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Item 2. Management’s Discussion and Analysis

2025-05-07 compared with 2024-11-06 · 140 added, 266 removed, 197 unchanged (67% of the section changed)

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You should read the following discussion and analysis of our financial condition and results of operations together with our condensed consolidated financial statements and the related notes thereto appearing elsewhere in this Quarterly Report.

The following discussion is based on our financial information prepared in accordance with accounting principles generally accepted in the U.S.

GAAP"), as found in the Accounting Standards Codification and Accounting Standards Update of the Financial Accounting Standards Board and the rules and regulations of the Securities and Exchange Commission ("SEC").

The accompanying MD&A, including all periods presented, has been prepared under U.S.

Some of the information contained in this discussion and analysis or set forth elsewhere in this Quarterly Report, including information with respect to our plans and strategy for our business, includes forward-looking statements that involve risks and uncertainties.

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We are a commercial stage biotechnology company pioneering and delivering transformative immunomodulating medicines to radically improve outcomes for patients with cancer, infectious diseases, and autoimmune diseases.

Leveraging our proprietary, flexible, off-the-shelf ImmTAX (Immune mobilizing monoclonal TCRs Against X disease) platform, with a pipeline in multiple therapeutic areas, including nine active clinical and preclinical programs in oncology, infectious disease, and autoimmune disease.

In 2022, we received approval for our lead product, KIMMTRAK, for the treatment of unresectable metastatic uveal melanoma from the FDA, the European Commission, and other health authorities.

Leveraging our proprietary, flexible, off-the-shelf ImmTAX ( I mmune m obilizing m onoclonal T CRs A gainst X disease) platform, we are developing a deep pipeline in multiple therapeutic areas, including clinical stage programs in oncology and infectious disease, advanced preclinical programs in autoimmune disease and earlier preclinical programs across three therapeutic areas.

In 2022, we received approval for our lead product, KIMMTRAK, for the treatment of unresectable or metastatic uveal melanoma ("mUM") from the FDA, the European Commission, and other health authorities.

KIMMTRAK is now approved in 39 countries for the treatment of unresectable or mUM.

We have launched KIMMTRAK in 21 countries globally to date and we plan to launch KIMMTRAK in additional countries, if approved in those countries.

KIMMTRAK is the lead product from our ImmTAX platform and was the first approved new therapy in mUM in four decades.

We have commercially launched KIMMTRAK in 26 countries globally including the United States, Germany and France through March 31, 2025, with further commercial launches planned in additional territories where KIMMTRAK is approved.

KIMMTRAK is the lead product from our ImmTAX platform and was the first approved therapy in mUM.

To date, we have treated over 2,000 cancer patients with KIMMTRAK, tebentafusp, and our other ImmTAX product candidates, which we believe is the largest clinical data set of any T cell engager bispecific in solid tumors and any TCR therapeutic.

Our clinical programs are being conducted with patients with a broad range of cancers including melanoma, ovarian, lung, endometrial and colorectal, among others.

We believe that these other tumor types have large addressable patient populations and significant unmet need.

We are progressing three late-stage clinical programs within our ImmTAC ( I mmune m obilizing m onoclonal T CRs A gainst C ancer) portfolio, including KIMMTRAK and the PRAME-targeted brenetafusp.

Since our inception, we have focused on organizing and staffing our company, raising capital and performing research and development activities to advance our research, development and technology, and commercializing KIMMTRAK.

While we have successfully generated revenue from KIMMTRAK, which is our first marketed product, our ability to generate higher levels of product revenue from other marketed products, which may never be fully developed or commercialized, depends on the successful development and regulatory approval of one or more of our product candidates and our ability to finance operations.

Since inception, through to September 30, 2024, we have raised an aggregate of $1,677 million through our initial public offering, private placements of our ordinary and preferred shares, debt financings, and historical payments from our collaboration partners.

Our clinical programs are being conducted with patients with a broad range of cancers including melanoma, ovarian, lung, and colorectal, among others.

We believe that these tumor types have large addressable patient populations and significant unmet need.

We are progressing three late-stage clinical programs within our ImmTAC ( I mmune m obilizing m onoclonal T CRs A gainst C ancer) portfolio, including KIMMTRAK and PRAME-targeted brenetafusp.

Since our inception, we have focused on organizing and staffing our company, raising capital, performing research and development activities to advance our research, development and technology, and commercialization of KIMMTRAK.

While we have successfully generated revenue from KIMMTRAK, which is our first marketed product, our ability to generate higher levels of revenue from other marketed products, which may never be fully developed or commercialized, depends on the successful development and regulatory approval of one or more of our product candidates and our ability to finance operations.

Since inception, we have raised funds through our initial public offering, private placements of our ordinary and preferred shares, debt financings, revenue and historical payments from our collaboration partners.

These funds have been and are being used to fund operations and invest in activities for technology creation, drug discovery and clinical development programs, infrastructure, creation of portfolio of intellectual property and commercial and administrative support.

We have incurred significant operating losses and expect to continue to incur significant expenses and operating losses for the near future.

We had net income of $8.7 million and a net loss of $27.3 million for the three and nine months ended September 30, 2024, respectively.

As of September 30, 2024, our accumulated deficit was $772.0 million.

We had net income of $5.0 million and a net loss of $24.4 million, for the three months ended March 31, 2025 and 2024, respectively.

As of March 31, 2025, our accumulated deficit was $790.7 million.

We expect to continue to incur significant and increasing expenses and to incur operating losses for the foreseeable future, as we advance our product candidates through preclinical and clinical development and seek regulatory approvals, manufacture drug product and drug supply, maintain and expand our intellectual property portfolio, as well as hire additional personnel, pay for further accounting, audit, legal, regulatory and consulting services, and pay costs associated with maintaining compliance with Nasdaq listing rules and the requirements of the SEC, director and officer liability insurance, investor and public relations activities and other expenses associated with operating as a public company.

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Recent Developments

In September 2024 at the European Society for Medical Oncology 2024 Meeting ("ESMO 2024"), we presented clinical data from the Phase 1 trial in heavily pre-treated platinum-resistant high grade serous ovarian cancer, with brenetafusp as monotherapy and in combination with chemotherapy.

• Monotherapy:

31 of the 37 monotherapy patients were evaluable for RECIST v1.1 tumor assessment, 58% of whom demonstrated disease control (partial response and stable disease), including two confirmed partial responses (6.5% RECIST response rate).

Of patients who had tumor progression, 64% were treated beyond progression (median of 2 additional months).

Across all 37 patients, the median progression-free survival (PFS) was 3.3 months, and the overall survival (OS), while still maturing, was 73% at 6 months.

Brenetafusp was well tolerated with no treatment-related discontinuation or death observed.

