Immunocore Holdings plc

Previous wording

You should read the following discussion and analysis of our financial condition and results of operations together with our condensed consolidated financial statements and the related notes thereto appearing elsewhere in this Quarterly Report. The following discussion is based on our financial information prepared in accordance with accounting principles generally accepted in the U.S., or U.S. GAAP, as found in the Accounting Standards Codification and Accounting Standards Update of the Financial Accounting Standards Board and the rules and regulations of the SEC. Some of the information contained in this discussion and analysis or set forth elsewhere in this Quarterly Report, including information with respect to our plans and strategy for our business, includes forward-looking statements that involve risks and uncertainties. We also recommend that you read our discussion and analysis of financial condition and results of operations together with our audited financial statements and notes thereto, and the section entitled “Risk Factors”, each of which appear in our Annual Report on Form 10-K for the year ended December 31, 2023, as filed with the SEC on February 28, 2024, or, our Annual Report as well as the section titled “Special Note Regarding Forward-Looking Statements.”

Current wording

You should read the following discussion and analysis of our financial condition and results of operations together with our condensed consolidated financial statements and the related notes thereto appearing elsewhere in this Quarterly Report. The following discussion is based on our financial information prepared in accordance with accounting principles generally accepted in the U.S. ("U.S. GAAP"), as found in the Accounting Standards Codification and Accounting Standards Update of the Financial Accounting Standards Board and the rules and regulations of the Securities and Exchange Commission ("SEC"). Some of the information contained in this discussion and analysis or set forth elsewhere in this Quarterly Report, including information with respect to our plans and strategy for our business, includes forward-looking statements that involve risks and uncertainties. We also recommend that you read our discussion and analysis of financial condition and results of operations together with our audited financial statements and notes thereto, and the section entitled “Risk Factors”, each of which appear in our Annual Report on Form 10-K for the year ended December 31, 2023 as filed with the SEC on February 28, 2024 (the "Annual Report") as well as the section titled “Special Note Regarding Forward-Looking Statements".

Previous wording

We are a commercial stage biotechnology company pioneering and delivering transformative immunomodulating medicines to radically improve outcomes for patients with cancer, infectious diseases, and autoimmune diseases. Leveraging our proprietary, flexible, off-the-shelf ImmTAX (Immune mobilizing monoclonal TCRs Against X disease) platform, with a pipeline in multiple therapeutic areas, including nine active clinical and pre-clinical programs​ in oncology, infectious disease, and autoimmune disease.

Current wording

We are a commercial stage biotechnology company pioneering and delivering transformative immunomodulating medicines to radically improve outcomes for patients with cancer, infectious diseases, and autoimmune diseases. Leveraging our proprietary, flexible, off-the-shelf ImmTAX (Immune mobilizing monoclonal TCRs Against X disease) platform, with a pipeline in multiple therapeutic areas, including nine active clinical and preclinical programs in oncology, infectious disease, and autoimmune disease.

Previous wording

In 2022, we received approval for our lead product, KIMMTRAK, for the treatment of unresectable metastatic uveal melanoma from the FDA, the European Commission, and other health authorities. KIMMTRAK is now approved in 38 countries for the treatment of unresectable or mUM. We have launched KIMMTRAK in 17 countries globally to date and we plan to launch KIMMTRAK in additional countries, if approved in those countries, in 2024.

Current wording

In 2022, we received approval for our lead product, KIMMTRAK, for the treatment of unresectable metastatic uveal melanoma from the FDA, the European Commission, and other health authorities. KIMMTRAK is now approved in 38 countries for the treatment of unresectable or mUM. We have launched KIMMTRAK in 19 countries globally to date and we plan to launch KIMMTRAK in additional countries, if approved in those countries, in 2024.

Previous wording

KIMMTRAK is the lead product from our ImmTAX platform and was the first approved new therapy in mUM in four decades. To date, we have treated over 2,000 cancer patients with KIMMTRAK, tebentafusp, and our other ImmTAX product candidates, which we believe is the largest clinical data set of any T cell engager bispecific in solid tumors and any TCR therapeutic. Our clinical programs are being conducted with patients with a broad range of cancers including melanoma, ovarian, lung, endometrial, and colorectal, among others. We believe that these other tumor types have large addressable patient populations and significant unmet need. We are progressing two late-stage clinical programs within our ImmTAC (Immunem obilizingm onoclonal TCRs Against Cancer) portfolio, including KIMMTRAK and the PRAME-targeted brenetafusp (IMC-F106C).

