# MeiraGTx Holdings plc (MGTX) FY 2024 MD&A

Verbatim Item 7 Management's Discussion and Analysis from MeiraGTx Holdings plc's 10-K for fiscal year 2024.

SEC filing source: https://www.sec.gov/Archives/edgar/data/1735438/000155837025002867/mgtx-20241231x10k.htm
Accession: 0001558370-25-002867
Filing date: 2025-03-13
Report date: 2024-12-31
Extracted structurally from real Item 7 body heading to real Item 7A/8 boundary.
Confidence: high

Company profile: /company/MGTX/
All MD&A years: /company/MGTX/mda/
Previous year: /company/MGTX/mda/fy2023/ (FY 2023)
Next year: /company/MGTX/mda/fy2025/ (FY 2025)

ITEM 7.MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

You should read the following discussion and analysis of financial condition and operating results together with our financial statements and the related notes appearing in this Form 10-K.  Some of the information contained in this discussion and analysis or set forth elsewhere in this Form 10-K, including information with respect to our plans and strategy for our business and related financing, includes forward-looking statements that involve risks and uncertainties. As a result of many important factors, including those set forth in the section of this Form 10-K captioned “Item 1A.  Risk Factors” and elsewhere in this Form 10-K, our actual results could differ materially from the results described in, or implied by, the forward-looking statements contained in the following discussion and analysis. For convenience of presentation some of the numbers have been rounded in the text below.

Overview

We are a vertically integrated, clinical-stage genetic medicines company with a broad pipeline of late-stage clinical programs, including Parkinson’s disease, radiation-induced xerostomia and AIPL1-associated retinal dystrophy. Our clinical programs use targeted local delivery of small doses of genetic medicines to treat both inherited and more common conditions with severe unmet need. The successful development of the clinical pipeline is supported by our internal end-to-end manufacturing capabilities. We have two GMP viral vector production facilities, internal plasmid production for GMP, as well as an in-house Quality Control hub for stability and release, all fit for IND through

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commercial supply. In addition, we have developed a proprietary manufacturing platform with leading yield and quality aspects and commercial readiness. Our core capabilities in viral vector and capsid optimization allow increased potency, decreased dose and significantly reduced cost of goods for our genetic medicines. We have developed a potentially transformative gene regulation platform using bespoke synthetic riboswitch technology invented in-house that allows for the precise, dose-responsive control of any transgene under the control of oral small molecules. We are focusing the riboswitch platform on in vivo delivery of biologic therapeutics such as the metabolic peptides GLP-1, GIP, glucagon, amylin, PYY and leptin via oral small molecules, as well as cell therapy for oncology and autoimmune diseases, and long-term intractable pain. We have developed unique comprehensive technology capabilities to apply genetic medicine to more common diseases, increasing efficacy, addressing novel targets, and expanding access in some of the largest disease areas where the unmet need remains high.

We are an exempted company incorporated under the laws of the Cayman Islands in 2018, and prior to that, we commenced operations as MeiraGTx Limited, a private limited company incorporated under the laws of England and Wales in 2015. Our discussion of our financial condition and results of operations is based upon our financial statements, which have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”). Since our formation, we have devoted substantially all of our resources to developing our technology platform, establishing our viral vector manufacturing facilities and our GMP plasmid and DNA production facility and developing manufacturing processes, advancing the product candidates in our ophthalmology, salivary gland and neurodegenerative disease programs, building our intellectual property portfolio, organizing and staffing our company, developing our business plan, raising capital, and providing general and administrative support for these operations. To date, we have financed our operations primarily with cash on hand and proceeds from the sales of our Series A ordinary shares, Convertible Preferred C Shares and ordinary shares, debt financing and upfront and milestone payments in connection with the Collaboration Agreement and Asset Purchase Agreement. Through December 31, 2024, we received gross proceeds of approximately $622.3 million from sales of our ordinary shares, Series A ordinary shares and convertible preferred C shares, gross proceeds of approximately $75.0 million from issuance of debt, $130.0 million from the Collaboration Agreement with Johnson & Johnson Innovative Medicine, and $125.0 million from the Asset Purchase Agreement with Johnson & Johnson Innovative Medicine. As of December 31, 2024, we had cash, cash equivalents and restricted cash of $105.7 million, as well as $0.7 million we expect to receive from Johnson & Johnson Innovative Medicine in the first quarter of 2025 in connection with the PPQ and transition services we provided to Johnson & Johnson Innovative Medicine.

We are a clinical stage company and have not generated any product revenues to date. We have ongoing clinical development programs and a broad pipeline of preclinical programs. Since inception, we have incurred significant operating losses. Our net losses for the years ended December 31, 2024 and 2023 were $147.8 million and $84.0 million, respectively. As of December 31, 2024, we had an accumulated deficit of $702.0 million. We do not expect to generate revenue from sales of products unless and until we successfully initiate and complete clinical development and obtain regulatory approval for any product candidates, or satisfy our third party obligations. Under the Collaboration Agreement, we received an upfront payment in the amount of $100.0 million in March 2019 and a milestone payment in the amount of $30.0 million in December 2021. Additionally, pursuant to the Collaboration Agreement, we received research and development funding for certain research, manufacturing and clinical development costs. On December 20, 2023, we entered into an Asset Purchase Agreement with Johnson & Johnson Innovative Medicine pursuant to which the Company sold and assigned to Johnson & Johnson Innovative Medicine a License Agreement between the Company and UCLB relating to the research, development, manufacture and exploitation of the RPGR Product, and other related assets as described in the Asset Purchase Agreement. In connection with entering into the Asset Purchase Agreement, we entered into a Termination Agreement with Johnson & Johnson Innovative Medicine terminating the Collaboration Agreement. The Company and Johnson & Johnson Innovative Medicine also entered into a Supply Agreement on December 20, 2023 pursuant to which the Company agreed to manufacture and supply the RPGR Product for Johnson & Johnson Innovative Medicine. In December 2023, we received a non-refundable upfront payment of $65.0 million in connection with the Asset Purchase Agreement. During the year ended December 31, 2024, we received $60.0 million in milestone payments under the Asset Purchase Agreement.

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Our total operating expenses were $197.5 million and $151.1 million for the years ended December 31, 2024 and 2023, respectively. We expect to continue incurring increasing costs associated with our clinical activities for AAV-hAQP1 for the treatment of radiation-induced xerostomia and xerostomia associated with Sjogren’s syndrome, AAV-GAD for the treatment of Parkinson’s disease, as well as costs associated with the delivery of services under the Asset Purchase and related agreements. We also incurred expenses during the year ended December 31, 2024 and expect to continue to incur expenses related to research activities in additional therapeutic areas to expand our pipeline, developing our potentially transformative gene regulation technology, hiring additional personnel as needed in manufacturing, research, clinical operations, quality and other functional areas, and associated cash and share-based compensation expense, as well as the further development of internal manufacturing capabilities and capacity and other associated costs including the management of our intellectual property portfolio.

On May 3, 2023, we entered into a securities purchase agreement with certain accredited investors, pursuant to which we, in a private placement, agreed to issue and sell an aggregate of 10,773,913 ordinary shares at a purchase price of $5.75 per share, for gross proceeds of approximately $62.0 million. The closing occurred on May 5, 2023.

On October 30, 2023, we entered into the Investment Agreement with Sanofi Foreign Participations, and solely for the limited purposes set forth therein, Sanofi, pursuant to which, among other things and subject to the terms and conditions specified therein, we issued an aggregate of 4,000,000 ordinary shares of the Company at a purchase price of $7.50 per share for gross proceeds of $30.0 million. The Investment Agreement also provides Sanofi Foreign Participations and its affiliates with a right of first negotiation for use of our riboswitch gene regulation technology for certain Immunology and Inflammation (I&I), including modulation of IL-4 and IL-13, and Central Nervous System (CNS) targets, as well as for GLP-1 and other gut peptides for metabolic disease, and for our Phase 2 xerostomia program, in each case, on the terms set forth therein.

