Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2016 | Nov. 10, 2016 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | Adaptimmune Therapeutics PLC | |
Entity Central Index Key | 1,621,227 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2016 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Common Stock, Shares Outstanding | 424,711,900 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q3 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Current assets | ||
Cash and cash equivalents | $ 140,440 | $ 194,263 |
Short-term deposits | 47,064 | 54,620 |
Accounts receivable, net of allowance for doubtful accounts of $- and $- (including amounts due from related parties of $- and $2) | 744 | |
Other current assets and prepaid expenses (including current portion of clinical materials) | 12,040 | 13,420 |
Total current assets | 199,544 | 263,047 |
Restricted cash | 4,146 | 4,508 |
Clinical materials | 2,741 | 4,736 |
Property, plant and equipment, net | 15,086 | 13,225 |
Intangibles, net | 1,127 | 305 |
Total assets | 222,644 | 285,821 |
Current liabilities | ||
Accounts payable (including amounts due to related parties of $125 and $-) | 3,193 | 7,884 |
Accrued expenses and other accrued liabilities (including amounts due to related parties of $27 and $288) | 9,954 | 7,518 |
Deferred revenue | 9,514 | 12,487 |
Total current liabilities | 22,661 | 27,889 |
Deferred revenue, less current portion | 19,335 | 22,939 |
Other liabilities | 644 | |
Total liabilities | 42,640 | 50,828 |
Contingencies and commitments - Note 8 | ||
Stockholders' Equity | ||
Common stock - Ordinary shares par value GBP 0.001, 574,711,900 authorized and 424,711,900 issued and outstanding (2015: 574,711,900 authorized and 424,711,900 issued and outstanding) | 682 | 682 |
Additional paid in capital | 339,188 | 332,363 |
Accumulated other comprehensive loss | (13,788) | (8,139) |
Accumulated deficit | (146,078) | (89,913) |
Total stockholders' equity | 180,004 | 234,993 |
Total liabilities and stockholders' equity | $ 222,644 | $ 285,821 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) $ in Thousands | Sep. 30, 2016£ / shares | Sep. 30, 2016USD ($)shares | Dec. 31, 2015£ / shares | Dec. 31, 2015USD ($)shares |
CONDENSED CONSOLIDATED BALANCE SHEETS | ||||
Accounts receivable, net of allowance for doubtful accounts, due from related parties | $ | $ 2 | |||
Accounts payable, due to related parties | $ | $ 125 | |||
Accrued expenses and other accrued liabilities, due to related parties | $ | $ 27 | $ 288 | ||
Common stock, par value | £ / shares | £ 0.001 | £ 0.001 | ||
Common stock, shares authorized | shares | 574,711,900 | 574,711,900 | ||
Common stock, shares issued | shares | 424,711,900 | 424,711,900 | ||
Common stock, shares outstanding | shares | 424,711,900 | 424,711,900 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS | ||||
Revenue | $ 2,416 | $ 4,948 | $ 5,662 | $ 10,459 |
Operating expenses | ||||
Research and development | (15,610) | (8,853) | (46,942) | (23,838) |
General and administrative | (5,424) | (4,403) | (16,863) | (11,643) |
Total operating expenses (including purchases from related parties, net of reimbursements of $523, $1,352, $1,852 and $2,606) | (21,034) | (13,256) | (63,805) | (35,481) |
Operating loss | (18,618) | (8,308) | (58,143) | (25,022) |
Interest income | 289 | 235 | 839 | 533 |
Other (expense) income, net | (61) | 1,851 | 1,595 | 1,952 |
Loss before income taxes | (18,390) | (6,222) | (55,709) | (22,537) |
Income taxes | (104) | (20) | (456) | (218) |
Net loss | (18,494) | (6,242) | (56,165) | (22,755) |
Deemed dividend on convertible preferred shares | (8,663) | |||
Net loss attributable to ordinary shareholders | $ (18,494) | $ (6,242) | $ (56,165) | $ (31,418) |
Net loss per ordinary share basic and diluted (Note 4) (in dollars per share) | $ (0.04) | $ (0.01) | $ (0.13) | $ (0.10) |
Weighted average shares outstanding, basic and diluted (in shares) | 424,711,900 | 424,711,900 | 424,711,900 | 307,943,490 |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS | ||||
Operating expenses in relation to related parties, net of reimbursements | $ 523 | $ 1,352 | $ 1,852 | $ 2,606 |
CONDENSED CONSOLIDATED STATEME6
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS | ||||
Net loss | $ (18,494) | $ (6,242) | $ (56,165) | $ (22,755) |
Other comprehensive (loss) income, net of tax | ||||
Foreign currency translation adjustments, net of tax of $-, $-, $- and $- | (779) | (2,973) | (5,649) | (2,440) |
Total comprehensive loss for the period | $ (19,273) | $ (9,215) | $ (61,814) | $ (25,195) |
CONDENSED CONSOLIDATED CASH FLO
CONDENSED CONSOLIDATED CASH FLOW STATEMENTS - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Cash flows from operating activities | ||
Net loss | $ (56,165) | $ (22,755) |
Adjustments to reconcile net income to net cash used in operating activities: | ||
Depreciation | 2,290 | 828 |
Amortization | 122 | 25 |
Share-based compensation expense | 6,825 | 7,694 |
Unrealized foreign exchange (gains) losses | (1,943) | 329 |
Changes in operating assets and liabilities: | ||
Increase in receivables and other operating assets | (912) | (5,327) |
Decrease in non-current operating assets | 2,041 | |
(Decrease) increase in payables and deferred revenue | (2,796) | 5,385 |
Net cash used in operating activities | (50,538) | (13,821) |
Cash flows from investing activities | ||
Acquisition of property, plant and equipment | (4,840) | (10,095) |
Acquisition of intangibles | (1,024) | (31) |
Proceeds from sale of property, plant and equipment | 122 | |
Maturity of short-term deposits | 49,497 | |
Investment in short-term deposits | (42,837) | (28,594) |
Investment in restricted cash | (3,065) | |
Net cash provided by (used in) investing activities | 796 | (41,663) |
Cash flows from financing activities | ||
Proceeds from issuance of common stock upon initial public offering, net of issuance costs of $13,387 | 175,989 | |
Net cash provided by financing activities | 175,989 | |
Effect of currency exchange rate changes on cash and cash equivalents | (4,081) | (4,951) |
Net (decrease) increase in cash and cash equivalents | (53,823) | 115,554 |
Cash and cash equivalents at start of period | 194,263 | 101,664 |
Cash and cash equivalents at end of period | $ 140,440 | $ 217,218 |
CONDENSED CONSOLIDATED CASH FL8
CONDENSED CONSOLIDATED CASH FLOW STATEMENTS (Parenthetical) $ in Thousands | 9 Months Ended |
Sep. 30, 2015USD ($) | |
Common stock | |
Cash flows from financing activities | |
Stock issuance costs | $ 13,387 |
General
General | 9 Months Ended |
Sep. 30, 2016 | |
General | |
General | Note 1 - General Adaptimmune Therapeutics plc is registered in England and Wales. Its registered office is 101 Park Drive, Milton Park, Abingdon, Oxfordshire, OX14 4RY, United Kingdom. Adaptimmune Therapeutics plc and its subsidiaries (collectively “Adaptimmune” or the “Company”) is a clinical-stage biopharmaceutical company focused on novel cancer immunotherapy products based on its proprietary SPEAR (Specific Peptide Enhanced Affinity Receptor) T-cell platform. It has developed a comprehensive proprietary platform that enables it to identify cancer targets, find and genetically engineer T-cell receptors (“TCRs”), and produce TCR therapeutic candidates for administration to patients. The Company engineers TCRs to increase their affinity to cancer specific peptides in order to destroy cancer cells in patients. The Company is subject to a number of risks similar to other biopharmaceutical companies in the early stage including, but not limited to, the need to obtain adequate additional funding, possible failure of preclinical programs or clinical trials, the need to obtain marketing approval for its SPEAR T-cells, competitors developing new technological innovations, the need to successfully commercialize and gain market acceptance of the Company’s SPEAR T-cells, the need to develop a suitable commercial manufacturing process and protection of proprietary technology. If the Company does not successfully commercialize any of its SPEAR T-cells, it will be unable to generate product revenue or achieve profitability. The Company had an accumulated deficit of $146.1 million as of September 30, 2016. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2016 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | Note 2 - Summary of Significant Accounting Policies (a) Basis of presentation The condensed consolidated interim financial statements of Adaptimmune Therapeutics plc and its subsidiaries and other financial information included in this Quarterly Report are unaudited and have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) and are presented in U.S. dollars. All significant intercompany accounts and transactions between the Company and its subsidiaries have been eliminated on consolidation. The unaudited condensed interim financial statements presented in this Quarterly Report should be read in conjunction with the consolidated financial statements and accompanying notes included in Item 9.01 of the Company’s Current Report on Form 8-K filed with the SEC on July 8, 2016. The balance sheet as of December 31, 2015 was derived from audited consolidated financial statements included in Item 9.01 of the Company’s Current Report on Form 8-K filed with the SEC on July 8, 2016 but does not include all disclosures required by U.S. GAAP. The Company’s significant accounting policies are described in Note 2 to those consolidated financial statements. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted from these interim financial statements. However, these interim financial statements include all adjustments, consisting only of normal recurring adjustments, which are, in the opinion of management, necessary to fairly state the results of the interim period. The interim results are not necessarily indicative of results to be expected for the full year. (b) Use of estimates in interim financial statements The preparation of interim financial statements, in conformity with U.S. GAAP and SEC regulations, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the consolidated financial statements and reported amounts of revenues and expenses during the reporting period. Estimates and assumptions are primarily made in relation to the valuation of share options, valuation allowances relating to deferred tax assets, revenue recognition, estimating clinical trial expenses and estimating reimbursements from R&D tax and expenditure credits. If actual results differ from the Company’s estimates, or to the extent these estimates are adjusted in future periods, the Company’s results of operations could either benefit from, or be adversely affected by, any such change in estimate. (c) Reclassification In the three months ended September 30, 2016, an immaterial error in the classification of legal expenses for patent applications, which had been incorrectly classified as research and development expenditure in prior periods, was identified. The Company has reclassified the legal expenses relating to patents of $149,000 in the six months ended June 30, 2016 and $65,000 and $215,000 in the three and nine months ended September 30, 2015, respectively, from research and development expenses to general and administrative expenses to conform the presentation of prior periods to the current period presentation. The Company has also identified that certain property and insurance costs relating to research and development facilities have been misclassified as general and administrative expenses in prior periods resulting in an immaterial error in the financial statements in prior periods. The Company has reclassified expenses relating to property and insurance used in research and development of $1,373,000 in the six months ended June 30, 2016 and $641,000 and $1,397,000 in the three and nine months ended September 30, 2015, respectively, from general administrative expenses to research and development expenses to conform the presentation of prior periods to the current period presentation. The operating expenses for comparative periods as previously reported and as presented after the reclassification are as follows (in thousands): Three months ended Nine months ended As previously After As previously After Research and development $ $ $ General and administrative Total operating expenses $ $ $ $ (d) Revenue Revenue is recognized when earned and realized or realizable, which is generally when persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the seller’s price to the buyer is fixed or determinable, and collectability is reasonably assured. Where applicable, all revenues are stated net of value added and similar taxes. The Company’s revenue currently arises from a Collaboration and License Agreement with GSK entered into in June 2014 and amended in February 2016 (the “GSK Collaboration and License Agreement”), which requires the Company to provide multiple deliverables to GSK. The Company recognizes revenue for arrangements with multiple deliverables by identifying the separable deliverables within the arrangement, whereby a deliverable is considered separable if it has value to the customer on a standalone basis. Contingent deliverables, such as the right to nominate further development targets, which represent a substantive option (i.e. the customer is not required or compelled to purchase the optional products or services) and not priced at a significant and incremental discount are not considered to be a deliverable at inception of the arrangement. The non-contingent arrangement consideration is allocated between the separate deliverables using the relative selling price. The relative selling price is determined using vendor-specific objective evidence (“VSOE”), if available, third party evidence if VSOE is not available, or a best estimate of the standalone selling price if neither VSOE nor third party evidence is available. The best estimate of the selling price is estimated after considering all reasonably available information, including market data and conditions, entity-specific factors such as the cost structure of the deliverable, internal profit and pricing objectives and the stage of development, if appropriate. Revenue allocated to each deliverable is recognized as it is delivered. Where delivery occurs over time, revenue is systematically recognized over the period which the Company will be providing services. Amounts received prior to satisfying the revenue recognition criteria are recorded as deferred revenue in the Company’s consolidated balance sheet. Amounts expected to be recognized as revenue within the 12 months following the balance sheet date are classified as deferred revenue in current liabilities. Amounts not expected to be recognized as revenue within the 12 months following the balance sheet date are classified as deferred revenue, less current portion. Milestone payments which are non-refundable, non-creditable and contingent on achieving clinical milestones are recognized as revenues either on achievement of such milestones if the milestones are considered substantive or over the period the Company has continuing performance obligations, if the milestones are not considered substantive. When determining if a milestone is substantive, the Company considers the following factors: · The degree of certainty in achieving the milestone, · The frequency of milestone payments, · The Company’s efforts, which result in achievement of the milestone, · The amount of the milestone payment relative to the other deliverables and payment terms, and · Whether the milestone payment is related to future performance or deliverables. (e) Intangible assets Intangibles includes intellectual property (“IP”) rights for licensed technology used in research and development with an alternative future use, which are recorded at cost and amortized over the estimated useful life of the related product. The weighted-average amortization period for IP rights for licensed technology at September 30, 2016 is seven years. Intangibles also include acquired computer software licenses, which are recorded at cost and amortized over the estimated useful lives of the software. Intangibles are assessed for impairment whenever events or changes in circumstances indicate that an asset’s carrying amount may not be recoverable. (f) Related parties Adaptimmune and Immunocore Limited (“Immunocore”) have a shared history, some overlap in board membership (which will cease effective on December 31, 2016) and substantial overlap in shareholder base. The Company has entered into several agreements with Immunocore regarding the shared use of certain services including licensing and research collaboration. The Company believes its agreements are structured on an arm’s length basis. During the periods presented Immunocore and the Company have invoiced each other in respect of a transitional services agreement (under which certain staff resources and other administration services are supplied by each company to the other company for a transitional period). Additionally, during the periods presented Immunocore has invoiced the Company in respect of services provided under a target collaboration agreement (under which certain target identification services were provided by Immunocore), costs related to joint patents and in respect of property rent. Immunocore and the Company have mutually agreed to end their target collaboration agreement effective March 1, 2017. The companies entered into the target collaboration agreement in January 2015, to facilitate joint target identification activities and specific T-cell cloning work, and jointly create a target database of peptides. Both companies will continue to have access to the target database and associated target information even after termination of the target collaboration agreement. The Company now has its own dedicated target identification capability and as a result has no requirement for ongoing target collaboration with Immunocore. The companies’ decision to end the target collaboration agreement has no impact on other agreements between them. In particular, the companies will continue to co-own the patents, patent applications and know-how relating to the underlying core TCR technology under a previously executed and irrevocable assignment and license agreement. (g) New accounting pronouncements Adopted with effect from January 1, 2016 Customer’s accounting for fees paid in a cloud computing arrangement The Company has adopted Accounting Standards Update (“ASU”) 2015-05 - Internal-Use Software: Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement issued by the Financial Accounting Standards Board (“FASB”) in April 2015 which clarifies a customer’s accounting for fees