UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
 
FORM 6-K
 

REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
 
For the Month of August 2021
 
Commission File Number: 001-39992
 


Immunocore Holdings plc
(Translation of registrant’s name into English)
 


92 Park Drive
Milton Park
Abingdon, Oxfordshire OX14 4RY
United Kingdom
 (Address of principal executive office)
 

 
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:
☒  Form 20-F    ☐  Form 40-F
 
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):  ☐
 
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):  ☐
 


INCORPORATION BY REFERENCE
 
Exhibits 99.1 and 99.2 to this Report on Form 6-K (the “Report”) shall be deemed to be incorporated by reference into the registration statement on Form S-8 (File No. 333-226457) of Immunocore Holdings plc (the “Company”) and to be a part thereof from the date on which this Report is furnished, to the extent not superseded by documents or reports subsequently filed or furnished.
 
Exhibit 99.3 to this Report is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act.

CAUTIONARY NOTE ON FORWARD-LOOKING STATEMENTS

This Report contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as “may,” “will,” “expect,” “plan,” “anticipate,” “estimate,” “intend” and similar expressions (as well as other words or expressions referencing future events, conditions or circumstances) are intended to identify forward-looking statements. These forward-looking statements are based on the Company’s expectations and assumptions as of the date of this Report. Each of these forward-looking statements involves risks and uncertainties. Actual results may differ materially from those expressed or implied by these forward-looking statements. For a discussion of risk factors that may cause the Company’s actual results to differ from those expressed or implied in the forward-looking statements in this Report, you should refer to the Company’s filings with the U.S. Securities and Exchange Commission, including the “Risk Factors” sections contained therein. Except as required by law, the Company undertakes no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. You should, therefore, not rely on these forward-looking statements as representing the Company’s views as of any date subsequent to the date of this Report.


EXHIBIT INDEX

Exhibit
No.
 
Description
     
 
Unaudited Condensed Consolidated Interim Financial Statements for the Three and Six Months Ended June 30, 2021.
     
 
Management’s Discussion and Analysis of Financial Condition and Results of Operations for the Three and Six Months Ended June 30, 2021.
     
 
Press Release dated August 11, 2021.


SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

   
IMMUNOCORE HOLDINGS PLC
       
Date:
August 11, 2021
By:
/s/ Bahija Jallal, Ph.D.
     
Name
Bahija Jallal, Ph.D.
     
Title:
Chief Executive Officer
 



Exhibit 99.1

INDEX TO UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

 
Page
   
Unaudited Condensed Consolidated Statements of Loss and Other Comprehensive Income for the Three and Six Months Ended June 30, 2021 and 2020
2
Unaudited Condensed Consolidated Statements of Financial Position as at June 30, 2021 and December 31, 2020
3
Unaudited Condensed Consolidated Statements of Changes in Equity for the Three and Six Months Ended June 30, 2021 and 2020
4
Unaudited Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2021 and 2020
5
Unaudited Condensed Consolidated Notes to the Financial Statements
6

1

Immunocore Holdings plc
Unaudited Condensed Consolidated Interim Financial Statements

Unaudited Condensed Consolidated Statements of Loss and Other Comprehensive Income

         
Three months ended
June 30,
   
Six months ended
June 30,
 
   
​Notes
   
2021
£’000
   
2020
£’000
   
2021
£’000
   
2020
£’000
 
Revenue
   
3
     
5,733
     
7,787
     
14,003
     
16,042
 
Total revenue
           
5,733
     
7,787
     
14,003
     
16,042
 
                                         
Net other operating income / (expense)
           
40
     
346
     
(42
)
   
356
 
Research and development costs
           
(16,471
)
   
(16,378
)
   
(36,356
)
   
(37,157
)
Administrative expenses
           
(23,801
)
   
(12,250
)
   
(43,985
)
   
(21,855
)
Operating loss
           
(34,499
)
   
(20,495
)
   
(66,380
)
   
(42,614
)
                                         
Finance income
   
4
     
12
     
222
     
34
     
1,605
 
Finance costs
   
5
     
(1,288
)
   
(635
)
   
(3,148
)
   
(1,702
)
Non-operating expense
           
(1,276
)
   
(413
)
   
(3,114
)
   
(97
)
                                         
Loss before taxation
           
(35,775
)
   
(20,908
)
   
(69,494
)
   
(42,711
)
Income tax credit
   
6
     
2,813
     
3,691
     
7,494
     
6,855
 
Loss for the period
           
(32,962
)
   
(17,217
)
   
(62,000
)
   
(35,856
)
                                         
Other comprehensive income
                                       
Other comprehensive income that are or may be reclassified to profit or loss in subsequent periods:
                                       
Exchange differences on translation of foreign operations
           
(38
)
   
(45
)
   
(130
)
   
322
 
Total other comprehensive (loss) / income for the period
           
(38
)
   
(45
)
   
(130
)
   
322
 
                                         
Total comprehensive loss for the period
           
(33,000
)
   
(17,262
)
   
(62,130
)
   
(35,534
)
Basic and diluted loss per share - £
   
7
     
(0.75
)
   
(0.63
)
   
(1.51
)
   
(1.39
)

The accompanying notes form part of these unaudited condensed consolidated interim financial statements.

2

Immunocore Holdings plc
Unaudited Condensed Consolidated Interim Financial Statements

Unaudited Condensed Consolidated Statements of Financial Position as at

   
Notes
   
June 30,
2021
£’000
   
December 31,
2020
£’000
 
Non-current assets
                 
Property, plant and equipment
   
8
     
10,988
     
13,754
 
Right of use assets
           
22,391
     
23,093
 
Investment in sub-lease
           
470
     
776
 
Other non-current financial assets
           
5,476
     
4,410
 
Deferred tax asset
           
2,192
     
2,230
 
Total non-current assets
           
41,517
     
44,263
 
Current assets
                       
Trade and other receivables
   
9
     
12,198
     
10,280
 
Tax receivable
           
20,428
     
12,935
 
Cash and cash equivalents
           
278,870
     
129,716
 
Total current assets
           
311,496
     
152,931
 
Total assets
           
353,013
     
197,194
 
Equity
                       
Share capital
   
11
     
88
     
64
 
Share premium
   
11
     
211,286
     
-
 
Foreign currency translation reserve
   
11
     
33
     
163
 
Other reserves
   
11
     
386,167
     
386,167
 
Share-based payment reserve
   
11, 12
     
36,434
     
18,821
 
Accumulated deficit
           
(411,869
)
   
(349,869
)
Total equity
           
222,139
     
55,346
 
Non-current liabilities
                       
Interest-bearing loans and borrowings
   
10
     
36,135
     
36,654
 
Deferred liabilities
           
14,953
     
24,868
 
Lease liabilities
           
24,923
     
25,190
 
Provisions
           
175
     
138
 
Total non-current liabilities
           
76,186
     
86,850
 
Current liabilities
                       
Interest-bearing loans and borrowings
   
10
     
546
      -  
Trade and other payables
   
13
     
27,027
     
25,728
 
Deferred liabilities
           
25,395
     
27,118
 
Lease liabilities
           
1,605
     
2,043
 
Provisions
           
115
     
109
 
Total current liabilities
           
54,688
     
54,998
 
Total liabilities
           
130,874
     
141,848
 
Total equity and liabilities
           
353,013
     
197,194
 

The accompanying notes form part of these unaudited condensed consolidated interim financial statements.

3

Immunocore Holdings plc
Unaudited Condensed Consolidated Interim Financial Statements

Unaudited Condensed Consolidated Statements of Changes in Equity

   
Notes
   
Share
capital
£’000
   
Share
premium
£’000
   
Foreign
currency
translation
reserve
£’000
   
Share-
based
payment
reserve
£’000
   
Other
reserve
£’000
   
Accumulated
deficit
£’000
   
Total
equity
£’000
 
At January 1, 2021 - adjusted
         
64
     
-
     
163
     
18,821
     
386,167
     
(349,869
)
   
55,346
 
Loss for the period
         
-
     
-
     
-
     
-
      -      
(62,000
)
   
(62,000
)
Other comprehensive loss
         
-
     
-
     
(130
)
   
-
      -      
-
     
(130
)
Total comprehensive loss for the period
         
-
     
-
     
(130
)
   
-
     
-
     
(62,000
)
   
(62,130
)
Issue of share capital
 
11
     
24
     
210,961
     
-
     
-
     
-
     
-
     
210,985
 
Equity-settled share-based payment transactions
 
11, 12
     
-
     
325
     
-
     
17,613
     
-
     
-
     
17,938
 
At June 30, 2021
         
88
     
211,286
     
33
     
36,434
     
386,167
     
(411,869
)
   
222,139
 
                                                               
At January 1, 2020 - adjusted
         
49
     
-
     
(32
)
   
10,659
     
283,201
     
(279,106
)
   
14,771
 
Loss for the period
         
-
      -      
-
     
-
     
-
   
(35,856)​
     
(35,856
)
Other comprehensive income
         
-
     
-
     
322
     
-
     
-
     
-
     
322
 
Total comprehensive income / (loss) for the period
         
-
     
-
     
322
     
-
     
-
     
(35,856
)
   
(35,534
)
Conversion of interest-bearing loan
         
-
     
-
     
-
     
-
     
-
     
(510
)
   
(510
)
Derecognition of derivative liability
         
-
     
-
     
-
     
-
     
-
     
3,840
     
3,840
 
Issue of share capital
 
11
     
6
             
-
     
-
     
47,135
     
-
     
47,141
 
Equity-settled share-based payment transactions
 
11, 12
     
-
     
-
     
-
     
3,392
     
-
     
-
     
3,392
 
At June 30, 2020
         
55
     
-
     
290
     
14,051
     
330,336
     
(311,632
)
   
33,100
 

The accompanying notes form part of these unaudited condensed consolidated interim financial statements.

4

Immunocore Holdings plc
Unaudited Condensed Consolidated Interim Financial Statements

Unaudited Condensed Consolidated Statements of Cash Flows

   
Six months ended
June 30,
 
   
2021
£’000
   
2020
£’000
 
Cash flows from operating activities
           
Loss for the period
   
(62,000
)
   
(35,856
)
Adjustments for:
               
Depreciation of property, plant and equipment
   
2,858
     
3,259
 
Depreciation of right of use assets
   
723
     
1,242
 
Loss on disposal of property, plant and equipment
   
182
     
23
 
Net finance costs
   
3,114
     
97
 
Foreign exchange (gain) / loss
   
(616
)
   
416
 
Equity settled share-based payment expenses
   
17,938
     
3,392
 
Income tax credit
   
(7,494
)
   
(6,855
)
Working capital adjustments:
               
Increase in trade and other receivables
   
(2,984
)
   
(1,834
)
Increase / (decrease) in trade and other payables
   
1,299
     
(9,942
)
Movement in provisions and other charges
   
43
     
(62
)
Decrease in deferred liabilities
   
(11,638
)
   
(13,160
)
Cash used in operations
   
(58,575
)
   
(59,280
)
Net income tax credit received
   
-
     
18,635
 
Net cash used in operating activities
   
(58,575
)
   
(40,645
)
Cash flows from investing activities
               
Bank interest received on cash and cash equivalents
   
15
     
258
 
Proceeds from sale of property, plant and equipment
   
64
     
15
 
Purchase of property, plant and equipment
   
(356
)
   
(2,073
)
Proceeds from investment in sub-leases
   
321
     
116
 
Net cash flows used in investing activities
   
44
     
(1,684
)
Cash flows from financing activities
               
Proceeds from exercise of share options
   
-
     
45
 
Gross proceeds from issue of share capital
   
226,528
     
27,288
 
Costs from issue of share capital
   
(15,543
)
   
(58
)
Interest paid on non-current interest-bearing loan
   
(1,623
)
   
-
 
Repayment of lease liabilities
   
(1,601
)
   
(2,221
)
Net cash flows from financing activities
   
207,761
     
25,054
 
Increase/(decrease) in cash and cash equivalents
   
149,230
     
(17,275
)
Net foreign exchange difference on cash held
   
(76
)
   
118
 
Cash and cash equivalents at beginning of the period
   
129,716
     
73,966
 
Cash and cash equivalents at end of the period
   
278,870
     
56,809
 

The accompanying notes form part of these unaudited condensed consolidated interim financial statements.

