Immunocore Holdings plc 10-Q

Item 1. Financial Statements Immunocore Holdings plc Condensed Consolidated Balance Sheets (Unaudited) (In thousands, except share and per share data) March 31, 2026 December 31, 2025 Assets Current assets Cash and cash equivalents $ 452,675 $ 467,709 Marketable securities 392,221 396,444 Accounts receivable, net 81,068 73,977 Prepaid expenses and other current assets 69,590 51,870 Inventory, net 8,253 6,742 Total current assets 1,003,807 996,742 Property and equipment, net 12,128 11,462 Operating lease right of use assets, net 37,546 38,783 Other non-current assets 18,614 20,282 Total assets $ 1,072,095 $ 1,067,269 Liabilities and shareholders’ equity Current liabilities Accounts payable $ 30,157 $ 24,364 Accrued expenses and other current liabilities 207,388 219,744 Deferred revenue, current 572 583 Operating lease liabilities, current 1,996 2,006 Total current liabilities 240,113 246,697 Deferred revenue, non-current 4,622 4,858 Operating lease liabilities, non-current 40,027 41,556 Interest-bearing loans and borrowings 393,660 393,125 Total liabilities 678,422 686,236 Commitments and contingencies (Note 10) Shareholders’ equity Ordinary shares (voting), £ 0.002 par value, most recent authority to allot up to a maximum nominal value of £ 149,633 and shares as of March 31, 2026 and December 31, 2025, respectively, and 50,831,928 and 50,689,271 shares issued and outstanding as of March 31, 2026 and December 31, 2025, respectively. 137 136 Deferred shares, £ 0.0001 par value, 5,793,501 shares authorized, issued and outstanding as of March 31, 2026 and December 31, 2025. 1 1 Additional paid-in capital 1,247,212 1,240,255 Accumulated deficit ( 818,304 ) ( 831,275 ) Accumulated other comprehensive loss ( 35,373 ) ( 28,084 ) Total shareholders' equity 393,673 381,033 Total liabilities and shareholders' equity $ 1,072,095 $ 1,067,269 The accompanying notes form an integral part of these condensed consolidated financial statements. 2 Table of Contents Immunocore Holdings plc Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) (Unaudited) (In thousands, except share and per share data) Three Months Ended March 31, 2026 2025 Revenue: Revenue from sale of therapies, net $ 106,677 $ 93,881 Total revenue 106,677 93,881 Cost and operating expenses: Cost of revenue from sale of therapies ( 434 ) ( 831 ) Research and development expense ( 61,113 ) ( 56,468 ) Selling, general and administrative expense ( 37,850 ) ( 40,198 ) Income (Loss) from operations 7,280 ( 3,616 ) Other income (expense): Interest income 3,418 4,176 Interest expense ( 3,051 ) ( 3,025 ) Foreign currency gains 3,849 3,080 Other income, net 1,776 5,469 Net income before income taxes 13,272 6,084 Income tax expense ( 301 ) ( 1,061 ) Net income $ 12,971 $ 5,023 Other comprehensive income (loss): Exchange differences on translation of foreign operations ( 7,289 ) 673 Total comprehensive income $ 5,682 $ 5,696 Basic net income per share $ 0.26 $ 0.10 Basic weighted-average number of shares outstanding 50,754,763 50,086,684 Diluted net income per share $ 0.25 $ 0.10 Diluted weighted-average number of shares outstanding 52,934,787 51,949,798 The accompanying notes form an integral part of these condensed consolidated financial statements. 3 Table of Contents Immunocore Holdings plc Condensed Consolidated Statements of Shareholders’ Equity (Unaudited) (In thousands, except share data) Ordinary Shares Deferred Shares Additional Paid-in Capital Accumulated deficit Accumulated other comprehensive (loss) income Total Shareholders' Equity Shares Amount Shares Amount As of December 31, 2025 50,689,271 $ 136 5,793,501 $ 1 $ 1,240,255 $ ( 831,275 ) $ ( 28,084 ) $ 381,033 Net income — — — — — 12,971 — 12,971 Other comprehensive loss — — — — — — ( 7,289 ) ( 7,289 ) Equity plan options exercised and units assigned 142,657 1 — — 655 — — 656 Share-based compensation expense — — — — 6,302 — — 6,302 As of March 31, 2026 50,831,928 $ 137 5,793,501 $ 1 $ 1,247,212 $ ( 818,304 ) $ ( 35,373 ) $ 393,673 Ordinary Shares Deferred Shares Additional Paid-in Capital Accumulated deficit Accumulated other comprehensive (loss) income Total Shareholders' Equity Shares Amount Shares Amount As of December 31, 2024 50,064,860 $ 135 5,793,501 $ 1 $ 1,190,104 $ ( 795,761 ) $ ( 33,763 ) $ 360,716 Net income — — — — — 5,023 — 5,023 Other comprehensive income — — — — — — 673 673 Exercise of share options 119,749 — — — 2,551 — — 2,551 Share-based compensation expense — — — — 9,516 — — 9,516 As of March 31, 2025 50,184,609 $ 135 5,793,501 $ 1 $ 1,202,171 $ ( 790,738 ) $ ( 33,090 ) $ 378,479 The accompanying notes form an integral part of these condensed consolidated financial statements. 