• Combination:

16 patients with platinum-resistant ovarian cancer were treated with brenetafusp and either gemcitabine, nab-paclitaxel or pegylated doxorubicin chemotherapy.

Thirteen of these 16 patients were evaluable for RECIST v1.1 tumor assessment (all 13 received prior platinum and taxane therapy, and 6 received prior gemcitabine).

69% of patients achieved disease control, including three partial responses (23% RECIST response rate).

The safety profile of brenetafusp in combination with chemotherapy was consistent with the expected profile of each individual agent.

We presented new baseline blood gene expression signature data at ESMO 2024 confirming that T cell fitness in blood is an important parameter of clinical activity for KIMMTRAK in previously treated uveal melanoma, and for brenetafusp in ovarian cancer and uveal melanoma.

We are currently evaluating brenetafusp in combination with non-platinum chemotherapies in platinum-resistant ovarian cancer and with bevacizumab and with platinum chemotherapy in earlier lines of platinum sensitive ovarian cancer.

We continue signal detection for brenetafusp in metastatic non-small-cell lung cancer ("NSCLC") cohorts, including in combination with docetaxel and with osimertinib in earlier-line NSCLC.

As a result, we will not release initial data in the fourth quarter of 2024.

Randomization in the ATOM Phase 3 trial, the only active registrational Phase 3 trial in adjuvant uveal melanoma, led by the European Organisation for Research and Treatment of Cancer ("EORTC") is expected to start in the fourth quarter of 2024.

We expect to complete the single ascending dose ("SAD") portion of the Phase 1 trial of IMC-I109V in HBV in the fourth quarter of 2024.

In March 2025 at the Conference on Retroviruses and Opportunistic Infections ("CROI 2025"), we presented initial data from the multiple ascending dose (MAD) portion of our Phase 1/2 STRIVE trial of IMC-M113V, our functional cure candidate for HIV.

The data included 16 people living with HIV (PLWH) who were stable on antiretrovial therapy (ART).

While continuing ART, three sequential cohorts evaluated weekly IV infusions of IMC-M113V up to doses of 60 mcg (n=5), 120 mcg (n=5), and 300 mcg (n=6) administered over 12 weeks, followed by analytical treatment interruption for up to 12 weeks, after which participants resumed their prior ART regimen.

• All doses were well tolerated and no serious adverse events (“AEs”) or dose limiting toxicities were observed.

Grade 1 cytokine release syndrome, consisting of fever alone that resolved within 4 hours, was observed in five of the six PLWH in the 300 mcg cohort when receiving their first 300 mcg dose.

There were no discontinuations due to AEs.

One person withdrew prior to completing the dose schedule in the 300 mcg cohort for reasons unrelated to IMC-M113V.

• In the 15 evaluable PLWH, delayed viral rebound and/or viremia control at any point during analytical treatment interruption was observed in 0 of 5 PLWH at 60 mcg, 1 of 5 PLWH at 120 mcg, and 2 of 5 PLWH at 300 mcg.

The 3 PLWH with evidence of viral control had a viral load of approximately 200 c/mL at week 8.

The historical rate for this observation is 5%.

Furthermore, 2 of these 3 PLWH remained off ART for the entire 12 week analytical treatment interruption period that was pre-specified in the protocol.

• In the 3 PLWH with evidence of viral control, the pattern consisted of initial viral rebound followed by viral reduction to approximately 200 c/mL, including 1 PLWH at 300 mcg who had initial viremia to >104 c/mL before subsequent decrease to <50 c/mL at week 12.

Such ‘regained’ post-treatment control may be associated with an immune response to the virus.

• There was also a reduction in CD4+ T cell-associated HIV Gag RNA in some PLWH during treatment, indicating a reduction in the active virus reservoir, which was quantified at weeks 1, 7 and 13.

A trend of reduction in intact HIV DNA was also observed post-treatment in a preliminary analysis of 6 people treated at the two highest doses.

The Company has completed price negotiations in France and Germany.

Components of Results of Operations

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.

Revenue from sale of therapies, net

Revenue from sale of therapies, net relates to the sale of KIMMTRAK following marketing approval.

We recognize net revenue from sale of therapies 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 distributors take 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.

The amount of revenue recognized reflects the consideration to which we expect to be entitled, net of estimated deductions for rebates, chargebacks and product returns.

These estimates consider contractual and statutory requirements, the expected payor and patient mix, sell-through data, our customers’ inventory levels, anticipated demand and the volume of customer purchase orders, internal data, and other information provided by our customers and third-party logistics providers, and, in certain countries including France, pricing negotiations.

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Collaboration revenue

Collaboration revenue arose under our collaboration agreement with Genentech.

In February 2023, we and Genentech agreed to wind down the co-funding arrangements and clinical trial for IMC-C103C.

We could be eligible to receive development and commercial milestone payments and royalties from Genentech on any sales of MAGE-A4 HLA-A02 targeted products arising under the Genentech collaboration.

Collaboration revenue consisted of non-refundable upfront payments, development milestones as well as reimbursement of research and development expenses.

As of December 31, 2023, we determined our performance obligation under the collaboration with Genentech was complete.

Cost and 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.

Cost of product revenue may also include costs related to manufacturing losses, excess or obsolete inventory costs.

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 currently not material, and while these costs are expected to increase in future periods as inflationary pressures increase, we do not expect such costs to be material for the foreseeable future.

Research and development expense

Research and development ("R&D") 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 R&D departments, costs associated with clinical trial activities undertaken by contract research organizations ("CROs") and external manufacturing costs associated with R&D undertaken by contract manufacturing organizations ("CMOs"), R&D laboratory consumables, internal clinical trial expenses, payments for purchased rights and milestones in connection with third-party in-process R&D agreements, costs associated with maintaining laboratory equipment, costs associated with our R&D facilities, including a reasonable allocation of overhead costs, and reductions from expenses for R&D tax credits.

Historically, collaboration revenue arose under our collaboration agreements and consisted of non-refundable upfront payments, development milestone payments as well as reimbursement of certain research and development expenses.

We have no continuing performance obligations under our historical collaboration agreements.

Operating Expenses

Cost of revenue from sale of therapies

Cost of revenue from sale of therapies represents production costs including raw materials, external manufacturing costs, and other costs incurred in bringing inventories to their location and condition prior to sale.

Cost of revenue from sale of therapies may also include costs related to manufacturing losses and excess or obsolete inventory costs.

Overheads and internal costs of revenue from sale of therapies are minimal under our manufacturing arrangements.

Due to the low costs involved in manufacturing KIMMTRAK, cost of revenue from sale of therapies is currently not material, and while these costs are expected to increase in future periods as inflationary pressures increase, we do not expect such costs to be material for the foreseeable future.

