Immunocore Holdings plc

Previous wording

You should read the following discussion and analysis of our financial condition and results of operations together with our consolidated financial statements and the related notes thereto appearing elsewhere in this Annual Report. Historically, we qualified 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 prepared our financial statements in accordance with IFRS. Effective January 1, 2024, we no longer qualified as a foreign private issuer. Therefore, we have now become a domestic filer and are required under current SEC rules to prepare our financial statements in accordance with U.S. GAAP, as opposed to IFRS. The following discussion is based on our financial information prepared in accordance with U.S. GAAP and regulations of the SEC. Some of the information contained in this discussion and analysis or set forth elsewhere in this Annual Report, including information with respect to our plans and strategy for our business, includes forward-looking statements that involve risks and uncertainties. You should review the section titled “Risk Factors” for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis, 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 consolidated financial statements and the related notes thereto appearing elsewhere in this Annual Report. Some of the information contained in this discussion and analysis or set forth elsewhere in this Annual Report, including information with respect to our plans and strategy for our business, includes forward-looking statements that involve risks and uncertainties. You should review the section titled “Risk Factors” for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis, as well as the section titled “Special Note Regarding Forward-Looking Statements.” The accompanying MD&A, including all periods presented, have been prepared under U.S. GAAP.

Previous wording

We are a commercial stage biotechnology company pioneering the development of a novel class of TCR bispecific immunotherapies called ImmTAX – Immune mobilizing monoclonal TCRs Against X disease – designed to treat a broad range of diseases, including cancer, infectious and autoimmune diseases. Leveraging our proprietary, flexible, off-the-shelf ImmTAX platform, we are developing a deep pipeline in multiple therapeutic areas, including five clinical stage programs in oncology and infectious disease, advanced pre-clinical programs in autoimmune disease and earlier pre-clinical programs across three therapeutic areas.

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 (Immunem obilizingm onoclonal TCRs Against X disease) platform, we are developing a deep pipeline in multiple therapeutic areas, including clinical stage programs in oncology and infectious disease, advanced pre-clinical programs in autoimmune disease and earlier pre-clinical programs across three therapeutic areas.

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. In 2023, we launched KIMMTRAK in Austria, Israel, Italy, Finland, Switzerland and Belgium, and, reached price agreements with Canada and Australia with further commercial launches underway in additional territories. 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 or metastatic uveal melanoma ("mUM") from the FDA, the European Commission, and other health authorities. KIMMTRAK is now approved in 39 countries for the treatment of unresectable or mUM. We have launched KIMMTRAK in 24 countries globally through December 31, 2024, with further commercial launches planned in additional territories where KIMMTRAK is approved.

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, endometrial, and colorectal, among others. We believe that these 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 IMC-F106C.

Current wording

KIMMTRAK is the lead product from our ImmTAX platform and was the first approved therapy in mUM. 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, and colorectal, among others. We believe that these 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 PRAME-targeted brenetafusp.

Previous wording

Since our inception, we have focused on organizing and staffing our company, raising capital and performing research and development activities to advance our research, development and technology, and commercializing KIMMTRAK. While we have successfully generated revenue from KIMMTRAK, which is our first marketed product, our ability to generate higher levels of product revenue from other marketed products, which may never be fully developed or commercialized, depends on the successful development and regulatory approval of one or more of our product candidates and our ability to finance operations. Since inception, through to December 31, 2023, we have raised an aggregate of $1,275 million through our initial public offering where we listed our ADSs on the Nasdaq Global Select Market in February 2021, private placements of our ordinary and preferred shares, debt financings, and historical payments from our collaboration partners. These funds have been and are being used to fund operations and invest in activities for technology creation, drug discovery and clinical development programs, infrastructure, creation of portfolio of intellectual property and commercial and administrative support.