Current wording

KIMMTRAK is the lead product from our ImmTAX platform and was the first approved new therapy in mUM in four decades. To date, we have treated over 2,000 cancer patients with KIMMTRAK, tebentafusp, and our other ImmTAX product candidates, which we believe is the largest clinical data set of any T cell engager bispecific in solid tumors and any TCR therapeutic. Our clinical programs are being conducted with patients with a broad range of cancers including melanoma, ovarian, lung, endometrial and colorectal, among others. We believe that these other tumor types have large addressable patient populations and significant unmet need. We are progressing three late-stage clinical programs within our ImmTAC (Immunem obilizingm onoclonal TCRs Against Cancer) portfolio, including KIMMTRAK and the PRAME-targeted brenetafusp (IMC-F106C).

Previous wording

We have incurred significant operating losses and expect to continue to incur significant expenses and operating losses for the near future. These net losses were $24.4 million and $19.4 million, for the three months ended March 31, 2024 and 2023, respectively. As of March 31, 2024, our accumulated deficit was $769.1 million. We expect to continue to incur significant and increasing expenses and to incur operating losses for the foreseeable future, as we advance our product candidates through preclinical and clinical development and seek regulatory approvals, manufacture drug product and drug supply, maintain and expand our intellectual property portfolio, as well as hire additional personnel, pay for further accounting, audit, legal, regulatory and consulting services, and pay costs associated with maintaining compliance with Nasdaq listing rules and the requirements of the SEC, director and officer liability insurance, investor and public relations activities and other expenses associated with operating as a public company.

Current wording

We have incurred significant operating losses and expect to continue to incur significant expenses and operating losses for the near future. These net losses were $11.6 million and $36.1 million for the three and six months ended June 30, 2024, respectively. As of June 30, 2024, our accumulated deficit was $780.7 million. We expect to continue to incur significant and increasing expenses and to incur operating losses for the foreseeable future, as we advance our product candidates through preclinical and clinical development and seek regulatory approvals, manufacture drug product and drug supply, maintain and expand our intellectual property portfolio, as well as hire additional personnel, pay for further accounting, audit, legal, regulatory and consulting services, and pay costs associated with maintaining compliance with Nasdaq listing rules and the requirements of the SEC, director and officer liability insurance, investor and public relations activities and other expenses associated with operating as a public company.

Previous wording

We do not expect to generate revenue from the sale of our other product candidates unless and until we successfully complete clinical development of and obtain regulatory approval for such product candidates. As a result, we may need additional funding to support our continued operations and pursue our clinical development and growth strategy. Until we can generate sufficient revenue from product sales, if ever, we expect to finance our operations through a combination of public or private equity offerings, debt financings, government funding arrangements, collaborations and marketing, distribution and licensing arrangements. We may be unable to raise additional funds or enter into such other arrangements on favorable terms, or at all, particularly in light of recently worsening macroeconomic conditions, such as supply chain disruptions, rising interest rates and volatility in the capital markets. If we fail to raise capital or enter into such arrangements as, and when, needed, we may have to significantly delay, scale back or discontinue the development and commercialization of one or more of our programs.

Current wording

We do not expect to generate revenue from the sale of our other product candidates unless and until we successfully complete clinical development of and obtain regulatory approval for such product candidates. As a result, we may need additional funding to support our continued operations and pursue our clinical development and growth strategy. Until we can generate sufficient revenue from product sales, if ever, we expect to finance our operations through a combination of public or private equity offerings, debt financings, government funding arrangements, collaborations and marketing and distribution and licensing arrangements. We may be unable to raise additional funds or enter into such other arrangements on favorable terms, or at all, particularly in light of recently worsening macroeconomic conditions, such as supply chain disruptions, rising interest rates and volatility in the capital markets. If we fail to raise capital or enter into such arrangements as, and when, needed, we may have to significantly delay, scale back or discontinue the development and commercialization of one or more of our programs.

Previous wording

Cost of product revenue represents production costs including raw materials, external manufacturing costs, and other costs incurred in bringing inventories to their location and condition prior to sale. Overheads and internal costs of product revenue are minimal under our manufacturing arrangements. Due to the low costs involved in manufacturing KIMMTRAK, cost of product revenue is currently not material, and while these costs are expected to increase in future periods as inflationary pressures increase, we do not expect such costs to be material for the foreseeable future. Cost of product revenue may also include costs related to excess or obsolete inventory adjustment charges.

Current wording

Cost of product revenue represents production costs including raw materials, external manufacturing costs, and other costs incurred in bringing inventories to their location and condition prior to sale. Cost of product revenue may also include costs related to manufacturing losses, excess or obsolete inventory costs. Overheads and internal costs of product revenue are minimal under our manufacturing arrangements. Due to the low costs involved in manufacturing KIMMTRAK, cost of product revenue is currently not material, and while these costs are expected to increase in future periods as inflationary pressures increase, we do not expect such costs to be material for the foreseeable future.

