uniQure N.V. (QURE) Earnings Call Transcript & Summary

Hello, and welcome to the Annual General Meeting of Shareholders of uniQure N.V. Please note that today's meeting is being recorded. Also, there may be forward-looking statements made during this meeting, which are subject to a safe harbor, as provided in the slide presentation. It is now my pleasure to turn today's meeting over to Philip Astley-Sparke, the Chair of the Board of Directors of uniQure. Mr. Astley-Sparke, the floor is yours.

Good afternoon. My name is Philip Astley-Sparke, Chairman of uniQure's Board of Directors, and it is my pleasure to welcome you to the 2021 Annual General Meeting of Shareholders of uniQure N.V. Due to the COVID-19 pandemic, it is not possible to conduct this meeting in person in Amsterdam as we usually do. Therefore, we're holding this year's AGM virtually as we did with our AGM held last year in June. In accordance with legal requirements as ruled in the Dutch emergency legislation, we announced this on Wednesday, May 12, in a Dutch newspaper and on our uniQure website. On our website, we have provided additional information regarding the conduct of the meeting. The key difference for this meeting compared to our prior meetings is that shareholders are not attending in person and will not be able to vote their shares in real time. I would also like to point out that those who return the proxies solicited by uniQure have authorized the persons named in the proxy, Matthew Kapusta and David Cerveny, to vote on the propositions coming before the meeting. Please note that unlike the format in our prior in-person meetings, if you have previously submitted a proxy, including over the Internet or by phone, your vote at this virtual meeting cannot be revoked. In the proxy materials, shareholders have been invited to submit questions regarding the agenda items in advance of the meeting and no later than 11:59 a.m. Central European Time on June 15, 2021. However, we have not received any questions in advance of the meeting and, therefore, we'll not be answering any questions at this meeting. Before proceeding to the business of the meeting, I would like to take a moment to introduce those who are participating. On behalf of uniQure's Board, we have Matthew Kapusta, our Chief Executive Officer and Executive Member of the Board of uniQure. Also from our Board, we have Jack Kaye, Chair of our Audit Committee; David Meek who will chair the Board in the conclusion of this meeting; and Robert Gut. We also have several representatives of the company attending today. David Cerveny, our Chief Legal Officer and Secretary to the Board, who will serve as secretary to this meeting; Christian Klemt, our Chief Financial Officer; Maria Cantor, our Chief Communications Officer; Chiara Russo, our Director of Investor Relations and Communications; and [ Mattheus von Bruklam ] Legal Adviser to uniQure. We also have [ Bob Skirning ] representing our auditor, KPMG; and [ Thea Skousen ], also from KPMG. I've also been informed, we have 2 additional Board members, Leonard Post, Chair of our Research and Development Committee; and Paula Soteropoulos who sits on our Nominating and Governance Committee and will be rejoining the Audit Committee. And finally, we have Bart Kraak, representing the Dutch notary firm of Holdinga Matthijssen Kraak in Amsterdam, which has been retained by uniQure to assist with the voting and administration of today's meeting. This meeting is being held pursuant to the notice given to each shareholder of record at the close of business on May 12, 2021. The Notice of this Meeting was also filed with the Securities and Exchange Commission and posted on our website, www.uniqure.com, on or about April 30, 2021. To be counted at the AGM, the ordinary shares are required to be voted in advance of this meeting by the deadline of 12 noon Central European Time on June 16, 2021. There were 35,618,724 ordinary shares represented by proxy at this meeting, representing approximately 77% of the outstanding voting ordinary shares of uniQure. This represents a quorum as required by the company's articles of association. Consequently, all announced proposals should be approved by a majority of our ordinary shares voted on in advance of this meeting on or before 12 noon Central European Summertime on June 16, 2021, except where law or the company's Articles of Association provide for other than a majority. On behalf of the Board of Directors of uniQure, I would like to express my appreciation to all shareholders who returned their proxies and especially to all shareholders who have taken the time to join us today. At this time, I'd like to give the floor to Matt Kapusta, our Chief Executive Officer, to discuss our second and third agenda items, the report on the financial year 2020 and a review of the application of our remuneration policy. Matt, the floor is yours.

