0001558370-22-012045 | 6-K | XBRL Viewer

Document and Entity Information	6 Months Ended
Document and Entity Information	Jun. 30, 2022
Document and Entity Information [Abstract]
Entity Registrant Name	ProQR Therapeutics N.V.
Entity Central Index Key	0001612940
Document Type	6-K
Document Period End Date	Jun. 30, 2022
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2022
Document Fiscal Period Focus	Q2

Condensed Consolidated Statement of Financial Position - EUR (€) € in Thousands	Jun. 30, 2022	Dec. 31, 2021
Current assets
Cash and cash equivalents	€ 156,402	€ 187,524
Prepayments and other receivables	4,159	3,404
Other taxes	498	555
Total current assets	161,059	191,483
Property, plant and equipment	17,373	17,467
Investments in associates		8
Investments in financial assets	621	621
Total assets	179,053	209,579
Equity
Equity attributable to owners of the Company	87,369	113,833
Non-controlling interests	(395)	(604)
Total equity	86,974	113,229
Current liabilities
Borrowings	7,214	4,771
Lease liabilities	1,378	1,534
Derivative financial instruments	228	3,995
Trade payables	767	191
Current income tax liability	0	0
Social securities and other taxes	1,195	1,230
Deferred income	6,824	5,115
Other current liabilities	9,533	10,760
Total current liabilities	27,139	27,596
Borrowings	37,777	39,319
Lease liabilities	14,563	14,748
Deferred income	12,600	14,687
Total liabilities	92,079	96,350
Total equity and liabilities	€ 179,053	€ 209,579

Condensed Consolidated Statement of Profit or Loss and OCI - EUR (€)
€ in Thousands

3 Months Ended

6 Months Ended

Jun. 30, 2022

Jun. 30, 2021

Jun. 30, 2022

Jun. 30, 2021

Consolidated Statement of Profit or Loss and Comprehensive Income

Revenue

€ 1,025

€ 243

€ 2,259

€ 243

Other income

411

200

552

Research and development costs

(11,449)

(9,735)

(24,816)

(18,640)

General and administrative costs

(5,412)

(4,122)

(10,320)

(7,461)

Total operating costs

(16,861)

(13,857)

(35,136)

(26,101)

Operating result

(15,737)

(13,203)

(32,677)

(25,306)

Finance income and expense

(119)

(2,464)

(1,378)

(2,757)

Results related to associates

(8)

Gain on disposal of associate

514

Gain on derecognition of financial liabilities

1,144

(33)

3,826

(762)

Result before corporate income taxes

(14,650)

(15,700)

(29,093)

(28,311)

Income taxes

(20)

(53)

(27)

(60)

Result for the period

(14,670)

(15,753)

(29,120)

(28,371)

Other comprehensive income (foreign exchange differences on foreign operation)

689

(141)

911

255

Total comprehensive income

(13,981)

(15,894)

(28,209)

(28,116)

Result attributable to

Owners of the Company

(14,887)

(15,746)

(29,329)

(28,353)

Non-controlling interests

217

(7)

209

(18)

Result for the period

(14,670)

(15,753)

(29,120)

(28,371)

Total comprehensive income attributable to

Owners of the Company

(14,198)

(15,887)

(28,418)

(28,098)

Non-controlling interests

217

(7)

209

(18)

Total comprehensive income

€ (13,981)

€ (15,894)

€ (28,209)

€ (28,116)

Share information

Weighted average number of shares outstanding

^[1]

71,362,088

66,147,153

71,359,642

58,521,508

Weighted average number of ordinary shares used in calculating diluted earnings per share

^[1]

71,362,088

66,147,153

71,359,642

58,521,508

Earnings per share attributable to owners of the Company (Euro per share)

Basic loss per share

^[1]

€ (0.21)

€ (0.24)

€ (0.41)

€ (0.48)

Diluted loss per share

^[1]

€ (0.21)

€ (0.24)

€ (0.41)

€ (0.48)

[1]	For these periods the potential exercise of share options is not included in the diluted earnings per share as the Company was loss-making. Due to the anti-dilutive nature of the outstanding options, basic and diluted earnings per share are equal

Condensed Consolidated Statement of Changes in Equity - EUR (€) € in Thousands	Share capital	Share Premium	Equity Settled Employee Benefit Reserve	Option premium on convertible loan	Translation Reserve	Accumulated Deficit	Total	Non-controlling Interests	Total
Balance at beginning of period at Dec. 31, 2020	€ 2,165	€ 288,757	€ 23,825	€ 280	€ (189)	€ (257,747)	€ 57,091	€ (545)	€ 56,546
Balance at beginning of period (in shares) at Dec. 31, 2020	54,131,553
Result for the period						(28,353)	(28,353)	(18)	(28,371)
Other comprehensive income					255		255		255
Recognition of share-based payments	€ 5	382	2,719				3,106		3,106
Recognition of share-based payments (in shares)	112,657
Issue of ordinary shares	€ 660	84,594					85,254		85,254
Issue of ordinary shares (in shares)	16,508,475
Treasury shares transferred (in shares)	(127,303)
Shares options lapsed			(160)			160
Shares options exercised		753	(541)			541	753		753
Share options exercised (in shares)	243,189
Balance at end of period at Jun. 30, 2021	€ 2,830	374,486	25,843	280	66	(285,399)	118,106	(563)	117,543
Balance at end of period (in shares) at Jun. 30, 2021	70,868,571
Balance at beginning of period at Dec. 31, 2021	€ 2,995	398,309	28,443	1,426	430	(317,770)	113,833	(604)	113,229
Balance at beginning of period (in shares) at Dec. 31, 2021	74,865,381
Result for the period						(29,329)	(29,329)	209	(29,120)
Other comprehensive income					911		911		911
Recognition of share-based payments			1,921				1,921		1,921
Treasury shares transferred (in shares)	(71,283)
Shares options lapsed			(380)			380
Shares options exercised		33	(256)			256	33		33
Share options exercised (in shares)	71,283
Balance at end of period at Jun. 30, 2022	€ 2,995	€ 398,342	€ 29,728	€ 1,426	€ 1,341	€ (346,463)	€ 87,369	€ (395)	€ 86,974
Balance at end of period (in shares) at Jun. 30, 2022	74,865,381