Previous wording

Research and development, or R&D, expenses consist primarily of costs incurred for current or planned investigations undertaken with the prospect of gaining new scientific or technical knowledge and understanding and consist primarily of personnel-related costs, including salaries and share-based compensation expense for the various R&D departments, costs associated with clinical trial activities undertaken by contract research organizations, or CROs, and external manufacturing costs associated with R&D undertaken by contract manufacturing organizations, or CMOs, R&D laboratory consumables, internal clinical trial expenses, payments for purchased rights and milestones in connection with third-party In-process R&D, or IPRD, agreements, costs associated with maintaining laboratory equipment, costs associated with our R&D facilities, including a reasonable allocation of overhead costs, and reductions from expenses for R&D tax credits. R&D expenses are expensed as incurred, although the timing of expense recognition can vary with contractual and payment terms in order to determine when services are received.

Current wording

Research and development ("R&D") expenses consist primarily of costs incurred for current or planned investigations undertaken with the prospect of gaining new scientific or technical knowledge and understanding and consist primarily of personnel-related costs, including salaries and share-based compensation expense for the various R&D departments, costs associated with clinical trial activities undertaken by contract research organizations ("CROs) and external manufacturing costs associated with R&D undertaken by contract manufacturing organizations ("CMOs"), R&D laboratory consumables, internal clinical trial expenses, payments for purchased rights and milestones in connection with third-party in-process R&D agreements, costs associated with maintaining laboratory equipment, costs associated with our R&D facilities, including a reasonable allocation of overhead costs, and reductions from expenses for R&D tax credits. R&D expenses are expensed as incurred, although the timing of expense recognition can vary with contractual and payment terms in order to determine when services are received.

Previous wording

R&D expenses incurred with external organizations to undertake R&D activities on our behalf typically relate to clinical programs and are assigned to the individual programs in tables further below. However, for certain pre-clinical programs and other research spend incurred externally, such spend is not assigned to individual programs. Internal R&D expenses primarily relate to personnel-related costs, facilities, and R&D laboratory consumables and due to the cross-functional expertise of our people, it is not possible to provide a breakdown of internal costs by program.

Current wording

R&D expenses incurred with external organizations to undertake R&D activities on our behalf typically relate to clinical programs and are assigned to the individual programs in tables further below. However, for certain preclinical programs and other research spend incurred externally, such spend is not assigned to individual programs. Internal R&D expenses primarily relate to personnel-related costs, facilities and laboratory consumables. Due to the cross functional expertise of our people, it is not possible to provide a breakdown of internal costs by program.

Previous wording

As a company that carries out extensive R&D activities, we benefit from the U.K. R&D tax regime. For certain specific categories of expenditure, we have benefited from the Research and Development Expenditure Credit, or RDEC, program for the three months ended March 31, 2024. R&D tax credits are presented as a reduction to R&D expenses. On April 1, 2023, the headline rate under the RDEC program increased from 13% to 20% and can generate cash rebates of up to 15% (increased from 10.5%) on qualifying R&D expenditure incurred from this date.

Current wording

As a company that carries out extensive R&D activities, we benefit from the Research and Development Expenditure Credit ("RDEC") in the United Kingdom for certain specific categories of expenditure. R&D tax credits are presented as a reduction to R&D expenses. On April 1, 2023, the headline rate under the RDEC program increased from 13% to 20% and can generate cash rebates of up to 15% (increased from 10.5%) on qualifying R&D expenditure incurred from this date.

Previous wording

Amendments to the U.K. R&D tax credit regime that are contained in the Finance Bill currently proceeding through the U.K. Parliament with effect from April 1, 2024 (i) (unless limited exceptions apply) introduce restrictions on the tax relief that can be claimed for expenditure incurred on sub-contracted R&D activities or externally provided workers, where such sub-contracted activities are not carried out in the United Kingdom or such workers are not subject to U.K. payroll taxes, and (ii) merge the Small and Medium-sized Enterprise Program and the RDEC program into a single scheme.

Current wording

Recent amendments to the U.K. R&D tax credit regime introduced restrictions on the tax relief that can be claimed for expenditure incurred on subcontracted R&D activities or externally provided workers, where such subcontracted activities are not carried out in the United Kingdom or such workers are not subject to U.K. payroll taxes, subject to limited exceptions.

Previous wording

Selling, general and administrative, or SG&A, expenses consist primarily of personnel-related costs, including salaries and share-based compensation expense, for selling, corporate and other administrative and operational functions including finance, legal, human resources, commercial-related expenses, information technology, as well as a proportion of facility-related costs.

Current wording

Selling, general and administrative ("SG&A") expenses consist primarily of personnel-related costs, including salaries and share-based compensation expense, for selling, corporate and other administrative and operational functions including finance, legal, human resources, commercial-related expenses, information technology, as well as a proportion of facility-related costs.