On December 20, 2023, we entered into an Asset Purchase Agreement with Johnson & Johnson Innovative Medicine pursuant to which the Company sold and assigned to Johnson & Johnson Innovative Medicine a License Agreement between the Company and UCLB relating to the research, development, manufacture and exploitation of the RPGR Product, and other related assets as described in the APA. In connection with entering into the Asset Purchase Agreement, we entered into a Termination Agreement with Johnson & Johnson Innovative Medicine terminating the Collaboration Agreement. The Company and Johnson & Johnson Innovative Medicine also entered into a Supply Agreement on December 20, 2023 pursuant to which we agreed to manufacture and supply the RPGR Product for Johnson & Johnson Innovative Medicine. Under the Asset Purchase Agreement, Johnson & Johnson Innovative Medicine paid the Company a non-refundable upfront cash payment of $65.0 million in December 2023. Additionally, pursuant to and subject to the terms and conditions set forth in the Asset Purchase Agreement, Johnson & Johnson Innovative Medicine agreed to pay the Company future contingent consideration of up to an aggregate of $350.0 million, as follows: (i) a milestone payment of $50.0 million in connection with the achievement of the initiation of the extension study for the Phase 3 LUMEOS clinical trial for the RPGR Product; (ii) $10.0 million upon completion of certain specified development services for the drug substance for the RPGR Product; (iii) $5.0 million upon completion of certain specified development services for the drug product for the RPGR Product; (iv) $175.0 million upon the first commercial sale of an RPGR Product in the United States; (v) $75.0 million upon the first commercial sale of an RPGR Product in at least one of the United Kingdom, France, Germany, Spain and Italy; (vi) $25.0 million upon completion of the transfer of certain manufacturing technology for drug substance and drug product from the Company to Johnson & Johnson Innovative Medicine; and (vii) $10.0 million upon regulatory approval of a Johnson & Johnson Innovative Medicine-selected manufacturing facility in each of the United States and European Union for commercial manufacture of the RPGR Product. As of December 31, 2024, we have received $60.0 million in milestone payments from Johnson & Johnson Innovative Medicine. Johnson & Johnson Innovative Medicine is also responsible for any royalty or milestone amounts that become payable on the RPGR Product under the UCLB RPGR License Agreement.

In December 2023, we entered into an “at-the-market” sales agreement with BofA Securities, Inc., or BofA, pursuant to which we may sell from time to time, ordinary shares having an aggregate offering price of up to $100.0 million through BofA, acting as our agent. During the year ended December 31, 2024, we raised gross proceeds of $8.4

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million through the sale of 1,508,517 ordinary shares pursuant to an “at-the-market” equity offering program. Under the “at-the-market” equity program which is currently effective and may remain available for us to use in the future, we may sell an additional $91.6 million of ordinary shares. Whether we choose to affect future sales under the “at-the-market” equity offering program will depend on a number of factors, including, among others, market conditions and the trading price of our ordinary shares relative to other sources of capital.

On August 12, 2024, we entered into an underwriting agreement with BofA in connection with the issuance and sale by the Company in a public offering of 12,500,000 of our ordinary shares at a public offering price of $4.00 per share, less underwriting discounts and commissions, pursuant to an effective shelf registration statement on Form S-3 (Registration No. 333-276183) and a related prospectus supplement filed with the SEC. The closing of the offering occurred on August 13, 2024. We received gross proceeds from the offering of $50.0 million and incurred underwriting discounts and commissions and estimated offering expenses of approximately $1.9 million.

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On August 12, 2024, the Company agreed to sell shares to an accredited investor (the “Investor”) through a private placement rather than through the public offering and as a result, on August 23, 2024, we entered into a securities purchase agreement with the Investor, pursuant to which we, in a private placement, agreed to issue and sell to the Investor 250,000 ordinary shares at a purchase price of $4.00 per share, for gross proceeds of $1.0 million (the “Private Placement”). The closing of the Private Placement occurred on August 29, 2024.

We will require additional capital in the future, which we may raise through equity offerings, debt financings, marketing and distribution arrangements and other collaborations, strategic alliances and licensing arrangements or other sources to enable us to complete the development and potential commercialization of our product candidates. Furthermore, we expect to continue incurring costs associated with being a public company. Adequate additional financing may not be available to us on acceptable terms, or at all. Our failure to raise capital as and when needed would have a negative effect on our financial condition and our ability to pursue our business strategy. In addition, attempting to secure additional financing may divert the time and attention of our management from day-to-day activities and harm our product candidate development efforts. If we are unable to raise capital when needed or on acceptable terms, we would be forced to delay, reduce or eliminate certain of our research and development programs.

Based on our cash, cash equivalents, accounts receivable – related party and tax incentive receivable at December 31, 2024, together with the proceeds from the anticipated closing of the strategic collaboration with Hologen Ltd, we estimate that such funds will be sufficient to enable us to fund our operating expenses and capital expenditure requirements into 2027 and to repay our debt obligation of $75.0 million to Perceptive (due in August 2026). This estimate does not include the $285.0 million in milestones we are eligible to receive under the Asset Purchase Agreement upon first commercial sale of an RPGR Product in the United States and in at least one of the United Kingdom, France, Germany, Spain and Italy, for completion of the transfer of certain manufacturing technology to Johnson & Johnson Innovative Medicine and upon regulatory approval of a Johnson & Johnson Innovative Medicine-selected manufacturing facility in each of the United States and European Union for commercial manufacture of the RPGR Product. We have based these estimates on assumptions that may prove to be wrong, and we may use our available capital resources sooner than we currently expect. See “Liquidity and Capital Resources.” Because of the numerous risks and uncertainties associated with the development of our product candidates, any future product candidates, our platform and technology and because the extent to which we may enter into collaborations with third parties for development of any of our product candidates is unknown, we are unable to estimate the amounts of increased capital outlays and operating expenses associated with completing the research and development of our product candidates.

Adequate additional funds may not be available to us on acceptable terms, or at all. To the extent that we raise additional capital through the sale of equity or convertible securities, your ownership interest will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect your rights as a shareholder. Any future debt financing or preferred equity or other financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital

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expenditures or declaring dividends and may require the issuance of warrants, which could potentially dilute your ownership interests.

If we raise additional funds through collaborations, strategic alliances, or licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs 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 programs or any future commercialization efforts or grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves.

Because of the numerous risks and uncertainties associated with drug development, we are unable to predict the timing or amount of increased expenses or when or if we will be able to achieve or maintain profitability. Even if we are able to generate revenue from product sales, we may not become profitable. If we fail to become profitable or are unable to sustain profitability on a continuing basis, then we may be unable to continue our operations at planned levels and be forced to reduce or terminate our operations.

