Document and Entity Information
Document and Entity Information | 12 Months Ended |
Dec. 31, 2022 shares | |
Document Information [Line Items] | |
Document Type | 20-F |
Amendment Flag | false |
Document Period End Date | Dec. 31, 2022 |
Document Fiscal Year Focus | 2022 |
Document Fiscal Period Focus | FY |
Entity Registrant Name | Freeline Therapeutics Holdings plc |
Entity Central Index Key | 0001810031 |
Entity Current Reporting Status | Yes |
Entity Voluntary Filers | No |
Entity Interactive Data Current | Yes |
Document Annual Report | true |
Document Transition Report | false |
Document Shell Company Report | false |
Document Registration Statement | false |
Document Accounting Standard | U.S. GAAP |
Current Fiscal Year End Date | --12-31 |
Entity Filer Category | Non-accelerated Filer |
Entity Well-known Seasoned Issuer | No |
Entity Common Stock, Shares Outstanding | 65,113,575 |
Entity Shell Company | false |
Entity Emerging Growth Company | true |
Entity Ex Transition Period | false |
ICFR Auditor Attestation Flag | false |
Entity File Number | 001-39431 |
Entity Incorporation State Country Code | X0 |
Entity Address Address Line1 | Sycamore House |
Entity Address, Address Line Two | Gunnels Wood Road |
Entity Address City Or Town | Stevenage |
Entity Address, Country | GB |
Entity Address Postal Zip Code | Hertfordshire SG1 2BP |
Auditor Firm ID | 1147 |
Auditor Name | Deloitte LLP |
Auditor Location | Reading, United Kingdom |
Business Contact | |
Document Information [Line Items] | |
Entity Address Address Line1 | Sycamore House |
Entity Address, Address Line Two | Gunnels Wood Road |
Entity Address City Or Town | Stevenage |
Entity Address, Country | GB |
Entity Address Postal Zip Code | Hertfordshire SG1 2BP |
Contact Personnel Name | Chip McCorkle |
City Area Code | 44 |
Local Phone Number | (0)1438 906870 |
American Depository Shares | |
Document Information [Line Items] | |
Title of 12(b) Security | American Depositary Shares, each representing one ordinary share, nominal value £0.00001 per share |
Security Exchange Name | NASDAQ |
Trading Symbol | FRLN |
Ordinary shares | |
Document Information [Line Items] | |
Title of 12(b) Security | Ordinary shares, nominal value £0.00001 per share |
Security Exchange Name | NASDAQ |
No Trading Symbol Flag | true |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 47,279 | $ 117,662 |
Prepaid expenses and other current assets | 6,235 | 10,630 |
Assets held for sale | 14,113 | |
Total current assets | 67,627 | 128,292 |
Property and equipment, net | 9,007 | 9,906 |
Operating lease right of use assets | 6,014 | |
Other non-current assets | 3,993 | 2,927 |
Total assets | 86,641 | 141,125 |
CURRENT LIABILITIES: | ||
Accounts payable | 10,058 | 5,187 |
Accrued expenses and other current liabilities | 7,908 | 15,497 |
Operating lease liabilities, current | 2,663 | |
Liabilities related to assets held for sale | 10,337 | |
Total current liabilities | 30,966 | 20,684 |
Operating lease liabilities, non-current | 3,261 | |
Total liabilities | 34,227 | 20,684 |
Commitments and contingencies (Note 12) | ||
SHAREHOLDERS’ EQUITY: | ||
Additional paid-in capital | 500,781 | 467,213 |
Accumulated other comprehensive (loss) gain | (3,151) | 9,472 |
Accumulated deficit | (445,353) | (356,381) |
Total shareholders’ equity | 52,414 | 120,441 |
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | 86,641 | 141,125 |
Deferred Shares One | ||
SHAREHOLDERS’ EQUITY: | ||
Deferred shares, value | $ 137 | $ 137 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - £ / shares | Dec. 31, 2022 | Dec. 31, 2021 |
Ordinary shares, par value | £ 0.00001 | £ 0.00001 |
Ordinary shares, authorized | 400,000,000 | 160,000,000 |
Ordinary shares, issued | 65,113,575 | 35,854,591 |
Ordinary shares, outstanding | 65,113,575 | 35,854,591 |
Deferred Shares | ||
Deferred shares, par value | £ 0.00001 | £ 0.00001 |
Deferred shares, authorized | 118,263 | 112,077 |
Deferred shares, issued | 118,263 | 112,077 |
Deferred shares, outstanding | 118,263 | 112,077 |
Deferred Shares Two | ||
Deferred shares, par value | £ 100,000 | £ 100,000 |
Deferred shares, authorized | 1 | 1 |
Deferred shares, issued | 1 | 1 |
Deferred shares, outstanding | 1 | 1 |
Consolidated Statement of Opera
Consolidated Statement of Operations - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
OPERATING EXPENSES: | |||
Research and development | $ 66,203 | $ 95,431 | $ 76,149 |
General and administrative | 30,656 | 44,567 | 26,300 |
Restructuring expense | 1,588 | 2,381 | |
Total operating expenses | 98,447 | 142,379 | 102,449 |
LOSS FROM OPERATIONS: | (98,447) | (142,379) | (102,449) |
OTHER (EXPENSE) INCOME, NET: | |||
Other (expense) income, net | 2,152 | (165) | (9,288) |
Gain on lease termination | 5,216 | ||
Interest income, net | 904 | 404 | 275 |
Benefit from R&D tax credit | 1,571 | 2,091 | 15,269 |
Total other income, net | 9,843 | 2,330 | 6,256 |
Loss before income taxes | (88,604) | (140,049) | (96,193) |
Income tax expense | (368) | (342) | (129) |
NET LOSS | $ (88,972) | $ (140,391) | $ (96,322) |
Net loss per share attributable to ordinary shareholders - basic | $ (1.50) | $ (3.93) | $ (6.81) |
Net loss per share attributable to ordinary shareholders - diluted | $ (1.50) | $ (3.93) | $ (6.81) |
Weighted average ordinary shares outstanding - basic | 59,271,778 | 35,704,368 | 14,152,843 |
Weighted average ordinary shares outstanding - diluted | 59,271,778 | 35,704,368 | 14,152,843 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Statement of Comprehensive Income [Abstract] | |||
Net loss | $ (88,972) | $ (140,391) | $ (96,322) |
Other comprehensive loss: | |||
Foreign currency translation adjustment | (12,623) | 130 | 12,341 |
Comprehensive loss | $ (101,595) | $ (140,261) | $ (83,981) |
Consolidated Statements of Shar
Consolidated Statements of Shareholders' Equity - USD ($) $ in Thousands | Total | SERIES A Preferred Stock | SERIES B $0.00001 PAR VALUE | Series C Preferred Stock | PREFERRED SHARES $0.00001 PAR VALUE | PREFERRED SHARES $0.00001 PAR VALUE SERIES A Preferred Stock | PREFERRED SHARES $0.00001 PAR VALUE SERIES B $0.00001 PAR VALUE | PREFERRED SHARES $0.00001 PAR VALUE Series C Preferred Stock | A-G ORDINARY £0.00001 PAR VALUE | ORDINARY £0.00001 PAR VALUE | DEFERRED SHARES £0.00001 PAR VALUE | Deferred Shares Two | DEFERRED B SHARES £0.001 PAR VALUE | ADDITIONAL PAID-IN CAPITAL | ADDITIONAL PAID-IN CAPITAL SERIES A Preferred Stock | ADDITIONAL PAID-IN CAPITAL SERIES B $0.00001 PAR VALUE | ADDITIONAL PAID-IN CAPITAL Series C Preferred Stock | ACCUMULATED OTHER COMPREHENSIVE GAIN (LOSS) | ACCUMULATED DEFICIT |
Balance at Dec. 31, 2019 | $ 84,956 | $ 1 | $ 207,622 | $ (2,999) | $ (119,668) | ||||||||||||||
Balance, Shares at Dec. 31, 2019 | 106,081,025 | 16,047,440 | 110,370 | ||||||||||||||||
Issuance of preferred shares | $ 299 | $ 875 | $ 79,679 | $ 299 | $ 875 | $ 79,679 | |||||||||||||
Issuance of shares, Shares | 230,249 | 448,631 | 46,515,834 | 987,703 | |||||||||||||||
Issuance of ordinary shares | 9 | 9 | |||||||||||||||||
Forfeiture of ordinary shares, Shares | (165,414) | (17,804) | 183,218 | ||||||||||||||||
Employee exchange of ordinary shares for stock options, Shares | (1,780,944) | 1,780,944 | |||||||||||||||||
Subdivision of £1 nominal shares and reduction in deferred share capital, see Note 6 | $ 153 | (153) | |||||||||||||||||
Subdivision of £1 nominal shares and reduction in deferred share capital, see Note 6, Shares | 123,638,835 | ||||||||||||||||||
Effect of corporate reorganization including conversion of preferred shares and class A - G ordinary shares to ordinary share, see Note 6 | 2 | $ (1) | $ 2 | ||||||||||||||||
Effect of corporate reorganization including conversion of preferred shares and class A - G ordinary shares to ordinary share, see Note 6, Shares | (153,275,739) | (15,088,785) | 25,921,158 | 142,443,366 | |||||||||||||||
Issuance of ADSs in initial public offering, net of issuance costs of $4,832 | 161,758 | 161,758 | |||||||||||||||||
'Issuance of ADRs in initial public offering, net of issuance costs of $4,832, Shares | 9,951,591 | ||||||||||||||||||
Non-cash share-based compensation | 6,204 | 6,204 | |||||||||||||||||
Foreign currency translation adjustment | 12,341 | 12,341 | |||||||||||||||||
Net loss | (96,322) | (96,322) | |||||||||||||||||
Balance at Dec. 31, 2020 | 249,800 | $ 2 | $ 153 | 456,293 | 9,342 | (215,990) | |||||||||||||
Balance, Shares at Dec. 31, 2020 | 35,854,945 | 144,517,898 | 123,638,835 | ||||||||||||||||
Shares issued under employee share purchase plan | 179 | 179 | |||||||||||||||||
Shares issued under employee share purchase plan, Shares | 59,169 | ||||||||||||||||||
Vesting of restricted share units | 34,750 | ||||||||||||||||||
Forfeiture of ordinary shares, Shares | (94,273) | 94,273 | |||||||||||||||||
Subdivision of £1 nominal shares and reduction in deferred share capital, see Note 6 | $ 137 | $ (137) | |||||||||||||||||
Subdivision of £1 nominal shares and reduction in deferred share capital, see Note 6, Shares | 1 | (100,000,000) | |||||||||||||||||
Cancellation of deferred shares | $ (2) | $ (16) | 18 | ||||||||||||||||
Cancellation of deferred shares, Shares | (144,500,094) | (23,638,835) | |||||||||||||||||
Non-cash share-based compensation | 10,723 | 10,723 | |||||||||||||||||
Foreign currency translation adjustment | 130 | 130 | |||||||||||||||||
Net loss | (140,391) | (140,391) | |||||||||||||||||
Balance at Dec. 31, 2021 | 120,441 | $ 137 | 467,213 | 9,472 | (356,381) | ||||||||||||||
Balance, Shares at Dec. 31, 2021 | 35,854,591 | 112,077 | 1 | ||||||||||||||||
Shares issued under employee share purchase plan | 200 | 200 | |||||||||||||||||
Shares issued under employee share purchase plan, Shares | 372,139 | ||||||||||||||||||
Issuance of shares, Shares | 28,848,968 | ||||||||||||||||||
Issuance of ordinary shares | 28,291 | 28,291 | |||||||||||||||||
Vesting of restricted share units | 44,063 | ||||||||||||||||||
Forfeiture of ordinary shares, Shares | (6,186) | 6,186 | |||||||||||||||||
Non-cash share-based compensation | 5,077 | 5,077 | |||||||||||||||||
Foreign currency translation adjustment | (12,623) | (12,623) | |||||||||||||||||
Net loss | (88,972) | (88,972) | |||||||||||||||||
Balance at Dec. 31, 2022 | $ 52,414 | $ 137 | $ 500,781 | $ (3,151) | $ (445,353) | ||||||||||||||
Balance, Shares at Dec. 31, 2022 | 65,113,575 | 118,263 | 1 |
Consolidated Statements of Sh_2
Consolidated Statements of Shareholders' Equity (Parenthetical) $ in Thousands | 12 Months Ended | |||||||
Dec. 31, 2022 USD ($) | Dec. 31, 2020 USD ($) | Dec. 31, 2022 £ / shares | Dec. 31, 2022 $ / shares | Dec. 31, 2021 £ / shares | Dec. 31, 2021 $ / shares | Dec. 31, 2020 £ / shares | Dec. 31, 2020 $ / shares | |
Preferred shares, par value | $ / shares | $ 0.00001 | $ 0.00001 | $ 0.00001 | |||||
A-G Ordinary shares par value | £ 0.00001 | £ 0.00001 | £ 0.00001 | |||||
Ordinary shares, par value | 0.00001 | 0.00001 | 0.00001 | |||||
Subdivision of nominal shares and reduction in deferred share capital | 0.001 | 1 | ||||||
Issuance of shares, issuance costs | $ | $ 2,600 | $ 4,832 | ||||||
Series C Preferred Stock | ||||||||
Issuance of shares, issuance costs | $ | $ 323 | |||||||
DEFERRED SHARES £0.00001 PAR VALUE | ||||||||
Deferred shares, par value | 0.00001 | 0.00001 | 0.00001 | |||||
DEFERRED SHARES £100,000 PAR VALUE | ||||||||
Deferred shares, par value | 100,000 | 100,000 | 100,000 | |||||
DEFERRED B SHARES £0.001 PAR VALUE | ||||||||
Deferred shares, par value | £ 0.001 | £ 0.001 | £ 0.001 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | |||
Net loss | $ (88,972) | $ (140,391) | $ (96,322) |
Adjustments to reconcile net loss to net cash used in operating activities: | |||
Depreciation and amortization | 1,741 | 2,390 | 1,913 |
Non-cash share-based compensation expense | 5,077 | 10,723 | 6,204 |
Deferred income tax | (156) | (171) | (158) |
Loss on disposal of property and equipment | 235 | 148 | 76 |
Gain on lease termination | (5,216) | ||
Changes in components of operating assets and liabilities: | |||
Accounts receivable | 98 | (91) | |
Prepaids and other current assets | 808 | 17,519 | (11,885) |
Other non-current assets | (384) | 9 | 104 |
Operating lease right of use assets | 7,506 | ||
Accounts payable | 5,446 | (2,890) | 1,540 |
Accrued expenses and other current liabilities | (5,124) | 5,008 | 3,654 |
Operating lease liabilities | 815 | ||
Net cash used in operating activities | (78,224) | (107,557) | (94,965) |
CASH FLOWS FROM INVESTING ACTIVITIES: | |||
Purchase of property, plant and equipment | (7,014) | (4,274) | (2,513) |
Purchase of intangible assets | (1) | ||
Proceeds from disposal of property and equipment | 126 | ||
Net cash used in investing activities | (7,014) | (4,274) | (2,388) |
CASH FLOWS FROM FINANCING ACTIVITIES: | |||
Proceeds from issuance of preferred shares, net of issuance costs | 80,853 | ||
Proceeds from exercise of ESPP | 195 | 179 | |
Proceeds from exercise of warrants for ordinary shares | 9 | ||
Proceeds from issuance of ADSs, net of issuance costs | 27,328 | 161,758 | |
Payments of deferred financing costs | (1,163) | ||
Net cash (used) in/provided by financing activities | 27,523 | (984) | 242,620 |
Net increase in cash and cash equivalents classified within current assets for sale | (300) | ||
Effect of exchange rate changes on cash, cash equivalents and restricted cash | (12,442) | 302 | 11,738 |
Net (decrease) increase in cash, cash equivalents and restricted cash | (70,457) | (112,513) | 157,005 |
Cash, cash equivalents and restricted cash | |||
Beginning of period | 119,063 | 231,576 | 74,571 |
End of period | 48,606 | 119,063 | 231,576 |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | |||
Operating lease liabilities arising from obtaining right-of-use assets | 2,526 | ||
Commitment shares issued to Lincoln Park Capital Fund, LLC | 963 | ||
Property and equipment purchases included in accounts payable | 261 | 21 | 379 |
Cash paid for income taxes | 317 | 281 | |
Reconciliation of cash, cash equivalents and restricted cash | |||
Cash and cash equivalents | 47,279 | 117,662 | 229,974 |
Long-term restricted cash | 1,327 | 1,401 | 1,602 |
Total cash, cash equivalents and restricted cash | $ 48,606 | $ 119,063 | $ 231,576 |
Nature of the Business
Nature of the Business | 12 Months Ended |
Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of the Business | 1. Nature of the Business Organization Freeline Therapeutics Holdings plc (the “Company”) is a clinical-stage biotechnology company developing transformative adeno-associated virus (“AAV”) vector-mediated gene therapies for patients suffering from chronic debilitating diseases. The Company is headquartered in the United Kingdom (“U.K.”) and had operations in Germany and the United States (“U.S.”) as of December 31, 2022. On November 11, 2022, the Company signed a definitive agreement to sell its German subsidiary, Freeline Therapeutics GmbH, and certain intellectual property rights pertaining to the business of Freeline Therapeutics GmbH, to Ascend Gene and Cell Therapies Ltd. (“Ascend”) for $ 25.0 million, subject to purchase price adjustments. Refer to the discussion in Note 3, Assets Held for Sale, for further information. Reorganization and Initial Public Offering The Company is a public limited company incorporated pursuant to the laws of England and Wales. On August 11, 2020, the Company completed its initial public offering (“IPO”) of American Depositary Shares (“ADSs”). In the IPO, the Company sold an aggregate of 9,951,591 ADSs representing the same number of ordinary shares, including 1,128,062 ADSs pursuant to the underwriters’ option to purchase additional ADSs, at an IPO price of $ 18.00 per ADS. Net proceeds were approximately $ 161.8 million after deducting underwriting discounts and commissions and offering expenses paid by the Company. Freeline Therapeutics Holdings plc is the successor to Freeline Therapeutics Holdings Limited (the “Predecessor”) and the financial information for periods prior to the incorporation of the Company represents that of the Predecessor. In connection with the IPO, the Company completed a corporate reorganization. In connection with the corporate reorganization, the different classes of ordinary shares were converted into a single class of ordinary shares, and such ordinary shares were consolidated and subdivided to reflect an approximately 1 -for-0.159 reverse split of such ordinary shares (see Note 8, Shareholders' Equity). Going Concern In accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“ASU”) 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern (Subtopic 205-40), the Company has evaluated whether there are conditions and events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern. The Company is subject to risks and uncertainties common to early-stage companies in the biotechnology industry, including, but not limited to, development by competitors of new technological innovations, dependence on key personnel, protection of proprietary technology, compliance with government regulations and the ability to secure additional capital to fund operations. Product candidates currently under development require significant additional research and development efforts, including clinical testing and regulatory approval, prior to any commercialization. These efforts require significant amounts of capital, adequate personnel and infrastructure and extensive compliance-reporting capabilities. Even if the Company’s product development efforts are successful, it is uncertain when, if ever, the Company will realize revenue from any product sales. The Company has funded its operations primarily with proceeds from the sale of its equity securities. As of December 31, 2022, the Company had unrestricted cash and cash equivalents of $ 47.3 million. On November 11, 2022, the Company signed a definitive agreement to sell its German subsidiary, Freeline Therapeutics GmbH, and certain intellectual property rights pertaining to the business of Freeline Therapeutics GmbH, to Ascend Gene and Cell Therapies Ltd. for $ 25.0 million, subject to purchase price adjustments. Subsequent to the balance sheet date, the Company closed this transaction. See Note 16, Subsequent Events. However, the Company has incurred recurring losses since its inception, including net losses of $ 89.0 million, $ 140.4 million, and $ 96.3 million for the years ended December 31, 2022, 2021 and 2020, respectively. In addition, the Company had an accumulated deficit of $ 445.4 million as of December 31, 2022. The net cash used in operating and investing activities was $ 85.2 million for the year ended December 31, 2022. The Company expects to continue to incur significant expenses and generate operating losses for the foreseeable future. Additionally, the Company is involved in a dispute with Brammer relating to the Manufacturing Agreement as described in Note 12, Commitments and Contingencies. There can be no assurance that the outcome of such dispute will be successful, and an adverse determination could have a material adverse effect on the Company's financial condition. However, the Company is confident in the merits of its claims against Brammer and intends to prosecute this action vigorously. These conditions indicate that there is substantial doubt regarding the Company’s ability to continue as a going concern for at least 12 months from the issuance date of the audited consolidated financial statements. As a result, the Company will need additional funding to support its continuing operations. There can be no assurances, however, that additional funding will be available on favorable terms, or at all. If adequate funds are not available, the Company will be required to reduce spending and potentially delay, limit, reduce or terminate its product research and development efforts in order to enable it to meet its obligations as they fall due for the foreseeable future. The accompanying consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. Accordingly, the consolidated financial statements have been prepared on a basis that assumes the Company will continue as a going concern and which contemplates the realization of assets and satisfaction of liabilities and commitments in the ordinary course of business. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Basis of Presentation The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). All intercompany accounts and transactions have been eliminated upon consolidation. Use of Estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of income and expenses during the reporting periods. Significant estimates and assumptions reflected in these consolidated financial statements include, but are not limited to, the accrual for research and development expenses, the fair value of ordinary shares, the valuation of the warrants, non-cash share-based compensation and income taxes. Estimates are periodically reviewed in light of changes in circumstances, facts and experience. Changes in estimates are recorded in the period in which they become known. Actual results could differ materially from those estimates. Cash and Cash Equivalents The Company considers all highly liquid investments that have maturities of three months or less when acquired to be cash equivalents. Restricted Cash Restricted cash as of December 31, 2022 and 2021 consisted of collateral deposits for the office spaces leased by Freeline Therapeutics GmbH. Restricted cash is included as a component of prepaid expenses and other current assets or other non-current assets on the Company’s consolidated balance sheets, depending on whether it has been classified as short-term or long-term. Deferred Financing Costs The Company capitalizes deferred financing costs, which primarily consist of direct, incremental legal, professional, accounting and other third-party fees relating to the Company’s financing transactions, within other non-current assets. In November 2021, the Company entered into the Open Market Sale Agreement SM with Jefferies LLC. The Company incurred deferred financing costs of $ 1.2 million , which were capitalized within other non-current assets. Fair Value of Financial Instruments Financial instruments consist of cash and cash equivalents. Certain assets of the Company are carried at fair value under U.S. GAAP. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. Financial assets and liabilities carried at fair value are to be classified and disclosed in one of the following three levels of the fair value hierarchy, of which the first two are considered observable and the last is considered unobservable: • Level 1—Quoted prices in active markets for identical assets or liabilities. • Level 2—Observable inputs (other than Level 1 quoted prices), such as quoted prices in active markets for similar assets or liabilities, quoted prices in markets that are not active for identical or similar assets or liabilities, or other inputs that are observable or can be corroborated by observable market data. • Level 3—Unobservable inputs that are supported by little or no market activity that are significant to determining the fair value of the assets or liabilities, including pricing models, discounted cash flow methodologies and similar techniques. The hierarchy requires the use of observable market data when available and to minimize the use of unobservable inputs when determining fair value. The Company has classified cash equivalents at December 31, 2022 and 2021 as fair value on a recurring basis, as Level 1. Management believes that the carrying amounts of the Company’s consolidated financial instruments approximate fair value due to the short-term nature of those instruments. Concentrations of Credit Risk and Off-Balance Sheet Risk Financial instruments that subject the Company to credit risk consist solely of cash and cash equivalents. While the Company is evaluating the financial institutions at which it places its cash and cash equivalents, the Company generally places its cash and cash equivalents at banks in amounts that may exceed the insurance coverage offered by the Financial Services Compensation Scheme (“FSCS”) or the Federal Deposit Insurance Corporation (“FDIC”) . The Company has no significant off-balance-sheet risk or concentration of credit risk, such as foreign exchange contracts, options contracts, or other foreign hedging arrangements. Property and Equipment Property and equipment are recorded at cost and depreciated using the straight-line method over the estimated useful lives of the respective assets, which are as follows: Estimated Useful Life Office equipment, computers and fixtures and fittings 3 years Laboratory equipment 5 years Leasehold improvements 10 years Shorter of useful life or remaining lease term Upon retirement or sale, the cost of assets disposed of and the related accumulated depreciation are removed from the accounts and any resulting gain or loss is included in the consolidated statement of operations and other comprehensive loss. Expenditures for repairs and maintenance are charged to expense as incurred. Impairment of Long-Lived Assets The Company evaluates assets for potential impairment when events or changes in circumstances indicate the carrying value of the assets may not be recoverable. Recoverability is measured by comparing the book values of the assets to the expected future net undiscounted cash flows that the assets are expected to generate. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the book values of the assets exceed their fair value. The Company did no t recognize impairment losses in the year ended December 31, 2022 . The Company recognized $ 0.1 million impairment losses in the year ended December 31, 2021 . The Company did no t recognize impairment losses in the year ended December 31, 2020 . Segment Information Operating segments are defined as components of an enterprise about which separate discrete information is available for evaluation by the chief operating decision maker in deciding how to allocate resources and assess performance. The Company and the Company’s chief operating decision maker, the Company’s chief executive officer, views the Company’s operations and manages its business as a single operating segment, which is the business of developing and commercializing gene therapies. The Company is a public limited company incorporated pursuant to the laws of England and Wales, has its principal executive offices in Stevenage, United Kingdom and operates as one business segment. The Company’s long-lived assets by country were as follows: December 31, December 31, 2022 2021 U.K $ 17,894 $ 6,078 Germany 13,569 6,193 U.S 587 185 $ 32,050 $ 10,233 Long-lived assets include assets classified as held for sale and exclude deferred tax assets. Research and Development Costs Research and development costs are expensed as incurred. Research and development expenses consist of costs incurred in performing research and development activities, including employee related salaries, benefits, and non-cash share-based compensation, facilities and related depreciation expenses, travel, third-party license fees, and external costs of outside vendors engaged to conduct clinical trial and development activities and manufacturing costs to develop and produce clinical trial materials. Research Contract Costs and Accruals The Company has entered into various research and development-related contracts with research institutions and other companies. These agreements are generally cancelable, and related payments are recorded as research and development expenses as incurred. Accruals for research and development expenses typically include fees paid to vendors in conjunction with preclinical development activities, contract research organization (“CROs”) and investigative sites in connection with preclinical and clinical activities, and contract manufacturing organization (“CMOs”) in connection with the manufacturing of drug formulations for use in preclinical and clinical activities. The Company records accruals for estimated ongoing research costs. When evaluating the adequacy of the accrued liabilities, the Company analyzes progress of the studies or clinical trials, including the phase or completion of events, invoices received and contracted costs. Estimates are made in determining the accrued balances at the end of any reporting period. Actual results could differ from the Company’s estimates. Patent Costs The Company expenses patent application and related legal costs as incurred and classifies such costs as general and administrative expenses in the accompanying consolidated statement of operations and comprehensive loss. Non-Cash Share-Based Compensation The Company recognizes compensation expense for equity awards based on the grant date fair value of the award. For equity awards that vest based on a service condition, the non-cash share-based compensation expense is recognized on a straight-line basis over the requisite service period. The Company uses the fair value of its ordinary shares to determine the fair value of Employee Shares. The Company accounts for forfeitures as they occur. For equity awards with a combination of service and performance conditions, the Company recognizes non-cash share-based compensation expense using a straight-line basis over the requisite service period when the achievement of a performance-based milestone is probable, based on the relative satisfaction of the performance condition as of the reporting date. The fair value of each share option grant is estimated on the date of grant using the Black-Scholes option pricing model. See Note 9, Non-cash Share-Based Compensation, for the Company's assumptions used in connection with option grants made during the periods covered by these financial statements. Assumptions used in the option pricing model include the following: Expected volatility . The Company lacks company-specific historical and implied volatility information for its ADSs. Therefore, the Company estimates the expected share volatility based on the historical volatility of publicly traded peer companies and expects to continue to do so until such time as it has adequate historical data regarding the volatility of its own traded share price. Expected term . The expected term of the Company's share options has been determined utilizing the “simplified” method for awards that qualify as “plain-vanilla” options. Risk-free interest rate . The risk-free interest rate is determined by reference to the U.S. Treasury yield curve in effect at the time of grant of the award for time periods that are approximately equal to the expected term of the award. Expected dividend . Expected dividend yield of zero is based on the fact that the Company has never paid cash dividends on ordinary shares and does not expect to pay any cash dividends in the foreseeable future. Fair value of ordinary shares . The ordinary shares underlying the options granted after the Company's IPO are issued at the fair market value of the Company's ADS at the date the grant is approved. Foreign Currency Translation The Company maintains its financial statements of each entity within the group in its local currency, which is also the entity’s functional currency. Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency at rates of exchange prevailing at the balance sheet dates. Non-monetary assets and liabilities denominated in foreign currencies are translated into the functional currency at the exchange rates prevailing at the date of the transaction. Exchange gains or losses arising from foreign currency transactions are included in other expense, net in the consolidated statement of comprehensive loss. The Company recorded foreign exchange loss of approximately $ 12.6 million for the year ended December 31, 2022. The Company recorded foreign exchange gains of approximately $ 0.1 million and $ 12.3 million for the years ended December 31, 2021 and 2020 respectively. For financial reporting purposes, the financial statements of the Company have been presented in the U.S. dollar, the reporting currency. The financial statements of entities are translated from their functional currency into the reporting currency as follows: assets and liabilities are translated at the exchange rates at the balance sheet dates, revenue and expenses are translated at the average exchange rates and shareholders’ equity is translated based on historical exchange rates. Translation adjustments are not included in determining net loss but are included as a foreign exchange adjustment to other comprehensive loss, a component of shareholders’ equity. Income Taxes The Company accounts for income taxes using the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in the consolidated financial statements or in its tax returns. Deferred tax assets and liabilities are determined on the basis of the differences between the consolidated financial statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Changes in deferred tax assets and liabilities are recorded in the provision for income taxes. The Company assesses the likelihood that deferred tax assets will be recovered in the future to the extent management believes, based upon the weight of available evidence, that it is more likely than not that all or a portion of the deferred tax assets will not be realized, a valuation allowance is established through a charge to income tax expense. Potential for recovery of deferred tax assets is evaluated by estimating the future taxable profits expected and considering prudent and feasible tax planning strategies. The Company accounts for uncertainty in income taxes by recognizing in the consolidated financial statements by applying a two-step process to determine the amount of tax benefit to be recognized. First, the tax position must be evaluated to determine the likelihood that it will be sustained upon external examination by the taxing authorities. If the tax position is deemed more-likely-than-not to be sustained, the tax position is then assessed as the amount of benefit to recognize in the consolidated financial statements. The amount of benefits that may be used is the largest amount that has a greater than 50% likelihood of being realized upon ultimate settlement. The provision for income taxes includes the effects of any resulting tax reserves, or unrecognized tax benefits, that are considered appropriate, as well as the related net interest and penalties. The Company recognizes interest and penalties related to unrecognized tax benefits on the income tax expense line in the accompanying consolidated statement of operations. As of December 31, 2022 and 2021 , no accrued interest or penalties are included on the related tax liability line in the consolidated balance sheets. Benefit from Research and Development Tax Credit The Company is subject to corporate taxation in the U.K. Due to the nature of the business, the Company has generated losses since inception. The benefit from research and development (“R&D”) tax credits is recognized in the consolidated statements of operations as a component of other income, net, and represents the sum of the research and development tax credits recoverable in the U.K. The U.K. R&D tax credit is fully refundable to the Company and is not dependent on current or future taxable income. As a result, the Company has recorded the entire benefit from the U.K. research and development tax credit as a benefit which is included in net loss before income tax and accordingly, not reflected as part of the income tax provision. If, in the future, any U.K. R&D tax credits generated are needed to offset a corporate income tax liability in the U.K., that portion would be recorded as a benefit within the income tax provision and any refundable portion not dependent on taxable income would continue to be recorded within other income, net. As a company that carries out extensive research and development activities, the Company benefits from the U.K. R&D tax credit regime. The amount of benefits received depends on whether the Company qualifies for a tax credit either as a Small and Medium Enterprise (“SME”), or under the Research and Development Expenditure Credit (“RDEC”), program. The RDEC program provides a lower tax credit than the SME program. Based on criteria established by HM Revenue & Customs (“HMRC”), the Company expects a portion of expenditures being carried out in relation to its pipeline R&D, clinical trials management and manufacturing development activities to be eligible for the RDEC regime for the years ended December 31, 2022 and 2021. Such expenditures were eligible for the SME regime for the years ended December 31, 2020. Under the RDEC scheme, the Company is able to surrender some of its trading losses that arise from qualifying research and development activities for a cash rebate of up to 10.53 % (or, from April 2023, 15 %) of such qualifying research and development expenditure. Qualifying expenditures largely comprise employment costs for research staff, consumables, and utilities costs incurred as part of research projects. A portion of costs relating to research and development, clinical trials and manufacturing activities are eligible for inclusion within these tax credit cash rebate claims. Unsurrendered U.K. losses may be carried forward indefinitely to be offset against future