Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Mar. 09, 2018 | Jun. 30, 2017 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | Adaptimmune Therapeutics PLC | ||
Entity Central Index Key | 1,621,227 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2017 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Accelerated Filer | ||
Entity Public Float | $ 438,546,644 | ||
Entity Common Stock, Shares Outstanding | 562,142,638 | ||
Document Fiscal Year Focus | 2,017 | ||
Document Fiscal Period Focus | FY |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Current assets | ||
Cash and cash equivalents | $ 84,043 | $ 158,779 |
Short-term deposits | 22,694 | |
Marketable securities - available-for-sale debt securities | 124,218 | |
Accounts receivable, net of allowance for doubtful accounts of $0 and $0 | 206 | 1,480 |
Other current assets and prepaid expenses (including current portion of clinical materials) | 21,716 | 15,798 |
Total current assets | 230,183 | 198,751 |
Restricted cash | 4,253 | 4,017 |
Clinical materials | 4,695 | 2,580 |
Property, plant and equipment, net | 40,679 | 27,899 |
Intangibles, net | 1,337 | 1,268 |
Total assets | 281,147 | 234,515 |
Current liabilities | ||
Accounts payable (including amounts due to related parties of $- and $326) | 8,378 | 11,350 |
Accrued expenses and other accrued liabilities (including amounts due to related parties of $- and $39) | 27,201 | 17,528 |
Deferred revenue | 38,735 | 11,392 |
Total current liabilities | 74,314 | 40,270 |
Deferred revenue, non-current | 24,962 | |
Other liabilities, non-current | 3,849 | 3,141 |
Total liabilities | 78,163 | 68,373 |
Contingencies and commitments - Note 9 | ||
Stockholders' equity | ||
Common stock - Ordinary shares par value GBP 0.001, 701,103,126 authorized and 562,119,334 issued and outstanding (2016: 574,711,900 authorized and 424,775,092 issued and outstanding) | 854 | 683 |
Additional paid in capital | 455,401 | 341,200 |
Accumulated other comprehensive loss | (21,641) | (14,249) |
Accumulated deficit | (231,630) | (161,492) |
Total stockholders' equity | 202,984 | 166,142 |
Total liabilities and stockholders' equity | $ 281,147 | $ 234,515 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) $ in Thousands | Dec. 31, 2017USD ($)shares | Dec. 31, 2016USD ($)shares |
CONSOLIDATED BALANCE SHEETS | ||
Allowance for doubtful accounts | $ | $ 0 | $ 0 |
Accounts payable, due to related parties | $ | 326 | |
Accrued expenses and other accrued liabilities, due to related parties | $ | $ 0 | $ 39 |
Common stock, shares authorized | shares | 701,103,126 | 574,711,900 |
Common stock, shares issued | shares | 562,119,334 | 424,775,092 |
Common stock, shares outstanding | shares | 562,119,334 | 424,775,092 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | Jun. 30, 2015 | |
CONSOLIDATED STATEMENTS OF OPERATIONS | ||||
Revenue | $ 8,979 | $ 37,833 | $ 14,198 | $ 9,871 |
Operating expenses | ||||
Research and development | (25,472) | (87,388) | (63,789) | (24,137) |
General and administrative | (9,917) | (31,106) | (23,208) | (10,375) |
Total operating expenses (including purchases from related parties, net of reimbursements of $786, $2,067, $1,609 and $2,443) | (35,389) | (118,494) | (86,997) | (34,512) |
Operating loss | (26,410) | (80,661) | (72,799) | (24,641) |
Interest income | 489 | 2,230 | 1,110 | 504 |
Other income , net | 2,866 | 8,744 | 1,002 | 2,323 |
Loss before income taxes | (23,055) | (69,687) | (70,687) | (21,814) |
Income taxes | 55 | (451) | (892) | (244) |
Net loss | (23,000) | (70,138) | (71,579) | (22,058) |
Deemed dividend on convertible preferred shares | (14,735) | |||
Net loss attributable to shareholders used for basic | $ (23,000) | $ (70,138) | $ (71,579) | $ (36,793) |
Net loss per ordinary share (Note 2) | ||||
Basic and diluted (in dollars per share) | $ (0.05) | $ (0.13) | $ (0.17) | $ (0.17) |
Weighted average shares outstanding: | ||||
Basic and diluted (in shares) | 424,711,900 | 527,637,086 | 424,713,997 | 214,704,593 |
CONSOLIDATED STATEMENTS OF OPE5
CONSOLIDATED STATEMENTS OF OPERATIONS (Parenthetical) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | Jun. 30, 2015 | |
CONSOLIDATED STATEMENTS OF OPERATIONS | ||||
Operating expenses in relation to related parties, net of reimbursements | $ 1,609 | $ 786 | $ 2,067 | $ 2,443 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | Jun. 30, 2015 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS | ||||
Net loss | $ (23,000) | $ (70,138) | $ (71,579) | $ (22,058) |
Other comprehensive loss, net of tax | ||||
Foreign currency translation adjustments, net of tax of $0, $0, $0 and $0 | (4,578) | (3,618) | (6,110) | (3,835) |
Unrealized gains (losses) on available-for-sale debt securities | ||||
Unrealized holding losses on available-for-sale debt securities, net of tax of $0, $0, $0 and $0 | (4,420) | |||
Reclassification adjustment for losses on available-for-sale debt securities included in net income, net of tax of $0, $0, $0 and $0 | 646 | |||
Total comprehensive loss for the period | $ (27,578) | $ (77,530) | $ (77,689) | $ (25,893) |
CONSOLIDATED STATEMENTS OF COM7
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (Parenthetical) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | Jun. 30, 2015 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS | ||||
Foreign currency translation adjustments, tax | $ 0 | $ 0 | $ 0 | $ 0 |
Unrealized holding losses on available-for-sale debt securities, tax | 0 | 0 | 0 | 0 |
Reclassification adjustment for losses on available-for-sale debt securities, tax | $ 0 | $ 0 | $ 0 | $ 0 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY - USD ($) $ in Thousands | Series A Preferred SharesPreferred shares | Series A Preferred Shares | Common stockIPO | Common stock | Preferred shares | Additional paid in capitalIPO | Additional paid in capital | Accumulated other comprehensive income (loss) | Accumulated foreign currency translation adjustments | Accumulated unrealized gains (losses) on available-for-sale debt securities | Accumulated deficit | IPO | Total |
Balance at the beginning of the period at Jun. 30, 2014 | $ 291 | $ 32,512 | $ 274 | $ (30,120) | $ 2,957 | ||||||||
Balance at the beginning of the period (in shares) at Jun. 30, 2014 | 181,370,100 | ||||||||||||
Increase (Decrease) in Stockholders' Equity | |||||||||||||
Net loss | (22,058) | $ (22,058) | |||||||||||
Issuance of common stock | $ 98,872 | $ 98,872 | $ 104 | $ 175,885 | $ 175,989 | ||||||||
Issuance of common stock (in shares) | 67,500,000 | ||||||||||||
Beneficial conversion feature | $ (102,126) | 102,126 | |||||||||||
Issuance of shares upon exercise of stock options (in shares) | 0 | ||||||||||||
Issuance of common stock upon conversion of preferred shares | $ 287 | (11,481) | 11,194 | ||||||||||
Issuance of common stock upon conversion of preferred shares (in shares) | 175,841,800 | ||||||||||||
Deemed dividends on preferred shares | $ 14,735 | (14,735) | |||||||||||
Other comprehensive loss, net of tax | (3,835) | $ (3,835) | |||||||||||
Other comprehensive loss before reclassifications | |||||||||||||
Foreign currency translation adjustments | (3,835) | ||||||||||||
Share-based compensation expense | 7,078 | 7,078 | |||||||||||
Balance at the end of the period at Jun. 30, 2015 | $ 682 | 328,795 | (3,561) | (66,913) | 259,003 | ||||||||
Balance at the end of the period (in shares) at Jun. 30, 2015 | 424,711,900 | ||||||||||||
Increase (Decrease) in Stockholders' Equity | |||||||||||||
Net loss | (23,000) | $ (23,000) | |||||||||||
Issuance of shares upon exercise of stock options (in shares) | 0 | ||||||||||||
Other comprehensive loss, net of tax | (4,578) | $ (4,578) | |||||||||||
Other comprehensive loss before reclassifications | |||||||||||||
Foreign currency translation adjustments | (4,578) | ||||||||||||
Share-based compensation expense | 3,568 | 3,568 | |||||||||||
Balance at the end of the period at Dec. 31, 2015 | $ 682 | 332,363 | (8,139) | (89,913) | 234,993 | ||||||||
Balance at the end of the period (in shares) at Dec. 31, 2015 | 424,711,900 | ||||||||||||
Increase (Decrease) in Stockholders' Equity | |||||||||||||
Net loss | (71,579) | (71,579) | |||||||||||
Issuance of shares upon exercise of stock options | $ 1 | 16 | $ 17 | ||||||||||
Issuance of shares upon exercise of stock options (in shares) | 63,192 | 63,192 | |||||||||||
Other comprehensive loss, net of tax | (6,110) | $ (6,110) | |||||||||||
Other comprehensive loss before reclassifications | |||||||||||||
Foreign currency translation adjustments | (6,110) | ||||||||||||
Share-based compensation expense | 8,821 | 8,821 | |||||||||||
Balance at the end of the period at Dec. 31, 2016 | $ 683 | 341,200 | $ (14,249) | $ (14,249) | (161,492) | 166,142 | |||||||
Balance at the end of the period (in shares) at Dec. 31, 2016 | 424,775,092 | ||||||||||||
Increase (Decrease) in Stockholders' Equity | |||||||||||||
Net loss | (70,138) | (70,138) | |||||||||||
Issuance of common stock | $ 170 | 102,997 | 103,167 | ||||||||||
Issuance of common stock (in shares) | 136,201,338 | ||||||||||||
Issuance of shares upon exercise of stock options | $ 1 | 400 | $ 401 | ||||||||||
Issuance of shares upon exercise of stock options (in shares) | 1,142,904 | 1,142,904 | |||||||||||
Other comprehensive loss before reclassifications | |||||||||||||
Foreign currency translation adjustments | (3,618) | $ (3,618) | |||||||||||
Unrealized holding losses on available-for-sale debt securities, net of tax of $0, $0, $0 and $0 | $ (4,420) | (4,420) | |||||||||||
Reclassification adjustment for losses on available-for-sale debt securities included in net income, net of tax of $0, $0, $0 and $0 | 646 | 646 | |||||||||||
Share-based compensation expense | 10,804 | 10,804 | |||||||||||
Balance at the end of the period at Dec. 31, 2017 | $ 854 | $ 455,401 | $ (17,867) | $ (3,774) | $ (231,630) | $ 202,984 | |||||||
Balance at the end of the period (in shares) at Dec. 31, 2017 | 562,119,334 |
CONSOLIDATED STATEMENTS OF CHA9
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (PARENTHETICAL) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | Jun. 30, 2015 | |
Other Comprehensive Income (Loss), Available-for-sale Securities, before Reclassification Adjustments, Tax [Abstract] | ||||
Unrealized holding losses on available-for-sale debt securities, tax | $ 0 | $ 0 | $ 0 | $ 0 |
Reclassification adjustment for losses on available-for-sale debt securities, tax | $ 0 | $ 0 | $ 0 | $ 0 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | Jun. 30, 2015 | |
Cash flows from operating activities | ||||
Net loss | $ (23,000) | $ (70,138) | $ (71,579) | $ (22,058) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||||
Depreciation | 1,176 | 5,032 | 3,126 | 705 |
Amortization | 69 | 391 | 160 | 30 |
Share-based compensation expense | 3,568 | 10,804 | 8,821 | 7,078 |
Realized loss on available-for-sale debt securities | 646 | |||
Unrealized foreign exchange gains | (2,867) | (8,599) | (1,314) | 13 |
Other | 341 | 122 | ||
Changes in operating assets and liabilities: | ||||
Increase in receivables and other operating assets | (4,243) | (7,346) | (6,533) | (7,812) |
Decrease (increase) in non-current operating assets | (4,736) | 2,115 | 2,221 | |
Increase (decrease) in payables and deferred revenue | 11,971 | 12,439 | 16,808 | (7,622) |
Net cash used in operating activities | (18,062) | (54,315) | (48,168) | (29,666) |
Cash flows from investing activities | ||||
Acquisition of property, plant and equipment | (9,628) | (24,643) | (11,506) | (5,080) |
Acquisition of intangibles | (210) | (369) | (1,279) | |
Proceeds from disposal of property, plant and equipment | 550 | 122 | ||
Maturity of short-term deposits | 16,645 | 40,625 | 73,377 | |
Investment in short-term deposits | (16,645) | (18,000) | (42,837) | (53,879) |
Maturity or redemption of marketable securities | 29,090 | |||
Investment in marketable securities | (153,334) | |||
Net cash (used in) provided by investing activities | (9,838) | (126,081) | 17,755 | (58,837) |
Cash flows from financing activities | ||||
Proceeds from issuance of common stock, net of issuance costs $4,774 | 103,167 | |||
Proceeds from issuance of preferred shares, net of issuance costs of $4,949 | 98,872 | |||
Proceeds from issuance of common stock upon initial public offering, net of issuance costs of $13,387 | 175,989 | |||
Proceeds from exercise of stock options | 401 | 17 | ||
Net cash provided by financing activities | 103,568 | 17 | 274,861 | |
Effect of currency exchange rate changes on cash, cash equivalents and restricted cash | (2,375) | 2,328 | (5,579) | (8,491) |
Net decrease in cash and cash equivalents | (30,275) | (74,500) | (35,975) | 177,867 |
Cash, cash equivalents and restricted cash at start of period | 229,046 | 162,796 | 198,771 | 51,179 |
Cash, cash equivalents and restricted cash at end of period | 198,771 | 88,296 | 162,796 | 229,046 |
Supplemental cash flow information | ||||
Interest received | 326 | 1,784 | 1,191 | |
Income taxes paid | 95 | $ 1,565 | 34 | 280 |
Deemed dividends | $ 14,735 | |||
Investment in restricted cash | $ 4,666 | |||
Allowance for tenant improvements | $ 2,607 |
CONSOLIDATED STATEMENTS OF CA11
CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) $ in Thousands | 12 Months Ended |
Jun. 30, 2015USD ($) | |
Preferred shares | |
Cash flows from financing activities | |
Stock issuance costs | $ 4,949 |
Common stock | |
Cash flows from financing activities | |
Stock issuance costs | $ 13,387 |
General
General | 12 Months Ended |
Dec. 31, 2017 | |
General | |
General | 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 focused on providing novel cell therapies to patients, particularly in solid tumors. The Company’s comprehensive and proprietary SPEAR (Specific Peptide Enhanced Affinity Receptor) T-cell platform enables it to identify cancer targets, find and genetically engineer T-cell receptors (“TCRs”), and produce therapeutic candidates for administration to patients. Using its affinity engineered TCRs, the Company aims to become a fully integrated cell therapy company and to have the first TCR T-cell approved for a solid tumor indication. The Company is subject to a number of risks similar to other biopharmaceutical companies in the early 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 SPEAR T-cells, competitors developing new technological innovations, the need to successfully commercialize and gain market acceptance of the Company’s SPEAR T-cells, the need to develop a suitable commercial manufacturing process and protection of proprietary technology. If the Company does not successfully commercialize any of its SPEAR T-cells, it will be unable to generate product revenue or achieve profitability. The Company had an accumulated deficit of $231.6 million as of December 31, 2017. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2017 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | Note 2 - Summary of Significant Accounting Policies (a) Basis of presentation The consolidated financial statements of Adaptimmune Therapeutics plc and its subsidiaries and other financial information included in this Annual Report have been prepared in accordance with generally accepted accounting principles in the United States of America (“US 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 Company undertook a reorganization that was completed in April 2015 and is described in Note 10. As appropriate for a reorganization of entities under common control, the historical consolidated financial statements of Adaptimmune Limited and subsidiary prior to the reorganization became those of Adaptimmune Therapeutics plc. On February 23, 2015 the Company undertook a one-for-100 share exchange. All share and per share information presented gives effect to the reorganization by dividing the loss for the period by the weighted average number of shares outstanding of Adaptimmune Therapeutics plc as if the one-for-100 share exchange had been in effect throughout the period. The nominal value of the share capital has been increased to reflect the nominal share capital after the one-for-100 share exchange. (b) Use of estimates in financial statements The preparation of 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 consolidated financial statements and reported amounts of revenues and expenses during the reporting period. Estimates and assumptions are primarily made in relation to the valuation of share options, valuation allowances relating to deferred tax assets, revenue recognition, estimating clinical trial expenses and estimating R&D tax and expenditure credits. 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. (c) Going concern Management considers that there are no conditions or events, in the aggregate, that raise substantial doubt about the entity’s ability to continue as a going concern for a period of at least one year from the date the financial statements are issued. This evaluation is based on relevant conditions and events that are known and reasonably knowable at the date that the financial statements are issued, including: a. The Company’s current financial condition, including its liquidity sources; b. The Company’s conditional and unconditional obligations due or anticipated within one year; c. The funds necessary to maintain the Company’s operations considering its current financial condition, obligations, and other expected cash flows; and d. Other conditions and events, when considered in conjunction with the above that may adversely affect the Company’s ability to meet its obligations. (d) Foreign currency The reporting currency of the Company is the U.S. dollar. The Company has determined the functional currency of the ultimate parent company, Adaptimmune Therapeutics plc, is U.S. dollars because it predominately raises finance and expends cash in U.S. dollars. The functional currency of subsidiary operations is the applicable local currency. Transactions in foreign currencies are translated into the functional currency of the subsidiary in which they occur at the foreign exchange rate in effect on at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are translated into the functional currency of the relevant subsidiary at the foreign exchange rate in effect on the balance sheet date. Foreign exchange differences arising on translation are recognized within other income (expense) in the consolidated statement of operations. The results of operations for subsidiaries, whose functional currency is not the U.S. dollar, are translated at an average rate for the period where this rate approximates to the foreign exchange rates ruling at the dates of the transactions and the balance sheet are translated at foreign exchange rates ruling at the balance sheet date. Exchange differences arising from this translation of foreign operations are reported as an item of other comprehensive income (loss). Other income, net includes foreign exchange gains of $8,744,000, $1,002,000, $12,596,000 and $11,200,000 for the years ended December 31, 2017 and 2016, the six months ended December 31, 2015 and the year ended June 30, 2015, respectively. (e) 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, short-term deposits, 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 4, Fair value measurements . (f) Accumulated other comprehensive income (loss) The following amounts were reclassified out of other comprehensive income during the year ended December 31, 2017 (in thousands): Amount Component of Accumulated Other Comprehensive Income reclassified Affected line item in the Statement of Operations Unrealized gains (losses) on available-for-sale securities Reclassification adjustment for losses on available-for-sale debt securities $ Other income, net (g) Cash, cash equivalents and restricted cash The Company considers all highly-liquid investments with a maturity at acquisition date of three months or less to be cash equivalents. Cash and cash equivalents comprise cash balances, commercial paper and corporate debt securities with maturities of three months or less at acquisition and short deposits with maturities of three months or less. The Company’s restricted cash consists of cash providing security for letters of credit in respect of lease agreements. The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the balance sheet that sum to the total of the same such amounts shown in the statement of cash flows (in thousands). December 31, December 31, 2017 2016 Cash and cash equivalents $ $ Restricted cash Total cash, cash equivalents, and restricted cash shown in the statement of cash flows $ $ (h) Short-term deposits Short-term deposits consist of bank deposits with a maturity at acquisition date of between three and twelve months. (i) Available-for-sale debt securities As of December 31, 2017, the Company has the following investments in available-for-sale debt securities, which are categorized as cash equivalents or marketable securities — available-for-sale debt securities on the balance sheet depending on their maturity at acquisition (in thousands): Foreign Gross Gross currency Aggregate Amortized Unrealized Unrealized translation Estimated Maturity cost Gains Losses adjustment Fair Value Cash equivalents: Corporate debt securities Less than 3 months $ 1,610 $ $ ) $ $ $ 1,610 $ — $ ) $ $ Marketable securities: Corporate debt securities 3 months to 1 year $ 124,406 $ — $ ) $ $ $ 124,406 $ — $ ) $ $ Management determines the appropriate classification of its investments in available-for-sale debt securities at the time of purchase and reevaluates such designation as of each reporting date. The securities are classified as current or non-current based on the maturity dates and management’s intentions. At December 31 2017, the Company has classified all of its available-for-sale debt securities, including those with maturities beyond one year, as current assets on the accompanying consolidated balance sheets based on the highly-liquid nature of these investment securities and because these investment securities are considered available for use in current operations. The investment in available-for-sale debt securities is measured at fair value at each reporting date. Unrealized gains and losses are excluded from earnings and are reported as a component of comprehensive loss. Realized gains and losses, interest income and amortization of premiums and discounts at acquisition are included in other income (expense), net. In the year ended December 31, 2017, proceeds from the maturity or redemption of available-for-sale debt securities were $29,090,000. There were realized losses of $646,000 recognized on the maturity of available-for-sale debt securities during the year ended December 31, 2017, primarily arising due to foreign exchange movements, and, as a result, the Company reclassified this amount out of accumulated other comprehensive loss for the same period. At each reporting date, the Company assesses whether each individual investment is impaired, which occurs if the fair value is less than the amortized cost, adjusted for amortization of premiums and discounts at acquisition. If the investment is impaired, the impairment is assessed to determine if it is other than temporary. Impairments judged to be other than temporary are included in other income (expense), net when they are identified. As of December 31, 2017, the aggregate fair value of securities held by the Company in an unrealized loss position was $125,828,000, which consisted of 54 securities. No securities have been in an unrealized loss position for more than one year. As of December 31, 2017, these securities are not considered to be other than temporarily impaired because the impairments are not severe, have been for a short duration and are due to normal market and exchange rate fluctuations. Furthermore, the Company does not intend to sell the debt securities in an unrealized loss position and it is unlikely that the Company will be required to sell these securities before the recovery of the amortized cost. The cost of securities sold is based on the specific-identification method. Interest on debt securities is included in interest income. Our investment in available-for-sale debt securities is subject to credit risk. The Company’s investment policy limits investments to certain types of instruments, such as money market instruments and corporate debt securities, 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. (j) Accounts receivable Accounts receivable are amounts due from customers. As of December 31, 2017 and 2016, the Company had one customer, which was GlaxoSmithKline, or GSK. Management analyses current and past due accounts and determines if an allowance for uncollectible accounts is required based on collection experience and other relevant information. As of December 31, 2017 and 2016, the allowance for doubtful accounts is $nil. 