%)
Difference in tax rates between the Netherlands and the U.S. as well as other
foreign countries
Release of valuation allowance related to expected future taxable income of U.S.
operations
Other net change in valuation allowance
Nondeductible expenses
Change in fair value of contingent consideration
Income tax benefit / (expense)
147
2020
Years ended December 31,
2019
(in thousands)
$ (141,443) $ (124,201) $ (83,073)
31,050 20,768
35,361
2018
247
(495)
(106)
16,419
(30,568)
(5,041)
—
16,419 $
—
—
(25,583) (19,207)
(2,648)
(4,972)
962
—
(231)
— $
$
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Nondeductible expenses predominantly relate to share-based compensation expenses and affected the effective tax
rate by an amount of $5.8 million in 2020 (2019: $4.4 million; 2018: $2.7 million). Derivative financial instruments
affected the effective tax rate by income of $0.8 million in 2020 (expense of $0.6 million in 2019; $0.0 million in 2018),
which reduced the nondeductible expenses resulting from share-based compensation expenses.
c. Significant components of deferred taxes
The tax effects of temporary differences and carryforwards that give rise to significant portions of deferred tax
assets and deferred tax liabilities at December 31, 2020 and 2019 are as follows:
Years ended December 31,
2020
2019
(in thousands)
Deferred tax assets:
Net operating loss carryforwards
Lease liabilities
Intangible assets
Interest carryforwards
Accrued expenses and other current liabilities
Property, plant and equipment
Derivative financial instrument
Deferred revenue
Gross deferred tax asset
Less valuation allowance
Net deferred tax asset
Right-of-use asset
Prepaid expenses
Deferred tax liability
Net deferred tax asset
$ 158,614
9,515
1,702
1,597
1,118
1,072
661
—
$
$ 174,279
(150,113)
24,166
(7,702)
(45)
(7,747)
16,419
$
$
$
99,644
7,861
770
—
628
761
-
6,676
$ 116,340
(109,856)
6,484
(6,484)
—
(6,484)
—
$
$
$
Changes in the valuation allowance were as follows:
January 1,
Changes related to reduction of deferred revenue recorded in equity upon
implementation of ASC 606 Revenue recognition as of January 1, 2018
Changes recorded in profit and loss
Increase/(reduction) related to 2020, 2019 and 2018 Dutch tax reforms
Release of valuation allowance related to expected current year and future
periods recorded in profit and loss
Other changes including currency translation effects
December 31,
Years ended December 31,
2019
2020
2018
$
109,856
(in thousands)
85,100
$
$
93,682
—
30,568
18,287
—
25,583
4,059
(6,229)
19,207
(15,670)
(16,419)
7,821
150,113
—
(4,886)
$ 109,856
$
—
(5,890)
85,100
$
Included within changes recorded in profit and loss for the year ended December 31, 2020 are benefits of $1.2
million from the utilization of U.S. net operating loss carryforwards ($0.8 million for the year ended December 31, 2019
and $0.9 million for the year ended December 31, 2018).
The valuation allowance as of December 31, 2020 is primarily related to net operating loss carryforwards in the
Netherlands that, in the judgment of management, are not more-likely than-not to be realized. In addition, the valuation
allowance as of December 31, 2019 included deferred tax assets for net operating loss carryforwards and temporary
differences in the United States of America. Management considered projected future taxable income and tax-planning
strategies in making this assessment. A valuation allowance will be recorded against deferred tax assets if it is more likely
than not that some or all the deferred tax assets will not be realized.
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Netherlands
The Company determined that in accordance with Dutch tax law it would recognize the CSL Behring License
Revenue as well as the License Fees as taxable results as of the date on which the Company is contractually entitled to
receive (or obligated to make) a payment under the CSL Behring Agreement. The Company expects to continue to incur
taxable losses in the Netherlands except for the period in which it would receive the $450.0 million upfront payment under
the CSL Behring Agreement. In the event that the Company recognizes the $450.0 million upfront payment in 2021, such
payment is expected to be subject to Dutch corporate income tax at a rate of 25.0%. However, the Company does not
expect that it will be required to pay any income taxes in the period in which it recognizes the $450.0 million upfront
payment as taxable revenue, as such payment is not expected to exceed the net operating losses that it carries forward in the
Netherlands. The Company specifically assessed the impact of the CSL Behring agreement with respect to retaining a full
valuation allowance as of December 31, 2020. Closing of the CSL Behring Agreement is contingent on the successful
completion of reviews under the antitrust laws in the United States, Australia, and the United Kingdom. The transactions
have not closed as of December 31, 2020 as the Company received a Second Request from the United States Federal Trade
Commission, on January 4, 2021. Closing of the transaction is dependent on the timing, extent, and result of the Second
Request. In its assessment of whether or not it was more likely than not that the Company’s deferred tax assets in the
Netherlands will be realized, the Company considered all relevant facts and circumstances, including similar regulatory
reviews as well as the five-year cumulative losses reported by the Company in the Netherlands. The Company concluded
that it should continue to record a full valuation allowance as of December 31, 2020 in relation to its Dutch net operating
loss carryforwards.
A portion of the valuation allowance for deferred tax assets relates to follow-on offering costs. Any subsequently
recognized tax benefits will be credited directly to contributed capital. As of December 31, 2020, that amount was $7.7
million ($6.9 million as of December 31, 2019). The change is attributable to changes in the foreign currency rate.
The Dutch corporate tax rate for fiscal years 2018, 2019 and 2020 was 25%. During the years 2018 and 2019, the
Dutch government enacted various changes to the corporate income tax rate applicable to future fiscal years. In September
2020, further changes were enacted that retain the corporate rate at 25% from 2021 onwards.
A tax reform in December 2018 limited the carryforward of tax losses arising from January 1, 2019, to six years
after the end of the respective period. Tax losses incurred prior to this date continue to expire nine years after the end of the
respective period.
As of December 31, 2020, new loss compensation rules were accepted by the Dutch Senate. However, the bill
includes a provision that the new compensation rules will be effective by a separate Governmental Decree, which has not
been introduced as of December 31, 2020. Hence, the new loss compensation rules are not enacted as of December 31,
2020. If enacted, the rules allow losses to be carried forward indefinitely, but from fiscal year 2022 onwards would limit
offsetting taxable profit in excess of EUR 1.0 million to 50% of the taxable profit.
The Dutch fiscal unity as of December 31, 2020 has an estimated $588.2 million (2019: $414.0 million; 2018:
$311.7 million) of taxable losses that can be offset in the following six to seven years. The expiration dates of these Dutch
losses are summarized in the following table. In the year ended December 31, 2020 unused tax losses of $18.5 million
(December 31, 2019: $20.7 million) expired.
Loss expiring
2021
2022
$ 15,206
$ 25,878
2023
(in thousands)
$
$ 25,202
2024
2025-2027
— $ 521,931
The fiscal periods after 2017 are still open for inspection by the Dutch tax authorities.
United States of America
The federal corporate tax rate in the U.S. is 21%. In addition, the Company is subject to state taxes resulting in a
combined tax rate of 27.32% for its U.S. operation. As of December 31, 2020, an estimated $42.3 million of net operating
losses remain to be carried forward. These losses will expire between 2035 and 2037.
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The Company’s U.S. operations generated taxable income in the fiscal years 2018, 2019 and 2020. Based on the
current design of the Company’s worldwide operations, the Company expects to continue to generate taxable income in the
U.S. during the foreseeable future. As of December 31, 2020, the Company considers it more likely than not that it will
utilize its net deferred tax assets in the U.S. and therefore released the remaining valuation allowance of $16.4 million
through profit and loss as of this date.
Under the provision of the Internal Revenue Code, the U.S. net operating losses may become subject to an annual
limitation in the event of certain cumulative exchange in the ownership interest of significant shareholders over a three-
year period in excess of 50 percent, as defined under Section 382 and 383 of the Internal Revenue Code. This could limit
the amount of tax attributes that can be utilized annually to offset future taxable income or tax liabilities. The amount of the
annual limitation is determined based on the value of the Company immediately prior to the ownership change. Subsequent
ownership changes may further affect the limitation.
The fiscal periods after 2017 are still open for inspection by the Internal Revenue Service. The Company is
currently not under examination by the IRS for any tax years.
15. Basic and diluted earnings per share
Diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares outstanding,
assuming conversion of all potentially dilutive ordinary shares. As the Company has incurred a loss in the years presented,
all potentially dilutive ordinary shares would have an antidilutive effect, if converted, and thus have been excluded from
the computation of loss per share. The shares are presented without giving effect to the application of the treasury method
or exercise prices that would be above the share price as of December 31, 2020, December 31, 2019, and December 31,
2018, respectively. In addition, the BMS warrants were not exercisable as of December 31, 2019, and December 31, 2018,
since this would have required the prior designation of Collaboration Targets by BMS. This would generally have resulted
in a lower number of potentially dilutive ordinary shares as some stock option grants as well as the BMS warrants would
have been excluded.
The potentially dilutive ordinary shares are summarized below:
2020
Years ended December 31,
2019
(ordinary shares)
2018
BMS warrants (derecognized as of December 1, 2020 - see Note 4, "Fair value
measurement")
Stock options under 2014 Plans
Non-vested RSUs and earned PSUs
Stock options under previous option plan
Hercules warrants (exercised February 1, 2019)
Employee share purchase plan
Total potential dilutive ordinary shares
16. Commitments and contingencies
— 8,893,000
2,683,104
850,252
14,000
—
485
8,575,000
2,673,712
789,490
32,567
37,175
1,012
12,440,841 12,108,956
2,659,279
679,958
14,000
—
560
3,353,797
In the course of its business, the Company enters as a licensee into contracts with other parties regarding the
development and marketing of its pipeline products. Among other payment obligations, the Company is obligated to pay
royalties to the licensors based on future sales levels and milestone payments whenever specified development, regulatory
and commercial milestones are met. As both future sales levels and the timing and achievement of milestones are
uncertain, the financial effect of these agreements cannot be estimated reliably.
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17. Related party transaction
Between June 2015 and December 2020, BMS was considered a related party due to the combination of its equity
investment in the Company (December 31, 2020: 2.4 million ordinary shares or 5.3% of outstanding ordinary shares), the
warrants as well as the potential obligations arising from the expansion of collaboration targets. On December 1, 2020, the
Company entered into the amended BMS CLA. All transactions subsequent to the effective date of the amended BMS CLA
are considered to no longer be with a related party due to the elimination of the potential obligations related to additional
Collaboration Targets (see Note 3 “Collaboration arrangements and concentration of credit risk”) as well as the elimination
of the BMS warrants (see Note 4, “Fair value measurement”).
On September 14, 2020, the Company appointed Ricardo Dolmetsch, Ph.D. as President, Research and
Development. Dr. Dolmetsch succeeded Sander van Deventer, M.D., Ph.D., the former Executive Vice President, Research
and Product Development. On August 25, 2020, the Company entered into a separation agreement with Robert Gut, M.D.,
Ph.D., pursuant to which Dr. Gut transitioned from his role as Chief Medical Officer on October 14, 2020, to be appointed
a non-executive director of the Board of Directors. On December 1, 2020, at an extraordinary general meeting, the
Company’s shareholders voted to approve the appointment of Dr. Gut as a non-executive director on the Board of
Directors. Dr. Gut had previously been appointed as a non-executive director on the Board of Directors on June 13, 2018
by the Company’s shareholders and had resigned as a non-executive director on August 20, 2018, to be appointed as the
Company’s Chief Medical Officer. On October 24, 2018, at an extraordinary general meeting, the Company’s shareholders
voted to approve the appointment of Dr. Gut as an executive director on the Board of Directors.
On June 17, 2020, the Company’s shareholders voted to approve the appointment of Leonard E. Post, Ph.D., as a
non-executive director of the Board of Directors. Dr. Post replaced Dr. David Schaffer, whose term as a non-executive
director of the Board of Directors ended on the same date. Dr. Post has also assumed the role of chair of the Company’s
Research and Development Committee of the Board of Directors.
On August 20, 2019, the Company promoted Alex Kuta, Ph.D., to Executive Vice President, Operations. Dr. Kuta,
in addition to regulatory affairs, became responsible for global quality as well as GMP manufacturing at the Company’s
facility in Lexington, Massachusetts. As of the same date Sander van Deventer, M.D., Ph.D., was promoted to Executive
Vice President, Research and Product Development, and Dr. van Deventer, in addition to his responsibilities for research,
also became responsible for the Company’s product development. As a result of these changes Scott McMillan, Ph.D.
retired from uniQure. The employment of Dr. van Deventer terminated on September 14, 2020.
In August 2019, the Company entered into an Amended and Restated Agreement Collaboration and License
Agreement (“Amended CLA”) as well as an additional new Collaboration and License Agreement (“New CLA”) with its
related party 4DMT Molecular Therapeutics, Inc. (“4DMT”). In the Amended CLA, the Company received from 4DMT an
exclusive, sublicensable, worldwide license under certain 4DMT intellectual property rights to research, develop, make,
use, and commercialize previously selected Adeno-associated virus (“AAV”) capsid variants and certain associated
products using 4DMT proprietary AAV technology for delivery of gene therapy constructs to cells in the central nervous
system and the liver (“the Field”). In the New CLA, the parties agreed to research and develop, at 4DMT’s cost, new AAV
capsid variants using 4DMT proprietary AAV technology for delivery of up to six additional transgene constructs in the
Field that will be selected by the Company. As of June 2020, 4DMT is no longer considered a related party as a result of
David Schaffer no longer being a non-executive member of the Company’s Board of Directors.
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18. Subsequent events
Amendment Loan Facility
As of December 31, 2020, a $35.0 million term loan was outstanding in accordance with the 2018 Amended
Facility between the Company and Hercules.
On January 29, 2021, the Company and Hercules amended the Company’s loan facility with Hercules Capital Inc.
entered, (“2021 Amended Facility”). Pursuant to the 2021 Amended Facility, Hercules agreed to the 2021 Term Loan,
increasing the aggregate principal amount of the term loan facility from $35.0 million to $135.0 million. On January 29,
2021, the Company drew down $35.0 million of the 2021 Term Loan. The Company may draw down the remaining $65.0
million under the 2021 Term Loan in a series of one or more advances of not less than $20.0 million each until December
15, 2021. Advances under the 2021 Term Loan bear interest at a rate equal to the greater of (i) 8.25% or (ii) 8.25% plus the
prime rate, less 3.25% per annum. The principal balance and all accrued but unpaid interest on advances under 2021 Term
Loan is due on June 1, 2023, which date may be extended by the Company by up to two twelve-month periods. Advances
under the 2021 Term Loan may not be prepaid until six months after the Closing Date, following which the Company may
prepay all such advances without charge.
In addition to the 2021 Term Loan, the amendment also extends the interest-only payment period of the previously
funded $35.0 million term loan from January 1, 2022 to June 1, 2023.
The Company paid a $0.4 million facility charge on January 29, 2021. End of term charges in respect of advances
under the 2021 Term Loan range from 1.65% to 6.85% depending on the maturity date.
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Exhibit
No.
EXHIBIT INDEX
Description
3.1 Amended Articles of Association of the Company (incorporated by reference to Exhibit 3.1 of the Company’s
annual report on Form 10-K for the year ended December 31, 2018 (file no. 0001-36294) filed with the
Securities and Exchange Commission).
4.1* Description of the Registrant’s Securities Registered Pursuant to Section 12 of the Securities Exchange Act of
1934.
10.1t 2014 Share Incentive Plan (incorporated by reference to Exhibit 4.3 of the Company's registration statement on
Form S-8 (file no. 333-225629) filed with the Securities and Exchange Commission).
10.2t Form of Inducement Share Option Agreement under 2014 Share Incentive Plan (incorporated by reference to
Exhibit 10.2 of the Company's annual report on Form 10-K (file no. 001-36294) for the period ending
December 31, 2016 filed with the Securities and Exchange Commission).
10.3t Form of Share Option Agreement under 2014 Share Incentive Plan (incorporated by reference to Exhibit 10.3
of the Company's annual report on Form 10-K (file no. 001-36294) for the period ending December 31, 2016
filed with the Securities and Exchange Commission).
10.4t Form of Restricted Stock Unit Award under the 2014 Share Incentive (incorporated by reference to Exhibit 10.4
of the Company's annual report on Form 10-K (file no. 001-36294) for the period ending December 31, 2017
filed with the Securities and Exchange Commission).
10.5t Form of Performance Stock Unit Award under the 2014 Share Incentive Plan (incorporated by reference to
Exhibit 10.5 of the Company's annual report on Form 10-K (file no. 001-36294) for the period ending
December 31, 2017 filed with the Securities and Exchange Commission).
10.6t Employment Agreement dated December 9, 2014 between uniQure, Inc. and Matthew Kapusta (incorporated
by reference to Exhibit 10.6 of the Company's annual report on Form 10-K (file no. 001-36294) for the period
ending December 31, 2016 filed with the Securities and Exchange Commission).
10.7t Amendment to the Employment Agreement between uniQure, Inc. and Matthew Kapusta, dated March 14,
2017 (incorporated by reference to Exhibit 10.7 of the Company's annual report on Form 10-K (file no. 001-
36294) for the period ending December 31, 2016 filed with the Securities and Exchange Commission).
10.8t Amendment to the Employment Agreement between uniQure, Inc. and Matthew Kapusta, dated October 26,
2017 (incorporated by reference to Exhibit 10.1 of the Company’s quarterly report on Form 10-Q (file no. 001-
36294) for the period ending on September 31, 2017 filed with the Securities and Exchange Commission).
10.10 Patent License Agreement (L-107-2007), effective as of May 2, 2007, by and between the Company and the
National Institutes of Health, as amended on December 31, 2009, May 31, 2013, and November 11, 2013
(incorporated by reference to Exhibit 10.1 of the Company’s quarterly report on Form 10-Q (file no. 001-
36294) for the period ending on March 31, 2017 filed with the Securities and Exchange Commission).
10.11 Patent License Agreement (L-116-2011), effective as of August 10, 2011, by and between the Company and
National Institutes of Health, as amended on May 31, 2013 and November 11, 2013 (incorporated by reference
to Exhibit 10.2 of the Company’s quarterly report on Form 10-Q (file no. 001-36294) for the period ending on
March 31, 2017 filed with the Securities and Exchange Commission).
10.18 Lease relating to 113 Hartwell Avenue, Lexington, Massachusetts, dated as of July 24, 2013, by and between
the Company and King113 Hartwell LLC (incorporated by reference to Exhibit 10.28 of the Company's
registration statement on Form F-1 (file no. 333-193158) filed with the Securities and Exchange Commission).
10.19 Business Acquisition Agreement, dated as of February 16, 2012, by and among Amsterdam Molecular
Therapeutics (AMT) Holding N.V., the Company and the other Parties listed therein (incorporated by reference
to Exhibit 10.29 of the Company's registration statement on Form F-1 (file no. 333-193158) filed with the
Securities and Exchange Commission).
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10.20 Deed of Assignment of Certain Assets and Liabilities of Amsterdam Molecular Therapeutics (AMT) Holding
N.V., dated as of April 5, 2012, by and among Amsterdam Molecular Therapeutics (AMT) Holding B.V.,
Amsterdam Molecular Therapeutics (AMT) Holding IP B.V. and Amsterdam Molecular Therapeutics (AMT)
Holding N.V. (incorporated by reference to Exhibit 10.30 of the Company's registration statement on Form F-1
(file no. 333-193158) filed with the Securities and Exchange Commission).
10.21 Agreement for Transfer of Certain Assets and Liabilities of Amsterdam Molecular Therapeutics (AMT)
Holding N.V., dated as of February 16, 2012, by and among Amsterdam Molecular Therapeutics (AMT)
Holding B.V., Amsterdam Molecular Therapeutics (AMT) Holding IP B.V. and Amsterdam Molecular
Therapeutics (AMT) Holding N.V. (incorporated by reference to Exhibit 10.31 of the Company's registration
statement on Form F-1 (file no. 333-193158) filed with the Securities and Exchange Commission).
10.26 Second Amended and Restated Loan and Security Agreement, dated as of May 6, 2016 by and among uniQure
Biopharma B.V., uniQure, Inc., uniQure IP B.V., the Company's subsidiaries listed therein, and Hercules
Technology Growth Capital, Inc (incorporated by reference to Exhibit 10.30 of the Company's annual report on
Form 10-K (file no. 001-36294) for the period ending December 31, 2016 filed with the Securities and
Exchange Commission.
10.27† Collaboration and License Agreement by and between uniQure Biopharma B.V. and Bristol-Myers Squibb
Company dated April 6, 2015 (incorporated by reference to Exhibit 4.30 of the Company's annual report on
Form 20-F (file no. 001-36294) filed with the Securities and Exchange Commission).
10.29† Investor Agreement by and between uniQure Biopharma B.V. and Bristol-Myers Squibb Company dated April
6, 2015 (incorporated by reference to Exhibit 4.32 of the Company's annual report on Form 20-F (file no. 001-
36294) filed with the Securities and Exchange Commission).
10.32 Lease relating to Paasheuvelweg 25, dated as of March 7, 2016, by and between 52 IFH GmbH & Co. KG and
uniQure biopharma B.V. (incorporated by reference to Exhibit 10.36 of the Company's annual report on Form
10-K (file no. 001-36294) for the period ending December 31, 2016 filed with the Securities and Exchange
Commission).
10.34t Employment Agreement dated August 4, 2017 between uniQure biopharma B.V. and Sander van Deventer
(incorporated by reference to Exhibit 10.2 of the Company’s quarterly report on Form 10-Q (file no. 001-
36294) for the period ending on June 30, 2017 filed with the Securities and Exchange Commission).
10.36t Employment Agreement dated July 15, 2017 between uniQure biopharma B.V. and Christian Klemt
(incorporated by reference to Exhibit 10.4 of the Company’s quarterly report on Form 10-Q (file no. 001-
36294) for the period ending on June 30, 2017 filed with the Securities and Exchange Commission).
10.37† Assignment and License Agreement dated April 17, 2017 between Professor Paolo Simioni and uniQure
biopharma B.V. (incorporated by reference to Exhibit 10.1 of the Company’s periodic report on Form 8-K (file
no. 001-36294) filed on October 19, 2017 with the Securities and Exchange Commission).
10.38t Employment Agreement dated August 20, 2018 by and between uniQure, Inc. and Dr. Robert Gut (incorporated
by reference to Exhibit 10.38 of the Company’s annual report on Form 10-K for the year ended December 31,
2018 (file no. 0001-36294) filed with the Securities and Exchange commission).
10.39 Amendment No. 1 to Second Amended and Restated Loan and Security Agreement dates as of December 6,
2018 by and among uniQure Biopharma B.V., uniQure, Inc., uniQure IP B.V., the Company, and Hercules
Technology Growth Capital, Inc (incorporated by reference to Exhibit 10.1 of the Company's current report on
Form 8-K (file no. 001-36294) filed with the Securities and Exchange Commission) filed on December 10,
2018.
10.40 First Amendment Lease relating to 113 Hartwell Avenue, Lexington, Massachusetts, dated as of July 24, 2013,
by and between the Company and King113 Hartwell LLC (incorporated by reference to Exhibit 10.1 of the
Company's current report on form 8-K (file no. 001-36294) filed with the Securities and Exchange
Commission) filed on November 15, 2018.
10.41t Employee Share Purchase Plan (incorporated by reference to Exhibit 4.2 of the Company's registration
statement on Form S-8 (file no. 333-225629) filed with the Securities and Exchange Commission) filed on June
14, 2018.
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10.42
10.43
10.44t
10.45t
10.47
10.48
10.49t
10.50t
10.51t
10.52t
10.53†
10.54t
10.55t
10.56t
Second Amendment Lease relating to 113 Hartwell Avenue, Lexington Massachusetts, dated as of June 17,
2019, by and between the Company and King 113 Hartwell LLC (incorporated by reference to Exhibit 10.42
of the Company’s quarterly report on Form 10-Q (file no. 001-36294) for the period ending on June 30, 2019
filed with the Securities and Exchange Commission).
Form of Share Option Agreement, effective June 18, 2019, under the 2014 Share Incentive Plan
(incorporated by reference to Exhibit 10.43 of the Company’s quarterly report on Form 10-Q (file no. 001-
36294) for the period ending on June 30, 2019 filed with the Securities and Exchange Commission).
Amended and Restated Employment Agreement, executed September 17, 2019, by and between the
Company and Dr. Kuta (incorporated by reference to Exhibit 10.1 of the Company’s current report on Form
8-K (file no. 001-36294) filed with the Securities and Exchange Commission) filed on September 20, 2019.
Employment Agreement, executed September 17, 2019, by and between the Company and Dr. Sander van
Deventer (incorporated by reference to Exhibit 10.2 of the Company’s current report on form 8-K (file no.
001-36294) filed with the Securities and Exchange Commission) filed on September 20, 2019.
Amended and Restated Collaboration and License Agreement by and between 4D Molecular Therapeutics,
Inc and uniQure biopharma B.V., dated August 6, 2019 (incorporated by reference to Exhibit 10.4 of the
Company’s quarterly report on Form 10-Q (file no. 001-36294) for the period ending on September 30, 2019
filed with the Securities and Exchange Commission).
Collaboration and License Agreement by and between 4D Molecular Therapeutics, Inc and uniQure
biopharma B.V., dates August 6, 2019 (incorporated by reference to Exhibit 10.5 of the Company’s quarterly
report on Form 10-Q (file no. 001-36294) for the period ending on September 30, 2019 filed with the
Securities and Exchange Commission).
Amended and Restated Employment Agreement, executed March 1, 2020 by and between uniQure
biopharma B.V. and Christian Klemt (incorporated by reference to Exhibit 10.49 of the Company’s annual
report on Form 10-K for the year ended December 31, 2019 (file no. 0001-36294) filed with the Securities
and Exchange commission).
Amended and Restated Employment Agreement, executed March 1, 2020 by and between uniQure Inc. and
Dr. Robert Gut (incorporated by reference to Exhibit 10.50 of the Company’s annual report on Form 10-K
for the year ended December 31, 2019 (file no. 0001-36294) filed with the Securities and Exchange
commission).
Amended and Restated Employment Agreement, executed March 1, 2020 by and between uniQure Inc. and
Maria Cantor (incorporated by reference to Exhibit 10.51 of the Company’s annual report on Form 10-K for
the year ended December 31, 2019 (file no. 0001-36294) filed with the Securities and Exchange
commission).
Amended and Restated Employment Agreement, executed March 1, 2020 by and between uniQure Inc. and
Jonathan Garen (incorporated by reference to Exhibit 10.52 of the Company’s annual report on Form 10-K
for the year ended December 31, 2019 (file no. 0001-36294) filed with the Securities and Exchange
commission).
Commercialization and License Agreement by and between uniQure biopharma B.V. and CSL Behring LLC
dated June 24, 2020 (incorporated by reference to Exhibit 10.1 of the Company’s quarterly report on Form
10-Q (file no. 001-36294) for the period ending on June 30, 2020 filed with the Securities and Exchange
Commission).
Separation agreement, executed August 25, 2020, by and between uniQure biopharma B.V. and Sander van
Deventer (incorporated by reference to Exhibit 10.1 of the Company’s quarterly report on Form 10-Q (file
no. 001-36294) for the period ending on September 30, 2020 filed with the Securities and Exchange
Commission).
Separation agreement, executed August 25, 2020, by and between uniQure Inc. and Robert Gut
(incorporated by reference to Exhibit 10.2 of the Company’s quarterly report on Form 10-Q (file no. 001-
36294) for the period ending on September 30, 2020 filed with the Securities and Exchange Commission).
Employment agreement, executed September 14, 2020, by and between uniQure Inc. and Ricardo Dolmetsch
(incorporated by reference to Exhibit 10.3 of the Company’s quarterly report on Form 10-Q (file no. 001-
36294) for the period ending on September 30, 2020 filed with the Securities and Exchange Commission).