Previous wording

These losses arise on a variety of items, including on U.S. dollar monetary assets and liabilities held by our main operating subsidiary in the United Kingdom, including our cash and cash equivalent balances. Our foreign currency losses can vary significantly between periods as a result of volatility in foreign exchange rates.

Current wording

These losses arise on a variety of items, including on U.S. dollar monetary assets and liabilities held by our main operating subsidiary in the United Kingdom, including our cash, cash equivalent and marketable securities balances. Our foreign currency losses can vary significantly between periods as a result of volatility in foreign exchange rates.

Previous wording

We are subject to corporate taxation in the United Kingdom. Our wholly owned U.S. subsidiaries, Immunocore LLC and Immunocore Commercial LLC, are subject to corporate taxation in the United States. Our wholly owned Irish subsidiary is subject to corporate taxation in Ireland. Our wholly owned Swiss subsidiary is subject to corporate taxation in Switzerland. Due to the nature of our business and on a consolidated basis, we have generated losses since inception. Our income tax expense represents the sum of income taxes payable in the United States, Ireland and Switzerland, offset by deferred tax credits arising on deferred tax assets generated.

Current wording

We are subject to corporate taxation in the United Kingdom and our wholly-owned subsidiaries are subject to corporate taxation in the United States, Ireland and Switzerland. Due to the nature of our business and on a consolidated basis, we have generated losses since inception. Our income tax expense represents the sum of income taxes payable in the United States, Ireland and Switzerland, offset by deferred tax credits arising on deferred tax assets generated.

Previous wording

Un-surrendered tax losses are carried forward to be offset against future taxable profits. After accounting for tax credits receivable, there were accumulated tax losses available for carry forward in the United Kingdom of $312 million as of March 31, 2024. A full valuation allowance is recognized in respect of accumulated tax losses and other temporary differences in the United Kingdom because future profits are not sufficiently certain. A deferred tax asset is, however, recognized in respect of the subsidiary in the United States, relating to unused tax credits on share-based compensation expense and other temporary differences on the basis that we expect to continue generating U.S. taxable income against which deductible temporary differences can unwind.

Current wording

Unsurrendered tax losses are carried forward to be offset against future taxable profits. After accounting for tax credits receivable, there were accumulated tax losses available for carry forward in the United Kingdom of $324 million as of June 30, 2024. A full valuation allowance is recognized in respect of accumulated tax losses and other temporary differences in the United Kingdom because future profits are not sufficiently certain. A deferred tax asset is, however, recognized in respect of the subsidiary in the United States, relating to unused tax credits on share-based compensation expense and other temporary differences on the basis that we expect to continue generating U.S. taxable income against which deductible temporary differences can unwind.

Previous wording

For the three months ended March 31, 2024, we generated product revenue, net of $70.3 million due to the sale of KIMMTRAK, of which $50.0 million was in the United States, $19.0 million in Europe (including the impact of a net increase in estimated reserves related to prior periods of $5.4 million) and $1.4 million in International. Product revenue, net increased in the three months ended March 31, 2024 as compared to March 31, 2023, due primarily to increased volume in the United States and global country expansion, as we continued our commercialization efforts.

Current wording

For the three months ended June 30, 2024, we generated product revenue, net of $75.3 million due to the sale of KIMMTRAK, of which $55.6 million was in the United States, $15.4 million in Europe (including the impact of a net increase in estimated reserves related to prior periods of $6.7 million) and $4.3 million in International. Product revenue, net increased in the three months ended June 30, 2024 as compared to June 30, 2023, due primarily to increased volume in the United States and global country expansion, as we continued our commercialization efforts.

Previous wording

Revenue from collaboration agreements decreased by $2.9 million to $0.2 million in the three months ended March 31, 2024, compared to $3.1 million for the three months ended March 31, 2023. This decrease was due to our February 2023 agreement with Genentech under the terms of our Genentech Collaboration, our only remaining revenue collaboration, to close the Phase 1 clinical trial and for the parties to fulfill the remaining obligations in relation to the trial.

Current wording

Revenue from collaboration agreements decreased to $0.1 million in the three months ended June 30, 2024, compared to $2.8 million for the three months ended June 30, 2023. This decrease was due to our February 2023 agreement with Genentech to close the Phase 1 clinical trial and for the parties to fulfill the remaining obligations under the terms of our Genentech collaboration.

Previous wording

Salaries and other employee-related costs increased by $5.6 million during the three months ended March 31, 2024, primarily due to an increase in the number of employees engaged in business support functions, including medical and regulatory activities to support our growing pipeline and commercial activities. In addition, the internalizing of our U.S. salesforce in the second half of 2023 increased salaries and other employee-related costs for the three months ended March 31, 2024, as these costs were included within selling and commercial costs for the three months ended March 31, 2023.

