Immunocore Holdings plc

Notes to the Financial Statements

1. Description of Business

Immunocore Holdings plc (collectively with its subsidiaries, the “Company”) is a public limited company incorporated in England and Wales and has the following wholly owned subsidiaries: Immunocore Limited, Immunocore LLC, Immunocore Commercial LLC, Immunocore Ireland Limited, Immunocore GmbH, and Immunocore Nominees Limited with operations based primarily in the U.K. and U.S. The Company is pioneering the development and sale of a novel class of TCR bispecific immunotherapies called ImmTAX –Immunem obilizingm onoclonal TCRs Against X disease – designed to treat a broad range of diseases, including cancer, infectious and autoimmune diseases. Leveraging its proprietary, flexible, off-the-shelf ImmTAX platform, the Company is developing a pipeline in multiple therapeutic areas, including five clinical stage programs in oncology and infectious disease, advanced pre-clinical programs in autoimmune disease and multiple earlier pre-clinical programs.

In January and April 2022, the Company received approval from the U.S. Food and Drug Administration, or FDA, and European Commission EC, respectively, for its lead product, KIMMTRAK, for the treatment of unresectable or metastatic uveal melanoma and has subsequently received approvals in further territories, and the Company continues to launch and seek approvals in additional territories. KIMMTRAK is now approved in over 30 countries and the Company has commercially launched the product in the United States, Germany and France, among other territories.

The Company’s American Depositary Shares, or ADS, began trading on the Nasdaq Global Select Market under the ticker symbol “IMCR” on February 5, 2021, following its initial public offering, or IPO. The IPO and concurrent private placement generated net proceeds of $286.9 million after underwriting discounts, commissions and directly attributable offering expenses. In July 2022, the Company issued and sold a total of 3,733,333 ADSs and non-voting ordinary shares to certain institutional accredited investors and existing shareholders as a private investment in public entity, or PIPE, pursuant to a securities purchase agreement with such investors, generating net proceeds of $139.5 million.

Prior to completion of the IPO, Immunocore Holdings Limited was incorporated in England and Wales on January 7, 2021. Effective immediately prior to completion of the IPO, the Company re-organized its share capital whereby all of the outstanding series A preferred shares, series B preferred shares and series C preferred shares were re-designated as ordinary shares of the Company on aone for one basis. Following a subsequent corporate reorganization, Immunocore Holdings Limited became the ultimate parent company for the Company and was re-registered as a public limited company with the name Immunocore Holdings plc, the registrant. The corporate reorganization was accounted for as a business combination under common control and therefore, Immunocore Holdings plc is a continuation of Immunocore Limited and its subsidiaries. The corporate reorganization, further outlined below in Note 9 “Shareholders’ Equity”, was given retrospective effect in the financial statements..

2. Summary of Significant Accounting Policies

Basis of Presentation

Historically, the Company qualified as a foreign private issuer and prepared its consolidated financial statements in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB). Effective January 1, 2024, the Company no longer qualifies as a foreign private issuer as defined in Rule 405 of Regulation C under the Securities Act and Rule 3b-4 under the Exchange Act and therefore has become a domestic filer and must file this Form 10-K pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 and in accordance with accounting principles generally accepted in the U.S (U.S. GAAP). The Company’s consolidated financial statements were prepared in accordance with U.S. GAAP retrospectively for the fiscal years ended December 31, 2023, 2022, and 2021 and include the financial results of all wholly-owned subsidiaries. Intercompany transactions and balances have been eliminated upon consolidation and the consolidated financial statements are presented in U.S. dollars.

Significant Accounting Policies

Use of estimates

The preparation of the financial statements in conformity with U.S. GAAP requires management to make judgments, estimates and assumptions. These judgments, estimates and assumptions affect the reported assets and liabilities as well as income and expenses in the financial period.

The estimates and associated assumptions are based on information available when the consolidated financial statements are prepared, historical experience and various other factors which are believed to be reasonable under the circumstances, the results of which form the basis of making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources.

Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising that are beyond the Company’s control. Actual results could differ from those estimates. Estimates are primarily made in relation to revenue recognition, estimation of operating lease incremental borrowing rates, share-based compensation expense, clinical accruals, and deferred tax asset valuation allowances.

Segment reporting

The Company operates inone operating segment: immunotherapies. We generate our revenue fromtwo streams, collaboration revenue and revenue from the sale of therapies. Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision-maker (CODM), the Chief Executive Officer, in making decisions regarding resource allocation and assessing performance. The CODM evaluates financial performance and allocates resources using financial information reported on a company-wide basis.

Foreign currencies

The reporting currency of the Company is U.S. dollars. The functional currency of the Company’s ultimate parent and each subsidiary is based on the currency of the economic environment in which they operate. Assets and liabilities of each subsidiary with a functional currency that differs to the Company’s ultimate parent are translated into sterling and consolidated. The consolidated balances are then converted into U.S. dollars at period-end exchange rates. Revenues and expenses are translated into sterling, and then reported in U.S. dollars using average exchange rates for each reporting period. Translation adjustments are reflected as accumulated other comprehensive (loss) income.

Revenues

Pursuant to Accounting Standards Codification, ASC, Topic 606, the Company recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To determine revenue recognition for agreements, the Company performs the following five steps: (i) identifying the contract with a customer, (ii) identifying the performance obligations in the contract, (iii) determining the transaction price, (iv) allocating the transaction price to the performance obligations, and (v) recognizing revenue when, or as, an entity satisfies a performance obligation. The Company only applies the five-step model to contracts when it is probable that the entity will collect the consideration to which it is entitled in exchange for the goods or services it transfers to the customer.

At contract inception, the Company identifies the goods or services promised within each contract, assesses whether each promised good or service is distinct and determines those that are performance obligations. The Company recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when the performance obligation is satisfied.

Product revenue, net

Product revenue, net, relates to the sale of KIMMTRAK following marketing approval. The Company recognizes revenue at the point in time that control transfers to a customer, which is typically on delivery. The Company also operates under consignment arrangements where control passes when the Company’s distributors take KIMMTRAK out of consignment inventory. The amount of revenue recognized under its arrangements reflects the consideration to which the Company expects to be entitled, net of estimated deductions for rebates, chargebacks, levies, other customer fees and product returns. Estimated revenue deductions are updated at the end of each reporting period using the latest available data. The Company considers whether any part of amounts expected to be received should be constrained to ensure that it is probable that a significant reversal in the cumulative revenue recognized will not occur.

Rebates: Rebates consist of Medicaid and other governmental rebates in the U.S. and other similar programs in Europe. These reserves are recorded as a reduction to revenue in the same period the related revenue is recognized. The Company currently estimates based on internal forecasts of the patient mix, information obtained from claims received and other industry data, and external health coverage statistics.

