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 2023

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



INCORPORATION BY REFERENCE
 
Exhibits 99.1, 99.2 and 99.4 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 Nos. 333-255182, 333-265000 and 333-271164) and the registration statement on Form F-3ASR (File No. 333-264105) 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plc (the “Company”) and to be a part thereof from the date on which this Report is furnished, to the extent not superseded by documents or reports subsequently filed or furnished.
 
Exhibits 99.3 and 99.4 to this Report are 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 either exhibit 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”, “believe”, “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 risks and other 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” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” 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 as at and for the Three and Six Months Ended June 30, 2023.
     
 
Management’s Discussion and Analysis of Financial Condition and Results of Operations as at and for the Three and Six Months Ended June 30, 2023.
     
 
Press Release dated August 10, 2023.
     
99.4
 
Earnings Conference Call Presentation dated August 10, 2023.


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 10, 2023
By:
/s/ Bahija Jallal, Ph.D.
     
Name
Bahija Jallal, Ph.D.
     
Title:
Chief Executive Officer
 



Exhibit 99.1

Immunocore Holdings plc
Unaudited Condensed Consolidated Interim Financial Statements

Unaudited Condensed Consolidated Statements of Loss and Comprehensive Loss

         
Three months ended
June 30,
   
Six Months Ended
June 30,
 
   
Notes
   
2023
£’000
   
2022
£’000
   
2023
£’000
   
2022
£’000
 
Product revenue, net
   
3
     
45,514
     
23,992
     
87,566
     
31,674
 
Pre-product revenue, net
   
3
     
     
3,708
     
     
6,537
 
Total revenue from sale of therapies
           
45,514
     
27,700
     
87,566
     
38,211
 
Collaboration revenue
   
3
     
2,250
     
4,302
     
4,739
     
16,265
 
Total revenue
           
47,764
     
32,002
     
92,305
     
54,476
 
                                         
Cost of product revenue
   
     
(886
)
   
(34
)
   
(1,064
)
   
(282
)
Research and development expenses
           
(28,767
)
   
(20,150
)
   
(57,216
)
   
(38,731
)
Selling and administrative expenses
   
4
     
(33,884
)
   
(18,811
)
   
(67,185
)
   
(38,916
)
Operating loss
           
(15,773
)
   
(6,993
)
   
(33,160
)
   
(23,453
)
                                         
Finance income
    5      
3,412
     
118
     
5,958
     
128
 
Finance costs
           
(1,565
)
   
(1,397
)
   
(3,185
)
   
(2,730
)
Net finance income / (costs)
           
1,847
     
(1,279
)
   
2,773
     
(2,602
)
                                         
Loss before taxation
           
(13,926
)
   
(8,272
)
   
(30,387
)
   
(26,055
)
Income tax (charge) / credit
   
6
     
(151
)
   
2,151
     
(387
)
   
3,806
 
Loss for the period
           
(14,077
)
   
(6,121
)
   
(30,774
)
   
(22,249
)
                                         
Other comprehensive income / ( loss)
                                       
Other comprehensive income /  (loss) that is or may be reclassified to profit or loss in subsequent periods:
                                       
Exchange differences on translation of foreign operations
           
1,054
     
(323
)
   
1,434
     
(118
)
Total other comprehensive income / (loss) for the period
           
1,054
     
(323
)
   
1,434
     
(118
)
                                         
Total comprehensive loss for the period
           
(13,023
)
   
(6,444
)
   
(29,340
)
   
(22,367
)
Basic and diluted loss per share - £
    7
      (0.29 )     (0.14 )     (0.64 )     (0.51 )

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,
2023
£’000
   
December 31,
2022
£’000
 
Non-current assets
                 
Property, plant and equipment
    8      
8,325
     
6,472
 
Intangible assets
            410       410  
Right of use assets
           
24,233
     
25,173
 
Other non-current assets
           
7,895
     
7,342
 
Deferred tax asset
    6      
4,442
     
4,240
 
Total non-current assets
           
45,305
     
43,637
 
Current assets
                       
Inventory
           
1,891
     
943
 
Trade and other receivables
   
9
     
48,458
     
46,711
 
Tax credits receivable
    6
     
2,365
     
11,688
 
Cash and cash equivalents
           
342,341
     
332,539
 
Total current assets
           
395,055
     
391,881
 
Total assets
           
440,360
     
435,518
 
Equity
                       
Share capital
    10      
98
     
97
 
Share premium
           
137,957
     
123,751
 
Foreign currency translation reserve
           
(1,663
)
   
(3,097
)
Other reserves
           
337,847
     
337,847
 
Share-based payment reserve
    11      
95,062
     
81,411
 
Accumulated deficit
           
(292,027
)
   
(261,253
)
Total equity
           
277,274
     
278,756
 
Non-current liabilities
                       
Non-current accruals
            1,646       1,479  
Interest-bearing loans and borrowings
           
37,116
     
39,500
 
Deferred revenue
   
3
     
4,331
     
4,331
 
Lease liabilities
           
27,570
     
28,248
 
Provisions
           
136
     
114
 
Total non-current liabilities
           
70,799
     
73,672
 
Current liabilities
                       
Trade and other payables
   
12
     
85,754
     
75,076
 
Corporation tax liability
    6       803        
Interest-bearing loans and borrowings
            991        
Deferred revenue
   
3
     
3,204
     
6,408
 
Lease liabilities
           
1,513
     
1,555
 
Provisions
           
22
     
51
 
Total current liabilities
           
92,287
     
83,090
 
Total liabilities
           
163,086
     
156,762
 
Total equity and liabilities
           
440,360
     
435,518
 

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, 2023
         
97
     
123,751
     
(3,097
)
   
81,411
     
337,847
     
(261,253
)
   
278,756
 
Loss for the period
         
     
     
     
     
     
(30,774
)
   
(30,774
)
Other comprehensive income
         
     
     
1,434
     
     
     
     
1,434
 
Total comprehensive income / (loss) for the period
         
     
     
1,434
     
     
     
(30,774
)
   
(29,340
)
Exercise of share options
    10, 11
     
1
     
14,206
     
     
     
     
     
14,207
 
Equity-settled share-based payment transactions
   
11
     
     
     
     
13,651
     
     
     
13,651
 
At June 30, 2023
           
98
     
137,957
     
(1,663
)
   
95,062
     
337,847
     
(292,027
)
   
277,274
 

   
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, 2022
         
88
     
212,238
     
89
     
54,357
     
386,167
     
(481,392
)
   
171,547
 
Loss for the period
         
     
     
     
     
     
(22,249
)
   
(22,249
)
Other comprehensive loss
         
     
     
(118
)
   
     
     
     
(118
)
Total comprehensive loss for the period
         
     
     
(118
)
   
     
     
(22,249
)
   
(22,367
)
Exercise of share options
 

     
     
1,384
     
     
     
     
     
1,384
 
Capital reduction in Group’s parent company
                (213,043 )                 (48,320 )     261,363        
Equity-settled share-based payment transactions
   
11
     
     
     
     
14,088
     
     
     
14,088
 
At June 30, 2022
           
88
     
579
     
(29
)
   
68,445
     
337,847
     
(242,278
)
   
164,652
 

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,
 
    Notes
   
2023
£’000
   
2022
£’000
 
Cash flows from operating activities
 
             
Loss for the period
 
     
(30,774
)
   
(22,249
)
Adjustments for:
                     