Highlights and Recent Developments

Strategic Collaboration with Hologen AI:

[[GREPCENT_TABLE]]
[["","\u25cf","We will receive $200 million in upfront cash consideration at closing."]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","\u25cf","We and Hologen will form a joint venture, Hologen Neuro AI Ltd, with additional committed funding from Hologen of up to $230 million into the joint venture to finance the development of the AAV-GAD program in Parkinson\u2019s disease to commercialization, as well as other locally-delivered therapies to the CNS."]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","\u25cf","The joint venture, Hologen Neuro AI Ltd, will use Hologen\u2019s proprietary multi-modal generative foundation models (LMMs)."]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","\u25cf","We will hold a 30% ownership in the joint venture and will lead all clinical development and manufacturing."]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","\u25cf","Hologen Neuro AI Ltd will enter into both clinical and commercial manufacturing supply agreements with us for exclusive manufacturing of AAV-GAD and other locally-delivered genetic medicines targeting the CNS."]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","\u25cf","Hologen will own a minority stake in our manufacturing subsidiary and will contribute a portion of the annual funding and deploy Hologen\u2019s world leading generative AI capabilities to further accelerate the optimization of our proprietary manufacturing capabilities."]]
[[/GREPCENT_TABLE]]

​

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AAV-GAD for the Treatment of Parkinson’s Disease:

[[GREPCENT_TABLE]]
[["","\u25cf","Announced positive data in October 2024 from randomized, sham-controlled clinical bridging study of AAV-GAD for the treatment of Parkinson\u2019s disease."]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","\u25cf","The primary study objective of safety and tolerability was met."]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","\u25cf","Significant and clinically meaningful improvements from baseline demonstrated for key efficacy endpoints at 26 weeks."]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","\u25cf","Significant improvement of 18 points in Unified Parkinson\u2019s Disease Rating Scale (UPDRS) Part 3 in the high dose group at 26 weeks (p=0.03)."]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","\u25cf","Significant improvement in the Parkinson\u2019s Disease Questionnaire (PDQ-39) score, a key quality of life measure, for both the high and low dose groups at 26 weeks."]]
[[/GREPCENT_TABLE]]

​

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AAV2-hAQP1 for the Treatment of Xerostomia:

[[GREPCENT_TABLE]]
[["","\u25cf","In December 2024, we were granted RMAT Designation by the FDA for AAV2-hAQP1 for the treatment of Grade 2/3 RIX."]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","\u25cf","RMAT designation includes the benefits of the Fast Track and Breakthrough Therapy designations, allows frequent regulatory interactions with the FDA, and potential routes to accelerated approval and Priority Review."]]
[[/GREPCENT_TABLE]]

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[[GREPCENT_TABLE]]
[["","\u25cf","We have gained alignment with the FDA on requirements for the ongoing Phase 2 AQUAx2 clinical trial for Grade 2/3 RIX to be considered a pivotal trial in support of a potential BLA filing based on the use of material manufactured using our proprietary production process and in-house manufacturing."]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","\u25cf","Data from our Phase 1 AQUAx clinical trial were presented in an oral session at the American Academy of Oral Medicine (AAOM) 2024 annual meeting in April 2024, demonstrating that treatment with AAV2-hAQP1 resulted in significant improvements across three different patient-reported outcomes and in saliva production, with no treatment-related serious adverse events or dose-limiting toxicities reported. These data underpinned this successful RMAT designation."]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","\u25cf","The Phase 2 AQUAx2 (NCT05926765) randomized, double-blind, placebo-controlled study continues to enroll and dose participants at multiple sites in the U.S., Canada and the U.K."]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","\u25cf","The RMAT designation will allow us to benefit from increased interactions with the FDA to further accelerate the development pathway and potential BLA filing based on data from the ongoing pivotal study in 2026."]]
[[/GREPCENT_TABLE]]

​

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AAV-AIPL1 Specials License in the UK:

[[GREPCENT_TABLE]]
[["","\u25cf","In February 2025, we announced that data demonstrating the efficacy of rAAV8.hRKp.AIPL1 for the treatment of LCA4 were published in The Lancet in a paper titled, \u201cGene therapy in children with AIPL1-associated severe retinal dystrophy: an open-label, first-in-human interventional study\u201d."]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","\u25cf","As disclosed in the paper, 4 out of 4 young children with the AIPL1-associated retinal dystrophy, LCA4, benefited substantially from unilateral subretinal administration of rAAV8.hRKp.AIPL1 with improved visual acuity, functional vision, and protection against progressive retinal degeneration."]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","\u25cf","Following the strong safety and substantial efficacy demonstrated in this first cohort of 4 children treated unilaterally, a further 7 children were treated bilaterally, and all showed substantial benefit from treatment with rAAV8.hRKp.AIPL1."]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","\u25cf","Meaningful responses were observed in 11 out of 11 LCA4 children treated to date with rAAV8.hRKp.AIPL1."]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","\u25cf","Following recent meetings with the MHRA, we intend to submit a Marketing Authorization Application (MAA) under exceptional circumstances for rAAV8.hRKp.AIPL1 based on the results from the 11 treated children with no further clinical data required."]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","\u25cf","We have aligned on an expedited CMC package to support approval."]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","\u25cf","We are also currently engaging with the FDA to discuss a parallel path forward for expedited approval in the U.S., as well as other global regulatory agencies."]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","\u25cf","The Offices of Orphan Products Development and Pediatric Therapeutics of the FDA has granted RPDD to AAV8-RK-AIPL1 for the treatment of LCA4 retinal dystrophy."]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","\u25cf","In addition, three of our other IRD programs gained RPDD: AAV8-RK-BBS10 for the treatment of Bardet-Biedl syndrome (BBS) due to BBS10 mutations; AAV5-RDH12 for the treatment of RDH12 associated retinal dystrophy; and AAV8-RK-RetGC for the treatment of Leber congenital amaurosis due to GUCY2D mutations."]]
[[/GREPCENT_TABLE]]

​

An RPDD may be granted by the FDA to drugs and biologics intended to treat certain orphan diseases affecting fewer than 200,000 patients in the U.S., the serious or life-threatening manifestations of which primarily affect individuals aged 18 years or younger. Under the FDA’s Rare Pediatric Disease Priority Review Voucher (PRV) program, a sponsor that receives approval for a biologics license application for a rare pediatric disease may be eligible to receive a voucher for a priority review of a subsequent marketing application for a different product. PRVs may be used by the sponsor or sold to another sponsor for their use and have recently been sold for between $100 million to $158 million.

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Botaretigene Sparoparvovec for the Treatment of XLRP:

[[GREPCENT_TABLE]]
[["","\u25cf","Data from the Phase 3 LUMEOS trial of botaretigene sparoparvovec (bota-vec) for the treatment of X-linked retinitis pigmentosa in collaboration with Johnson & Johnson Innovative Medicine is expected in 2025. We are eligible to receive up to $285 million upon the first commercial sales of bota-vec in the U.S. and EU and manufacturing tech transfer."]]
[[/GREPCENT_TABLE]]

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[[GREPCENT_TABLE]]
[["","\u25cf","We also entered into a commercial supply agreement with Johnson & Johnson Innovative Medicine for bota-vec manufacturing, which we anticipate will generate additional revenue during the product launch."]]
[[/GREPCENT_TABLE]]

​

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Riboswitch Gene Regulation Technology Platform for in vivo Delivery:

[[GREPCENT_TABLE]]
[["","\u25cf","We continue to progress our riboswitch technology platform in multiple potential indications, with an initial focus on obesity and metabolic disease and CAR-T for oncology and autoimmune disease."]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","\u25cf","We continue to generate compelling preclinical data with metabolic peptides and hormones, including incretins, myokines and leptin, which suggests greater efficacy on weight loss as well as a positive impact on fat to muscle ratio with certain novel combinations of peptides."]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","\u25cf","Preclinical data mentioned above as well as new data on chronic pain therapies is informing the decision for our first INDs using our riboswitch small molecule platform."]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","\u25cf","We are in dialogue with regulatory agencies and intend to initiate first-in-human studies using the riboswitch platform in 2025."]]
[[/GREPCENT_TABLE]]

​

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Manufacturing:

United Kingdom (MeiraGTx UK II Ltd.)