Consolidated Statement of Cash Flows - EUR (€) € in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Cash flows from operating activities
Net result	€ (14,670)	€ (15,753)	€ (29,120)	€ (28,371)
Adjustments for:
Depreciation	591	602	1,161	1,233
Share-based compensation	738	1,471	1,921	2,719
Financial income and expenses	120	2,464	1,378	2,757
Results related to associates			8
Gain on disposal of associate				(514)
Results related to financial liabilities measured at fair value through profit or loss	(62)	33	(3,826)	762
Gain on derecognition of financial liabilities	(1,144)		(1,144)
Income tax expenses	20	53	27	60
Changes in working capital	820	1,774	(3,234)	822
Cash used in operations	(13,587)	(9,356)	(32,829)	(20,532)
Corporate income tax paid	(20)	(53)	(27)	(60)
Interest received		5		5
Interest paid	(1,237)	(575)	(2,455)	(1,153)
Net cash used in operating activities	(14,844)	(9,979)	(35,311)	(21,740)
Cash flow from investing activities
Purchases of property, plant and equipment	(231)	(52)	(475)	(84)
Net cash used in investing activities	(231)	(52)	(475)	(84)
Cash flow from financing activities
Proceeds from issuance of shares, net of transaction costs		82,601		85,254
Proceeds from exercise of share options		185	33	753
Proceeds from borrowings		569		569
Repayment of lease liability	(357)	(14)	(933)	(250)
Net cash (used in)/generated by financing activities	(357)	83,341	(900)	86,326
Net increase (decrease) in cash and cash equivalents	(15,432)	73,310	(36,686)	64,502
Currency effect cash and cash equivalents	4,222	(1,746)	5,564	(898)
Cash and cash equivalents, at beginning of the period	167,612	67,878	187,524	75,838
Cash and cash equivalents at the end of the period	€ 156,402	€ 139,442	€ 156,402	€ 139,442

General Information

6 Months Ended

Jun. 30, 2022

General Information

General Information

1. General information

ProQR Therapeutics N.V., or “ProQR” or the “Company”, is a development stage company domiciled in the Netherlands that primarily focuses on the development and commercialization of novel therapeutic medicines.

Since September 18, 2014, the Company’s ordinary shares are listed on the NASDAQ Global Market under ticker symbol PRQR.

The Company was incorporated in the Netherlands, on February 21, 2012 and was reorganized from a private company with limited liability to a public company with limited liability on September 23, 2014. The Company has its statutory seat in Leiden, the Netherlands. The address of its headquarters and registered office is Zernikedreef 9, 2333 CK Leiden, the Netherlands.

ProQR Therapeutics N.V. is the ultimate parent company of the following entities:

●	ProQR Therapeutics Holding B.V. (100%);

●	ProQR Therapeutics I B.V. (100%);

●	ProQR Therapeutics II B.V. (100%);

●	ProQR Therapeutics III B.V. (100%);

●	ProQR Therapeutics IV B.V. (100%);

●	ProQR Therapeutics V B.V. (100%);

●	ProQR Therapeutics VI B.V. (100%);

●	ProQR Therapeutics VII B.V. (100%);

●	ProQR Therapeutics VIII B.V. (100%);

●	ProQR Therapeutics IX B.V. (100%);

●	ProQR Therapeutics I Inc. (100%);

●	Amylon Therapeutics B.V. (80%);

ProQR Therapeutics N.V. is also statutory director of Stichting Bewaarneming Aandelen ProQR (“ESOP Foundation”) and has full control over this entity. The Company holds a 5.1% minority shareholding in Yarrow Biotechnology, Inc.

As used in these condensed consolidated financial statements, unless the context indicates otherwise, all references to “ProQR” or the “Company” refer to ProQR Therapeutics N.V. including its subsidiaries and the ESOP Foundation.

Significant Accounting Policies

6 Months Ended

Jun. 30, 2022

Significant Accounting Policies

Significant Accounting Policies

2. Significant Accounting Policies

These condensed consolidated financial statements have been prepared in accordance with the recognition and measurement criteria of IFRS. Certain disclosures required by IAS 34 Interim Financial Statements have been condensed or omitted. Accordingly, these condensed consolidated financial statements should be read in conjunction with the Company’s annual financial statements for the year ended December 31, 2021. In the opinion of management, all events and transactions that are significant to an understanding of the changes in financial position and performance of the Company since the end of the last annual reporting period are disclosed in these condensed consolidated financial statements.

The Company’s financial results have varied substantially, and are expected to continue to vary, from period to period. The Company believes that its ordinary activities are not linked to any particular seasonal factors.

The Company operates in one reportable segment, which comprises the discovery and development of innovative, RNA based therapeutics.

Adoption of new and revised International Financial Reporting Standards

6 Months Ended

Jun. 30, 2022

Adoption of new and revised International Financial Reporting Standards

Adoption of new and revised International Financial Reporting Standards

3. Adoption of new and revised International Financial Reporting Standards

The accounting policies adopted in the preparation of the condensed consolidated financial statements are consistent with those applied in the preparation of the Company’s annual financial statements for the year ended December 31, 2021.

New Standards and Interpretations, which became effective as of January 1, 2022, did not have a material impact on our condensed consolidated financial statements.

Critical Accounting Estimates and Judgments

6 Months Ended

Jun. 30, 2022

Critical Accounting Estimates and Judgments

Critical Accounting Estimates and Judgments

4. Critical Accounting Estimates and Judgments

In the application of the Company’s accounting policies, management is required to make judgments, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both current and future periods.

The significant judgements made by management in applying the Company’s accounting policies and the key sources of estimation uncertainty were the same as those described in the Company’s annual financial statements for the year ended December 31, 2021.