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10.57*†
10.58*
14.1
21.1*
23.1*
23.2*
24.1*
31.1*
31.2*
32.1*
101*
Amendment to Collaboration and License Agreement by and between uniQure Biopharma B.V. and Bristol-
Myers Squibb Company dated December 1, 2020.
Amendment No. 2 to Second Amended and Restated Loan and Security Agreement as of January 29, 2021
by and among uniQure Biopharma B.V., uniQure, Inc., uniQure IP B.V., the Company and Hercules Capital
Inc.
Code of Ethics (incorporated by reference to Exhibit 14.1 of the Company's annual report on Form 10-K (file
no. 001-36294) for the period ending December 31, 2016 filed with the Securities and Exchange
Commission).
Subsidiaries of the Company.
Consent of Independent Registered Public Accounting Firm – KPMG Accountants N.V.
Consent of Independent Registered Public Accounting Firm – PricewaterhouseCoopers Accountants N.V.
Power of Attorney (incorporated by reference to the signature page of this Annual Report on Form 10-K).
Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer.
Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer.
Section 1350 Certification.
The following materials from the Company’s Annual Report on Form 10-K for the year ended December 31,
2020, formatted in Inline XBRL (eXtensible Business Reporting Language): (i) Consolidated Balance
Sheets, (ii) Consolidated Statements of Operations and Comprehensive Income (Loss), (iii) Consolidated
Statements of Shareholders’ Equity, (iv) Consolidated Statements of Cash Flows and (v) Notes to
Consolidated Financial Statements.
104*
The cover page from the Company’s Annual Report on Form 10-K for the year ended December 31, 2020,
has been formatted in Inline XBRL.
† Confidential treatment requested as to certain portions, which portions have been omitted and filed separately with the
Securities and Exchange Commission
Filed herewith
Indicates a management contract or compensatory plan or arrangement.
*
t
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Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
SIGNATURES
UNIQURE, N.V.
By:
/s/ MATTHEW KAPUSTA
Matthew Kapusta
Chief Executive Officer
(Principal Executive and Financial Officer)
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and
appoints Matthew Kapusta and Christian Klemt, jointly and severally, his or her attorney-in-fact, with the power of
substitution, for him or her in any and all capacities, to sign any amendments to this Annual Report on Form 10-K and to
file the same, with exhibits thereto and other documents in connection therewith, with the Securities and Exchange
Commission, hereby ratifying and confirming all that each of said attorneys-in-fact, or his or her substitute or substitutes,
may do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Exchange Act of 1934, this Annual Report on Form 10-K has been
signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
Signatures
Title
Date
/s/ MATTHEW KAPUSTA
Matthew Kapusta
Chief Executive Officer, Chief Financial Officer
and Director (Principal Executive and Financial
Officer)
March 1, 2021
/s/ CHRISTIAN KLEMT
Christian Klemt
Chief Accounting Officer
March 1, 2021
/s/ PHILIP ASTLEY SPARKE
Philip Astley Sparke
Director
/s/ MADHAVAN BALACHANDRAN
Madhavan Balachandran
Director
/s/ ROBERT GUT
Robert Gut
/s/ JACK KAYE
Jack Kaye
/s/ DAVID MEEK
David Meek
/s/ LEONARD POST
Leonard Post
/s/ PAULA SOTEROPOULOS
Paula Soteropoulos
/s/ JEREMY P. SPRINGHORN
Jeremy P. Springhorn
Director
Director
Director
Director
Director
Director
157
March 1, 2021
March 1, 2021
March 1, 2021
March 1, 2021
March 1, 2021
March 1, 2021
March 1, 2021
March 1, 2021
Exhibit 4.1
DESCRIPTION OF THE REGISTRANT’S SECURITIES
REGISTERED PURSUANT TO SECTION 12 OF THE
SECURITIES EXCHANGE ACT OF 1934
The following description sets forth certain material terms and provisions of uniQure N.V.’s (“uniQure N.V.”,
“we,” “us,” and “our”) securities that are registered under Section 12 of the Securities Exchange Act of 1934, as
amended. The description below of our ordinary shares and provisions of our articles of association are summaries and
are qualified by reference to our articles of association and the applicable provisions of Dutch law.
DESCRIPTION OF CAPITAL STOCK
The following description of the general terms and provisions of our ordinary shares is a summary only and
therefore is not complete and is subject to, and qualified in its entirety by reference to, the terms and provisions of our
articles of association. Our articles of association have been filed with the SEC as an exhibit to the Annual Report on
Form 10-K of which this Exhibit 4.1 is a part and you should read the articles for provisions that may be important to
you.
Authorized Ordinary Shares
Our articles of association provide an authorized share capital of 60,000,000 ordinary shares, each with a nominal
value per share of €0.05.
Form of Ordinary Shares
We issue our ordinary shares in registered book-entry form and such shares are not certificated.
NASDAQ Global Market Listing
Our ordinary shares are listed on The NASDAQ Global Market under the symbol "QURE."
Comparison of Dutch corporate law and our Articles of Association and Delaware corporate law
The following comparison between Dutch corporate law, which applies to us, and Delaware corporate law, the
law under which many publicly listed companies in the United States are incorporated, discusses additional matters not
otherwise described in this exhibit. This summary is subject to Dutch law, including Book 2 of the Dutch Civil Code
and Delaware corporation law, including the Delaware General Corporation Law.
Corporate governance
Duties of directors
The Netherlands. We have a one tier board structure consisting of our executive directors and non-executive
directors. Under the one-tier board structure, both the executive and non-executive directors will be collectively
responsible for the management performed by the one-tier board and for the general policy and strategy of a company.
The executive directors are responsible for the day-to-day management of a company. The non-executive directors are
responsible for supervising the conduct of, and providing advice to, the executive directors and for providing
supervision with respect to the company's general state of affairs. Each executive director and non-executive director
has a duty to act in the corporate interest of the company. Under Dutch law, the corporate interest extends to the
interests of all corporate stakeholders, such as shareholders, creditors, employees, customers and suppliers. The duty to
act in the corporate interest of the company also applies in the event of a proposed sale or split-up of a company,
whereby the circumstances generally dictate how such duty is to be applied. Any resolution of the board regarding a
significant change in the identity or character of a company requires shareholders' approval.
Delaware. The board of directors bears the ultimate responsibility for managing the business and affairs of a
corporation. In discharging this function, directors of a Delaware corporation owe fiduciary duties of care and loyalty
to the corporation and to its stockholders. Delaware courts have decided that the directors of a Delaware corporation
are required to exercise informed business judgment in the performance of their duties. Informed business judgment
means that the directors have informed themselves of all material information reasonably available to them. Delaware
courts have also imposed a heightened standard of conduct upon directors of a Delaware corporation who take any
action designed to defeat a threatened change in control of the corporation. In addition, under Delaware law, when the
board of directors of a Delaware corporation approves the sale or break-up of a corporation, the board of directors may,
in certain circumstances, have a duty to obtain the highest value reasonably available to the stockholders.
Director terms
The Netherlands. Under Dutch law, executive directors of a listed company are generally appointed for a term
of a maximum of four years and reappointed for a term of a maximum of four years at a time. Non-executive directors
of a listed company are generally appointed for a term of a maximum of four years and reappointed once for another
term of a maximum of four years. Non-executive directors of a listed company may subsequently be reappointed for a
term of a maximum of two years, which reappointment may be extended by at most two years. Our executive and non-
executive directors are, in principle, appointed by the general meeting of shareholders upon the binding nomination of
the non-executive directors.
The general meeting of shareholders is entitled at all times to suspend or dismiss a director. The general meeting
of shareholders may only adopt a resolution to suspend or dismiss such director by at least a two-thirds majority of the
votes cast, if such majority represents more than half of the issued share capital of the company.
Delaware. The Delaware General Corporation Law generally provides for a one-year term for directors, but
permits directorships to be divided into up to three classes with up to three-year terms, with the years for each class
expiring in different years, if permitted by a company's certificate of incorporation, an initial bylaw or a bylaw adopted
by the stockholders. A director elected to serve a term on such a classified board may not be removed by stockholders
without cause. There is no limit in the number of terms a director may serve.
Director vacancies
The Netherlands. Under Dutch law, directors are appointed by the general meeting of shareholders. Under our
articles of association, directors are, in principle, appointed by the general meeting of shareholders upon the binding
nomination by the non-executive directors. However, the general meeting of shareholders may at all times overrule
such binding nomination by a resolution adopted by at least a two-thirds majority of the votes cast, provided such
majority represents more than half of the issued share capital of our company. If the general meeting of shareholders
overrules the binding nomination, the non-executive directors must make a new nomination.
Delaware. The Delaware General Corporation Law provides that vacancies and newly created directorships
may be filled by a majority of the directors then in office (even though less than a quorum) unless (1) otherwise
provided in the certificate of incorporation or bylaws of the corporation or (2) the certificate of incorporation directs
that a particular class of stock is to elect such director, in which case any other directors elected by such class, or a sole
remaining director elected by such class, will fill such vacancy.
Conflict-of-interest transactions
The Netherlands. Pursuant to Dutch law and our articles of association, directors may not take part in any
discussion or decision-making that involves a subject or transaction in relation to which they have a personal direct or
indirect conflict of interest with us. Our articles of association provide that if as a result thereof, the board is unable to
act the resolution will be adopted by the general meeting of shareholders.
Delaware. The Delaware General Corporation Law generally permits transactions involving a Delaware
corporation and an interested director of that corporation if:
● the material facts as to the director's relationship or interest are disclosed and a majority of disinterested
directors consent;
● the material facts are disclosed as to the director's relationship or interest and a majority of shares entitled to
vote thereon consent; or
● the transaction is fair to the corporation at the time it is authorized by the board of directors, a committee of
the board of directors or the stockholders.
Shareholder rights
Voting rights
The Netherlands. In accordance with Dutch law and our articles of association, each issued ordinary share
confers the right to cast one vote at the general meeting of shareholders. Each holder of ordinary shares may cast as
many votes as it holds shares. Shares that are held by us or our direct or indirect subsidiaries do not confer the right to
vote. Dutch law does not permit cumulative voting for the election of executive directors and non-executive directors.
For each general meeting of shareholders, a record date will be applied with respect to ordinary shares in order to
establish which shareholders are entitled to attend and vote at a specific general meeting of shareholders. Such record
date is set by the board. The record date and the manner in which shareholders can register and exercise their rights
will be set out in the convocation notice of the meeting.
Delaware. Under the Delaware General Corporation Law, each stockholder is entitled to one vote per share of
stock, unless the certificate of incorporation provides otherwise. In addition, the certificate of incorporation may
provide for cumulative voting at all elections of directors of the corporation, or at elections held under specified
circumstances. Either the certificate of incorporation or the bylaws may specify the number of shares and/or the
amount of other securities that must be represented at a meeting in order to constitute a quorum, but in no event will a
quorum consist of less than one third of the shares entitled to vote at a meeting.
Stockholders as of the record date for the meeting are entitled to vote at the meeting, and the board of directors
may fix a record date that is no more than 60 nor less than ten days before the date of the meeting, and if no record
date is set then the record date is the close of business on the day next preceding the day on which notice is given, or if
notice is waived then the record date is the close of business on the day next preceding the day on which the meeting is
held. The determination of the stockholders of record entitled to notice or to vote at a meeting of stockholders shall
apply to any adjournment of the meeting, but the board of directors may fix a new record date for the adjourned
meeting.
Shareholder proposals
The Netherlands. Pursuant to our articles of association, extraordinary general meetings of shareholders will be
convened by the board or by those who are authorized by law or pursuant to our articles of association to do so.
Pursuant to Dutch law, one or more shareholders representing at least one-tenth of the issued share capital of the
company may request the Dutch courts to order that they be authorized by the court to convene a general meeting of
shareholders. The court shall disallow the request if it does not appear that the applicants have previously requested the
board to convene a general meeting of shareholders and the board has taken the necessary steps so that the general
meeting of shareholders could be held within six weeks after the request.
The agenda for a general meeting of shareholders must include such items requested by one or more shareholders
representing at least 3% of the issued share capital of a company or such lower percentage as the articles of association
may provide. Our articles of association do not state such lower percentage.
Delaware. Delaware law does not specifically grant stockholders the right to bring business before an annual or
special meeting. However, if a Delaware corporation is subject to the SEC's proxy rules, a stockholder who owns
at least $2,000 in market value, or 1% of the corporation's securities entitled to vote, may propose a matter for a vote at
an annual or special meeting in accordance with those rules.
Action by written consent
The Netherlands. Under Dutch law, the articles of association of a company may provide that shareholders'
resolutions may be adopted in writing without holding a general meeting of shareholders, provided that the resolution
is adopted unanimously by all shareholders that are entitled to vote. For a listed company, this method of adopting
resolutions is not feasible.
Delaware. Although permitted by Delaware law, publicly listed companies do not typically permit stockholders
of a corporation to take action by written consent.
Appraisal rights
The Netherlands. The concept of appraisal rights does not exist under Dutch law. However, pursuant to Dutch
law a shareholder who for its own account contributes at least 95% of our issued share capital may initiate proceedings
against our minority shareholders jointly for the transfer of their shares to it. The proceedings are held before the
Enterprise Chamber (Ondernemingskamer). The Enterprise Chamber may grant the claim for squeeze-out in relation to
all minority shareholders and will determine the price to be paid for the shares, if necessary after appointment of one or
three experts who will offer an opinion to the Enterprise Chamber on the value to be paid for the shares of the minority
shareholders.
Furthermore, in accordance with Directive 2005/56/EC of the European Parliament and the Council of
October 26, 2005 on cross-border mergers of limited liability companies, Dutch law provides that, to the extent the
acquiring company in a cross-border merger is organized under the laws of another EU member state, a shareholder of
a Dutch disappearing company who has voted against the cross-border merger may file a claim with the Dutch
company for compensation. The compensation is to be determined by one or more independent experts.
Delaware. The Delaware General Corporation Law provides for stockholder appraisal rights, or the right to
demand payment in cash of the judicially determined fair value of the stockholder's shares, in connection with certain
mergers and consolidations.
Shareholder suits
The Netherlands. In the event a third party is liable to a Dutch company, only a company itself can bring a civil
action against that third party. An individual shareholder does not have the right to bring an action on behalf of a
company. This individual shareholder may, in its own name, have an individual right to take action against such third
party in the event that the cause for the liability of that third party also constitutes a tortious act directly against that
individual shareholder. The Dutch Civil Code provides for the possibility to initiate such action collectively. A
collective action can be instituted by a foundation or an association whose objective is to protect the rights of a group
of persons having similar interests. The collective action itself cannot result in an order for payment of monetary
damages but may only result in a declaratory judgment (verklaring voor recht). In order to obtain compensation for
damages, the foundation or association and the defendant may reach—often on the basis of such declaratory judgment
—a settlement. A Dutch court may declare the settlement agreement binding upon all the injured parties with an opt-
out choice for an individual injured party. An individual injured party may also itself—outside the collective action—
institute a civil claim for damages.
Delaware. Under the Delaware General Corporation Law, a stockholder may bring a derivative action on behalf
of the corporation to enforce the rights of the corporation. An individual also may commence a class action suit on
behalf of himself and other similarly situated stockholders where the requirements for maintaining a class action under
Delaware law have been met. A person may institute and maintain such a suit only if that person was a stockholder at
the time of the transaction which is the subject of the suit. In addition, under Delaware case law, the plaintiff normally
must be a stockholder at the time of the transaction that is the subject of the suit and throughout the duration of the
derivative suit. Delaware law also requires that the derivative plaintiff make a demand on the directors of the
corporation to assert the corporate claim before the suit may be prosecuted by the derivative plaintiff in court, unless
such a demand would be futile.
Repurchase of shares
The Netherlands. Under Dutch law, a company such as ours may not subscribe for newly issued shares in its
own share capital. Such company may, however, subject to certain restrictions under Dutch law and its articles of
association, acquire shares in its own share capital. We may acquire fully paid-up shares in our own share capital at
any time for no valuable consideration. Furthermore, subject to certain provisions of Dutch law and our articles of
association, we may repurchase fully paid-up shares in our own share capital if (1) such repurchase would not cause
our shareholders' equity to fall below an amount equal to the sum of the paid-up and called-up part of the issued share
capital and the reserves we are required to maintain pursuant to applicable law and (2) we would not as a result of such
repurchase hold more than 50% of our own issued share capital.
Other than shares acquired for no valuable consideration, ordinary shares may only be acquired following a
resolution of our board, acting pursuant to an authorization for the repurchase of shares granted by the general meeting
of shareholders. An authorization by the general meeting of shareholders for the repurchase of shares can be granted
for a maximum period of 18 months. Such authorization must specify the number of shares that may be acquired, the
manner in which these shares may be acquired and the price range within which the shares may be acquired. Our board
has been authorized, for a period of 18 months to be calculated from the date of the annual general meeting of
shareholders held on June 17, 2020, to cause the repurchase of ordinary shares by us of up to 10% of our issued share
capital, for a price per share between the nominal value of the ordinary shares and an amount of 110% of the highest
price of the ordinary shares officially quoted on any of the official stock markets we are listed on during any of 30
banking days preceding the date the repurchase is effected or proposed.
No authorization of the general meeting of shareholders is required if fully paid-up ordinary shares are acquired
by us with the intention of transferring such ordinary shares to our employees under an applicable employee stock
purchase plan, provided such ordinary shares are officially quoted on any of the official stock markets.
Delaware. Under the Delaware General Corporation Law, a corporation may purchase or redeem its own shares
unless the capital of the corporation is impaired or the purchase or redemption would cause an impairment of the
capital of the corporation. A Delaware corporation may, however, purchase or redeem out of capital any of its
preferred shares or, if no preferred shares are outstanding, any of its own shares if such shares will be retired upon
acquisition and the capital of the corporation will be reduced in accordance with specified limitations.
Anti-takeover provisions
The Netherlands. Under Dutch law, various protective measures are possible and permissible within the
boundaries set by Dutch statutory law and Dutch case law. We have adopted several provisions that may have the
effect of making a takeover of our company more difficult or less attractive, including:
● the staggered four-year terms of our directors, as a result of which only approximately one-fourth of our non-
executive directors will be subject to election in any one year;
● a provision that our directors may only be removed at the general meeting of shareholders by a two-thirds
majority of votes cast representing more than half of our issued share capital; and
● requirements 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 board.
Delaware. In addition to other aspects of Delaware law governing fiduciary duties of directors during a
potential takeover, the Delaware General Corporation Law also contains a business combination statute that protects
Delaware companies from hostile takeovers and from actions following the takeover by prohibiting some transactions
once an acquirer has gained a significant holding in the corporation.
● Section 203 of the Delaware General Corporation Law prohibits "business combinations," including mergers,
sales and leases of assets, issuances of securities and similar transactions by a corporation or a subsidiary with
an interested stockholder that beneficially owns 15% or more of a corporation's voting stock, within three
years after the person becomes an interested stockholder, unless: the transaction that will cause the person to
become an interested stockholder is approved by the board of directors of the target prior to the transactions;
● after the completion of the transaction in which the person becomes an interested stockholder, the interested
stockholder holds at least 85% of the voting stock of the corporation not including shares owned by persons
who are directors and representatives of interested stockholders and shares owned by specified employee
benefit plans; or
● after the person becomes an interested stockholder, the business combination is approved by the board of
directors of the corporation and holders of at least 66.67% of the outstanding voting stock, excluding shares
held by the interested stockholder.
A Delaware corporation may elect not to be governed by Section 203 by a provision contained in the original
certificate of incorporation of the corporation or an amendment to the original certificate of incorporation or to the
bylaws of the company, which amendment must be approved by a majority of the shares entitled to vote and may not
be further amended by the board of directors of the corporation. Such an amendment is not effective until twelve
months following its adoption.
Inspection of books and records
The Netherlands. Our board provides the shareholders, at the general meeting of shareholders, with all
information that the shareholders require for the exercise of their powers, unless doing so would be contrary to an
overriding interest of ours. Our board must give reason for electing not to provide such information on the basis of an
overriding interest.
Delaware. Under the Delaware General Corporation Law, any stockholder may inspect certain of the
corporation's books and records, for any proper purpose, during the corporation's usual hours of business.
Removal of directors
The Netherlands. Under our articles of association, the general meeting of shareholders is at all times entitled to
suspend or dismiss a director. The general meeting of shareholders may only adopt a resolution to suspend or dismiss
such a member by at least a two-thirds majority of the votes cast, provided such majority represents more than half of
the issued share capital of our company.
Delaware. Under the Delaware General Corporation Law, any director or the entire board of directors may be
removed, with or without cause, by the holders of a majority of the shares then entitled to vote at an election of
directors, except (1) unless the certificate of incorporation provides otherwise, in the case of a corporation whose board
is classified, stockholders may effect such removal only for cause, or (2) in the case of a corporation having
cumulative voting, if less than the entire board is to be removed, no director may be removed without cause if the votes
cast against his removal would be sufficient to elect him if then cumulatively voted at an election of the entire board of
directors, or, if there are classes of directors, at an election of the class of directors of which he is a part.
Preemptive rights
The Netherlands. Under Dutch law, in the event of an issuance of ordinary shares, each shareholder will have a
pro rata preemptive right in proportion to the aggregate nominal value of the ordinary shares held by such holder (with
the exception of ordinary shares to be issued to employees or ordinary shares issued against a contribution other than
in cash). Under our articles of association, the preemptive rights in respect of newly issued ordinary shares may be
restricted or excluded by a resolution of the general meeting of shareholders upon proposal of our board. The general
meeting of shareholders may designate our board to restrict or exclude the preemptive rights in respect of newly issued
ordinary shares. Such designation can be granted for a period not exceeding five years. A resolution of the general
meeting of shareholders to restrict or exclude the preemptive rights or to designate the board as the authorized body to
do so requires a two-thirds majority of the votes cast, if less than one half of our issued share capital is represented at
the meeting.
At our annual general meeting of shareholders held on June 17, 2020, the general meeting of shareholders
resolved to authorize our board for a period of 18 months with effect from the date of the meeting to restrict or exclude
preemptive rights accruing to shareholders in connection with the issue of ordinary shares or rights to subscribe for
ordinary shares.
Delaware. Under the Delaware General Corporation Law, stockholders have no preemptive rights to subscribe
for additional issues of stock or to any security convertible into such stock unless, and to the extent that, such rights are
expressly provided for in the certificate of incorporation.
Dividends
The Netherlands. Dutch law provides that dividends may be distributed after adoption of the annual accounts by
the general meeting of shareholders from which it appears that such dividend distribution is allowed. Moreover,
dividends may be distributed only to the extent that the shareholders' equity exceeds the amount of the paid-up and
called-up part of the issued share capital of the company and the reserves that must be maintained under the law or the
articles of association. Interim dividends may be declared as provided in the articles of association and may be
distributed to the extent that the shareholders' equity exceeds the amount of the paid-up and called-up part of the issued
share capital of the company and the reserves that must be maintained under the law or the articles of association, as
apparent from an interim statement of assets and liabilities.
Under our articles of association, any amount of profit may be carried to a reserve as our board determines. After
reservation by our board of any profit, the remaining profit will be at the disposal of the shareholders. Our corporate
policy is to only make a distribution of dividends to our shareholders after the adoption of our annual accounts
demonstrating that such distribution is legally permitted. However, our board is permitted to declare interim dividends
without the approval of the general meeting of shareholders.
Dividends will be made payable not later than thirty days after the date they were declared unless the body
declaring the dividend determines a different date. Claims to dividends not made within five years and one day from
the date that such dividends became payable will lapse and any such amounts will be considered to have been forfeited
to us (verjaring).
Delaware. Under the Delaware General Corporation Law, a Delaware corporation may pay dividends out of its
surplus (the excess of net assets over capital), or in case there is no surplus, out of its net profits for the fiscal year in
which the dividend is declared and/or the preceding fiscal year (provided that the amount of the capital of the
corporation is not less than the aggregate amount of the capital represented by the issued and outstanding stock of all
classes having a preference upon the distribution of assets). In determining the amount of surplus of a Delaware
corporation, the assets of the corporation, including stock of subsidiaries owned by the corporation, must be valued at
their fair market value as determined by the board of directors, without regard to their historical book value. Dividends
may be paid in the form of shares, property or cash.
Shareholder vote on certain reorganizations
The Netherlands. Under Dutch law, the general meeting of shareholders must approve resolutions of the board
relating to a significant change in the identity or the character of the company or the business of the company, which
includes:
● a transfer of the business or virtually the entire business to a third party;
● the entry into or termination of a long-term cooperation of the company or a subsidiary with another legal
entity or company or as a fully liable partner in a limited partnership or general partnership, if such
cooperation or termination is of a far-reaching significance for the company; and
● the acquisition or divestment by the company or a subsidiary of a participating interest in the capital of a
company having a value of at least one third of the amount of its assets according to its balance sheet and
explanatory notes or, if the company prepares a consolidated balance sheet, according to its consolidated
balance sheet and explanatory notes, according to the last adopted annual accounts of the company.
Delaware. Under the Delaware General Corporation Law, the vote of a majority of the outstanding shares of
capital stock entitled to vote thereon generally is necessary to approve a merger or consolidation or the sale of all or
substantially all of the assets of a corporation. The Delaware General Corporation Law permits a corporation to
include in its certificate of incorporation a provision requiring for any corporate action the vote of a larger portion of
the stock or of any class or series of stock than would otherwise be required.
Under the Delaware General Corporation Law, no vote of the stockholders of a surviving corporation to a merger
is needed, however, unless required by the certificate of incorporation, if (1) the agreement of merger does not amend
in any respect the certificate of incorporation of the surviving corporation, (2) the shares of stock of the surviving
corporation are not changed in the merger and (3) the number of shares of common stock of the surviving corporation
into which any other shares, securities or obligations to be issued in the merger may be converted does not exceed 20%
of the surviving corporation's common stock outstanding immediately prior to the effective date of the merger. In
addition, stockholders may not be entitled to vote in certain mergers with other corporations that own 90% or more of
the outstanding shares of each class of stock of such corporation, but the stockholders will be entitled to appraisal
rights.
Remuneration of directors
The Netherlands. Under Dutch law and our articles of association, we must adopt a remuneration policy for our
directors. Such remuneration policy shall be adopted by the general meeting of shareholders upon the proposal of our
non-executive directors. The remuneration of our executive directors will be determined by our non-executive
directors with due observance of our remuneration policy; the remuneration of our non-executive directors will be
determined by the board with due observance of our remuneration policy.
Delaware. Under the Delaware General Corporation Law, the stockholders do not generally have the right to
approve the compensation policy for directors or the senior management of the corporation, although certain aspects of
executive compensation may be subject to binding or advisory stockholder votes due to the provisions of U.S. federal
securities and tax law, as well as stock exchange requirements.
Transfer Agent and Registrar
Computershare Trust Company, N.A. serves as transfer agent and registrar for our ordinary shares.
Exhibit 10.57
Confidential
Execution Version
*Portions of this exhibit have been omitted for confidential treatment pursuant to Item 601(b)(10)(iv) of
Regulation S-K.
AMENDMENT TO COLLABORATION AND LICENSE AGREEMENT
(the
This AMENDMENT TO THE COLLABORATION AND LICENSE AGREEMENT
“Amendment”) is effective as of December 1, 2020 (the “Amendment Effective Date”), by and between
UNIQURE BIOPHARMA B.V., a corporation organized under the laws of the Netherlands, having its principal
place of business at Paasheuvelweg 25a, 1105 BP Amsterdam, The Netherlands (“uniQure”), and BRISTOL-
MYERS SQUIBB COMPANY, a Delaware corporation headquartered at 430 E. 29 Street, 14 Floor, New York,
New York, USA 10016. UNIQURE N.V. is a party to this Agreement solely for purposes of Section 2. uniQure
and BMS are sometimes referred to herein individually as a “Party” and collectively as the “Parties”.