paid in a cloud computing arrangement. The guidance provides a customer with guidance on whether a cloud computing arrangement includes a software license and clarifies that the customer should account for the software license element of the arrangement consistent with the acquisition of other software licenses. If a cloud computing arrangement does not include a software license, the customer should account for the arrangement as a service contract. The guidance has been adopted prospectively to all arrangements entered into or materially modified after January 1, 2016. The adoption of this guidance did not have any impact on the financial position, results of operations or cash flows. To be adopted in future periods Classification of certain cash receipts and cash payments In August 2016, the FASB issued ASU 2016-15 - Statement of Cash Flows - Classification of Certain Cash Receipts and Cash Payments , which provides clarification on the classification of certain cash receipts and cash payments where current U.S. GAAP either is unclear or does not include specific guidance. The amendments are effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted. The amendments must be adopted using a retrospective transition method to each period presented. The Company does not believe the adoption of the guidance will have a material impact on the consolidated financial statements. Accounting for leases In February 2016, the FASB issued ASU 2016-02 - Leases . The guidance requires that lessees recognize a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis; and a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term at the commencement date. The guidance also makes targeted improvements to align lessor accounting with the lessee accounting model and guidance on revenue from contracts with customers. The guidance is effective for the fiscal year beginning January 1, 2019, including interim periods within that fiscal year. Early application is permitted. The guidance must be adopted on a modified retrospective transition approach for leases existing, or entered into after, the beginning of the earliest comparative period presented in the financial statements. The Company is currently evaluating the impact of the guidance on the consolidated financial statements. Recognition and measurement of financial assets and financial liabilities In January 2016, the FASB issued ASU 2016-01 - Financial Instruments - Overall: Recognition and Measurement of Financial Assets and Financial Liabilities , which amended the guidance on the recognition and measurement of financial assets and financial liabilities. The new guidance requires that equity investments (except those accounted for under the equity method of accounting, or those that result in consolidation of the investee) are measured at fair value with changes in fair value recognized in net income. The guidance also requires the use of an exit price when measuring the fair value of financial instruments for disclosure purposes, eliminates the requirement to disclose the methods and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost and requires separate presentation of financial assets and financial liabilities by measurement category and form of financial asset. The guidance is effective for the fiscal year beginning January 1, 2018, including interim periods within that fiscal year. The Company does not believe the adoption of the guidance will have a material impact on the consolidated financial statements. Revenue from contracts with customers In May 2014, the FASB issued ASU 2014-09 - Revenue from Contracts with Customers which supersedes nearly all existing revenue recognition guidance under U.S. GAAP. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Additionally, qualitative and quantitative disclosures are required about customer contracts, significant judgments and changes in judgments, and assets recognized from the costs to obtain or fulfill a contract. The guidance is effective for the fiscal year beginning January 1, 2018, including interim reporting periods within that reporting period. Earlier application is permitted only as of annual reporting periods beginning after December 15, 2016, including interim reporting periods within that reporting period. The guidance can be adopted retrospectively to each prior reporting period presented, subject to certain practical expedients, or retrospectively with the cumulative effect of initially applying the guidance recognized at the date of initial application. The Company is currently assessing the impact of adopting the guidance. The Company intends to adopt the guidance in the fiscal year beginning January 1, 2018. In March 2016, the FASB issued ASU 2016-08 - Revenue from Contracts with Customers: Principal versus Agent Considerations (Reporting Revenue Gross versus Net), which provided further clarification on the principal versus agent considerations included within the new revenue recognition guidance. This guidance will be effective upon the adoption of the new revenue recognition guidance. The Company is currently assessing the impact of adopting the guidance. In April 2016, the FASB issued ASU 2016-10 - Revenue from Contracts with Customers: Identifying Performance Obligations and Licensing , which provided further clarification on identifying performance obligations in a contract with a customer and provided implementation guidance on whether licenses are satisfied at a point in time or over time. This guidance will be effective upon the adoption of the new revenue recognition guidance. The Company is currently assessing the impact of adopting the guidance. In May 2016, the FASB issued ASU 2016-12 - Revenue from Contracts with Customers: Narrow-Scope Improvements and Practical Expedients , which provided further clarification on the new revenue recognition guidance. This clarification did not change the core principles but provided narrow-scope improvements to the guidance and certain practical expedients available upon transitioning to the guidance. The Company is currently assessing the impact of adopting the guidance. |
Revenue
Revenue | 9 Months Ended |
Sep. 30, 2016 | |
Revenue | |
Revenue | Note 3 — Revenue GSK Collaboration and License Agreement Revenue represents recognized income from the GSK Collaboration and License Agreement. The GSK Collaboration and License Agreement contains the following significant deliverables, which are separate accounting units: (i) the development of, and option to obtain an exclusive license to, the Company’s NY-ESO SPEAR T-cells, and (ii) the development of, and option to obtain an exclusive license to a second target nominated by GSK. In addition, GSK also has the right to nominate three additional target peptides, excluding those where the Company has already initiated development of a SPEAR T-cell candidate, which is not considered to be a deliverable at the inception of the arrangement because it represents a substantive option not priced at a significant and incremental discount. The Company received an upfront payment of $42.1 million (£25 million) in June 2014 and has achieved various non-substantive development milestones resulting in milestone payments of $14.4 million in the six months ended December 31, 2015 and $7.2 million in the year ended June 30, 2015. No milestones were achieved in the nine months ended September 30, 2016. The Company is entitled to further non-substantive milestone payments based on the achievement of specified development milestones by the Company. When, and if, GSK exercises its option to obtain an exclusive license to a target, an option exercise fee will be payable and the Company will be entitled to further development and commercialization milestone payments based on achievement of specified milestones by GSK. The non-contingent arrangement consideration was allocated between the separate deliverables using the Company’s best estimate of the relative selling price. In determining the best estimate, the Company considered internal pricing objectives it used in negotiating the GSK Collaboration and License Agreement together with internal data regarding the cost of providing services for each deliverable. In addition to the development milestones, the Company is entitled to royalties from GSK on all GSK sales of TCR therapeutic products licensed under the agreement, varying between a mid-single-digit percentage and a low-double-digit percentage of net sales. No royalties have been received as of September 30, 2016. Sales milestones also apply once any TCR therapeutic covered by the GSK Collaboration and License Agreement is on the market. The GSK Collaboration and License Agreement is effective until all payment obligations expire. The agreement can also be terminated on a collaboration program-by-collaboration program basis by GSK for lack of feasibility or inability to meet certain agreed requirements. Both parties have rights to terminate the agreement for material breach upon 60 days’ written notice or immediately upon insolvency of the other party. GSK has additional rights to terminate either the agreement or any specific license or collaboration program on provision of 60 days’ notice to us. The Company also has rights to terminate any license where GSK ceases development or withdraws any licensed TCR therapeutic in specified circumstances. In February 