Research and development expenses

Research and development ("R&D") 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, costs associated with clinical trial activities undertaken by contract research organizations, and external manufacturing costs associated with R&D undertaken by contract manufacturing organizations ("CMOs"), laboratory consumables, internal clinical trial expenses, payments for purchased rights and milestones in connection with third-party in-process R&D agreements, costs associated with maintaining laboratory equipment, costs associated with our R&D facilities, including a reasonable allocation of overhead costs, and reductions from expenses for R&D tax credits.

R&D expenses are expensed as incurred, although the timing of expense recognition can vary with contractual and payment terms in order to determine when services are received.

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However, for certain preclinical programs and other research spend incurred externally, such spend is not assigned to individual programs.

Internal R&D expenses primarily relate to personnel-related costs, facilities and laboratory consumables.

Internal R&D expenses primarily relate to personnel-related costs, facilities, information technology used in R&D activities and laboratory consumables.

Due to the cross functional expertise of our people, it is not possible to provide a breakdown of internal costs by program.

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Research and development tax credits

As a company that carries out extensive R&D activities, we benefit from the Research and Development Expenditure Credit ("RDEC") in the United Kingdom for certain specific categories of expenditure.

R&D tax credits are presented as a reduction to R&D expenses.

On April 1, 2023, the headline rate under the RDEC program increased from 13% to 20% and can generate cash rebates of up to 15% (increased from 10.5%) on qualifying R&D expenditure incurred from this date.

As a company that carries out extensive R&D activities, we benefit from the U.

R&D tax regime.

For the periods ending March 31, 2025 and 2024, we claimed credits under the Research and Development Expenditure Credit ("RDEC") program and these credits are presented as a reduction to R&D expenses.

Under the RDEC program, tax credits for qualifying R&D expenses incurred prior to April 1, 2023 are granted at a headline rate of 13% and can generate cash rebates of up to 10.5% of qualifying R&D expenses.

The headline rate under the RDEC program increased from 13% to 20% on April 1, 2023 and can generate cash rebates of up to 15% (increased from 10.5%) on qualifying R&D expenses incurred from this date.

Recent amendments to the U.K.

R&D tax credit regime introduced restrictions on the tax relief that can be claimed for expenditure incurred on subcontracted R&D activities or externally provided workers, where such subcontracted activities are not carried out in the United Kingdom or such workers are not subject to U.K.

R&D tax credit regime introduced restrictions on the tax relief that can be claimed for expenses incurred on subcontracted R&D activities or externally provided workers, where such subcontracted activities are not carried out in the United Kingdom or such workers are not subject to U.K.

payroll taxes, subject to limited exceptions.

Selling, general and administrative expense

Selling, general and administrative expenses

Selling, general and administrative ("SG&A") 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-related expenses, information technology, as well as a proportion of facility-related costs.

Following our commercialization of KIMMTRAK and our substantial increase in planned R&D expenses, as explained above, we also expect that our SG&A 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 further public relations expenses associated with being a public company operating in multiple territories.

We anticipate that the additional costs for these services will substantially increase our SG&A expenses.

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 and other impacts due to rising global inflation.

In order to support our continued commercialization and global expansion of KIMMTRAK, R&D activities, and our operations as a public company, we expect that we will continue to incur selling, distribution, commercial, accounting, audit, legal, regulatory, compliance, director and officer insurance costs, as well as investor and public relations expenses.

Additionally, if and as we receive further regulatory approvals of product candidates, we anticipate an increase in personnel-related costs and expenses in connection with our commercial operations.

We have experienced, and may continue to experience, increased personnel-related costs attributable to offering and maintaining competitive salaries and other impacts due to global inflation.

Interest income

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Foreign currency gain (loss)

These gains (losses) arise on a variety of items, including on U.S.

dollar monetary assets and liabilities held by our main operating subsidiary in the United Kingdom, including our cash, cash equivalent and marketable securities balances.

Our foreign currency gains (losses) can vary significantly between periods as a result of volatility in foreign exchange rates.

Foreign currency gain (loss) arises on a variety of items, including on U.S.

dollar monetary assets and liabilities held by our main operating subsidiary in the United Kingdom, including our cash and cash equivalents.

Other income (expense), net

Other income (expense), net consists primarily of the unrealized gains (losses) resulting from the change in fair value of our marketable securities and also includes loan and borrowing costs and other items.

Income tax benefit (expense)

Other income (expense), net consists primarily of unrealized gains (losses) resulting from the change in fair value of our marketable securities and also includes loan and borrowing costs and other items.

Income tax expense

We are subject to corporate taxation in the United Kingdom and our wholly-owned subsidiaries are subject to corporate taxation in the United States, Ireland and Switzerland.

Due to the nature of our business and on a consolidated basis, we have generated losses since inception.

Due to the nature of our business and on a consolidated basis, we have generated cumulative losses since inception.

Our income tax expense represents the sum of income taxes payable in the United States, Ireland and Switzerland, offset by deferred tax credits arising on deferred tax assets generated.

Unsurrendered tax losses are carried forward to be offset against future taxable profits.

After accounting for tax credits receivable, there were accumulated tax losses available for carry forward in the United Kingdom of $320 million as of September 30, 2024.

After accounting for tax credits receivable, there were accumulated tax losses available for carry forward in the United Kingdom of $277.0 million as of March 31, 2025.

A full valuation allowance is recognized in respect of accumulated tax losses and other temporary differences in the United Kingdom because future profits are not sufficiently certain.

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taxable income against which deductible temporary differences can unwind.

As we begin to generate significant net product revenue, we may benefit from the U.K.’s “patent box” regime, which allows profits attributable to revenues from patents or patented products to be taxed at a lower rate than other revenue.

As we begin to generate significant net revenue from sale of therapies, we may benefit from the U.K.’s “patent box” regime, which allows profits attributable to revenues from patents or patented products to be taxed at a lower rate than other revenue.

The effective rate of tax for relevant streams of revenue for companies receiving this relief is 10%.

Comparison of the Three Months Ended September 30, 2024 and 2023

Comparison of the Three Months Ended March 31, 2025 and 2024

The following table summarizes our total revenue (in thousands):

Three Months Ended September 30,

Three Months Ended March 31,

2025 2024 Increase /

(decrease) % Increase /

Product revenue, net

Revenue from sale of therapies, net

93,881 70,342 23,539 33.5 %

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$ 93,881 $ 70,502 $ 23,379 33.2 %

Product revenue, net

Product revenue, net from the sale of KIMMTRAK is presented by country / region based on location of the end customer below (in thousands):

Three Months Ended September 30,

Revenue from sale of therapies, net

Revenue from sale of therapies, net is presented by country / region based on location of the end customer below (in thousands).