5

Immunocore Holdings plc
Unaudited Condensed Consolidated Interim Financial Statements

Notes to the Financial Statements

1. Organization and nature of business

General information

Immunocore Holdings plc (the “Company”) is a public limited company incorporated in England and Wales and has the following wholly owned subsidiaries, Immunocore Limited, Immunocore LLC, Immunocore Commercial LLC, Immunocore Ireland Limited and Immunocore Nominees Limited (collectively referred to as the “Group”).

On February 9, 2021, the Company completed its initial public offering (“IPO”) of 11,426,280 American Depositary Shares (“ADSs”) representing 11,426,280 ordinary shares with nominal value of £0.002 per ordinary share for aggregate gross proceeds of $297,083,000.  The Company’s ADSs began trading on the Nasdaq Global Select Market under the ticker symbol “IMCR” on February 5, 2021.

In addition to the ADSs sold in the IPO, the Company completed the concurrent sale of an additional 576,923 ADSs at the initial offering price of $26.00 per ADS, for gross proceeds of approximately $15.0 million, in a private placement to the Bill & Melinda Gates Foundation (“Gates Foundation”).

Prior to completion of the IPO, Immunocore Holdings Limited was incorporated in England and Wales on January 7, 2021.  Following a subsequent corporate reorganization, Immunocore Holdings Limited became the ultimate parent company for the Group and was re-registered as a public limited company with the name Immunocore Holdings plc, the registrant. The corporate reorganization has been accounted for as a business combination under common control and therefore, Immunocore Holdings plc is a continuation of Immunocore Limited and its subsidiaries.  The corporate reorganization has been given retrospective effect in these financial statements and such financial statements represent the financial statements of Immunocore Holdings plc.

The principal activity of the Group is pioneering the development of a novel class of TCR bispecific immunotherapies called ImmTAX – Immune mobilizing monoclonal TCRs Against X disease – designed to treat a broad range of diseases, including cancer, infectious and autoimmune. Leveraging its proprietary, flexible, off-the-shelf ImmTAX platform, the Group is developing a deep pipeline in multiple therapeutic areas, including five clinical stage programs in oncology and infectious disease, advanced pre-clinical programs in autoimmune disease and multiple earlier pre-clinical programs.

2. Significant accounting policies

Basis of preparation

The unaudited condensed consolidated interim financial statements for the three and six months ended June 30, 2021 and 2020 have been prepared in accordance with International Accounting Standard 34, “Interim Financial Reporting” (“IAS 34”). The accounting policies and methods of computation applied in the preparation of the unaudited condensed consolidated interim financial statements are consistent with those applied in the Group’s annual financial statements for the year ended December 31, 2020.

The unaudited condensed consolidated interim financial statements do not include all of the information required for the full annual financial statements and should be read in conjunction with the annual consolidated financial statements of the Group for the year ended December 31, 2020 included in the Company’s Annual Report on Form 20-F for the year ended December 31, 2020, filed with the Securities and Exchange Commission on March 25, 2021 (the “Annual Report”).

The unaudited condensed and consolidated interim financial statements have been prepared under the historical cost basis, as modified by the recognition of certain financial instruments measured at fair value and are presented in pounds sterling which is the Company’s functional currency. All values are rounded to the nearest thousand, except where otherwise indicated.

6

Date of authorization

These unaudited condensed consolidated interim financial statements were prepared at the request of the Company’s Board of Directors (the “Board”) and were approved by the Board on August 11, 2021 and signed on its behalf by Dr. Bahija Jallal, Chief Executive Officer of the Group.

Adoption of New Accounting Standards

There have been no recent new accounting standards that have had an impact on these unaudited condensed consolidated interim financial statements. New accounting standards not listed below were assessed and determined to be either not applicable or did not have a material impact on the unaudited condensed consolidated interim financial statements or processes.
 
During the six-month period ended June 30, 2020, Interest Rate Benchmark Reform – Phase 1, issued by the International Accounting Standards Board (“IASB”), became effective. Phase 1 contained amendments to IFRS 9, IAS 39, and IFRS 7 related to the impact of interest rate benchmark reform on hedging relationships.  These amendments were not applicable to the Group, as the Group does not have any hedging arrangements. During the six month period ended June 30, 2021, the Group adopted the amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4, and IFRS 16 related to Interest Rate Benchmark Reform – Phase 2, issued by the IASB, which addresses issues that might affect financial reporting during the reform on an interest rate benchmark.  The only financial instrument subject to interest rate reform is the Group’s loan and security agreement (“Loan Agreement”) with Oxford Finance Luxembourg S.A.R.L. (“Oxford Finance”), which has a carrying amount of £36,681,000 as of June 30, 2021 (£36,654,000 as of December 31, 2020).  Currently, borrowings under the Loan Agreement bear interest at an annual rate equal to LIBOR plus 8.85%, with a minimum rate of 9.01% and a maximum rate of 12.01%.  LIBOR is the subject of recent national, international, and other regulatory guidance and proposals for reform, which may cause LIBOR to cease to exist after 2021 or to perform differently than in the past. While the Group expects that alternatives to LIBOR will be implemented prior to the 2021 target date or that the 2021 cessation date may be extended, the consequences and timing of these developments cannot be predicted. There is currently no definitive information regarding the future utilization of LIBOR or of any particular replacement rate. A transition away from LIBOR as a benchmark for establishing the applicable interest rate may adversely affect the Group’s outstanding variable-rate indebtedness.

Going concern

The Group reported cash and cash equivalents of £278,870,000 and net current assets of £256,808,000 as at June 30, 2021, with an operating loss for the six months ended June 30, 2021 of £66,380,000.  The Group did not generate positive operational cash flow which was largely due to the continuing focus on the research, development, and clinical activities to advance the programs within the Group’s pipeline. During the six months ended June 30, 2021, the Company completed its IPO and the private placement to the Gates Foundation and received net proceeds of $286,887,000.

In assessing the going concern assumptions, the Board has undertaken an assessment of the forecasts, prepared through the end of 2022. As part of this assessment, the Board has considered the impact of the ongoing coronavirus 2019 (‘‘COVID-19’’) pandemic and have concluded that COVID-19 may have an impact, but the Board considers that any future impact will be minimal on clinical trials or other business activities over the period assessed for going concern purposes. As of the date of these financial statements, the Company is not aware of any specific event or circumstance that would require the Company to update its estimates, assumptions and judgments or revise the carrying value of its assets or liabilities. Actual results could differ from these estimates, and any such differences may be material to the Company’s financial statements.

7

Given the current cash position and the assessment performed, the Board is confident that the Group will have sufficient funds to continue to meet its liabilities as they fall due until at least the end of 2022 and therefore, have prepared the financial statements on a going concern basis. As the Group continues to incur significant expenses in the pursuit of its business strategy, additional funding will be needed before the existing programs are expected to reach commercialization, which would potentially lead to operational cash inflows. Until the Group can generate significant revenue from product sales, if ever, it expects to finance its operations through a combination of public or private equity offerings and debt financings or other sources, such as potential collaboration agreements, strategic alliances and licensing arrangements.

Estimates and judgements

The preparation of the unaudited condensed consolidated interim financial statements in conformity with IAS 34 requires management to make judgments, estimates and assumptions. These judgments, estimates and assumptions affect the reported assets and liabilities as well as contingent liabilities and income and expenses in the financial period.

The estimates and associated assumptions are based on information available when the unaudited condensed consolidated interim financial statements are prepared, historical experience and various other factors which are believed to be reasonable under the circumstances. Judgements and assumptions are primarily made in relation to revenue recognition, the valuation of ordinary shares prior to the IPO, the incremental borrowing rate for leases and valuation of derivatives.

Existing circumstances and assumptions about future developments may change due to market changes or circumstances arising that are beyond the Group’s control. Hence, estimates may vary from the actual results.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which they become known and are applied prospectively.

Those judgements and estimates made, together with our significant accounting policies, are disclosed in the consolidated financial statements of the Group for the year ended December 31, 2020, included in the Annual Report. There have been no changes to these accounting policies for the six months ended June 30, 2021.
 
IPO related expenses
 
Incremental costs incurred and directly attributable to the offering of securities were deducted from the related proceeds of the IPO. The net amount is recorded as contributed shareholders’ equity in the period when such shares, represented by ADSs, were issued. Costs that are not incremental and directly attributable to issuing new shares, represented by ADSs, are recorded as an expense in the consolidated statements of loss and other comprehensive income. Costs that relate to both new share issuances and listing of existing shares are allocated between those functions on a rational and consistent basis. In the absence of a more specific basis for apportionment, an allocation of common costs based on the proportion of new shares issued to the total number of (new and existing) shares listed has been used.

8

3. Revenue

Revenue recognized during the three and six months ended June 30, 2021 and 2020 was from collaboration agreements with GlaxoSmithKline Intellectual Property Development Ltd (“GlaxoSmithKline”), Eli Lilly and Company (“Eli Lilly”) and Genentech, Inc. (“Genentech”).

   
For the three months ended
June 30,
   
For the six months ended
June 30,
 
   
2021
£’000
   
2020
£’000
   
2021
£’000
   
2020
£’000
 
GlaxoSmithKline
   
1,286
     
1,705
     
4,656
     
2,400
 
Eli Lilly
   
-
     
424
     
-
     
3,098
 
Genentech
   
4,447
     
5,658
     
9,347
     
10,544
 
     
5,733
     
7,787
     
14,003
     
16,042
 
                                 
United Kingdom
   
1,286
     
1,705
     
4,656
     
2,400
 
United States
   
4,447
     
6,082
     
9,347
     
13,642
 
     
5,733
     
7,787
     
14,003
     
16,042
 

Genentech Collaboration.
 
During the three and six months ended June 30, 2021, the Group recognized £4,447,000 and £9,347,000 of revenue, respectively, relating to the 2018 Genentech Agreement and Imm-C103C (for the three and six months ended June 30, 2020: £5,658,000 and £10,544,000, respectively). The revenue recognized represents both deductions from deferred revenue and research and development costs reimbursed, predominantly for clinical trial costs. Such reimbursements arise in order to ensure that research and development costs are shared equally in-line with the Genentech Agreement. Of the total revenue recognized during the three and six months ended June 30, 2021, £175,000 and £803,000, respectively, represented research and development cost reimbursements (for the three and six months ended June 30, 2020: £1,385,000 and £1,636,000 respectively).

GlaxoSmithKline Collaboration
 
During the three and six months ended June 30, 2021, the Group recognized £1,286,000 and £4,656,000 of revenue, respectively, relating to the GlaxoSmithKline Agreement (for the three and six months ended June 30, 2020: £1,705,000 and £2,400,000 respectively). Of the total revenue recognized during the three and six months ended June 30, 2021, £971,000 and £1,562,000 respectively, represented research and development cost reimbursement (for the three and six months ended June 30, 2020: £891,000 and £1,215,000 respectively). Such reimbursements arise where research and development costs in excess of a defined amount are incurred on one specified program.  Following an annual portfolio review, in March 2021, GlaxoSmithKline and the Group elected not to move forward with the expansion stage of the ongoing Phase 1 clinical trial for GSK-01 targeting NY-ESO. GlaxoSmithKline have forgone their option to acquire an exclusive license to this program and therefore, ownership of the program and NY-ESO target will remain with the Group. Accordingly, the balance of deferred revenue of £2,463,000 was released in full.