Revenue recognition for the Eli Lilly collaboration and license agreement

a. Identification of the performance obligation

Note 11 describes the Company’s collaboration and license agreement with Eli Lilly. Under this agreement, ProQR provides Eli Lilly with a license (with a right to sub-license) to exploit compounds resulting from the collaboration. A significant amount of judgement is required to determine whether the license is distinct from the other promises in the contract. The license was concluded not to be distinct from the other promises in the contract based on the following considerations:

●

the license has no stand-alone value to Eli Lilly without the Company being involved in the research and development collaboration, and;

●

there are significant interdependencies between the license and the research and development services to be provided by the Company.

b. Determining the timing of satisfaction of performance obligations

For the Eli Lilly collaboration, the Company recognizes revenue over time, using an input method that estimates the satisfaction of the performance obligation as the percentage of labor hours incurred compared to the total estimated labor hours required to complete the promised services. As our estimate of the total labor hours required is dependent on the evolution of the research and development activities, it may be subject to change. If the progression and/or outcome of certain research and development activities would be different from the assumptions that were made during the preparation of these financial statements, this could lead to material adjustments to the total estimated labor hours, which might result in a reallocation of revenue between current and future periods.

c. Determining the transaction price

The Company applied judgement to determine whether the equity investment made by Eli Lilly in ProQR is part of the transaction price for the collaboration and license agreement. The Company concluded that the premium that Eli Lilly paid above the closing price on the day of entering into the equity investment agreement was paid because of the Company’s existing obligations to deliver research and development services to Eli Lilly under the terms of the collaboration and license agreement. Therefore, the premium paid by Eli Lilly on the equity investment is considered to be part of the transaction price. The contract also includes variable consideration, but no variable consideration was included in the transaction price, as it is not highly 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.

Research and development expenditures

Development expenditures are currently not capitalized but are reflected in the income statement because the criteria for capitalization are not met. At each balance sheet date, the Company estimates the level of service performed by the vendors and the associated costs incurred for the services performed.

Although we do not expect the estimates to be materially different from amounts actually incurred, the understanding of the status and timing of services performed relative to the actual status and timing of services performed may vary and could result in reporting amounts that are too high or too low in any particular period.

Convertible debt

The terms of our convertible debt agreements are evaluated to determine whether the convertible debt instruments contain both liability and equity components, in which case the instrument is a compound financial instrument. Convertible debt agreements are also evaluated to determine whether they contain embedded derivatives, in which case the instrument is a hybrid financial instrument. Judgement is required to determine the classification of such financial instruments based on the terms and conditions of the convertible debt agreements, the currencies in which the debt instruments are denominated and the Company’s functional currency.

Estimation methods are used to determine the fair values of the liability and equity components of compound financial instruments and to determine the fair value of embedded derivatives included in hybrid financial instruments. The determination of the effective interest used for the host contracts of hybrid financial instruments and the liability components of compound financial instruments is dependent on the outcome of such estimations. Evaluating the reasonableness of these estimations and the assumptions and inputs used in the valuation methods requires a significant amount of judgement and is therefore subject to an inherent risk of error.

Cash and Cash Equivalents

6 Months Ended

Jun. 30, 2022

Cash and Cash Equivalents.

Cash and Cash Equivalents

5. Cash and Cash Equivalents

At June 30, 2022, the Company’s cash and cash equivalents were € 156,402,000 as compared to € 187,524,000 at December 31, 2021. The cash balances are held at banks with investment grade credit ratings. The cash at banks is at full disposal of the Company.

Property, plant and equipment

6 Months Ended

Jun. 30, 2022

Property, Plant and Equipment [Abstract]

Property, Plant and Equipment

6. Property, plant and equipment

At June 30, 2022 and December 31, 2021, property plant and equipment consisted of buildings and leasehold improvements, laboratory equipment and other assets. Buildings and leasehold improvements include a right-of-use asset relating to the lease of our Leiden office and laboratory space, with a carrying amount of € 15,336,000 at June 30, 2022 (December 31, 2021: € 15,568,000).

Current liabilities

6 Months Ended

Jun. 30, 2022

Current liabilities

Current liabilities

7. Current liabilities

The following table summarizes details of deferred income at June 30, 2022 and December 31, 2021. The nature of the deferred income relating to Eli Lilly and Yarrow is described in Note 11.


	June 30,	December 31,
	2022	2021

	2022	2021
	€ 1,000	€ 1,000

Eli Lilly up-front payment and premium on equity consideration	18,976	19,143
Yarrow up-front payment and premium on equity consideration	—	73
Foundation for Fighting Blindness grant	444	561
Horizon 2020 grant	4	25

Total deferred income	19,424	19,802
Current portion	(6,824)	(5,115)
	12,600	14,687

At June 30, 2022, other current liabilities amount to € 9,533,000 (December 31, 2021: € 10,760,000). At June 30, 2022 and December 31, 2021, other current liabilities consisted principally of accruals for services provided by vendors not yet billed, payroll related accruals and other miscellaneous liabilities. At June 30, 2022 other current liabilities also include a restructuring accrual amounting to € 906,000 (December 31, 2021: nil).

Borrowings

6 Months Ended

Jun. 30, 2022

Borrowings

Borrowings

8. Borrowings


	June 30,	December 31,
	2022	2021
	€ 1,000	€ 1,000
Innovation credit	3,907	3,907
Accrued interest on innovation credit	840	645
Convertible notes	39,839	38,925
Accrued interest on convertible notes	405	613

Total borrowings	44,991	44,090
Current portion	(7,214)	(4,771)
	37,777	39,319

On December 10, 2018 ProQR was awarded an Innovation credit for the sepofarsen program for LCA 10. Amounts will be drawn under this facility from 2018 through 2022. The total credit of € 4.7 million is used to conduct the Phase 2/3 clinical study for sepofarsen and to finance efforts to obtain regulatory and ethical market approval (NDA/MAA). The credit, including accrued interest of 10% per annum, is repayable depending on ProQR obtaining market approval for sepofarsen. An amount of € 3.9 million had been received as at June 30, 2022. Accumulated interest amounted to € 0.8 million as at June 30, 2022. The assets that are co-financed with the granted innovation credit are subject to a right of pledge for the benefit of RVO.

Convertible loans

In July 2020, the Company entered into a convertible debt financing agreement with Pontifax Medison Debt Financing. Under the agreement, the Company had access to up to $ 30 million in convertible debt financing in three tranches of $ 10 million each that will mature over a 54-month period and have an interest-only period of 24 months. One tranche of $ 10 million (€ 9.6 million) had been drawn down as at June 30, 2022.