Chargebacks: Chargebacks for discounts represent the Company’s estimated obligations resulting from contractual commitments for specialty distributors to sell KIMMTRAK to qualifying hospitals at a lower price. For such sales, the specialty distributors charge back the difference between the wholesale acquisition cost and this lower price. The Company estimates chargeback deductions by analyzing sell-through data relating to the hospital mix of onward sales made by specialty distributors.

Product returns: The Company estimates the amount of its product sales that may be returned by its customers and records this in the period the related product revenue is recognized. The Company bases product return liabilities on quantitative information provided by the Company’s distributors.

The Company’s main customers in the United States and Europe are its distributors. These distributors are invoiced at contractual list prices with standard payment terms typically betweenone andtwo months. When the Company has the right to offset chargebacks against accounts receivable and the parties have agreed to settle the payments net, chargebacks are recorded as a reduction in accounts receivable. Other chargebacks, rebates and deductions are recognized in Accrued expenses and other current liabilities and Accrued expenses, non-current in the Consolidated Balance Sheets.

In certain countries, the Company’s customers are hospitals and healthcare providers, where KIMMTRAK is sold through an agent acting on the Company’s behalf. Product revenue also includes amounts for partnered revenue, which is recognised on delivery and transfer of title to Medison Pharma Ltd, or Medison, the Company’s exclusive distributor in certain countries outside the U.S.

Pre-product revenue, net

Pre-product revenue, net, relates to the sale of tebentafusp under a compassionate use and an early access program in France up to September 2022. These programs provided patients with access to tebentafusp before KIMMTRAK became available as a marketed product in France. Pre-product revenue is recognized on delivery of tebentafusp to healthcare providers, which is the point in time when control is transferred. Such revenue is recognized net and represents the prices set by the Company that are expected to be retained after estimated deductions and to the extent that it is probable that a significant reversal of revenue will not occur. These variable estimated deductions include both an estimate of government rebates and levies payable, and an estimate of returns in the case of expiry, damage or other instances. The total rebate payable by the Company is dependent on the outcome of price negotiations with the French government, and the Company makes an estimate of these amounts payable each reporting period based on available pricing information and the applicable regulations.

The estimates for rebates and returns deducted from pre-product revenue are recorded in the period the related pre-product revenue is recognized and are classified under Accrued expenses and other current liabilities and Accrued expenses, non-current in the Consolidated Balance Sheets. Costs of pre-product revenue are expensed when incurred and include costs associated with previous manufacturing of tebentafusp and other third-party selling expenses. Previous manufacturing costs were recognized in research and development (R&D) expenses at the time, and third-party selling expenses are recognized within Selling and administrative expenses.

We analyze our collaboration agreements to assess whether they are within the scope of ASC Topic 808, Collaborative Arrangements (“ASC 808”) to determine whether such arrangements involve joint operating activities performed by parties that are both active participants in the activities and exposed to significant risks and rewards that are dependent on the commercial success of such activities. To the extent the arrangement is within the scope of ASC 808, we assess whether aspects of the arrangement between us and the collaboration partner are within the scope of other accounting literature. If we conclude 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 Topic 606, Revenue from Contracts with Customers (“ASC 606”). 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 share of the allocation of the shared costs incurred with respect to the jointly conducted activities as a component of the related expense in the period incurred. Pursuant to ASC 606, a customer is a party that has contracted with an entity to obtain goods or services that are an output of the entity’s ordinary activities in exchange for consideration. Under ASC 606, an entity recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services. If we conclude a counterparty to a transaction is not a customer or otherwise not within the scope of ASC 606 or ASC 808, we consider the guidance in other accounting literature as applicable or by analogy to account for such transaction. We determine the units of account within the Collaboration Agreement utilizing the guidance in ASC 606 to determine which promised goods or services are distinct. In order for a promised good or service to be considered “distinct” under ASC 606, the customer can benefit from the good or service either on its own or together with other resources that are readily available to the customer (i.e., the good or service is capable of being distinct), and the entity’s promise to transfer the good or service to the customer is separately identifiable from other promises in the contract (i.e., the promise to transfer the good or service is distinct within the context of the contract). The Company has concluded that it has customer relationships with its collaborators and therefore, the Company follows the guidance in ASC Topic 606, Revenue from Contracts with Customers.

Under ASC 606, the Company determines whether milestones or other variable consideration should be included in the transaction price, whether performance obligations are satisfied at a point in time or over time, and the appropriate method of measuring progress for the purposes of revenue recognition for performance obligations satisfied over time.

Under each of its collaboration agreements, the Company granted rights to technology with respect to the development of specified targets and the commercialization of future product candidates for such targets defined in the respective agreements. In addition, the Company was required to perform R&D services, participate on a joint steering committee and the agreements also provided parties with the option to obtain exclusive rights to the associated intellectual property license. The Company assesses whether each promised good or service is distinct for the purpose of identifying the performance obligations in the contract. Promised goods and services are considered distinct provided that: (i) the customer can benefit from the good or service either on its own or together with other resources that are readily available to the customer (that is, the good or service is capable of being distinct) and (ii) the entity’s promise to transfer the good or service to the customer is separately identifiable from other promises in the contract (that is, the promise to transfer the good or service is distinct within the context of the contract). The Company determined that these promises represented specialized, combined performance obligations, which were satisfied over time and deemed fully satisfied on completion of the development services for the specified period and when the collaborator is contractually entitled to benefit from the exclusive rights to the associated intellectual property license either through the collaborator exercising an option to do so or at the Company’s election. Further, the Company determined that their collaborators cannot benefit from the associated intellectual property licenses separately from the R&D activities and participation on the joint steering committee because these services are specialized and rely on the Company’s expertise such that these activities are highly interrelated and therefore not distinct.

The Company estimates the transaction price based on the amount it expects to be entitled to for transferring the promised goods or services in the contract. The consideration may include fixed consideration and variable consideration. At the inception of each arrangement that includes variable consideration, the Company evaluates the amount of potential payment and the likelihood that the underlying constraint will be released. Under certain of the Company’s collaboration agreements, development milestones and reimbursements of research and development costs incurred either in excess of a defined amount, or in accordance with a cost sharing agreement are considered variable consideration.Variable consideration may be constrained and is included in the transaction price only to the extent that it is probable that a significant reversal in the amount of the cumulative revenue recognized will not occur in a future period.

Revenue is recognized as the programs progress through stages of R&D using an estimate of percentage completion which takes into consideration the estimated timelines required to satisfy the performance obligation and the time taken since program nomination. The determination of the percentage of completion requires the estimation of when the performance obligation will be completed, based on the latest project plan and discussions with project teams and will consider progress achieved to date, historical experience on similar programs and other internal factors as may be available.

The difference between the cumulative revenue recognized based on the previous estimate and the revenue recognized based on the revised estimate is recognized as an adjustment to revenue in the period in which the change in estimate occurs.

The Company’s collaboration revenue arrangements have standard payment terms and do not contain a significant financing component.