Three Months Ended March 31,

2025 2024 Increase /

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4,470 1,364 3,106 227.7 %

Total product revenue, net

Revenue from sale of therapies, net

$ 93,881 $ 70,342 $ 23,539 33.5 %

For the three months ended September 30, 2024, we generated product revenue, net of $80.2 million due to the sale of KIMMTRAK, of which $57.3 million was in the United States, $21.0 million in Europe (including the impact of a net increase in estimated reserves related to prior periods of $3.6 million) and $1.9 million in International.

Product revenue, net increased in the three months ended September 30, 2024 compared to the three months ended September 30, 2023, due primarily to increased volume in the United States and global country expansion, as we continued our commercialization efforts.

For the three months ended March 31, 2025, we generated net revenue from sale of therapies of $93.9 million, due to the sale of KIMMTRAK, of which $56.6 million was in the United States, $32.8 million in Europe (including the impact of a net decrease in estimated reserves related to prior periods of $6.0 million) and $4.5 million in International.

Revenue from sale of therapies, net increased in the three months ended March 31, 2025 compared to the three months ended March 31, 2024, due primarily to global country expansion and increased sales volume in the United States, as we continued our commercialization efforts.

The following table summarizes our R&D expenses (in thousands):

Three Months Ended September 30,

Three Months Ended March 31,

2025 2024 Increase /

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All other external clinical and preclinical costs 11,231 6,499 4,732 72.8 %

6,361 3,708 2,653 71.5 %

Total external R&D expenses 37,931 41,339 (3,408) (8.2) %

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R&D tax credits (2,086) (1,823) (263) 14.4 %

(2,068) (1,427) (641) 44.9 %

Total internal R&D expenses 18,537 16,120 2,417 15.0 %

Total R&D expenses $ 56,468 $ 57,459 $ (991) (1.7) %

For the three months ended September 30, 2024, our R&D expenses were $52.8 million, compared to $43.2 million for the three months ended September 30, 2023.

For the three months ended September 30, 2024, our external R&D expenses increased by $9.2 million primarily due to an increase of $6.0 million in expenses incurred for our tebentafusp programs as a result of the advanced cutaneous melanoma ("TEBE-AM") and ATOM Phase 3 trials.

All other external clinical and preclinical costs increased by $2.7 million due to continued progress in the pipeline.

For the three months ended September 30, 2024, our internal R&D expenses increased by $0.4 million primarily due to an increase in headcount-related expenses as our number of employees and associated personnel costs increased with the growth of our clinical and preclinical programs partially offset by an increase in our R&D tax credits.

SG&A Expenses

The following table summarizes our SG&A expenses (in thousands):

Three Months Ended September 30,

2024 2023 Increase /

(decrease) % Increase /

Salaries and other employee-related costs $ 11,783 $ 7,456 $ 4,327 58.0 %

Share-based compensation expense 4,740 6,482 (1,742) (26.9) %

Selling and commercial costs 11,621 12,100 (479) (4.0) %

Other administrative expenses 7,388 9,431 (2,043) (21.7) %

Total SG&A expenses $ 35,532 $ 35,469 $ 63 0.2 %

For each of the three months ended September 30, 2024 and 2023, our SG&A expenses were $35.5 million.

Salaries and other employee-related costs increased by $4.3 million, primarily due to the internalization of our U.S.

sales force in the fourth quarter of 2023, whereas these costs were included within selling and commercial costs for the three months ended September 30, 2023.

In addition, there was an increase in the number of employees in medical and regulatory activities and business support functions, to support our growing pipeline and commercial activities.

This was offset by a decrease in share-based compensation expense of $1.7 million due to higher estimated forfeitures in the three months ended September 30, 2024 and a decrease in other administrative expenses.

Interest Income and Interest Expense

For the three months ended September 30, 2024, interest income was $6.0 million compared to $5.1 million for the three months ended September 30, 2023.

This increase of $0.9 million reflects higher levels of cash and cash equivalents held in 2024 relative to 2023 due primarily to the net cash proceeds from the convertible senior notes issued in February 2024 (the "Notes") and increases in interest rates earned on our cash and cash equivalents balances.

For the three months ended September 30, 2024, interest expense was $4.3 million compared to $1.3 million for the three months ended September 30, 2023 and the increase was primarily related to interest on the Notes.

Foreign Currency Gain

For the three months ended September 30, 2024, foreign currency gain was $4.0 million compared to a gain of $11.2 million for the three months ended September 30, 2023.

This decrease of $7.2 million reflects less significant exchange rate movements in the three months ended September 30, 2024 relative to the three months ended September 30, 2023.

Other Income (Expense), Net

For the three months ended September 30, 2024, other income, net was $9.0 million compared to other expense, net of $0.2 million for the three months ended September 30, 2023.

The change is primarily related to the unrealized gains resulting from the change in fair value of our marketable securities, which were purchased in 2024.

Income Tax Benefit (Expense)

For the three months ended September 30, 2024, the income tax benefit was $2.6 million compared to $0.2 million for the three months ended September 30, 2023.

This increase is related to a favorable discrete item for U.S.

research tax credits claimed on our 2023 U.S.

income tax return.

Comparison of the Nine Months Ended September 30, 2024 and 2023

The following table summarizes our total revenue (in thousands):

Nine Months Ended September 30,

2024 2023 Increase /

(decrease) % Increase /

Product revenue, net

$ 225,937 $ 171,142 $ 54,795 32.0 %

Collaboration revenue

213 8,124 (7,911) (97.4) %

Total revenue

$ 226,150 $ 179,266 $ 46,884 26.2 %

Product revenue, net

Product revenue, net from the sale of KIMMTRAK is presented by country / region based on location of the end customer below (in thousands).

Nine Months Ended September 30,

2024 2023 Increase /

(decrease) % Increase /

United States

$ 162,900 $ 120,722 $ 42,178 34.9 %

55,454 49,293 6,161 12.5 %

International

7,583 1,127 6,456 572.8 %

Total product revenue, net

$ 225,937 $ 171,142 $ 54,795 32.0 %

For the nine months ended September 30, 2024, we generated product revenue, net of $225.9 million, due to the sale of KIMMTRAK, of which $162.9 million was in the United States, $55.5 million in Europe (including the impact of a net increase in estimated reserves related to prior periods of $12.6 million) and $7.6 million in International.

Product revenue, net increased in the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023, due primarily to increased volume in the United States and global country expansion, as we continued our commercialization efforts.

Collaboration revenue

Revenue from collaboration agreements decreased by $7.9 million to $0.2 million in the nine months ended September 30, 2024, compared to $8.1 million for the nine months ended September 30, 2023.

This decrease was due to our February 2023 agreement with Genentech to close the Phase 1 clinical trial and for the parties to fulfill the remaining obligations under the terms of our Genentech collaboration.

