UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
For the quarterly period ended
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Securities registered pursuant to Section 12(b) of the Act:
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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. ⌧
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). ⌧
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.
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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).
As of November 12, 2024, the number of outstanding ordinary shares par value £0.001 per share of the Registrant is
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General information
In this Quarterly Report on Form 10-Q (“Quarterly Report”), “Adaptimmune,” the “Group,” the “Company,” “we,” “us” and “our” refer to Adaptimmune Therapeutics plc and its consolidated subsidiaries, except where the context otherwise requires.
Information Regarding Forward-Looking Statements
This Quarterly Report contains forward-looking statements that involve risks and uncertainties, as well as assumptions that, if they never materialize or prove incorrect, could cause our results to differ materially from those expressed or implied by such forward-looking statements. We make such forward-looking statements pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and other federal securities laws. All statements other than statements of historical facts contained in this Quarterly Report are forward-looking statements. In some cases, you can identify forward-looking statements by words such as “believe,” “may,” “will,” “estimate,” “continue,” “anticipate,” “intend,” “expect” or the negative of these words or other comparable terminology.
Any forward-looking statements in this Quarterly Report reflect our current views with respect to future events or to our future financial performance and involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements. Factors that may cause actual results to differ materially from current expectations include, among other things, those discussed in Part I, Item 1A “Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2023 filed with the Securities and Exchange Commission (the “SEC”) on March 6, 2024. Given these uncertainties, you should not place undue reliance on these forward-looking statements. Except as required by law, we assume no obligation to update or revise these forward-looking statements for any reason, even if new information becomes available in the future.
This Quarterly Report also contains estimates, projections and other information concerning our industry, our business, and the markets for certain diseases, including data regarding the estimated size of those markets, and the incidence and prevalence of certain medical conditions. Information that is based on estimates, forecasts, projections, market research or similar methodologies is inherently subject to uncertainties and actual events or circumstances may differ materially from events and circumstances reflected in this information. Unless otherwise expressly stated, we obtained this industry, business, market and other data from reports, research surveys, studies and similar data prepared by third parties, industry, medical and general publications, government data and similar sources.
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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)
September 30, | December 31, | |||||
| 2024 |
| 2023 | |||
Assets | ||||||
Current assets | ||||||
Cash and cash equivalents | $ | | $ | | ||
Marketable securities - available-for-sale debt securities (amortized cost of $ | | | ||||
Accounts receivable, net of allowance for expected credit losses of $ | | | ||||
Inventory, net | | — | ||||
Other current assets and prepaid expenses | | | ||||
Total current assets | | | ||||
Restricted cash | | | ||||
Other noncurrent assets | | — | ||||
Operating lease right-of-use assets, net of accumulated amortization of $ | | | ||||
Property, plant and equipment, net of accumulated depreciation of $ | | | ||||
Intangible assets, net of accumulated amortization of $ | | | ||||
Total assets | $ | | $ | | ||
Liabilities and stockholders’ equity | ||||||
Current liabilities | ||||||
Accounts payable | $ | | $ | | ||