9

Eli Lilly Collaboration
 
During the three and six months ended June 30, 2021, the Group recognized no revenue relating to the Eli Lilly Agreement (for the three and six months ended June 30, 2020: £424,000 and £3,098,000, respectively). During the six months ended June 30, 2020, after a change in overall program focus under the Eli Lilly collaboration, the £3,132,000 balance of deferred revenue was released in full.  While the focus of the remaining programs is reviewed, a deferred revenue balance of £7,361,000 is held under current liabilities in respect of both the second and third programs.

Deferred revenue

For the six months ended June 30, 2021 and the year ended December 31, 2020, deductions from deferred revenue represent revenue recognized during the period. During the six months ended June 30, 2021 and the year ended December 31, 2020 there were no additions to deferred revenue.

The total revenue recognized during the three and six months ended June 30, 2021 was £5,733,000 and £14,003,000, respectively, of which £4,587,000 and £11,638,000, respectively, was included in deferred revenue at January 1, 2021 and the balance of £1,146,000 and £2,365,000, respectively, relates to reimbursed research and development costs. The total revenue recognized during the three months and six months ended June 30, 2020 was £7,787,000 and £16,042,000 respectively, of which £5,511,000 and £13,191,000, respectively, was included in deferred revenue at January 1, 2020 and the balance of £2,276,000 and £2,851,000 respectively, relates to reimbursed research and development costs. Reimbursed research and development costs are recognized gross as revenue.  No revenue was recognized in the three or six months ended June 30, 2021 relating to performance obligations satisfied in previous years (for the three and six months ended June 30, 2020: £nil).

   
At
June 30,
2021
£’000
   
At
December 31,
2020
£’000
 
Current deferred revenue:
           
GlaxoSmithKline
   
945
     
2,668
 
Eli Lilly
   
7,361
     
7,361
 
Genentech
   
17,089
     
17,089
 
Current deferred revenue
   
25,395
     
27,118
 
Non-current deferred revenue:
               
GlaxoSmithKline
   
-
     
1,371
 
Genentech
   
14,953
     
23,497
 
Non-current deferred revenue
   
14,953
     
24,868
 
Total deferred revenue
   
40,348
     
51,986
 

Deferred revenue is in respect of the upfront fee and development milestone consideration received from the various collaboration agreements in advance of services performed by the Group.

10

4. Finance income

   
For the three months ended
June 30,
   
For the six months ended
June 30,
 
   
2021
£’000
   
2020
£’000
   
2021
£’000
   
2020
£’000
 
Bank interest on cash and cash equivalents
   
4
     
214
     
15
     
300
 
Interest on investment in sub-lease
   
8
     
8
     
19
     
18
 
Gain on change in fair value of derivative liability
   
-
     
-
     
-
     
1,287
 
     
12
     
222
     
34
     
1,605
 

The derivative liability represents a foreign exchange call option over certain series B shares which was settled in full in March 2020, resulting in a gain of £1,287,000 based on the fair value as at derecognition, and a credit to equity of £3,840,000.

The fair value of this derivative liability at the time of derecognition was determined using an option pricing model using a range of inputs both quoted, observable and unobservable in nature. The unobservable input was the expected final closing of the series B preferred share financing. The resulting derivative liability was not sensitive to changes in the expected close date nor in changes to other underlying input assumptions.

5. Finance costs

   
For the three months ended
June 30,
   
For the six months ended
June 30,
 
   
2021
£’000
   
2020
£’000
   
2021
£’000
   
2020
£’000
 
Interest expense on lease liabilities
   
434
     
635
     
873
     
1,277
 
Interest expense on financial liabilities measured at amortized cost
   
854
     
-
     
2,275
     
159
 
Loss from change in fair value of embedded derivative asset
   
-
     
-
     
-
     
266
 
     
1,288
     
635
     
3,148
     
1,702
 

Interest expense for the three and six months ended June 30, 2021 is related to the $50.0 million of borrowings under the debt facility with Oxford Finance entered into on November 6, 2020 and includes £546,000, representing a fee of $750,000, that became payable to Oxford Finance on completion of the IPO on February 9, 2021, (see Note 10).

11

Interest expense for the three and six months ended June 30, 2020 related to the convertible loan with the Gates Foundation, which was partially converted into series B preferred shares in March 2020.

The convertible loan received from the Gates Foundation contains conversion features which were accounted for as an embedded derivative and separated from the convertible loan. During the three and six months ended June 30, 2020, the loss from the change in fair value of the embedded derivative asset represented the movement in fair value of this embedded derivative asset on derecognition arising from the conversion of the loan into series B preferred shares in March 2020.

The fair value of this embedded derivative asset at the time of derecognition was determined using an option pricing model, discounted and probability weighted for the conversion features within the underlying convertible loan, which included unobservable (Level 3) inputs supported by little or no market activity. Significant unobservable inputs used in the fair value measurement of the embedded derivative asset were predominantly regarding the probability of each of the conversion features occurring.

6. Income tax
 
Income tax credit is recognized at an amount determined by multiplying the loss before taxation for the interim reporting period by the Group’s best estimate of the weighted-average annual income tax credit rate expected for the full financial year, adjusted for the tax effect of certain items recognized in full in the interim period. As such, the effective tax credit rate in the interim financial statements may differ from the Group’s estimate of the effective tax credit rate for the annual financial statements.

The Group’s consolidated effective tax credit rate for the three months ended June 20, 2021 was 7.9% (for the three months ended June 30, 2020: 17.7%), for the six months ended June 20, 2021 was 10.8% (for the six months ended June 30, 2020: 16.0%).

A deferred tax asset of £2,192,000 has been recognized as of June 30, 2021 (December 31, 2020: £2,230,000) representing unused tax credits carried forward for Immunocore LLC following an annual assessment, or periodically as required, of all available and applicable information, including its forecasts of costs and future profitability and the resulting ability to reverse the recognized deferred tax assets over a short period of time.

7. Basic and diluted loss per share

   
For the three months ended
June 30,
   
For the six months ended
June 30,
 
   
2021
    2020    
​2021
   
2020
 
Loss for the period (£’000s)
   
(32,962
)
   
(17,217
)
   
(62,000
)
   
(35,856
)
Basic and diluted weighted average number of shares
   
43,786,088
     
27,195,976
     
41,133,447
     
25,783,069
 
Basic and diluted loss per share (£) (1)
   
(0.75
)
   
(0.63
)
   
(1.51
)
   
(1.39
)

(1) The basic and diluted loss per share are adjusted for the (i) the exchange of shares of Immunocore Limited for shares of Immunocore Holdings Limited on a 1 for 100 basis, and (ii) the reorganization of the share capital of Immunocore Holdings plc, resulting in a consolidation with the effect of a 20 to 1 reverse stock split on the Company’s ordinary shares and non-voting ordinary shares, all of which took place in connection with the IPO which closed on February 9, 2021. Refer to Note 11 for further information.

Basic loss per share is calculated by dividing the loss for the period attributable to the equity holders of the Group by the weighted average number of ordinary shares outstanding during the period, including ordinary shares represented by ADSs. The dilutive effect of potential shares through equity settled transactions are considered to be anti-dilutive as they would decrease the loss per share and are, therefore, excluded from the calculation of diluted loss per share.

12

8. Property, plant and equipment

During the six months ended June 30, 2021, the Group acquired assets at a cost of £355,000, of which £282,000 were additions to plant and equipment, primarily laboratory equipment, and wrote-off leasehold improvements totaling £231,000.

9. Trade and other receivables

   
June 30,
2021
£’000
   
December 31,
2020
£’000
 
Trade receivables
   
603
     
2,051
 
Other receivables
   
1,685
     
1,722
 
Prepayments and accrued income
   
9,910
     
6,507
 
     
12,198
     
10,280
 

Included within prepayments and accrued income are amounts paid in advance for clinical trials that are expected to be expensed within 12 months.

10. Interest-bearing loans and borrowings

   
June 30,
2021
£’000
   
December 31,
2020
£’000
 
Current interest-bearing loans and borrowings
   
546
     
-
 
Non-current interest-bearing loans and borrowings
   
36,135
     
36,654
 
     
36,681
     
36,654
 

On November 6, 2020, the Group entered into a loan and security agreement with Oxford Finance for the provision of up to $100 million debt financing to be provided under three tranches, of which the first tranche of $50 million was received on execution of the agreement. Upon closing of the IPO on February 9, 2021, a fee of £546,000 ($750,000) became payable to Oxford Finance. The carrying value of the Oxford Finance loan approximates the fair value of the loan.

11. Capital and reserves

IPO and Impact of Corporate Reorganization

On January 7, 2021 Immunocore Holdings Limited was incorporated as a private limited company under the laws of England and Wales with nominal assets and liabilities for the purpose of becoming the holding company of Immunocore Limited.

On January 22, 2021, each holder of series A preferred shares, series B preferred shares, series C preferred shares, Growth Shares and ordinary shares in Immunocore Limited, sold and transferred their shares to Immunocore Holdings Limited in exchange for 100 shares of the same class at par value of 0.01 pence in Immunocore Holdings Limited.  Following this share exchange, Immunocore Limited became a wholly owned subsidiary of Immunocore Holdings Limited.

13

All Immunocore Limited share options granted to directors and employees under share option plans that were in existence immediately prior to the reorganization were exchanged for share options in Immunocore Holdings Limited on a one-for-100 basis.

Following the share exchange, Immunocore Limited undertook a reorganization of its share capital to re-designate its series A preferred shares, series B preferred shares, series C preferred shares and Growth shares into a single class of ordinary shares and subsequently undertook a share capital reduction, cancelling all amounts standing to the credit of its share premium account and cancelling 6,414,412 ordinary shares.

On February 1, 2021, Immunocore Holdings Limited was re-registered as a public limited company (“plc”) with the name Immunocore Holdings plc. The Company’s consolidated assets and liabilities immediately following the reorganization were the same as Immunocore Limited immediately before the reorganization.

Effective immediately prior to completion of the IPO, the Company re-organized its share capital whereby all of the outstanding series A preferred shares, series B preferred shares and series C preferred shares were re-designated as ordinary shares of the Company on a one for one basis.  A total of 16,632,540 of the ordinary shares, following the re-designation of the series C preferred shares, were converted to a separate class of non-voting ordinary shares. A total of 6,250,000 Growth Shares were re-designated of which 4,324,000 of the Growth Shares were re-designated as deferred shares of the Company. The remaining 1,926,000 Growth Shares were re-designated in the ratio of one ordinary share, issued for non-cash consideration and three deferred shares.

Immediately following these re-designations referred to above every 20 ordinary shares of £0.0001 and every 20 non-voting ordinary shares of £0.0001 in the Company were consolidated into one ordinary share and one non-voting ordinary share of £0.002.