Thank you, Philip. So the last year has been an extraordinary year for many reasons. What I'm really excited about is the progress that we've made despite significant challenges that the COVID-19 pandemic has ushered into the company based on very significant hard work of our leadership team and all the staff at uniQure. With respect to hemophilia B, we recently announced the closure of a commercialization and license agreement with CSL. We've removed the clinical hold associated with our HOPE-B pivotal trial program. We completed the enrollment of all patients in the study in March of this year. We did 26-week follow-up Factor IX activity and other data from the study in December of last year, and we plan to have a 52-week follow-up of all patients from the study that we'll be announcing later this quarter. With respect to Huntington's disease, we completed patient enrollment in the first dose cohort and announced earlier this morning the initiation of enrollment in our second dose cohort, and we look forward to having initial safety and biomarker data on the first 4 patients later this year. We're making advancements in our pipeline, including initiating IND-enabling studies for a program in spinocerebellar ataxia type 3. We plan to submit an IND next year. And we very much look forward to hosting an R&D Day where we'll talk more about our strategy for expanding the pipeline aggressively and continuing to invest in our platform. On the next slide, we just provide an overview of our collaboration with CSL Behring for the commercialization of our hemophilia B gene therapy product candidate. This is one of the largest transactions, single-product transactions, in the gene therapy space to date with the potential to receive $2 billion in economics and the receipt of a $450 million upfront payment and potential for another $1.6 billion in regulatory and commercial milestones. We're very excited to partner with CSL. We think they're one of the preeminent commercial players in the hematology and thrombosis space. They have one of the broadest product portfolios in hematology and thrombosis with $1 billion in sales and commercial operations in more than 80 countries around the world. On the following slide, we provide an overview of the data that we presented at the American Society of Hematology that included a 26-week follow-up data on all 54 patients in the HOPE-B pivotal study. We were really pleased with these results that showed a mean increase in Factor IX activity up to 37% and a very substantial reduction in bleeding frequency and consumption of Factor IX replacement therapy. All patients, with the exception of 2, remain off of prophylaxis at that 26-week follow-up mark. The other aspect of our product that we think is highly differentiated is on the following slide. This is the first study, one of the largest studies to date, that looked at the application of gene therapy to patients with preexisting neutralizing antibodies, irrespective of their status. What we demonstrated in this study is that at titers up to approximately 1 to 700, we were able to demonstrate clinically relevant increases in Factor IX activity that led to significant clinical outcomes. This level represents approximately 93% of patients in the market and potentially allows us to provide the access to our gene therapy to an overwhelming majority of patients with hemophilia B. The next slide provides an overview of another very exciting program, AMT-130, that is targeting Huntington's disease. This program has the potential to be the first gene therapy on the market with a very substantial clinical [ element ] that potentially could be up to 100,000 patients in the United States and Europe. We are leveraging a proprietary onetime-administered gene silencing platform that we call miQURE that has been 7 years in the making, that has been demonstrated in diseased animal models to lead to a very significant suppression of the mutant protein. This is a monogenic disorder with an aberrant protein that is known to be 100% penetrating the patients with Huntington's disease. We directly administer this product into the brain. So we know the bioavailability of the products in the areas of the brain that are implicated in the disease. And we've demonstrated that this product construct has the ability to not only suppress the full-length mutant protein sequence but also a highly toxic exon 1 protein fragment. We're in the process right now of conducting a Phase I/II study with the primary objective to assess safety, tolerability and to also assess potential signals of efficacy. It is a very robust trial design that would -- taking into account strong recommendations from the FDA to incorporate a multicenter randomized and double-blinded protocol. And we do believe that this has the potential to accelerate our regulatory and clinical development pathway. We will have 2 dose cohorts in 26 patients. And as I mentioned before, we are currently in the process of enrolling our second dose cohort. So as I also mentioned, the execution and progress that we've made on the Phase I/II study despite the challenges in the last year, in my view, have been spectacular. In June 2020, we enrolled the first 2 patients. We've had 3 Data and Safety Monitoring Board meetings that evaluated the safety of our products. And at the culmination of each of those meetings, they've recommended us to proceed. We expect to have, at the end of this year, data from the first 4 patients in the study with at least 12 months of follow-up. So we're very much looking forward to that. So we do have a portfolio of other gene therapy products. They include programs targeting Fabry disease, spinocerebellar ataxia type 3 and other undisclosed liver and CNS targets. We also have our continued collaboration with Bristol-Myers Squibb that is focused on cardiovascular disease and other muscle disorders. We have 4 designated collaboration targets that are continuing to be developed. As I mentioned before, we have an R&D Day on Tuesday, June 22, next week, where we will talk about our strategy to aggressively expand the pipeline and to continue to invest in our platform, including our manufacturing capabilities. So we look forward to providing more detail in that forum. With respect to our financial results, the results as of December 31, 2020 versus 2019 are relatively consistent. We ended the year with approximately $244.9 million of cash and a debt position with Hercules Capital of approximately $35.6 million. On the following slide, we review our remuneration policy. Relevant information on remuneration of members of the Board and management is included in our 2020 annual report beginning on Page 53 as well as in our 2021 proxy statement. In accordance with the policies and regulations, the Board is authorized to determine the remuneration of each individual member of the management and the granting of equity to the Board members. In view of the financial position of uniQure and management's expertise, the Compensation Committee and the Board consider the remuneration appropriate and concluded that there is no reason for material adjustments to the remuneration policy. And with that, I'll hand it back over to Philip.