RECITALS
A.
uniQure and BMS are parties to that certain Collaboration and License Agreement, dated April 6,
2015 (the “Agreement”), pursuant to which the Parties are collaborating to discover and develop gene therapy
products for the treatment of cardiovascular diseases.
B.
BMS and uniQure N.V., an Affiliate of uniQure, have also entered into that certain Investor
Agreement (the “Investor Agreement”), that certain Share Subscription Agreement (the “Subscription
Agreement”), that certain Seventh Collaboration Warrant Agreement, and that certain Tenth Collaboration
Warrant Agreement (collectively, the “Warrant Agreements”), each one dated April 6, 2015.
C.
The Parties now wish to concurrently amend the Agreement, in accordance with Section 17.1
thereof, to limit the number of Collaboration Targets and to modify the indication exclusivity provisions and
certain financial terms, among other changes, and to terminate the Warrant Agreements.
NOW, THEREFORE, in consideration of the foregoing premises and the mutual promises, covenants and
conditions contained in this Amendment, uniQure and BMS, intending to be legally bound, agree as follows.
1.
DEFINITIONS
Capitalized terms used in this Amendment that are not otherwise defined herein shall have the meanings
such terms are given in the Agreement
2.
TERMINATION OF WARRANT AGREEMENTS; CHANGE OF CONTROL PAYMENT
2.1 Warrant Agreements. BMS and uniQure N.V. hereby agree that on the Amendment Effective
Date, each of the Warrant Agreements shall terminate and be of no further force and effect, without any exercise
by BMS of its right to subscribe for and acquire from uniQure N.V. the Warrant Shares (as defined thereunder).
2.2
Payment upon Change of Control of uniQure. Subject to the provisions of this Section 2.2,
substantially simultaneously with the consummation of the first Change of Control Transaction of uniQure that
occurs prior to the earlier of (i) [*] anniversary of the Amendment Effective Date and (ii) BMS’ delivery of a
Target Cessation Notice for all four (4) Collaboration Targets, uniQure (or its Third Party acquirer) shall pay to
BMS in Dollars via electronic funds transfer to an account designated by BMS a one-time, non-refundable, non-
creditable cash payment (the “Change of Control Payment”) of seventy million dollars ($70,000,000), provided
that (x) if seventy million dollars ($70,000,000) is greater than five percent (5.0%) of the Net Proceeds from such
Change of Control Transaction, the Change of Control Payment shall be an amount equal to five percent (5.0%) of
such Net Proceeds, and (y) if seventy million dollars ($70,000,000) is less than one percent (1.0%) of such Net
Proceeds, the Change of Control Payment shall be an amount equal to one percent (1.0%) of such Net Proceeds.
For the avoidance of doubt, the sale or transfer of uniQure N.V. constitutes a Change of Control Transaction as
set forth in subsection (3) of the definition of Change of Control Transaction (set forth in the Agreement). [*].
Net Proceeds shall be calculated as set forth in Schedule 2.2. For clarity, (a) the foregoing payment shall apply
only to the first Change of Control Transaction of uniQure and not to any subsequent Change of Control
Transaction and (b) the foregoing payment shall be in addition to any amounts paid or payable to BMS in
connection with a Change of Control Transaction in respect of any equity securities of uniQure (or any of its
Affiliates) held by BMS at such time or in respect of any other agreement, understanding or arrangement between
uniQure and BMS, or their respective Affiliates, at such time.
Target Cessation Notice. With respect to each Collaboration Target, BMS shall, in good faith,
2.3
notify uniQure
termination of all research, Development and
Commercialization (if applicable) of all Target Therapeutics for such Collaboration Target (such notice, a “Target
Cessation Notice”).
in writing promptly following BMS’
3.
AMENDMENT OF THE AGREEMENT
3.1
Research Program. The Parties agree that, notwithstanding anything in the Agreement to the
contrary:
(a)
the Research Term expired at the end of the Initial Research Term on May 21, 2019;
(b)
notwithstanding such expiration of the Research Term, the Parties shall continue to conduct
the Research Program under the Research Plan in accordance with the terms of the Agreement, until the earlier of
[*];
(c)
from and after the Amendment Effective Date, there shall be no more than four (4)
Collaboration Targets;
(d)
as of the Amendment Effective Date, the Collaboration Targets and the Exclusive
Indications that BMS is pursuing are those set forth in Schedule 3.1 (such Targets, the “Existing Collaboration
Targets”), and all of the Existing Collaboration Targets are BMS Proprietary Targets;
(e)
as of the Amendment Effective Date, there are no Reserved Targets and no Targets in which
BMS is potentially interested that are subject to the terms of Section 3.4(d) of the Agreement;
2
(f)
from and after the Amendment Effective Date, BMS shall have no rights to designate new
Collaboration Targets under Section 3.3(a) or 3.3(c)(i) of the Agreement;
(g)
during the Replacement Period, BMS shall have the right to designate [*] Reserved Targets
for one or more Cardiovascular Disease(s) using the process in Section 3.4 of the Agreement, Section 3.3(b) of the
Agreement will not apply to the designation of such Reserved Targets, such Reserved Targets shall be BMS
Proprietary Targets, and during the Replacement Period, uniQure shall have no right to, directly or indirectly, have
any discussions or engage in any other activities with any Third Party regarding a possible collaboration or license
with respect to any Reserved Target or any Variant thereof nor any right to initiate or engage in any other activities
with respect to an internal program for any Reserved Target or any Variant thereof; and
(h)
from and after the Amendment Effective Date, BMS shall have the right to replace [*]
Collaboration Targets with Replacement Targets pursuant to Section 3.3(c)(ii) of the Agreement, as amended
below.
For clarity, (A) in the event that BMS designates any Target as a Reserved Target during the Replacement Period,
at the end of the Replacement Period, any Reserved Target will cease to be a Reserved Target, and (B) BMS will
have no right to designate any Target as a Reserved Target after the Replacement Period.
3.2
Amendment of Article 1; Certain Defined Terms.
(a)
The definition of “Therapeutic” in Section 1.175 of the Agreement is hereby deleted and
replaced with the following:
“Therapeutic” means (a) any Target Therapeutic discovered, owned or Controlled by or for uniQure or
any of its Affiliates as part of the performance of the Research Program, (b) any Target Therapeutic for a
Collaboration Target discovered by or for uniQure or any of its Affiliates (i.e., whether or not as part of the
performance of the Research Program) as of the Effective Date or thereafter during the Term, (c) any
peptide or any AAV derived vector with a Collaboration Target that is generically or specifically claimed
by a Valid Claim of the uniQure Patents, (d) any Target Therapeutic discovered by BMS or any other
Related Party as part of the performance of the Research Program, and (e) any Target Therapeutic for a
Collaboration Target which BMS’ manufacture, approved use or sale thereof would infringe a Valid Claim
of the uniQure Patents but for the exclusive license granted to BMS under this Agreement. For clarity, the
inclusion of “Collaboration Target” in clause (c) does not limit the AAV derived vectors that are included
in the uniQure Technology licensed to BMS under this Agreement.
New Defined Terms. Article 1 of the Agreement is hereby amended to add the following new definitions:
“CoC Opt-Out Period” has the meaning set forth in the definition of Indication Exclusivity Opt-Out
Period.
“Exclusive Indication” means [*].
“Non-Exclusive Indication” means [*].
3
“Indication Exclusivity Opt-Out Period” means (a) the period commencing on the Amendment
Effective Date and ending on [*] anniversary of the Amendment Effective Date, and (b) if the first Change
of Control Transaction of uniQure occurs after [*] anniversary of the Amendment Effective Date, the [*]
period following the effective date of such Change of Control Transaction (such [*] period, the “CoC Opt-
Out Period”).
“Replacement Period” has the meaning set forth in Section 3.3(c)(ii).
3.3
following:
Replacement Targets. Section 3.3(c)(ii) of the Agreement is hereby deleted and replaced with the
(ii) Replacing a Collaboration Target. During the period from the Amendment Effective Date until [*]
anniversary thereof (the “Replacement Period”), BMS shall have the right to replace any of the Existing
Collaboration Targets, and after the first such replacement, any then-current Collaboration Target, with a
new Target for one or more Cardiovascular Disease(s) (a “Replacement Target”) in accordance with and
subject to the Excluded Target process as described in Section 3.4; provided however, that (A) BMS may
replace a Collaboration Target hereunder no more than [*], and (B) if BMS is replacing a Collaboration
Target with a Reserved Target, BMS may do so by written notice to the JSC without following the
Excluded Target process in Section 3.4. For the avoidance of doubt, no Target Designation Fee is due or
payable for a Replacement Target.
3.4
Excluded Targets and Non-Exclusive Indications. Section 3.4 of the Agreement is hereby
deleted and replaced with the following:
Excluded Target and Non-Exclusive Indication Process; Designation of Reserved Targets and
Replacement Targets for Collaboration Targets.
(a)
Target Reviewer.
(i)
If, during the Replacement Period, BMS desires to add a Reserved Target
(which BMS may do [*]) or propose a new Target as a Replacement Target for a Collaboration Target,
BMS shall notify uniQure through the Joint Discovery Working Group of (A) such Target, (B) the
Collaboration Target that is being replaced (if applicable), and (C) the proposed Exclusive Indication(s) for
which BMS intends to Develop Therapeutics, which Exclusive Indications may be Cardiovascular
Diseases only. Within [*] after such notification, uniQure shall provide an independent reviewer mutually
agreed to by BMS and uniQure (the “Target Reviewer”) with an updated Excluded Target list (which
shall include the Target identification information for each Excluded Target) and Non-Exclusive Indication
list. Within [*] after uniQure has provided the Target Reviewer with such updated Excluded Target list
and Non-Exclusive Indication list, BMS shall provide to the Target Reviewer the Target BMS proposes to
become a Replacement Target (and thereby, a Collaboration Target) or Reserved Target and the
corresponding proposed Exclusive Indication(s). Within [*] thereafter, the Target Reviewer shall notify
BMS whether or not the proposed Target is an Excluded Target and, if such proposed Target is not an
Excluded Target, whether or not each of the proposed Exclusive Indications is a Non-Exclusive Indication.
If the proposed Target is not an Excluded Target, BMS shall then
4
have the right to designate such Target as a Collaboration Target or Reserved Target, as the case may be, in
accordance with Section 3.4(b). [*].
(ii)
In the case where BMS is considering a Target as a potential Replacement
Target or potential Reserved Target and does not want to bring such Target to the attention of uniQure
through the Joint Discovery Working Group before determining whether such Target is an Excluded
Target, then BMS shall request uniQure to provide an updated Excluded Target list and updated Non-
Exclusive Indication list to the Target Reviewer within [*] after such request without obligation to specify
the Target or proposed Exclusive Indication for which the Target Reviewer process shall be initiated.
Within [*] after uniQure has provided the Target Reviewer with such updated lists, BMS shall provide to
the Target Reviewer the Target BMS proposes to become a Replacement Target or Reserved Target and the
proposed Exclusive Indication(s). Within [*] thereafter, the Target Reviewer shall notify BMS whether or
not the proposed Target is an Excluded Target and, if such proposed Target is not an Excluded Target,
whether or not each of the proposed indications is a Non-Exclusive Indication. If the proposed Target is
not an Excluded Target, BMS shall have the right to designate such Target as a Collaboration Target or
Reserved Target, as the case may be, in accordance with Section 3.4(b). BMS [*] and shall not be obliged
to disclose to uniQure for which Target the Target Reviewer function was performed.
(b)
Consultation with uniQure; Designation of Reserved Target or Replacement
Target for a Collaboration Target and any Exclusive Indication(s). Promptly after the Target Reviewer
has indicated that the proposed Target is not an Excluded Target, BMS shall notify uniQure through the
Joint Discovery Working Group with respect to such proposed Target, including providing the Joint
Discovery Working Group the Target identification information with respect to such Target and proposed
Exclusive Indications for such Target. The Joint Discovery Working Group shall discuss the proposed
Collaboration Target or Reserved Target, as the case may be, and the proposed Exclusive Indications for
such Target; provided however, that BMS shall have the final decision making authority with respect to the
designation of a proposed Target as a Collaboration Target or Reserved Target, as the case may be,
provided that such Target is not an Excluded Target. BMS may designate such Target as a Collaboration
Target or Reserved Target, as the case may be, by written notification to uniQure, and in conjunction with
the designation of such proposed Target as a Collaboration Target by BMS, uniQure shall deliver a
certificate for such proposed Target substantially in the form attached to this Agreement as Exhibit G.
Where a proposed indication is a Non-Exclusive Indication at the time such Target is designated as a
Collaboration Target, or if there is no scientific rationale or therapeutic applicability for such proposed
Exclusive Indication, then such indication will not be an Exclusive Indication. Where a proposed
indication is a Non-Exclusive Indication at the time such Target is designated as a Reserved Target, or if
there is no scientific rationale or therapeutic applicability for such indication, when and if such Reserved
Target is subsequently designated by BMS as a Replacement Target, such indication will not be an
Exclusive Indication.
(c)
Adding a New Exclusive Indication. If, during the Replacement Period, BMS
desires to propose a new potential Exclusive Indication for
5
any Collaboration Target, BMS shall notify uniQure of such potential Exclusive Indication for which BMS
intends to Develop Therapeutics through the Joint Discovery Working Group. Within [*] after such
notification, uniQure shall provide a Target Reviewer with an updated Non-Exclusive Indication list.
Within [*] after uniQure has provided the Target Reviewer with such updated Non-Exclusive Indication
list, BMS shall provide to the Target Reviewer the proposed Non-Exclusive Indication. Within [*]
thereafter, the Target Reviewer shall notify BMS whether or not the proposed Exclusive Indication is a
Non-Exclusive Indication. If the proposed Exclusive Indication is not a Non-Exclusive Indication and
there is a scientific rationale and therapeutic applicability for such indication, it will become an Exclusive
Indication, and BMS will promptly thereafter provide an updated Development Plan including
Development activities for such Exclusive Indication to the JSC. BMS shall pay all fees and expenses of
the Target Reviewer for performing this Target Reviewer function. For clarity, BMS shall not have the
right to add an Exclusive Indication after the Replacement Period.
(d)
Alternative Procedure. For purposes of the designation of any particular Target as
a Replacement Target or Reserved Target or the designation of any indication as an Exclusive Indication,
the Parties may mutually agree to not utilize the Target Reviewer, and instead allow the Joint Discovery
Working Group to consider any particular Target as a Replacement Target or Reserved Target and any
indication as an Exclusive Indication, and allow BMS to designate such particular Target as a Replacement
Target or Reserved Target or such indication as an Exclusive Indication without utilizing the Target
Reviewer.
3.5 Manufacturing. Section 6.2 of the Agreement is hereby deleted and replaced with the following:
Manufacturing Overview.
(a) Within the scope of the licenses granted in Section 7.1(a) and (b) and subject to the payment
obligations of BMS pursuant to Article 8 and the provisions set forth in Section 6.3, BMS shall,
notwithstanding anything to the contrary herein, have (i) the exclusive right and will be solely responsible
for the manufacture of Therapeutics that are not for Gene Therapy (e.g., peptides) and Products containing
such Therapeutics (“Non-Gene Therapy Therapeutics” and “Non-Gene Therapy Products”,
respectively) itself or through one or more Affiliates or Third Parties selected by BMS, and (ii) the right,
but not the obligation, to manufacture Therapeutics that are for Gene Therapy and any Products containing
any such Therapeutics itself or through one or more Affiliates or Third Parties selected by BMS. Where
BMS exercises its right to so manufacture any amount of any Therapeutic that is for Gene Therapy and
any Product containing any such Therapeutic, uniQure shall have no obligations in connection with the
manufacture of such amount of such Therapeutic and such Product manufactured by BMS or its Affiliate
or any Third Party.
(b) For all Therapeutics and Products that are for Gene Therapy, uniQure shall be responsible for the
manufacture and supply of such Therapeutics and Products. Supply of Therapeutics for research and pre-
clinical purposes will be conducted under Schedule 3.5 to the Amendment. Clinical supply will be
conducted pursuant to that certain Master Clinical Supply Agreement, dated April 25, 2017, as amended
on the Amendment Effective Date, between uniQure and E.R. Squibb and Sons, LLC, an Affiliate of BMS
(the “Clinical Supply Agreement”). The Parties (or their respective Affiliates) shall enter into a
commercial supply agreement that shall contain the provisions set forth in Exhibit J except for those
pertaining to clinical supply and the termination provisions, which shall be modified to permit BMS (or
the Applicable Affiliate(s)) to terminate such commercial supply agreement in its entirety or on a
Collaboration Target-by-Collaboration Target, Therapeutic-by-Therapeutic or Product-by-Product basis
and to terminate any statement of work under such commercial supply agreement at any time without
6
cause on [*] prior written notice, in each case subject to payments, if any, to uniQure set forth in such
agreement (the “Commercial Supply Agreement”), and shall enter into the Commercial Supply
Agreement no later than [*]. Schedule 3.5 of the Amendment, the Clinical Supply Agreement and the
Commercial Supply Agreement are hereinafter, individually and collectively, the “Supply Agreement(s)”.
Notwithstanding anything to the contrary in this Agreement or any Supply Agreement, BMS (or the
applicable Affiliate(s)) may terminate any Supply Agreement in its entirety or on a Collaboration Target-
by-Collaboration Target, Therapeutic-by-Therapeutic or Product-by-Product basis and may terminate any
statement of work under any Supply Agreement at any time without cause on [*] prior written notice, in
each case subject to payments, if any, to uniQure set forth in the applicable Supply Agreement. For clarity,
nothing contained herein will limit any of BMS’ rights hereunder, including BMS’ right to manufacture
Therapeutics that are for Gene Therapy and any Products containing any such Therapeutics itself or
through one or more Affiliates or Third Parties selected by BMS as set out in Section 6.2(a).
(c) Notwithstanding anything to the contrary herein or in any of the Supply Agreement(s), (i) uniQure
shall conduct its manufacture and supply obligations hereunder and under the Supply Agreement(s) using
[*], and (ii) if BMS desires that any Therapeutic be manufactured and supplied using [*], the “Other
Platforms”), BMS shall have the right to manufacture and supply, or have manufactured and supplied, any
or all of its requirements of any such Therapeutic using any Other Platform and shall be solely responsible
for such manufacture and supply, at its sole expense, and uniQure shall have no rights or obligations in
connection with such manufacture and supply (and, for clarity, (A) neither BMS nor any of its Affiliates
will have any obligations to uniQure hereunder or otherwise with respect to such manufacture and supply
of any Therapeutic using any such Other Platform, and (B) for as long as a Collaboration Target remains a
Collaboration Target, any Therapeutics and Products manufactured for such Collaboration Target using
any Other Platform will be subject to all other terms of the Agreement, including all payment obligations
of BMS, except that there will be no payment obligation for the Manufacturing Cost-Based Component of
Supply Price).
3.6
Third Party Manufacturing. Section 6.3 of the Agreement is hereby deleted and replaced with
the following:
Third Party Manufacturing. Within the scope of the licenses granted in Section 7.1(a) and (b) and
subject to the payment obligations of BMS pursuant to Article 8 and the provisions set forth in Section 6.2,
BMS may exercise any of its manufacturing rights (including any have made rights) with respect to any (i)
Non-Gene Therapy Therapeutics and Non-Gene Therapy Products, and (ii) Therapeutics and Products for
Gene Therapy, in each case, through one or more Third Party manufacturers; provided however, that the
Third Party manufacturer undertakes in writing obligations of confidentiality and non-use regarding
Confidential Information of uniQure (including uniQure Manufacturing Technology received by such
Third Party manufacturer) that are consistent with those undertaken by the Parties pursuant to Article 12
hereof; provided further, that [*]. Such Third Party manufacturers shall be obligated in writing not to use
the uniQure Know-How and uniQure Manufacturing Technology for any use, other than [*].
3.7
Restatement of Exclusive License and Limitations. Sections 7.1(a) and 7.1(e) of the Agreement
are hereby restated as the following Section 7.1(a):
(a)
Exclusive License Grant. Subject to the terms and conditions of this Agreement and the
terms and conditions of any Third Party agreement that are applicable to a sublicensee under such Third
Party agreement (including the Existing License Agreements), uniQure hereby grants to BMS an exclusive
(even as to uniQure, except as provided in Section 7.3) license, with the right to grant sublicenses (through
7
multiple tiers) as provided in Section 7.2, under the uniQure Technology to research, develop, make, have
made, use, sell, offer for sale, export and import (including the exclusive right to Develop and
Commercialize) Collaboration Targets, Therapeutics and Products in the Field in the Territory. Without
limiting the generality of the foregoing terms of this Section 7.1(a), the license granted by uniQure to BMS
pursuant to this Section 7.1(a) shall include, subject to the terms and conditions of this Agreement and the
terms and conditions of any Third Party agreement that are applicable to a sublicensee under such Third
Party agreement (including the Existing License Agreements), an exclusive (even as to uniQure, except as
provided in Section 7.3) sublicense, with the right to grant sublicenses (through multiple tiers) as provided
in Section 7.2, under the Information and Patents included in the uniQure Technology and licensed to
uniQure under any Third Party Agreements to which uniQure is a party, to research, develop, make, have
made, use, sell, offer for sale, export and import (including the exclusive right to Develop and
Commercialize) Collaboration Targets, Therapeutics and Products in the Field in the Territory. For clarity,
BMS’ licenses under this Section 7.1(a) and Sections 7.1(b) and (c) shall cover only Collaboration Targets,
and Therapeutics and Products with respect to the applicable Collaboration Target, and only for so long as
the applicable Collaboration Target remains a Collaboration Target (i.e., has not been replaced or
terminated). Accordingly, the licenses under this Section 7.1 with respect to a particular Collaboration
Target, and Therapeutics and Products with respect to such Collaboration Target, shall terminate when
such Collaboration Target is terminated or replaced and is therefore no longer a Collaboration Target. For
further clarity, subject to the terms of this Agreement and any Supply Agreement, BMS and its Affiliates
shall have the right to use Third Parties to assist with, and/or to conduct, discovery, research, development,
pre-clinical, clinical, commercial and other activities with respect to the Therapeutics for the Collaboration
Targets, including studies, testing and validation, and the right for BMS to make and have made
Therapeutics and research grade and other materials (including uniQure Materials) (itself or by any of its
Affiliates or any Third Parties selected by BMS) to conduct research, pre-clinical, development,
commercial and other activities.
3.8
Indication Exclusivity. Section 11.1(d) of the Agreement (which for clarity includes only the first
clause thereof and not the subsequent paragraphs) is hereby deleted and replaced with the following:
“for as long as BMS is pursuing the Development of or is Commercializing a Therapeutic or Product for
any Exclusive Indication, with respect to discovery, research, Development or Commercialization
activities for such Exclusive Indication in the Field in the Territory (including with respect to discovery or
research activities for the purpose of identifying Target Therapeutics for such Exclusive Indication).”
3.9
Indication Exclusivity Opt-Out. A new Section 11.2 is hereby added to the Agreement as
follows:
Indication Exclusivity Opt-Out. At any time during the Indication Exclusivity Opt-Out Period, uniQure
(or as the case may be, its successor in interest) may opt out of the exclusivity obligations under Section
11.1(d) with respect to a particular indication by written notice to BMS (such notice, the “Opt-Out
Notice” and such indication, the “Opt-Out Indication”). uniQure may exercise such right to opt out up to
[*]. Upon BMS’ receipt of the Opt-Out Notice (the “Opt-Out Exercise”), the following will apply:
All payments under Sections 8.3, 8.4 and 8.5 will be reduced by [*] of the amounts
(a)
otherwise payable under such sections and, in addition, if the Opt-Out Exercise occurs during the CoC
Opt-Out Period, uniQure shall refund to BMS [*] of all amounts previously paid by BMS under Sections
8.3, 8.4 and 8.5. Such reduction will apply for each Opt-Out Exercise. For example, [*]. For the
avoidance of doubt, and notwithstanding anything contained herein to the contrary, for each Opt-Out
Exercise, payments under Sections 8.3, 8.4 and 8.5 will be reduced for all of the Collaboration Targets, not
just the Collaboration Target(s) for which the Opt-Out Indication is being worked on by BMS.
8
(b)
BMS shall not be obligated to inform the JSC or any subcommittees or working groups of
its Development activities with respect to Therapeutics and Products for the Collaboration Target to which
the Opt-Out Indication relates, to the extent such activities are for the Opt-Out Indication, except to the
extent necessary for uniQure to conduct its obligations under this Agreement or any separate agreement
for the supply of Therapeutics and Products for Gene Therapy for research purposes or any Supply
Agreement.
(c)
uniQure shall establish and maintain appropriate firewalls to segregate its independent
activities on the Opt-Out Indication and its personnel (and, if applicable, those of its Third Party
collaborator) conducting such activities from activities performed by or on behalf of BMS or its Affiliates
under this Agreement or any Supply Agreement, in each case for the Collaboration Target(s) to which such
Opt-Out Indication relates and the personnel performing such activities, (A) to ensure that no BMS
Confidential Information and no Information generated under this Agreement or any Supply Agreement is
disclosed to any of such personnel performing such independent activities or used in connection with such
independent activities, other than [*], and (B) to ensure that any and all intellectual property (including
know-how, patents, copyright, trademarks and trade secrets), regulatory materials, regulatory filings and
approvals, materials and other proprietary Information generated in connection with such independent
activities on the Opt-Out Indication [*] will be segregated from activities performed pursuant to this
Agreement or any Supply Agreement. Without limiting the foregoing, such firewalls will include all
personnel conducting manufacturing activities, including manufacturing development (e.g., analytical
development and process development) [*].
For clarity, the Opt-Out Exercise applies only to exclusivity with respect to the Opt-Out Indication under
Section 11.1(d), and will not affect exclusivity under Section 11.1(c) with respect to any Collaboration
Target. For further clarity, when uniQure exercises an Opt-Out Exercise, uniQure shall have no right to
work on any Collaboration Target or Variant thereof, including on any Therapeutic for any Collaboration
Target for any indication, except as permitted under the paragraphs of Section 11.1 that follow Section
11.1(d).
4.
MISCELLANEOUS
4.1
Full Force and Effect. This Amendment amends the terms of the Agreement and is deemed
incorporated into the Agreement. The provisions of the Agreement, as amended by this Amendment, remain in
full force and effect.
4.2
Counterparts. This Amendment may be executed in one or more counterparts, each of which will
be an original and all of which together will constitute one instrument and may be executed and delivered through
the use of facsimiles or email of pdf copies of this executed Amendment, and each such scanned or pdf copy of
this Amendment that includes a Party’s signature will be deemed an original.
9
IN WITNESS WHEREOF, BMS, uniQure and uniQure N.V. have executed this Amendment, effective
as of the Amendment Effective Date.
BRISTOL-MYERS SQUIBB COMPANY
UNIQURE BIOPHARMA B.V.
By:
/s/ Christian Klemt
Name: Christian Klemt
Title: Chief Accounting Officer & Director
By:
/s/ [*]
Name:[*]
Title: [*]
Solely for purposes of Section 2:
UNIQURE N.V.
By:
/s/ Matthew Kapusta
Name:Matthew Kapusta
Title: Chief Executive Officer & Executive Director
Schedule 2.2
Net Proceeds; Calculation of Change of Control Payment
[*]
Schedule 3.1
Existing Collaboration Targets and Exclusive Indications
The four Existing Collaboration Targets and Exclusive Indications are:
[*]
2
Schedule 3.5
Research Supply Terms
This Schedule 3.5 includes terms and conditions for the supply of research materials by uniQure to BMS.
