Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Feb. 23, 2023 | Jun. 30, 2022 | |
Document Information [Line Items] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2022 | ||
Document Transition Report | false | ||
Entity File Number | 001-38916 | ||
Entity Registrant Name | BICYCLE THERAPEUTICS PLC | ||
Entity Incorporation, State or Country Code | X0 | ||
Entity Tax Identification Number | 00-0000000 | ||
Entity Address, Address Line One | Blocks A & B, Portway Building, Granta Park | ||
Entity Address, City or Town | Great Abington, Cambridge | ||
Entity Address, Country | GB | ||
Entity Address, Postal Zip Code | CB21 6GS | ||
City Area Code | +44 | ||
Local Phone Number | 1223 261503 | ||
Entity Well Known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | false | ||
Entity Shell Company | false | ||
Entity Common Stock, Shares Outstanding | 30,021,071 | ||
Entity Public Float | $ 489,652,180 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Fiscal Year Focus | 2022 | ||
Document Fiscal Period Focus | FY | ||
Entity Central Index Key | 0001761612 | ||
Amendment Flag | false | ||
Auditor Name | PricewaterhouseCoopers LLP | ||
Auditor Location | Cambridge, United Kingdom | ||
Auditor Firm ID | 876 | ||
Ordinary Shares | |||
Document Information [Line Items] | |||
Title of 12(b) Security | Ordinary shares, nominal value £0.01 per share* | ||
No Trading Symbol Flag | true | ||
Security Exchange Name | NASDAQ | ||
American Depositary Shares | |||
Document Information [Line Items] | |||
Title of 12(b) Security | American Depositary Shares, each representing one ordinary share, nominal value £0.01 per share | ||
Trading Symbol | BCYC | ||
Security Exchange Name | NASDAQ |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 339,154 | $ 438,680 |
Accounts receivable | 2,045 | 1,000 |
Prepaid expenses and other current assets | 9,022 | 7,965 |
Research and development incentives receivable | 19,162 | 10,910 |
Total current assets | 369,383 | 458,555 |
Property and equipment, net | 19,110 | 3,123 |
Operating lease right-of-use assets | 13,658 | 14,666 |
Other assets | 8,458 | 3,448 |
Total assets | 410,609 | 479,792 |
Current liabilities: | ||
Accounts payable | 6,472 | 2,721 |
Accrued expenses and other current liabilities | 26,452 | 14,244 |
Deferred revenue, current portion | 20,418 | 19,273 |
Total current liabilities | 53,342 | 36,238 |
Long-term debt, net of discount | 30,315 | 29,873 |
Operating lease liabilities, net of current portion | 10,885 | 12,081 |
Deferred revenue, net of current portion | 41,455 | 52,067 |
Other long-term liabilities | 3,829 | 3,279 |
Total liabilities | 139,826 | 133,538 |
Commitments and contingencies (Note 11) | ||
Shareholders' equity: | ||
Ordinary shares, £0.01 nominal value; 57,820,181 and 55,295,420 shares authorized at December 31, 2022 and December 31, 2021, respectively; 29,873,893 and 29,579,364 shares issued and outstanding at December 31, 2022 and December 31, 2021, respectively | 387 | 384 |
Additional paid-in capital | 601,105 | 567,637 |
Accumulated other comprehensive income (loss) | 387 | (3,388) |
Accumulated deficit | (331,096) | (218,379) |
Total shareholders' equity | 270,783 | 346,254 |
Total liabilities and shareholders' equity | $ 410,609 | $ 479,792 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - £ / shares | Dec. 31, 2022 | Dec. 31, 2021 |
Consolidated Balance Sheets | ||
Ordinary shares, nominal value | £ 0.01 | £ 0.01 |
Ordinary shares, shares authorized | 57,820,181 | 55,295,420 |
Ordinary shares, shares issued | 29,873,893 | 29,579,364 |
Ordinary shares, shares outstanding | 29,873,893 | 29,579,364 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Loss - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Consolidated Statements of Operations and Comprehensive Loss | |||
Collaboration revenues | $ 14,463 | $ 11,697 | $ 10,390 |
Operating expenses: | |||
Research and development | 81,609 | 44,880 | 33,149 |
General and administrative | 49,507 | 32,435 | 29,201 |
Total operating expenses | 131,116 | 77,315 | 62,350 |
Loss from operations | (116,653) | (65,618) | (51,960) |
Other income (expense): | |||
Interest income | 5,756 | 120 | 683 |
Interest expense | (3,344) | (2,984) | (457) |
Total other income (expense), net | 2,412 | (2,864) | 226 |
Net loss before income tax provision | (114,241) | (68,482) | (51,734) |
Benefit from income taxes | (1,524) | (1,663) | (724) |
Net loss | $ (112,717) | $ (66,819) | $ (51,010) |
Net loss per share, basic | $ (3.80) | $ (2.67) | $ (2.66) |
Net loss per share, diluted | $ (3.80) | $ (2.67) | $ (2.66) |
Weighted average ordinary shares outstanding, basic | 29,660,659 | 25,061,734 | 19,145,938 |
Weighted average ordinary shares outstanding, diluted | 29,660,659 | 25,061,734 | 19,145,938 |
Comprehensives loss: | |||
Net loss | $ (112,717) | $ (66,819) | $ (51,010) |
Other comprehensive income (loss): | |||
Foreign currency translation adjustment | 3,775 | (195) | (1,658) |
Total comprehensive loss | $ (108,942) | $ (67,014) | $ (52,668) |
Consolidated Statements of Shar
Consolidated Statements of Shareholders' Equity - USD ($) $ in Thousands | Ordinary Shares Ionis Share Purchase Agreement | Ordinary Shares | Additional Paid-in Capital Ionis Share Purchase Agreement | Additional Paid-in Capital | Accumulated Other Comprehensive Income (Loss) | Accumulated Deficit | Ionis Share Purchase Agreement | Total |
Beginning balance at Dec. 31, 2019 | $ 227 | $ 195,056 | $ (1,535) | $ (100,550) | $ 93,198 | |||
Beginning balance (in shares) at Dec. 31, 2019 | 17,993,701 | |||||||
Increase (decrease) in shareholders' equity (deficit) | ||||||||
Issuance of ordinary shares upon exercise of warrants | $ 1 | 1 | ||||||
Issuance of ordinary shares upon exercise of warrants (in shares) | 92,885 | |||||||
Issuance of ADSs upon exercise of share options | $ 1 | 270 | 271 | |||||
Issuance of ADSs upon exercise of share options (in shares) | 79,158 | |||||||
Issuance of ADSs, net of commissions and offering expenses | $ 37 | 48,107 | 48,144 | |||||
Issuance of ADSs, net of commissions and offering expenses (in shares) | 2,928,813 | |||||||
Share-based compensation expense | 6,514 | 6,514 | ||||||
Foreign currency translation adjustment | (1,658) | (1,658) | ||||||
Net loss | (51,010) | (51,010) | ||||||
Ending balance at Dec. 31, 2020 | $ 266 | 249,947 | (3,193) | (151,560) | 95,460 | |||
Ending balance (in shares) at Dec. 31, 2020 | 21,094,557 | |||||||
Increase (decrease) in shareholders' equity (deficit) | ||||||||
Issuance of ADSs upon exercise of share options | $ 10 | 7,173 | 7,183 | |||||
Issuance of ADSs upon exercise of share options (in shares) | 703,786 | |||||||
Issuance of ADSs, net of commissions and offering expenses | $ 4 | $ 104 | $ 7,554 | 290,880 | $ 7,558 | 290,984 | ||
Issuance of ADSs, net of commissions and offering expenses (in shares) | 282,485 | 7,498,536 | ||||||
Share-based compensation expense | 12,083 | 12,083 | ||||||
Foreign currency translation adjustment | (195) | (195) | ||||||
Net loss | (66,819) | (66,819) | ||||||
Ending balance at Dec. 31, 2021 | $ 384 | 567,637 | (3,388) | (218,379) | $ 346,254 | |||
Ending balance (in shares) at Dec. 31, 2021 | 29,579,364 | 29,579,364 | ||||||
Increase (decrease) in shareholders' equity (deficit) | ||||||||
Issuance of ADSs upon exercise of share options | $ 1 | 988 | $ 989 | |||||
Issuance of ADSs upon exercise of share options (in shares) | 78,074 | |||||||
Issuance of ADSs, net of commissions and offering expenses | $ 2 | 5,701 | 5,703 | |||||
Issuance of ADSs, net of commissions and offering expenses (in shares) | 181,455 | |||||||
Issuance of ADSs upon vesting of restricted share units (in shares) | 35,000 | |||||||
Share-based compensation expense | 26,779 | 26,779 | ||||||
Foreign currency translation adjustment | 3,775 | 3,775 | ||||||
Net loss | (112,717) | (112,717) | ||||||
Ending balance at Dec. 31, 2022 | $ 387 | $ 601,105 | $ 387 | $ (331,096) | $ 270,783 | |||
Ending balance (in shares) at Dec. 31, 2022 | 29,873,893 | 29,873,893 |
Consolidated Statements of Sh_2
Consolidated Statements of Shareholders' Equity (Parenthetical) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Consolidated Statements of Shareholders' Equity | |||
Offering expenses | $ 0.2 | $ 16.1 | $ 1.9 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Cash flows from operating activities: | |||
Net loss | $ (112,717) | $ (66,819) | $ (51,010) |
Adjustments to reconcile net loss to net cash used in operating activities: | |||
Share-based compensation expense | 26,779 | 12,083 | 6,514 |
Depreciation and amortization | 3,689 | 1,409 | 1,277 |
Non-cash interest | 442 | 468 | 78 |
Deferred income tax benefit | (4,976) | (1,668) | (673) |
Changes in operating assets and liabilities: | |||
Accounts receivable | (1,641) | 4,543 | (2,149) |
Research and development incentives receivable | (9,707) | (1,866) | (1,786) |
Prepaid expenses and other assets | (2,020) | (2,974) | 502 |
Operating lease right-of-use assets | 2,698 | 404 | 771 |
Accounts payable | 2,561 | 1,196 | (663) |
Accrued expenses and other current liabilities | 12,362 | 1,185 | 4,832 |
Operating lease liabilities | (2,114) | (582) | (621) |
Deferred revenue | (2,135) | 37,117 | 24,622 |
Other long-term liabilities | 668 | 710 | 517 |
Net cash used in operating activities | (86,111) | (14,794) | (17,789) |
Cash used in investing activities: | |||
Purchases of property and equipment | (18,987) | (2,030) | (1,200) |
Net cash used in investing activities | (18,987) | (2,030) | (1,200) |
Cash flows from financing activities: | |||
Proceeds from the issuance of ADSs, net of issuance costs | 5,703 | 290,984 | 48,144 |
Issuance of ordinary shares pursuant to the Ionis share purchase agreement | 7,558 | ||
Proceeds from the exercise of share options and sale of ordinary shares | 989 | 7,183 | 271 |
Proceeds from the exercise of warrants | 1 | ||
Proceeds from issuance of debt | 15,000 | 15,000 | |
Payments of debt issuance costs | (573) | ||
Net cash provided by financing activities | 6,692 | 320,725 | 62,843 |
Effect of exchange rate changes on cash and cash equivalents | (1,120) | (1,211) | 19 |
Net (decrease) increase in cash and cash equivalents | (99,526) | 302,690 | 43,873 |
Cash and cash equivalents at beginning of period | 438,680 | 135,990 | 92,117 |
Cash and cash equivalents at end of period | 339,154 | 438,680 | 135,990 |
Supplemental disclosure of cash flow information | |||
Cash paid for interest | 2,793 | 2,515 | 378 |
Cash paid for income taxes | 2,228 | 73 | 124 |
Cash paid for amounts included in the measurement of operating lease liabilities | 3,154 | 911 | 961 |
Purchases of property and equipment included in accounts payable and accrued expenses | 1,564 | 324 | 109 |
Advance billings on deferred revenue included in accounts receivable | $ 3,000 | ||
Non-cash impact right-of-use asset and operating lease liabilities | $ 3,120 | $ 13,846 |
Nature of the business and basi
Nature of the business and basis of presentation | 12 Months Ended |
Dec. 31, 2022 | |
Nature of the business and basis of presentation | |
Nature of the business and basis of presentation | 1. Nature of the business and basis of presentation Bicycle Therapeutics plc (collectively with its subsidiaries, the “Company”) is a clinical-stage biopharmaceutical company developing a novel class of medicines, which the Company refers to as Bicycles Bicycles Bicycle TM Bicycle ® Bicycle TM Bicycle Bicycle The accompanying consolidated financial statements include the accounts of Bicycle Therapeutics plc and its wholly owned subsidiaries, BicycleTx Limited, BicycleRD Limited and Bicycle Therapeutics Inc. All intercompany balances and transactions have been eliminated on consolidation. The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The Company has reclassified the deferred income tax benefit within its consolidated statements of cash flows in prior periods to conform to current period presentation. Liquidity The accompanying consolidated financial statements have been prepared on the basis of continuity of operations, realization of assets and the satisfaction of liabilities and commitments in the ordinary course of business. Since inception, the Company has devoted substantially all of its efforts to business planning, research and development, recruiting management and technical staff and raising capital. The Company has funded its operations with proceeds from the sale of its ordinary shares and American Depositary Shares (“ADSs”), including in its initial public offering (“IPO”) completed in May 2019 and follow-on offering completed in October 2021 (Note 7), offerings pursuant to its at-the-market offering program (“ATM”) program, prior to its IPO convertible preferred shares, proceeds received from its collaboration arrangements (Note 9) and proceeds from the Loan Agreement with Hercules Capital, Inc. (“Hercules”) (Note 6). The Company has incurred recurring losses since inception, including net losses of $112.7 million for the year ended December 31, 2022, $66.8 million for the year ended December 31, 2021 and $51.0 million for the year ended December 31, 2020. As of December 31, 2022, the Company had an accumulated deficit of $331.1 million. The Company expects to continue to generate operating losses in the foreseeable future. The Company expects that its cash will be sufficient to fund its operating expenses and capital expenditure requirements through at least twelve months from the issuance date of these annual consolidated financial statements. The Company expects its expenses to increase substantially in connection with ongoing activities, particularly as the Company advances its preclinical activities and clinical trials for its product candidates in development. Accordingly, the Company will need to obtain additional funding in connection with continuing operations. If the Company is unable to raise funding when needed, or on attractive terms, it could be forced to delay, reduce or eliminate its research or drug development programs or any future commercialization efforts. There is no assurance that the Company will be successful in obtaining sufficient funding on terms acceptable to the Company to fund continuing operations, if at all. The Company is subject to risks common to companies in the biotechnology industry, including but not limited to, risks of delays in initiating or continuing research programs and clinical trials, risks of failure of preclinical studies and clinical trials, the need to obtain marketing approval for any drug product candidate that it may identify and develop, the need to successfully commercialize and gain market acceptance of its product candidates, if approved, dependence on key personnel and collaboration partners, protection of proprietary technology, compliance with government regulations, development by competitors of technological innovations, and the ability to secure additional capital to fund operations. Product candidates currently under development will require significant additional research and development efforts, including preclinical and clinical testing and regulatory approval prior to commercialization. Even if the Company’s research and development efforts are successful, it is uncertain when, if ever, the Company will realize significant revenue from product sales. |
Summary of significant accounti
Summary of significant accounting policies | 12 Months Ended |
Dec. 31, 2022 | |
Summary of significant accounting policies | |
Summary of significant accounting policies | 2. Summary of significant accounting policies Use of estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of expenses during the reporting periods. Significant estimates and assumptions reflected in these consolidated financial statements include, but are not limited to, the accrual for research and development expenses, revenue recognition, share-based compensation expense, valuation of right-of-use assets and liabilities and income taxes, including the valuation allowance for deferred tax assets. The Company bases its estimates on historical experience, known trends and other market-specific or other relevant factors that it believes to be reasonable under the circumstances. Estimates are periodically reviewed in light of reasonable changes in circumstances, facts and experience. Changes in estimates are recorded in the period in which they become known. Actual results could differ from those estimates or assumptions. Significant risks and uncertainties The Company currently operates in a period of economic uncertainty which has been significantly impacted by the ongoing COVID-19 pandemic, domestic and global monetary and fiscal policy, geopolitical instability, the ongoing war in Ukraine, rising inflation and interest rates, and fluctuations in monetary exchange rates. While the Company has experienced limited financial impacts at this time, the Company continues to monitor these factors and events and the potential effects each may have on the Company’s business, financial condition, results of operations and growth prospects. Foreign currency and currency translation The reporting currency of the Company is the U.S. Dollar (“USD”). The functional currency of Bicycle Therapeutics plc’s wholly owned non-U.S. subsidiaries, BicycleTx Limited and BicycleRD Limited, is the British Pound Sterling, and the functional currency of its U.S. subsidiary, Bicycle Therapeutics Inc., is the USD. The functional currency of the Company’s subsidiaries is the same as the local currency. Monetary assets and liabilities denominated in foreign currencies are remeasured into the functional currency at rates of exchange prevailing at the balance sheet dates. Non-monetary assets and liabilities denominated in foreign currencies are remeasured into the functional currency at the exchange rates prevailing at the date of the transaction. Exchange gains or losses arising from foreign currency transactions are included in the determination of net loss for the respective periods. Adjustments that arise from exchange rate changes on transactions denominated in a currency other than the local currency are included in general and administrative expense in the consolidated statements of operations and comprehensive loss as incurred. The Company recorded a foreign exchange loss of $0.6 million for the year ended December 31, 2022, and foreign exchange gains of $0.4 million and $0.6 million for the years ended December 31, 2021 and 2020, respectively. The Company translates the assets and liabilities of its non-U.S. subsidiaries into USD at the exchange rate in effect on the balance sheet date. Revenues and expenses are translated at the average exchange rate in effect during the period. Unrealized translation gains and losses are recorded as a cumulative translation adjustment, which is included in the consolidated statements of shareholders’ equity as a component of accumulated other comprehensive loss. Concentrations of credit risk and of significant suppliers Financial instruments that potentially expose the Company to concentrations of credit risk consist primarily of cash and cash equivalents and accounts receivable. The Company deposits its cash in financial institutions in amounts that may exceed federally insured limits and has not experienced any losses on such accounts. The Company does not believe it is exposed to any unusual credit risk beyond the normal credit risk associated with commercial banking relationships. As of December 31, 2022 and 2021, accounts receivable consists of amounts due under the Company’s collaboration agreements with Ionis Pharmaceuticals, Inc. (“Ionis”) and Genentech, Inc. (“Genentech”) for which the Company does not obtain collateral. For the years ended December 31, 2022, 2021, and 2020, the Company’s revenue has primarily been generated from collaboration agreements with Ionis, Genentech, AstraZeneca AB (“AstraZeneca”), and Oxurion (Note 9). The Company relies, and expects to continue to rely, on a small number of vendors to manufacture supplies and raw materials for its development programs. These programs could be adversely affected by a significant interruption in these manufacturing services or the availability of raw materials. Cash and cash equivalents The Company considers all highly liquid investments that are readily convertible to known amounts of cash with original maturities of three months or less at date of purchase to be cash equivalents. The Company had cash equivalents of $276.1 million and $100.0 million at December 31, 2022 and 2021, respectively. Accounts receivable The Company makes judgments as to its ability to collect outstanding receivables and estimates credit losses at the reporting date resulting from the inability of its customers to make required payments. Provisions are made based upon a specific review of all significant outstanding invoices and the overall quality and age of those invoices. To date, the Company has not had any write-offs of bad debt, and the Company did not have an allowance for credit losses as of December 31, 2022 and 2021. Deferred offering costs The Company capitalizes certain legal, professional accounting and other third-party fees that are directly associated with in-process equity financings as deferred offering costs until such financings are consummated. After consummation of the equity financing, these costs are recorded in shareholders’ equity as a reduction of proceeds generated as a result of the offering. Should an in-process equity financing be abandoned, the deferred offering costs will be expensed immediately as a charge to operating expenses in the consolidated statements of operations and comprehensive loss. Property and equipment Property and equipment are stated at cost, less accumulated depreciation and amortization. Depreciation and amortization expense is recognized using the straight-line method over the estimated useful lives of the respective assets as follows: Estimated Useful Life Laboratory equipment 3 Leasehold improvements Lesser of lease term or useful life Computer equipment and software 3 years Furniture and office equipment 3 to 5 years Costs for property and equipment not yet placed into service are capitalized as construction-in-progress and depreciated in accordance with the above guidelines once placed into service. Upon retirement or sale, the cost of assets disposed of and the related accumulated depreciation are removed from the accounts and any resulting gain or loss is included in loss from operations. To date, there have been no significant asset retirements. Expenditures for repairs and maintenance are charged to expense as incurred. Impairment of long-lived assets Long-lived assets to be held and used are tested for recoverability whenever events or changes in business circumstances indicate that the carrying amount of the assets may not be fully recoverable. Factors that the Company considers in deciding when to perform an impairment review include significant underperformance of the business in relation to expectations, significant negative industry or economic trends and significant changes or planned changes in the use of the assets. If an impairment review is performed to evaluate a long-lived asset group for recoverability, the Company compares forecasts of undiscounted cash flows expected to result from the use and eventual disposition of the long-lived asset group to its carrying value. An impairment loss would be recognized when estimated undiscounted future cash flows expected to result from the use of an asset group are less than its carrying amount. The impairment loss would be based on the excess of the carrying value of the impaired asset group over its fair value, determined based on discounted cash flows. To date, the Company has not recorded any material impairment losses on long-lived assets. Fair value measurements Certain of the Company’s assets and liabilities are carried at fair value under GAAP. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. Financial assets and liabilities carried at fair value are to be classified and disclosed in one of the following three levels of the fair value hierarchy, of which the first two are considered observable and the last is considered unobservable: ● Level 1 — Quoted prices in active markets for identical assets or liabilities. ● Level 2 — Observable inputs (other than Level 1 quoted prices), such as quoted prices in active markets for similar assets or liabilities, quoted prices in markets that are not active for identical or similar assets or liabilities, or other inputs that are observable or can be corroborated by observable market data. ● Level 3 — Unobservable inputs that are supported by little or no market activity that are significant to determining the fair value of the assets or liabilities, including pricing models, discounted cash flow methodologies and similar techniques. The carrying values of accounts receivable, research and development incentives receivable, prepaid expenses and other current assets, accounts payable and accrued expenses and other current liabilities approximate their fair values due to the short-term nature of these assets and liabilities. As of December 31, 2022 and 2021, the carrying value of the long-term debt approximates its fair value, which was determined using unobservable Level 3 inputs, including quoted interest rates from a lender for borrowings with similar terms. As of December 31, 2022 and 2021, there were no assets or liabilities measured at fair value on a recurring basis. Debt issuance costs Debt issuance costs consist of certain third-party legal expenses and payments made to secure commitments under certain debt financing arrangements. These amounts are recognized as interest expense over the period of the financing arrangement. Segment and geographic information Operating segments are defined as components of a business for which separate discrete financial information is available for evaluation by the chief operating decision maker in deciding how to allocate resources and assess performance. The Company and its chief operating decision maker, the Company’s Chief Executive Officer, view the Company’s operations and manages its business as a single operating segment, which is developing a unique class of chemically synthesized medicines based on its proprietary platform. The Company operates in two geographic regions: the United Kingdom and the United States. Leases Leases are accounted for in accordance with Accounting Standards Codification (“ASC”) Topic 842, Leases ROU assets represent the Company’s right to use and control an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. ROU assets and liabilities are recognized on the lease commencement date based on the present value of lease payments over the lease term. The ROU asset also includes lease payments made before the lease commencement date and excludes any lease incentives. The Company identifies and assesses the following significant assumptions in recognizing the ROUA assets and corresponding lease liabilities: ● Expected lease term – The expected lease term includes both contractual lease periods and, when applicable, periods covered by an option to extend the lease when it is reasonably certain that the Company will exercise the extension option, or cancelable option periods when it is reasonably certain that the Company would not exercise such cancelation option. ● Incremental borrowing rate – As the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available on the commencement date in determining the present value of lease payments. As the Company does not have any external borrowings for comparable terms of its leases, the Company estimates the incremental borrowing rate by comparing interest rates available in the market for similar borrowings and third-party quotations. ● Lease and non-lease components – The components of a lease shall be split into three categories, if applicable: lease components (e.g., land, building, etc.), non-lease components (e.g., common area maintenance, maintenance, consumables, etc.) and non-components (e.g., property taxes, insurance, etc.). The fixed and in-substance fixed contract consideration (including any related to non-components) must then be allocated based on fair values to the lease components and non-lease components. The Company’s facilities operating leases may have both lease components and non-lease components for which the Company has elected to apply the practical expedient to account for each lease component and related non-lease component as one single component. The lease component results in a ROU asset being recorded on the balance sheet. Lease expense for lease payments is considered operating lease cost and is recognized on a straight-line basis over the lease term. Variable payments for other operating costs, which may be billed based on both usage and as a percentage of the Company’s share of total square footage, are considered variable lease cost and are recognized in the period in which the costs are incurred. Operating and variable lease cost are recorded as a component of research and development expenses and general and administrative expenses in the consolidated statements of operations and comprehensive loss. Revenue recognition The Company’s revenues are generated primarily through collaborative arrangements and license agreements with pharmaceutical companies. The terms of these arrangements may include (i) performing research and development services using the Company’s bicyclic peptide screening platform with the goal of identifying compounds for further development and commercialization, (ii) the transfer of intellectual property rights (licenses), or (iii) options to obtain additional research and development services or licenses for additional targets, or to optimize product candidates, upon the payment of option fees. The terms of these arrangements typically include payment to the Company of one or more of the following: non-refundable, upfront license fees; payments for research and development services; fees upon the exercise of options to obtain additional services or licenses; payments based upon the achievement of defined collaboration objectives; future regulatory and sales-based milestone payments; and royalties on net sales of future products. The Company recognizes revenue in accordance with ASC Topic 606, Revenue from Contracts with Customers Under ASC 606, an entity recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services. To determine revenue recognition for arrangements that the Company determines are within the scope of ASC 606, it performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when, or as, the Company satisfies the performance obligations. The Company only applies the five-step model to contracts when it is probable that the entity will collect substantially all of the consideration it is entitled to in exchange for the goods or services it transfers to the customer. As part of the accounting for these arrangements, the Company must make significant judgments, including identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each performance obligation. Once a contract is determined to be within the scope of ASC 606, the Company assesses the goods or services promised within the contract and determines those that are performance obligations. Arrangements that include rights to additional goods or services that are exercisable at a customer’s discretion are generally considered options. The Company assesses if these options provide a material right to the customer and if so, they are considered performance obligations. Performance obligations are promised goods or services in a contract to transfer a distinct good or service to the customer. The promised goods or services in the Company’s contracts with customers primarily consist of license rights to the Company’s intellectual property, research and development services, options to acquire additional research and development services, and options to obtain additional licenses, such as a commercialization license for a potential product candidate. Promised goods or services are considered distinct when: (i) the customer can benefit from the good or service on its own or together with other readily available resources, and (ii) the promised good or service is separately identifiable from other promises in the contract. In assessing whether promised goods or services are distinct, the Company considers factors such as the stage of development of the underlying intellectual property, the capabilities of the collaboration partner to develop the intellectual property on their own and whether the required expertise is readily available. In addition, the Company considers whether the customer can benefit from a promise for its intended purpose without the receipt of the remaining promises, whether the value of the promise is dependent on the unsatisfied promises, whether there are other vendors that could provide the remaining promises, and whether it is separately identifiable from the remaining promises. The Company estimates the transaction price based on the amount of consideration the Company expects to receive for transferring the promised goods or services in the contract. The consideration may include both fixed consideration and variable consideration. At the inception of each arrangement that includes variable consideration, the Company evaluates the amount of the potential payments and the likelihood that the payments will be received. The Company utilizes either the most likely amount method or expected value method to estimate variable consideration to include in the transaction price based on which method better predicts the amount of consideration expected to be received. The amount included in the transaction price is constrained to the amount for which it is probable that a significant reversal of cumulative revenue recognized will not occur. At the end of each subsequent reporting period, the Company re-evaluates the estimated variable consideration included in the transaction price and any related constraint, and if necessary, adjusts its estimate of the overall transaction price. Any such adjustments are recorded on a cumulative catch-up basis in the period of adjustment. The initial transaction price of a contract does not include amounts associated with customer option payments. After the transaction price is determined, it is allocated to the identified performance obligations based on the estimated standalone selling price. The Company must develop assumptions that require judgment to determine the standalone selling price for each performance obligation identified in the contract. The Company utilizes key assumptions to determine the standalone selling price, which may include other comparable transactions, pricing considered in negotiating the transaction, probabilities of technical and regulatory success and the estimated costs. Certain variable consideration is allocated specifically to one or more performance obligations in a contract when the terms of the variable consideration relate to the satisfaction of the performance obligation and the resulting amounts allocated to each performance obligation are consistent with the amounts the Company would expect to receive for each performance obligation. The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) each performance obligation is satisfied at a point in time or over time, and if over time based on the use of an input method. Licenses of intellectual property: If a license to the Company’s intellectual property is determined to be distinct from the other promises or performance obligations identified in the contract, the Company recognizes revenue from portion of the transaction price allocated to the license when the license is transferred to the customer and the customer is able to use and benefit from the license. For licenses that are combined with other promises, such as research and development services and a research license, the Company utilizes judgment to assess the nature of the combined performance obligation to determine whether the combined performance obligation is satisfied over time or at a point in time and, if over time, the appropriate method of measuring progress for purposes of recognizing revenue. The Company evaluates the measure of progress each reporting period and, if necessary, adjusts the measure of performance and related revenue recognition. The measure of progress, and thereby periods over which revenue should be recognized, are subject to estimates by management and may change over the course of the arrangement. Research and development services: The promises under the Company’s collaboration agreements may include research and development services to be performed by the Company on behalf of the partner. Payments or reimbursements resulting from the Company’s research and development efforts are recognized as the services are performed and presented on a gross basis because the Company is the principal for such efforts. Customer options: a discount. Optional future services that reflect their standalone selling prices do not provide the customer with a material right and, therefore, are not considered performance obligations and are accounted for as separate contracts. If optional future services include a material right, they are accounted for as performance obligations. The Company determines an estimated standalone selling price of any material rights for the purpose of allocating the transaction price. The Company considers factors such as the identified discount and the probability that the customer will exercise the option. Amounts allocated to a material right are not recognized as revenue until, at the earliest, the option is exercised or expires. Milestone payments: The Company’s collaboration agreements may include development and regulatory milestones. The Company evaluates whether the milestones are considered probable of being reached and estimates the amount to be included in the transaction price using the most likely amount method. The Company evaluates factors such as the scientific, clinical, regulatory, commercial, and other risks that must be overcome to achieve the particular milestone in making this assessment. If it is probable that a significant revenue reversal would not occur, the associated milestone value is included in the transaction price. Milestone payments that are not within the Company’s control or the licensee’s control, such as regulatory approvals, are not considered probable of being achieved until those approvals are received. At the end of each reporting period, the Company re-evaluates the probability of achievement of such milestones and any related constraint, and if necessary, adjusts the estimate of the overall transaction price. Any such adjustments are recorded on a cumulative catch-up basis, which would affect collaboration revenue and net loss in the period of adjustment. Milestone payments that may only be achieved after the exercise of a customer option are excluded from the initial determination of the transaction price. Royalties: For sales-based royalties, including milestone payments based on the level of sales, the Company determines whether the sole or predominant item to which the royalties relate is a license. When the license is the sole or predominant item to which the sales-based royalty relates, the Company recognizes revenue at the later of: (i) when the related sales occur, or (ii) when the performance obligation to which some or all of the royalty has been allocated has been satisfied (or partially satisfied). To date, the Company has not recognized any sales-based royalty revenue resulting from the Company’s collaboration agreements. The Company receives payments from customers based on billing schedules established in each contract. Up-front payments and fees are recorded as deferred revenue upon receipt or when due until the Company performs its obligations under these arrangements. Amounts are recorded as accounts receivable when the Company’s right to consideration is unconditional, such as when the Company has a contractual right to payment per the terms of the contract. For a complete discussion of accounting for collaboration revenues, see Note 9, “Significant agreements.” Government grants From time to time, the Company may enter into arrangements with governmental entities for the purposes of obtaining funding for research and development activities. The Company is reimbursed for costs incurred that are associated with specified research and development activities included in the grant application approved by the government authority. The Company recognizes government grant funding in the consolidated statements of operations and comprehensive loss as the related expenses being funded are incurred. The Company classifies government grants received under these arrangements as a reduction to the related research and development expense incurred, and accrued but unpaid grant income is included in other current assets. The Company analyzes each arrangement on a case-by-case basis, and income is recognized when the Company concludes that it has reasonable assurance that it will comply with the conditions attached to the grant and the expenses have been incurred. There are no significant performance criteria other than to maintain satisfactory progress on the specified project, and there are no significant acceptance or recapture provisions associated with the government grants for the years ended December 31, 2022, 2021 and 2020, respectively. For the years ended December 31, 2022, 2021 and 2020, the Company recognized $1.5 million, $3.0 million, and $0.7 million, respectively, as a reduction of research and development expense related to government grant arrangements. As of December 31, 2022, the Company has approximately $1.1 million of government grant funding remaining for future cost reimbursement through February of 2024. Research and development costs Research and development costs are expensed as incurred. Research and development costs consist of costs incurred in performing research and development activities, including salaries, share-based compensation and benefits, travel, facilities costs, depreciation, materials and laboratory supplies, and external costs of outside vendors engaged to conduct preclinical development and clinical development activities, as well as to manufacture clinical trial materials. Facilities costs primarily include the allocation of rent and utilities. Non-refundable prepayments for goods or services that will be used or rendered for future research and development activities are deferred and capitalized until the related goods are delivered or the related services are performed, or until it is no longer expected that the goods will be delivered, or the services rendered. Research and manufacturing contract costs and accruals The Company has entered into various research and development and manufacturing contracts, including contracts with respect to preclinical studies and clinical trials, with companies both inside and outside of the United States. These agreements are generally cancelable with 90 days or less notice, and related costs are recorded as research and development expenses as incurred. The Company records accruals for estimated ongoing costs. When evaluating the adequacy of the accrued liabilities, the Company analyzes progress of the research and development and manufacturing activities, including the phase or completion of events, invoices received and contracted costs. Significant judgments and estimates are made in determining the accrued balances at the end of any reporting period. Actual results could differ from the Company’s estimates. The Company’s historical accrual estimates have not been materially different from the actual costs. Research and development incentives and receivable The Company, through its subsidiaries in the United Kingdom, receives reimbursements of certain research and development expenditures as part of a United Kingdom government’s research and development tax reliefs program. Under the program, the Company is able to surrender trading losses that arise from qualifying research and development expenses incurred by the Company’s subsidiaries in the United Kingdom for a tax credit of up to 14.5% of the surrenderable losses, subject to certain limitations. Management has assessed the Company’s research and development activities and expenditures to determine which activities and expenditures are likely to be eligible under the research and development incentive program described above. At each period end, management estimates the reimbursement available to the Company based on available information at the time. The Company recognizes income from the research and development incentives when the relevant expenditure has been incurred, the associated conditions have been satisfied and there is reasonable assurance that the reimbursement will be received. The Company records these research and development incentives as a reduction to research and development expenses in the statements of operations and comprehensive loss, as the research and development tax credits are not dependent on us generating future taxable income, the Company’s ongoing tax status, or tax position. The research and development incentives receivable represent an amount due in connection with the above program. The Company recorded a reduction to research and development expense of $19.3 million, $10.8 million and $8.4 million during the years ended December 31, 2022, 2021 and 2020, respectively. Patent costs All patent-related costs incurred in connection with preparing, filing and prosecuting patent applications are expensed as incurred due to the uncertainty about the recovery of the expenditure. Amounts incurred are classified as general and administrative expenses in the consolidated statements of operations and comprehensive loss. Share-based compensation The Company measures all equity awards granted to employees and directors based on the fair value on the date of grant. Compensation expense of those awards is recognized over the requisite service period, which is generally the vesting period of the respective award. The Company records the expense for awards with only service-based vesting conditions using the straight-line method. The Company accounts for forfeitures as they occur. For share-based awards granted to non-employee consultants, the measurement date is the date of grant. The compensation expense is then recognized over the requisite service period, which is the v |
Fair value of financial assets
Fair value of financial assets and liabilities | 12 Months Ended |
Dec. 31, 2022 | |
Fair value of financial assets and liabilities | |
Fair value of financial assets and liabilities | 3. Fair value of financial assets and liabilities At December 31, 2022 and 2021, the Company had cash equivalents of $276.1 million and $100.0 million, respectively, consisting of a 30-day term deposit, which is considered a Level 1 asset. |
Property and equipment, net
Property and equipment, net | 12 Months Ended |
Dec. 31, 2022 | |
Property and equipment, net | |
Property and equipment, net | 4. Property and equipment, net Property and equipment, net consisted of the following (in thousands): December 31, 2022 2021 Laboratory equipment $ 14,872 $ 6,746 Leasehold improvements 10,736 809 Computer equipment and software 441 143 Furniture and office equipment 924 225 26,973 7,923 Less: Accumulated depreciation and amortization (7,863) (4,800) $ 19,110 $ 3,123 As of December 31, 2022, approximately $2.3 million of laboratory equipment was not yet placed in service. Depreciation expense was $3.7 million, $1.4 million and $1.3 million for the years ended December 31, 2022, 2021 and 2020, respectively. |
Accrued expenses and other curr
Accrued expenses and other current liabilities | 12 Months Ended |
Dec. 31, 2022 | |
Accrued expenses and other current liabilities | |
Accrued expenses and other current liabilities | 5. Accrued expenses and other current liabilities Accrued expenses and other current liabilities consisted of the following (in thousands): December 31, 2022 2021 Accrued employee compensation and benefits $ 9,928 $ 6,429 Accrued external research and development expenses 10,859 3,980 Accrued professional fees 1,068 882 Current portion of operating lease liabilities 3,125 2,383 Other 1,472 570 $ 26,452 $ 14,244 |
Long-term debt
Long-term debt | 12 Months Ended |
Dec. 31, 2022 | |
Long-term debt | |
Long-term debt | 6. Long-term debt On September 30, 2020 (the “Closing Date”), Bicycle Therapeutics plc and its subsidiaries (the “Borrowers”) entered into a loan and security agreement (the “Loan Agreement”) with Hercules, which provided for aggregate maximum borrowings of up to $40.0 million, consisting of (i) a term loan of $15.0 million, which was funded on the Closing Date, (ii) subject to customary conditions, an additional term loan of up to $15.0 million available from the Closing Date through March 15, 2021, and (iii) subject to the Borrowers achieving certain performance milestones and satisfying customary conditions and available until March 15, 2022, an additional term loan of $10.0 million. On March 10, 2021 (“the Amendment Closing Date”), the Borrowers entered into the First Amendment to the Loan and Security Agreement (the “First Amendment to LSA”) with Hercules, in its capacity as administrative agent and collateral agent, and the lenders named in the First Amendment to LSA. Pursuant to the First Amendment to LSA, payments on borrowings under the Company’s debt facility with Hercules were interest-only until the first payment was due on August 1, 2023, which date was extended from November 1, 2022, followed by equal monthly payments of principal and interest through the scheduled maturity date on October 1, 2024 (the “Maturity Date”). If the Company achieved certain performance milestones, the interest-only period could be extended, with the first principal payment due on February 1, 2024, which date was extended from May 1, 2023. On the Amendment Closing Date and pursuant to the terms of the First Amendment to LSA, the Company borrowed the additional term loan of $15.0 million that had been available from September 30, 2020 to March 15, 2021. In November 2021, the performance milestones were achieved, and the interest only period was extended until February 1, 2024. On March 15, 2022, the additional term loan of $10.0 million expired unexercised. During 2020 and 2021, borrowings under the Loan Agreement bore interest at an annual rate equal to the greater of (i) 8.85% or (ii) 5.60% plus The Wall Street Journal prime rate. On July 15, 2022, the Borrowers entered into the Second Amendment to the Loan and Security Agreement (the “Second Amendment to LSA”) with Hercules. Pursuant to the Second Amendment to LSA, the rate at which the borrowings under the Loan Agreement bear interest was decreased and capped. Under the Second Amendment, interest is paid at an annual rate of the Wall Street Journal prime rate plus 4.55% , with a minimum annual rate of at least 8.05% , capped at a rate no greater than 9.05 %. In addition, among other amendments, the Second Amendment extended the interest-only period to April 1, 2025, extended the Maturity Date to July 1, 2025, and provided the Borrowers, at their request, the potential for additional term loans, subject to satisfaction of customary conditions, in an aggregate principal amount of up to $45.0 million, and as such the aggregate maximum borrowings under the Loan Agreement increased to $75.0 million. At the Borrowers’ option, the Borrowers may prepay all or any portion greater than $5.0 million of the outstanding borrowings, subject to a prepayment premium equal to (i) 1.5% of the principal amount outstanding if the prepayment occurs after the first anniversary of the Closing Date but on or prior to December 31, 2023, and (ii) 1.0% of the principal amount outstanding if the prepayment occurs thereafter but prior to the Maturity Date. The Loan Agreement also provides for an end of term charge (the “End of Term Charge”), payable upon maturity or the repayment of obligations under the Loan Agreement, equal to 5.0% of the principal amount repaid. Borrowings under the Loan Agreement are collateralized by substantially all of the Borrower’s personal property and other assets, other than their intellectual property. Hercules has a perfected first-priority security interest in certain cash accounts. The Loan Agreement contains customary affirmative and restrictive covenants and representations and warranties, including a covenant against the occurrence of a change in control, as defined in the agreement. There are no financial covenants. The Loan Agreement also includes customary events of default, including payment defaults, breaches of covenants following any applicable cure period, cross acceleration to third-party indebtedness, certain events relating to bankruptcy or insolvency, and the occurrence of certain events that could reasonably be expected to have a material adverse effect. Upon the occurrence of an event of default, a default interest rate of an additional The Company incurred fees and transaction costs totaling $0.6 million associated with the initial term loan, which are recorded as a reduction to the carrying value of the long-term debt in the consolidated balance sheets. The fees, transaction costs, and the End of Term Charge are amortized to interest expense through the Maturity Date using the effective interest method. The Company evaluated the First Amendment to LSA and the Second Amendment to LSA and concluded that these amendments represent modifications to the Loan Agreement, and as such, the fees and transaction costs associated with the term loan will continue to be amortized to interest expense through the Maturity Date. The effective interest rate of the Hercules borrowings was 10.8% at December 31, 2022. The Company assessed all terms and features of the Loan Agreement in order to identify any potential embedded features that would require bifurcation. As part of this analysis, the Company assessed the economic characteristics and risks of the debt. The Company determined that all features of the Loan Agreement are clearly and closely associated with a debt host and, as such, do not require separate accounting as a derivative liability. Interest expense associated with the Loan Agreement for the years ended December 31, 2022, 2021 and 2020 was $3.2 million, $2.9 million and $0.4 million, respectively. Long-term debt consisted of the following (in thousands): December 31, December 31, 2022 2021 Term loan payable $ 30,000 $ 30,000 End of term charge 682 376 Unamortized debt issuance costs (367) (503) Carrying value of term loan $ 30,315 $ 29,873 Future principal payments, including the End of Term Charge, are as follows (in thousands): Year Ending December 31, 2023 $ — 2024 — 2025 31,500 Total $ 31,500 In addition, the Company granted Hercules the right to purchase up to an aggregate of $2.0 million of the Company’s equity securities sold to investors in certain subsequent financings upon the same terms and conditions afforded to such other investors. On October 1, 2020, Hercules purchased 98,100 ADSs, representing the same number of ordinary shares, at a public offering price of $19.05 per ADS ordinary share pursuant to the Sales Agreement, resulting in net proceeds of $1.8 million. |