2016, the terms of the GSK Collaboration and License Agreement were expanded to accelerate the development of the Company’s NY-ESO SPEAR T-cells towards registrational trials in synovial sarcoma, as well as the exploration of development of NY-ESO SPEAR T-cells in myxoid round-cell liposarcoma. The amendment also provides the opportunity for up to eight combination studies using NY-ESO SPEAR T-cells and increases the potential development milestones that the Company is eligible to receive. These development milestones will be allocated to the separate standalone deliverables within the arrangement once the milestone is achieved. The revenue recognized to date relates to the upfront fee and non-substantive development milestones payments received, which are being recognized using the proportional performance model in revenue systematically over the period in which the Company is delivering services under the GSK Collaboration and License Agreement, which is determined to be the period until GSK’s option to obtain licenses expires. We regularly review and monitor the performance of the GSK Collaboration and License Agreement to determine the period over which we will be delivering services to GSK. The Company recognized revenue of $2,416,000 and $4,948,000 in the three months ended September 30, 2016 and 2015, respectively, and $5,662,000 and $10,459,000 in the nine months ended September 30, 2016 and 2015, respectively. In the three months ended June 30, 2016, the estimate of the period over which the Company will deliver services under the GSK Collaboration and License Agreement was increased. This change in estimate resulted in a decrease in revenue of $2,785,000 and $336,000 in the three months ended June 30, 2016 and September 30, 2016, respectively. The change in estimate will also result in a decrease in revenue of $336,000 and $1,344,000 in the three months ended December 31, 2016 and the year ended December 31, 2017, respectively, and an increase in revenue of $1,793,000, $1,187,000 and $1,642,000 in the years ended December 31, 2018, 2019 and 2020, respectively, compared to the revenue that would have been recognized based on previous estimates. |
Earnings (loss) per share
Earnings (loss) per share | 9 Months Ended |
Sep. 30, 2016 | |
Earnings (loss) per share | |
Earnings (loss) per share | Note 4 — Earnings (loss) per share Basic earnings (loss) per share is determined by dividing net income or loss attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the period. Diluted earnings (loss) per share is determined by dividing net income or loss attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the period, adjusted for the dilutive effect of all potential ordinary shares that were outstanding during the period. Potentially dilutive shares are excluded when the effect would be to increase diluted earnings per share or reduce diluted loss per share. The following table reconciles the numerator and denominator in the basic and diluted earnings (loss) per share computation (in thousands): Three months ended Nine months ended 2016 2015 2016 2015 Numerator for basic and diluted EPS Net loss $ ) $ ) $ ) $ ) Deemed dividend on convertible preferred shares — — — ) Net loss attributable to ordinary shareholders $ ) $ ) $ ) $ ) Denominator for basic and diluted EPS Weighted average number of shares used to calculate basic and diluted loss per share The effects of the following potentially dilutive equity instruments have been excluded from the diluted loss per share calculation because they would have an antidilutive effect on the loss per share for the period: Three months ended Nine months ended 2016 2015 2016 2015 Weighted average number of share options |
Property, plant and equipment,
Property, plant and equipment, net | 9 Months Ended |
Sep. 30, 2016 | |
Property, plant and equipment, net | |
Property, plant and equipment, net | Note 5 — Property, plant and equipment, net Property, plant and equipment, net consisted of the following (in thousands): September 30, December 31, Computer equipment $ $ Laboratory equipment Office equipment Leasehold improvements Assets under construction Less accumulated depreciation ) ) $ $ Depreciation expense was $779,000 and $463,000 for the three months ended September 30, 2016 and 2015, respectively, and $2,290,000 and $828,000 for the nine months ended September 30, 2016 and 2015, respectively. |
Intangible assets, net
Intangible assets, net | 9 Months Ended |
Sep. 30, 2016 | |
Intangible assets, net | |
Intangible assets, net | Note 6 — Intangible assets, net Intangible assets, net consisted of the following (in thousands): September 30, December 31, Acquired software licenses $ $ IP rights for licensed technology — Less accumulated amortization ) ) $ $ Amortization expense was $40,000 and $25,000 for the three months ended September 30, 2016 and 2015, respectively, and $122,000 and $25,000 for the nine months ended September 30, 2016 and 2015, respectively. The estimated aggregate amortization expense in respect of these assets for each of the five years ended September 30, 2021 is $410,000, $364,000, $309,000, $13,000 and $13,000, respectively. |
Accrued expenses and other curr
Accrued expenses and other current liabilities | 9 Months Ended |
Sep. 30, 2016 | |
Accrued expenses and other current liabilities | |
Accrued expenses and other current liabilities | Note 7 — Accrued expenses and other current liabilities Accrued expenses and other current liabilities consisted of the following (in thousands): September 30, December 31, Accrued purchases and clinical trial expenditure $ $ Accrued employee compensation and benefits payable Other current liabilities $ $ |
Contingencies and commitments
Contingencies and commitments | 9 Months Ended |
Sep. 30, 2016 | |
Contingencies and commitments | |
Contingencies and commitments | Note 8 — Contingencies and commitments Leases Future minimum lease payments under operating leases at September 30, 2016 are presented below (in thousands): September 30, 2016 $ 2017 2018 2019 2020 2021 Thereafter $ The Company leases property under operating leases expiring through 2027. Lease expenses amounted to $327,000 and $433,000 for the three months ended September 30, 2016 and 2015, respectively and $1,159,000 and $836,000 for the nine months ended September 30, 2016 and 2015, respectively, which are included within research and development and general and administrative expenses in the Company’s consolidated statement of operations. In July 2015, the Company entered into a long-term lease agreement, with break clauses, for offices and research facilities in Philadelphia, U.S. In October 2016, the lease commenced upon completion of construction. The related lease commitments are included in the table above. In September 2015, the Company entered into an agreement for a 25-year lease, with break clauses, for a research and development facility in Oxfordshire, U.K. In October 2016, the Company entered into the lease for that facility following the completion of construction. The related lease commitments are included in the table above. Capital commitments At September 30, 2016, the Company had commitments for capital expenditure totaling $15,455,000, which the Company expects to incur within one year. Purchase commitments for clinical materials, clinical trials and contract manufacturing At September 30, 2016, the Company had non-cancellable commitments for purchase of clinical materials, executing and administering clinical trials, and for contract manufacturing of $54,611,000, of which the Company expects to pay $25,850,000 within one year, $20,292,000 in one to three years, $7,659,000 in three to five years, and $810,000 after five years. The timing of these payments vary depending on the rate of progress of development and clinical trial enrollment rates. Our subcontracted costs for clinical trials and contract manufacturing were $6,032,000 and $3,406,000 for the three months ended September 30, 2016 and 2015, respectively, and $15,908,000 and $8,040,000 for the nine months ended September 30, 2016 and 2015, respectively. MD Anderson Strategic Alliance On September 26, 2016, the Company announced that it had entered into a multi-year strategic alliance with The University of Texas MD Anderson Cancer Center (“MD Anderson”) designed to expedite the development of T-cell therapies for multiple types of cancer. The Company and MD Anderson will collaborate in a number of studies including clinical and preclinical development of Adaptimmune’s SPEAR T-cell therapies targeting MAGE-A10 and future clinical stage first and second generation SPEAR T-cell therapies such as MAGE-A4 across a number of cancers, including bladder, lung, ovarian, head and neck, melanoma, esophageal and gastric cancers. The Company will make payments to MD Anderson as certain milestones are achieved and these costs will be expensed to research and development as MD Anderson renders the services under the strategic alliance. These milestones are included within ‘Purchase commitments for clinical materials, clinical trials and contract manufacturing’ above. Universal Cells Research, Collaboration and License Agreement On November 25, 2015, the Company entered into a Research, Collaboration and License Agreement relating to gene editing and HLA-engineering technology with Universal Cells, Inc. (“Universal