Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2018 | May 08, 2018 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | Adaptimmune Therapeutics PLC | |
Entity Central Index Key | 1,621,227 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2018 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 564,859,960 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q1 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Current assets | ||
Cash and cash equivalents | $ 53,375 | $ 84,043 |
Marketable securities - available-for-sale debt securities | 108,459 | 124,218 |
Accounts receivable, net of allowance for doubtful accounts of $0 and $0 | 5,052 | 206 |
Other current assets and prepaid expenses (including current portion of clinical materials) | 28,777 | 21,716 |
Total current assets | 195,663 | 230,183 |
Restricted cash | 4,360 | 4,253 |
Clinical materials | 4,572 | 4,695 |
Property, plant and equipment, net | 41,235 | 40,679 |
Intangibles, net | 1,238 | 1,337 |
Total assets | 247,068 | 281,147 |
Current liabilities | ||
Accounts payable | 5,051 | 8,378 |
Accrued expenses and other accrued liabilities | 19,650 | 27,201 |
Deferred revenue | 27,221 | 38,735 |
Total current liabilities | 51,922 | 74,314 |
Other liabilities, non-current | 3,884 | 3,849 |
Total liabilities | 55,806 | 78,163 |
Stockholders' equity | ||
Common stock - Ordinary shares par value ?0.001, 701,103,126 authorized and 564,859,960 issued and outstanding (2017: 701,103,126 authorized and 562,119,334 issued and outstanding) | 858 | 854 |
Additional paid in capital | 461,603 | 455,401 |
Accumulated other comprehensive loss | (27,136) | (21,641) |
Accumulated deficit | (244,063) | (231,630) |
Total stockholders' equity | 191,262 | 202,984 |
Total liabilities and stockholders' equity | $ 247,068 | $ 281,147 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) $ in Thousands | Mar. 31, 2018£ / shares | Mar. 31, 2018USD ($)shares | Dec. 31, 2017£ / shares | Dec. 31, 2017USD ($)shares |
CONDENSED CONSOLIDATED BALANCE SHEETS | ||||
Allowance for doubtful accounts | $ | $ 0 | $ 0 | ||
Common stock, par value | £ / shares | £ 0.001 | £ 0.001 | ||
Common stock, shares authorized | 701,103,126 | 701,103,126 | ||
Common stock, shares issued | 564,859,960 | 562,119,334 | ||
Common stock, shares outstanding | 564,859,960 | 562,119,334 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||
Revenue | $ 8,196 | $ 2,857 |
Operating expenses | ||
Research and development | (25,732) | (18,615) |
General and administrative | (11,204) | (6,463) |
Total operating expenses | (36,936) | (25,078) |
Operating loss | (28,740) | (22,221) |
Interest income | 659 | 240 |
Other income, net | 7,130 | 430 |
Loss before income taxes | (20,951) | (21,551) |
Income taxes | (127) | (231) |
Net loss attributable to ordinary shareholders | $ (21,078) | $ (21,782) |
Net loss per ordinary share | ||
Basic and diluted (in dollars per share) | $ (0.04) | $ (0.05) |
Weighted average shares outstanding: | ||
Basic and diluted (in shares) | 562,381,995 | 428,961,818 |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS | ||
Net loss | $ (21,078) | $ (21,782) |
Other comprehensive loss, net of tax | ||
Foreign currency translation adjustments, net of tax of $0 and $0 | (2,602) | (117) |
Unrealized holding losses on available-for-sale debt securities, net of tax of $0 and $0 | (4,056) | |
Reclassification adjustment for losses on available-for-sale debt securities included in net income, net of tax of $0 and $0 | 1,163 | |
Total comprehensive loss for the period | $ (26,573) | $ (21,899) |
CONDENSED CONSOLIDATED STATEME6
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS | ||
Foreign currency translation adjustments, tax | $ 0 | $ 0 |
Unrealized holding losses on available-for-sale debt securities, tax | 0 | 0 |
Reclassification from accumulated other comprehensive income of losses on available-for-sale debt securities included in net income, tax | $ 0 | $ 0 |
CONDENSED CONSOLIDATED STATEME7
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY - USD ($) $ in Thousands | Common stock | Additional paid in capital | Accumulated foreign currency translation adjustments | Accumulated unrealized gains (losses) on available-for-sale debt securities | Accumulated deficit | Total |
Increase (Decrease) in Stockholders' Equity | ||||||
Cumulative effect of applying new accounting standards | $ 8,645 | $ 8,645 | ||||
Beginning balance as adjusted (in shares) | 562,119,334 | |||||
Beginning balance as adjusted | $ 854 | $ 455,401 | $ (17,867) | $ (3,774) | (222,985) | 211,629 |
Balance at the beginning of the period at Dec. 31, 2017 | $ 854 | 455,401 | (17,867) | (3,774) | (231,630) | 202,984 |
Balance at the beginning of the period (in shares) at Dec. 31, 2017 | 562,119,334 | |||||
Increase (Decrease) in Stockholders' Equity | ||||||
Net loss | (21,078) | (21,078) | ||||
Issuance of shares upon exercise of stock options | $ 4 | 1,530 | 1,534 | |||
Issuance of shares upon exercise of stock options (in shares) | 2,740,626 | |||||
Other comprehensive loss before reclassifications | ||||||
Foreign currency translation adjustments | (2,602) | (2,602) | ||||
Unrealized holding losses on available-for-sale debt securities, net of tax of $0 and $0 | (4,056) | (4,056) | ||||
Reclassification from accumulated other comprehensive income of losses on available-for-sale debt securities included in net income, net of tax of $0 and $0 | (1,163) | (1,163) | ||||
Share-based compensation expense | 4,672 | 4,672 | ||||
Balance at the end of the period at Mar. 31, 2018 | $ 858 | $ 461,603 | $ (20,469) | $ (6,667) | $ (244,063) | $ 191,262 |
Balance at the end of the period (in shares) at Mar. 31, 2018 | 564,859,960 |
CONDENSED CONSOLIDATED STATEME8
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (PARENTHETICAL) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
Other comprehensive income (loss), available-for-sale securities, before reclassification adjustments, tax | ||
Unrealized holding losses on available-for-sale debt securities, tax | $ 0 | $ 0 |
Reclassification from accumulated other comprehensive income of losses on available-for-sale debt securities included in net income, tax | $ 0 | $ 0 |
CONDENSED CONSOLIDATED STATEME9
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Cash flows from operating activities | ||
Net loss | $ (21,078) | $ (21,782) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation | 1,740 | 986 |
Amortization | 143 | 60 |
Share-based compensation expense | 4,672 | 2,686 |
Realized loss on available-for-sale debt securities | 1,163 | |
Unrealized foreign exchange gains | (7,862) | (52) |
Other | 124 | |
Changes in operating assets and liabilities: | ||
Increase in receivables and other operating assets | (10,179) | (1,813) |
Increase in non-current operating assets | (123) | (17) |
Decrease in payables and deferred revenue | (15,879) | (8,507) |
Net cash used in operating activities | (47,279) | (28,439) |
Cash flows from investing activities | ||
Acquisition of property, plant and equipment | (1,904) | (12,249) |
Acquisition of intangibles | (10) | (242) |
Maturity of short-term deposits | 7,854 | |
Investment in short-term deposits | (18,000) | |
Maturity or redemption of marketable securities | 28,043 | |
Investment in marketable securities | 12,490 | |
Net cash provided by (used in) investing activities | 13,639 | (22,637) |
Cash flows from financing activities | ||
Proceeds from issuance of common stock, net of issuance costs $4,774 | 61,397 | |
Proceeds from exercise of stock options | 1,534 | |