Deferred revenue

The Company’s deferred revenue as of December 31, 2023 and 2022 is related to the collaboration agreements further outlined below in Note 3. “Revenue.” Following termination of its collaborations with GSK and Eli Lilly, and the agreement with Genentech in 2023 to close the IMC-C103C trial, the Company currently expects no further revenue or deferred revenue from its collaborations.

The Company has a revenue partnership with Medison relating to the supply and distribution of KIMMTRAK and is classified within Product revenue in accordance with ASC 606. The Company’s deferred product revenue relates to a non-refundable upfront receipt from Medison under an amended agreement entered into in November 2022. The Company determined that this receipt relates to the distribution of KIMMTRAK in South America and assessed the Company has a single performance obligation to provide KIMMTRAK to Medison for onward sale under exclusive distribution license. The deferred revenue is expected to be released with the sale of products following regulatory approval in the territory.

Accounts receivable

Accounts receivable includes amounts invoiced or contractually accrued where only the passage of time is required before payment is received under the Company’s revenue arrangements. Such receivables principally relate to KIMMTRAK sales. An allowance for lifetime expected credit losses on accounts receivable is measured using historical credit loss experience, conditions at the end of each reporting period, and reasonable and supportable forecasts that affect collectability. Expected credit losses at the end of December 31, 2023 and 2022 were immaterial.

Inventory

Inventory includes KIMMTRAK manufactured for commercial sale, items in the process of being manufactured for sale, and materials to be used in the manufacturing process for such sale. The principal costs in manufacturing the Company’s inventory are raw materials, external manufacturing costs, and other costs incurred in bringing inventory to its location and condition prior to sale.

Inventory is recorded at weighted average cost and presented as an asset in the Consolidated Balance Sheets at the lower of cost and net realizable value. The Company assesses whether an expense should be recognized as a result of writing down inventory values at each reporting period for excess inventory at risk of expiry. Such expenses are recorded as a component of Cost of product revenue in the Consolidated Statements of Operations and Comprehensive Loss in the period during which they are first identified.

The Company records inventory costs for potential products within R&D expenses until regulatory approval is considered probable, after which the Company capitalizes subsequent costs related to the production of inventories. Certain inventory can be used for clinical purposes or for commercial products, and the Company records such items within R&D expenses at the point that the vials are assigned for clinical use.

Cost of product revenue

Cost of product revenue represents production costs including raw materials, external manufacturing costs, and other costs incurred in bringing inventory to its location and condition prior to sale. Overheads and internal costs of product revenue are minimal under our manufacturing arrangements. Cost of product revenue may also include write-off costs and provisions related to excess or obsolete inventory.

Research and development (R&D) expense

R&D costs are expensed as incurred and include (i) employee-related expenses, including salaries, benefits, travel and share-based compensation expense for employees engaged in R&D functions; (ii) external R&D expenses incurred under arrangements with third parties, such as contract research organization (CRO) agreements, investigational sites and consultants; (iii) the cost of acquiring, developing and manufacturing clinical study materials, including the cost of consultants and contract manufacturing organization (CMOs); (iv) costs associated with preclinical and clinical activities and regulatory operations; (v) costs incurred in development of intellectual property, (vi) and depreciation and R&D facilities costs.

The Company estimates accrued expenses at each balance sheet date based on facts and circumstances known at that time. These estimates are based on reviews of open contracts, reports provided by the CROs and internal reviews to estimate the level of service performed and the associated cost incurred for those services when the Company has not yet been invoiced or otherwise notified of the actual cost. In accruing clinical trial expenses, the Company estimates the time period over which services will be performed and the level of effort to be expended in each period. If the actual timing of the performance of services or the level of effort varies from the estimate made, the expense is adjusted accordingly. Where payments made to CROs or other parties exceed the level of services provided, a prepayment is recorded in the Consolidated Balance Sheets.

Share-based compensation

The Company operates equity-settled, share-based compensation plans whereby employees and directors are granted options to purchase shares in the Company. The fair value of grants is expensed over the vesting period, which is the period in which the services are received. The majority of the Company’s awards have graded vesting schedules, and the expense for these options is recognized over the requisite service period for each separately vesting portion as if the grant of options, in substance, represented multiple awards. The grant date fair value of options is calculated using the Black Scholes valuation model.

Estimation of fair value requires judgement, including assumptions about the expected term of share-based options and expected volatility, which are used to determine the fair value of the Company’s options granted. The expected term is based on the Company’s assessment of the period within which participants are expected to exercise options, which requires consideration of employee groups, expected employee service, and other internal factors, and the degree to which these are expected to shorten the term of options in comparison to contractual expiry dates. Estimated expected volatility is based on a combination of the Company’s share price volatility since its IPO and the historical data of a group of comparator companies. The expected volatility reflects the assumption that the historical volatility over a period similar to the life of the awards is indicative of future trends, which may not necessarily be the actual outcome.

The Company does not assume dividend payments for the purposes of estimating fair value and uses a zero-coupon U.S. Treasury yield curve applicable for the period of the expected term to form an estimate of the risk-free rate.

Forfeitures expected to occur are estimated considering both market and company-specific data and the available internal information at the end of each reporting period.

Income tax

Income tax includes components of current and deferred tax and is recognized in the Consolidated Statements of Operations and Comprehensive Loss.

Current tax is the expected tax payable or receivable on the taxable income or loss for the current or prior periods using tax rates enacted at the balance sheet date.

Deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial statement carrying amount and the tax bases of assets and liabilities at the applicable tax rates and for operating loss and tax credit carryforwards. A valuation allowance reduces deferred tax assets in the Consolidated Balance Sheets to reflect the amount that is more likely than not to be realized. The Company evaluates the realizability of its deferred tax assets at each reporting period and adjusts the valuation allowance accordingly, considering income forecasts, availability of carrybacks, taxable temporary differences and other factors affecting the realization of deferred tax assets.

The Company accounts for uncertain tax positions in accordance with the provisions of ASC 740. When uncertain tax positions exist, the Company recognizes the tax benefit of tax positions to the extent that the benefit will more likely than not be realized. The determination as to whether the tax benefit will more likely than not be realized is based upon the technical merits of the tax position as well as consideration of the available facts and circumstances. As of December 31, 2023 and 2022, the Company hasnot recorded any provision for uncertain tax positions.

Changes in the Company’s estimate of income tax positions relating to the more-likely-than-not threshold are recognized in the first subsequent period following the threshold being met or ceasing to be met.

R&D expenditure credits

The Company receives R&D expenditure credits to compensate for its research activities, which are recognized when it is more likely than not the Company will meet the terms for receiving and realizing the benefit of the credits. Recognition is on a systematic basis over the periods in which the Company recognizes costs for which the credits are intended to compensate (i.e. qualified expenses).