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. (k) Clinical materials Clinical materials for use in research and development with alternative future use are capitalized as either other current assets or other non-current assets, depending on the timing of their expected consumption. (l) Property, plant and equipment Property, plant and equipment is stated at cost, less any impairment losses, less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the related assets. The following table provides the range of estimated useful lives used for each asset type: Computer equipment 3 to 5 years Laboratory equipment 5 years Office equipment 5 years Leasehold improvements the expected duration of the lease Assets under construction are not depreciated until the asset is available and ready for its intended use. The Company assesses property, plant and equipment for impairment whenever events or changes in circumstances indicate that an asset’s carrying amount may not be recoverable. (m) Intangibles Intangibles includes intellectual property (“IP”) rights for licensed technology used in research and development with an alternative future use, which are recorded at cost and amortized over the estimated useful life of the related product. The weighted-average amortization period for IP rights for licensed technology as of December 31, 2017 is seven years. Intangibles also include acquired computer software licenses, which are recorded at cost and amortized over the estimated useful lives of approximately three years. Intangibles are assessed for impairment whenever events or changes in circumstances indicate that an asset’s carrying amount may not be recoverable. (n) Segmental reporting Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision-maker in making decisions regarding resource allocation and assessing performance. The Company’s chief operating decision maker (the “CODM”), its chief executive officer, 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. Accordingly, the Company has determined that it operates in one operating segment. (o) Revenue Revenue is recognized when earned and realized or realizable, which is generally when persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the seller’s price to the buyer is fixed or determinable, and collectability is reasonably assured. Where applicable, all revenues are stated net of value added and similar taxes. The Company’s revenue arises from a collaboration and license agreement with GSK entered into in May 2014 and amended in February 2016 and September 2017 (the “GSK Collaboration and License Agreement”), which requires the Company to provide multiple deliverables to GSK. The Company recognizes revenue for arrangements with multiple deliverables by identifying the separable deliverables within the arrangement, whereby a deliverable is considered separable if it has value to the customer on a standalone basis. Contingent deliverables, such as the right to nominate further development targets, which represent a substantive option (i.e. the customer is not required or compelled to purchase the optional products or services) and not priced at a significant and incremental discount are not considered to be a deliverable at inception of the arrangement. When the contract is amended, the amendment is assessed to determine if it should be accounted for as a separate contract or a modification to the existing arrangement. If the amendment is a modification, the modified arrangement is assessed to identify the deliverables at the time of the modification and the non-contingent arrangement consideration is allocated between the separate deliverables using the Company’s best estimate of the relative selling price at the time of the modification. The amendments to the GSK Collaboration and License Agreement in February 2016 and September 2017 were both accounted for as modifications to an existing arrangement. The non-contingent arrangement consideration is allocated between the separate deliverables using the relative selling price. The relative selling price is determined using vendor-specific objective evidence (“VSOE”), if available, third party evidence if VSOE is not available, or a best estimate of the standalone selling price if neither VSOE nor third party evidence is available. The best estimate of the selling price is estimated after considering all reasonably available information, including market data and conditions, entity-specific factors such as the cost structure of the deliverable, internal profit and pricing objectives and the stage of development, if appropriate. Revenue allocated to each deliverable is recognized as it is delivered. Where delivery occurs over time, revenue is systematically recognized over the period which the Company will be providing services. Amounts received prior to satisfying the revenue recognition criteria are recorded as deferred revenue in the Company’s consolidated balance sheet. Amounts expected to be recognized as revenue within the 12 months following the balance sheet date are classified as deferred revenue in current liabilities. Amounts not expected to be recognized as revenue within the 12 months following the balance sheet date are classified as deferred revenue, non-current. Milestone payments which are non-refundable, non-creditable and contingent on achieving clinical milestones are recognized as revenues either on achievement of such milestones if the milestones are considered substantive or over the period the Company has continuing performance obligations, if the milestones are not considered substantive. When determining if a milestone is substantive, the Company considers the following factors: · The degree of certainty in achieving the milestone, · The frequency of milestone payments, · The Company’s efforts, which result in achievement of the milestone, · The amount of the milestone payment relative to the other deliverables and payment terms, and · Whether the milestone payment is related to future performance or deliverables. (p) Research and development expenditures Research and development expenditures are expensed as incurred. Expenses related to clinical trials are recognized as services are received. Nonrefundable advance payments for services are deferred and recognized in the consolidated statement of operations as the services are rendered. This determination is based on an estimate of the services received and there may be instances when the payments to vendors exceed the level of services provided resulting in a prepayment of the clinical expense. If the actual timing of the performance of services varies from our estimate, the accrual or prepaid expense is adjusted accordingly. Upfront and milestone payments to third parties for in-licensed products or technology which has not yet received regulatory approval and which does not have alternative future use in R&D projects or otherwise are expensed as incurred. The Company expensed acquired in-process R&D of $1,003,000, $3,000,000, $2,500,000 and $- in the years ended December 31, 2017 and 2016, the six months ended December 31, 2015 and the year ended June 30, 2015, respectively. Milestone payments made to third parties either on or subsequent to regulatory approval are capitalized as an intangible asset and amortized over the remaining useful life of the product. Research and development expenditure is presented net of reimbursements from grants and R&D tax and expenditure credits from the U.K. government, which are recognized over the period necessary to match the reimbursement with the related costs when it is probable that the Company has complied with any conditions attached and will receive the reimbursement. Grant income was $150,000, $414,000, $905,000 and $613,000 in the years ended December 31, 2017 and 2016, the six months ended December 31, 2015 and the year ended June 30, 2015, respectively. Reimbursable R&D tax and expenditure credits were $10,576,000, $6,891,000, $1,506,000 and $1,497,000 in the years ended December 31, 2017 and 2016, the six months ended December 31, 2015 and the year ended June 30, 2015, respectively. (q) Operating leases Costs in respect of operating leases are charged to the consolidated statement of operations on a straight line basis over the lease term. Rent holidays are recognized on a straight-line basis over the lease term (including any rent holiday period). Lease incentives, including leasehold improvement incentives or allowances, are recorded as deferred rent and amortized as reductions to lease expense over the lease term. Leasehold improvements made by a lessee that are funded by landlord incentives or allowances are recorded as leasehold improvement assets and amortized over the shorter of the useful life of the asset and the non-cancellable lease term. In May 2017, the Company entered into an agreement for the lease of a building at Milton Park, Oxfordshire, U.K. The term of the lease expires on October 23, 2041, with termination options exercisable by the Company on the fifth anniversary of the lease commencement date and at approximately five yearly intervals thereafter. In September 2015, the Company entered into an agreement for a 25-year lease, with early termination options, for a research and development facility in Oxfordshire, U.K. In October 2016, the Company entered into the lease for that facility following the completion of construction. In July 2015, the Company entered into a 15 year lease agreement, with an early termination option at 123 months, for offices and research facilities in Philadelphia, U.S. The lease commenced upon completion of construction in October 2016. (r) Share-based compensation The Company awards certain employees and nonemployees options over the ordinary shares of the parent company. The cost of share-based awards issued to employees are measured at the grant-date fair value of the award and recognized as an expense over the requisite service period. The fair value of the options is determined using the Black-Scholes option-pricing model. Share options with graded-vesting schedules are recognized on a straight-line basis over the requisite service period for each separately vesting portion of the award. The Company has elected to account for forfeitures of stock options when they occur by reversing compensation cost previously recognized, in the period the award is forfeited, for an award that is forfeited before completion of the requisite service period. The Company has awarded share options to nonemployees for consultancy services. These share options are measured at the fair value of the goods/services received or the fair value of the equity instrument issued, whichever is more reliably measured, and then remeasured at the then-current fair values at each reporting date until the share options have vested and recognized as an expense over the requisite service period. (s) Retirement benefits The Company operates defined contribution pension schemes for its directors and employees. The contributions to this scheme are expensed to the consolidated statement of operations as they fall due. The pension contributions for the years ended December 31, 2017 and 2016, six months ended December 31, 2015 and the year ended June 30, 2015 were $1,264,000, $976,000, $122,000 and $240,000, respectively. (t) Income taxes Income taxes for the period comprise current and deferred tax. Income tax is recognized in the consolidated statement of operations except to the extent that it relates to items occurring during the year recognized either in other comprehensive income or directly in equity, in which case it is recognized in other comprehensive income or equity. Current tax is the expected tax payable or receivable on the taxable income or loss for the current or prior periods using tax rates enacted at the balance sheet date. Deferred tax is accounted for using the asset and liability method that requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the financial statement carrying amount and the tax bases of assets and liabilities at the applicable tax rates. A valuation allowance is provided when it is more likely than not that some portion or all of the deferred tax assets will not be realized. The Company evaluates the realizability of its deferred tax assets by assessing its valuation allowance and by adjusting the amount of such allowance, if necessary. The factors used to assess the likelihood of realization include the Company’s forecast of future taxable income, carryback availability, reversing taxable temporary differences and available tax-planning strategies that could be implemented to realize the deferred tax assets. Income tax positions must meet a more-likely-than-not recognition threshold to be recognized. Income tax positions that previously failed to meet the more-likely-than-not threshold are recognized in the first subsequent financial reporting period in which that threshold is met. Previously recognized tax positions that no longer meet the more-likely-than-not threshold are derecognized in the first subsequent financial reporting period in which that threshold is no longer met. Recognized income tax positions are measured at the largest amount that is greater than 50 percent likely of being realized. We recognize potential accrued interest and penalties related to unrecognized tax benefits within the consolidated statement of operations as income tax expense. In interim periods, the income tax expense (benefit) related to income (loss) from continuing operations before income tax expense (benefit) excluding significant unusual or infrequently occurring items is computed at an estimated annual effective tax rate and the income tax expense (benefit) related to all other items is individually computed and recognized when the items occur. (u) Preferred shares In September 2014, Adaptimmune Limited issued 1,758,418 Series A Preferred Shares for net consideration of $98,872,000 after the deduction of fees of $4,949,000. On February 23, 2015, 1,758,418 Series A Preferred Shares were exchanged for newly issued Series A Preferred Shares of Adaptimmune Therapeutics Limited on a one-for-100 basis. The Series A Preferred Shares were convertible into ordinary shares at the option of the holder at an initial rate of 1:1 reducing to 2:1 on the third anniversary of the issuance, or on the occurrence of an initial public offering at a rate of 1:1 reducing from 1:1 on the first anniversary of the issuance to 2:1 on the third anniversary of the issuance. The Series A Preferred Shares contained a beneficial conversion feature, which is recognized within additional paid-in capital and accreted over the minimum period in which the investor can recognize that return. The beneficial conversion feature was accreted through a deemed dividend of $14,735,000 in the year ended June 30, 2015. The Series A Preferred Shares were converted into ordinary shares at a rate of 1:1 immediately prior to the Company’s initial public offering on NASDAQ in May 2015. Upon conversion the Company reclassified the carrying amount of the Series A Preferred Shares to common stock and additional paid-in capital. (v) Loss per share Basic loss per share is determined by dividing net loss attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the period. Diluted loss per share is determined by dividing net loss attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the period, adjusted for the dilutive effect of all potential ordinary shares that were outstanding during the period. Potentially dilutive shares are excluded when the effect would be to increase diluted earnings per share or reduce diluted loss per share. The following table reconciles the numerator and denominator in the basic and diluted loss per share computation (in thousands): Year ended Year ended Six months ended Year ended December 31, December 31, December 31 June 30, 2017 2016 2015 2015 Numerator for basic and diluted loss per share Net loss $ ) $ ) $ ) $ ) Deemed dividend on convertible preferred shares — — — ) Net loss attributable to shareholders used for basis and diluted EPS calculation $ ) $ ) $ ) $ ) Denominator for basic and diluted loss per share Weighted average number of shares used to calculate basic and diluted loss per share The effects of the following potentially dilutive equity instruments have been excluded from the diluted loss per share calculation because they would have an antidilutive effect on the loss per share for the period: Year ended Year ended Six months ended Year ended December 31, December 31, December 31 June 30, 2017 2016 2015 2015 Weighted average number of share options (1) Weighted average number of Preferred Shares — — — (1) From January 1, 2018 through to February 28, 2018, the Company granted 9,994,656 options over ordinary shares with an exercise price determined by reference to the market value of an ADS at the date of grant, and 6,555,900 options over ordinary shares with an exercise price equal to the nominal value of the ordinary shares (£0.001 per share). (w) Related parties The Company has historically entered into several agreements with Immunocore Limited (“Immunocore”). During the year ended December 31, 2017, Immunocore has invoiced the Company in respect of: (i) services provided under a target collaboration agreement (which terminated on March 1, 2017); (ii) costs relating to prosecution of jointly owned patents; and (iii) property rents (effective until June 1, 2017). During the year ended December 31, 2017, all of the Company’s U.K-based research and development and corporate staff moved into the Company’s new building at Milton Park, Oxfordshire, which comprises laboratory and office space. Consequently, the Company’s lease from Immunocore of premises formerly used for research and development terminated on June 1, 2017 and the Company received $550,000 in relation to leasehold improvements, as provided for under the lease. The lease of the Company’s former corporate office premises was assigned to Immunocore effective from July 1, 2017 in a transaction on arms-length terms. As of the closing of the Company’s registered direct offering of its American Depositary Shares on April 10, 2017, Immunocore held less than 5% of the Company’s shares. Due to several factors including the decrease in share ownership, the termination of the target collaboration agreement and our lack of common directors, the Company no longer considers Immunocore to be a related party with effect from January 1, 2018. (x) New accounting pronouncements Adopted in the period Intra-Entity Transfers of Assets Other Than Inventory The Company adopted Accounting Standards Update (“ASU”) ASU 2016-16 - Income Taxes: Intra-Entity Transfers of Assets Other Than Inventory issued by the Financial Accounting Standards Board (“FASB”) in October 2016, which requires that entities recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. The guidance has been adopted on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption prospectively to all arrangements entered into or materially modified after January 1, 2017. The adoption of this guidance did not have any impact on the financial position, results of operations or cash flows. To be adopted in future periods Revenue from Contracts with Customers In May 2014, the FASB issued ASU 2014-09 - Revenue from Contracts with Customers (“ASU 2014-09”) which requires a new approach to revenue recognition and, in March, April, May and December 2016, the FASB issued additional clarification related to this guidance. This guidance has been codified within Accounting Standard Codification Topic 606, Revenue from Contracts with Customers (“ASC 606”). The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or servi |
Revenue
Revenue | 12 Months Ended |
Dec. 31, 2017 | |
Revenue | |