4 Table of Contents Immunocore Holdings plc Condensed Consolidated Statements of Cash Flows (Unaudited) (In thousands) Three Months Ended March 31, 2026 2025 Cash flows from operating activities Net income $ 12,971 $ 5,023 Adjustments for: Share-based compensation expense 6,302 9,489 Depreciation 948 854 Unrealized foreign exchange gains, net ( 3,490 ) ( 2,907 ) Unrealized gains on marketable securities ( 1,776 ) ( 5,469 ) Non-cash lease expense 627 546 Other 534 509 Changes in assets and liabilities: (Increase) decrease in accounts receivable ( 7,930 ) 836 Increase in prepayments and other current assets ( 18,772 ) ( 28 ) Increase in accounts payable 5,974 3,342 Decrease in accrued expenses ( 8,303 ) ( 10,943 ) Decrease in deferred revenue ( 146 ) — (Decrease) increase in operating lease liabilities ( 864 ) 756 Decrease (increase) in other operating assets 150 ( 1,573 ) Net cash (used in) provided by operating activities ( 13,775 ) 435 Cash flows from investing activities Proceeds from sale of marketable securities 6,000 10,000 Purchase of property and equipment ( 1,781 ) ( 298 ) Net cash provided by investing activities 4,219 9,702 Cash flows from financing activities Proceeds from exercise of share options 656 2,551 Net cash provided by financing activities 656 2,551 (Decrease) increase in cash and cash equivalents ( 8,900 ) 12,688 Net foreign exchange difference on cash held ( 6,134 ) 8,426 Cash and cash equivalents at beginning of period 467,709 455,731 Cash and cash equivalents at end of period $ 452,675 $ 476,845 Supplemental disclosure of cash flow and noncash information Cash paid for interest $ ( 5,031 ) $ ( 5,031 ) Cash paid for income taxes, net of refunds $ ( 13 ) $ ( 32 ) The accompanying notes form an integral part of these condensed consolidated financial statements. 5 Table of Contents Immunocore Holdings plc Notes to the Condensed Consolidated Financial Statements (Unaudited) 1. Description of business Immunocore Holdings plc (collectively with its subsidiaries, 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 with operations based primarily in the United Kingdom and United States. The Company is pioneering and delivering transformative immunomodulating medicines to radically improve outcomes for patients with cancer, infectious diseases, and autoimmune diseases. Leveraging its proprietary, flexible, off-the-shelf ImmTAX ( I mmune m obilizing m onoclonal T CRs A gainst X disease) platform, the Company’s pipeline includes clinical and preclinical programs in oncology, infectious diseases, and autoimmune diseases. In January and April 2022, the Company received approval from the U.S. Food and Drug Administration ("FDA") and European Commission ("EC"), respectively, for its lead product, KIMMTRAK, for the treatment of unresectable or metastatic uveal melanoma. The Company has subsequently received approvals in further territories, and the Company continues to launch and seek approvals in additional territories. KIMMTRAK is now approved in 39 countries and the Company has commercially launched the product in over 30 countries, including the United States, Germany and France, among other territories. 2. Summary of significant accounting policies Basis of presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States ("U.S. GAAP") for interim financial reporting and pursuant to the requirements for reporting on Form 10-Q and Article 10 of Regulation S-X. Accordingly, they 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 Company for the year ended December 31, 2025, included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (the "SEC") on February 25, 2026 (the "Annual Report"). The accompanying condensed consolidated financial statements contain all normal recurring adjustments necessary to present a fair statement of the financial position, results of operations, and cash flows for the interim periods reported. In the opinion of management, all adjustments considered necessary to present fairly the results of the interim periods have been included and consist only of normal and recurring adjustments. Certain information and footnote disclosures have been condensed or omitted as permitted under U.S. GAAP. The results for the three months ended March 31, 2026 are not necessarily indicative of the results to be expected for the year ending December 31, 2026, any other interim periods, or any future year or period. Use of estimates The preparation of the condensed consolidated financial statements in conformity with U.S. GAAP requires management to make judgments, estimates and assumptions. These judgments, estimates and assumptions affect the reported assets and liabilities as well as income and expenses in the financial period. The estimates and associated assumptions are based on information available when the condensed consolidated 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 Company’s control. Actual results could differ from those estimates. Estimates are primarily made in relation to revenue recognition, operating lease incremental borrowing rates, share-based compensation expense, clinical accruals, and deferred tax asset valuation allowances. 