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Share-based compensation

12 Months Ended

Dec. 31, 2022

Share-based compensation

Share-based compensation

14. Share-based compensation

Share-based compensation expense recognized by classification included in the consolidated statements of operations and comprehensive loss was as follows:


		Year ended December 31,
		2022			2021			2020

		(in thousands)
Cost of manufacturing services revenue		$	323		$	—		$	—
Research and development			18,402			12,834			11,995
Selling, general and administrative			15,479			12,801			9,836
Total		$	34,204		$	25,635		$	21,831

Share-based compensation expense recognized by award type was as follows:


		Year ended December 31,
		2022			2021			2020

		(in thousands)
Award type/ESPP
Share options		$	13,425		$	12,477		$	11,434
Restricted share units			15,486			11,347			7,364
Performance share units			5,267			1,783			2,990
Employee share purchase plan			26			28			43
Total		$	34,204		$	25,635		$	21,831

As of December 31, 2022, the unrecognized compensation cost related to unvested awards under the various share-based compensation plans were:


		Unrecognized			Weighted average
		share-based			remaining
		compensation			period for
		expense			recognition
		(in thousands)			(in years)
Award type
Share options		$	24,420		2.48
Restricted share units			24,924		1.90
Performance share units			184		0.14
Total		$	49,528		2.18

The Company satisfies the exercise of share options and vesting of Restricted Share Units (“RSUs”) and Performance Share Units (“PSUs”) through newly issued ordinary shares.

The Company’s share-based compensation plans include the 2014 Amended and Restated Share Option Plan (the “2014 Plan”) and inducement grants under Rule 5653(c)(4) of The Nasdaq Global Select Market with terms similar to the 2014 Plan (together the “2014 Plans”). The Company previously had a 2012 Equity Incentive Plan (the “2012 Plan”). As of December 31, 2022, no fully vested share options are outstanding (December 31, 2021: 14,000) under the 2012 Plan.

At the general meeting of shareholders on January 9, 2014, the Company’s shareholders approved the adoption of the 2014 Plan. At the annual general meetings of shareholders in June 2015, 2016, 2018 and 2021, uniQure shareholders approved amendments of the 2014 Plan, increasing the shares authorized for issuance by 1,070,000 shares in 2015, 3,000,000 in 2016, 3,000,000 shares in 2018 and 4,000,000 shares in 2021 for a total of 12,601,471 shares.

Share options

Share options are priced on the date of grant and, except for certain grants made to non-executive directors, vest over a period of four years. The first 25% vests after one year from the initial grant date and the remainder vests in equal quarterly installments over years two, three and four. Certain grants to non-executive directors vest in full after one year. Any options that vest must be exercised by the tenth anniversary of the initial grant date.

2014 Plan

The following tables summarize option activity under the Company’s 2014 Plans for the year ended December 31, 2022:


		Options
		Number of		Weighted average			Weighted average		Aggregate intrinsic
		ordinary shares		exercise price			remaining contractual life		value
							in years			(in thousands)
Outstanding at December 31, 2021		3,308,325		$	31.02		7.05		$	8,660
Granted		1,426,966		$	15.90
Forfeited		(204,224)		$	38.29
Expired		(154,794)		$	36.86
Exercised		(138,356)		$	7.81
Outstanding at December 31, 2022		4,237,917		$	26.13		7.14			17,848
Thereof, fully vested and exercisable on December 31, 2022		2,139,360		$	28.82		5.45			8,339
Thereof, outstanding and expected to vest after December 31, 2022		2,098,557		$	23.38		8.86			9,509
Outstanding and expected to vest after December 31, 2021		1,521,500		$	38.71


Total weighted average grant date fair value of options issued during the period (in $ millions)				$	12.9
Granted to directors and officers during the period (options, grant date fair value $ in millions)		672,908		$	5.9
Proceeds from option sales during the period (in $ millions)				$	1.3

The following table summarizes information about the weighted average grant-date fair value of options during the years ended December 31:


				Weighted average
		Options		grant‑date fair value
Granted, 2022		1,426,966		$	9.04
Granted, 2021		1,174,893			20.95
Granted, 2020		653,852			28.08
Vested, 2022		652,635			22.27
Forfeited, 2022		(204,224)			22.17

The following table summarizes information about the weighted average grant-date fair value of options at December 31:


				Weighted average
		Options		grant‑date fair value
Outstanding and expected to vest, 2022		2,098,557		$	13.46
Outstanding and expected to vest, 2021		1,521,500			22.52

The fair value of each option issued is estimated at the respective grant date using the Hull & White option pricing model with the following weighted-average assumptions:


		Year ended December 31,
Assumptions		2022		2021		2020
Expected volatility		70%		75%		70%
Expected terms		10 years		10 years		10 years
Risk free interest rate		2.12% - 4.16%		1.21 - 1.86%		0.76% - 1.44%
Expected dividend yield		0%		0%		0%

The Hull & White option model captures early exercises by assuming that the likelihood of exercises will increase when the share price reaches defined multiples of the strike price. This analysis is performed over the full contractual term.