On February 9, 2021, the Company completed an IPO of 11,426,280 ADSs representing 11,426,280 ordinary shares with nominal value of £0.002 per ordinary share, for gross proceeds of $297,083,000.  In addition to the ADSs sold in the IPO, the Company completed the concurrent sale of an additional 576,923 ADSs, representing 576,923 ordinary shares with a nominal value of £0.002 per ordinary share, at the initial offering price of $26.00 per ADS, for gross proceeds of approximately $15.0 million, in a private placement to the Gates Foundation.  The total aggregate gross proceeds were $312,083,000 (£226,528,000).  A total of £15,543,000 representing underwriting discounts and commissions and other offering expenses incurred incrementally and directly attributable to the offering of securities and have been deducted from the gross proceeds of the IPO.

Under the terms of the Company’s agreement with the Gates Foundation, the Group is required to develop, manufacture and commercialize soluble TCR bispecific therapeutic candidates targeted to mutually agreed neglected diseases, currently HIV, with the potential to treat people at an affordable price in developing countries. In the event of certain defaults by the Group under the agreement, the Gates Foundation has the right to sell, or require the Group to buy-back, any of the shareholdings in the Group held by the Gates Foundation. In such an event, if within 12 months after such redemption or sale, the Group experiences a change in control at a valuation of more than 150% of the valuation used for the redemption or the sale of the shares, the Group has agreed to pay the Gates Foundation compensation equal to the excess of what it would have received in such transaction if it still held its shares at the time of such change of control over what it received in the sale or redemption of its shares.

The table below reflects the number of preferred, growth, ordinary, and deferred issued and outstanding at December 31, 2021 and June 30, 2021 and also reflects the conversion of preferred and Growth Shares on 1-for-20 basis in the current and previous periods and the creation of deferred shares.

14

Share Capital

Issued share capital (0.2p per share, except deferred shares which are 0.01p per share)
 
Growth
Shares
   
Series A
Shares
   
Series B
Shares
   
Series C Shares
   
Ordinary
Shares
   
Deferred
Shares
 
At January 1, 2021 – adjusted
   
391
     
-
     
-
     
-
     
31,782,885
     
5,793,501
 
Repurchased and cancelled
   
(391
)
   
-
     
-
     
-
     
-
     
-
 
New shares issued for cash
   
-
     
-
     
-
     
-
     
12,003,203
     
-
 
At June 30, 2021
    -       -       -       -      
43,786,088
     
5,793,501
 

The impact of the corporate reorganization reflects the combined effect of each of the steps of the corporate reorganization set out in this Note 11.  Included within ordinary shares are 831,627 non-voting ordinary shares.  A total of 391 Growth Shares with a nominal value of £0.0001 per Growth Share were repurchased and cancelled.

Shares at Par Value
 
June 30, 2021
£
   
December 31, 2020
£
 
Allotted, called up and fully paid
           
Ordinary shares
   
87,572
     
268
 
Series A shares
    -      
170
 
Series B shares
    -      
115
 
Series C shares
    -      
82
 
Growth shares
    -      
6
 
Deferred shares
   
579
     
---
 
     
88,151
     
641
 

Share premium


£’000
 
At January 1, 2021 – adjusted
 
-
 
New shares issued for cash
 
210,961
 
Equity-settled share-based payment transactions
 
325
 
At June 30, 2021
 
211,286
 

The £325,000 of share premium is attributable to ordinary shares issued for non-cash consideration arising from the redesignation of 1,926,000 Growth Shares in the ratio of one ordinary share, issued for non-cash consideration and three deferred shares.

Nature and purpose of reserves

The share-based payments reserve is used to recognize the value of equity-settled share-based payments provided to employees. All other reserves are as stated in the consolidated statement of changes in equity.

The other reserve arose as a result of the corporate reorganization described above.

No dividends were paid or declared in the six months ended June 30, 2021 (for the six months ended June 30, 2020: £nil).

15

12. Share-based payments

The Group operates various employee share schemes that grant equity settled awards to certain employees and directors to acquire shares in the Group at a specified exercise price.  Grants are normally exercisable over a four-year period with 25% vesting at the end of the first year and the remaining award vesting quarterly over the following three years. All awards lapse on the tenth anniversary from the date of grant and are not entitled to dividends.
 
The total charge, to the consolidated statement of loss and other comprehensive loss, for such share-based payment plans during the three and six months ended June 30, 2021 was £9,342,000 and £17,938,000 respectively (three and six months ended June 30, 2020 £3,187,000 and £3,392,000, respectively).

Immediately prior to completion of the IPO, the Group undertook a corporate reorganization (see Note 11), the following changes were undertaken in respect to share options and growth share awards in existence immediately prior to the reorganization.

All Immunocore Limited share options and Growth Shares granted to directors and employees under share incentive arrangements that were in existence immediately prior to the reorganization were exchanged for share options and Growth Shares in the Company on a one-for-100 basis with no change in any of the vesting terms and exercise prices.

Immediately prior to completion of the IPO, the Company reorganized its share capital which included the re-designation of 6,250,000 Growth Shares, or 312,500 Growth Shares reflecting the consolidation of every 20 ordinary shares into one ordinary share of £0.002, as both ordinary shares and deferred shares (see Note 11).  Previously awarded Growth Shares were replaced with an award of share options in the Company on a one-for-one basis.  For 216,200 of these replacement share option awards, the vesting terms and exercise prices were substantially unchanged.  For the remaining 96,300 replacement share option awards the vesting terms and exercise prices and revised to an extent that these Growth Shares are considered cancelled, for the purpose of determining the share-based payment charge, prior to the replacement share options being awarded. In addition, the replacement ordinary shares that arose from the re-designation of Growth Shares resulted in an incremental fair value of £325,000, attributed to share premium.

Immediately following these re-designations referred to above every 20 share options over ordinary shares of £0.0001 in the Company was consolidated into one share option over an ordinary share of £0.002.  At the same time, the exercise price for each of the outstanding share options was adjusted to reflect the reorganization, subject to a minimum exercise price equal to the nominal value of a share and was re-designated into U.S. Dollars.  The adjustment to exercise price did not impact the fair value of the underlying share options, with the exception of the 96,300 replacement share options re-designated from Growth Shares where the exercise price was increased.

Those share options awarded in 2019 were modified at the same time as the corporate reorganization, through the removal of accelerated vesting conditions under certain circumstances.  The incremental fair value granted was valued on a consistent basis to other awards made within the Group and was valued at $5.19 per share and has been applied to those unvested awards as at the date of modification resulting in an incremental charge to the consolidated statement of loss and other comprehensive loss of £1,820,000 for that period.  During March 2020, those share options awarded in 2019 were modified through a reduction in the associated exercise price from $40.932 to $17.4643 per share. The incremental fair value granted was valued on a consistent basis to other awards made within the Group and was valued at $3.84 per share and has been applied to those unvested awards as at the date of modification resulting in an incremental charge to the consolidated statement of loss of £65,000 for that period.

During the six months ended June 30, 2021, options over a total of 4,534,527 shares were awarded (for the six months ended June 30, 2020: 721,850) which will vest over a four-year period from the date of grant, with 25% of the award vesting at the end of the first year and the remaining award vesting quarterly over the following three years.  The awards are not entitled to dividends prior to exercise. There were no grants during the three months ended June 30, 2021 or during the three and six months ended June 30, 2020.

16

The number and weighted average exercise prices of share options are as follows:

Number of shares issuable
 
Number of share
options (#)
   
Weighted average
exercise price ($)
 
Outstanding at January 1, 2021
   
4,551,359
     
17.16
 
Awards granted
   
4,534,527
     
26.18
 
Awards exercised
   
-
     
-
 
Awards forfeited
   
(59,050
)
   
19.80
 
Awards replacing growth shares
   
312,500
     
38.72
 
Outstanding at June 30, 2021
   
9,339,336
     
22.25
 
Exercisable at June 30, 2021
   
2,234,569
     
19.28
 

The weighted average fair value of options granted in the six months ended June 30, 2021 was $16.23.

The number and weighted average hurdle rate of Growth Shares are as follows:

Number of shares issuable
 
Number of growth
Shares
   
Weighted average
hurdle rate $
 
Outstanding at January 1, 2021
   
314,456
     
37.53
 
Awards forfeited
   
(1,956
)
   
40.95
 
Awards replaced with options
   
(312,500
)
   
37.48
 
Outstanding at June 30, 2021
   
-
     
-
 
Exercisable at June 30, 2021
   
-
     
-
 

For share options outstanding at June 30, 2021, the range of exercise prices and weighted average remaining contractual life are as follows:

 
Share options
 
 
Exercise price $
   
Number of
Options
   
Weighted average
remaining
contractual life
 
   
11.8348
     
459,970
     
3.7
 
   
17.4643
     
3,996,221
     
9.0
 
   
26.00
     
4,553,923
     
9.6
 
   
32.983
     
16,545
     
4.5
 
   
40.932
     
123,350
     
8.2
 
   
41.74
     
52,482
     
9.8
 
   
46.3896
     
136,845
     
9.6
 

17

Awards granted in the six months ended June 30, 2021, have been valued using the Black-Scholes option pricing model. The assumptions used in the models for share options granted during the six months ended June 30, 2021, are as follows:

   
February
2021
   
April 2021
 
Share price at grant date
 
$
26.00
   
$
41.74
 
Exercise price
 
$
26.00
   
$
41.74
 
Expected volatility
   
88
%
   
89
%
Expected life
 
4 years
   
4 years
 
Risk-free rate
   
(0.05
%)
   
0.25
%
Fair value
 
$
16.16
   
$
26.18
 

As the Group completed its IPO on February 9, 2021, there is insufficient trading history at this time to derive historical volatility from the Group’s own ADS price.  Accordingly, the expected volatility is determined by reference to the historical volatility of similar listed entities.  The expected volatility used reflects the assumption that the historical volatility over a period similar to the life of the awards is indicative of future trends, which may not necessarily be the actual outcome. The expected life of the share options is based on expectations and is not necessarily indicative of exercise patterns that may occur. The risk-free rate is based on the Bank of England’s estimates of gilt yield curve as at the respective grant dates.

13. Trade and other payables

   
June 30,
2021
£’000
   
December 31,
2020
£’000
 
Trade payables
   
5,927
     
5,783
 
Other taxation and social security
   
690
     
620
 
Accruals
   
20,410
     
19,325
 
     
27,027
     
25,728
 

14. Commitments and contingencies

The following table summarizes the Group’s contractual obligations as of June 30, 2021:

£’000s
 
Less than
1 year
   
1-3
years
   
3-5
Years
   
More than
5 years
   
Total
 
Lease liabilities – existing
   
3,364
     
5,208
     
4,355
     
31,364
     
44,291
 
Lease liabilities – contingent
   
282
     
2,308
     
2,417
     
1,559
     
6,566
 
Manufacturing
   
2,263
     
522
     
-
     
-
     
2,785
 
Capital commitments
   
139
     
-
     
-
     
-
     
139
 
Total contractual obligations
   
6,048
     
8,038
     
6,772
     
32,923
     
53,781
 

18

The following table summarizes the Group’s contractual obligations as of December 31, 2020:

£’000s
 
Less than
1 year
   
1-3
years
   
3-5
Years
   
More than
5 years
   
Total
 
Lease liabilities – existing
   
3,529
     
5,322
     
4,286
     
32,600
     
45,737
 
Lease liabilities – contingent
    -      
2,254
     
2,471
     
1,841
     
6,566
 
Manufacturing
   
2,824
     
500
      -       -      
3,324
 
Capital commitments
   
77
      -       -       -      
77
 
Total contractual obligations
   
6,430
     
8,076
     
6,757
     
34,441
     
55,704
 

The Group has contractual obligations for two leasehold properties under which it is obligated to take on the leases should the properties become vacant at specified dates in the future.  For both properties, the Group has reassessed these contingent events as at June 30, 2021, and has continued to recognize a contingent commitment totaling £6,566,000 (December 31, 2020: £6,566,000).