Thank you, Matt. At this time, we will begin the discussions for the various proposals presented in our Notice of Annual General Meeting and proxy statement. These correspond to agenda items 4 to 13. There are 11 voting proposals that we will review today. Each of these items is more fully described in our Notice of Annual General Meeting and proxy statement, copies of which have been made available to all shareholders and are available at this meeting via the company's website and the Computershare platform that we're using for this meeting. For each voting proposal, we will announce the voting instructions received for the relevant proposal. Because all voting was conducted prior to the meeting, these instructions represent the final results for each proposal, subject to the receipt of any votes timely submitted by mail and final verification and certification by Mr. Kraak who is serving as the notary for this meeting. The first proposal to be acted upon by shareholders is the adoption of the annual accounts for the 2020 financial year and the treatment of the loss of $123.5 million incurred in 2020 to the accumulated deficit of uniQure. The annual accounts prepared by the Board in accordance with the Articles of Association and applicable law and audited, and all is provided with an auditor's report by KPMG Accountants N.V., uniQure's external auditor. The auditor's report begins on Page 125 of the 2020 annual report. uniQure's Audit Committee also reviewed and discussed the audited financial statements with uniQure's management and auditors. The Board unanimously recommends a vote for the proposal. The Board's statement in support of this proposal appears in uniQure's proxy statement, beginning on Page 7 as well as in other materials uniQure sent to shareholders. We will now announce the results of the vote on the proposal.

In accordance with all the received voting instructions and pending certification of the vote, there were 35,536,851 votes for; 28,905 votes against; and 52,968 votes abstained. So the proposal is adopted, including the charging of the loss of the accumulated deficit of the company.

The second proposal to be acted upon by the shareholders is approval to grant discharge of liability to the members of the Board of Directors for the management and conducted policy during the 2020 financial year insofar as the exercise of such duties is reflected in the 2020 annual report or otherwise disclosed in the general meeting. There are no additional matters to disclose at this time. The Board unanimously recommends a vote for the proposal. The Board's statement in support of this proposal appears in uniQure's proxy statement beginning on Page 8 as well as in other materials that uniQure sent to shareholders. We will now announce the results of the vote on the proposal.

In accordance with all the received voting instructions and pending certification of vote, there were 28,013,486 votes for; 210,236 votes against; 47,738 votes abstained; and 7,347,264 noncast votes. Therefore, the proposal is adopted.