Ordinary shares
Ordinary shares | 12 Months Ended |
Dec. 31, 2022 | |
Ordinary shares. | |
Ordinary shares | 7. Ordinary shares Each holder of ordinary shares is entitled to one vote per ordinary share and to receive dividends when and if such dividends are recommended by the board of directors and declared by the shareholders. Holders of ADSs are not treated as holders of the Company’s ordinary shares, unless they withdraw the ordinary shares underlying their ADSs in accordance with the deposit agreement and applicable laws and regulations. The depositary is the holder of the ordinary shares underlying the ADSs. Holders of ADSs therefore do not have any rights as holders of the Company’s ordinary shares, other than the rights that they have pursuant to the deposit agreement with the depositary. As of December 31, 2022 and 2021, the Company had not declared any dividends. As of December 31, 2022 and 2021, the Company’s authorized capital share consisted of 57,820,181 and 55,295,420 ordinary shares, respectively, with a nominal value of £0.01 per share. Authorized share capital, or shares authorized, comprises (i) the currently issued and outstanding ordinary shares, (ii) the remaining ordinary shares available for allotment under the existing authority granted to the Board at the annual general meeting held on June 28, 2021, (iii) ordinary shares issuable on the exercise of outstanding options, and (iv) ordinary shares reserved for issuance under the Bicycle Therapeutics plc 2020 Equity Incentive Plan and/or the Bicycle Therapeutics plc 2019 Employee Share Purchase Plan. On June 5, 2020, the Company entered into a Sales Agreement (the “Sales Agreement”) with Cantor Fitzgerald & Co. and Oppenheimer & Co. Inc. (the “Sales Agents”) with respect to an ATM program pursuant to which the Company may offer and sell through the Sales Agents, from time to time at the Company’s sole discretion, American Depositary Shares (“ADSs”), each ADS representing one ordinary share. During the year ended December 31, 2022, the Company issued and sold 181,455 ADSs, representing the same number of ordinary shares for gross proceeds of $5.9 million, resulting in net proceeds of $5.7 million after deducting sales commissions and offering expenses of $0.2 million. During the year ended December 31, 2021, the Company issued and sold 3,771,684 ADSs, representing the same number of ordinary shares for gross proceeds of $105.8 million, resulting in net proceeds of $102.6 million after deducting sales commissions and offering expenses of $3.2 million. During the year ended December 31, 2020, the Company issued and sold 2,928,813 ADSs, representing the same number of ordinary shares for gross proceeds of $50.0 million, resulting in net proceeds of $48.1 million after deducting sales commissions and offering expenses of $1.9 million. On July 9, 2021, the Company entered into a share purchase agreement (the “Ionis Share Purchase Agreement”) with Ionis, pursuant to which Ionis purchased 282,485 of the Company’s ordinary shares (the “Ionis Shares”) at a price per share of $38.94, for an aggregate purchase price of approximately $11.0 million. The Company determined the fair value of the Ionis Shares to be $7.6 million, based on the closing price of the Company’s ADSs of $31.11 per ADS on the date of the Ionis Share Purchase Agreement, less a discount for lack of marketability associated with resale restrictions applicable to the Ionis Shares, which was recorded as a component of shareholders’ equity. The Company concluded that the premium paid by Ionis under the Ionis Share Purchase Agreement represents additional consideration for the goods and services to be provided under the Ionis Collaboration Agreement (Note 9). |
Share-based compensation
Share-based compensation | 12 Months Ended |
Dec. 31, 2022 | |
Share-based compensation | |
Share-based compensation | 8. Share-based compensation Employee incentive pool 2020 Equity Incentive Plan In June 2020, the Company’s shareholders approved the Bicycle Therapeutics plc 2020 Equity Incentive Plan (the “2020 Plan”), under which the Company may grant market value options, market value stock appreciation rights or restricted shares, restricted share units (“RSUs”), performance RSUs and other share-based awards to the Company’s employees. The Company’s non-employee directors and consultants are eligible to receive awards under the 2020 Non-Employee Sub-Plan to the 2020 Plan. All awards under the 2020 Plan, including the 2020 Non-Employee Sub-Plan, will be set forth in award agreements, which will detail the terms and conditions of awards, including any applicable vesting and payment terms, change of control provisions and post-termination exercise limitations. In the event of a change of control of the Company, as defined in the 2020 Plan, any outstanding awards under the 2020 Plan will vest in full immediately prior to such change of control. The Company initially reserved up to 4,773,557 ordinary shares for future issuance under the 2020 Plan, representing 574,679 new shares, 544,866 shares that remained available for future issuance under the Company’s 2019 Share Option Plan (the “2019 Plan”) immediately prior to the effectiveness of the 2020 Plan and up to 3,654,012 shares subject to options that were granted under the 2019 Plan and that were granted pursuant to option contracts granted prior to the Company’s IPO, in each case that expire, terminate, are forfeited or otherwise not issued from time to time, if any. On June 27, 2022, the Company’s shareholders approved an amendment to the 2020 Plan (the “Amendment”) which increased the number of ordinary shares reserved for future issuance by 750,000 shares. Additionally, the number of ordinary shares reserved for issuance pursuant to the 2020 Plan will automatically increase on the first day of January of each year, commencing on January 1, 2021, in an amount equal to 5% of the total number of the Company’s ordinary shares outstanding on the last day of the preceding year, or a lesser number of shares determined by the Company’s board of directors. Pursuant to this evergreen provision, on January 1, 2022, the number of shares reserved for issuance under the 2020 Plan was increased by 1,478,968 shares. The Amendment extended the final date upon which an “evergreen” increase may occur under this provision from January 1, 2030, to January 1, 2032. As of December 31, 2022, there were 1,082,274 shares available for issuance under the 2020 Plan. The number of shares reserved for issuance under the 2020 Plan was increased by 1,493,694 shares effective January 1, 2023. Share options issued under the 2020 Share Option Plan have a 10-year contractual life, and generally vest over either a three-year service period for non-employee directors, or a four-year service period with 25% of the award vesting on the first anniversary of the commencement date and the balance thereafter in 36 equal monthly installments for employees and consultants. Certain options granted to the Company’s non-employee directors vest immediately upon grant. In 2022, the Company granted RSUs to non-employee directors and certain employees under the 2020 Plan. Each RSU represents the right to receive one of the Company’s ordinary shares upon vesting. RSUs granted to employees generally vest over a four-year service period with 25% of the award vesting on the first anniversary of the vesting commencement date and the remaining RSUs vesting in 12 equal quarterly installments. Certain RSUs granted to the Company’s non-employee directors vest immediately upon grant. As of December 31, 2022, there were options to purchase 3,172,533 shares and RSUs for 187,725 shares outstanding under the 2020 Plan. 2019 Share Option Plan In May 2019, the Company adopted the 2019 Plan, which became effective in conjunction with the IPO. As of December 31, 2022, there were Share options previously issued under the 2019 Plan have a 10-year contractual life, and generally either vest monthly over a three-year service period, or over a four-year service period with 25% of the award vesting on the first anniversary of the commencement date and the balance thereafter in 36 equal monthly installments. Certain awards granted to the Company’s non-employee directors were fully vested on the date of grant. The exercise price of share options issued under the 2019 Plan is not less than the fair value of ordinary shares as of the date of grant. Employee Share Purchase Plan (“ESPP”) In May 2019, the Company adopted the 2019 Employee Stock Purchase Plan (the “ESPP”), which became effective in conjunction with the IPO. The Company initially reserved 215,000 ordinary shares for future issuance under this plan. The ESPP provides that the number of shares reserved and available for issuance will automatically increase each January 1, beginning on January 1, 2020 and each January 1 thereafter through January 1, 2029, by the least of (i) 1% of the outstanding number of ordinary shares on the immediately preceding December 31; (ii) 430,000 ordinary shares or (iii) such lesser number of shares as determined by the Compensation Committee. The number of shares reserved under the ESPP is subject to adjustment in the event of a split-up, share dividend or other change in the Company’s capitalization. As of December 31, 2022, the total number of shares available for issuance under the ESPP was 901,675 shares. The number of shares reserved for issuance under the ESPP was increased by 298,738 shares effective January 1, 2023. As of December 31, 2022, there have been no offering periods to employees under ESPP. Share-based compensation The Company recorded share-based compensation expense in the following expense categories of its consolidated statements of operations and comprehensive loss (in thousands): Year Ended December 31, 2022 2021 2020 Research and development expenses $ 10,394 $ 4,974 $ 2,603 General and administrative expenses 16,385 7,109 3,911 $ 26,779 $ 12,083 $ 6,514 Share options The following table summarizes the Company’s option activity since December 31, 2021: Number of Weighted Shares Weighted Average Aggregate Underlying Average Contractual Intrinsic Share Options Exercise Price Term Value (in years) (in thousands) Outstanding as of December 31, 2021 4,603,486 $ 14.97 8.13 $ 207,009 Granted 1,548,167 44.83 — — Exercised (78,074) 12.67 — — Forfeited (174,691) 27.92 — — Outstanding as of December 31, 2022 5,898,888 $ 22.45 7.64 $ 71,002 Vested and expected to vest as of December 31, 2022 5,898,888 $ 22.45 7.64 $ 71,002 Options exercisable as of December 31, 2022 3,352,315 $ 13.93 6.87 $ 55,749 The weighted average grant-date fair value of share options granted during the years ended December 31, 2022, 2021 and 2020 was $31.45 per share, $15.66 per share and $7.87 per share, respectively. The aggregate intrinsic value of share options is calculated as the difference between the exercise price of the share options and the fair value of the Company’s ordinary shares. The aggregate intrinsic value of share options exercised during the years ended December 31, 2022, 2021 and 2020 was $1.5 million, $22.0 million and $1.3 million, respectively. For the years ended December 31, 2022, 2021 and 2020, the Company recorded share-based compensation expense for share options granted of $21.9 million, $12.1 million and $6.5 million, respectively. Expense for non-employee consultants for each of the years ended December 31, 2022, 2021 and 2020, was immaterial. The following table presents, on a weighted average basis, the assumptions used in the Black-Scholes option-pricing model to determine the fair value of share options granted to employees and directors: Year Ended December 31, 2022 2021 2020 Risk-free interest rate 2.2 % 0.6 % 1.3 % Expected volatility 82.5 % 79.8 % 74.8 % Expected dividend yield — — — Expected term (in years) 6.02 5.98 5.98 As of December 31, 2022, total unrecognized compensation expense related to the unvested employee and director share options was $50.1 million, which is expected to be recognized over a weighted average period of 2.8 years. Restricted share units The following table summarizes the Company’s RSU activity under the 2020 Plan since December 31, 2021: Number of Shares Weighted-Average Underlying RSUs Grant Date Fair Value Unvested at December 31, 2021 — $ — Granted 222,725 60.86 Vested (35,000) 60.86 Unvested at December 31, 2022 187,725 $ 60.86 The fair value of RSUs that vested during the years ended December 31, 2022, 2021 and 2020 was $2.1 million, zero and zero, respectively. Total share-based compensation expense for RSUs granted for the years ended December 31, 2022, 2021 and 2022 was $4.9 million, zero and zero, respectively. As of December 31, 2022, the total unrecognized compensation expense related to unvested RSUs was $8.6 million, which is expected to be recognized over a weighted-average period of 3.0 years. |
Significant agreements
Significant agreements | 12 Months Ended |
Dec. 31, 2022 | |
Significant agreements | |
Significant agreements | 9. Significant agreements For the years ended December 31, 2022, 2021 and 2020, the Company recognized revenue for its collaborations with Ionis, Genentech, DDF, AstraZeneca, and Oxurion. The following table summarizes the revenue recognized in the Company’s consolidated statements of operations and comprehensive loss from these arrangements (in thousands): Year Ended December 31, 2022 2021 2020 Collaboration revenues Ionis $ 9,347 $ 4,242 $ — Genentech 3,565 5,660 4,896 Dementia Discovery Fund 386 391 436 AstraZeneca 1,165 1,404 2,696 Oxurion — — 2,362 Total collaboration revenues $ 14,463 $ 11,697 $ 10,390 Ionis Agreements Ionis Evaluation and Option Agreement On December 31, 2020 (the “Effective Date”), the Company entered into an Evaluation and Option Agreement (the “Evaluation and Option Agreement”) with Ionis. Under the terms of the Evaluation and Option Agreement, the Company agreed to transfer Bicycles At any point during the term of the agreement and continuing through 30 days after the expiration of the Evaluation Period, Ionis had the option (the “Ionis Option”) to obtain an exclusive license to the Company’s intellectual property for the purpose of continued research, development, manufacture and commercialization of products within a particular application of the Company’s platform technology. The upfront payment of The Company concluded that the only performance obligation was a material right for the option to obtain an exclusive license. All other promises under the Evaluation and Option Agreement were immaterial in the context of the contract. The Company accounted for the million payment as deferred revenue as of December 31, 2020. On July 9, 2021, the Ionis Option was exercised upon the parties’ entry into a collaboration and license agreement as contemplated by the Evaluation and Option Agreement. The Company determined that the Ionis Option exercise constituted a continuation of the existing arrangement. Therefore, the million in deferred revenue under the Evaluation and Option Agreement was included in the transaction price of the collaboration and license agreement. Ionis Collaboration Agreement Following the exercise by Ionis of the Ionis Option granted pursuant to the Evaluation and Option Agreement, on July 9, 2021, the Company and Ionis entered into a collaboration and license agreement (the “Ionis Collaboration Agreement”). Pursuant to the Ionis Collaboration Agreement, the Company granted to Ionis a worldwide exclusive license under the Company’s relevant technology to research, develop, manufacture and commercialize products incorporating Bicycle peptides directed to the protein coded by the gene TFRC1 (transferrin receptor) (“TfR1 Bicycles”) intended for the delivery of oligonucleotide compounds directed to targets selected by Ionis for diagnostic, therapeutic, prophylactic and preventative uses in humans. Ionis will maintain exclusivity to all available targets unless it fails to achieve specified development diligence milestone deadlines. If Ionis fails to achieve one or more development diligence milestone deadlines, the Company has the right to limit exclusivity to certain specific collaboration targets, subject to the payment by Ionis of a low-single-digit million dollar amount per target as specified in the Ionis Collaboration Agreement. Each party will be responsible for optimization of such TfR1 Bicycles Bicycles , as specified by a research plan, and thereafter Ionis will be responsible for all future research, development, manufacture and commercialization activities. The Company will perform research and discovery activities including a baseline level of effort for a period of for no additional consideration. The parties will negotiate a commercially reasonable rate if additional research activities are agreed to be performed. For certain research and discovery activities that the Company is responsible for performing, the Company may use the assistance of a contract research organization (“CRO”). The Company has retained certain rights, including the right to use TfR1 Bicycles The activities under the Ionis Collaboration Agreement are governed by a joint steering committee (“JSC”) with an equal number of representatives from the Company and Ionis. The JSC will oversee the performance of the research and development activities. Upon first commercial sales of a licensed product, the JSC will have no further responsibilities or authority under the Ionis Collaboration Agreement. Under the Ionis Collaboration Agreement, Ionis made a non-refundable upfront payment of $31.0 million in addition to the $3.0 million already paid under the Option and Evaluation Agreement. Additionally, Ionis is obligated to reimburse the Company on a pass-through basis for expenses incurred in connection with research and discovery activities performed by a CRO. If Ionis is at risk of failing to achieve a specified development diligence milestone deadline, it can make up to three separate payments of a mid-single-digit million dollar amount to extend the development diligence milestone deadlines. On a collaboration target-by-collaboration target basis, Ionis will be required to make a low-single-digit million dollar payment upon acceptance of an investigational new drug application (“IND”) for the first product directed to such collaboration target (provided that Ionis will have a high single-digit million dollar credit to be applied towards the IND acceptance fee for In December 2021, the Company and Ionis entered into an amendment to the Ionis Collaboration Agreement (the “Ionis Amendment”). Ionis paid the Company Either party may terminate the Ionis Collaboration Agreement for the uncured material breach of the other party or in the case of insolvency. Ionis may terminate the Ionis Collaboration Agreement for convenience on specified notice periods depending on the development stage of the applicable target, either in its entirety or on a target-by-target basis. Ionis Share Purchase Agreement Concurrently with the execution of the Ionis Collaboration Agreement on July 9, 2021, the Company entered into the Ionis Share Purchase Agreement with Ionis, pursuant to which Ionis purchased the Ionis Shares at a price per share of $38.94, for an aggregate purchase price of approximately $11.0 million. Pursuant to the terms of the Ionis Share Purchase Agreement, Ionis agreed that until January 9, 2023, it would not, without our prior written consent and subject to certain conditions and exceptions, among other things, directly or indirectly acquire additional shares of our outstanding equity securities, seek or propose a tender or exchange offer, merger or other business combination involving us, solicit proxies or consents with respect to any matter, or undertake other specified actions related to the potential acquisition of additional equity interests in us. The Share Purchase Agreement also provided that, subject to limited exceptions, Ionis could not sell any of the Ionis Shares until July 2022. The Company determined the fair value of the Ionis Shares to be $7.6 million, based on the closing price of the Company’s ADSs of $31.11 per ADS on the date of the Ionis Share Purchase Agreement, less a discount for lack of marketability associated with resale restrictions applicable to the Ionis Shares. The Company concluded that the premium paid by Ionis under the Ionis Share Purchase Agreement represents additional consideration for the goods and services to be provided under the Ionis Collaboration Agreement. As such, the total premium of Accounting Analysis Upon execution of the Ionis Collaboration Agreement, the Company identified the following promises in the arrangement: i) a worldwide exclusive license to research, develop, manufacture and commercialize products incorporating TfR1 Bicycles Bicycles collaboration targets. The Company’s participation in the JSC was deemed immaterial in the context of the contract. The Company has concluded that the exclusive license to research, develop, manufacture and commercialize products Bicycles Bicycles The total transaction price was initially determined to be $38.0 million, consisting of the $31.0 million up front payment, the $3.0 million payment under the Option and Evaluation Agreement, that was credited against the total upfront payment payable pursuant to the Ionis Collaboration Agreement, the $3.4 million premium paid under the Ionis Share Purchase Agreement, and an estimated $0.6 million for the reimbursement of CRO costs. Additional variable consideration including development diligence milestone deadline extension payments, development and regulatory milestone payments, sales milestone payments and royalty payments was fully constrained as a result of the uncertainty regarding whether any of the milestones will be achieved. The transaction price was allocated to the performance obligations based on the relative estimated standalone selling prices of each performance obligation. The estimated standalone selling price of the Ionis combined licenses and research and discovery performance obligation was based on the nature of the licenses to be delivered, as well as the services to be performed and estimates of the associated effort and costs of the services, adjusted for a reasonable profit margin for what would be expected to be realized under similar contracts. The estimated standalone selling price for the material rights was determined based on the estimated value of the underlying goods and services, and the probability that Ionis would exercise the option. Based on the relative standalone selling price, the allocation of the transaction price to the separate performance obligations is as follows (in thousands): Allocation of Performance Obligations Transaction Price Combined licenses and research and discovery performance obligation $ 34,100 Four material rights associated with credits for IND Acceptance fees 3,900 $ 38,000 The Company is recognizing revenue related to amounts allocated to the combined licenses and research and discovery performance obligation using a proportional performance model over the period of service using input-based measurements including total full-time equivalent effort and CRO costs incurred to date as a percentage of total full-time equivalent effort and CRO costs expected, which best reflects the progress towards satisfaction of the performance obligation. The amount allocated to the material rights is recorded as deferred revenue and the Company commences revenue recognition upon exercise of or upon expiry of the respective option. The Company anticipates that the combined licenses and research and discovery performance obligation will be satisfied over a period of three years and anticipates the material rights may be exercisable or may expire after approximately four years from contract execution. The Company concluded that the Ionis Amendment will be accounted for as a separate contract, as the services are distinct from the Ionis Collaboration Agreement, and the price of the contract increased by an amount of consideration that reflects the Company’s standalone selling price. The Company concluded that the option does not contain a material right. The Company recognized the $0.8 million associated with the services in the initial six-month period as revenue as the underlying services were performed using a proportional performance model over the period of service using input based measurements of total full time equivalent efforts and external costs incurred to date as a percentage of total expected full time equivalent efforts and expected external costs, which best reflects the progress towards satisfaction of the performance obligation. As the option to perform additional research services for an additional six months does not contain a material right, the Company accounted for Ionis’ exercise of the option in October 2022 as a separate contract. The Company is recognizing the $0.8 million associated with the services for the additional six-month period as revenue as the underlying services are performed using a proportional performance model over the period of service using input based measurements of total full time equivalent efforts and external costs incurred to date as a percentage of total expected full time equivalent efforts and expected external costs, which best reflects the progress towards satisfaction of the performance obligation. For the years ended December 31, 2022, 2021 and 2020, the Company recognized $9.3 million, $4.2 million and no revenue, respectively, and as of December 31, 2022 and 2021, the Company recorded deferred revenue of $21.5 million and $34.1 million, respectively, in connection with the Ionis Collaboration Agreement, Ionis Amendment, and Ionis Evaluation and Option Agreement. Genentech Collaboration Agreement On February 21, 2020, the Company entered into a Discovery Collaboration and License Agreement, as amended from time to time (as amended, the “Genentech Collaboration Agreement”), with Genentech. The collaboration is focused on the discovery and development of Bicycle Under the terms of the Genentech Collaboration Agreement, the Company received a $30.0 million upfront, non-refundable payment. The initial discovery and optimization