Net cash provided by financing activities | 1,534 | 61,397 |
Effect of currency exchange rate changes on cash, cash equivalents and restricted cash | 1,545 | 1,491 |
Net (decrease) increase in cash, cash equivalents and restricted cash | (30,561) | 11,812 |
Cash, cash equivalents and restricted cash at start of period | 88,296 | 162,796 |
Cash, cash equivalents and restricted cash at end of period | $ 57,735 | $ 174,608 |
CONDENSED CONSOLIDATED STATEM10
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) $ in Thousands | 3 Months Ended |
Mar. 31, 2018USD ($) | |
Common stock | |
Cash flows from financing activities | |
Stock issuance costs | $ 4,774 |
General
General | 3 Months Ended |
Mar. 31, 2018 | |
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. The Company is subject to a number of risks similar to other biopharmaceutical companies in the early stage of clinical development 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 $244.1 million as of March 31, 2018. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2018 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | Note 2 - Summary of Significant Accounting Policies (a) Basis of presentation The condensed consolidated interim financial statements of Adaptimmune Therapeutics plc and its subsidiaries and other financial information included in this Quarterly Report are unaudited and have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) and are presented in U.S. dollars. All significant intercompany accounts and transactions between the Company and its subsidiaries have been eliminated on consolidation. The unaudited condensed interim financial statements presented in this Quarterly Report should be read in conjunction with the consolidated financial statements and accompanying notes included in the Company’s Annual Report on Form 10-K filed with the SEC on March 15, 2018 (the “Annual Report”). The balance sheet as of December 31, 2017 was derived from audited consolidated financial statements included in the Company’s Annual Report but does not include all disclosures required by U.S. GAAP. The Company’s significant accounting policies are described in Note 2 to those consolidated financial statements. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted from these interim financial statements. However, these interim financial statements include all adjustments, consisting only of normal recurring adjustments, which are, in the opinion of management, necessary to fairly state the results of the interim period. The interim results are not necessarily indicative of results to be expected for the full year. On January 1, 2018, the Company adopted new guidance on revenue recognition, which has been codified within Accounting Standard Codification Topic 606, Revenue from Contracts with Customers (“ASC 606”). The comparative financial information for the three months ended March 31, 2017 and as of December 31, 2017 has not been restated. (b) Use of estimates in interim financial statements The preparation of interim financial statements, in conformity with U.S. GAAP and SEC regulations, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the 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 reimbursements from 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) Fair value measurements The Company is required to disclose information on all assets and liabilities reported at fair value that enables an assessment of the inputs used in determining the reported fair values. The fair value hierarchy prioritizes valuation inputs based on the observable nature of those inputs. The hierarchy defines three levels of valuation inputs: Level 1 — Quoted prices in active markets for identical assets or liabilities Level 2 — Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly Level 3 — Unobservable inputs that reflect the Company’s own assumptions about the assumptions market participants would use in pricing the asset or liability The carrying amounts of the Company’s cash and cash equivalents, restricted cash, accounts receivable, accounts payable and accrued expenses approximate fair value because of the short-term nature of these instruments. The fair value of marketable securities, which are measured at fair value on a recurring basis is detailed in Note 6, Fair value measurements . (d) Revenue from contracts with customers On January 1, 2018, the Company adopted new guidance on revenue recognition, which has been codified within ASC 606. The accounting policy applicable from January 1, 2018 is described below and further details on the transition is available in Note 2(e). The comparative financial information for the three months ended March 31, 2017 and as of December 31, 2017 has not been restated and is prepared in accordance with the accounting policies that are described in Note 2 to the consolidated financial statements included in the Annual Report. The Company has one contract with a customer, which is the GSK Collaboration and License Agreement. The GSK Collaboration and License Agreement consists of multiple performance obligations, including the transition of the NY-ESO SPEAR T-cell program to GSK, the development of a second target, PRAME, and an exclusive license to research, develop, and commercialize the Company’s NY-ESO SPEAR T-cell therapy program. The aggregate transaction price consists of an upfront payment of $42,123,000 received in June 2014, development milestones achieved of $53,433,000, an option exercise fee of $26,610,000, which was received in September 2017 and an estimate of variable consideration of $20,039,000. The variable consideration relates to further milestone payments, which the Company is entitled to upon achievement of development milestones, and the remaining option exercise fee of approximately $14,032,000 which is expected to be received upon successful transition of the NY-ESO program to GSK. The Company determines the variable consideration to be included in the transaction price by estimating the most-likely amount that will be received and then applies a constraint to reduce the consideration to the amount which is probable of being received. The determination of whether a milestone is probable includes consideration of the following factors: · Whether achievement of a development milestone is highly susceptible to factors outside the entity’s influence, such as milestones involving the judgment or actions of third parties, including regulatory bodies or the customer; · Whether the uncertainty about the achievement of the milestone is not expected to be resolved for a long period of time; · Whether the Company can reasonably predict that a milestone will be achieved based on previous experience; and. · The complexity and inherent uncertainty underlying the achievement of the milestone. The payments to the Company under the contract are typically due upon achievement of milestones and within standard payment terms (approximating to 45 days). The contract does not include a significant financing component. The upfront payment of $42,123,000 was allocated between the performance obligations 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 contract, 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 included in the contract. The variable consideration is allocated to the performance obligation to which it relates. The amount of the transaction price allocated to the performance obligation is recognized as or when the Company satisfies the performance obligation. The Company satisfies the performance obligations relating to the