Current wording

For the three months ended June 30, 2024, our SG&A expenses were $38.6 million compared to $35.0 million for the three months ended June 30, 2023, an increase of $3.6 million. Salaries and other employee-related costs increased by $2.2 million during the three months ended June 30, 2024, primarily due to the internalization of our U.S. sales force in the second half of 2023, for the three months ended June 30, 2023 these costs were included within selling and commercial costs. In addition, there was an increase in the number of employees engaged in business support functions, including medical and regulatory activities, to support our growing pipeline and commercial activities.

Previous wording

For the three months ended March 31, 2024, interest income was $8.2 million compared to $3.1 million for the three months ended March 31, 2023. This increase of $5.1 million reflects higher levels of cash and cash equivalents held in 2024 relative to 2023 due to the net cash proceeds from the Notes issued in February 2024 and increases in interest rates earned on our cash and cash equivalents balances. For the three months ended March 31, 2024, interest expense was $3.2 million compared to $1.3 million for the three months ended March 31, 2023, and the increase was primarily related to our Notes issued in February 2024.

Current wording

For the three months ended June 30, 2024, interest income was $6.2 million compared to $4.3 million for the three months ended June 30, 2023. This increase of $1.9 million reflects higher levels of cash and cash equivalents held in 2024 relative to 2023 due primarily to the net cash proceeds from the 2.5% convertible senior notes due in 2030 issued in February 2024 (the "Notes") and increases in interest rates earned on our cash and cash equivalents balances. For the three months ended June 30, 2024, interest expense was $4.3 million compared to $1.3 million for the three months ended June 30, 2023 and the increase was primarily related to interest on the Notes.

Previous wording

For the three months ended March 31, 2024, foreign currency loss was $2.4 million compared to a loss of $6.0 million for the three months ended March 31, 2023. This change of $3.6 million reflects smaller exchange rate movements in 2024.

Current wording

For the three months ended June 30, 2024, foreign currency loss was $0.5 million compared to a loss of $5.9 million for the three months ended June 30, 2023. This change of $5.4 million reflects less significant exchange rate movements in 2024 relative to 2023.

Previous wording

For the three months ended March 31, 2024, the income tax charge amounted to $0.4 million compared to a $0.3 million for the three months ended March 31, 2023.

Current wording

For the three months ended June 30, 2024, the income tax charge was $1.5 million compared to $0.2 million for the three months ended June 30, 2023.

Previous wording

Although we have recorded product revenue for sales of KIMMTRAK in the three months ended March 31, 2024, we have continued to incur operating losses and negative cash flows from our operations since our inception. We have an accumulated deficit of $769.1 million as of March 31, 2024.

Current wording

Although we have recorded product revenue for sales of KIMMTRAK and have positive operating cash flows in the six months ended June 30, 2024, we have continued to incur operating losses and cumulative negative cash flows from our operations since our inception. We have an accumulated deficit of $780.7 million as of June 30, 2024.

Previous wording

Since our inception, we have funded our operations primarily with proceeds from sales of equity securities, debt financing, product and pre-product revenue and payments from collaboration partners. Through March 31, 2024, we have raised an aggregate of $1,677 million. As of March 31, 2024 and December 31, 2023, we had cash and cash equivalents of $832.8 million and $442.6 million, respectively.

Current wording

Since our inception, we have funded our operations primarily with proceeds from sales of equity securities, debt financings and historical payments from our collaboration partners. Through June 30, 2024, we have raised an aggregate of $1,677 million. As of June 30, 2024 and December 31, 2023, we had cash, cash equivalents and marketable securities of $859.6 million and $442.6 million, respectively.

Previous wording

On September 9, 2022, we entered into an Open Market Sale Agreement, or the Sales Agreement, with Jefferies LLC, or Jefferies, pursuant to which we may issue and sell ADSs, each representing one ordinary share, having an aggregate offering price of up to $250 million, from time to time, in one or more at-the-market offerings, for which Jefferies will act as sales agent and/or principal. The at-the-market facility has been registered under the Securities Act pursuant to our Registration Statement on Form F-3ASR (File No. 333-264105). As of March 31, 2024, no issuances or sales had been made pursuant to the Sales Agreement.

Current wording

On September 9, 2022, we entered into an Open Market Sale Agreement (the "Sales Agreement") with Jefferies LLC ("Jefferies"), pursuant to which we may issue and sell ADSs, each representing one ordinary share, having an aggregate offering price of up to $250 million, from time to time, in one or more at-the-market offerings, for which Jefferies will act as sales agent and/or principal. The at-the-market facility has been registered under the Securities Act pursuant to our Registration Statement on Form F-3ASR (File No. 333-264105). As of June 30, 2024, no issuances or sales had been made pursuant to the Sales Agreement.