taxable profits, subject to numerous utilization criteria and restrictions. The amount that can be offset each year is limited to £ 5.0 million plus an incremental 50 % of U.K. taxable profits. Value Added Tax (“VAT”) is broadly charged on all taxable supplies of goods and services by VAT-registered businesses. Under current rates, an amount of 20% of the value, as determined for VAT purposes, of the goods or services supplied is added to all sales invoices and is payable to HMRC. Similarly, VAT paid on purchase invoices is generally reclaimable from HMRC. Comprehensive Loss Comprehensive loss includes net loss as well as other changes in shareholders’ equity that result from transactions and economic events other than those with shareholders. Net Loss per Share The Company has reported losses since inception and has computed basic net loss per share attributable to ordinary shareholders by dividing net loss attributable to ordinary shareholders by the weighted-average number of ordinary shares outstanding for the period, without consideration for potentially dilutive securities. The Company computes diluted net loss per ordinary share after giving consideration to all potentially dilutive ordinary shares, including unvested Employee Shares and warrants to purchase ordinary shares and convertible preferred shares, outstanding during the period determined using the treasury-stock and if-converted methods, except where the effect of including such securities would be antidilutive. Because the Company has reported net losses since inception, these potential ordinary shares have been anti-dilutive and basic and diluted loss per share were the same for all periods presented. Recently Adopted Accounting Pronouncement Leases Effective January 1, 2022 , the Company adopted Accounting Standards Codification (“ASC”), Topic 842, Leases (“ASC 842”), using the modified retrospective approach and utilizing the effective date as its date of initial application, for which prior periods are presented in accordance with the previous guidance in ASC 840, Leases. Adoption of this standard resulted in the recording of operating lease right-of-use assets and operating lease liabilities of $ 61.9 million and $ 64.7 million, respectively, on the Company’s balance sheets on the effective date. The adoption of the standard did no t have a material effect on the Company’s statements of operations and comprehensive loss, shareholders’ equity and cash flows. Refer to Note 12, Commitments and Contingencies, for right-of-use assets and liabilities recorded during the year ended December 31, 2022. At the inception of an arrangement, the Company determines whether the arrangement is or contains a lease based on the unique facts and circumstances present. Leases with a term greater than one year are recognized on the balance sheet as right-of-use assets, current lease liabilities and, if applicable, long-term lease liabilities. The Company has elected to utilize the practical expedient to not recognize on the balance sheet leases with terms of one year or less. Operating lease liabilities and their corresponding right-of-use assets are recorded based on the present value of lease payments over the expected remaining lease term. However, certain adjustments to the right-of-use asset may be required for items such as incentives received, initial direct costs, or prepayments. The interest rate implicit in lease contracts is typically not readily determinable. As a result, the Company utilizes its incremental borrowing rates, which are the rates incurred to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment. The Company has elected to apply the package of three expedients to all of its leases requiring (1) no reassessment of whether any expired or existing contracts are or contain leases, (2) the lease classification of any expired or existing leases, or (3) the capitalization of initial direct costs for any existing leases. All the Company’s leases are classified as operating leases. Assumptions made by the Company at the commencement date are re-evaluated upon occurrence of certain events, including a lease modification. A lease modification results in a separate contract when the modification grants the lessee an additional right of use not included in the original lease and when lease payments increase commensurate with the stand-alone price for the additional right of use. When a lease modification results in a separate contract, it is accounted for in the same manner as a new lease. Operating lease costs are recognized on a straight-line basis over the lease term, and they are categorized within research and development and general and administrative expenses in the consolidated statements of operations. The operating lease cash flows are categorized under net cash used in operating activities in the consolidated statements of cash flows. The Company subleased certain leased office spaces to third parties and recognized sublease income on a straight-line basis over the sublease term within research and development. |
Assets Held for Sale
Assets Held for Sale | 12 Months Ended |
Dec. 31, 2022 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Assets Held for Sale | 3. Assets Held for Sale The Company classifies assets as held for sale when a sale is probable, is expected to be completed within one year, and the asset group meets all of the accounting criteria to be classified as held for sale. As discussed in Note 1, Nature of Business, on November 11, 2022, the Company entered into a definitive agreement to sell its German subsidiary, Freeline Therapeutics GmbH, and certain intellectual property. As a result, the assets related to Freeline Therapeutics GmbH were classified as held for sale as of December 31, 2022, and the Company ceased recording depreciation and amortization of the long-lived assets included in the sale from the date of execution of the definitive agreement. The carrying amounts of the assets and liabilities held for sale in the consolidated balance sheet consisted of the following (in thousands): December 31, 2022 ASSETS CURRENT ASSETS: Cash and cash equivalents $ 300 Prepaid expenses and other current assets 244 Total current assets held for sale 544 NON-CURRENT ASSETS: Property and equipment, net 5,384 Operating lease right of use assets 8,182 Other non-current assets 3 Total assets held for sale $ 14,113 LIABILITIES AND SHAREHOLDERS’ EQUITY CURRENT LIABILITIES: Accounts payable $ 193 Accrued expenses and other current liabilities 1,324 Operating lease liabilities, current 914 Total current liabilities related to assets held for sale 2,431 NON-CURRENT LIABILITIES: Operating lease liabilities, non-current $ 7,906 Total liabilities related to assets held for sale $ 10,337 |
Prepaid Expenses and Other Curr
Prepaid Expenses and Other Current Assets | 12 Months Ended |
Dec. 31, 2022 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Prepaid Expenses and Other Current Assets | 4. Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets consisted of the following (in thousands): December 31, December 31, 2022 2021 U.K. R&D tax credit $ 1,230 $ 2,211 Prepaid tax 1,373 2,070 Insurance 1,702 2,346 Prepaid manufacturing costs 456 2,002 Other current assets 1,474 2,001 $ 6,235 $ 10,630 |
Property and Equipment Net
Property and Equipment Net | 12 Months Ended |
Dec. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment, Net | 5. Property and Equipment, Net Property and equipment, net consisted of the following (in thousands): December 31, December 31, 2022 2021 Office equipment and computers $ 751 $ 1,098 Furniture & Fixtures 2,584 4,602 Laboratory equipment 3,140 10,083 Leasehold improvements 7,549 955 14,024 16,738 Less: accumulated depreciation ( 5,017 ) ( 6,832 ) $ 9,007 $ 9,906 Depreciation and amortization expense was $ 1.8 million, $ 2.4 million and $ 1.9 million for the years ended December 31, 2022, 2021 and 2020, respectively. |
Other Non-current Assets
Other Non-current Assets | 12 Months Ended |
Dec. 31, 2022 | |
Other Assets, Noncurrent Disclosure [Abstract] | |
Other Non-current Assets | 6. Other Non-current Assets Other non-current assets consisted of the following (in thousands): December 31, December 31, 2022 2021 Restricted cash $ 1,327 $ 1,400 Deferred financing costs 2,133 1,142 Deferred tax asset 533 377 Intangible assets — 8 $ 3,993 $ 2,927 Restricted cash consisted of collateral deposits for the office space leased by the Company's wholly owned subsidiary, Freeline Therapeutics GmbH. |
Accrued Expenses and Other Liab
Accrued Expenses and Other Liabilities | 12 Months Ended |
Dec. 31, 2022 | |
Payables and Accruals [Abstract] | |
Accrued Expenses and Other Liabilities | 7. Accrued Expenses and Other Liabilities Accrued expenses and other liabilities consisted of the following (in thousands): December 31, December 31, 2022 2021 Compensation and benefits costs $ 4,178 $ 4,554 Restructuring charges — 2,362 Research and development expenses 1,923 6,726 Consulting and professional services 1,215 1,083 Other liabilities 592 772 $ 7,908 $ 15,497 |
Shareholders_ Equity
Shareholders’ Equity | 12 Months Ended |
Dec. 31, 2022 | |
Equity [Abstract] | |
Shareholders’ Equity | 8. Shareholders’ Equity Ordinary Shares As of December 31, 2022 , the Company’s authorized capital consisted of 400,000,000 ordinary shares with a par value of £ 0.00001 per share. Each holder of ordinary shares is entitled to one vote per ordinary share and to receive dividends when and if such dividends are recommended by the board of directors and approved by the shareholders. As of December 31, 2022 , the Company has no t declared any dividends. Registered Direct Offering On March 10, 2022, the Company entered into a purchase agreement with its majority shareholder, Syncona Portfolio Limited, a subsidiary of Syncona Limited, and certain other existing shareholders providing for the issuance and sale by the Company of 24,857,144 of the Company’s American Depositary Shares (“ADSs”) at a price of $ 1.05 per ADS for total gross proceeds of $ 26.1 million, in a registered direct offering. The offering closed on March 15, 2022. The Company received net proceeds of approximately $ 24.2 million from the offering, after deducting offering expenses payable by the Company. Lincoln Park Capital On March 18, 2022, the Company entered into a purchase agreement with Lincoln Park Capital Fund, LLC (“Lincoln Park”) under which the Company may at its discretion, sell to Lincoln Park up to $ 35.0 million of its ADSs over a 36 -month period, subject to certain daily limits, applicable prices, and conditions. In addition, under the purchase agreement, the Company issued 954,208 ADSs as commitment shares to Lincoln Park as consideration for its commitment to purchase ADSs under the purchase agreement (the “Commitment Shares”). The Commitment Shares were valued using the closing price of the Company’s ADSs on the date of the purchase agreement resulting in a fair market value of $ 1.0 million. The fair value of the Commitment Shares as well as issuance costs of $ 0.2 million associated with the purchase agreement are classified as prepaid expenses and other current assets in the accompanying consolidated balance sheet. As the Company’s ADSs are sold in accordance with the purchase agreement, the fair value of the Commitment Shares and issuance costs will be reclassified to additional paid-in capital on the Company’s consolidated balance sheet. During the year ended December 31, 2022, the Company did no t issue any additional ADSs pursuant to the purchase agreement. Open Market Sale Agreement SM On November 17, 2021, the Company entered into an Open Market Sale Agreement SM (the "Sales Agreement") with Jefferies LLC ("Jefferies") pursuant to which the Company may issue and sell ADSs having aggregate offering sales proceeds of up to $ 75.0 million, from time to time, in “at-the-market” offerings pursuant to which Jefferies will act as sales agent and/or principal. During the year ended December 31, 2022, the Company issued 3,037,616 ADSs pursuant to the Sales Agreement, raising approximately $ 3.2 million in net proceeds. Initial Public Offering and Impact of Corporate Reorganization On August 11, 2020, the Company completed its IPO. As part of the IPO, the Company sold an aggregate of 8,823,529 ADSs representing the same number of ordinary shares, at a public offering price of $ 18.00 per ADS for total net proceeds of approximately $ 147.7 million. On August 20, 2020, the underwriters of the IPO exercised a portion of their overallotment option by purchasing an additional 1,128,062 ADSs from the Company at the IPO price of $ 18.00 per ADS, resulting in additional net proceeds of $ 18.9 million. The total net proceeds were approximately $ 161.8 million, after deducting underwriting discounts, commissions and offering expense paid by the Company of $ 12.5 million. Prior to the Company’s corporate reorganization and IPO, the Company had issued series A preferred shares, series B preferred shares, series C preferred shares, A ordinary shares, B ordinary shares, C ordinary shares, D ordinary shares, E ordinary shares, F ordinary shares and G ordinary shares. As part of the Company’s corporate reorganization and prior to its IPO, all shareholders of Freeline Therapeutics Limited exchanged each of their shares for shares of Freeline Therapeutics Holdings Limited, resulting in each shareholder holding the same number and class of newly issued shares of £ 1.00 each in Freeline Therapeutics Holdings Limited. Each resulting share was subdivided into (i) one share of the same class, with a nominal value of £ 0.00001 , and (ii) one deferred share of £ 0.99999 nominal value. Immediately prior to the closing of the IPO, the different classes of shares were converted into a single class of ordinary shares , and such ordinary shares were consolidated and subdivided to reflect an approximately 1-for-0.159 reverse split of such ordinary shares and the balance of any ordinary shares created various classes of deferred shares. Deferred Shares Deferred shares are a unit of equity that confer to their holder effectively no economic rights or any voting rights. The Company, without the consent of the shareholder, may transfer deferred shares at any time for $nil consideration. In the first quarter of 2021, (i) 100,000,000 deferred shares of £ 0.001 each were consolidated into a single deferred share of £ 100,000 nominal value, and (ii) the remaining 23,638,835 deferred shares of £ 0.001 each and all 144,500,094 deferred shares of £ 0.00001 each were canceled. In each of the years ended December 31, 2022, 2021 and 2020, unvested Employee Shares were forfeited upon termination of employment, classified as additional deferred shares of £ 0.00001 each on the balance sheet and were or will be subsequently cancelled (see Note 9). The remaining deferred share of £ 100,000 nominal value is presented as a separate class of equity on the balance sheet and statement of shareholders’ equity. Deferred shares are not included in the Company’s potentially dilutive securities as they are not ordinary shares and have no conversion rights . The table below reflects the number of ordinary shares and deferred shares issued and outstanding at December 31, 2022, 2021 and 2020 . The conversion of preferred and ordinary shares on an approximately 1 -for-0.159 basis and the creation of deferred shares are reflected in the years ended December 31, 2021 and 2020 only. December 31, 2022 2021 2020 Ordinary shares 65,113,575 35,854,591 35,854,945 Deferred shares of £ 0.00001 118,263 (1) 112,077 (2) 144,517,898 (3) Deferred shares of £ 0.001 — — 123,638,835 Deferred shares of £ 100,000 1 1 — Total ordinary and deferred shares 65,231,839 35,966,669 304,011,678 (1) 118,263 represents forfeiture of unvested ordinary shares of £ 0.00001 par value upon termination of employment (see Note 9). (2) 112,077 represents forfeiture of unvested ordinary shares of £ 0.00001 par value upon termination of employment (see Note 9). (3) 144,517,898 includes forfeiture of 17,804 unvested ordinary shares of £ 0.00001 par value upon termination of employment (see Note 9). |
Non-Cash Share-Based Compensati
Non-Cash Share-Based Compensation | 12 Months Ended |