The Group entered into two guarantee agreements during the year ended December 31, 2020, associated with the termination of the lease term for one of the leasehold properties.  These agreements indemnify the lessor for certain costs in the event of the new lessee defaulting under their lease agreement for the leasehold property. As at June 30, 2021, the Group does not expect to make future payments as a result of these agreements.


19


Exhibit 99.2
 
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

You should read the following discussion and analysis of our financial condition and results of operations together with our unaudited condensed consolidated interim financial statements and the related notes to those statements included as Exhibit 99.1 to this Report on Form 6-K, or this Report, submitted to the Securities and Exchange Commission, or the SEC, on August 11, 2021.  We also recommend that you read our discussion and analysis of financial condition and results of operations together with our audited financial statements and notes thereto, and the section entitled “Risk Factors”, each of which appear in our Annual Report on Form 20-F for the year ended December 31, 2020 filed with the SEC on March 25, 2021, or our Annual Report.

We present our unaudited condensed consolidated interim financial statements in accordance with International Accounting Standard 34, “Interim Financial Reporting” or IAS 34, which may differ in material respects from generally accepted accounting principles in other jurisdictions, including generally accepted accounting principles in the United States, or U.S. GAAP.
 
We maintain our books and records in pounds sterling. For the convenience of the reader, we have translated pound sterling amounts as of and for the period ended June 30, 2021 into U.S. dollars at the noon buying rate of the Federal Reserve Bank of New York on June 30, 2021, which was £1.00 to $1.3806. These translations should not be considered representations that any such amounts have been, could have been or could be converted into U.S. dollars at that or any other exchange rate as of that or any other date.
 
We have historically conducted our business through Immunocore Limited, and therefore our historical consolidated financial statements previously presented the consolidated results of operations of Immunocore Limited. Following the completion of our initial public offering in February 2021, our consolidated financial statements present the consolidated results of operations of Immunocore Holdings plc.

Unless otherwise indicated or the context otherwise requires, all references to “Immunocore,” the “Company,” “we,” “our,” “us” or similar terms refer to Immunocore Holdings plc.

The statements in this discussion regarding industry outlook, our expectations regarding our future performance, liquidity and capital resources and other non-historical statements are forward-looking statements. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. These risks and uncertainties include, but are not limited to, the risks and uncertainties set forth in the “Risk Factors” section of our Annual Report and any subsequent reports that we file with the SEC.
 
Overview
 
We are a late-stage biotechnology company pioneering the development of a novel class of TCR bispecific immunotherapies called ImmTAX – Immune mobilizing monoclonal TCRs Against X disease – designed to treat a broad range of diseases, including cancer, infectious and autoimmune. Leveraging our proprietary, flexible, off-the-shelf ImmTAX platform, we are developing a deep pipeline in multiple therapeutic areas, including five clinical stage programs in oncology and infectious disease, advanced pre-clinical programs in autoimmune disease and multiple earlier pre-clinical programs.

To date, we have dosed over 600 cancer patients with our ImmTAX product candidates, which we believe is the largest clinical data set of any bispecific in a solid tumor and any TCR therapeutic. Our clinical programs are being conducted with patients with a broad range of cancers including lung, bladder, gastric, head and neck and ovarian, among others. Our lead product candidate tebentafusp demonstrated superior overall survival (OS) in a Phase 3 randomized clinical trial, we believe this is the first TCR to demonstrate survival benefit, the first bispecific t-cell engager to improve OS in solid tumor, and first immunotherapy in low tumor mutational burden. Tebentafusp is the lead candidate from our ImmTAX platform and has the potential to be the first new therapy in uveal melanoma in four decades. Our following ImmTax product candidates have the potential to address other tumor types with larger addressable patient populations and significant unmet need.

1

Our ImmTAC Platform (Oncology)


Tebentafusp, our ImmTAC molecule targeting an HLA-A*02:01 gp100 antigen, demonstrated monotherapy activity and achieved the primary endpoint of superior overall survival in a randomized Phase 3 clinical trial in patients with previously untreated metastatic uveal melanoma. The OS Hazard Ratio (HR) in the intent-to-treat population favored tebentafusp, HR=0.51 (95% CI: 0.37, 0.71); p< 0.0001, over investigator’s choice (82% pembrolizumab; 12% ipilimumab; 6% dacarbazine). We anticipate completing submission of a Biologics License Application, or BLA, to the U.S. Food and Drug Administration, or FDA, in the third quarter of 2021. The U.S. Food and Drug Administration (FDA) will review the Biologics License application (BLA) for tebentafusp (IMCgp100) under the Real-Time Oncology Review (RTOR) pilot program, an initiative of the FDA’s Oncology Center of Excellence designed to expedite the delivery of safe and effective cancer treatments to patients.  Tebentafusp is also being reviewed under the FDA’s Project Orbis initiative, which enables concurrent review by the health authorities in partner countries that have requested participation. We anticipate completing submission of a Marketing Authorization Application, or MAA, to the European Medicines Agency, or EMA, and the United Kingdom’s Medicines and Healthcare Regulatory Agency, or MHRA, in the third quarter of 2021. The EMA granted tebentafusp accelerated assessment procedure for this MAA.
 

IMC-C103C, our ImmTAC molecule targeting an HLA-A*02:01 MAGE-A4 antigen, is currently being evaluated in a first-in-human, Phase 1/2 dose escalation trial in patients with solid tumor cancers including non-small-cell lung cancer, or NSCLC, gastric, head and neck, ovarian and synovial sarcoma. As of June 30, 2021, the Company has enrolled 39 patients in the Phase 1 study. Early pharmacodynamic data indicate that IMC-C103C monotherapy is demonstrating biological activity at the doses currently under evaluation. We anticipate reporting Phase 1 initial data from this trial in the fourth quarter of 2021.
 

IMC-F106C, our ImmTAC molecule targeting an optimal HLA-A*02:01 PRAME antigen is currently being evaluated in a first-in-human, Phase 1/2 dose escalation trial in patients with multiple solid tumor cancers. PRAME is overexpressed in many solid tumors including NSCLC, SCLC, endometrial, ovarian, melanoma, and breast cancers. As of June 30, 2021, the Company has enrolled 23 patients in the Phase 1 study. Early pharmacodynamic data indicate that IMC-F106C monotherapy is demonstrating biological activity at the doses currently under evaluation. We anticipate reporting Phase 1 initial data from this trial in mid-2022.
 
Our ImmTAV Platform (Infectious Diseases)
 

IMC-I109V, our ImmTAV molecule targeting a conserved hepatitis B virus, or HBV, envelope antigen, is our most advanced ImmTAV program and is currently being evaluated in a Phase 1/2 clinical trial in patients with chronic HBV who are non-cirrhotic, hepatitis B e-Antigen negative, and virally suppressed on chronic nucleot(s)ide analogue therapy. Our goal is to develop a functional cure for HBV and we initiated dosing in our Phase 1 single ascending dose, or SAD, trial in the second quarter of 2021.
 

IMC-M113V, our ImmTAV molecule targeting a human immunosuppression virus, or HIV, gag antigen bispecific TCR molecule, is currently in pre-clinical development. We anticipate regulatory submission during the second half of 2021 in support of our Phase 1 trial.
 
2

Significant Events in the Three Months Ended June 30, 2021

On June 4, 2021 the Company presented a subset analysis from the Phase 3 study exploring the overall survival benefit from tebentafusp in patients with best RECIST* response of progressive disease (PD) at the American Society of Clinical Oncology (ASCO) Annual Meeting. In patients with a best response of PD in the phase 3 trial, the overall survival (OS) was superior for the tebentafusp arm versus the investigator’s choice arm with a hazard ratio (HR) of 0.43 (95% CI 0.27-0.68). More than half of tebentafusp patients with best response of PD were treated beyond initial progression and no new safety signals were observed. In addition, analysis from the phase 2 tebentafusp trial suggests that at least one-third of patients on tebentafusp with a best response of PD have a reduction in circulating tumor DNA and that this may be associated with longer OS.

On May 18, 2021, we announced the dosing of the first patient in the first-in-human clinical trial of IMC-I109V, a new class of bispecific protein immunotherapy that is being developed for the treatment of patients with chronic hepatitis B (HBV) infection (CHB). Wholly-owned IMC-I109V is the first candidate in development using Immunocore’s immune‐mobilizing monoclonal T cell receptors against virus (ImmTAV®) platform to enter clinical trials. The trial is an open label study evaluating the safety, antiviral activity, and pharmacokinetics of IMC-I190V in HLA-A*02:01 positive patients with Chronic HBV who are non-cirrhotic, hepatitis B antigen-negative, and virally suppressed.

In April 2021, we launched a global early access program for tebentafusp in metastatic uveal melanoma.

On April 10, 2021, we presented Phase 3 clinical trial data from IMCgp100-202 clinical trial in an oral presentation in the Phase 3 clinical trials plenary session at the American Association for Cancer Research (AACR) Annual Meeting 2021. Tebentafusp demonstrated a statistically significant and clinically meaningful improvement in overall survival (OS) as a first-line treatment in mUM.  In the intent-to-treat population, tebentafusp demonstrated a median overall survival of 21.7 months compared to 16.0 months for investigator’s choice and with 73% of patients alive at 1 year for tebentafusp vs. 58% for investigator’s choice. The OS Hazard Ratio (HR) favored tebentafusp, HR=0.51 (95% CI: 0.37, 0.71); p< 0.0001, over investigator’s choice (82% pembrolizumab; 12% ipilimumab; 6% dacarbazine). In addition, tebentafusp resulted in a statistically significant longer PFS. Treatment-related adverse events were manageable and consistent with the proposed mechanism.

Recent Developments since June 30, 2021

 In July, the European Medicines Agency (EMA) granted tebentafusp accelerated assessment procedure for its Marketing Authorization Application (MAA). Accelerated assessment potentially reduces the time frame for the EMA Committee for Medicinal Products for Human Use (CHMP) and Committee for Advanced Therapies (CAT) to review a MAA for an Advanced Therapy Medicinal Product (ATMP). The U.S. Food and Drug Administration (FDA) will review the Biologics License application (BLA) for tebentafusp (IMCgp100) under the Real-Time Oncology Review (RTOR) pilot program, an initiative of the FDA’s Oncology Center of Excellence designed to expedite the delivery of safe and effective cancer treatments to patients.  Tebentafusp is also being reviewed under the FDA’s Project Orbis initiative, which enables concurrent review by the health authorities in partner countries that have requested participation.

Operating Results

Basic and diluted loss per share was £0.75 or $1.04 for the three months ended June 30, 2021 compared to an adjusted £0.63 for the three months ended June 30, 2020.  Basic and diluted loss per share was £1.51 or $2.08 for the six months ended June 30, 2021 compared to an adjusted £1.39 for the six months ended June 30, 2020. Total operating loss for the three months ended June 30, 2021 was £34.5 million or $47.6 million compared to £20.5 million for the same period last year, largely due to an increase in employee costs associated with non-cash share-based payment charge. Total operating loss for the six months ended June 30, 2021 was £66.4 million or $91.6 million compared to £42.6 million for the same period last year, largely due to an increase in employee costs associated with non-cash share-based payment charge.