Previous wording

We entered into a loan with Pharmakon Advisors, LP, or the Pharmakon Loan Agreement, in November 2022, under which we have borrowed $50 million, which bears interest at a fixed rate of 9.75% and is due to mature in November 2028.

Current wording

We entered into a loan with Pharmakon Advisors, LP (the "Pharmakon Loan Agreement") in November 2022, under which we have borrowed $50 million, which bears interest at a fixed rate of 9.75% and is due to mature in November 2028.

Previous wording

On February 2, 2024, we completed a private offering of $402.5 million aggregate principal amount of the Notes. Our net proceeds from the offering of the Notes were $389.1 million, after deducting the initial purchasers’ discounts and commissions and other 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. Our intention is to use part of the proceeds to repay in full, loans outstanding under the Pharmakon Loan Agreement in the fourth quarter of 2024. As of the date of this Quarterly Report, we have not yet repaid those loans and our indebtedness includes both the Pharmakon Loan Agreement and the Notes.

Current wording

On February 2, 2024, we completed a private offering of$402.5 million aggregate principal amount of the Notes. Our net proceeds from the offering of the Notes were$389.1 million, after deducting the initial purchasers’ discounts and commissions and other 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. Our intention is to use part of the proceeds to repay in full loans outstanding under the Pharmakon Loan Agreement in the fourth quarter of 2024. As of the date of this Quarterly Report, we have not yet repaid those loans and our indebtedness includes both the Pharmakon Loan Agreement and the Notes.

Previous wording

Other than the abovementioned loan facilities we currently have no ongoing material financing commitments, such as lines of credit or guarantees, that are expected to affect our liquidity over the next five years, other than our lease obligations and supplier purchase commitments.

Current wording

Other than the above mentioned loan facilities, we currently have no ongoing material financing commitments, such as lines of credit or guarantees, that are expected to affect our liquidity over the next five years, other than our lease obligations and supplier purchase commitments.

Previous wording

As of March 31, 2024, we had cash and cash equivalents of $832.8 million, as compared with $442.6 million as of December 31, 2023. Our working capital was $770.7 million as of March 31, 2024, as compared with $389.8 million as of December 31, 2023.

Current wording

As of June 30, 2024, we had cash, cash equivalents and marketable securities of $859.6 million, as compared with $442.6 million as of December 31, 2023. Our working capital was $771.8 million as of June 30, 2024, as compared with $389.8 million as of December 31, 2023.

Previous wording

The following table summarizes the primary sources and uses of cash for each period presented (in thousands):

Current wording

The following table summarizes the primary sources and uses of cash and cash equivalents for each period presented (in thousands):

Previous wording

Net cash used in our operating activities was $4.6 million for the three months ended March 31, 2024, as compared to cash provided by operating activities of $10.5 million for the three months ended March 31, 2023. The decrease of $15.1 million in the three months ended March 31, 2024 was primarily due to increases in clinical trial expenditures, partially offset by an increase in revenue and net interest income.

Current wording

Net cash provided by our operating activities was $18.9 million for the six months ended June 30, 2024, compared to cash provided by operating activities of $10.6 million for the six months ended June 30, 2023. The increase of $8.3 million in the six months ended June 30, 2024 was primarily due to increases in revenues, interest income and accrued expenses, partially offset by an increase in R&D expenses.

Previous wording

Net cash used in investing activities was $0.4 million and $3.0 million for the three months ended March 31, 2024 and 2023, respectively. The net cash used in investing activities during both periods was primarily related to purchases of property and equipment.

Current wording

Net cash used in investing activities was $350.8 million and $4.4 million for the six months ended June 30, 2024 and 2023, respectively. The net cash used in investing activities increased for the six months ended June 30, 2024 due to purchases of marketable securities.

Previous wording

Net cash provided by our financing activities during the three months ended March 31, 2024 was $396.0 million as compared to $6.2 million for the three months ended March 31, 2023. The increase of $389.9 million was the result of the net cash proceeds from the Notes of $390.2 million with no similar proceeds in the three months ended March 31, 2023.

Current wording

Net cash provided by our financing activities during the six months ended June 30, 2024 was $395.2 million as compared to $17.7 million for the six months ended June 30, 2023. The increase of $377.5 million was the result of the net cash proceeds from the Notes of $389.1 million with no similar proceeds in the six months ended June 30, 2023.