activities are focused on utilizing the Company’s phage screening technology to identify product candidates aimed at two immuno-oncology targets (“Genentech Collaboration Programs”), which may also include additional discovery and optimization of Bicycles If Genentech elects for the Company to perform discovery and optimization services for certain Targeting Arms, the Company will be entitled to receive an additional advance payment for the additional research services. Genentech exercised its right to select a Targeting Arm for million each. If a Targeting Arm achieves specified criteria in accordance with the research plan, Genentech will be required to pay a further specified amount in the low single digit millions for each such Targeting Arm as consideration for the additional services to be provided. The Company granted to Genentech a non-exclusive research license under the Company’s intellectual property solely to enable Genentech to perform any activities under the agreement. The activities under the Genentech Collaboration Agreement are governed by a joint research committee (“JRC”) with representatives from each of the Company and Genentech. The JRC will oversee, review and recommend direction of each Genentech Collaboration Program, achievement of development criteria, and variations of or modifications to the research plans. After the Company performs the initial discovery and optimization activities in accordance with an agreed research plan and achieves specified criteria, Genentech will have the option to have the Company perform initial pre-clinical development and optimization activities in exchange for an additional specified milestone payment in the mid-single digit millions for each Genentech Collaboration Program (the “LSR Go Option”). Upon completion of such initial pre-clinical development and optimization activities for each Genentech Collaboration Program, Genentech will have the option to obtain an exclusive license to exploit any compound developed under such Genentech Collaboration Program in exchange for an additional specified payment in the mid to high single digit millions for each of the initial On a Genentech Collaboration Program by Genentech Collaboration Program basis, if Genentech elects to obtain exclusive development and commercialization rights and pays the applicable LSR Go Option and Dev Go Option fees, Genentech will be required to make milestone payments to the Company upon the achievement of specified development, regulatory, and initial commercialization milestones for products arising from each collaboration program, totaling up to $200.0 million. Specifically, the Company is eligible for additional development milestones totaling up to $65.0 million, as well as regulatory milestones of up to $135.0 million for each collaboration program. In addition, the Company is also eligible to receive up to $200.0 million in sales milestone payments on a Genentech Collaboration Program-by-Genentech Collaboration Program basis. In addition, to the extent any of the product candidates covered by the licenses conveyed to Genentech are commercialized, the Company would be entitled to receive tiered royalty payments on net sales at percentages ranging from the mid-single to low double-digits, subject to certain standard reductions and offsets. Royalties will be payable, on a product by product and country by country basis, until the later of the expiration of specified licensed patents covering such product in such country, or ten years from first commercial sale of such product in such country. Accounting Analysis Upon the execution of the Genentech Collaboration Agreement, the Company has identified the following performance obligations: (i) Research license, and the related research and development and preclinical services through LSR Go for a first Genentech Collaboration Program (Genentech Collaboration Program #1); (ii) Research license, and the related research and development and preclinical services through LSR Go for a second Genentech Collaboration Program with a specified Targeting Arm (Genentech Collaboration Program #2); (iii) Material right associated with an option to a specified Targeting Arm for Genentech Collaboration Program #1; (iv) Two material rights associated with the LSR Go Option for Genentech Collaboration Program #1 and Genentech Collaboration Program #2, which includes research services to be provided through the Dev Go Option and an option to receive an exclusive license; (v) Material rights associated with certain limited substitution rights with respect to a limited number of collaboration targets; (vi) Two material rights related to each Genentech Expansion Option, which upon exercise include the services for an additional immuno-oncology target through the LSR Go Option, an LSR Go Option which includes the services to be provided through the Dev Go Option and an option to receive an exclusive license, limited substitution rights, and an option to select a specified Targeting Arm. The Company concluded that certain substitution rights that require the payment of additional consideration, which approximate the standalone selling price of the underlying services to be provided, do not provide the customer with a material right and therefore, are not considered as performance obligations and are accounted for as separate contracts upon exercise, if ever. The Company’s participation in the joint steering committee was assessed as immaterial in the context of the contract. The Company has concluded that the research license is not distinct from the research and development services as Genentech cannot obtain the benefit of the research license without the Company performing the research and development services. The services incorporate proprietary technology and unique skills and specialized expertise, particularly as it relates to constrained peptide technology that is not available in the marketplace. As a result, for each research program, the research license has been combined with the research and development services into a single performance obligation. In addition, the Company concluded that the Dev Go Option is not distinct or separately exercisable from the LSR Go Option, as the customer cannot benefit from the Dev Go Option unless and until the LSR Go Option is exercised. In assessing whether the various options under the Genentech Collaboration Agreement represent material rights, the Company considered the additional consideration the Company would be entitled to upon the option exercise, the standalone selling price of the underlying goods, services, and additional options. For the material rights identified above the Company concluded that each of the options provided Genentech with a discount that it otherwise would not have received. The total transaction price was initially determined to be $31.0 million, consisting of the $30.0 million upfront fee and the additional $1.0 million for Genentech’s selection of a new Targeting Arm at inception. The Company utilizes the most likely amount method to determine the amount of research and development funding to be received. Additional consideration to be paid to the Company upon the exercise of options by Genentech and subsequent milestones are excluded from the transaction price as they relate to option fees and milestones that can only be achieved subsequent to the exercise of an option. In addition, other variable consideration for development milestones not subject to option exercises was fully constrained, as a result of the uncertainty regarding whether any of the milestones will be achieved. In March 2021, the Company achieved specified criteria in accordance with the research plan under the Genentech Collaboration Agreement and therefore updated its estimate of the variable consideration to include an additional The transaction price was allocated to the performance obligations based on the relative estimated standalone selling prices of each performance obligation. The estimated standalone selling prices for the Genentech Collaboration Programs was based on the nature of the services to be performed and estimates of the associated effort and costs of the services, adjusted for a reasonable profit margin for what would be expected to be realized under similar contracts. The estimated standalone selling price for the material rights was determined based on the fees Genentech would pay to exercise the options, the estimated value of the underlying goods and services, and the probability that Genentech would exercise the option and any underlying options. Allocation of Performance Obligations Transaction Price Genentech Collaboration Program #1 Performance Obligation $ 4,019 Genentech Collaboration Program #2 Performance Obligation 8,037 Specified Targeting Arm Material Right Arm for Genentech Collaboration Program #1 352 Two material rights associated with the LSR Go Option for Collaboration Programs #1 and #2 12,400 Material rights associated with limited substitution rights 1,187 Two material rights for Expansion Options 7,005 $ 33,000 The Company is recognizing revenue related to amounts allocated to the Genentech Collaboration Program #1 and #2 Performance Obligations as the underlying services are performed using a proportional performance model over the period of service using input-based measurements of total full-time equivalent efforts and external costs incurred to date as a percentage of total full-time equivalent efforts and expected external costs, which best reflects the progress towards satisfaction of the performance obligation. The amount allocated to the material rights is recorded as deferred revenue and the Company will commence revenue recognition upon exercise of or upon expiry of the respective option. The Company anticipates that the Genentech Collaboration Performance Program #1 and #2 obligations will be performed over a period of approximately two In October 2021, Genentech exercised the first Expansion Option to add an additional Genentech Collaboration Program (Genentech Collaboration Program #3) and paid to the Company an expansion fee of $10.0 million in November 2021. Genentech also elected for Bicycle to perform discovery and optimization services for a Targeting Arm, and the Company received an additional payment of $1.0 million for additional research services. The Company exercised judgment and concluded that the exercise of the first Expansion Option and the option to a specified Targeting Arm is accounted for as a continuation of an existing contract as the customer decided to purchase additional goods and services contemplated in the original contract, as such, the additional arrangement consideration of $11.0 million received upon the option exercises together with the amount originally allocated to the Expansion Option material right of $3.5 million is allocated to the underlying goods and services associated with the Expansion Option. The arrangement consideration was allocated to the separate performance obligations on the same basis as the initial allocation of the Genentech Collaboration Agreement. In December 2022, the Targeting Arm achieved specified criteria in accordance with the research plan under the Genentech Collaboration Agreement and therefore the Company updated its estimate of variable consideration to include an additional $2.0 million, that is no longer constrained. The Company allocated the additional $2.0 million entirely to the Genentech Collaboration Program #3 and Targeting Arm services as the terms of the variable consideration relate specifically to the Company’s efforts in satisfying the performance obligation and allocating the variable consideration entirely to the performance obligation is consistent with the allocation objective in ASC 606. The Company is recognizing $8.4 million allocated to Genentech Collaboration Program #3 and Targeting Arm services as the underlying services are performed using a proportional performance model over the period of service of approximately two external costs incurred to date as a percentage of total full-time equivalent efforts and external costs expected, which best reflects the progress towards satisfaction of the performance obligation. The amount allocated to the material right associated with an LSR Go Option for Collaboration Program #3 of $7.4 million and limited substitution material rights of $0.7 million are recorded as deferred revenue and the Company will commence revenue recognition upon exercise of or upon expiry of the respective option. Other variable consideration for development milestones not subject to option exercises was fully constrained, as a result of the uncertainty regarding whether any of the milestones will be achieved. In June 2022, Genentech exercised the second Expansion Option to add an additional Genentech Collaboration Program (“Genentech Collaboration Program #4”), which triggered a $10.0 million payment to the Company under the Genentech Collaboration Agreement. The Company exercised judgment and concluded that the exercise of the second Expansion Option is accounted for as a continuation of an existing contract as the customer decided to purchase additional goods and services contemplated in the original contract, and as such, the additional arrangement consideration of $10.0 million received pursuant to the option exercise together with the amount originally allocated to the Expansion Option material right of $3.5 million is allocated to the underlying goods and services associated with the Expansion Option. The arrangement consideration was allocated to the separate performance obligations on the same basis as the initial allocation of the Genentech Collaboration Agreement. The Company will recognize $5.3 million allocated to the Genentech Collaboration Program #4 services as the underlying services are performed using a proportional performance model over the period of service of approximately two For the years ended December 31, 2022, 2021 and 2020, the Company recognized revenue of $3.6 million, $5.7 million and $4.9 million, respectively, and as of December 31, 2022 and 2021, the Company recorded deferred revenue of $39.3 million and $34.4 million, respectively, in connection with the Genentech Collaboration Agreement. Dementia Discovery Fund Agreement In May 2019, the Company entered into a collaboration with the Dementia Discovery Fund (“DDF”) to use Bicycle technology for the discovery and development of novel therapeutics for dementia (the “DDF Collaboration Agreement”). In October 2019, the collaboration with DDF was expanded to include Oxford University’s Oxford Drug Discovery Institute (ODDI). Under the terms of the DDF Collaboration Agreement, the Company and DDF will collaborate to identify Bicycles Bicycles The Company received an upfront payment of $1.1 million in May 2019. The DDF arrangement provided the Company could receive up to an additional $0.7 million, of which $0.6 million has been received as of December 31, 2022, upon achievement of certain milestones such as the identification of lead Bicycle Intellectual property created by the collaboration shall be owned by the Company, and background intellectual property improvements shall be owned by the party from whose background intellectual property they exclusively relate. If promising lead compounds are identified, the Company, ODDI and DDF have the option (the “DDF Option”) to establish a jointly owned new company (“NewCo”) to advance the compounds through further development towards commercialization. NewCo will receive a royalty and milestone-bearing assignment and license of intellectual property from the Company for this purpose. The DDF Option is exercisable at any time until 90 days following the completion of the Research Plan and delivery of a final report. If DDF does not elect to exercise the DDF Option during the Option period, then DDF shall have no right in the collaboration intellectual property. NewCo will initially be owned 66% by the Company and 34% by DDF; however, the Company shall not be entitled to exercise more than 50% of the total voting rights related to its ownership interests. After completion of the DDF Option exercise, for a period of two years following the option exercise, NewCo shall have the right to initiate a new research program to develop up to three additional dementia targets, on a target by target basis, and the Company will be entitled to charge NewCo an agreed upon FTE rate for peptide screening and optimization for the active targets. Either party may terminate the DDF Collaboration Agreement upon providing not less than 60 days written notice. A party may terminate the DDF Collaboration Agreement with immediate effect without notice if at any time the other party files for protection under bankruptcy or insolvency laws, makes an arrangement for the benefit of creditors, appoints a receiver, administrator, manager or trustee over its property, proposes a written agreement of composition or extension of its debts, is a party to any dissolution, winding-up or liquidation, or is in material breach that has not been remedied. Accounting Analysis The Company identified a single performance obligation associated with the performance of research and development services under the DDF Research Plan. The Company concluded that the Company’s participation in the Research Advisory Panel and the DDF Option are immaterial in the context of the contract, and that neither the DDF Option nor the option for NewCo to obtain additional peptide screening and optimization services contain a material right. The total transaction price was initially determined to be $1.1 million, consisting of the upfront payment for research and development funding. The Company may receive additional milestone payments during the DDF Research Plan, as well as for research and development services for additional targets following the exercise of DDF Option. These variable amounts are excluded from the transaction price as they relate to fees that can only be achieved subsequent to the exercise of an option, and therefore are treated as separate contracts. The transaction price was allocated to the single performance obligation of research and development services. The Company is recognizing revenue as the underlying services are performed using a proportional performance model, over the period of service using input-based measurements of total costs, including total full-time equivalent effort incurred to date as a percentage of total costs expected, which best reflects the progress towards satisfaction of the performance obligation. In December 2020, the Company received a payment of $0.5 million upon the achievement of specified scientific criteria. The Company concluded that the payment represents consideration for a single performance obligation to perform lead optimization activities, and is recognizing revenue as the underlying services are performed using a proportional performance model, over the period of service using input based measurements of total costs, including total full time equivalent effort |
Income taxes
Income taxes | 12 Months Ended |
Dec. 31, 2022 | |
Income taxes | |
Income taxes | 10. Income taxes The components of net loss before income tax provision are as follows (in thousands): Year Ended December 31, 2022 2021 2020 United Kingdom $ (116,275) $ (69,546) $ (52,521) United States 2,034 1,064 787 Total $ (114,241) $ (68,482) $ (51,734) The components of the benefit for income taxes are as follows (in thousands): Year Ended December 31, 2022 2021 2020 Current income tax provision (benefit) Federal $ 2,048 $ (2) $ (24) State 1,404 7 (27) Total current income tax provision (benefit) 3,452 5 (51) Deferred income tax (benefit) provision Federal (4,111) (1,236) (435) State (865) (432) (238) Total deferred income tax (benefit) (4,976) (1,668) (673) Total benefit from income taxes $ (1,524) $ (1,663) $ (724) A reconciliation of the benefit for income taxes computed at the statutory income tax rate to the benefit for income taxes as reflected in the financial statement is as follows: Year Ended December 31, 2022 2021 2020 Benefit for income taxes at statutory rate 19 % 19 % 19 % (Decreases) increases resulting from: Federal tax credits 0.3 % 0.6 % 0.9 % Change in valuation allowance (16.8) % (27.0) % (15.4) % Net losses surrendered for research credit (6.5) % (5.9) % (6.2) % Impact of statutory rate change 11.3 % 12.1 % 1.8 % Impact of foreign exchange rates (9.9) % — % 1.3 % Other 3.9 % 3.6 % — % Effective income tax rate 1.3 % 2.4 % 1.4 % Significant components of the Company’s current and deferred tax assets are as follows (in thousands): December 31, 2022 2021 Deferred tax assets: Operating loss carryforwards $ 45,452 $ 30,536 Research credit carryforwards — 1,862 Operating lease liability 3,566 3,626 Share-based compensation 9,842 4,406 Capitalized research and development expenses 5,168 — Accrued expenses and other 2,318 1,496 Total deferred tax assets 66,346 41,926 Deferred tax liabilities: Operating lease right-of-use asset (3,474) (3,665) Depreciation & amortization (933) (439) Total deferred tax liabilities (4,407) (4,104) Valuation allowance (53,743) (34,601) Net deferred tax assets $ 8,196 $ 3,221 During the years ended December 31, 2022, 2021 and 2020, the Company recorded an income tax benefit of $1.5 million, $1.7 million, and $0.7 million, respectively. The Company is subject to U.K. corporate taxation. Due to the nature of its business, the Company has generated losses since inception and therefore not paid U.K. corporation tax. The Company's income tax benefit is mainly the result of deferred tax assets benefited in the United States that do not have a valuation allowance against them because of profits that will be generated by an intercompany service agreement. Starting in 2022, amendments to Section 174 of the Internal Revenue Code of 1986, as amended (“IRC”), will no longer permit an immediate deduction for research and development expenditures in the tax year that such costs are incurred. Instead, these IRC Section 174 development costs must now be capitalized and amortized over either a five- or 15-year period, depending on the location of the activities performed. The new amortization period begins with the midpoint of any taxable year that IRC Section 174 costs are first incurred, regardless of whether the expenditures were made prior to or after July 1, and runs until the midpoint of year five for activities conducted in the United States or year 15 in the case of development conducted on foreign soil. The Company regularly assesses its ability to realize its deferred tax assets. Assessing the realization of deferred tax assets requires significant judgment. In determining whether its deferred tax assets are more likely than not realizable, the Company evaluated all available positive and negative evidence, and weighed the evidence based on its objectivity. After consideration of the evidence, including the Company's history of cumulative net losses in the U.K., the Company has concluded that it is more likely than not that the Company will not realize the benefits of its U.K. deferred tax assets and accordingly the Company has provided a valuation allowance for the full amount of the net deferred tax assets in the U.K. The Company has considered its history of cumulative net profits in the United States and estimated future taxable income and has concluded that it is more likely than not that the Company will realize the benefits of its United States deferred tax assets and has not provided a valuation allowance against the net deferred tax assets in the United States. The valuation allowance increased in the year ended December 31, 2022 by $19.1 million due to the corresponding increase in U.K. deferred tax assets, primarily due to operating loss carryforwards generated during the year that were not surrendered for research credit utilization. The Company recorded a valuation allowance against all of its U.K. deferred tax assets as of December 31, 2022 and 2021. The Company intends to continue to maintain a full valuation allowance on its U.K. deferred tax assets until there is sufficient evidence to support the reversal of all or some portion of these allowances. The release of the valuation allowance would result in the recognition of certain deferred tax assets and an increase to the benefit for income taxes for the period the release is recorded. However, the exact timing and amount of the valuation allowance release are subject to change on the basis of the level of profitability that the Company is able to actually achieve. The benefit for income taxes shown on the consolidated statements of operations differs from amounts that would result from applying the statutory tax rates to income before taxes primarily because of certain permanent expenses that were not deductible and U.K., U.S. federal and state research and development credits, as well as the application of valuation allowances against the U.K. deferred tax assets. As of December 31, 2022, the Company had $181.8 million of U.K. operating loss carryforwards that have an indefinite life. The Company recognizes, in its consolidated financial statements, the effect of a tax position when it is more likely than not, based on the technical merits, that the position will be sustained upon examination. The Company had no uncertain tax positions during the years ended of December 31, 2022 and 2021. There are no amounts of interest or penalties recognized in the consolidated statement of operations or accrued on the consolidated balance sheet for any period presented. The Company does not expect any material changes in these uncertain tax benefits within the next 12 months. The Company files income tax returns in the United Kingdom, and in the United States for federal income taxes and in 11 jurisdictions for state income taxes. In the normal course of business, the Company is subject to examination by tax authorities in these jurisdictions. The 2021 and 2020 tax years remains open to examination the by HM Revenue & Customs. The statute of limitations for assessment with the Internal Revenue Service is generally three years from filing the tax return. As such, all years since 2019 in the U.S. remain open to examination. The Company is currently not under examination by jurisdictions for any tax years. |
Commitments and contingencies
Commitments and contingencies | 12 Months Ended |
Dec. 31, 2022 | |
Commitments and contingencies | |