[*]
Exhibit 10.58
EXECUTION VERSION
*Portions of this exhibit have been omitted for confidential treatment pursuant to Item 601(b)(10)(iv) of
Regulation S-K.
AMENDMENT NO. 2 TO SECOND AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
This AMENDMENT NO. 2 TO SECOND AMENDED AND RESTATED LOAN AND SECURITY
AGREEMENT (this “Amendment”), is dated as of January 29, 2021 and is entered into by and among (a) (i) UNIQURE
BIOPHARMA B.V., a private limited liability company incorporated and existing under the laws of the Netherlands, having
its corporate seat at Amsterdam, the Netherlands and registered at the trade register of the Chamber of Commerce for
Amsterdam under number 34275365 (“uniQure Bio”), (ii) UNIQURE, INC., a Delaware corporation (“US Borrower” and
together with uniQure Bio hereinafter collectively referred to as “Borrower”), (iii) UNIQURE IP B.V., a private limited
liability company incorporated and existing under the laws of the Netherlands, having its corporate seat at Amsterdam, the
Netherlands and registered at the trade register of the Chamber of Commerce for Amsterdam under number 34275369
(“uniQure IP”), and (iv) UNIQURE N.V. (formerly uniQure B.V.), a public limited company incorporated and existing
under the laws of the Netherlands, having its corporate seat at Amsterdam, the Netherlands and registered at the trade
register of the Chamber of Commerce for Amsterdam under number 54385229 (“uniQure Holdings” and together with
Borrower and uniQure IP, the “Obligors”), (b) HERCULES CAPITAL, INC., a Maryland corporation in its capacity as
administrative agent for itself and the Lender (as defined herein) (in such capacity, the “Agent”), and (c) the several banks
and other financial institutions or entities from time to time parties to the Loan Agreement (collectively, referred to as
“Lender”). Capitalized terms used herein without definition shall have the same meanings given them in the Amended
Loan Agreement (as defined below).
RECITALS
A.
WHEREAS, Obligors, Agent and Lender have entered into that certain Second Amended and Restated
Loan and Security Agreement, dated as of May 6, 2016, as amended by Amendment No. 1 to Second Amended and Restated
Loan and Security Agreement dated as of December 6, 2018 (as so amended and as may further be amended, restated,
amended and restated, supplemented or otherwise modified from time to time, the “Loan Agreement”), pursuant to which
Lender has agreed to extend and make available to Borrower certain advances of money;
B.
WHEREAS, under the Loan Agreement, there are 2018 Term Loan Advances outstanding in the aggregate
principal amount of Thirty-Five Million Dollars ($35,000,000) and Lender has not made any 2018 Term B Loan Advance to
Borrower;
C.
WHEREAS, Borrower has requested Lender to make available to Borrower term loans in an aggregate
principal amount of up to One Hundred Million Dollars ($100,000,000); and
D.
WHEREAS, Obligors and Lender have agreed to amend the Loan Agreement upon the terms and
conditions more fully set forth herein.
AGREEMENT
NOW THEREFORE, in consideration of the foregoing Recitals and intending to be legally bound, the parties
hereto agree as follows:
1
1.
AMENDMENTS.
1.1.
Subject to and upon the satisfaction of the conditions specified in Section 4 hereof, the Loan
Agreement and certain schedules thereto are hereby amended to reflect the changes which are attached as Exhibit
A hereto [*].
1.2.
Each reference in the Loan Agreement to “this Agreement” and the words “hereof,” “herein,”
“hereunder,” or words of like import, shall mean and be a reference to the Loan Agreement as amended by this
Amendment (the “Amended Loan Agreement”).
2.
BORROWER’S REPRESENTATIONS AND WARRANTIES. Borrower represents and warrants that:
2.1.
Immediately upon giving effect to this Amendment (i) the representations and warranties contained
in the Loan Documents are true, accurate and complete in all material respects except to the extent such
representations and warranties relate to an earlier date, in which case they are true and correct in all material
respects as of such date (in all cases without duplication of any standard(s) of materiality contained in the Loan
Documents as to such representations and warranties) and (ii) no Event of Default has occurred and is continuing
with respect to which Borrower has not been notified in writing by Agent or Lender.
2.2.
Borrower has the corporate or other applicable company power and authority to execute and deliver
this Amendment and to perform its obligations under the Amended Loan Agreement.
2.3.
[Reserved.]
2.4.
The execution and delivery by Borrower of this Amendment and the performance by Borrower of
its obligations under the Amended Loan Agreement have been duly authorized by all necessary corporate or other
applicable company action on the part of Borrower.
2.5.
Subject to any matters which are set out as qualifications or reservations as to matters of law of
general application in the legal opinions delivered to the Lender pursuant to Section 4, this Amendment has been
duly executed and delivered by Borrower and is the binding obligation of Borrower, enforceable against it in
accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization,
liquidation, moratorium or other similar laws of general application and equitable principles relating to or
affecting creditors’ rights; and
2.6.
As of the date hereof, it has no defenses against the obligations to pay any amounts under the
Secured Obligations. Borrower acknowledges that each of Agent and Lender has acted in good faith and has
conducted in a commercially reasonable manner its relationships with Borrower in connection with this
Amendment and in connection with the Loan Documents.
Borrower understands and acknowledges that each of Agent and Lender is entering into this Amendment in reliance
upon, and in partial consideration for, the above representations and warranties, and agrees that such reliance is reasonable
and appropriate.
3.
LIMITATION. The amendments set forth in this Amendment shall be limited precisely as written and shall not
be deemed (a) to be a waiver or modification of any other term or condition of the
2
Loan Agreement or of any other instrument or agreement referred to therein or to prejudice any right or remedy which Agent
and/or Lender may now have or may have in the future under or in connection with the Amended Loan Agreement or any
instrument or agreement referred to therein; or (b) to be a consent to any future amendment or modification or waiver to any
instrument or agreement the execution and delivery of which is consented to hereby, or to any waiver of any of the
provisions thereof. Except as expressly amended hereby, the Loan Agreement shall continue in full force and effect.
4.
EFFECTIVENESS. This Amendment shall become effective upon the satisfaction of all the following
conditions precedent (the date of satisfaction of all such conditions precedent, the “Second Amendment Effective Date”):
4.1.
to Lender.
Amendment. Obligors, Agent and Lender shall have duly executed and delivered this Amendment
4.2.
Certificates of Authority and Incumbency. Each Obligor shall have delivered to Agent a
certificate, dated the Second Amendment Effective Date and executed by the secretary or equivalent officer of
such Obligor, with appropriate insertions and attachments, including:
4.2.1.
a copy of its respective certificate or deed of incorporation and current articles of
association and bylaws, and for uniQure Bio an extract of its registration in the Trade Register of the
Dutch Chamber of Commerce;
4.2.2.
a copy of resolutions of its Board and general meeting of shareholders (to the extent
required) evidencing approval of (a) this Amendment and the transactions contemplated thereby
including the 2021 Term Loan Advances and (b) other transactions evidenced by the Loan
Documents;
4.2.3.
the names, titles, incumbency and signature specimens of those respective representatives of
such Obligor who have been authorized by such resolutions and/or written consents to execute Loan
Documents on behalf of such Person; and
4.2.4.
for uniQure US, a certificate of good standing from its state of incorporation and similar
certificates from all other jurisdictions in which such Borrower does business and where the failure
to be qualified would have a Material Adverse Effect.
4.3.
Searches. Agent shall have received the results of searches in Delaware, the District of Columbia
and Massachusetts with respect to the applicable Obligors, and such searches shall reveal no liens on any of the
assets of such Person except for Permitted Liens or Liens to be discharged on or prior to the Second Amendment
Effective Date (which liens shall be discharged pursuant to documentation reasonably satisfactory to Agent).
4.4.
certificate.
Perfection Certification. Each Obligor shall have delivered to Agent an updated perfection
4.5.
Opinion Letters. Agent shall have received a legal opinion of Lender’s Dutch counsel.
3
4.6.
Advance Request. An Advance Request in respect of the 2021 Term Loan Advance to be requested
under Section 2.1.2(a)(i) of the Amended Loan Agreement as described in Section 4.2 of the Amended Loan
Agreement.
4.7.
Facility Charge. Borrower shall have paid to Agent a facility fee of three hundred fifty thousand
dollars ($350,000).
4.8.
Payment of Lender Expenses. Borrower shall have paid all reasonable and invoiced Lender
expenses (including all reasonable and invoiced attorneys’ fees and reasonable expenses) incurred through the date
of this Amendment.
5.
RELEASE. In consideration of the agreements of Agent and each Lender contained herein and for other good
and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Borrower, on behalf of itself and
its successors, assigns, and other legal representatives, hereby to the extent possible under applicable law fully, absolutely,
unconditionally and irrevocably releases, remises and forever discharges Agent and each Lender, and its successors and
assigns, and its present and former shareholders, affiliates, subsidiaries, divisions, predecessors, directors, officers, attorneys,
employees, agents and other representatives (Agent, Lenders and all such other persons being hereinafter referred to
collectively as the “Releasees” and individually as a “Releasee”), of and from all demands, actions, causes of action, suits,
covenants, contracts, controversies, agreements, promises, sums of money, accounts, bills, reckonings, damages and any and
all other claims, counterclaims, defenses, rights of set-off, demands and liabilities whatsoever of every name and nature,
known or unknown, suspected or unsuspected, both at law and in equity, which Borrower, or any of its successors, assigns,
or other legal representatives may now or hereafter own, hold, have or claim to have against the Releasees or any of them
for, upon, or by reason of any circumstance, action, cause or thing whatsoever which arises at any time on or prior to the day
and date of this Amendment, for or on account of, or in relation to, or in any way in connection with the Loan Agreement, or
any of the other Loan Documents or transactions thereunder or related thereto. Borrower understands, acknowledges and
agrees that the release set forth above may be pleaded as a full and complete defense and may be used as a basis for an
injunction against any action, suit or other proceeding which may be instituted, prosecuted or attempted in breach of the
provisions of such release. Borrower agrees that no fact, event, circumstance, evidence or transaction which could now be
asserted or which may hereafter be discovered shall affect in any manner the final, absolute and unconditional nature of the
release set forth above.
6.
COUNTERPARTS. This Amendment may be signed in any number of counterparts, and by different parties
hereto in separate counterparts, with the same effect as if the signatures to each such counterpart were upon a single
instrument. All counterparts shall be deemed an original of this Amendment. This Amendment may be executed by
facsimile, portable document format (.pdf) or similar technology signature, and such signature shall constitute an original for
all purposes.
7.
INCORPORATION BY REFERENCE. The provisions of Section 10 (Miscellaneous) of the Loan Agreement shall
be deemed incorporated herein by reference, mutatis mutandis.
8.
LOAN DOCUMENTS. This Amendment shall constitute a Loan Document.
[Remainder of this page intentionally left blank]
4
IN WITNESS WHEREOF, the parties have duly authorized and caused this Amendment to be executed as of the
date first written above.
BORROWER:
UNIQURE BIOPHARMA B.V.
Signature:
/s/ Christian Klemt
Print Name:
Christian Klemt
Title:
Chief Accounting Officer Director
UNIQURE, INC.
Signature:
/s/ Matt Kapusta
Print Name:
Matt Kapusta
Title:
Chief Executive Officer
OBLIGOR:
UNIQURE N.V. (formerly uniQure B.V.)
Signature:
/s/ Matt Kapusta
Print Name:
Matt Kapusta
Title:
Chief Executive Officer
UNIQURE IP B.V.
Signature:
/s/ Christian Klemt
Print Name:
Christian Klemt
Title:
Chief Accounting Officer Director
Signature Page to Amendment No. 2 to Loan and Security Agreement
Accepted in Palo Alto, California:
AGENT:
HERCULES CAPITAL, INC.
By:
Name:
Its:
/s/ [*]
[*]
[*]
LENDER:
HERCULES CAPITAL FUNDING TRUST 2018-1
By:
Name:
Its:
/s/ [*]
[*]
[*]
HERCULES CAPITAL FUNDING TRUST 2019-1
By:
Name:
Its:
/s/ [*]
[*]
[*]
HERCULES CAPITAL, INC.
By:
Name:
Its:
/s/ [*]
[*]
[*]
Signature Page to Amendment No. 2 to Loan and Security Agreement
EXHIBIT A
UNIQURE
SECOND AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
THIS SECOND AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT is made and
dated as of May 6, 2016 and is entered into by and among (i) UNIQURE BIOPHARMA B.V., a private limited
liability company incorporated and existing under the laws of the Netherlands, having its corporate seat at
Amsterdam, the Netherlands and registered at the trade register of the Chamber of Commerce for Amsterdam
under number 34275365 (“uniQure Bio”), (ii) UNIQURE, Inc., a Delaware corporation (“US Borrower” and
together with uniQure Bio hereinafter collectively referred to as “Borrower”), (iii) UNIQURE IP B.V., a private
limited liability company incorporated and existing under the laws of the Netherlands, having its corporate seat at
Amsterdam, the Netherlands and registered at the trade register of the Chamber of Commerce for Amsterdam
under number 34275369 (“uniQure IP”), (iv) each of the subsidiaries of uniQure identified on the Schedule 1
hereto and the signature pages hereof (“uniQure Subsidiaries”), (v) UNIQURE N.V. (formerly uniQure B.V.), a
public limited company incorporated and existing under the laws of the Netherlands, having its corporate seat at
Amsterdam, the Netherlands and registered at the trade register of the Chamber of Commerce for Amsterdam
under number 54385229 (“uniQure Holdings” and together with uniQure IP, the uniQure Subsidiaries, and
Borrower, the “Obligors”), (vi) the several banks and other financial institutions or entities from time to time
parties to this Agreement (collectively referred to as “Lender”), and (vii) HERCULES CAPITAL, INC., a
Maryland corporation, in its capacity as administrative agent and collateral agent for itself and the Lender (and in
such capacity, the “Agent”), and as amended by (a) Amendment No. 1 to Second Amended and Restated Loan
and Security Agreement, dated as of the First Amendment Closing Date (as defined below) (the “Amendment
No. 1”), by and among the Obligors, Agent and Lender and (b) Amendment No. 2 to Second Amended and
Restated Loan and Security Agreement, dated as of the Second Amendment Closing Date (as defined below) (the
“Amendment No. 2”), by and among the Obligors, Agent and Lender (as so amended and as may be further
amended, restated, amended and restated, supplemented or otherwise modified from time to time, the
“Agreement”).
RECITALS
A.
WHEREAS, following the execution of this Agreement on May 6, 2016, the parties hereto entered
into Amendment No. 1 whereby Lender made available 2018 Term Loan Commitments in respect of a 2018 Term
A Loan Advance and a 2018 Term B Loan Advance (in each case as defined below) in an aggregate principal
amount of up to Fifty Million Dollars ($50,000,000).
B.
WHEREAS, immediately prior to the Second Amendment Closing Date (as defined below), there
are 2018 Term Loan Advances outstanding hereunder in the aggregate principal amount of Thirty-Five Million
Dollars ($35,000,000) and Lender has not made any 2018 Term B Loan Advance to Borrower.
C.
WHEREAS, Borrower desires to obtain additional term loan commitments in an aggregate
principal amount of One Hundred Million Dollars ($100,000,000) for general corporate purposes permitted
pursuant to the terms of this Agreement.
D.
WHEREAS, the parties hereto desire to further amend this Agreement upon the terms and subject
to the conditions set forth herein and in Amendment No. 2 to inter alia provide for such additional term loan
commitments and to reduce the 2018 Term Loan Commitment to zero ($0).
NOW, THEREFORE, in consideration of the mutual conditions and agreements set forth in this
Agreement and the other Loan Documents and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:
DEFINITIONS AND RULES OF CONSTRUCTION
Unless otherwise defined herein, the following capitalized terms shall have the following meanings:
“2018 End of Term Charge” shall have the meaning assigned to such term in Section 2.6.
“2018 Prepayment Charge” shall have the meaning assigned to such term in Section 2.4.
“2018 Term A Loan Advance” shall have the meaning assigned to such term in Section 2.1.1(a).
“2018 Term B Loan Advance” shall have the meaning assigned to such term in Section 2.1.1(a).
“2018 Term Commitment” means as to any Lender, the obligation of such Lender, if any, to make a 2018
Term Loan Advance to the Borrower in a principal amount not to exceed the amount set forth under the heading
“2018 Term Loan Advances” under the heading “Commitment” opposite such Lender’s name on Schedule 1.1.
“2018 Term Loan Advance” and “2018 Term Loan Advances” shall have the meaning assigned to such
terms in Section 2.1.1(a).
“2018 Term Loan Interest Rate” means for any day, a floating per annum rate equal to the greater of
either (a) 8.85%, or (b) the sum of (i) 8.85%, plus (ii) the Prime Rate minus five and one half of one percent
(5.50%).
“2018 Term Loan Maturity Date” means June 1, 2023.
“2021 End of Term Charge” shall have the meaning assigned to such term in Section 2.6.
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“2021 Term Commitment” means as to any Lender, the obligation of such Lender, if any, to make a 2021
Term Loan Advance to the Borrower in a principal amount not to exceed the amount set forth under the heading
“2021 Term Loan Advances” under the heading “Commitment” opposite such Lender’s name on Schedule 1.1.
“2021 Term Loan Advance” and “2021 Term Loan Advances” shall have the meaning assigned to such
terms in Section 2.1.2(a).
“2021 Term Loan Interest Rate” means for any day, a floating per annum rate equal to the greater of
either (a) 8.25%, or (b) the sum of (i) 8.25%, plus (ii) the Prime Rate minus three and one quarter of one percent
(3.25%).
“2021 Term Loan Maturity Date” means June 1, 2023; provided, however, that if Borrower duly extends
the 2021 Term Loan Maturity Date pursuant to Section 2.1.2(e), then the 2021 Term Loan Maturity Date shall
mean June 1, 2024 or June 1, 2025, as applicable.
“Account Control Agreement(s)” means any agreement entered into by and among Agent, Borrower and
a third party bank or other institution (including a Securities Intermediary) in which Borrower maintains a Deposit
Account or an account holding Investment Property and which grants Agent a perfected first priority security
interest in the subject account or accounts.
“Accounting Standards” means accounting principles used by uniQure Holdings in the preparation of its
consolidated financial statements for U.S. Securities Exchange Commission filings, being IFRS or GAAP, as
applicable.
“ACH Authorization” means the ACH Debit Authorization Agreement in substantially the form of
Exhibit H.
“Advance” means a Term Loan Advance, a 2018 Term Loan Advance or a 2021 Term Loan Advance.
“Advance Date” means the funding date of an Advance.
“Advance Request” means a request for an Advance submitted by a Borrower to Lender in substantially
the form of Exhibit A.
“Affiliate” means (a) any Person that directly or indirectly controls, is controlled by, or is under common
control with the Person in question, (b) any Person directly or indirectly owning, controlling or holding with
power to vote twenty percent (20%) or more of the outstanding voting securities of another Person, (c) any Person
twenty percent (20%) or more of whose outstanding voting securities are directly or indirectly owned, controlled
or held by another Person with power to vote such securities, or (d) any Person related by blood or marriage to
any Person described in subsection (a), (b) or (c) of this paragraph. As used in the definition of “Affiliate,” the
term “control” means the possession, directly or indirectly, of the power to direct or cause the direction of the
management and policies of a Person, whether through ownership of voting securities, by contract or otherwise.
“Agreement” has the meaning given to it in the preamble to this Agreement.
9
“Amendment No. 1” has the meaning given to it in the preamble to this Agreement.
“Amendment No. 2” has the meaning given to it in the preamble to this Agreement.
“Anti-Corruption Laws” shall mean all laws, rules, and regulations of any jurisdiction applicable to
Borrower or any of its Affiliates from time to time concerning or relating to bribery or corruption, including
without limitation the United States Foreign Corrupt Practices Act of 1977, as amended, the UK Bribery Act 2010
and other similar legislation in any other jurisdictions.
“Anti-Terrorism Laws” means any laws, rules, regulations or orders relating to terrorism or money
laundering, including without limitation Executive Order No. 13224 (effective September 24, 2001), the USA
PATRIOT Act, the laws comprising or implementing the Bank Secrecy Act, and the laws administered by OFAC.
“Assignee” has the meaning given to it in Section 11.12.
“Blocked Person” means any Person: (a) listed in the annex to, or is otherwise subject to the provisions
of, Executive Order No. 13224, (b) a Person owned or controlled by, or acting for or on behalf of, any Person that
is listed in the annex to, or is otherwise subject to the provisions of, Executive Order No. 13224, (c) a Person with
which any Lender is prohibited from dealing or otherwise engaging in any transaction by any Anti-Terrorism Law,
(d) a Person that commits, threatens or conspires to commit or supports “terrorism” as defined in Executive Order
No. 13224, or (e) a Person that is named a “specially designated national” or “blocked person” on the most current
list published by OFAC or other similar list.
“Board” means the supervisory board or the single board of directors of uniQure Holdings in place from
time to time.
“Borrower Products” means all products, software, service offerings, technical data or technology
currently being designed, manufactured or sold by Borrower or which Borrower intends to sell, license, or
distribute in the future including any products or service offerings under development, collectively, together with
all products, software, service offerings, technical data or technology that have been sold, licensed or distributed
by Borrower since its incorporation.
“Business Day” is any day other than a Saturday or Sunday, a day on which Lender is closed or a day on
which banks are closed for general business in the Netherlands.
“Cash” means all cash and liquid funds.
“Change in Control” means any (i) reorganization, recapitalization, consolidation or merger (or similar
transaction or series of related transactions) of uniQure Holdings or Borrower sale or exchange of outstanding
shares (or similar transaction or series of related transactions) of uniQure Holdings’ or Borrower’s outstanding
shares immediately before consummation of such transaction or series of related transactions do not, immediately
after consummation of such transaction or series of related transactions, retain shares representing more than fifty
percent (50%) of the voting power of the surviving entity of such transaction or series of related
10
transactions (or the parent of such surviving entity if such surviving entity is wholly owned by such parent), in
each case without regard to whether uniQure Holdings or Borrower is the surviving entity, or (ii) sale or issuance
by uniQure Holdings or Borrower of new shares of Preferred Securities of uniQure Holdings or Borrower to
investors, none of whom are current investors in uniQure Holdings or Borrower, and such new Preferred
Securities are senior to all existing Preferred Securities and ordinary shares or common stock of uniQure Holdings
or Borrower, as applicable, with respect to liquidation preferences, and the aggregate liquidation preference of
such new Preferred Securities is more than fifty percent (50%) of the aggregate liquidation preference of all shares
of Preferred Securities of uniQure Holdings or Borrower, as applicable.
“Collateral” means the property described in Section 3.
“Collateral Documents” means the security documents described in Section 3.
“Commitment” means as to any Lender, such Lender’s 2018 Term Commitment or 2021 Term
Commitment, as the case may be.
“Confidential Information” has the meaning given to it in Section 10.11.
“Contingent Obligation” means, as applied to any Person, any direct or indirect liability, contingent or
otherwise, of that Person with respect to (i) any indebtedness, lease, dividend, letter of credit or other obligation of
another, including any such obligation directly or indirectly guaranteed, endorsed, co-made or discounted or sold
with recourse by that Person, or in respect of which that Person is otherwise directly or indirectly liable; (ii) any
obligations with respect to undrawn letters of credit, corporate credit cards or merchant services issued for the
account of that Person; and (iii) all obligations arising under any interest rate, currency or commodity swap
agreement, interest rate cap agreement, interest rate collar agreement, or other agreement or arrangement
designated to protect a Person against fluctuation in interest rates, currency exchange rates or commodity prices;
provided, however, that the term “Contingent Obligation” shall not include endorsements for collection or deposit
in the ordinary course of business. The amount of any Contingent Obligation shall be deemed to be an amount
equal to the stated or determined amount of the primary obligation in respect of which such Contingent Obligation
is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof as
determined by such Person in good faith; provided, however, that such amount shall not in any event exceed the
maximum amount of the obligations under the guarantee or other support arrangement.
“continuing” means, with respect to an Event of Default, an Event of Default that has not been remedied
or waived.
“Copyright License” means any written agreement granting any right to use any Copyright or Copyright
registration, now owned or hereafter acquired by Borrower or in which Borrower now holds or hereafter acquires
any interest.
“Copyrights” means all copyrights, whether registered or unregistered, held by the Borrower pursuant to
the laws of the Netherlands, or of any other country.
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“CSL Licenses” is defined in the definition of “Permitted Liens”.
“Deposit Accounts” means any “deposit accounts,” including any checking account, savings account, or
certificate of deposit and any deposit account as defined in the UCC.
“End of Term Charge” means collectively, the charges set forth in Sections 2.5 and 2.6.
“Equity Interests” means, with respect to any Person, the capital stock, partnership or limited liability
company interest, or other equity securities or equity ownership interests of such Person.
“Event of Default” has the meaning given to it in Section 8.
“Existing 2021 Term Loan Maturity Date” has the meaning given to it in Section 2.1.2(e).
“Existing Loan and Security Agreement” means that certain Amended and Restated Loan and Security
Agreement dated as of June 26, 2014 (as the same may have been amended, modified, supplemented or restated
and in effect from time to time).
“Extera Judgment” means any settlement or judgment in connection with the currently pending dispute
with Extera Partners so long as such settlement or judgment is limited to monetary damages and does not exceed
$15,000,000 in the aggregate and no payment is made if an Event of Default has occurred and is continuing.
“Facility Charge” means one and one-quarter of one percent (1.25%) of the original principal amount of
the Term Loan advanced on the Original Closing Date.
“Financial Statements” has the meaning given to it in Section 7.1.
“First Amendment Closing Date” means December 6, 2018.
“Funding Documents” means the following: (i) a certificate of good standing for US Borrower from its
state of incorporation and from all other US jurisdictions in which it does business to the extent that the failure to
be qualified to do business would have a Material Adverse Effect and for uniQure Bio an extract of its registration
in the Trade Register of the Dutch Chamber of Commerce, a copy of the deed of incorporation and, if amended
after incorporation, the articles of association currently in force and effect; (ii) completed Schedules and Exhibits
to this Agreement; (iii) executed originals of the following: (x) the Account Control Agreements, and any other
documents executed in connection with the Secured Obligations or the transactions contemplated hereby, as the
same may from time to time be amended, modified, supplemented or restated and (y) the Perfection Certificate;
(iv) legal opinion of Lender’s counsel; (v) the insurance policies and/or endorsements required pursuant to
Section 6.1 hereof; (vi) documents, releases, terminations, and other instruments as may be necessary or proper to
release any creditor’s Lien in the Intellectual Property of Borrower including, without limitation, UCC financing
statement amendments and appropriate filings with any appropriate register or authority in any jurisdiction; and
(vii) and all other documents and instruments reasonably required by Lender to effectuate the transactions
contemplated hereby or to create and perfect the
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Liens of Lender with respect to all Collateral, in all cases in form and substance reasonably acceptable to Lender.
“GAAP” means generally accepted accounting principles in the United States of America.
“IFRS” are the International Financial Reporting Standards, a collection of guidelines and rules set by the
International Accounting Standards Board (www.iasb.org) which are applicable to the circumstances as of the date
of determination.
“Indebtedness” means indebtedness of any kind, including (a) all indebtedness for borrowed money or the
deferred purchase price of property or services (excluding trade credit entered into in the ordinary course of
business due within sixty (60) days), including reimbursement and other obligations with respect to surety bonds
and letters of credit, (b) all obligations evidenced by notes, bonds, debentures or similar instruments, (c) all capital
lease obligations (as such term is understood under GAAP), and (d) all Contingent Obligations.