The Company benefits in the United Kingdom from His Majesty’s Revenue & Customs (“HMRC”) R&D expenditure (“RDEC”), which provides relief against U.K. corporation tax. Based on criteria established by HMRC a portion of the Company’s expenditures incurred on R&D activities are eligible for RDEC relief. The Company recognizes the benefit as a reduction of the related expenses included in R&D costs on the Consolidated Statements of Operations and Comprehensive Loss. Historically, the Company satisfied the definition of a Small and Medium-sized Enterprise (“SME”) and was able to surrender some of its U.K. tax losses for a cash rebate of up to 33.35% of expenditures related to eligible R&D projects. The Company exceeded the size limit thresholds and no longer qualifies for tax relief under the U.K. SME R&D regime in 2023.

Leases

The Company assesses whether contracts represent or contain leases at inception by determining whether the Company has the right to use, or control the use of, an identified asset from which it can obtain substantially all the economic benefits for a defined period.

The Company leases its corporate headquarters in the United Kingdom, where its facilities contain R&D, laboratory and office space of approximately 123,000 square feet. In addition, the Company leases approximately 20,000 square feet of office space in the United States, and small offices in Ireland and Switzerland. The leases in the United Kingdom expire between 2037 and 2043. Estimates of the term consider non-cancellable periods and include options to extend or terminate the lease when it is reasonably certain that the Company will exercise such options.

Operating lease right-of-use assets and liabilities are recognized at the lease commencement date. Right-of-use assets are initially measured at cost, representing the initial amount of the lease liability and any initial direct costs incurred, with a reduction for any lease incentives received. Lease liabilities are initially measured at the present value of the lease payments.

Since the rate implicit in leases is not readily determinable, the Company uses available information to determine its incremental borrowing rates, which represent the rate of interest that the Company would have to pay to borrow on a collateralized basis over a similar term for an amount equal to the lease payments in a similar economic environment.

Fixed lease components include rental payments at inception and termination costs for leases not reasonably certain of extension. Such components are accounted for as part of the right-of-use assets and lease liabilities and recognized on a straight-line basis over the lease term. Variable lease components include subsequent indexation-related rental increases. If such variable components do not coincide with a remeasurement of the lease term, the additional costs are recorded as a variable component of the lease expense in the Consolidated Statements of Operations and Comprehensive Loss as incurred. Non-lease components such as maintenance costs and service charges are separated from lease components and recognized separately in the Consolidated Statements of Operations and Comprehensive Loss.

Operating lease costs are allocated to R&D and Selling, general and administrative expenses in the Consolidated Statements of Operations and Comprehensive Loss. The related lease cash flows are categorized under Net cash used in operating activities in the Consolidated Statements of Cash Flows. The Company elects not to recognize right-of-use assets and lease liabilities for short-term leases with a term of 12 months or less containing no repurchase options reasonably certain of exercise, and the expense for these short-term leases is immaterial. The Company does not have financing leases.

Property and equipment

Property and equipment are stated at cost net of accumulated depreciation and impairment losses. The Company expenses repairs and maintenance related to property and equipment in the Consolidated Statements of Operations and Comprehensive Loss when the costs are incurred.

Depreciation is charged to the Consolidated Statements of Operations and Comprehensive Loss on a straight-line basis over the estimated useful lives of assets as follows:

Impairment of long-lived assets

The Company periodically assesses whether circumstances indicate that the estimated remaining useful life of its long-lived assets should be changed or that the carrying value of such assets may be impaired. The Company didnot identify any such circumstances or recognize any impairment charges for the years ended December 31, 2023, 2022 and 2021.

Cash and cash equivalents

Cash and cash equivalents comprise cash balances and short-term money market funds with an original maturity of less than three months. Money market funds are presented at fair value in the Consolidated Balance Sheets.

Concentrations of credit risk and off-balance sheet risk

Financial instruments that potentially subject the Company toconcentrations of credit risk are accounts receivable, cash equivalents and deposits held with banks and financial institutions. Cash, cash equivalents and deposits are maintained with high-quality financial institutions in Europe and the United States. The Company has not experienced any credit losses with such institutions and has incurred an immaterial amount of losses in relation to its accounts receivable from customers The Company has no financial instruments with off-balance sheet risk of loss. As of December 31, 2023 and 2022, the amounts of expected credit losses recognized in the Consolidated Balance Sheets were not material.

Interest-bearing loans and borrowings

The Company offsets issuance costs against the initial value of the debt on the Company’s Consolidated Balance Sheets and amortizes the costs over the loan term using the effective interest method. Such costs are recognized under Interest expense in the Consolidated Statements of Operations and Comprehensive Loss and under Accrued expenses on the Consolidated Balance Sheets.

Fair value measurements

Where financial and non-financial assets and liabilities are measured at fair value, the Company uses appropriate valuation techniques for which sufficient data are available to measure fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs.

Fair values are categorized into different levels in a fair value hierarchy based on the inputs used in the valuation techniques as follows:

As of December 31, 2023 and 2022, the Company held $331.0 million and $191.9 million, respectively, of money market funds required to be measured at fair value on a recurring basis. The fair value of these cash equivalents is based on quoted prices from active markets (Level 1 inputs). The Company recognizes transfers between levels of the fair value hierarchy at the end of the reporting period during which the changes have occurred. There wereno transfers between levels of fair value hierarchy in the years ended December 31, 2023 and 2022. Other financial instruments, although not recorded at fair value on a recurring basis, include cash, accounts receivable, accounts payable and debt obligations.

The fair value of borrowings under the Pharmakon Loan Agreement (disclosed in Note 7. “Non-current interest-bearing loans and borrowings”) were based on Level 2 inputs, which include observable inputs estimated using discounted cash flows and market-based expectations for interest rates, credit risk, and the contractual terms of debt instruments. After initial recognition, borrowings are measured at amortized cost using the effective interest method.

Net loss per share

Basic and diluted net loss per share is calculated by dividing the net loss for the period by the weighted average number of ordinary shares outstanding during the period. The dilutive effect of potential ordinary shares through share options are considered to be anti-dilutive as they would decrease the net loss per share and are therefore excluded from the calculation of diluted net loss per share.

Recently issued and recently adopted accounting pronouncements

In November 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2023-07, Segment Reporting: Improvements to Reportable Segment Disclosures. This ASU modified the disclosure and presentation requirements primarily through enhanced disclosures of significant segment expenses and clarified that single reportable segment entities must apply Topic 280 in its entirety. This guidance is effective for the Company for the year beginning January 1, 2024, with early adoption permitted. The amendments should be applied retrospectively to all prior periods presented in the financial statement. We are currently assessing the impact of this guidance on our disclosures.

In December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures. This ASU improves the transparency of income tax disclosure by requiring consistent categories and greater disaggregation of information in the rate reconciliation, and income taxes paid disaggregated by jurisdiction. This guidance is effective for the Company for the year beginning January 1, 2025, with early adoption permitted. The amendments should be applied on a prospective basis, with retrospective application permitted. We are currently assessing the impact of this guidance on our disclosures.