3

For the three and six months ended June 30, 2021, revenue from collaboration agreements was £5.7 million or $7.9 million and £14.0 million or $19.3 million, respectively, as compared to £7.8 million and £16.0 million, respectively, for the three and six months ended June 30, 2020. For the three and six months ended June 30, 2021, our research and development expenses were £16.5 million or $22.7 million and £36.4 million or $50.2 million, respectively, as compared to £16.4 million and £37.2 million, respectively, for the three and six months ended June 30, 2020. For the three and six months ended June 30, 2021, our administrative expenses were £23.8 million or $32.9 million and £44.0 million or $60.7 million, respectively, compared to £12.3 million and £21.9 million respectively, for the three and six months ended June 30, 2020 including a £5.1 million and £13.0 million increase, respectively, in the non-cash share-based payment charge.

Cash and cash equivalents are £278.9 million or approximately $385 million as of June 30, 2021 compared to £129.7 million as of December 31, 2020.

Components of Results of Operations

Revenue
 
To date, we have not generated any revenue from the sale of marketed pharmaceutical products. If our development efforts for our product candidates are successful and result in regulatory approval of a product candidate, we may generate revenue in the future from product sales. However, there can be no assurance as to when we will generate such revenue, if at all.
 
Revenue from Collaboration Agreements
 
Our revenue has been solely derived from our collaboration agreements with Genentech, GSK and Eli Lilly. Our revenue from collaboration agreements consists of non-refundable upfront payments, development milestones as well as reimbursement of research and development expenses. To the extent that existing or potential future collaborations generate revenue, such revenue may vary due to many uncertainties in the development of our product candidates and other factors.

As of June 30, 2021, we have received a total of $216.8 million in upfront and milestone payments, intended to fund the research and development activities under each contract. As part of the agreements, we contribute our ImmTAC technology and commit to participate in joint research activities. In addition, we agree to license, or option certain target rights and the possible product candidates developed under the collaboration. The agreements provide for future payments if development, regulatory or sales milestones are achieved. In addition, we are entitled to future royalties. The uncertainty of achieving these certain milestones significantly impacts our ability to project revenue.
 
Upfront payments and development milestones are initially recorded on our statement of financial position as deferred revenue and are subsequently recognized as revenue as the underlying programs progress through research and development using an estimate of the percentage completion of each program in accordance with our accounting policy.
 
Operating Expenses
 
Research and Development Expenses
 
Research and development expenses consist primarily of costs incurred for current or planned investigations undertaken with the prospect of gaining new scientific or technical knowledge and understanding and consist primarily of personnel-related costs, including salaries, for the various research and development departments, costs associated with clinical trial activities undertaken by contract research organizations, or CROs, and external manufacturing costs undertaken by contract manufacturing organizations, or CMOs, research and development laboratory consumables, internal clinical trial expenses and costs associated with maintaining laboratory equipment. All research and development expenses are expensed as incurred due to scientific uncertainty. Those research and development expenses incurred with external organizations to undertake research and development activities on our behalf typically relate to clinical programs and are assigned to the individual programs, however for pre-clinical programs and other research spend incurred externally, such spend is typically not assigned to individual programs. Internal research and development expenses typically relate to personnel-related costs and research and development laboratory consumables and due to the cross functional expertise of our people it is not possible to provide a breakdown of internal costs by program.

4

We expect our research and development expenses to remain significant in the future as we advance existing and future product candidates into and through clinical studies and pursue regulatory approval. The process of conducting the necessary clinical studies to obtain regulatory approval is costly and time-consuming. We maintain our headcount at a level required to support our continued research activities and development of our product candidates. Clinical trials generally become larger and more costly to conduct as they advance into later stages. We cannot determine with certainty the timing of initiation, the duration or the completion costs of current or future preclinical studies and clinical trials of our product candidates due to the inherently unpredictable nature of preclinical and clinical development. Clinical and preclinical development timelines, the probability of success and development costs can differ materially from expectations. At this time, we cannot reasonably estimate or know the nature, timing and estimated costs of the efforts that will be necessary to complete the development of any product candidates that we develop from our programs. As a result, our research and development expenses may vary substantially from period to period based on the timing of our research and development activities. Several of our research and development programs are at an early stage. We must demonstrate the safety and efficacy of our product candidates in humans through extensive clinical testing. We may experience numerous unforeseen events during, or as a result of, the testing process that could delay or prevent commercialization of our products, including but not limited to the following:
 

after reviewing trial results, our collaboration partners may abandon projects that might previously have been believed to be promising;

we, our collaboration partners, or regulators may suspend or terminate clinical trials if the participating subjects or patients are being exposed to unacceptable health risks;

our potential products may not have the desired effects or may include undesirable side effects or other characteristics that preclude regulatory approval or limit their commercial use if approved;

manufacturers may not meet the necessary standards for the production of the product candidates or may not be able to supply the product candidates in a sufficient quantity;

regulatory authorities may find that our clinical trial design or conduct does not meet the applicable approval requirements; and

safety and efficacy results in various human clinical trials reported in scientific and medical literature may not be indicative of results we obtain in our clinical trials.

Any changes in the outcome of any of these variables with respect to the development of our product candidates in preclinical and clinical development could mean a significant change in the costs and timing associated with the development of these product candidates. We may never succeed in achieving regulatory approval for any of our product candidates. We may obtain unexpected results from our clinical trials. We may elect to discontinue, delay or modify clinical trials of some product candidates or focus on other product candidates. For example, if the FDA, EMA or another regulatory authority were to delay our planned start of clinical trials or require us to conduct clinical trials or other testing beyond those that we currently expect or if we experience significant delays in enrollment in any of our planned clinical trials, we could be required to expend significant additional financial resources and time on the completion of clinical development of that product candidate.

Administrative Expenses
 
Administrative expenses consist primarily of personnel-related costs, including salaries and share-based compensation expense, for corporate and other administrative and operational functions including finance, legal, human resources, pre-commercial expenses, information technology, as well as facility-related costs. These costs relate to the operation of the business, unrelated to the research and development function or any individual program.
 
Due to our substantial increase in planned research and development expenses, as explained above, we also expect that our administrative expenses will increase proportionally. We expect that we will incur increased accounting, audit, legal, regulatory, compliance, director, and officer insurance costs as well as investor and public relations expenses associated with being a public company. We anticipate that the additional costs for these services will substantially increase our administrative expenses. Additionally, if and when we receive regulatory approval of a product candidate, we anticipate an increase in payroll and expenses as a result of our preparation for commercial operations.

5

Net Other Operating (Expense) / Income

Net other operating income consists primarily of profit on derecognition of leases, the profit or loss arising on the disposal of property, plant and equipment and sublease income.
 
Finance Income
 
Finance income arises primarily from interest income on cash and cash equivalents, short-term deposits and gains on entering into sub-lease arrangements on leasehold properties as recognized under the accounting standard IFRS 16 “Leases” and gains arising on changes in the fair value of an embedded derivative asset and derivative liability.
 
Finance Costs
 
Finance costs consist of the movement in fair value of an embedded derivative asset and derivative liability and interest expenses related to financial liabilities and lease liabilities as recognized under the accounting standard IFRS 16, “Leases”.

Income Tax Credit
 
Our income tax balance largely comprises research and development tax credits. Research and development credits are obtained at a maximum rate of 33.35% of our qualifying research and development.
 
We are subject to corporate taxation in the United Kingdom. Our wholly owned U.S. subsidiaries, Immunocore LLC and Immunocore Commercial LLC, are subject to corporate taxation in the United States. Due to the nature of our business, we have generated losses since inception. Our income tax credit recognized represents the sum of the research and development tax credits recoverable in the United Kingdom and income tax payable in the United States.
 
As a company that carries out extensive research and development activities, we benefit from the U.K. research and development tax credit regime and are able to surrender some of our losses for a cash rebate of up to 33.35% of expenditures related to eligible research and development projects. Qualifying expenditures largely comprise clinical trial and manufacturing costs, employment costs for relevant staff and consumables incurred as part of research and development projects. Certain subcontracted qualifying research and development expenditures are eligible for a cash rebate of up to 21.68%. A large portion of costs relating to our research and development, clinical trials and manufacturing activities are eligible for inclusion within these tax credit cash rebate claims.
 
We may not be able to continue to claim research and development tax credits in the future under the current research and development tax credit scheme when we become a public company because we may no longer qualify as a small or medium-sized company. However, we may be able to file under a large company scheme.

Un-surrendered tax losses are carried forward to be offset against future taxable profits. No deferred tax asset is recognized in respect of accumulated tax losses in the United Kingdom because future profits are not sufficiently certain. A deferred tax asset is recognized in respect of the unused tax credits for the subsidiary in the United States.
 
In the event we generate revenues in the future, we may benefit from the new “patent box” initiative that allows profits attributable to revenues from patents or patented products to be taxed at a lower rate than other revenue. The rate of tax for relevant streams of revenue for companies receiving this relief will be 10%.

6

Results of Operations
 
Comparison of the Three Months Ended June 30, 2021 and 2020
 
The following table summarizes our unaudited consolidated statement of loss for each period presented:


   
Three Months Ended June 30,
 
   
2021
   
2020
 
   
​$’000
   
£’000
   
£’000
 
Revenue
    7,915      
5,733
     
7,787
 
Research and development expenses
   
(22,740
)
   
(16,471
)
   
(16,378
)
Administrative expenses
   
(32,860
)
   
(23,801
)
   
(12,250
)
Net other operating income
   
55
     
40
     
346
 
Operating loss
   
(47,630
)
   
(34,499
)
   
(20,495
)
Finance income
   
17
     
12
     
222
 
Finance costs
   
(1,778
)
   
(1,288
)
   
(635
)
Non-operating expense
   
(1,761
)
   
(1,276
)
   
(413
)
Loss before taxes
   
(49,391
)
   
(35,775
)
   
(20,908
)
Income tax credit
   
3,884
     
2,813
     
3,691
 
Loss for the period
   
(45,507
)
   
(32,962
)
   
(17,217
)

The results for the three months ended June 30, 2021 are not necessarily indicative of the operating results to be expected for the full year or for any other subsequent interim period.

Revenue

   
Three Months Ended June 30,
 
   
2021
   
2020
 
   
$’000
   
£’000
   
£’000
 
GlaxoSmithKline
   
1,775
     
1,286
     
1,705
 
Eli Lilly
   
-
     
-
     
424
 
Genentech
   
6,140
     
4,447
     
5,658
 
Total
   
7,915
     
5,733
     
7,787
 

For the three months ended June 30, 2021, revenue from collaboration agreements decreased by £2.1 million to £5.7 million compared to £7.8 million for the three months ended June 30, 2020.  This reflects primarily a decrease in revenue recognised from the Genentech collaboration of £1.2 million reflecting increased activity undertaken by Genentech which reduced the reimbursements we recognized in-line with the Genentech collaboration agreement.  In addition, no revenue has been recognized from the Eli Lilly Collaboration during the three months ended June 30, 2021, while a review is undertaken of the two ongoing programs.

7

Research and Development Expenses

   
Three Months Ended June 30,
 
   
2021
   
2020
 
   
$’000
 
 
£’000
   
£’000
 
External research and development expenses:
                         
Tebentafusp
   
7,582
       
5,492
     
8,131
 
IMC-F106C (PRAME)
   
1,291
       
935
     
364
 
IMC-C103C (MAGE-A4)
   
1,207
       
873
     
491
 
IMC-I109V(HBV)
   
804
       
582
     
409
 
Other programs
   
2,258
       
1,637
     
1,440
 
Research expenses
   
178
       
129
     
157
 
Total external research and development expenses
   
13,320
       
9,648
     
10,992
 
Internal research and development expenses:
                         
Headcount related expenses
   
7,262
       
5,260
     
4,655
 
Laboratory consumables
   
1,541
       
1,116
     
701
 
Laboratory equipment expenses
   
614
       
445
     
27
 
Other
   
3
       
2
     
3
 
Total internal research and development expenses
   
9,420
 

   
6,823
     
5,386
 
Total research and development expenses
   
22,740
       
16,471
     
16,378
 
 
For the three months ended June 30, 2021, our research and development expenses were £16.5 million, as compared to £16.4 million for the three months ended June 30, 2020. This increase of £0.1 million was primarily attributable to an increase in internal research and development expenses of £1.4 million partially offset by a decrease in external research and development expenses of £1.3 million.