transition of the NY-ESO SPEAR T-cell program and the development of a second target, PRAME, over time and recognizes revenue based on an estimate of the percentage of completion of the project determined based on the costs incurred on the project as a percentage of the total expected costs. The Company considers that this depicts the progress of the project, where the significant inputs are internal project resource and third-party clinical and manufacturing costs. The determination of the percentage of completion requires the Company to estimate the costs-to-complete the project. The Company makes a detailed estimate of the costs-to-complete on an annual basis as part of the Company’s budgeting process, which is re-assessed every reporting period based on the latest project plan and discussions with project teams. If 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. The Company has determined that the performance obligation relating to the exclusive license to research, develop, and commercialize the Company’s NY-ESO SPEAR T-cell therapy program is recognized at a point-in-time, upon commencement of the license, which occurs once transition of the NY-ESO program is completed and all amounts due under the agreement are paid. The Company recognizes a contract asset, when the value of satisfied (or part satisfied) performance obligations is in excess of the payment due to the Company, and deferred revenue (contract liability) when the amount of unconditional consideration is in excess of the value of satisfied (or part satisfied) performance obligations. Once a right to receive consideration is unconditional, that amount is presented as a receivable. The timing and amount of milestone payments for the development and transition of the NY-ESO SPEAR T-cell program are intended to be commensurate with the cost and effort involved in achieving the milestones and therefore a contract asset would typically arise. However, the Company received $26,610,000 of the option exercise fee in September 2017, with the remaining amount of approximately $14,032,000 payable upon transition of the program to GSK in 2018, and associated revenue will be recognized upon commencement of the license, which occurs upon payment of the remaining option exercise fee, resulting in deferred revenue. Changes in deferred revenue typically arise due to: · adjustments arising from a change in the estimate of the cost to complete the project, which results in a cumulative catch-up adjustment to revenue that affects the corresponding contract asset or deferred revenue; · a change in the estimate of the transaction price due to changes in the assessment of whether variable consideration is constrained because it is not considered probable of being received; · the recognition of revenue arising from deferred revenue; and · the reclassification of amounts to receivables when a right to consideration to becomes unconditional. A change in the estimate of variable consideration constrained (for example, if a development milestone becomes probable of being received) could result in a significant change in the revenue recognized and deferred revenue. (e) New accounting pronouncements Adopted in the period 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 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 has adopted the guidance using the modified retrospective approach, with the cumulative effect of initially applying the guidance recognized as an adjustment to the opening balance of equity at January 1, 2018. Therefore, the comparative information has not been adjusted and continues to be reported under previous guidance. The quantitative impact of the changes on the statement of operations for the three months ended March 31, 2018 are set out below (in thousands): Under previous Adjustment As reported Revenue $ $ ) $ Operating loss ) ) ) Loss before income taxes ) ) ) Net loss attributable to ordinary shareholders ) ) ) The quantitative impact of the changes on the balance sheet as of March 31, 2018 are set out below (in thousands): Under previous Adjustment As reported Deferred revenue $ $ ) $ Total current liabilities ) Total liabilities ) Accumulated deficit ) ) Total stockholders’ equity The quantitative impact of the changes on the statement of cashflows for the three months ended March 31, 2018 are set out below (in thousands): Under previous Adjustment As reported Net loss $ ) $ ) $ ) Decrease in payables and deferred revenue ) ) The adoption of ASC 606 has not impacted net loss per share. The cumulative effect of adopting the guidance on our financial statements at January 1, 2018 is a credit to opening accumulated losses and corresponding decrease in deferred revenue of $8.6 million. The adoption of ASC 606 has had 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 the Company is 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 were previously recognized in revenue using the proportional performance model ratably over the period that services are rendered, unless another attribution method more closely approximates 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. The Company considers that an input measure, such as costs incurred, relative to the total expected inputs is the appropriate measure to depict the transfer of control of the services under the GSK Collaboration and License Agreement, which impacts the timing of its revenue from the GSK Collaboration and License Agreement. The Company has applied the practical expedient for contracts that were modified before the adoption of ASU 2014-09, which permits entities to not retrospectively restate the contract for those contract modifications. Instead, the aggregate effect of all modifications that occurred before the adoption date has been reflected when: a. Identifying the satisfied and unsatisfied performance obligations b. Determining the transaction price c. Allocating the transaction price to the satisfied and unsatisfied performance obligations. 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 included within Note 2(d) and Note 3, which are more extensive than the previously required revenue disclosures. Recognition and Measurement of Financial Assets and Financial Liabilities The Company has adopted 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 did not have a material impact on the Company’s consolidated financial statements. To be adopted in future periods 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 its consolidated financial statements. Measurement of Credit Losses on Financial Instruments In June 2016, the FASB issued ASU 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 its consolidated financial statements. (f) Related parties In the three months ended March 31, 2017, research and development expenses includes purchases of $536,000 from Immunocore Ltd (“Immuncore”). As described in Note 2(w) to the consolidated financial statements included in the Annual Report, the Company no longer considered Immunocore to be a related party with effect from January 1, 2018. |
Revenue
Revenue | 3 Months Ended |
Mar. 31, 2018 | |
Revenue | |