3. Revenue

Product revenue, net

During the year ended December 31, 2023, the Company recognized $238.7 million (2022: $130 million) of net product revenue relating to the sale of KIMMTRAK primarily in the United States and Europe after estimated deductions for rebates, chargebacks, other customer fees and returns, which are recognized in Accrued expenses and other current liabilities as set out in the Company’s accounting policies.

Pre-product revenue, net

There was no pre-product revenue during the year ended December 31, 2023, following the transition to the commercial sale of KIMMTRAK in France in the second half of 2022. During the year ended December 31, 2022 and 2021, the Company recognized $10.7 million and $4.1 million of net pre-product revenue, respectively, relating to the sale of tebentafusp under compassionate use and early access programs in France after estimated deductions for rebates and returns, which are recognized in Accrued expenses and other current liabilities as set out in the Company’s accounting policies.

The Company recognized revenues from four customers accounting for 29%,26%,17% and 16% of the Company’s total revenue from the sale of therapies for the year ended December 31, 2023, five customers accounting for 26%,25%,17%,17% and 12% of the Company’s total revenue from the sale of therapies for the year ended December 31, 2022, andone customer accounted for all revenue from the sale of therapies for the year ended December 31, 2021.

Net product revenue from the sale of KIMMTRAK, and net pre-product revenue are presented by country / region based on the location of the end customer below (in thousands).

Net product revenue for the year ended December 31,2023 includes $3.6 million (2022: $1.9 million, 2021: none) of partnered revenue under our agreement with Medison, split between our European and international markets.

Of the Company’s collaboration customers, Eli Lilly and Genentech are based in the United States. GSK is based in the United Kingdom. The revenue for Genentech represented more than 10% of the Company’s total revenue during 2022. During 2021, the revenue for GSK and Genentech represented more than 10% of the Company’s total revenue.

Accounts receivable from contracts with customers

Accounts receivable, net as of December 31, 2023 and 2022 were as follows (in thousands):

As of December 31, 2023, four customers individually accounted for approximately 31%,26%,19% and 16% of accounts receivable associated with the Company’s revenue from the sale of therapies, as compared to 27%,25%,23% and 20% as of December 31,2022. As of December 31,2023 and 2022, the amount of expected credit losses on accounts receivable was not material.

Accruals for rebates and chargebacks

Current and non-current accruals for rebates, chargebacks and returns as of December 31, 2023 and 2022 were as follows (in thousands):

The adjustments related to prior period sales in the year ended December 31, 2023 was due to changes in estimates primarily related to the pricing agreement signed for Germany in August 2023.

Deferred revenue

For the year ended December 31,2023, a total of $7.8 million of revenue recognized was included in Deferred revenue as of January 1, 2023 (2022: $33.0 million ; 2021: $29.1 million).

Deferred revenue in the Consolidated Balance Sheets is primarily in respect of the upfront fee and development milestone consideration received from the various collaboration agreements in advance of services performed by the Company.

Non-current deferred revenue in the Consolidated Balance Sheet as of December 31, 2023, relates to a revised distribution agreement with Medison entered into in November 2022. Under the revised agreement, the Company received a non-refundable payment of $5.0 millionin exchange for granting Medison exclusive distribution rights in South America. The Company has determined that the deferred revenue relates to the Company’s single, combined performance obligation to supply KIMMTRAK to Medison and to grant Medison the exclusive right to distribute KIMMTRAK in South America. The Company expects to recognize this revenue with the sale of products following regulatory approval in the territory. The Company estimates that Product revenue recognition of this non-current deferred revenue will commence after one year or later.

Revenue recognized relating to performance obligations satisfied in previous years waszero for all years presented.

Under the Genentech agreement signed in November 2018, the Company received aggregate non-refundable payments totaling $100 million consisting of an initial upfront payment of $50 million and $50 million paid upon an investigational new drug filing for the first clinical trial of the product candidate compound, in exchange for granting Genentech rights to co- develop/co-promote the Company’s IMC-C103C program and the co-exclusive worldwide license to the Company’s intellectual property rights in MAGE A4 soluble TCR bispecific therapeutic candidate compounds. The Company was responsible for development of the IMC-C103C program over the period of time to estimated completion of the Phase 1 clinical trial, with costs being shared equally with Genentech.

In February 2023, as the Company elected to withdraw from co-funding with Genentech the MAGE-A4 HLA-A02 program, IMC-C103C, Genentech acquired an exclusive worldwide license to the MAGE-A4 HLA-A02 soluble TCR bispecific therapeutic candidate compounds and shall be fully responsible for all further development and commercialization of such candidate compounds, at its expense.

The transaction price was recorded as deferred revenue on receipt in November 2018 and allocated to a single combined performance obligation covering the granting of the co-exclusive worldwide license, the provision of development services and participation on a joint steering committee. This deferred revenue is recognized as the Company satisfies the combined performance obligation over the estimated period of time to when the Company has completed substantially all of its responsibilities associated with its withdrawal from the co-funding and the Phase I clinical trial. R&D costs reimbursed under the 2018 Genentech Agreement are considered variable consideration and not recognized in the transaction price until it is probable that the recognition of such revenue will not be reversed.

During the year ended December 31, 2023, the Company recognized $10.7 million of revenue relating to the 2018 Genentech Agreement (2022: $24.5 million; 2021: $24.0 million). The revenue recognized represents both deductions from deferred revenue and R&D costs reimbursed, predominantly for clinical trial costs. Such reimbursements arise in order to ensure that R&D costs are shared equally in accordance with the 2018 Genentech agreement. The revenue recognized in 2023 represents the remaining transaction price relating to the unsatisfied performance obligation as of December 31, 2022, and the unsatisfied performance obligation was expected to be fully recognized within one year. As of December 31, 2023, the Company determined its performance obligation under its collaboration with Genentech was complete. The Company determined achieving commercialization milestones and royalties to be unlikely and were excluded from the transaction price as of December 31, 2023, 2022 and 2021, therefore any future milestones will be recorded when they become probable of being achieved.

Lilly Collaboration

In July 2014, the Company entered into a development and license agreement with Eli Lilly, or the Lilly Agreement, pursuant to which the Company and Eli Lilly agreed to collaborate in the development, manufacture and commercialization of soluble TCR bispecific therapeutic compounds. Under the Lilly Agreement, Eli Lilly paid an initial non-refundable upfront fee payment of $45 million in exchange for options tothree targets. Following termination of the agreement, Eli Lilly no longer has any rights to the targets or the ability to nominate any further targets under the initial agreement.

The transaction price, equal to the $45.0 million upfront payment was recorded as deferred revenue on receipt and was allocated to each target based on the relative standalone selling price. Each target had a single combined performance obligation covering the provision of R&D services and participation on a joint steering committee. This deferred revenue was recognized as the Company satisfied the combined performance obligations over the estimated period of time to when Eli Lilly could exercise the option to obtain exclusive co-development/co-promotion rights to the target and the Company could opt-out of the co-development of the target.