“Insolvency Proceeding” is any proceeding by or against any Person under the Dutch Bankruptcy Act, or
any other bankruptcy or insolvency law, including assignments for the benefit of creditors, compositions,
extensions generally with its creditors, or proceedings seeking reorganization, arrangement, or other relief.
“Intellectual Property” means any and all intellectual property rights in any country or jurisdiction,
including but not limited to all of Borrower’s Copyrights; Trademarks; Patents; Licenses; trade secrets and
inventions; mask works, utility models, layout-designs (topographies) of integrated circuits, know-how, industrial
designs, neighboring rights, database rights or other rights in compilations of data, trade names, internet domain
names, plant variety rights and any and all rights of a similar nature, either (i) now known, contemplated or
unforeseen, (ii) having a statutory basis or existing under equity, common law or otherwise, or (iii) registered,
deposited, filed or not, and including any and all rights in connection with applications for or rights to apply for or
acquire any and all of such rights.
“Intra-Group Loans” means the liabilities owed by any Obligor to any other Obligor.
“Investment” means any beneficial ownership (including stock, partnership or limited liability company
interests) of or in any Person, or any loan, advance or capital contribution to any Person or the acquisition of all,
or substantially all, of the assets of another Person,
“Joinder Agreements” means for each Subsidiary, a completed and executed Joinder Agreement in
substantially the form attached hereto as Exhibit G.
“Leasehold Financing” means any financing entered into by Borrower in respect of improvements of its
facilities and/or financed equipment in any location in an aggregate amount of up to $10,000,000.
“Lender” has the meaning given to it in the preamble to this Agreement.
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“License” means any Copyright License, Patent License, Trademark License or other license of rights or
interests.
“Lien” means any mortgage, deed of trust, pledge, hypothecation, assignment for security, security
interest, encumbrance, levy, lien or charge of any kind, whether voluntarily incurred or arising by operation of law
or otherwise, against any property, any conditional sale or other title retention agreement, and any lease in the
nature of a security interest.
“Loan Documents” means this Agreement, the Notes (if any), the ACH Authorization, the Account
Control Agreements, any reaffirmations, the Joinder Agreements, all UCC Financing Statements, the Warrant
Agreement, any intellectual property security agreement, and any other documents executed in connection with
the Secured Obligations or the transactions contemplated hereby, as the same may from time to time be amended,
modified, supplemented or restated.
“Material Adverse Effect” means a material adverse effect upon: (i) the business, operations, properties,
assets or condition (financial or otherwise) of the Obligors, taken as a whole, other than in and of itself (x) the
expenditure of cash in the ordinary course, or (y) adverse results of a preclinical or clinical trial or program or the
denial, delay or limitation of approval of, or taking of any other regulatory action by, the United States Food and
Drug Administration or any other governmental entity with respect to any biologic product or drug; or (ii) the
ability of an Obligor to perform the Secured Obligations when due in accordance with the terms of the Loan
Documents, or the ability of Lender to enforce any of its rights or remedies with respect to the Secured
Obligations; or (iii) the Collateral or Lender’s Liens on the Collateral or the priority of such Liens.
“Maximum 2021 Term Loan Amount” means an aggregate principal amount of up to One Hundred
Million Dollars ($100,000,000).
“Maximum Rate” shall have the meaning assigned to such term in Section 2.2.
“Note(s)” means a promissory note or promissory notes to evidence an Advance made by a Lender.
“OFAC” is the U.S. Department of Treasury Office of Foreign Assets Control.
“OFAC Lists” are, collectively, the Specially Designated Nationals and Blocked Persons List maintained
by OFAC pursuant to Executive Order No. 13224, 66 Fed. Reg. 49079 (Sept. 25, 2001) and/or any other list of
terrorists or other restricted Persons maintained pursuant to any of the rules and regulations of OFAC or pursuant
to any other applicable Executive Orders.
“Ordinary Shares” means the Ordinary Shares, €1 par value per share, of uniQure Bio.
“Original Closing Date” means June 13, 2013.
“Original Term Loan Advances” has the meaning given to it in Section 2.1.1(a).
14
“Patent License” means any written agreement granting any right with respect to any invention on which
a Patent is in existence or a Patent application is pending, in which agreement Borrower now holds or hereafter
acquires any interest.
“Patents” means any patent in the Netherlands or in any other country, all registrations and recordings
thereof, and all applications for patents of, or rights corresponding thereto, in the Netherlands or any other
country.
“Permitted Convertible Debt” means Indebtedness of Borrower consisting of one or more series of notes
and notes issued in exchange therefor, that are in each case convertible into Ordinary Shares (or other securities or
property following a merger event or other change of the Ordinary Shares), or cash or any combination of cash
and Ordinary Shares; provided, however, that such Indebtedness shall (a) be either unsecured or Subordinated
Indebtedness, (b) not require any mandatory redemption, prepayment, repurchase, “put”, “call”, or conversion for
cash prior to stated maturity other than any customary provision requiring an offer to purchase such notes as a
result of a “change of control”, fundamental change, delisting or termination of trading or similar provision, (c)
mature after, and not require any scheduled amortization or other scheduled payments of principal prior to, the
date that is 181 days after the latest 2021 Term Loan Maturity Date (after giving effect to all possible extensions
thereof under Section 2.1.2(e)), and (d) not be guaranteed by any Subsidiary of Borrower.
“Permitted Indebtedness” means: (i) Indebtedness of Borrower in favor of Lender arising under this
Agreement or any other Loan Document; (ii) Indebtedness existing on the Restatement Date which is disclosed in
Schedule 1A; (iii) Indebtedness of up to $250,000 outstanding at any time secured by a Lien described in
clause (vii) of the defined term “Permitted Liens,” provided such Indebtedness does not exceed the lesser of the
cost or fair market value of the equipment financed with such Indebtedness; (iv) Indebtedness to trade creditors
incurred in the ordinary course of business, including Indebtedness incurred in the ordinary course of business
with corporate credit cards; (v) Indebtedness that also constitutes a Permitted Investment; (vi) Subordinated
Indebtedness; (vii) reimbursement obligations in connection with letters of credit that are secured by cash or cash
equivalents and issued on behalf of the Borrower or a Subsidiary thereof in an amount not to exceed $200,000 at
any time outstanding, (viii) the Leasehold Financing; (ix) any contingent consideration payable in connection with
the acquisition of InoCard in an amount not to exceed €15,000,000 in accordance with the term of the Sale and
Purchase Agreement dated as of July 15, 2014 by any among Prof. Hugo Katus, Prof. Patrick Most, uniQure
Holdings and uniQure Bio (as amended from time to time) (provided however, no cash payments may be made if
an Event of Default has occurred and is continuing); (x) any operating leases; (xi) any Intra-Group Loans;
(xii) any liability arising pursuant to any guarantee in the form of a declaration of joint and several liability
(hoofdelijke aansprakelijkheid) as referred to in article 2:403 Dutch civil code in respect of a member of the group
and any residual liability with respect to such declaration arising pursuant to article 2:404 Dutch civil code;
(xiii) any joint and several liability arising as a result of (the establishment) of a fiscal unity (fiscale eenheid)
between members of the group incorporated in the Netherlands; (xiv) Permitted Convertible Debt not to exceed
Five Hundred Million Dollars ($500,000,000) in aggregate principal amount at any time outstanding; (xv) other
Indebtedness in an aggregate amount not to exceed $100,000 at any time outstanding, and (xvi) extensions,
refinancings and renewals of any items of Permitted Indebtedness, provided that the principal amount is not
15
increased or the terms modified to impose materially more burdensome terms upon Borrower or its Subsidiary, as
the case may be.
“Permitted Investment” means: (i) Investments existing on the Restatement Date which are disclosed in
Schedule 1B; (ii) (a) marketable direct obligations issued or unconditionally guaranteed by any agency or any
country thereof maturing within two-years from the date of acquisition thereof, (b) commercial paper maturing no
more than two-years from the date of creation thereof and currently having a rating of at least A-2 or P-2 from
either Standard & Poor’s Corporation or Moody’s Investors Service, (c) certificates of deposit issued by any bank
with assets of at least $500,000,000 maturing no more than two-years from the date of investment therein, and
(d) money market accounts; (iii) repurchases of stock from former employees, directors, or consultants of
Borrower under the terms of applicable repurchase agreements at the original issuance price of such securities in
an aggregate amount not to exceed $500,000 in any fiscal year, provided that no Event of Default has occurred, is
continuing or would exist after giving effect to the repurchases; (iv) Investments accepted in connection with
Permitted Transfers; (v) Investments (including debt obligations) received in connection with the bankruptcy or
reorganization of customers or suppliers and in settlement of delinquent obligations of; and other disputes with,
customers or suppliers arising in the ordinary course of Borrower’s business; (vi) Investments consisting of notes
receivable of, or prepaid royalties and other credit extensions, to customers and suppliers who are not affiliates, in
the ordinary course of business, provided that this subparagraph (vi) shall not apply to Investments of Borrower in
any Subsidiary; (vii) Investments consisting of loans not involving the net transfer on a substantially
contemporaneous basis of cash proceeds to employees, officers or directors relating to the purchase of capital
stock of Borrower pursuant to employee stock purchase plans or other similar agreements approved by the Board;
(viii) Investments consisting of employee travel advances, employee relocation loans and other employee loans
and advances in the ordinary course of business; (ix) Investments in newly-formed Subsidiaries organized in the
Netherlands or any other country, provided that such Subsidiaries enter into a Joinder Agreement promptly after
their formation by Borrower and execute such other documents as shall be reasonably requested by Lender;
(x) joint ventures or strategic alliances in the ordinary course of Borrower’s business consisting of the
nonexclusive licensing of technology, the development of technology or the providing of technical support;
(xi) any Intra-Group Loans; and (xii) other Investments that do not exceed $1,000,000 in the aggregate.
“Permitted Liens” means any and all of the following: (i) Liens in favor of Lender; (ii) Liens existing on
the Second Amendment Closing Date which are disclosed in Schedule 1C; (iii) Liens for taxes, fees, assessments
or other governmental charges or levies, either not delinquent or being contested in good faith by appropriate
proceedings; provided, that Borrower maintains adequate reserves therefor in accordance with Accounting
Standards; (iv) Liens securing claims or demands of materialmen, artisans, mechanics, carriers, warehousemen,
landlords and other like Persons arising in the ordinary course of Borrower’s business and imposed without action
of such parties; provided, that the payment thereof is not yet required; (v) Liens arising from judgments, decrees
or attachments in circumstances which do not constitute an Event of Default hereunder; (vi) the following
deposits, to the extent made in the ordinary course of business: deposits under worker’s compensation,
unemployment insurance, social security and other similar laws, or to secure the performance of bids, tenders or
contracts (other than for the repayment of borrowed money) or to secure indemnity, performance or other
16
similar bonds for the performance of bids, tenders or contracts (other than for the repayment of borrowed money)
or to secure statutory obligations (other than liens arising under environmental liens) or surety or appeal bonds, or
to secure indemnity, performance or other similar bonds; (vii) Liens on equipment or software or other intellectual
property constituting purchase money liens and liens in connection with capital leases securing Indebtedness
permitted in clause (iii) of “Permitted Indebtedness”; (viii) Liens incurred in connection with Subordinated
Indebtedness; (ix) leasehold interests in leases or subleases and licenses granted in the ordinary course of business
and not interfering in any material respect with the business of the licensor; (x) Liens in favor of customs and
revenue authorities arising as a matter of law to secure payment of custom duties that are promptly paid on or
before the date they become due; (xi) Liens on insurance proceeds securing the payment of financed insurance
premiums that are promptly paid on or before the date they become due (provided that such Liens extend only to
such insurance proceeds and not to any other property or assets); (xii) statutory and common law rights of set-off
and other similar rights as to deposits of cash and securities in favor of banks, other depository institutions and
brokerage firms and any Lien, netting or set-off arrangement granted or entered into by any Obligor under or in
connection with the ordinary banking arrangements of such Obligor as a result of the applicable general terms and
conditions of the relevant account bank where the Obligor maintains a bank account (including, in respect of an
account bank in the Netherlands, the general banking terms and conditions (algemene bankvoorwaarden));
(xiii) easements, zoning restrictions, rights-of-way and similar encumbrances on real property imposed by law or
arising in the ordinary course of business so long as they do not materially impair the value or marketability of the
related property; (xiv) Liens on cash or cash equivalents securing obligations permitted under clause (vii) of the
definition of Permitted Indebtedness; (xv) Liens incurred in connection with the Leasehold Financing which are
limited to the improvements and equipment financed in respect of Borrower’s property located thereon;
(xvi) licenses granted by Borrower or its affiliates pursuant to the terms of that certain Commercialization and
License Agreement, dated June 24, 2020, by and between uniQure Bio and CSL Berhing LLC, as amended and in
effect from time to time (the “CSL Licenses”); and (xvii) Liens incurred in connection with the extension,
renewal or refinancing of the indebtedness secured by Liens of the type described in clauses (i) through (xi) and
(xv) above; provided, that any extension, renewal or replacement Lien shall be limited to the property encumbered
by the existing Lien and the principal amount of the indebtedness being extended, renewed or refinanced (as may
have been reduced by any payment thereon) does not increase.
“Permitted Transfers” means (i) sales of inventory in the normal course of business; (ii) exclusive
licenses and similar arrangements for the use of Intellectual Property in the ordinary course of business that could
not result in a legal transfer of title of the licensed property; (iii) dispositions of worn-out, obsolete or surplus
equipment that is, in the reasonable judgment of Borrower, no longer economically practicable to maintain or
useful in the ordinary course of business of Borrower; (iv) other Transfers of assets having a fair market value of
not more than $250,000 in the aggregate in any fiscal year; (v) the entering into of commercialization, co-
development or license agreements with development or collaboration partners in the ordinary course of business;
and (vi) the CSL Licenses.
“Person” means any individual, sole proprietorship, partnership, joint venture, trust, unincorporated
organization, association, corporation, limited liability company, institution, other entity or government.
17
“Preferred Securities” means at any given time any equity issued by uniQure Holdings or Borrowers, as
applicable, that has any rights, preferences or privileges senior to uniQure Holdings’ or Borrower’ ordinary shares
or common stock, as applicable.
“Prime Rate” means the “prime rate” as reported in The Wall Street Journal, and if not reported, then the
prime rate most recently reported in The Wall Street Journal.
“Restatement Date” shall mean May 6, 2016.
“Sanctioned Country” shall mean, at any time, a country or territory which is the subject or target of any
Sanctions.
“Sanctioned Person” shall mean, at any time, (a) any Person listed in any Sanctions-related list of
designated Persons maintained by the Office of Foreign Assets Control of the U.S. Department of the Treasury or
the U.S. Department of State, or by the United Nations Security Council, the European Union or any EU member
state, (b) any Person operating, organized or resident in a Sanctioned Country or (c) any Person controlled by any
such Person.
“Sanctions” shall mean economic or financial sanctions or trade embargoes imposed, administered or
enforced from time to time by (a) the U.S. government, including those administered by the Office of Foreign
Assets Control of the U.S. Department of the Treasury or the U.S. Department of State, or (b) the United Nations
Security Council, the European Union or Her Majesty’s Treasury of the United Kingdom.
“Second Advance End of Term Charge” is defined in Section 2.6.
“Second Amendment Closing Date” means January 29, 2021.
“Secured Obligations” means Borrower’s obligations under this Agreement and any Loan Document,
including any obligation to pay any amount now owing or later arising.
“Subordinated Indebtedness” means Indebtedness subordinated to the Secured Obligations in amounts
and on terms and conditions satisfactory to Lender in its sole discretion.
“Subsequent Financing” means any equity financing involving the sale and issuance of Borrower’s
Equity Interests that is broadly marketed to multiple investors and consummated after the Second Amendment
Closing Date, provided, however, that in no event shall the sale and issuance of Borrower’s Equity Interests in any
“at-the-market offering” (as defined in Rule 415 promulgated under the Securities Act of 1933, as amended) be
deemed a “Subsequent Financing”.
“Subsidiary” means an entity, whether corporate, partnership, limited liability company, joint venture or
otherwise, in which uniQure Holdings owns or controls directly or indirectly 50% or more of the outstanding
voting securities, including each entity listed on Schedule 1 hereto.
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“Term Loan” shall mean the term loans in an aggregate principal amount of up to Fifty Million Dollars
($50,000,000) made available under this Agreement as described in Section 2.1.1.
“Term Loan Advance” means an advance of a Term Loan by a Lender to Borrower pursuant to this
Agreement.
“Term Loan Maturity Date” means May 1, 2020.
“Third Advance Facility Charge” means 0.75% of the original principal amount of the aggregate
principal amount of the Term Loans advanced pursuant to the Loan Documents.
“Trademark License” means any written agreement granting any right to use any Trademark or
Trademark registration, now owned or hereafter acquired by Borrower or in which Borrower now holds or
hereafter acquires any interest.
“Trademarks” means all trademarks (registered, common law or otherwise) and any applications in
connection therewith, including registrations, recordings and applications with any appropriate register or
authority in any jurisdiction.
“UCC” means the Uniform Commercial Code as the same is, from time to time, in effect in the State of
California; provided, that in the event that, by reason of mandatory provisions of law, any or all of the attachment,
perfection or priority of, or remedies with respect to, Lender’s Lien on any Collateral is governed by the Uniform
Commercial Code as the same is, from time to time, in effect in a jurisdiction other than the State of California,
then the term “UCC” shall mean the Uniform Commercial Code as in effect, from time to time, in such other
jurisdiction solely for purposes of the provisions thereof relating to such attachment, perfection, priority or
remedies and for purposes of definitions related to such provisions.
“Warrant Agreement” means the Warrant Agreement dated as of September 20, 2013 by and between
uniQure Holdings and Hercules Capital, Inc. (formerly known as Hercules Technology Growth Capital, Inc.).
Unless otherwise specified, all references in this Agreement or any Annex or Schedule hereto to a
“Section,” “subsection,” “Exhibit,” “Annex,” or “Schedule” shall refer to the corresponding Section, subsection,
Exhibit, Annex, or Schedule in or to this Agreement. Unless otherwise specifically provided herein, any
accounting term used in this Agreement or the other Loan Documents shall have the meaning customarily given
such term in accordance with Accounting Standards, and all financial computations hereunder shall be computed
in accordance with Accounting Standards, consistently applied. Unless otherwise defined herein or in the other
Loan Documents, terms that are used herein or in the other Loan Documents and defined in the UCC shall have
the meanings given to them in the UCC.
THE LOANS
Reserved.
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2018 Term Loan.
(a)
First Amendment Closing Date. Pursuant to the transactions described in this Agreement as
amended by Amendment No. 1, on the First Amendment Closing Date, Twenty Million Dollars ($20,000,000) of
the principal amount of the Original Term Loan Advances was deemed to constitute and refer to, and was
converted into, the 2018 Term A Loan Advance hereunder, without constituting a novation. Such conversion of
the Original Term Loan Advances into the 2018 Term A Loan Advance hereunder was deemed an Advance on the
First Amendment Closing Date for purposes of this Agreement. In furtherance thereof, the Lenders severally (and
not jointly) made, in an amount not exceeding their respective 2018 Term Commitment as in effect on the First
Amendment Closing Date, and Borrower agreed to draw, one (1) 2018 Term Loan Advance in an aggregate
principal amount of Thirty-Five Million Dollars ($35,000,000) (inclusive of the Original Term Loan Advances) on
the First Amendment Closing Date (the “2018 Term A Loan Advance”). Furthermore, pursuant to the
transactions described in this Agreement as amended by Amendment No. 1, on the First Amendment Closing
Date, Lender provided severally (and not jointly) its respective 2018 Term Commitment to make one (1) 2018
Term Loan Advance in a principal amount of Fifteen Million Dollars ($15,000,000) (the “2018 Term B Loan
Advance”, and together with the 2018 Term A Loan Advance, the “2018 Term Loan Advances”).
Outstanding Principal Amount; Termination of Commitments. The parties hereto acknowledge and
agree that as of the Second Amendment Closing Date: (i) Lender has not made any 2018 Term B Loan Advance to
Borrower, (ii) the aggregate outstanding principal amount of the 2018 Term Loan Advances is Thirty-Five Million
Dollars ($35,000,000) and (iii) Borrower shall not be permitted to draw, and Lender shall not make, any further
2018 Term Loan Advances.
Interest. The principal balance of each 2018 Term Loan Advance shall bear interest thereon from
such Advance Date at the 2018 Term Loan Interest Rate based on a year consisting of 360 days, with interest
computed daily based on the actual number of days elapsed. The 2018 Term Loan Interest Rate will float and
change on the day the Prime Rate changes from time to time.
Payment. Borrower will pay interest on each 2018 Term Loan Advance on the first (1st) Business
Day of each month, beginning the month after the Advance Date. The entire 2018 Term Loan Advances principal
balance and all accrued but unpaid interest thereon hereunder, shall be due and payable on the 2018 Term Loan
Maturity Date. Borrower shall make all payments under this Agreement without setoff, recoupment or deduction
and regardless of any counterclaim or defense. Lender will initiate debit entries to the Borrower’s account as
authorized on the ACH Authorization on each payment date of all periodic obligations payable to Lender under
each 2018 Term Loan Advance. Once repaid, the 2018 Term Loan Advances or any portion thereof may not be
reborrowed.
1.1.2 2021 Term Loan.
(a)
2021 Term Loan Advances. Subject to the terms and conditions of this Agreement, the
Lenders agree severally (and not jointly) to make, in an amount not to exceed
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their respective 2021 Term Commitment, at the Borrower’s request in accordance with clause (b) below, (i) one
(1) term loan in an aggregate principal amount of Thirty-Five Million Dollars ($35,000,000) on the Second
Amendment Closing Date and (ii) after the Second Amendment Closing Date but on or prior to December 15,
2021, additional term loans in an aggregate principal amount not to exceed Sixty-Five Million Dollars
($65,000,000) (each advance of the term loans referred to in Section 2.1.2(a)(i) or (ii), a “2021 Term Loan
Advance” and collectively, the “2021 Term Loan Advances”). The amount of any proposed 2021 Term Loan
Advance pursuant to Section 2.1.2(a)(ii) must be a minimum amount of Twenty Million Dollars ($20,000,000).
Only one 2021 Term Loan Advance may be requested in each Advance Request and the aggregate outstanding
2021 Term Loan Advances shall not exceed the Maximum 2021 Term Loan Amount. Proceeds of each 2021
Term Loan Advance shall be deposited into an account that is subject to a first priority perfected security interest
in favor of Agent perfected by an Account Control Agreement.
Advance Request. To obtain a 2021 Term Loan Advance, Borrower shall complete, sign and
deliver an Advance Request (at least (i) in the case of any 2021 Term Loan Advance to be advanced under Section
2.1.2(a)(i), one (1) Business Day before the Advance Date, and (ii) in the case of any 2021 Term Loan Advance to
be advanced under Section 2.1.2(a)(ii), at least five (5) Business Days before the Advance Date) to Agent. Lender
shall fund its ratable portion of each 2021 Term Loan Advance in the manner requested by the Advance Request
provided that each of the conditions precedent to such 2021 Term Loan Advance is satisfied as of the requested
Advance Date.
Interest. The principal balance of each 2021 Term Loan Advance shall bear interest thereon from
such Advance Date at the 2021 Term Loan Interest Rate based on a year consisting of 360 days, with interest
computed daily based on the actual number of days elapsed. The 2021 Term Loan Interest Rate will float and
change on the day the Prime Rate changes from time to time.
Payment. Borrower will pay interest on each 2021 Term Loan Advance on the first (1st) Business
Day of each month, beginning the month after the Advance Date. The entire 2021 Term Loan Advances principal
balance and all accrued but unpaid interest thereon hereunder, shall be due and payable on the 2021 Term Loan
Maturity Date. Borrower shall make all payments under this Agreement without setoff, recoupment or deduction
and regardless of any counterclaim or defense. Lender will initiate debit entries to the Borrower’s account as
authorized on the ACH Authorization on each payment date of all periodic obligations payable to Lender under
each 2021 Term Loan Advance. Once repaid, the 2021 Term Loan Advances or any portion thereof may not be
reborrowed.
Extension of 2021 Term Loan Maturity Date.
(i)
Subject to the terms and conditions set forth in clause (ii) below, Borrower may give
Agent written notice not later than the date that is thirty (30) days prior to the 2021 Term Loan Maturity Date then
in effect hereunder (such 2021 Term Loan Maturity Date then in effect, the “Existing 2021 Term Loan Maturity
Date”), that it has elected to extend the 2021 Term Loan Maturity Date by an additional twelve (12) months from
the Existing 2021 Term Loan Maturity Date; provided that Borrower may deliver only two (2) such notices of
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extension so that the total number of months by which the 2021 Term Loan Maturity Date may be extended under
this Section 2.1.2(e) shall not exceed twenty-four (24).
pursuant to this Section 2.1.2(e) shall be effective unless:
(ii)
Notwithstanding the foregoing, no extension of the 2021 Term Loan Maturity Date
(A) immediately prior to and upon giving effect to such extension (1) the
representations and warranties contained in the Loan Documents are true, accurate and complete in all material
respects except to the extent such representations and warranties relate to an earlier date, in which case they are
true and correct in all material respects as of such date (in all cases without giving effect to any standard(s) of
materiality contained in such Loan Documents as to such representations and warranties), (2) no fact or condition
exists that would (or would, with the passage of time, the giving of notice, or both) constitute an Event of Default
and (3) no event that has had or could reasonably be expected to have a Material Adverse Effect has occurred and
is continuing; and
(B) Agent shall have received, without limitation, such other documents,
agreements, certificates, notices, reports, filings, opinions, financial statements and other writings reasonably
requested by Agent in connection therewith.
Maximum Interest. Notwithstanding any provision in this Agreement or any other Loan Document, it is
the parties’ intent not to contract for, charge or receive interest at a rate that is greater than the maximum rate
permissible by law that a court of competent jurisdiction shall deem applicable hereto (which under the laws of
the State of California shall be deemed to be the laws relating to permissible rates of interest on commercial loans)
(the “Maximum Rate”). If a court of competent jurisdiction shall finally determine that Borrower has actually
paid to Lender an amount of interest in excess of the amount that would have been payable if all of the Secured
Obligations had at all times borne interest at the Maximum Rate, then such excess interest actually paid by
Borrower shall be applied as follows: first, to the payment of the Secured Obligations consisting of the
outstanding principal of the Term Loan Advances, the 2018 Term Loan Advances and the 2021 Term Loan
Advances; second, after all principal is repaid, to the payment of Lender's accrued interest, costs, expenses,
professional fees and any other Secured Obligations; and third, after all Secured Obligations are repaid, the excess
(if any) shall be refunded to Borrower.
Default Interest. In the event any payment is not paid on the scheduled payment date, an amount equal to
five percent (5%) of the past due amount shall be payable on demand. In addition, upon the occurrence and
during the continuation of an Event of Default hereunder, all Secured Obligations, including principal, interest,
compounded interest, and professional fees, shall bear interest at a rate per annum equal to the rate set forth in
Section 2.1(d), plus five percent (5%) per annum. In the event any interest is not paid when due hereunder,
delinquent interest shall be added to principal and shall bear interest on interest, compounded at the rate set forth
in Section 2.1(d).
