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Fair value measurement

3 Months Ended

Mar. 31, 2024

Fair value measurement

Fair value measurement

6	Fair value measurement

The Company measures certain financial assets and liabilities at fair value, either upon initial recognition or for subsequent accounting or reporting. ASC 820, Fair Value Measurements and Disclosures requires disclosure of methodologies used in determining the reported fair values and establishes a hierarchy of inputs used when available. The three levels of the fair value hierarchy are described below:

Level 1 – Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities that the Company can access at the measurement date.

Level 2 – Valuations based on quoted prices for similar assets or liabilities in markets that are not active or models for which the inputs are observable, either directly or indirectly.

Level 3 – Valuations that require inputs that reflect the Company’s own assumptions that are both significant to the fair value measurement and are unobservable.

To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised by the Company in determining fair value is greatest for instruments categorized as Level 3. A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement.

The carrying amount of cash and cash equivalents, accounts receivable from licensing and collaboration partners, other assets, accounts payable, accrued expenses and other current liabilities reflected in the consolidated balance sheets approximate their fair values due to their short-term maturities.

The following table sets forth the Company’s assets and liabilities that are required to be measured at fair value on a recurring basis as of March 31, 2024 and December 31, 2023:


		Quoted prices in active markets (Level 1)			Significant other observable inputs (Level 2)			Significant unobservable inputs (Level 3)			Total			Classification in Consolidated balance sheets

			(in thousands)
At December 31, 2023
Assets:
Cash and cash equivalents		$	241,360		$	—		$	—		$	241,360		Cash and cash equivalents
Restricted cash			3,184			—			—			3,184		Other non-current assets
Total assets		$	244,544		$	—		$	—		$	244,544
Liabilities:
Contingent consideration			—			—			43,006			43,006		Contingent consideration
Consideration for post-acquisition services			—			—			457			457		Other non-current liabilities
Total liabilities		$	—		$	—		$	43,463		$	43,463
At March 31, 2024
Assets:
Cash and cash equivalents		$	243,062		$	—		$	—		$	243,062		Cash and cash equivalents
Restricted cash			3,167			—			—			3,167		Other non-current assets
Total assets		$	246,229		$	—		$	—		$	246,229
Liabilities:
Contingent consideration			—			—			42,212			42,212		Contingent consideration
Consideration for post-acquisition services			—			—			498			498		Other non-current liabilities
Total liabilities		$	—		$	—		$	42,710		$	42,710

Contingent consideration

The Company is required to pay up to EUR 178.8 million (or $193.0 million based on the foreign exchange rate on March 31, 2024) to the former shareholders of uniQure France SAS (formerly Corlieve Therapeutics SAS) upon the achievement of contractually defined milestones in connection with the Company’s July 2021 acquisition of uniQure France SAS.

The fair value of the contingent consideration as of March 31, 2024 was $42.2 million (December 31, 2023: $43.0 million) using discount rates of approximately 14.8% to 15.6% (December 31, 2023: 15.3% to 15.6%). The Company assumes the probability of achieving a EUR 30.0 million ($32.4 million) milestone payment following the dosing of the first patient in Phase I/II clinical trial to be 100%.

If as of March 31, 2024 the Company had assumed a 100% likelihood of AMT-260 advancing into a Phase III clinical study, then the fair value of the contingent consideration would have increased to $74.8 million. If as of March 31, 2024 the Company had assumed that it would discontinue development of the AMT-260 program, then the contingent consideration would have been released to income.

The following table presents the changes in fair value of contingent consideration between December 31, 2023 and March 31, 2024:


	Amount of
	contingent
	consideration
		2024
	(in thousands)
Balance at December 31, 2023	$	43,006
Change in fair value (presented within research and development expenses)		165
Currency translation effects		(959)
Balance at March 31, 2024	$	42,212

As of March 31, 2024, the Company classified $27.6 million (December 31, 2023: $28.2 million) of the total contingent consideration of $42.2 million (December 31, 2023: $43.0 million) as current liabilities. The balance sheet classification between current and non-current liabilities is based upon the Company’s best estimate of the timing of settlement of the remaining relevant milestones.

Investment securities

Refer to Note 4 “Investment securities” for the fair value of the investment securities as of March 31, 2024 and December 31, 2023.

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

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