Adaptimmune Therapeutics PLC 10-Q for FY2023 Q1

Adaptimmune Therapeutics PLC (ADAPY)

10-Q 2023-05-12 For: 2023-03-31

Added on June 11, 2026

About this 10-Q

Adaptimmune Therapeutics PLC filed this 10-Q on May 12, 2023, covering the quarter ended March 31, 2023 (FY2023 Q1).

Headline figures

Quarter ended March 31, 2023, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $47.6M; up 1231.5% from $3.58M a year earlier
Net income: $1.04M; compared with a net loss of $50.27M a year earlier
Diluted EPS: $0.00; compared with -$0.05 a year earlier

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	☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

	For the quarterly period ended March 31, 2023

	OR

	☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


England and Wales	Not Applicable
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

Title of each class	Trading Symbol	Name of each exchange on which registered

American Depositary Shares, each representing 6 Ordinary Shares, par value £0.001 per share	ADAP	The Nasdaq Global Select Market

Large accelerated filer ◻	Accelerated filer ◻
Non-accelerated filerx	Smaller reporting company x
	Emerging growth company☐


PART I — FINANCIAL INFORMATION		4

Item 1.	Financial Statements:	4

	Unaudited Condensed Consolidated Balance Sheets as of March 31, 2023 and December 31, 2022	4

	Unaudited Condensed Consolidated Statements of Operations for the three months ended March 31, 2023 and 2022	5

	Unaudited Condensed Consolidated Statements of Comprehensive Profit/Loss for the three months ended March 31, 2023 and 2022	6

	Unaudited Condensed Consolidated Statements of Change in Equity for the three months ended March 31, 2023 and 2022	7

	Unaudited Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2023 and 2022	9

	Notes to the Unaudited Condensed Consolidated Financial Statements	10

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	21

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	31

Item 4.	Controls and Procedures	31

PART II — OTHER INFORMATION		32

Item 1.	Legal Proceedings	32

Item 1A.	Risk Factors	32

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	35

Item 3.	Defaults Upon Senior Securities	35

Item 4.	Mine Safety Disclosures	35

Item 5.	Other Information	35

Item 6.	Exhibits	36

Signatures		37


	March 31,		December 31,
	2023		2022
Assets
Current assets
Cash and cash equivalents	$	119,866	$	108,033
Marketable securities - available-for-sale debt securities		45,688		96,572
Accounts receivable, net of allowance for expected credit losses of $0 and $0		1,715		7,435
Other current assets and prepaid expenses		46,479		43,330
Total current assets		213,748		255,370

Restricted cash		1,578		1,569
Operating lease right-of-use assets, net of accumulated amortization of $10,296 and $9,470		17,947		18,019
Property, plant and equipment, net of accumulated depreciation of $38,534 and $38,588		54,365		53,516
Intangible assets, net of accumulated amortization of $4,904 and $4,676		443		442
Total assets	$	288,081	$	328,916

Liabilities and stockholders’ equity
Current liabilities
Accounts payable	$	5,187	$	4,753
Operating lease liabilities, current		2,842		2,728
Accrued expenses and other current liabilities		33,210		31,215
Restructuring provision		88		2,285
Deferred revenue, current		22,304		23,520
Total current liabilities		63,631		64,501

Operating lease liabilities, non-current		19,991		20,349
Deferred revenue, non-current		119,251		160,892
Other liabilities, non-current		1,332		1,296
Total liabilities		204,205		247,038

Stockholders’ equity
Common stock - Ordinary shares par value £0.001, 1,282,773,750 authorized and 993,699,960 issued and outstanding (2022: 1,282,773,750 authorized and 987,109,890 issued and outstanding)		1,407		1,399
Additional paid in capital		992,520		990,656
Accumulated other comprehensive loss		(1,785)		(875)
Accumulated deficit		(908,266)		(909,302)
Total stockholders' equity		83,876		81,878

Total liabilities and stockholders’ equity	$	288,081	$	328,916



	Three months ended
	March 31,
	2023		2022
Revenue	$	47,601	$	3,575
Operating expenses
Research and development		(25,548)		(36,752)
General and administrative		(20,397)		(16,804)
Total operating expenses		(45,945)		(53,556)
Operating profit/(loss)		1,656		(49,981)
Interest income		676		338
Other (expense) income, net		(671)		12
Profit/(loss) before income tax expense		1,661		(49,631)
Income tax expense		(625)		(634)
Net profit/(loss) attributable to ordinary shareholders	$	1,036	$	(50,265)

Net profit/(loss) per ordinary share
Basic	$	0.00	$	(0.05)
Diluted	$	0.00	$	(0.05)

Weighted average shares outstanding:
Basic		991,330,402		940,029,247
Diluted		1,000,276,615		940,029,247