Dec. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Non-Cash Share-Based Compensation | 9. Non-Cash Share-Based Compensation 2020 Equity Incentive Plan On July 31, 2020, the Company adopted an equity incentive plan (the “2020 Plan”). The 2020 Plan provides for the grant of options, share appreciation rights ("SARs"), restricted shares, dividend equivalents, restricted share units ("RSUs"), and other share-based awards. The maximum number of equity awards originally authorized under the 2020 Plan was 5,898,625 shares, which consisted of 3,474,469 new ordinary shares and 2,424,156 ordinary shares that were subject to awards under prior equity incentive plans that may become available for issuance under the 2020 Plan. Additionally, the number of ordinary shares reserved for issuance under the 2020 Plan automatically increases on January 1st of each year, for a period of not more than ten years , by an amount equal to the lesser of (i) 4 % of the total number of ordinary shares outstanding on December 31st of the prior calendar year or (ii) such fewer number of ordinary shares as the board of directors may designate prior to the applicable January 1st date. On January 1, 2022 and 2021, the number of shares reserved automatically increased by 1,434,184 and 1,434,198 shares, which were 4 % of the total number of ordinary shares outstanding on December 31, 2021 and 2020, respectively. Any equity awards granted under the 2020 Plan or any prior equity incentive plan that expire, lapse, or are terminated, exchanged for cash, surrendered, repurchased, or cancelled, without having been fully exercised, or forfeited, will be added back to shares issuable under the 2020 Plan, subject to certain conditions. The Company has typically granted equity awards under the 2020 Plan that vest over a four-year service period, with 25 % of the award vesting on the first anniversary of the vesting commencement date, with the balance generally vesting periodically over the remaining three years . 2021 Equity Inducement Plan On September 27, 2021, the Company adopted an equity inducement plan (the “Inducement Plan”). The purpose of the Inducement Plan is to enhance the Company’s ability to attract employees who are expected to make important contributions to the Company by providing these individuals with equity ownership opportunities. Awards under the Inducement Plan are granted as an inducement material to employees entering into employment with the Company. The Inducement Plan provides for the grant of options, SARs, restricted shares, dividend equivalents, RSUs, and other share-based awards. On May 30, 2022, the Board amended the Inducement Plan to authorize an additional 2,000,000 shares under the Inducement Plan. The maximum number of equity awards authorized under the Inducement Plan is 3,400,000 shares. Any equity awards granted under the Inducement Plan that expire, lapse, or are terminated, exchanged for cash, surrendered, repurchased or cancelled, without having been fully exercised, or forfeited, will be added back to shares issuable under the Inducement Plan, subject to certain conditions. 2020 Employee Share Purchase Plan On July 31, 2020, the Company adopted an employee share purchase plan (the “ESPP”). The purpose of the ESPP is to provide employees the opportunity to purchase ordinary shares or ADSs at 85 % of the fair market value of the ADSs on the offering date or the exercise date, whichever is lower, for up to 15 % of such employee’s compensation for each pay period. The Company reserved 347,447 ordinary shares for the ESPP. The ESPP provides for an annual increase beginning on January 1, 2022 in an amount equal to the least of (i) 347,447 ordinary shares, (ii) 1 % of the total number of ordinary shares outstanding on December 31 st of the prior calendar year or (iii) such fewer number of ordinary shares as the board of directors may designate prior to the applicable January 1 st date. On January 1, 2022, the reserve automatically increased by 347,447 shares. During the year ended December 31, 2022 , 372,139 shares were purchased under the ESPP. As of December 31, 2022 , 263,586 shares are available for future issuance. Employee Shares The Company measures all non-cash share-based awards using the fair value on the date of grant and recognizes compensation expense for those awards over the requisite service period, which is generally the vesting period of the respective award. Prior to the Company’s IPO, the Company granted share-based compensation in the form of ordinary shares, collectively referred to as Employee Shares, to employees and non-employees with both performance and service-based vesting conditions. The Company records expense for these awards using the straight-line method. A summary of the changes in the Employee Shares from December 31, 2019 through December 31, 2022 is as follows. Number of Weighted Unvested balance as of December 31, 2019 492,514 $ 1.36 Granted 42,412 11.78 Vested ( 209,836 ) 7.10 Forfeited ( 117,780 ) 12.64 Unvested balance as of December 31, 2020 207,310 9.97 Granted — 0.00 Vested ( 65,705 ) 8.71 Forfeited ( 94,273 ) 10.36 Unvested balance as of December 31, 2021 47,332 10.82 Granted — — Vested ( 24,837 ) 8.71 Forfeited ( 6,186 ) 10.36 Unvested balance as of December 31, 2022 16,309 $ 11.33 As of December 31, 2022, there was $ 0.2 million of unrecognized compensation cost related to unvested Employee Shares outstanding, which is expected to be recognized over a weighted average period of 1.5 years. Unvested Employee Shares are forfeited upon termination of employment, classified as deferred shares on the balance sheet and are subsequently cancelled. Share Options Valuation The assumptions used in the Black-Scholes option pricing model (see Note 2, Summary of Significant Accounting Policies) to determine the fair value of the share options granted to employees and directors during the years ended December 31, 2022 , 2021 and 2020 were as follows: For the Year Ended December 31, 2022 2021 2020 Expected option life (years) 6.3 6.3 6.1 Expected volatility 74.7 % 76.9 % 77.4 % Risk-free interest rate 2.2 % 1.1 % 0.4 % Expected dividend yield — — — Share Options Number of Weighted Weighted Average Remaining Contractual Term (in years) Aggregate Intrinsic Value (in thousands) Outstanding as of December 31, 2019 — $ — — $ — Granted 3,760,210 14.79 — Exercised — — — Canceled or Forfeited ( 73,124 ) 15.32 — Outstanding as of December 31, 2020 3,687,086 $ 13.03 9.59 $ 9,931 Granted 4,352,281 6.87 — Exercised — — — Expired ( 145,638 ) 13.02 — Canceled or Forfeited ( 2,472,014 ) 13.20 — Outstanding as of December 31, 2021 5,421,715 9.23 8.37 — Granted 5,284,810 1.05 $ 570 Exercised — — Expired ( 298,143 ) 13.57 — Canceled or Forfeited ( 2,489,882 ) 5.74 — Outstanding as of December 31, 2022 7,918,500 4.76 8.40 — Exercisable as of December 31, 2022 2,044,228 10.98 6.48 — Vested and expected to vest as of December 31, 2022 7,918,500 $ 4.76 8.40 $ — The aggregate intrinsic value of share options is calculated as the difference between the exercise price of the share options and the fair value of the Company’s ordinary shares for those share options that had exercise prices lower than the fair value of the Company’s ordinary shares. The weighted average grant-date fair values used for the share options granted during the years ended December 31, 2022, 2021 and 2020 were $ 0.70 per share, $ 4.49 per share and $ 9.87 per share, respectively. As of December 31, 2022, there was $ 9.4 million of unrecognized compensation cost related to unvested share options outstanding, which is expected to be recognized over a weighted average period of 2.4 years. Restricted Share Units The Company has granted (i) RSUs that generally vest over a period of four years from the date of grant and (ii) RSUs to certain new employees in order to compensate them for equity awards forfeited to their previous employers. The latter RSUs generally vest over a period of under one year from the date of grant. The Company granted share options and RSUs as its annual equity incentive awards to employees during the year ended December 31, 2022. In 2021, the annual equity incentive awards consisted only of share options. The following table summarizes the activity related to RSUs during the years ended December 31, 2022 , 2021 and 2020: Number of Weighted Outstanding as of December 31, 2019 — $ — Granted 2,500 17.56 Vested and settled — — Forfeited — — Outstanding as of December 31, 2020 2,500 17.56 Granted 120,375 9.64 Vested and settled — — Forfeited ( 34,125 ) 8.63 Outstanding as of December 31, 2021 88,750 $ 10.01 Granted 669,270 1.03 Vested and settled — — Exercised ( 44,688 ) 5.63 Forfeited ( 267,742 ) 3.03 Outstanding as of December 31, 2022 445,590 $ 0.98 Share-based Compensation Expense Non-cash share-based compensation expense recorded as research and development and general and administrative expenses is as follows (in thousands): For the Year Ended December 31, 2022 2021 2020 Research and development $ 2,127 $ 4,511 $ 2,510 General and administrative 2,950 6,212 3,694 $ 5,077 $ 10,723 $ 6,204 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 10. Income Taxes The provision for income taxes for the years ended December 31, 2022, 2021 and 2020 was computed at the United Kingdom statutory income tax rate. The net loss (income) realized by the Company’s domestic and foreign entities before the calculation of income tax was $ 89.7 million and $ ( 1.2 ) million in 2022, respectively. The net loss realized by the Company’s domestic and foreign entities before the calculation of income tax in 2021 was $ 141.2 million and $ ( 1.0 ) million, respectively. The net loss realized by the Company’s domestic and foreign entities before the calculation of income tax in 2020 was $ 96.9 million and $ ( 0.7 ) million, respectively. The income tax provision for the years then ended comprised (in thousands): For the Year Ended December 31, 2022 2021 2020 Current expense: United Kingdom $ — $ — $ — Foreign 524 513 287 Total current expense: $ 524 $ 513 $ 287 Deferred benefit United Kingdom — — — Foreign ( 156 ) ( 171 ) ( 158 ) Total deferred benefit: ( 156 ) ( 171 ) ( 158 ) Total income tax expense: $ 368 $ 342 $ 129 A reconciliation of income tax expense computed at the statutory U.K. income tax rate to income taxes as reflected in the consolidated financial statements is as follows (in thousands): For the Year Ended December 31, 2022 2021 2020 Income taxes at UK statutory rate of 19 % $ ( 16,806 ) $ ( 26,609 ) $ ( 18,277 ) R&D expenditure — — 5,756 Foreign rate differential 62 69 42 Change in valuation allowance 19,280 40,508 15,691 U.S. state income taxes 35 21 ( 13 ) Change in tax rates ( 4,627 ) ( 16,777 ) — Other 2,425 3,130 ( 3,070 ) $ 368 $ 342 $ 129 Significant components of the Company’s deferred tax assets and liabilities as of December 31, 2022 and 2021 consist of the following (in thousands): For the Year Ended December 31, 2022 2021 Deferred tax assets Net operating loss carryforwards $ 78,057 $ 64,527 Depreciation ( 538 ) ( 885 ) Accrued expenses 531 393 Non-cash share-based compensation 2,686 4,900 Other 168 26 Total deferred tax assets $ 80,904 $ 68,961 Valuation allowance ( 80,369 ) ( 68,584 ) Net deferred tax assets $ 535 $ 377 As of December 31, 2022 and 2021, the Company had U.K. net operating loss carryforwards of approximately $ 310.8 million and $ 258.1 million, respectively. Changes in the valuation allowance for deferred tax assets during the years ended December 31, 2022 and 2021 related primarily to the increases in net operating loss carryforwards and were as follows (in thousands): For the Year Ended December 31, 2022 2021 Valuation allowance at beginning of year $ 68,584 $ 24,450 Increases recorded to income tax provision 11,785 44,134 Valuation allowance at end of year $ 80,369 $ 68,584 Future realization of the tax benefits of existing temporary differences and net operating loss carryforwards ultimately depends on the existence of sufficient taxable income within the carryforward period. As of December 31, 2022, the Company performed an evaluation to determine whether a valuation allowance was needed. The Company considered all available evidence, both positive and negative, which included the results of operations for the current and preceding years. The Company determined that it was not possible to reasonably quantify future taxable income and determined that it is more likely than not that all of the deferred tax assets in the United Kingdom and Ireland will not be realized. Accordingly, the Company maintained a full valuation allowance as of December 31, 2022 and 2021 on the United Kingdom and Ireland net deferred tax assets. The Company applies the authoritative guidance on accounting for and disclosure of uncertainty in tax positions, which requires the Company to determine whether a tax position of the Company is more likely than not to be sustained upon examination, including resolution of any related appeals of litigation processes, based on the technical merits of the position. For tax positions meeting the more likely than not threshold, the tax amount recognized in the financial statements is reduced by the largest benefit that has a greater than fifty percent likelihood of being realized upon the ultimate settlement with the relevant taxing authority. There were no material uncertain tax positions as of December 31, 2022 and 2021. The Company will recognize interest and penalties related to uncertain tax positions in income tax expense when in a taxable income position. As of December 31, 2022 and 2021 , the Company had no accrued interest or penalties related to uncertain tax positions and no amounts have been recognized in the Company’s statement of operations. The Company and its subsidiaries file income tax returns in the U.K., the U.S., Germany, and Ireland. Generally, the tax years through 2022 remain open to examination by the major taxing jurisdictions to which the Company is subject. To the extent the Company has tax attribute carryforwards, the tax years in which the attribute was generated may still be adjusted upon examination by the federal, state, or foreign tax authorities, if such tax attributes are utilized in a future period. During the second quarter of 2021, the Finance Act 2021 (the Act) was enacted in the United Kingdom. The Act increases the main corporate income tax rate from 19 % to 25 % effective April 1, 2023 and enhances the first-year capital allowance on qualifying new plant and machinery assets effective April 1, 2021. The effects on the Company’s existing deferred tax balances have been recorded and is offset by the valuation allowance maintained against the Company’s U.K. net deferred tax assets. |
Net Loss Per Share
Net Loss Per Share | 12 Months Ended |
Dec. 31, 2022 | |
Earnings Per Share [Abstract] | |
Net Loss Per Share | 11. Net Loss Per Share Basic and diluted net loss per share attributable to ordinary shareholders was calculated as follows (in thousands, except share and per share amounts): December 31, 2022 2021 2020 Numerator Net loss $ ( 88,972 ) $ ( 140,391 ) $ ( 96,322 ) Net loss attributable to ordinary shareholders—basic and diluted $ ( 88,972 ) $ ( 140,391 ) $ ( 96,322 ) Denominator Weighted-average number of ordinary shares used in net loss per share—basic and diluted 59,271,778 35,704,368 14,152,843 Net loss per share attributable to ordinary shareholders—basic and diluted $ ( 1.50 ) $ ( 3.93 ) $ ( 6.81 ) The Company’s potentially dilutive securities, which include unvested Employee Shares, share options and RSUs, have been excluded from the computation of diluted net loss per share as the effect would be to reduce the net loss per share. Therefore, the weighted-average number of ordinary shares outstanding used to calculate both basic and diluted net loss per share attributable to ordinary shareholders is the same. The Company excluded the following potential ordinary shares, presented based on amounts outstanding at each period end, from the computation of diluted net loss per share attributable to ordinary shareholders for the years ended December 31, 2022, 2021 and 2020 because including them would have had an anti-dilutive effect: December 31, 2022 2021 2020 Unvested ordinary shares 16,309 47,332 207,310 Share options 7,918,500 5,421,715 3,687,086 Restricted share units 445,590 88,750 2,500 Total 8,380,399 5,557,797 3,896,896 |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 12. Commitments and Contingencies Legal Proceedings From time to time, the Company may be a party to litigation or arbitration or subject to claims incident to the ordinary course of business. Regardless of the outcome, litigation and arbitration are subject to inherent uncertainties and could adversely impact the Company’s reputation, operations, and its operating results or overall financial condition. As of December 31, 2022, except as set forth below, there were no pending material legal proceedings to which the Company was a party or to which any of its property was subject, and the Company did not have contingency reserves established for any liabilities as of December 31, 2022 and December 31, 2021. When appropriate in management’s estimation, the Company will record adequate reserves in its financial statements for pending litigation or arbitration. In June 2020, the Company entered into a dedicated manufacturing and commercial supply agreement (the “Manufacturing Agreement”) with Brammer Bio MA, LLC (“Brammer”) pursuant to which Brammer was obligated to reserve certain amounts of manufacturing capacity in its manufacturing facility to supply the Company with its product candidate FLT180a for the treatment of hemophilia B. As consideration for the reserved manufacturing capacity, the Company was required to pay Brammer an annual capacity access fee of $ 10.0 million, subject to inflationary annual increases, excluding any purchase commitment or other fees. The Company committed to an annual minimum purchase commitment equivalent to $ 6.0 million throughout the term of the Manufacturing Agreement. The term of the Manufacturing Agreement was effective as of June 30, 2020 and was to continue until December 31, 2027. On July 15, 2022, the Company sent notice in writing to Brammer that it was terminating, as of July 31, 2022, the Manufacturing Agreement as a result of alleged material breaches by Brammer of the Manufacturing Agreement and related agreements. On August 17, 2022, Brammer responded with a letter to terminate the Manufacturing Agreement effective immediately for the Company's alleged material breach of the Manufacturing Agreement and related agreements. On October 3, 2022, the Company filed a demand for arbitration before the American Arbitration Association (the “AAA”) in New York against Brammer pursuant to the Manufacturing Agreement. The demand seeks damages for Brammer’s alleged breaches of its obligations to the Company, as communicated in the Company’s July 15, 2022 termination notice to Brammer and also seeks a declaratory judgment that Brammer materially breached the Manufacturing Agreement and related agreements and that, as a result of those material breaches, the Company had the right to terminate the Manufacturing Agreement. On December 5, 2022, Brammer filed an answer to the Company’s demand for arbitration and a counterclaim against the Company. The counterclaim seeks significant damages for the Company’s alleged repudiation and breach of its obligations to Brammer, as communicated in Brammer’s August 17, 2022 letter to the Company. It also seeks a declaratory judgment that the Company’s alleged repudiation and purported termination constituted a material breach of the Manufacturing Agreement and that Brammer is entitled to damages and any other relief set forth in the Manufacturing Agreement or deemed just by the AAA. The final hearing in this matter has been scheduled for November 6 to 9, 2023. There can be no assurance that the outcome of such dispute will be successful, and an adverse determination could have a material adverse effect on the Company's results of operations and financial condition. However, the Company is confident in the merits of its claims against Brammer and intends to prosecute this action vigorously. As a result of the mutual termination of the Manufacturing Agreement, the Company has derecognized the associated operating lease assets and liabilities (see "Operating Lease Agreements" below) and no longer recognizes the annual minimum purchase commitment as a contractual obligation. No loss contingencies have been recorded by the Company in relation to the dispute because the Company cannot reasonably estimate the potential outcome or amount of potential loss at this time. Operating Lease Agreements In August 2022, in connection with the termination of the Manufacturing Agreement, the Company deemed terminated the operating lease in connection with the dedicated capacity at the Brammer facility. The Company derecognized the related right-of-use asset of approximately $ 35.6 million and accordingly the operating lease liabilities of $ 40.3 million, resulting in a gain of $ 5.3 million, which was included in other income (expense), net on the consolidated statements of operations for the year ended December 31, 2022. The following table summarizes the Company’s costs included in the statements of operations related to right-of-use lease assets entered into through December 31, 2022 (in thousands): Lease Cost For the Year Ended December 31, 2022 Operating lease cost Research and development $ 11,558 General and administrative 608 Short-term lease cost 276 Sublease income ( 246 ) Total lease cost $ 12,196 Other Information For the Year Ended December 31, 2022 Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases $ 10,475 Right-of-use assets obtained in exchange for new operating lease liabilities $ 2,526 Weighted-average remaining lease term-operating leases 5.80 Weighted-average discount rate-operating leases 9.33 % Contractual Obligations The following table summarizes the Company’s contractual obligations as of December 31, 2022, and the effects that such obligations are expected to have on its liquidity and cash flows in future periods (in thousands): Maturity of Contractual Obligations Years Ended December 31, Operating Leases 2023 4,564 2024 3,535 2025 2,224 2026 1,992 2027 1,668 Thereafter 6,268 Total payments 20,251 Less: imputed interest ( 5,969 ) Less: foreign exchange (gain)/loss 463 Total $ 14,745 The Company recorded rent expense of $ 15.4 million and $ 4.2 million for the years ended December 31, 2021 and 2020, prior to the adoption of ASC 842. Indemnification Agreements In the normal course of business, the Company enters into contracts and agreements that contain a variety of representations and warranties and provide for general indemnification. The Company’s exposure under these agreements is unknown because it involves claims that may be made against the Company in the future. To date, the Company has not paid any claims or been required to defend any action related to its indemnification obligations. However, the Company may record charges in the future as a result of these indemnification obligations. In accordance with the Articles of Association in force on December 31, 2022 , the Company has indemnification obligations to its officers and directors for certain events or occurrences, subject to certain limits, while they are serving at the Company’s request in such capacity. There have been no claims to date, and the Company has director and officer insurance that may enable it to recover a portion of any amounts paid for future potential claims. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2022 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 13. Related Party Transactions The Company analyzed its transactions with related parties for the years ended December 31, 2022, 2021 and 2020, and determined it had the following material transactions. Syncona On March 10, 2022, the Company entered into a purchase agreement with its majority shareholder, Syncona Portfolio Limited, a subsidiary of Syncona Limited, and certain other existing shareholders providing for the issuance and sale by the Company of $ 26.1 million of the Company’s ADSs at a price of $ 1.05 per ADS, in a registered direct offering. The offering closed on March 15, 2022. The Company received net proceeds of approximately $ 24.2 million from the offering, after deducting offering expenses payable by the Company. |
Employee Benefit Plans
Employee Benefit Plans | 12 Months Ended |
Dec. 31, 2022 | |
Retirement Benefits [Abstract] | |
Employee Benefit Plans | 14. Employee Benefit Plans In the United Kingdom, the Company makes contributions to private defined contribution pension schemes on behalf of its employees. The Company paid $ 0.6 million, $ 0.9 million and $ 0.8 million in contributions for the years ended December 31, 2022, 2021 and 2020, respectively. In the United States, the Company established a defined contribution savings plan under Section 401(k) of the Internal Revenue Code. This plan covers substantially all U.S. employees who meet minimum age and service requirements and allows participants to defer a portion of their annual compensation on a pre-tax basis. Matching contributions to the plan may be made at the discretion of the Company’s board of directors. The Company contributed $ 0.5 million, $ 0.5 million and $ 0.1 million to the plan for the years ended December 31, 2022, 2021 and 2020, respectively. In Germany, the Company has made contributions to private defined contribution pension schemes on behalf of its employees. The Company paid $ 0.3 million, $ 0.4 million and $ 0.3 million in contributions for the years ended December 31, 2022, 2021 and 2020 , respectively. |
Restructuring Charges
Restructuring Charges | 12 Months Ended |
Dec. 31, 2022 | |
Restructuring Charges [Abstract] | |
Restructuring Charges | 15. Restructuring Charges During the fourth quarter of 2022, the Company completed a financial and organizational assessment to increase efficiencies and reduce expenses. As a result of this assessment, the Company reduced its U.S. and U.K. workforce by 26 employees. The Company incurred total expenses relating to the workforce reduction of approximately $ 1.5 million, consisting of severance and termination-related costs. During the fourth quarter of 2021, the Company undertook a previous detailed strategic review of its programs and operations which allowed the Company to reduce expenses and extend its cash runway through a prioritization of its programs and an approximately 25 % reduction in workforce. Associated total expenses for the workforce reduction of $ 2.1 million were accrued as at December 31, 2021 and settled in the year ended December 31, 2022. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2022 | |
Subsequent Events [Abstract] | |
Subsequent Events | 16. Subsequent Events On February 8, 2023, the Company closed t he previously announced sale of its German subsidiary, Freeline Therapeutics GmbH, and certain intellectual property rights pertaining to the business of Freeline Therapeutics GmbH, to Ascend, for $ 25 million, subject to purchase price adjustments. At closing the Company and Ascend entered into an intellectual property deed of assignment and license and a transition services agreement (the "Transition Services Agreement"), pursuant to which Ascend will provide certain services in the area of development and manufacturing to the Company. The Company agreed to utilize, and Ascend agreed to make exclusively available to the Company, no fewer than 15 full-time employee equivalents, or FTEs (as defined in the Transition Services Agreement), per annum for a guarantee period of 18 months following the Transition Services Agreement’s effective date. The Company also agreed to pay Ascend a guaranteed minimum of approximately $ 7.9 million in respect of FTE costs during such period, $ 2.6 million of which were paid upfront. The Company completed a financial and organizational assessment to increase efficiencies and reduce operating expenses. As a result of this assessment, the Company is reducing its U.S. and U.K. workforce by nearly 30 %. The Company estimates that it will incur total expenses relating to the workforce reduction of approximately $ 1.0 to $ 1.5 million, consisting of severance and termination-related costs, and expects to record a significant portion of these charges in the first quarter of 2023. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). All intercompany accounts and transactions have been eliminated upon consolidation. |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of income and expenses during the reporting periods. Significant estimates and assumptions reflected in these consolidated financial statements include, but are not limited to, the accrual for research and development expenses, the fair value of ordinary shares, the valuation of the warrants, non-cash share-based compensation and income taxes. Estimates are periodically reviewed in light of changes in circumstances, facts and experience. Changes in estimates are recorded in the period in which they become known. Actual results could differ materially from those estimates. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid investments that have maturities of three months or less when acquired to be cash equivalents. |
Restricted Cash | Restricted Cash Restricted cash as of December 31, 2022 and 2021 consisted of collateral deposits for the office spaces leased by Freeline Therapeutics GmbH. Restricted cash is included as a component of prepaid expenses and other current assets or other non-current assets on the Company’s consolidated balance sheets, depending on whether it has been classified as short-term or long-term. |
Deferred Financing Costs | Deferred Financing Costs The Company capitalizes deferred financing costs, which primarily consist of direct, incremental legal, professional, accounting and other third-party fees relating to the Company’s financing transactions, within other non-current assets. In November 2021, the Company entered into the Open Market Sale Agreement SM with Jefferies LLC. The Company incurred deferred financing costs of $ 1.2 million , which were capitalized within other non-current assets. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments Financial instruments consist of cash and cash equivalents. Certain assets of the Company are carried at fair value under U.S. GAAP. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. Financial assets and liabilities carried at fair value are to be classified and disclosed in one of the following three levels of the fair value hierarchy, of which the first two are considered observable and the last is considered unobservable: • Level 1—Quoted prices in active markets for identical assets or liabilities. • Level 2—Observable inputs (other than Level 1 quoted prices), such as quoted prices in active markets for similar assets or liabilities, quoted prices in markets that are not active for identical or similar assets or liabilities, or other inputs that are observable or can be corroborated by observable market data. • Level 3—Unobservable inputs that are supported by little or no market activity that are significant to determining the fair value of the assets or liabilities, including pricing models, discounted cash flow methodologies and similar techniques. The hierarchy requires the use of observable market data when available and to minimize the use of unobservable inputs when determining fair value. The Company has classified cash equivalents at December 31, 2022 and 2021 as fair value on a recurring basis, as Level 1. Management believes that the carrying amounts of the Company’s consolidated financial instruments approximate fair value due to the short-term nature of those instruments. |
Concentrations of Credit Risk and Off-Balance Sheet Risk | Concentrations of Credit Risk and Off-Balance Sheet Risk Financial instruments that subject the Company to credit risk consist solely of cash and cash equivalents. While the Company is evaluating the financial institutions at which it places its cash and cash equivalents, the Company generally places its cash and cash equivalents at banks in amounts that may exceed the insurance coverage offered by the Financial Services Compensation Scheme (“FSCS”) or the Federal Deposit Insurance Corporation (“FDIC”) . The Company has no significant off-balance-sheet risk or concentration of credit risk, such as foreign exchange contracts, options contracts, or other foreign hedging arrangements. |
Property and Equipment | Property and Equipment Property and equipment are recorded at cost and depreciated using the straight-line method over the estimated useful lives of the respective assets, which are as follows: Estimated Useful Life Office equipment, computers and fixtures and fittings 3 years Laboratory equipment 5 years Leasehold improvements 10 years Shorter of useful life or remaining lease term Upon retirement or sale, the cost of assets disposed of and the related accumulated depreciation are removed from the accounts and any resulting gain or loss is included in the consolidated statement of operations and other comprehensive loss. Expenditures for repairs and maintenance are charged to expense as incurred. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets The Company evaluates assets for potential impairment when events or changes in circumstances indicate the carrying value of the assets may not be recoverable. Recoverability is measured by comparing the book values of the assets to the expected future net undiscounted cash flows that the assets are expected to generate. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the book values of the assets exceed their fair value. The Company did no t recognize impairment losses in the year ended December 31, 2022 . The Company recognized $ 0.1 million impairment losses in the year ended December 31, 2021 . The Company did no t recognize impairment losses in the year ended December 31, 2020 . |
Segment Information | Segment Information Operating segments are defined as components of an enterprise about which separate discrete information is available for evaluation by the chief operating decision maker in deciding how to allocate resources and assess performance. The Company and the Company’s chief operating decision maker, the Company’s chief executive officer, views the Company’s operations and manages its business as a single operating segment, which is the business of developing and commercializing gene therapies. The Company is a public limited company incorporated pursuant to the laws of England and Wales, has its principal executive offices in Stevenage, United Kingdom and operates as one business segment. The Company’s long-lived assets by country were as follows: December 31, December 31, 2022 2021 U.K $ 17,894 $ 6,078 Germany 13,569 6,193 U.S 587 185 $ 32,050 $ 10,233 Long-lived assets include assets classified as held for sale and exclude deferred tax assets. |
Research and Development Costs | Research and Development Costs Research and development costs are expensed as incurred. Research and development expenses consist of costs incurred in performing research and development activities, including employee related salaries, benefits, and non-cash share-based compensation, facilities and related depreciation expenses, travel, third-party license fees, and external costs of outside vendors engaged to conduct clinical trial and development activities and manufacturing costs to develop and produce clinical trial materials. |
Research Contract Costs and Accruals | Research Contract Costs and Accruals The Company has entered into various research and development-related contracts with research institutions and other companies. These agreements are generally cancelable, and related payments are recorded as research and development expenses as incurred. Accruals for research and development expenses typically include fees paid to vendors in conjunction with preclinical development activities, contract research organization (“CROs”) and investigative sites in connection with preclinical and clinical activities, and contract manufacturing organization (“CMOs”) in connection with the manufacturing of drug formulations for use in preclinical and clinical activities. The Company records accruals for estimated ongoing research costs. When evaluating the adequacy of the accrued liabilities, the Company analyzes progress of the studies or clinical trials, including the phase or completion of events, invoices received and contracted costs. Estimates are made in determining the accrued balances at the end of any reporting period. Actual results could differ from the Company’s estimates. |
Patent Costs | Patent Costs The Company expenses patent application and related legal costs as incurred and classifies such costs as general and administrative expenses in the accompanying consolidated statement of operations and comprehensive loss. |
Non-Cash Share-Based Compensation | Non-Cash Share-Based Compensation The Company recognizes compensation expense for equity awards based on the grant date fair value of the award. For equity awards that vest based on a service condition, the non-cash share-based compensation expense is recognized on a straight-line basis over the requisite service period. The Company uses the fair value of its ordinary shares to determine the fair value of Employee Shares. The Company accounts for forfeitures as they occur. For equity awards with a combination of service and performance conditions, the Company recognizes non-cash share-based compensation expense using a straight-line basis over the requisite service period when the achievement of a performance-based milestone is probable, based on the relative satisfaction of the performance condition as of the reporting date. The fair value of each share option grant is estimated on the date of grant using the Black-Scholes option pricing model. See Note 9, Non-cash Share-Based Compensation, for the Company's assumptions used in connection with option grants made during the periods covered by these financial statements. Assumptions used in the option pricing model include the following: Expected volatility . The Company lacks company-specific historical and implied volatility information for its ADSs. Therefore, the Company estimates the expected share volatility based on the historical volatility of publicly traded peer companies and expects to continue to do so until such time as it has adequate historical data regarding the volatility of its own traded share price. Expected term . The expected term of the Company's share options has been determined utilizing the “simplified” method for awards that qualify as “plain-vanilla” options. Risk-free interest rate . The risk-free interest rate is determined by reference to the U.S. Treasury yield curve in effect at the time of grant of the award for time periods that are approximately equal to the expected term of the award. Expected dividend . Expected dividend yield of zero is based on the fact that the Company has never paid cash dividends on ordinary shares and does not expect to pay any cash dividends in the foreseeable future. Fair value of ordinary shares . The ordinary shares underlying the options granted after the Company's IPO are issued at the fair market value of the Company's ADS at the date the grant is approved. |