For the three months ended June 30, 2021, our internal research and development expenses increased by £1.4 million.  This is attributable to an increase in headcount related expenses of £0.6 million, largely due to a share-based payment charge of £1.0 million, partially offset by lower salary costs of £0.4 million. In addition, laboratory consumables and equipment expenses each increased by £0.4 million.

For the three months ended June 30, 2021, our external research and development expenses reduced by £1.3 million.  The is attributable to a decrease of £2.6 million in expenses incurred for our tebentafusp program as clinical trial activity has reduced.  This is partially offset by the following increases: £0.4 million of expenses incurred for our IMC-C103C program and £0.6 million expenses incurred for our IMC-F106C program both due to increased clinical activities, £0.2 million for our IMC-I109V program reflecting increased activity in advance of commencing dosing in our Phase 1 single ascending dose trial which started in the second quarter 2021, and £0.2 million on other programs across our portfolio.
 
8

Administrative Expenses
 
For the three months ended June 30, 2021, administrative expenses were £23.8 million, compared to £12.3 million for the three months ended June 30, 2020, an increase of £11.6 million.  The administrative expenses for the three months ended June 30, 2021, of £23.8 million  comprises the following:  a share based payment charge of £8.3 million which has increased by £5.1 million compared to the comparative period; other staff related expenses of £3.6 million, a decrease of £0.4 million;  pre-commercial expenditure related to tebentafusp of £4.7 million, an increase of £4.2 million; legal and professional fees of £2.5 million, an increase of £1.8 million primarily attributable to additional costs incurred as a result of being a public company; depreciation of property, plant and equipment of £1.8 million, a decrease of £0.5 million and unfavourable foreign exchange movements of £1.4 million, increased from £nil.

Net Other Operating (Expense) / Income
 
For the three months ended June 30, 2021, net other operating expense totalled £nil, compared to £0.3 million for the three months ended June 30, 2020. The decrease of £0.3 million reflects primarily a £0.2 million gain on the remeasurement of a right of use asset following the reduction in lease term for the associated leasehold property during the three months ended June 30, 2020.

Finance Income
 
For the three months ended June 30, 2021, finance income was £nil compared to £0.2 million for the three months ended June 30, 2020 reflecting a decrease in bank interest received on cash and cash equivalents.
 
Finance Costs
 
For the three months ended June 30, 2021, finance costs amounted to £1.3 million, compared to £0.6 million for the three months ended June 30, 2020. This increase of £0.7 million is due to an increase in interest expenses on financial liabilities measured at amortized cost of £0.9 million reflecting our loan from Oxford Finance of $50 million which was drawn down on November 6, 2020, including £0.5 million relating to a fee that became to Oxford Finance upon completion of the IPO.  This is partially offset by a £0.2 million decrease in interest on lease liabilities reflecting the termination of two leasehold properties subsequent to the six months ended June 30, 2020.

Income Tax Credit
 
For the three months ended June 30, 2021, the income tax credit amounted to £2.8 million compared to £3.7 million for the three months ended June 30, 2020. This decrease of £0.9 million relates to an increase in the proportion of operating costs in the period that are not eligible for the UK R&D tax credit regime, primarily the non-cash share-based payment charge, relative to the increase in total research and development costs and administrative expenses which increased by £11.6 million.

Comparison of the Six Months Ended June 30, 2021 and 2020
 
The following table summarizes our unaudited consolidated statement of loss for each period presented:

   
Six Months Ended June 30,
 
   
2021
   
2020
 
   
$’000
    £’000    
£’000
 
Revenue
   
19,333
     
14,003
     
16,042
 
Research and development expenses
   
(50,193
)
   
(36,356
)
   
(37,157
)
Administrative expenses
   
(60,726
)
   
(43,985
)
   
(21,855
)
Net other operating (expense) / income
   
(58
)
   
(42
)
   
356
 
Operating loss
   
(91,644
)
   
(66,380
)
   
(42,614
)
Finance income
   
47
      34      
1,605
 
Finance costs
   
(4,346
)
   
(3,148
)
   
(1,702
)
Non-operating expense
   
(4,299
)
    (3,114 )    
(97
)
Loss before taxes
   
(95,943
)
   
(69,494
)
   
(42,711
)
Income tax credit
   
10,346
      7,494      
6,855
 
Loss for the period
   
(85,597
)
   
(62,000
)
   
(35,856
)

9

The results for the six months ended June 30, 2021 are not necessarily indicative of the operating results to be expected for the full year or for any other subsequent interim period.

Revenue

   
Six Months Ended June 30,
 
   
2021
   
2020
 
   
$’000
   
£’000
   
£’000
 
GlaxoSmithKline
   
6,428
     
4,656
     
2,400
 
Eli Lilly
   
-
     
-
     
3,098
 
Genentech
   
12,905
     
9,347
     
10,544
 
Total
   
19,333
     
14,003
     
16,042
 

For the six months ended June 30, 2021, revenue from collaboration agreements reduced by £2.0 million to £14.0 million compared to £16.0 million for the six months ended June 30, 2020. This is primarily driven by the Eli Lilly Collaboration for which no revenue has been recognised during the six months ended June 30, 2021, while a review is undertaken of the two ongoing programs.  During the six months ended June 30, 2020, £3.1 million of revenue was recognized from the Eli Lilly Collaboration following a change in program focus. The increase in revenue recognized from the GSK collaboration of £2.3 million is due to GlaxoSmithKline having forgone their option to acquire an exclusive license to the NY-ESO program and ownership of the program resulting in the recognition of £2.5 million revenue during the six months ended June 30, 2021.

Research and Development Expenses

   
Six Months Ended June 30,
 
   
2021
 
 
2020
 
   
$’000
   
£’000
 
 
£’000
 
External research and development expenses:
                         
Tebentafusp
   
18,714
     
13,555
       
17,595
 
IMC-F106C (PRAME)
   
3,012
     
2,182
       
904
 
IMC-C103C (MAGE-A4)
   
2,688
     
1,947
       
1,892
 
IMC-I109V(HBV)
   
1,818
     
1,317
       
847
 
Other programs
   
5,282
     
3,826
       
2,475
 
Research expenses
   
278
     
201
       
299
 
Total external research and development expenses
   
31,792
     
23,028
       
24,012
 
Internal research and development expenses:
                         
Headcount related expenses
   
14,493
     
10,498
       
10,318
 
Laboratory consumables
   
2,767
     
2,004
 

   
2,023
 
Laboratory equipment expenses
   
1,131
     
819
       
753
 
Other
   
10
     
7
       
51
 
Total internal research and development expenses
   
18,401
     
13,328
       
13,145
 
Total research and development expenses
   
50,193
     
36,356
       
37,157
 
 
10

For the six months ended June 30, 2021, our research and development expenses were £36.4 million, as compared to £37.2 million for the six months ended June 30, 2020. This decrease of £0.8 million was primarily attributable to a decrease in external research and development expenses of £1.0 million partially offset by an increase in internal research and development expenses of £0.2 million.

For the six months ended June 30, 2021, our external research and development expenses reduced by £1.0 million. This was driven by a reduction in spend of £4.0 million incurred for our tebentafusp program as clinical trial activity has reduced.  This is partially offset by the following increases: an increase of £1.3 million expenses incurred for our IMC-F106C program both due to increased clinical activities, £0.5 million for our IMC-I109V program reflecting increased activity in advance of commencing dosing in our Phase 1 single ascending dose trial which started in the second quarter 2021, and £1.4 million on other programs across our portfolio.
 
For the six months ended June 30, 2021, our internal research and development increased by £0.2 million. This was due to a £1.7m share based payment charge partially offset by a reduction in other staff related cost of £1.5m.
 
Administrative Expenses
 
For the six months ended June 30, 2021, administrative expenses were £44.0 million, compared to £21.9 million for the six months ended June 30, 2020, an increase of £22.1 million.  The administrative expenses for the six months ended June 30, 2021, of £44.0 million, comprises the following:  a share based payment charge of £16.4 million which has increased by £13.0 million compared to the comparative period; other staff related expenses of £6.9 million, a decrease of £2.7 million;  pre-commercial expenditure related to tebentafusp of £6.1 million, an increase of £5.6 million; legal and professional fees of £5.7 million, an increase of £4.3 million primarily attributable to the IPO and additional costs incurred as a result of being a public company; depreciation of property, plant and equipment of £3.6 million, a decrease of £1.0 million and unfavourable foreign exchange movements of £2.3 million, compared to favourable foreign exchange movements of £1.3 million in the comparative period.

Net Other Operating (Expense) / Income
 
For the six months ended June 30, 2021, net other operating expense totalled £nil compared to net other operating income of £0.4 million for the six months ended Jun 30, 2021.  The decrease of £0.4 million reflects primarily a £0.2 million gain on the remeasurement of a right of use asset following the reduction in lease term for the associated leasehold property during the three months ended June 30, 2020 and £0.1 million sub-lease income arising from sub-lease arrangements on certain leasehold properties.

Finance Income
 
For the six months ended June 30, 2021, finance income was £nil compared to £1.6 million for the six months ended June 30, 2020. This decrease of £1.6 million reflects the movement in fair value of the derivative liability for £1.3 million, a foreign exchange call option over certain series B preferred shares which was settled in full on March 2, 2020 and a decrease in bank interest received on cash and cash equivalents of £0.3 million.
 
11

Finance Costs
 
For the six months ended June 30, 2021, finance costs amounted to £3.1 million, compared to £1.7 million for the six months ended June 30, 2020. This increase of £1.4 million is primarily due to an increase in interest expenses on financial liabilities measured at amortized cost of £2.1 million reflecting our loan from Oxford Finance of $50 million which was drawn down on November 6, 2020, including £0.5 million relating to a fee that became to Oxford Finance upon completion of the IPO.  During the six months ended June 30, 2020 interest expenses on financial liabilities of £0.2 million reflect our outstanding loan from the Gates Foundation, which converted into series B preferred shares on March 2, 2020.  This increase is partially offset by £0.4 million decrease in interest on lease liabilities reflecting the termination of two leasehold properties subsequent to the six months ended June 30, 2020 and a £0.3 million decrease in the loss from a change in the fair value of the embedded derivative asset also following the conversion of our outstanding loan from the Gates Foundation.

Income Tax Credit
 
For the six months ended June 30, 2021, the income tax credit amounted to £7.5 million compared to £6.9 million for the six months ended June 30, 2020. This increase of £0.6 million relates to an increase in total research and development costs and administrative expenses of £21.3 million partially offset by an increase in operating costs in the period that are not eligible for the UK R&D tax credit regime primarily the non-cash share-based payment charge.
 
Liquidity and Capital Resources

Sources of Liquidity

Since our inception, we have not generated any product revenue and have incurred operating losses and negative cash flows from our operations. We expect to incur significant expenses and operating losses for the foreseeable future as we advance our product candidates through preclinical and clinical development, seek regulatory approval and pursue commercialization of any approved product candidates. We expect that our research and development and general and administrative costs will increase in connection with our planned research activities. As a result, we will need additional capital to fund our operations until such time as we can generate significant revenue from product sales.