A second close of the convertible debt financing agreement was completed in August 2020 with Kreos Capital. Under the second agreement, the Company had access to up to € 15 million in convertible debt financing in three tranches of € 5 million each that will mature over a 54-month period and have an interest-only period of 24 months. One tranche of € 5 million had been drawn down as at June 30, 2022.

In connection with the loan agreement, the Company issued to Pontifax and Kreos warrants to purchase up to an aggregate of 302,676 shares of its common stock at a fixed exercise price.

On December 29, 2021, the Company amended its convertible debt financing agreement with the Lenders. Under the amended agreement, at June 30, 2022, the Company had drawn down an additional $ 30 million that matures over a 54-month period and has an interest-only period of 33 months. The amendment replaces the two undrawn tranches under the original convertible debt financing agreements.

In connection with the loan agreement, the Company issued to the Lenders warrants to purchase up to an aggregate of 376,952 shares of its common stock at a fixed exercise price.

The Lenders may elect to convert the outstanding loan into ProQR ordinary shares at any time prior to repayment at a fixed conversion price. ProQR also has the ability to convert the loan into its ordinary shares, at the same conversion price, if the Company’s stock price reaches a pre-determined threshold.

Pontifax’ conversion option and warrants are accounted for as embedded derivatives and are recognized separately from the host contract as financial liabilities at fair value through profit or loss. The host contract is recognized at amortized cost.

The Kreos loan is accounted for as a compound financial instrument. The liability component is recognized at amortized cost. The equity component is initially recognized at fair value as option premium on convertible loan and will not be subsequently remeasured. Kreos’ warrants are accounted for as embedded derivatives and are recognized as financial liabilities at fair value through profit or loss.

Convertible loans were issued to Amylon Therapeutics B.V. (‘Amylon’) and are interest-bearing at an average rate of 8% per annum. They are convertible into a variable number of ordinary shares within 36 months at the option of the holder or the Company in case financing criteria are met. Any unconverted loans become payable on demand after 24 – 36 months in equal quarterly terms.

In the second quarter of 2022, Amylon entered into waiver agreements with certain lenders. Such lenders’ loan agreements with Amylon are severed and any claims to repayment of any outstanding debt and accumulated interest are renounced. The total amount of convertible loans and accumulated interest waived under these agreements in the second quarter of 2022 is € 1,144,000. The resulting gain was recognized as a gain on derecognition of financial liabilities, amounting to € 1,144,000 for the six month period ended June 30, 2022.

Lease Liabilities

6 Months Ended

Jun. 30, 2022

Lease Liabilities

Lease Liabilities

9. Lease liabilities

At June 30, 2022 and December 31, 2021, lease liabilities primarily consisted of the Company’s lease of office and laboratory facilities at Zernikedreef in Leiden, the Netherlands.

The lease agreement for our Leiden headquarters, where our main offices and laboratories are located, was put in place on July 1, 2020 and the current lease term is 11 years. The lease agreement may be further extended for subsequent 5-year terms. The carrying amount of the right-of-use asset is disclosed in note 6.

Shareholders equity

6 Months Ended

Jun. 30, 2022

Shareholders Equity

Shareholders Equity

10. Shareholders’ equity

The authorized share capital of the Company amounting to € 13,600,000 consists of 170,000,000 ordinary shares and 170,000,000 preference shares with a par value of € 0.04 per share. At June 30, 2022, 74,865,381 ordinary shares were issued. 71,362,088 ordinary shares were fully paid and 3,503,293 ordinary shares were held by the Company as treasury shares (December 31, 2021: 3,574,576).

On March 31, 2020, the Company entered into a sales agreement, which permitted the offering, issuance and sale by the Company of up to a maximum aggregate offering price of $ 75,000,000 of its ordinary shares that may be issued and sold in one or more at-the-market offerings with Citigroup Global Markets, Inc. and Cantor Fitzgerald & Co. In January 2021, the Company issued 585,398 ordinary shares under this sales agreement. The gross proceeds from this sale amounted to € 2,767,000, with transaction costs amounting to € 114,000, resulting in net proceeds of € 2,653,000.

In April 2021, the Company consummated an underwritten public offering of 15,923,077 ordinary shares at an issue price of $ 6.50 per share. The gross proceeds from this offering amounted to € 88,115,000 while the transaction costs amounted to € 5,499,000, resulting in net proceeds of € 82,616,000.

In September 2021, the Company issued 3,989,976 shares to Eli Lilly and Company (‘Eli Lilly’) pursuant to the global licensing and research collaboration between the Company and Eli Lilly at an issue price of $ 7.52 per share, resulting in net proceeds of € 23,223,000. This amount excludes a premium paid by Eli Lilly that is considered to be part of the transaction price of the licensing and research collaboration agreement (refer to note 11).

On November 4, 2021, the Company filed a shelf registration statement, which permitted the offering, issuance and sale by the Company of up to a maximum aggregate offering price of $ 300,000,000 of its ordinary shares, warrants and/or units.

On November 4, 2021, the Company entered into a sales agreement, which permitted the offering, issuance and sale by the Company of up to a maximum aggregate offering price of $ 75,000,000 of its ordinary shares that may be issued and sold in one or more at-the-market offerings with Cantor Fitzgerald & Co. In 2021 and 2022, no shares were issued pursuant to this ATM facility.

Translation reserve

The translation reserve comprises all foreign currency differences arising from the translation of the financial statements of foreign operations.

Share options

The Company operates an equity-settled share-based compensation plan, which was introduced in 2013. Options and RSUs may be granted to employees, members of the Supervisory Board, members of the Management Board and consultants. The compensation expenses included in operating costs for this plan in the six month period ended June 30, 2022 were € 1,921,000 (six month period ended June 30, 2021: € 2,719,000), of which € 1,537,000 (six month period ended June 30, 2021: € 1,673,000) was recorded in general and administrative costs and € 384,000 (six month period ended June 30, 2021: € 1,046,000) was recorded in research and development costs.

Revenue

6 Months Ended

Jun. 30, 2022

Revenue.