Prepayment. At its option, Borrower may prepay the whole or part (but in an amount not less than
$10,000,000 or less if the applicable amount of outstanding Advances are less than $10,000,000 at such time) of:
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Upon at least five (5) Business Days prior written notice to Agent, the outstanding 2018 Term Loan
Advances including all accrued and unpaid interest thereon, all unpaid Lender's fees and expenses accrued to the
date of the repayment (including, without limitation, the Third Advance End of Term Charge and the 2018 End of
Term Charge) together with a prepayment charge equal to the following percentage of the amount of the 2018
Term Loan Advances being prepaid: if such 2018 Term Loan Advance amounts are prepaid in any of the first
twelve (12) months following the First Amendment Closing Date, two percent (2%); after twelve (12) months
following the First Amendment Closing Date but prior to twenty four (24) months following the First Amendment
Closing Date, one and one half percent (1.5%); and after twenty four (24) months following the First Amendment
Closing Date but prior to the 2018 Term Loan Maturity Date, one percent (1%) (each, a “2018 Prepayment
Charge”). Borrower agrees that the 2018 Prepayment Charge is a reasonable calculation of Lender's lost profits in
view of the difficulties and impracticality of determining actual damages resulting from an early repayment of the
2018 Term Loan Advances. For the avoidance of doubt, Lender and Agent agree that the 2018 Term A Loan
Advances made hereunder does not constitute prepayment of the Original Term Loan Advances.
Upon at least thirty (30) days prior written notice to Agent and only after the date is six months
after the Second Amendment Closing Date, the outstanding 2021 Term Loan Advances including all accrued and
unpaid interest thereon, all unpaid Lender's fees and expenses accrued to the date of the repayment (including,
without limitation, the 2021 End of Term Charge).
Upon the occurrence of a Change in Control, Borrower shall immediately prepay the aggregate outstanding
amount of all principal of all Advances and accrued interest thereon through the prepayment date and all unpaid
Lender's fees and expenses accrued to the date of the prepayment (including, without limitation, the Third
Advance End of Term Charge, the 2018 End of Term Charge and the 2021 End of Term Charge) together with a
2018 Prepayment Charge.
Original End of Term Charge. On the earliest to occur of (i) October 1, 2016, (ii) the date that Borrower
prepays the outstanding Secured Obligations, or (iii) the date that the Secured Obligations become due and
payable, Borrower shall pay Lender a charge equal to $345,000. Notwithstanding the required payment date of
such charge, it shall be deemed earned by Lender as of the Original Closing Date.
Additional End of Term Charges.
On the earliest to occur of (i) June 30, 2018, (ii) the date that Borrower prepays the outstanding
Secured Obligations, or (iii) the date that the Secured Obligations become due and payable, Borrower shall
immediately pay Lender an additional charge equal to $250,000 (the “Second Advance End of Term Charge”).
Notwithstanding the required payment date of such charge, it shall be deemed earned by Lender as of June 26,
2014.
On the earliest to occur of (i) the Term Loan Maturity Date, (ii) the date that Borrower prepays the
outstanding Secured Obligations in full, or (iii) the date that the Secured Obligations become due and payable,
Borrower shall immediately pay Lender an additional charge equal to $970,000 (the “Third Advance End of
Term Charge”). Notwithstanding the
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required payment date of such charge, it shall be deemed earned by Lender as of the Restatement Date.
On the earliest to occur of (i) the 2018 Term Loan Maturity Date, (ii) the date that Borrower
prepays the outstanding Secured Obligations in full, or (iii) the date that the Secured Obligations become due and
payable, Borrower shall immediately pay Lender One Million Seven Hundred Thirty-Two Thousand Five
Hundred Dollars ($1,732,500) (the “2018 End of Term Charge”). Notwithstanding the required payment date of
such charge, the 2018 End of Term Charge shall be deemed earned by Lender as of the First Amendment Closing
Date.
On the earliest to occur of (i) the 2021 Term Loan Maturity Date, (ii) the date that Borrower
prepays the outstanding Secured Obligations in respect of the 2021 Term Loan Advances in full, or (iii) the date
that the Secured Obligations become due and payable, Borrower shall immediately pay Lender with respect to the
2021 Term Loan Advances a charge equal to following percentages multiplied by the aggregate original principal
amount of all 2021 Term Loan Advances extended by Lender (the “2021 End of Term Charge”): (A) 1.65% if
the date such payment is required to be made occurs after six (6) months following the Second Amendment
Closing Date but prior to nine (9) months following the Second Amendment Closing Date, (B) 2.25% if the date
such payment is required to be made occurs after nine (9) months following the Second Amendment Closing Date
but prior to twelve (12) months following the Second Amendment Closing Date, (C) 3.85% if the date such
payment is required to be made occurs after twelve (12) months following the Second Amendment Closing Date
but prior to twenty-four (24) months following the Second Amendment Closing Date and (4) 4.85% if the date
such payment is required to be made occurs after twenty-four (24) months following the Second Amendment
Closing Date; provided, however that immediately upon the effectiveness of each separate twelve (12) month
extension of the 2021 Term Loan Maturity Date pursuant to Section 2.1.2(e), each of the foregoing percentages
shall be increased by one percent (1%). For the avoidance of doubt, if the 2021 Term Loan Maturity Date is
extended twice under Section 2.1.2(e), then each of the foregoing percentages used to calculate the 2021 End of
Term Charge shall be increased by two percent (2%) in total. Notwithstanding the required payment date of such
charge, the 2021 End of Term Charge shall be deemed earned by Lender, as to such 2021 Term Loan Advance, as
of each date a 2021 Term Loan Advance is made.
Notes. If so requested by Lender by written notice to Borrower, then Borrower shall execute and deliver
to Lender (and/or, if applicable and if so specified in such notice, to any person who is an assignee of Lender
pursuant to Section 11.12) (promptly after the Borrower’s receipt of such notice) a Note or Notes to evidence an
Advance made by a Lender.
Commitment Fee; Facility Charge. The parties acknowledge and agree that Borrower paid to Lender (i) a
commitment fee of $45,000 on or before the Original Closing Date, and such commitment fee was fully earned on
the Original Closing Date and non-refundable regardless of the early termination of this Agreement, (ii) the
Facility Charge of $125,000 on the Original Closing Date, and that such Facility Charge was fully earned on the
Original Closing Date and non-refundable regardless of the early termination of this Agreement, (iii) the facility
charge of $200,000 on June 26, 2014, and such facility charge was fully earned on June 26, 2014 and non-
refundable regardless of the early termination of this Agreement, (iv) the Third Advance Facility
24
Charge of $150,000 on the Restatement Date, and such facility charge was fully earned on the Restatement Date
and non-refundable regardless of the early termination of this Agreement, (v) the facility charge of $175,000 on
the First Amendment Closing Date, and such facility charge was fully earned on the First Amendment Closing
Date and non-refundable regardless of the early termination of this Agreement and (vi) the facility charge of
$350,000 on the Second Amendment Closing Date, and such facility charge was fully earned on the Second
Amendment Closing Date and non-refundable regardless of the early termination of this Agreement.
Pro Rata Treatment. Each payment (including prepayment) on account of any fee and any reduction of the
2018 Term Loan Advances shall be made pro rata according to the 2018 Term A Loan Advance of the relevant
Lender. Each payment (including prepayment) on account of any fee and any reduction of the 2021 Term Loan
Advances shall be made pro rata according to such 2021 Term Loan Advance of the relevant Lender.
SECURITY INTEREST
As security for the prompt, complete and indefeasible payment when due (whether on the payment dates
or otherwise) of all the Secured Obligations:
uniQure Holdings grants to Lender a first ranking right of pledge on its shares in uniQure Bio and
uniQure IP;
uniQure Bio grants to Lender a first ranking right of pledge on its shares in its Dutch subsidiaries
identified on the Schedule 1 hereto and a security interest in 100% of the capital stock of US Borrower;
Obligor (excluding US Borrower) grants to Lender a first ranking right of pledge on its (a) trade,
intercompany and insurance receivables; (b) movable assets and (c) Deposit Accounts; and
US Borrower grants to Lender a security interest in all of US Borrower’s right, title, and interest in
and to the following personal property whether now owned or hereafter acquired: (a) receivables; (b) equipment;
(c) fixtures; (d) general intangibles (except as described below); (e) inventory; (f) Investment Property;
(g) Deposit Accounts; (h) Cash; (i) Goods; and all other tangible and intangible personal property of US Borrower
whether now or hereafter owned or existing, leased, consigned by or to, or acquired by, US Borrower and
wherever located, and any of US Borrower’s property in the possession or under the control of Lender; and, to the
extent not otherwise included, all proceeds of each of the foregoing and all accessions to, substitutions and
replacements for, and rents, profits and products of each of the foregoing, (a), (b), (c) and (d) collectively, the
“Collateral”.
Notwithstanding anything in this Agreement or any other Loan Document to the contrary, in no event shall
the Collateral include, and the Obligor shall not be deemed to have granted a security interest in: (i) Intellectual
Property; provided, however, that the Collateral shall include all accounts and general intangibles that consist of
rights to payment and proceeds from the sale, licensing or disposition of all or any part, or rights in, the
Intellectual Property (the “Rights to Payment”); or (ii) any of the Borrower’s rights or interests in or under, any
license, contract, permit, instrument, security or franchise to which the Borrower is a party or any of its rights or
25
interests thereunder to the extent, but only to the extent, that such a grant would, under the terms of such license,
contract, permit, instrument, security or franchise, result in a breach of the terms of, or constitute a default under,
such license, contract, permit, instrument, security or franchise (other than to the extent that any such term would
be rendered ineffective pursuant to the UCC or any other applicable law (including the Dutch and the United
States Bankruptcy Code) or principles of equity); provided, that immediately upon the ineffectiveness, lapse or
termination of any such provision the Collateral shall include, and the Borrower shall be deemed to have granted a
security interest in, all the rights and interests described in the foregoing clause (ii) as if such provision had never
been in effect. Notwithstanding the foregoing, if a judicial authority (including a U.S. Bankruptcy Court) holds
that a security interest in the underlying Intellectual Property is necessary to have a security interest in the Rights
to Payment, then the Collateral shall automatically, and effective as of the date of this Agreement, include the
Intellectual Property to the extent necessary to permit perfection of Lender’s security interest in the Rights to
Payment.
CONDITIONS PRECEDENT TO ADVANCES
The obligation of Lender to make the 2021 Term Loan Advances hereunder is subject to the satisfaction by
Borrower of the following conditions:
Closing Documents. On or prior to the Advance of the 2021 Term Loan Advances under Section 2.1.2(a)
(i) only, Borrower shall have delivered to Lender each of the documents, certificates and other items required
pursuant to Section 4 of the Amendment No. 2 and satisfaction of all conditions precedent thereto.
Advance Request. Borrower shall have delivered to Lender the following: (a) an Advance Request for the
relevant Advance as required by 2.1.2(b), duly executed by uniQure Holdings’ Chief Executive Officer, Chief
Financial Officer or Chief Accounting Officer and (b) any other documents Lender may reasonably request.
Other conditions to Advances.
The representations and warranties set forth in this Agreement and in Section 5 shall be true and
correct in all material respects on and as of the relevant Advance Date with the same effect as though made on and
as of such date, except to the extent such representations and warranties expressly relate to an earlier date.
Borrower shall be in compliance with all the terms and provisions set forth herein and in each other
Loan Document on its part to be observed or performed.
The Advance Request shall be deemed to constitute a representation and warranty by Borrower on
the relevant Advance Date as to the matters specified in Section 4.4 and as to the matters set forth in the Advance
Request.
No Default. As of the relevant Advance Date, (i) no fact or condition exists that would (or would, with the
passage of time, the giving of notice, or both) constitute an Event of Default and (ii) no event that has had or could
reasonably be expected to have a Material Adverse Effect has occurred and is continuing.
26
REPRESENTATIONS AND WARRANTIES OF BORROWER
Borrower represents and warrants that:
Corporate Status. uniQure Bio is a private limited liability company duly incorporated and existing under
the laws of the Netherlands, and is duly qualified as a foreign corporation in all jurisdictions in which the nature
of its business or location of its properties require such qualifications and where the failure to be qualified could
reasonably be expected to have a Material Adverse Effect. uniQure Bio’s present name, former names (if any),
locations, place of formation, tax identification number, organizational identification number and other
information are correctly set forth in Exhibit C, as may be updated by uniQure Bio in a written notice (including
any Compliance Certificate) provided to Lender after the Restatement Date. US Borrower is a corporation duly
organized, legally existing and in good standing under the laws of the State of Delaware, and is duly qualified as a
foreign corporation in all jurisdictions in which the nature of its business or location of its properties require such
qualifications and where the failure to be qualified could reasonably be expected to have a Material Adverse
Effect.
Collateral. The relevant Obligor owns the Collateral and the Intellectual Property, free of all Liens, except
for Permitted Liens. Each Obligor has the power and authority to grant to Lender a Lien in the Collateral as
security for the Secured Obligations.
Consents. Borrower’s execution, delivery and performance of the Notes (if any), this Agreement and all
other Loan Documents, (i) have been duly authorized by all necessary corporate action of Borrower, (ii) will not
result in the creation or imposition of any Lien upon the Collateral, other than Permitted Liens and the Liens
created by this Agreement and the other Loan Documents, (iii) do not violate any provisions of Borrower’s
articles of association, or any, law, regulation, order, injunction, judgment, decree or writ to which Borrower is
subject and (iv) except as described on Schedule 5.3, do not violate any contract or agreement or require the
consent or approval of any other Person which has not already been obtained. The individual or individuals
executing the Loan Documents are duly authorized to do so.
Material Adverse Effect. No event that has had or could reasonably be expected to have a Material
Adverse Effect has occurred and is continuing. Borrower is not aware of any event likely to occur that is
reasonably expected to result in a Material Adverse Effect.
Actions Before Governmental Authorities. Except as described on Schedule 5.5, there are no actions, suits
or proceedings at law or in equity or by or before any governmental authority now pending or, to the knowledge
of uniQure Holdings, threatened against or affecting Borrower or its property (i) which seek to prevent, enjoin,
hinder or delay the transactions contemplated by the Loan Documents or (ii) as to which there is a reasonable
possibility of an adverse determination and which, if adversely determined, would reasonably be expected to,
individually or in the aggregate, have a Material Adverse Effect on Borrower’s business.
Laws. Borrower, to its knowledge, is not in violation of any law, rule or regulation, or in default with
respect to any judgment, writ, injunction or decree of any governmental authority, where such violation or default
is reasonably expected to result in a Material Adverse Effect. Borrower, to its knowledge, is not in default in any
manner under any provision of any
27
agreement or instrument evidencing indebtedness, or any other material agreement to which it is a party or by
which it is bound and for which such default would reasonably be expected to have a Material Adverse Effect on
Borrower’s business.
Neither Borrower nor any of its Subsidiaries is an “investment company” or a company “controlled” by an
“investment company” under the Investment Company Act of 1940, as amended, as applicable. Neither Borrower
nor any of its Subsidiaries is engaged as one of its important activities in extending credit for margin stock (under
Regulations X, T and U of the Federal Reserve Board of Governors, as applicable). Borrower and each of its
Subsidiaries has complied in all material respects with the Federal Fair Labor Standards Act, as applicable.
Neither Borrower nor any of its Subsidiaries is a “holding company” or an “affiliate” of a “holding company” or
a “subsidiary company” of a “holding company” as each term is defined and used in the Public Utility Holding
Company Act of 2005, as applicable. Neither Borrower’s nor any of its Subsidiaries’ properties or assets has been
used by Borrower or such Subsidiary or, to Borrower’s knowledge, by previous Persons, in disposing, producing,
storing, treating, or transporting any hazardous substance other than in material compliance with applicable laws.
Borrower and each of its Subsidiaries has obtained all consents, approvals and authorizations of, made all
declarations or filings with, and given all notices to, all Governmental Authorities that are necessary to continue
their respective businesses as currently conducted.
None of Borrower, any of its Subsidiaries, or any of Borrower’s or its Subsidiaries’ Affiliates or any of
their respective agents acting or benefiting in any capacity in connection with the transactions contemplated by
this Agreement is (i) in violation of any Anti-Terrorism Law, (ii) engaging in or conspiring to engage in any
transaction that evades or avoids, or has the purpose of evading or avoiding or attempts to violate, any of the
prohibitions set forth in any Anti-Terrorism Law, or (iii) is a Blocked Person. None of Borrower, any of its
Subsidiaries, or to the knowledge of Borrower and any of their Affiliates or agents, acting or benefiting in any
capacity in connection with the transactions contemplated by this Agreement, (x) conducts any business or
engages in making or receiving any contribution of funds, goods or services to or for the benefit of any Blocked
Person, or (y) deals in, or otherwise engages in any transaction relating to, any property or interest in property
blocked pursuant to Executive Order No. 13224, any similar executive order or other Anti-Terrorism Law. None
of the funds to be provided under this Agreement will be used, directly or indirectly, (a) for any activities in
violation of any applicable anti-money laundering, economic sanctions and anti-bribery laws and regulations laws
and regulations or (b) for any payment to any governmental official or employee, political party, official of a
political party, candidate for political office, or anyone else acting in an official capacity, in order to obtain, retain
or direct business or obtain any improper advantage, in violation of the United States Foreign Corrupt Practices
Act of 1977, as amended.
Information Correct and Current. No information, report, Advance Request, financial statement, exhibit or
schedule furnished, by or on behalf of Borrower to Lender in connection with any Loan Document or included
therein or delivered pursuant thereto contained, contains or will contain any material misstatement of fact or
omitted, omits or will omit to state any material fact necessary to make the statements therein, in the light of the
circumstances under which they were, are or will be made, not misleading at the time such statement was made or
deemed made. Additionally, any and all financial or business projections provided by Borrower to Lender shall be
(i) provided in good faith and based on the most current data and information available to
28
Borrower, (ii) the most current of such projections provided to the Board, and (iii) are based on reasonable
assumptions not viewed as facts and that actual results during the period or periods covered by such projections
and forecast may differ from the projected or forecasted results.
Tax Matters. Except as described on Schedule 5.8, (a) Borrower has filed all federal, state and local tax
returns that it is required to file, (b) Borrower has duly paid or fully reserved for all taxes or installments thereof
(including any interest or penalties) as and when due, which have or may become due pursuant to such returns,
and (c) Borrower has paid or fully reserved for any tax assessment received by Borrower for the three (3) years
preceding the Restatement Date, if any (including any taxes being contested in good faith and by appropriate
proceedings).
Intellectual Property Claims. Borrower is the sole owner of, or otherwise has the right to use, the
Intellectual Property. Except as described on Schedule 5.9, (i) each of the material Copyrights, Trademarks and
Patents is valid and enforceable, (ii) no material part of the Intellectual Property has been judged invalid or
unenforceable, in whole or in part, and (iii) no claim has been made in writing to Borrower that any material part
of the Intellectual Property violates the rights of any third party. Exhibit D is a true, correct and complete list of
each of Borrower’s Patents, registered Trademarks, registered Copyrights, and material agreements under which
Borrower licenses Intellectual Property from third parties (other than shrink-wrap software licenses and other
licenses for over-the-counter software), together with application or registration numbers, as applicable, owned by
Borrower or any Subsidiary, in each case as of the Restatement Date. Borrower is not in material breach of, nor
has Borrower failed to perform any material obligations under, any of the foregoing contracts, licenses or
agreements and, to uniQure Holdings’ knowledge, no third party to any such contract, license or agreement is in
material breach thereof or has failed to perform any material obligations thereunder.
Intellectual Property. Except as described on Schedule 5.10, Borrower has, or in the case of any proposed
business, will have, all material rights with respect to Intellectual Property necessary in the operation or conduct
of Borrower’s business as currently conducted and proposed to be conducted by Borrower, Without limiting the
generality of the foregoing, and in the case of Licenses, except for restrictions that are unenforceable under
Division 9 of the UCC, Borrower has the right, to the extent required to operate Borrower’s business, to freely
transfer, license or assign Intellectual Property without condition, restriction or payment of any kind (other than
license payments in the ordinary course of business) to any third party, and Borrower owns or has the right to use,
pursuant to valid licenses, all software development tools, library functions, compilers and all other third-party
software and other items that are necessary in the design, development, promotion, sale, license, manufacture,
import, export, use or distribution of Borrower Products.
Borrower Products. Except as described on Schedule 5.11, no Intellectual Property owned by Borrower or
Borrower Product has been or is subject to any actual or, to the knowledge of Borrower, threatened litigation,
proceeding or outstanding decree, order, judgment, settlement agreement or stipulation that restricts in any
material manner Borrower’s use, transfer or licensing thereof or that may materially affect the validity, use or
enforceability thereof. There is no decree, order, judgment, agreement, stipulation, arbitral award or other
provision entered into in connection with any litigation or proceeding that obligates Borrower to grant licenses or
ownership interest in any future Intellectual Property related to the operation or
29
conduct of the business of Borrower or Borrower Products. Borrower has not received any written notice or
claim, or, to the knowledge of Borrower, oral notice or claim, challenging or questioning Borrower’s ownership in
any Intellectual Property (or written notice of any claim challenging or questioning the ownership in any licensed
Intellectual Property of the owner thereof) or suggesting that any third party has any claim of legal or beneficial
ownership with respect thereto nor, to Borrower’s knowledge, is there a reasonable basis for any such claim. To
Borrower’s knowledge, neither Borrower’s use of its Intellectual Property nor the production and sale of Borrower
Products infringes the Intellectual Property or other rights of others.
Financial Accounts. Exhibit E, as may be updated by the Borrower in a written notice provided to Lender
after the Restatement Date, is a true, correct and complete list of (a) all banks and other financial institutions at
which Borrower or any Subsidiary maintains Deposit Accounts and (b) all institutions at which Borrower or any
Subsidiary maintains an account holding Investment Property, and such exhibit correctly identifies the name,
address and telephone number of each bank or other institution, the name in which the account is held, a
description of the purpose of the account, and the complete account number therefor.
Employee Loans. Borrower has no outstanding loans to any employee, officer or director of the Borrower
nor has Borrower guaranteed the payment of any loan made to an employee, officer or director of the Borrower by
a third party.
Capitalization and Subsidiaries. uniQure Holdings’ capitalization as of the Restatement Date is set forth
on Schedule 5.14 annexed hereto. uniQure Holdings does not own any stock, partnership interest or other
securities of any Person, except for Permitted Investments. Attached as Schedule 5.14, as may be updated by
uniQure Holdings in a written notice provided after the Restatement Date, is a true, correct and complete list of
each Subsidiary.
Centre of main interests and establishments. uniQure Bio has its “centre of main interests” (as that term is
used in article 3(1) of The Council of the European Union Regulation No. 1346/2000 on Insolvency Proceedings)
in the Netherlands.
INSURANCE; INDEMNIFICATION
Coverage. uniQure Holdings shall cause to be carried and maintained (by itself or its Subsidiaries)
commercial general liability insurance, on an occurrence form, against risks customarily insured against in
uniQure Holdings’s line of business. Such risks shall include the risks of bodily injury, including death, property
damage, personal injury, advertising injury, and contractual liability per the terms of the indemnification
agreement found in Section 6.3. uniQure Holdings or its Subsidiaries must maintain a minimum of $1,000,000 of
commercial general liability insurance for each occurrence and $2,000,000 in the aggregate. uniQure Holdings or
its Subsidiaries has and agrees to maintain a minimum of $2,000,000 of directors’ and officers’ insurance for each
occurrence and $5,000,000 in the aggregate. So long as there are any Secured Obligations outstanding, uniQure
Holdings shall also cause or procure that its Subsidiaries cause to be carried and maintained insurance upon the
Collateral, insuring against all risks of physical loss or damage howsoever caused, in an amount not less than the
full replacement cost of the Collateral, provided that such insurance may be subject to standard
30
exceptions and deductibles. uniQure Holdings or its Subsidiaries shall also carry and maintain a fidelity insurance
policy in an amount not less than $100,000.
Certificates. uniQure Holdings shall deliver to Lender certificates of insurance that evidence uniQure
Holdings or its Subsidiaries compliance with its insurance obligations in Section 6.1 and the obligations contained
in this Section 6.2. uniQure Holding’s (or its Subsidiaries) insurance certificate shall state Lender is an additional
insured for commercial general liability, a loss payee for all risk property damage insurance, subject to the
insurer’s approval, a loss payee for fidelity insurance, and a loss payee for property insurance and additional
insured for liability insurance for any future insurance that uniQure Holdings or its Subsidiaries may acquire from
such insurer, unless any right under the liability insurance is restricted from being pledged under Section 7:954(4)
of the Dutch Civil Code. Attached to the certificates of insurance will be additional insured endorsements for
liability and lender’s loss payable endorsements for all risk property damage insurance and fidelity. Unless an
Event of Default shall have occurred and be continuing, all insurance proceeds shall be paid or turned over to
uniQure Holdings or its Subsidiaries, as applicable. All certificates of insurance will provide for a minimum of
thirty (30) days advance written notice to Lender of cancellation or any other change adverse to Lender’s interests.
Any failure of Lender to scrutinize such insurance certificates for compliance is not a waiver of any of Lender’s
rights, all of which are reserved. Borrower shall provide Agent with copies of each insurance policy, and upon
entering or amending any insurance policy required hereunder, Borrower shall provide Agent with copies of such
policies and shall promptly deliver to Agent updated insurance certificates with respect to such policies.
Indemnity. Borrower agrees to indemnify and hold Lender and its officers, directors, employees, agents,
in-house attorneys, representatives and shareholders harmless from and against any and all claims, costs,
expenses, damages and liabilities (including such claims, costs, expenses, damages and liabilities based on
liability in tort:, including strict liability in tort), including reasonable documented attorneys’ fees and
disbursements and other costs of investigation or defense (including those incurred upon any appeal), that may be
instituted or asserted against or incurred by Lender or any such Person as the result of credit having been
extended, suspended or terminated under this Agreement and the other Loan Documents or the administration of
such credit, or in connection with or arising out of the transactions contemplated hereunder and thereunder, or any
actions or failures to act in connection therewith, or arising out of the disposition or utilization of the Collateral,
excluding in all cases claims resulting solely from Lender’s gross negligence or willful misconduct Borrower
agrees to pay, and to save Lender harmless from, any and all liabilities with respect to, or resulting from any delay
in paying, any and all excise, sales or other similar taxes (excluding taxes imposed on or measured by the net
income of Lender) that may be payable or determined to be payable with respect to any of the Collateral or this
Agreement. This Section 6.3 shall survive the repayment of indebtedness under, and otherwise shall survive the
expiration or other termination of, the Agreement.