6 Table of Contents Fair value measurements Where financial and non-financial assets and liabilities are measured at fair value, the Company uses appropriate valuation techniques for which sufficient data are available, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs. As of March 31, 2026 and December 31, 2025, the Company held $ 353.0 million and $ 366.8 million, respectively, of money market funds required to be measured at fair value on a recurring basis within cash and cash equivalents. In addition, as of March 31, 2026 and December 31, 2025, the Company held $ 392.2 million and $ 396.4 million of marketable securities, respectively. The Company recorded unrealized gains of $ 1.8 million for the three months ended March 31, 2026 and $ 5.5 million for the three months ended March 31, 2025, respectively on these marketable securities. The fair value of these cash equivalents and marketable securities is based on quoted prices from active markets (Level 1 inputs). Other financial instruments, although not recorded at fair value on a recurring basis, include cash, accounts receivable, accounts payable and debt obligations. The fair value of borrowings under the convertible senior notes (the “Notes”, disclosed in Note 5. “Interest-bearing loans and borrowings”) were based on Level 2 inputs, which include observable inputs estimated using discounted cash flows and market-based expectations for interest rates, credit risk, and the contractual terms of debt instruments. After initial recognition, borrowings are measured at amortized cost using the effective interest method. Significant accounting policies The significant accounting policies used in the preparation of these condensed consolidated financial statements as of and for the three months ended March 31, 2026 are consistent with those disclosed in No te 2. "Summary of Significant Accounting Policies" in the audited consolidated financial statements for the year ended December 31, 2025, included in the Company’s Annual Report. Recently issued and recently adopted accounting pronouncements In November 2024, the FASB issued ASU 2024-03, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40). This ASU requires disclosure in the notes to the financial statements, at each interim and annual reporting period, of specified information about certain costs and expenses including purchases of inventory, employee compensation, depreciation and intangible asset amortization included in each relevant expense caption. Also required is a qualitative description of the amounts remaining in relevant expense captions that are not separately disaggregated. This ASU is effective for all public entities for annual reporting periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027, and early adoption is permitted. This ASU should be applied either prospectively to financial statements issued after the effective date of this update or retrospectively to any or all prior periods presented in the financial statements. The Company is currently evaluating these new disclosure requirements and the impact of adoption on its financial statements. 3. Revenue During the three months ended March 31, 2026, the Company recognized $ 106.7 million (2025: $ 93.9 million) of net revenue from sale of therapies relating to the sale of KIMMTRAK primarily in the United States and Europe after estimated deductions for rebates, chargebacks and returns, which are recognized in Accrued expenses and other current liabilities and Accrued expenses, non-current, as set out in the Company’s accounting policies included in the Annual Report. Revenue from sale of therapies, net is presented by country / region based on the location of the end customer below (in thousands): Three Months Ended March 31, 2026 2025 United States $ 67,438 $ 56,607 Europe 34,413 32,804 International 4,826 4,470 Revenue from sale of therapies, net $ 106,677 $ 93,881 7 Table of Contents Revenue from sale of therapies, net for the three months ended March 31, 2026 included $ 9.3 million (2025: $ 7.3 million), of partnered revenue pursuant to the Company's separate agreements with Medison Pharma Ltd. ("Medison") and Er-Kim Pharmaceuticals Bulgaria EOOD. Revenue from these agreements is allocated between the Company's European and International markets. Accounts receivable from contracts with customers Accounts receivable as of March 31, 2026 