Previous wording

We expect to continue to incur significant operating losses in the foreseeable future and expect our expenses to increase in connection with our ongoing activities, particularly as we continue to commercialize KIMMTRAK in additional territories, continue R&D and the advancement of our product candidates through preclinical and clinical development, and seek regulatory approval and pursue commercialization of any approved product candidates. In addition, since our initial public offering in February 2021, we have incurred additional costs associated with operating as a public company, which could continue to increase further in future periods.

Current wording

We expect to continue to incur significant operating losses in the foreseeable future and expect our expenses to increase in connection with our ongoing activities, particularly as we continue to commercialize KIMMTRAK in additional territories, continue our research and development programs and the advancement of our product candidates through preclinical and clinical development, and seek regulatory approval and pursue commercialization of any approved product candidates. In addition, since our initial public offering in February 2021, we have incurred additional costs associated with operating as a public company, which could continue to increase further in future periods.

Previous wording

In order to maintain such levels of expenditure and our anticipated expenditure, we expect to raise further funds by exploring debt or equity financing, or potentially further collaborations, in the future. The amount we are able to raise from these options can vary with market conditions, including the impacts of recently worsening macroeconomic conditions such as supply chain disruptions, rising interest rates and volatility in the capital markets, and our long-term strategy as a company is dependent on our ability to successfully raise such funding. Moreover, we have based our estimates on assumptions that may prove to be wrong, and we could use our available capital resources sooner than we currently expect.

Current wording

In order to maintain such levels of expenditure and our anticipated expenditure, we may raise further funds by exploring debt or equity financing, or potentially further collaborations, in the future. The amount we are able to raise from these options can vary with market conditions, including the impacts of recently worsening macroeconomic conditions such as supply chain disruptions, rising interest rates and volatility in the capital markets, and our long-term strategy as a company is dependent on our ability to successfully raise such funding. Moreover, we have based our estimates on assumptions that may prove to be wrong, and we could use our available capital resources sooner than we currently expect.

Previous wording

We held cash and cash equivalents of $832.8 million as of March 31, 2024. Based on our current operating plans, we expect that our existing cash and cash equivalents, along with anticipated revenue from KIMMTRAK, will enable us to fund our operating expenses and capital expenditure requirements for at least twelve months from the date of filing of this Quarterly Report. Given our need for additional financing to support the long-term clinical development of our programs, we intend to consider additional financing opportunities when market terms are favorable to us.

Current wording

We held cash, cash equivalents and marketable securities of $859.6 million as of June 30, 2024. Based on our current operating plans, we expect that our existing cash, cash equivalents and marketable securities, along with anticipated future revenue from KIMMTRAK, will enable us to fund our operating expenses and capital expenditure requirements for at least twelve months from the date of filing of this Quarterly Report. Given our need for additional financing to support the long-term clinical development of our programs, we may consider additional financing opportunities when market terms are favorable to us.

Previous wording

Our ability to raise additional capital may also be adversely impacted by potential worsening global economic conditions and disruptions to, and volatility in, financial markets in the United States and worldwide. We are also mindful that conditions in the current macroeconomic environment could affect our ability to achieve our goals. We sell our products in countries that face economic volatility and weakness. Although we have historically collected receivables from customers in such countries, sustained weakness or further deterioration of the local economies and currencies may cause customers in those countries to be unable to pay for our products. We will continue to monitor these conditions and will attempt to adjust our business processes, as appropriate, to mitigate macroeconomic risks to our business.

Current wording

Our ability to raise additional capital may also be adversely impacted by potential worsening global economic conditions and disruptions to, and volatility in, financial markets in the United States and worldwide. We are also mindful that conditions in the current macroeconomic environment could affect our ability to achieve our goals. We sell our products in countries that face economic volatility and weakness and although we have historically collected receivables from customers in such countries, sustained weakness or further deterioration of the local economies and currencies may cause customers in those countries to be unable to pay for our products. We will continue to monitor these conditions and will attempt to adjust our business processes, as appropriate, to mitigate macroeconomic risks to our business.

Previous wording

As part of our ongoing operations, we have material contractual lease obligations over expected lease terms of several years and expiry dates extending to 2043 primarily for our most significant facilities in the United Kingdom. These obligations and potential obligations could result in payments of up to $60.1 million. The majority of such payments represent longer-term commitments as outlined in the notes to our condensed consolidated financial statements. The lease agreements are cancellable assuming certain conditions are met prior to expiry. We expect to continue to incur expenses for such leases for the foreseeable future. As we continue to grow, launch further products or expand our operations in other countries, we may determine that it is necessary to enter into further lease agreements, which would further increase our cash outflows. Further obligations or commitments in the near term relate to our capital expenditure requirements for the purpose of improving our leased facilities. If we continue to grow, such commitments may become significant in value.