The following table summarizes our R&D expenses (in thousands):

Nine Months Ended September 30,

2024 2023 Increase /

(decrease) % Increase /

External R&D expenses:

PRAME programs $ 67,144 $ 37,300 $ 29,844 80.0 %

Tebentafusp programs 18,766 10,630 8,136 76.5 %

Infectious disease programs 5,009 4,272 737 17.3 %

All other external clinical and preclinical costs 17,309 13,733 3,576 26.0 %

Total external R&D expenses 108,228 65,935 42,293 64.1 %

Internal R&D expenses:

Salaries and other employee-related costs 33,247 27,780 5,467 19.7 %

Share-based compensation expense 5,971 5,254 717 13.6 %

All other internal R&D costs 19,577 21,854 (2,277) (10.4) %

UK R&D tax credits (5,722) (2,843) (2,879) 101.3 %

Total internal R&D expenses 53,073 52,045 1,028 2.0 %

Total R&D expenses $ 161,301 $ 117,980 $ 43,321 36.7 %

For the nine months ended September 30, 2024, our R&D expenses were $161.3 million, compared to $118.0 million for the nine months ended September 30, 2023.

For the nine months ended September 30, 2024, our external R&D expenses increased by $42.3 million primarily due to an increase of $29.8 million in expenses incurred for our PRAME programs as a result of the initiation of our registrational Phase 3 PRISM-MEL-301 clinical trial, scale-up of manufacturing and increase in the number of patients in combination expansions in our PRAME-A02 Phase 1 clinical trial.

R&D expenses incurred for our tebentafusp programs increased by $8.1 million primarily due to the advanced cutaneous melanoma ("TEBE-AM") and ATOM Phase 3 trials.

All other external clinical and preclinical costs increased by $3.6 million due to continued progress in the pipeline.

For the nine months ended September 30, 2024, our internal R&D expenses increased by $1.0 million primarily due to an increase of $5.5 million in headcount-related expenses as our number of employees and associated personnel costs increased with the growth of our clinical and preclinical programs partially offset by an increase in our R&D tax credits.

For the three months ended March 31, 2025, our R&D expenses were $56.5 million, compared to $57.5 million for the three months ended March 31, 2024.

For the three months ended March 31, 2025, our external R&D expenses decreased by $3.4 million primarily due to a decrease of $9.4 million in expenses incurred for our PRAME programs as a result of higher costs related to timing of manufacturing batches and purchases of drug consumables for our clinical trials in the three months ended March 31, 2024.

This was partially offset by expenses incurred for our tebentafusp programs which increased by $2.1 million primarily due to the advanced cutaneous melanoma ("TEBE-AM") and ATOM Phase 3 trials.

All other external clinical and preclinical costs increased by $4.7 million due to continued progress in the pipeline, primarily related to our autoimmune programs.

For the three months ended March 31, 2025, our internal R&D expenses increased by $2.4 million primarily due to an increase in salaries and other employee-related costs and all other internal R&D costs due to the growth of our clinical and preclinical programs.

We expect our R&D expenses to increase in future periods as we advance our trials and further develop our clinical and preclinical pipeline.

SG&A Expenses

The following table summarizes our SG&A expenses (in thousands):

Nine Months Ended September 30,

2024 2023 Increase /

(decrease) % Increase /

Salaries and other employee-related costs $ 37,104 $ 24,984 $ 12,120 48.5 %

Share-based compensation expense 19,552 20,024 (472) (2.4) %

Selling and commercial costs 35,321 36,624 (1,303) (3.6) %

Other administrative expenses 21,480 21,414 66 0.3 %

Total SG&A expenses $ 113,457 $ 103,046 $ 10,411 10.1 %

For the nine months ended September 30, 2024, our SG&A expenses were $113.5 million, compared to $103.0 million for the nine months ended September 30, 2023, an increase of $10.4 million.

Salaries and other employee-related costs increased by $12.1 million during the nine months ended September 30, 2024, primarily due to the internalization of our U.S.

sales force in the fourth quarter of 2023, whereas for the nine months ended September 30, 2023 these costs were included within selling and commercial costs.

In addition, there was an increase in the number of employees in medical and regulatory activities and business support functions to support our growing pipeline and commercial activities.

For the three months ended March 31, 2025, our SG&A expenses were $40.2 million, compared to $39.3 million for the three months ended March 31, 2024, an increase of $0.9 million.

The increase is due to costs related to commercial and business support functions to support our growing pipeline and global commercial expansion.

Interest Income and Interest Expense

For the nine months ended September 30, 2024, interest income was $20.4 million compared to $12.5 million for the nine months ended September 30, 2023.

This increase of $7.9 million reflects higher levels of cash and cash equivalents held in 2024 relative to 2023 due primarily to the net cash proceeds from the Notes issued in February 2024 and increases in interest rates earned on our cash and cash equivalents balances.

For the nine months ended September 30, 2024, interest expense was $11.8 million compared to $3.8 million for the nine months ended September 30, 2023 and the increase was primarily related to interest on the Notes.

For the three months ended March 31, 2025, interest income was $4.2 million compared to $8.2 million for the three months ended March 31, 2024.

This decrease of $4.0 million was due to reduced cash and cash equivalents balances related to purchases of marketable securities of $350.0 million in the second quarter of 2024.

For the three months ended March 31, 2025, interest expense was $3.0 million compared to $3.2 million for the three months ended March 31, 2024 and the decrease was primarily related to interest on the Pharmakon loan in 2024, which was repaid in November 2024.

Foreign Currency Gain (Loss)

For the three months ended March 31, 2025, foreign currency gain was $3.1 million compared to a loss of $2.4 million for the three months ended March 31, 2024.

This change of $5.5 million reflects favorable exchange rate movements mainly due to the weakening of the U.S.

dollar against the pound sterling and the euro in the three months ended March 31, 2025.

Other Income (Expense), Net

For the nine months ended September 30, 2024, other income, net was $13.2 million compared to other expense, net of $0.7 million for the nine months ended September 30, 2023.

The change is primarily related to the unrealized gains resulting from the change in fair value of our marketable securities, which were purchased in 2024.

Income Tax Benefit (Expense)

For the nine months ended September 30, 2024, the income tax benefit was $0.8 million compared to a charge of $0.3 million for the nine months ended September 30, 2023.

This change is related to a favorable discrete item for U.S.

research tax credits claimed on our 2023 U.S.

income tax return.

For the three months ended March 31, 2025, other income, net was $5.5 million compared to other expense, net of $0.2 million for the three months ended March 31, 2024.

The change is primarily related to income on our marketable securities purchased in the second quarter of 2024, including the unrealized gains resulting from the change in fair value.

Income Tax Expense

For the three months ended March 31, 2025, the income tax expense was $1.1 million compared to $0.4 million for the three months ended March 31, 2024.

This was driven by a lower deduction in the United States related to share option exercises in the three months ended March 31, 2025.