Revenue | Note 3 — Revenue Revenue from contracts with customers arises from one customer, which is GSK, in one geographic location, which is the United Kingdom. Revenue comprises the following categories (in thousands): Three months 2018 Development $ Licenses — $ The following table shows movements in deferred revenue for the three months ended March 31, 2018 (in thousands): Deferred Deferred revenue at January 1, 2018 under previous guidance $ Cumulative effect of adopting ASC 606 ) Deferred revenue at January 1, 2018 Revenue recognized included in opening deferred revenue ) Change in variable consideration ) Change in percentage of completion Revenue in the period ) Amounts invoiced in the period Foreign exchange translation adjustment Deferred revenue at March 31, 2018 $ The aggregate amount of the transaction price, excluding variable consideration which is constrained to reduce the consideration to the amount which is probable of being received, allocated to the performance obligations that are unsatisfied (or partially unsatisfied) as of the end of the reporting period was $47,081,000 at March 31, 2018. Management anticipates that this will be recognized in 2018, specifically $3,162,000 will be recognized as the Company transitions the NY-ESO program to GSK, a further $1,823,000 will be recognized as the development of the second target, PRAME, progresses, and $42,096,000 will be recognized upon commencement of the exclusive license to research, develop, and commercialize the Company’s NY-ESO SPEAR T-cell therapy program. |
Other income, net
Other income, net | 3 Months Ended |
Mar. 31, 2018 | |
Other income, net | |
Other income, net | Note 4 — Other income, net Other income, net consisted of the following (in thousands): Three months ended 2018 2017 Unrealized foreign exchange gains $ $ Losses on redemption or maturity of available-for-sale debt securities ) — Other $ $ |
Loss per share
Loss per share | 3 Months Ended |
Mar. 31, 2018 | |
Loss per share | |
Loss per share | Note 5 — Loss per share The dilutive effect of 89,203,915 and 67,828,170 stock options for the three months ended March 31, 2018 and 2017, respectively, 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. |
Fair value measurements
Fair value measurements | 3 Months Ended |
Mar. 31, 2018 | |
Fair value measurements | |
Fair value measurements | Note 6 — Fair value measurements Assets and liabilities measured at fair value on a recurring basis based on Level 1, Level 2, and Level 3 fair value measurement criteria as of March 31, 2018 are as follows (in thousands): March 31, Fair Value Measurements Using 2018 Level 1 Level 2 Level 3 Assets: Marketable securities: Corporate debt securities $ $ $ — $ — Government bonds — — Commercial paper — — $ $ $ $ — 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. |
Available-for-sale debt securit
Available-for-sale debt securities | 3 Months Ended |
Mar. 31, 2018 | |
Available-for-sale debt securities | |
Available-for-sale debt securities | Note 7 — Available-for-sale debt securities As of March 31, 2018, the Company has the following investments in available-for-sale debt securities (in thousands): Amortized Gross Gross Foreign Aggregate Maturity cost Gains Losses adjustment Fair Value Cash equivalents: Corporate debt securities Less than 3 months $ $ $ ) $ $ $ $ — $ ) $ $ Marketable securities: Corporate debt securities 3 months to 1 year $ $ — $ ) $ $ Government bonds 3 months to 1 year ) Commercial paper 3 months to 1 year ) $ $ — $ ) $ $ In the three months ended March 31, 2018, realized losses recognized on the maturity of available-for-sale debt securities of $1,163,000, primarily arising due to foreign exchange movements, were reclassified out of accumulated other comprehensive loss. As of March 31, 2018 and December 31, 2017, the aggregate fair value of securities held by the Company in an unrealized loss position was $110,979,000 and $125,828,000, respectively, which consisted of 46 and 54 securities, respectively. No securities have been in an unrealized loss position for more than one year. As of March 31, 2018, 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. |
Other current assets
Other current assets | 3 Months Ended |
Mar. 31, 2018 | |
Other current assets | |
Other current assets | Note 8 —Other current assets Other current assets consisted of the following (in thousands): March 31, December 31, Corporate tax receivable $ $ Prepayments Clinical materials Other current assets $ $ |
Accrued expenses and other curr
Accrued expenses and other current liabilities | 3 Months Ended |
Mar. 31, 2018 | |
Accrued expenses and other current liabilities | |
Accrued expenses and other current liabilities | Note 9 — Accrued expenses and other current liabilities Accrued expenses and other current liabilities consisted of the following (in thousands): March 31, December 31, Accrued clinical and development expenditure $ $ Accrued employee expenses VAT Other accrued expenditure Accrued capital expenditure Other liabilities $ $ |
Share-based compensation
Share-based compensation | 3 Months Ended |
Mar. 31, 2018 | |
Share-based compensation | |
Share-based compensation | Note 10 — Share-based compensation The following table shows the total share-based compensation expense included in the unaudited consolidated statements of operations (thousands): Three months ended 2018 2017 Research and development $ $ General and administrative $ $ There were 9,994,656 and 18,950,976 options over ordinary shares granted in the three months ended March 31, 2018 and 2017, respectively, with a weighted average fair value of $0.75 and $0.34, respectively. Additionally, in the three months ended March 31, 2018, 6,552,636 options were granted, which have a nominal exercise price (similar to a restricted stock unit (RSU)). These options had a weighted average fair value of $1.34. The RSU-style options over ordinary shares in Adaptimmune Therapeutics plc were granted under the Adaptimmune Therapeutics plc Employee Share Option Scheme (adopted on January 14, 2016). These options have an exercise price equal to the nominal value of an ordinary share, of £0.001, and generally vest over four years, with 25% on the first, and each subsequent, anniversary of the grant date. The RSU-style options are not subject to performance conditions and the contractual term is ten years. |
Summary of Significant Accoun21
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2018 | |
Summary of Significant Accounting Policies | |
Basis of presentation | (a) Basis of presentation The condensed consolidated interim financial statements of Adaptimmune Therapeutics plc and its subsidiaries and other financial information included in this Quarterly Report are unaudited and have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) and are presented in U.S. dollars. All significant intercompany accounts and transactions between the Company and its subsidiaries have been eliminated on consolidation. The unaudited condensed interim financial statements presented in this Quarterly Report should be read in conjunction with the consolidated financial statements and accompanying notes included in the Company’s Annual Report on Form 10-K filed with the SEC on March 15, 2018 (the “Annual Report”). The balance sheet as of December 31, 2017 was derived from audited consolidated financial statements included in the Company’s Annual Report but does not include all disclosures required by U.S. GAAP. The Company’s significant accounting policies are described in Note 2 to those consolidated financial statements. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted from these interim financial statements. However, these interim financial statements include all adjustments, consisting only of normal recurring adjustments, which are, in the opinion of management, necessary to fairly state the results of the interim period. The interim results are not necessarily indicative of results to be expected for the full year. On January 1, 2018, the Company adopted new guidance on revenue recognition, which has been codified within Accounting Standard Codification Topic 606, Revenue from Contracts with Customers (“ASC 606”). The comparative financial information for the three months ended March 31, 2017 and as of December 31, 2017 has not been restated. |