Our UK manufacturing facility holds two authorizations issued by the MHRA:

[[GREPCENT_TABLE]]
[["","\u25cf","MIA(IMP) Licence (MIA(IMP) 45522) \u2013 Authorizing manufacturing, fill-finish, and QC testing of Investigational Medicinal Products (IMPs)."]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","\u25cf","Specials Licence (MS 45522) \u2013 Authorizing manufacturing, fill-finish, and QC testing of \u2018Special\u2019 medicinal products."]]
[[/GREPCENT_TABLE]]

The UK facility was inspected in May 2024, and the licences were successfully renewed. The outcome of this inspection confirmed that the site was found to be in compliance with GMP requirements for Investigational Medicinal Products (IMPs) and was operating at the required compliance level to support an application for a commercial MIA licence. We plan to submit this application in the second quarter of 2025.

Ireland (MeiraGTx Ireland DAC)

Our Shannon facility holds two authorizations issued by Ireland’s Health Products Regulatory Authority (HPRA):

[[GREPCENT_TABLE]]
[["","\u25cf","MIA Licence (M1316) \u2013 Authorizing QC testing of commercial products (awarded June 2023)."]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","\u25cf","MIA(IMP) Licence (IMP13221) \u2013 Authorizing QC testing of Investigational Medicinal Products (IMPs) (awarded September 2023/QC and 2025/MFG)."]]
[[/GREPCENT_TABLE]]

The QC laboratory is actively undertaking release and stability testing on PPQ batches.

The latest HPRA inspection in February 2025 was highly successful—both QC licences were renewed, and viral vector manufacturing was added to the MIA(IMP) licence. This means the Shannon site can manufacture material for use in clinical trials, a first-of-its-kind licence for a gene therapy facility in Ireland.

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Strategic Investment from Sanofi:

[[GREPCENT_TABLE]]
[["","\u25cf","On August 12, 2024, Sanofi purchased $30 million of ordinary shares of the Company."]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","\u25cf","Sanofi holds a right of first negotiation (ROFN) for the use of our riboswitch gene regulation technology for certain Central Nervous System (CNS) and Immunology and Inflammation (I&I) targets, including IL-4 and IL-13, as well as for GLP-1 and other gut peptides for obesity, and for our Phase 2 xerostomia program."]]
[[/GREPCENT_TABLE]]

​

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Components of Our Results of Operations

Service Revenue – Related Party

Our service revenue consisted of the process performance qualification (“PPQ”) services performed in connection with the Asset Purchase Agreement and related agreements.

License Revenue – Related Party

Our license revenue consisted of the amortization of the upfront and milestone payments we received in connection with the Collaboration Agreement.

Operating Expenses

Our operating expenses since inception have consisted primarily of general and administrative costs and research and development costs. Beginning in 2024, we incurred expenses classified as cost of service revenue – related party performed in connection with the Asset Purchase Agreement and related agreements.

Cost of Service Revenue – Related Party

Our cost of service revenue consisted of the PPQ services performed in connection with the Asset Purchase Agreement and related agreements.

General and Administrative Expenses

General and administrative expenses consist primarily of salaries and other related costs, including share-based compensation, for personnel in our executive, finance, legal, business development and administrative functions. General and administrative expenses also include legal fees relating to intellectual property and corporate matters; professional fees for accounting, auditing, tax and consulting services; insurance costs; travel expenses; and office facility-related expenses, which include direct depreciation costs.

We have incurred and expect to continue to incur increased expenses associated with being a public company, including costs of accounting, audit, legal, regulatory and tax-related services associated with maintaining compliance with Nasdaq and SEC requirements; director and officer insurance costs; maintaining and protecting our intellectual property portfolio; and investor and public relations costs.

Research and Development Expenses

Research and development expenses consist primarily of costs incurred for our research activities, including our discovery efforts, and the development of our product candidates, and include:

[[GREPCENT_TABLE]]
[["","\u25cf","employee-related expenses, including salaries, benefits and travel of our research and development personnel;"]]
[[/GREPCENT_TABLE]]

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[[GREPCENT_TABLE]]
[["","\u25cf","expenses incurred in connection with third-party vendors that conduct clinical and preclinical studies and manufacture the drug product for the clinical trials and preclinical activities;"]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","\u25cf","acquisition and impairment of in process research and development;"]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","\u25cf","costs associated with clinical and preclinical activities including costs related to facilities, supplies, rent, insurance, certain legal fees, share-based compensation, and depreciation; and"]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","\u25cf","expenses incurred with the development and operation of our manufacturing facilities."]]
[[/GREPCENT_TABLE]]

We expense research and development costs as incurred.

Research and development activities are central to our business model. We expect to continue incurring increasing research and development costs associated with our clinical activities for AAV-hAQP1 for the treatment of radiation-induced xerostomia and xerostomia associated with Sjogren’s syndrome, as well as for AAV-GAD for the treatment of Parkinson’s disease. In addition, we expect to continue to incur expenses related to research activities in additional therapeutic areas to expand our pipeline and develop our potentially transformative gene regulation technology.

We cannot determine with certainty the duration and costs of future clinical trials of our product candidates or any other product candidate we may develop or if, when, or to what extent we will generate revenue from the commercialization and sale of any product candidate for which we obtain marketing approval. We may never succeed in obtaining marketing approval for any product candidate. The duration, costs and timing of clinical trials and development of our existing product candidates or any other product candidate we may develop will depend on a variety of factors, including:

[[GREPCENT_TABLE]]
[["","\u25cf","the scope, rate of progress, expense and results of clinical trials of our existing product candidates, as well as of any future clinical trials of other product candidates and other research and development activities that we may conduct;"]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","\u25cf","uncertainties in clinical trial design and patient enrollment rates;"]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","\u25cf","the actual probability of success for our product candidates, including the safety and efficacy, early clinical data, competition, manufacturing capability and commercial viability;"]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","\u25cf","significant and changing government regulation and regulatory guidance;"]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","\u25cf","the timing and receipt of any marketing approvals; and"]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","\u25cf","the expense of filing, prosecuting, defending and enforcing any patent claims and other intellectual property rights."]]
[[/GREPCENT_TABLE]]

A change in the outcome of any of these variables with respect to the development of a product candidate could mean a significant change in the costs and timing associated with the development of that product candidate. For example, if the FDA or another U.S. or foreign regulatory authority were to require us to conduct clinical trials beyond those that we anticipate will be required for the completion of clinical development of a product candidate, or if we experience significant delays in our clinical trials due to patient enrollment or other reasons, we would be required to expend significant additional financial resources and time on the completion of clinical development.

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Other Non-Operating Income (Expense)

Other non-operating income (expense) includes the following:

Foreign Currency (Loss) Gain

Our consolidated financial statements are presented in U.S. dollars, which is our reporting currency. The financial position and results of operations of our subsidiaries are measured using the foreign subsidiaries’ local currency as the functional currency, either the pound sterling or the euro. These entities’ cash accounts holding U.S. dollars and intercompany payables and receivables are remeasured based upon the exchange rate at the date of remeasurement with the resulting gain or loss included in the consolidated statement of operations and comprehensive loss.

Interest Income

Interest income is comprised on interest earned on our interest-bearing bank accounts.

Interest Expense

Interest expense consists of interest expense and amortization of the debt discount in connection with the debt financing described in Note 13 to our consolidated financial statements.

Gain on Sale of Nonfinancial Assets

The gain on sale of nonfinancial assets represents the value allocated to the nonfinancial assets sold and assigned to Johnson & Johnson Innovative Medicine including the UCLB RPGR License Agreement relating to the research, development, manufacture and exploitation of the RPGR Product, and other related assets pursuant to the Asset Purchase Agreement, net of carrying value.

​

Other Comprehensive Loss

Other comprehensive loss includes the following:

Foreign Currency Translation Loss

Expenses of subsidiaries have been translated into U.S. dollars at average exchange rates prevailing during the period. Assets and liabilities have been translated at the rates of exchange on the consolidated balance sheet date. The resulting translation gain adjustments are recorded directly as a separate component of shareholders’ equity and as other comprehensive loss on the consolidated statements of operations and comprehensive loss.