The third proposal to be acted upon by the shareholders is the reappointment of Mr. David Meek as Non-Executive Director of the Board. Based on the unanimous nomination of the Nominating and Corporate Governance Committee, the Board has unanimously resolved to reappoint Mr. David Meek as a Non-Executive Director of the Board effective as of the close of this meeting, the term ending at the end of the Annual General Meeting of Shareholders of the company in 2024. Mr. David Meek has served as a member of the Board since June 2018 and serves the Compensation Committee. Mr. Meek holds options to purchase ordinary shares in the capital of the company and has been granted restricted share units. Details of his biography and equity holdings are listed in our proxy statement. The Board believes that Mr. Meek is qualified to serve on the Board of Directors as a Non-Executive Director due to his Board expertise and experience in the biotechnology industry. The Board unanimously recommends a vote for the appointment of Mr. Meek as a Non-Executive Director for the term of 3 years. The Board's statement in support of this proposal is in uniQure's proxy statement beginning on Page 8 as well as in other materials that uniQure sent to shareholders. We will now announce the results of the vote.

In accordance with all voting instructions and pending certification of the vote, there were 26,682,610 votes for; 1,586,228 votes against; 2,622 votes abstained; 7,347,264 noncast votes. Therefore, proposal is adopted.

The fourth proposal to be acted upon by the shareholders is the reappointment of Mrs. Paula Soteropoulos as Non-Executive Director of the Board. Based on the unanimous nomination of the Nominating and Corporate Governance Committee, the Board has unanimously resolved to reappoint Mrs. Paula Soteropoulos as Non-Executive Director of the Board effective as of the close of this meeting, her term ending at the end of the Annual General Meeting of Shareholders of the company in 2024. Mrs. Paula Soteropoulos has served as a member of our Board since July 2013 and serves at the Nominating and Corporate Governance Committee and Research Committee. Paula holds options to purchase ordinary shares in the capital of the company and to be granted restricted share units. Details of her biography and equity holdings are listed in our proxy statement. The Board believes that Mrs. Paula Soteropoulos is qualified to serve on the Board of Directors as a Non-Executive Director due to her extensive experience in the biotechnology industry. The Board unanimously recommends a vote for the appointment of Mrs. Paula Soteropoulos as a Non-Executive Director for a term of 3 years. The Board's statement in support of this proposal appears in uniQure's proxy statement beginning on Page 8 as well as in other materials uniQure presented to shareholders. We will now announce the results of the vote.

In accordance with all received voting instructions and pending certification of the vote, we have 24,678,570 votes for; 3,589,471 votes against; 3,415 votes abstained; and 7,347,264 noncast votes. The proposal is adopted.

The fifth proposal to be acted upon by the shareholders is the amendment of the 2014 restated plan to increase the number of authorized ordinary shares to be issued under the 2014 restated plan by 4 million shares. The latest amendment of the 2014 restated plan was approved by the company's General Meeting of Shareholders on the 13th of June 2018. The purpose of the 2014 restated plan is to advance the interest of the company's shareholders by enhancing accountability to attract, retain and motivate persons who are expected to make important contributions to the group and providing such persons with equity ownership opportunities and performance-based incentives are intended to better align the interest of such persons with those of the company's shareholders. Pursuant to the 2014 restated plan, the company may grant incentive share options, nonstatutory share options, share appreciation rights, restricted share awards, restricted share units and other share-based awards. Under the 2014 restated plan, the maximum number of ordinary shares available is currently limited to 5,276,317. As of the 31st of March 2021, 1,147,689 ordinary shares remain available for grant under the 2014 restated plan. It is now proposed to increase the equity incentive pool under the 2014 restated plan in order to provide adequate incentives for new and existing employees, the executive directors, non-executive directors, consultants and advisers in light of the significant growth of the group's operations and staff as the company progresses its clinical and preclinical product candidates. The amendment to the 2014 restated plan, if approved, will increase the authorized number of ordinary shares available by 4 million. So the number of shares reserved for issuance is 9,276,317 shares. The Board unanimously recommends a vote for the amendment to the 2014 restated plan. The Board's statement in support of this proposal appears in uniQure's proxy statement beginning on Page 9 as well as in other materials that uniQure sent to shareholders. We will now announce the results for the vote on this proposal.

In accordance with all received voting instructions and pending certification of the vote, there were 24,088,491 votes for; 11,489,137 votes against; 41,096 votes abstained. Therefore, the proposal is adopted.