Use of estimates in interim financial statements | (b) Use of estimates in interim financial statements The preparation of interim financial statements, in conformity with U.S. GAAP and SEC regulations, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the 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 reimbursements from 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. |
Fair value measurements | (c) Fair value measurements The Company is required to disclose information on all assets and liabilities reported at fair value that enables an assessment of the inputs used in determining the reported fair values. The fair value hierarchy prioritizes valuation inputs based on the observable nature of those inputs. The hierarchy defines three levels of valuation inputs: Level 1 — Quoted prices in active markets for identical assets or liabilities Level 2 — Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly Level 3 — Unobservable inputs that reflect the Company’s own assumptions about the assumptions market participants would use in pricing the asset or liability The carrying amounts of the Company’s cash and cash equivalents, restricted cash, accounts receivable, accounts payable and accrued expenses approximate fair value because of the short-term nature of these instruments. The fair value of marketable securities, which are measured at fair value on a recurring basis is detailed in Note 6, Fair value measurements . |
Revenue from contracts with customers | (d) Revenue from contracts with customers On January 1, 2018, the Company adopted new guidance on revenue recognition, which has been codified within ASC 606. The accounting policy applicable from January 1, 2018 is described below and further details on the transition is available in Note 2(e). The comparative financial information for the three months ended March 31, 2017 and as of December 31, 2017 has not been restated and is prepared in accordance with the accounting policies that are described in Note 2 to the consolidated financial statements included in the Annual Report. The Company has one contract with a customer, which is the GSK Collaboration and License Agreement. The GSK Collaboration and License Agreement consists of multiple performance obligations, including the transition of the NY-ESO SPEAR T-cell program to GSK, the development of a second target, PRAME, and an exclusive license to research, develop, and commercialize the Company’s NY-ESO SPEAR T-cell therapy program. The aggregate transaction price consists of an upfront payment of $42,123,000 received in June 2014, development milestones achieved of $53,433,000, an option exercise fee of $26,610,000, which was received in September 2017 and an estimate of variable consideration of $20,039,000. The variable consideration relates to further milestone payments, which the Company is entitled to upon achievement of development milestones, and the remaining option exercise fee of approximately $14,032,000 which is expected to be received upon successful transition of the NY-ESO program to GSK. The Company determines the variable consideration to be included in the transaction price by estimating the most-likely amount that will be received and then applies a constraint to reduce the consideration to the amount which is probable of being received. The determination of whether a milestone is probable includes consideration of the following factors: · Whether achievement of a development milestone is highly susceptible to factors outside the entity’s influence, such as milestones involving the judgment or actions of third parties, including regulatory bodies or the customer; · Whether the uncertainty about the achievement of the milestone is not expected to be resolved for a long period of time; · Whether the Company can reasonably predict that a milestone will be achieved based on previous experience; and. · The complexity and inherent uncertainty underlying the achievement of the milestone. The payments to the Company under the contract are typically due upon achievement of milestones and within standard payment terms (approximating to 45 days). The contract does not include a significant financing component. The upfront payment of $42,123,000 was allocated between the performance obligations 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 contract, 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 included in the contract. The variable consideration is allocated to the performance obligation to which it relates. The amount of the transaction price allocated to the performance obligation is recognized as or when the Company satisfies the performance obligation. The Company satisfies the performance obligations relating to the transition of the NY-ESO SPEAR T-cell program and the development of a second target, PRAME, over time and recognizes revenue based on an estimate of the percentage of completion of the project determined based on the costs incurred on the project as a percentage of the total expected costs. The Company considers that this depicts the progress of the project, where the significant inputs are internal project resource and third-party clinical and manufacturing costs. The determination of the percentage of completion requires the Company to estimate the costs-to-complete the project. The Company makes a detailed estimate of the costs-to-complete on an annual basis as part of the Company’s budgeting process, which is re-assessed every reporting period based on the latest project plan and discussions with project teams. If 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. The Company has determined that the performance obligation relating to the exclusive license to research, develop, and commercialize the Company’s NY-ESO SPEAR T-cell therapy program is recognized at a point-in-time, upon commencement of the license, which occurs once transition of the NY-ESO program is completed and all amounts due under the agreement are paid. The Company recognizes a contract asset, when the value of satisfied (or part satisfied) performance obligations is in excess of the payment due to the Company, and deferred revenue (contract liability) when the amount of unconditional consideration is in excess of the value of satisfied (or part satisfied) performance obligations. Once a right to receive consideration is unconditional, that amount is presented as a receivable. The timing and amount of milestone payments for the development and transition of the NY-ESO SPEAR T-cell program are intended to be commensurate with the cost and effort involved in achieving the milestones and therefore a contract asset would typically arise. However, the Company received $26,610,000 of the option exercise fee in September 2017, with the remaining amount of approximately $14,032,000 payable upon transition of the program to GSK in 2018, and associated revenue will be recognized upon commencement of the license, which occurs upon payment of the remaining option exercise fee, resulting in deferred revenue. Changes in deferred revenue typically arise due to: · adjustments arising from a change in the estimate of the cost to complete the project, which results in a cumulative catch-up adjustment to revenue that affects the corresponding contract asset or deferred revenue; · a change in the estimate of the transaction price due to changes in the assessment of whether variable consideration is constrained because it is not considered probable of being received; · the recognition of revenue arising from deferred revenue; and · the reclassification of amounts to receivables when a right to consideration to becomes unconditional. A change in the estimate of variable consideration constrained (for example, if a development milestone becomes probable of being received) could result in a significant change in the revenue recognized and deferred revenue. |