Liquidity and Capital Resources

Sources of Liquidity

Although we have recorded product revenue for sales of KIMMTRAK, have positive operating cash flows in the nine months ended September 30, 2024 and have net income in the three months ended September 30, 2024, we have continued to incur operating losses and cumulative negative cash flows from our operations since our inception.

We have an accumulated deficit of $772.0 million as of September 30, 2024.

Since our inception, we have funded our operations primarily with proceeds from sales of equity securities, debt financings and historical payments from our collaboration partners.

Through September 30, 2024, we have raised an aggregate of $1,677 million.

As of September 30, 2024 and December 31, 2023, we had cash, cash equivalents and marketable securities of $901.3 million and $442.6 million, respectively.

At our IPO in February 2021, we listed our ordinary shares in the form of ADSs on the Nasdaq Global Select Market and raised gross proceeds of approximately $297 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 million, in a private placement to the Gates Foundation, and in July 2022, we raised gross proceeds of approximately $140.0 million through the sale of our ordinary shares in the form of ADSs and non-voting ordinary shares in a private placement.

On September 9, 2022, we entered into an Open Market Sale Agreement (the "Sales Agreement") with Jefferies LLC ("Jefferies"), pursuant to which we may issue and sell ADSs, each representing one ordinary share, having an aggregate offering price of up to $250 million, from time to time, in one or more at-the-market offerings, for which Jefferies will act as sales agent and/or principal.

The at-the-market facility has been registered under the Securities Act pursuant to our Registration Statement on Form F-3ASR (File No.

As of September 30, 2024, no issuances or sales had been made pursuant to the Sales Agreement.

We entered into a loan with Pharmakon Advisors, LP (the "Pharmakon Loan Agreement") in November 2022, under which we have borrowed $50 million, which bears interest at a fixed rate of 9.75% and is due to mature in November 2028.

We intend to use a portion of our cash and cash equivalents to repay in full the loan outstanding under the Pharmakon Loan Agreement during the three months ending December 31, 2024.

As of the date of this Quarterly Report, we have not yet repaid the loan outstanding under the Pharmakon Loan Agreement and this is included in our indebtedness as of September 30, 2024 .

On February 2, 2024, we completed a private offering of $402.5 million aggregate principal amount of the Notes.

Our net proceeds from the offering of the Notes were $389.1 million, after deducting the initial purchasers’ discounts and commissions and other offering expenses.

Although we have recorded revenue from the sale of therapies, we have continued to incur operating losses and cumulative negative cash flows from our operations since our inception.

We have an accumulated deficit of $790.7 million as of March 31, 2025.

Since our inception, we have funded our operations primarily with proceeds from sales of equity securities, product sales, debt financings and historical payments from collaboration partners.

As of March 31, 2025 and December 31, 2024, we had cash and cash equivalents of $476.8 million and $455.7 million, respectively, and marketable securities of $360.2 million and $364.6 million, respectively.

In September 2022, we entered into an Open Market Sale Agreement (the "Sales Agreement") with Jefferies LLC ("Jefferies"), pursuant to which we may issue and sell ADSs, each representing one ordinary share, having an aggregate offering price of up to $250 million, from time to time, in one or more at-the-market offerings, for which Jefferies will act as sales agent and/or principal.

The at-the-market facility has been registered under the Securities Act pursuant to our Registration Statement on Form S-3ASR (File No.

As of March 31, 2025, no issuances or sales had been made pursuant to the Sales Agreement.

In February 2024, we completed a private offering of $402.5 million aggregate principal amount of the Notes.

Our net proceeds from the offering of the Notes were $389.1 million, after deducting the initial purchasers’ discounts and commissions and the offering expenses.

The Notes are senior, unsecured obligations of the Company and will mature on February 1, 2030, unless earlier converted, redeemed or repurchased.

The Notes will accrue interest payable semi-annually in arrears on February 1 and August 1 of each year, beginning on August 1, 2024, at a rate of 2.50% per year.

Other than the above mentioned indebtedness, 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.

As of September 30, 2024, we had cash, cash equivalents and marketable securities of $901.3 million, compared with $442.6 million as of December 31, 2023.

Our working capital was $739.7 million as of September 30, 2024, compared with $389.8 million as of December 31, 2023.

The Notes will accrue interest payable semiannually in arrears on February 1 and August 1 of each year, beginning on August 1, 2024, at a rate of 2.50% per year.

Part of the proceeds were used to repay in full loans outstanding under our previous loan agreement with Pharmakon.

As of March 31, 2025, we had cash and cash equivalents of $476.8 million, as compared to $455.7 million as of December 31, 2024 and we also have marketable securities of $360.2 million as of March 31, 2025 as compared to $364.6 million as of December 31, 2024.

Our working capital was $799.5 million as of March 31, 2025, compared to $717.7 million as of December 31, 2024.

The following table summarizes the primary sources and uses of cash and cash equivalents for each period presented (in thousands):

Nine Months Ended September 30,

Three Months Ended March 31,

Cash and cash equivalents at beginning of period

$ 455,731 $ 442,626

Net cash provided by operating activities

40,012 20,673

Net cash used in investing activities

(351,589) (4,608)

Net cash provided by (used in) operating activities 435 (4,587)

Net cash provided by (used in) investing activities 9,702 (430)

Net cash provided by financing activities 2,551 396,012

395,392 28,092

Net foreign exchange difference on cash held

11,326 (2,491)

Cash and cash equivalents at end of period

$ 476,845 $ 832,821

Net cash provided by our operating activities was $40.0 million for the nine months ended September 30, 2024, compared to cash provided by operating activities of $20.7 million for the nine months ended September 30, 2023.

The increase of $19.3 million in the nine months ended September 30, 2024 was primarily due to increases in net product revenue and accrued expenses, partially offset by an increase in operating expenses and prepayments and other current assets.

Net cash used in investing activities was $351.6 million and $4.6 million for the nine months ended September 30, 2024 and 2023, respectively.

The net cash used in investing activities increased for the nine months ended September 30, 2024 due to purchases of marketable securities.

Net cash provided by our financing activities during the nine months ended September 30, 2024 was $395.4 million compared to $28.1 million for the nine months ended September 30, 2023.

The increase of $367.3 million was the result of the net cash proceeds from the Notes of $389.1 million with no similar proceeds in the nine months ended September 30, 2023, partially offset by a decrease in exercise of share options.

Net cash provided by our operating activities was $0.4 million for the three months ended March 31, 2025, compared to cash used in operating activities of $4.6 million for the three months ended March 31, 2024.

The increase of $5.0 million in the three months ended March 31, 2025 was primarily due to an increase in net revenue from sale of therapies and cash collections, partially offset by a decrease in accrued expenses related to timing of payments.