The Company released the remaining deferred revenue attributed to the third target under the Lilly Collaboration after the parties agreed to terminate the agreement in March 2022. No further revenue under the collaboration has been recognized.

During the year ended December 31, 2023, the Company recognizedno revenue relating to the Lilly Agreement (2022: $9.2 million; 2021: no revenue).

GSK Collaboration

In June 2013, the Company entered into a collaboration and license agreement with GSK pursuant to which the Company and GSK agreed to collaborate in the development of soluble TCR bispecific therapeutic compounds (the “GSK Agreement”). Under the GSK Agreement, the Company granted GSK the right to nominate up tofour exclusive targets. The first target, GSK01/NY-ESO, was nominated at the time of execution of the GSK Agreement. A second target was nominated in July 2017. GSK subsequently had no further ability to nominate additional targets under the terms of the agreement. Following a review of the targets in the year ended December 31, 2021, the parties elected not to proceed further with the second target and the GSK Agreement was terminated in January 2022. The transaction price at the time the agreement was entered was equal to the total payments received of $27.8 million.

The total payments were recorded as deferred revenue on receipt and were allocated to each target based on the relative standalone selling price. Each target had a single combined performance obligation covering the provision of R&D services and participation on a joint steering committee. This deferred revenue was recognized as the Company satisfied the combined performance obligation over the estimated period that GSK could exercise the option to obtain an exclusive worldwide license for the therapeutic candidate compounds. R&D costs reimbursed under the GSK Agreement were considered variable consideration and assessed at contract inception and each subsequent reporting period and not recognized in the transaction price until it was probable that the recognition of such revenue would not be reversed.

During the year ended December 31, 2023, the Company recognizedno revenue relating to the GSK Agreement (2022: no revenue; 2021: $8.4 million) following termination of the agreement in 2021.

Other information

Substantially all of the Company’s assets are held in the United Kingdom.

The total of non-current assets other than financial instruments and deferred tax assets located in the United Kingdom as of December 31, 2023 is $55.4 million (2022: $43.7 million). The total located in the United States is $1.8 million (2022: $2.7 million).

4. Prepaid expenses and other current assets

Prepaid expenses and other current assets consist of the following (in thousands):

Included within other current assets are amounts paid in advance to clinical research organizations that are expected to be received through services rendered or repaid within 12 months.

5. Property and equipment, net

Property and equipment, net, consists of the following (in thousands):

Depreciation expense for the year ended December 2023, 2022 and 2021 was $4.1 million, $5.3 million and $7.6 million, respectively.

6. Accrued expenses and other current liabilities

Accrued expenses and other current liabilities consists of the following (in thousands):

See Note 3 “Revenue” for a detailed breakdown of Rebates, chargebacks, other customer fees and returns.

Clinical accruals primarily represent unbilled work undertaken by Contract Research Organizations (CRO’s) as part of our clinical programs.

7. Non-current interest-bearing loans and borrowings

On November 8, 2022, the Company entered into the Pharmakon Loan Agreement, providing for term loans to the Company in an aggregate principal amount of up to $100 million to be funded intwo tranches. The first tranche of $50 million bears interest at a fixed rate of 9.75%, which is payable quarterly in arrears, with payments commencing in 2023. The Company used the proceeds after drawing down the first tranche of $50 million under the Pharmakon Loan Agreement to repay and close the Company’s previous loan with Oxford Finance. Thereafter no further amounts may be borrowed pursuant to the loan agreement with Oxford Finance, and no further amounts are due. The total payments made for the exit fee on the loan with Oxford Finance and attributable fees to the agreement with Pharmakon were $3.8 million. The Company is also required to pay a further fee of $1.25 million at the latest by June 2024, regardless of whether it elects to draw down on the second $50 m tranche under the Pharmakon Loan Agreement. The second tranche, consisting of one or two term loan(s) of up to $50 million is available until June 30, 2024, and may be advanced at the Company’s election. The Pharmakon loan agreement has a maturity of November 8, 2028.

As of December 31, 2023 and 2022, debt fees and issuance costs incurred with loans under the Pharmakon agreement were zero and $2.2 million, respectively, and are being amortized as interest expense on an effective interest rate method over the remaining term of the loan. As of December 31, 2023 and 2022, the fair value of the loan was $46.1 million and $47.6 million, respectively. These values were determined based on prevailing interest rates as of the balance sheet dates and are classified as Level 2 within the fair value hierarchy.

The Company has pledged its total assets of $597.0 million, presented in the Consolidated Balance Sheet as of December 31, 2023 as collateral for the $50 million loan drawn down under the Pharmakon Loan Agreement. In the event the Company was unable to repay the loan, these pledged assets would instead be used to repay the outstanding amount of loan and interest.

The Company’s borrowings under the Pharmakon Loan Agreement, contain customary representations and warranties and customary affirmative and negative covenants, including limitations on the Company’s ability to dispose of assets, enter into merger, consolidation or acquisition transactions, and incur additional debt. The Company monitors these covenants and is in compliance.

The Company originally entered into its loan and security agreement with Oxford Finance in November 2020 for the provision of up to $100 million debt financing to be provided under three tranches, of which the first tranche of $50 million was received on signing the agreement. Borrowings under the Oxford Finance Agreement bore interest at an annual rate equal to LIBOR plus 8.85%, with a minimum rate of 9.01% and a maximum rate of 12.01% and were repayable in monthly interest-only payments. The Company recorded a loss on extinguishment of the debt of $1.7 million within Other (expense) income, net in the Company’s Consolidated Statements of Operations and Comprehensive Loss for the year ended December 31, 2022, representing the difference between the reacquisition price and the net carrying amount of the outstanding loans extinguished.

As of December 31, 2023, future principal payments due are as follows (in thousands):

8. Leases

The Company’s costs as a lessee for the years ended December 31, 2023, 2022 and 2021 were as follows (in thousands):

Supplemental cash flow information related to leases for the years ended December 31, 2023, 2022 and 2021 were as follows (in thousands):

The weighted average remaining lease term and weighted average discount rate of operating leases at December 31, 2023 and 2022 were as follows:

The maturities of operating lease liabilities as of December 31, 2023 are as follows (in thousands):

In October 2023, the Company entered into a lease agreement for approximately 19,000 square feet of office space in the United States. The lease is expected to commence in July 2024 and expire in July 2035, although it may be terminated earlier at the Company’s election. The Company will recognize an initial right-of-use asset and associated lease liability of $5.5 million and $5.5 million, respectively, at lease inception.