and December 31, 2025 were $ 81.1 million and $ 74.0 million, respectively. An allowance for lifetime expected credit losses on accounts receivable is measured using historical credit loss experience, conditions at the end of each reporting period, and reasonable and supportable forecasts that affect collectability. Expected credit losses as of March 31, 2026 and December 31, 2025 were immaterial. Accruals for rebates, chargebacks and returns Current and non-current accruals for rebates, chargebacks and returns as of March 31, 2026 were as follows (in thousands): Rebates Chargebacks Returns Total As of December 31, 2025 $ 129,531 $ 2,682 $ 567 $ 132,780 Provisions related to sales in the period 23,275 10,362 113 33,750 Credits and payments made ( 11,462 ) ( 10,359 ) ( 185 ) ( 22,006 ) As of March 31, 2026 $ 141,344 $ 2,685 $ 495 $ 144,524 Deferred revenue Current and non-current deferred revenue as of March 31, 2026 and December 31, 2025 relates to a revised distribution agreement with Medison entered into in November 2022. Under the revised agreement, the Company received a non-refundable payment of $ 5.0 million in exchange for granting Medison exclusive distribution rights in South America. The Company has determined that the deferred revenue relates to the Company’s single, combined performance obligation to supply KIMMTRAK to Medison and to grant Medison the exclusive right to distribute KIMMTRAK in South America. The revenue will be recognized on a straight-line basis over the term of the contract of 10 years from the date of the first commercial sale in the territory. Following the first commercial sale in the territory during the three months ended June 30, 2025, the Company began recognizing this revenue within net revenue from sale of therapies and consequently the Company reclassified the portion of deferred revenue expected to be recognized over the next twelve months as current. 4. Accrued expenses and other current liabilities Accrued expenses and other current liabilities consisted of the following (in thousands): March 31, 2026 December 31, 2025 Rebates, chargebacks and returns $ 144,524 $ 132,780 Clinical accruals 34,677 40,945 Employee related expenses 5,229 16,542 Contract manufacturing 11,138 17,143 Interest accruals 1,677 4,193 Commercial services 3,156 2,349 Other accruals 6,987 5,792 $ 207,388 $ 219,744 See Note 3. “Revenue” for a breakdown of rebates, chargebacks and returns. Clinical accruals primarily represent unbilled work undertaken by contract research organizations as part of the advancement of the Company's clinical programs. 8 Table of Contents 5. Interest-bearing loans and borrowings Interest-bearing loans and borrowings consisted of the following as of March 31, 2026 (in thousands): Fair Value Principal Amount Unamortized Debt Issuance Costs Net Carrying Amount Amount Level Convertible senior notes $ 402,500 $ ( 8,840 ) $ 393,660 $ 362,693 Level 2 Interest-bearing loans and borrowings consisted of the following as of December 31, 2025 (in thousands): Fair Value Principal Amount Unamortized Debt Issuance Costs Net Carrying Amount Amount Level Convertible senior notes $ 402,500 $ ( 9,375 ) $ 393,125 $ 363,538 Level 2 Interest expense consisted of the following (in thousands): Three Months Ended March 31, 2026 2025 Convertible senior notes Coupon interest $ 2,516 $ 2,516 Amortization of debt issuance costs 535 509 Total interest expense $ 3,051 $ 3,025 Convertible senior notes On February 2, 2024, the Company completed a private offering (the "Offering") of $ 402.5 million aggregate principal amount of Notes, including the exercise in full of the initial purchasers’ option to purchase up to an additional $ 52.5 million principal amount of Notes. The Notes were issued pursuant to an indenture, dated February 2, 2024, as supplemented on March 17, 2025 (the "Indenture"), between the Company and U.S. Bank Trust Company, National Association, as trustee. The Company’s net proceeds from the Offering of the Notes were $ 389.1 million, after deducting issuance costs of $ 13.4 million. 