Commitments and contingencies | 11. Commitments and contingencies Leases On December 6, 2021 the Company entered into a lease of new office and laboratory space, in Cambridge, United Kingdom. The lease has a contractual period of 10 years, but may be cancelled by the Company on the fifth anniversary of the lease commencement date. The lease term is five years, representing the non-cancelable lease period, as it is not reasonably certain that the lease will not be cancelled. The Company has a contractual right to renew the lease for a further ten-year period, which also may be cancelled after five years. The annual rent is approximately $3.0 million, payable quarterly in advance beginning in June 2022, following a six-month rent-free period. There was no deposit paid in conjunction with the lease. The Company recorded a ROU asset of approximately $11.6 million and a lease liability of approximately $11.1 million at the lease commencement date, based on the present value of future lease payments, discounted at a 6.9%, the Company’s estimated incremental borrowing rate at the commencement of the lease, over the lease term. Rent expense is recognized on a straight-line basis over the five-year lease term, including the six-month rent-free period. In October 2017, the Company entered into a lease agreement for office and laboratory space in Building 900, Babraham Research Campus, Cambridge, U.K. In March 2021, prior to the expiration of the lease, the Company concluded that it was reasonably certain that it would exercise its additional five-year lease renewal option, which was not included in the original lease term, and accounted for the change in lease term as a modification of the existing lease. The Company remeasured the ROU asset and lease liability by calculating the present value of expected lease payments, discounted at 7.70%, the Company’s estimated incremental borrowing rate at the date of the modification of the lease, over the remaining lease term. In December 2021, the lease was renewed. The annual rent for the new lease is approximately $0.6 million. Service charges are also payable based on floor area and are estimated to be approximately $0.2 million per year. In September 2017, Bicycle Therapeutics Inc. entered into a lease agreement for office and laboratory space in Lexington, Massachusetts, which commenced on January 1, 2018. In conjunction with the lease agreement, Bicycle Therapeutics Inc. paid a security deposit of $0.2 million as well as prepaid rent of $0.1 million for the first month of the third, fourth, and fifth year of the lease. The deposit is recorded in other assets in the consolidated balance sheets. In March 2022, Bicycle Therapeutics Inc. notified the landlord of its intent to exercise its option to extend the lease, originally set to expire on December 31, 2022, for a successive period through December 31, 2027, which successive period was not included in the original lease term. The Company accounted for the change in lease term as a modification of the existing lease and remeasured the ROU asset and lease liability by calculating the present value of lease payments, discounted at 7.0%, the Company’s incremental borrowing rate at the date of the modification of the lease, over the remaining lease term. In May 2022, the lease was extended. The payments for the extended lease are approximately $0.2 million remaining through December 31, 2022, $0.7 million in 2023, and increases annually pursuant to an escalation clause with the last year of the lease term having a per annum fixed rent obligation of $0.8 million. The components of the Company’s lease expense are as follows (in thousands): Year Ended December 31, 2022 2021 2020 Operating lease cost $ 3,790 $ 1,224 $ 896 Variable lease cost 1,643 612 662 Total lease cost $ 5,433 $ 1,836 $ 1,558 The weighted average remaining operating lease term was 4.2 years and 4.8 years as of December 31, 2022 and 2021, respectively, and the weighted average discount rate was 7.0% and 7.1% as of December 31, 2022 and 2021, respectively. The following table summarizes the maturities of the Company’s operating leases as of December 31, 2022 (in thousands): Year Ending December 31, 2023 3,972 2024 3,994 2025 4,016 2026 3,236 2027 821 Present value adjustment (2,029) Total lease liabilities 14,010 Less: current lease liabilities (3,125) Long term lease liabilities $ 10,885 The Company has entered into various agreements with contract research organizations to provide clinical trial services, contract manufacturing organizations to provide clinical trial materials and with vendors for preclinical research studies, synthetic chemistry and other services for operating purposes. These payments are not included in the table of operating lease payments above as the contracts are generally cancelable at any time upon less than 90 days’ prior written notice. The Company is not contractually able to terminate for convenience and avoid any and all future obligations to these vendors. In some cases, the Company is contractually obligated to make certain minimum payments to the vendors, based on the timing of the termination notification and the exact terms of the agreement. Legal proceedings From time to time, the Company or its subsidiaries may become involved in various legal proceedings and claims, either asserted or unasserted, which arise in the ordinary course of business. The Company is not currently subject to any material legal proceedings. In September 2016, the Company’s subsidiary, BicycleRD, filed a complaint in the District Court of the Hague against Pepscan Systems B.V. and its affiliates (“Pepscan”) to contest the right of Pepscan to terminate a non-exclusive patent license agreement entered into with Pepscan in 2009 (“PLA”). On November 20, 2020, the Company entered into a settlement and license agreement with Pepscan regarding Bicycle’s use of Pepscan’s CLIPS peptide technology. The companies agreed to settle all intellectual property disputes worldwide. Under the terms of the settlement, Bicycle has been granted a license to use CLIPS peptide technology in the development of its product candidates BT1718 and THR-149. Bicycle paid €3 million in November 2020, paid €1 million on the first anniversary of the date of settlement, and will make additional future milestone payments upon the achievement of development, regulatory and commercial milestones, with an aggregate total value of $92.4 million. The Company recorded $4.7 million of expense related to the settlement and license agreement with Pepscan during the year ended December 31, 2020. Founder Royalty arrangements At the time BicycleRD Limited was organized, BicycleRD Limited entered into a royalty agreement with its founders and initial investors (the “Founder Royalty Agreement”). Pursuant to the Founder Royalty Agreement, as amended, the Company will pay a royalty rate in the low single digit percentages on net product sales under the collaborations with Oxurion and AstraZeneca to its founders and initial investors, for a period of 10 years from the first commercial sale on a country by country basis. No royalties have been earned or paid Indemnification obligations In the ordinary course of business, the Company may provide indemnification of varying scope and terms to vendors, lessors, business partners and other parties with respect to certain matters including, but not limited to, losses arising out of breach of such agreements or from intellectual property infringement claims made by third parties. In addition, the Company has indemnification obligations towards members of its board of directors and officers that will require the Company, among other things, to indemnify them against certain liabilities that may arise by reason of their status or service as directors or officers. The maximum potential amount of future payments the Company could be required to make under these indemnification arrangements is, in many cases, unlimited. To date, the Company has not incurred any material costs as a result of such indemnification obligations. The Company is not aware of any claims under indemnification arrangements, and therefore it has not accrued any liabilities related to such obligations in its consolidated financial statements as of December 31, 2022 and 2021. |
Net loss per share
Net loss per share | 12 Months Ended |
Dec. 31, 2022 | |
Net loss per share | |
Net loss per share | 12. Net loss per share Basic and diluted net loss per share was calculated as follows (in thousands, except share and per share amounts): Year Ended December 31, 2022 2021 2020 Numerator: Net loss $ (112,717) $ (66,819) $ (51,010) Denominator: Weighted average ordinary shares outstanding, basic and diluted 29,660,659 25,061,734 19,145,938 Net loss per share, basic and diluted $ (3.80) $ (2.67) $ (2.66) The Company’s potentially dilutive securities, which include options to purchase ordinary shares and restricted share units for ordinary shares, have been excluded from the computation of diluted net loss per share as the effect would be to reduce the net loss per share. Therefore, the weighted average number of ordinary shares outstanding used to calculate both basic and diluted net loss per share is the same. The Company excluded the following potentially dilutive ordinary shares, presented based on amounts outstanding at each period end, from the computation of diluted net loss per share for the periods indicated because including them would have had an anti-dilutive effect: December 31, 2022 2021 2020 Restricted ordinary shares 187,725 — — Options to purchase ordinary shares 5,898,888 4,603,486 3,736,663 6,086,613 4,603,486 3,736,663 |
Benefit plans
Benefit plans | 12 Months Ended |
Dec. 31, 2022 | |
Benefit plans | |
Benefit plans | 13. Benefit plans The Company established a defined-contribution savings plan under Section 401(k) of the Code (the “401(k) Plan”). The 401(k) Plan covers all U.S. employees and allows participants to defer a portion of their annual compensation on a pre-tax basis. Matching contributions to the 401(k) Plan may be made at the discretion of the Company’s board of directors. During the years ended December 31, 2022, 2021 and 2020, the Company made contributions totaling $0.5 million, $0.3 million and $0.2 million, respectively, to the 401(k) Plan. The Company provides a pension contribution plan for its employees in the United Kingdom, pursuant to which the Company may make contributions each year (“U.K Plan”). During the years ended December 31, 2022, 2021 and 2020, the Company made contributions totaling $1.4 million, $0.7 million and $0.5 million, respectively, to the U.K. Plan. |
Related party transactions
Related party transactions | 12 Months Ended |
Dec. 31, 2022 | |
Related party transactions | |
Related party transactions | 14. Related party transactions The Company has entered into Founder Royalty Agreements, as amended, with its founders and initial investors (Note 11). No royalties have been earned or paid The Chairman of the Company’s board of directors is associated with Stone Sunny Isles Inc. and Stone Atlanta Estates LLC, the successor-in-interest to Stone Sunny Isles Inc., which provided consultancy services to the Company totaling $0.2 million, $0.2 million and $0.2 million during each of the years ended December 31, 2022, 2021 and 2020, respectively. |
Geographic information
Geographic information | 12 Months Ended |
Dec. 31, 2022 | |
Geographic information | |
Geographic information | 15. Geographic information The Company operates in two geographic regions: the United States and the United Kingdom. Information about the Company’s long-lived assets, including operating lease ROU assets, held in different geographic regions is presented in the table below (in thousands): December 31, 2022 2021 United States $ 4,466 $ 1,095 United Kingdom 28,302 16,694 $ 32,768 $ 17,789 The Company’s collaboration revenues are attributed to the operations of the Company in the United Kingdom. |
Subsequent events
Subsequent events | 12 Months Ended |
Dec. 31, 2022 | |
Subsequent events. | |
Subsequent events | 16. Subsequent events On January 26, 2023, the Company entered into a lease agreement for office and laboratory space in Cambridge, Massachusetts. The lease has a contractual period of approximately three years, which, subject to certain conditions, may be extended for an additional two years at the Company’s option. The annual rent is approximately $2.1 million in the first year of the lease and increases annually with the last year of the lease having annual rent of approximately $2.3 million. Annual rent is payable monthly in advance following a two-month rent-free period. In connection with the lease agreement, the Company is required to deliver to the landlord a security deposit in the form of a letter of credit of approximately $0.3 million. |
Summary of significant accoun_2
Summary of significant accounting policies (Policies) | 12 Months Ended |
Dec. 31, 2022 | |
Summary of significant accounting policies | |
Use of estimates | Use of estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of expenses during the reporting periods. Significant estimates and assumptions reflected in these consolidated financial statements include, but are not limited to, the accrual for research and development expenses, revenue recognition, share-based compensation expense, valuation of right-of-use assets and liabilities and income taxes, including the valuation allowance for deferred tax assets. The Company bases its estimates on historical experience, known trends and other market-specific or other relevant factors that it believes to be reasonable under the circumstances. Estimates are periodically reviewed in light of reasonable changes in circumstances, facts and experience. Changes in estimates are recorded in the period in which they become known. Actual results could differ from those estimates or assumptions. |
Significant risks and uncertainties | Significant risks and uncertainties The Company currently operates in a period of economic uncertainty which has been significantly impacted by the ongoing COVID-19 pandemic, domestic and global monetary and fiscal policy, geopolitical instability, the ongoing war in Ukraine, rising inflation and interest rates, and fluctuations in monetary exchange rates. While the Company has experienced limited financial impacts at this time, the Company continues to monitor these factors and events and the potential effects each may have on the Company’s business, financial condition, results of operations and growth prospects. |
Foreign currency and currency translation | Foreign currency and currency translation The reporting currency of the Company is the U.S. Dollar (“USD”). The functional currency of Bicycle Therapeutics plc’s wholly owned non-U.S. subsidiaries, BicycleTx Limited and BicycleRD Limited, is the British Pound Sterling, and the functional currency of its U.S. subsidiary, Bicycle Therapeutics Inc., is the USD. The functional currency of the Company’s subsidiaries is the same as the local currency. Monetary assets and liabilities denominated in foreign currencies are remeasured into the functional currency at rates of exchange prevailing at the balance sheet dates. Non-monetary assets and liabilities denominated in foreign currencies are remeasured into the functional currency at the exchange rates prevailing at the date of the transaction. Exchange gains or losses arising from foreign currency transactions are included in the determination of net loss for the respective periods. Adjustments that arise from exchange rate changes on transactions denominated in a currency other than the local currency are included in general and administrative expense in the consolidated statements of operations and comprehensive loss as incurred. The Company recorded a foreign exchange loss of $0.6 million for the year ended December 31, 2022, and foreign exchange gains of $0.4 million and $0.6 million for the years ended December 31, 2021 and 2020, respectively. The Company translates the assets and liabilities of its non-U.S. subsidiaries into USD at the exchange rate in effect on the balance sheet date. Revenues and expenses are translated at the average exchange rate in effect during the period. Unrealized translation gains and losses are recorded as a cumulative translation adjustment, which is included in the consolidated statements of shareholders’ equity as a component of accumulated other comprehensive loss. |
Concentrations of credit risk and of significant suppliers | Concentrations of credit risk and of significant suppliers Financial instruments that potentially expose the Company to concentrations of credit risk consist primarily of cash and cash equivalents and accounts receivable. The Company deposits its cash in financial institutions in amounts that may exceed federally insured limits and has not experienced any losses on such accounts. The Company does not believe it is exposed to any unusual credit risk beyond the normal credit risk associated with commercial banking relationships. As of December 31, 2022 and 2021, accounts receivable consists of amounts due under the Company’s collaboration agreements with Ionis Pharmaceuticals, Inc. (“Ionis”) and Genentech, Inc. (“Genentech”) for which the Company does not obtain collateral. For the years ended December 31, 2022, 2021, and 2020, the Company’s revenue has primarily been generated from collaboration agreements with Ionis, Genentech, AstraZeneca AB (“AstraZeneca”), and Oxurion (Note 9). The Company relies, and expects to continue to rely, on a small number of vendors to manufacture supplies and raw materials for its development programs. These programs could be adversely affected by a significant interruption in these manufacturing services or the availability of raw materials. |
Cash and cash equivalents | Cash and cash equivalents The Company considers all highly liquid investments that are readily convertible to known amounts of cash with original maturities of three months or less at date of purchase to be cash equivalents. The Company had cash equivalents of $276.1 million and $100.0 million at December 31, 2022 and 2021, respectively. |
Accounts receivable | Accounts receivable The Company makes judgments as to its ability to collect outstanding receivables and estimates credit losses at the reporting date resulting from the inability of its customers to make required payments. Provisions are made based upon a specific review of all significant outstanding invoices and the overall quality and age of those invoices. To date, the Company has not had any write-offs of bad debt, and the Company did not have an allowance for credit losses as of December 31, 2022 and 2021. |
Deferred offering costs | Deferred offering costs The Company capitalizes certain legal, professional accounting and other third-party fees that are directly associated with in-process equity financings as deferred offering costs until such financings are consummated. After consummation of the equity financing, these costs are recorded in shareholders’ equity as a reduction of proceeds generated as a result of the offering. Should an in-process equity financing be abandoned, the deferred offering costs will be expensed immediately as a charge to operating expenses in the consolidated statements of operations and comprehensive loss. |
Property and equipment | Property and equipment Property and equipment are stated at cost, less accumulated depreciation and amortization. Depreciation and amortization expense is recognized using the straight-line method over the estimated useful lives of the respective assets as follows: Estimated Useful Life Laboratory equipment 3 Leasehold improvements Lesser of lease term or useful life Computer equipment and software 3 years Furniture and office equipment 3 to 5 years Costs for property and equipment not yet placed into service are capitalized as construction-in-progress and depreciated in accordance with the above guidelines once placed into service. Upon retirement or sale, the cost of assets disposed of and the related accumulated depreciation are removed from the accounts and any resulting gain or loss is included in loss from operations. To date, there have been no significant asset retirements. Expenditures for repairs and maintenance are charged to expense as incurred. |
Impairment of longlived assets | Impairment of long-lived assets Long-lived assets to be held and used are tested for recoverability whenever events or changes in business circumstances indicate that the carrying amount of the assets may not be fully recoverable. Factors that the Company considers in deciding when to perform an impairment review include significant underperformance of the business in relation to expectations, significant negative industry or economic trends and significant changes or planned changes in the use of the assets. If an impairment review is performed to evaluate a long-lived asset group for recoverability, the Company compares forecasts of undiscounted cash flows expected to result from the use and eventual disposition of the long-lived asset group to its carrying value. An impairment loss would be recognized when estimated undiscounted future cash flows expected to result from the use of an asset group are less than its carrying amount. The impairment loss would be based on the excess of the carrying value of the impaired asset group over its fair value, determined based on discounted cash flows. To date, the Company has not recorded any material impairment losses on long-lived assets. |
Fair value measurements | Fair value measurements Certain of the Company’s assets and liabilities are carried at fair value under GAAP. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. Financial assets and liabilities carried at fair value are to be classified and disclosed in one of the following three levels of the fair value hierarchy, of which the first two are considered observable and the last is considered unobservable: ● Level 1 — Quoted prices in active markets for identical assets or liabilities. ● Level 2 — Observable inputs (other than Level 1 quoted prices), such as quoted prices in active markets for similar assets or liabilities, quoted prices in markets that are not active for identical or similar assets or liabilities, or other inputs that are observable or can be corroborated by observable market data. ● Level 3 — Unobservable inputs that are supported by little or no market activity that are significant to determining the fair value of the assets or liabilities, including pricing models, discounted cash flow methodologies and similar techniques. The carrying values of accounts receivable, research and development incentives receivable, prepaid expenses and other current assets, accounts payable and accrued expenses and other current liabilities approximate their fair values due to the short-term nature of these assets and liabilities. As of December 31, 2022 and 2021, the carrying value of the long-term debt approximates its fair value, which was determined using unobservable Level 3 inputs, including quoted interest rates from a lender for borrowings with similar terms. As of December 31, 2022 and 2021, there were no assets or liabilities measured at fair value on a recurring basis. |
Debt issuance costs | Debt issuance costs Debt issuance costs consist of certain third-party legal expenses and payments made to secure commitments under certain debt financing arrangements. These amounts are recognized as interest expense over the period of the financing arrangement. |
Segment and geographic information | Segment and geographic information Operating segments are defined as components of a business for which separate discrete financial information is available for evaluation by the chief operating decision maker in deciding how to allocate resources and assess performance. The Company and its chief operating decision maker, the Company’s Chief Executive Officer, view the Company’s operations and manages its business as a single operating segment, which is developing a unique class of chemically synthesized medicines based on its proprietary platform. The Company operates in two geographic regions: the United Kingdom and the United States. |
Leases | Leases Leases are accounted for in accordance with Accounting Standards Codification (“ASC”) Topic 842, Leases ROU assets represent the Company’s right to use and control an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. ROU assets and liabilities are recognized on the lease commencement date based on the present value of lease payments over the lease term. The ROU asset also includes lease payments made before the lease commencement date and excludes any lease incentives. The Company identifies and assesses the following significant assumptions in recognizing the ROUA assets and corresponding lease liabilities: ● Expected lease term – The expected lease term includes both contractual lease periods and, when applicable, periods covered by an option to extend the lease when it is reasonably certain that the Company will exercise the extension option, or cancelable option periods when it is reasonably certain that the Company would not exercise such cancelation option. ● Incremental borrowing rate – As the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available on the commencement date in determining the present value of lease payments. As the Company does not have any external borrowings for comparable terms of its leases, the Company estimates the incremental borrowing rate by comparing interest rates available in the market for similar borrowings and third-party quotations. ● Lease and non-lease components – The components of a lease shall be split into three categories, if applicable: lease components (e.g., land, building, etc.), non-lease components (e.g., common area maintenance, maintenance, consumables, etc.) and non-components (e.g., property taxes, insurance, etc.). The fixed and in-substance fixed contract consideration (including any related to non-components) must then be allocated based on fair values to the lease components and non-lease components. The Company’s facilities operating leases may have both lease components and non-lease components for which the Company has elected to apply the practical expedient to account for each lease component and related non-lease component as one single component. The lease component results in a ROU asset being recorded on the balance sheet. Lease expense for lease payments is considered operating lease cost and is recognized on a straight-line basis over the lease term. Variable payments for other operating costs, which may be billed based on both usage and as a percentage of the Company’s share of total square footage, are considered variable lease cost and are recognized in the period in which the costs are incurred. Operating and variable lease cost are recorded as a component of research and development expenses and general and administrative expenses in the consolidated statements of operations and comprehensive loss. |