New accounting pronouncements | (e) New accounting pronouncements Adopted in the period 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 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 has adopted the guidance using the modified retrospective approach, with the cumulative effect of initially applying the guidance recognized as an adjustment to the opening balance of equity at January 1, 2018. Therefore, the comparative information has not been adjusted and continues to be reported under previous guidance. The quantitative impact of the changes on the statement of operations for the three months ended March 31, 2018 are set out below (in thousands): Under previous Adjustment As reported Revenue $ $ ) $ Operating loss ) ) ) Loss before income taxes ) ) ) Net loss attributable to ordinary shareholders ) ) ) The quantitative impact of the changes on the balance sheet as of March 31, 2018 are set out below (in thousands): Under previous Adjustment As reported Deferred revenue $ $ ) $ Total current liabilities ) Total liabilities ) Accumulated deficit ) ) Total stockholders’ equity The quantitative impact of the changes on the statement of cashflows for the three months ended March 31, 2018 are set out below (in thousands): Under previous Adjustment As reported Net loss $ ) $ ) $ ) Decrease in payables and deferred revenue ) ) The adoption of ASC 606 has not impacted net loss per share. The cumulative effect of adopting the guidance on our financial statements at January 1, 2018 is a credit to opening accumulated losses and corresponding decrease in deferred revenue of $8.6 million. The adoption of ASC 606 has had 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 the Company is 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 were previously recognized in revenue using the proportional performance model ratably over the period that services are rendered, unless another attribution method more closely approximates 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. The Company considers that an input measure, such as costs incurred, relative to the total expected inputs is the appropriate measure to depict the transfer of control of the services under the GSK Collaboration and License Agreement, which impacts the timing of its revenue from the GSK Collaboration and License Agreement. The Company has applied the practical expedient for contracts that were modified before the adoption of ASU 2014-09, which permits entities to not retrospectively restate the contract for those contract modifications. Instead, the aggregate effect of all modifications that occurred before the adoption date has been reflected when: a. Identifying the satisfied and unsatisfied performance obligations b. Determining the transaction price c. Allocating the transaction price to the satisfied and unsatisfied performance obligations. 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 included within Note 2(d) and Note 3, which are more extensive than the previously required revenue disclosures. Recognition and Measurement of Financial Assets and Financial Liabilities The Company has adopted 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 did not have a material impact on the Company’s consolidated financial statements. To be adopted in future periods 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 its consolidated financial statements. Measurement of Credit Losses on Financial Instruments In June 2016, the FASB issued ASU 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 its consolidated financial statements. |
Related parties | (f) Related parties In the three months ended March 31, 2017, research and development expenses includes purchases of $536,000 from Immunocore Ltd (“Immuncore”). As described in Note 2(w) to the consolidated financial statements included in the Annual Report, the Company no longer considered Immunocore to be a related party with effect from January 1, 2018. |
Summary of Significant Accoun22
Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
ASU 2014-09 | Adjustment | |
Schedule of quantitative impact of the changes on financials | The quantitative impact of the changes on the statement of operations for the three months ended March 31, 2018 are set out below (in thousands): Under previous Adjustment As reported Revenue $ $ ) $ Operating loss ) ) ) Loss before income taxes ) ) ) Net loss attributable to ordinary shareholders ) ) ) The quantitative impact of the changes on the balance sheet as of March 31, 2018 are set out below (in thousands): Under previous Adjustment As reported Deferred revenue $ $ ) $ Total current liabilities ) Total liabilities ) Accumulated deficit ) ) Total stockholders’ equity The quantitative impact of the changes on the statement of cashflows for the three months ended March 31, 2018 are set out below (in thousands): Under previous Adjustment As reported Net loss $ ) $ ) $ ) Decrease in payables and deferred revenue ) ) |
Revenue (Tables)
Revenue (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Revenue | |
Summary of revenue categories | Revenue comprises the following categories (in thousands): Three months 2018 Development $ Licenses — $ |
Schedule of movements in deferred revenue | The following table shows movements in deferred revenue for the three months ended March 31, 2018 (in thousands): Deferred Deferred revenue at January 1, 2018 under previous guidance $ Cumulative effect of adopting ASC 606 ) Deferred revenue at January 1, 2018 Revenue recognized included in opening deferred revenue ) Change in variable consideration ) Change in percentage of completion Revenue in the period ) Amounts invoiced in the period Foreign exchange translation adjustment Deferred revenue at March 31, 2018 $ |
Other income, net (Tables)
Other income, net (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Other income, net | |
Schedule of other income, net | Other income, net consisted of the following (in thousands): Three months ended 2018 2017 Unrealized foreign exchange gains $ $ Losses on redemption or maturity of available-for-sale debt securities ) — Other $ $ |
Fair value measurements (Tables
Fair value measurements (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Fair value measurements | |
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 March 31, 2018 are as follows (in thousands): March 31, Fair Value Measurements Using 2018 Level 1 Level 2 Level 3 Assets: Marketable securities: Corporate debt securities $ $ $ — $ — Government bonds — — Commercial paper — — $ $ $ $ — |
Available-for-sale debt secur26
Available-for-sale debt securities (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Available-for-sale debt securities | |