Revenue | Note 3 — Revenue Revenue represents recognized income from the GSK Collaboration and License Agreement which requires the Company to provide multiple deliverables to GSK. The GSK Collaboration and License Agreement related to up to five target programs, the first of which was the NY-ESO SPEAR T-cell program. On September 7, 2017, and by way of an amendment agreement (the “Amendment”), GSK exercised its option to obtain an exclusive license to research, develop, and commercialize the Company’s NY-ESO SPEAR T-cell therapy program. The Amendment also specified the activities required to transition the NY-ESO SPEAR T-cell program to GSK. Transition of the program is targeted for completion during 2018. The exercise of the NY-ESO option and the Amendment has been accounted for as a modification of an existing arrangement. As of September 7, 2017, we have accounted for the modified arrangement as a multiple-element arrangement consisting of the following deliverables under the GSK Collaboration and License Agreement (i) an exclusive license to research, develop, and commercialize the Company’s NY-ESO SPEAR T-cell therapy program, (ii) the transitional development program for the NY-ESO Spear T-cell performed during the transition period, (iii) additional transitional services, when and if required by GSK and reimbursed when performed and (iv) the development of, and option to obtain an exclusive license to a second target, PRAME. As provided under the GSK Collaboration and License Agreement, GSK continues to have the right to nominate three additional target peptides, excluding any targets on which work is already under way. No further targets can be nominated until after full payment of the option exercise fee for the NY-ESO program. Management does not consider this to be a deliverable at September 7, 2017, because it represents a substantive option not priced at a significant and incremental discount. After the transition, GSK will assume responsibility for all NY-ESO-related activities. Upon modification, the non-contingent arrangement consideration was allocated between the separate deliverables using the Company’s best estimate of the relative selling price. In determining the best estimate, the Company considered internal pricing objectives it used in negotiating the GSK Collaboration and License Agreement and the Amendment, together with internal data regarding the cost and margin of providing services for each deliverable taking into account the different stage of development of each development program. Under the GSK Collaboration and License Agreement, the Company received an upfront payment of $42.1 million in June 2014 and has achieved non-substantive development milestones of $49.3 million, of which $10.3 million were achieved in the year ended December 31, 2017. Upon exercise of the NY-ESO option, the Company is entitled to receive an option exercise fee of £30 million (approximately $38 million), of which $26.6 million was received in September 2017 and the remainder is payable upon transition of the program to GSK, which is expected to occur during 2018. The Company is entitled to further non-substantive milestone payments based on the achievement of development milestones by the Company relating to the NY-ESO SPEAR T-cell program. In addition to the development milestone payments due in relation to the NY-ESO SPEAR T-cell program, the Company is also entitled to non-substantive milestone payments based on achievement of development milestones under the PRAME SPEAR T-cell program, the second target program nominated by GSK under the GSK Collaboration and License Agreement. The Company will also be entitled to further development and commercialization milestone payments based on achievement of specified milestones by GSK. The Company is entitled to royalties from GSK on all GSK sales of TCR therapeutic products licensed under the GSK Collaboration and License Agreement, varying between a mid-single-digit percentage and a low-double-digit percentage of net sales. Sales milestones also apply once any TCR therapeutic covered by the GSK Collaboration and License Agreement is on the market. The revenue allocated to the exclusive license to research, develop, and commercialize the Company’s NY-ESO SPEAR T-cell therapy program will be recognized as revenue upon commencement of the exclusive license, which occurs on completion of defined transition activities and transition of sponsorship of clinical programs to GSK. The revenue allocated to the transitional development program for the NY-ESO Spear T-cells and the development of, and option to obtain an exclusive license to a second target, PRAME is recognized using the proportional performance model in revenue systematically over the period in which the Company is delivering services under the GSK Collaboration and License Agreement, which is determined to be the estimated duration of the development activities to be performed by Adaptimmune under the GSK Collaboration and License Agreement. Management regularly reviews and monitors the performance of the GSK Collaboration and License Agreement to determine the period over which the Company will be delivering services to GSK: and when a change in facts or circumstances occurs, the estimated is adjusted and the revenue is recognized based on the revised estimate. The difference between the cumulative revenue recognized based on the previous estimate and the revenue recognized based on the revised estimate is recognized as an adjustment to revenue in the period in which the change in estimate occurs. Upon the exercise of the NY-ESO option, the estimate of the period over which the Company will be delivering services to GSK in relation to the NY-ESO Spear T-Cell development program has significantly reduced, resulting in an increase in revenue amortization of $17.5 million in September 2017. Management estimates that all deferred revenue, totaling $38.7 million, will now be amortized within 12 months. The GSK Collaboration and License Agreement is effective until all payment obligations expire. The GSK Collaboration and License Agreement can also be terminated on a collaboration program-by-collaboration program basis by GSK for lack of feasibility or inability to meet certain agreed requirements. Both parties have rights to terminate the GSK Collaboration and License Agreement for material breach upon 60 days’ written notice or immediately upon insolvency of the other party. GSK has additional rights to terminate either the GSK Collaboration and License Agreement or any specific license or collaboration program on provision of 60 days’ notice to us. The Company also has rights to terminate any license where GSK ceases development or withdraws any licensed TCR therapeutic in specified circumstances. |
Financial instruments
Financial instruments | 12 Months Ended |
Dec. 31, 2017 | |
Financial instruments | |
Financial instruments | Note 4 — Financial instruments The Company’s financial instruments consist primarily of cash and cash equivalents, short-term deposits, marketable securities, restricted cash, accounts receivable, accounts payable and accrued expenses. 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 December 31, 2017 are as follows (in thousands): December 31, Fair Value Measurements Using 2017 Level 1 Level 2 Level 3 Assets: Marketable securities: Corporate debt securities $ $ $ — $ 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. Significant concentration of credit risk The Company held cash and cash equivalents of $84,043,000, marketable securities of $124,218,000 and restricted cash of $4,253,000 as of December 31, 2017. 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 has one customer as a result of the GSK Collaboration and License Agreement. Trade receivables were $0.2 million and $1.5 million as of December 31, 2017 and December 31, 2016. Trade receivables arise in relation to the GSK Collaboration and License Agreement. The Company has been transacting with GSK since June 2014, during which time no impairment losses have been recognized. There are no amounts which are past due as of December 31, 2017. Foreign exchange risk The Company is exposed to foreign exchange rate risk because it currently operates in the United Kingdom and the United States. The Company’s revenue from the GSK Collaboration and License Agreement is denominated in pounds sterling and is generated by our U.K.-based subsidiary, which has a pounds sterling functional currency. As a result, these sales are subject to translation into U.S. Dollars when the financial statements are consolidated. Expenses are generally denominated in the currency in which the Company’s operations are located, which are the United Kingdom and the United States. However, the U.K.-based subsidiary incurs significant research and development costs in U.S. dollars and, to a lesser extent, Euros. The results of operations and cash flows will be subject to fluctuations due to changes in foreign currency exchange rates, which could harm the Company’s business in the future. Management seeks to minimize this exposure by maintaining currency cash balances at levels appropriate to meet foreseeable expenses in U.S. dollars and pounds sterling. To date, the Company has not used forward exchange contracts or other currency hedging products to manage exchange rate exposure, although it may do so in the future. The exchange rate as of December 31, 2017, the last business day of the reporting period, was £1.00 to $1.35. Interest Rate Risk Surplus cash and cash equivalents are invested in interest-bearing savings, money market funds, corporate debt securities and commercial paper from time to time. Investments in corporate debt securities are subject to fixed interest rates. The Company’s exposure to interest rate sensitivity is impacted by changes in the underlying U.K. and U.S. bank interest rates and the fair market value of its corporate debt securities will fall in value if market interest rates increase. Management believes that an immediate one percentage point change in interest rates would not have a material effect on the fair market value of our portfolio, and therefore does not expect the operating results or cash flows to be significantly affected by changes in market interest rates. |
Other current assets
Other current assets | 12 Months Ended |
Dec. 31, 2017 | |
Other current assets | |
Other current assets | Note 5 — Other current assets Other current assets consisted of the following (in thousands): December 31, December 31, 2017 2016 Corporate tax receivable $ $ Prepayments Clinical materials Other current assets $ $ |
Property, plant and equipment,
Property, plant and equipment, net | 12 Months Ended |
Dec. 31, 2017 | |
Property, plant and equipment, net | |
Property, plant and equipment, net | Note 6 - Property, plant and equipment, net Property and equipment, net consisted of the following (in thousands): December 31, December 31, 2017 2016 Computer equipment $ $ Laboratory equipment Office equipment Leasehold improvements Assets under construction Less accumulated depreciation ) ) $ $ Depreciation expense was $5,032,000, $3,126,000, $1,176,000 and $705,000 for the years ended December 31, 2017 and 2016, six months ended December 31, 2015 and the year ended June 30, 2015, respectively. The Company has disposed of leasehold improvements resulting in a loss on disposal of $194,000 and $122,000 in the years ended December 31, 2017 and 2016, respectively, which is included within general and administrative expenses in the statement of operations. |
Intangible assets, net
Intangible assets, net | 12 Months Ended |
Dec. 31, 2017 | |
Intangible assets, net | |
Intangible assets, net | Note 7 — Intangible assets, net Intangible assets, net consisted of the following (in thousands): December 31, December 31, 2017 2016 Acquired software licenses $ $ Licensed IP rights - completed technology used in R&D Less accumulated amortization ) ) $ $ Amortization expense was $391,000, $160,000, $69,000 and $30,000 for the years ended December 31, 2017 and 2016, six months ended December 31, 2015 and the year ended June 30, 2015, respectively. The estimated aggregate amortization expense in respect of these assets for each of the five years ended 2022 is $585,000, $542,000, $467,000, $24,000 and $24,000, respectively. |
Accrued expenses and other curr
Accrued expenses and other current liabilities | 12 Months Ended |
Dec. 31, 2017 | |
Accrued expenses and other current liabilities | |
Accrued expenses and other current liabilities | Note 8 — Accrued expenses and other current liabilities Accrued expenses and other current liabilities consisted of the following (in thousands): December 31, December 31, 2017 2016 Accrued clinical & development expenditure $ $ Accrued employee expenses VAT Other accrued expenditure Accrued capital expenditure Other $ $ |
Contingencies and commitments
Contingencies and commitments | 12 Months Ended |
Dec. 31, 2017 | |
Contingencies and commitments | |
Contingencies and commitments | Note 9 — Contingencies and commitments Leases Future minimum lease payments under operating leases as of December 31, 2017 are presented below (in thousands): December 31, 2017 2018 $ 2019 2020 2021 2022 Thereafter $ The Company leases property under operating leases expiring through 2027. Lease expenses amounted to $3,617,000, $2,255,000, $841,000 and $610,000 for the years ended December 31, 2017 and 2016, six months ended December 31, 2015 and year ended June 30, 2015, respectively, which is included within research and development and general and administrative expenses in the Company’s unaudited consolidated statements of operations. In May 2017, the Company entered into an agreement for the lease of a building at Milton Park, Oxfordshire, U.K. In February 2018, the Company entered into the lease for that facility. The term of the lease expires on October 23, 2041, with termination options exercisable by the Company on the fifth anniversary of the lease commencement date and at approximately five yearly intervals thereafter. The related lease commitments are included in the table above. Capital commitments As of December 31, 2017, the Company had commitments for capital expenditure totaling $945,000, which the Company expects to incur within one year. Commitments for clinical materials, clinical trials and contract manufacturing As of December 31, 2017, the Company had non-cancellable commitments for purchase of clinical materials, executing and administering clinical trials, and for contract manufacturing of $76,725,000, of which the Company expects to pay $33,028,000 within one year, $41,214,000 in one to three years, $1,475,000 in three to five years, and $1,008,000 after five years. The amount and timing of these payments vary depending on the rate of progress of development and clinical trial enrollment rates. The Company’s subcontracted costs for clinical trials and contract manufacturing were $41,505,000, $23,565,000, $8,585,000 and $8,818,000 for the years ended December 31, 2017 and 2016, six months ended December 31, 2015 and year ended June 30, 2015, respectively. Bellicum Pharmaceuticals Inc., Co-Development and Co-Commercialization Agreement On December 16, 2016, the Company entered into a Co-Development and Co-Commercialization Agreement with Bellicum Pharmaceuticals, Inc. (“Bellicum”) in order to facilitate a staged collaboration to evaluate, develop and commercialize next generation T-cell therapies. Under the agreement, the Company will evaluate Bellicum’s GoTCR technology (inducible MyD88/CD40 co-stimulation, or iMC) with the Company’s SPEAR T-cells for the potential to create enhanced T-cell therapeutics. Depending on results of the initial preclinical proof-of-concept phase, the agreement may progress to a two-target co-development and co-commercialization phase. To the extent necessary, and in furtherance of the parties’ proof-of-concept and co-development efforts, the parties granted each other a royalty-free, non-transferable, non-exclusive license covering their respective technologies for purposes of facilitating such proof-of-concept and co-development efforts. In addition, as to covered therapies developed under the agreement, the parties granted each other a reciprocal exclusive license for the commercialization of such therapies. During the proof of concept phase, each party bears its own costs and there are no payments made between the Company and Bellicum. Any research and development costs incurred by the Company with third parties have been accounted for in accordance with the Company’s accounting policy for research and development expenses. With respect to any joint commercialization of a covered therapy, the parties agreed to negotiate in good faith the commercially reasonable terms of a co-commercialization agreement. The parties also agreed that any such agreement shall provide for, among other things, equal sharing of the costs of any such joint commercialization and the calculation of profit shares as set forth in the agreement. The agreement will expire on a country-by-country basis once the parties cease commercialization of the T-cell therapies covered by the agreement, unless earlier terminated by either party for material breach, non-performance or cessation of development, bankruptcy/insolvency, or failure to progress to co-development phase. Merck Combination Agreement On October 27, 2016, the Company entered into a clinical trial collaboration agreement with Merck & Co., Inc. (“Merck”) (known as MSD outside the United States and Canada), for the assessment of the NY-ESO SPEAR T-cell therapy in combination with Merck’s PD-1 inhibitor, KEYTRUDA® (pembrolizumab), in patients with multiple myeloma. Under the terms of the agreement, each of Merck and the Company will manufacture and supply its relevant compound for use in the combination study. Each of the Company and Merck are responsible for their own costs incurred in the performance of obligations under the agreement. Any research and development costs incurred by the Company with third parties have been accounted for in accordance with the Company’s accounting policy for research and development expenses. The agreement will last until the earlier of delivery of the final study report or study completion. Either party may terminate the agreement for material breach, patient safety, regulatory action preventing supply of compound or withdrawal of regulatory approval for one of the combination study compounds. Merck may also terminate the agreement where it believes its compound is being used in an unsafe manner. As a result of GSK’s exercise of its option over the NY-ESO SPEAR T-cell program, the clinical trial and performance obligations covered by the agreement with Merck will transition to GSK at the same time as other clinical trials using the NY-ESO SPEAR T-cell. MD Anderson Strategic Alliance On September 26, 2016, the Company announced that it had entered into a multi-year strategic alliance with The University of Texas MD Anderson Cancer Center (“MD Anderson”) designed to expedite the development of T-cell therapies for multiple types of cancer. The Company and MD Anderson are collaborating on a number of studies including clinical and preclinical development of the Company’s SPEAR T-cell therapies targeting NY-ESO, MAGE-A10 and MAGE-A4 and will collaborate on future clinical stage first and second generation SPEAR T-cell therapies across a number of cancers. Under the terms of the agreement, the Company has committed at least $19,644,000 to fund studies. Payment of this funding is contingent on mutual agreement to study orders in order for any study to be included under the alliance and the performance of set milestones by MD Anderson. The Company made an upfront payment of $3,412,000 to MD Anderson in the year ended December 31, 2017 and is obligated to make further payments to MD Anderson as certain milestones are achieved. These costs will be expensed to research and development as MD Anderson renders the services under the strategic alliance. The agreement may be terminated by either party for material breach by the other party. Individual studies may be terminated for, amongst other things, material breach, health and safety concerns or where the institutional review board, the review board at the clinical site with oversight of the clinical study, requests termination of any study. Where any legal or regulatory authorization is finally withdrawn or terminated, the relevant study will also terminate automatically. Universal Cells Research, Collaboration and License Agreement On November 25, 2015, the Company entered into a Research, Collaboration and License Agreement relating to gene editing and Human Leukocyte Antigen (“HLA”) engineering technology with Universal Cells, Inc. (“Universal Cells”). The Company paid an upfront license and start-up fee of $2.5 million to Universal Cells in November 2015, a milestone payment of $3.0 million in February 2016 and further milestone payments of $0.9 million in 2017. Further milestone payments of up to $43.5 million are payable if certain development and product milestones are achieved. Universal Cells would also receive a profit-share payment for the first product, and royalties on sales of other products utilizing its technology. The upfront license and start-up fee and milestone payments were expensed to research and development when incurred. ThermoFisher License Agreement In 2012, the Company entered into a series of license and sub-license agreements with Life Technologies Corporation, part of ThermoFisher Scientific, Inc. (“ThermoFisher”) that provide the Company with a field-based exclusive license under certain intellectual property rights owned or controlled by ThermoFisher. The Company paid upfront license fees of $1.0 million relating to the license and sublicense agreements and has an obligation to pay minimum annual royalties (in the tens of thousands of U.S. dollars prior to licensed product approval and thereafter at a level of 50% of running royalties in the previous year), milestone payments and a low single-digit running royalty payable on the net selling price of each licensed product. The upfront payment made in 2012 was expensed to research and development when incurred. Subsequent milestone payments have been recognized as an intangible asset due to the technology having alternative future use in research and development projects at the time of the payment. The minimum annual royalties have been expensed as incurred. On June 16, 2016, the Company entered into a supply agreement with ThermoFisher for the supply of the Dynabeads® CD3/CD28 technology. The Dynabeads® CD3/CD28 technology is designed to isolate, activate and expand human T-cells, and is being used in the manufacturing of the Company’s affinity enhanced T-cell therapies. The supply agreement runs until December 31, 2025. Under the supply agreement the Company is required to purchase its requirements for CD3/CD28 magnetic bead product exclusively from ThermoFisher for a period of 5 years and there are also minimum purchasing obligations, which are included within ‘Purchase commitments for clinical materials, clinical trials and contract manufacturing’ set forth above. ThermoFisher has the right to terminate the supply agreement for material breach or insolvency. |