Critical Accounting Policies and Use of Estimates

Management’s discussion and analysis of our financial condition and results of operations is based on our consolidated financial statements, which have been prepared in accordance with GAAP. The preparation of these consolidated financial statements requires us to make estimates and judgements that affect the reporting amounts of assets, liabilities and expenses and the disclosure of contingent assets and liabilities in our consolidated financial statements. On an ongoing basis, we evaluate our estimates and judgements, including those related to license and collaboration revenue, share-based compensation and accrued expenses. We base our estimates on historical experience, known trends and events and various other factors that we believe to be reasonable under the circumstances, the results of which form the basis for making judgements about the carrying value of assets and liabilities that are not readily apparent from our sources. Actual results may differ from these estimates under different assumptions.

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While our significant accounting policies are described in more detail in the notes to our financial statements appearing in this Form 10-K, we believe that the following accounting policies are those most critical to the judgments and estimates used in the preparation of our financial statements.

Collaboration Arrangements

We evaluate our collaborative arrangements pursuant to Accounting Standards Codification (“ASC”) 808, Collaborative Arrangements (“ASC 808”) and ASC 606, Revenue from Contracts with Customers (“ASC 606”). We consider the nature and contractual terms of collaborative arrangements and assess whether the arrangement involves a joint operating activity pursuant to which we are an active participant and are exposed to significant risks and rewards with respect to the arrangement. If we are an active participant and exposed to significant risks and rewards with respect to the arrangement, we account for the arrangement as a collaboration under ASC 808.

ASC 808 does not address recognition or measurement matters related to collaborative arrangements. Payments between participants pursuant to a collaborative arrangement that are within the scope of other authoritative accounting literature on income statement classification are accounted for using the relevant provisions of that literature. If we conclude that some or all aspects of the arrangement are within the scope of ASC 808 and do not represent a transaction with a customer, we recognize our allocation of the shared costs incurred with respect to the jointly conducted activities pursuant to ASC 730, Research and Development (“ASC 730”). If we concluded that some or all aspects of the arrangement represent a transaction with a customer, we account for those aspects of the arrangement within the scope of ASC 606. If the payments are not within the scope of other authoritative accounting literature, the income statement classification for the payments is based on an analogy to authoritative accounting literature or if there is no appropriate analogy, a reasonable, rational and consistently applied accounting policy election. Payments received from a collaboration partner to which this policy applies may include upfront payments in respect of a license of intellectual property, development and commercialization-based milestones, and royalties.

Revenue Recognition

We evaluate the promised goods or services to determine which promises, or group of promises, represent performance obligations in our contracts with customers. In contemplation of whether a promised good or service meets the criteria required of a performance obligation, we consider the stage of development of the underlying intellectual property, the capabilities and expertise of the customer relative to the underlying intellectual property, and whether the promised goods or services are integral to or dependent on other promises in the contract. When accounting for an arrangement that contains multiple performance obligations, we must develop judgmental assumptions, which may include market conditions, reimbursement rates for personnel costs, development timelines and probabilities of regulatory success to determine the stand-alone selling price for each performance obligation identified in the contract.

When we conclude that a contract should be accounted for as a combined performance obligation and recognized over time, we must then determine the period over which revenue should be recognized and the method by which to measure revenue. We generally recognize revenue using a cost-based input method.

At inception, we determine whether contracts are within the scope of ASC 606 or other topics. For contracts that are determined to be within the scope of ASC 606, we recognize revenue when the customer or collaborator obtains control of promised goods or services, in an amount that reflects the consideration which we expect to receive in exchange for those goods or services. To determine revenue recognition, we perform the following five steps:

[[GREPCENT_TABLE]]
[["","i.","identify the contract(s) with a customer;"]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","ii.","identify the performance obligations in the contract;"]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","iii.","determine the transaction price;"]]
[[/GREPCENT_TABLE]]

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[[GREPCENT_TABLE]]
[["","iv.","allocate the transaction price to the performance obligations within the contract; and"]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","v.","recognize revenue when (or as) the entity satisfies a performance obligation."]]
[[/GREPCENT_TABLE]]

We only apply the five-step model to contracts when we determine that it is probable we will collect the consideration we are entitled to in exchange for the goods or services we transfer to the customer.

At contract inception, we assess the goods or services promised within the contract to determine whether each promised good or service is a performance obligation. The promised goods or services for our arrangements typically consist of a license to our intellectual property and research, development and manufacturing services. We may provide options to additional items in such arrangements, which are accounted for as separate contracts when the customer elects to exercise such options, unless the option provides a material right to the customer. Performance obligations are promises in a contract to transfer a distinct good or service to the customer that (i) the customer can benefit from on its own or together with other readily available resources, and (ii) is separately identifiable from other promises in the contract. Goods or services that are not individually distinct performance obligations are combined with other promised goods or services until such combined group of promises meet the requirements of a performance obligation.

We determine transaction prices based on the amount of consideration we expect to receive for transferring the promised goods or services in the contract. Consideration may be fixed, variable, or a combination of both. At contract inception for arrangements that include variable consideration, we estimate the probability and extent of consideration we expect to receive under the contract utilizing either the most likely amount method or expected amount method, whichever best estimates the amount expected to be received. We then consider any constraints on the variable consideration and include in the transaction price variable consideration to the extent it is deemed probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved.

We then allocate the transaction price to each performance obligation based on the relative standalone selling price and recognize as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) control is transferred to the customer and the performance obligation is satisfied. For performance obligations which consist of licenses and other promises, we utilize judgment to assess the nature of the combined performance obligation to determine whether the combined performance obligation is satisfied over time or at a point in time and, if over time, the appropriate method of measuring progress. We evaluate the measure of progress each reporting period and, if necessary, adjust the measure of performance and related revenue recognition.

If there are multiple performance obligations, we allocate the transaction price to each performance obligation based on their estimated standalone selling prices (“SSP”). We estimate the SSP for each performance obligation by considering information such as market conditions, entity-specific factors, and information about our customer that is reasonably available. We consider estimation approaches that allow us to maximize the use of observable inputs. These estimation approaches may include the adjusted market assessment approach, the expected cost plus a margin approach or the residual approach. We also consider whether to use a different estimation approach or a combination of approaches to estimate the SSP for each performance obligation. Developing certain assumptions (e.g., treatable patient population, expected market share, probability of success and product profitability, and discount rate based on weighted-average cost of capital) to estimate the SSP of a performance obligation requires significant judgment.

We record amounts as contract assets when the right to consideration is deemed unconditional. Contract assets are reclassified as accounts receivable once billed. When consideration is received, or such consideration is unconditionally due, from a customer prior to transferring goods or services to the customer under the terms of a contract, a contract liability is recorded as deferred revenue.

Amounts received prior to satisfying the revenue recognition criteria are recognized as deferred revenue in our consolidated balance sheet. Amounts expected to be recognized as revenue within the 12 months following the balance

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sheet date are classified as deferred revenue – related party, current. Amounts not expected to be recognized as revenue within the 12 months following the balance sheet date are classified as deferred revenue – related party.

Our collaboration and revenue arrangements include the following:

Up-front License Fees: If a license is determined to be distinct from the other performance obligations identified in the arrangement, we recognize revenues from nonrefundable, up-front fees allocated to the license when the license is transferred to the licensee and the licensee is able to use and benefit from the license. For licenses that are bundled with other promises, we utilize judgment to assess the nature of the combined performance obligation to determine whether the combined performance obligation is satisfied over time or at a point in time and, if over time, the appropriate method of measuring progress for purposes of recognizing revenue from non-refundable, up-front fees. We evaluate the measure of progress each reporting period and, if necessary, adjusts the measure of performance and related revenue recognition.