Foreign Currency Translation | Foreign Currency Translation The Company maintains its financial statements of each entity within the group in its local currency, which is also the entity’s functional currency. Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency at rates of exchange prevailing at the balance sheet dates. Non-monetary assets and liabilities denominated in foreign currencies are translated into the functional currency at the exchange rates prevailing at the date of the transaction. Exchange gains or losses arising from foreign currency transactions are included in other expense, net in the consolidated statement of comprehensive loss. The Company recorded foreign exchange loss of approximately $ 12.6 million for the year ended December 31, 2022. The Company recorded foreign exchange gains of approximately $ 0.1 million and $ 12.3 million for the years ended December 31, 2021 and 2020 respectively. For financial reporting purposes, the financial statements of the Company have been presented in the U.S. dollar, the reporting currency. The financial statements of entities are translated from their functional currency into the reporting currency as follows: assets and liabilities are translated at the exchange rates at the balance sheet dates, revenue and expenses are translated at the average exchange rates and shareholders’ equity is translated based on historical exchange rates. Translation adjustments are not included in determining net loss but are included as a foreign exchange adjustment to other comprehensive loss, a component of shareholders’ equity. |
Income Taxes | Income Taxes The Company accounts for income taxes using the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in the consolidated financial statements or in its tax returns. Deferred tax assets and liabilities are determined on the basis of the differences between the consolidated financial statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Changes in deferred tax assets and liabilities are recorded in the provision for income taxes. The Company assesses the likelihood that deferred tax assets will be recovered in the future to the extent management believes, based upon the weight of available evidence, that it is more likely than not that all or a portion of the deferred tax assets will not be realized, a valuation allowance is established through a charge to income tax expense. Potential for recovery of deferred tax assets is evaluated by estimating the future taxable profits expected and considering prudent and feasible tax planning strategies. The Company accounts for uncertainty in income taxes by recognizing in the consolidated financial statements by applying a two-step process to determine the amount of tax benefit to be recognized. First, the tax position must be evaluated to determine the likelihood that it will be sustained upon external examination by the taxing authorities. If the tax position is deemed more-likely-than-not to be sustained, the tax position is then assessed as the amount of benefit to recognize in the consolidated financial statements. The amount of benefits that may be used is the largest amount that has a greater than 50% likelihood of being realized upon ultimate settlement. The provision for income taxes includes the effects of any resulting tax reserves, or unrecognized tax benefits, that are considered appropriate, as well as the related net interest and penalties. The Company recognizes interest and penalties related to unrecognized tax benefits on the income tax expense line in the accompanying consolidated statement of operations. As of December 31, 2022 and 2021 , no accrued interest or penalties are included on the related tax liability line in the consolidated balance sheets. |
Benefit from Research and Development Tax Credit | Benefit from Research and Development Tax Credit The Company is subject to corporate taxation in the U.K. Due to the nature of the business, the Company has generated losses since inception. The benefit from research and development (“R&D”) tax credits is recognized in the consolidated statements of operations as a component of other income, net, and represents the sum of the research and development tax credits recoverable in the U.K. The U.K. R&D tax credit is fully refundable to the Company and is not dependent on current or future taxable income. As a result, the Company has recorded the entire benefit from the U.K. research and development tax credit as a benefit which is included in net loss before income tax and accordingly, not reflected as part of the income tax provision. If, in the future, any U.K. R&D tax credits generated are needed to offset a corporate income tax liability in the U.K., that portion would be recorded as a benefit within the income tax provision and any refundable portion not dependent on taxable income would continue to be recorded within other income, net. As a company that carries out extensive research and development activities, the Company benefits from the U.K. R&D tax credit regime. The amount of benefits received depends on whether the Company qualifies for a tax credit either as a Small and Medium Enterprise (“SME”), or under the Research and Development Expenditure Credit (“RDEC”), program. The RDEC program provides a lower tax credit than the SME program. Based on criteria established by HM Revenue & Customs (“HMRC”), the Company expects a portion of expenditures being carried out in relation to its pipeline R&D, clinical trials management and manufacturing development activities to be eligible for the RDEC regime for the years ended December 31, 2022 and 2021. Such expenditures were eligible for the SME regime for the years ended December 31, 2020. Under the RDEC scheme, the Company is able to surrender some of its trading losses that arise from qualifying research and development activities for a cash rebate of up to 10.53 % (or, from April 2023, 15 %) of such qualifying research and development expenditure. Qualifying expenditures largely comprise employment costs for research staff, consumables, and utilities costs incurred as part of research projects. A portion of costs relating to research and development, clinical trials and manufacturing activities are eligible for inclusion within these tax credit cash rebate claims. Unsurrendered U.K. losses may be carried forward indefinitely to be offset against future taxable profits, subject to numerous utilization criteria and restrictions. The amount that can be offset each year is limited to £ 5.0 million plus an incremental 50 % of U.K. taxable profits. Value Added Tax (“VAT”) is broadly charged on all taxable supplies of goods and services by VAT-registered businesses. Under current rates, an amount of 20% of the value, as determined for VAT purposes, of the goods or services supplied is added to all sales invoices and is payable to HMRC. Similarly, VAT paid on purchase invoices is generally reclaimable from HMRC. |
Comprehensive Loss | Comprehensive Loss Comprehensive loss includes net loss as well as other changes in shareholders’ equity that result from transactions and economic events other than those with shareholders. |
Net Loss per Share | Net Loss per Share The Company has reported losses since inception and has computed basic net loss per share attributable to ordinary shareholders by dividing net loss attributable to ordinary shareholders by the weighted-average number of ordinary shares outstanding for the period, without consideration for potentially dilutive securities. The Company computes diluted net loss per ordinary share after giving consideration to all potentially dilutive ordinary shares, including unvested Employee Shares and warrants to purchase ordinary shares and convertible preferred shares, outstanding during the period determined using the treasury-stock and if-converted methods, except where the effect of including such securities would be antidilutive. Because the Company has reported net losses since inception, these potential ordinary shares have been anti-dilutive and basic and diluted loss per share were the same for all periods presented. |
Recently Issued Accounting Pronouncements Not Yet Adopted | Recently Adopted Accounting Pronouncement Leases Effective January 1, 2022 , the Company adopted Accounting Standards Codification (“ASC”), Topic 842, Leases (“ASC 842”), using the modified retrospective approach and utilizing the effective date as its date of initial application, for which prior periods are presented in accordance with the previous guidance in ASC 840, Leases. Adoption of this standard resulted in the recording of operating lease right-of-use assets and operating lease liabilities of $ 61.9 million and $ 64.7 million, respectively, on the Company’s balance sheets on the effective date. The adoption of the standard did no t have a material effect on the Company’s statements of operations and comprehensive loss, shareholders’ equity and cash flows. Refer to Note 12, Commitments and Contingencies, for right-of-use assets and liabilities recorded during the year ended December 31, 2022. At the inception of an arrangement, the Company determines whether the arrangement is or contains a lease based on the unique facts and circumstances present. Leases with a term greater than one year are recognized on the balance sheet as right-of-use assets, current lease liabilities and, if applicable, long-term lease liabilities. The Company has elected to utilize the practical expedient to not recognize on the balance sheet leases with terms of one year or less. Operating lease liabilities and their corresponding right-of-use assets are recorded based on the present value of lease payments over the expected remaining lease term. However, certain adjustments to the right-of-use asset may be required for items such as incentives received, initial direct costs, or prepayments. The interest rate implicit in lease contracts is typically not readily determinable. As a result, the Company utilizes its incremental borrowing rates, which are the rates incurred to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment. The Company has elected to apply the package of three expedients to all of its leases requiring (1) no reassessment of whether any expired or existing contracts are or contain leases, (2) the lease classification of any expired or existing leases, or (3) the capitalization of initial direct costs for any existing leases. All the Company’s leases are classified as operating leases. Assumptions made by the Company at the commencement date are re-evaluated upon occurrence of certain events, including a lease modification. A lease modification results in a separate contract when the modification grants the lessee an additional right of use not included in the original lease and when lease payments increase commensurate with the stand-alone price for the additional right of use. When a lease modification results in a separate contract, it is accounted for in the same manner as a new lease. Operating lease costs are recognized on a straight-line basis over the lease term, and they are categorized within research and development and general and administrative expenses in the consolidated statements of operations. The operating lease cash flows are categorized under net cash used in operating activities in the consolidated statements of cash flows. The Company subleased certain leased office spaces to third parties and recognized sublease income on a straight-line basis over the sublease term within research and development. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Schedule of Estimated Useful Lives of the Respective Assets | Property and equipment are recorded at cost and depreciated using the straight-line method over the estimated useful lives of the respective assets, which are as follows: Estimated Useful Life Office equipment, computers and fixtures and fittings 3 years Laboratory equipment 5 years Leasehold improvements 10 years Shorter of useful life or remaining lease term |
Schedule of Long-Lived Assets | The Company’s long-lived assets by country were as follows: December 31, December 31, 2022 2021 U.K $ 17,894 $ 6,078 Germany 13,569 6,193 U.S 587 185 $ 32,050 $ 10,233 |
Assets Held for Sale (Tables)
Assets Held for Sale (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Schedule of the Carrying Amounts of the Assets and Liabilities Held for Sale in the Consolidated Balance Sheet | The carrying amounts of the assets and liabilities held for sale in the consolidated balance sheet consisted of the following (in thousands): December 31, 2022 ASSETS CURRENT ASSETS: Cash and cash equivalents $ 300 Prepaid expenses and other current assets 244 Total current assets held for sale 544 NON-CURRENT ASSETS: Property and equipment, net 5,384 Operating lease right of use assets 8,182 Other non-current assets 3 Total assets held for sale $ 14,113 LIABILITIES AND SHAREHOLDERS’ EQUITY CURRENT LIABILITIES: Accounts payable $ 193 Accrued expenses and other current liabilities 1,324 Operating lease liabilities, current 914 Total current liabilities related to assets held for sale 2,431 NON-CURRENT LIABILITIES: Operating lease liabilities, non-current $ 7,906 Total liabilities related to assets held for sale $ 10,337 |
Prepaid Expenses and Other Cu_2
Prepaid Expenses and Other Current Assets (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Schedule of Prepaid Expenses and Other Current Assets | Prepaid expenses and other current assets consisted of the following (in thousands): December 31, December 31, 2022 2021 U.K. R&D tax credit $ 1,230 $ 2,211 Prepaid tax 1,373 2,070 Insurance 1,702 2,346 Prepaid manufacturing costs 456 2,002 Other current assets 1,474 2,001 $ 6,235 $ 10,630 |
Property and Equipment Net (Tab
Property and Equipment Net (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
Summary of Property and Equipment, Net | Property and equipment, net consisted of the following (in thousands): December 31, December 31, 2022 2021 Office equipment and computers $ 751 $ 1,098 Furniture & Fixtures 2,584 4,602 Laboratory equipment 3,140 10,083 Leasehold improvements 7,549 955 14,024 16,738 Less: accumulated depreciation ( 5,017 ) ( 6,832 ) $ 9,007 $ 9,906 |
Other Non-current Assets (Table
Other Non-current Assets (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Other Assets, Noncurrent Disclosure [Abstract] | |
Summary of Other Non-current Assets | Other non-current assets consisted of the following (in thousands): December 31, December 31, 2022 2021 Restricted cash $ 1,327 $ 1,400 Deferred financing costs 2,133 1,142 Deferred tax asset 533 377 Intangible assets — 8 $ 3,993 $ 2,927 |
Accrued Expenses and Other Li_2
Accrued Expenses and Other Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Expenses and Other Liabilities | Accrued expenses and other liabilities consisted of the following (in thousands): December 31, December 31, 2022 2021 Compensation and benefits costs $ 4,178 $ 4,554 Restructuring charges — 2,362 Research and development expenses 1,923 6,726 Consulting and professional services 1,215 1,083 Other liabilities 592 772 $ 7,908 $ 15,497 |
Shareholders_ Equity (Tables)
Shareholders’ Equity (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Equity [Abstract] | |
Summary of Ordinary Shares and Deferred Shares Issued | The table below reflects the number of ordinary shares and deferred shares issued and outstanding at December 31, 2022, 2021 and 2020 . The conversion of preferred and ordinary shares on an approximately 1 -for-0.159 basis and the creation of deferred shares are reflected in the years ended December 31, 2021 and 2020 only. December 31, 2022 2021 2020 Ordinary shares 65,113,575 35,854,591 35,854,945 Deferred shares of £ 0.00001 118,263 (1) 112,077 (2) 144,517,898 (3) Deferred shares of £ 0.001 — — 123,638,835 Deferred shares of £ 100,000 1 1 — Total ordinary and deferred shares 65,231,839 35,966,669 304,011,678 (1) 118,263 represents forfeiture of unvested ordinary shares of £ 0.00001 par value upon termination of employment (see Note 9). (2) 112,077 represents forfeiture of unvested ordinary shares of £ 0.00001 par value upon termination of employment (see Note 9). (3) 144,517,898 includes forfeiture of 17,804 unvested ordinary shares of £ 0.00001 par value upon termination of employment (see Note 9). |
Non-Cash Share-Based Compensa_2
Non-Cash Share-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Summary of Changes in Employee Shares | A summary of the changes in the Employee Shares from December 31, 2019 through December 31, 2022 is as follows. Number of Weighted Unvested balance as of December 31, 2019 492,514 $ 1.36 Granted 42,412 11.78 Vested ( 209,836 ) 7.10 Forfeited ( 117,780 ) 12.64 Unvested balance as of December 31, 2020 207,310 9.97 Granted — 0.00 Vested ( 65,705 ) 8.71 Forfeited ( 94,273 ) 10.36 Unvested balance as of December 31, 2021 47,332 10.82 Granted — — Vested ( 24,837 ) 8.71 Forfeited ( 6,186 ) 10.36 Unvested balance as of December 31, 2022 16,309 $ 11.33 |
Assumptions Used in Black-Scholes Option Pricing Model to Determine Fair Value of Share Options Granted to Employees and Directors | The assumptions used in the Black-Scholes option pricing model (see Note 2, Summary of Significant Accounting Policies) to determine the fair value of the share options granted to employees and directors during the years ended December 31, 2022 , 2021 and 2020 were as follows: For the Year Ended December 31, 2022 2021 2020 Expected option life (years) 6.3 6.3 6.1 Expected volatility 74.7 % 76.9 % 77.4 % Risk-free interest rate 2.2 % 1.1 % 0.4 % Expected dividend yield — — — |
Summary of Share Options | Share Options Number of Weighted Weighted Average Remaining Contractual Term (in years) Aggregate Intrinsic Value (in thousands) Outstanding as of December 31, 2019 — $ — — $ — Granted 3,760,210 14.79 — Exercised — — — Canceled or Forfeited ( 73,124 ) 15.32 — Outstanding as of December 31, 2020 3,687,086 $ 13.03 9.59 $ 9,931 Granted 4,352,281 6.87 — Exercised — — — Expired ( 145,638 ) 13.02 — Canceled or Forfeited ( 2,472,014 ) 13.20 — Outstanding as of December 31, 2021 5,421,715 9.23 8.37 — Granted 5,284,810 1.05 $ 570 Exercised — — Expired ( 298,143 ) 13.57 — Canceled or Forfeited ( 2,489,882 ) 5.74 — Outstanding as of December 31, 2022 7,918,500 4.76 8.40 — Exercisable as of December 31, 2022 2,044,228 10.98 6.48 — Vested and expected to vest as of December 31, 2022 7,918,500 $ 4.76 8.40 $ — |
Summary of Activity Related to RSUs | The following table summarizes the activity related to RSUs during the years ended December 31, 2022 , 2021 and 2020: Number of Weighted Outstanding as of December 31, 2019 — $ — Granted 2,500 17.56 Vested and settled — — Forfeited — — Outstanding as of December 31, 2020 2,500 17.56 Granted 120,375 9.64 Vested and settled — — Forfeited ( 34,125 ) 8.63 Outstanding as of December 31, 2021 88,750 $ 10.01 Granted 669,270 1.03 Vested and settled — — Exercised ( 44,688 ) 5.63 Forfeited ( 267,742 ) 3.03 Outstanding as of December 31, 2022 445,590 $ 0.98 |