Revenue recognition | Revenue recognition The Company’s revenues are generated primarily through collaborative arrangements and license agreements with pharmaceutical companies. The terms of these arrangements may include (i) performing research and development services using the Company’s bicyclic peptide screening platform with the goal of identifying compounds for further development and commercialization, (ii) the transfer of intellectual property rights (licenses), or (iii) options to obtain additional research and development services or licenses for additional targets, or to optimize product candidates, upon the payment of option fees. The terms of these arrangements typically include payment to the Company of one or more of the following: non-refundable, upfront license fees; payments for research and development services; fees upon the exercise of options to obtain additional services or licenses; payments based upon the achievement of defined collaboration objectives; future regulatory and sales-based milestone payments; and royalties on net sales of future products. The Company recognizes revenue in accordance with ASC Topic 606, Revenue from Contracts with Customers Under ASC 606, an entity recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services. To determine revenue recognition for arrangements that the Company determines are within the scope of ASC 606, it performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when, or as, the Company satisfies the performance obligations. The Company only applies the five-step model to contracts when it is probable that the entity will collect substantially all of the consideration it is entitled to in exchange for the goods or services it transfers to the customer. As part of the accounting for these arrangements, the Company must make significant judgments, including identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each performance obligation. Once a contract is determined to be within the scope of ASC 606, the Company assesses the goods or services promised within the contract and determines those that are performance obligations. Arrangements that include rights to additional goods or services that are exercisable at a customer’s discretion are generally considered options. The Company assesses if these options provide a material right to the customer and if so, they are considered performance obligations. Performance obligations are promised goods or services in a contract to transfer a distinct good or service to the customer. The promised goods or services in the Company’s contracts with customers primarily consist of license rights to the Company’s intellectual property, research and development services, options to acquire additional research and development services, and options to obtain additional licenses, such as a commercialization license for a potential product candidate. Promised goods or services are considered distinct when: (i) the customer can benefit from the good or service on its own or together with other readily available resources, and (ii) the promised good or service is separately identifiable from other promises in the contract. In assessing whether promised goods or services are distinct, the Company considers factors such as the stage of development of the underlying intellectual property, the capabilities of the collaboration partner to develop the intellectual property on their own and whether the required expertise is readily available. In addition, the Company considers whether the customer can benefit from a promise for its intended purpose without the receipt of the remaining promises, whether the value of the promise is dependent on the unsatisfied promises, whether there are other vendors that could provide the remaining promises, and whether it is separately identifiable from the remaining promises. The Company estimates the transaction price based on the amount of consideration the Company expects to receive for transferring the promised goods or services in the contract. The consideration may include both fixed consideration and variable consideration. At the inception of each arrangement that includes variable consideration, the Company evaluates the amount of the potential payments and the likelihood that the payments will be received. The Company utilizes either the most likely amount method or expected value method to estimate variable consideration to include in the transaction price based on which method better predicts the amount of consideration expected to be received. The amount included in the transaction price is constrained to the amount for which it is probable that a significant reversal of cumulative revenue recognized will not occur. At the end of each subsequent reporting period, the Company re-evaluates the estimated variable consideration included in the transaction price and any related constraint, and if necessary, adjusts its estimate of the overall transaction price. Any such adjustments are recorded on a cumulative catch-up basis in the period of adjustment. The initial transaction price of a contract does not include amounts associated with customer option payments. After the transaction price is determined, it is allocated to the identified performance obligations based on the estimated standalone selling price. The Company must develop assumptions that require judgment to determine the standalone selling price for each performance obligation identified in the contract. The Company utilizes key assumptions to determine the standalone selling price, which may include other comparable transactions, pricing considered in negotiating the transaction, probabilities of technical and regulatory success and the estimated costs. Certain variable consideration is allocated specifically to one or more performance obligations in a contract when the terms of the variable consideration relate to the satisfaction of the performance obligation and the resulting amounts allocated to each performance obligation are consistent with the amounts the Company would expect to receive for each performance obligation. The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) each performance obligation is satisfied at a point in time or over time, and if over time based on the use of an input method. Licenses of intellectual property: If a license to the Company’s intellectual property is determined to be distinct from the other promises or performance obligations identified in the contract, the Company recognizes revenue from portion of the transaction price allocated to the license when the license is transferred to the customer and the customer is able to use and benefit from the license. For licenses that are combined with other promises, such as research and development services and a research license, the Company utilizes judgment to assess the nature of the combined performance obligation to determine whether the combined performance obligation is satisfied over time or at a point in time and, if over time, the appropriate method of measuring progress for purposes of recognizing revenue. The Company evaluates the measure of progress each reporting period and, if necessary, adjusts the measure of performance and related revenue recognition. The measure of progress, and thereby periods over which revenue should be recognized, are subject to estimates by management and may change over the course of the arrangement. Research and development services: The promises under the Company’s collaboration agreements may include research and development services to be performed by the Company on behalf of the partner. Payments or reimbursements resulting from the Company’s research and development efforts are recognized as the services are performed and presented on a gross basis because the Company is the principal for such efforts. Customer options: a discount. Optional future services that reflect their standalone selling prices do not provide the customer with a material right and, therefore, are not considered performance obligations and are accounted for as separate contracts. If optional future services include a material right, they are accounted for as performance obligations. The Company determines an estimated standalone selling price of any material rights for the purpose of allocating the transaction price. The Company considers factors such as the identified discount and the probability that the customer will exercise the option. Amounts allocated to a material right are not recognized as revenue until, at the earliest, the option is exercised or expires. Milestone payments: The Company’s collaboration agreements may include development and regulatory milestones. The Company evaluates whether the milestones are considered probable of being reached and estimates the amount to be included in the transaction price using the most likely amount method. The Company evaluates factors such as the scientific, clinical, regulatory, commercial, and other risks that must be overcome to achieve the particular milestone in making this assessment. If it is probable that a significant revenue reversal would not occur, the associated milestone value is included in the transaction price. Milestone payments that are not within the Company’s control or the licensee’s control, such as regulatory approvals, are not considered probable of being achieved until those approvals are received. At the end of each reporting period, the Company re-evaluates the probability of achievement of such milestones and any related constraint, and if necessary, adjusts the estimate of the overall transaction price. Any such adjustments are recorded on a cumulative catch-up basis, which would affect collaboration revenue and net loss in the period of adjustment. Milestone payments that may only be achieved after the exercise of a customer option are excluded from the initial determination of the transaction price. Royalties: For sales-based royalties, including milestone payments based on the level of sales, the Company determines whether the sole or predominant item to which the royalties relate is a license. When the license is the sole or predominant item to which the sales-based royalty relates, the Company recognizes revenue at the later of: (i) when the related sales occur, or (ii) when the performance obligation to which some or all of the royalty has been allocated has been satisfied (or partially satisfied). To date, the Company has not recognized any sales-based royalty revenue resulting from the Company’s collaboration agreements. The Company receives payments from customers based on billing schedules established in each contract. Up-front payments and fees are recorded as deferred revenue upon receipt or when due until the Company performs its obligations under these arrangements. Amounts are recorded as accounts receivable when the Company’s right to consideration is unconditional, such as when the Company has a contractual right to payment per the terms of the contract. For a complete discussion of accounting for collaboration revenues, see Note 9, “Significant agreements.” |
Government grants | Government grants From time to time, the Company may enter into arrangements with governmental entities for the purposes of obtaining funding for research and development activities. The Company is reimbursed for costs incurred that are associated with specified research and development activities included in the grant application approved by the government authority. The Company recognizes government grant funding in the consolidated statements of operations and comprehensive loss as the related expenses being funded are incurred. The Company classifies government grants received under these arrangements as a reduction to the related research and development expense incurred, and accrued but unpaid grant income is included in other current assets. The Company analyzes each arrangement on a case-by-case basis, and income is recognized when the Company concludes that it has reasonable assurance that it will comply with the conditions attached to the grant and the expenses have been incurred. There are no significant performance criteria other than to maintain satisfactory progress on the specified project, and there are no significant acceptance or recapture provisions associated with the government grants for the years ended December 31, 2022, 2021 and 2020, respectively. For the years ended December 31, 2022, 2021 and 2020, the Company recognized $1.5 million, $3.0 million, and $0.7 million, respectively, as a reduction of research and development expense related to government grant arrangements. As of December 31, 2022, the Company has approximately $1.1 million of government grant funding remaining for future cost reimbursement through February of 2024. |
Research and development costs | Research and development costs Research and development costs are expensed as incurred. Research and development costs consist of costs incurred in performing research and development activities, including salaries, share-based compensation and benefits, travel, facilities costs, depreciation, materials and laboratory supplies, and external costs of outside vendors engaged to conduct preclinical development and clinical development activities, as well as to manufacture clinical trial materials. Facilities costs primarily include the allocation of rent and utilities. Non-refundable prepayments for goods or services that will be used or rendered for future research and development activities are deferred and capitalized until the related goods are delivered or the related services are performed, or until it is no longer expected that the goods will be delivered, or the services rendered. |
Research and manufacturing contract costs and accruals | Research and manufacturing contract costs and accruals The Company has entered into various research and development and manufacturing contracts, including contracts with respect to preclinical studies and clinical trials, with companies both inside and outside of the United States. These agreements are generally cancelable with 90 days or less notice, and related costs are recorded as research and development expenses as incurred. The Company records accruals for estimated ongoing costs. When evaluating the adequacy of the accrued liabilities, the Company analyzes progress of the research and development and manufacturing activities, including the phase or completion of events, invoices received and contracted costs. Significant judgments and estimates are made in determining the accrued balances at the end of any reporting period. Actual results could differ from the Company’s estimates. The Company’s historical accrual estimates have not been materially different from the actual costs. |
Research and development incentives and receivable | Research and development incentives and receivable The Company, through its subsidiaries in the United Kingdom, receives reimbursements of certain research and development expenditures as part of a United Kingdom government’s research and development tax reliefs program. Under the program, the Company is able to surrender trading losses that arise from qualifying research and development expenses incurred by the Company’s subsidiaries in the United Kingdom for a tax credit of up to 14.5% of the surrenderable losses, subject to certain limitations. Management has assessed the Company’s research and development activities and expenditures to determine which activities and expenditures are likely to be eligible under the research and development incentive program described above. At each period end, management estimates the reimbursement available to the Company based on available information at the time. The Company recognizes income from the research and development incentives when the relevant expenditure has been incurred, the associated conditions have been satisfied and there is reasonable assurance that the reimbursement will be received. The Company records these research and development incentives as a reduction to research and development expenses in the statements of operations and comprehensive loss, as the research and development tax credits are not dependent on us generating future taxable income, the Company’s ongoing tax status, or tax position. The research and development incentives receivable represent an amount due in connection with the above program. The Company recorded a reduction to research and development expense of $19.3 million, $10.8 million and $8.4 million during the years ended December 31, 2022, 2021 and 2020, respectively. |
Patent costs | Patent costs All patent-related costs incurred in connection with preparing, filing and prosecuting patent applications are expensed as incurred due to the uncertainty about the recovery of the expenditure. Amounts incurred are classified as general and administrative expenses in the consolidated statements of operations and comprehensive loss. |
Share-based compensation | Share-based compensation The Company measures all equity awards granted to employees and directors based on the fair value on the date of grant. Compensation expense of those awards is recognized over the requisite service period, which is generally the vesting period of the respective award. The Company records the expense for awards with only service-based vesting conditions using the straight-line method. The Company accounts for forfeitures as they occur. For share-based awards granted to non-employee consultants, the measurement date is the date of grant. The compensation expense is then recognized over the requisite service period, which is the vesting period of the respective award, without subsequent changes in the fair value of the award. The fair value of each restricted share award is based on the fair value of the Company’s shares, less any applicable purchase price. The fair value of each share option is estimated using the Black-Scholes option-pricing model, which requires inputs based on certain subjective assumptions, including the fair value of shares, the expected share price volatility, the expected term of the award, the risk-free interest rate and expected dividends. Previously, due to a lack of company-specific historical volatility data, the Company’s expected volatility was calculated based on reported volatility data for a representative group of publicly traded companies for which historical information was available. The historical volatility was calculated based on a period of time commensurate with the assumption used for the expected term. During 2022, the Company began to estimate its volatility by using a blend of its stock price history for the length of time it has market data for its stock and the historical volatility of similar public companies for the expected term of each grant. The Company will continue to apply this process until a sufficient amount of historical information regarding the volatility of its own stock price becomes available. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant commensurate with the expected term assumption. The Company uses the simplified method, under which the expected term is presumed to be the midpoint between the vesting date and the end of the contractual term. The Company utilizes this method due to the lack of historical exercise data and the plain nature of its share-based awards. The Company uses the remaining contractual term for the expected life of non-employee awards. The expected dividend yield is assumed to be zero as the Company has never paid dividends and has no current plans to pay any dividends on ordinary shares. The Company classifies share-based compensation expense in its consolidated statements of operations and comprehensive loss in the same manner in which the award recipient’s payroll or service costs are classified. |
Comprehensive loss | Comprehensive loss Comprehensive loss includes net loss as well as other changes in shareholders’ equity that result from transactions and economic events other than those with shareholders. The Company records unrealized gains and losses related to foreign currency translation as a component of other comprehensive loss in the consolidated statements of operations and comprehensive loss. |
Contingencies | Contingencies Liabilities for loss contingencies arising from claims, assessments, litigation, fines, penalties and other sources are recorded when it is probable that a liability has been incurred and the amount can be reasonably estimated. At each reporting date, the Company evaluates whether or not a potential loss amount or a potential loss range is probable and reasonably estimable under the provisions of ASC Topic 450, Contingencies |
Income taxes | Income taxes The Company accounts for income taxes using the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in the consolidated financial statements or in the Company’s tax returns. Deferred tax assets and liabilities are determined on the basis of the differences between the consolidated financial statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Changes in deferred tax assets and liabilities are recorded in the provision for income taxes. The Company assesses the likelihood that its deferred tax assets will be recovered from future taxable income and, to the extent it believes, based upon the weight of available evidence, that it is more likely than not that all or a portion of the deferred tax assets will not be realized, a valuation allowance is established through a charge to income tax expense. Potential for recovery of deferred tax assets is evaluated by estimating the future taxable profits expected and considering prudent and feasible tax planning strategies. The Company accounts for uncertainty in income taxes recognized in the consolidated financial statements by applying a two-step process to determine the amount of tax benefit to be recognized. First, the tax position must be evaluated to determine the likelihood that it will be sustained upon external examination by the taxing authorities. If the tax position is deemed more-likely-than-not to be sustained, the tax position is then assessed to determine the amount of benefit to recognize in the consolidated financial statements. The amount of the benefit that may be recognized is the largest amount that will more likely than not be realized upon ultimate settlement. The provision for income taxes includes the effects of any resulting tax reserves, or unrecognized tax benefits, that are considered appropriate as well as the related net interest and penalties. |
Net loss per share | Net loss per share Basic net loss per share is computed by dividing the net loss by the weighted average number of ordinary shares outstanding for the period. Diluted net loss is computed by adjusting net loss to reallocate undistributed earnings based on the potential impact of dilutive securities. Diluted net loss per share is computed by dividing the diluted net loss by the weighted average number of ordinary shares outstanding for the period, including potential dilutive ordinary shares assuming the dilutive effect of ordinary share equivalents. In periods in which the Company reported a net loss, diluted net loss per share is the same as basic net loss per share, since dilutive ordinary shares are not assumed to have been issued if their effect is anti-dilutive. |
Recently adopted accounting pronouncements | Recently adopted accounting pronouncements In June 2016, the FASB issued Accounting Standards Update (“ASU”) No. 2016-13, Measurement of Credit Losses on Financial Instruments Financial Instruments — Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842): Effective Dates In November 2021, the FASB issued ASU No. 2021-10, Government Assistance (Topic 832): Disclosures by Business Entities about Government Assistance |
Summary of significant accoun_3
Summary of significant accounting policies (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Summary of significant accounting policies | |
Schedule of estimated useful lives of property and equipment | Estimated Useful Life Laboratory equipment 3 Leasehold improvements Lesser of lease term or useful life Computer equipment and software 3 years Furniture and office equipment 3 to 5 years |
Property and equipment, net (Ta
Property and equipment, net (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Property and equipment, net | |
Schedule of property and equipment, net | Property and equipment, net consisted of the following (in thousands): December 31, 2022 2021 Laboratory equipment $ 14,872 $ 6,746 Leasehold improvements 10,736 809 Computer equipment and software 441 143 Furniture and office equipment 924 225 26,973 7,923 Less: Accumulated depreciation and amortization (7,863) (4,800) $ 19,110 $ 3,123 |
Accrued expenses and other cu_2
Accrued expenses and other current liabilities (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
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): December 31, 2022 2021 Accrued employee compensation and benefits $ 9,928 $ 6,429 Accrued external research and development expenses 10,859 3,980 Accrued professional fees 1,068 882 Current portion of operating lease liabilities 3,125 2,383 Other 1,472 570 $ 26,452 $ 14,244 |
Long-term debt (Tables)
Long-term debt (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Long-term debt | |
Schedule of long term debt instruments | Long-term debt consisted of the following (in thousands): December 31, December 31, 2022 2021 Term loan payable $ 30,000 $ 30,000 End of term charge 682 376 Unamortized debt issuance costs (367) (503) Carrying value of term loan $ 30,315 $ 29,873 |
Schedule of maturities of long term debt | Future principal payments, including the End of Term Charge, are as follows (in thousands): Year Ending December 31, 2023 $ — 2024 — 2025 31,500 Total $ 31,500 |
Share-based compensation (Table
Share-based compensation (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Share-based compensation | |
Schedule of share based compensation expense | The Company recorded share-based compensation expense in the following expense categories of its consolidated statements of operations and comprehensive loss (in thousands): Year Ended December 31, 2022 2021 2020 Research and development expenses $ 10,394 $ 4,974 $ 2,603 General and administrative expenses 16,385 7,109 3,911 $ 26,779 $ 12,083 $ 6,514 |
Schedule of share option activity | Number of Weighted Shares Weighted Average Aggregate Underlying Average Contractual Intrinsic Share Options Exercise Price Term Value (in years) (in thousands) Outstanding as of December 31, 2021 4,603,486 $ 14.97 8.13 $ 207,009 Granted 1,548,167 44.83 — — Exercised (78,074) 12.67 — — Forfeited (174,691) 27.92 — — Outstanding as of December 31, 2022 5,898,888 $ 22.45 7.64 $ 71,002 Vested and expected to vest as of December 31, 2022 5,898,888 $ 22.45 7.64 $ 71,002 Options exercisable as of December 31, 2022 3,352,315 $ 13.93 6.87 $ 55,749 |
Schedule of assumptions used to determine the fair value of share options granted | Year Ended December 31, 2022 2021 2020 Risk-free interest rate 2.2 % 0.6 % 1.3 % Expected volatility 82.5 % 79.8 % 74.8 % Expected dividend yield — — — Expected term (in years) 6.02 5.98 5.98 |
Schedule of restricted ordinary share award activity | Number of Shares Weighted-Average Underlying RSUs Grant Date Fair Value Unvested at December 31, 2021 — $ — Granted 222,725 60.86 Vested (35,000) 60.86 Unvested at December 31, 2022 187,725 $ 60.86 |
Significant agreements (Tables)
Significant agreements (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Significant agreements. | |
Summary of revenue recognized from collaboration arrangements | The following table summarizes the revenue recognized in the Company’s consolidated statements of operations and comprehensive loss from these arrangements (in thousands): Year Ended December 31, 2022 2021 2020 Collaboration revenues Ionis $ 9,347 $ 4,242 $ — Genentech 3,565 5,660 4,896 Dementia Discovery Fund 386 391 436 AstraZeneca 1,165 1,404 2,696 Oxurion — — 2,362 Total collaboration revenues $ 14,463 $ 11,697 $ 10,390 |