Operating lease liabilities, current | | | ||||
Accrued expenses and other current liabilities | | | ||||
Deferred revenue, current | | | ||||
Total current liabilities | | | ||||
Operating lease liabilities, non-current | | | ||||
Deferred revenue, non-current | | | ||||
Borrowings, non-current | | — | ||||
Other liabilities, non-current | | | ||||
Total liabilities | | | ||||
Stockholders’ equity | ||||||
Common stock - Ordinary shares par value £ | | | ||||
Additional paid in capital | | | ||||
Accumulated other comprehensive loss | ( | ( | ||||
Accumulated deficit | ( | ( | ||||
Total stockholders' equity | | | ||||
Total liabilities and stockholders’ equity | $ | | $ | |
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 |
| Nine months ended | ||||||||||
September 30, | September 30, | |||||||||||
| 2024 |
| 2023 |
| 2024 |
| 2023 | |||||
Revenue | $ | | $ | | $ | | $ | | ||||
Operating expenses | ||||||||||||
Research and development | ( | ( |
| ( |
| ( | ||||||
Selling, general and administrative | ( | ( |
| ( |
| ( | ||||||
Total operating expenses | ( | ( | ( |
| ( | |||||||
Operating (loss)/profit | ( | ( |
| |
| ( | ||||||
Interest income | | |
| |
| | ||||||
Interest expense | ( | — | ( | — | ||||||||
Gain on bargain purchase | — | ( |
| — |
| | ||||||
Other income (expense), net | ( | ( |
| ( |
| ( | ||||||
(Loss)/profit before income tax expense | ( | ( |
| |
| ( | ||||||
Income tax expense | ( | ( |
| ( |
| ( | ||||||
Net (loss)/profit attributable to ordinary shareholders | $ | ( | $ | ( | $ | | $ | ( | ||||
Net (loss)/profit per ordinary share | ||||||||||||
Basic | $ | ( | $ | ( | $ | | $ | ( | ||||
Diluted | $ | ( | $ | ( | $ | | $ | ( | ||||
Weighted average shares outstanding: | ||||||||||||
Basic | | |
| |
| | ||||||
Diluted | | | | |
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 | Nine months ended | |||||||||||
September 30, | September 30, | |||||||||||
| 2024 |
| 2023 | 2024 | 2023 | |||||||
Net (loss)/profit | $ | ( | $ | ( | $ | | $ | ( | ||||
Other comprehensive (loss)/income, net of tax | ||||||||||||
Foreign currency translation adjustments, net of tax of $ | ( | | ( | ( | ||||||||
Foreign currency gains (losses) on intercompany loan of a long-term investment nature, net of tax of $ | | ( | | | ||||||||
Unrealized holding gains (losses) on available-for-sale debt securities, net of tax of $ | | | | | ||||||||
Reclassification adjustment for gains on available-for-sale debt securities included in net loss, net of tax of $ | — | | — | | ||||||||
Total comprehensive (loss)/profit for the period | $ | ( | $ | ( | $ | | $ | ( |
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 | | $ | | $ | | $ | ( | $ | ( | $ | | ||||||
Net loss |
| — | — | — | — | ( | ( | ||||||||||
Other comprehensive profit | — | — | — | | — | | |||||||||||
Issuance of shares upon exercise of stock options |
| | | | — | — | | ||||||||||
Issue of shares under At The Market sales agreement, net of commission and expenses | | | | — | — | | |||||||||||
Share-based compensation expense |
| — | — | | — | — | | ||||||||||
Balance as of March 31, 2024 |
| | $ | | $ | | $ | ( | $ | ( | $ | | |||||
Net profit |
| — | — | — | — | | | ||||||||||
Other comprehensive loss | — | — | — | ( | — | ( | |||||||||||
Issuance of shares upon exercise of stock options |
| | | — | — | — | | ||||||||||
Issue of shares under At The Market sales agreement, net of commission and expenses | — | — | | — | — | | |||||||||||
Share-based compensation expense |
| — | — | | — | — | | ||||||||||
Balance as of June 30, 2024 |
| | $ | | $ | | $ | ( | $ | ( | $ | | |||||
Net loss |
| — | — | — | — | ( | ( | ||||||||||
Other comprehensive loss | — | — | — | ( | — | ( | |||||||||||
Issuance of shares upon exercise of stock options |
| | | — | — | — | | ||||||||||
Share-based compensation expense |
| — | — | | — | — | | ||||||||||
Balance as of September 30, 2024 |
| | $ | | $ | | $ | ( | $ | ( | $ | |
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 |
| | $ | | $ | | $ | ( | $ | ( | $ | | |||||
Net profit |
| — | — | — | — | | | ||||||||||
Other comprehensive loss | — | — | — | ( | — | ( | |||||||||||
Issuance of shares upon exercise of stock options |
| | | | — | — | | ||||||||||
Issuance of shares upon completion of public offering, net of issuance costs | | | | — | — | | |||||||||||