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. Issuance costs incurred with the Notes were $ 13.4 million and are being amortized as interest expense on an effective interest rate method over the expected life of the Notes, through February 2030, at an effective interest rate of 3.06 %. Holders may convert all or any portion of their Notes at their option at any time prior to the close of business on the business day immediately preceding the maturity date into American Depositary Shares ("ADSs") of the Company. The Notes have an initial conversion rate of 10.5601 ADSs per $1,000 principal amount of the Notes, which will be subject to anti-dilution adjustments in certain circumstances. This represented an initial conversion price of $ 94.70 per ADS. The number of shares that would be issuable assuming conversion of all of the Notes is 5,950,600 (assuming the maximum increase to the conversion rate in connection with a “make-whole fundamental change” (as defined in the Indenture)). Following certain corporate events that occur prior to the maturity date of the Notes or if the Company delivers a notice of optional redemption or a notice of tax redemption, the Company shall, in certain circumstances, increase the conversion rate for a holder of the Notes who elects to convert its notes in connection with such a corporate event or convert its notes called (or deemed called) for redemption in connection with such notice of optional redemption or notice of tax redemption, as the case may be. 9 Table of Contents The Company may not redeem the Notes prior to February 5, 2027, except in the event of certain tax law changes as described below and in the Indenture. The Company may redeem for cash all or any portion of the Notes (subject to the partial redemption limitation described in the Indenture), at its option, on or after February 5, 2027 if the last reported sale price of the ADSs has been at least 130 % of the conversion price for the Notes then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending on, and including, the trading day immediately preceding the date on which the Company provides notice of optional redemption, at a redemption price equal to 100 % of the principal amount of the Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the optional redemption date. If, as a result of certain changes in the law of any relevant tax jurisdiction, the Company would be required to pay additional amounts (as defined in the Indenture) on the Notes, the Company may redeem the Notes in whole, but not in part, at a tax redemption price of 100 % of the aggregate principal amount thereof, plus accrued and unpaid interest to, but excluding, the tax redemption date and all additional amounts, if any, which otherwise would be payable to the date of tax redemption. Upon the Company giving notice of a tax redemption, a holder may elect not to have its Notes redeemed, in which case the holder would not be entitled to receive any additional amounts with respect to its Notes after the tax redemption date. If the Company undergoes a fundamental change, holders may require the Company to repurchase for cash all or any portion of their Notes at a repurchase price equal to 100 % of the principal amount of the Notes to be repurchased, plus accrued and unpaid interest to, but excluding, the fundamental change repurchase date. 6. Share-based compensation The following table shows the total share-based compensation expense recorded in the Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) (in thousands): Three Months Ended March 31, 2026 2025 Research and development $ 2,572 $ 2,181 Selling, general and administrative $ 3,730 $ 7,308 Equity Incentive Plan Under the Company’s Equity Incentive Plan ("EIP"), the Company may grant market value options, share appreciation rights or restricted shares, restricted share units ("RSUs"), performance share units and other share-based awards to the Company’s employees. The Company’s board members and consultants are eligible to receive awards under the Company’s non-employee sub-plan to the EIP. Awards may be granted at such times as the Company may determine, but will generally be granted annually following the end of the financial year. Awards vest at such times and as specified in the award agreement, typically being over a four-year period, although the Company retains the discretion to provide for other vesting schedules. If the participant violates the non-competition, non-solicitation, confidentiality or other similar restrictive covenant provisions of any employment contract, the right of the participant to receive these shares on vesting shall terminate immediately. The Company maintains discretion over the type and terms of equity awards granted. Share options lapse on the ten th anniversary from the date of grant, and they are not subject to performance conditions or entitled to dividends. As of March 31, 2026, the Company has reserved 7,018,558 authorized shares for future issuance under the EIP. 10 Table of Contents The number and weighted average exercise prices of share options were as follows: Number of Share Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term Aggregate Intrinsic Value (in thousands) Outstanding as of December 31, 2025 10,374,316 $ 31.34 5.9 years $ 87,338 Awards granted 1,387,755 32.45 Awards exercised ( 27,334 ) 22.76 Awards forfeited ( 204,570 ) 46.15 Awards expired ( 43,926 ) 42.74 