Summary of Non-Cash Share-Based Compensation Expense | Non-cash share-based compensation expense recorded as research and development and general and administrative expenses is as follows (in thousands): For the Year Ended December 31, 2022 2021 2020 Research and development $ 2,127 $ 4,511 $ 2,510 General and administrative 2,950 6,212 3,694 $ 5,077 $ 10,723 $ 6,204 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Schedule of Income Tax Provision | The income tax provision for the years then ended comprised (in thousands): For the Year Ended December 31, 2022 2021 2020 Current expense: United Kingdom $ — $ — $ — Foreign 524 513 287 Total current expense: $ 524 $ 513 $ 287 Deferred benefit United Kingdom — — — Foreign ( 156 ) ( 171 ) ( 158 ) Total deferred benefit: ( 156 ) ( 171 ) ( 158 ) Total income tax expense: $ 368 $ 342 $ 129 |
Schedule of Reconciliation of Income Tax Expense | A reconciliation of income tax expense computed at the statutory U.K. income tax rate to income taxes as reflected in the consolidated financial statements is as follows (in thousands): For the Year Ended December 31, 2022 2021 2020 Income taxes at UK statutory rate of 19 % $ ( 16,806 ) $ ( 26,609 ) $ ( 18,277 ) R&D expenditure — — 5,756 Foreign rate differential 62 69 42 Change in valuation allowance 19,280 40,508 15,691 U.S. state income taxes 35 21 ( 13 ) Change in tax rates ( 4,627 ) ( 16,777 ) — Other 2,425 3,130 ( 3,070 ) $ 368 $ 342 $ 129 |
Schedule of Deferred Tax Assets and Liabilities | Significant components of the Company’s deferred tax assets and liabilities as of December 31, 2022 and 2021 consist of the following (in thousands): For the Year Ended December 31, 2022 2021 Deferred tax assets Net operating loss carryforwards $ 78,057 $ 64,527 Depreciation ( 538 ) ( 885 ) Accrued expenses 531 393 Non-cash share-based compensation 2,686 4,900 Other 168 26 Total deferred tax assets $ 80,904 $ 68,961 Valuation allowance ( 80,369 ) ( 68,584 ) Net deferred tax assets $ 535 $ 377 |
Schedule of Changes in Valuation Allowance for Deferred Tax Assets | Changes in the valuation allowance for deferred tax assets during the years ended December 31, 2022 and 2021 related primarily to the increases in net operating loss carryforwards and were as follows (in thousands): For the Year Ended December 31, 2022 2021 Valuation allowance at beginning of year $ 68,584 $ 24,450 Increases recorded to income tax provision 11,785 44,134 Valuation allowance at end of year $ 80,369 $ 68,584 |
Net Loss Per Share (Tables)
Net Loss Per Share (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Earnings Per Share [Abstract] | |
Schedule of Basic and Diluted Net Loss Per Share Attributable to Ordinary Shareholders | Basic and diluted net loss per share attributable to ordinary shareholders was calculated as follows (in thousands, except share and per share amounts): December 31, 2022 2021 2020 Numerator Net loss $ ( 88,972 ) $ ( 140,391 ) $ ( 96,322 ) Net loss attributable to ordinary shareholders—basic and diluted $ ( 88,972 ) $ ( 140,391 ) $ ( 96,322 ) Denominator Weighted-average number of ordinary shares used in net loss per share—basic and diluted 59,271,778 35,704,368 14,152,843 Net loss per share attributable to ordinary shareholders—basic and diluted $ ( 1.50 ) $ ( 3.93 ) $ ( 6.81 ) |
Schedule of Potential Ordinary Shares Excluded from Computation of Diluted Net Loss Per Share | The Company excluded the following potential ordinary shares, presented based on amounts outstanding at each period end, from the computation of diluted net loss per share attributable to ordinary shareholders for the years ended December 31, 2022, 2021 and 2020 because including them would have had an anti-dilutive effect: December 31, 2022 2021 2020 Unvested ordinary shares 16,309 47,332 207,310 Share options 7,918,500 5,421,715 3,687,086 Restricted share units 445,590 88,750 2,500 Total 8,380,399 5,557,797 3,896,896 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Summary of Lease Cost | The following table summarizes the Company’s costs included in the statements of operations related to right-of-use lease assets entered into through December 31, 2022 (in thousands): Lease Cost For the Year Ended December 31, 2022 Operating lease cost Research and development $ 11,558 General and administrative 608 Short-term lease cost 276 Sublease income ( 246 ) Total lease cost $ 12,196 |
Summary of Right of Use Lease Assets | Other Information For the Year Ended December 31, 2022 Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases $ 10,475 Right-of-use assets obtained in exchange for new operating lease liabilities $ 2,526 Weighted-average remaining lease term-operating leases 5.80 Weighted-average discount rate-operating leases 9.33 % |
Schedule of Future Minimum Lease Payments | The following table summarizes the Company’s contractual obligations as of December 31, 2022, and the effects that such obligations are expected to have on its liquidity and cash flows in future periods (in thousands): Maturity of Contractual Obligations Years Ended December 31, Operating Leases 2023 4,564 2024 3,535 2025 2,224 2026 1,992 2027 1,668 Thereafter 6,268 Total payments 20,251 Less: imputed interest ( 5,969 ) Less: foreign exchange (gain)/loss 463 Total $ 14,745 |
Nature of the Business - Additi
Nature of the Business - Additional Information (Details) $ / shares in Units, $ in Thousands | 12 Months Ended | |||||
Aug. 20, 2020 $ / shares shares | Aug. 11, 2020 USD ($) $ / shares shares | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | Nov. 11, 2022 USD ($) | |
Nature Of Business [Line Items] | ||||||
Consideration transferred from sale of subsidiary | $ 25,000 | |||||
Reverse split, description | 1-for-0.159 reverse split | |||||
Reverse split, ratio | 6.289 | 6.289 | 6.289 | |||
Net losses | $ 88,972 | $ 140,391 | $ 96,322 | |||
Accumulated deficit | 445,353 | 356,381 | ||||
Net cash used in operating and investing activities | 85,200 | |||||
Cash and cash equivalents | $ 47,279 | $ 117,662 | $ 229,974 | |||
American Depositary Shares | ||||||
Nature Of Business [Line Items] | ||||||
Proceeds from issuance of ADSs in initial public offering, net of issuance costs | $ 161,800 | |||||
American Depositary Shares | IPO | ||||||
Nature Of Business [Line Items] | ||||||
Issuance of shares, Shares | shares | 9,951,591 | |||||
Ordinary shares, price per share | $ / shares | $ 18 | |||||
American Depositary Shares | Overallotment Options to Underwriters | ||||||
Nature Of Business [Line Items] | ||||||
Issuance of shares, Shares | shares | 1,128,062 | |||||
American Depository Shares | IPO | ||||||
Nature Of Business [Line Items] | ||||||
Issuance of shares, Shares | shares | 8,823,529 | |||||
Ordinary shares, price per share | $ / shares | $ 18 | |||||
American Depository Shares | Overallotment Options to Underwriters | ||||||
Nature Of Business [Line Items] | ||||||
Issuance of shares, Shares | shares | 1,128,062 | |||||
Ordinary shares, price per share | $ / shares | $ 18 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Additional Information (Details) | 1 Months Ended | 12 Months Ended | |||
Apr. 30, 2023 | Dec. 31, 2022 USD ($) | Dec. 31, 2022 GBP (£) | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | |
Summary Of Significant Accounting Policies [Line Items] | |||||
Impairment losses | $ 0 | $ 100,000 | $ 0 | ||
Foreign currency translation adjustment | (12,623,000) | 130,000 | $ 12,341,000 | ||
Income tax, accrued interest or penalties | 0 | $ 0 | |||
Operating lease right-of-use assets | 6,014,000 | ||||
Operating lease liabilities | $ 14,745,000 | ||||
Forecast | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Cash rebate percentage on research and development | 15% | ||||
U.K | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Incremental percentage on taxable profit | 50% | 50% | |||
Maximum | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Cash rebate percentage on research and development | 10.53% | 10.53% | |||
Maximum | U.K | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Offset amount against future taxable profits | £ | £ 5,000,000 | ||||
ASU 2016-02 | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Operating lease right-of-use assets | $ 61,900,000 | ||||
Operating lease liabilities | $ 64,700,000 | ||||
Change in accounting principle, accounting standards update, adopted [true false] | true | ||||
Change in accounting principle, accounting standards update, adoption date | Jan. 01, 2022 | ||||
Change in accounting principle, accounting standards update, immaterial effect [true false] | true | ||||
Other Non-current Assets | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Deferred financing costs | $ 1,200,000 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Schedule of Estimated Useful Lives of the Respective Assets (Details) | 12 Months Ended |
Dec. 31, 2022 | |
Office Equipment, Computers and Fixtures and Fittings | |
Property Plant And Equipment [Line Items] | |
Estimated Useful Life | 3 years |
Laboratory Equipment | |
Property Plant And Equipment [Line Items] | |
Estimated Useful Life | 5 years |
Leasehold Improvements | |
Property Plant And Equipment [Line Items] | |
Estimated Useful Life | 10 years |
Property, plant and equipment, estimated useful lives | Shorter of useful life or remaining lease term |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Schedule of Long-Lived Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Revenues From External Customers And Long Lived Assets [Line Items] | ||
Long-lived assets | $ 32,050 | $ 10,233 |
U.K | ||
Revenues From External Customers And Long Lived Assets [Line Items] | ||
Long-lived assets | 17,894 | 6,078 |
Germany | ||
Revenues From External Customers And Long Lived Assets [Line Items] | ||
Long-lived assets | 13,569 | 6,193 |
U.S | ||
Revenues From External Customers And Long Lived Assets [Line Items] | ||
Long-lived assets | $ 587 | $ 185 |
Assets Held for Sale - Schedule
Assets Held for Sale - Schedule of the Carrying Amounts of the Assets and Liabilities Held for Sale in the Consolidated Balance Sheet (Details) $ in Thousands | Dec. 31, 2022 USD ($) |
CURRENT ASSETS: | |
Cash and cash equivalents | $ 300 |
Prepaid expenses and other current assets | 244 |
Total current assets held for sale | 544 |
NON-CURRENT ASSETS: | |
Property and equipment, net | 5,384 |
Operating lease right of use assets | 8,182 |
Other non-current assets | 3 |
Total assets held for sale | 14,113 |
CURRENT LIABILITIES: | |
Accounts payable | 193 |
Accrued expenses and other current liabilities | 1,324 |
Operating lease liabilities, current | 914 |
Total current liabilities related to assets held for sale | 2,431 |
NON-CURRENT LIABILITIES: | |
Operating lease liabilities, non-current | 7,906 |
Total liabilities related to assets held for sale | $ 10,337 |
Prepaid Expenses and Other Cu_3
Prepaid Expenses and Other Current Assets - Schedule of Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
U.K. R&D tax credit | $ 1,230 | $ 2,211 |
Prepaid tax | 1,373 | 2,070 |
Insurance | 1,702 | 2,346 |
Prepaid manufacturing costs | 456 | 2,002 |
Other current assets | 1,474 | 2,001 |
Prepaid expenses and other current assets | $ 6,235 | $ 10,630 |
Property and Equipment, Net - S
Property and Equipment, Net - Summary of Property and Equipment, Net (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | $ 14,024 | $ 16,738 |
Less: accumulated depreciation | (5,017) | (6,832) |
Property plant and equipment net | 9,007 | 9,906 |
Office Equipment and Computers | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | 751 | 1,098 |
Fixtures and Fittings | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | 2,584 | 4,602 |
Laboratory Equipment | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | 3,140 | 10,083 |
Leasehold Improvements | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | $ 7,549 | $ 955 |
Property and Equipment, Net - A
Property and Equipment, Net - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |||
Depreciation and amortization expense | $ 1.8 | $ 2.4 | $ 1.9 |
Other Non-current Assets - Summ
Other Non-current Assets - Summary of Other Non-current Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Other Assets, Noncurrent [Abstract] | ||
Restricted cash | $ 1,327 | $ 1,400 |
Deferred financing costs | 2,133 | 1,142 |
Deferred tax asset | 533 | 377 |
Intangible assets | 8 | |
Other Non-current assets | $ 3,993 | $ 2,927 |
Accrued Expenses and Other Li_3
Accrued Expenses and Other Liabilities - Schedule of Accrued Expenses and Other Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Payables and Accruals [Abstract] | ||
Compensation and benefits costs | $ 4,178 | $ 4,554 |
Restructuring charges | 2,362 | |
Research and development expenses | 1,923 | 6,726 |
Consulting and professional services | 1,215 | 1,083 |
Other liabilities | 592 | 772 |
Accrued expenses and other liabilities | $ 7,908 | $ 15,497 |
Shareholders' Equity - Addition
Shareholders' Equity - Additional Information (Details) | 3 Months Ended | 12 Months Ended | ||||||||||
Mar. 18, 2022 USD ($) shares | Mar. 10, 2022 USD ($) $ / shares shares | Nov. 17, 2021 USD ($) | Aug. 20, 2020 USD ($) $ / shares shares | Aug. 11, 2020 USD ($) $ / shares shares | Mar. 31, 2021 £ / shares shares | Dec. 31, 2022 USD ($) shares | Dec. 31, 2021 USD ($) shares | Dec. 31, 2020 USD ($) | Dec. 31, 2022 £ / shares | Dec. 31, 2021 £ / shares | Dec. 31, 2020 £ / shares | |
Class Of Stock [Line Items] | ||||||||||||
Ordinary shares, authorized | shares | 400,000,000 | 160,000,000 | ||||||||||
Ordinary shares, par value | £ / shares | £ 0.00001 | £ 0.00001 | £ 0.00001 | |||||||||
Common stock, voting rights | Each holder of ordinary shares is entitled to one vote per ordinary share | |||||||||||
Dividends declared or paid | $ 0 | |||||||||||
Proceeds from issuance of ordinary shares | 27,328,000 | $ 161,758,000 | ||||||||||
Stock Issued | 963,000 | |||||||||||
Prepaid expenses and other current assets | $ 6,235,000 | $ 10,630,000 | ||||||||||
Newly issued shares, nominal value per share | £ / shares | 1 | |||||||||||
Common stock, conversion basis | the different classes of shares were converted into a single class of ordinary shares | |||||||||||
Reverse split, description | 1-for-0.159 reverse split | |||||||||||
Reverse split, ratio | 6.289 | 6.289 | 6.289 | |||||||||
Deferred shares voting rights | no | |||||||||||
Deferred shares conversion rights | no conversion rights | |||||||||||
American Depository Shares | ||||||||||||
Class Of Stock [Line Items] | ||||||||||||
Proceeds from issuance of ordinary shares | $ 161,800,000 | |||||||||||
Underwriting discounts, commissions and offering expense | $ 12,500,000 | |||||||||||
American Depository Shares | IPO | ||||||||||||
Class Of Stock [Line Items] | ||||||||||||
Stock issued during period, shares | shares | 8,823,529 | |||||||||||
Price per ADS | $ / shares | $ 18 | |||||||||||
Proceeds from issuance of ordinary shares | $ 147,700,000 | |||||||||||
American Depository Shares | Overallotment Options to Underwriters | ||||||||||||
Class Of Stock [Line Items] | ||||||||||||
Stock issued during period, shares | shares | 1,128,062 | |||||||||||
Price per ADS | $ / shares | $ 18 | |||||||||||
Proceeds from issuance of ordinary shares | $ 18,900,000 | |||||||||||
American Depository Shares | Syncona Portfolio Limited | ||||||||||||
Class Of Stock [Line Items] | ||||||||||||
Stock issued during period, shares | shares | 24,857,144 | |||||||||||
Price per ADS | $ / shares | $ 1.05 | |||||||||||
Stock issued during period, value | $ 26,100,000 | |||||||||||
Proceeds from issuance of ordinary shares | $ 24,200,000 | |||||||||||
American Depository Shares | Lincoln Park Capital Fund, LLC | ||||||||||||
Class Of Stock [Line Items] | ||||||||||||
Stock issued during period, shares | shares | 954,208 | 0 | ||||||||||
Sale of stock period | 36 months | |||||||||||
Stock Issued | $ 1,000,000 | |||||||||||
Prepaid expenses and other current assets | 200,000 | |||||||||||
American Depository Shares | Lincoln Park Capital Fund, LLC | Maximum | ||||||||||||
Class Of Stock [Line Items] | ||||||||||||
Value of stock available for sale under the purchase agreement | $ 35,000,000 | |||||||||||
American Depository Shares | Jefferies LLC | Open Market Sale Agreement | ||||||||||||
Class Of Stock [Line Items] | ||||||||||||
Stock issued during period, shares | shares | 3,037,616 | |||||||||||
Proceeds from issuance of ordinary shares | $ 3,200,000 | |||||||||||
American Depository Shares | Jefferies LLC | At-the-Market Offerings | Open Market Sale Agreement | ||||||||||||
Class Of Stock [Line Items] | ||||||||||||
Maximum offering Sales proceeds from issuance of common stock | $ 75,000,000 | |||||||||||
Deferred Shares | ||||||||||||
Class Of Stock [Line Items] | ||||||||||||
Deferred shares, par value | £ / shares | 0.00001 | 0.00001 | 0.00001 | |||||||||
Deferred B Shares | ||||||||||||
Class Of Stock [Line Items] | ||||||||||||
Deferred shares, par value | £ / shares | 0.001 | 0.001 | 0.001 | |||||||||
Deferred share, nominal value | £ / shares | 0.99999 | |||||||||||
DEFERRED SHARES £100,000 PAR VALUE | ||||||||||||
Class Of Stock [Line Items] | ||||||||||||
Deferred shares, par value | £ / shares | £ 0.001 | |||||||||||
Number of deferred shares cancelled | shares | 100,000,000 | |||||||||||
Number of remaining deferred shares cancelled | shares | 23,638,835 | |||||||||||
Deferred Shares of £ 100,000 Par Value | ||||||||||||
Class Of Stock [Line Items] | ||||||||||||
Deferred shares, par value | £ / shares | £ 100,000 | £ 100,000 | £ 100,000 | |||||||||
Deferred share, nominal value | £ / shares | £ 100,000 | |||||||||||
Deferred Shares of £0.00001 Par Value | ||||||||||||
Class Of Stock [Line Items] | ||||||||||||
Deferred shares, par value | £ / shares | £ 0.00001 | |||||||||||
Number of deferred shares cancelled | shares | 144,500,094 |
Shareholders' Equity - Summary
Shareholders' Equity - Summary of Ordinary Shares and Deferred Shares Issued (Details) - shares | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Class Of Stock [Line Items] | |||
Ordinary shares, issued | 65,113,575 | 35,854,591 | |
Total ordinary and deferred shares | 65,231,839 | 35,966,669 | 304,011,678 |
Ordinary shares | |||
Class Of Stock [Line Items] | |||
Ordinary shares, issued | 65,113,575 | 35,854,591 | 35,854,945 |
Deferred Shares | |||
Class Of Stock [Line Items] | |||
Deferred shares | 118,263 | 112,077 | 144,517,898 |
Deferred B Shares | |||
Class Of Stock [Line Items] | |||
Deferred shares | 123,638,835 | ||