9. Shareholders’ Equity

The Company had 49,725,649 and 48,088,346 ordinary shares issued and outstanding as of December 31, 2023 and 2022, respectively, with a par value of £0.002 per share. In addition there are 5,793,501 deferred shares as of December 31, 2023 and 2022 which are £0.0001 per share. The Company has reserved 4,172,055 authorized shares for future issuance under the Equity Incentive Plan (“EIP”). See Note 10 “Share-based compensation” for a description of the EIP.

Included within ordinary shares at December 31, 2023 and 2022 are 1,714,650 and 2,164,960 of ordinary shares withno voting rights, respectively. All ordinary shares are entitled to receive dividends and assets available for distribution. Deferred shares haveno voting rights, are not entitled to dividends and are only entitled to receive amounts paid up on the deferred shares out of assets available for distribution after all payments have been made to holders of ordinary shares for amounts paid up or payable on such shares. No dividends were paid or declared in the years ended December 31, 2023, 2022 and 2021.

On February 3, 2021, the Company passed an ordinary resolution which authorizes the Directors, or any duly authorized committee of the directors, to allot shares in the Company or grant rights to subscribe for or convert any security into shares in the Company up to an aggregate nominal value of £150,000 for a period expiring five years (up to February 3, 2026). This amount may be renewed, varied or revoked by the Company in a general meeting.

Private investment in public equity (“PIPE”)

In July 2022, the Company issued and sold 2,000,000 ADSs, with each ADS representingone ordinary share of nominal value £0.002 and 1,733,333 non-voting ordinary shares of nominal value £0.002 each, to certain institutional accredited investors and existing shareholders (the “Investors”) at a purchase price of $37.50 per ADS / non-voting ordinary share pursuant to a securities purchase agreement with such Investors dated July 15, 2022, generating net proceeds of $139.5 million.

IPO and Impact of Corporate Reorganization

On January 7, 2021, Immunocore Holdings Limited was incorporated as a private limited company under the laws of England and Wales with nominal assets and liabilities for the purpose of becoming the holding company of Immunocore Limited.

On January 22, 2021, each holder of series A preferred shares, series B preferred shares, series C preferred shares, Growth Shares and ordinary shares in Immunocore Limited, sold and transferred their shares to Immunocore Holdings Limited in exchange for 100 shares of the same class at par value of 0.01 pence in Immunocore Holdings Limited. Following this share exchange, Immunocore Limited became a wholly owned subsidiary of Immunocore Holdings Limited.

All Immunocore Limited share options granted to directors and employees under share option plans that were in existence immediately prior to the reorganization were exchanged for share options in Immunocore Holdings Limited on a one-for-100 basis.

Following the share exchange, Immunocore Limited undertook a reorganization of its share capital to re-designate its series A preferred shares, series B preferred shares, series C preferred shares and Growth Shares into a single class of ordinary shares and subsequently undertook a share capital reduction, cancelling all amounts standing to the credit of its share premium account and cancelling 6,414,412 ordinary shares.

On February 1, 2021, Immunocore Holdings Limited was re-registered as a public limited company (“plc”) with the name Immunocore Holdings plc. The Company’s consolidated assets and liabilities immediately following the reorganization were the same as Immunocore Limited immediately before the reorganization.

Effective immediately prior to completion of the IPO, the Company re-organized its share capital whereby all of the outstanding series A preferred shares, series B preferred shares and series C preferred shares were re-designated as ordinary shares of the Company on aone for one basis. A total of 16,632,540 of the ordinary shares, following the re-designation of the series C preferred shares, were converted to a separate class of non-voting ordinary shares. A total of 6,250,000 Growth Shares were re-designated of which 4,324,000 of the Growth Shares were re-designated as deferred shares of the Company. The remaining 1,926,000 Growth Shares were re-designated in the ratio ofone ordinary share, issued for non-cash consideration andthree deferred shares.

Immediately following these re-designations referred to above every 20 ordinary shares of £0.0001 and every 20 non-voting ordinary shares of £0.0001 in the Company were consolidated intoone ordinary share and one non-voting ordinary share of £0.002.

On February 9, 2021, the Company completed an IPO of 11,426,280 ADSs representing 11,426,280 ordinary shares with a nominal value of £0.002. In addition to the ADSs sold in the IPO, the Company completed the concurrent sale of an additional 576,923 ADSs, representing 576,923 ordinary shares with a nominal value of £0.002 per ordinary share, at the initial offering price of $26.00 per ADS in a private placement to the Gates Foundation. The total net proceeds after deductions for underwriting discounts, commissions and other attributable offering expenses for the IPO and concurrent private placement were $286.9 million.

Under the terms of the Company’s agreement with the Gates Foundation, the Company is required to develop, manufacture and commercialize soluble TCR bispecific therapeutic candidates targeted to mutually agreed neglected diseases, currently HIV, with the potential to treat people at an affordable price in developing countries. In the event of certain defaults by the Company under the agreement, which the Company considers to be within its control, the Gates Foundation has the right to sell, or require the Company to buy back, any of the shareholdings in the Company held by the Gates Foundation. In such an event, if within 12 months after such redemption or sale, the Company experiences a change in control at a valuation of more than 150% of the valuation used for the redemption or the sale of the shares, the Company has agreed to pay the Gates Foundation compensation equal to the excess of what it would have received in such transaction if it still held its shares at the time of such change of control over what it received in the sale or redemption of its shares.

10. Share-based compensation

At the time of the Company’s corporate reorganization and subsequent IPO in February 2021, previously awarded options were re-designated to reflect the equivalent number of options and exercise prices on the basis of the Company’s new shares. References in this note to options granted prior to the Company’s reorganization are made on this redesignated basis. Details of modifications in the year ended December 31, 2021 impacting the fair value of previously awarded options are provided further below under “Pre-IPO Grants”.

The following table shows the total share-based compensation expense recorded in the Consolidated Statements of Operations and Comprehensive Loss (in thousands):

Equity Incentive Plan (“EIP”)

Under the Company’s EIP, the Company may grant market value options, share appreciation rights or restricted shares, restricted share units, performance share units and other share-based awards to the Company’s employees. The Company’s board members and consultants are eligible to receive awards under the Company’s non-employee sub-plan to the EIP. Awards may be granted at such times as the Company may determine, but will generally be granted annually following the end of the financial year. Awards vest at such times and as specified in the award agreement, typically being over afour-year period although the Company retains the discretion to provide for other vesting schedules. If the participant violates the non-competition, non-solicitation, confidentiality or other similar restrictive covenant provisions of any employment contract, the right of the participant to receive these shares on vesting shall terminate immediately. The Company maintains discretion over the type and terms of equity awards granted. All awards lapse on the tenth anniversary from the date of grant, and they are not subject to performance conditions or entitled to dividends.

During the year ended December 31,2023 and 2022, options over a total of 853,863 shares and 1,507,581 shares respectively were awarded under the Company’s EIP. Of the above awards in the year ended December 31, 2023, there were 43,380 options awarded to our non-executive directors, which vest on the first anniversary from the date of grant. In fiscal 2022, there were 66,972 non-executive options awarded,56,704 of which vestedone year from the date of grant and 10,268 of which vest monthly over athree-year period.