Summary of changes in the balances of the Company's contract assets and liabilities | The following table presents changes in the balances of the Company’s contract liabilities (in thousands): Beginning Balance Impact of Ending Balance January 1, Exchange December 31, 2022 Additions Deductions Rates 2022 Contract liabilities: Deferred revenue Ionis collaboration deferred revenue $ 34,115 $ 99 $ (9,347) $ (3,378) $ 21,489 Genentech collaboration deferred revenue 34,436 12,000 (3,565) (3,563) 39,308 DDF collaboration deferred revenue 428 — (386) (42) — AstraZeneca collaboration deferred revenue 2,361 — (1,165) (120) 1,076 Total deferred revenue $ 71,340 $ 12,099 $ (14,463) $ (7,103) $ 61,873 Beginning Balance Impact of Ending Balance January 1, Exchange December 31, 2021 Additions Deductions Rates 2021 Contract liabilities: Deferred revenue Ionis collaboration deferred revenue $ 3,000 $ 36,002 $ (4,242) $ (645) $ 34,115 Genentech collaboration deferred revenue 27,579 13,000 (5,660) (483) 34,436 DDF collaboration deferred revenue 821 — (391) (2) 428 AstraZeneca collaboration deferred revenue 3,756 54 (1,404) (45) 2,361 Total deferred revenue $ 35,156 $ 49,056 $ (11,697) $ (1,175) $ 71,340 |
Summary of recognition of revenues as a result of changes in contract asset and contract liability balances | During the years ended December 31, 2022, 2021 and 2020, the Company recognized the following revenues as a result of changes in the contract asset and the contract liability balances in the respective periods (in thousands): Year Ended December 31, 2022 2021 2020 Revenue recognized in the period from: Revenue recognized based on proportional performance $ 12,358 $ 9,652 $ 6,326 Revenue recognized based on expiration of material rights 1,433 1,876 1,702 Revenue recognized based on changes in transaction price 672 169 — Total $ 14,463 $ 11,697 $ 8,028 |
Ionis | |
Significant agreements. | |
Summary of allocation of transaction price to separate performance obligations | Based on the relative standalone selling price, the allocation of the transaction price to the separate performance obligations is as follows (in thousands): Allocation of Performance Obligations Transaction Price Combined licenses and research and discovery performance obligation $ 34,100 Four material rights associated with credits for IND Acceptance fees 3,900 $ 38,000 |
Genentech | |
Significant agreements. | |
Summary of allocation of transaction price to separate performance obligations | Based on the relative standalone selling price, the allocation of the transaction price to the separate performance obligations is as follows (in thousands): Allocation of Performance Obligations Transaction Price Genentech Collaboration Program #1 Performance Obligation $ 4,019 Genentech Collaboration Program #2 Performance Obligation 8,037 Specified Targeting Arm Material Right Arm for Genentech Collaboration Program #1 352 Two material rights associated with the LSR Go Option for Collaboration Programs #1 and #2 12,400 Material rights associated with limited substitution rights 1,187 Two material rights for Expansion Options 7,005 $ 33,000 |
AstraZeneca | |
Significant agreements. | |
Summary of allocation of transaction price to separate performance obligations | Based on the relative standalone selling price, the allocation of the transaction price to the separate performance obligations was as follows (in thousands): Allocation of Performance Obligations Transaction Price Target Three Research License and Related Services $ 650 Target 3 Material Right 1,504 Target 4 Material Right 1,204 Target 5 Material Right 1,165 Target 6 Material Right 1,127 $ 5,650 |
Income taxes (Tables)
Income taxes (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Income taxes | |
Schedule of components of net loss before tax provision from income taxes | The components of net loss before income tax provision are as follows (in thousands): Year Ended December 31, 2022 2021 2020 United Kingdom $ (116,275) $ (69,546) $ (52,521) United States 2,034 1,064 787 Total $ (114,241) $ (68,482) $ (51,734) |
Schedule of components of the benefit for income taxes | The components of the benefit for income taxes are as follows (in thousands): Year Ended December 31, 2022 2021 2020 Current income tax provision (benefit) Federal $ 2,048 $ (2) $ (24) State 1,404 7 (27) Total current income tax provision (benefit) 3,452 5 (51) Deferred income tax (benefit) provision Federal (4,111) (1,236) (435) State (865) (432) (238) Total deferred income tax (benefit) (4,976) (1,668) (673) Total benefit from income taxes $ (1,524) $ (1,663) $ (724) |
Schedule of reconciliation of the provision (benefit) for income taxes | Year Ended December 31, 2022 2021 2020 Benefit for income taxes at statutory rate 19 % 19 % 19 % (Decreases) increases resulting from: Federal tax credits 0.3 % 0.6 % 0.9 % Change in valuation allowance (16.8) % (27.0) % (15.4) % Net losses surrendered for research credit (6.5) % (5.9) % (6.2) % Impact of statutory rate change 11.3 % 12.1 % 1.8 % Impact of foreign exchange rates (9.9) % — % 1.3 % Other 3.9 % 3.6 % — % Effective income tax rate 1.3 % 2.4 % 1.4 % |
Schedule of significant components of the Company's current and deferred tax assets | Significant components of the Company’s current and deferred tax assets are as follows (in thousands): December 31, 2022 2021 Deferred tax assets: Operating loss carryforwards $ 45,452 $ 30,536 Research credit carryforwards — 1,862 Operating lease liability 3,566 3,626 Share-based compensation 9,842 4,406 Capitalized research and development expenses 5,168 — Accrued expenses and other 2,318 1,496 Total deferred tax assets 66,346 41,926 Deferred tax liabilities: Operating lease right-of-use asset (3,474) (3,665) Depreciation & amortization (933) (439) Total deferred tax liabilities (4,407) (4,104) Valuation allowance (53,743) (34,601) Net deferred tax assets $ 8,196 $ 3,221 |
Commitments and contingencies (
Commitments and contingencies (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Commitments and contingencies | |
Schedule of components of lease expense | The components of the Company’s lease expense are as follows (in thousands): Year Ended December 31, 2022 2021 2020 Operating lease cost $ 3,790 $ 1,224 $ 896 Variable lease cost 1,643 612 662 Total lease cost $ 5,433 $ 1,836 $ 1,558 |
Schedule of maturities of operating leases | The following table summarizes the maturities of the Company’s operating leases as of December 31, 2022 (in thousands): Year Ending December 31, 2023 3,972 2024 3,994 2025 4,016 2026 3,236 2027 821 Present value adjustment (2,029) Total lease liabilities 14,010 Less: current lease liabilities (3,125) Long term lease liabilities $ 10,885 |
Net loss per share (Tables)
Net loss per share (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Net loss per share | |
Schedule of basic and diluted net loss attributable to ordinary shareholders | Basic and diluted net loss per share was calculated as follows (in thousands, except share and per share amounts): Year Ended December 31, 2022 2021 2020 Numerator: Net loss $ (112,717) $ (66,819) $ (51,010) Denominator: Weighted average ordinary shares outstanding, basic and diluted 29,660,659 25,061,734 19,145,938 Net loss per share, basic and diluted $ (3.80) $ (2.67) $ (2.66) |
Schedule of antidilutive securities excluded from computation of diluted net loss per share | December 31, 2022 2021 2020 Restricted ordinary shares 187,725 — — Options to purchase ordinary shares 5,898,888 4,603,486 3,736,663 6,086,613 4,603,486 3,736,663 |
Geographic information (Tables)
Geographic information (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Geographic information | |
Schedule of long-lived assets, including operating lease right-of-use assets, held in different geographic regions | December 31, 2022 2021 United States $ 4,466 $ 1,095 United Kingdom 28,302 16,694 $ 32,768 $ 17,789 |
Nature of the business and ba_2
Nature of the business and basis of presentation - Liquidity (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Nature of the business and basis of presentation | |||
Cash and cash equivalents | $ 339,154 | $ 438,680 | |
Net loss | 112,717 | 66,819 | $ 51,010 |
Accumulated deficit | $ 331,096 | $ 218,379 |
Summary of significant accoun_4
Summary of significant accounting policies - Foreign currency and currency translation (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Summary of significant accounting policies | |||
Foreign exchange gain (loss) | $ (0.6) | $ 0.4 | $ 0.6 |
Summary of significant accoun_5
Summary of significant accounting policies - Cash and cash equivalents (Details) - USD ($) $ in Millions | Dec. 31, 2022 | Dec. 31, 2021 |
Summary of significant accounting policies | ||
Cash equivalents | $ 276.1 | $ 100 |
Summary of significant accoun_6
Summary of significant accounting policies - Property and equipment (Details) | 12 Months Ended |
Dec. 31, 2022 | |
Computer equipment and software | |
Property and equipment | |
Estimated Useful Life | 3 years |
Minimum | Laboratory equipment | |
Property and equipment | |
Estimated Useful Life | 3 years |
Minimum | Furniture and office equipment | |
Property and equipment | |
Estimated Useful Life | 3 years |
Maximum | Laboratory equipment | |
Property and equipment | |
Estimated Useful Life | 5 years |
Maximum | Furniture and office equipment | |
Property and equipment | |
Estimated Useful Life | 5 years |
Summary of significant accoun_7
Summary of significant accounting policies - Fair value measurements (Details) - Recurring - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Fair value of financial assets and liabilities | ||
Assets at fair value | $ 0 | $ 0 |
Liabilities at fair value | $ 0 | $ 0 |
Summary of significant accoun_8
Summary of significant accounting policies - Government grants (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Summary of significant accounting policies | |||
Reduction of research and development related to government grant arrangements | $ 1.5 | $ 3 | $ 0.7 |
Government grant funding remaining for future cost reimbursement | $ 1.1 |
Summary of significant accoun_9
Summary of significant accounting policies - Research and development incentives and receivable (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Research and development incentives and receivable | |||
Maximum percentage of surrenderable losses | 14.50% | ||
Reduction of research and development | $ 19.3 | $ 10.8 | $ 8.4 |
Summary of significant accou_10
Summary of significant accounting policies - Share based compensation (Details) | 12 Months Ended |
Dec. 31, 2022 | |
Summary of significant accounting policies | |
Expected dividend yield | 0% |
Fair value of financial asset_2
Fair value of financial assets and liabilities - Financial assets and liabilities measured at fair value (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Fair value of financial assets and liabilities | ||
Cash equivalents | $ 276.1 | $ 100 |
Level 1 | Recurring | ||
Fair value of financial assets and liabilities | ||
Cash equivalents | $ 276.1 | $ 100 |
Term deposit maturity period | 30 days |
Property and equipment, net (De
Property and equipment, net (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Property and equipment, net | |||
Property and equipment, gross | $ 26,973 | $ 7,923 | |
Less: Accumulated depreciation and amortization | (7,863) | (4,800) | |
Property and equipment, net | 19,110 | 3,123 | |
Depreciation expense | 3,700 | 1,400 | $ 1,300 |
Laboratory equipment | |||
Property and equipment, net | |||
Property and equipment, gross | 14,872 | 6,746 | |
Laboratory equipment was not yet placed in service | 2,300 | ||
Leasehold improvements | |||
Property and equipment, net | |||
Property and equipment, gross | 10,736 | 809 | |
Computer equipment and software | |||
Property and equipment, net | |||
Property and equipment, gross | 441 | 143 | |
Furniture and office equipment | |||
Property and equipment, net | |||
Property and equipment, gross | $ 924 | $ 225 |
Accrued expenses and other cu_3
Accrued expenses and other current liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Accrued expenses and other current liabilities | ||
Accrued employee compensation and benefits | $ 9,928 | $ 6,429 |
Accrued external research and development expenses | 10,859 | 3,980 |
Accrued professional fees | 1,068 | 882 |
Current portion of operating lease liabilities | $ 3,125 | $ 2,383 |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] | Accrued expenses and other current liabilities | Accrued expenses and other current liabilities |
Other | $ 1,472 | $ 570 |
Accrued expenses and other current liabilities | $ 26,452 | $ 14,244 |
Long-term debt (Details)
Long-term debt (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |||||||
Jul. 15, 2022 | Mar. 15, 2022 | Oct. 01, 2020 | Sep. 30, 2020 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Mar. 10, 2021 | |
Debt Instrument [Line Items] | ||||||||
Borrowing option to prepay subject to minimum debt outstanding | $ 5,000 | |||||||
End term charge rate | 5% | |||||||
Additional interest rate event of default | 5% | |||||||
Aggregate purchase price | $ 5,703 | $ 290,984 | $ 48,144 | |||||
Net proceeds | $ 5,703 | 290,984 | 48,144 | |||||
Prepayment occurs in second year | ||||||||
Debt Instrument [Line Items] | ||||||||
Prepayment rate | 1.50% | |||||||
Prepayment occurs after year two | ||||||||
Debt Instrument [Line Items] | ||||||||
Prepayment rate | 1% | |||||||
At the market offering | ||||||||
Debt Instrument [Line Items] | ||||||||
Aggregate purchase price | $ 5,900 | $ 105,800 | $ 50,000 | |||||
Issuance of ADSs, net of commissions and offering expenses (in shares) | 181,455 | 3,771,684 | 2,928,813 | |||||
Net proceeds | $ 5,700 | $ 102,600 | $ 48,100 | |||||
Prime Rate | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument stated percentage | 8.85% | 8.85% | ||||||
Basis spread variable rate | 5.60% | 5.60% | ||||||
Maximum | Hercules | ||||||||
Debt Instrument [Line Items] | ||||||||
Aggregate purchase price | $ 2,000 | |||||||
Second Amendment to LSA | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument stated percentage | 8.05% | |||||||
Second Amendment to LSA | Prime Rate | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread variable rate | 4.55% | |||||||
Second Amendment to LSA | Maximum | ||||||||
Debt Instrument [Line Items] | ||||||||
Term loan | $ 45,000 | |||||||
Debt instrument stated percentage | 9.05% | |||||||
Term Loan | ||||||||
Debt Instrument [Line Items] | ||||||||
Maximum borrowing | $ 75,000 | |||||||
Initial Term Loan | ||||||||
Debt Instrument [Line Items] | ||||||||
Fees and transaction costs | 600 | |||||||
Debt instrument effective percentage | 10.80% | |||||||
Interest expense | $ 3,200 | $ 2,900 | $ 400 | |||||
Additional Term Loan One | ||||||||
Debt Instrument [Line Items] | ||||||||
Additional term loan expired unexercised. | $ 10,000 | |||||||
Loan and Security Agreement | Term Loan | ||||||||
Debt Instrument [Line Items] | ||||||||
Maximum borrowing | 40,000 | |||||||
Loan and Security Agreement | Initial Term Loan | ||||||||
Debt Instrument [Line Items] | ||||||||
Term loan | 15,000 | |||||||
Loan and Security Agreement | Additional Term Loan One | ||||||||
Debt Instrument [Line Items] | ||||||||
Term loan | 15,000 | $ 15,000 | ||||||
Loan and Security Agreement | Additional Term Loan Two | ||||||||
Debt Instrument [Line Items] | ||||||||
Term loan | $ 10,000 | |||||||
Sales Agreement | Hercules | At the market offering | ||||||||
Debt Instrument [Line Items] | ||||||||
Issuance of ADSs, net of commissions and offering expenses (in shares) | 98,100 | |||||||
Share issue price | $ 19.05 | |||||||
Net proceeds | $ 1,800 |
Long-term debt - Debt (Details)
Long-term debt - Debt (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Long-term debt | ||
Term loan payable | $ 30,000 | $ 30,000 |
End of term charge | 682 | 376 |
Unamortized debt issuance costs | (367) | (503) |
Carrying value of term loan | $ 30,315 | $ 29,873 |
Long-term debt - Future Princip
Long-term debt - Future Principal Payments (Details) $ in Thousands | Dec. 31, 2022 USD ($) |
Long-term debt | |
2023 | $ 0 |
2024 | 0 |
2025 | 31,500 |
Total | $ 31,500 |
Ordinary shares (Details)
Ordinary shares (Details) | 12 Months Ended | |
Dec. 31, 2022 Vote £ / shares shares | Dec. 31, 2021 £ / shares shares | |
Ordinary shares. | ||
Vote per ordinary share | Vote | 1 | |
Ordinary shares, shares authorized | shares | 57,820,181 | 55,295,420 |
Ordinary shares, nominal value | £ / shares | £ 0.01 | £ 0.01 |
Ordinary shares - Share Purchas
Ordinary shares - Share Purchase Agreement (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||||
Oct. 15, 2021 | Jul. 09, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Class of Stock [Line Items] | |||||
Gross proceeds before discounts and commissions | $ 5,703 | $ 290,984 | $ 48,144 | ||
Net proceeds | 5,703 | 290,984 | 48,144 | ||
Offering expenses | $ 200 | 16,100 | $ 1,900 | ||
American Depositary Shares | |||||
Class of Stock [Line Items] | |||||
Gross proceeds before discounts and commissions | $ 201,300 | ||||
Net proceeds | $ 188,400 | ||||
Ionis Share Purchase Agreement | |||||
Class of Stock [Line Items] | |||||
Gross proceeds before discounts and commissions | $ 7,558 | ||||
At the market offering | |||||
Class of Stock [Line Items] | |||||
Shares issued (in shares) | 181,455 | 3,771,684 | 2,928,813 | ||
Gross proceeds before discounts and commissions | $ 5,900 | $ 105,800 | $ 50,000 | ||
Net proceeds | 5,700 | 102,600 | 48,100 | ||
Offering expenses | $ 200 | $ 3,200 | $ 1,900 | ||
Underwritten Public Offering | American Depositary Shares | |||||
Class of Stock [Line Items] | |||||
Shares issued (in shares) | 3,726,852 | ||||
Price per share | $ 54 | ||||
Ionis | Ionis Share Purchase Agreement | |||||
Class of Stock [Line Items] | |||||
Shares issued (in shares) | 282,485 | ||||
Gross proceeds before discounts and commissions | $ 11,000 | ||||
Price per share | $ 38.94 | ||||
Fair value of shares held | $ 7,600 | ||||
Ionis | Ionis Share Purchase Agreement | American Depositary Shares | |||||
Class of Stock [Line Items] | |||||
Price per share | $ 31.11 |
Share-based compensation (Detai
Share-based compensation (Details) | 1 Months Ended | 12 Months Ended | |||||
Jun. 30, 2020 installment shares | May 31, 2019 shares | Dec. 31, 2022 installment shares | Jan. 01, 2023 shares | Jun. 27, 2022 shares | Jan. 01, 2022 shares | Dec. 31, 2021 shares | |
Stock option | |||||||
Share-based compensation. | |||||||
Shares outstanding | 5,898,888 | 4,603,486 | |||||
Employee Share Purchase Plan | |||||||
Share-based compensation. | |||||||
Number of shares reserved for issuance | 298,738 | ||||||
Percentage of annual increase in reserves on total number of ordinary shares outstanding | 1% | ||||||
Number of ordinary shares reserved for issuance | 215,000 | 901,675 | |||||
Number of shares available for issuance | 430,000 | ||||||
2020 Plan | |||||||
Share-based compensation. | |||||||
Number of shares reserved for issuance | 4,773,557 | 1,082,274 | 1,493,694 | 750,000 | 1,478,968 | ||
Shares issued (in shares) | 574,679 | ||||||
Percentage of annual increase in reserves on total number of ordinary shares outstanding | 5% | ||||||
2020 Plan | Stock option | |||||||
Share-based compensation. | |||||||
Shares outstanding | 3,172,533 | ||||||
Contractual life | 10 years | ||||||
2020 Plan | Stock option | Non-employee Director | |||||||
Share-based compensation. | |||||||
Vesting period | 3 years | ||||||
2020 Plan | Stock option | First anniversary | |||||||
Share-based compensation. | |||||||
Vesting Percentage | 25% | ||||||
2020 Plan | Stock option | Employee | |||||||
Share-based compensation. | |||||||
Vesting period | 4 years | ||||||
2020 Plan | Stock option | Employee | Remaining equal installments | |||||||
Share-based compensation. | |||||||
Number of equal monthly installments for vesting remaining awards | installment | 36 | ||||||
2020 Plan | Restricted ordinary shares | |||||||
Share-based compensation. | |||||||
Vesting period | 4 years | ||||||
Right to receive upon vesting | 1 | ||||||
RSUs outstanding under the 2020 Plan. | 187,725 | ||||||
2020 Plan | Restricted ordinary shares | First anniversary | |||||||
Share-based compensation. | |||||||
Vesting Percentage | 25% | ||||||
2020 Plan | Restricted ordinary shares | Remaining equal installments | |||||||
Share-based compensation. | |||||||
Number of equal quarterly installments for vesting remaining awards | installment | 12 | ||||||
2019 Plan | |||||||
Share-based compensation. | |||||||
Number of shares reserved for issuance | 544,866 | ||||||
2019 Plan | Stock option | |||||||
Share-based compensation. | |||||||
Shares outstanding | 3,654,012 | 2,133,437 | |||||
Contractual life | 10 years | ||||||
2019 Plan | Minimum | Stock option | |||||||
Share-based compensation. | |||||||
Vesting period | 3 years | ||||||
2019 Plan | Maximum | Stock option | |||||||
Share-based compensation. | |||||||
Vesting period | 4 years | ||||||
Pre-IPO Share Options and restricted shares | Stock option | First anniversary | |||||||
Share-based compensation. | |||||||
Vesting Percentage | 25% | ||||||
Pre-IPO Share Options and restricted shares | Stock option | Employee | Remaining equal installments | |||||||
Share-based compensation. | |||||||
Number of equal monthly installments for vesting remaining awards | installment | 36 |
Share-based compensation - Shar
Share-based compensation - Share based compensation expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Share based compensation expense | |||
Total share-based compensation expense | $ 26,779 | $ 12,083 | $ 6,514 |
Research and development expenses | |||
Share based compensation expense | |||
Total share-based compensation expense | 10,394 | 4,974 | 2,603 |
General and administrative expenses | |||
Share based compensation expense | |||
Total share-based compensation expense | $ 16,385 | $ 7,109 | $ 3,911 |
Share-based compensation - Sh_2
Share-based compensation - Share Options (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Additional Information | |||
Total share-based compensation expense | $ 26,779 | $ 12,083 | $ 6,514 |
Stock option | |||
Number of Shares | |||
Outstanding number of shares at beginning | 4,603,486 | ||
Granted | 1,548,167 | ||
Exercised | (78,074) | ||
Forfeited | (174,691) | ||
Outstanding number of shares at end | 5,898,888 | 4,603,486 | |
Number of shares, vested and expected to vest | 5,898,888 | ||
Number of shares, options exercisable | 3,352,315 | ||
Weighted Average Exercise Price | |||
Weighted average exercise price at beginning | $ 14.97 | ||
Granted | 44.83 | ||
Exercised | 12.67 | ||
Forfeited | 27.92 | ||
Weighted average exercise price at ending | 22.45 | $ 14.97 | |
Weighted average exercise price, vested and expected to vest | 22.45 | ||
Weighted average exercise price, options exercisable | $ 13.93 | ||
Weighted Average Contractual Term | |||
Weighted average contractual term, outstanding | 7 years 7 months 20 days | 8 years 1 month 17 days | |
Weighted average contractual term, vested and expected to vest | 7 years 7 months 20 days | ||
Weighted average contractual term ,options exercisable | 6 years 10 months 13 days | ||
Aggregate Intrinsic Value | |||
Aggregate intrinsic value outstanding | $ 71,002 | $ 207,009 | |
Aggregate intrinsic value, vested and expected to vest | 71,002 | ||
Aggregate intrinsic value, options exercisable | $ 55,749 | ||
Additional Information | |||
Granted | $ 31.45 | $ 15.66 | $ 7.87 |
Exercised | $ 1,500 | $ 22,000 | $ 1,300 |
Total share-based compensation expense | $ 21,900 | $ 12,100 | $ 6,500 |
Share-based compensation - Assu
Share-based compensation - Assumptions used in the Black Scholes option pricing model to determine the fair value of share options (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Share-based compensation. | |||
Expected dividend yield | 0% | ||
Stock option | Employees and directors | |||
Share-based compensation. | |||
Risk-free interest rate | 2.20% | 0.60% | 1.30% |
Expected volatility | 82.50% | 79.80% | 74.80% |
Expected term (in years) | 6 years 7 days | 5 years 11 months 23 days | 5 years 11 months 23 days |
Unrecognized compensation expense | |||
Total unrecognized compensation expense related to the unvested employee and director | $ 50.1 | ||
Unrecognized compensation cost expected to be recognized over a weighted average period | 2 years 9 months 18 days |
Share-based compensation - Rest
Share-based compensation - Restricted Share Units (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Restricted shares | |||
Total share-based compensation expense | $ 26,779 | $ 12,083 | $ 6,514 |
Restricted ordinary shares | 2020 Plan | |||
Number of Shares Underlying RSUs | |||
Granted | 222,725 | ||
Vested | (35,000) | ||
Unvested restricted ordinary shares at ending | 187,725 | ||
Weighted Average Grant Date Fair Value | |||
Granted | $ 60.86 | ||
Vested | 60.86 | ||
Weighted average grant date fair value unvested, Ending Balance | $ 60.86 | ||
Restricted shares | |||
Fair value of employee restricted share awards vested | $ 2,100 | 0 | 0 |
Total share-based compensation expense | 4,900 | $ 0 | $ 0 |
Unrecognized compensation cost | $ 8,600 | ||
Weighted average Period | 3 years |
Significant agreements - Collab
Significant agreements - Collaboration revenues (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Significant agreements. | |||
Collaboration revenues | $ 14,463 | $ 11,697 | $ 10,390 |
Ionis | |||
Significant agreements. | |||
Collaboration revenues | 9,347 | 4,242 | 0 |
Genentech | |||
Significant agreements. | |||
Collaboration revenues | 3,565 | 5,660 | 4,896 |
Dementia Discovery Fund | |||
Significant agreements. | |||
Collaboration revenues | 386 | 391 | 436 |
AstraZeneca | |||
Significant agreements. | |||
Collaboration revenues | $ 1,165 | $ 1,404 | 2,696 |
Oxurion | |||
Significant agreements. | |||
Collaboration revenues | $ 2,362 |
Significant agreements - Ionis
Significant agreements - Ionis Evaluation and Option Agreement (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | ||||
Jul. 09, 2021 | Dec. 31, 2020 | Jan. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2020 | Dec. 31, 2021 | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||
Deferred revenue | $ 35,156 | $ 61,873 | $ 35,156 | $ 71,340 | ||
Ionis Evaluation and Option Agreement | ||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||
Term of the Evaluation Period (in months) | 4 months | |||||
Upfront cash payment | $ 3,000 | $ 3,000 | $ 3,000 | 3,000 | ||
Threshold period of notice required for termination of agreement | 30 days | |||||
Deferred revenue | $ 3,000 | $ 3,000 |
Significant agreements - Ioni_2
Significant agreements - Ionis Collaboration Agreement (Details) $ in Millions | 1 Months Ended | 12 Months Ended | ||||
Jul. 09, 2021 USD ($) item | Oct. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Jan. 31, 2021 USD ($) | Dec. 31, 2022 USD ($) | Dec. 31, 2020 USD ($) | |
Ionis | ||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||
Period for which research and discovery activities will be performed with no additional consideration | 3 years | |||||
Upfront cash payment | $ 31 | |||||
Number of payments of a mid-single-digit million dollar, failing to achieve the specified development diligence | item | 3 | |||||