31
COVENANTS OF BORROWER
Borrower agrees as follows:
Financial Reports. uniQure Holdings shall furnish to Lender the financial statements and reports listed
hereinafter (the “Financial Statements”):
as soon as practicable (and in any event within 30 days) after the end of each month, its unaudited
interim and year-to-date financial statements as of the end of such month (prepared on a consolidated and
consolidating basis, if applicable), including balance sheet and related statements of income accompanied by a
report detailing any material contingencies (including the commencement of any material litigation by or against
the Obligors) or any other occurrence that would reasonably be expected to have a Material Adverse Effect, all
certified by uniQure Holdings’ Chief Executive Officer, Chief Financial Officer, Chief Accounting Officer or
Global Controller to the effect that they have been prepared in accordance with Accounting Standards, except
(i) for the absence of footnotes, (ii) that they are subject to normal year-end adjustments, and (iii) they do not
contain certain non-cash items that are customarily included in quarterly and annual financial statements;
as soon as practicable (and in any event within 60 days) after the end of each calendar quarter,
unaudited interim and year-to-date financial statements as of the end of such calendar quarter (prepared on a
consolidated and consolidating basis, if applicable), including balance sheet and related statements of income and
cash flows accompanied by a report detailing any material contingencies (including the commencement of any
material litigation by or against Borrower) or any other occurrence that would reasonably be expected to have a
Material Adverse Effect, certified by uniQure Holdings’ Chief Executive Officer, Chief Financial Officer, Chief
Accounting Officer or Global Controller to the effect that they have been prepared in accordance with Accounting
Standards, except (i) for the absence of footnotes, and (ii) that they are subject to normal year-end adjustments; as
well as the most recent capitalization table for the Obligors, including the weighted average exercise price of
employee stock options;
as soon as practicable (and in any event within one hundred and eighty (180 days)) after the end of
each fiscal year, unqualified audited financial statements as of the end of such year (prepared on a consolidated
and consolidating basis, if applicable), including balance sheet and related statements of income and cash flows,
and setting forth in comparative form the corresponding figures for the preceding fiscal year, certified by a firm of
independent certified public accountants selected by uniQure Holdings and reasonably acceptable to Lender,
accompanied by any management report from such accountants;
as soon as practicable (and in any event within 30 days) after the end of each month, a Compliance
Certificate in the form of Exhibit F;
promptly after the sending or filing thereof, as the case may be, copies of any proxy statements,
financial statements or reports that US Borrower has made available to holders of its capital stock and copies of
any regular, periodic and special reports or registration statements that US Borrower files with the Securities and
Exchange Commission or any governmental authority that may be substituted therefor, or any national securities
exchange;
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notify Lender in writing at least two (2) weeks in advance of the time and place of any regularly
scheduled meeting of the Board (including without limitation telephone, conference call and video meetings).
uniQure Holdings shall give Lender copies of all notices, minutes, consents and other materials uniQure Holdings
provides to its directors in connection with said meetings if reasonably requested by Lender;
Borrower at all times shall maintain Cash and/or cash equivalents on deposit in a deposit or
security account located in the United States that is subject to an Account Control Agreement of at least the lesser
of (i) 65% of the outstanding principal balance of the Advances or (ii) 100% of all of the worldwide Cash and
cash equivalents of the Borrower;
as soon as practicable (and in any event within 30 days) of approval by the Board an annual budget
for each financial year as well as budgets, operating plans and other financial information with respect to the
Obligors reasonably requested by Lender; and
uniQure Holdings shall not make any change in its (a) accounting policies or reporting practices
except in accordance with Accounting Standards, or (b) fiscal years or fiscal quarters. The fiscal year of Borrower
shall end on December 31.
The filing of any financial statements, reports or registration statements by uniQure Holdings with the U.S.
Securities Exchange Commission (or foreign equivalent thereof) through its electronic filing system shall
constitute delivery of such materials to Lender for purposes hereof so long as Borrower timely emails a link of
such filings to Lender.
The executed Compliance Certificate may be sent via facsimile to Lender at [*]. All Financial Statements
required to be delivered pursuant to clauses (a), (b) and (c) shall be sent via e-mail to [*] provided, that if e-mail is
not available or sending such Financial Statements via e-mail is not possible, they shall be sent via facsimile to
Lender at: [*], attention Chief Credit Officer.
Management Rights. Borrower shall permit any representative that Lender authorizes, including its
attorneys and accountants, to inspect the Collateral and examine and make copies and abstracts of the books of
account and records of Borrower at reasonable times and upon reasonable notice during normal business hours. In
addition, any such representative shall have the right to meet with management and officers of Borrower to
discuss such books of account and records. In addition, Lender shall be entitled at reasonable times and intervals
to consult with and advise the management and officers of Borrower concerning significant business issues
affecting Borrower. Such consultations shall not unreasonably interfere with Borrower’s business operations. The
parties intend that the rights granted Lender shall constitute “management rights” within the meaning of 29 C.F.R
Section 2510.3-101(d)(3)(ii), but that any advice, recommendations or participation by Lender with respect to any
business issues shall not be deemed to give Lender, nor be deemed an exercise by Lender of, control over
Borrower’s management or policies.
Further Assurances. Borrower shall from time to time execute, deliver and file, alone or with Lender, any
financing statements, security agreements, collateral assignments, notices, control agreements, or other documents
to perfect or give the highest priority to Lender’s Lien on
33
the Collateral. Borrower shall from time to time procure any instruments or documents as may reasonably be
requested by Lender, and take all further action that may be necessary or desirable, or that Lender may reasonably
request, to perfect and protect the Liens granted hereby and thereby. In addition, and for such purposes only,
Borrower hereby authorizes Lender to execute and deliver on behalf of Borrower and to file such financing
statements, collateral assignments, notices, control agreements, security agreements and other documents
necessary to grant, perfect and give the highest priority to Lender’s Lien on the Collateral without the signature of
Borrower either in Lender’s name or in the name of Lender as agent and attorney-in-fact for Borrower. Borrower
shall protect and defend Borrower’s title to the Collateral and Lender’s Lien thereon against all Persons claiming
any interest adverse to Borrower or Lender other than Permitted Liens.
Indebtedness. Borrower shall not create, incur, assume, guarantee or be or remain liable with respect to
any Indebtedness, or permit any Subsidiary so to do, other than Permitted Indebtedness, or prepay any
Indebtedness or take any actions which impose on Borrower an obligation to prepay any Indebtedness, except for
the conversion of Indebtedness into equity securities and the payment of cash in lieu of fractional shares in
connection with such conversion. Borrower shall not make any payments under the Leasehold Financing if an
Event of Default has occurred and is continuing.
Collateral. Borrower shall at all times keep the Collateral, the Intellectual Property and all other property
and assets used in Borrower’s business or in which Borrower now or hereafter holds any interest free and clear
from any legal process or Liens whatsoever (except for Permitted Liens), and shall give Lender prompt written
notice of any legal process affecting the Collateral, the Intellectual Property, such other property and assets, or any
Liens thereon. Borrower shall cause its Subsidiaries to protect and defend such Subsidiary’s title to its assets from
and against all Persons claiming any interest adverse to such Subsidiary, and Borrower shall cause its Subsidiaries
at all times to keep such Subsidiary’s property and assets free and clear from any legal process or Liens
whatsoever (except for Permitted Liens), and shall give Lender prompt written notice of any legal process
affecting such Subsidiary’s assets. Borrower shall not agree with any Person other than Lender not to encumber
its property.
Investments. Borrower shall not directly or indirectly acquire or own, or make any Investment in or to any
Person, or permit any of its Subsidiaries so to do, other than Permitted Investments.
Distributions. Borrower shall not, and shall not allow any Subsidiary to, (a) repurchase or redeem any
class of stock or other equity interest other than (i) pursuant to employee, director or consultant repurchase plans,
stock option plans or agreements, restricted stock agreements or other similar agreements, provided, however, in
each case the repurchase or redemption price does not exceed the original consideration paid for such stock or
equity interest or (ii) the delivery of its Ordinary Shares upon conversion of Permitted Convertible Debt;
(b) declare or pay any cash dividend or make a cash distribution on any class of stock or other equity interest,
except that (i) a Subsidiary may pay dividends or make distributions to Borrower and (ii) Borrower may make
cash payments in lieu of issuing fractional shares in connection with a conversion of Permitted Convertible Debt
into Ordinary Shares; (c) lend money to any employees, officers or directors or guarantee the payment of any such
loans granted by a third
34
party in excess of $250,000 in the aggregate; or (d) waive, release or forgive any indebtedness owed by any
employees, officers or directors in excess of $250,000 in the aggregate.
Transfers. Except for Permitted Transfers, Borrower shall not voluntarily or involuntarily transfer, sell,
lease, license, lend or in any other manner convey any equitable, beneficial or legal interest in any material
portion of their assets.
Mergers or Acquisitions. uniQure Holdings shall not merge or consolidate, or permit any of its
Subsidiaries to merge or consolidate, with or into any other business organization (other than mergers or
consolidations of (i) a Subsidiary into an Obligor, or (ii) of a Subsidiary which is not an Obligor into any
Subsidiary or into an Obligor, provided, in each case, that with respect to any merger into an Obligor, Obligor is
the surviving entity) or acquire, or permit any of its Subsidiaries to acquire, all or substantially all of the capital
stock or property of another Person.
Taxes. Borrower and its Subsidiaries shall pay when due all taxes, fees or other charges of any nature
whatsoever (together with any related interest or penalties) now or hereafter imposed or assessed against
Borrower, Lender or the Collateral or upon Borrower’s ownership, possession, use, operation or disposition
thereof or upon Borrower’s rents, receipts or earnings arising therefrom. Borrower shall file on or before the due
date therefor all personal property tax returns in respect of the Collateral. Notwithstanding the foregoing,
Borrower may contest, in good faith and by appropriate proceedings, taxes for which Borrower maintains
adequate reserves therefor in accordance with Accounting Standards.
Corporate Changes. Neither Borrower nor any Subsidiary shall change its corporate name, legal form or
jurisdiction of formation without twenty (20) days’ prior written notice to Lender. Neither Borrower nor any
Subsidiary shall relocate its principal place of business unless it has provided prior written notice to Lender and
such relocation is within the Netherlands or the United States or within the same country as its previous location.
Neither Borrower nor any Subsidiary shall relocate any item of Collateral (other than (x) sales of movable assets
in the ordinary course of business, (y) relocations of movable assets having an aggregate value of up to $250,000
in any fiscal year, and (z) relocations of Collateral from a location described on Exhibit C to another location
described on Exhibit C) unless (i) it has provided prompt written notice to Lender, (ii) such relocation is within
the Netherlands or the United States or within the same country as its previous location, and (iii) if such relocation
is to a third party bailee in the United States, it has used commercially reasonable efforts to deliver a bailee
agreement in form and substance reasonably acceptable to Lender.
Deposit Accounts. No Obligor shall maintain any Deposit Accounts (other than (i) accounts consisting of
the proceeds from the Leasehold Financing so long as the aggregate amount in such accounts do not exceed
$10,000,000 and (ii) payroll, trust or escrow accounts), or accounts holding Investment Property, except with
respect to which Lender has an Account Control Agreement and/or a right of pledge (subject only to a Lien under
clause (xii) of the definition of Permitted Liens); provided however, Obligor shall (a) obtain Account Control
Agreements for its respective accounts at Rabobank National Association and (b) deliver a completed and
executed Perfection Certificate, in each case, no later than 30 Business Days after the Restatement Date.
35
Subsidiaries. Borrower shall notify Lender of each Subsidiary formed subsequent to the Restatement Date
and, within 15 days of formation, shall cause any such Subsidiary to execute and deliver to Lender a Joinder
Agreement.
Pensions. Borrower shall ensure that all pension schemes operated by or maintained for the benefit of
members of the Borrower and/or any of their employees are funded to the extent required by applicable law and
regulations where failure to do so would be reasonably likely to have a Material Adverse Effect.
Non-Obligors. The revenue of Subsidiaries which are not Obligors shall not exceed €250,000 in the
aggregate on an annual basis. The fair market value of the assets of Subsidiaries which are not Obligors shall not
exceed €500,000 in the aggregate at any given time.
Use of Proceeds. Borrower agrees that the proceeds of the Loans shall be used solely to pay related fees
and expenses in connection with this Agreement and for working capital and general corporate purposes. The
proceeds of the Loans will not be used in violation of applicable Anti-Corruption Laws or applicable Sanctions.
Compliance with Laws.
Borrower shall maintain, and shall cause its Subsidiaries to maintain, compliance in all material respect
with all applicable laws, rules or regulations (including any law, rule or regulation with respect to the making or
brokering of loans or financial accommodations), and shall, or cause its Subsidiaries to, obtain and maintain all
required governmental authorizations, approvals, licenses, franchises, permits or registrations reasonably
necessary in connection with the conduct of Borrower’s business.
Neither Borrower nor any of its Subsidiaries shall, nor shall Borrower or any of its Subsidiaries permit any
Affiliate to, directly or indirectly, knowingly enter into any documents, instruments, agreements or contracts with
any Person listed on the OFAC Lists. Neither Borrower nor any of its Subsidiaries shall, nor shall Borrower or
any of its Subsidiaries, permit any Affiliate to, directly or indirectly, (i) conduct any business or engage in any
transaction or dealing with any Blocked Person, including, without limitation, the making or receiving of any
contribution of funds, goods or services to or for the benefit of any Blocked Person, (ii) deal in, or otherwise
engage in any transaction relating to, any property or interests in property blocked pursuant to Executive Order
No. 13224 or any similar executive order or other Anti-Terrorism Law, or (iii) engage in or conspire to engage in
any transaction that evades or avoids, or has the purpose of evading or avoiding, or attempts to violate, any of the
prohibitions set forth in Executive Order No. 13224 or other Anti-Terrorism Law.
Borrower has implemented and maintains in effect policies and procedures designed to ensure compliance
by the Borrower, its Subsidiaries and their respective directors, officers, employees and agents with applicable
Anti-Corruption Laws and applicable Sanctions, and Borrower, its Subsidiaries and their respective officers and
employees and to the knowledge of Borrower its directors and agents, are in compliance with applicable Anti-
Corruption Laws and applicable Sanctions in all material respects.
36
None of Borrower, any of its Subsidiaries or any of their respective directors, officers or employees, or to
the knowledge of Borrower, any agent for Borrower or its Subsidiaries that will act in any capacity in connection
with or benefit from the credit facility established hereby, is a Sanctioned Person. No Loan, use of proceeds or
other transaction contemplated by this Agreement will violate applicable Anti-Corruption Laws or applicable
Sanctions.
Transactions with Affiliates. Borrower shall not and shall not permit any Subsidiary to, directly or
indirectly, enter into or permit to exist any transaction of any kind with any Affiliate of Borrower or such
Subsidiary on terms that are less favorable to Borrower or such Subsidiary, as the case may be, than those that
might be obtained in an arm’s length transaction from a Person who is not an Affiliate of Borrower or such
Subsidiary; provided that no such restriction shall apply where the value of any transaction with any Affiliate of
Borrower is less than Five Hundred Thousand Dollars ($500,000).
Right to Invest. Borrower agrees that, prior to the repayment in full of all 2021 Term Loan Advances,
Lender, any of its affiliates and/or (subject to Borrower's consent, which consent shall not be unreasonably
withheld, conditioned or delayed) any other assignees or nominees, shall have the right, in their discretion, to
invest up to an aggregate amount of $2,000,000 in any Subsequent Financing on the same terms, conditions and
pricing afforded to others participating in any such Subsequent Financing, provided, however, that such aggregate
amount for any such Subsequent Financing may be reduced to an amount determined in good faith by the
managing underwriter of any such Subsequent Financing if such managing underwriter determines, in its
reasonable discretion, that such reduction is required as a result of bona fide marketing factors. Borrower shall
notify Lender within twenty-four (24) hours of the public announcement of any such Subsequent Financing and
Lender shall notify Borrower of its intention to participate in such Subsequent Financing as soon as possible
thereafter, but in any event, not later than eight (8) hours prior to the pricing of such Subsequent Financing.
EVENTS OF DEFAULT
The occurrence of any one or more of the following events shall be an Event of Default:
Payments. Borrower fails to pay any amount when due under this Agreement or any of the other Loan
Documents unless its failure to pay is caused by administrative or technical error and payment is made within
three Business Days of its due date; or
Covenants. Borrower breaches or defaults in the performance of any covenant or Secured Obligation
under this Agreement, or any of the other Loan Documents (other than a breach or default covered by
Section 8.1), and (a) with respect to a default under any covenant under this Agreement (other than under
Sections 6, 7.1(g), 7.5, 7.6, 7.7, 7.8, 7.9, 7.15, 7.16, 7.17 or 7.19) such default continues for more than 15
Business Days after the earlier of the date on which (i) Agent or Lender has given notice of such default to
Borrower and (ii) Borrower has actual knowledge of such default or (b) with respect to a default under any of
Sections 6, 7.1(g), 7.5, 7.6, 7.7, 7.8, 7.9, 7.15, 7.16, 7.17 or 7.19, the occurrence of such default; or
Material Adverse Effect. A circumstance (other than the Extera Judgment) has occurred that would
reasonably be expected to have a Material Adverse Effect; or
37
Other Loan Documents. The occurrence of any default under any Loan Document and such default
continues for more than 15 Business Days after the earlier of (a) Lender has given notice of such default to
Borrower, or (b) Borrower has actual knowledge of such default; or
Representations. Any material representation or warranty made by Borrower in any Loan Document shall
have been false or misleading in any material respect; or
Insolvency. Borrower (A) (i) shall make an assignment for the benefit of creditors; or (ii) shall be unable
to pay its debts as they become due, or be unable to pay or perform under the Loan Documents, or shall become
insolvent; or (iii) shall file a voluntary petition in bankruptcy; or (iv) shall file any petition, answer, or document
seeking for itself any reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar
relief under any present or future statute, law or regulation pertinent to such circumstances; or (v) shall seek or
consent to or acquiesce in the appointment of any trustee, receiver, or liquidator of Borrower or of all or any
substantial part (i.e., 33-1/3% or more) of the assets or property of Borrower; or (vi) shall cease operations of its
business as its business has normally been conducted, or terminate substantially all of its employees;
(vii) Borrower or its directors or majority shareholders shall take any action initiating any of the foregoing actions
described in clauses (i) through (vi); or (B) either (i) forty-five (45) days shall have expired after the
commencement of an involuntary action against Borrower seeking reorganization, arrangement, composition,
readjustment, liquidation, dissolution or similar relief under any present or future statute, law or regulation,
without such action being dismissed or all orders or proceedings thereunder affecting the operations or the
business of Borrower being stayed; or (ii) a stay of any such order or proceedings shall thereafter be set aside and
the action setting it aside shall not be timely appealed; or (iii) Borrower shall file any answer admitting or not
contesting the material allegations of a petition filed against Borrower in any such proceedings; or (iv) the court in
which such proceedings are pending shall enter a decree or order granting the relief sought in any such
proceedings; or (v) thirty (30) days shall have expired after the appointment, without the consent or acquiescence
of Borrower, of any trustee, receiver or liquidator of Borrower or of all or any substantial part of the properties of
Borrower without such appointment being vacated; or
Attachments; Judgments. Any portion of Borrower’s assets is attached or seized, or a levy is filed against
any such assets (and such attachment, seizure or levy is not lifted or released within 30 days), or a judgment or
judgments (no longer subject to appeal) (excluding the Extera Judgment) is/are entered for the payment of money,
individually or in the aggregate, of at least $2,000,000, unless otherwise waived by Lender in its reasonable
discretion, or Borrower is enjoined or in any way prevented by court order from conducting any part of its
business; or
Other Obligations. The occurrence of any default (beyond any applicable grace, appeal or cure periods)
under any agreement or obligation of Borrower involving any Indebtedness in excess of $1,000,000, or the
occurrence of any default by the Borrower under any agreement or obligation of Borrower that could reasonably
be expected to have a Material Adverse Effect.
REMEDIES
General. On and at any time after the occurrence of an Event of Default which is continuing (i) Lender
may, at its option, accelerate and demand payment of all or any part of the
38
Secured Obligations and the 2018 Prepayment Charge and declare them to be immediately due and payable
(provided, that upon the occurrence of an Event of Default of the type described in Section 8.6, all of the Secured
Obligations shall automatically be accelerated and made due and payable, in each case without any further notice
or act), and (ii) Lender may notify any of Borrower's account debtors to make payment directly to Lender,
compromise the amount of any such account on Borrower's behalf and endorse Lender's name without recourse on
any such payment for deposit directly to Lender's account.
Collection; Foreclosure. Unless otherwise agreed in the Collateral Documents, on and at any time after the
occurrence of an Events of Default which is continuing, Lender may, at any time or from time to time, apply,
collect, liquidate, sell in one or more sales, lease or otherwise dispose of, any or all of the Collateral, in its then
condition or following any commercially reasonable preparation or processing, in such order as Lender may elect,
in each case to the extent permitted under applicable law. Any such sale may be made either at public or private
sale at its place of business or elsewhere. Borrower agrees that any such public or private sale may occur upon ten
(10) calendar days’ prior written notice to Borrower. Lender may require Borrower to assemble the Collateral and
make it available to Lender at a place designated by Lender that is reasonably convenient to Lender and Borrower.
The proceeds of any sale, disposition or other realization upon all or any part of the Collateral shall be applied by
Lender in the following order of priorities:
First, to Lender in an amount sufficient to pay in full Lender’s costs and professionals’ and
advisors’ fees and expenses as described in Section 11.11;
Second, to Lender in an amount equal to the then unpaid amount of the Secured Obligations
(including principal, interest, and the Default Rate interest), in such order and priority as Lender
may choose in its sole discretion; and
Finally, after the full, final, and indefeasible payment in Cash of all of the Secured Obligations, to
any creditor holding a junior Lien on the Collateral, or to Borrower or its representatives or as a
court of competent jurisdiction may direct.
Lender shall be deemed to have acted reasonably in the custody, preservation and disposition of any of the
Collateral if it complies with the obligations of a secured party under the UCC.
No Waiver. Lender shall be under no obligation to marshal any of the Collateral for the benefit of
Borrower or any other Person, and Borrower expressly waives all rights, if any, to require Lender to marshal any
Collateral.
Cumulative Remedies. The rights, powers and remedies of Lender hereunder shall be in addition to all
rights, powers and remedies given by statute or rule of law and are cumulative. The exercise of any one or more
of the rights, powers and remedies provided herein shall not be construed as a waiver of or election of remedies
with respect to any other rights, powers and remedies of Lender.
39
MISCELLANEOUS
Severability. Whenever possible, each provision of this Agreement shall be interpreted in such manner as
to be effective and valid under applicable law, but if any provision of this Agreement shall be prohibited by or
invalid under such law, such provision shall be ineffective only to the extent and duration of such prohibition or
invalidity, without invalidating the remainder of such provision or the remaining provisions of this Agreement.
Notice. Except as otherwise provided herein, any notice, demand, request, consent, approval, declaration,
service of process or other communication (including the delivery of Financial Statements) that is required,
contemplated, or permitted under the Loan Documents or with respect to the subject matter hereof shall be in
writing, and shall be deemed to have been validly served, given, delivered, and received upon the earlier of: (i) the
day of transmission by facsimile or hand delivery or delivery by an overnight express service or overnight mail
delivery service; or (ii) the third calendar day after deposit in the United States mails, with proper first class
postage prepaid, in each case addressed to the party to be notified as follows:
[*]
or to such other address as each party may designate for itself by like notice.
Entire Agreement; Amendments. This Agreement and the other Loan Documents constitute the entire
agreement and understanding of the parties hereto in respect of the subject matter hereof and thereof, and
supersede and replace in their entirety any prior proposals, term sheets, non-disclosure or confidentiality
agreements, letters, negotiations or other documents or agreements, whether written or oral, with respect to the
subject matter hereof or thereof (including Lender’s proposal letter dated November 8, 2018). None of the terms
of this Agreement or any of the other Loan Documents may be amended except by an instrument executed by
each of the parties hereto.
No Strict Construction. The parties hereto have participated jointly in the negotiation and drafting of this
Agreement. In the event an ambiguity or question of intent or interpretation arises, this Agreement shall be
construed as if drafted jointly by the parties hereto and no presumption or burden of proof shall arise favoring or
disfavoring any party by virtue of the authorship of any provisions of this Agreement.
No Waiver. The powers conferred upon Lender by this Agreement are solely to protect its rights
hereunder and under the other Loan Documents and its interest in the Collateral and shall not impose any duty
upon Lender to exercise any such powers. No omission or delay by Lender at any time to enforce any right or
remedy reserved to it, or to require performance of any of the terms, covenants or provisions hereof by Borrower
at any time designated, shall be a waiver of any such right or remedy to which Lender is entitled, nor shall it in
any way affect the right of Lender to enforce such provisions thereafter.
Survival. All agreements, representations and warranties contained in this Agreement and the other Loan
Documents or in any document delivered pursuant hereto or thereto shall be
40
for the benefit of Lender and shall survive the execution and delivery of this Agreement and the expiration or
other termination of this Agreement.
Successors and Assigns. The provisions of this Agreement and the other Loan Documents shall inure to
the benefit of and be binding on Borrower and its permitted assigns (if any). Borrower shall not assign its
obligations under this Agreement or any of the other Loan Documents without Lender’s express prior written
consent, and any such attempted assignment shall be void and of no effect. Lender may assign, transfer, or
endorse its rights hereunder and under the other Loan Documents without prior notice to Borrower, and all of such
rights shall inure to the benefit of Lender’s successors and assigns.
Governing Law. This Agreement and the other Loan Documents shall be governed by, and construed and
enforced in accordance with, the laws of the Netherlands.
Jurisdiction. The courts (Rechtbank) of Amsterdam, the Netherlands, subject to ordinary appeal and final
appeal shall have exclusive jurisdiction to hear and determine any suit, action or proceeding and to settle any
disputes arising out of or in connection with this Agreement and the other Loan Documents (including a dispute
regarding the existence, validity or termination of this Agreement or the consequences of its nullity) and, for such
purposes, each of the parties hereto irrevocably submits to the exclusive jurisdiction of such courts. This
Section is for the benefit of the Lender only. As a result, the Lender may take proceedings relating to a dispute in
any other courts with jurisdiction. To the extent allowed by law, the Lender may take concurrent proceedings in
any number of jurisdictions.
Professional Fees. Borrower promises to pay Lender’s documented out-of-pocket fees and expenses
necessary to finalize the loan documentation, including but not limited to reasonable documented attorneys’ fees,
UCC searches, filing costs, and other miscellaneous expenses up to a maximum amount of $10,000 and Agent
confirms as of the Restatement Date that there are no other legal fees owing as of such date. In addition,
Borrower promises to pay any and all reasonable documented attorneys’ and other professionals’ fees and
expenses (including fees and expenses of in-house counsel) incurred by Lender after the Restatement Date in
connection with or related to: (a) the Loan; (b) the administration, collection, or enforcement of the Loan; (c) the
amendment or modification of the Loan Documents; (d) any waiver, consent, release, or termination under the
Loan Documents; (e) the protection, preservation, sale, lease, liquidation, or disposition of Collateral or the
exercise of remedies with respect to the Collateral; (f) any legal, litigation, administrative, arbitration, or out of
court proceeding in connection with or related to Borrower or the Collateral, and any appeal or review thereof;
and (g) any bankruptcy, restructuring, reorganization, assignment for the benefit of creditors, workout,
foreclosure, or other action related to Borrower, the Collateral, the Loan Documents, including representing
Lender in any adversary proceeding or contested matter commenced or continued by or on behalf of Borrower’s
estate, and any appeal or review thereof.
Confidentiality. Lender acknowledges that all financial statements provided to Lender by Borrower and
certain items of Collateral and information provided to Lender by Borrower are confidential and proprietary
information of Borrower, if and to the extent such information either (x) is marked as confidential by Borrower at
the time of disclosure, or (y) should reasonably be understood to be confidential (the “Confidential
Information”). Accordingly, Lender agrees
41
that any Confidential Information it may obtain in the course of acquiring, administering, or perfecting Lender’s
security interest in the Collateral shall not be disclosed to any other person or entity in any manner whatsoever, in
whole or in part, without the prior written consent of Borrower, except that Lender may disclose any such
information: (a) to its own directors, officers, employees, accountants, counsel and other professional advisors and
to its affiliates if Lender in its sole discretion determines that any such party should have access to such
information in connection with such party’s responsibilities in connection with the Loan or this Agreement and,
provided that such recipient of such Confidential Information either (i) agrees to be bound by the confidentiality
provisions of this paragraph or (ii) is otherwise subject to confidentiality restrictions that reasonably protect
against the disclosure of Confidential Information; (b) if such information is generally available to the public;
(c) if required or appropriate in any report, statement or testimony submitted to any governmental authority
having or claiming to have jurisdiction over Lender; (d) if required or appropriate in response to any summons or
subpoena or in connection with any litigation, to the extent permitted or deemed advisable by Lender’s counsel;
(e) to comply with any legal requirement or law applicable to Lender; (f) to the extent reasonably necessary in
connection with the exercise of any right or remedy under any Loan Document, including Lender’s sale, lease, or
other disposition of Collateral after the occurrence and during the continuance of an Event of Default; (g) to any
participant or assignee of Lender or any prospective participant or assignee; provided, that such participant or
assignee or prospective participant or assignee agrees in writing to be bound by this Section prior to disclosure; or
(h) otherwise with the prior consent of Borrower; provided, that any disclosure made in violation of this
Agreement shall not affect the obligations of Borrower or any of its affiliates or any guarantor under this
Agreement or the other Loan Documents.