Revenue

11. Revenue

Eli Lilly

In September 2021, the Company entered into a global licensing and research collaboration with Eli Lilly and Company (‘Eli Lilly’) focused on the discovery, development, and commercialization of potential new medicines for genetic disorders in the liver and nervous system. ProQR and Eli Lilly use ProQR’s proprietary Axiomer^® RNA editing platform to progress new drug targets toward clinical development and commercialization.

Under the terms of the agreement, ProQR received an upfront payment and equity consideration, and is eligible to receive milestone payments and royalties on the net sales of any resulting products. In September 2021, the Company issued 3,989,976 shares to Eli Lilly, resulting in net proceeds of € 23,223,000. This amount included a price premium of € 2,144,000, which was determined to be part of the transaction price and as such was initially recognized as deferred revenue. An up-front payment of € 17,651,000 was received in October 2021.

With regard to its collaboration with Eli Lilly, the Company concluded as follows:

●

There is one single performance obligation under IFRS 15, which is the transfer of a license combined with the performance of research and development activities. The Company concluded that the license is not capable of being distinct and is not distinct in the context of the contract.

●

The transaction price of this agreement currently only includes fixed parts, consisting of an up-front fee and an equity component. The agreement also contains variable parts, but those are not yet included in the transaction price. Milestone payments will only be included to the extent that it is highly probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the milestones is subsequently resolved. Sales-based milestones and sales-based royalties will be included as the underlying sales occur.

●

The Company recognizes revenue over time, using an input method that estimates the satisfaction of the performance obligation as the percentage of labor hours incurred compared to the total estimated labor hours required to complete the promised services.

Yarrow Biotechnology

In May 2021, the Company entered into an exclusive worldwide license and discovery collaboration for an undisclosed target with Yarrow Biotechnology, Inc. (“Yarrow”). Under the terms of the agreement, ProQR received an upfront payment, equity consideration and reimbursement for ongoing R&D services. ProQR is also eligible to receive milestone payments and royalties on the net sales of any resulting products. In May 2021, ProQR received an up-front payment of € 419,000 and 8% of the shares of Yarrow’s common stock (see Note 15), which was subsequently diluted to 5.1%. In 2022, ProQR was also entitled to receive reimbursements for R&D services performed amounting to € 272,000 (2021: € 178,000).

With regard to its collaboration with Yarrow, the Company concluded as follows:

●

The transaction price of this agreement currently includes both fixed and variable parts. The fixed part consists of an up-front fee and an equity component. The variable part consists of a cost reimbursement for research and development activities. The agreement also contains other variable parts, but those are not yet included in the transaction price. Milestone payments will only be included to the extent that it is highly probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the milestones is subsequently resolved. Sales-based milestones and sales-based royalties will be included as the underlying sales occur.

●


	Six month period
	ended June 30,

	2022	2021
	€ 1,000	€ 1,000

Eli Lilly collaboration revenue	1,902	—
Yarrow collaboration revenue	357	243
	2,259	243

The revenues relating to providing IP licenses and research and development services under the Company’s collaboration agreements have no directly associable cost of sales. Costs incurred to fulfill the associated performance obligations are recognized in research and development expenses, due to their being part of the Company’s primary activities of biopharmaceutical research and development.

Other income

6 Months Ended

Jun. 30, 2022

Other income

Other income

12. Other income


	Six month period
	ended June 30,
	2022	2021
	€ 1,000	€ 1,000

Grant income	193	501
Other income	7	51
	200	552

On February 9, 2018, the Company entered into a partnership agreement with Foundation Fighting Blindness (FFB), under which FFB has agreed to provide funding of $ 7.5 million for the pre-clinical and clinical development of QR-421a for Usher syndrome type 2A targeting mutations in exon 13.

Grants are recognized in other income in the same period in which the related R&D costs are recognized.

Research and development costs

6 Months Ended

Jun. 30, 2022

Research and Development costs

Research and Development Costs

13. Research and development costs

Research and development costs amount to € 24,816,000 for the six month period ended June 30, 2022 (six month period ended June 30, 2021: € 18,640,000) and are comprised of allocated employee costs including share-based payments, the costs of materials and laboratory consumables, outsourced activities, license and intellectual property costs and other allocated costs. Research and development costs for the six month period ended June 30, 2022 include restructuring costs amounting to € 934,000 (six month period ended June 30, 2021: € nil).

General and administrative costs

6 Months Ended

Jun. 30, 2022

General and administrative costs

General and administrative costs

14. General and administrative costs

General and administrative costs amount to € 10,320,000 for the six month period ended June 30, 2022 (six month period ended June 30, 2021: € 7,461,000). General and administrative costs for the six month period ended June 30, 2022 include restructuring costs amounting to € 205,000 (six month period ended June 30, 2021: € nil).

Investments in associates and results related to associates

6 Months Ended

Jun. 30, 2022

Investments in associates and results related to associates

Investments in associates and results related to associates

15. Investments in associates and results related to associates

As disclosed in note 11, in May 2021, the Company obtained an 8% share in the common stock of Yarrow Biotechnology, Inc. ProQR’s share in Yarrow was subsequently diluted to 4.9% in the fourth quarter of 2021, due to Yarrow’s execution of a second seed financing round. ProQR’s share increased to 5.1% in the first quarter of 2022 due to Yarrow’s issuance of additional shares to the Company. Although ProQR only owns 5.1% of Yarrow’s shares, the Company has significant influence over Yarrow by virtue of its right to appoint one of Yarrow’s three board members, as well as its participation in Yarrow’s policy-making process, amongst other factors. As such, our interest in Yarrow amounting to € nil at June 30, 2022 (December 31, 2021: € 8,000) was recognized as an investment in associate.

The results related to associates for the six month period ended June 30, 2022 amounting to € 8,000 consist of ProQR's share in the loss of Yarrow.

Investment in financial asset and gain on disposal of associate

6 Months Ended

Jun. 30, 2022

Investment in financial asset and gain on disposal of associate

Investment in financial asset and gain on disposal of associate

16. Investment in financial asset and gain on disposal of associate

In January 2021, Wings Therapeutics Inc. merged into Phoenicis Therapeutics Inc. by means of a non-cash transaction. ProQR holds a 3.9% interest in Phoenicis Therapeutics Inc.