Milestone Payments: At the inception of an agreement that includes research and development milestone payments, we evaluate each milestone to determine when and how much of the milestone to include in the transaction price. We first estimate the amount of the milestone payment that we could receive using either the expected value or the most likely amount approach. We primarily use the most likely amount approach as that approach is generally most predictive for milestone payments with a binary outcome. Then, we consider whether any portion of that estimated amount is subject to the variable consideration constraint (that is, whether it is probable that a significant reversal of cumulative revenue would not occur upon resolution of the uncertainty.) We update the estimate of variable consideration included in the transaction price at each reporting date which includes updating the assessment of the likely amount of consideration and the application of the constraint to reflect current facts and circumstances.

Royalties: For arrangements that include sales-based royalties, including milestone payments based on a level of sales, and the license is deemed to be the predominant item to which the royalties relate, we will recognize revenue at the later of (i) when the related sales occur, or (ii) when the performance obligation to which some or all of the royalty has been allocated has been satisfied (or partially satisfied). To date, we have not recognized any revenue related to sales-based royalties or milestone payments based on the level of sales.

Research and Development Services: Under the Collaboration Agreement, we incurred research and development costs, with Johnson & Johnson Innovative Medicine responsible for up to 100% of the costs, depending on the type of research and development services being performed. We recorded costs associated with the development activities as research and development expenses in the consolidated statements of operations and comprehensive loss consistent with ASC 730. The reimbursement of the research and development costs by Johnson & Johnson Innovative Medicine was representative of the joint risk sharing nature of the arrangement. We considered the guidance in ASC 808 and recognize the payments received from Johnson & Johnson Innovative Medicine as a reduction to research and development expense when the related costs are incurred. Under the Asset Purchase Agreement, research and development services (PPQ services) are recorded as incurred under cost of service revenue – related party.

Manufacturing Supply Services: Arrangements that include a promise for future supply of drug substance or drug product for either clinical development or commercial supply at the customer’s discretion are generally considered options. We assess if these options provide a material right to the licensee and if so, they are accounted for as separate performance obligations at the outset of the arrangement.

Customer Options: Customer options are evaluated at contract inception to determine whether those options provide a material right (i.e., an optional good or service offered for free or at a discount) to the customer. If the customer options represent a material right, the material right is treated as a separate performance obligation at the outset of the arrangement. We allocate the transaction price to material rights based on the standalone selling price. As a practical alternative to estimating the standalone selling price of a material right when the underlying goods or services are both (i) similar to the original goods or services in the contract and (ii) provided in accordance with the terms of the

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original contract, we allocate the total amount of consideration expected to be received from the customer to the total goods or services expected to be provided to the customer. Amounts allocated to any material right are recognized as revenue when or as the related future goods or services are transferred or when the option expires.

Research and Development

Research and development costs are charged to expense as incurred. These costs include, but are not limited to, employee-related expenses, including salaries, benefits and travel of our research and development personnel; expenses incurred under agreements with contract research organizations and investigative sites that conduct clinical and preclinical studies and manufacture the drug product for the clinical studies and preclinical activities; acquisition of in-process research and development; facilities; supplies; rent, insurance, certain legal fees, stock-based compensation, depreciation and other costs associated with clinical and preclinical activities and regulatory operations. Research funding under collaboration agreements and refundable research and development credits / tax credits received are recorded as an offset to these costs.

Costs for certain development activities, such as outside research programs funded by us, are recognized based on an evaluation of the progress to completion of specific tasks with respect to their actual costs incurred. Payments for these activities are based on the terms of the individual arrangements, which may differ from the pattern of costs incurred, and are reflected in the financial statements as prepaid or accrued research and development expense, as the case may be.

Share-Based Compensation

Options

We grant share options to employees, non-employee members of our board of directors and non-employee consultants as compensation for services performed. Share-based compensation are accounted for in accordance with ASC 718, Compensation—Stock Compensation, or ASC 718. ASC 718 requires all share-based payments, including grants of share options, to be recognized in the statement of operations and comprehensive loss based on their grant date fair values. The grant date fair value of share options is estimated using the Black-Scholes option valuation model.

Using this model, fair value is calculated based on assumptions with respect to (i) the fair value of our ordinary shares on the grant date; (ii) expected volatility of our ordinary share price, (iii) the periods of time over which recipients are expected to hold their options prior to exercise (expected term), (iv) expected dividend yield on our ordinary shares, and (v) risk-free interest rates.

The expected term of share options granted to the optionees is determined using the average of the vesting period and contractual life of the option, an accepted method for our Company’s option grants under the SEC Staff Accounting Bulletin No. 107 and No. 110, Share-Based Payment.

Expected volatility is based on an analysis of our Company and guideline companies in accordance with ASC 718. The expected dividend yield is zero as we have never paid dividends and do not currently anticipate paying any in the foreseeable future. Risk-free interest rates are based on quoted U.S. Treasury rates for securities with maturities approximating the option’s expected term.

Restricted Share Units

The Company grants restricted share units (“RSUs”) to employees, non-employee members of our board of directors and non-employee consultants as compensation for services performed. Awards of RSUs are accounted for in accordance with ASC 718. ASC 718 requires all share-based payments, including grants of RSUs, to be recognized in

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the consolidated statement of operations and comprehensive loss based on their grant date fair values. The grant date fair value of RSUs is determined using the closing market price of the Company’s ordinary shares on the date of grant.

Results of Operations

Comparison of the Years Ended December 31, 2024 and 2023

[[GREPCENT_TABLE]]
[["\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["\u200b","","2024","","2023","","Change"],["\u200b","\u200b","(in thousands)"],["Revenues:","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Service revenue - related party","\u200b","$","33,279","\u200b","$","\u2014","\u200b","$","33,279"],["License revenue - related party","\u200b","\u200b","\u2014","\u200b","\u200b","14,017","\u200b","\u200b","(14,017)"],["Total revenue","\u200b","\u200b","33,279","\u200b","\u200b","14,017","\u200b","\u200b","19,262"],["Operating expenses:","","\u200b","\u200b","","\u200b","\u200b","","\u200b","\u200b"],["Cost of service revenue - related party","\u200b","\u200b","23,791","\u200b","\u200b","\u2014","\u200b","\u200b","23,791"],["General and administrative","\u200b","\u200b","54,216","\u200b","\u200b","47,293","\u200b","\u200b","6,923"],["Research and development","\u200b","","119,484","\u200b","","103,785","\u200b","","15,699"],["Total operating expenses","\u200b","","197,491","\u200b","","151,078","\u200b","","46,413"],["Loss from operations","\u200b","","(164,212)","\u200b","","(137,061)","\u200b","","(27,151)"],["Other non-operating income (expense)","\u200b","","\u200b","\u200b","","\u200b","\u200b","","\u200b"],["Foreign currency (loss) gain","\u200b","","(2,886)","\u200b","","9,300","\u200b","","(12,186)"],["Interest income","\u200b","","4,145","\u200b","","2,272","\u200b","","1,873"],["Interest expense","\u200b","","(13,272)","\u200b","","(13,245)","\u200b","","(27)"],["Gain on sale of nonfinancial assets","\u200b","\u200b","28,434","\u200b","\u200b","54,208","\u200b","\u200b","(25,774)"],["Fair value adjustments","\u200b","\u200b","\u2014","\u200b","","499","\u200b","","(499)"],["Net loss","\u200b","$","(147,791)","\u200b","$","(84,027)","\u200b","$","(63,764)"],["Other comprehensive loss:","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Foreign currency translation loss","\u200b","\u200b","(2,284)","\u200b","\u200b","(7,482)","\u200b","\u200b","5,198"],["Comprehensive loss","\u200b","$","(150,075)","\u200b","$","(91,509)","\u200b","$","(58,566)"]]
[[/GREPCENT_TABLE]]

​

Service Revenue – Related Party

Service revenue was $33.3 million for the year ended December 31, 2024, due to progress of PPQ services under the Asset Purchase Agreement and related agreements. There was no service revenue for the year ended December 31, 2023.