Current wording

As part of our ongoing operations, we have material contractual lease obligations over expected lease terms of several years and expiry dates extending to 2043 primarily for our most significant facilities in the United Kingdom. These obligations and potential obligations could result in payments of up to $58.7 million. The majority of such payments represent longer-term commitments as outlined in the notes to our condensed consolidated financial statements. The lease agreements are cancellable assuming certain conditions are met prior to expiry. We expect to continue to incur expenses for such leases for the foreseeable future. As we continue to grow, launch further products or expand our operations in other countries, we may determine that it is necessary to enter into further lease agreements, which would further increase our cash outflows. Further obligations or commitments in the near term relate to our capital expenditure requirements for the purpose of improving our leased facilities. If we continue to grow, such commitments may become significant in value.

Previous wording

We have a number of existing manufacturing obligations, some of which relate to the manufacture of KIMMTRAK. We have similar obligations related to our earlier stage programs. These obligations and potential obligations could result in payments of up to $11.7 million, and are expected to increase as we commit to advancing the development of our brenetafusp (IMC-F106C) program in 2024 and beyond. While we have already incurred costs for commercial launches in the United States, Europe and other territories, additional manufacturing obligations may arise in future in relation to product sales in these territories. We have also entered into third-party agreements relating to marketing and distribution. The majority of such obligations have standard payment terms, and our level of non-cancellable commitments with such parties is not considered material. To meet demand, we may amend or enter into further agreements with CMOs or other parties which could cause our cash requirements to increase. While receipts from the sale of KIMMTRAK or other future products may fund our ongoing manufacturing and sales efforts, there can be no assurance that we will earn such revenues. In the longer term, if we received regulatory approval for our other product candidates, we would expect to incur significant commercialization expenses related to product manufacturing, sales, marketing and distribution, depending on where we choose to commercialize. We may also require additional capital to pursue in-licenses or acquisitions of other product candidates.

Current wording

We have a number of existing manufacturing obligations, some of which relate to the manufacture of KIMMTRAK. We have similar obligations related to our earlier stage programs. These obligations and potential obligations could result in payments of up to $15.5 million, and are expected to increase as we continue to commit to advancing the development of our brenetafusp (IMC-F106C) program in 2024 and beyond. While we have already incurred costs for commercial launches of KIMMTRAK in the United States, Europe and other territories, additional manufacturing obligations may arise in future in relation to product sales in these territories. We have also entered into third-party agreements relating to marketing and distribution of KIMMTRAK. The majority of such obligations have standard payment terms, and our level of non-cancellable commitments with such parties is not considered material. To meet demand, we may amend or enter into further agreements with CMOs or other parties which could cause our cash requirements to increase. While receipts from the sale of KIMMTRAK or other future products may fund our ongoing manufacturing and sales efforts, there can be no assurance that we will earn such revenues. In the longer term, if we received regulatory approval for our other product candidates, we would expect to incur significant commercialization expenses related to product manufacturing, sales, marketing and distribution, depending on where we choose to commercialize. We may also require additional capital to pursue in-licenses or acquisitions of other product candidates.

Previous wording

We are required to make interest payments for our Notes issued on February 2, 2024. As of March 31, 2024, we had $402.5 million aggregate principal amount of Notes outstanding, which will mature on February 1, 2030, unless earlier converted, redeemed or repurchased. See Note 5. “Non-current interest-bearing loans and borrowings” of the notes to our condensed consolidated financial statements in Part I of this Quarterly Report for further information.

Current wording

We are required to make interest payments for the Notes issued in February 2024. As of June 30, 2024, we had $402.5 million aggregate principal amount of the Notes outstanding, which will mature on February 1, 2030, unless earlier converted, redeemed or repurchased. See Note 5. “Non-current interest-bearing loans and borrowings” of the notes to our condensed consolidated financial statements in Part I of this Quarterly Report for further information.

Previous wording

We are also required to make interest payments, and, from 2026 onward, repayments of principal borrowings under our Pharmakon Loan Agreement, until at least 2028. The loan liability as of March 31, 2024 was $48.1 million and further details regarding this loan facility are provided in Note 5. “Non-current interest-bearing loans and borrowings” of the notes to our condensed consolidated financial statements in Part I of this Quarterly Report. We have the option to draw down a further $50 million under our Pharmakon Loan Agreement.

Current wording

We are also required to make interest payments, and, from 2026 onward, repayments of principal borrowings under our Pharmakon Loan Agreement, until at least 2028. The loan liability as of June 30, 2024 was $48.1 million, and further details regarding this loan facility are provided in Note 5. ''Non-current interest-bearing loans and borrowings'' of the notes to our condensed consolidated financial statements, in Part I of this Quarterly Report. We had the option to draw down a further $50 million under our Pharmakon Loan Agreement through June 2024, and we elected not to exercise this option.