Pre-IPO Grants

Prior to its IPO, the Company granted a limited number of options to employees and directors. These grants had varying terms, typically vesting over afour-year period with 25% vesting at the end of the first year and the options lapsing on the tenth anniversary from the date of grant. Following the Company’s corporate reorganization in February 2021, previous options were re-designated to reflect an equivalent number of share options and exercise price on the basis of the Company’s new shares.

There was no impact to the fair value of pre-IPO grants on redesignation, with the exception of 96,300 Growth shares awarded in previous periods and 2,911,260 options originally awarded in 2019. The 2019 awards were modified at the time of the Company’s reorganization through the removal of accelerated vesting conditions under certain circumstances. The incremental fair value granted was valued on a consistent basis to other awards made within the Company and was valued at $5.19 per share and was applied to those unvested awards as of the date of modification. Fair value inputs for the purposes of calculating the incremental fair value of the modification in January 2021 included an exercise price of $17.46, a share price of $26.00, an expected life of 3 years, expected volatility of 90%, and a risk-free rate of -0.13%.

As of December 31, 2023, there was $31.0 million of total unrecognized compensation cost related to stock options granted but not vested under the Company’s plans. That cost will be recognized over an expected remaining weighted-average period of 1.0 years.

The number and weighted average exercise prices of share options are as follows:

The weighted average fair value of options granted in 2023 was $38.57 (2022: $16.93; 2021: $16.48). The weighted average share price at the date of exercise of the options during the year was $56.73 (2022: $46.17; 2021: $33.97). As of December 31, 2023 we have $0.5 million included in prepaid expenses and other current assets for exercises of options during the year.

In the years ended December 31, 2023, 2022 and 2021 the total intrinsic value of stock options exercised was $58.4 million, $12.9 million and $1.3 million, respectively. The tax benefit arising on the exercise of stock options was $3.1 million, $2.6 million and $0.2 million for the years ended December 31, 2023, 2022 and 2021, respectively.

Awards granted in the year ended December 31, 2023, 2022 and 2021, have been valued using the Black-Scholes option pricing model. The assumptions used in the models for share options granted during year ended December 31, 2023 2022 and 2021, are as follows:

Share options are not entitled to dividends.

11. Basic and diluted net loss per share

Basic and diluted net loss per share is calculated as follows (in thousands, except share and per share amounts):

The potential shares through share options of 8,967,882,9,893,244 and 9,198,460 for the years ended December 31, 2023, 2022 and 2021, respectively, have been excluded from the calculation of diluted net loss per share due to their anti-dilutive effect.

12. Income taxes

Net loss before income taxes is as follows (in thousands):

The components of income tax credit are as follows (in thousands):

The tax effects of temporary differences and carryforwards that give rise to deferred tax assets and liabilities were as follows (in thousands):

The movements in the deferred tax asset valuation allowances are as follows (in thousands):

Reconciliation of the U.K. statutory income tax rate, the income tax rate of the country of domicile of the Company, to the Company’s effective income tax rate is as follows (in percentages):

On May 24, 2021, the U.K. 2021 Finance Bill was substantively enacted and subsequently received Royal Assent on June 10, 2021. Under this bill, the rate of U.K. corporation tax has increased to 25% in 2023, with lower rates and tapered relief applied to companies with profits below $2.5 million.

As of December 31, 2023, the Company’s net operating loss carryforwards in the United Kingdom totaled $286 million.

As of December 31, 2023, the Company has U.S. R&D credits totaling $5.7 million, of which, $5.3 million relates to federal tax credits.

U.K. tax credit carryforwards can be carried forward indefinitely to be offset against future tax liabilities of the company. Non-U.K. net operating loss carryforwards can be carried forward indefinitely. U.S. tax credit carryforwards can be carried forward for 20 years to be offset against future tax liabilities, subject to a minimum tax payment of 25% of the tax charge.

A valuation allowance is established when it is more likely than not that some portion or all of a deferred tax asset will not be realized. The realization of deferred tax assets depends on the generation of future taxable income during the period in which related temporary differences become deductible. The majority of the Company’s deferred tax assets relate to net operating loss and R&D carryforwards that can only be realized if the Company is profitable in future periods. Accordingly, the Company has provided a valuation allowance against a substantial amount of the net deferred tax assets due to uncertainties as to their ultimate realization.

The Company operates in multiple jurisdictions with complex tax and regulatory environment and our tax returns are periodically audited or subjected to review by tax authorities. The following table summarizes tax years that remain subject to examination by tax jurisdiction as of December 31, 2023:

The Company accounts for uncertain tax positions in accordance with the provisions of ASC 740. When uncertain tax positions exist, the Company recognizes the tax benefit of tax positions to the extent that the benefit will more likely than not be realized. The determination as to whether the tax benefit will more likely than not be realized is based upon the technical merits of the tax position as well as consideration of the available facts and circumstances. As of December 31, 2023 and 2022, the Company hasnot recorded any provision for uncertain tax positions.

13. Commitments and contingencies

Lease Commitments

See “Leases,” for the maturities of operating lease liabilities as of December 31, 2023.

Manufacturing Commitments

The Company enters into a number of manufacturing commitments for the future purchase of materials and contract manufacturing services. While the majority of such contracts can be cancelled on reasonable notice, due to the significant ongoing expenditure associated with the Company’s programs, including IMC-F106C (PRAME), the Company estimates it has noncancellable commitments in relation to the development and supply of product candidates totaling, $13.1 million, which are expected to be paid in 2024

Legal Proceedings

The Company is not currently a party to any material legal proceedings.

14. Subsequent events

On February 2, 2024, the Company completed a private offering of $402.5 million aggregate principal amount of 2.50% Convertible Senior Notes due 2030 (Notes). The Company’s net proceeds from the offering of the Notes were $389.3 million, after deducting the initial purchasers’ discounts and commissions and the estimated offering expenses. The Notes are senior, unsecured obligations of the Company and will mature on February 1, 2030, unless earlier converted, redeemed or repurchased. The Notes will accrue interest payable semi-annually in arrears on February 1 and August 1 of each year, beginning on August 1, 2024, at a rate of 2.50% per year.

In February 2024, the Company entered into a clinical trial collaboration and supply agreement with Bristol Myers Squibb to investigate it’s ImmTAC bispecific TCR candidate targeting PRAME HLA-A02, IMC-F106C, in combination with Bristol Myers Squibb’s nivolumab, in first-line advanced cutaneous melanoma. Under the terms of the collaboration, the Company will sponsor and fund the registrational Phase 3 clinical trial of IMC-F106C in combination with nivolumab in first-line advanced cutaneous melanoma (PRISM-MEL-301), and Bristol Myers Squibb will provide nivolumab.