Share-based compensation expense |
| — | — | | — | — | | ||||||||||
Balance as of March 31, 2023 |
| | $ | | $ | | $ | ( | $ | ( | $ | | |||||
Net loss |
| — | — | — | — | ( | ( | ||||||||||
Other comprehensive loss | — | — | — | ( | — | ( | |||||||||||
Issuance of shares upon exercise of stock options |
| | | | — | — | | ||||||||||
Issuance of shares upon acquisition of TCR2 | | | | — | — | | |||||||||||
Share-based compensation expense |
| — | — | | — | — | | ||||||||||
Balance as of June 30, 2023 |
| | $ | | $ | | $ | ( | $ | ( | $ | | |||||
Net loss |
| — | — | — | — | ( | ( | ||||||||||
Issuance of shares upon exercise of stock options |
| — | — | — | | — | | ||||||||||
Issuance of shares under At The Market sales agreement, net of commission and expenses | | | | — | — | | |||||||||||
Other comprehensive gain | | | | — | — | | |||||||||||
Share-based compensation expense |
| — | — | | — | — | | ||||||||||
Balance as of September 30, 2023 |
| | $ | | $ | | $ | | $ | ( | $ | |
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)
Nine months ended | ||||||
September 30, | ||||||
| 2024 |
| 2023 | |||
Cash flows from operating activities | ||||||
Net profit/(loss) | $ | | $ | ( | ||
Adjustments to reconcile net loss to net cash used in operating activities: | ||||||
Depreciation | | | ||||
Amortization | | | ||||
Gain on bargain purchase | — | ( | ||||
Share-based compensation expense | | | ||||
Unrealized foreign exchange losses | | | ||||
Accretion on available-for-sale debt securities | ( | ( | ||||
Other | ( | | ||||
Changes in operating assets and liabilities: | ||||||
Decrease/(increase) in receivables and other operating assets | | ( | ||||
Increase in inventories | ( | — | ||||
Increase/(decrease) in payables and other current liabilities | | ( | ||||
Increase in noncurrent assets | ( | — | ||||
Increase in borrowings and other non-current liabilities | | — | ||||
Decrease in deferred revenue | ( | ( | ||||
Net cash used in operating activities | ( | ( | ||||
Cash flows from investing activities | ||||||
Acquisition of property, plant and equipment | ( | ( | ||||
Acquisition of intangible assets | ( | ( | ||||
Cash from acquisition of TCR2 Therapeutics Inc. | — | | ||||
Maturity or redemption of marketable securities | — | | ||||
Investment in marketable securities | ( | ( | ||||
Other | | | ||||
Net cash (used in)/provided by investing activities | ( | | ||||
Cash flows from financing activities | ||||||
Proceeds from issuance of borrowings, net of discount | | — | ||||
Proceeds from issuance of common stock from offerings, net of commissions and issuance costs | | | ||||
Proceeds from exercise of stock options | | | ||||
Net cash provided by financing activities | | | ||||
Effect of currency exchange rate changes on cash, cash equivalents and restricted cash | ( | | ||||
Net decrease in cash, cash equivalents and restricted cash | ( | ( | ||||
Cash, cash equivalents and restricted cash at start of period | | | ||||
Cash, cash equivalents and restricted cash at end of period | $ | | $ | |
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 commercial-stage biopharmaceutical company primarily focused on the treatment of solid tumor cancers with cell therapies. 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 $
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 2023 Annual Report. The balance sheet as of December 31, 2023 was derived from audited consolidated financial statements included in the Company’s 2023 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 $
The Company had
Management analyzes 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
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In March 2024, the FASB issued ASU 2024-02 - Codification Improvements—Amendments to remove References to the Concepts Statements, which contains amendments to the Codification that remove references to various FASB Concepts Statements. The amendments apply to all reporting entities within the scope of the affected accounting guidance and are effective for public business entities for fiscal years beginning after December 15, 2024, with early adoption permitted for all entities. The Company adopted the guidance in the fiscal year beginning January 1, 2024. There was no impact on the Company’s financial statements.