Equity settled share-based payment expense
    11
     
13,651
     
14,088
 
Depreciation
           
2,601
     
3,317
 
Net finance (income) / costs
           
(2,773
)
   
2,602
 
Foreign exchange movements
           
9,106
     
(8,808
)
Other
           
(187
)
   
(131
)
Income tax charge / (credit)
           
387
     
(3,806
)
Working capital adjustments:
                       
Increase in trade and other receivables and other non-current assets
           
(3,562
)
   
(19,951
)
Increase in trade and other payables
           
12,177
     
11,474
 
Decrease in current and non-current deferred revenue
           
(3,204
)
   
(15,905
)
Other working capital movements
           
(748
)
   
(648
)
Cash used in operations
           
(3,326
)
   
(40,017
)
R&D tax credits received
    6
     
9,904
     
 
Taxation paid
           
(177
)
   
 
Net cash from / (used in) operating activities
            6,401       (40,017 )
Cash flows from investing activities
                       
Proceeds from sale of property, plant and equipment                   5  
Purchase of property, plant and equipment
    8      
(3,238
)
   
(475
)
Interest income receipts
           
5,550
     
128
 
Net cash flows from / (used in) investing activities
           
2,312
     
(342
)
Cash flows from financing activities
                       
Exercise of share options
    10, 11
     
14,207
     
1,384
 
Interest paid
           
(3,559
)
   
(1,805
)
Repayment of lease liabilities
           
(805
)
   
(1,449
)
Net cash flows from / (used in) financing activities
           
9,843
     
(1,870
)
Increase / (decrease) in cash and cash equivalents
           
18,556
     
(42,229
)
Net foreign exchange difference on cash held
           
(8,754
)
   
12,407
 
Cash and cash equivalents at beginning of the period
           
332,539
     
237,886
 
Cash and cash equivalents at end of the period
           
342,341
     
208,064
 

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, Immunocore GmbH, and Immunocore Nominees Limited (collectively referred to as the “Group”).

The Company’s American Depositary Shares (“ADSs”) began trading on the Nasdaq Global Select Market under the ticker symbol “IMCR” on February 5, 2021, following its initial public offering (“IPO”). The IPO and concurrent private placement generated net proceeds of £210,985,000 ($286,887,000) after underwriting discounts, commissions and directly attributable offering expenses. In July 2022, the Company raised £116,812,000 ($140,000,000) before deductions for offering expenses of £388,000 through the sale of its ordinary shares in the form of ADSs and non-voting ordinary shares in a private placement.

The principal activity of the Group is pioneering the development and sale 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 diseases. Leveraging its proprietary, flexible, off-the-shelf ImmTAX platform, the Group is developing a deep pipeline in multiple therapeutic areas, including four clinical stage programs in oncology and infectious disease, advanced pre-clinical programs in autoimmune disease and multiple earlier pre-clinical programs.

In 2022, the Group received approval for its lead product, KIMMTRAK, for the treatment of unresectable metastatic uveal melanoma from the U.S. Food and Drug Administration, the European Commission, and other health authorities. KIMMTRAK is now approved in over 35 countries and the Group has commercially launched in the United States, Germany and France, among other territories, with further commercial launches underway in additional territories where it has received approval. The Group expects to obtain regulatory approval for KIMMTRAK in further territories in 2023.

2. Significant accounting policies

Basis of preparation and statement of compliance

The unaudited condensed consolidated interim financial statements as at and for the three and six months ended June 30, 2023 and 2022 have been prepared in accordance with International Accounting Standard 34,Interim Financial Reporting (“IAS 34”). The accounting policies, including the Group’s Critical accounting estimates, applied in these interim financial statements are the same as those applied in the Group’s consolidated financial statements as at and for the year ended December 31, 2022.

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, 2022 included in the Company’s Annual Report on Form 20-F, filed with the Securities and Exchange Commission on March 1, 2023 (the “Annual Report”).

The unaudited condensed 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.

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 10, 2023, and signed on its behalf by Dr. Bahija Jallal, Chief Executive Officer of the Group.

Adoption of new accounting standards

There have been no new accounting standards adopted by the Group in the three and six months ended June 30, 2023 which have had a material impact on these unaudited condensed consolidated interim financial statements. There are no standards issued but not yet effective that the Group expects to have a material impact on its financial statements.

6

Going concern

The Group reported cash and cash equivalents of £342,341,000 and net current assets of £302,768,000 as at June 30, 2023, with an operating loss for the three and six months ended June 30, 2023 of £15,773,000 and £33,160,000 respectively, and net cash from operating activities for the six months ended June 30, 2023 of £6,401,000. The positive operational cash inflow was largely due to R&D tax credits received, and generated net product revenue of £45,514,000 and £87,566,000 for the three and six months ended June 30, 2023, respectively.

In assessing the going concern assumptions, the Board has undertaken an assessment of the current business and strategy forecasts covering a twelve month period, which includes anticipated KIMMTRAK revenue. In assessing the downside risks, the Board has also considered scenarios incorporating a range of revenue arising from KIMMTRAK sales. As part of considering the downside risks, the Board has considered the impact of the current macroeconomic environment, such as the effects of pandemics or epidemics and other potential economic impacts including the war in Ukraine and related geopolitical tensions, as well as global inflation, liquidity concerns at banks and financial institutions, capital market instability, interest and exchange rate fluctuations, and increases in commodity, energy and fuel prices as well as supply chain disruptions. The Board has concluded that while these may have a future impact on the Group’s business and implementation of its strategy and plans, it anticipates that any such 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 Group is not aware of any specific event or circumstance that would require the Group 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 Group’s financial statements.

Given the current cash position and the assessment performed, the Board believes that the Group will have sufficient funds to continue to meet its liabilities as they fall due for a period of at least twelve months from the date of issue of these unaudited condensed consolidated interim financial statements and therefore, the Group has prepared the financial statements on a going concern basis. This scenario is based on the Group’s lower range of anticipated revenue levels. As the Group continues to incur significant expenses in the pursuit of its business strategy, including further commercialization and marketing plans for KIMMTRAK, additional funding will be needed before further existing clinical and preclinical programs may be expected to reach commercialization, which would potentially lead to additional operational cash inflows. Until the Group can generate revenue from product sales sufficient to fund its ongoing operations and further develop its pipeline, 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 judgments

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 the results of which form the basis of making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. 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 the estimate is revised if the revision affects only that period or the period of revision and future periods if this revision affects both current and future periods.

Judgments and estimates made, including Critical accounting estimates, together with the Group’s significant accounting policies, are disclosed in the consolidated financial statements of the Group for the year ended December 31, 2022, and are presented in the Group’s Annual Report. There have been no significant updates to the Group’s estimates and accounting policies for the three and six months ended June 30, 2023.

Fair value disclosures
 
For financial assets and liabilities not measured at fair value in the unaudited condensed consolidated statement of financial position, the carrying amount is a reasonable approximation of fair value, with the exception of the Group’s loan, the fair value of which does not materially differ to its carrying value at June 30, 2023 and December 31, 2022.

Segmental reporting

The Group operates in one operating segment. The Group’s chief operating decision maker (the “CODM”), its Chief Executive Officer, manages the Group’s operations on an integrated basis for the purposes of allocating resources.

7

3. Revenue

Revenue is presented by type, and net of deductions in the table below. The Group’s accounting policies for revenue and such deductions are disclosed in the consolidated financial statements of the Group for the year ended December 31, 2022.