Cells”). The Company paid an upfront license and start-up fee of $2.5 million to Universal Cells in November 2015 and a milestone payment of $3.0 million in February 2016. Further milestone payments of up to $44 million are payable if certain development and product milestones are achieved. Universal Cells would also receive a profit-share payment for the first product, and royalties on sales of other products utilizing its technology. The upfront and start-up fee was expensed to research and development when incurred. ThermoFisher License Agreement In 2012, the Company entered into a series of license and sub-license agreements with Life Technologies Corporation, part of ThermoFisher Scientific, Inc. (“ThermoFisher Scientific”) that provide the Company with a field-based exclusive license under certain intellectual property rights owned or controlled by ThermoFisher Scientific. The Company paid upfront license fees of $1.0 million relating to the license and sublicense agreements and has an obligation to pay minimum annual royalties (in the tens of thousands of U.S. dollars prior to licensed product approval and thereafter at a level of 50% of running royalties in the previous year), milestone payments and a low single-digit running royalty payable on the net selling price of each licensed product. The upfront payment made in 2012 was expensed to research and development when incurred. Subsequent milestone payments have been recognized as an intangible asset due to the technology having alternative future use in research and development projects at the time of the payment. The minimum annual royalties have been expensed as incurred. On June 16, 2016, the Company entered into a supply agreement with ThermoFisher Scientific for the supply of the Dynabeads® CD3/CD28 technology. The Dynabeads® CD3/CD28 technology is designed to isolate, activate and expand human T-cells, and is being used in the manufacturing of the Company’s affinity enhanced T-cell therapies. The supply agreement runs until December 31, 2025. Under the supply agreement the Company is required to purchase its requirements for CD3/CD28 magnetic bead product exclusively from ThermoFisher Scientific for a period of 5 years and there are also minimum purchasing obligations, which are included within ‘Purchase commitments for clinical materials, clinical trials and contract manufacturing’ set forth above. ThermoFisher Scientific has the right to terminate the supply agreement for material breach or insolvency. |
Share-based compensation
Share-based compensation | 9 Months Ended |
Sep. 30, 2016 | |
Share-based compensation | |
Share-based compensation | Note 9 — Share-based compensation The following table shows the total share-based compensation expense included in the consolidated statements of operations (thousands): Three months ended Nine months ended 2016 2015 2016 2015 Research and development $ $ $ $ General and administrative $ $ $ $ There were 2,414,576 share options granted in the three months ended September 30, 2016. No share options were granted in the three months ended September 30, 2015 and 17,758,373 and 11,069,577 share options granted in the nine months ended September 30, 2016 and 2015, respectively. The weighted average fair value of stock options granted was $0.74 in the three months ended September 30, 2016 and $0.74 and $0.94 in the nine months ended September 30, 2016 and 2015, respectively. The fair value of the share options granted during the period was calculated using the Black-Scholes option-pricing model using the following assumptions: Nine months ended 2016 2015 Expected term (years) 5 years 5 years Expected volatility 68-73% Risk free rate 0.17-1.07% 1.03-1.39% Expected dividend yield The expected term of the option is based on management judgment. Forfeitures are recognized when they occur. To date, our forfeitures have been minimal. Due to the Company’s lack of sufficient history as a publicly traded company, management’s estimate of expected volatility is based on the average volatilities of seven public companies with similar attributes to the Company. The risk free rate is based on the Bank of England’s estimates of gilt yield curve as of the respective grant dates. At September 30, 2016, there were 3,074,600 share options granted to nonemployees outstanding. These share options are measured at the current fair values at each reporting date until the share options have vested and recognized in the consolidated statement of operation over the requisite service period. The total share based payment expense relating to these options was a benefit of $24,000 and $450,000 in the three months ended September 30, 2016 and 2015, respectively, and a benefit of $139,000 and an expense of $2,056,000 in the nine months ended September 30, 2016 and 2015, respectively. |
Summary of Significant Accoun18
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2016 | |
Summary of Significant Accounting Policies | |
Basis of presentation | (a) Basis of presentation The condensed consolidated interim financial statements of Adaptimmune Therapeutics plc and its subsidiaries and other financial information included in this Quarterly Report are unaudited and have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) and are presented in U.S. dollars. All significant intercompany accounts and transactions between the Company and its subsidiaries have been eliminated on consolidation. The unaudited condensed interim financial statements presented in this Quarterly Report should be read in conjunction with the consolidated financial statements and accompanying notes included in Item 9.01 of the Company’s Current Report on Form 8-K filed with the SEC on July 8, 2016. The balance sheet as of December 31, 2015 was derived from audited consolidated financial statements included in Item 9.01 of the Company’s Current Report on Form 8-K filed with the SEC on July 8, 2016 but does not include all disclosures required by U.S. GAAP. The Company’s significant accounting policies are described in Note 2 to those consolidated financial statements. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted from these interim financial statements. However, these interim financial statements include all adjustments, consisting only of normal recurring adjustments, which are, in the opinion of management, necessary to fairly state the results of the interim period. The interim results are not necessarily indicative of results to be expected for the full year. |
Use of estimates in interim financial statements | (b) Use of estimates in interim financial statements The preparation of interim financial statements, in conformity with U.S. GAAP and SEC regulations, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the consolidated financial statements and reported amounts of revenues and expenses during the reporting period. Estimates and assumptions are primarily made in relation to the valuation of share options, valuation allowances relating to deferred tax assets, revenue recognition, estimating clinical trial expenses and estimating reimbursements from R&D tax and expenditure credits. If actual results differ from the Company’s estimates, or to the extent these estimates are adjusted in future periods, the Company’s results of operations could either benefit from, or be adversely affected by, any such change in estimate. |
Reclassification | (c) Reclassification In the three months ended September 30, 2016, an immaterial error in the classification of legal expenses for patent applications, which had been incorrectly classified as research and development expenditure in prior periods, was identified. The Company has reclassified the legal expenses relating to patents of $149,000 in the six months ended June 30, 2016 and $65,000 and $215,000 in the three and nine months ended September 30, 2015, respectively, from research and development expenses to general and administrative expenses to conform the presentation of prior periods to the current period presentation. The Company has also identified that certain property and insurance costs relating to research and development facilities have been misclassified as general and administrative expenses in prior periods resulting in an immaterial error in the financial statements in prior periods. The Company has reclassified expenses relating to property and insurance used in research and development of $1,373,000 in the six months ended June 30, 2016 and $641,000 and $1,397,000 in the three and nine months ended September 30, 2015, respectively, from general administrative expenses to research and development expenses to conform the presentation of prior periods to the current period presentation. The operating expenses for comparative periods as previously reported and as presented after the reclassification are as follows (in thousands): Three months ended Nine months ended As previously After As previously After Research and development $ $ $ General and administrative Total operating expenses $ $ $ $ |