						Accumulated
				Additional		other				Total
	Common	Common		paid in		comprehensive		Accumulated		stockholders'
	stock	stock		capital		(loss) / gain		deficit		equity
Balance as of January 1, 2023	987,109,890	$	1,399	$	990,656	$	(875)	$	(909,302)	$	81,878

Net profit	—		—		—		—		1,036		1,036
Other comprehensive loss	—		—		—		(910)		—		(910)
Issuance of shares upon exercise of stock options	6,035,574		7		1		—		—		8
Issuance of shares upon completion of public offering, net of issuance costs	554,496		1		187		—				188
Share-based compensation expense	—		—		1,676		—		—		1,676
Balance as of March 31, 2023	993,699,960	$	1,407	$	992,520	$	(1,785)	$	(908,266)	$	83,876


			Fair value measurements using
	March 31,		Level 1		Level 2		Level 3
	2023
Assets classified as cash equivalents:
U.S. Treasury securities	$	3,992	$	—	$	3,992	$	—

Assets classified as available-for-sale debt securities:
Corporate debt securities	$	40,791	$	40,791	$	—	$	—
Agency bonds		4,897		—		4,897		—
	$	45,688	$	40,791	$	4,897	$	—


				Gross		Gross		Aggregate
	Remaining	Amortized		unrealized		unrealized		estimated
	contractual maturity	cost		gains		losses		fair value
Available-for-sale debt securities:
Corporate debt securities	Less than 3 months	$	25,527	$	—	$	(131)	$	25,396
Agency bonds	3 months to 1 year		5,000		—		(103)		4,897
Corporate debt securities	3 months to 1 year		15,619		—		(224)		15,395
		$	46,146	$	—	$	(458)	$	45,688



	March 31, 2023						December 31, 2022
	Fair market value of investments in an unrealized loss position		Number of investments in an unrealized loss position		Unrealized losses		Fair market value of investments in an unrealized loss position		Number of investments in an unrealized loss position		Unrealized losses
Marketable securities in a continuous loss position for 12 months or longer:
Corporate debt securities	$	40,791		9	$	(355)	$	74,481		16	$	(679)
Agency bond		4,897		1		(103)		4,854		1		(154)

Marketable securities in a continuous loss position for less than 12 months:
Corporate debt securities	$	—		—	$	—	$	11,283		2	$	(97)
	$	45,688		10	$	(458)	$	90,618		19	$	(930)


	Operating leases

2023	$	3,267
2024		4,003
2025		4,051
2026		4,104
2027		5,521
after 2027		7,504
Total lease payments		28,450
Less: Imputed interest		(5,617)
Present value of lease liability	$	22,833


			One-time
	Contractual		employee		Total
	termination		termination		restructuring
	benefits		benefits		costs
Cumulative amount incurred to December 31, 2022	$	1,171	$	1,114	$	2,285
Amount incurred in the three months ended March 31, 2023		778		925		1,703
Total amount expected to be incurred and cumulative amount incurred to March 31, 2023	$	1,949	$	2,039	$	3,988


Exhibit Number	Description of Exhibit

2.1#		Agreement and Plan of Merger, dated as of March 5, 2023, by and among Adaptimmune Therapeutics plc, CM Merger Sub, Inc. and TCR 2 Therapeutics Inc. (incorporated by reference to Exhibit 2.1 of the Registrant’s Form 8-K, filed with the SEC on March 6, 2023).
2.2		Amendment No. 1 to the Agreement and Plan of Merger, dated as of April 5, 2023, by and among Adaptimmune Therapeutics plc, CM Merger Sub, Inc. and TCR²Therapeutics Inc. (incorporated by reference to Exhibit 2.2 of the Registrant’s Registration Statement on Form S-4 (file no. 333-271145), filed with the SEC on April 5, 2023).
10.1		Form of Voting and Support Agreement, dated as of March 5, 2023, by and among Adaptimmune Therapeutics plc, TCR2 Therapeutics Inc. and certain stockholders of TCR2 Therapeutics Inc. (incorporated by reference to Exhibit 10.1 of the Registrant’s Form 8-K, filed with the SEC on March 6, 2023).
10.2		Form of Voting and Support Agreement, dated as of March 5, 2023, by and among Adaptimmune Therapeutics plc, TCR2 Therapeutics Inc. and certain shareholders of Adaptimmune Therapeutics plc (incorporated by reference to Exhibit 10.2 of the Registrant’s Form 8-K, filed with the SEC on March 6, 2023).
31.1**		Certification of Principal Executive Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2**		Certification of Principal Financial Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1***		Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2***		Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101**		The following financial information from Adaptimmune Therapeutics plc’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2023, formatted in iXBRL (Inline eXtensible Business Reporting Language): (i) Unaudited Condensed Consolidated Balance Sheets as of March 31, 2023 and December 31, 2022, (ii) Unaudited Condensed Consolidated Statements of Operations for the three months ended March 31, 2023 and 2022, (iii) Unaudited Condensed Consolidated Statements of Comprehensive Profit/Loss for the three months ended March 31, 2023 and 2022, (iv) Unaudited Condensed Consolidated Statements of Change in Equity for the three months ended March 31, 2023 and 2022, (v) Unaudited Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2023 and 2022 and (vi) Notes to the Unaudited Condensed Consolidated Financial Statements.