To be adopted in future periods
Improvements 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.
(f) Borrowings
The Company recognizes borrowings comprised solely of contractual payments on fixed or determinable dates that are issued solely for cash equal to their face value, at face value with the difference between the face amount and proceeds received upon issuance shown as either a discount or premium.
These notes are subsequently measured using the Interest Method, with the total interest being measured as the difference between the actual amount of cash received by the Company and the total amount agreed to be repaid. The interest charge in a given period is based on the effective interest rate, which is the rate implicit in the note based on the contractual cash flows. The discount or premium on the note is amortized as interest expense over the life of the note so as to produce a constant rate of interest.
(g) Inventory
The Company commences capitalization of inventory once regulatory approval is received or considered probable. Until this date, the Company expenses all such costs as incurred as research and development expenses. The Company capitalizes material costs, labor and applicable overheads that are incurred in the production of its commercial product.
The Company values inventory at the lower of cost or net realizable value on a first-in-first-out basis. The Company reviews the recoverability of inventory each reporting period to determine any changes to net realizable airisng from excess, slow-moving or obsolete inventory. If net realizable value is lower than cost, the inventory will be written down to net realizable value and an impairment charge will be recognized in Cost of goods sold.
Inventory that can be used for either clinical or commercial purposes is classified initially as inventory. Inventory that is subsequently designated to be used in clinical trials and is no longer available for use in commercial products is expensed as research and development expenditure from the point that it becomes exclusively for clinical use.
Note 3 — Revenue
The Company generates development revenue from collaboration agreements with customers. The Company had
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terminated as of March 6, 2023. The Genentech Collaboration Agreement was terminated in April 2024 which subsequently became effective on September 23, 2024.
Revenue comprises the following categories (in thousands):
Three months ended |
| Nine months ended | ||||||||||
| September 30, | September 30, | ||||||||||
| 2024 |
| 2023 | 2024 |
| 2023 | ||||||
Development revenue |
| $ | |
| $ | | $ | |
| $ | | |
| $ | |
| $ | | $ | |
| $ | |
Deferred revenue decreased by $
The aggregate amount of the transaction price that is allocated to performance obligations that are unsatisfied or partially satisfied under the agreements as of September 30, 2024 was $
The Galapagos Collaboration and Exclusive License Agreement
On May 30, 2024, the Company entered into the Galapagos Collaboration Agreement, a clinical collaboration agreement with Galapagos. The Galapagos Collaboration Agreement includes an option for Galapagos to exclusively license the TCR T-cell therapy candidate uza-cel, manufactured on Galapagos’ decentralized manufacturing platform, in head and neck cancer and potential future solid tumor indications. Under the Galapagos Collaboration Agreement, we will conduct a clinical proof-of-concept trial (the “POC Trial”) to evaluate the safety and efficacy of uza-cel produced on Galapagos’ decentralized manufacturing platform in patients with head and neck cancer.
The Company will receive initial payments of $
The Company determined that Galapagos is a customer and has accounted for the agreement under ASC 606 Revenue from Contracts with Customers. The Company has identified a performance obligation relating to the various activities required to complete the POC trial and a material right associated with the exclusive license option.
The aggregate transaction price at inception of the Galapagos Collaboration Agreement was $
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 POC Trial. The residual approach was used to value the material right associated with the exclusive license option as the Company has not previously sold uza-cel on a standalone basis and has not established a price for uza-cel.
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The Company expects to satisfy the POC Trial obligation over time over the period that the trial is completed, based on an estimate of the percentage of completion of the trial determined based on the costs incurred on the trial as a percentage of the total expected costs. The revenue allocated to the material right associated with the exclusive licence option will be recognized from the point that the option is either exercised and control of the license has passed to Galapagos or the option lapses.