Stockholders' equity
Stockholders' equity | 12 Months Ended |
Dec. 31, 2017 | |
Stockholders' equity | |
Stockholders' equity | Note 10 — Stockholders’ equity Ordinary shares Each holder of ordinary shares is entitled to one vote, on a show of hands and one vote per share on a poll, at general meetings of the Company. On the winding up of the Company, the assets of the Company available for distribution to holders remaining after payment of all other debts and liabilities of the Company shall be paid to the shareholders in proportion to the number of shares held by each of them. The payment of dividends by Adaptimmune Therapeutics plc is governed by English law Effective from June 21, 2017, the Directors have the authority to allot new ordinary shares or to grant rights to subscribe for or to convert any security into ordinary shares in the Company up to a maximum aggregate nominal amount of £140,000. This authority runs for five years and will expire on June 20, 2022. Effective from June 21, 2017, the Directors also have the authority to allot ordinary shares for cash or to grant rights to subscribe for or to convert any security into ordinary shares in the Company without first offering them to existing shareholders in proportion to their existing holdings up to an aggregate maximum nominal amount of £140,000. This power will expire at the end of the Annual General Meeting of the Company to be held in 2019. Underwritten public offering On March 27, 2017, the Company completed an underwritten public offering of the Company’s American Depositary Shares (“ADSs”). The Company sold 15,700,223 ADSs (representing 94,201,338 ordinary shares) at a price to the public of $4.20 per ADS. The net proceeds were $61,397,000 after deducting offering expenses of $4,544,000. Registered direct offering On April 10, 2017, the Company completed a registered direct offering of the Company’s ADSs following its entry into a definitive agreement with Matrix Capital Management Company, LP. The Company sold 7,000,000 ADSs (representing to 42,000,000 ordinary shares) at a price of $6.00 per ADS. The net proceeds were $41,770,000 after deducting offering expenses of $230,000. Initial public offering (“IPO”) On May 11, 2015, the Company closed its IPO on NASDAQ, issuing 11,250,000 American Depositary Shares representing 67,500,000 ordinary shares with nominal value of $104,000 (£67,500) for proceeds of $175,989,000, net of issuance costs of $13,387,000. Corporate reorganization On April 1, 2015, the Company completed a corporate reorganization. Pursuant to the first stage of this reorganization, on February 23, 2015, all shareholders of Adaptimmune Limited exchanged each of the Series A Preferred Shares and ordinary shares held by them for newly issued Series A Preferred Shares and ordinary shares of Adaptimmune Therapeutics Limited on a one-for-100 basis, resulting in Adaptimmune Limited becoming a wholly-owned subsidiary of Adaptimmune Therapeutics Limited. On April 1, 2015, pursuant to the final step in the corporate reorganization, Adaptimmune Therapeutics Limited re-registered as a public limited company with the name Adaptimmune Therapeutics plc. On March 20, 2015, Adaptimmune Limited share options over ordinary shares granted to directors and employees under share option plans that were in existence immediately prior to the reorganization were exchanged for share options over ordinary shares of Adaptimmune Therapeutics plc on a one-for-100 basis with no change in any of the terms or conditions. Adaptimmune Therapeutics plc’s Board, management and corporate governance arrangements, and consolidated assets and liabilities immediately following the reorganization were the same as Adaptimmune Limited immediately before the reorganization. Convertible preferred shares In September 2014, Adaptimmune Limited issued 1,758,418 Series A Preferred Shares for net consideration of $98,872,000 after the deduction of fees of $4,949,000. In February 2015, the Series A Preferred Shares were exchanged for Series A Preferred Shares of Adaptimmune Therapeutics Limited on a one-for-100 basis. The Series A Preferred Shares were convertible into ordinary shares at the option of the holder at an initial rate of 1:1 reducing to 2:1 on the third anniversary of the issuance, or on the occurrence of an initial public offering at a rate of 1:1 reducing from 1:1 on the first anniversary of the issuance to 2:1 on the third anniversary of the issuance. The Series A Preferred Shares were converted into ordinary shares at a rate of 1:1 immediately prior to the Company’s initial public offering on NASDAQ in May 2015. |
Share-based compensation
Share-based compensation | 12 Months Ended |
Dec. 31, 2017 | |
Share-based compensation | |
Share-based compensation | Note 11 — Share-based compensation The Company grants options over ordinary shares in Adaptimmune Therapeutics plc under the following option plans: (i) the Adaptimmune Therapeutics plc Employee Share Option Scheme (adopted on January 14, 2016), (ii) the Adaptimmune Therapeutics plc 2015 Share Option Scheme and (adopted March 16, 2015) (ii) the Adaptimmune Therapeutics plc Company Share Option Plan (adopted March 16, 2015). The Adaptimmune Therapeutics plc Company Share Option Plan is a tax efficient option scheme intended to comply with the requirements of Schedule 4 to the Income Tax (Earnings and Pensions) Act 2003 of the United Kingdom, which provides for the grant of company share option plan (“CSOP”) options. Grants may not exceed the maximum value of £30,000 per participant for the shares under the option, which is a CSOP compliance requirement. Generally, the vesting dates for the options granted under these plans up to December 31, 2017 are 25% on the first anniversary of the grant date and 75% in monthly installments over the following three years. However, the options granted to non-executive directors under the Adaptimmune Therapeutics plc 2015 Share Option Scheme vest and become exercisable as follows: Options granted to non-executive directors on May 11, 2015: Immediately on grant date Options granted to a non-executive director on June 23, 2016: 25% on the first anniversary of the grant date and 75% in monthly installments over the following two years Options granted to non-executive directors on August 11, 2016: 100% on the first anniversary of the grant date Options granted to non-executive directors on November 28, 2016: 25% on the first anniversary of the grant date and 75% in monthly installments over the following two years Options granted to non-executive directors on July 3, 2017 100% on the first anniversary of the grant date Options granted under these plans are not subject to performance conditions. The contractual term of options granted under these plans is ten years. The maximum aggregate number of options which may be granted under these plans and any incentive plans adopted by the Company cannot exceed a scheme limit that equates to 8% of the initial fully diluted share capital of the Company immediately following its IPO plus an automatic annual increase of an amount equivalent to 4% of the issued share capital on each 30 June (or such lower number as the Board, or an appropriate committee of the Board, may determine). The automatic increase is effective from July 1, 2016. Prior to December 31, 2014, the Company granted options to purchase ordinary shares in Adaptimmune Limited under three option schemes: (i) The Adaptimmune Limited Share Option Scheme was adopted on May 30, 2008. Under this scheme Enterprise Management Incentive (“EMI”) options (which are potentially tax-advantaged in the United Kingdom) have been granted (subject to the relevant conditions being met) to its employees who are eligible to receive EMI options under applicable U.K. tax law and unapproved options (which do not attract tax advantages) have been granted to its employees who are not eligible to receive EMI options, and to its Directors and consultants. In May 2014, the Company no longer qualified for EMI status and since that date, no further EMI options were granted under this scheme; however, unapproved options have been under granted under this scheme since that date. (ii) The Adaptimmune Limited 2014 Share Option Scheme was adopted on April 11, 2014. EMI options were granted (subject to the relevant conditions being met) under this scheme to our employees who are eligible to receive EMI options under applicable U.K. tax law. Unapproved options were granted to its employees who are not eligible to receive EMI options and to directors. In May 2014, the Company no longer qualified for EMI status and since that date, no further EMI options were granted under this scheme; however, unapproved options have been under granted under this scheme since that date. (iii) The Adaptimmune Limited Company Share Option Plan was adopted on December 16, 2014. This scheme allowed the grant of options to our eligible employees prior to the Company’s corporate reorganization. This scheme is a tax efficient option scheme and options were granted on December 19, 2014 and on December 31, 2014 to our part-time and full-time employees. As part of the corporate reorganization in connection with our IPO, the holders of options granted under these schemes over ordinary shares of Adaptimmune Limited were granted equivalent options on substantially the same terms over ordinary shares of Adaptimmune Therapeutics plc (“Replacement Options”) in exchange for the release of these options. The Company does not intend to grant any further options under these schemes. Generally, the vesting dates for the Replacement Options under the Adaptimmune Limited schemes are: Options granted in 2009: 100% on the third anniversary of the grant date Options granted in 2011, 2012, 2013 and April 2014: 25% on the first anniversary of the grant date and 75% in annual installments over the following three years Options granted in December 2014: 25% on the first anniversary of the grant date and 75% in monthly installments over the following three years The contractual life of options granted under these schemes is ten years. In August 2016, the Company accelerated the vesting of 361,222 share options held by two non-executive directors, such that those options became vested and exercisable on December 30, 2016 when the non-executive directors stepped down from the Board, and the options expire on December 31, 2018. The following table shows the total share-based compensation expense included in the consolidated statement of operations (thousands): Year ended Year ended Six months ended Year ended December 31, December 31, December 31, June 30, 2017 2016 2015 2015 Research and development $ $ $ $ General and administrative $ $ $ $ As of December 31, 2017 and December 31, 2016, there were 3,224,600 and 3,074,600 share options granted to nonemployees outstanding, respectively. These share options are measured at the current fair values at each reporting date until the share options have vested and recognized in the consolidated statement of operations over the requisite service period. The total share-based payment expense included in the consolidated statement of operations includes a charge of $314,000 in the year ended December 31, 2017, a benefit of $488,000 and $33,000 in the year ended December 31, 2016 and six months ended December 31, 2015, respectively, and a charge of $2,001,000 in the year ended June 30, 2015 relating to share options granted to nonemployees. As of December 31, 2017, there was $10,086,000 of total unrecognized compensation cost related to stock options granted but not vested under the plans. That cost will be recognized over an expected remaining weighted-average period of 2.9 years. There were 29,924,787, 19,404,373 and 21,779,577 options granted in the years ended December 31, 2017 and 2016 and June 30, 2015, respectively. No share options were granted in the six months ended December 31, 2015. The weighted average fair value of stock options granted in the years ended December 31, 2017 and 2016 and June 30, 2015 were $0.35, $0.74 and $0.64, respectively. The following table summarizes all stock option activity for the year ended December 31, 2017: Weighted Average average remaining Aggregate exercise price contractual intrinsic value Options per option term (years) (thousands) Outstanding at January 1, 2017 £ Changes during the period: Granted £ Exercised ) £ Forfeited ) £ Outstanding at December 31, 2017 £ $ Exercisable at December 31, 2017 £ $ The following table summarizes information about stock options outstanding as of December 31, 2017: Outstanding Exercisable Weighted- average Weighted- Weighted- Total share remaining average Total share average exercise Exercise price options contractual life exercise price options price £ 0 – 0.25 £ £ 0.26 – 0.50 0.51 – 0.75 0.76 – 1.00 1.01 – 1.50 1.51 – 2.00 Total £ £ There were 1,142,904 and 63,192 share options exercised in the years ended December 31, 2017 and 2016, respectively. No share options were exercised in the six months ended December 31, 2015 and year ended June 30, 2015. In the years ended December 31, 2017 and 2016 the total intrinsic value of stock options exercised was $1,522,000 and $40,000, respectively and the cash received from exercise of stock options was $401,000 and $17,000, respectively. The Company recognizes tax benefits arising on the exercise of stock options regardless of whether the benefit reduces current taxes. The tax benefit arising on the exercise of stock options was $73,000 and $8,000 for the year ended December 31, 2017 and 2016, respectively and nil for the six months ended December 31, 2015 and the year ended June 30, 2015. The Company satisfies the exercise of stock options through newly issued shares. The fair value of the stock options granted during the period was calculated using the Black-Scholes option-pricing model using the following assumptions: Year ended Year ended Year ended December 31, December 31, June 30, 2017 2016 2015 Expected term (years) 5 years 5 years 5 years Expected volatility 66-71% 68-73% Risk free rate 0.40-0.76% 0.17-1.07% 1.04-1.54% Expected dividend yield The expected term of the option is based on management judgment. Due to the Company’s lack of sufficient history as a publicly traded company, management’s estimate of expected volatility for grants prior to May 2017 are based on the average volatilities of seven public companies with similar attributes to the Company. For grants subsequent to May 2017, there is over two years of historical data upon which to determine the volatility of the Company’s share price, which management consider is sufficient to estimate the volatility based on the Company’s historical share price. The risk free rate is based on the Bank of England’s estimates of gilt yield curve as of the respective grant dates. |
Income taxes
Income taxes | 12 Months Ended |
Dec. 31, 2017 | |
Income taxes | |
Income taxes | Note 12 — Income taxes Loss before income taxes is as follows (in thousands): Year ended Year ended Six months ended Year ended December 31, December 31, December 31, June 30, 2017 2016 2015 2015 U.S. $ ) $ ) $ ) $ ) U.K. ) ) ) ) Loss before income taxes $ ) $ ) $ ) $ ) The components of income tax expense (benefit) are as follows (in thousands): Year ended Year ended Six months ended Year ended December 31, December 31, December 31, June 30, 2017 2016 2015 2015 United States: Federal $ $ $ $ State and local ) ) U.K. — — — — Total current tax expense (benefit) ) United States: Federal — — — — State and local — — — — U.K. — — — — Total deferred tax expense (benefit) — — — — Total income tax expense (benefit) $ $ $ ) $ As of December 31, 2017 and 2016 the tax effects of temporary differences and carryforwards that give rise to deferred tax assets and liabilities were as follows (in thousands): December 31, December 31, 2017 2016 Deferred tax liabilties Property, plant and equipment: $ ) $ ) Accruals ) ) Total ) ) Deferred tax assets Share-based compensation expense Available-for-sale debt securities — Other accruals Net operating loss and expenditure credit carryforwards Total Valuation allowance ) ) Net deferred tax asset (liability) $ — $ — The valuation allowances are primarily related to deferred tax assets for operating loss carry-forwards and temporary differences relating to share-based compensation expense. Deferred tax assets have been recognized without a valuation allowance to the extent supported by reversing taxable temporary differences. A valuation allowance has been provided over the remaining deferred tax assets, which management considered are not more likely than not of being realized after weighing all available positive and negative evidence including cumulative losses in recent years and projections of future taxable losses. The valuation allowance increased by $9,819,000 in the year ended December 31, 2017, which includes the impact of foreign currency translation adjustments of $1,722,000. Reconciliation of the U.K. statutory income tax rate to the Company’s effective tax rate is as follows (in percentages): Year ended Year ended Six months ended Year ended 2017 2016 2015 2015 U.K. tax rate % % % % Permanent differences relating to reimbursable tax credits % % % % Permanent differences relating to foreign exchange — — )% % Surrender of R&D expenditures for R&D tax credit refund )% )% )% )% Change in valuation allowances )% )% )% )% Other )% )% % )% Effective income tax rate )% )% % )% The Company is headquartered in the United Kingdom and has subsidiaries in the United Kingdom and the United States. The Company incurs tax losses in the United Kingdom. The weighted-average U.K. corporate tax rate for the years ended December 31, 2017 and 2016, six months ended December 31, 2015 and year ended June 30, 2015 was 19.25%, 20%, 20% and 20.75%, respectively. The Company’s subsidiary in the United States has generated taxable profits due to a service agreement between the Company’s subsidiaries in the United States and the United Kingdom. The U.S. federal corporate tax rate was 34% for the years ended December 31, 2017 and 2016, six months ended December 31, 2015 and year ended June 30, 2015. The United Kingdom’s 2016 Finance Bill, which was enacted on September 15, 2016, contained reductions in corporation tax to 19% from April 1, 2017 and 17% from April 1, 2020. The Company used a 17% tax rate as of December 31, 2017 in respect of the measurement of deferred taxes arising in the United Kingdom, which reflects the currently enacted tax rate and the anticipated timing of the unwinding of the deferred tax balances. In respect of the measurement of deferred taxes arising in the U.S, the Company has adopted a 21% tax rate as of December 31, 2017. This rate has decreased from 34% as of December 31, 2016 due to U.S. tax reforms which were enacted in December 2017. This reduced the net deferred tax asset and corresponding valuation allowance by $1.8 million. We believe that other aspects of U.S. tax reforms will not have a significant impact on our income taxes. The effect of the change in tax rates on the consolidated statement of operations is $nil, after consideration of the change in valuation allowance. As of December 31, 2017, we do not have unremitted earnings in our U.S. subsidiary. As of December 31, 2017, we had U.K. net operating loss of approximately $135.6 million, expenditure credit carryforwards of $0.6 million and U.S. tax credit carryforwards of $0.2 million. Unsurrendered U.K. tax losses and tax credit carryforwards can be carried forward indefinitely to be offset against future taxable profits, however this is restricted to an annual £5 million allowance in each standalone company or group and above this allowance, there will be a 50% restriction in the profits that can be covered by losses brought forward. U.S. tax credit carryforwards can be carried forward for 20 years. Our tax returns are under routine examination in the U.K. and U.S. tax jurisdictions. The scope of these examinations includes, but is not limited to, the review of our taxable presence in a jurisdiction, our deduction of certain items, our claims for research and development credits, our compliance with transfer pricing rules and regulations and the inclusion or exclusion of amounts from our tax returns as filed. The Company is no longer subject to examinations by tax authorities for the tax years 2011 and prior in the United Kingdom. However, U.K. net operating losses from the tax years 2011 and prior would be subject to examination if and when used in a future tax return to offset taxable income. Our U.K. income tax returns have been accepted by Her Majesty’s Revenue and Customs through the period ended December 31, 2016. The Company is subject to examinations by tax authorities in the United States for all tax years 2013 through 2016. Our U.S. federal income tax return for the year ended June 30, 2014 was audited by the U.S. Internal Revenue Service and resulted in no changes. We are also subject to audits by U.S. state taxing authorities where we have operations. Unrecognized tax benefits arise when the estimated benefit recorded in the financial statements differs from the amounts taken or expected to be taken in a tax return because of the uncertainties described above. As of December 31, 2017 and December 31, 2016, the Company had no unrecognized tax benefits. |
Geographic information
Geographic information | 12 Months Ended |
Dec. 31, 2017 | |
Geographic information | |