The sixth proposal to be acted upon by the shareholders is the renewal of the designation of the Board as the competent body to issue ordinary shares and grant rights to subscribe for ordinary shares up to a maximum, one, the authorized share capital of uniQure in the event of an underwritten public offering; or two, a maximum 19.9% of the aggregate issued share capital of the company at the time of issuance in connection with any other single issuance or series of related issuances for a term of 18 months with effect from the date of this meeting. The existing authorization expires on the 17th of December 2021, and it is common practice for Dutch companies to seek to renew this authorization annually on a rolling basis. The approval of this voting proposal will maintain flexibility to allow the Board to issue ordinary shares without the delay and expense of calling an extraordinary general meeting of shareholders. The designation can be used for any and all purposes, subject to statutory limitations and with the exception of awards granted under the 2014 restated plan. The Board unanimously recommends a vote for the proposal. The Board's statement in support of this proposal appears in uniQure's proxy statement beginning on Page 15 as well as in other materials that uniQure sent to shareholders. We will now announce the results of the vote on the proposal.

In accordance with all received voting instructions and pending certification of vote, there were 24,048,273 votes for; 11,517,148 votes against; 53,303 votes abstained. Therefore, the proposal is adopted.

The seventh proposal to be acted upon by the shareholders is the renewal of the designation of the Board as a competent body to limit or exclude preemptive rights in connection to the issuance of ordinary shares of uniQure and granting of rights to subscribe for ordinary shares. The existing authorization expires on the 17th of December 2021. Under Dutch law, holders of our ordinary shares would generally have a pro rata preemptive right of subscription to any of our ordinary shares issued for cash. A preemptive right of subscription is the right of our current shareholders to maintain their percentage ownership of our ordinary shares by buying a proportional number of any new ordinary shares that we issue. However, Dutch law and our Articles of Association permit our shareholders to authorize our Board to exclude or limit these preemptive rights. This authorization may not continue for more than 5 years but may be given on a working basis. We currently have authorization from our shareholders to exclude or limit these preemptive rights, which authorization expires on December 17, 2021. It is common practice for Dutch companies to seek to renew this authorization annually on a rolling basis. The Board unanimously recommends a vote for the proposal. The Board's statement in support of this proposal appears in uniQure's proxy statement beginning on Page 16 as well as in other materials that uniQure has sent to shareholders. We will now announce the results of the vote on this proposal.

In accordance with all received voting instructions and pending certification of the vote, there were 24,296,596 votes for; 11,276,131 votes against; 45,997 votes abstained. Therefore, the proposal is adopted.

The eighth proposal to be acted upon by the shareholders is the reauthorization of the Board to acquire uniQure's own fully paid-up ordinary shares up to a maximum of 10% of the issued share capital of uniQure for a period of 18 months from the date of the 2021 Annual Meeting in open market purchases, through privately negotiated transactions or by means of self-tender offer or offers, at price per share ranging up to 110% of the market price per share at the time of the transaction. The current authorization of our Board to repurchase shares expires on the 17th of December 2021. The Board unanimously recommends a vote for the proposal. The Board's statement in support of this proposal appears in uniQure's proxy statement beginning on Page 16 as well as in other materials that uniQure sent to shareholders. We will now announce the results of this proposal.

In accordance with all received voting instructions and pending certification of the vote, there were 35,581,047 votes for; 26,308 votes against; 11,369 votes abstained. Therefore, the proposal is adopted.