Revenue | (d) Revenue Revenue is recognized when earned and realized or realizable, which is generally when persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the seller’s price to the buyer is fixed or determinable, and collectability is reasonably assured. Where applicable, all revenues are stated net of value added and similar taxes. The Company’s revenue currently arises from a Collaboration and License Agreement with GSK entered into in June 2014 and amended in February 2016 (the “GSK Collaboration and License Agreement”), which requires the Company to provide multiple deliverables to GSK. The Company recognizes revenue for arrangements with multiple deliverables by identifying the separable deliverables within the arrangement, whereby a deliverable is considered separable if it has value to the customer on a standalone basis. Contingent deliverables, such as the right to nominate further development targets, which represent a substantive option (i.e. the customer is not required or compelled to purchase the optional products or services) and not priced at a significant and incremental discount are not considered to be a deliverable at inception of the arrangement. The non-contingent arrangement consideration is allocated between the separate deliverables using the relative selling price. The relative selling price is determined using vendor-specific objective evidence (“VSOE”), if available, third party evidence if VSOE is not available, or a best estimate of the standalone selling price if neither VSOE nor third party evidence is available. The best estimate of the selling price is estimated after considering all reasonably available information, including market data and conditions, entity-specific factors such as the cost structure of the deliverable, internal profit and pricing objectives and the stage of development, if appropriate. Revenue allocated to each deliverable is recognized as it is delivered. Where delivery occurs over time, revenue is systematically recognized over the period which the Company will be providing services. Amounts received prior to satisfying the revenue recognition criteria are recorded as deferred revenue in the Company’s consolidated balance sheet. Amounts expected to be recognized as revenue within the 12 months following the balance sheet date are classified as deferred revenue in current liabilities. Amounts not expected to be recognized as revenue within the 12 months following the balance sheet date are classified as deferred revenue, less current portion. Milestone payments which are non-refundable, non-creditable and contingent on achieving clinical milestones are recognized as revenues either on achievement of such milestones if the milestones are considered substantive or over the period the Company has continuing performance obligations, if the milestones are not considered substantive. When determining if a milestone is substantive, the Company considers the following factors: · The degree of certainty in achieving the milestone, · The frequency of milestone payments, · The Company’s efforts, which result in achievement of the milestone, · The amount of the milestone payment relative to the other deliverables and payment terms, and · Whether the milestone payment is related to future performance or deliverables. |
Intangible assets | (e) Intangible assets Intangibles includes intellectual property (“IP”) rights for licensed technology used in research and development with an alternative future use, which are recorded at cost and amortized over the estimated useful life of the related product. The weighted-average amortization period for IP rights for licensed technology at September 30, 2016 is seven years. Intangibles also include acquired computer software licenses, which are recorded at cost and amortized over the estimated useful lives of the software. Intangibles are assessed for impairment whenever events or changes in circumstances indicate that an asset’s carrying amount may not be recoverable. |
Related parties | (f) Related parties Adaptimmune and Immunocore Limited (“Immunocore”) have a shared history, some overlap in board membership (which will cease effective on December 31, 2016) and substantial overlap in shareholder base. The Company has entered into several agreements with Immunocore regarding the shared use of certain services including licensing and research collaboration. The Company believes its agreements are structured on an arm’s length basis. During the periods presented Immunocore and the Company have invoiced each other in respect of a transitional services agreement (under which certain staff resources and other administration services are supplied by each company to the other company for a transitional period). Additionally, during the periods presented Immunocore has invoiced the Company in respect of services provided under a target collaboration agreement (under which certain target identification services were provided by Immunocore), costs related to joint patents and in respect of property rent. Immunocore and the Company have mutually agreed to end their target collaboration agreement effective March 1, 2017. The companies entered into the target collaboration agreement in January 2015, to facilitate joint target identification activities and specific T-cell cloning work, and jointly create a target database of peptides. Both companies will continue to have access to the target database and associated target information even after termination of the target collaboration agreement. The Company now has its own dedicated target identification capability and as a result has no requirement for ongoing target collaboration with Immunocore. The companies’ decision to end the target collaboration agreement has no impact on other agreements between them. In particular, the companies will continue to co-own the patents, patent applications and know-how relating to the underlying core TCR technology under a previously executed and irrevocable assignment and license agreement. |
New accounting pronouncements | (g) New accounting pronouncements Adopted with effect from January 1, 2016 Customer’s accounting for fees paid in a cloud computing arrangement The Company has adopted Accounting Standards Update (“ASU”) 2015-05 - Internal-Use Software: Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement issued by the Financial Accounting Standards Board (“FASB”) in April 2015 which clarifies a customer’s accounting for fees paid in a cloud computing arrangement. The guidance provides a customer with guidance on whether a cloud computing arrangement includes a software license and clarifies that the customer should account for the software license element of the arrangement consistent with the acquisition of other software licenses. If a cloud computing arrangement does not include a software license, the customer should account for the arrangement as a service contract. The guidance has been adopted prospectively to all arrangements entered into or materially modified after January 1, 2016. The adoption of this guidance did not have any impact on the financial position, results of operations or cash flows. To be adopted in future periods Classification of certain cash receipts and cash payments In August 2016, the FASB issued ASU 2016-15 - Statement of Cash Flows - Classification of Certain Cash Receipts and Cash Payments , which provides clarification on the classification of certain cash receipts and cash payments where current U.S. GAAP either is unclear or does not include specific guidance. The amendments are effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted. The amendments must be adopted using a retrospective transition method to each period presented. The Company does not believe the adoption of the guidance will have a material impact on the consolidated financial statements. Accounting for leases In February 2016, the FASB issued ASU 2016-02 - Leases . The guidance requires that lessees recognize a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis; and a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term at the commencement date. The guidance also makes targeted improvements to align lessor accounting with the lessee accounting model and guidance on revenue from contracts with customers. The guidance is effective for the fiscal year beginning January 1, 2019, including interim periods within that fiscal year. Early application is permitted. The guidance must be adopted on a modified retrospective transition approach for leases existing, or entered into after, the beginning of the earliest comparative period presented in the financial statements. The Company is currently evaluating the impact of the guidance on the consolidated financial statements. Recognition and measurement of financial assets and financial liabilities In January 2016, the FASB issued ASU 2016-01 - Financial Instruments - Overall: Recognition and Measurement of Financial Assets and Financial Liabilities , which amended the guidance on the recognition and measurement of financial assets and financial liabilities. The new guidance requires that equity investments (except those accounted for under the equity method of accounting, or those that result in consolidation of the investee) are measured at fair value with changes in fair value recognized in net income. The guidance also requires the use of an exit price when measuring the fair value of financial instruments for disclosure purposes, eliminates the requirement to disclose the methods and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost and requires separate presentation of financial assets and financial liabilities by measurement category and form of financial asset. The guidance is effective for the fiscal year beginning January 1, 2018, including interim periods within that fiscal year. The Company does not believe the adoption of the guidance will have a material impact on the consolidated financial statements. Revenue from contracts with customers In May 2014, the FASB issued ASU 2014-09 - Revenue from Contracts with Customers which supersedes nearly all existing revenue recognition guidance under U.S. GAAP. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Additionally, qualitative and quantitative disclosures are required about customer contracts, significant judgments and changes in judgments, and assets recognized from the costs to obtain or fulfill a contract. The guidance is effective for the fiscal year beginning January 1, 2018, including interim reporting periods within that reporting period. Earlier application is permitted only as of annual reporting periods beginning after December 15, 2016, including interim reporting periods within that reporting period. The guidance can be adopted retrospectively to each prior reporting period presented, subject to certain practical expedients, or retrospectively with the cumulative effect of initially applying the guidance recognized at the date of initial application. The Company is currently assessing the impact of adopting the guidance. The Company intends to adopt the guidance in the fiscal year beginning January 1, 2018. In March 2016, the FASB issued ASU 2016-08 - Revenue from Contracts with Customers: Principal versus Agent Considerations (Reporting Revenue Gross versus Net), which provided further clarification on the principal versus agent considerations included within the new revenue recognition guidance. This guidance will be effective upon the adoption of the new revenue recognition guidance. The Company is currently assessing the impact of adopting the guidance. In April 2016, the FASB issued ASU 2016-10 - Revenue from Contracts with Customers: Identifying Performance Obligations and Licensing , which provided further clarification on identifying performance obligations in a contract with a customer and provided implementation guidance on whether licenses are satisfied at a point in time or over time. This guidance will be effective upon the adoption of the new revenue recognition guidance. The Company is currently assessing the impact of adopting the guidance. In May 2016, the FASB issued ASU 2016-12 - Revenue from Contracts with Customers: Narrow-Scope Improvements and Practical Expedients , which provided further clarification on the new revenue recognition guidance. This clarification did not change the core principles but provided narrow-scope improvements to the guidance and certain practical expedients available upon transitioning to the guidance. The Company is currently assessing the impact of adopting the guidance. |
Earnings (loss) per share (Tabl
Earnings (loss) per share (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Earnings (loss) per share | |
Schedule of numerator and denominator in the basic and diluted earnings/loss per share computation | The following table reconciles the numerator and denominator in the basic and diluted earnings (loss) per share computation (in thousands): Three months ended Nine months ended 2016 2015 2016 2015 Numerator for basic and diluted EPS Net loss $ ) $ ) $ ) $ ) Deemed dividend on convertible preferred shares — — — ) Net loss attributable to ordinary shareholders $ ) $ ) $ ) $ ) Denominator for basic and diluted EPS Weighted average number of shares used to calculate basic and diluted loss per share |
Schedule of potentially dilutive equity instruments excluded from the diluted loss per share calculation | Three months ended Nine months ended 2016 2015 2016 2015 Weighted average number of share options |
Property, plant and equipment20
Property, plant and equipment, net (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Property, plant and equipment, net | |
Schedule of property, plant and equipment, net | Property, plant and equipment, net consisted of the following (in thousands): September 30, December 31, Computer equipment $ $ Laboratory equipment Office equipment Leasehold improvements Assets under construction Less accumulated depreciation ) ) $ $ |
Intangible assets, net (Tables)
Intangible assets, net (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Intangible assets, net | |
Schedule of intangible assets, net | Intangible assets, net consisted of the following (in thousands): September 30, December 31, Acquired software licenses $ $ IP rights for licensed technology — Less accumulated amortization ) ) $ $ |
Accrued expenses and other cu22
Accrued expenses and other current liabilities (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Accrued expenses and other current liabilities | |
Schedule of accrued expenses and other current liabilities | Accrued expenses and other current liabilities consisted of the following (in thousands): September 30, December 31, Accrued purchases and clinical trial expenditure $ $ Accrued employee compensation and benefits payable Other current liabilities $ $ |
Contingencies and commitments (
Contingencies and commitments (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Contingencies and commitments | |
Summary of future minimum lease payments under operating leases | Future minimum lease payments under operating leases at September 30, 2016 are presented below (in thousands): September 30, 2016 $ 2017 2018 2019 2020 2021 Thereafter $ |
Share-based compensation (Table
Share-based compensation (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Share-based compensation | |
Summary of share-based compensation expense included in the consolidated statements of operations | The following table shows the total share-based compensation expense included in the consolidated statements of operations (thousands): Three months ended Nine months ended 2016 2015 2016 2015 Research and development $ $ $ $ General and administrative $ $ $ $ |
Summary of the assumptions used to estimate the fair values of the share options granted using the Black-Scholes option-pricing model | Nine months ended 2016 2015 Expected term (years) 5 years 5 years Expected volatility 68-73% Risk free rate 0.17-1.07% 1.03-1.39% Expected dividend yield |
General (Details)
General (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
General | ||
Accumulated deficit | $ 146,078 | $ 89,913 |
Summary of Significant Accoun26
Summary of Significant Accounting Policies - Reclassification - General Information (Details) - Reclassification - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 9 Months Ended |
Sep. 30, 2015 | Jun. 30, 2016 | Sep. 30, 2015 | |
Research and development | |||
Operating expenses | |||
Legal expenses related to patents | $ (65) | $ (149) | $ (215) |
Property and insurance costs | 641 | 1,373 | 1,397 |
General and administrative | |||
Operating expenses | |||
Legal expenses related to patents | 65 | 149 | 215 |
Property and insurance costs | $ (641) | $ (1,373) | $ (1,397) |
Summary of Significant Accoun27
Summary of Significant Accounting Policies - Reclassification - Tabular Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Operating expenses | ||||
Research and development | $ 15,610 | $ 8,853 | $ 46,942 | $ 23,838 |
General and administrative | 5,424 | 4,403 | 16,863 | 11,643 |
Total operating expenses | $ 21,034 | 13,256 | $ 63,805 | 35,481 |
Previously Reported | ||||
Operating expenses | ||||
Research and development | 8,277 | 22,656 | ||
General and administrative | 4,979 | 12,825 | ||
Total operating expenses | $ 13,256 | $ 35,481 |
Summary of Significant Accoun28
Summary of Significant Accounting Policies - Intangible Assets (Details) | 9 Months Ended |
Sep. 30, 2016 | |
IP rights for licensed technology | |
Intangibles | |
Weighted-average amortization period (in years) | 7 years |
Revenue (Details)
Revenue (Details) $ in Thousands, £ in Millions | 1 Months Ended | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | |||||||||
Jun. 30, 2014GBP (£) | Jun. 30, 2014USD ($) | Dec. 31, 2016USD ($) | Sep. 30, 2016USD ($)Milestone | Jun. 30, 2016USD ($) | Sep. 30, 2015USD ($) | Dec. 31, 2015USD ($) | Sep. 30, 2016USD ($)Milestoneitem | Sep. 30, 2015USD ($) | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Jun. 30, 2015USD ($) | |
Collaboration and License Agreement | ||||||||||||||
Revenue recognized | $ 2,416 | $ 4,948 | $ 5,662 | $ 10,459 | ||||||||||
Collaborative arrangement | GlaxoSmithKline Intellectual Property Development Ltd | ||||||||||||||
Collaboration and License Agreement | ||||||||||||||
Number of additional target peptides, that the entity has right to nominate | item | 3 | |||||||||||||
Upfront payment received | £ 25 | $ 42,100 | ||||||||||||
Milestone payments received | $ 14,400 | $ 7,200 | ||||||||||||
Number of milestones achieved during the period | Milestone | 0 | 0 | ||||||||||||
Royalties received | $ 0 | |||||||||||||
Written notice period required to be served for the termination of agreement for material breach (in days) | 60 days | |||||||||||||
Notice period required to be served for the termination of agreement or specific program (in days) | 60 days | |||||||||||||
Maximum combination studies permitted | item | 8 | |||||||||||||
Revenue recognized | $ 2,416 | $ 4,948 | $ 5,662 | $ 10,459 | ||||||||||