Assignment of Rights. Borrower acknowledges and understands that Lender may sell and assign all or
part of its interest hereunder and under the Loan Documents to any person or entity (an “Assignee”). After such
assignment the term “Lender” as used in the Loan Documents shall mean and include such Assignee, and such
Assignee shall be vested with all rights, powers and remedies of Lender hereunder with respect to the interest so
assigned; but with respect to any such interest not so transferred, Lender shall retain all rights, powers and
remedies hereby given. No such assignment by Lender shall relieve Borrower of any of its obligations hereunder.
Lender agrees that in the event of any transfer by it of the Note(s) (if any), it will endorse thereon a notation as to
the portion of the principal of the Note(s), which shall have been paid at the time of such transfer and as to the
date to which interest shall have been last paid thereon.
Revival of Secured Obligations. This Agreement and the Loan Documents shall remain in full force and
effect and continue to be effective if any petition is filed by or against Borrower for liquidation or reorganization,
if Borrower becomes insolvent or makes an assignment for the benefit of creditors, if a receiver or trustee is
appointed for all or any significant part of Borrower’s assets, or if any payment or transfer of Collateral is
recovered from Lender. The Loan Documents and the Secured Obligations and Collateral security shall continue
to be effective, or shall be revived or reinstated, as the case may be, if at any time payment and performance of the
Secured Obligations or any transfer of Collateral to Lender, or any part thereof is rescinded, avoided or avoidable,
reduced in amount, or must otherwise be restored or returned by, or is recovered from, Lender or by any obligee
of the Secured Obligations, whether as a “voidable preference,” “fraudulent conveyance,” or otherwise, all as
though such payment,
42
performance, or transfer of Collateral had not been made. In the event that any payment, or any part thereof, is
rescinded, reduced, avoided, avoidable, restored, returned, or recovered, the Loan Documents and the Secured
Obligations shall be deemed, without any further action or documentation, to have been revived and reinstated
except to the extent of the full, final, and indefeasible payment to Lender in Cash.
Counterparts. This Agreement and any amendments, waivers, consents or supplements hereto may be
executed in any number of counterparts, and by different parties hereto in separate counterparts, each of which
when so delivered shall be deemed an original, but all of which counterparts shall constitute but one and the same
instrument.
Publicity.
Borrower consents to the publication and use by Lender and any of its member businesses and
affiliates of (i) Borrower’s name (including a brief description of the relationship between Borrower and Lender)
and logo for use on Lender’s website and as required for the purposes of filings with or reports to governmental
authorities required by law, and (ii) after review and approval by Borrower (a) Borrower’s name and a hyperlink
to Borrower’s web site, separately or together, in written and oral presentations, advertising, promotional and
marketing materials, client lists, public relations materials or on its web site (together, the “Lender Publicity
Materials”); (b) the names of officers of Borrower in the Lender Publicity Materials; and (c) Borrower’s name,
trademarks or servicemarks in any news release concerning Lender.
Neither Borrower nor any of its member businesses and affiliates shall, without Lender’s consent,
publicize or use, for any purpose other than filings with or reports to governmental authorities required by law and
the rules of any applicable securities commission or securities exchange, (i) Lender’s name (including a brief
description of the relationship between Borrower and Lender), logo or hyperlink to Lender’s web site, separately
or together, in written and oral presentations, advertising, promotional and marketing materials, client lists, public
relations materials or on its web site (together, the “Borrower Publicity Materials”); (ii) the names of officers of
Lender in the Borrower Publicity Materials; and (iii) Lender’s name, trademarks, servicemarks in any news
release concerning Borrower.
Existing Loan and Security Agreement Amended and Restated. Upon satisfaction of the conditions
precedent to the effectiveness of this Agreement, (a) this Agreement shall amend and restate the Existing Loan
and Security Agreement in its entirety (except to the extent that definitions from the Existing Loan and Security
Agreement are incorporated herein by reference) and (b) the rights and obligations of the parties under the
Existing Loan and Security Agreement shall be subsumed within, and be governed by, this Agreement; provided,
however, that the Borrower hereby agrees that all Secured Obligations of the Borrower under, and as defined in,
the Existing Loan and Security Agreement and the other Loan Documents shall remain outstanding, shall
constitute continuing Secured Obligations secured by the Collateral, and this Agreement shall not be deemed to
evidence or result in a novation or repayment and re-borrowing of such obligations and other liabilities. Borrower
hereby acknowledges and reaffirms each and every Loan Document entered into in connection with the Existing
Loan and Security Agreement and acknowledges that each such Loan Document remains in full force and effect
and enforceable against Borrower in accordance with its respective terms after giving
43
effect to the execution and delivery of this Agreement without further action by Lender, Borrower or any other
Person. All reference to the “Loan and Security Agreement” in each such Loan Document shall be deemed to be a
reference to this Agreement.
Agency. Lender hereby irrevocably appoints HERCULES CAPITAL, INC. to act on its behalf as agent
hereunder and under the other Loan Documents and authorizes the agent to take such actions on its behalf and to
exercise such powers as are delegated to the agent by the terms hereof or thereof, together with such actions and
powers as are reasonably incidental thereto.
(SIGNATURES TO FOLLOW)
44
LENDER:
HERCULES CAPITAL, INC.
Signature:
Print Name:
Title:
IN WITNESS WHEREOF, the Obligors and Lender have duly executed and delivered this Loan and
Security Agreement as of the day and year first above written.
BORROWER:
UNIQURE BIOPHARMA B.V.
by: uniQure N.V., its Managing Director
Signature:
Print Name: Matt Kapusta
Title: Managing Director
UNIQURE, INC.
Signature:
Print Name: Matt Kapusta
Title: President and Secretary
OBLIGORS:
UNIQURE N.V. (formerly uniQure B.V.)
Signature:
Print Name: Matt Kapusta
Title: Managing Director
UNIQURE RESEARCH B.V.
by: uniQure Biopharma RV.,
the Company’s Managing Director
by: uniQure N.V., its Managing Director
Signature:
Print Name: Matt Kapusta
Title: Managing Director
UNIQURE ASSAY DEVELOPMENT
by: uniQure Biopharma B.V.,
the Company’s Managing Director
by: uniQure N.V., its Managing Director
Signature:
Print Name: Matt Kapusta
Title: Managing Director
UNIQURE QA B.V.
by: uniQure Biopharma B.V.,
the Company’s Managing Director
by: uniQure N.V., its Managing Director
Print Name: Matt Kapusta
Title: Managing Director
UNIQURE PROCESS DEVELOPMENT B.V.
by: uniQure .Biopharma B.V.,
the Company’s Managing Director
by: uniQure N.V., its Managing Director
Signature:
Print Name: Matt Kapusta
Title: Managing Director
UNIQURE, NON CLINICAL B.V.
by: uniQure Biopharma B.V.,
the Company’s Managing Director
by: uniQure N.V., its Managing Director
Signature:
Print Name: Matt Kapusta
Title: Managing Director
UNIQURE CLINICAL B.V.
by: uniQure Biopharma B.V.,
the Company’s Managing Director
Signature:
Print Name: Matt Kapusta
Title: Managing Director
UNIQURE IP B.V.
by uniQure N.V. ,
the Company’s Managing Director
Signature:
Print Name: Matt Kapusta
Title: Managing Director
IN WITNESS WHEREOF, the Obligors and Lender have duly executed and delivered this Loan and
Security Agreement as of the day and year first above written.
UNIQURE GmbH
Signature:
Print Name: Christian Klemt
Title: Managing Director
Table of Addenda, Exhibits and Schedules
Exhibit A:
Exhibit B:
Exhibit C:
Advance Request
Attachment to Advance Request
Note
Name, Locations, and Other Information for Borrower
Exhibit D:
Borrower’s Patents, Trademarks, Copyrights and Licenses
Exhibit E:
Exhibit F:
Exhibit G:
Exhibit H:
Borrower’s Deposit Accounts and Investment Accounts
Compliance Certificate
Joinder Agreement
ACH Debit Authorization Agreement
Schedule 1
Subsidiaries
Schedule 1.1
Commitments
Schedule 1A
Existing Permitted Indebtedness
Schedule 1B
Existing Permitted Investments
Schedule 1C
Existing Permitted Liens
Schedule 5.3
Consents, Etc.
Schedule 5.5
Actions Before Governmental Authorities
Schedule 5.8
Tax Matters
Schedule 5.9
Intellectual Property Claims
Schedule 5.10
Intellectual Property
Schedule 5.11 Borrower Products
Schedule 5.14 Capitalization
To: Lender:
Date , 20
EXHIBIT A
ADVANCE REQUEST
HERCULES CAPITAL, INC.
400 Hamilton Avenue, Suite 310
Palo Alto, CA 94301
Facsimile: [*]
Email: [*]
Attn: Chief Legal Officer and [*]
UNIQURE BIOPHARMA B.V., and UNIQURE, INC., (hereinafter collectively referred to as
“Borrower”) hereby requests from HERCULES CAPITAL, INC. (“Lender”) a 2021 Term Loan Advance in the
amount of _________________Dollars ($_______________) on (the “Advance Date”)
pursuant to the Second Amended and Restated Loan and Security Agreement between, among others, Borrower
and Lender (the “Agreement”). Capitalized words and other terms used but not otherwise defined herein are used
with the same meanings as defined in the Agreement.
SECTION 1. Please:
Issue a check payable to Borrower
(a)
or
(h) Wire Funds to Borrower’s account
Bank:
Address:
ABA Number:
Account Number:
Account Name:
Borrower represents that the conditions precedent to the Advance set forth in the Agreement are satisfied
and shall be satisfied upon the making of such Advance, including but not limited to: (i) that no event that has had
or could reasonably be expected to have a Material Adverse Effect has occurred and is continuing; (ii) that the
representations and warranties set forth in the Agreement are and shall be true and correct in all material respects
on and as of the Advance Date with the same effect as though made on and as of such date, except to the extent
such representations and warranties expressly relate to an earlier date; (iii) that Borrower is in compliance with all
the terms and provisions set forth in each Loan Document on its part to be observed or performed; and (iv) that as
of the Advance Date, no fact or condition exists that would (or would, with the passage of time, the giving of
notice, or both) constitute an Event of Default under the Loan Documents. Borrower understands and
acknowledges that Lender has the right to review the financial information supporting this representation and,
based upon such review in its sole discretion, Lender may decline to fund the requested Advance.
Borrower hereby represents that Borrower’s corporate status and principal place of business have not
changed since the date of the Agreement or, if the Attachment to this Advance Request is completed, are as set
forth in the Attachment to this Advance Request.
Borrower agrees to notify Lender promptly before the funding of the Advance if any of the matters which
have been represented above shall not be true and correct on the Advance Date and if Lender has received no such
notice before the Advance Date then the statements set forth above shall be deemed to have been made and shall
be deemed to be true and correct as of the Advance Date.
Executed as of [ ], 2021
BORROWER:
UNIQURE BIOPHARMA B.V.
by: uniQure N.V., its Managing Director
Signature:
Print Name: Matt Kapusta
Title: Managing Director
UNIQURE, INC.
Signature:
Print Name: Matt Kapusta
Title: President and Secretary
ATTACHMENT TO ADVANCE REQUEST
Dated: __________
Borrower hereby represents and warrants to Lender that Borrower’s current name and organizational status
is as follows:
Name:
Type of organization:
State of organization:
Organization file number:
Borrower hereby represents and warrants to Lender that the street addresses, cities, states and postal codes
of its current locations are as follows:
EXHIBIT B
SECOND AMENDED AND RESTATED PROMISSORY NOTE
SECTION 2. $
Maturity Date , 20
FOR VALUE RECEIVED, (i) UNIQURE BIOPHARMA B.V., a private limited liability company
incorporated and existing under the laws of the Netherlands, having its corporate seat at Amsterdam, the
Netherlands and registered at the trade register of the Chamber of Commerce for Amsterdam under number
34275365 (“uniQure Bio”), (ii) UNIQURE, Inc., a Delaware corporation (“US Borrower” and together with
uniQure Bio hereinafter collectively referred to as “Borrower”) hereby promises to pay to the order of
[HERCULES CAPITAL FUNDING TRUST 2014-1, a Delaware statutory trust][ HERCULES CAPITAL, INC., a
Maryland corporation] (the “Lender”) or the holder of this Second Amended and Restated Promissory Note (this
“Promissory Note”) at 400 Hamilton Avenue, Suite 310, Palo Alto, CA 94301 or such other place of payment as
the holder of this Promissory Note may specify from time to time in writing, in lawful money of the United States
of America, the principal amount of _____________________ Dollars ($______________) or such other
principal amount as Lender has advanced to
Borrower, together with interest at a floating rate as set forth in Section [2.1.1(d)][2.1.2(d)] of the Loan
Agreement referenced below.
This Promissory Note is the Note referred to in, and is executed and delivered in connection with, that
certain Second Amended and Restated Loan and Security Agreement dated May 6, 2016, by and between, among
others, Borrower and Lender (as the same may from time to time be amended, modified or supplemented in
accordance with its terms, the “Loan Agreement”), and is entitled to the benefit and security of the Loan
Agreement and the other Loan Documents (as defined in the Loan Agreement), to which reference is made for a
statement of all of the terms and conditions thereof. All payments shall be made in accordance with the Loan
Agreement. All terms defined in the Loan Agreement shall have the same definitions when used herein, unless
otherwise defined herein. An Event of Default under the Loan Agreement shall constitute a default under this
Promissory Note.
Borrower agrees to make all payments under this Promissory Note without setoff, recoupment or
deduction and regardless of any counterclaim or defense. This Promissory Note has been negotiated and delivered
to Lender and is payable in the State of California. This Promissory Note shall be governed by and construed and
enforced in accordance with, the laws of the Netherlands, excluding any conflicts of law rules or principles that
would cause the application of the laws of any other jurisdiction.
BORROWER:
UNIQURE BIOPHARMA B.V.
by: uniQure N.V., its Managing Director
Signature:
Print Name: Matt Kapusta
Title: Managing Director
UNIQURE, INC.
Signature:
Print Name: Matt Kapusta
Title: President and Secretary
EXHIBIT C
NAME, LOCATIONS, AND OTHER INFORMATION FOR BORROWER
1.
uniQure US represents and warrants to Agent that its current name and organizational status as of
the First Amendment Closing Date is as follows:
Name:
Type of organization:
State of organization:
Organization file number:
UNIQURE, INC.
Corporation
Delaware
5330494
2.
uniQure represents and warrants to Agent that its current name and organizational status as of the
First Amendment Closing Date is as follows:
Name:
Type of organization:
State of organization:
Organization file number:
UNIQURE BIOPHARMA B.V.
Private Limited Company
The Netherlands
34275365
3.
Borrower represents and warrants to Agent that for five (5) years prior to the First Amendment
Closing Date, Borrower did not do business under any other name or organization or form.
4.
Borrower represents and warrants to Agent that its principal executive office is at Paasheuvelweg
25a, 1105 BP Amsterdam, the Netherlands.
EXHIBIT D
BORROWER’S PATENTS, TRADEMARKS, COPYRIGHTS AND LICENSES
[PROVIDED SEPARATELY]
EXHIBIT E
BORROWER’S DEPOSIT ACCOUNTS AND INVESTMENT ACCOUNTS
[*]
EXHIBIT F
COMPLIANCE CERTIFICATE
SECTION 3. Hercules Capital, Inc. (as “Agent”)
400 Hamilton Avenue, Suite 310
Palo Alto, CA 94301
SECTION 4. Facsimile: [*]
SECTION 5. Email: [*]
SECTION 6. Attn: [*]
Reference is made to that certain Second Amended and Restated Loan and Security Agreement dated May
6, 2016 and the Loan Documents (as defined therein) entered into in connection with such Second Amended and
Restated Loan and Security Agreement all as may be amended from time to time (hereinafter referred to
collectively as the “Loan Agreement”) by and among Hercules Capital, Inc. (the “Agent”), the several banks and
other financial institutions or entities from time to time party thereto (collectively, the “Lender”) and Hercules
Capital, Inc., as agent for the Lender (the “Agent”) and UNIQURE BIOPHARMA B.V. and UNIQURE, Inc.,
(hereinafter collectively referred to as "Borrower"), as Borrower. All capitalized terms not defined herein shall
have the same meaning as defined in the Loan Agreement.
The undersigned is an Officer of UNIQURE N.V., knowledgeable of all UNIQURE N.V.'s financial
matters, and is authorized to provide certification of information regarding UNIQURE N.V.; hereby certifies that
in accordance with the terms and conditions of the Loan Agreement, UNIQURE N.V. is in compliance for the
period ending _______________ of all covenants, conditions and terms and hereby reaffirms that all
representations and warranties contained therein are true and correct in all material respects on and as of the date
of this Compliance Certificate with the same effect as though made on and as of such date, except to the extent
such representations and warranties expressly relate to an earlier date, after giving effect in all cases to any
standard(s) of materiality contained in the Loan Agreement as to such representations and warranties. Attached
are the required documents supporting the above certification. The undersigned further certifies that these are
prepared in accordance with Accounting Standards (except for the absence of footnotes with respect to unaudited
financial statement and subject to normal year-end adjustments) and are consistent from one period to the next
except as explained below.
SECTION 7. REPORTING REQUIREMENT
REQUIRED CHECK IF ATTACHED
SECTION 8. Interim Financial Statements
Monthly within 30 days
SECTION 9. Interim Financial Statements
Quarterly within 60 days
SECTION 10. Audited Financial Statements
FYE within 180 days
SECTION 11. Total Cash Balance $
SECTION 12. US Accounts Balance $
Very Truly Yours,
UNIQURE N.V.
Signature:
Print Name:
Title:
EXHIBIT G
FORM OF JOINDER AGREEMENT
This Joinder Agreement (the “Joinder Agreement”) is made and dated as of [ ], 20[ ], and
is entered into by and between , a corporation (“Subsidiary”), and
HERCULES CAPITAL FUNDING TRUST 2014-1, a Delaware statutory trust, as agent on behalf itself and other
lenders (collectively, “Lender”).
RECITALS
A.
Subsidiary’s Affiliates, (i) UNIQURE BIOPHARMA B.V., and UNIQURE, INC., (hereinafter
collectively referred to as “Borrower”) have, among others, entered into that certain Second Amended and
Restated Loan and Security Agreement dated May 6, 2016, with the lenders party thereto, as such agreement may
be amended (the “Loan Agreement”), together with the other agreements executed and delivered in connection
therewith;
B.
Subsidiary acknowledges and agrees that it will benefit both directly and indirectly from
Borrower’s execution of the Loan Agreement and the other agreements executed and delivered in connection
therewith;
NOW THEREFORE, Subsidiary and Lender agree as follows:
AGREEMENT
1.
The recitals set forth above are incorporated into and made part of this Joinder Agreement.
Capitalized terms not defined herein shall have the meaning provided in the Loan Agreement.
2.
By signing this Joinder Agreement, Subsidiary shall be bound by the terms and conditions of the
Loan Agreement the same as if it were the Borrower (as defined in the Loan Agreement) under the Loan
Agreement, mutatis mutandis, provided however, that Lender shall have no duties, responsibilities or obligations
to Subsidiary arising under or related to the Loan Agreement or the other agreements executed and delivered in
connection therewith. Rather, to the extent that Lender has any duties, responsibilities or obligations arising under
or related to the Loan Agreement or the other agreements executed and delivered in connection therewith, those
duties, responsibilities or obligations shall flow only to Borrower and not to Subsidiary or any other person or
entity. By way of example (and not an exclusive list): (a) Lender’s providing notice to Borrower in accordance
with the Loan Agreement or as otherwise agreed between Borrower and Lender shall be deemed provided to
Subsidiary; (b) a Lender’s providing an Advance to Borrower shall be deemed an Advance to Subsidiary; and
(c) Subsidiary shall have no right to request an Advance or make any other demand on Lender.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
[SIGNATURE PAGE TO JOINDER AGREEMENT]
SECTION 13. SUBSIDIARY:
By:
Name:
Title:
Address:
Telephone:
Facsimile:
SECTION 14. HERCULES CAPITAL, INC., as agent for Lender
By:
Name:
Title:
Address:
400 Hamilton Ave., Suite 310
Palo Alto, CA 94301
Facsimile: [*]
Telephone: [*]
SECTION 15. [*]
EXHIBIT H
ACH DEBIT AUTHORIZATION AGREEMENT
SECTION 16. Hercules Capital, Inc. (as “Agent”)
400 Hamilton Avenue, Suite 310
Palo Alto, CA 94301
SECTION 17. Facsimile: [*]
SECTION 18. Email: [*]
SECTION 19. Attn: [*]
SECTION 20. Re:
Second Amended and Restated Loan and Security Agreement dated May 2016 between,
among others, (i) UNIQURE BIOPHARMA B.V., and UNIQURE, INC., (hereinafter collectively referred
to as “Borrower”), the lenders party thereto and HERCULES CAPITAL FUNDING TRUST 2014-1 as
agent for itself and the lenders (collectively, “Lender”) (the “Agreement”)
SECTION 21. In connection with the above referenced Agreement, Borrower hereby authorizes the Lender to
initiate debit entries for the periodic payments due under the Agreement to Borrower’s account indicated below.
Borrower authorizes the depository institution named below to debit to such account.
DEPOSITORY NAME
BRANCH
CITY
STATE AND ZIP CODE
TRANSIT/ABA NUMBER
ACCOUNT NUMBER
SECTION 22. This authority will remain in full force and effect so long as any amounts are due under the
Agreement.
SECTION 23.
(Borrower)(Please Print)
By:
Date:
[*]
SCHEDULE 1
LIST OF SUBSIDIARIES
Exhibit A to Amendment No. 2 to Loan and Security Agreement
SCHEDULE 1.1
COMMITMENTS
2018 TERM LOAN ADVANCES
LENDER
TRANCHE
COMMITMENT ADVANCES
HERCULES CAPITAL,
INC.
HERCULES CAPITAL
FUNDING TRUST 2018-
1
HERCULES CAPITAL
FUNDING TRUST 2019-
1
TOTAL
2018 Term A Loan
Advance
2018 Term A Loan
Advance
2018 Term A Loan
Advance
$0
$0
$0
$0
OUTSTANDING AS OF
SECOND
AMENDMENT
CLOSING DATE
$7,000,000
$13,000,000
$15,000,000
$35,000,000
2021 TERM LOAN ADVANCES
LENDER
HERCULES CAPITAL, INC.
COMMITMENT
$100,000,000
TOTAL COMMITMENTS $100,000,000
SECTION 24.
Exhibit A to Amendment No. 2 to Loan and Security Agreement
[*]
SCHEDULE 1A
INDEBTEDNESS
Exhibit A to Amendment No. 2 to Loan and Security Agreement
[*]
SCHEDULE 1B
INVESTMENTS
Exhibit A to Amendment No. 2 to Loan and Security Agreement
[*]
SCHEDULE 1C
LIENS
Exhibit A to Amendment No. 2 to Loan and Security Agreement
[*]
SCHEDULE 5.3
CONSENTS, ETC.
Exhibit A to Amendment No. 2 to Loan and Security Agreement
SCHEDULE 5.5
ACTIONS BEFORE GOVERNMENTAL AUTHORITIES
[*]
Exhibit A to Amendment No. 2 to Loan and Security Agreement
[*]
SCHEDULE 5.8
TAX MATTERS
Exhibit A to Amendment No. 2 to Loan and Security Agreement
SCHEDULE 5.9
INTELLECTUAL PROPERTY CLAIMS
[*]
Exhibit A to Amendment No. 2 to Loan and Security Agreement
SCHEDULE 5.10
INTELLECTUAL PROPERTY
[*]
Exhibit A to Amendment No. 2 to Loan and Security Agreement
[*]
SCHEDULE 5.11
BORROWER PRODUCTS
Exhibit A to Amendment No. 2 to Loan and Security Agreement
SCHEDULE 5.14
CAPITALIZATION
Capitalization – see SEC Form 20-F published on 4 April 2016 or Dutch annual accounts
Subsidiaries – see Schedule 1
Exhibit A to Amendment No. 2 to Loan and Security Agreement
March 1, 2021
Name of Subsidiary
uniQure biopharma B.V.
uniQure IP B.V.
uniQure Inc.
SUBSIDIARIES OF UNIQURE N.V.
Jurisdiction of Organization
The Netherlands
The Netherlands
Delaware
Exhibit 21.1
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Exhibit 23.1
The Board of Directors
uniQure N.V.:
We consent to the incorporation by reference in the registration statements (No. 333-225636) on Form S-3 and (No. 333-
225629, No. 333-222051, No. 333-218005 and No. 333-197887) on Form S-8 of uniQure N.V. of our report dated March 1,
2021, with respect to the consolidated balance sheets of uniQure N.V. as of December 31, 2020 and 2019, the related
consolidated statements of operations and comprehensive loss, shareholders’ equity, and cash flows for the years then
ended, and the related notes, and the effectiveness of internal control over financial reporting as of December 31, 2020,
which report appears in the 2020 Annual Report on Form 10-K of uniQure N.V. Our report refers to a change in accounting
for leases due to the adoption of ASC Topic 842 Leases.
/s/ KPMG Accountants N.V.
Amstelveen, the Netherlands
March 1, 2021
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We hereby consent to the incorporation by reference in the Registration Statements on Form S-3 (No. 333-225636) and
Form S-8 (No. 333-225629, No. 333-222051, No. 333-218005 and No. 333-197887) of uniQure N.V. of our report dated
February 28, 2019 relating to the financial statements, which appears in this Form 10-K.
Exhibit 23.2
/s/ R.M.N. Admiraal RA
PricewaterhouseCoopers Accountants N.V.
Amsterdam, the Netherlands
March 1, 2021
Exhibit 31.1
Certification of Chief Executive Officer
I, Matthew Kapusta, certify that:
1. I have reviewed this Annual Report on Form 10-K of uniQure N.V.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements made, in light of the circumstances under which such statements were made,
not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly
present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for,
the periods presented in this report;
4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls
and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting
(as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be
designed under our supervision, to ensure that material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being
prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to
be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our
conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this
report based on such evaluation; and
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during
the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has
materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal
control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or
persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial
reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report
financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in
the registrant’s internal control over financial reporting.
By: /s/ MATTHEW KAPUSTA
Matthew Kapusta
Chief Executive Officer
March 1, 2021
Exhibit 31.2
Certification of Chief Financial Officer
I, Matthew Kapusta, certify that:
1. I have reviewed this Annual Report on Form 10-K of uniQure N.V.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements made, in light of the circumstances under which such statements were made,
not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly
present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for,
the periods presented in this report;
4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls
and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting
(as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be
designed under our supervision, to ensure that material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being
prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to
be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our
conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this
report based on such evaluation; and
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during
the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has
materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal
control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or
persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial
reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report
financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in
the registrant’s internal control over financial reporting.
By: /s/ MATTHEW KAPUSTA
Matthew Kapusta
Principal Financial Officer
March 1, 2021
Exhibit 32.1
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with this Annual Report of uniQure N.V. (the “Company”) on Form 10-K for the period ended December 31,
2020, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned, Matthew
Kapusta, Chief Executive Officer and Chief Financial Officer of the Company, hereby certifies, pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
1 the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of
1934; and
2 the information contained in the Report fairly presents, in all material respects, the financial condition and
results of operations of the Company.
By: /s/ MATTHEW KAPUSTA
Matthew Kapusta
Chief Executive Officer and
Principal Financial Officer
March 1, 2021
A signed original of this written statement required by Section 906 has been provided to uniQure N.V. and will be retained
by uniQure N.V. and furnished to the SEC or its staff upon request.