Current wording

Since our inception, we have focused on organizing and staffing our company, raising capital, performing research and development activities to advance our research, development and technology, and commercializing KIMMTRAK. While we have successfully generated revenue from KIMMTRAK, which is our first marketed product, our ability to generate higher levels of revenue from other marketed products, which may never be fully developed or commercialized, depends on the successful development and regulatory approval of one or more of our product candidates and our ability to finance operations. Since inception, we have raised funds through our initial public offering, private placements of our ordinary and preferred shares, debt financings, revenue and historical payments from our collaboration partners. These funds have been and are being used to fund operations and invest in activities for technology creation, drug discovery and clinical development programs, infrastructure, creation of portfolio of intellectual property and commercial and administrative support.

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 $55.3 million, $52.5 million and $180.0 million, for the years ended December 31, 2023, 2022 and 2021, respectively. As of December 31, 2023, our accumulated deficit was $744.7 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 U.S. Securities and Exchange Commission, or 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 $51.1 million, $55.3 million and $52.5 million, for the years ended December 31, 2024,2023 and 2022, respectively. As of December 31, 2024, our accumulated deficit was $795.8 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, fluctuations in 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

Product revenue, net, relates to the sale of KIMMTRAK following marketing approval. We recognize product revenue at the point in time that control transfers to a customer, which is typically on delivery to our distributors and healthcare providers. We also operate under consignment arrangements where control passes when our distributors take KIMMTRAK out of consignment inventory. The amount of revenue recognized reflects the consideration to which we expect to be entitled, net of estimated deductions for rebates, chargebacks, other customer fees and product returns. These estimates consider contractual and statutory requirements, the expected payor and patient mix, sell-through data, our customers’ inventory levels, anticipated demand and the volume of customer purchase orders, internal data, and other information provided by our customers and third-party logistics providers, and, in certain countries including France, pricing negotiations. Further information on estimates is provided under the section below headed, “Critical Accounting Estimates”.

Current wording

Revenue from sale of therapies, net relates to the sale of KIMMTRAK following marketing approval and the sale of tebentafusp under compassionate use and early access programs in France through September 2022. We recognize net revenue from sale of therapies at the point in time that control transfers to a customer, which is typically on delivery to our distributors and healthcare providers. We also operate under consignment arrangements where control passes when our distributors take KIMMTRAK out of consignment inventory. The amount of revenue recognized reflects the consideration to which we expect to be entitled, net of estimated deductions for rebates, chargebacks and product returns. These estimates consider contractual and statutory requirements, the expected payor and patient mix, sell-through data, our customers’ inventory levels, anticipated demand and the volume of customer purchase orders, internal data, and other information provided by our customers and third-party logistics providers, and, in certain countries including France, pricing negotiations. Further information on estimates is provided under the section below headed, “Critical Accounting Estimates”.

Previous wording

Collaboration revenue arose under our collaboration agreements with Genentech, GSK and Lilly. Following the termination of our collaboration agreements with GSK and Lilly our only revenue collaboration as of December 31, 2023, was with Genentech. However, in February 2023, we and Genentech agreed to wind down the co-funding arrangements and clinical trial for IMC-C103C. We could be eligible to receive development and commercial milestone payments and royalties from Genentech on any sales of MAGE-A4 HLA-A02 targeted products arising under the Genentech collaboration. For more information, please see “Item 1. Business—Our Collaborations and License Agreements—Genentech Collaboration.”

Current wording

Historically, collaboration revenue arose under our collaboration agreements with Genentech and Lilly and consisted of non-refundable upfront payments, development milestone payments as well as reimbursement of certain research and development expenses. Our collaboration agreement with Lilly was terminated in 2022 and in February 2023, we and Genentech agreed to wind down the co-funding arrangements and clinical trial for IMC-C103C. We could be eligible to receive development and commercial milestone payments and royalties from Genentech on any sales of MAGE-A4 HLA-A02 targeted products arising under the Genentech collaboration. As of December 31, 2023, we determined our performance obligation under the collaboration with Genentech was complete.