The net gain on disposal of associate for the six month period ended June 30, 2021 of € 514,000 consists of a loss on derecognition of Wings Therapeutics Inc. of € 107,000 off-set by a gain realized on ProQR’s investment in the equity instruments of Phoenicis Therapeutics Inc. of € 621,000. The Company elected to recognize subsequent changes in the fair value of our investment in Phoenicis in Other Comprehensive Income. There have been no changes in the fair value of our investment in Phoenicis since the initial recognition.

Income taxes

6 Months Ended

Jun. 30, 2022

Income Taxes

Income Taxes

17. Income taxes

The current income tax liability amounts to € nil at June 30, 2022 (December 31, 2021: € nil). No significant temporary differences exist between accounting and tax results. Realization of deferred tax assets is dependent on future earnings, if any, the timing and amount of which are uncertain. Accordingly, the Company has not yet recognized any deferred tax asset related to operating losses.

Tax losses may be carried forward indefinitely. However, the offset of losses will be limited in a given year against the first € 1 million of taxable profit. For taxable profit in excess of this amount, losses may only be offset up to 50% of this excess.

Events after balance sheet date

6 Months Ended

Jun. 30, 2022

Events after balance sheet date

Events after balance sheet date

18. Events after balance sheet date

No significant events occurred after the balance sheet date.

Critical Accounting Estimates and Judgments (Policies)

6 Months Ended

Jun. 30, 2022

Critical Accounting Estimates and Judgments

Revenue recognition for the Eli Lilly collaboration and license agreement

Revenue recognition for the Eli Lilly collaboration and license agreement

a. Identification of the performance obligation

●

the license has no stand-alone value to Eli Lilly without the Company being involved in the research and development collaboration, and;

●

there are significant interdependencies between the license and the research and development services to be provided by the Company.

b. Determining the timing of satisfaction of performance obligations

c. Determining the transaction price

Research and development expenditures

Research and development expenditures

Convertible debt

Convertible debt

Current Liabilities (Tables)

6 Months Ended

Jun. 30, 2022

Current liabilities

Summary of deferred income


	June 30,	December 31,
	2022	2021

	2022	2021
	€ 1,000	€ 1,000

Eli Lilly up-front payment and premium on equity consideration	18,976	19,143
Yarrow up-front payment and premium on equity consideration	—	73
Foundation for Fighting Blindness grant	444	561
Horizon 2020 grant	4	25

Total deferred income	19,424	19,802
Current portion	(6,824)	(5,115)
	12,600	14,687

Borrowings (Tables)

6 Months Ended

Jun. 30, 2022

Borrowings

Schedule of borrowings


	June 30,	December 31,
	2022	2021
	€ 1,000	€ 1,000
Innovation credit	3,907	3,907
Accrued interest on innovation credit	840	645
Convertible notes	39,839	38,925
Accrued interest on convertible notes	405	613

Total borrowings	44,991	44,090
Current portion	(7,214)	(4,771)
	37,777	39,319

Revenue (Tables)

6 Months Ended

Jun. 30, 2022

Revenue.

Schedule of collaboration revenue


	Six month period
	ended June 30,

	2022	2021
	€ 1,000	€ 1,000

Eli Lilly collaboration revenue	1,902	—
Yarrow collaboration revenue	357	243
	2,259	243

Other income (Tables)

6 Months Ended

Jun. 30, 2022

Other income

Schedule of other income


	Six month period
	ended June 30,
	2022	2021
	€ 1,000	€ 1,000

Grant income	193	501
Other income	7	51
	200	552

General Information (Details)	1 Months Ended	3 Months Ended		6 Months Ended
General Information (Details)	May 31, 2021	Mar. 31, 2022	Dec. 31, 2021	Jun. 30, 2022
Yarrow Biotechnology, Inc
Disclosure of subsidiaries [line items]
Proportion of ownership interest in associate	8.00%	5.10%	4.90%	5.10%
ProQR Therapeutics Holding B.V. [Member]
Disclosure of subsidiaries [line items]
Proportion of ownership interest in subsidiary				100.00%
ProQR Therapeutics I B.V. [Member]
Disclosure of subsidiaries [line items]
Proportion of ownership interest in subsidiary				100.00%
ProQR Therapeutics II B.V. [Member]
Disclosure of subsidiaries [line items]
Proportion of ownership interest in subsidiary				100.00%
ProQR Therapeutics III B.V. [Member]
Disclosure of subsidiaries [line items]
Proportion of ownership interest in subsidiary				100.00%
ProQR Therapeutics IV B.V. [Member]
Disclosure of subsidiaries [line items]
Proportion of ownership interest in subsidiary				100.00%
ProQR Therapeutics V B.V. [Member]
Disclosure of subsidiaries [line items]
Proportion of ownership interest in subsidiary				100.00%
ProQR Therapeutics VI B.V. [Member]
Disclosure of subsidiaries [line items]
Proportion of ownership interest in subsidiary				100.00%
ProQR Therapeutics VII B.V. [Member]
Disclosure of subsidiaries [line items]
Proportion of ownership interest in subsidiary				100.00%
ProQR Therapeutics VIII B.V. [Member]
Disclosure of subsidiaries [line items]
Proportion of ownership interest in subsidiary				100.00%
ProQR Therapeutics IX B.V. [Member]
Disclosure of subsidiaries [line items]
Proportion of ownership interest in subsidiary				100.00%
Amylon Therapeutics B.V [Member]
Disclosure of subsidiaries [line items]
Proportion of ownership interest in subsidiary				80.00%
ProQR Therapeutics I Inc. [Member]
Disclosure of subsidiaries [line items]
Proportion of ownership interest in subsidiary				100.00%

Significant Accounting Policies (Details)	6 Months Ended
Significant Accounting Policies (Details)	Jun. 30, 2022 segment
Significant Accounting Policies
Number of reportable segment	1

Cash and Cash Equivalents (Details) - EUR (€) € in Thousands	Jun. 30, 2022	Mar. 31, 2022	Dec. 31, 2021	Jun. 30, 2021	Mar. 31, 2021	Dec. 31, 2020
Cash and Cash Equivalents.
Cash and cash equivalents	€ 156,402	€ 167,612	€ 187,524	€ 139,442	€ 67,878	€ 75,838