Outstanding as of March 31, 2026 11,486,241 $ 31.18 5.8 years $ 48,937 Exercisable as of March 31, 2026 8,315,349 $ 28.99 4.5 years $ 48,149 As of March 31, 2026, total unrecognized compensation expense related to share options granted but not vested was $ 31.9 million, which the Company expects to recognize over a remaining weighted-average period of 1.9 years. Awards granted in the three months ended March 31, 2026 and 2025 have been valued using the Black-Scholes option pricing model. The assumptions used in the models for share options granted were as follows: Three Months Ended March 31, 2026 2025 Share price at grant date $ 32.38 - $ 34.71 $ 29.21 - $ 29.60 Exercise price $ 32.38 - $ 34.71 $ 29.21 - $ 29.60 Expected volatility 51.08 % - 53.52 % 53.30 % - 55.78 % Expected life 5.5 years 5.5 years Risk free rate 3.68 % - 3.78 % 4.14 % - 4.41 % Fair value $ 16.94 - $ 17.62 $ 15.70 - $ 16.21 Restricted share unit activity In February 2025, the Company granted RSU awards that vest over a four-year service period with 25 % on each anniversary of the grant date. An RSU award represents the right to receive one of the Company’s ADSs upon vesting of the RSU. The fair value of each RSU award is based on the closing price of the Company’s ADSs on Nasdaq on the date of grant. The number and weighted average fair value of RSU awards were as follows: Number of RSUs Weighted Average Grant Date Fair Value Unvested and outstanding as of December 31, 2025 496,156 $ 29.88 Awards granted 557,683 32.46 Awards vested ( 114,671 ) 29.60 Awards forfeited ( 44,842 ) 29.77 Unvested and outstanding as of March 31, 2026 894,326 $ 31.53 As of March 31, 2026, total unrecognized compensation expense related to RSU awards granted but not vested was $ 20.4 million, which the Company expects to recognize over a remaining weighted-average period of 2.3 years. 11 Table of Contents 7. Basic and diluted net income per share Basic and diluted net income per share is calculated as follows (in thousands, except share and per share amounts): Three Months Ended March 31, 2026 2025 Net income $ 12,971 $ 5,023 Basic weighted-average number of shares outstanding 50,754,763 50,086,684 Adjustment for share options and RSUs with dilutive effect 2,180,024 1,863,114 Diluted weighted-average number of shares outstanding 52,934,787 51,949,798 Basic net income per share $ 0.26 $ 0.10 Diluted net income per share $ 0.25 $ 0.10 A total of 4,301,939 shares issuable upon the exercise of outstanding share options and vesting of RSUs for the three months ended March 31, 2026 (March 31, 2025: 3,691,365 ) have been excluded from the calculation of diluted net income per share due to their anti-dilutive effect. For the three months ended March 31, 2026 and 2025, shares issuable upon the potential conversion of all of the Notes were excluded from the calculation of diluted net income per share due to their anti-dilutive effect. 8. Income taxes Income tax expense is recognized at an amount determined by multiplying the net income (loss) before income taxes for the interim reporting period by the Company’s estimated annual effective tax rate, adjusted for the tax effect of certain items recognized in full in the interim period. As such, the effective tax rate in the condensed consolidated financial statements may differ from the Company’s estimate of the effective tax rate for the Company’s consolidated financial statements for the year ending December 31, 2026 . The Company’s consolidated estimated effective tax rate for the three months ended March 31, 2026 w as 2.3 %. During the three months ended March 31, 2026, the Company recorded a tax expense of $ 0.3 million (March 31, 2025: tax expense of $ 1.1 million ). The Company benefits from the U.K. large company Research & Development Expenditure Credit ("RDEC") regime which can generate a cash rebate of up t o 15 % of qualifying research and development expenditures incurred after April 1, 2023. Tax credits receivable under the RDEC regime are recorded "above the line" as a reduction from research and development expenses. For the three months ended March 31, 2026 , the Company excluded the United Kingdom and the United States from the calculation of the annual estimated tax rate as the Company anticipates an ordinary loss in these jurisdictions for which the tax benefit cannot be recognized. No deferred tax assets have been recognized as of March 31, 2026 ( December 31, 2025 : nil ) . The majority of the Company’s deferred tax assets relate to net operating loss and R&D carryforwards that can only be realized if the Company is profitable in future periods. Accordingly, the Company has provided a valuation allowance against a substantial amount of the net deferred tax assets due to uncertainties as to their ultimate realization. 