   
For the three months ended
June 30,
   
For the six months ended
June 30,
 
   
2023
£’000
   
2022
£’000
   
2023
£’000
   
2022
£’000
 
                         
Product revenue, net
   
45,514
     
23,992
     
87,566
     
31,674
 
Pre-product revenue, net
   
     
3,708
     
     
6,537
 
Total revenue from sale of therapies
   
45,514
     
27,700
     
87,566
     
38,211
 
Collaboration revenue
                               
Eli Lilly
   
     

     
     
7,361
 
Genentech
   
2,250
     
4,302
     
4,739
     
8,904
 
Total collaboration revenue
   
2,250
     
4,302
     
4,739
     
16,265
 
Total revenue
   
47,764
     
32,002
     
92,305
     
54,476
 

Eli Lilly and Genentech are based in the United States. Net product revenue from the sale of KIMMTRAK, and net pre-product revenue from the sale of tebentafusp as part of a compassionate use and early access program are presented by region based on the location of the customer below.

   
For the three months ended
June 30,
   
For the six months ended
June 30,
 
   
2023
£’000
   
2022
£’000
   
2023
£’000
   
2022
£’000
 
United States
   
32,812
     
18,137
     
62,345
     
25,819
 
Europe
   
12,189
     
9,560
     
24,517
     
12,389
 
Rest of World
   
513
     
3
     
704
     
3
 
Total revenue from sale of therapies
   
45,514
     
27,700
     
87,566
     
38,211
 

Product revenue, net

During the three and six months ended June 30, 2023, the Group recognized £45,514,000 and £87,566,000 of net product revenue, respectively, relating to the sale of KIMMTRAK primarily in the United States and Europe following marketing approvals in the first half of 2022. Revenue is presented after estimated deductions for rebates, chargebacks, other customer fees and returns.

Pre-product revenue, net

There was no pre-product revenue during the three and six months ended June 30, 2023, following the transition to the commercial sale of KIMMTRAK in France in the second half of 2022. In the three and six months ended June 30, 2022, the Group recognized £3,708,000 and £6,537,000 of net pre-product revenue, respectively, relating to the sale of tebentafusp under a compassionate use and early access program in France after estimated deductions for rebates and returns.

Genentech Collaboration

During the three and six months ended June 30, 2023, the Group recognized £2,250,000 and £4,739,000 of revenue, respectively, relating to the 2018 Genentech agreement and IMC-C103C (for the three and six months ended June 30, 2022: £4,302,000 and £8,904,000).

In February 2023, Genentech accepted the Group’s proposal to cease co-funding the development of MAGE-A4 HLA-A02 targeted programs, except for the Group’s equal share of the wind-down costs of the IMC-C103C Phase 1 clinical trial.

Eli Lilly Collaboration

During the three and six months ended June 30, 2023, the Group recognized no revenue relating to the Eli Lilly collaboration (for the three and six months ended June 30, 2022: £nil and £7,361,000, respectively).

The Group released the remaining deferred revenue attributed to the third target under the collaboration after the parties agreed to terminate the agreement during the three months ended March 31, 2022. No further revenue under the collaboration is expected.

8

Deferred revenue

Of the total revenue recognized during the three and six months ended June 30, 2023, £1,602,000 and £3,204,000, respectively, was included in deferred revenue at January 1, 2023. No revenue was recognized in the three and six months ended June 30, 2023 relating to performance obligations satisfied in previous years (for the three and six months ended June 30, 2022: £nil). The remaining current deferred revenue as at June 30, 2023 relates to the Genentech agreement. The Group expects to recognize this remaining revenue within the next year.

Non-current deferred revenue in the unaudited condensed consolidated interim statement of financial position as at June 30, 2023 and December 31, 2022, respectively, relates to the Group’s non-refundable payment of £4,331,000 received from Medison Pharma Ltd (“Medison”) in the year ended December 31, 2022. The Group expects to recognize revenue for this combined performance obligation of supplying KIMMTRAK and granting Medison the exclusive right to distribute KIMMTRAK in South America with the sale of products following regulatory approval in South America. The Group estimates that Product revenue recognition of this Non-current deferred revenue will commence later than June 302024.

4. Selling and administrative expenses

There were £4,653,000 and £9,406,000 of foreign exchange losses, which the Group classifies within Selling and administrative expenses, for the three and six months ended June 30, 2023 respectively, compared to gains of £6,778,000 and £9,159,000 in the three and six months ended June 30, 2022 respectively. These gains and losses arise on a number of foreign currency items, including the translation of monetary foreign currency balances in the Group’s main operating subsidiary in the United Kingdom.


5. Finance income



Finance income increased in the three and six months ended June 30, 2023 due to higher interest rates and higher levels of cash and cash equivalents held by the Group in the three and six months ended June 30, 2022 compared to the three and six months ended June 30, 2023.

6. Income tax

Income tax (charge) / 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 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 rate in the interim financial statements may differ from the Group’s estimate of the effective tax rate for the annual financial statements.



The Group’s consolidated estimated effective tax rate for the six months ended June 30, 2023 was 1.3% (tax credit rate for the six months ended June 30, 2022: 14.6%). During the six months ended June 30, 2023, the Company recorded a tax charge of £387,000  (tax credit for the six months ended June 30, 2022: £3,806,000). Historically, the Group satisfied the definition of a Small and Medium-sized Enterprise (“SME”) and was able to surrender some of its U.K. tax losses for a cash rebate of up to 33.35% of expenditures related to eligible research and development projects. The Group exceeded the size limit thresholds and no longer qualifies for tax relief under the U.K. SME research and development regime in 2023. The Group will continue to benefit from the U.K. large company, Research & Development Expenditure Credit (“RDEC”) regime which can generate a cash rebate of up to 10.53% of qualifying research and development expenditures incurred prior to 1 April 2023 and 15% for expenditure incurred after this date. The Group records tax credits receivable under the SME research and development tax credit regime within Income tax (charge) / credit. Tax credits receivable under the large company RDEC regime are recorded ‘above the line’ as a reduction from research and development expenses.



A deferred tax asset of £4,442,000 has been recognized as of June 30, 2023 (December 31, 2022: £4,240,000) primarily representing unused tax credits and relevant research and development expenditure (which is capitalized for U.S. Federal Income Tax purposes but not for accounting purposes under IFRS) carried forward for one of the Group’s U.S. subsidiaries, 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.



During the six months ended June 30, 2023 the Group received U.K. tax credits of £9,904,000 relating to research and development expenditure in the year ended December 31, 2021 (for the six months ended June 30, 2022 no tax credits were received).
 
7. Basic and diluted loss per share
 
   
For the three months ended
June 30,
   
For the six months ended
June 30,
 
   
2023
   
2022
   
2023
   
2022
 
Loss for the period (£’000s)
   
(14,077
)
   
(6,121
)
   
(30,774
)
   
(22,249
)
Basic and diluted weighted average number of shares
   
48,694,047
     
43,935,837
     
48,440,318
     
43,901,011
 
Basic and diluted loss per share (£)
   
(0.29
)
   
(0.14
)
   
(0.64
)
   
(0.51
)


Basic and diluted 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. Outstanding share options 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.
 
9


8. Property, plant and equipment



During the three and six months ended June 30, 2023, the Group acquired assets at a cost of £768,000 and £3,238,000, respectively  relating primarily to laboratory equipment.