Geographic information | Note 13 — Geographic information Operations by geographic area Revenue represents recognized income from the GSK Collaboration and License Agreement. All revenue was derived in the United Kingdom. Long-lived assets (excluding intangibles and financial instruments) were located as follows (in thousands): December 31, December 31, 2017 2016 U.K. $ $ U.S. Total long-lived assets (1) $ $ (1) Clinical materials of $4,695,000 and 2,580,000, included within non-current assets as of December 31, 2017 and 2016, respectively, are not included within the table above because they can easily be transferred between geographic locations. Major customers: During the year ended December 31, 2017 and 2016, six months ended December 31, 2015 and the year ended June 30, 2015 100% of revenues were generated from one customer, which was GSK. |
Summary of Significant Accoun25
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Summary of Significant Accounting Policies | |
Basis of presentation | (a) Basis of presentation The consolidated financial statements of Adaptimmune Therapeutics plc and its subsidiaries and other financial information included in this Annual Report have been prepared in accordance with generally accepted accounting principles in the United States of America (“US 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 Company undertook a reorganization that was completed in April 2015 and is described in Note 10. As appropriate for a reorganization of entities under common control, the historical consolidated financial statements of Adaptimmune Limited and subsidiary prior to the reorganization became those of Adaptimmune Therapeutics plc. On February 23, 2015 the Company undertook a one-for-100 share exchange. All share and per share information presented gives effect to the reorganization by dividing the loss for the period by the weighted average number of shares outstanding of Adaptimmune Therapeutics plc as if the one-for-100 share exchange had been in effect throughout the period. The nominal value of the share capital has been increased to reflect the nominal share capital after the one-for-100 share exchange. |
Use of estimates in financial statements | (b) Use of estimates in financial statements The preparation of 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 consolidated financial statements and reported amounts of revenues and expenses during the reporting period. Estimates and assumptions are primarily made in relation to the valuation of share options, valuation allowances relating to deferred tax assets, revenue recognition, estimating clinical trial expenses and estimating R&D tax and expenditure credits. 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. |
Going concern | (c) Going concern Management considers that there are no conditions or events, in the aggregate, that raise substantial doubt about the entity’s ability to continue as a going concern for a period of at least one year from the date the financial statements are issued. This evaluation is based on relevant conditions and events that are known and reasonably knowable at the date that the financial statements are issued, including: a. The Company’s current financial condition, including its liquidity sources; b. The Company’s conditional and unconditional obligations due or anticipated within one year; c. The funds necessary to maintain the Company’s operations considering its current financial condition, obligations, and other expected cash flows; and d. Other conditions and events, when considered in conjunction with the above that may adversely affect the Company’s ability to meet its obligations. |
Foreign currency | (d) Foreign currency The reporting currency of the Company is the U.S. dollar. The Company has determined the functional currency of the ultimate parent company, Adaptimmune Therapeutics plc, is U.S. dollars because it predominately raises finance and expends cash in U.S. dollars. The functional currency of subsidiary operations is the applicable local currency. Transactions in foreign currencies are translated into the functional currency of the subsidiary in which they occur at the foreign exchange rate in effect on at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are translated into the functional currency of the relevant subsidiary at the foreign exchange rate in effect on the balance sheet date. Foreign exchange differences arising on translation are recognized within other income (expense) in the consolidated statement of operations. The results of operations for subsidiaries, whose functional currency is not the U.S. dollar, are translated at an average rate for the period where this rate approximates to the foreign exchange rates ruling at the dates of the transactions and the balance sheet are translated at foreign exchange rates ruling at the balance sheet date. Exchange differences arising from this translation of foreign operations are reported as an item of other comprehensive income (loss). Other income, net includes foreign exchange gains of $8,744,000, $1,002,000, $12,596,000 and $11,200,000 for the years ended December 31, 2017 and 2016, the six months ended December 31, 2015 and the year ended June 30, 2015, respectively. |
Fair value measurements | (e) 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, short-term deposits, 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 4, Fair value measurements . |
Accumulated other comprehensive income (loss) | (f) Accumulated other comprehensive income (loss) The following amounts were reclassified out of other comprehensive income during the year ended December 31, 2017 (in thousands): Amount Component of Accumulated Other Comprehensive Income reclassified Affected line item in the Statement of Operations Unrealized gains (losses) on available-for-sale securities Reclassification adjustment for losses on available-for-sale debt securities $ Other income, net |
Cash, cash equivalents and restricted cash | (g) Cash, cash equivalents and restricted cash The Company considers all highly-liquid investments with a maturity at acquisition date of three months or less to be cash equivalents. Cash and cash equivalents comprise cash balances, commercial paper and corporate debt securities with maturities of three months or less at acquisition and short deposits with maturities of three months or less. The Company’s restricted cash consists of cash providing security for letters of credit in respect of lease agreements. The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the balance sheet that sum to the total of the same such amounts shown in the statement of cash flows (in thousands). December 31, December 31, 2017 2016 Cash and cash equivalents $ $ Restricted cash Total cash, cash equivalents, and restricted cash shown in the statement of cash flows $ $ |
Short-term deposits | (h) Short-term deposits Short-term deposits consist of bank deposits with a maturity at acquisition date of between three and twelve months. |
Available-for-sale debt securities | (i) Available-for-sale debt securities As of December 31, 2017, the Company has the following investments in available-for-sale debt securities, which are categorized as cash equivalents or marketable securities — available-for-sale debt securities on the balance sheet depending on their maturity at acquisition (in thousands): Foreign Gross Gross currency Aggregate Amortized Unrealized Unrealized translation Estimated Maturity cost Gains Losses adjustment Fair Value Cash equivalents: Corporate debt securities Less than 3 months $ 1,610 $ $ ) $ $ $ 1,610 $ — $ ) $ $ Marketable securities: Corporate debt securities 3 months to 1 year $ 124,406 $ — $ ) $ $ $ 124,406 $ — $ ) $ $ Management determines the appropriate classification of its investments in available-for-sale debt securities at the time of purchase and reevaluates such designation as of each reporting date. The securities are classified as current or non-current based on the maturity dates and management’s intentions. At December 31 2017, the Company has classified all of its available-for-sale debt securities, including those with maturities beyond one year, as current assets on the accompanying consolidated balance sheets based on the highly-liquid nature of these investment securities and because these investment securities are considered available for use in current operations. The investment in available-for-sale debt securities is measured at fair value at each reporting date. Unrealized gains and losses are excluded from earnings and are reported as a component of comprehensive loss. Realized gains and losses, interest income and amortization of premiums and discounts at acquisition are included in other income (expense), net. In the year ended December 31, 2017, proceeds from the maturity or redemption of available-for-sale debt securities were $29,090,000. There were realized losses of $646,000 recognized on the maturity of available-for-sale debt securities during the year ended December 31, 2017, primarily arising due to foreign exchange movements, and, as a result, the Company reclassified this amount out of accumulated other comprehensive loss for the same period. At each reporting date, the Company assesses whether each individual investment is impaired, which occurs if the fair value is less than the amortized cost, adjusted for amortization of premiums and discounts at acquisition. If the investment is impaired, the impairment is assessed to determine if it is other than temporary. Impairments judged to be other than temporary are included in other income (expense), net when they are identified. As of December 31, 2017, the aggregate fair value of securities held by the Company in an unrealized loss position was $125,828,000, which consisted of 54 securities. No securities have been in an unrealized loss position for more than one year. As of December 31, 2017, these securities are not considered to be other than temporarily impaired because the impairments are not severe, have been for a short duration and are due to normal market and exchange rate fluctuations. Furthermore, the Company does not intend to sell the debt securities in an unrealized loss position and it is unlikely that the Company will be required to sell these securities before the recovery of the amortized cost. The cost of securities sold is based on the specific-identification method. Interest on debt securities is included in interest income. Our investment in available-for-sale debt securities is subject to credit risk. The Company’s investment policy limits investments to certain types of instruments, such as money market instruments and corporate debt securities, 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. |
Accounts receivable | (j) Accounts receivable Accounts receivable are amounts due from customers. As of December 31, 2017 and 2016, the Company had one customer, which was GlaxoSmithKline, or GSK. Management analyses current and past due accounts and determines if an allowance for uncollectible accounts is required based on collection experience and other relevant information. As of December 31, 2017 and 2016, the allowance for doubtful accounts is $nil. 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. |
Clinical materials | (k) Clinical materials Clinical materials for use in research and development with alternative future use are capitalized as either other current assets or other non-current assets, depending on the timing of their expected consumption. |
Property, plant and equipment | (l) Property, plant and equipment Property, plant and equipment is stated at cost, less any impairment losses, less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the related assets. The following table provides the range of estimated useful lives used for each asset type: Computer equipment 3 to 5 years Laboratory equipment 5 years Office equipment 5 years Leasehold improvements the expected duration of the lease Assets under construction are not depreciated until the asset is available and ready for its intended use. The Company assesses property, plant and equipment for impairment whenever events or changes in circumstances indicate that an asset’s carrying amount may not be recoverable. |
Intangibles | (m) Intangibles Intangibles includes intellectual property (“IP”) rights for licensed technology used in research and development with an alternative future use, which are recorded at cost and amortized over the estimated useful life of the related product. The weighted-average amortization period for IP rights for licensed technology as of December 31, 2017 is seven years. Intangibles also include acquired computer software licenses, which are recorded at cost and amortized over the estimated useful lives of approximately three years. Intangibles are assessed for impairment whenever events or changes in circumstances indicate that an asset’s carrying amount may not be recoverable. |
Segmental reporting | (n) Segmental reporting Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision-maker in making decisions regarding resource allocation and assessing performance. The Company’s chief operating decision maker (the “CODM”), its chief executive officer, 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. Accordingly, the Company has determined that it operates in one operating segment. |
Revenue | (o) Revenue Revenue is recognized when earned and realized or realizable, which is generally when persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the seller’s price to the buyer is fixed or determinable, and collectability is reasonably assured. Where applicable, all revenues are stated net of value added and similar taxes. The Company’s revenue arises from a collaboration and license agreement with GSK entered into in May 2014 and amended in February 2016 and September 2017 (the “GSK Collaboration and License Agreement”), which requires the Company to provide multiple deliverables to GSK. The Company recognizes revenue for arrangements with multiple deliverables by identifying the separable deliverables within the arrangement, whereby a deliverable is considered separable if it has value to the customer on a standalone basis. Contingent deliverables, such as the right to nominate further development targets, which represent a substantive option (i.e. the customer is not required or compelled to purchase the optional products or services) and not priced at a significant and incremental discount are not considered to be a deliverable at inception of the arrangement. When the contract is amended, the amendment is assessed to determine if it should be accounted for as a separate contract or a modification to the existing arrangement. If the amendment is a modification, the modified arrangement is assessed to identify the deliverables at the time of the modification and the non-contingent arrangement consideration is allocated between the separate deliverables using the Company’s best estimate of the relative selling price at the time of the modification. The amendments to the GSK Collaboration and License Agreement in February 2016 and September 2017 were both accounted for as modifications to an existing arrangement. The non-contingent arrangement consideration is allocated between the separate deliverables using the relative selling price. The relative selling price is determined using vendor-specific objective evidence (“VSOE”), if available, third party evidence if VSOE is not available, or a best estimate of the standalone selling price if neither VSOE nor third party evidence is available. The best estimate of the selling price is estimated after considering all reasonably available information, including market data and conditions, entity-specific factors such as the cost structure of the deliverable, internal profit and pricing objectives and the stage of development, if appropriate. Revenue allocated to each deliverable is recognized as it is delivered. Where delivery occurs over time, revenue is systematically recognized over the period which the Company will be providing services. Amounts received prior to satisfying the revenue recognition criteria are recorded as deferred revenue in the Company’s consolidated balance sheet. Amounts expected to be recognized as revenue within the 12 months following the balance sheet date are classified as deferred revenue in current liabilities. Amounts not expected to be recognized as revenue within the 12 months following the balance sheet date are classified as deferred revenue, non-current. Milestone payments which are non-refundable, non-creditable and contingent on achieving clinical milestones are recognized as revenues either on achievement of such milestones if the milestones are considered substantive or over the period the Company has continuing performance obligations, if the milestones are not considered substantive. When determining if a milestone is substantive, the Company considers the following factors: · The degree of certainty in achieving the milestone, · The frequency of milestone payments, · The Company’s efforts, which result in achievement of the milestone, · The amount of the milestone payment relative to the other deliverables and payment terms, and · Whether the milestone payment is related to future performance or deliverables. |
Research and development expenditures | (p) Research and development expenditures Research and development expenditures are expensed as incurred. Expenses related to clinical trials are recognized as services are received. Nonrefundable advance payments for services are deferred and recognized in the consolidated statement of operations as the services are rendered. This determination is based on an estimate of the services received and there may be instances when the payments to vendors exceed the level of services provided resulting in a prepayment of the clinical expense. If the actual timing of the performance of services varies from our estimate, the accrual or prepaid expense is adjusted accordingly. Upfront and milestone payments to third parties for in-licensed products or technology which has not yet received regulatory approval and which does not have alternative future use in R&D projects or otherwise are expensed as incurred. The Company expensed acquired in-process R&D of $1,003,000, $3,000,000, $2,500,000 and $- in the years ended December 31, 2017 and 2016, the six months ended December 31, 2015 and the year ended June 30, 2015, respectively. Milestone payments made to third parties either on or subsequent to regulatory approval are capitalized as an intangible asset and amortized over the remaining useful life of the product. Research and development expenditure is presented net of reimbursements from grants and R&D tax and expenditure credits from the U.K. government, which are recognized over the period necessary to match the reimbursement with the related costs when it is probable that the Company has complied with any conditions attached and will receive the reimbursement. Grant income was $150,000, $414,000, $905,000 and $613,000 in the years ended December 31, 2017 and 2016, the six months ended December 31, 2015 and the year ended June 30, 2015, respectively. Reimbursable R&D tax and expenditure credits were $10,576,000, $6,891,000, $1,506,000 and $1,497,000 in the years ended December 31, 2017 and 2016, the six months ended December 31, 2015 and the year ended June 30, 2015, respectively. |
Operating leases | (q) Operating leases Costs in respect of operating leases are charged to the consolidated statement of operations on a straight line basis over the lease term. Rent holidays are recognized on a straight-line basis over the lease term (including any rent holiday period). Lease incentives, including leasehold improvement incentives or allowances, are recorded as deferred rent and amortized as reductions to lease expense over the lease term. Leasehold improvements made by a lessee that are funded by landlord incentives or allowances are recorded as leasehold improvement assets and amortized over the shorter of the useful life of the asset and the non-cancellable lease term. In May 2017, the Company entered into an agreement for the lease of a building at Milton Park, Oxfordshire, U.K. The term of the lease expires on October 23, 2041, with termination options exercisable by the Company on the fifth anniversary of the lease commencement date and at approximately five yearly intervals thereafter. In September 2015, the Company entered into an agreement for a 25-year lease, with early termination options, for a research and development facility in Oxfordshire, U.K. In October 2016, the Company entered into the lease for that facility following the completion of construction. In July 2015, the Company entered into a 15 year lease agreement, with an early termination option at 123 months, for offices and research facilities in Philadelphia, U.S. The lease commenced upon completion of construction in October 2016. |
Share-based compensation | (r) Share-based compensation The Company awards certain employees and nonemployees options over the ordinary shares of the parent company. The cost of share-based awards issued to employees are measured at the grant-date fair value of the award and recognized as an expense over the requisite service period. The fair value of the options is determined using the Black-Scholes option-pricing model. Share options with graded-vesting schedules are recognized on a straight-line basis over the requisite service period for each separately vesting portion of the award. The Company has elected to account for forfeitures of stock options when they occur by reversing compensation cost previously recognized, in the period the award is forfeited, for an award that is forfeited before completion of the requisite service period. The Company has awarded share options to nonemployees for consultancy services. These share options are measured at the fair value of the goods/services received or the fair value of the equity instrument issued, whichever is more reliably measured, and then remeasured at the then-current fair values at each reporting date until the share options have vested and recognized as an expense over the requisite service period. |