Property, Plant and Equipment (Details) - EUR (€) € in Thousands	Jun. 30, 2022	Dec. 31, 2021
Property, Plant and Equipment
Property, plant and equipment	€ 17,373	€ 17,467
Building And Leasehold Improvements
Property, Plant and Equipment
Right-of-use assets	€ 15,336	€ 15,568

Current Liabilities (Details) - EUR (€) € in Thousands	Jun. 30, 2022	Dec. 31, 2021
Current contract liabilities [abstract]
Deferred income	€ 19,424	€ 19,802
Current portion	(6,824)	(5,115)
Non current deferred income	12,600	14,687
Other current liabilities	9,533	10,760
Restructuring Accrual	906	0
Eli Lilly and Company
Current contract liabilities [abstract]
Deferred income	18,976	19,143
Yarrow Biotechnology, Inc
Current contract liabilities [abstract]
Deferred income		73
Foundation Fighting Blindness
Current contract liabilities [abstract]
Deferred income	444	561
EC Horizon 2020 Program
Current contract liabilities [abstract]
Deferred income	€ 4	€ 25

Borrowings (Details) € in Thousands, $ in Millions			1 Months Ended		3 Months Ended		6 Months Ended
Borrowings (Details) € in Thousands, $ in Millions	Dec. 29, 2021 shares	Jul. 14, 2020 shares	Aug. 31, 2020 EUR (€) tranche	Jul. 31, 2020 USD ($) tranche	Jun. 30, 2022 EUR (€)	Jun. 30, 2021 EUR (€)	Jun. 30, 2022 EUR (€)	Jun. 30, 2021 EUR (€)	Jun. 30, 2022 USD ($)	Dec. 31, 2021 EUR (€)	Dec. 10, 2018 EUR (€)
Disclosure of detailed information about borrowings [line items]
Total borrowings					€ 44,991		€ 44,991			€ 44,090
Current portion					(7,214)		(7,214)			(4,771)
Non Current portion					37,777		37,777			39,319
Proceeds from borrowings						€ 569		€ 569
Gain on derecognition of financial liabilities					1,144		1,144
Innovation credit
Disclosure of detailed information about borrowings [line items]
Accrued interest					840		840			645
Total borrowings					3,907		3,907			3,907
Interest rate (as percent)											10.00%
Innovation credit \| Maximum
Disclosure of detailed information about borrowings [line items]
Notional amount											€ 4,700
Convertible loans
Disclosure of detailed information about borrowings [line items]
Accrued interest					405		405			613
Total borrowings					€ 39,839		€ 39,839			€ 38,925
Convertible loans \| Minimum
Disclosure of detailed information about borrowings [line items]
Unconvertible Debt Maturity							24 months
Convertible Debt
Disclosure of detailed information about borrowings [line items]
Number of Shares Exercisable for Issued Warrants \| shares		302,676
Number of shares exercisable for issued warrants \| shares		302,676
Convertible loans Amylon Therapeutics B.V. [Member]
Disclosure of detailed information about borrowings [line items]
Interest rate (as percent)					8.00%		8.00%		8.00%
Debt instrument convertible term							36 months
Loan and interest waived					€ 1,144
Gain on derecognition of financial liabilities							€ 1,144
Convertible loans Amylon Therapeutics B.V. [Member] \| Maximum
Disclosure of detailed information about borrowings [line items]
Unconvertible Debt Maturity							36 months
Convertible Debt Pontifax Medison and Kreos Capital Debt Financing \| Maximum
Disclosure of detailed information about borrowings [line items]
Number of Shares Exercisable for Issued Warrants \| shares	376,952
Number of shares exercisable for issued warrants \| shares	376,952
Convertible Debt Pontifax Medison Debt Financing
Disclosure of detailed information about borrowings [line items]
Total borrowings					9,600		€ 9,600		$ 10
Number of tranches \| tranche				3
Maximum borrowing capacity per tranche \| $				$ 10
Term of debt				54 months
Debt, interest only payment term				24 months
Convertible Debt Pontifax Medison Debt Financing \| Maximum
Disclosure of detailed information about borrowings [line items]
Notional amount \| $				$ 30
Convertible Debt Kreos Capital Debt Financing
Disclosure of detailed information about borrowings [line items]
Total borrowings					€ 5,000		€ 5,000
Number of tranches \| tranche			3
Maximum borrowing capacity per tranche			€ 5,000
Term of debt			54 months
Debt, interest only payment term			24 months
Convertible Debt Kreos Capital Debt Financing \| Maximum
Disclosure of detailed information about borrowings [line items]
Notional amount			€ 15,000
Convertible Debt Pontifax Medison and Kreos Capital Debt Financing, amended agreement
Disclosure of detailed information about borrowings [line items]
Total borrowings \| $									$ 30
Term of debt	54 months
Debt, interest only payment term	33 months

Lease Liabilities (Details) - Leiden headquarters	Jul. 01, 2020
Disclosure of quantitative information about right-of-use assets [line items]
Lease agreement period	11 years
Renewal term	5 years