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 revenue from sale of therapies 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 revenue from sale of therapies may also include costs related to manufacturing losses and excess or obsolete inventory costs. Overheads and internal costs of revenue from sale of therapies are minimal under our manufacturing arrangements. Due to the low costs involved in manufacturing KIMMTRAK, cost of revenue from sale of therapies 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, 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"), 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, information technology used in R&D activities 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. Historically, we benefited from the Small and Medium-sized Enterprise, or SME, R&D tax relief program, and for certain specific categories of expenditure, the Research and Development Expenditure Credit program, or RDEC Program. As noted below, for the period ended December 31, 2023 we are only eligible for the RDEC Program. R&D tax credits are presented as a reduction to R&D expenses.

Current wording

As a company that carries out extensive R&D activities, we benefit from the U.K. R&D tax regime. For the periods ending December 31, 2024,2023 and 2022 we claimed credits under the Research and Development Expenditure Credit ("RDEC") program and these credits are presented as a reduction to R&D expenses. For the period ending December 31, 2022, we also benefited from the Small and Medium-sized Enterprise, ("SME") R&D tax relief program.

Previous wording

While the SME Program has been particularly beneficial to us, as under such program the trading losses that arise from our qualifying R&D activities can be surrendered for a cash rebate of up to 33.35% of qualifying expenditure incurred prior to April 1, 2023, and up to 18.6% of qualifying expenditure incurred thereafter. We exceeded the size limit thresholds to qualify as a “small or medium-sized enterprise” as defined for the purposes of the SME Program, or SME, in 2023, and may therefore, unless we once again fall within such thresholds, cease to be eligible to claim U.K. R&D tax credits under the SME Program with effect from 2023.

Current wording

Under the SME program, the trading losses that arise from our qualifying R&D activities can be surrendered for a cash rebate of up to 33.35% of qualifying expenditure incurred prior to April 1, 2023, and up to 18.6% of qualifying expenditure incurred thereafter. We exceeded the size limit thresholds to qualify as a “small or medium-sized enterprise” as defined for the purposes of the SME program in 2023, and may therefore, unless we once again fall within such thresholds, cease to be eligible to claim U.K. R&D tax credits under the SME program with effect from 2023.

Previous wording

Under the RDEC Program, tax credits for qualifying R&D expenditure incurred prior to April 1, 2023 are granted at a headline rate of 13% and can generate cash rebates of up to 10.5% of qualifying R&D expenditure. The headline rate of RDEC increased to 20% on April 1, 2023 and can generate cash rebates of up to 15% on qualifying R&D expenditure incurred from this date.

Current wording

Under the RDEC program, tax credits for qualifying R&D expenses incurred prior to April 1, 2023 are granted at a headline rate of 13% and can generate cash rebates of up to 10.5% of qualifying R&D expenses. The headline rate under the RDEC program increased from 13% to 20% on April 1, 2023 and can generate cash rebates of up to 15% (increased from 10.5%) on qualifying R&D expenses 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 will (if enacted) 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 U.K. or such workers are not subject to U.K. payroll taxes, and (ii) merge the SME 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 expenses 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

Following our commercialization of KIMMTRAK and our substantial increase in planned R&D expenses, as explained above, we also expect that our SG&A expenses will increase. We expect that we will incur increased selling, distribution, commercial, accounting, audit, legal, regulatory, compliance, director, and officer insurance costs as well as investor and further public relations expenses associated with being a public company operating in multiple territories and now being a domestic filer. We anticipate that the additional costs for these services will substantially increase our SG&A expenses. Additionally, if and as we receive further regulatory approvals of product candidates, we anticipate an increase in payroll and expenses in connection with our commercial operations. We have experienced, and may continue to experience, increased personnel costs attributable to offering and maintaining competitive salaries and other impacts due to rising global inflation.

Current wording

In order to support our continued commercialization and global expansion of KIMMTRAK and our substantial increase in planned R&D expenses, and operating as a public company, we expect that we will continue to incur significant selling, distribution, commercial, accounting, audit, legal, regulatory, compliance, director and officer insurance costs, as well as investor and public relations expenses. Additionally, if and as we receive further regulatory approvals of product candidates, we anticipate an increase in personnel-related costs and expenses in connection with our commercial operations. We have experienced, and may continue to experience, increased personnel-related costs attributable to offering and maintaining competitive salaries and other impacts due to global inflation.

Previous wording

Interest expense represents costs under our loan agreements under the effective interest method.

Current wording

Interest expense represents costs under our interest-bearing loans and borrowings under the effective interest method and the loss on extinguishment of loans we have repaid in the period.

Previous wording

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

Current wording

The (loss) gain arises 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 equivalents.

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 credit (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 benefit (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 $286 million as of December 31, 2023. 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 our subsidiary in the United States, relating to unused tax credits on share based payments and other temporary differences since 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 $277.4 million as of December 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.

Previous wording

As we begin to generate significant net product revenue, we may benefit from the U.K.’s “patent box,” which allows profits attributable to revenues from patents or patented products to be taxed at a lower rate than other revenue. The rate of tax for relevant streams of revenue for companies receiving this relief will be 10%.

Current wording

As we begin to generate significant net revenue from sale of therapies, we may benefit from the U.K.’s “patent box” regime, which allows profits attributable to revenues from patents or patented products to be taxed at a lower rate than other revenue. The effective rate of tax for relevant streams of revenue for companies receiving this relief is 10%.

Previous wording

Net product revenue from the sale of KIMMTRAK, and net pre-product revenue from the sale of tebentafusp as part of an early access program presented by country / region based on location of the end customer below (in thousands).

Current wording

Revenue from sale of therapies, net is presented by country / region based on location of the end customer below (in thousands):

Previous wording

For the year ended December 31, 2023, we generated total revenue from the sale of therapies of $238.7 million due to the sale of KIMMTRAK, of which $169.8 million was in the United States, $67.6 million in Europe and $1.3 million in International. Total revenue from the sale of therapies increased in the year ended December 31, 2023 as compared to December 31, 2022, due primarily to increased volume in the United States and global country expansion, as we continued our commercialization efforts.

Current wording

For the year ended December 31, 2024, we generated net revenue from sale of therapies of $310.0 million due to the sale of KIMMTRAK, of which $226.7 million was in the United States, $73.2 million in Europe (including the impact of a net increase in estimated reserves related to prior periods of $18.1 million) and $10.1 million in International. Revenue from the sale of therapies, net increased in the year ended December 31, 2024 as compared to December 31, 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 $23.0 million to $10.7 million in the year ended December 31, 2023, compared to $33.7 million for the year ended December 31, 2022. This decrease was due to (i) the termination of our collaboration with Eli Lilly in 2022; and (ii) 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 by $10.5 million to $0.2 million in the year ended December 31, 2024, compared to $10.7 million for the year ended December 31, 2023. This decrease was due to our February 2023 agreement with Genentech, under the terms of our Genentech Collaboration, to close the Phase 1 clinical trial and for the parties to fulfill the remaining obligations in relation to the trial.

Previous wording

For the year ended December 31, 2023, our R&D expenses were $163.5 million, as compared to $101.9 million for the year ended December 31, 2022.

Current wording

For the year ended December 31, 2024, our R&D expenses were $222.2 million, as compared to $163.5 million for the year ended December 31, 2023.

Previous wording

For the year ended December 31, 2023, our internal R&D expenses increased by $23.7 million. This was primarily due to an increase of $8.6 million in headcount-related expenses as our number of employees and associated staff costs increased with the growth of our clinical and pre-clinical programs, and an increase of $4.6 million related to higher consumables and facilities costs. Our R&D tax credit decreased by $9.3 million in 2023 primarily due to us no longer qualifying as a SME under the UK R&D tax regulations.

Current wording

For the year ended December 31, 2024, our internal R&D expenses increased by $5.8 million. This was primarily due to an increase of $5.5 million in salaries and other employee-related costs as our average number of employees and associated personnel costs increased with the growth of our clinical and preclinical programs, and an increase of $2.3 million in other internal R&D costs related to higher information technology and facilities costs. These cost increases were partially offset by an increase in the U.K. R&D tax credits of$3.3 million in 2024, primarily due to an increase in eligible U.K. R&D expenses.

Previous wording

Salaries and other employee related costs increased by $11.3 million during the year ended December 31, 2023, due to an increase in the number of employees engaged in commercial and administrative activities. Selling and commercial costs increased by $7.5 million reflecting higher costs of commercializing and distributing KIMMTRAK following approval in the United States, Europe and other territories in the year ended December 31, 2022. In addition, other administrative expenses increased by $4.2 million in the year ended December 31, 2023, due to higher costs associated with expansion as a growing publicly listed and commercial company.

Current wording

For the year ended December 31, 2024, our SG&A expenses were $155.8 million, compared to $144.5 million for the year ended December 31, 2023, an increase of $11.3 million. Salaries and other employee-related costs increased by $12.5 million during the year ended December 31, 2024, due to the internalization of our U.S. sales force in the fourth quarter of 2023. Prior to this, these costs were outsourced and included in selling and commercial costs. In addition, there was an increase in the number of employees in business support functions to support our growing pipeline and global commercial expansion. Other administrative expenses increased by $2.0 million in the year ended December 31, 2024, due primarily to higher information technology and facilities costs.

Previous wording

For the year ended December 31, 2023, interest income was $18.0 million compared to $3.8 million for the year ended December 31, 2022. This increase of $14.2 million reflects higher levels of cash and cash equivalents held in 2023 relative to 2022 and increases in interest rates earned on our cash deposits. For the year ended December 31, 2023, interest expense was $5.2 million compared to $5.4 million for the year ended December 31, 2022 which represents interest related to our $50.0 million loan facilities with Pharmakon and Oxford Finance, respectively.

Current wording

For the year ended December 31, 2024, interest income was $25.6 million compared to $18.0 million for the year ended December 31, 2023. This increase of $7.6 million reflects higher levels of cash and cash equivalents held in 2024 relative to 2023 due primarily 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 year ended December 31, 2024, interest expense was $18.8 million compared to $5.2 million for the year ended December 31, 2023 and the increase was primarily related to interest arising on the Notes and the loss on extinguishment of our Pharmakon Loan Agreement of $3.9 million in 2024.

Previous wording

Although we have recorded product revenue for sales of KIMMTRAK and tebentafusp in the year ended December 31, 2023, we have continued to incur operating losses and negative cash flows from our operations since our inception.

Current wording

Although we have recorded revenue from the sale of therapies in the year ended December 31, 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 $795.8 million as of December 31, 2024.

Previous wording

We have funded our operations to date primarily with proceeds from sales of equity securities, debt financing, and payments from collaboration partners. Through December 31, 2023, we have raised an aggregate of $1,275 million. As of December 31, 2023 and 2022, we had cash and cash equivalents of $442.6 million and $402.5 million, respectively.

Current wording

Since our inception, we have funded our operations primarily with proceeds from sales of equity securities, product sales, debt financing, and historical payments from collaboration partners. As of December 31, 2024 and 2023, we had cash and cash equivalents of $455.7 million and $442.6 million, respectively, and marketable securities of $364.6 million and $0, 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 December 31, 2023, no issuances or sales had been made pursuant to the Sales Agreement.

Current wording

In September 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 S-3ASR (File No. 333-278120). As of December 31, 2024, no issuances or sales had been made pursuant to the Sales Agreement.

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 $389.3 million, after deducting the initial purchasers’ discounts and commissions and the 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 semiannually 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. As of the date of this Annual Report, we have not yet repaid those loans and our indebtedness includes both the Pharmakon Loan Agreement and the Notes.

Current wording

In February 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 the 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 semiannually in arrears on February 1 and August 1 of each year, beginning on August 1, 2024, at a rate of 2.50% per year. Part of the proceeds were used to repay in full loans outstanding under our loan agreement with Pharmakon (the “Pharmakon Loan Agreement”).

Previous wording

Other than our loan facility entered into with Pharmakon Advisors, LP in November 2022 (the Pharmakon Loan Agreement), 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, 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

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 in the normal course of business.

Previous wording

Since our inception, we have incurred significant losses due to our substantial R&D and SG&A expenses. We have an accumulated deficit of $744.7 million as of December 31, 2023. We expect to continue to incur significant 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 and continue R&D and clinical activities for our 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

Since our inception, we have incurred significant losses due to our substantial R&D and SG&A expenses. We have an accumulated deficit of$795.8 million as of December 31, 2024. We expect to continue to incur significant 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.

Previous wording

Since our inception, we have raised funds from sales of equity securities, debt financing, product and pre-product revenue and collaboration agreements. 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 longer 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

Since our inception, we have raised funds from sales of equity securities, debt financing, revenue from sale of therapies and collaboration agreements. 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 macroeconomic conditions such as supply chain disruptions, fluctuations in interest rates and volatility in the capital markets, and our longer 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 $442.6 million as of December 31, 2023. Based on our current operating plans, we expect that our existing cash and cash equivalents, along with anticipated revenue from KIMMTRAK and the cash proceeds from our February 2024 Notes offering, will enable us to fund our operating expenses and capital expenditure requirements for at least twelve months from the date of filing of this Annual Report. We have based this estimate on assumptions that may prove to be wrong, and we could use our capital resources sooner than we expect. 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 and cash equivalents of$455.7 million and marketable securities of $364.6 million as of December 31, 2024. Based on our current operating plans, we expect that our existing cash and cash equivalents and marketable securities balances, along with anticipated revenue from KIMMTRAK and the cash proceeds from our February 2024 Notes offering, will enable us to fund our operating expenses and capital expenditure requirements for at least twelve months from the date of filing of this Annual Report. We have based this estimate on assumptions that may prove to be wrong, and we could use our capital resources sooner than we expect. 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.

Previous wording

Until we can generate sufficient revenue to finance our cash requirements, which we may never do, we expect to finance our future cash needs through a combination of public or private equity offerings, debt financings, collaborations, strategic alliances, licensing arrangements and other marketing or distribution arrangements as well as grant funding. If we raise additional capital through marketing and distribution arrangements or other collaborations, strategic alliances or licensing arrangements with third parties, we may have to relinquish certain valuable rights to our product candidates, technologies, future revenue streams or research programs or grant licenses on terms that may not be favorable to us. If we raise additional capital through public or private equity offerings, the terms of these securities may include liquidation or other preferences that adversely affect our shareholders’ rights. Further, to the extent that we raise additional capital through the sale of common stock or securities convertible or exchangeable into common stock, our shareholders’ ownership interest will be diluted. If we raise additional capital through debt financing, it would be subject to fixed payment obligations and may be subject to covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends. If we are unable to obtain additional funding on favorable terms when needed, we may have to delay, reduce the scope of or terminate one or more of our R&D programs or clinical trials.

Current wording

Until we can generate sufficient revenue to finance our cash requirements, which we may never do, we expect to finance our future cash needs through a combination of public or private equity offerings, debt financings, collaborations, strategic alliances, licensing arrangements and other marketing or distribution arrangements as well as grant funding. If we raise additional capital through marketing and distribution arrangements or other collaborations, strategic alliances or licensing arrangements with third parties, we may have to relinquish certain valuable rights to our product candidates, technologies, future revenue streams or research programs or grant licenses on terms that may not be favorable to us. If we raise additional capital through public or private equity offerings, the terms of these securities may include liquidation or other preferences that adversely affect our shareholders’ rights. Further, to the extent that we raise additional capital through the sale of ordinary shares or securities convertible or exchangeable into ordinary shares, our shareholders’ ownership interest will be diluted. If we raise additional capital through debt financing, it would be subject to fixed payment obligations and may be subject to covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends. If we are unable to obtain additional funding on favorable terms when needed, we may have to delay, reduce the scope of or terminate one or more of our R&D programs or clinical trials.

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 $61.3 million. The majority of such payments represent longer-term commitments as outlined in the notes to our 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 $65.6 million. The majority of such payments represent longer-term commitments as outlined in the notes to our 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.