Retirement benefits | (s) Retirement benefits The Company operates defined contribution pension schemes for its directors and employees. The contributions to this scheme are expensed to the consolidated statement of operations as they fall due. The pension contributions for the years ended December 31, 2017 and 2016, six months ended December 31, 2015 and the year ended June 30, 2015 were $1,264,000, $976,000, $122,000 and $240,000, respectively. |
Income taxes | (t) Income taxes Income taxes for the period comprise current and deferred tax. Income tax is recognized in the consolidated statement of operations except to the extent that it relates to items occurring during the year recognized either in other comprehensive income or directly in equity, in which case it is recognized in other comprehensive income or equity. Current tax is the expected tax payable or receivable on the taxable income or loss for the current or prior periods using tax rates enacted at the balance sheet date. Deferred tax is accounted for using the asset and liability method that requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the financial statement carrying amount and the tax bases of assets and liabilities at the applicable tax rates. A valuation allowance is provided when it is more likely than not that some portion or all of the deferred tax assets will not be realized. The Company evaluates the realizability of its deferred tax assets by assessing its valuation allowance and by adjusting the amount of such allowance, if necessary. The factors used to assess the likelihood of realization include the Company’s forecast of future taxable income, carryback availability, reversing taxable temporary differences and available tax-planning strategies that could be implemented to realize the deferred tax assets. Income tax positions must meet a more-likely-than-not recognition threshold to be recognized. Income tax positions that previously failed to meet the more-likely-than-not threshold are recognized in the first subsequent financial reporting period in which that threshold is met. Previously recognized tax positions that no longer meet the more-likely-than-not threshold are derecognized in the first subsequent financial reporting period in which that threshold is no longer met. Recognized income tax positions are measured at the largest amount that is greater than 50 percent likely of being realized. We recognize potential accrued interest and penalties related to unrecognized tax benefits within the consolidated statement of operations as income tax expense. In interim periods, the income tax expense (benefit) related to income (loss) from continuing operations before income tax expense (benefit) excluding significant unusual or infrequently occurring items is computed at an estimated annual effective tax rate and the income tax expense (benefit) related to all other items is individually computed and recognized when the items occur. |
Preferred shares | (u) Preferred shares In September 2014, Adaptimmune Limited issued 1,758,418 Series A Preferred Shares for net consideration of $98,872,000 after the deduction of fees of $4,949,000. On February 23, 2015, 1,758,418 Series A Preferred Shares were exchanged for newly issued Series A Preferred Shares of Adaptimmune Therapeutics Limited on a one-for-100 basis. The Series A Preferred Shares were convertible into ordinary shares at the option of the holder at an initial rate of 1:1 reducing to 2:1 on the third anniversary of the issuance, or on the occurrence of an initial public offering at a rate of 1:1 reducing from 1:1 on the first anniversary of the issuance to 2:1 on the third anniversary of the issuance. The Series A Preferred Shares contained a beneficial conversion feature, which is recognized within additional paid-in capital and accreted over the minimum period in which the investor can recognize that return. The beneficial conversion feature was accreted through a deemed dividend of $14,735,000 in the year ended June 30, 2015. The Series A Preferred Shares were converted into ordinary shares at a rate of 1:1 immediately prior to the Company’s initial public offering on NASDAQ in May 2015. Upon conversion the Company reclassified the carrying amount of the Series A Preferred Shares to common stock and additional paid-in capital. |
Loss per share | (v) Loss per share Basic loss per share is determined by dividing net loss attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the period. Diluted loss per share is determined by dividing net loss attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the period, adjusted for the dilutive effect of all potential ordinary shares that were outstanding during the period. Potentially dilutive shares are excluded when the effect would be to increase diluted earnings per share or reduce diluted loss per share. The following table reconciles the numerator and denominator in the basic and diluted loss per share computation (in thousands): Year ended Year ended Six months ended Year ended December 31, December 31, December 31 June 30, 2017 2016 2015 2015 Numerator for basic and diluted loss per share Net loss $ ) $ ) $ ) $ ) Deemed dividend on convertible preferred shares — — — ) Net loss attributable to shareholders used for basis and diluted EPS calculation $ ) $ ) $ ) $ ) Denominator for basic and diluted loss per share Weighted average number of shares used to calculate basic and diluted loss per share The effects of the following potentially dilutive equity instruments have been excluded from the diluted loss per share calculation because they would have an antidilutive effect on the loss per share for the period: Year ended Year ended Six months ended Year ended December 31, December 31, December 31 June 30, 2017 2016 2015 2015 Weighted average number of share options (1) Weighted average number of Preferred Shares — — — (1) From January 1, 2018 through to February 28, 2018, the Company granted 9,994,656 options over ordinary shares with an exercise price determined by reference to the market value of an ADS at the date of grant, and 6,555,900 options over ordinary shares with an exercise price equal to the nominal value of the ordinary shares (£0.001 per share). |
Related parties | (w) Related parties The Company has historically entered into several agreements with Immunocore Limited (“Immunocore”). During the year ended December 31, 2017, Immunocore has invoiced the Company in respect of: (i) services provided under a target collaboration agreement (which terminated on March 1, 2017); (ii) costs relating to prosecution of jointly owned patents; and (iii) property rents (effective until June 1, 2017). During the year ended December 31, 2017, all of the Company’s U.K-based research and development and corporate staff moved into the Company’s new building at Milton Park, Oxfordshire, which comprises laboratory and office space. Consequently, the Company’s lease from Immunocore of premises formerly used for research and development terminated on June 1, 2017 and the Company received $550,000 in relation to leasehold improvements, as provided for under the lease. The lease of the Company’s former corporate office premises was assigned to Immunocore effective from July 1, 2017 in a transaction on arms-length terms. As of the closing of the Company’s registered direct offering of its American Depositary Shares on April 10, 2017, Immunocore held less than 5% of the Company’s shares. Due to several factors including the decrease in share ownership, the termination of the target collaboration agreement and our lack of common directors, the Company no longer considers Immunocore to be a related party with effect from January 1, 2018. |
New accounting pronouncements | (x) New accounting pronouncements Adopted in the period Intra-Entity Transfers of Assets Other Than Inventory The Company adopted Accounting Standards Update (“ASU”) ASU 2016-16 - Income Taxes: Intra-Entity Transfers of Assets Other Than Inventory issued by the Financial Accounting Standards Board (“FASB”) in October 2016, which requires that entities recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. The guidance has been adopted on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption prospectively to all arrangements entered into or materially modified after January 1, 2017. The adoption of this guidance did not have any impact on the financial position, results of operations or cash flows. To be adopted in future periods Revenue from Contracts with Customers In May 2014, the FASB issued ASU 2014-09 - Revenue from Contracts with Customers (“ASU 2014-09”) which requires a new approach to revenue recognition and, in March, April, May and December 2016, the FASB issued additional clarification related to this guidance. This guidance has been codified within Accounting Standard Codification Topic 606, Revenue from Contracts with Customers (“ASC 606”). The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve that core principle, an entity should apply the following steps: Step 1: Identify the contract(s) with a customer. Step 2: Identify the performance obligations in the contract. Step 3: Determine the transaction price. Step 4: Allocate the transaction price to the performance obligations in the contract. Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation. The Company intends to adopt the guidance using the modified retrospective approach, with the cumulative effect of initially applying the guidance recognized at the date of initial application, with effect from January 1, 2018. The Company’s assessment of the impact of the guidance is complete and the adoption of ASC 606 will have a material impact on the Company’s financial statements due to the following: · Under the GSK Collaboration and License Agreement, the Company will receive non-substantive milestone payments in the future upon achievement of specified development milestones. Non-substantive milestones are currently included within the transaction price upon achievement of the milestone and recognized over the period during which we are delivering services to GSK. ASC 606 requires an entity to estimate the amount of consideration to which the entity will be entitled in exchange for transferring the promised goods or services to a customer. This includes an estimate of variable consideration to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. This results in certain milestone payments being recognized earlier under ASC 606 than under existing guidance, if it is considered probable that the milestone will be achieved. · Upfront payments and non-refundable milestone payments are currently recognized in revenue using the proportional performance model ratably over the period that services are rendered, unless another attribution method is determined to more closely approximate the delivery of the goods or services to the customer. ASC 606 requires an entity to recognize revenue using a measure of progress that depicts the transfer of control of the goods or services to the customer. We consider that an input measure, such as costs incurred, relative to the total expected inputs will be the appropriate measure to depict the transfer of control of the services under the GSK Collaboration and License Agreement, which impacts the timing of our revenue from the GSK Collaboration and License Agreement. Due to these factors, the cumulative effect of adopting the guidance on our financial statements at January 1, 2018 is estimated to be a credit to opening accumulated losses and corresponding decrease in deferred revenue of approximately $9 million. ASC 606 requires an entity to provide financial statement users with sufficient information to understand the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. To help achieve this objective, ASC 606 requires certain quantitative and qualitative disclosures, which will be more extensive than our current revenue disclosures. Accounting for Leases In February 2016, the FASB issued ASU 2016-02 - Leases . The guidance requires that lessees recognize a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis; and a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term at the commencement date. The guidance also makes targeted improvements to align lessor accounting with the lessee accounting model and guidance on revenue from contracts with customers. The guidance is effective for the fiscal year beginning January 1, 2019, including interim periods within that fiscal year. Early application is permitted. The guidance must be adopted on a modified retrospective transition approach for leases existing, or entered into after, the beginning of the earliest comparative period presented in the financial statements. The Company is currently evaluating the impact of the guidance on the consolidated financial statements. Measurement of Credit Losses on Financial Instruments In June 2016, the FASB issued ASC 2016-13 — Financial Instruments — Credit losses , which replaces the incurred loss impairment methodology for financial instruments in current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The guidance is effective for the fiscal year beginning January 1, 2020, including interim periods within that fiscal year. Early application is permitted for the fiscal year beginning January 1, 2019, including interim periods within that fiscal year. The guidance must be adopted using a modified-retrospective approach and a prospective transition approach is required for debt securities for which an other-than-temporary impairment had been recognized before the effective date. The Company is currently evaluating the impact of the guidance on the consolidated financial statements. Recognition and Measurement of Financial Assets and Financial Liabilities In January 2016, the FASB issued ASU 2016-01 - Financial Instruments - Overall: Recognition and Measurement of Financial Assets and Financial Liabilities , which amended the guidance on the recognition and measurement of financial assets and financial liabilities. The new guidance requires that equity investments (except those accounted for under the equity method of accounting, or those that result in consolidation of the investee) are measured at fair value with changes in fair value recognized in net income. The guidance also requires the use of an exit price when measuring the fair value of financial instruments for disclosure purposes, eliminates the requirement to disclose the methods and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost and requires separate presentation of financial assets and financial liabilities by measurement category and form of financial asset. The guidance is effective for the fiscal year beginning January 1, 2018, including interim periods within that fiscal year. The Company does not believe the adoption of the guidance will have a material impact on the consolidated financial statements. |
Summary of Significant Accoun26
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Summary of Significant Accounting Policies | |
Schedule of amounts reclassified out of accumulated other comprehensive income | The following amounts were reclassified out of other comprehensive income during the year ended December 31, 2017 (in thousands): Amount Component of Accumulated Other Comprehensive Income reclassified Affected line item in the Statement of Operations Unrealized gains (losses) on available-for-sale securities Reclassification adjustment for losses on available-for-sale debt securities $ Other income, net |
Schedule of the reconciliation of cash, cash equivalents, and restricted cash | The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the balance sheet that sum to the total of the same such amounts shown in the statement of cash flows (in thousands). December 31, December 31, 2017 2016 Cash and cash equivalents $ $ Restricted cash Total cash, cash equivalents, and restricted cash shown in the statement of cash flows $ $ |
Schedule of investments in available-for-sale debt securities categorized as cash equivalents or marketable securities | As of December 31, 2017, the Company has the following investments in available-for-sale debt securities, which are categorized as cash equivalents or marketable securities — available-for-sale debt securities on the balance sheet depending on their maturity at acquisition (in thousands): Foreign Gross Gross currency Aggregate Amortized Unrealized Unrealized translation Estimated Maturity cost Gains Losses adjustment Fair Value Cash equivalents: Corporate debt securities Less than 3 months $ 1,610 $ $ ) $ $ $ 1,610 $ — $ ) $ $ Marketable securities: Corporate debt securities 3 months to 1 year $ 124,406 $ — $ ) $ $ $ 124,406 $ — $ ) $ $ |
Schedule of estimated useful lives of property, plant and equipment | Computer equipment 3 to 5 years Laboratory equipment 5 years Office equipment 5 years Leasehold improvements the expected duration of the lease |
Schedule of numerator and denominator in the basic and diluted loss per share computation | The following table reconciles the numerator and denominator in the basic and diluted loss per share computation (in thousands): Year ended Year ended Six months ended Year ended December 31, December 31, December 31 June 30, 2017 2016 2015 2015 Numerator for basic and diluted loss per share Net loss $ ) $ ) $ ) $ ) Deemed dividend on convertible preferred shares — — — ) Net loss attributable to shareholders used for basis and diluted EPS calculation $ ) $ ) $ ) $ ) Denominator for basic and diluted loss per share Weighted average number of shares used to calculate basic and diluted loss per share |
Schedule of potentially dilutive equity instruments excluded from the diluted loss per share calculation | Year ended Year ended Six months ended Year ended December 31, December 31, December 31 June 30, 2017 2016 2015 2015 Weighted average number of share options (1) Weighted average number of Preferred Shares — — — (1) From January 1, 2018 through to February 28, 2018, the Company granted 9,994,656 options over ordinary shares with an exercise price determined by reference to the market value of an ADS at the date of grant, and 6,555,900 options over ordinary shares with an exercise price equal to the nominal value of the ordinary shares (£0.001 per share). |
Financial instruments (Tables)
Financial instruments (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Financial instruments | |
Summary of fair value of assets and liabilities on a recurring basis based on fair value measurement criteria | 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 December 31, 2017 are as follows (in thousands): December 31, Fair Value Measurements Using 2017 Level 1 Level 2 Level 3 Assets: Marketable securities: Corporate debt securities $ $ $ — $ |
Other current assets (Tables)
Other current assets (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Other current assets | |
Summary of other current assets | Other current assets consisted of the following (in thousands): December 31, December 31, 2017 2016 Corporate tax receivable $ $ Prepayments Clinical materials Other current assets $ $ |
Property, plant and equipment29
Property, plant and equipment, net (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Property, plant and equipment, net | |
Schedule of property and equipment, net | Property and equipment, net consisted of the following (in thousands): December 31, December 31, 2017 2016 Computer equipment $ $ Laboratory equipment Office equipment Leasehold improvements Assets under construction Less accumulated depreciation ) ) $ $ |
Intangible assets, net (Tables)
Intangible assets, net (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Intangible assets, net | |
Schedule of intangible assets, net | Intangible assets, net consisted of the following (in thousands): December 31, December 31, 2017 2016 Acquired software licenses $ $ Licensed IP rights - completed technology used in R&D Less accumulated amortization ) ) $ $ |
Accrued expenses and other cu31
Accrued expenses and other current liabilities (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Accrued expenses and other current liabilities | |
Schedule of accrued expenses and other current liabilities | Accrued expenses and other current liabilities consisted of the following (in thousands): December 31, December 31, 2017 2016 Accrued clinical & development expenditure $ $ Accrued employee expenses VAT Other accrued expenditure Accrued capital expenditure Other $ $ |
Contingencies and commitments (
Contingencies and commitments (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Contingencies and commitments | |
Summary of future minimum lease payments under operating leases | Future minimum lease payments under operating leases as of December 31, 2017 are presented below (in thousands): December 31, 2017 2018 $ 2019 2020 2021 2022 Thereafter $ |
Share-based compensation (Table
Share-based compensation (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Summary of vesting information | Options granted in 2009: 100% on the third anniversary of the grant date Options granted in 2011, 2012, 2013 and April 2014: 25% on the first anniversary of the grant date and 75% in annual installments over the following three years Options granted in December 2014: 25% on the first anniversary of the grant date and 75% in monthly installments over the following three years |
Summary of share-based compensation expense included in the consolidated statement of operations | The following table shows the total share-based compensation expense included in the consolidated statement of operations (thousands): Year ended Year ended Six months ended Year ended December 31, December 31, December 31, June 30, 2017 2016 2015 2015 Research and development $ $ $ $ General and administrative $ $ $ $ |
Summary of all stock option activity | Weighted Average average remaining Aggregate exercise price contractual intrinsic value Options per option term (years) (thousands) Outstanding at January 1, 2017 £ Changes during the period: Granted £ Exercised ) £ Forfeited ) £ Outstanding at December 31, 2017 £ $ Exercisable at December 31, 2017 £ $ |
Summary of information about stock options outstanding | The following table summarizes information about stock options outstanding as of December 31, 2017: Outstanding Exercisable Weighted- average Weighted- Weighted- Total share remaining average Total share average exercise Exercise price options contractual life exercise price options price £ 0 – 0.25 £ £ 0.26 – 0.50 0.51 – 0.75 0.76 – 1.00 1.01 – 1.50 1.51 – 2.00 Total £ £ |
Summary of the assumptions used to estimate the fair values of the share options granted using the Black-Scholes option-pricing model | Year ended Year ended Year ended December 31, December 31, June 30, 2017 2016 2015 Expected term (years) 5 years 5 years 5 years Expected volatility 66-71% 68-73% Risk free rate 0.40-0.76% 0.17-1.07% 1.04-1.54% Expected dividend yield |
Non-executive director | |
Summary of vesting information | Options granted to non-executive directors on May 11, 2015: Immediately on grant date Options granted to a non-executive director on June 23, 2016: 25% on the first anniversary of the grant date and 75% in monthly installments over the following two years Options granted to non-executive directors on August 11, 2016: 100% on the first anniversary of the grant date Options granted to non-executive directors on November 28, 2016: 25% on the first anniversary of the grant date and 75% in monthly installments over the following two years Options granted to non-executive directors on July 3, 2017 100% on the first anniversary of the grant date |
Income taxes (Tables)
Income taxes (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Income taxes | |
Schedule of loss before income taxes | Loss before income taxes is as follows (in thousands): Year ended Year ended Six months ended Year ended December 31, December 31, December 31, June 30, 2017 2016 2015 2015 U.S. $ ) $ ) $ ) $ ) U.K. ) ) ) ) Loss before income taxes $ ) $ ) $ ) $ ) |
Schedule of components of income tax expense (benefit) | The components of income tax expense (benefit) are as follows (in thousands): Year ended Year ended Six months ended Year ended December 31, December 31, December 31, June 30, 2017 2016 2015 2015 United States: Federal $ $ $ $ State and local ) ) U.K. — — — — Total current tax expense (benefit) ) United States: Federal — — — — State and local — — — — U.K. — — — — Total deferred tax expense (benefit) — — — — Total income tax expense (benefit) $ $ $ ) $ |
Schedule of deferred tax assets and liabilities | As of December 31, 2017 and 2016 the tax effects of temporary differences and carryforwards that give rise to deferred tax assets and liabilities were as follows (in thousands): December 31, December 31, 2017 2016 Deferred tax liabilties Property, plant and equipment: $ ) $ ) Accruals ) ) Total ) ) Deferred tax assets Share-based compensation expense Available-for-sale debt securities — Other accruals Net operating loss and expenditure credit carryforwards Total Valuation allowance ) ) Net deferred tax asset (liability) $ — $ — |
Schedule of the effective tax rate reconciliation | Reconciliation of the U.K. statutory income tax rate to the Company’s effective tax rate is as follows (in percentages): Year ended Year ended Six months ended Year ended 2017 2016 2015 2015 U.K. tax rate % % % % Permanent differences relating to reimbursable tax credits % % % % Permanent differences relating to foreign exchange — — )% % Surrender of R&D expenditures for R&D tax credit refund )% )% )% )% Change in valuation allowances )% )% )% )% Other )% )% % )% Effective income tax rate )% )% % )% |
Geographic information (Tables)
Geographic information (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Geographic information | |
Schedule of long-lived assets | Long-lived assets (excluding intangibles and financial instruments) were located as follows (in thousands): December 31, December 31, 2017 2016 U.K. $ $ U.S. Total long-lived assets (1) $ $ (1) Clinical materials of $4,695,000 and 2,580,000, included within non-current assets as of December 31, 2017 and 2016, respectively, are not included within the table above because they can easily be transferred between geographic locations. |
General (Details)
General (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
General | ||
Accumulated deficit | $ (231,630) | $ (161,492) |
Summary of Significant Accoun37
Summary of Significant Accounting Policies - Basis of Presentation (Details) | Mar. 20, 2015 | Feb. 23, 2015 |
Summary of Significant Accounting Policies | ||
Share exchange ratio | 0.01 | 0.01 |
Summary of Significant Accoun38
Summary of Significant Accounting Policies - Foreign currency (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | Jun. 30, 2015 | |
Other income , net | ||||
Foreign currency transaction gain | $ 12,596 | $ 8,744 | $ 1,002 | $ 11,200 |
Summary of Significant Accoun39
Summary of Significant Accounting Policies - Accumulated other comprehensive income (loss) (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2017USD ($) | |
Other income , net | |
Reclassification adjustment for losses on available-for-sale debt securities | $ 646 |
Summary of Significant Accoun40
Summary of Significant Accounting Policies - Cash, Cash Equivalents and Restricted Cash (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Jun. 30, 2015 | Jun. 30, 2014 |
Summary of Significant Accounting Policies | |||||
Cash and cash equivalents | $ 84,043 | $ 158,779 | |||
Restricted cash | 4,253 | 4,017 | |||
Total cash, cash equivalents, and restricted cash shown in the statement of cash flows | $ 88,296 | $ 162,796 | $ 198,771 | $ 229,046 | $ 51,179 |
Summary of Significant Accoun41
Summary of Significant Accounting Policies - Short-term Deposits (Details) | 12 Months Ended |
Dec. 31, 2017 | |
Short-term deposits | |
Maturity term, minimum (in months) | 3 months |
Maturity term, maximum (in months) | 12 months |
Summary of Significant Accoun42
Summary of Significant Accounting Policies - Available-for-sale securities (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2017USD ($)security | |
Available-for-sale securities | |
Aggregate Estimated Fair Value | $ 125,828 |
Proceeds from the maturity or redemption of available-for-sales debt securities | 29,090 |
Losses recognized on the maturity of available-for-sale debt securities | $ 646 |
Number of available-for-sale securities in an unrealized loss position | security | 54 |
Number of available-for-sale securities in an unrealized loss position for more than one year | security | 0 |
Cash equivalents | |
Available-for-sale securities | |
Amortized cost | $ 1,610 |
Gross Unrealized Losses | (22) |
Foreign currency translation adjustment | 22 |
Aggregate Estimated Fair Value | 1,610 |
Marketable securities | |
Available-for-sale securities | |
Amortized cost | 124,406 |
Gross Unrealized Losses | (3,723) |
Foreign currency translation adjustment | 3,535 |
Aggregate Estimated Fair Value | 124,218 |
Corporate Debt Securities Maturity Period Less Than Three Months | Cash equivalents | |
Available-for-sale securities | |
Amortized cost | 1,610 |
Gross Unrealized Losses | (22) |
Foreign currency translation adjustment | 22 |
Aggregate Estimated Fair Value | 1,610 |
Corporate Debt Securities Maturity Period Three Months To One Year | Marketable securities | |
Available-for-sale securities | |
Amortized cost | 124,406 |
Gross Unrealized Losses | (3,723) |
Foreign currency translation adjustment | 3,535 |
Aggregate Estimated Fair Value | $ 124,218 |
Summary of Significant Accoun43
Summary of Significant Accounting Policies - Accounts receivable (Details) $ in Thousands | Dec. 31, 2017USD ($)customer | Dec. 31, 2016USD ($)customer |
Accounts receivable | ||
Allowance for doubtful accounts | $ | $ 0 | $ 0 |
GlaxoSmithKline Intellectual Property Development Ltd | ||
Accounts receivable | ||
Number of customers | customer | 1 | 1 |
Summary of Significant Accoun44
Summary of Significant Accounting Policies - Property, Plant & Equipment (Details) | 12 Months Ended |
Dec. 31, 2017 | |
Computer equipment | Minimum | |
Property, plant & equipment | |
Estimated useful lives (in years) | 3 years |
Computer equipment | Maximum | |
Property, plant & equipment | |
Estimated useful lives (in years) | 5 years |
Laboratory equipment | |
Property, plant & equipment | |
Estimated useful lives (in years) | 5 years |
Office equipment | |
Property, plant & equipment | |
Estimated useful lives (in years) | 5 years |
Summary of Significant Accoun45
Summary of Significant Accounting Policies - Intangibles (Details) | 12 Months Ended |
Dec. 31, 2017 | |
Licensed IP rights - completed technology used in R&D | Weighted Average | |
Intangibles | |
Weighted-average amortization period (in years) | 7 years |
Acquired software licenses | |
Intangibles | |
Estimated useful life (in years) | 3 years |
Summary of Significant Accoun46
Summary of Significant Accounting Policies - Segment Reporting (Details) | 12 Months Ended |
Dec. 31, 2017segment | |
Segmental reporting | |
Number of operating segments | 1 |
Summary of Significant Accoun47
Summary of Significant Accounting Policies - Research and Development Expenditure (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | Jun. 30, 2015 | |
Summary of Significant Accounting Policies | ||||
Acquired in-process R&D expensed | $ 2,500 | $ 1,003 | $ 3,000 | $ 0 |
Grant income | 905 | 150 | 414 | 613 |
Reimbursement of Research and Development Tax and Expenditure Credit | $ 1,506 | $ 10,576 | $ 6,891 | $ 1,497 |
Summary of Significant Accoun48
Summary of Significant Accounting Policies - Operating Leases (Details) | 1 Months Ended | |
Sep. 30, 2015 | Jul. 31, 2015 | |
Lease for Offices and Research facilities in Philadelphia, U.S. | ||
Lease term (in years) | 15 years | |
Early termination option (in months) | 123 months | |
Lease for Research and development facility in Oxfordshire, U.K. | ||
Lease term (in years) | 25 years |
Summary of Significant Accoun49
Summary of Significant Accounting Policies - Retirement Benefits (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | Jun. 30, 2015 | |
Summary of Significant Accounting Policies | ||||
Pension contributions | $ 122 | $ 1,264 | $ 976 | $ 240 |
Summary of Significant Accoun50
Summary of Significant Accounting Policies - Preferred Shares (Details) $ in Thousands | Mar. 20, 2015 | Feb. 23, 2015shares | May 31, 2015 | Sep. 30, 2014USD ($)shares | Dec. 31, 2017USD ($) | Jun. 30, 2015USD ($) |
Preferred shares | ||||||
Net consideration | $ 103,167 | |||||
Shares exchanged (in shares) | shares | 1,758,418 | |||||
Share exchange ratio | 0.01 | 0.01 | ||||
Deemed dividend, accretion of beneficial conversion feature | $ 14,735 | |||||
Series A Preferred Shares | ||||||
Preferred shares | ||||||
Sale of stock (in shares) | shares | 1,758,418 | |||||
Net consideration | $ 98,872 | 98,872 | ||||
Stock issuance costs | $ 4,949 | |||||
Conversion ratio, initial rate | 1 | |||||
Conversion ratio, third anniversary of the issuance | 2 | |||||
Conversion ratio, initial public offering | 1 | |||||
Conversion ratio, initial public offering, third anniversary | 2 | |||||
Deemed dividend, accretion of beneficial conversion feature | $ 14,735 | |||||
Conversion ratio | 1 |
Summary of Significant Accoun51
Summary of Significant Accounting Policies - Loss per share (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | Jun. 30, 2015 | |
Numerator for basic and diluted loss per share | ||||
Net loss | $ (23,000) | $ (70,138) | $ (71,579) | $ (22,058) |
Deemed dividend on convertible preferred shares | (14,735) | |||
Net loss attributable to shareholders used for basic | (23,000) | (70,138) | (71,579) | (36,793) |
Net loss attributable to shareholders used for diluted | $ (23,000) | $ (70,138) | $ (71,579) | $ (36,793) |
Denominator for basic and diluted loss per share | ||||
Weighted average number of shares used to calculate basic and diluted loss per share (in shares) | 424,711,900 | 527,637,086 | 424,713,997 | 214,704,593 |
Summary of Significant Accoun52
Summary of Significant Accounting Policies - Antidilutive Securities (Details) - shares | 6 Months Ended | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | Jun. 30, 2015 | |
Share options | ||||
Antidilutive securities | ||||
Weighted average number of share options (in shares) | 31,203,477 | 70,374,832 | 45,882,791 | 31,473,477 |
Preferred shares | ||||
Antidilutive securities | ||||
Weighted average number of share options (in shares) | 122,848,381 |
Summary of Significant Accoun53
Summary of Significant Accounting Policies - Options (Details) - £ / shares | 2 Months Ended | 6 Months Ended | 12 Months Ended | ||
Feb. 28, 2018 | Dec. 31, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | Jun. 30, 2015 | |
Number of options granted (in shares) | 0 | 29,924,787 | 19,404,373 | 21,779,577 | |
Nominal value of ordinary shares | £ 0.001 | £ 0.001 | £ 0.001 | ||
Exercise price determined by reference to the market value of an ADS at the date of grant | |||||
Number of options granted (in shares) | 9,994,656 | ||||
Exercise price equal to the nominal value of the ordinary shares | |||||
Number of options granted (in shares) | 6,555,900 |
Summary of Significant Accoun54
Summary of Significant Accounting Policies - Preferred Shares (Details) | Mar. 20, 2015 | Feb. 23, 2015 | May 31, 2015 | Sep. 30, 2014shares |
Preferred shares | ||||
Share exchange ratio | 0.01 | 0.01 | ||
Series A Preferred Shares | ||||
Preferred shares | ||||
Sale of stock (in shares) | 1,758,418 | |||
Conversion ratio | 1 |
Summary of Significant Accoun55
Summary of Significant Accounting Policies - Related parties (Details) - USD ($) $ in Thousands | Apr. 10, 2017 | Sep. 30, 2017 |
Related parties | ||
Proceeds from sale of leasehold improvements on termination of lease agreement | $ 550 | |
Maximum | ||
Related parties | ||
Percentage of shares ceased to be held by Immunocore | 5.00% |
Summary of Significant Accoun56
Summary of Significant Accounting Policies - New accounting pronouncements (Details) - USD ($) $ in Thousands | Jan. 01, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
New accounting pronouncements | |||
Accumulated deficit | $ (231,630) | $ (161,492) | |
ASU 2014-09 | Forecast | |||
New accounting pronouncements | |||
Accumulated deficit | $ (9,000) | ||
Decrease in deferred revenue | $ (9,000) |
Revenue (Details)
Revenue (Details) $ in Thousands, £ in Millions | 1 Months Ended | 12 Months Ended | 44 Months Ended | ||||
Sep. 30, 2017USD ($) | Jun. 30, 2014USD ($) | Dec. 31, 2017USD ($)item | Dec. 31, 2017USD ($) | Dec. 31, 2017GBP (£) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | |
Collaboration and License Agreement | |||||||
Deferred revenue | $ 38,735 | $ 11,392 | |||||
Collaboration and License Agreement | GlaxoSmithKline Intellectual Property Development Ltd | |||||||
Collaboration and License Agreement | |||||||
Number of Target programs | item | 5 | ||||||
Number of additional target peptides, that the entity has right to nominate | item | 3 | ||||||
Upfront payment received | $ 42,100 | ||||||
Amount of non-substantive development milestones | $ 49,300 | ||||||
Milestone payments received | $ 10,300 | ||||||
License exercise fee, receivable | £ 30 | 38,000 | |||||
Option exercise fee, received | $ 26,600 | ||||||
Increase in revenue amortization | $ 17,500 | ||||||
Deferred revenue | $ 38,700 | ||||||
Deferred revenue amortization period | 12 months | ||||||
Written notice period required to be served for the termination of agreement for material breach (in days) | 60 days | ||||||
Notice period required to be served for the termination of agreement or specific program (in days) | 60 days |
Financial instruments - Fair va
Financial instruments - Fair value of assets and liabilities (Details) $ in Thousands | Dec. 31, 2017USD ($) |
Marketable securities: | |
Corporate debt securities | $ 124,218 |
Recurring basis | Corporate debt securities | |
Marketable securities: | |
Corporate debt securities | 124,218 |
Recurring basis | Level 1 | Corporate debt securities | |
Marketable securities: | |
Corporate debt securities | 124,218 |
Recurring basis | Level 3 | Corporate debt securities | |
Marketable securities: | |
Corporate debt securities | $ 0 |
Financial instruments - Cash Eq
Financial instruments - Cash Equivalents and Short-term Deposits (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Financial instruments | ||
Cash and cash equivalents | $ 84,043 | $ 158,779 |
Marketable securities | 124,218 | |
Restricted cash | $ 4,253 |
Financial instruments - Collabo
Financial instruments - Collaboration and License Agreement (Details) $ in Thousands | 6 Months Ended | 12 Months Ended | 43 Months Ended | |||
Dec. 31, 2015customer | Dec. 31, 2017USD ($)customer | Dec. 31, 2016USD ($)customer | Jun. 30, 2015customer | Dec. 31, 2017USD ($) | Sep. 30, 2017USD ($) | |
Collaboration and License Agreement | ||||||
Number of customers | customer | 1 | 1 | 1 | 1 | ||
GlaxoSmithKline Intellectual Property Development Ltd | Collaboration and License Agreement | ||||||
Collaboration and License Agreement | ||||||
Trade receivables | $ 1,500 | $ 200 | ||||
Impairment losses | $ 0 | |||||
Amounts past due | $ 0 | $ 0 |
Financial instruments - Foreign
Financial instruments - Foreign Exchange Risk (Details) | Dec. 31, 2017$ / £ |
Financial instruments | |
Exchange rate | 1.3500 |
Other current assets (Details)
Other current assets (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Other current assets | ||
Corporate tax receivable | $ 11,454 | $ 6,247 |
Prepayments | 6,120 | 7,383 |
Clinical materials | 3,760 | 1,192 |
Other current assets | 382 | 976 |
Other current assets, Total | $ 21,716 | $ 15,798 |
Property, plant and equipment63
Property, plant and equipment, net - Tabular Disclosure (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Property, plant and equipment | ||
Property, plant & equipment, gross | $ 50,143 | $ 32,422 |
Less accumulated depreciation | (9,464) | (4,523) |
Property, plant & equipment, net | 40,679 | 27,899 |
Computer equipment | ||
Property, plant and equipment | ||
Property, plant & equipment, gross | 2,706 | 1,904 |
Laboratory equipment | ||
Property, plant and equipment | ||
Property, plant & equipment, gross | 18,745 | 11,423 |
Office equipment | ||
Property, plant and equipment | ||
Property, plant & equipment, gross | 858 | 265 |
Leasehold improvements | ||
Property, plant and equipment | ||
Property, plant & equipment, gross | 27,441 | 4,498 |
Assets under construction | ||
Property, plant and equipment | ||
Property, plant & equipment, gross | $ 393 | $ 14,332 |
Property, plant and equipment64
Property, plant and equipment, net - Depreciation Expense (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | Jun. 30, 2015 | |
Property, plant and equipment | ||||
Depreciation expense | $ 1,176 | $ 5,032 | $ 3,126 | $ 705 |
Leasehold improvements | ||||
Property, plant and equipment | ||||
Loss on disposal | $ 194 | $ 122 |
Intangible assets, net - Tabula
Intangible assets, net - Tabular Disclosure (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Intangible assets, net | ||
Intangible assets, gross | $ 1,989 | $ 1,493 |
Less accumulated amortization | (652) | (225) |
Intangible assets, net | 1,337 | 1,268 |
Acquired software licenses | ||
Intangible assets, net | ||
Intangible assets, gross | 1,789 | 1,310 |
Licensed IP rights - completed technology used in R&D | ||
Intangible assets, net | ||
Intangible assets, gross | $ 200 | $ 183 |
Intangible assets, net - Amorti
Intangible assets, net - Amortization Expense (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | Jun. 30, 2015 | |
Intangible assets, net | ||||
Amortization expense | $ 69 | $ 391 | $ 160 | $ 30 |
Intangible assets, net - Aggreg
Intangible assets, net - Aggregate Amortization Expense (Details) $ in Thousands | Dec. 31, 2017USD ($) |
Estimated aggregate amortization expense | |
Estimated aggregate amortization expense, year ended December 31, 2018 | $ 585 |
Estimated aggregate amortization expense, year ended December 31, 2019 | 542 |
Estimated aggregate amortization expense, year ended December 31, 2020 | 467 |
Estimated aggregate amortization expense, year ended December 31, 2021 | 24 |
Estimated aggregate amortization expense, year ended December 31, 2022 | $ 24 |
Accrued expenses and other cu68
Accrued expenses and other current liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Accrued expenses and other current liabilities | ||
Accrued clinical & development expenditure | $ 10,065 | $ 4,938 |
Accrued employee expenses | 6,592 | 4,539 |
VAT | 5,741 | 2,014 |
Other accrued expenditure | 3,944 | 1,003 |
Accrued capital expenditure | 502 | 3,954 |
Other | 357 | 1,080 |
Total | $ 27,201 | $ 17,528 |
Contingencies and commitments -
Contingencies and commitments - Future Minimum Lease Payments (Details) $ in Thousands | Dec. 31, 2017USD ($) |
Future minimum payments under operating leases | |
2,018 | $ 2,886 |
2,019 | 3,767 |
2,020 | 3,809 |
2,021 | 3,853 |
2,022 | 3,897 |
Thereafter | 15,215 |
Total | $ 33,427 |
Contingencies and commitments70
Contingencies and commitments - Lease Expenses (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | Jun. 30, 2015 | |
Contingencies and commitments | ||||
Lease expenses | $ 841 | $ 3,617 | $ 2,255 | $ 610 |
Contingencies and commitments71
Contingencies and commitments - Capital Commitments (Details) - Capital commitments $ in Thousands | 12 Months Ended |
Dec. 31, 2017USD ($) | |
Contingencies and commitments | |
Committed amount | $ 945 |
Period in which commitments will be expected to incur (in years) | 1 year |
Contingencies and commitments72
Contingencies and commitments - Clinical Trials and Contract Manufacturing Commitments (Details) - Clinical trials and contract manufacturing commitments - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | Jun. 30, 2015 | |
Contingencies and commitments | ||||
Other commitments | $ 76,725 | |||
Other commitments, due within one year | 33,028 | |||
Other commitments, due in one to three years | 41,214 | |||
Other commitments, due in three to five years | 1,475 | |||
Other commitments, due after five years | 1,008 | |||
Subcontract costs | $ 8,585 | $ 41,505 | $ 23,565 | $ 8,818 |
Contingencies and commitments73
Contingencies and commitments - Collaborations and License Agreements (Details) - USD ($) | Jun. 16, 2016 | Feb. 29, 2016 | Nov. 30, 2015 | Dec. 31, 2017 | Dec. 31, 2012 | Mar. 31, 2017 | Sep. 26, 2016 |
ThermoFisher | |||||||
Collaboration and License Agreement | |||||||
Supply contract agreement period (in years) | 5 years | ||||||
MD Anderson Strategic Alliance | |||||||
Collaboration and License Agreement | |||||||
Upfront license fees | $ 3,412,000 | ||||||
Clinical trials commitment | MD Anderson Strategic Alliance | Minimum | |||||||
Collaboration and License Agreement | |||||||
Potential milestone payments | $ 19,644,000 | ||||||