We do not currently have any approved products and have never generated any revenue from product sales. We have funded our operations to date primarily with proceeds from sales of equity securities, debt financing and collaboration agreements. Through June 30, 2021, we have raised an aggregate of $1,135.1 million through private placements of our ordinary and preferred shares, payments from our collaboration partners, debt financing and most recently, the completion of our IPO where we listed our ADSs on the Nasdaq Global Select Market and raised gross proceeds of $297.1 million. In addition to the ADSs sold in the IPO, we completed the concurrent sale of an additional 576,923 ADSs at the IPO price of $26.00 per ADS, for gross proceeds of approximately $15.0 million, in a private placement to the Gates Foundation.

As of June 30, 2021, and December 31, 2020, we had cash and cash equivalents of £278.9 million and £129.7 million, respectively.

Other than our debt facility with Oxford Finance described below, we currently have no ongoing material financing commitments, such as lines of credit or guarantees, that are expected to affect our liquidity over the next five years, other than our lease obligations and supplier purchase commitments described below.

Cash Flows

The following table summarizes the primary sources and uses of cash for each period presented:

   
Six Months Ended June 30,
 
   
2021
   
2021
   
2020
 
   
$’000
   
£’000
   
£’000
 
           
(unaudited)
         
Cash and cash equivalents at beginning of year
   
179,085
     
129,716
     
73,966
 
Net cash flows used in operating activities
   
(80,867
)
   
(58,575
)
   
(40,645
)
Net cash flows from / (used in) investing activities
   
61
     
44
     
(1,684
)
Net cash flows from financing activities
   
286,834
     
207,761
     
25,054
 
Net foreign exchange difference on cash held
   
(105
)
   
(76
)
   
118
 
Cash and cash equivalents at end of period
   
385,008
     
278,870
     
56,809
 

12

Operating Activities

Net cash used in operating activities increased to £58.6 million for the six months ended June 30, 2021 from £40.6 million for the six months ended June 30, 2020. This increase of £17.9 million is due to operating losses increasing by £26.1 million and £18.6 million net income tax credit received during the six months ended June 30, 2020.  These are partially offset by the following non-cash movements, an increase in the non-cash adjustments for the share-based payment charge of £14.5 million and a decrease in working capital of £11.7 million.

Investing Activities

Net cash from investing activities for the six months ended June 30, 2021 was £nil compared to net cash used in investing activities of £1.7 million for the six months ended June 30, 2020. This was primarily related to £1.7 million decrease in capital expenditure on plant, property and equipment.

Financing Activities

Net cash from financing activities during the six months ended June 30, 2021 was £207.8 million primarily reflecting the net proceeds we received of £211.0 million from the IPO which closed in February 2021.  Net cash from financing activities during the six months ended June 30, 2020 was £25.1 million.    This represents gross funding of £47.1 million from the second and final close of the series B preferred share financing in March 2020 of which £19.9 million was non-cash consideration arising from the conversion of the
Gates Foundation convertible loan into series B preferred shares.

Operation and Funding Requirements

Since our inception, we have incurred significant losses due to our substantial research and development expenses. We have an accumulated deficit of £411.9 million as of June 30, 2021. We expect to continue to incur significant losses in the foreseeable future and expect our expenses to increase in connection with our ongoing activities, particularly as we continue research and development and clinical activities for our product candidates. In addition, due to our IPO in February 2021, we have and expect to continue to incur additional costs associated with operating as a public company. Our expenses will also increase if, and as, we:


continue to advance our clinical trials and the development of our pre-clinical programs;

continue to invest in our soluble TCR platforms to conduct research to identify novel technologies;

change or add additional suppliers;

13


add additional infrastructure to our quality control, quality assurance, legal, compliance and other groups to support our operations as we progress product candidates toward commercialization;

seek to attract and retain skilled personnel;

create additional infrastructure to support our operations as a public company listed in the United States and our product development and planned future commercialization efforts;

seek marketing approvals and reimbursement for our product candidates;

establish a sales, marketing and distribution infrastructure to commercialize any products for which we may obtain marketing approval;

seek to identify and validate additional product candidates;

acquire or in-license other product candidates and technologies;

maintain, protect, defend, enforce and expand our intellectual property portfolio; and

experience any delays, interruptions or encounter issues with any of the above, including any delays or other impacts as a result of the COVID-19 pandemic.

We held cash and cash equivalents of £278.9 million as at June 30, 2021. We believe that our existing cash and cash equivalents, together with our debt facility, is sufficient to enable us to fund our planned operating expenses and capital expenditure requirements through at least the end of 2022. This estimation of funding requirements includes an assessment of the forecasts including the ongoing impact of the COVID-19 pandemic. We have based this estimation of capital requirements on assumptions that may prove to be wrong, and we could utilize our available capital resources sooner than we currently expect. If we receive regulatory approval for our other product candidates, we expect to incur significant commercialization expenses related to product manufacturing, sales, marketing and distribution, depending on where we choose to commercialize. We may also require additional capital to pursue in-licenses or acquisitions of other product candidates.

Because of the numerous risks and uncertainties associated with research, development and commercialization of pharmaceutical product candidates, we are unable to estimate the exact amount of our working capital requirements. Our future funding requirements will depend on and could increase significantly as a result of many factors, including:


the progress, timing, scope and costs of our clinical trials, including the ability to timely initiate clinical sites, enroll subjects and manufacture soluble bispecific TCR product candidates for our ongoing, planned and potential future clinical trials;

the time and costs required to perform research and development to identify and characterize new product candidates from our research programs;

the time and cost necessary to obtain regulatory authorizations and approvals that may be required by regulatory authorities to execute clinical trials or commercialize our products;

our ability to successfully commercialize our product candidates, if approved;

our ability to have clinical and commercial products successfully manufactured consistent with FDA, EMA and other authorities’ regulations;

the amount of sales and other revenues from product candidates that we may commercialize, if any, including the selling prices for such potential products and the availability of adequate third-party coverage and reimbursement for patients;

the sales and marketing costs associated with commercializing our products, if approved, including the cost and timing of building our marketing and sales capabilities;

the cost of building, staffing and validating our manufacturing processes, which may include capital expenditure;

the terms and timing of any revenue from our existing collaborations;

the costs of operating as a public company;

the time and cost necessary to respond to technological, regulatory, political and market developments;

the costs of filing, prosecuting, defending and enforcing any patent claims and other intellectual property rights;

the costs, associated with, and terms and timing of, any future any potential acquisitions, strategic collaborations, licensing agreements or other arrangements that we may establish; and

14


the inability of clinical sites to enroll patients as healthcare capacities are required to cope with natural disasters, epidemics or other health system emergencies, such as the COVID-19 pandemic.

A change in the outcome of any of these or other variables with respect to the development of any of our current and future product candidates could significantly change the costs and timing associated with the development and commercialization of that product candidate. Furthermore, our operating plans may change in the future, and we may need additional funds to meet operational needs and capital requirements associated with such operating plans.

Until we can generate sufficient product and royalty revenue to finance our cash requirements, which we may never do, we expect to finance our future cash needs through a combination of public or private equity offerings, debt financings, collaborations, strategic alliances, licensing arrangements and other marketing or distribution arrangements as well as grant funding. If we are unable to obtain additional funding on favorable terms when needed, we may have to delay, reduce the scope of or terminate one or more of our research and development programs or clinical trials.

Critical Accounting Policies and Significant Judgments and Estimates

Our unaudited condensed consolidated interim financial statements for the three and six months ended June 30, 2021 and 2020, respectively, have been prepared in accordance with International Accounting Standard 34, “Interim Financial Reporting,” or IAS 34. The preparation of the unaudited condensed consolidated interim financial statements requires us to make judgements, estimates and assumptions that affect the value of assets and liabilities—as well as contingent assets and liabilities—as reported on the statement of financial position date, and revenues and expenses arising during the fiscal year.

The estimates and associated assumptions are based on information available when the consolidated financial statements are prepared, historical experience and various other factors which are believed to be reasonable under the circumstances. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising that are beyond the Group’s control. Hence, estimates may vary from the actual values.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which they become known and are applied prospectively.

Those judgements and estimates made, together with our significant accounting policies, are set out in the consolidated financial statements of the Group for the year ended December 31, 2020. There have been no changes to these accounting policies for the six months ended June 30, 2021.

Recently Issued and Adopted Accounting Pronouncements

A description of recently issued accounting pronouncements that may potentially impact our financial position and results of operations is disclosed in Note 2, “Significant Accounting Policies,” to our unaudited condensed consolidated interim financial statements included in Exhibit 99.1 of this Report.

COVID-19 Business Update
 
With the global spread of the ongoing coronavirus 2019, or COVID-19, pandemic since the first quarter of 2020, we have implemented business continuity plans designed to address and mitigate the impact of the COVID-19 pandemic on our employees and our business, including our preclinical studies and clinical trials.  While we are experiencing limited financial impacts at this time, given the global economic slowdown, the overall disruption of global healthcare systems and the other risks and uncertainties associated with the pandemic, our business, financial condition and results of operations could be materially adversely affected. We continue to closely monitor the COVID-19 pandemic as we evolve our business continuity plans, clinical development plans and response strategy as required or recommended by government authorities or in the best interests of our employees and business partners.

15

To date, the COVID-19 pandemic has resulted in a short-term delay of up to six months in progressing our early-stage pipeline programs and specifically, our Phase 1 clinical trial in HBV. In addition, our current and planned clinical trials may also be affected by the COVID-19 pandemic, including (i) delays or difficulties in enrolling and retaining patients in our clinical trials, including patients that may not be able or willing to comply with clinical trial protocols if quarantines impede patient movement or interrupt healthcare services; (ii) delays or difficulties in clinical site initiation, including difficulties in recruiting and retaining clinical site investigators and clinical site staff; (iii) diversion or prioritization of healthcare resources away from the conduct of clinical trials and towards the COVID-19 pandemic, including the diversion of hospitals serving as our clinical trial sites and hospital staff supporting the conduct of our clinical trials and, because as healthcare providers, may also have a heightened exposure to COVID-19 and adversely impact our clinical trial operations; (iv) interruption of our future clinical supply chain or key clinical trial activities, such as clinical trial site monitoring, due to limitations on travel imposed or recommended by federal, state/provincial or municipal governments, employers and others; and (v) limitations in employee resources that would otherwise be focused on the conduct of our planned clinical trials, including because of sickness of employees or their families or the desire of employees to avoid contact with large groups of people.

The COVID-19 pandemic remains a rapidly evolving situation. We will continue to closely monitor, assess and mitigate the effects of the COVID-19 pandemic on our business.


16


Exhibit 99.3




PRESS RELEASE

Immunocore Reports Second Quarter 2021 Financial Results & Provides a Business Update

Biologics License Application (BLA) submission for tebentafusp in metastatic uveal melanoma remains on track for completion in Q3; FDA has granted tebentafusp Real Time Oncology Review (RTOR) and the application will be part of the Project Orbis initiative

Submission of a Market Authorization Application (MAA) to the European Medicines Agency (EMA), and the United Kingdom’s Medicines and Healthcare Regulatory Agency (MHRA) accelerated to Q3; EMA granted tebentafusp accelerated assessment procedure for this MAA

Dose escalation of IMC-C103C targeting MAGE-A4 and IMC-F106C targeting PRAME continues as planned; initial Phase 1 MAGE-A4 data planned for Q4

Cash position of approximately $385 million as of June 30, 2021

(OXFORDSHIRE, England & CONSHOHOCKEN, Penn. & ROCKVILLE, Md., US, 11 August 2021) Immunocore Holdings plc (Nasdaq: IMCR), a late-stage biotechnology company pionee