9. Trade and other receivables

   
June 30,
2023
£’000
   
December 31,
2022
£’000
 
Trade receivables
   
32,273
     
27,736
 
Other receivables
   
5,525
     
7,682
 
Prepayments and accrued income
   
10,660
     
11,293
 
     
48,458
     
46,711
 

Included within prepayments and accrued income are amounts paid in advance for clinical trials that are expected to be received in services or repaid within twelve months.

10. Share capital

Issued share capital
 
Ordinary
   
Deferred
 
(0.2p per share, except deferred shares which are 0.01p per share)
 
shares
   
shares
 
At January 1, 2023
   
48,088,346
     
5,793,501
 
Exercise of share options
   
853,003
     
 
At June 30, 2023
   
48,941,349
     
5,793,501
 

11. Share-based payments

During the three and six months ended June 30, 2023 the total charge for share-based payments was £6,990,000 and £13,651,000 respectively (for the three and six months ended June 30, 2022, £6,675,000 and £14,088,000, respectively).

The Group granted 48,980 and 180,621 options to purchase ordinary shares under the Group’s 2021 Equity Incentive Plan in the three months ended June 30, 2023 and 2022 respectively, and 742,105 and 1,363,653 options in the six months ended June 30, 2023 and 2022, respectively. The weighted average exercise price and weighted average fair value of options granted is set out below. The options in both periods were valued using the Black-Scholes model, with the majority vesting over a four-year period from the date of grant, and with 25% of the award vesting at the end of the first year and the remaining award vesting quarterly over the following three years. Of the options granted in the three months ended June 30, 2023, 43,380 options were awarded to the Company’s non-executive directors, which vest after one year from the date of grant.

   
For the three months ended
June 30,
   
For the six months ended
June 30,
 
   
2023
   
2022
   
2023
   
2022
 
   

$
   
$
   
$
   
$
 
Weighted average exercise price
   
57.51
     
28.86
     
63.94
     
25.47
 
Weighted average fair value
   
35.14
     
17.91
     
39.52
     
15.62
 

During the three and six months ended June 30, 2023, 561,940 and 853,003 options with a weighted average exercise price of $20.48 and $20.64, were exercised, respectively. As at June 30, 2023, and 2022, there were 9,739,383 and 10,174,957 outstanding options, respectively, of which 5,474,272 and 4,358,536 respectively, were exercisable.

10

12. Trade and other payables

   
June 30,
2023
£’000
   
December 31,
2022
£’000
 
Trade payables
   
13,992
     
11,716
 
Other taxation and social security
   
1,066
     
927
 
Pension liability
    395       34  
Accruals
   
70,301
     
62,399
 
     
85,754
     
75,076
 

Accruals as at June 30, 2023 include estimates for rebates, chargebacks, other customer fees and returns of £39,434,000 in respect of Product revenue from the sale of KIMMTRAK and Pre-product revenue from the sale of tebentafusp, compared to £24,066,000 as at December 31, 2022. Combined with the Non-current accruals in the unaudited condensed consolidated interim statement of financial position, our total accruals for such deductions from revenue were £41,080,000 as at June 30, 2023, and £25,545,000 as at December 31, 2022.

13. Events after the reporting period

In early August, the Group negotiated KIMMTRAK pricing with authorities in Germany. This price is expected to be published in September 2023 and is not materially higher than the Group’s estimate.


11

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 10, 2023.  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, 2022 filed with the SEC on March 1, 2023, 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, 2023 into U.S. dollars at a rate of £1.00 to $1.2709. 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.

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 and its consolidated subsidiaries.

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 are based on the Company’s expectations and assumptions as of the date of this Report, and involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by 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. 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.

Overview

We are a commercial 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 diseases. Leveraging our proprietary, flexible, off-the-shelf ImmTAX platform, we are developing a deep pipeline in multiple therapeutic areas, including four clinical stage programs in oncology and infectious disease, advanced pre-clinical programs in autoimmune disease and multiple earlier pre-clinical programs.

In 2022, we received approval for our lead product, KIMMTRAK, for the treatment of unresectable metastatic uveal melanoma, or mUM, from the U.S. Food and Drug Administration, or FDA, the European Commission, or EC, and other health authorities. KIMMTRAK is the lead product from our ImmTAX platform and is the first new therapy in uveal melanoma in four decades. To date, we have dosed over 1,000 cancer patients with KIMMTRAK, tebentafusp, and our other ImmTAX product candidates, which we believe is the largest clinical data set of any bispecific in a solid tumor and any TCR therapeutic. Our other clinical programs are being conducted with patients with a broad range of cancers including lung, bladder, gastric, head and neck and ovarian, among others. We believe that these other ImmTAX product candidates have the potential to address other tumor types with larger addressable patient populations and significant unmet need.

As of June 30, 2023, our global portfolio comprises approximately 600 patents and pending applications, including approximately 25 issued US patents and approximately 300 ex-US patents.  The majority of our patents and patent applications are solely owned. The portfolio encompasses solely owned patents and patent applications directed to our commercial TCR product (KIMMTRAK) and further product candidates (including IMC-F106C, IMC-M113V and IMC-I109V), our platform technology used to identify and generate our therapeutic candidates, novel targets, formulations and methods of treatment. A minor proportion of the portfolio, comprising certain older platform IP, is jointly owned in equal share with Adaptimmune. We control the prosecution of the jointly owned patents and patent applications, and we have rights under the joint patents as required to develop and commercialize our therapeutics.

Our ImmTAC Platform (Oncology)


KIMMTRAK (tebentafusp-tebn), our ImmTAC molecule targeting an HLA-A*02:01 gp100 antigen, is our first approved product. The FDA and the EC have approved KIMMTRAK (tebentafusp-tebn and tebentafusp, respectively) for the treatment of HLA-A*02:01-positive adult patients with unresectable or mUM. The U.K.’s MHRA, Health Canada, and the Australian Government Department of Health’s TGA have each approved KIMMTRAK for the treatment of HLA-A*02:01-positive adult patients with mUM. KIMMTRAK is now approved in over 35 countries and we have commercially launched in the United States, Germany, France among other territories. In the first half of the 2023, we launched KIMMTRAK in Austria, Israel, and most recently in Italy and Finland. In France and Germany, KIMMTRAK remains the standard of care for first line HLA-A*02:01 positive patients with mUM, with nearly all patients in Germany being  treated in first-line. The Company expects to launch KIMMTRAK in several additional European countries by the end of 2023. The Company plans to present updated 3-year overall survival, OS, data from the Phase 3 trial in mUM at a medical conference later this year.



KIMMTRAK is also being developed for the treatment of previously treated, advanced melanoma. In June 2022, we presented updated clinical data from our Phase 1b clinical trial of KIMMTRAK in metastatic cutaneous melanoma, or mCM, at the 2022 ASCO Annual Meeting. In mCM patients who progressed on prior anti-PD(L)1, KIMMTRAK with durvalumab continues to demonstrate promising overall survival, or OS, (1-yr ~75%) compared to recent benchmarks (1-yr ~55%). The Company has started randomization in the Phase 2/3 clinical trial. This trial is randomizing patients with previously treated, advanced melanoma, excluding only uveal melanoma, that have progressed on an anti-PD1, received prior ipilimumab and, if applicable, received a BRAF kinase inhibitor. Patients will be randomized to one of three arms including KIMMTRAK, as monotherapy or in combination with an anti-PD1, and a control arm. The Phase 2 portion of the trial will include 40 patients per arm and has a dual primary endpoint of OS and circulating tumor DNS, or ctDNA reduction. The company expects to complete randomization of the Phase 2 portion of the study in the second half of 2024.


IMC-F106C, our ImmTAC molecule targeting an optimal HLA-A*02 PRAME antigen is being evaluated in a Phase 1/2 dose escalation clinical trial in patients with multiple solid tumor cancers and is expected to initiate a Phase 3 trial in previously untreated, advanced melanoma patients in the first quarter of 2024. The initial Phase 1 of IMC-F106C, the first PRAME x CD3 ImmTAC bispecific protein, was presented at the 2022 European Society for Medical Oncology (ESMO) Congress. Durable RECIST responses and reduction in circulating tumor DNA or ctNDA, were observed across multiple solid tumors. We are enrolling patients into the Phase 1/2 monotherapy and combination arms across multiple tumor types, including the four expansion arms for patients with advanced ovarian, non-small cell lung, endometrial cancers, and melanoma. The updated analysis of the original eighteen melanoma patients (initially presented at ESMO in September 2022) continues to show promising durability of the clinical activity (range of duration of response from 6 months to 17 months). We expect to report data from the trial in the first half of 2024. The PRISM-MEL-301, the first PRAME Phase 3 trial with IMC-F106C, will randomize previously untreated, advanced melanoma to IMC-F106C+nivolumab versus nivolumab or nivolumab + relatlimab, depending on country.  Based on feedback from the FDA, including Project Optimus, the study will initially randomize to three arms: two well tolerated and clinically active F106C dose regimens (40 mcg and 160 mcg) and control arm and will discontinue one of the F106C dose regimens after an initial review of the first 60 patients randomized to the two experimental arms (90 patients randomized total). We plan to randomize the first patient in this trial in the first quarter of 2024. We estimate there are over ten thousand HLA-A02 advanced melanoma patients in the “Group of Seven” countries, or G7, per year.


IMC-P115C, our half-life extended ImmTAC molecule targeting an optimal HLA-A*02 PRAME antigen was announced as part of our pipeline in January 2023 with planned IND or CTA submission in 2024. This ImmTAC candidate was designed with the aim of improving patient convenience. IMC-P115C targets the same PRAME-A02 peptide and uses the same CD3 end and TCR specificity as IMC-F106C.


IMC-T119C, our ImmTAC molecule targeting an optimal HLA-A*24 PRAME antigen was announced as part of our pipeline in January 2023 with planned IND or CTA submission in 2024. In order to expand the potential of TCR therapy targeting PRAME, we are developing IMC-T119C, an ImmTAC product candidate targeting a PRAME peptide presented by HLA-A24. HLA-24 is an HLA-type that is estimated to be present in 60% of people in Japan and 15-20% in Western populations.


IMC-R117C, our ImmTAC molecule targeting an optimal HLA-A*02 PIWIL1 antigen was announced as part of our pipeline in January 2023 with planned IND or CTA submission in the fourth quarter of 2023. PIWIL1 is believed to play a role in tumor progression and is expressed across a range of tumors including colorectal, which is historically insensitive to immune checkpoints, as well as gastro-esophageal, and pancreatic cancer. PIWIL1 is also reported to be a negative prognostic marker. We believe IMC-R117C is the first PIWIL1 targeted immunotherapy.

Our ImmTAV Platform (Infectious Diseases)


IMC-M113V, our ImmTAV molecule targeting a human immunosuppression virus, or HIV, gag antigen bispecific TCR molecule, expected to be evaluated in a Phase 1 clinical trial for which we are currently enrolling patients. Our goal is to develop a functional cure for HIV. Initial Phase 1 safety and pharmacodynamic activity data from the single ascending dose portion of the study was presented at the Conference on Retroviruses and Opportunistic Infections (CROI) in 2023. IMC-M113V was well tolerated at doses where we observed biomarkers of T cell engagement. We are enrolling people living with HIV in the multiple ascending dose, or MAD, part of the trial, to identify a safe and tolerable dosing schedule. This study will also test whether IMC-M113V could lead to reduction in the viral reservoir and control of HIV after stopping all therapies (antiretroviral therapies and ImmTAV), or functional cure. The MAD trial will enroll up to 28 patients. The Company expects to present a data update in 2024.


IMC-I109V, our ImmTAV molecule targeting a conserved hepatitis B virus, or HBV, envelope antigen, is currently being evaluated in a Phase 1 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. We reported initial data from our trial in June 2022, observing a transient decrease in the HBV surface antigen, as well as transient elevations in alanine transaminase and cytokines. We are enrolling patients in the single ascending dose portion and have amended the study to include HBV-positive hepatocellular carcinoma in the MAD portion of the study.


Significant Events in the Three Months Ended June 30, 2023

In April 2023, we presented data in HLA-A*02:01 patients with mUM at the 2023 American Association for Cancer Research (AACR) Annual Meeting. The data demonstrated a correlation between early ctDNA, reduction and better overall survival, or OS, in the Phase 3 trial of KIMMTRAK. ctDNA reduction by week 9 was observed in 88% of mUM patients treated as first-line (Phase 3 trial) and 71% in previously treated patients (Phase 2 trial). ctDNA clearance was also higher in first-line patients (37%) compared to second-line patients (13%).  In both trials, this reduction was associated with longer OS. We also presented (1) long-term follow-up of KIMMTRAK from the Phase 2 trial, (2) tumor response in orbital lesions with KIMMTRAK, and (3) in vitro data demonstrating direct and indirect mechanisms of tumor control from TCR-CD3 bispecifics in melanoma.

In June 2023, we issued a press release announcing our presentation of two posters at the 2023 American Society for Clinical Oncology Meeting. The first poster was titled “Early ctDNA reduction may identify patients with stable disease and long OS on tebentafusp” and included an analysis of ctDNA data from the Phase 3 KIMMTRAK trial in HLA-A*02:01 patients with mUM. In this analysis, ctDNA reduction by week 9 was observed in 94% of patients (34/36) with detectable ctDNA at baseline, and this reduction was associated with longer OS. These data were consistent with those presented at the 2023 AACR Annual Meeting in showing that ctDNA reduction by week 9 was strongly associated with improved OS, even in patients with best RECIST response of progressive disease – further indicating that RECIST responses underestimate KIMMTRAK’s clinical benefits, and that early reduction in ctDNA may be a better predictor of long OS than radiographic response. The second poster was titled “A Phase 2/3 trial in progress on tebentafusp as monotherapy and in combination with pembrolizumab in HLA-A*02:01+ patients with previously treated advanced, non-uveal melanoma” and described the Phase 2/3 trial that has started randomizing patients with previously treated advanced melanoma, excluding uveal melanoma, who have progressed on an anti-PD1, received prior ipilimumab and, if applicable, received a BRAF kinase inhibitor. Patients will be randomized to one of three arms including KIMMTRAK, as monotherapy or in combination with an anti-PD1, and a control arm.

In the second quarter of 2023, Sanofi informed Immunocore that they will not be progressing their evaluation of SAR444245 in combination with KIMMTRAK. As such, Sanofi elected to terminate the previously announced clinical trial collaboration, in which Sanofi was responsible for clinical development. Immunocore is no longer responsible for supplying KIMMTRAK for this clinical trial and no other costs are expected.

Recent Developments since June 30, 2023

In July, the Centers for Medicare & Medicaid Services (“CMS”) released the 2024 Proposed Rule for the physician fee schedule. The Proposed Rule names KIMMTRAK as a medicine identified as meeting the proposed criteria for unique circumstances whereby it would have a proposed increased applicable percentage of unused or discarded product volume subject to refund to CMS, of 45%, and not 10% used for medicines without these unique circumstances. The Proposed Rule is expected to be finalized during the fourth quarter of 2023 with a January 1, 2024 effective date.

In early August, we negotiated KIMMTRAK pricing with authorities in Germany. This price is expected to be published in September 2023 and is not materially higher than our estimates.

As of the date of this Report, we announced the advancement of IMC-F106C (PRAME-A02) into a Phase 3 registrational trial in previously untreated, advanced melanoma patients. The Company, following an FDA Type B interaction, is planning a registrational Phase 3 trial with IMC-F106C, with the goal of starting by the first quarter of 2024. The trial will randomize previously untreated, advanced melanoma patients to IMC-F106C+nivolumab versus nivolumab or nivolumab + relatlimab, depending on country.  Based on feedback from the FDA, including Project Optimus, the study will initially randomize to three arms: two F106C dose regimens (40 mcg and 160 mcg) and control arm, and will discontinue one of the F106C dose regimens after an initial review of the first 60 patients randomized to the two experimental arms (90 patients randomized total). We plan to randomize the first patient in this trial in the first quarter of 2024. We estimate there are over ten thousand HLA-A*02:01 advanced cutaneous melanoma patients in the G7 per year.

Operating Results

Total net product revenue arising from the sale of KIMMTRAK was £45.5 million ($57.8 million) and £87.6 million ($111.3 million) in the three and six months ended June 30, 2023, respectively, of which £32.8 million ($41.7 million) and £62.3 million ($79.2 million) was in the United States, £12.2 million ($15.5 million) and £24.5 million ($31.2 million) was in Europe, and £0.5 million ($0.6 million) and £0.7 million ($0.9 million) was in the rest of the world. For the three and six months ended June 30, 2022, we recorded total net product and pre-product revenue of £27.7 million and £38.2 million.


For the three and six months ended June 30, 2023, our research and development expenses were £28.8 million ($36.6 million) and £57.2 million ($72.7 million), respectively, as compared to £20.2 million and £38.7 million for the three and six months ended June 30, 2022, respectively. For the three and six months ended June 30, 2023, our selling and administrative expenses were £33.9 million ($43.1 million) and £67.2 million ($85.4 million), respectively, compared to £18.8 million and £38.9 million for the three and six months ended June 30, 2022, respectively.

Basic and diluted loss per share for the three and six months ended June 30, 2023, was £0.29 ($0.37) and £0.64 ($0.81), respectively, compared to a basic and diluted loss per share of £0.14 and £0.51 for the three and six months ended June 30, 2022, respectively.

Cash and cash equivalents were £342.3 million ($435.1 million) as of June 30, 2023 compared to £332.5 million as of December 31, 2022.

Components of Results of Operations

Revenue

Product revenue, Net

Product revenue, net, relates to the sale of KIMMTRAK following marketing approval. We recognize product revenue at the point in time that control transfers to a customer, which is typically on delivery to our distributors and healthcare providers. We also operate under consignment arrangements where control passes when our distributor takes KIMMTRAK out of consignment inventory. The amount of revenue recognized reflects the consideration to which we expect to be entitled, net of estimated deductions for rebates, chargebacks, other customer fees and product returns. These estimates consider contractual and statutory requirements, the expected payer and patient mix, sell-through data, our customers’ inventory levels, anticipated demand and the volume of customer purchase orders, internal data,  other information provided by our customers and third-party logistics providers, and, in certain countries, pricing negotiations.

Pre-Product Revenue, Net

Pre-product revenue, net, relates to the sale of tebentafusp under a compassionate use and an early access program. These programs provided patients with access to tebentafusp prior to KIMMTRAK becoming available as a marketed product in France. Pre-product revenue is recognized on delivery of tebentafusp to healthcare providers, which is the point in time when control is transferred. Such revenue is recognized net and represents the prices set by the Company that are expected to be retained after estimated deductions for product returns and government rebates, which are dependent on the outcome of French legislative processes and price negotiations. In September 2022, we began selling KIMMTRAK as a commercial product in France, and these sales are reflected in Product revenue, net.

Collaboration Revenue

Our revenue from collaboration agreements consists of non-refundable upfront payments, development milestones as well as reimbursement of research and development expenses.  Our only current revenue collaboration is with Genentech. In February 2023, Genentech accepted our proposal to cease co-funding the development of MAGE-A4 HLA-A02 targeted programs under our co-development and co-promotion agreement. We are responsible for development of the IMC-C103C program over the period of time to estimated completion of the Phase 1 clinical trial, with costs being shared equally with Genentech. The IMC-C103C clinical trial is nearing completion and we do not plan to enrol additional patients.

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

Cost of Product Revenue

Cost of product revenue represents production costs including raw materials, external manufacturing costs, and other costs incurred in bringing inventories to their location and condition prior to sale. Overheads and internal costs of product revenue are minimal under our manufacturing arrangements. Due to the low costs involved in manufacturing KIMMTRAK, cost of product revenue is not material, and we do not expect such costs to be material for the foreseeable future.


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 and share-based compensation expense, for the various research and development departments, costs associated with clinical trial activities undertaken by contract research organizations, or CROs, and external manufacturing costs related to research and development undertaken by contract manufacturing organizations, or CMOs, research and development laboratory consumables, internal clinical trial expenses, costs associated with maintaining laboratory equipment, and reductions from expenses for amounts under the U.K.’s Research & Development Expenditure Credit, or RDEC, scheme. 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 primarily 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.

We expect our research and development expenses to increase in the future as we advance existing and future product candidates into and through clinical studies and pursue further 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:


we may face disruptions affecting the site initiation, patient enrollment, clinical trial site monitoring, development and operation of our clinical trials, including public health emergencies;

we 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, including as a result of supply chain disruptions caused by pandemics or epidemics, the war in Ukraine or global geopolitical tensions;

we may be unable to obtain additional funding necessary to continue our operations on favorable terms or at all, including as a result of global and macroeconomic factors as described elsewhere herein;

we have faced and expect to face further increased costs as a result of rising global inflation including significant increases in commodity prices, energy and fuel prices, and employee costs;

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 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.

Selling and Administrative Expenses

Selling and administrative expenses consist primarily of personnel-related costs, including salaries and share-based compensation expense, for selling, corporate and other administrative and operational functions including finance, legal, human resources, commercial expenses, information technology, as well as facility-related costs and foreign currency movements.


Following our commercialization of KIMMTRAK and our substantial increase in planned research and development expenses, as explained above, we also expect that our selling and administrative expenses will increase. We expect that we will incur increased selling, distribution, commercial, accounting, audit, legal, regulatory, compliance, director, and officer insurance costs as well as investor and public relations expenses associated with being a public company operating in multiple territories. Additionally, if and as we receive further regulatory approvals of product candidates, we anticipate an increase in payroll and expenses in connection with our commercial operations. We have experienced, and may continue to experience, increased personnel costs attributable to offering and maintaining competitive salaries due to heightened global inflation. We anticipate that we will continue to experience these and other increased costs attributable to inflation, and may also experience increased selling and administrative costs as a result of further volatility in the impact of foreign exchange differences.

Finance Income

Finance income arises from interest income on cash and cash equivalents and short-term deposits.

Finance Costs

Finance costs consist of interest expenses related to our loan and lease liabilities.

Income Tax (Charge) / Credit

We are subject to corporate taxation in the United Kingdom, United States, Ireland and Switzerland. Due to the nature of our business, on a consolidated basis, we have generated losses since inception. Our income tax charge recognized represents income tax payable in the United States, Ireland and Switzerland.

As a company that carries out extensive research and development activities, we benefit from the U.K. research and development tax regime. Historically we satisfied the definition of a Small and Medium-sized Enterprise, or SME, and were able to surrender some of our U.K. tax losses for a cash rebate of up to 33.35% of expenditures related to eligible research and development projects. We exceeded the size limit thresholds and no longer qualify for tax relief under the U.K. SME research and development regime in 2023. We will continue to benefit from the U.K.’s RDEC regime which can generate a cash rebate of up to 10.53% of qualifying research and development expenditures incurred prior to 1 April 2023 and 15% for expenditure incurred after this date.

We record tax credits receivable under the SME research and development tax credit regime within Income tax (charge) / credit. Tax credits receivable under the large company RDEC regime are recorded ‘above the line’ as a reduction from research and development expenses. Whilst we expect to continue to receive cash, we have moved from an overall tax credit position to recording a tax charge because no SME research and development tax credits have been generated and recorded within Income tax (charge) / credit since the start of 2023. Historically, SME research and development tax credits comprised the majority of our income tax credits.

Qualifying expenditures largely comprise clinical trial and manufacturing costs, employment costs for relevant staff and consumables incurred as part of research and development projects. 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.

Amendments to the U.K. R&D tax credit regime have recently been enacted, proposed or are under consultation. These amendments (amongst other things) (i) will reduce the cash rebate that may be claimed under the SME Program to 18.6% of qualifying expenditure, and (ii) increase the cash rebate that can be claimed under the RDEC regime to 15% of qualifying expenditure.  These amendments took effect from 1 April 2023. In addition, the U.K. Government has recently launched a consultation on its proposal to merge the SME Program and the RDEC Program into a single scheme with effect from April 2024 and may (unless limited exceptions apply) introduce restrictions on the tax relief that can be claimed for expenditure incurred on sub-contracted R&D activities or externally provided workers, where such sub-contracted activities are not carried out in the U.K. or such workers are not subject to U.K. payroll taxes. If such a proposal is implemented, it may be the case that different (and potentially lower) caps are imposed on the amount of tax relief or rebates that we can claim. These and other potential future changes to the U.K. R&D tax relief programs may have a material impact on the extent to which we can benefit from U.K. research and development tax relief.

Un-surrendered U.K. tax losses are carried forward indefinitely to be offset against future taxable profits, subject to any relevant utilization criteria and restrictions (including the U.K. Corporate Loss Restriction rules, which broadly restrict the amount of carried forward losses that can be utilized to 50% of U.K. tax profits above £5 million per year). After accounting for tax credits receivable, there were accumulated tax losses for carry forward in the United Kingdom of £241 million as of December 31, 2022. 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 capitalized research and development expenditure for the subsidiary in the United States.

As we continue to generate significant net product revenue, we may benefit from the U.K.’s. “patent box”, which 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%.


Results of Operations

Comparison of the Three Months Ended June 30, 2023 and 2022

The following table summarizes our unaudited condensed consolidated statement of loss for each period presented:

   
Three Months Ended June 30,
 
   
2023
   
2022
 
   

$’000
   

£’000
   
£’000
 
Product revenue, net
   
57,844
     
45,514
     
23,992
 
Pre-product revenue, net
   
     
     
3,708
 
Total revenue from sale of therapies
   
57,844
     
45,514
     
27,700
 
Collaboration revenue
   
2,860
     
2,250
     
4,302
 
Total revenue
   
60,704
     
47,764
     
32,002
 
                         
Cost of product revenue
   
(1,126
)
   
(886
)
   
(34
)
Research and development expenses
   
(36,560
)
   
(28,767
)
   
(20,150
)
Selling and administrative expenses
   
(43,064
)
   
(33,884
)
   
(18,811
)
Operating loss
   
(20,046
)
   
(15,773
)
   
(6,993
)
Finance income
   
4,336
     
3,412
     
118
 
Finance costs
   
(1,989
)
   
(1,565
)
   
(1,397
)
Net finance income / (costs)
   
2,347
     
1,847
     
(1,279
)
Loss before taxes
   
(17,699
)
   
(13,926
)
   
(8,272
)
Income tax (charge) / credit
   
(192
)
   
(151
)
   
2,151
 
Loss for the period
   
(17,891
)
   
(14,077
)
   
(6,121
)

Revenue

Product and pre-product revenue, net

Net product revenue from the sale of KIMMTRAK, and net pre-product revenue from the sale of tebentafusp as part of an early access program, are presented by region based on the location of the customer below.

   
Three Months Ended June 30, 2023
 
   
2023
   
2022
 
   

$’000
   

£’000
   

£’000
 
United States
   
41,701
     
32,812
     
18,137
 
Europe
   
15,491
     
12,189
     
9,560
 
Rest of World
   
652
     
513
     
3
 
Total revenue from sale of therapies
   
57,844
     
45,514
     
27,700
 

For the three months ended June 30, 2023, we generated net product revenue of £45.5 million ($57.8 million) from the sale of KIMMTRAK, of which £32.8 million ($41.7 million) was in the United States, £12.2 million ($15.5 million) in Europe and £0.5 million ($0.6 million) in the rest of the world. There was no pre-product revenue in the three months ended June 30, 2023 following the transition to the commercial sale of KIMMTRAK in France in the second half of 2022. Total product and pre-product revenue of £27.7 million was lower in the three months ended June 30, 2022, as we had only recently commenced our commercial launch.

Collaboration revenue

Revenue from collaboration agreements decreased by £2.0 million to £2.3 million in the three months ended June 30, 2023, compared to £4.3 million for the three months ended June 30, 2022, following agreement with Genentech in February 2023 to wind down the Phase I trial under our collaboration.


Research and Development Expenses

   
Three Months Ended June 30,
 
   
2023
   
2022
 
   

$’000
   

£’000
   

£’000
 
External research and development expenses:
                       
Tebentafusp
   
4,222
     
3,322
     
3,478
 
IMC-F106C (PRAME)
   
11,197
     
8,810
     
2,629
 
IMC-C103C (MAGE-A4)
   
1,079
     
849
     
1,951
 
IMC-I109V(HBV)
   
613
     
482
     
663
 
IMC-M113V (HIV)
   
108
     
85
     
996
 
Other programs
   
3,125
     
2,459
     
1,407
 
Research expenses
   
1,381
     
1,087
     
282
 
Total external research and development expenses
   
21,725
     
17,094
     
11,406
 
Internal research and development expenses:
                       
Salaries and other employee related costs
   
9,036
     
7,110
     
5,438
 
Share based payments
   
1,854
     
1,459
     
654
 
Laboratory consumables
   
2,070
     
1,629
     
1,479
 
Laboratory equipment expenses
   
1,188
     
935
     
1,017
 
Other
   
687
     
540
     
156
 
Total internal research and development expenses
   
14,835
     
11,673
     
8,744
 
Total research and development expenses
   
36,560
     
28,767
     
20,150
 

For the three months ended June 30, 2023, our research and development expenses were £28.8 million, compared to £20.2 million for the three months ended June 30, 2022. This increase of £8.6 million was due to an increase in external research and development expenses of £5.7 million, and in internal research and development expenses of £2.9 million.

The increase in our external research and development expenses of £5.7 million was primarily due to an additional £6.2 million in expenses associated with our IMC-F106C (PRAME) program as we seek to advance this product candidate through clinical trials. Other programs for the three months ended June 30, 2023 in the table above include a reduction in expenses of £0.5 million under the U.K.’s Research and Development Expenditure Credit scheme.

The increase in our internal research and development expenses was largely attributable to higher employee costs as the number of staff engaged in research and development activities increased.

Selling and Administrative Expenses

   
Three Months Ended June 30,
 
   
2023
   
2022
 
   
$’000
   

£’000
   

£’000
 
                         
Share-based payment charge
   
7,029
     
5,531
     
6,021
 
Other employee related expenses
   
8,413
     
6,620
     
4,889
 
Selling and commercial costs
   
14,502
     
11,411
     
8,191
 
Legal and professional fees
   
2,359
     
1,856
     
3,272
 
Depreciation
   
1,202
     
945
     
1,077
 
Other expenses
   
3,646
     
2,868
     
2,139
 
Foreign exchange losses / (gains)
   
5,913
     
4,653
     
(6,778
)
Total selling and administrative expenses
   
43,064
     
33,884
     
18,811
 

For the three months ended June 30, 2023, our selling and administrative expenses were £33.9 million, compared to £18.8 million for the three months ended June 30, 2022, reflecting an increase of £15.1 million.

This increase primarily reflects foreign exchange losses of £4.7 million in the three months ended June 30, 2023, compared to gains of £6.8 million in the three months ended June 30, 2022. Such exchange differences arose primarily on the translation of monetary U.S. dollar balances held by our U.K. subsidiary. Selling and  commercial costs increased by £3.2 million due to further costs associated with the distribution of KIMMTRAK in multiple territories and other employee costs also increased by £1.7 million due to an increase in employees engaged in selling and administrative activities.

We expect our selling and administrative expenses to increase as we continue to grow as a commercial organization and as KIMMTRAK is approved and launched in further countries. The impact of macroeconomic factors, volatility in foreign exchange differences, and global inflation may also significantly impact our selling and administrative expenses in the future.

Finance income

Our finance income increased by £3.3 million to £3.4 million in the three months ended June 30, 2023 due to higher interest rates and our higher levels of cash and cash equivalents held in the three months ended June 30, 2023 compared to the three months ended June 30, 2022.


Comparison of the Six Months Ended June 30, 2023 and 2022

The following table summarizes our unaudited condensed consolidated statement of loss for each period presented:

   
Six Months Ended June 30,
 
   
2023
   
2022
 
   

$’000
   

£’000
   

£’000
 
Product revenue, net
   
111,288
     
87,566
     
31,674
 
Pre-product revenue, net
   
     
     
6,537
 
Total revenue from sale of therapies
   
111,288
     
87,566
     
38,211
 
Collaboration revenue
   
6,023
     
4,739
     
16,265
 
Total revenue
   
117,311
     
92,305
     
54,476
 
                         
Cost of product revenue
   
(1,352
)
   
(1,064
)
   
(282
)
Research and development expenses
   
(72,716
)
   
(57,216
)
   
(38,731
)
Selling and administrative expenses
   
(85,386
)
   
(67,185
)
   
(38,916
)
Operating loss
   
(42,143
)
   
(33,160
)
   
(23,453
)
Finance income
   
7,572
     
5,958
     
128
 
Finance costs
   
(4,048
)
   
(3,185
)
   
(2,730
)
Net finance income / (costs)
   
3,524
     
2,773
     
(2,602
)
Loss before taxes
   
(38,619
)
   
(30,387
)
   
(26,055
)
Income tax (charge) / credit
   
(492
)
   
(387
)
   
3,806
 
Loss for the period
   
(39,111
)
   
(30,774
)
   
(22,249
)

Revenue

Product and pre-product revenue, net

Net product revenue from the sale of KIMMTRAK, and net pre-product revenue from the sale of tebentafusp as part of a compassionate use and early access program are presented by region based on the location of the customer below.

   
Six Months Ended June 30,
 
   
2023
   
2022
 
   

$’000
   

£’000
   

£’000
 
United States
   
79,234
     
62,345
     
25,819
 
Europe
   
31,159
     
24,517
     
12,389
 
Rest of World
   
895
     
704
     
3
 
Total revenue from sale of therapies
   
111,288
     
87,566
     
38,211
 

For the six months ended June 30, 2023, we generated net product revenue of £87.6 million ($111.3 million) from the sale of KIMMTRAK, of which £62.3 million ($79.2 million) was in the United States, £24.5 million ($31.2 million) in Europe and £0.7 million ($0.9 million) in the rest of the world, following marketing approval for KIMMTRAK in the United States, Europe and other territories. There was no pre-product revenue in the six months ended June 30, 2023 following the transition to the commercial sale of KIMMTRAK in France in the second half of 2022. Total product and pre-product revenue of £38.2 million was lower in the six months ended June 30, 2022, as we had only recently commenced our commercial launch.

Collaboration revenue

   
Six Months Ended June 30,
 
   
2023
   
2022
 
   

$’000
   

£’000
   

£’000
 
Eli Lilly
   
     
     
7,361
 
Genentech
   
6,023
     
4,739
     
8,904
 
Total collaboration revenue
   
6,023
     
4,739
     
16,265
 

For the six months ended June 30, 2023, revenue from collaboration agreements decreased by £11.6 million to £4.7 million compared to £16.3 million for the six months ended June 30, 2022. The decrease was primarily due to no Eli Lilly revenue being recognized in 2023 following the termination of the collaboration in 2022. Our Genentech revenue also decreased following agreement in February 2023 to wind down the Phase I trial under our collaboration.


Research and Development Expenses

   
Six Months Ended June 30,
 
   
2023
   
2022
 
   

$’000
   
£’000
   

£’000
 
External research and development expenses:
                       
Tebentafusp
   
8,533
     
6,714
     
8,094
 
IMC-F106C (PRAME)
   
20,397
     
16,049
     
4,613
 
IMC-C103C (MAGE-A4)
   
1,951
     
1,535
     
3,461
 
IMC-I109V (HBV)
   
1,619
     
1,274
     
1,129
 
IMC-M113V (HIV)
   
930
     
732
     
996
 
Other programs
   
6,771
     
5,328
     
2,419
 
Research expenses
   
1,598
     
1,257
     
393
 
Total external research and development expenses
   
41,799
     
32,889
     
21,105
 
Internal research and development expenses:
                       
Salaries and other employee related costs
   
18,639
     
14,666
     
11,031
 
Share based payments
   
3,593
     
2,827
     
1,588
 
Laboratory consumables
   
5,391
     
4,242
     
2,693
 
Laboratory equipment expenses
   
2,369
     
1,864
     
2,078
 
Other
   
925
     
728
     
236
 
Total internal research and development expenses
   
30,917
     
24,327
     
17,626
 
Total research and development expenses