Collaborative arrangement | GlaxoSmithKline Intellectual Property Development Ltd | Change in service delivery period in collaboration and license agreement | ||||||||||||||
Collaboration and License Agreement | ||||||||||||||
Revenue recognized | $ (336) | |||||||||||||
Collaborative arrangement | GlaxoSmithKline Intellectual Property Development Ltd | Change in service delivery period in collaboration and license agreement | Adjustment | ||||||||||||||
Collaboration and License Agreement | ||||||||||||||
Revenue recognized | $ (2,785) | |||||||||||||
Collaborative arrangement | GlaxoSmithKline Intellectual Property Development Ltd | Change in service delivery period in collaboration and license agreement | Forecast adjustment | ||||||||||||||
Collaboration and License Agreement | ||||||||||||||
Revenue recognized | $ (336) | $ 1,642 | $ 1,187 | $ 1,793 | $ (1,344) |
Earnings (loss) per share - Rec
Earnings (loss) per share - Reconciliation of Earnings per share (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Numerator for basic and diluted EPS | ||||
Net loss | $ (18,494) | $ (6,242) | $ (56,165) | $ (22,755) |
Deemed dividend on convertible preferred shares | (8,663) | |||
Net loss attributable to ordinary shareholders | $ (18,494) | $ (6,242) | $ (56,165) | $ (31,418) |
Denominator for basic and diluted EPS | ||||
Weighted average number of shares used to calculate basic and diluted loss per share (in shares) | 424,711,900 | 424,711,900 | 424,711,900 | 307,943,490 |
Earnings (loss) per share - Ant
Earnings (loss) per share - Antidilutive Securities (Details) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Share options | ||||
Antidilutive securities | ||||
Potentially dilutive equity instruments excluded from the diluted loss per share (in shares) | 47,392,118 | 31,432,048 | 44,951,407 | 27,541,366 |
Property, plant and equipment32
Property, plant and equipment, net - Tabular Disclosure (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Property, plant and equipment | ||
Property, plant & equipment, gross | $ 19,015 | $ 15,234 |
Less accumulated depreciation | (3,929) | (2,009) |
Property, plant & equipment, net | 15,086 | 13,225 |
Computer equipment | ||
Property, plant and equipment | ||
Property, plant & equipment, gross | 1,592 | 1,182 |
Laboratory equipment | ||
Property, plant and equipment | ||
Property, plant & equipment, gross | 11,648 | 11,016 |
Office equipment | ||
Property, plant and equipment | ||
Property, plant & equipment, gross | 230 | 258 |
Leasehold improvements | ||
Property, plant and equipment | ||
Property, plant & equipment, gross | 1,476 | 1,631 |
Assets under construction | ||
Property, plant and equipment | ||
Property, plant & equipment, gross | $ 4,069 | $ 1,147 |
Property, plant and equipment33
Property, plant and equipment, net - Depreciation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Property, plant and equipment, net | ||||
Depreciation expense | $ 779 | $ 463 | $ 2,290 | $ 828 |
Intangible assets, net - Tabula
Intangible assets, net - Tabular Disclosure (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Intangible assets, net | ||
Acquired software licenses | $ 1,324 | $ 399 |
Less accumulated amortization | (197) | (94) |
Intangible assets, net | 1,127 | 305 |
Acquired software licenses | ||
Intangible assets, net | ||
Acquired software licenses | 1,234 | $ 399 |
IP rights for licensed technology | ||
Intangible assets, net | ||
Acquired software licenses | $ 90 |
Intangible assets, net - Amorti
Intangible assets, net - Amortization Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Intangible assets, net | ||||
Amortization expense | $ 40 | $ 25 | $ 122 | $ 25 |
Intangible assets, net - Aggreg
Intangible assets, net - Aggregate Amortization Expense (Details) $ in Thousands | Sep. 30, 2016USD ($) |
Estimated aggregate amortization expense | |
Estimated aggregate amortization expense, year ended September 30, 2017 | $ 410 |
Estimated aggregate amortization expense, year ended September 30, 2018 | 364 |
Estimated aggregate amortization expense, year ended September 30, 2019 | 309 |
Estimated aggregate amortization expense, year ended September 30, 2020 | 13 |
Estimated aggregate amortization expense, year ended September 30, 2021 | $ 13 |
Accrued expenses and other cu37
Accrued expenses and other current liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Accrued expenses and other current liabilities | ||
Accrued purchases and clinical trial expenditure | $ 8,846 | $ 6,406 |
Accrued employee compensation and benefits payable | 572 | 368 |
Other current liabilities | 536 | 744 |
Total | $ 9,954 | $ 7,518 |
Contingencies and commitments -
Contingencies and commitments - Future Minimum Lease Payments (Details) $ in Thousands | Sep. 30, 2016USD ($) |
Future minimum payments under operating leases | |
2,016 | $ 471 |
2,017 | 2,560 |
2,018 | 2,819 |
2,019 | 3,455 |
2,020 | 3,331 |
2,021 | 3,208 |
Thereafter | 18,091 |
Total | $ 33,935 |
Contingencies and commitments39
Contingencies and commitments - Lease Expenses (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Contingencies and commitments | ||||
Lease expenses | $ 327 | $ 433 | $ 1,159 | $ 836 |
Contingencies and commitments40
Contingencies and commitments - Operating Leases (Details) | 1 Months Ended |
Sep. 30, 2015 | |
Research and Development Facility in Oxfordshire, U.K. | |
Contingencies and commitments | |
Lease term (in years) | 25 years |
Contingencies and commitments41
Contingencies and commitments - Capital Commitments (Details) - Capital commitments $ in Thousands | 9 Months Ended |
Sep. 30, 2016USD ($) | |
Contingencies and commitments | |
Committed amount | $ 15,455 |
Period in which commitments will be expected to incur (in years) | 1 year |
Contingencies and commitments42
Contingencies and commitments - Clinical Trials and Contract Manufacturing Commitments (Details) - Clinical trials and contract manufacturing commitments - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Contingencies and commitments | ||||
Other commitments | $ 54,611 | $ 54,611 | ||
Other commitments, due within one year | 25,850 | 25,850 | ||
Other commitments, due in one to three years | 20,292 | 20,292 | ||
Other commitments, due in three to five years | 7,659 | 7,659 | ||
Other commitments, due after five years | 810 | 810 | ||
Subcontract costs | $ 6,032 | $ 3,406 | $ 15,908 | $ 8,040 |
Contingencies and commitments43
Contingencies and commitments - Collaborations and License Agreements (Details) - USD ($) $ in Millions | Jun. 16, 2016 | Feb. 29, 2016 | Nov. 30, 2015 | Dec. 31, 2012 | Sep. 30, 2016 |
ThermoFisher Scientific | |||||
Collaboration and License Agreement | |||||
Supply contract agreement period (in years) | 5 years | ||||
Collaborative arrangement | Universal Cells, Inc. | |||||
Collaboration and License Agreement | |||||
Upfront license and startup fees | $ 2.5 | ||||
Milestone payments | $ 3 | ||||
Further potential milestone payments | $ 44 | ||||
Collaborative arrangement | Life Technologies Corp | |||||
Collaboration and License Agreement | |||||
Upfront license fees | $ 1 | ||||
Minimum annual royalties as a percentage of prior year running royalties (as a percent) | 50.00% |
Share-based compensation - Shar
Share-based compensation - Share-based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Total share-based compensation expense included in the consolidated statements of operations | ||||
Total share-based compensation expense | $ 2,286 | $ 1,401 | $ 6,825 | $ 7,694 |
Research and development | ||||
Total share-based compensation expense included in the consolidated statements of operations | ||||
Total share-based compensation expense | 1,170 | 389 | 3,438 | 3,887 |
General and administrative | ||||
Total share-based compensation expense included in the consolidated statements of operations | ||||
Total share-based compensation expense | $ 1,116 | $ 1,012 | $ 3,387 | $ 3,807 |
Share-based compensation - Opti
Share-based compensation - Options (Details) - $ / shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Share-based compensation | ||||
Number of options granted (in shares) | 2,414,576 | 0 | 17,758,373 | 11,069,517 |
Weighted average fair value (in dollars per share) | $ 0.74 | $ 0.74 | $ 0.94 |
Share-based compensation - Fair
Share-based compensation - Fair Value Assumptions (Details) - company | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Assumptions used to estimate the fair values of the share options granted using the Black-Scholes option-pricing model | ||
Expected term (in years) | 5 years | 5 years |
Expected volatility, minimum (as a percent) | 68.00% | |
Expected volatility (as a percent) | 60.00% | |
Expected volatility, maximum (as a percent) | 73.00% | |
Risk free rate, minimum (as a percent) | 0.17% | 1.03% |
Risk free rate, maximum (as a percent) | 1.07% | 1.39% |
Expected dividend yield (as a percent) | 0.00% | 0.00% |
Number of companies with similar public securities, considered for expected volatility rate computation | 7 |
Share-based compensation - Op47
Share-based compensation - Options Granted to Nonemployees (Details) - Nonemployees - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Share based compensation | ||||
Number of options granted outstanding (in shares) | 3,074,600 | 3,074,600 | ||
Share based payment charge (benefit) | $ (24) | $ (450) | $ (139) | $ 2,056 |