Deferred Shares of £ 100,000 Par Value | |||
Class Of Stock [Line Items] | |||
Deferred shares | 1 | 1 |
Shareholders' Equity - Summar_2
Shareholders' Equity - Summary of Ordinary Shares and Deferred Shares Issued (Parenthetical) (Details) - £ / shares | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Class Of Stock [Line Items] | |||
Ordinary shares, par value | £ 0.00001 | £ 0.00001 | £ 0.00001 |
Ordinary shares | |||
Class Of Stock [Line Items] | |||
Forfeiture of ordinary shares | 6,186 | 94,273 | 17,804 |
Ordinary shares, par value | £ 0.00001 | £ 0.00001 | £ 0.00001 |
Deferred Shares | |||
Class Of Stock [Line Items] | |||
Deferred shares, par value | £ 0.00001 | £ 0.00001 | £ 0.00001 |
Deferred shares, issued | 118,263 | 112,077 | 144,517,898 |
Deferred B Shares | |||
Class Of Stock [Line Items] | |||
Deferred shares, par value | £ 0.001 | £ 0.001 | £ 0.001 |
Deferred shares, issued | 123,638,835 | ||
Deferred Shares of £ 100,000 Par Value | |||
Class Of Stock [Line Items] | |||
Deferred shares, par value | £ 100,000 | £ 100,000 | £ 100,000 |
Deferred shares, issued | 1 | 1 |
Non-Cash Share-Based Compensa_3
Non-Cash Share-Based Compensation - Additional Information (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||||||||
Jan. 01, 2022 | Jan. 01, 2021 | Jul. 31, 2020 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | May 30, 2022 | Sep. 27, 2021 | Jul. 30, 2020 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||
Unrecognized compensation cost related to unvested employee shares outstanding | $ 0.2 | ||||||||
Weighted-average period of unvested employee shares outstanding | 1 year 6 months | ||||||||
Share Options | |||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||
Unrecognized compensation cost related to unvested employee shares outstanding | $ 9.4 | ||||||||
Weighted-average period of unvested employee shares outstanding | 2 years 4 months 24 days | ||||||||
Weighted average grant-date fair value of share options granted | $ 0.70 | $ 4.49 | $ 9.87 | ||||||
RSUs | |||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||
General vesting period | 1 year | ||||||||
2020 Employee Share Purchase Plan | |||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||
Percentage of ordinary shares subject to automatic increase in outstanding ordinary shares on each year | 1% | ||||||||
Terms of share option plan | The ESPP provides for an annual increase beginning on January 1, 2022 in an amount equal to the least of (i) 347,447 ordinary shares, (ii) 1% of the total number of ordinary shares outstanding on December 31st of the prior calendar year or (iii) such fewer number of ordinary shares as the board of directors may designate prior to the applicable January 1st date. | ||||||||
Number of ordinary shares subject to automatic increase in outstanding ordinary shares on each year | 347,447 | 347,447 | |||||||
Ordinary shares reserved for issuance | 347,447 | 263,586 | |||||||
Purchase price of ordinary shares, percentage of fair market value | 85% | ||||||||
Percentage of employee's compensation eligible | 15% | ||||||||
Number of shares purchased | 372,139 | ||||||||
2020 Plan | |||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||
Maximum number of equity awards authorized | 5,898,625 | ||||||||
Term of ordinary shares subject to automatic increase in outstanding ordinary shares on each year | 10 years | ||||||||
Percentage of ordinary shares subject to automatic increase in outstanding ordinary shares on each year | 4% | ||||||||
Terms of share option plan | Additionally, the number of ordinary shares reserved for issuance under the 2020 Plan automatically increases on January 1st of each year, for a period of not more than ten years, by an amount equal to the lesser of (i) 4% of the total number of ordinary shares outstanding on December 31st of the prior calendar year or (ii) such fewer number of ordinary shares as the board of directors may designate prior to the applicable January 1st date. | ||||||||
Number of ordinary shares subject to automatic increase in outstanding ordinary shares on each year | 1,434,184 | 1,434,198 | |||||||
Percentage of number of ordinary shares outstanding | 4% | 4% | |||||||
Service based options, vesting period | 4 years | ||||||||
Vesting percentage | 25% | ||||||||
General vesting period | 3 years | ||||||||
2020 Plan | Ordinary shares | |||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||
Maximum number of equity awards authorized | 3,474,469 | 2,424,156 | |||||||
Inducement Plan | |||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||
Maximum number of equity awards authorized | 2,000,000 | 3,400,000 |
Non-Cash Share-Based Compensa_4
Non-Cash Share-Based Compensation - Summary of Changes in Employee Shares (Details) - Performance and Service Based - $ / shares | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Number of Shares, Unvested balance | 47,332 | 207,310 | 492,514 |
Number of Shares, Granted | 42,412 | ||
Number of Shares, Vested | (24,837) | (65,705) | (209,836) |
Number of Shares, Forfeited | (6,186) | (94,273) | (117,780) |
Number of Shares, Unvested balance | 16,309 | 47,332 | 207,310 |
Weighted Average Grant Date Fair Value, Unvested balance | $ 10.82 | $ 9.97 | $ 1.36 |
Weighted Average Grant Date Fair Value, Granted | 0 | 11.78 | |
Weighted Average Grant Date Fair Value, Vested | 8.71 | 8.71 | 7.10 |
Weighted Average Grant Date Fair Value, Forfeited | 10.36 | 10.36 | 12.64 |
Weighted Average Grant Date Fair Value, Unvested balance | $ 11.33 | $ 10.82 | $ 9.97 |
Non-Cash Share-Based Compensa_5
Non-Cash Share-Based Compensation - Assumptions Used in Black-Scholes Option Pricing Model to Determine Fair Value of Share Options Granted to Employees and Directors (Details) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Share-Based Payment Arrangement [Abstract] | |||
Expected option life (years) | 6 years 3 months 18 days | 6 years 3 months 18 days | 6 years 1 month 6 days |
Expected volatility | 74.70% | 76.90% | 77.40% |
Risk-free interest rate | 2.20% | 1.10% | 0.40% |
Non-Cash Share-Based Compensa_6
Non-Cash Share-Based Compensation - Summary of Share Options (Details) - Share Options - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Number of Shares, Outstanding beginning balance | 5,421,715 | 3,687,086 | |
Number of Shares, Granted | 5,284,810 | 4,352,281 | 3,760,210 |
Number of Shares, Expired | (298,143) | (145,638) | |
Number of Shares, Canceled or Forfeited | (2,489,882) | (2,472,014) | (73,124) |
Number of Shares, Outstanding ending balance | 7,918,500 | 5,421,715 | 3,687,086 |
Number of Shares, Exercisable as of December 31, 2022 | 2,044,228 | ||
Number of Shares, Vested and expected to vest as of December 31, 2022 | 7,918,500 | ||
Weighted Average Exercise Price, Outstanding beginning balance | $ 9.23 | $ 13.03 | |
Weighted Average Exercise Price, Granted | 1.05 | 6.87 | $ 14.79 |
Weighted Average Exercise Price, Expired | 13.57 | 13.02 | |
Weighted Average Exercise Price, Canceled or Forfeited | 5.74 | 13.20 | 15.32 |
Weighted Average Exercise Price, Outstanding ending balance | 4.76 | $ 9.23 | $ 13.03 |
Weighted Average Exercise Price, Exercisable as of December 31, 2022 | 10.98 | ||
Weighted Average Exercise Price, Vested and expected to vest as of December 31, 2022 | $ 4.76 | ||
Weighted Average Remaining Contractual Term (in years), Outstanding | 8 years 4 months 24 days | 8 years 4 months 13 days | 9 years 7 months 2 days |
Weighted Average Remaining Contractual Term (in years), Exercisable as of December 31, 2022 | 6 years 5 months 23 days | ||
Weighted Average Remaining Contractual Term (in years), Vested and expected to vest as of December 31, 2022 | 8 years 4 months 24 days | ||
Aggregate Intrinsic Value, Outstanding | $ 570 | $ 9,931 |
Non-Cash Share-Based Compensa_7
Non-Cash Share-Based Compensation - Summary of Activity Related to RSUs (Details) - RSUs - $ / shares | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Number of Shares, Unvested balance | 88,750 | 2,500 | |
Number of RSUs, Granted | 669,270 | 120,375 | 2,500 |
Number of Shares, Exercised | (44,688) | ||
Number of RSUs, Forfeited | (267,742) | (34,125) | |
Number of Shares, Unvested balance | 445,590 | 88,750 | 2,500 |
Weighted Average Grant Date Fair Value, Unvested balance | $ 10.01 | $ 17.56 | |
Weighted Average Grant Date Fair Value, Granted | 1.03 | 9.64 | $ 17.56 |
Weighted Average Grant Date Fair Value, Exercised | 5.63 | ||
Weighted Average Grant Date Fair Value, Forfeited | 3.03 | 8.63 | |
Weighted Average Grant Date Fair Value, Unvested balance | $ 0.98 | $ 10.01 | $ 17.56 |
Non-Cash Share-Based Compensa_8
Non-Cash Share-Based Compensation - Summary of Non-Cash Share-Based Compensation Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | |||
Non-cash share-based compensation expense | $ 5,077 | $ 10,723 | $ 6,204 |
Research and Development | |||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | |||
Non-cash share-based compensation expense | 2,127 | 4,511 | 2,510 |
General and Administrative | |||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | |||
Non-cash share-based compensation expense | $ 2,950 | $ 6,212 | $ 3,694 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Jun. 30, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Income Tax [Line Items] | ||||
Net loss (income) realized before calculation of income tax, domestic | $ 89,700,000 | $ 141,200,000 | $ 96,900,000 | |
Net loss (income) realized before calculation of income tax, foreign | (1,200,000) | (1,000,000) | $ (700,000) | |
Net operating loss carryforwards | 310,800,000 | 258,100,000 | ||
Uncertain tax positions | 0 | 0 | ||
Accrued interest or penalties related to uncertain tax positions | $ 0 | $ 0 | ||
Minimum | ||||
Income Tax [Line Items] | ||||
Corporate income tax rate reconciliation, change in enacted tax rate, percentage | 19% | |||
Maximum | ||||
Income Tax [Line Items] | ||||
Corporate income tax rate reconciliation, change in enacted tax rate, percentage | 25% |
Income Taxes - Schedule of Inco
Income Taxes - Schedule of Income Tax Provision (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Current expense: | |||
Foreign | $ 524 | $ 513 | $ 287 |
Total current expense: | 524 | 513 | 287 |
Deferred benefit | |||
Foreign | (156) | (171) | (158) |
Total deferred benefit: | (156) | (171) | (158) |
Total income tax expense: | $ 368 | $ 342 | $ 129 |
Income Taxes - Schedule of Reco
Income Taxes - Schedule of Reconciliation of Income Tax Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |||
Income taxes at UK statutory rate of 19% | $ (16,806) | $ (26,609) | $ (18,277) |
R&D expenditure | 5,756 | ||
Foreign rate differential | 62 | 69 | 42 |
Change in valuation allowance | 19,280 | 40,508 | 15,691 |
U.S. state income taxes | 35 | 21 | (13) |
Change in tax rates | (4,627) | (16,777) | |
Other | 2,425 | 3,130 | (3,070) |
Total income tax expense: | $ 368 | $ 342 | $ 129 |
Income Taxes - Schedule of Re_2
Income Taxes - Schedule of Reconciliation of Income Tax Expense (Parenthetical) (Details) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |||
Statutory income tax rate, percent | 19% | 19% | 19% |
Income Taxes - Schedule of Defe
Income Taxes - Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Deferred tax assets | |||
Net operating loss carryforwards | $ 78,057 | $ 64,527 | |
Depreciation | (538) | (885) | |
Accrued expenses | 531 | 393 | |
Non-cash share-based compensation | 2,686 | 4,900 | |
Other | 168 | 26 | |
Total deferred tax assets | 80,904 | 68,961 | |
Valuation allowance | (80,369) | (68,584) | $ (24,450) |
Net deferred tax assets | $ 535 | $ 377 |
Income Taxes - Schedule of Chan
Income Taxes - Schedule of Changes in Valuation Allowance for Deferred Tax Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | ||
Valuation allowance at beginning of year | $ 68,584 | $ 24,450 |
Increases recorded to income tax provision | 11,785 | 44,134 |
Valuation allowance at end of year | $ 80,369 | $ 68,584 |
Net Loss Per Share - Schedule o
Net Loss Per Share - Schedule of Basic and Diluted Net Loss Per Share Attributable to Ordinary Shareholders (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Numerator | |||
Net loss | $ (88,972) | $ (140,391) | $ (96,322) |
Net loss attributable to ordinary shareholders—basic and diluted | $ (88,972) | $ (140,391) | $ (96,322) |
Denominator | |||
Weighted average ordinary shares outstanding - basic | 59,271,778 | 35,704,368 | 14,152,843 |
Weighted average ordinary shares outstanding - diluted | 59,271,778 | 35,704,368 | 14,152,843 |
Net loss per share attributable to ordinary shareholders - basic | $ (1.50) | $ (3.93) | $ (6.81) |
Net loss per share attributable to ordinary shareholders - diluted | $ (1.50) | $ (3.93) | $ (6.81) |
Net Loss Per Share - Schedule_2
Net Loss Per Share - Schedule of Potential Ordinary Shares Excluded from Computation of Diluted Net Loss Per Share (Details) - shares | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | |||
Ordinary shares excluded from computation of diluted net loss per share | 8,380,399 | 5,557,797 | 3,896,896 |
Unvested Ordinary Shares | |||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | |||
Ordinary shares excluded from computation of diluted net loss per share | 16,309 | 47,332 | 207,310 |
Share Options | |||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | |||
Ordinary shares excluded from computation of diluted net loss per share | 7,918,500 | 5,421,715 | 3,687,086 |
RSUs | |||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | |||
Ordinary shares excluded from computation of diluted net loss per share | 445,590 | 88,750 | 2,500 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Commitments And Contingencies [Line Items] | |||
Loss contingencies, loss in period | $ 0 | ||
Operating lease right-of-use assets | 6,014,000 | ||
Operating lease liabilities | 14,745,000 | ||
Gain on lease termination | (5,216,000) | ||
Rent expense | $ 15,400,000 | $ 4,200,000 | |
Brammer Bio MA, LLC | |||
Commitments And Contingencies [Line Items] | |||
Annual capacity access fee | 10,000,000 | ||
Operating Lease Agreements | |||
Commitments And Contingencies [Line Items] | |||
Operating lease right-of-use assets | 35,600,000 | ||
Operating lease liabilities | 40,300,000 | ||
Gain on lease termination | (5,300,000) | ||
Manufacturing Agreement | |||
Commitments And Contingencies [Line Items] | |||
Annual minimum purchase commitment | $ 6,000,000 |
Commitments and Contingencies_2
Commitments and Contingencies - Summary of Lease Cost (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
Lease Cost | |
Short-term lease cost | $ 276 |
Sublease income | (246) |
Total lease cost | 12,196 |
Research and Development | |
Lease Cost | |
Operating lease cost | 11,558 |
General and Administrative | |
Lease Cost | |
Operating lease cost | $ 608 |
Commitments and Contingencies_3
Commitments and Contingencies - Summary of Right of Use Lease Assets (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
Other Information | |
Operating cash flows from operating leases | $ 10,475 |
Right-of-use assets obtained in exchange for new operating lease liabilities | $ 2,526 |
Weighted-average remaining lease term-operating leases | 5 years 9 months 18 days |
Weighted-average discount rate-operating leases | 9.33% |
Commitments and Contingencies_4
Commitments and Contingencies - Schedule of Future Minimum Lease Payments (Details) $ in Thousands | Dec. 31, 2022 USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2023 | $ 4,564 |
2024 | 3,535 |
2025 | 2,224 |
2026 | 1,992 |
2027 | 1,668 |
Thereafter | 6,268 |
Total payments | 20,251 |
Less: imputed interest | (5,969) |
Less: foreign exchange (gain)/loss | 463 |
Total | $ 14,745 |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Mar. 10, 2022 | Dec. 31, 2022 | Dec. 31, 2020 | |
Related Party Transaction [Line Items] | |||
Proceeds from issuance of ordinary shares | $ 27,328 | $ 161,758 | |
American Depositary Shares | Syncona Portfolio Limited | |||
Related Party Transaction [Line Items] | |||
Stock issued during period, value | $ 26,100 | ||
Price per ADS | $ 1.05 | ||
Proceeds from issuance of ordinary shares | $ 24,200 |
Employee Benefit Plans - Additi
Employee Benefit Plans - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
U.K | |||
Defined Contribution Plan Disclosure [Line Items] | |||
Defined contribution plan, amount paid | $ 0.6 | $ 0.9 | $ 0.8 |
Germany | |||
Defined Contribution Plan Disclosure [Line Items] | |||
Defined contribution plan, amount paid | 0.3 | 0.4 | 0.3 |
U.S | |||
Defined Contribution Plan Disclosure [Line Items] | |||
Defined contribution plan, employer discretionary contribution to 401(k) plan | $ 0.5 | $ 0.5 | $ 0.1 |
Restructuring Charges - Additio
Restructuring Charges - Additional Information (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2022 USD ($) Employees | Dec. 31, 2021 USD ($) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | |
Restructuring Cost and Reserve [Line Items] | ||||
Reduction in workforce | Employees | 26 | |||
Restructuring charges, accrued | $ 2,100 | $ 1,588 | $ 2,381 | |
Reduction in workforce, percentage | 25% | |||
Severance and Termination | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges, estimates cost | $ 1,500 | $ 1,500 |
Subsequent Events - Additional
Subsequent Events - Additional Information (Details) | 3 Months Ended | 12 Months Ended | ||||
Feb. 08, 2023 USD ($) Employees | Mar. 31, 2023 USD ($) | Dec. 31, 2021 USD ($) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Nov. 11, 2022 USD ($) | |
Subsequent Event [Line Items] | ||||||
Consideration transferred from sale of subsidiary | $ 25,000,000 | |||||
FTE costs | $ 2,100,000 | $ 1,588,000 | $ 2,381,000 | |||
Reduction in workforce, percentage | 25% | |||||
Severance and Termination | ||||||
Subsequent Event [Line Items] | ||||||
Restructuring charges, estimates cost | $ 1,500,000 | |||||
Subsequent Events | ||||||
Subsequent Event [Line Items] | ||||||
Reduction in workforce, percentage | 30% | |||||
Subsequent Events | Minimum | Severance and Termination | ||||||
Subsequent Event [Line Items] | ||||||
Restructuring charges, estimates cost | $ 1,000,000 | |||||
Subsequent Events | Maximum | Severance and Termination | ||||||
Subsequent Event [Line Items] | ||||||
Restructuring charges, estimates cost | $ 1,500,000 | |||||
Subsequent Events | Freeline Therapeutics GmbH | ||||||
Subsequent Event [Line Items] | ||||||
Consideration transferred from sale of subsidiary | $ 25,000,000 | |||||
Number of full-time employee equivalents | Employees | 15 | |||||
Upfront payment | $ 2,600,000 | |||||
Subsequent Events | Freeline Therapeutics GmbH | Minimum | ||||||
Subsequent Event [Line Items] | ||||||
FTE costs | $ 7,900,000 |