The tenth (sic) [ ninth ] proposal to be acted upon by the shareholders is the appointment of KPMG Accountants N.V., or KPMG, an independent registered public accounting firm, as the external auditor charged with, one, auditing the Dutch annual accounts prepared in accordance with International Financial Reporting Standards as adopted by the European Union, or IFRS, for the financial year ending December 31, 2021; and two, serving as our independent registered public accounting firm for purposes of reporting pursuant to U.S. law for the fiscal year ending December 31, 2021. As required by the Dutch law, shareholder approval must be obtained for the selection of KPMG to serve as our auditor and independent registered public accounting firm. KPMG has served as our independent registered public accounting firm since June 2019. The services provided to us by KPMG as well as the previous auditor, PricewaterhouseCoopers, during the year ended December 31, 2019 and 2020 are described below under Principal Accountant Fee Information. Representatives of KPMG are present at this meeting and will also have the opportunity to make a statement if they desire to do so. KPMG's report on the financial statements for the fiscal year ended December 31, 2021, which is the only such report issued for these financial statements, does not contain an adverse opinion or a disclaimer of opinion, and it was not qualified or modified as to uncertainty, audit scope or accounting principles. The Audit Committee annually reviews the independent registered public accounting firm's independence, including reviewing all relationships between the independent registered public accounting firm and us and any disclosed relationships or services that may impact the objectivity and independence of the independent registered public accounting firm and the independent registered public accounting firm's performance. We do not believe that any relationships exist, which will interfere with PwC or with KPMG's independence. The Board unanimously recommends a vote for the proposal. The Board's statement in support this proposal appears in uniQure's proxy statement beginning on Page 18 as well as in other materials that uniQure sent to shareholders. We will now announce the results of the vote on the proposal.

In accordance with all received voting instructions and pending certification of the vote, there were 35,591,744 votes for; 14,083 votes against; 12,897 votes abstained. Therefore, proposal is adopted.

The next proposal to be acted upon by the shareholders is to adopt the amendment to the company's Articles of Association by which the authorized share capital be increased by 20 million shares to 80 million shares, each with a nominal value of EUR 0.05. The current authorized share capital is likely insufficient to provide sufficient flexibility for potential financing or acquisition transactions or equity incentive awards that may be needed moving forward. The proposed revised Articles of Association of the company reflecting the proposed increase in authorized share capital are provided us Appendix A to the proxy statement as well as in other materials uniQure sent to shareholders. The Board unanimously recommends a vote for the proposal and to amend the Articles of Association in accordance with the proposal and to authorize each director of the Board of the company as well as each employee of Holdinga Matthijssen Kraak, civil law notaries in Amsterdam, the Netherlands, to execute the deed of amendment. We will now announce the results of the vote on the proposal.

In accordance with all received voting instructions and pending certification of the vote, there were 28,181,036 votes for; 83,252 votes against; 7,172 votes abstained; and 7,347,264 noncast votes. Therefore, the proposal is adopted.

The 11th proposal to be acted upon by the shareholders is to approve, on an advisory basis, the compensation of the company's named executive officers as disclosed in the proxy statement in accordance with the SEC rules on Pages 34 to 61 of the proxy statement for the 2020 Annual Meeting (sic) [ 2021 Annual Meeting ] pursuant to Item 402 of Regulation S-K, including the compensation discussion and analysis, the 2020 summary compensation table and other related tables and disclosure. The executive compensation program is designed to align compensation metrics with our strategic imperatives, align the interests of management with the shareholders and attract and retain talented executives. Please see the compensation discussion and analysis beginning on Page 38 (sic) [ Page 34 ] of the proxy statement for additional details, including information about the fiscal year 2020 compensation of our named executive officers. We believe that the proposed compensation is consistent with the principles of our remuneration policy as presented earlier and is provided as an important incentive for the achievement of uniQure's high performance over the past year. The Board unanimously recommends a vote for the proposal. The Board's statement in support of this proposal appears in uniQure's proxy statement beginning on Page 19 and Pages 34 to 61 as well as in other materials uniQure sent to shareholders. We will now announce the results of the vote on the proposal.

In accordance with all received voting instructions and pending certification of the vote, there were 24,753,132 votes for; 3,509,699 votes against; 8,629 votes abstained; and 7,347,264 noncast votes. Therefore, the proposal is adopted.

Voting has now been completed on all matters on the agenda, and no further business has been brought before this meeting. Following this meeting, the secretary will complete the count of the proxies, including examination of all proxies for validity and will report the final results of the voting. As there is no further business to come before this meeting, I declare the meeting adjourned. I would like to thank you all for attending this Annual General Meeting, which is now concluded.

This concludes the meeting. You may now disconnect.