Number of collaboration targets | item | 4 | |||||
Number of years over which royalty is payable | 10 years | |||||
Ionis Evaluation and Option Agreement | ||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||
Upfront cash payment | $ 3 | $ 3 | $ 3 | $ 3 | ||
Amended Ionis | ||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||
Upfront cash payment | $ 1.6 | |||||
Amended Ionis | Service for initial six month | ||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||
Upfront cash payment | $ 0.8 | |||||
Amended Ionis | Service for additional six month | ||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||
Upfront cash payment | $ 0.8 |
Significant agreements - Ioni_3
Significant agreements - Ionis Share Purchase Agreement (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||||
Oct. 15, 2021 | Jul. 09, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||
Aggregate purchase price | $ 5,703 | $ 290,984 | $ 48,144 | ||
American Depositary Shares | |||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||
Aggregate purchase price | $ 201,300 | ||||
Ionis Share Purchase Agreement | |||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||
Aggregate purchase price | $ 7,558 | ||||
Ionis | |||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||
Transaction price | $ 38,000 | $ 38,000 | |||
Ionis | Ionis Share Purchase Agreement | |||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||
Purchase price per share | $ 38.94 | ||||
Aggregate purchase price | $ 11,000 | ||||
Fair value of shares held | 7,600 | ||||
Transaction price | $ 3,400 | ||||
Ionis | Ionis Share Purchase Agreement | American Depositary Shares | |||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||
Purchase price per share | $ 31.11 |
Significant agreements - Ioni_4
Significant agreements - Ionis (Details) $ in Thousands | 1 Months Ended | 12 Months Ended | |||||
Jul. 09, 2021 USD ($) item | Oct. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Jan. 31, 2021 USD ($) | Dec. 31, 2022 USD ($) item | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||||
Collaboration revenues | $ 14,463 | $ 11,697 | $ 10,390 | ||||
Deferred revenue | $ 71,340 | $ 61,873 | 71,340 | 35,156 | |||
Ionis | |||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||||
Number of material rights associated with future payments | item | 4 | ||||||
Number of collaboration targets | item | 4 | ||||||
Total transaction price initially determined | $ 38,000 | $ 38,000 | |||||
Upfront cash payment | 31,000 | ||||||
Estimated amount payable to CROs | 600 | ||||||
Expected period for satisfaction of performance obligations | 3 years | ||||||
Material rights exercise period | 4 years | ||||||
Collaboration revenues | $ 9,347 | 4,242 | 0 | ||||
Deferred revenue | 34,115 | 21,489 | $ 34,115 | 3,000 | |||
Ionis | Combined licenses and research and discovery performance obligation | |||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||||
Total transaction price initially determined | 34,100 | ||||||
Ionis | Four material rights associated with credits for IND Acceptance fees | |||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||||
Total transaction price initially determined | 3,900 | ||||||
Ionis | Ionis Share Purchase Agreement | |||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||||
Total transaction price initially determined | 3,400 | ||||||
Ionis Evaluation and Option Agreement | |||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||||
Upfront cash payment | $ 3,000 | $ 3,000 | $ 3,000 | 3,000 | |||
Deferred revenue | $ 3,000 | ||||||
Amended Ionis | |||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||||
Upfront cash payment | 1,600 | ||||||
Collaboration revenues | $ 800 | $ 800 |
Significant agreements - Genent
Significant agreements - Genentech Collaboration Agreement (Details) $ in Thousands | 1 Months Ended | 12 Months Ended | |||||||
Feb. 21, 2020 USD ($) item | Dec. 31, 2022 USD ($) | Jun. 30, 2022 USD ($) | Nov. 30, 2021 USD ($) | Dec. 31, 2022 USD ($) item | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | Oct. 31, 2021 USD ($) | Mar. 31, 2021 USD ($) | |
Significant agreements. | |||||||||
Collaboration revenues | $ 14,463 | $ 11,697 | $ 10,390 | ||||||
Deferred revenue | $ 61,873 | 61,873 | 71,340 | 35,156 | |||||
Genentech | |||||||||
Significant agreements. | |||||||||
Number of potential development candidates | item | 4 | ||||||||
Upfront cash payment | $ 30,000 | ||||||||
Number of immuno oncology targets | item | 2 | ||||||||
Additional number of immuno oncology targets | item | 2 | ||||||||
Expansion Fee | $ 10,000 | ||||||||
Milestone payments, receivable | $ 2,000 | ||||||||
Transaction price | 31,000 | 33,000 | 33,000 | $ 33,000 | |||||
Collaboration revenues | 3,565 | 5,660 | 4,896 | ||||||
Deferred revenue | 39,308 | $ 39,308 | $ 34,436 | $ 27,579 | |||||
Genentech | Royalty | |||||||||
Significant agreements. | |||||||||
Number of years over which royalty is payable | 10 years | ||||||||
Genentech | Maximum | |||||||||
Significant agreements. | |||||||||
Milestone payments, receivable | 200,000 | ||||||||
Genentech | Development milestone | Maximum | |||||||||
Significant agreements. | |||||||||
Milestone payments, receivable | 65,000 | ||||||||
Genentech | Regulatory milestone | Maximum | |||||||||
Significant agreements. | |||||||||
Milestone payments, receivable | $ 135,000 | ||||||||
Genentech | Collaboration Program 1 Performance Obligation | |||||||||
Significant agreements. | |||||||||
Transaction price | 4,019 | $ 4,019 | |||||||
Genentech | Collaboration Program 2 Performance Obligation | |||||||||
Significant agreements. | |||||||||
Transaction price | 8,037 | 8,037 | |||||||
Genentech | Collaboration Program 3 Performance Obligation | |||||||||
Significant agreements. | |||||||||
Expansion Fee | $ 10,000 | ||||||||
Milestone payments, receivable | $ 1,000 | ||||||||
Transaction price | 11,000 | ||||||||
Material rights | $ 3,500 | ||||||||
Collaboration revenues | 8,400 | ||||||||
Amount of estimate of variable consideration | $ 2,000 | ||||||||
Genentech | Collaboration Program 3 Performance Obligation | Maximum | |||||||||
Significant agreements. | |||||||||
Period over which performance obligations will be performed | 3 years | ||||||||
Genentech | Collaboration Program 3 Performance Obligation | Minimum | |||||||||
Significant agreements. | |||||||||
Period over which performance obligations will be performed | 2 years | ||||||||
Genentech | Collaboration Program 4 Performance Obligation | |||||||||
Significant agreements. | |||||||||
Expansion Fee | $ 10,000 | ||||||||
Material rights | 3,500 | ||||||||
Collaboration revenues | 5,300 | ||||||||
Deferred revenue | $ 100 | ||||||||
Genentech | Collaboration Program 4 Performance Obligation | Maximum | |||||||||
Significant agreements. | |||||||||
Period over which performance obligations will be performed | 3 years | ||||||||
Genentech | Collaboration Program 4 Performance Obligation | Minimum | |||||||||
Significant agreements. | |||||||||
Period over which performance obligations will be performed | 2 years | ||||||||
Genentech | Specified Targeting Arm Material Right Arm Program One | |||||||||
Significant agreements. | |||||||||
Number of initial collaboration programs exercised | item | 1 | ||||||||
Option fee for development and exploitation rights | $ 1,000 | ||||||||
Milestone payments, receivable | $ 1,000 | ||||||||
Transaction price | $ 352 | 352 | |||||||
Genentech | Material rights for associated and limited substitution rights | |||||||||
Significant agreements. | |||||||||
Transaction price | 1,187 | 1,187 | |||||||
Deferred revenue | 700 | $ 700 | $ 700 | ||||||
Genentech | Two material rights associated with the LSR Go Option for Collaboration Programs One And Two | |||||||||
Significant agreements. | |||||||||
Number of collaboration programs | item | 2 | 2 | |||||||
Transaction price | 12,400 | $ 12,400 | |||||||
Genentech | Material rights associated with the LSR Go Option for Collaboration Programs Three | |||||||||
Significant agreements. | |||||||||
Deferred revenue | 7,400 | $ 7,400 | |||||||
Genentech | Material rights associated with the LSR Go Option for Collaboration Programs Four | |||||||||
Significant agreements. | |||||||||
Deferred revenue | $ 7,400 | ||||||||
Genentech | Two material rights for Expansion Options | |||||||||
Significant agreements. | |||||||||
Number of expansion option collaboration programs | item | 2 | 2 | |||||||
Transaction price | $ 7,005 | $ 7,005 | |||||||
Genentech | Collaboration Program One and Two Performance Obligation | |||||||||
Significant agreements. | |||||||||
Material rights exercise period | 4 years | ||||||||
Genentech | Collaboration Program One and Two Performance Obligation | Maximum | |||||||||
Significant agreements. | |||||||||
Regulatory, and initial commercialization milestones, payments receivable | $ 200,000 | ||||||||
Period over which performance obligations will be performed | 3 years | ||||||||
Genentech | Collaboration Program One and Two Performance Obligation | Minimum | |||||||||
Significant agreements. | |||||||||
Period over which performance obligations will be performed | 2 years |
Significant agreements - Dement
Significant agreements - Dementia Discovery Fund Agreement (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | |||
Dec. 31, 2020 | May 31, 2019 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Significant agreements. | |||||
Collaboration revenues | $ 14,463 | $ 11,697 | $ 10,390 | ||
Deferred revenue | $ 35,156 | 61,873 | 71,340 | 35,156 | |
Dementia Discovery Fund | |||||
Significant agreements. | |||||
Upfront cash payment | $ 1,100 | ||||
Potential milestone payments | $ 700 | 600 | |||
Threshold period for exercising option to establish a jointly-owned new company | 90 days | ||||
Option to purchase ownership of new entity | 34% | ||||
Threshold period of notice required for termination of agreement | 60 days | ||||
Transaction price | $ 1,100 | ||||
Collaboration revenues | 386 | 391 | 436 | ||
Deferred revenue | 821 | $ 0 | $ 428 | $ 821 | |
Dementia Discovery Fund | NewCo | |||||
Significant agreements. | |||||
Option to purchase ownership of new entity | 66% | ||||
Threshold period in which Newco shall have the right to initiate a new research program | 2 years | ||||
Dementia Discovery Fund | NewCo | Maximum | |||||
Significant agreements. | |||||
Total voting rights related to ownership interests | 50% | ||||
Dementia Discovery Fund | Specific scientific criteria milestone | |||||
Significant agreements. | |||||
Milestone payment received | $ 500 |
Significant agreements - AstraZ
Significant agreements - AstraZeneca Collaboration Agreement (Details) $ in Thousands | 1 Months Ended | 12 Months Ended | |||||
May 31, 2018 USD ($) | May 31, 2018 USD ($) item | Nov. 30, 2016 item | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | Jun. 30, 2019 USD ($) | |
Significant agreements. | |||||||
Collaboration revenues | $ 14,463 | $ 11,697 | $ 10,390 | ||||
Deferred revenue | 61,873 | 71,340 | 35,156 | ||||
AstraZeneca | |||||||
Significant agreements. | |||||||
Option fee for development and exploitation rights | $ 5,000 | ||||||
Research term | 3 years | ||||||
Bicycle research term | 1 year | ||||||
AstraZeneca research | 2 years | ||||||
Additional research term | 12 months | ||||||
Transaction price | $ 5,700 | 5,700 | |||||
Collaboration revenues | 1,165 | 1,404 | 2,696 | ||||
Deferred revenue | 1,076 | $ 2,361 | $ 3,756 | ||||
AstraZeneca | Development Milestone | |||||||
Significant agreements. | |||||||
Transaction price | 700 | 700 | |||||
AstraZeneca | Development Milestone | Development milestone | |||||||
Significant agreements. | |||||||
Milestone payments, receivable | 29,000 | 29,000 | |||||
AstraZeneca | Regulatory Milestone | Regulatory milestone | |||||||
Significant agreements. | |||||||
Milestone payments, receivable | 23,000 | 23,000 | |||||
AstraZeneca | Commercial milestone | Commercial milestone | |||||||
Significant agreements. | |||||||
Milestone payments, receivable | $ 110,000 | 110,000 | |||||
AstraZeneca | Maximum | |||||||
Significant agreements. | |||||||
Additional research term | 15 months | ||||||
AstraZeneca | 2016 Collaboration Agreement | |||||||
Significant agreements. | |||||||
Biological Targets | item | 2 | ||||||
AstraZeneca | May 2018 Option Exercise | |||||||
Significant agreements. | |||||||
Option fee for development and exploitation rights | $ 5,000 | ||||||
Number of FTE | item | 2 | ||||||
Transaction price | 5,650 | $ 6,300 | |||||
AstraZeneca | May 2018 Option Exercise | Commercialization license per candidate | |||||||
Significant agreements. | |||||||
Customer option payment | $ 8,000 | $ 8,000 | |||||
AstraZeneca | May 2018 Option Exercise | Target Three Research License and Related Services | |||||||
Significant agreements. | |||||||
Transaction price | 650 | ||||||
AstraZeneca | May 2018 Option Exercise | Target 3 Material Right | |||||||
Significant agreements. | |||||||
Transaction price | 1,504 | ||||||
AstraZeneca | May 2018 Option Exercise | Target 4 Material Right | |||||||
Significant agreements. | |||||||
Transaction price | 1,204 | ||||||
AstraZeneca | May 2018 Option Exercise | Target 5 Material Right | |||||||
Significant agreements. | |||||||
Transaction price | 1,165 | ||||||
AstraZeneca | May 2018 Option Exercise | Target 6 Material Right | |||||||
Significant agreements. | |||||||
Transaction price | $ 1,127 |
Significant agreements - Oxurio
Significant agreements - Oxurion Collaboration Agreement (Details) € in Millions | 12 Months Ended | ||||
Dec. 31, 2022 USD ($) | Dec. 31, 2022 EUR (€) | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | Dec. 31, 2022 EUR (€) | |
Significant agreements. | |||||
Deferred revenue | $ | $ 61,873,000 | $ 71,340,000 | $ 35,156,000 | ||
Oxurion | |||||
Significant agreements. | |||||
Threshold period of notice required for termination of agreement | 90 days | 90 days | |||
Revenue recognized | $ | $ 0 | $ 0 | $ 2,400,000 | ||
Deferred revenue | $ | $ 0 | ||||
Oxurion | Development milestone | |||||
Significant agreements. | |||||
Potential milestone payments | € 8.3 | ||||
Revenue under contracts with customer from milestone payment | € 3.8 | ||||
Oxurion | Regulatory milestone | |||||
Significant agreements. | |||||
Potential milestone payments | 16.5 | ||||
Oxurion | Granting first regulatory approval or first indication | |||||
Significant agreements. | |||||
Potential milestone payments | € 5 |
Significant agreements - Summar
Significant agreements - Summary of Contract Assets and Liabilities (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Contract liabilities: | ||
Beginning Balance | $ 71,340 | $ 35,156 |
Additions | 12,099 | 49,056 |
Deductions | (14,463) | (11,697) |
Impact of Exchange Rates | (7,103) | (1,175) |
Ending Balance | 61,873 | 71,340 |
Ionis | ||
Contract liabilities: | ||
Beginning Balance | 34,115 | 3,000 |
Additions | 99 | 36,002 |
Deductions | (9,347) | (4,242) |
Impact of Exchange Rates | (3,378) | (645) |
Ending Balance | 21,489 | 34,115 |
Genentech | ||
Contract liabilities: | ||
Beginning Balance | 34,436 | 27,579 |
Additions | 12,000 | 13,000 |
Deductions | (3,565) | (5,660) |
Impact of Exchange Rates | (3,563) | (483) |
Ending Balance | 39,308 | 34,436 |
Dementia Discovery Fund | ||
Contract liabilities: | ||
Beginning Balance | 428 | 821 |
Deductions | (386) | (391) |
Impact of Exchange Rates | (42) | (2) |
Ending Balance | 0 | 428 |
AstraZeneca | ||
Contract liabilities: | ||
Beginning Balance | 2,361 | 3,756 |
Additions | 54 | |
Deductions | (1,165) | (1,404) |
Impact of Exchange Rates | (120) | (45) |
Ending Balance | $ 1,076 | $ 2,361 |
Significant agreements - Deferr
Significant agreements - Deferred revenue (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Deferred revenue | |||
Contract assets | $ 0 | $ 0 | |
Deferred revenue | 61,873,000 | 71,340,000 | $ 35,156,000 |
Ionis | |||
Deferred revenue | |||
Deferred revenue | 21,489,000 | 34,115,000 | 3,000,000 |
Ionis | Deferred revenue material rights option | |||
Deferred revenue | |||
Deferred revenue | 3,400,000 | ||
Genentech | |||
Deferred revenue | |||
Deferred revenue | 39,308,000 | 34,436,000 | 27,579,000 |
Genentech | Deferred revenue material rights option | |||
Deferred revenue | |||
Deferred revenue | 27,300,000 | ||
AstraZeneca | |||
Deferred revenue | |||
Deferred revenue | 1,076,000 | $ 2,361,000 | $ 3,756,000 |
AstraZeneca | Target 4 and Target 5 Material Rights | |||
Deferred revenue | |||
Deferred revenue | $ 1,100,000 |
Significant agreements - Revenu
Significant agreements - Revenue recognition due to changes in contract assets and liabilities (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Significant agreements | |||
Revenue recognized based on proportional performance | $ 12,358 | $ 9,652 | $ 6,326 |
Revenue recognized based on expiration of material rights | 1,433 | 1,876 | 1,702 |
Revenue recognized based on changes in transaction price | 672 | 169 | |
Total | $ 14,463 | $ 11,697 | $ 8,028 |
Significant agreements - Cancer
Significant agreements - Cancer Research UK (Details) - USD ($) $ in Millions | 1 Months Ended | |||
Dec. 13, 2016 | Dec. 31, 2019 | Dec. 31, 2022 | Dec. 31, 2021 | |
Research and development arrangement obligation to repay other parties | ||||
Contingent future milestones payments under research and development arrangement | $ 50.9 | $ 60.3 | ||
Other long term liabilities | ||||
Research and development arrangement obligation to repay other parties | ||||
Liability from research and development | $ 3.6 | $ 3.3 | ||
BT1718 | Minimum | ||||
Research and development arrangement obligation to repay other parties | ||||
Tiered royalties (percentage) | 70% | |||
BT1718 | Maximum | ||||
Research and development arrangement obligation to repay other parties | ||||
Tiered royalties (percentage) | 90% | |||
BT7401 | Minimum | ||||
Research and development arrangement obligation to repay other parties | ||||
Tiered royalties (percentage) | 55% | |||
BT7401 | Maximum | ||||
Research and development arrangement obligation to repay other parties | ||||
Tiered royalties (percentage) | 80% |
Income taxes (Details)
Income taxes (Details) | 12 Months Ended | ||
Dec. 31, 2022 USD ($) jurisdiction | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | |
Income taxes. | |||
Benefit from income taxes | $ 1,524,000 | $ 1,663,000 | $ 724,000 |
Increases recorded to income tax provision | 19,100,000 | ||
U.K. operating loss carryforwards | 181,800,000 | ||
Uncertain tax positions | 0 | 0 | |
Interest and penalties accrued | $ 0 | $ 0 | |
State | |||
Income taxes. | |||
Number of jurisdictions | jurisdiction | 11 |
Income taxes - Components of ne
Income taxes - Components of net loss before tax provision from income taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Income taxes | |||
United Kingdom | $ (116,275) | $ (69,546) | $ (52,521) |
United States | 2,034 | 1,064 | 787 |
Net loss before income tax provision | $ (114,241) | $ (68,482) | $ (51,734) |
Income taxes - Components of be
Income taxes - Components of benefit for income taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Current income tax provision (benefit) | |||
Federal | $ 2,048 | $ (2) | $ (24) |
State | 1,404 | 7 | (27) |
Total current income tax provision (benefit) | 3,452 | 5 | (51) |
Deferred income tax (benefit) provision | |||
Federal | (4,111) | (1,236) | (435) |
State | (865) | (432) | (238) |
Total deferred income tax (benefit) | (4,976) | (1,668) | (673) |
Total benefit from income taxes | $ (1,524) | $ (1,663) | $ (724) |
Income taxes - Reconciliation o
Income taxes - Reconciliation of benefit for income taxes (Details) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Income taxes | |||
Benefit for income taxes at statutory rate | 19% | 19% | 19% |
(Decreases) increases resulting from: | |||
Federal tax credits | 0.30% | 0.60% | 0.90% |
Change in valuation allowance | (16.80%) | (27.00%) | (15.40%) |
Net losses surrendered for research credit | 6.50% | 5.90% | 6.20% |
Impact of statutory rate change | 11.30% | 12.10% | 1.80% |
Impact of foreign exchange rates | (9.90%) | 1.30% | |
Other | 3.90% | 3.60% | |
Effective income tax rate | 1.30% | 2.40% | 1.40% |
Income taxes - Components of th
Income taxes - Components of the company's current and deferred tax assets (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Deferred tax assets: | ||
Operating loss carryforwards | $ 45,452 | $ 30,536 |
Research credit carryforwards | 1,862 | |
Operating lease liability | 3,566 | 3,626 |
Share-based compensation | 9,842 | 4,406 |
Capitalized research and development expenses | 5,168 | |
Accrued expenses and other | 2,318 | 1,496 |
Total deferred tax assets | 66,346 | 41,926 |
Deferred tax liabilities: | ||
Operating lease right-of-use asset | (3,474) | (3,665) |
Depreciation & amortization | (933) | (439) |
Total deferred tax liabilities | (4,407) | (4,104) |
Valuation allowance | (53,743) | (34,601) |
Net deferred tax assets | $ 8,196 | $ 3,221 |
Commitments and contingencies -
Commitments and contingencies - Leases, Office and laboratory space Cambridge (Details) - USD ($) | Dec. 06, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Oct. 31, 2017 | Sep. 30, 2017 |
Leases | |||||
Operating lease right-of-use assets | $ 13,658,000 | $ 14,666,000 | |||
Lease liabilities | 14,010,000 | ||||
Payments for the extended lease due in next twelve months | 3,972,000 | ||||
New Office and laboratory space in Cambridge, United Kingdom | |||||
Leases | |||||
Lease total contractual Term | 10 years | ||||
Leases, term of contract | 5 years | ||||
Renewal term | 10 years | ||||
Annual rent | $ 3,000,000 | ||||
Rent free period | 6 months | ||||
Security deposit | $ 0 | ||||
Operating lease right-of-use assets | 11,600,000 | ||||
Lease liabilities | $ 11,100,000 | ||||
Discounted percentage for present value of lease payments | 6.90% | ||||
Office and laboratory space in Building 900, Babraham Research Campus, Cambridge | |||||
Leases | |||||
Renewal term | 5 years | ||||
Annual rent | 600,000 | ||||
Discounted percentage for present value of lease payments | 7.70% | ||||
Estimated service charges payable | $ 200,000 | ||||
Office and laboratory space in Lexington, Massachusetts | |||||
Leases | |||||
Annual rent | $ 800,000 | ||||
Security deposit | $ 200,000 | ||||
Discounted percentage for present value of lease payments | 7% | ||||
Payments for the extended lease remaining through December | $ 200,000 | ||||
Payments for the extended lease due in next twelve months | $ 700,000 | ||||
Prepaid rent | $ 100,000 |
Commitments and contingencies_2
Commitments and contingencies - Components of lease expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Commitments and contingencies | |||
Operating lease cost | $ 3,790 | $ 1,224 | $ 896 |
Variable lease cost | 1,643 | 612 | 662 |
Total lease cost | $ 5,433 | $ 1,836 | $ 1,558 |
Weighted-average remaining operating lease term (years) | 4 years 2 months 12 days | 4 years 9 months 18 days | |
Weighted-average discount rate | 7% | 7.10% |
Commitments and contingencies_3
Commitments and contingencies - Leases, Maturities of operating leases (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Commitments and contingencies | ||
2023 | $ 3,972 | |
2024 | 3,994 | |
2025 | 4,016 | |
2026 | 3,236 | |
2027 | 821 | |
Present value adjustment | (2,029) | |
Total lease liabilities | 14,010 | |
Less: current lease liabilities | $ (3,125) | $ (2,383) |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] | Accrued Liabilities and Other Liabilities, Current | Accrued Liabilities and Other Liabilities, Current |
Long term lease liabilities | $ 10,885 | $ 12,081 |
Maximum days allowed for cancellation of contracts prior written notice | 90 days |
Commitments and contingencies_4
Commitments and contingencies - Legal proceedings (Details) € in Millions, $ in Millions | 1 Months Ended | 12 Months Ended | ||
Nov. 30, 2020 EUR (€) | Dec. 31, 2020 USD ($) | Dec. 31, 2022 EUR (€) | Dec. 31, 2022 USD ($) | |
Commitments and contingencies | ||||
Payments for Legal Settlements | € | € 3 | |||
Settlement payable on first anniversary | € | € 1 | |||
Milestone payments | $ | $ 92.4 | |||
Litigation settlement amount | $ | $ 4.7 |
Commitments and contingencies_5
Commitments and contingencies - Founder Royalty arrangements (Details) | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
Commitments and contingencies | |
Period of royalty payments agreed under arrangement | 10 years |
Royalties earned | $ 0 |
Royalties paid | $ 0 |
Net loss per share - Basic and
Net loss per share - Basic and diluted net loss per share (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Numerator: | |||
Net loss | $ (112,717) | $ (66,819) | $ (51,010) |
Denominator: | |||
Weighted average ordinary shares outstanding, basic | 29,660,659 | 25,061,734 | 19,145,938 |
Weighted average ordinary shares outstanding, diluted | 29,660,659 | 25,061,734 | 19,145,938 |
Net loss per share, basic | $ (3.80) | $ (2.67) | $ (2.66) |
Net loss per share, diluted | $ (3.80) | $ (2.67) | $ (2.66) |
Net loss per share - Securities
Net loss per share - Securities excluded from the diluted per share calculation (Details) - shares | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Antidilutive securities | |||
Antidilutive securities (in shares) | 6,086,613 | 4,603,486 | 3,736,663 |
Restricted ordinary shares | |||
Antidilutive securities | |||
Antidilutive securities (in shares) | 187,725 | ||
Options to purchase ordinary shares | |||
Antidilutive securities | |||
Antidilutive securities (in shares) | 5,898,888 | 4,603,486 | 3,736,663 |
Benefit plans (Details)
Benefit plans (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
United States | 401(k) Plan | |||
Benefit plans | |||
Contributions made | $ 0.5 | $ 0.3 | $ 0.2 |
Foreign Plan | U.K. Plan | |||
Benefit plans | |||
Contributions made | $ 1.4 | $ 0.7 | $ 0.5 |
Related party transactions (Det
Related party transactions (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Related party transactions | |||
Royalties earned | $ 0 | ||
Royalties paid | 0 | ||
Consultancy services with Stone Sunny Isles Inc. | |||
Related party transactions | |||
Amount of transaction | $ 200,000 | $ 200,000 | $ 200,000 |
Geographic information (Details
Geographic information (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 USD ($) segment | Dec. 31, 2021 USD ($) | |
Geographic information | ||
Number of geographic regions | segment | 2 | |
Long lived assets, including operating lease right of use assets | $ 32,768 | $ 17,789 |
United States | ||
Geographic information | ||
Long lived assets, including operating lease right of use assets | 4,466 | 1,095 |
United Kingdom | ||
Geographic information | ||
Long lived assets, including operating lease right of use assets | $ 28,302 | $ 16,694 |
Subsequent events (Details)
Subsequent events (Details) - Subsequent events - Office and laboratory space in Cambridge Massachusetts $ in Millions | Jan. 26, 2023 USD ($) |
Subsequent events | |
Leases, term of contract | 3 years |
Renewal term | 2 years |
Annual rent | $ 2.1 |
Amount of rent due in last year of lease | $ 2.3 |
Rent free period | 2 months |
Security deposit | $ 0.3 |