12 Table of Contents 9. Segment information The Company operates in one operating segment: immunotherapies, which is focused on pioneering and delivering transformative immunomodulating medicines in the areas of cancer, infectious diseases and autoimmune diseases. The Company primarily generates revenue from one stream, revenue from the sale of therapies, which consists of sales of KIMMTRAK. H istorically, the Company had a second stream, collaboration revenue, which is no longer significant. The Company manages its business activities on a consolidated basis. Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision-maker ("CODM"), the Chief Executive Officer, in making decisions regarding resource allocation and assessing performance. The measure of the segment profit or loss used is consolidated net income (loss), and the measure of segment assets is reported on the condensed consolidated balance sheet as total assets. The accounting policies of the immunotherapies segment are the same as those described in Note 2. "Summary of significant accounting policies". The following table summarizes the reportable segment's financial information (in thousands): Three Months Ended March 31, 2026 2025 Revenue $ 106,677 $ 93,881 Less: Cost of revenue from sale of therapies ( 434 ) ( 831 ) External research and development (R&D) expenses: PRAME programs ( 21,214 ) ( 17,305 ) Tebentafusp programs ( 8,239 ) ( 7,990 ) Infectious disease programs ( 846 ) ( 1,405 ) All other external clinical and preclinical costs ( 8,493 ) ( 11,231 ) Total external R&D expenses ( 38,792 ) ( 37,931 ) R&D salaries and other employee-related costs ( 14,140 ) ( 11,043 ) Selling, general and administrative (SG&A) salaries and other employee-related costs ( 13,090 ) ( 12,218 ) Other SG&A expenses ( 21,065 ) ( 20,672 ) Other segment (expense) income, net (a) ( 6,185 ) ( 6,163 ) Segment and consolidated net income $ 12,971 $ 5,023 (a) Other segment expenses, net includes other internal R&D expenses, share-based compensation expense, R&D tax credits, interest income, interest expense, foreign currency gains, other income, net and income tax expense. 10. Commitments and contingencies Lease commitments The maturities of operating lease liabilities as of March 31, 2026 were as follows (in thousands): Remainder of 2026 $ 4,407 2027 5,710 2028 5,396 2029 5,128 2030 and thereafter 48,629 Total lease payments 69,270 Less imputed interest ( 27,247 ) Present value of operating lease liabilities $ 42,023 Future lease commitments - leases not yet commenced $ 2,973 13 Table of Contents Future lease commitments - leases not yet commenced The Company has entered into a non-cancellable lease agreement for premises that will commence in 2028 and end in 2031, with total future minimum lease payments of $ 3.0 million. This amount is not included in the present value of operating lease liabilities above as the lease had not commenced as of March 31, 2026. Manufacturing commitments The Company enters into a number of manufacturing commitments for the future purchase of materials and contract manufacturing services. While the majority of such contracts can be cancelled on reasonable notice, due to the significant ongoing expenditure associated with the Company’s programs, the Company estimates it has noncancellable commitments in relation to the development and supply of product candidates totaling $ 20.5 million, the majority of which are estimated to be paid within twelve months from the balance sheet date. Gates collaboration Under the terms of the Company’s agreement with the Gates Foundation, the Company is required to develop, manufacture and commercialize soluble TCR bispecific therapeutic candidates targeted to mutually agreed neglected diseases, currently HIV, with the potential to treat people at an affordable price in developing countries. In the event of certain defaults by the Company under the agreement, which the Company considers to be within its control, the Gates Foundation has the right to sell, or require the Company to buy back, any of the shareholdings in the Company held by the Gates Foundation. In such an event, if within 12 months after such redemption or sale, the Company experiences a change in control at a valuation of more than 150 % of the valuation used for the redemption or the sale of the shares, the Company has agreed to pay the Gates Foundation compensation equal to the excess of what it would have received in such transaction if it still held its shares at the time of such change of control over what it received in the sale or redemption of its shares. Legal proceedings The Company is not currently a party to any material legal proceedings. 14 Table of Contents