Schedule of investments in available-for-sale debt securities | As of March 31, 2018, the Company has the following investments in available-for-sale debt securities (in thousands): Amortized Gross Gross Foreign Aggregate Maturity cost Gains Losses adjustment Fair Value Cash equivalents: Corporate debt securities Less than 3 months $ $ $ ) $ $ $ $ — $ ) $ $ Marketable securities: Corporate debt securities 3 months to 1 year $ $ — $ ) $ $ Government bonds 3 months to 1 year ) Commercial paper 3 months to 1 year ) $ $ — $ ) $ $ |
Other current assets (Tables)
Other current assets (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Other current assets | |
Summary of other current assets | Other current assets consisted of the following (in thousands): March 31, December 31, Corporate tax receivable $ $ Prepayments Clinical materials Other current assets $ $ |
Accrued expenses and other cu28
Accrued expenses and other current liabilities (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
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): March 31, December 31, Accrued clinical and development expenditure $ $ Accrued employee expenses VAT Other accrued expenditure Accrued capital expenditure Other liabilities $ $ |
Share-based compensation (Table
Share-based compensation (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Share-based compensation | |
Summary of share-based compensation expense included in the unaudited consolidated statements of operations | The following table shows the total share-based compensation expense included in the unaudited consolidated statements of operations (thousands): Three months ended 2018 2017 Research and development $ $ General and administrative $ $ |
General (Details)
General (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
General | ||
Accumulated deficit | $ (244,063) | $ (231,630) |
Summary of Significant Accoun31
Summary of Significant Accounting Policies - Revenue from contract with customers (Details) | 1 Months Ended | 3 Months Ended | 47 Months Ended | |||
Sep. 30, 2017USD ($) | Jun. 30, 2014USD ($) | Mar. 31, 2018USD ($)contract | Mar. 31, 2018USD ($) | Mar. 31, 2017USD ($) | Mar. 31, 2018USD ($) | |
Collaboration and License Agreement | ||||||
Option exercise fee | $ 8,196,000 | $ 8,196,000 | $ 2,857,000 | |||
GlaxoSmithKline Intellectual Property Development Ltd | Collaboration and License Agreement | ||||||
Collaboration and License Agreement | ||||||
Number of contracts with customers | contract | 1 | |||||
Upfront payment received | $ 42,123,000 | |||||
Amount of development milestone achieved | $ 53,433,000 | |||||
Estimate of variable consideration | $ 20,039,000 | |||||
License exercise fee, expected to be received | $ 14,032,000 | |||||
Licenses | GlaxoSmithKline Intellectual Property Development Ltd | Collaboration and License Agreement | ||||||
Collaboration and License Agreement | ||||||
Option exercise fee | $ 26,610,000 |
Summary of Significant Accoun32
Summary of Significant Accounting Policies - New accounting pronouncements (Details) - USD ($) $ in Thousands | 3 Months Ended | ||||
Mar. 31, 2018 | Mar. 31, 2018 | Mar. 31, 2017 | Jan. 01, 2018 | Dec. 31, 2017 | |
New accounting pronouncements | |||||
Revenue | $ 8,196 | $ 8,196 | $ 2,857 | ||
Operating loss | (28,740) | (22,221) | |||
Loss before income taxes | (20,951) | (21,551) | |||
Net loss attributable to ordinary shareholders | (21,078) | (21,782) | |||
Deferred revenue | 27,221 | 27,221 | $ 38,735 | ||
Cumulative effect of adopting ASC 606 | 8,645 | ||||
Total current liabilities | 51,922 | 51,922 | 74,314 | ||
Total liabilities | 55,806 | 55,806 | 78,163 | ||
Accumulated deficit | (244,063) | (244,063) | (231,630) | ||
Total stockholders' equity | 191,262 | 191,262 | $ 202,984 | ||
Net loss | (21,078) | (21,782) | |||
Decrease in payables and deferred revenue | (15,879) | $ (8,507) | |||
ASU 2014-09 | |||||
New accounting pronouncements | |||||
Cumulative effect of adopting ASC 606 | $ (8,645) | ||||
ASU 2014-09 | Under previous revenue guidance | |||||
New accounting pronouncements | |||||
Revenue | 8,996 | ||||
Operating loss | (27,940) | ||||
Loss before income taxes | (20,151) | ||||
Net loss attributable to ordinary shareholders | (20,278) | ||||
Deferred revenue | 35,066 | 35,066 | |||
Total current liabilities | 59,767 | 59,767 | |||
Total liabilities | 63,651 | 63,651 | |||
Accumulated deficit | (251,908) | (251,908) | |||
Total stockholders' equity | 183,417 | 183,417 | |||
Net loss | (20,278) | ||||
Decrease in payables and deferred revenue | (16,679) | ||||
ASU 2014-09 | Adjustment | |||||
New accounting pronouncements | |||||
Revenue | (800) | ||||
Operating loss | (800) | ||||
Loss before income taxes | (800) | ||||
Net loss attributable to ordinary shareholders | (800) | ||||
Deferred revenue | (7,845) | (7,845) | |||
Total current liabilities | (7,845) | (7,845) | |||
Total liabilities | (7,845) | (7,845) | |||
Accumulated deficit | 7,845 | 7,845 | |||
Total stockholders' equity | 7,845 | $ 7,845 | |||
Net loss | (800) | ||||
Decrease in payables and deferred revenue | $ 800 |
Summary of Significant Accoun33
Summary of Significant Accounting Policies - Related parties (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Related parties | ||
Research and Development Expense | $ 25,732,000 | $ 18,615,000 |
Immunocore | ||
Related parties | ||
Research and Development Expense | $ 536,000 |
Revenue (Details)
Revenue (Details) | 3 Months Ended | ||||
Mar. 31, 2018USD ($)itemcustomer | Mar. 31, 2018USD ($)customer | Mar. 31, 2017USD ($) | Jan. 01, 2018USD ($) | Dec. 31, 2017USD ($) | |
Disaggregation of revenue | |||||
Revenue | $ 8,196,000 | $ 8,196,000 | $ 2,857,000 | ||
Change in Contract with Customer, Liability [Abstract] | |||||
Deferred revenue at beginning of the period | 30,090,000 | ||||
Cumulative effect of adopting ASC 606 | $ 8,645,000 | ||||
Revenue recognized included in contract liability at beginning of the period | 7,870,000 | ||||
Change in variable consideration | (3,258,000) | ||||
Change in percentage of completion | 2,932,000 | ||||
Revenue | (8,196,000) | (8,196,000) | $ (2,857,000) | ||
Amounts invoiced in the period | 4,210,000 | ||||
Foreign exchange translation adjustment | 1,117,000 | ||||
Deferred revenue at end of the period | 27,221,000 | 27,221,000 | |||
Contract assets, liability and receivables | |||||
Remaining performance obligation | 47,081,000 | 47,081,000 | |||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2018-04-01 | |||||
Contract assets, liability and receivables | |||||
Remaining performance obligation | $ 3,162,000 | 3,162,000 | |||
Remaining performance obligation period | 9 months | ||||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-04-01 | |||||
Contract assets, liability and receivables | |||||
Remaining performance obligation | $ 1,823,000 | 1,823,000 | |||
Remaining performance obligation period | 12 months | ||||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-04-01 | |||||
Contract assets, liability and receivables | |||||
Remaining performance obligation | $ 42,096,000 | $ 42,096,000 | |||
Remaining performance obligation period | 12 months | ||||
ASU 2014-09 | |||||
Change in Contract with Customer, Liability [Abstract] | |||||
Cumulative effect of adopting ASC 606 | $ (8,645,000) | ||||
Under previous revenue guidance | |||||
Change in Contract with Customer, Liability [Abstract] | |||||
Deferred revenue at beginning of the period | $ 38,735,000 | ||||
Under previous revenue guidance | ASU 2014-09 | |||||
Disaggregation of revenue | |||||
Revenue | 8,996,000 | ||||
Change in Contract with Customer, Liability [Abstract] | |||||
Revenue | (8,996,000) | ||||
Development | |||||
Disaggregation of revenue | |||||
Revenue | 8,196,000 | ||||