104**		Cover Page Interactive data File (formatted in Inline XBRL and contained in Exhibit 101).


	ADAPTIMMUNE THERAPEUTICS PLC


Date: May 12, 2023	/s/ Adrian Rawcliffe
	Adrian Rawcliffe
	Chief Executive Officer


Date: May 12, 2023	/s/ Gavin Wood
	Gavin Wood
	Chief Financial Officer



	Three months ended
	March 31,
	2023		2022
Net profit/(loss)	$	1,036	$	(50,265)
Other comprehensive income/(loss), net of tax
Foreign currency translation adjustments, net of tax of $0, and $0		(16,908)		16,792
Foreign currency gains (losses) on intercompany loan of a long-term investment nature, net of tax of $0, and $0		15,526		(13,808)
Unrealized holding gains (losses) on available-for-sale debt securities, net of tax of $0, and $0		472		(1,155)
Total comprehensive profit/(loss) for the period	$	126	$	(48,436)


	Three months ended
	March 31,
	2023		2022
Cash flows from operating activities
Net profit/(loss)	$	1,036	$	(50,265)
Adjustments to reconcile net profit/(loss) to net cash used in operating activities:
Depreciation		1,659		1,386
Amortization		186		209
Share-based compensation expense		1,676		5,586
Unrealized foreign exchange losses/(gains)		563		(244)
Amortization on available-for-sale debt securities		112		999
Other		134		220
Changes in operating assets and liabilities:
Decrease/(increase) in receivables and other operating assets		3,683		(10,759)
Increase in payables and other current liabilities		21		964
Decrease in deferred revenue		(46,353)		(2,497)
Net cash used in operating activities		(37,283)		(54,401)

Cash flows from investing activities
Acquisition of property, plant and equipment		(2,349)		(7,114)
Acquisition of intangible assets		(173)		—
Maturity or redemption of marketable securities		50,863		44,536
Investment in marketable securities		—		(42,197)
Net cash provided by/(used in) investing activities		48,341		(4,775)

Cash flows from financing activities
Proceeds from issuance of common stock from offerings, net of commissions and issuance costs		188		—
Proceeds from exercise of stock options		8		35
Net cash provided by financing activities		196		35

Effect of currency exchange rate changes on cash, cash equivalents and restricted cash		588		(1,270)
Net increase/(decrease) in cash, cash equivalents and restricted cash		11,842		(60,411)
Cash, cash equivalents and restricted cash at start of period		109,602		151,666
Cash, cash equivalents and restricted cash at end of period	$	121,444	$	91,255


	Accumulated		Accumulated			Total
	foreign		unrealized			accumulated
	currency		gains (losses) on			other
	translation		available-for-sale			comprehensive
	adjustments		debt securities			(loss) income

Balance at January 1, 2023	$	55	$	(930)	$	(875)
Foreign currency translation adjustments		(16,908)		—		(16,908)
Foreign currency gains on intercompany loan of a long-term investment nature, net of tax of $0		15,526		—		15,526
Unrealized holding gains on available-for-sale debt securities, net of tax of $0		—		472		472
Balance at March 31, 2023	$	(1,327)	$	(458)		(1,785)


	Accumulated		Accumulated		Total
	foreign		unrealized		accumulated
	currency		gains (losses) on		other
	translation		available-for-sale		comprehensive
	adjustments		debt securities		(loss) income

Balance at January 1, 2022	$	(10,785)	$	(357)		(11,142)
Foreign currency translation adjustments		16,792		—		16,792
Foreign currency losses on intercompany loan of a long-term investment nature, net of tax of $0		(13,808)		—		(13,808)
Unrealized holding losses on available-for-sale debt securities, net of tax of $0		—		(1,155)		(1,155)
Balance at March 31, 2022	$	(7,801)	$	(1,512)		(9,313)


	March 31,		December 31,
	2023		2022
Research and development credits receivable	$	36,363	$	30,162
Prepayments		6,787		9,472
Clinical materials		1,310		1,279
VAT receivable		355		490
Other current assets		1,664		1,927
	$	46,479	$	43,330