Collaboration and License Agreement | Universal Cells, Inc. | |||||||
Collaboration and License Agreement | |||||||
Potential milestone payments | $ 43,500,000 | ||||||
Upfront license and start-up fees | $ 2,500,000 | ||||||
Milestone payments | $ 3,000,000 | $ 900,000 | |||||
Collaboration and License Agreement | Life Technologies Corp | |||||||
Collaboration and License Agreement | |||||||
Upfront license fees | $ 1,000,000 | ||||||
Minimum annual royalties as a percentage of prior year running royalties (as a percent) | 50.00% |
Stockholders' equity - Ordinary
Stockholders' equity - Ordinary Shares (Details) | Jun. 21, 2017GBP (£) | Dec. 31, 2017 | Jun. 21, 2017USD ($) |
Stockholders' equity | |||
Number of votes per share on a show of hands | 1 | ||
Number of votes per share on a poll | 1 | ||
Maximum aggregate nominal amount | £ | £ 140,000 | ||
Period of authority for directors | 5 years | ||
Maximum aggregate nominal amount of shares without offering to existing shareholders holding proportion | $ | $ 140,000 |
Stockholders' equity - Underwri
Stockholders' equity - Underwritten public offering and Registered direct offering (Details) - USD ($) $ / shares in Units, $ in Thousands | Apr. 10, 2017 | Mar. 27, 2017 | May 11, 2015 | Dec. 31, 2017 | Jun. 30, 2015 |
Stockholders' equity | |||||
Proceeds from issuance of common stock | $ 103,167 | ||||
Common stock | |||||
Stockholders' equity | |||||
Issuance of common stock (in shares) | 136,201,338 | ||||
Stock offering expenses | $ 13,387 | $ 4,774 | $ 13,387 | ||
Underwritten public offering | |||||
Stockholders' equity | |||||
Issuance of shares represented by American Depositary Shares (in ADSs) | 15,700,223 | ||||
Share price per ADS (in dollars per share) | $ 4.20 | ||||
Underwritten public offering | Common stock | |||||
Stockholders' equity | |||||
Issuance of common stock (in shares) | 94,201,338 | ||||
Proceeds from issuance of common stock | $ 61,397 | ||||
Stock offering expenses | $ 4,544 | ||||
Matrix Capital Management Company, LP | |||||
Stockholders' equity | |||||
Issuance of shares represented by American Depositary Shares (in ADSs) | 7,000,000 | ||||
Share price per ADS (in dollars per share) | $ 6 | ||||
Matrix Capital Management Company, LP | Common stock | |||||
Stockholders' equity | |||||
Issuance of common stock (in shares) | 42,000,000 | ||||
Proceeds from issuance of common stock | $ 41,770 | ||||
Stock offering expenses | $ 230 |
Stockholders' equity - Initial
Stockholders' equity - Initial Public Offering (Details) $ in Thousands | May 11, 2015GBP (£)shares | May 11, 2015USD ($)shares | Dec. 31, 2017USD ($)shares | Jun. 30, 2015USD ($)shares |
Stockholders' equity | ||||
Issuance of common stock | $ 103,167 | |||
Proceeds from issuance of common stock | $ 175,989 | |||
IPO | ||||
Stockholders' equity | ||||
Issuance of shares represented by American Depositary Shares (in ADSs) | shares | 11,250,000 | 11,250,000 | ||
Issuance of common stock | 175,989 | |||
Proceeds from issuance of common stock | $ 175,989 | |||
Common stock | ||||
Stockholders' equity | ||||
Issuance of common stock (in shares) | shares | 136,201,338 | |||
Issuance of common stock | $ 170 | |||
Stock issuance costs | $ 13,387 | $ 4,774 | $ 13,387 | |
Common stock | IPO | ||||
Stockholders' equity | ||||
Issuance of common stock (in shares) | shares | 67,500,000 | 67,500,000 | 67,500,000 | |
Issuance of common stock | £ 67,500 | $ 104 | $ 104 |
Stockholders' equity - Corporat
Stockholders' equity - Corporate Reorganization (Details) | Mar. 20, 2015 | Feb. 23, 2015 |
Stockholders' equity | ||
Share exchange ratio | 0.01 | 0.01 |
Stockholders' equity - Converti
Stockholders' equity - Convertible Preferred Shares (Details) $ in Thousands | Mar. 20, 2015 | Feb. 23, 2015 | May 31, 2015 | Sep. 30, 2014USD ($)shares | Dec. 31, 2017USD ($) | Jun. 30, 2015USD ($) |
Convertible preferred shares | ||||||
Net consideration | $ 103,167 | |||||
Share exchange ratio | 0.01 | 0.01 | ||||
Series A Preferred Shares | ||||||
Convertible preferred shares | ||||||
Sale of stock (in shares) | shares | 1,758,418 | |||||
Net consideration | $ 98,872 | $ 98,872 | ||||
Stock issuance costs | $ 4,949 | |||||
Conversion ratio, initial rate | 1 | |||||
Conversion ratio, third anniversary of the issuance | 2 | |||||
Conversion ratio, initial public offering | 1 | |||||
Conversion ratio, initial public offering, third anniversary | 2 | |||||
Conversion ratio | 1 |
Share-based compensation - Opti
Share-based compensation - Option Plans (Details) | Jul. 03, 2017 | Nov. 28, 2016 | Aug. 11, 2016 | Jun. 23, 2016 | Mar. 16, 2015GBP (£)item | Aug. 31, 2016directorshares | Dec. 31, 2014 | Dec. 31, 2017 | Dec. 31, 2009 | Dec. 31, 2014 |
Share based compensation | ||||||||||
Maximum value of option grants per participant | £ | £ 30,000 | |||||||||
Scheme limit, grants as a percentage of fully diluted share capital of the Company immediately following the IPO (as a percent) | 8.00% | |||||||||
Scheme limit, automatic increase percentage (as a percent) | 4.00% | |||||||||
Number of option schemes | item | 3 | |||||||||
Accelerated vesting (in shares) | shares | 361,222 | |||||||||
Number of non-executive directors | director | 2 | |||||||||
Options granted in March, 2015 and on May 11, 2015 | ||||||||||
Share based compensation | ||||||||||
Contractual term (in years) | 10 years | |||||||||
Options granted in March, 2015 and on May 11, 2015 | First anniversary | ||||||||||
Share based compensation | ||||||||||
Vesting percentage (as a percent) | 25.00% | |||||||||
Options granted in March, 2015 and on May 11, 2015 | Monthly installments over the following three years | ||||||||||
Share based compensation | ||||||||||
Vesting percentage (as a percent) | 75.00% | |||||||||
Vesting period (in years) | 3 years | |||||||||
Options granted in 2009 | ||||||||||
Share based compensation | ||||||||||
Vesting percentage (as a percent) | 100.00% | |||||||||
Vesting period (in years) | 3 years | |||||||||
Contractual term (in years) | 10 years | |||||||||
Options granted in 2011, 2012, 2013, and April 2014 | ||||||||||
Share based compensation | ||||||||||
Contractual term (in years) | 10 years | |||||||||
Options granted in 2011, 2012, 2013, and April 2014 | First anniversary | ||||||||||
Share based compensation | ||||||||||
Vesting percentage (as a percent) | 25.00% | |||||||||
Vesting period (in years) | 1 year | |||||||||
Options granted in 2011, 2012, 2013, and April 2014 | Annual installments over the following three years | ||||||||||
Share based compensation | ||||||||||
Vesting percentage (as a percent) | 75.00% | |||||||||
Vesting period (in years) | 3 years | |||||||||
Options granted in December 2014 | ||||||||||
Share based compensation | ||||||||||
Contractual term (in years) | 10 years | |||||||||
Options granted in December 2014 | First anniversary | ||||||||||
Share based compensation | ||||||||||
Vesting percentage (as a percent) | 25.00% | |||||||||
Vesting period (in years) | 1 year | |||||||||
Options granted in December 2014 | Monthly installments over the following three years | ||||||||||
Share based compensation | ||||||||||
Vesting percentage (as a percent) | 75.00% | |||||||||
Vesting period (in years) | 3 years | |||||||||
Non-executive director | Options granted on June 23, 2016 | First anniversary | ||||||||||
Share based compensation | ||||||||||
Vesting percentage (as a percent) | 25.00% | |||||||||
Vesting period (in years) | 1 year | |||||||||
Non-executive director | Options granted on June 23, 2016 | Monthly installments over the following two years | ||||||||||
Share based compensation | ||||||||||
Vesting percentage (as a percent) | 75.00% | |||||||||
Vesting period (in years) | 2 years | |||||||||
Non-executive director | Options granted on August 11, 2016 | First anniversary | ||||||||||
Share based compensation | ||||||||||
Vesting percentage (as a percent) | 100.00% | |||||||||
Vesting period (in years) | 1 year | |||||||||
Non-executive director | Options granted on November 28, 2016 | First anniversary | ||||||||||
Share based compensation | ||||||||||
Vesting percentage (as a percent) | 25.00% | |||||||||
Vesting period (in years) | 1 year | |||||||||
Non-executive director | Options granted on November 28, 2016 | Monthly installments over the following two years | ||||||||||
Share based compensation | ||||||||||
Vesting percentage (as a percent) | 75.00% | |||||||||
Vesting period (in years) | 2 years | |||||||||
Non-executive director | Options granted on July 03, 2017 | First anniversary | ||||||||||
Share based compensation | ||||||||||
Vesting percentage (as a percent) | 100.00% | |||||||||
Vesting period (in years) | 1 year |
Share-based compensation - Shar
Share-based compensation - Share-based Compensation Expense (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | Jun. 30, 2015 | |
Total share-based compensation expense included in the consolidated statements of operations | ||||
Total share-based compensation expense | $ 3,568 | $ 10,804 | $ 8,821 | $ 7,078 |
Research and development | ||||
Total share-based compensation expense included in the consolidated statements of operations | ||||
Total share-based compensation expense | 1,587 | 5,268 | 4,185 | 5,426 |
General and administrative | ||||
Total share-based compensation expense included in the consolidated statements of operations | ||||
Total share-based compensation expense | $ 1,981 | $ 5,536 | $ 4,636 | $ 1,652 |
Share-based compensation - Op81
Share-based compensation - Options Granted to Nonemployees (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | Jun. 30, 2015 | |
Share based compensation | ||||
Number of options granted outstanding (in shares) | 74,943,667 | 49,237,290 | ||
Nonemployees | ||||
Share based compensation | ||||
Number of options granted outstanding (in shares) | 3,224,600 | 3,074,600 | ||
Share based payment expense (benefit) | $ (33) | $ 314 | $ (488) | $ 2,001 |
Share based compensation - Unre
Share based compensation - Unrecognized Compensation Cost (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2017USD ($) | |
Share based compensation | |
Unrecognized compensation cost | $ 10,086 |
Expected weighted-average cost recognition period (in years) | 2 years 10 months 24 days |
Share-based compensation - Op83
Share-based compensation - Options (Details) - $ / shares | 6 Months Ended | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | Jun. 30, 2015 | |
Share-based compensation | ||||
Number of options granted (in shares) | 0 | 29,924,787 | 19,404,373 | 21,779,577 |
Weighted average fair value (in dollars per share) | $ 0.35 | $ 0.74 | $ 0.64 |
Share based compensation - Opti
Share based compensation - Option Activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 6 Months Ended | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | Jun. 30, 2015 | |
Options | ||||
Outstanding at the beginning of the period (in shares) | 49,237,290 | |||
Granted (in shares) | 0 | 29,924,787 | 19,404,373 | 21,779,577 |
Exercised (in shares) | 0 | (1,142,904) | (63,192) | 0 |
Forfeited (in shares) | (3,075,506) | |||
Outstanding at the end of the period (in shares) | 74,943,667 | 49,237,290 | ||
Weighted Average Exercise Price Per Option | ||||
Outstanding at the beginning of the period (in dollars per share) | $ 0.58 | |||
Granted (in dollars per share) | 0.62 | |||
Exercised (in dollars per share) | 0.19 | |||
Forfeited (in dollars per share) | 1.04 | |||
Outstanding at the end of the period (in dollars per share) | $ 0.58 | $ 0.58 | ||
Additional disclosures | ||||
Outstanding - Average Remaining Contractual Term (Years) | 7 years 10 months 24 days | |||
Outstanding - Aggregate Intrinsic Value | $ 84,989 | |||
Exercisable - Options | 31,449,602 | |||
Exercisable - Weighted Average Exercise Price Per Option | $ 0.51 | |||
Exercisable - Average Remaining Contractual Term (Years) | 6 years 9 months 18 days | |||
Exercisable - Aggregate Intrinsic Value | $ 35,665 |
Share based compensation - Stoc
Share based compensation - Stock Options Outstanding (Details) | 12 Months Ended |
Dec. 31, 2017£ / sharesshares | |
Share-based compensation | |
Outstanding - Total Share Options | shares | 74,943,667 |
Outstanding - Weighted-Average Remaining Contractual Life | 7 years 10 months 24 days |
Outstanding - Weighted Average Exercise Price | £ 0.58 |
Exercisable - Total Share Options | shares | 31,449,602 |
Exercisable - Weighted-Average Exercise Price | £ 0.51 |
Exercise Price $0 - $0.25 | |
Share-based compensation | |
Exercise Price, Upper Range Limit | £ 0.25 |
Outstanding - Total Share Options | shares | 9,224,274 |
Outstanding - Weighted-Average Remaining Contractual Life | 5 years 7 months 6 days |
Outstanding - Weighted Average Exercise Price | £ 0.12 |
Exercisable - Total Share Options | shares | 8,508,100 |
Exercisable - Weighted-Average Exercise Price | £ 0.12 |
Exercise Price $0.26 - $0.50 | |
Share-based compensation | |
Exercise Price, Lower Range Limit | 0.26 |
Exercise Price, Upper Range Limit | £ 0.50 |
Outstanding - Total Share Options | shares | 9,694,008 |
Outstanding - Weighted-Average Remaining Contractual Life | 7 years |
Outstanding - Weighted Average Exercise Price | £ 0.36 |
Exercisable - Total Share Options | shares | 7,477,900 |
Exercisable - Weighted-Average Exercise Price | £ 0.36 |
Exercise Price $0.51 - $0.75 | |
Share-based compensation | |
Exercise Price, Lower Range Limit | 0.51 |
Exercise Price, Upper Range Limit | £ 0.75 |
Outstanding - Total Share Options | shares | 38,859,727 |
Outstanding - Weighted-Average Remaining Contractual Life | 8 years 8 months 12 days |
Outstanding - Weighted Average Exercise Price | £ 0.58 |
Exercisable - Total Share Options | shares | 6,615,358 |
Exercisable - Weighted-Average Exercise Price | £ 0.51 |
Exercise Price $0.76 - $1.00 | |
Share-based compensation | |
Exercise Price, Lower Range Limit | 0.76 |
Exercise Price, Upper Range Limit | £ 1 |
Outstanding - Total Share Options | shares | 13,986,392 |
Outstanding - Weighted-Average Remaining Contractual Life | 7 years 10 months 24 days |
Outstanding - Weighted Average Exercise Price | £ 0.90 |
Exercisable - Total Share Options | shares | 7,405,720 |
Exercisable - Weighted-Average Exercise Price | £ 0.91 |
Exercise Price $1.01 - $1.50 | |
Share-based compensation | |
Exercise Price, Lower Range Limit | 1.01 |
Exercise Price, Upper Range Limit | £ 1.50 |
Outstanding - Total Share Options | shares | 2,313,651 |
Outstanding - Weighted-Average Remaining Contractual Life | 8 years 10 months 24 days |
Outstanding - Weighted Average Exercise Price | £ 1.05 |
Exercisable - Total Share Options | shares | 576,909 |
Exercisable - Weighted-Average Exercise Price | £ 1.06 |
Exercise Price $1.51 - $2.00 | |
Share-based compensation | |
Exercise Price, Lower Range Limit | 1.51 |
Exercise Price, Upper Range Limit | £ 2 |
Outstanding - Total Share Options | shares | 865,615 |
Outstanding - Weighted-Average Remaining Contractual Life | 4 years 10 months 24 days |
Outstanding - Weighted Average Exercise Price | £ 1.82 |
Exercisable - Total Share Options | shares | 865,615 |
Exercisable - Weighted-Average Exercise Price | £ 1.82 |
Share based compensation - Op86
Share based compensation - Options Exercised (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | Jun. 30, 2015 | |
Share based compensation | ||||
Option Exercised (in shares) | 0 | 1,142,904 | 63,192 | 0 |
Intrinsic value of stock options exercised | $ 1,522 | $ 40 | ||
Proceeds from exercise of stock options | 401 | 17 | ||
Tax benefit from stock option exercises | $ 0 | $ 73 | $ 8 | $ 0 |
Share-based compensation - Fair
Share-based compensation - Fair Value Assumptions (Details) - company | 7 Months Ended | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Jun. 30, 2015 | |
Assumptions used to estimate the fair values of the share options granted using the Black-Scholes option-pricing model | ||||
Expected term (in years) | 5 years | 5 years | 5 years | |
Expected volatility, minimum (as a percent) | 66.00% | 68.00% | ||
Expected volatility (as a percent) | 60.00% | |||
Expected volatility, maximum (as a percent) | 71.00% | 73.00% | ||
Risk free rate, minimum (as a percent) | 0.40% | 0.17% | 1.04% | |
Risk free rate, maximum (as a percent) | 0.76% | 1.07% | 1.54% | |
Expected dividend yield (as a percent) | 0.00% | 0.00% | 0.00% | |
Number of companies with similar attributes, considered for expected volatility rate computation | 7 | |||
Volatility of the share price determine period | 2 years |
Income taxes - Income before In
Income taxes - Income before Income Taxes (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | Jun. 30, 2015 | |
Income taxes | ||||
Loss before income taxes | $ (23,055) | $ (69,687) | $ (70,687) | $ (21,814) |
UNITED STATES | ||||
Income taxes | ||||
Loss before income taxes | (1,771) | (3,121) | (3,373) | (1,108) |
U.K. | ||||
Income taxes | ||||
Loss before income taxes | $ (21,284) | $ (66,566) | $ (67,314) | $ (20,706) |
Income taxes - Components of In
Income taxes - Components of Income Tax Expense (Benefit) (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | Jun. 30, 2015 | |
United States: | ||||
Federal | $ 33 | $ 459 | $ 752 | $ 121 |
State and local | (88) | (8) | 140 | 123 |
Total current tax expense (benefit) | (55) | 451 | 892 | 244 |
United States: | ||||
Total income tax expense (benefit) | $ (55) | $ 451 | $ 892 | $ 244 |
Income taxes - Reconciliation o
Income taxes - Reconciliation of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Deferred tax liabilities | ||
Property, plant and equipment | $ (2,159) | $ (1,880) |
Accruals | (3) | (326) |
Deferred tax liabilities | (2,162) | (2,206) |
Deferred tax assets | ||
Share-based compensation expense | 5,603 | 4,632 |
Available-for-sale debt securities | 33 | |
Other accruals | 602 | 574 |
Net operating loss and expenditure credit carryforwards | 23,357 | 14,613 |
Deferred tax assets | 29,595 | 19,819 |
Valuation allowance | (27,433) | (17,613) |
Deferred tax assets, net | $ 2,162 | $ 2,206 |
Income taxes - Change in Valuat
Income taxes - Change in Valuation Allowance (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2017USD ($) | |
Income taxes | |
Increase in valuation allowance | $ 9,819 |
Valuation allowance, foreign currency translation adjustments | $ 1,722 |
Income taxes - Reconciliation92
Income taxes - Reconciliation of Effective Tax Rate (Details) - Her Majesty's Revenue and Customs (HMRC) | Apr. 01, 2017 | Dec. 31, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | Jun. 30, 2015 |
Income taxes | |||||
UK tax rate | 19.00% | 20.00% | 19.25% | 20.00% | 20.75% |
Permanent differences relating to reimbursable tax credits | 1.60% | 2.60% | 1.60% | 2.30% | |
Permanent differences relating to foreign exchange | (8.70%) | 3.40% | |||
Surrender of R&D expenditures for R&D tax credit refund | (4.50%) | (8.40%) | (5.90%) | (5.50%) | |
Change in valuation allowances | (10.80%) | (13.50%) | (14.70%) | (20.70%) | |
Other | 2.60% | (0.60%) | (2.30%) | (1.40%) | |
Effective income tax rate | 0.20% | (0.60%) | (1.30%) | (1.10%) |
Income taxes - Tax Rates (Detai
Income taxes - Tax Rates (Details) | Apr. 01, 2017 | Dec. 31, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | Jun. 30, 2015 |
Her Majesty's Revenue and Customs (HMRC) | |||||
Income taxes | |||||
Tax rate (as a percent) | 19.00% | 20.00% | 19.25% | 20.00% | 20.75% |
Internal Revenue Service (IRS) | |||||
Income taxes | |||||
Tax rate (as a percent) | 34.00% | 34.00% | 34.00% | 34.00% |
Income taxes - Change in Tax Ra
Income taxes - Change in Tax Rate (Details) $ in Thousands, £ in Millions | Apr. 01, 2020 | Dec. 31, 2017USD ($) | Apr. 01, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2017GBP (£) | Dec. 31, 2017USD ($) | Dec. 31, 2016 | Jun. 30, 2015 |
Income taxes | |||||||||
Effect of changes in tax rates on Consolidated statement of Operations (in dollars) | $ 0 | ||||||||
Percentage on taxable profit | 50.00% | 50.00% | |||||||
Operating Loss Carryforwards And Tax Credit Carryforward Annual Allowance | £ | £ 5 | ||||||||
Her Majesty's Revenue and Customs (HMRC) | |||||||||
Income taxes | |||||||||
Tax rate (as a percent) | 19.00% | 20.00% | 19.25% | 19.25% | 20.00% | 20.75% | |||
Tax rate, deferred taxes (as a percent) | 17.00% | ||||||||
Her Majesty's Revenue and Customs (HMRC) | Forecast | |||||||||
Income taxes | |||||||||
Tax rate (as a percent) | 17.00% | ||||||||
Internal Revenue Service (IRS) | |||||||||
Income taxes | |||||||||
Tax rate (as a percent) | 34.00% | 34.00% | 34.00% | 34.00% | 34.00% | ||||
Tax rate, deferred taxes (as a percent) | 21.00% | 34.00% | |||||||
Decrease in net deferred tax asset and corresponding valuation allowance | $ 1,800 | $ 1,800 | |||||||
Tax credit carried forward period | 20 years | 20 years |
Income taxes - Net Operating Lo
Income taxes - Net Operating Loss and Expenditure Credit Carryforwards (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | Jun. 30, 2015 | |
Net Operating Loss and Expenditure Credit Carryforwards | ||||
Net operating loss | $ (26,410) | $ (80,661) | $ (72,799) | $ (24,641) |
Internal Revenue Service (IRS) | ||||
Net Operating Loss and Expenditure Credit Carryforwards | ||||
Tax credit carryforwards | 200 | |||
Her Majesty's Revenue and Customs (HMRC) | ||||
Net Operating Loss and Expenditure Credit Carryforwards | ||||
Net operating loss | (135,600) | |||
Expenditure credit carryforward | $ 600 |
Income taxes - Unrecognized Tax
Income taxes - Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Income taxes | ||
Unrecognized tax benefits | $ 0 | $ 0 |
Geographic information - Operat
Geographic information - Operations by Geographic Area - Long-lived Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Operations by Geographic Area | ||
Long-lived assets | $ 40,679 | $ 27,899 |
Clinical materials | 4,695 | 2,580 |
U.K. | ||
Operations by Geographic Area | ||
Long-lived assets | 22,786 | 15,719 |
UNITED STATES | ||
Operations by Geographic Area | ||
Long-lived assets | $ 17,893 | $ 12,180 |
Geographic information - Major
Geographic information - Major Customers (Details) - customer | 6 Months Ended | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | Jun. 30, 2015 | |
Major Customers | ||||
Number of customers | 1 | 1 | 1 | 1 |
Revenue. | Customer Concentration Risk | GlaxoSmithKline Intellectual Property Development Ltd | ||||
Major Customers | ||||
Concentration risk (as a percentage) | 100.00% | 100.00% | 100.00% | 100.00% |