Net cash provided by investing activities was $9.7 million compared to cash used in investing activities of $0.4 million for the three months ended March 31, 2025 and 2024, respectively.

The net cash provided by investing activities increased for the three months ended March 31, 2025 due to proceeds from the sale of marketable securities.

Net cash provided by our financing activities during the three months ended March 31, 2025 was $2.6 million compared to $396.0 million for the three months ended March 31, 2024.

The decrease of $393.4 million was the result of the net cash proceeds from the Notes of $389.1 million in the three months ended March 31, 2024 with no similar proceeds received in March 31, 2025, in addition to a decrease in exercise of share options.

Future Capital Requirements

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

• experience any delays, interruptions or encounter issues with any of the above, including any delays or other impacts as a result of the war in Ukraine, the conflict in the Middle East, global geopolitical tension, worsening macroeconomic conditions, including supply chain disruptions, fluctuations in interest rates and inflation, and health epidemics or pandemics.

Since our inception, we have raised funds from sales of equity securities, debt financing, revenue from sale of therapies and collaboration agreements.

In order to maintain such levels of expenditure and our anticipated expenditure, we may raise further funds by exploring debt or equity financing, or potentially further collaborations, in the future.

The amount we are able to raise from these options can vary with market conditions, including the impacts of macroeconomic conditions such as supply chain disruptions, fluctuations in interest rates and volatility in the capital markets, and our long-term strategy as a company is dependent on our ability to successfully raise such funding.

The amount we are able to raise from these options can vary with market conditions, including the impacts of macroeconomic conditions such as supply chain disruptions, fluctuations in interest rates and volatility in the capital markets, and our longer term strategy as a company is dependent on our ability to successfully raise such funding.

Moreover, we have based our estimates on assumptions that may prove to be wrong, and we could use our available capital resources sooner than we currently expect.

We held cash, cash equivalents and marketable securities of $901.3 million as of September 30, 2024.

Based on our current operating plans, we expect that our existing cash, cash equivalents and marketable securities, along with anticipated future revenue from KIMMTRAK, will enable us to fund our operating expenses and capital expenditure requirements for at least twelve months from the date of filing of this Quarterly Report.

Given our need for additional financing to support the long-term clinical development of our programs, we may consider additional financing opportunities when market terms are favorable to us.

We held cash and cash equivalents of $476.8 million and marketable securities of $360.2 million as of March 31, 2025.

Based on our current operating plans, we expect that our existing cash and cash equivalents and marketable securities balances, along with anticipated revenue from KIMMTRAK, will enable us to fund our operating expenses and capital expenditure requirements for at least twelve months from the date of filing of this Quarterly Report.

Given our need for additional financing to support the long-term clinical development of our programs, we intend to consider additional financing opportunities when market terms are favorable to us.

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.

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• 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 continued costs of operating as a public company;

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

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We are also mindful that conditions in the current macroeconomic environment could affect our ability to achieve our goals.

We sell our products in countries that face economic volatility and weakness and although we have historically collected receivables from customers in such countries, sustained weakness or further deterioration of the local economies and currencies may cause customers in those countries to be unable to pay for our products.

We sell our products in countries that face economic volatility and weakness.

Although we have historically collected receivables from customers in such countries, sustained weakness or further deterioration of the local economies and currencies may cause customers in those countries to be unable to pay for our products.

We will continue to monitor these conditions and will attempt to adjust our business processes, as appropriate, to mitigate macroeconomic risks to our business.

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We have similar obligations related to our earlier stage programs.

These obligations and potential obligations could result in payments of up to $26.0 million, and are expected to increase as we continue to commit to advancing the development of our brenetafusp (IMC-F106C) program in 2024 and beyond.

These obligations and potential obligations could result in payments of up to $27.5 million, and are expected to increase as we continue to advance our pipeline in 2025 and beyond.

While we have already incurred costs for commercial launches of KIMMTRAK in the United States, Europe and other territories, additional manufacturing obligations may arise in future in relation to product sales in these territories.

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Financing obligations

We are required to make interest payments for the Notes issued in February 2024.

As of September 30, 2024, we had $402.5 million aggregate principal amount of the Notes outstanding, which will mature on February 1, 2030, unless earlier converted, redeemed or repurchased.

“Current and non-current interest-bearing loans and borrowings” of the notes to our condensed consolidated financial statements in Part I of this Quarterly Report for further information.

We are also required to make interest payments, and, from 2026 onward, contractual repayments of principal borrowings under our Pharmakon Loan Agreement, until at least 2028.

The loan liability as of September 30, 2024 was $48.2 million, and further details regarding this loan facility are provided in Note 5.

''Current and non-current interest-bearing loans and borrowings'' of the notes to our condensed consolidated financial statements, in Part I of this Quarterly Report.

We had the option to draw down a further $50 million under our Pharmakon Loan Agreement through June 2024, and we elected not to exercise this option.

We intend to use a portion of our cash and cash equivalents to repay in full the loan outstanding under the Pharmakon Loan Agreement during the three months ending December 31, 2024, which will release us from the forementioned obligations.

Under the terms of our agreement with the Gates Foundation, we are 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.

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In such an event, if within 12 months after such redemption or sale, we experience a change in control at a valuation of more than 150% of the valuation used for the redemption or the sale of the shares, we have 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.

In February 2024, we completed a private offering of $402.5 million aggregate principal amount of the Notes, including the exercise in full of the initial purchasers’ option to purchase up to an additional $52.5 million principal amount of Notes.

Our net proceeds from the offering of the Notes were $389.1 million, after deducting the initial purchasers’ discounts and commissions and the offering expenses.

The Notes are senior, unsecured obligations of the Company and will mature on February 1, 2030, unless earlier converted, redeemed or repurchased.

The Notes will accrue interest payable semiannually in arrears on February 1 and August 1 of each year, beginning on August 1, 2024, at a rate of 2.50% per year.

“Interest-bearing loans and borrowings” of the notes to our condensed consolidated financial statements in Part I of this Quarterly Report for further information.

Our Key Collaboration Agreements

Genentech Collaboration

In June 2013, we entered into a research collaboration and license agreement (the "2013 Genentech Agreement") with Genentech, and F.

Hoffmann-La Roche Ltd ("Roche"), pursuant to which we, along with Genentech and Roche, agreed to collaborate in the development, manufacture and ultimately, commercialization of soluble TCR bispecific therapeutic candidate compounds.

Under the 2013 Genentech Agreement, Genentech paid us an initial upfront payment of $20 million in exchange for exclusive licenses to two of our targets, MAGE-A4 and an undisclosed target.

The first preclinical program nominated under the 2013 Genentech Agreement was target MAGE-A4, which we refer to as our IMC-C103C program.