License Revenue – Related Party

There was no license revenue for the year ended December 31, 2024, compared to $14.0 million for the year ended December 31, 2023. The decrease is due to the termination of the Collaboration Agreement concurrent with the execution of the Asset Purchase Agreement.

Cost of Service Revenue – Related Party

Cost of service revenue was $23.8 million for the year ended December 31, 2024, due to progress of PPQ services under the Asset Purchase Agreement and related agreements. There was no cost of service revenue for the year ended December 31, 2023.

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General and Administrative Expenses

General and administrative expenses were $54.2 million for the year ended December 31, 2024, compared to $47.3 million for the year ended December 31, 2023. The increase of $6.9 million was primarily due to an increase of $2.1 million in professional fees, and the remaining $4.8 million was related to other general and administrative costs, none of which were individually significant.

Research and Development Expenses

Research and development expenses for the years ended December 31, 2024 and 2023 were as follows (in thousands):

[[GREPCENT_TABLE]]
[["\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["\u200b","\u200b","For the Years Ended December 31,","\u200b","\u200b","\u200b"],["\u200b","","2024","","2023","\u200b","Change"],["Clinical Programs","\u200b","","\u200b","\u200b","","\u200b","\u200b","","\u200b"],["Botaretigene sparoparvovec","\u200b","$","1,250","\u200b","$","55,518","\u200b","$","(54,268)"],["AAV-hAQP1","\u200b","","17,307","\u200b","","15,772","\u200b","","1,535"],["AAV-CNGB3 / AAV-CNGA3","\u200b","\u200b","(969)","\u200b","\u200b","2,184","\u200b","\u200b","(3,153)"],["AAV-GAD","\u200b","\u200b","6,411","\u200b","\u200b","7,598","\u200b","\u200b","(1,187)"],["Other ocular diseases","\u200b","\u200b","1,763","\u200b","\u200b","\u2014","\u200b","\u200b","1,763"],["Manufacturing","","\u200b","53,445","","\u200b","50,221","","\u200b","3,224"],["Preclinical Programs","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["Gene regulation","\u200b","\u200b","10,509","\u200b","\u200b","8,324","\u200b","\u200b","2,185"],["Neurodegenerative diseases","\u200b","\u200b","1,608","\u200b","\u200b","2,242","\u200b","\u200b","(634)"],["Preclinical ocular diseases","\u200b","\u200b","2,474","\u200b","\u200b","2,849","\u200b","\u200b","(375)"],["Other research and development expenses","\u200b","\u200b","25,686","\u200b","\u200b","29,506","\u200b","\u200b","(3,820)"],["Gross research and development expenses","\u200b","\u200b","119,484","\u200b","\u200b","174,214","\u200b","\u200b","(54,730)"],["Johnson & Johnson Innovative Medicine reimbursement","\u200b","\u200b","\u2014","\u200b","\u200b","(70,429)","\u200b","\u200b","70,429"],["Research and development expenses","\u200b","$","119,484","\u200b","$","103,785","\u200b","$","15,699"]]
[[/GREPCENT_TABLE]]

​

​

Clinical program expenses represent the direct costs for each clinical trial plus the cost of the clinical trial material charged from the manufacturing costs.

Manufacturing expenses represent the costs to manufacture clinical trial material, including payroll, facilities, manufacturing supplies, raw materials, quality control and quality assurance. Upon completion of the manufacture of a batch of clinical trial material, the standard cost of manufacturing the batch of clinical trial material is charged to the clinical programs.

Preclinical program expenses represent the direct costs for each group of preclinical programs.

Other research and development expenses represent costs that are not allocated to a specific clinical or preclinical program, such as payroll and payroll related costs, share-based compensation, travel, rent and facilities costs, depreciation and other non-program specific expenses.

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Research and development expenses for the year ended December 31, 2024 were $119.5 million, compared to $103.8 million for the year ended December 31, 2023. The increase of $15.7 million was primarily due to an increase in manufacturing costs of $3.2 million, preclinical expenses of $1.2 million and a reduction in reimbursements from Johnson & Johnson Innovative Medicine of $70.4 million as the reimbursement for the year ended December 31, 2023 was in connection with research funding provided under the Collaboration Agreement, which was terminated on December 20, 2023. These increases were partially offset by a decrease of $55.3 million in clinical trial expenses primarily related to bota-vec as Johnson & Johnson Innovative Medicine is now primarily funding the research and development related to this program as a result of the Asset Purchase Agreement and $3.8 million of other research and development expenses.

Foreign Currency (Loss) Gain

Foreign currency loss was $2.9 million for the year ended December 31, 2024 compared to a gain of $9.3 million for the year ended December 31, 2023. The change of $12.2 million was primarily due to the restructuring and payment of certain intercompany receivables and payables during the year ended December 31, 2023. Foreign currency gains and losses subsequent to the restructuring are recorded as a part of accumulated other comprehensive income.

Interest Income

Interest income was $4.1 million for the year ended December 31, 2024 compared to $2.3 million for the year ended December 31, 2023. The increase was due to higher interest rates and cash balances during 2024.

Interest Expense

Interest expense was $13.3 million for each of the years ended December 31, 2024 and 2023.

Gain on Sale of Nonfinancial Assets

The gain on sale of nonfinancial assets was $28.4 million for the year ended December 31, 2024 compared to $54.2 million for the year ended December 31, 2023. This decrease was a result of a lower value of transaction consideration recognized in connection with the Asset Purchase Agreement during the year ended December 31, 2024 compared to the year ended December 31, 2023.

Liquidity and Capital Resources

Since our inception, we have incurred significant operating losses. For the year ended December 31, 2024, we used $104.5 million in cash flows from operations. We did not generate positive cash flows from operations during the year and there are no assurances that we will generate positive cash flows in the future. Additionally, there are no assurances that we will be successful in obtaining an adequate level of financing for the development and commercialization of our product candidates. We expect to incur significant expenses and operating losses for the foreseeable future as we advance the preclinical and clinical development of our product candidates. We expect that our research and development and general and administrative costs will increase in connection with conducting preclinical studies and clinical trials for our product candidates, building out internal capacity to have products manufactured to support preclinical studies and clinical trials as well as to manufacture commercial products, expanding our intellectual property portfolio, and providing general and administrative support for our operations. As a result of these incurred and expected expenses we will need additional capital to fund our operations, which we may obtain from additional equity or debt financings, collaborations, licensing arrangements, or other sources.

We do not currently have any approved products and have never generated any revenue from product sales. We have historically financed our operations primarily through cash on hand and proceeds from the sale of our ordinary shares, series A ordinary shares and convertible preferred C shares and upfront and milestone payments from

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collaboration agreements. On December 20, 2023, we entered into an Asset Purchase Agreement with Johnson & Johnson Innovative Medicine pursuant to which the Company sold and assigned to Johnson & Johnson Innovative Medicine a License Agreement between the Company and UCLB relating to the research, development, manufacture and exploitation of the RPGR Product, and other related assets as described in the Asset Purchase Agreement. In connection with entering into the Asset Purchase Agreement, we entered into a Termination Agreement with Johnson & Johnson Innovative Medicine terminating the Collaboration Agreement. The Company and Johnson & Johnson Innovative Medicine also entered into a Supply Agreement on December 20, 2023 pursuant to which the Company agreed to manufacture and supply the RPGR Product for Johnson & Johnson Innovative Medicine. During the year ended December 31, 2024, we received $60.0 million in milestone payments under the Asset Purchase Agreement.