The amount of the transaction price that is allocated to performance obligations that are unsatisfied or partially satisfied under the agreement as of September 30, 2024 was $
The Genentech Collaboration and License Agreement
On April 12, 2024 the Company announced the termination of the Genentech Collaboration Agreement, entered into by Adaptimmune Limited, a wholly-owned subsidiary of the Company, in relation to the research, development and commercialization of cancer targeted allogeneic T-cell therapies which was originally scheduled to be effective from October 7, 2024. The termination was accounted for as a contract modification on a cumulative catch-up basis. The termination did not change the nature of the performance obligations identified but resulted in a reduction in the transaction price as the additional payments and variable consideration that would have been due in periods after October 7, 2024 will now never be received.
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 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.
The aggregate remaining transaction price that had not yet been recognized as revenue as of the date of the termination was $
On September 23, 2024, the Adaptimmune Limited entered into a Mutual Release and Resolution Agreement (the “Mutual Release Agreement”) with Genentech. This agreement, among other things, resolved and released each party from any and all past, present and future disputes, claims, demands and causes of action, whether known or unknown, related to the Genentech Collaboration Agreement in any way. Under the terms of the Mutual Release Agreement, Genentech will pay the Company $
The Mutual Release Agreement resulted in all remaining performance obligations being fully satisfied and the remaining deferred revenue of $
The GSK Termination and Transfer Agreement
On April 6, 2023, the Company and GSK entered into 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 Termination and Transfer 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 the Company. In return for this, the Company received an upfront payment of £
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The Company determined that GSK is a customer and has accounted for the Termination and Transfer Agreement under ASC 606 Revenue from Contracts with Customers. The Termination and Transfer Agreement is accounted for as a separate contract from the original Collaboration and License Agreement with GSK. The agreement was terminated in October 2022 and the termination became effective on December 23, 2022. The Company has identified the following performance obligations under the Termination and Transfer 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 $
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 September 30, 2024 was $
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 Astellas 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.
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 $
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):
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Three months ended | Nine months ended | |||||||||||
September 30, | September 30, | |||||||||||
| 2024 |
| 2023 |
| 2024 |
| 2023 | |||||
Numerator for basic and diluted (loss)/profit per share | ||||||||||||
Net (loss)/profit attributable to ordinary shareholders |
| $ | ( |
| $ | ( |
| $ | |
| $ | ( |
Net (loss)/profit attributable to ordinary shareholders used for basic and diluted (loss)/profit per share | ( | ( | | ( |
Three months ended | Nine months ended | |||||||
September 30, | September 30, | |||||||
| 2024 |
| 2023 |
| 2024 |
| 2023 | |
Denominator for basic (loss)/profit per share - Weighted average shares outstanding |
| |
| |
| |
| |
Effect of dilutive securities: | ||||||||
Employee stock options |
| — |
| — |
| |
| — |
Denominator for diluted (loss)/profit per share |
| |
| |
| |
| |
The dilutive effect of
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 |
| $ | ( | $ | | $ | ( | ||
Foreign currency translation adjustments | | — | | ||||||
Foreign currency gains on intercompany loan of a long-term investment nature, net of tax of $ | ( | — | ( | ||||||
Unrealized holding gains on available-for-sale debt securities, net of tax of $ | — | ( | ( | ||||||
Balance at March 31, 2024 | $ | ( | $ | | $ | ( | |||
Foreign currency translation adjustments | ( | — | ( | ||||||
Foreign currency gains on intercompany loan of a long-term investment nature, net of tax of $ | | — | | ||||||
Unrealized holding gains on available-for-sale debt securities, net of tax of $ | — | ( | ( | ||||||
Balance at June 30, 2024 | $ | ( | $ | — | $ | ( | |||
Foreign currency translation adjustments | ( | — | ( | ||||||
Foreign currency losses on intercompany loan of a long-term investment nature, net of tax of $ | | — | | ||||||
Unrealized holding gains on available-for-sale debt securities, net of tax of $ | — | | | ||||||
Balance at September 30, 2024 | $ | ( | $ | | $ | ( | |||
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 |
| $ | | $ | ( | ( | |||
Foreign currency translation adjustments | ( | — | ( | ||||||
Foreign currency gains on intercompany loan of a long-term investment nature, net of tax of $ | | — |