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

Genentech will acquire an exclusive worldwide license to the MAGE-A4 HLA-A02 soluble TCR bispecific therapeutic candidate compounds and will be fully responsible for all further development and commercialization of such candidate compounds, at its expense.

As of December 31, 2023, we determined our performance obligation under the collaboration with Genentech was complete.

If MAGE-A4 HLA-A02 targeted products are commercialized, we would be eligible to receive development and commercial milestone payments plus royalties from Genentech on any sales of MAGE-A4 HLA-A02 targeted products arising under the Genentech Agreement.

Any future milestones will be recorded when they become probable of being achieved.

BMS Collaboration

In February 2024, we entered into a clinical trial collaboration and supply agreement with BMS (the "BMS Agreement") to investigate our ImmTAC bispecific TCR candidate targeting PRAME HLA-A02, brenetafusp (IMC-F106C), in combination with BMS’s nivolumab, in first-line advanced cutaneous melanoma.

In February 2024, we entered into a clinical trial collaboration and supply agreement with BMS (the "BMS Agreement") to investigate our ImmTAC bispecific TCR candidate targeting PRAME HLA-A*02:01, brenetafusp, in combination with BMS’s nivolumab, in first-line advanced cutaneous melanoma.

Under the terms of the BMS Agreement, we are sponsoring and funding the registrational Phase 3 clinical trial of brenetafusp in combination with nivolumab in first-line advanced cutaneous melanoma (PRISM-MEL-301), and BMS is providing nivolumab.

No monetary consideration is transferred as a result of the BMS Agreement.

Gadeta Collaboration

In December 2022, we entered into a Collaboration, Option and License Agreement (the "Gadeta Collaboration") with Gadeta B.V.

("Gadeta") which was acquired by Clade Therapeutics ("Clade") in October 2023.

Under the Gadeta Collaboration, we will collaborate on ‘201 γδ-TCR target discovery, and we will have the option to develop ImmTAC therapies derived from the ‘201 TCR as part of the research collaboration.

Following the acquisition of Gadeta by Clade, the rights under the Gadeta Collaboration were transferred to Ateda Therapeutics ("Ateda").

Our rights and obligations have not been altered through this transfer and we have an option for an exclusive license to further research, develop and commercialize an ImmTAC candidate from the Gadeta Collaboration.

If we exercised this option, Ateda could be eligible to receive further payments from us.

We have incurred amounts totaling $2.75 million under the Gadeta Collaboration as of September 30, 2024.

In April 2024, Clade was acquired by Century Therapeutics and our rights or obligations under the Gadeta Collaboration were not affected by the acquisition.

Critical Accounting Estimates

Our condensed consolidated financial statements as of September 30, 2024 and for the three and nine months ended September 30, 2024 and 2023 , respectively, have been prepared in accordance with U.S.

Our condensed consolidated financial statements as of March 31, 2025 and for the three months ended March 31, 2025 and 2024 , respectively, have been prepared in accordance with U.S.

The preparation of the condensed consolidated financial statements requires us to make judgments, estimates and assumptions that affect the value of assets and liabilities—as well as contingent assets and liabilities—as reported on the balance sheet date, and revenues and expenses arising during the fiscal period.

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Judgment is applied to consider the relevance and reliability of information used to make these estimates.

Judgment is also required in determining expected rebate percentages for the amount of net product revenue in France.

Rebates payable are subject to a high degree of estimation uncertainty.

Our estimate of these rebates represents the difference between the expected agreed price for the commercial sale of KIMMTRAK in France, which is subject to negotiation, and the initial price of tebentafusp and KIMMTRAK until this price is agreed.

Analysis of further legislative requirements, sales volumes and the expected benefit of KIMMTRAK to patients in France is also required in the assessment of rebates payable.

We apply judgement to assess internal targets, pricing information of other therapies approved for sale in France, information obtained from price negotiations of KIMMTRAK in other countries, and information connected with KIMMTRAK’s safety profile when forming our estimated rebate deduction from revenue.

Judgment has historically been required in determining expected rebate percentages for the amount of net revenue from sale of therapies in France.

Rebates payable were subject to a high degree of estimation uncertainty.

Our estimate of these rebates represented the difference between the expected agreed price for the commercial sale of KIMMTRAK in France, which has historically been subject to negotiation, and the initial price of tebentafusp and KIMMTRAK until the Company completed price negotiations in France during the three months ended March 31, 2025.

Analysis of further legislative requirements, sales volumes and the expected benefit of KIMMTRAK to patients in France was also required in the assessment of rebates payable.

We applied judgement to assess internal targets, pricing information of other therapies approved for sale in France, information obtained from price negotiations of KIMMTRAK in other countries, and information connected with KIMMTRAK’s safety profile when forming our estimated rebate deduction from revenue.

For other European markets where the price is open to negotiation, judgements are made in line with expected pricing outcomes.

Our total accrued revenue deductions as of September 30, 2024 were $133.6 million, including amounts of $118.2 million for the critical estimates subject to greater estimation uncertainty and judgments described above.

These are included within Accrued expenses and other current liabilities and Accrued expenses, non-current in the Condensed Consolidated Balance Sheet as of September 30, 2024.

In the three months ending December 31, 2024, we expect to pay approximately $40.0 million related to accrued revenue deductions.

A 20% increase or decrease in estimates of expected rebate and chargeback percentages for amounts payable to governments or government agencies for the critical estimates described above would have resulted in a $23.6 million reduction or increase in Product revenue, net reported in the Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) for the nine months ended September 30, 2024.

Our total accrued revenue deductions as of March 31, 2025 were $121.3 million, including amounts of $8.6 million for the critical estimates subject to greater estimation uncertainty and judgments described above.

These amounts are included within Accrued expenses and other current liabilities and Accrued expenses, non-current in the Condensed Consolidated Balance Sheet as of March 31, 2025.

A 20% increase or decrease in estimates of expected rebate and chargeback percentages for amounts payable to governments or government agencies for the critical estimates described above would have resulted in a $1.7 million reduction or increase in Revenue from sale of therapies, net reported in the Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) for the three months ended March 31, 2025.

We believe our expected values of accruals reported in the Condensed Consolidated Balance Sheet are materially appropriate;

however, due to the uncertainties and judgements outlined above, it is possible eventual amounts could significantly differ to these estimates.

For critical estimates reported as of December 31, 2023 where the uncertainty remains unresolved, additional information in the nine months ended September 30, 2024, resulted in a change in estimate of an additional $12.6 million of net increase to our total accrued revenue deductions as of September 30, 2024.

For critical estimates reported as of December 31, 2024, additional information including completing price negotiations in France and Germany in the three months ended March 31, 2025 resulted in a change in estimate of $6.0 million of net decrease to our total accrued revenue deductions as of March 31, 2025.

Recently Issued and Adopted Accounting Pronouncements

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis