UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2024

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number 001-37368

ADAPTIMMUNE THERAPEUTICS PLC

(Exact name of Registrant as specified in its charter)


England and Wales	Not Applicable
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

60 Jubilee Avenue, Milton Park

Abingdon, Oxfordshire OX14 4RX

United Kingdom

(Address of principal executive offices)

(44) 1235 430000

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol	Name of each exchange on which registered

American Depositary Shares, each representing 6 Ordinary Shares, par value £0.001 per share	ADAP	The Nasdaq Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ⌧ Yes ◻ No

Indicate by check mark whether the registrant has submitted electronically, every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ⌧ Yes ◻ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer ◻	Accelerated filer ◻
Non-accelerated filerx	Smaller reporting company x
	Emerging growth company☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standard provided pursuant to Section 13(a) of the Exchange Act. ◻

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ⌧ No

As of May 13, 2024, the number of outstanding ordinary shares par value £0.001 per share of the Registrant is 1,533,371,874.

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PART I — FINANCIAL INFORMATION

Item 1. Financial Statements.

ADAPTIMMUNE THERAPEUTICS PLC

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share data)


	March 31,		December 31,
	2024		2023
Assets
Current assets
Cash and cash equivalents	$	140,670	$	143,991
Marketable securities - available-for-sale debt securities (amortized cost of $2,981 and $2,940) net of allowance for expected credit losses of $0 and $0		2,982		2,947
Accounts receivable, net of allowance for expected credit losses of $0 and $0		8,404		821
Other current assets and prepaid expenses		34,847		59,793
Total current assets		186,903		207,552

Restricted cash		2,858		3,026
Operating lease right-of-use assets, net of accumulated amortization of $14,381 and $13,220		19,434		20,762
Property, plant and equipment, net of accumulated depreciation of $48,445 and $46,020		48,291		50,946
Intangible assets, net of accumulated amortization of $5,198 and $5,155		524		330
Total assets	$	258,010	$	282,616

Liabilities and stockholders’ equity
Current liabilities
Accounts payable	$	6,587	$	8,128
Operating lease liabilities, current		5,250		5,384
Accrued expenses and other current liabilities		23,050		30,303
Deferred revenue, current		31,524		28,973
Total current liabilities		66,411		72,788

Operating lease liabilities, non-current		18,442		19,851
Deferred revenue, non-current		147,365		149,060
Other liabilities, non-current		1,417		1,404
Total liabilities		233,635		243,103

Stockholders’ equity
Common stock - Ordinary shares par value £0.001, 1,702,760,280 authorized and 1,532,974,878 issued and outstanding (2023: 1,702,760,280 authorized and 1,363,008,102 issued and outstanding)		2,081		1,865
Additional paid in capital		1,096,690		1,064,569
Accumulated other comprehensive loss		(2,720)		(3,748)
Accumulated deficit		(1,071,676)		(1,023,173)
Total stockholders' equity		24,375		39,513

Total liabilities and stockholders’ equity	$	258,010	$	282,616

See accompanying notes to unaudited condensed consolidated financial statements.

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ADAPTIMMUNE THERAPEUTICS PLC

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except share and per share data)



	Three months ended
	March 31,
	2024		2023
Revenue	$	5,678	$	47,601
Operating expenses
Research and development		(35,207)		(25,548)
General and administrative		(19,732)		(20,397)
Total operating expenses		(54,939)		(45,945)
Operating (loss)/profit		(49,261)		1,656
Interest income		1,345		676
Other income (expense), net		(61)		(671)
(Loss)/profit before income tax expense		(47,977)		1,661
Income tax expense		(526)		(625)
Net (loss)/profit attributable to ordinary shareholders	$	(48,503)	$	1,036

Net (loss)/profit per ordinary share
Basic	$	(0.03)	$	0.00
Diluted	$	(0.03)	$	0.00


Weighted average shares outstanding:
Basic		1,451,241,661		991,330,402
Diluted		1,451,241,661		1,000,276,615

See accompanying notes to unaudited condensed consolidated financial statements.

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ADAPTIMMUNE THERAPEUTICS PLC

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME/LOSS

(In thousands)



	Three months ended
	March 31,
	2024		2023
Net (loss)/profit	$	(48,503)	$	1,036
Other comprehensive (loss)/income, net of tax
Foreign currency translation adjustments, net of tax of $0, and $0		6,815		(16,908)
Foreign currency gains (losses) on intercompany loan of a long-term investment nature, net of tax of $0, and $0		(5,782)		15,526
Unrealized holding gains (losses) on available-for-sale debt securities, net of tax of $0, and $0		(5)		472
Total comprehensive (loss)/profit for the period	$	(47,475)	$	126

See accompanying notes to unaudited condensed consolidated financial statements.

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ADAPTIMMUNE THERAPEUTICS PLC

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGE IN EQUITY

(In thousands, except share data)


						Accumulated
						other
						comprehensive				Total
	Common	Common		Additional		(loss)		Accumulated		stockholders’
	stock	stock		paid in capital		income		deficit		equity
Balance as of January 1, 2024	1,363,008,102	$	1,865	$	1,064,569	$	(3,748)	$	(1,023,173)	$	39,513

Net loss	—		—		—		—		(48,503)		(48,503)
Other comprehensive profit	—		—		—		1,028		—		1,028
Issuance of shares upon exercise of stock options	6,297,720		8		66		—		—		74
Issue of shares under At The Market sales agreement, net of commission and expenses	163,669,056		208		28,953		—		—		29,161
Share-based compensation expense	—		—		3,102						3,102
Balance as of March 31, 2024	1,532,974,878	$	2,081	$	1,096,690	$	(2,720)	$	(1,071,676)	$	24,375

See accompanying notes to unaudited condensed consolidated financial statements.

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ADAPTIMMUNE THERAPEUTICS PLC

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGE IN EQUITY

(In thousands, except share data)


						Accumulated
						other
						comprehensive				Total
	Common	Common		Additional		(loss)		Accumulated		stockholders’
	stock	stock		paid in capital		income		deficit		equity
Balance as of January 1, 2023	987,109,890	$	1,399	$	990,656	$	(875)	$	(909,302)	$	81,878

Net profit	—		—		—		—		1,036		1,036
Other comprehensive loss	—		—		—		(910)		—		(910)
Issuance of shares upon exercise of stock options	6,035,574		7		1		—		—		8
Issuance of shares upon completion of public offering, net of issuance costs	554,496		1		187		—		—		188
Share-based compensation expense	—		—		1,676		—		—		1,676
Balance as of March 31, 2023	993,699,960	$	1,407	$	992,520	$	(1,785)	$	(908,266)	$	83,876

See accompanying notes to unaudited condensed consolidated financial statements.

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ADAPTIMMUNE THERAPEUTICS PLC

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)


	Three months ended
	March 31,
	2024		2023
Cash flows from operating activities
Net (loss)/profit	$	(48,503)	$	1,036
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation		2,771		1,659
Amortization		59		186
Share-based compensation expense		3,102		1,676
Unrealized foreign exchange losses		305		563
(Accretion)/amortization on available-for-sale debt securities		(23)		112
Other		(19)		134
Changes in operating assets and liabilities:
Decrease in receivables and other operating assets		15,620		3,683
(Decrease)/increase in payables and other current liabilities		(7,650)		21
Increase/(decrease) in deferred revenue		2,388		(46,353)
Net cash used in operating activities		(31,950)		(37,283)

Cash flows from investing activities
Acquisition of property, plant and equipment		(102)		(2,349)
Acquisition of intangible assets		(256)		(173)
Maturity or redemption of marketable securities		—		50,863
Net cash (used in)/provided by investing activities		(358)		48,341

Cash flows from financing activities
Proceeds from issuance of common stock from offerings, net of commissions and issuance costs		29,161		188
Proceeds from exercise of stock options		74		8
Net cash provided by financing activities		29,235		196

Effect of currency exchange rate changes on cash, cash equivalents and restricted cash		(416)		588
Net (decrease)/increase in cash, cash equivalents and restricted cash		(3,489)		11,842
Cash, cash equivalents and restricted cash at start of period		147,017		109,602
Cash, cash equivalents and restricted cash at end of period	$	143,528	$	121,444

See accompanying notes to unaudited condensed consolidated financial statements.

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ADAPTIMMUNE THERAPEUTICS PLC

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 1 — General

Adaptimmune Therapeutics plc is registered in England and Wales. Its registered office is 60 Jubilee Avenue, Milton Park, Abingdon, Oxfordshire, OX14 4RX, United Kingdom. Adaptimmune Therapeutics plc and its subsidiaries (collectively “Adaptimmune” or the “Company”) is a clinical-stage biopharmaceutical company primarily focused on providing novel cell therapies to people with cancer. We are a leader in the development of T-cell therapies for solid tumors. The Company’s proprietary platform enables it to identify cancer targets, find and develop cell therapy candidates active against those targets and produce therapeutic candidates for administration to patients.

The Company is subject to a number of risks similar to other biopharmaceutical companies in the clinical development stage including, but not limited to, the need to obtain adequate additional funding, possible failure of preclinical programs or clinical programs, the need to obtain marketing approval for its cell therapies, competitors developing new technological innovations, the need to successfully commercialize and gain market acceptance of its cell therapies, the need to develop a reliable commercial manufacturing process, the need to commercialize any cell therapies that may be approved for marketing, and protection of proprietary technology. If the Company does not successfully commercialize any of its cell therapies, it will be unable to generate product revenue or achieve profitability. The Company had an accumulated deficit of $1,071,676,000 as of March 31, 2024.

Note 2 — Summary of Significant Accounting Policies

(a) Basis of presentation

The condensed consolidated financial statements of Adaptimmune Therapeutics plc and its subsidiaries and other financial information included in this Quarterly Report are unaudited and have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) and are presented in U.S. dollars. All significant intercompany accounts and transactions between the Company and its subsidiaries have been eliminated on consolidation.

The unaudited condensed consolidated financial statements presented in this Quarterly Report should be read in conjunction with the consolidated financial statements and accompanying notes included in the Company’s Annual Report on Form 10-K filed with the SEC on March 6, 2024 (the “Annual Report”). The balance sheet as of December 31, 2023 was derived from audited consolidated financial statements included in the Company’s Annual Report but does not include all disclosures required by U.S. GAAP. The Company’s significant accounting policies are described in Note 2 to those consolidated financial statements.

Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted from these interim financial statements. However, these interim financial statements include all adjustments, consisting only of normal recurring adjustments, which are, in the opinion of management, necessary to fairly state the results of the interim period. The interim results are not necessarily indicative of results to be expected for the full year.

(b) Use of estimates in interim financial statements

The preparation of interim financial statements, in conformity with U.S. GAAP and SEC regulations, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the interim financial statements and reported amounts of revenues and expenses during the reporting period. Estimates and assumptions are made in various areas, including in relation to valuation allowances relating to deferred tax assets, revenue recognition, the fair value of assets acquired, liabilities assumed and consideration transferred in business combinations, and estimation of the incremental borrowing rate for operating leases. If actual results differ from the Company’s estimates, or to the extent these estimates are adjusted in future periods, the Company’s results of operations could either benefit from, or be adversely affected by, any such change in estimate.

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(c) Fair value measurements

The Company is required to disclose information on all assets and liabilities reported at fair value that enables an assessment of the inputs used in determining the reported fair values. The fair value hierarchy prioritizes valuation inputs based on the observable nature of those inputs. The hierarchy defines three levels of valuation inputs:

Level 1 - Quoted prices in active markets for identical assets or liabilities

Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly

Level 3 - Unobservable inputs that reflect the Company's own assumptions about the assumptions market participants would use in pricing the asset or liability

The carrying amounts of the Company’s cash and cash equivalents, restricted cash, accounts receivable, accounts payable and accrued expenses approximate fair value because of the short-term nature of these instruments. The fair value of marketable securities, which are measured at fair value on a recurring basis is detailed in Note 6, Fair value measurements.

(d) Significant concentrations of credit risk

The Company held cash and cash equivalents of $140,670,000, marketable securities of $2,982,000 and restricted cash of $2,858,000 as of March 31, 2024. The cash and cash equivalents and restricted cash are held with multiple banks and the Company monitors the credit rating of those banks. The Company maintains cash balances in excess of amounts insured by the Federal Deposit Insurance Corporation in the United States and the U.K. Government Financial Services Compensation Scheme in the United Kingdom. The Company’s investment policy limits investments to certain types of instruments, such as money market instruments, corporate debt securities and commercial paper, places restrictions on maturities and concentration by type and issuer and specifies the minimum credit ratings for all investments and the average credit quality of the portfolio.

The Company had two customers during the three months ended March 31, 2024 which are Genentech and GSK. There were accounts receivable of $8,404,000 as of March 31, 2024 and $821,000 as of December 31, 2023. The Company has been transacting with Genentech since 2021 and GSK since 2014, during which time no credit losses have been recognized. As of March 31, 2024, no allowance for expected credit losses is recognized on the basis that the possibility of credit losses arising on its receivables as of March 31, 2024 is considered to be remote. As of March 31, 2024 there are no receivables, either accrued or billed, due from Genentech that are no longer recoverable following the termination of the Genentech Collaboration and License Agreement.

Management analyses current and past due accounts and determines if an allowance for credit losses is required based on collection experience, credit worthiness of customers and other relevant information. The process of estimating the uncollectible accounts involves assumptions and judgments and the ultimate amounts of uncollectible accounts receivable could be in excess of the amounts provided.

(e) New accounting pronouncements

Adopted in the current period

Improvements to Reportable Segment Disclosures

In November 2023, the FASB issued ASU 2023-07 – Segment Reporting (Topic 280) – Improvements to Reportable Segment Disclosures, which improves segment disclosure requirements, primarily through enhanced disclosure requirements for significant segment expenses. The improved disclosure requirements apply to all public entities that are required to report segment information, including those with only one reportable segment. The Company adopted the guidance in the fiscal year beginning January 1, 2024. There was no impact on the Company’s reportable segments identified and additional required disclosures have been included in Note 14.

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To be adopted in future periods

Improves to Income Tax Disclosures

In December 2023, the FASB issued ASU 2023-09 – Income Taxes (Topic 740) – Improvements to Income Tax Disclosures, which improves income tax disclosures primarily relating to the rate reconciliation and income taxes paid information. This includes a tabular reconciliation using both percentages and reporting currency amounts, covering various tax and reconciling items, and disaggregated summaries of income taxes paid during the period. For public business entities, the guidance is effective for annual periods beginning after December 15, 2024, with early adoption permitted. The Company intends to adopt the guidance in the fiscal year beginning January 1, 2025. The Company is currently evaluating the impact of the guidance on its Consolidated financial statements.

Note 3 — Revenue

The Company generates development revenue from collaboration agreements with customers. The Company had two revenue-generating contracts with customers in the three months ended March 31, 2024, compared to two in the three months ended March 31, 2023: a termination and transfer agreement with GSK that was effective on April 6, 2023, a strategic collaboration and license agreement with Genentech and a collaboration agreement with Astellas that was terminated as of March 6, 2023. The collaboration and licence agreement with Genentech was terminated in April 2024.

Revenue comprises the following categories (in thousands):


	Three months ended
	March 31,
	2024		2023

Development revenue	$	5,678	$	47,601
	$	5,678	$	47,601

Deferred revenue decreased by $856,000 from $178,033,000 at December 31, 2023 to $178,889,000 at March 31, 2024 due to revenue recognized during the quarter of $5,678,000 that was included in deferred revenue at December 31, 2023 and a $1,507,000 decrease caused by the change in the exchange rate between pound sterling and the U.S. dollar from £1.00 to $1.27 at December 31, 2023 to £1.00 to $1.26 at March 31, 2024. This was partially offset by a milestone of $7,574,000 from GSK that was met and accrued at March 31, 2024.

The aggregate amount of the transaction price that is allocated to performance obligations that are unsatisfied or partially satisfied under the agreements as of March 31, 2024 was $305,509,000.

The Genentech Collaboration and License Agreement

The amount of the transaction price that is allocated to performance obligations that are unsatisfied or partially satisfied under the Genentech agreement as of March 31, 2024 was $271,015,000. Of this amount $165,672,000 is allocated to the research services and rights granted for the initial ‘off-the-shelf’ collaboration targets, $85,963,000 is allocated to the research services and rights granted for the personalized therapies, $13,081,000 is allocated to the material rights to designate the additional ‘off-the-shelf’ collaboration targets, $5,039,000 is allocated to the material right for the first option to extend the research term and $1,260,000 is allocated to the material right for the option to extend the research term a second time.

The Company originally expected to satisfy the performance obligations relating to the initial ‘off-the-shelf’ collaboration targets and the personalized therapies as development progressed and recognized revenue based on an estimate of the percentage of completion of the project determined based on the costs incurred on the project as a percentage of the total expected costs. The Company expected to satisfy the performance obligations relating to the material rights to designate additional ‘off-the-shelf’ collaboration targets from the point that the options would have been exercised and then as development progressed, in line with the initial ‘off-the-shelf’ collaboration targets, or at the point in time that the rights expired. The Company expected to satisfy the performance obligations relating to the material rights

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to extend the research term from the point that the options would have been exercised and then over the period of the extension, or at the point in time that the rights expired.

On April 12, 2024 the Company announced the termination of the collaboration with Genentech in relation to the research, development and commercialization of cancer targeted allogeneic T-cell therapies. See Note 15 for further discussion.

The GSK Termination and Transfer Agreement

On April 6, 2023, the Company and GSK entered into a Termination and Transfer Agreement (the “Termination and Transfer Agreement”) regarding the return of rights and materials comprised within the PRAME and NY-ESO cell therapy programs. The parties will work collaboratively to ensure continuity for patients in ongoing lete-cel clinical trials forming part of the NY-ESO cell therapy program.

As part of the agreement, sponsorship and responsibility for the ongoing IGNYTE and long-term follow-up (“LTFU”) trials relating to the NY-ESO cell therapy program will transfer to Adaptimmune. In return for this, Adaptimmune received an upfront payment of £7.5 million in June 2023 following the signing of the agreement and milestone payment of £3 million and £12 million in September 2023 and December 2023, respectively. Further milestone payments totalling £7.5 million will be due in relation to successive stages of transfer of the trials of which a milestone of £6 million had been met and accrued, but not billed, at March 31, 2024.

The Company determined that GSK is a customer and has accounted for the agreement under ASC 606 Revenue from Contracts with Customers. The agreement is accounted for as a separate contract from the original GSK Collaboration and License Agreement. The Company has identified the following performance obligations under the agreement: (i) to take over sponsorship for the IGNYTE trial and (ii) to take over sponsorship for the LTFU trial.

The aggregate transaction price at inception of the agreement was $37,335,000 comprising the total £30,000,000 upfront and milestone payments. No value was ascribed to non-cash consideration and there was no variable consideration identified. The aggregate transaction price is allocated to the performance obligations depending on the relative standalone selling price of the performance obligations. In determining the best estimate of the relative standalone selling price, the Company considered the internal pricing objectives it used in negotiating the contract, together with internal data regarding the expected costs and a standard margin on those costs, for completing the trials. The amount of the transaction price allocated to the performance obligation is recognized as or when the Company satisfies the performance obligation.

The Company expects to satisfy the performance obligations over time from the point that sponsorship of the active trials that make up the trial transfers and then over the period that the trial is completed, based on the number of patients transferred and still actively enrolled to date on the trial at a given period-end relative to the total estimated periods of active patient enrollment over the estimated duration of the trial.

The Company considers that this depicts the progress of the completion of the trials under the Termination and Transfer Agreement, as the status of patients on the trial is not directly affected by decisions that the Company might make relating to its own development of the NY-ESO cell therapy program.

The amount of the transaction price that is allocated to performance obligations that are unsatisfied or partially satisfied under the agreement as of March 31, 2024 was $34,495,000, of which $18,325,000 is allocated to the IGNYTE performance obligation and $16,170,000 is allocated to the LTFU performance obligation.

The Astellas Collaboration Agreement

The Company and Universal Cells mutually agreed to terminate the Astellas Collaboration Agreement as of March 6, 2023 (the “Termination Date”). In connection with the termination, all licenses and sublicenses granted to either party pursuant to the Collaboration Agreement ceased as of the Termination Date. There were no termination penalties in connection with the termination; however the Company is still entitled to receive reimbursement for research and development work performed up to and including a period of 30 days after the Termination Date.

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The termination was accounted for as a contract modification on a cumulative catch-up basis. No performance obligations were identified as a result of the modification as there were no further goods or services to be provided by the Company and the modification resulted in the remaining unsatisfied and partially satisfied performance obligations under the collaboration becoming fully satisfied. The aggregate transaction price of the contract modification was $42,365,000 which included the remaining deferred income that had not been recognized as revenue as of the date of the modification and variable consideration from the remaining reimbursement income to be billed under the collaboration at the end of the 30 day period after the Effective Date. The transaction price of the modification was recognized in full in March 2023 and there is no remaining transaction price allocated to performance obligations that are unsatisfied or partially satisfied under, no remaining deferred income relating to, the agreement as of March 31, 2024 and no revenue was recognized in 2024.

Note 4 — (Loss)/profit per share

The following tables reconcile the numerator and denominator in the basic and diluted (loss)/profit per share computation (in thousands):


	Three months ended
	March 31,
	2024		2023
Numerator for basic and diluted (loss)/profit per share
Net (loss)/profit attributable to ordinary shareholders	$	(48,503)	$	1,036
Net (loss)/profit attributable to ordinary shareholders used for basic and diluted (loss)/profit per share	$	(48,503)	$	1,036


	Three months ended
	March 31,
	2024	2023
Denominator for basic (loss)/profit per share - Weighted average shares outstanding	1,451,241,661	991,330,402
Effect of dilutive securities:
Employee stock options	—	8,946,213
Denominator for diluted (loss)/profit per share	1,451,241,661	1,000,276,615

The dilutive effect of 249,957,127 and 128,614,053 stock options outstanding as of March 31, 2024 and 2023 respectively have been excluded from the diluted (loss)/profit per share calculation for the three months ended March 31, 2024 and 2023 because they would have an antidilutive effect on the (loss)/profit per share for the period.

Note 5 — Accumulated other comprehensive (loss)/income

The Company reports foreign currency translation adjustments and the foreign exchange gain or losses arising on the revaluation of intercompany loans of a long-term investment nature within Other comprehensive (loss) income. Unrealized gains and losses on available-for-sale debt securities are also reported within Other comprehensive (loss) income until a gain or loss is realized, at which point they are reclassified to Other (expense) income, net in the Condensed Consolidated Statement of Operations.

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The following tables show the changes in Accumulated other comprehensive (loss) income (in thousands):


	Accumulated		Accumulated			Total
	foreign		unrealized			accumulated
	currency		(losses) gains on			other
	translation		available-for-sale			comprehensive
	adjustments		debt securities			(loss) income

Balance at January 1, 2024	$	(3,754)	$	6	$	(3,748)
Foreign currency translation adjustments		6,815		—		6,815
Foreign currency gains on intercompany loan of a long-term investment nature, net of tax of $0		(5,782)		—		(5,782)
Unrealized holding gains on available-for-sale debt securities, net of tax of $0		—		(5)		(5)
Balance at March 31, 2024	$	(2,721)	$	1	$	(2,720)

	Accumulated		Accumulated		Total
	foreign		unrealized		accumulated
	currency		(losses) on		other
	translation		available-for-sale		comprehensive
	adjustments		debt securities		(loss) income

Balance at January 1, 2023	$	55	$	(930)		(875)
Foreign currency translation adjustments		(16,908)		—		(16,908)
Foreign currency gains on intercompany loan of a long-term investment nature, net of tax of $0		15,526		—		15,526
Unrealized holding gains on available-for-sale debt securities, net of tax of $0		—		472		472
Balance at March 31, 2023	$	(1,327)	$	(458)	$	(1,785)

Note 6 — Fair value measurements

Assets and liabilities measured at fair value on a recurring basis based on Level 1, Level 2, and Level 3 fair value measurement criteria as of March 31, 2024 are as follows (in thousands):


			Fair value measurements using
	March 31,		Level 1		Level 2		Level 3
	2024
Assets classified as available-for-sale debt securities:
Corporate debt securities	$	2,982		2,982	$	—		—
	$	2,982	$	2,982	$	—	$	—

The Company estimates the fair value of available-for-sale debt securities with the aid of a third party valuation service, which uses actual trade and indicative prices sourced from third-party providers on a daily basis to estimate the fair value. If observed market prices are not available (for example securities with short maturities and infrequent secondary market trades), the securities are priced using a valuation model maximizing observable inputs, including market interest rates.

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Note 7 — Marketable securities – available-for-sale debt securities

As of March 31, 2024, the Company has the following investments in marketable securities (in thousands):


				Gross		Gross		Aggregate
	Remaining	Amortized		unrealized		unrealized		estimated
	contractual maturity	cost		gains		losses		fair value
Available-for-sale debt securities:
Corporate debt securities	3 months to 1 year	$	2,981	$	1	$	—	$	2,982
		$	2,981	$	1	$	—	$	2,982

The aggregate fair value (in thousands) and number of securities held by the Company (including those classified as cash equivalents) in an unrealized loss position as of March 31, 2024 and December 31, 2023 are as follows:



	March 31, 2024						December 31, 2023
	Fair market value of investments in an unrealized loss position		Number of investments in an unrealized loss position		Unrealized losses		Fair market value of investments in an unrealized loss position		Number of investments in an unrealized loss position		Unrealized losses
Marketable securities in a continuous loss position for less than 12 months:
Corporate debt securities	$	—		—	$	—	$	1,600		1	$	(1)
	$	—		—	$	—	$	1,600		1	$	(1)

As of March 31, 2024, no allowance for expected credit losses has been recognized in relation to securities in an unrealized loss position as there are no securities in an unrealized loss position.

Note 8 — Other current assets

Other current assets consisted of the following (in thousands):


	March 31,		December 31,
	2024		2023
Research and development credits receivable	$	18,697	$	46,098
Prepayments		9,854		9,954
Clinical materials		1,668		1,329
VAT receivable		1,791		—
Other current assets		2,837		2,412
	$	34,847	$	59,793

On January 19, 2024, a receipt of £24.2 million ($30.8 million) was received from HMRC relating to the Research and development credits receivable.

Note 9 — Operating leases

The Company has operating leases in relation to property for office, manufacturing and research facilities.

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The following table shows the lease costs for the three months ended March 31, 2024 and 2023 and the weighted-average remaining lease term and the weighted-average discount rate as at March 31, 2024 and 2023:


	Three months ended
	March 31,
	2024		2023
Lease cost:
Operating lease cost	$	1,682	$	1,060
Short-term lease cost		59		137
	$	1,741	$	1,197

	March 31,
	2024		2023

Weighted-average remaining lease term - operating leases	5.3 years		6.7 years
Weighted-average discount rate - operating leases	8.0%		6.8%

The maturities of operating lease liabilities as of March 31, 2024 are as follows (in thousands):


	Operating leases

2024	$	5,189
2025		5,561
2026		4,362
2027		5,560
2028		2,141
after 2028		5,499
Total lease payments		28,312
Less: Imputed interest		(4,620)
Present value of lease liability	$	23,692

The maximum lease term without activation of termination options is to 2041.

Note 10 — Accrued expenses and other current liabilities

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


	March 31,		December 31,
	2024		2023
Accrued clinical and development expenditure	$	12,049	$	12,351
Accrued employee expenses		6,248		13,226
VAT payable		—		1,398
Other accrued expenditure		4,113		3,277
Other		640		51
	$	23,050	$	30,303

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Note 11 — Share-based compensation

The following table shows the total share-based compensation expense included in the unaudited consolidated statements of operations (in thousands):


		Three months ended
		March 31,
	2024		2023
Research and development	$	813	$	116
General and administrative		2,289		1,560
	$	3,102	$	1,676

The following table shows information about share options and options which have a nominal exercise price (similar to restricted stock units (RSUs)) granted:


		Three months ended
		March 31,
	2024		2023
Number of options over ordinary shares granted		37,097,688		21,755,328
Weighted average fair value of ordinary shares options	$	0.12	$	0.25
Number of additional options with a nominal exercise price granted		26,984,352		19,866,912
Weighted average fair value of options with a nominal exercise price	$	0.14	$	0.32

Note 12 — Stockholders’ equity

On April 8, 2022 the Company entered into a sales agreement with Cowen (the “Sales Agreement”) under which we may from time to time issue and sell ADSs representing our ordinary shares through Cowen in ATM offerings for an aggregate offering price of up to $200 million. In the three months ended March 31, 2024 the Company sold 27,278,176 ADSs under the agreement representing 163,669,056 ordinary shares resulting in net proceeds to the Company of $29,149,648 after deducting commissions payable under the Sales Agreement and estimated issuance costs. As of March 31, 2024, approximately $156,228,841 remained available for sale under the Sales Agreement.

Note 13 – Business combinations

On March 6, 2023 the Company announced entry into a definitive agreement under which it would combine with TCR² Therapeutics Inc. (“TCR²”) in an all-stock transaction to create a preeminent cell therapy company focused on treating solid tumors. TCR² is a Boston, Massachusetts-based T-cell therapy company focused on treating solid tumours, with clinical franchises undergoing trials and a preclinical pipeline. The combination provides extensive benefits for clinical development and product delivery supported by complementary technology platforms.

The transaction was approved by the Company’s shareholders and TCR² stockholders on May 30, 2023 and the merger became effective on June 1, 2023. The Company issued 357,429,306 shares to TCR²stockholders in return for 100% of TCR²’s stock. As a result, TCR² and all entities within the TCR² group, became wholly owned by the Company. Following the completion of the transaction, the former TCR² stockholders held approximately 25% of the Company, whereas the Company’s pre-existing shareholders held approximately 75%.

The Company was identified as the acquirer, with TCR² as the acquiree, and June 1, 2023 was determined to be the acquisition date.

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The consideration transferred for TCR² includes the shares issued by the Company to former TCR² shareholders, plus the fair value of replacement awards of the Company granted to TCR² grantholders attributable to pre-combination vesting. The table below summarizes the consideration transferred and the amounts of the assets acquired and liabilities assumed recognized at the acquisition date:


Consideration transferred:
Fair value of 357,429,306 ordinary shares issued	$	60,763
Fair value of replacement options and RSU-style options granted attributable to pre-combination service:		963
Purchase consideration	$	61,726

Identifiable assets acquired and liabilities assumed:

Assets acquired
Cash and cash equivalents	$	43,610
Restricted cash		1,654
Marketable securities - available-for-sale debt securities		39,532
Other current assets and prepaid expenses		6,029
Property, plant and equipment		2,712
Operating lease right-of-use assets		5,145
Intangible assets		58
Total assets acquired	$	98,740

Liabilities assumed
Accounts payable		(6,210)
Accrued expenses and other current liabilities		(4,537)
Operating lease liabilities, current		(1,974)
Operating lease liabilities, non-current		(2,244)
Total liabilities assumed	$	(14,965)

Net assets acquired and liabilities assumed	$	83,775

The fair value of the 357,429,306 ordinary shares issued to TCR² stockholders of $60,763,000 was determined on the basis of the closing market price of $1.02 ($0.17 per ordinary share) of the Company’s ADSs as of May 31, 2023.

The assets acquired and liabilities assumed were measured based on management’s estimates of the fair value as of the acquisition date, excluding leases.

The lease contracts acquired by the Company relate to the rental of office and manufacturing spaces in which TCR² was the lessee. The Company retained TCR²’s previous classification of acquired leases as operating leases as there were no lease modifications as a result of the combination, with the exception of leases with a remaining lease term of 12 months or less at the acquisition date, for which no assets or liabilities were recognized at the acquisition date. The lease liabilities were measured at the present value of the remaining lease payments as if the leases were a new lease as of June 1, 2023, discounted using the incremental borrowing rate. The right-of-use assets were measured at the same amount as the lease liabilities, with adjustments to reflect favorable or unfavorable terms compared to market terms. No intangible assets were identified in relation to lease contracts acquired.

The table below summarises the calculation for the gain on bargain purchase, recognized in the Gain on bargain purchase line in the Consolidated Statement of Operations:


Gain on bargain purchase

Purchase consideration	$	(61,726)
Net assets acquired and liabilities assumed		83,775
Gain on bargain purchase	$	22,049

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The transaction resulted in a gain on bargain purchase as the purchase consideration included in the agreement on March 6, 2023 comprising Company ADSs was based on a fixed ratio of 1.5117 of the Company’s ADSs to be issued for each TCR² stock acquired. As the transaction was an all-stock transaction, the value of the consideration was highly sensitive to changes in the Company’s ADS price. The price of a Company ADS fell from a closing price of $1.32 on March 6, 2023 compared to a closing price of $1.02 on May 31, 2023.

The amount of revenue and earnings of the combined entity for the three months ended March 31, 2023, had the acquisition date been January 1, 2022, would be as follows:


	Three months ended
	March 31, 2023
Revenue	$	47,601
Net loss		(31,325)

The supplemental pro forma earnings for the three months ended March 31, 2023 were adjusted to exclude the $3.8 million of acquisition-related costs recognized by the Company and the $3.7 million of acquisition-related costs incurred by TCR² during that period. The supplemental pro forma earnings was adjusted to include the impact of replacement options issued, as if these had been issued as of January 1, 2022. Accordingly, the share-based compensation expense recognized by TCR² in the three months ended March 31, 2023 of $0.6 million was excluded from the pro forma earnings.

TCR² did not generate revenue in the period from January 1, 2023 to March 31, 2023, as it has no contracts with customers, so there was no impact on the revenue included in the Company’s Consolidated Statement of Operations or in the supplemental pro forma revenue and earnings presented above.

The Company incurred the following acquisition-related costs that were recognized as an expense in 2023:


	Three months ended		Total
	March 31,		acquisition-related
	2023		costs
Legal, professional and accounting fees	$	3,323	$	5,174
Bankers' fees		750		2,172
Total acquisition-related costs	$	4,073	$	7,346

All acquisition-related costs that were recognized as an expense were recognized in General and administrative expenses in the Consolidated Statement of Operations. No issuance costs were incurred relating to the issuance of shares to TCR² stockholders.

Note 14 – Segment reporting

The Company has one reportable segment relating to the research, development and planned commercialization of its novel cell therapies. The segment derives its current revenues from research and development collaborations.

The Company’s chief operating decision maker (the “CODM”), its Chief Executive Officer and the senior leadership team (comprising the Executive Team members and three senior vice presidents), manages the Company’s operations on an integrated basis for the purposes of allocating resources. When evaluating the Company’s financial performance, the CODM reviews total revenues, total expenses and expenses by function and the CODM makes decisions using this information on a global basis.

The table below is a summary of the segment profit or loss, including significant segment expenses (in thousands):

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	Three months ended
	March 31,
	2024		2023
Revenue	$	5,678	$	47,601
Less:
Research		(3,800)		(3,500)
CMC and Quality		(14,200)		(14,300)
Biomarkers		(2,500)		(1,200)
Development and Compliance		(12,600)		(9,200)
Infrastructure management and Facilities		(7,700)		(6,200)
Commercial planning		(2,600)		(1,100)
Support functions		(9,000)		(13,600)
Other segment expenses^(a)		(2,539)		3,155
Total operating expenses		(54,939)		(45,945)
Operating (loss)/profit		(49,261)		1,656

Interest income		1,345		676
Other income (expense), net		(61)		(671)
Income tax expense		(526)		(625)
Segment and consolidated net (loss)/profit	$	(48,503)	$	1,036

^(a)Other segment expenses includes reimbursements receivable for research and development tax and expenditure credits, depreciation, amortization and share-based compensation expenses.

Note 15 – Subsequent events

On April 12, 2024 we announced the termination of the strategic collaboration between us and Genentech in relation to the research, development and commercialization of cancer targeted allogeneic T-cell therapies. The termination becomes effective 180 days after the date of receipt of the notice of termination (the “Genentech Termination Date”). As a result of the termination of the Agreement, Adaptimmune will not be entitled to receive any further milestones or other payments that become due after the Genentech Termination Date. We will also cease to have any development obligations after the Genentech Termination Date and all licenses granted to Genentech pursuant to the Agreement will cease to be in effect as of the Genentech Termination Date. The termination is expected to result in the deferred revenue associated with the agreement of $146,287,000 as of March 31, 2024, being recognised as revenue in the remainder of 2024. However, the Company is still evaluating the terms of the termination and therefore an estimate of the other financial effects of this event on the Company cannot yet be made.

On February 27, 2024 we announced the return of Cintia Piccina as our Chief Commercial Officer, effective March 18, 2024.

On May 14, 2024 (the “Closing Date”), we entered into a Loan and Security Agreement (the “Loan Agreement”), with several banks and other financial institutions or entities (each, a “Lender”, and collectively “Lenders”) and Hercules Capital, Inc. (the “Agent”), for a term loan facility of up to $125.0 million (the “Term Loan”), consisting of a term loan advance in the aggregate principal amount equal to $25.0 million on the Closing Date (the “Tranche 1 Advance”), a term loan advance available to the Company subject to certain terms and conditions in the aggregate principal amount of $25.0 million (the “Tranche 2 Advance’), a term loan advance available subject to certain terms and conditions in the aggregate amount of $5.0 million (the “Tranche 3 Advance”), a term loan advance available subject to certain terms and conditions in the aggregate principal amount of $30.0 million (the “Tranche 4 Advance”) and a term loan advance available in the sole discretion of the Lenders and subject to certain terms and conditions in the aggregate principal amount of $40.0 million (the “Tranche 5 Advance” and together with each Tranche Advance, the “Term Loan Advances”). The proceeds of the Term Loan will be used solely to repay related fees and expenses in connection with the Loan Agreement and for working capital and general corporate purposes.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited consolidated financial statements and related notes appearing elsewhere in this Quarterly Report and the audited consolidated financial statements and notes thereto and management’s discussion and analysis of financial condition and results of operations for the year ended December 31, 2023, included in our Annual Report on Form 10-K that was filed with the SEC on March 6, 2024. 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. As a result of many factors, including those factors set forth in the “Risk Factors” section of this Quarterly Report and our Annual Report on Form 10-K for the year ended December 31, 2023, our actual results could differ materially from the results described in, or implied by, these forward-looking statements.

Overview

We are a clinical-stage biopharmaceutical company transitioning in 2024 to a commercial-stage cell therapy company. We focus on providing novel cell therapies to people with cancer. We are a leader in the development of T-cell therapies for solid tumors and are anticipating our first marketing approval followed by the commercial launch of afami-cel in 2024. Our first product, afamitresgene autoleucel or “afami-cel” is specific to synovial sarcoma and will be the first product in our sarcoma product franchise. Letetresgene autoleucel or “lete-cel”, which we are planning for U.S. commercial launch in 2026, will be our second product in the sarcoma franchise and will target both synovial sarcoma and myxoid round cell liposarcoma (“MRCLS”), significantly expanding our treatable patient population.

Afami-cel and Commercialization

Adaptimmune’s lead product, afami-cel targets the MAGE-A4 antigen. We filed a Biologics License Application (“BLA”) with the Food and Drug Administration (“FDA”) in December 2023 for afami-cel, a cell therapy that provides a treatment option for people with synovial sarcoma.

We announced FDA acceptance of the BLA for afami-cel, which has priority review on January 31, 2024. The BLA has a Prescription Drug User Fee Act (“PDUFA”) target action date of August 4, 2024. We are currently preparing for the launch of afami-cel for shortly after the PDUFA target action date. We plan to work with a select number of authorized treatment centers (ATC’s) to deliver afami-cel and anticipate growing to 30 ATCs. Launch efforts will focus on sarcoma centers of excellence with a higher concentration of eligible patients. Initial actions to prepare for launch already under way. We are working with third parties to implement the necessary infrastructure to support the launch, including with diagnostic laboratory partners for the supply of the required companion diagnostics for eligibility testing.

Data from the SPEARHEAD-1 trial which supported the BLA filing was published in the Lancet in March 2024, with treatment with afami-cel resulting in 39% overall response rate in synovial sarcoma. Enrollment in the SPEARHEAD-1 trial in synovial sarcoma will shortly complete in the U.S. Enrollment in the SPEARHEAD-1 trial is continuing in Canada, the U.K., Spain and France. A pediatric trial, SPEARHEAD -3, is currently enrolling in the U.S..

Lete-cel

We have now transitioned sponsorship for the ongoing clinical trials for lete-cel to Adaptimmune from GSK. The transitioned IGNYTE-ESO trial is ongoing but closed to enrolment. Lete-cel targets the NY-ESO antigen and is in clinical trials for people with synovial sarcoma and MRCLS. We reported interim analysis data for the IGNYTE-ESO trial with lete-cel at CTOS in 2023. In sub-study 2 of the IGNYTE-ESO trial, we reported a 40% ORR (18/45 patients treated) in synovial sarcoma and MRCLS combined and approximately 11 months median duration of response. The primary efficacy endpoint requires 16/60 patients to have a response. Sub-study 2 explores safety and efficacy in patients who received prior anthracycline treatment and enrollment in sub-study 2 has completed. We also reported data for sub-study 1 of the IGNYTE-ESO trial which explores lete-cel in the first-line setting for treatment naïve patients with metastatic or unresectable synovial sarcoma or MRCLS. In the five patients treated the response rate was 80% (4/5) by investigator assessment.

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Clinical Pipeline

We have clinical trials ongoing for people with ovarian cancer, head and neck cancers and urothelial cancers in which the MAGE-A4 antigen is expressed. The SURPASS trials use a next-generation TCR T-cell with the aim of increasing efficacy.

●

SURPASS-3 Phase 2 Trial with uzatresgene autoleucel (“uza-cel”; formerly ADP-A2M4CD8]. A Phase 2 trial for people with platinum resistant ovarian cancer is recruiting patients. We have received Regenerative Medicine Advanced Therapy (“RMAT”) designation for uza-cel for the treatment of this indication from the FDA. The Phase 2 trial will evaluate ADP-A2M4CD8 as both monotherapy and in combination with a checkpoint inhibitor, nivolumab, in ovarian cancer. The trial is open in the U.S., Canada, Spain, the U.K. and France.

●

SURPASS Phase 1 Trial with uza-cel: Enrollment is ongoing in a Phase 1 trial, focusing on treatment of patients with head and neck and urothelial cancers in earlier line settings and in combination with a checkpoint inhibitor (nivolumab). In the focus areas of ovarian, urothelial and head and neck cancers the reported response rate is 75% in patients with 3 or fewer prior lines of therapy (9 out of 12 patients). The trial includes a combination cohort where participants receive a combination of uza-cel together with a checkpoint inhibitor (nivolumab). The trial is open at clinical sites in the U.S., Canada, France, the U.K. and Spain.

Our ADP-A2AFP Phase 1 trial, SURPASS-2 Phase 2 trial, gavo-cel and TC-510 trials have closed to enrolment.

Pre-clinical Pipeline

Our aim is to utilize the insights we obtain from our clinical trials and translational sciences work to improve the efficacy of our existing products and approaches; and to increase the scope of our cell therapies and ability to treat an increasing number of patients. We are currently focusing our preclinical pipeline on the development of T-cell therapies directed to PRAME and CD70 and on our allogeneic cell therapy platform.

●

PRAME is highly expressed across a broad range of solid tumors including ovarian, endometrial, lung and breast cancers. We are developing TCR T-cells directed to PRAME, with the initial candidate currently in preclinical testing and next-generation candidates being developed over the longer term.

●

The CD70 program targets the CD70 antigen which is expressed across a range of hematological malignancies (acute myeloid leukemia and lymphoma) and solid tumors (renal cell carcinoma). We are using TRuC technology to develop a T-cell therapy against CD70, with membrane bound IL-15 to enhance persistence. The T-cell therapy is currently in pre-clinical testing.

●

Our allogeneic platform utilizes cells derived from Induced Pluripotent Stem Cells (“iPSCs”), which can be gene-edited to express our engineered TCRs or other constructs and then differentiated into the required end cell type, for example T-cells. The platform is applicable to all of our cell therapies. We have a collaboration with Genentech Inc (“Genentech”). Termination of the agreement for the collaboration was announced on April 12, 2024 with termination becoming effective 180 days after receipt of notice of termination. The collaboration covered the development of two types of allogeneic T-cell therapies: (i) off-the-shelf αβ T-cell therapies directed to up to five collaboration targets and (ii) personalized therapies utilizing αβ T-cell receptors (TCRs) isolated from a patient, with these therapies being administered to the same patient. As of the effective date of termination, Adaptimmune will not be entitled to receive any additional milestones due after the date of termination and will also cease to have any further development obligations under the agreement.

Corporate News

On February 27, 2024 we announced the return of Cintia Piccina as our Chief Commercial Officer, effective March 18, 2024.

On May 14, 2024 (the “Closing Date”), we entered into a Loan and Security Agreement (the “Loan Agreement”), with several banks and other financial institutions or entities ( “Lender”) and Hercules Capital, Inc. (the “Agent”), for a term loan facility of up to $125.0 million (the “Term Loan”), consisting of a term loan advance in the aggregate principal amount equal to $25.0 million on the Closing Date (the “Tranche 1 Advance”), a term loan advance available to the Company subject to certain terms and conditions in the


PART I — FINANCIAL INFORMATION		4

Item 1.	Financial Statements:	4

	Unaudited Condensed Consolidated Balance Sheets as of March 31, 2024 and December 31, 2023	4

	Unaudited Condensed Consolidated Statements of Operations for the three months ended March 31, 2024 and 2023	5

	Unaudited Condensed Consolidated Statements of Comprehensive Income/Loss for the three months ended March 31, 2024 and 2023	6

	Unaudited Condensed Consolidated Statements of Change in Equity for the three months ended March 31, 2024 and 2023	7

	Unaudited Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2024 and 2023	9

	Notes to the Unaudited Condensed Consolidated Financial Statements	10

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	22

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	33

Item 4.	Controls and Procedures	33

PART II — OTHER INFORMATION		33

Item 1.	Legal Proceedings	33

Item 1A.	Risk Factors	33

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	33

Item 3.	Defaults Upon Senior Securities	34

Item 4.	Mine Safety Disclosures	34

Item 5.	Other Information	34

Item 6.	Exhibits	34

Signatures		35