Shareholders equity - Share capital (Details)	1 Months Ended			3 Months Ended	6 Months Ended
Shareholders equity - Share capital (Details)	Sep. 30, 2021 EUR (€) shares	Apr. 30, 2021 EUR (€) shares	Jan. 31, 2021 EUR (€) shares	Jun. 30, 2021 EUR (€)	Jun. 30, 2021 EUR (€)	Jun. 30, 2022 EUR (€) € / shares shares	Dec. 31, 2021 shares	Nov. 04, 2021 USD ($)	Sep. 30, 2021 $ / shares	Apr. 30, 2021 $ / shares	Mar. 31, 2020 USD ($)
Shareholders Equity
Authorized share capital						€ 13,600,000
Par value per share \| € / shares						€ 0.04
Net proceeds from issuance of shares				€ 82,601,000	€ 85,254,000
Shares issued in the period					€ 85,254,000
Eli Lilly and Company
Shareholders Equity
Net proceeds from issuance of shares	€ 23,223,000
Issue of ordinary shares (in shares) \| shares	3,989,976
Share price \| $ / shares									$ 7.52
Underwritten public offering
Shareholders Equity
Issue of ordinary shares (in shares) \| shares		15,923,077
Share price \| $ / shares										$ 6.50
Gross proceeds from issuance of shares		€ 88,115,000
Transaction cost		5,499,000
Net proceeds		€ 82,616,000
At The Market Offering
Shareholders Equity
Issue of ordinary shares (in shares) \| shares			585,398
Gross proceeds from issuance of shares			€ 2,767,000
Transaction cost			114,000
Net proceeds			€ 2,653,000
Cantor Fitzgerald & Co \| At The Market Offering
Shareholders Equity
Number of shares issued \| shares						0
Ordinary
Shareholders Equity
Number of shares outstanding \| shares						74,865,381
Maximum aggregate offering of ordinary shares \| $								$ 300,000,000
Number of shares authorised \| shares						170,000,000
Shares were issued and fully paid in cash \| shares						71,362,088
Treasury shares \| shares						3,503,293	3,574,576
Ordinary \| Cantor Fitzgerald & Co \| At The Market Offering
Shareholders Equity
Maximum aggregate offering of ordinary shares \| $								$ 75,000,000
Ordinary \| Market offering program
Shareholders Equity
Maximum aggregate offering of ordinary shares \| $											$ 75,000,000
Preferred
Shareholders Equity
Number of shares authorised \| shares						170,000,000

Shareholders equity - Share options (Details) - EUR (€)	6 Months Ended
Shareholders equity - Share options (Details) - EUR (€)	Jun. 30, 2022	Jun. 30, 2021
Operating costs
Shareholders Equity
Compensation expenses	€ 1,921,000	€ 2,719,000
General and administrative costs
Shareholders Equity
Compensation expenses	1,537,000	1,673,000
Research and development costs
Shareholders Equity
Compensation expenses	€ 384,000	€ 1,046,000

Revenue (Details) - EUR (€) € in Thousands	1 Months Ended			3 Months Ended			6 Months Ended		12 Months Ended
Revenue (Details) - EUR (€) € in Thousands	Oct. 31, 2021	Sep. 30, 2021	May 31, 2021	Mar. 31, 2022	Dec. 31, 2021	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021	Dec. 31, 2021
Disclosure of disaggregation of revenue from contracts with customers [line items]
Proceeds from issuing shares						€ 82,601		€ 85,254
Eli Lilly and Company
Disclosure of disaggregation of revenue from contracts with customers [line items]
Number of shares issued		3,989,976
Proceeds from issuing shares		€ 23,223
Up-front payment received	€ 17,651
Eli Lilly and Company \| Premiums on share issue
Disclosure of disaggregation of revenue from contracts with customers [line items]
Deferred revenue		€ 2,144
Yarrow Biotechnology, Inc
Disclosure of disaggregation of revenue from contracts with customers [line items]
Proportion of ownership interest in associate			8.00%	5.10%	4.90%		5.10%
Up-front payment received			€ 419
Reimbursements received							€ 272		€ 178

Revenue - Collaboration revenue (Details) - EUR (€) € in Thousands	6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021
Disclosure of disaggregation of revenue from contracts with customers [line items]
Collaboration revenue	€ 2,259	€ 243
Eli Lilly and Company
Disclosure of disaggregation of revenue from contracts with customers [line items]
Collaboration revenue	1,902
Yarrow Biotechnology, Inc
Disclosure of disaggregation of revenue from contracts with customers [line items]
Collaboration revenue	€ 357	€ 243

Other income (Details) - EUR (€) € in Thousands	3 Months Ended		6 Months Ended
Other income (Details) - EUR (€) € in Thousands	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Other income
Grant income			€ 193	€ 501
Other income			7	51
Total other income	€ 99	€ 411	€ 200	€ 552

Other income - Narrative (Details) $ in Millions	Feb. 09, 2018 USD ($)
Clinical support agreement \| Foundation Fighting Blindness
Other Income [Line Items]
Contribution received to support clinical development	$ 7.5

Research and development costs (Details) - EUR (€) € in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Disclosure of attribution of expenses by nature to their function [line items]
Research and development costs	€ 11,449	€ 9,735	€ 24,816	€ 18,640
Research and development costs
Disclosure of attribution of expenses by nature to their function [line items]
Restructuring costs			€ 934	€ 0

General and administrative costs (Details) - EUR (€) € in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Disclosure of attribution of expenses by nature to their function [line items]
General and administrative costs	€ 5,412	€ 4,122	€ 10,320	€ 7,461
General and administrative costs [Member]
Disclosure of attribution of expenses by nature to their function [line items]
Restructuring costs			€ 205	€ 0

Investments in associates and results related to associates (Details) € in Thousands	1 Months Ended	3 Months Ended		6 Months Ended
	May 31, 2021	Mar. 31, 2022	Dec. 31, 2021 EUR (€)	Jun. 30, 2022 EUR (€) director
Disclosure of associates [line items]
Investments in associates			€ 8
Results related to associates				€ (8)
Yarrow Biotechnology, Inc
Disclosure of associates [line items]
Proportion of ownership interest in associate	8.00%	5.10%	4.90%	5.10%
Investments in associates			€ 8	€ 0
Total number of board members \| director				3
Right to appoint number of board member \| director				1
Results related to associates				€ (8)

Investment in financial asset and gain on disposal of associate (Details) - EUR (€) € in Thousands	6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jan. 31, 2021
Disclosure of Investment in Financial Asset and Gain on Disposal of Associate [Line items]
Gain (loss) on disposal of associate		€ 514
Wings Therapeutics Inc
Disclosure of Investment in Financial Asset and Gain on Disposal of Associate [Line items]
Gain (loss) on disposal of associate		(107)
Phoenicis Therapeutics Inc.
Disclosure of Investment in Financial Asset and Gain on Disposal of Associate [Line items]
Proportion of ownership interest			3.90%
Gain (loss) on disposal of associate		€ 621
Changes in fair value of investment	€ 0

Income Taxes (Details) - EUR (€) € in Thousands	Jun. 30, 2022	Dec. 31, 2021
Income Taxes
Current income tax liability	€ 0	€ 0