Additionally, on August 2, 2022, we, as borrower, and our Subsidiary Guarantors, entered into a Financing Agreement by and among us, the Subsidiary Guarantors, the lenders and other parties from time to time party thereto and Perceptive, as administrative agent and lender. On December 19, 2022, the Financing Agreement was converted to a Notes Purchase Agreement between the same parties and under substantially the same terms and conditions as the Financing Agreement, subject to certain customary note constitution terms.

The Notes Purchase Agreement provides for the issuance of the Tranche 1 Notes in an initial amount of $75.0 million. Pursuant to the First Consent and Amendment, we were able to request, in our sole discretion, and Perceptive agreed to subscribe to purchase upon such request, the issuance of the Tranche 2 Notes in an additional amount of $25.0 million at any time before August 2, 2024 subject to the terms of the Notes Purchase Agreement. Previously, our request for the issuance of the Tranche 2 Notes was to be determined at Perceptive’s sole discretion. The Notes Purchase Agreement matures on August 2, 2026 and is interest-only during the term. We have the option to redeem outstanding principal notes at any time along with an applicable early redemption fee. Under each of the First Consent and Amendment and the Second Consent and Amendment, the Notes Purchase Agreement was amended to increase the applicable early redemption fee. Outstanding amounts under the Notes Purchase Agreement bear interest at a fluctuating rate per annum equal to 10.00% plus the secured overnight financing rate administered by the Federal Reserve Bank of New York for a one-month tenor, subject to a 1.00% floor.

​

Our obligations under the Notes Purchase Agreement are secured by our London, UK and Shannon, Ireland manufacturing facilities, $3.0 million of our cash and the bank accounts of the Subsidiary Guarantors, and the issued and outstanding equity interests of the Subsidiary Guarantors.

The Notes Purchase Agreement imposes certain covenants and restrictions on us and the Subsidiary Guarantors, including restrictions pertaining to: (i) the incurrence of additional indebtedness, (ii) limitations on liens, (iii) limitations on certain investments, (iv) making distributions, dividends and other payments, (v) mergers, consolidations and acquisitions, (vi) dispositions of assets, (vii) our maintenance of at least $3.0 million in a U.S. bank account, (viii) transactions with affiliates, (ix) changes to governing documents, (x) changes to certain agreements and leases and (xi) changes in control; however, certain of these restrictions contain exceptions which allow us to license, sell and monetize assets in our AAV-hAQP1 program in development to treat radiation-induced xerostomia, our AAV-GAD program in development to treat Parkinson’s disease and our gene regulation platform technologies.

In connection with entering into the Financing Agreement, we granted warrants (the “Warrants”) to Perceptive to purchase up to (i) 400,000 ordinary shares of the Company at an exercise price of $15.00 per share and (ii) 300,000 ordinary shares of the Company at an exercise price of $20.00 per share. The Warrants will expire on August 2, 2027.

Based on our current cash, cash equivalents, accounts receivable – related party, and tax incentive receivable at December 31, 2024, together with the proceeds from the anticipated closing of the strategic collaboration with Hologen Ltd, we estimate that we will be able to fund our operating expenses and capital expenditure requirements into 2027 and to repay our debt obligation of $75.0 million to Perceptive (due in August 2026). This estimate does not include the $285.0 million in milestones we are eligible to receive under the Asset Purchase Agreement upon first commercial sale of an RPGR Product in the United States and in at least one of the United Kingdom, France, Germany, Spain and Italy,

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for completion of the transfer of certain manufacturing technology to Johnson & Johnson Innovative Medicine and upon regulatory approval of a Johnson & Johnson Innovative Medicine-selected manufacturing facility in each of the United States and European Union for commercial manufacture of the RPGR Product. We have based these estimates on assumptions that may prove to be wrong, and we could utilize our available capital resources sooner than we expect.

Cash Flows

We had $105.7 million and $130.6 million of cash, cash equivalents, and restricted cash as of December 31, 2024 and 2023, respectively.

The following table summarizes our sources and uses of cash for the period presented:

[[GREPCENT_TABLE]]
[["\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b","\u200b"],["\u200b","\u200b","For the Years Ended December 31,","\u200b"],["\u200b","","2024","","2023"],["\u200b","\u200b","(in thousands)","\u200b"],["Net cash used in operating activities","","$","(104,495)","","$","(105,365)"],["Net cash provided by investing activities","\u200b","","23,479","\u200b","","34,034","\u200b"],["Net cash provided by financing activities","\u200b","","54,534","\u200b","","84,023","\u200b"],["Net (decrease) increase in cash, cash equivalents and restricted cash","\u200b","$","(26,482)","\u200b","$","12,692","\u200b"]]
[[/GREPCENT_TABLE]]

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Operating Activities

During the year ended December 31, 2024, our cash used in operating activities of $104.5 million was primarily due to our net loss of $147.8 million as we incurred expenses associated with research activities on our clinical programs, manufacturing of our clinical trial materials, preclinical research programs and general and administrative expenses. The net loss included net non-cash income and expense of $13.6 million, which consisted primarily of $25.2 million of share-based compensation, $12.8 million of depreciation and amortization, $2.9 million of a foreign currency loss and $1.3 million of non-cash interest, which was partially offset by $28.4 million of a gain on sale of nonfinancial assets and $0.2 million of a gain on termination of lease liabilities. Additionally, operating assets, consisting of accounts receivable – related party, contract assets – related party, prepaid expenses, tax incentive receivable, other current assets, inventory and other assets, net, decreased by $6.2 million and operating liabilities, consisting of accounts payable, accrued expenses, other current liabilities and deferred revenue – related party, increased by $23.5 million.

During the year ended December 31, 2023, our cash used in operating activities of $105.4 million was primarily due to our net loss of $84.0 million as we incurred expenses associated with research activities on our clinical programs, manufacturing of our clinical trial materials, preclinical research programs and general and administrative expenses. The net loss included net non-cash income and expense of $20.4 million, which consisted primarily of $27.7 million of share-based compensation, $13.7 million of depreciation and amortization, $1.3 million of non-cash interest and $1.1 million impairment related to acquired in-process research and development, which was partially offset by $54.2 million of a gain on sale of nonfinancial assets, $9.3 million of a foreign currency gain, $0.5 million of a fair value upward adjustment and $0.2 million of net change in right-of-use assets and liabilities. Additionally, operating assets, consisting of accounts receivable – related party, prepaid expenses, tax incentive receivable, other current assets and other assets, net, decreased by $6.0 million and operating liabilities, consisting of accounts payable, accrued expenses, other current liabilities and deferred revenue – related party, decreased by $6.9 million.

Investing Activities

Net cash provided by investing activities for the year ended December 31, 2024 of $23.5 million consisted of $28.4 million from proceeds from the sale of nonfinancial assets offset by $4.9 million of purchases of property and equipment for our manufacturing, laboratory and process development facilities.

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Net cash provided by investing activities for the year ended December 31, 2023 of $34.0 million consisted of $54.2 million from proceeds from the sale of nonfinancial assets offset by $20.2 million of purchases of property and equipment for our manufacturing, laboratory and process development facilities.

Financing Activities

Net cash provided by financing activities was $54.5 million for the year ended December 31, 2024, which consisted primarily of $59.4 million from the issuance of ordinary shares, which was offset by $2.5 million of issuance costs and $2.3 million of payments for withholdings of shares for income taxes.

Net cash provided by financing activities was $84.0 million for the year ended December 31, 2023, which consisted primarily of $92.0 million from the issuance of ordinary shares, which was offset by $6.4 million of issuance costs and $1.5 million of payments for withholdings of shares for income taxes.

Off-Balance Sheet Arrangements

We have not entered into any off-balance sheet arrangements under applicable SEC rules and do not have any holdings in variable interest entities.

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