The following table summarizes information about options exercised during the years ended December 31:


		Exercised
		during the year		Intrinsic value
				(in thousands)
2022		138,356		$	1,848
2021		241,496			5,046
2020		498,678			11,927

Restricted Share Units

The following table summarizes the RSU activity for the year ended December 31, 2022:


		RSU
				Weighted average
		Number of		grant-date fair
		ordinary shares		value
Non-vested at December 31, 2021		710,617		$	38.89
Granted		1,604,533		$	16.10
Vested		(292,688)		$	39.31
Forfeited		(203,688)		$	23.39
Non-vested at December 31, 2022		1,818,774		$	20.46

Total weighted average grant date fair value of RSUs granted during the period (in $ millions)				$	25.8
Granted to directors and officers during the period (shares, $ in millions)		380,288		$	6.0

The following table summarizes information about the weighted average grant-date fair value of RSUs granted during the years ended December 31:


		Granted		Weighted average
		during the year		grant‑date fair value
2022		1,604,533		$	16.10
2021		574,921			36.14
2020		376,799			48.18

The following table summarizes information about the total fair value of RSUs that vested during the years ended December 31:


	Total fair value
	(in thousands)
2022	$	5,104
2021		8,063
2020		12,156

RSUs generally vest over one to three years. RSUs granted to non-executive directors will vest one year from the date of grant.

Performance Share Units

The following table summarizes the PSU activity for the year ended December 31, 2022:


		PSU
				Weighted average
		Number of		grant-date fair
		ordinary shares		value
Non-vested at December 31, 2021		632,930		$	33.54
Granted		34,700		$	15.11
Vested		(213,145)		$	40.46
Forfeited		(53,795)		$	29.35
Non-vested at December 31, 2022		400,690		$	28.82

Total weighted average grant date fair value of PSUs granted during the period (in $ millions)				$	0.5

The Company granted shares to certain employees in September and December 2021 and various dates during the year ended December 31, 2022 that will be earned upon achievement of defined milestones. Earned shares will vest upon the later of a minimum service period of one year or three years, or the achievement of defined milestones, subject to the grantee’s continued employment. In addition, portions of the December 2021 granted to executives and other members of senior management are subject to achieving a minimum total shareholder return relative to the Nasdaq biotechnology index. The Company recognizes the compensation cost related to these grants to the extent it considers achievement of the milestones to be probable. Achievement of one of the total five defined milestones was met and one of the five defined milestones was considered probable as of December 31, 2022.

In January 2018 and January and February 2019, the Company awarded PSUs to its executives and other members of senior management. These PSUs were earned in January 2019 and January 2020, based on the Board of Directors’ (the “Board”) assessment of the level of achievement of agreed upon performance targets through December 31, 2018, and December 31, 2019, respectively. The PSUs awarded for the year ended December 31, 2018 vested in February 2021 and the PSUs awarded for the year ended December 31, 2019 vested in January 2022.

The following table summarizes information about the weighted average grant-date fair value of the PSUs determined as of the date those were earned for the 2019 PSUs, and the date of the grant for the 2021 and 2022 PSUs:


		Granted		Weighted average
		during the year		grant‑date fair value
2022		34,700		$	15.11
2021		555,600		$	30.19
2020		91,003		$	57.56

The following table summarizes information about the total fair value of PSUs that vested during the years ended December 31:


	Total fair value
	(in thousands)
2022	$	4,450
2021		5,074
2020		21,852

Employee Share Purchase Plan (“ESPP”)

In June 2018, the Company’s shareholders adopted and approved an ESPP allowing the Company to issue up to 150,000 ordinary shares. The ESPP is intended to qualify under Section 423 of the Internal Revenue Code of 1986. Under the ESPP, employees are eligible to purchase ordinary shares through payroll deductions, subject to any plan limitations. The purchase price of the shares on each purchase date is equal to 85% of the lower of the closing market price on the offering date or the closing market price on the purchase date of each three-month offering period. During the year ended December 31, 2022, 11,242 shares have been issued (December 31, 2021: 4,724 and December 31, 2020: 6,181). As of December 31, 2022, a total of 116,060 ordinary shares remain available for issuance under the ESPP plan.