Change in Contract with Customer, Liability [Abstract] | |||||
Revenue | $ (8,196,000) | ||||
GlaxoSmithKline Intellectual Property Development Ltd | |||||
Contract assets, liability and receivables | |||||
Number of customers | customer | 1 | 1 | |||
Number of geographic locations | item | 1 |
Other income, net (Details)
Other income, net (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Other income, net | ||
Unrealized foreign exchange gains | $ 7,862 | $ 52 |
Losses on redemption or maturity of available-for-sale debt securities | (1,163) | |
Other | 431 | 378 |
Other income, net | $ 7,130 | $ 430 |
Loss per share (Details)
Loss per share (Details) - shares | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Share options | ||
Antidilutive securities | ||
Potentially dilutive equity instruments excluded from the diluted loss per share (in shares) | 89,203,915 | 67,828,170 |
Fair value measurements (Detail
Fair value measurements (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Marketable securities: | ||
Available-for-sale securities, Debt Securities, Current, Total | $ 108,459 | $ 124,218 |
Recurring basis | ||
Marketable securities: | ||
Corporate debt securities | 99,465 | |
Government bonds | 6,007 | |
Commercial paper | 2,987 | |
Available-for-sale securities, Debt Securities, Current, Total | 108,459 | |
Recurring basis | Level 1 | ||
Marketable securities: | ||
Corporate debt securities | 99,465 | |
Government bonds | 6,007 | |
Available-for-sale securities, Debt Securities, Current, Total | 105,472 | |
Recurring basis | Level 2 | ||
Marketable securities: | ||
Commercial paper | 2,987 | |
Available-for-sale securities, Debt Securities, Current, Total | $ 2,987 |
Available-for-sale debt secur38
Available-for-sale debt securities (Details) | 3 Months Ended | |
Mar. 31, 2018USD ($)security | Dec. 31, 2017USD ($)security | |
Schedule of Available-for-sale Securities [Line Items] | ||
Realized loss on available-for-sale debt securities | $ 1,163,000 | |
Aggregate fair value of securities | $ 110,979,000 | $ 125,828,000 |
Number of debt securities | security | 46 | 54 |
Cash equivalents | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized cost | $ 2,520,000 | |
Gross Unrealized Losses | (42,000) | |
Foreign currency translation adjustment | 42,000 | |
Aggregate Estimated Fair Value | 2,520,000 | |
Marketable securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized cost | 108,718,000 | |
Gross Unrealized Losses | (6,887,000) | |
Foreign currency translation adjustment | 6,628,000 | |
Aggregate Estimated Fair Value | 108,459,000 | |
Corporate Debt Securities Maturity Period Less Than Three Months | Cash equivalents | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized cost | 2,520,000 | |
Gross Unrealized Losses | (42,000) | |
Foreign currency translation adjustment | 42,000 | |
Aggregate Estimated Fair Value | 2,520,000 | |
Corporate Debt Securities Maturity Period Three Months To One Year | Marketable securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized cost | 99,724,000 | |
Gross Unrealized Losses | (6,729,000) | |
Foreign currency translation adjustment | 6,470,000 | |
Aggregate Estimated Fair Value | 99,465,000 | |
Government Bonds Maturity Period Three Months to One Year | Marketable securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized cost | 6,007,000 | |
Gross Unrealized Losses | (108,000) | |
Foreign currency translation adjustment | 108,000 | |
Aggregate Estimated Fair Value | 6,007,000 | |
Commercial Paper Maturity Period Three Months to One Year | Marketable securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized cost | 2,987,000 | |
Gross Unrealized Losses | (50,000) | |
Foreign currency translation adjustment | 50,000 | |
Aggregate Estimated Fair Value | $ 2,987,000 | |
Minimum | Corporate Debt Securities Maturity Period Three Months To One Year | Marketable securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Available For Sale Securities Debt Maturity Period | 3 months | |
Minimum | Government Bonds Maturity Period Three Months to One Year | Marketable securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Available For Sale Securities Debt Maturity Period | 3 months | |
Minimum | Commercial Paper Maturity Period Three Months to One Year | Marketable securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Available For Sale Securities Debt Maturity Period | 3 months | |
Maximum | Corporate Debt Securities Maturity Period Less Than Three Months | Cash equivalents | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Available For Sale Securities Debt Maturity Period | 3 months | |
Maximum | Corporate Debt Securities Maturity Period Three Months To One Year | Marketable securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Available For Sale Securities Debt Maturity Period | 1 year | |
Maximum | Government Bonds Maturity Period Three Months to One Year | Marketable securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Available For Sale Securities Debt Maturity Period | 1 year | |
Maximum | Commercial Paper Maturity Period Three Months to One Year | Marketable securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Available For Sale Securities Debt Maturity Period | 1 year |
Other current assets (Details)
Other current assets (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Other current assets | ||
Corporate tax receivable | $ 16,136 | $ 11,454 |
Prepayments | 6,631 | 6,120 |
Clinical materials | 3,843 | 3,760 |
Other current assets | 2,167 | 382 |
Other current assets, Total | $ 28,777 | $ 21,716 |
Accrued expenses and other cu40
Accrued expenses and other current liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Accrued expenses and other current liabilities | ||
Accrued clinical and development expenditure | $ 10,212 | $ 10,065 |
Accrued employee expenses | 4,084 | 6,592 |
VAT | 458 | 5,741 |
Other accrued expenditure | 3,829 | 3,944 |
Accrued capital expenditure | 585 | 502 |
Other liabilities | 482 | 357 |
Total | $ 19,650 | $ 27,201 |
Share-based compensation - Shar
Share-based compensation - Share-based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Total share-based compensation expense included in the consolidated statements of operations | ||
Total share-based compensation expense | $ 4,672 | $ 2,686 |
Research and development | ||
Total share-based compensation expense included in the consolidated statements of operations | ||
Total share-based compensation expense | 2,554 | 1,359 |
General and administrative | ||
Total share-based compensation expense included in the consolidated statements of operations | ||
Total share-based compensation expense | $ 2,118 | $ 1,327 |
Share-based compensation - Opti
Share-based compensation - Options (Details) | 3 Months Ended | ||
Mar. 31, 2018$ / sharesshares | Mar. 31, 2018£ / sharesshares | Mar. 31, 2017$ / sharesshares | |
Number of options granted (in shares) | shares | 9,994,656 | 9,994,656 | 18,950,976 |
Weighted average fair value (in dollars per share) | $ / shares | $ 0.75 | $ 0.34 | |
RSU | |||
Number of options granted (in shares) | shares | 6,552,636 | 6,552,636 | |
Weighted average fair value (in dollars per share) | $ / shares | $ 1.34 | ||
Exercise price | £ / shares | £ 0.001 | ||
Vesting period (in years) | 4 years | 4 years | |
Contractual term (in years) | 10 years | 10 years | |
First anniversary | RSU | |||
Vesting percentage (as a percent) | 25.00% | 25.00% | |
Annual installments over the following three years | RSU | |||
Vesting percentage (as a percent) | 75.00% | 75.00% |