Adaptimmune Therapeutics PLC: Form 10-Q for the period ended Mar 31, 2025

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited consolidated financial statements and related notes appearing elsewhere in this Quarterly Report and the audited consolidated financial statements and notes thereto and management’s discussion and analysis of financial condition and results of operations for the year ended December 31, 2024, included in our Annual Report on Form 10-K that was filed with the SEC on March 24, 2025. Some of the information contained in this discussion and analysis or set forth elsewhere in this Quarterly Report, including information with respect to our plans and strategy for our business, includes forward-looking statements that involve risks and uncertainties. As a result of many factors, including those factors set forth in the “Risk Factors” section of this Quarterly Report and our Annual Report on Form 10-K for the year ended December 31, 2024, our actual results could differ materially from the results described in, or implied by, these forward-looking statements.

Overview

We are a commercial-stage biopharmaceutical company working to redefine the treatment of solid tumor cancers with cell therapies. With the approval by the U.S. Food and Drug Administration (“FDA”) of our first biologics license application (“BLA”) for TECELRA® (afamitresgene autoleucel) (“TECELRA”), which is the first engineered T-cell therapy for the treatment of a solid tumor cancer approved in the U.S., we are now focused on its launch and commercialization.

TECELRA is a genetically modified autologous T-cell immunotherapy indicated for the treatment of adults with unresectable or metastatic synovial sarcoma who have received prior chemotherapy, are HLA-A*02:01P, -A*02:02P, -A*02:03P, or -A*02:06P positive and whose tumor expresses the MAGE-A4 antigen as determined by FDA-approved or cleared companion diagnostic devices. This indication is approved under the FDA’s accelerated approval based on overall response rate (“ORR”) and duration of response. Continued approval for this indication may be contingent upon verification and description of clinical benefits in a confirmatory trial.

We are planning commercial launch for our second T-cell immunotherapy, letetresgene autoleucel (“lete-cel”), for people with synovial sarcoma and myxoid liposarcoma in 2026. In addition to our commercial sarcoma franchise we remain committed to our collaboration with Galapagos which uses our uzatresgene autoleucel (“uza-cel”) candidate manufactured using the Galapagos manufacturing process. A clinical trial authorization to start a Phase 1 trial in head and neck cancer is planned for later in 2025.

We are currently in the process of evaluating strategic options for the Company.

TECELRA and Commercialization

We are focused on the commercialization of TECELRA for the treatment of advanced synovial sarcoma and for which we received FDA approval on August 1, 2024. As of May 13, 2025, 28 Authorized Treatment Centers (“ATCs”) are available to initiate the treatment journey for our patients. During the first quarter of 2025 13 patients were apheresed and another 8 patients have been apheresed in the second quarter to date. We invoiced for 6 patients in the first quarter of 2025 and for 8 further patients to date in the second quarter of 2025. We are confident that our full network of approximately 30 ATCs will be active by the end of 2025, covering an estimated 80% of patients treated in sarcoma centers of excellence.

Letetresgene autoleucel (“lete-cel”)

Lete-cel targets the NY-ESO antigen and has been in clinical trials (the IGNYTE-ESO trial) for people with synovial sarcoma and myxoid liposarcoma. It is the second product in our sarcoma franchise. Final data for the IGNYTE-ESO trial were reported at the Connective Tissue Oncology Society Annual Meeting (“CTOS”) in November 2024. In January 2025, lete-cel was granted breakthrough therapy designation by the U.S. FDA for the treatment of patients with unresectable or metastatic myxoid liposarcoma who have received prior anthracycline-based chemotherapy, are positive for HLA-A*02:01, HLA-A*02:05, or HLA-A*02:06, and whose tumor expresses the NY-ESO-1 antigen.

Clinical and Pre-clinical Pipeline

*Afami-cel also being investigated in the pediatric basket trial SPEARHEAD-3.

**Data cut-off March 1, 2024, primary efficacy analysis conducted on 64 patients treated with lete-cel protocol (commercial supply). Data presented at CTOS 2024 by Dr Sandra D’Angelo

Clinical Programs

We have a pediatric trial ongoing in the U.S. in tumors expressing the MAGE-A4 antigen.

We anticipate filing a clinical trial authorization for a Phase 1 trial in head and neck cancer in collaboration with Galapagos during 2025. The trial will utilize ADP-5701, uza-cel manufactured using Galapagos’ innovative decentralized cell therapy manufacturing platform. Uza-cel has shown encouraging results in head and neck cancer with partial responses in four out of five patients to date in a Phase 1 trial using Adaptimmune’s manufacturing platform.

Preclinical programs

Our preclinical pipeline is focused on the development of T-cell therapies directed to PRAME (ADP-600) and CD70 (ADP-520). We have paused spend on these preclinical programs.

• PRAME is highly expressed across a broad range of solid tumors including ovarian, endometrial, lung and breast cancers. We are developing TCR T-cells directed to PRAME, with the initial candidate (ADP-600) currently in preclinical testing and next-generation candidates being developed over the longer term. We anticipated filing an IND for a Phase 1 trial with ADP-600 in 2025. ADP-600 has demonstrated high potency towards PRAME-positive tumor cells in pre-clinical testing.
• The CD70 program targets the CD70 antigen which is expressed across a range of hematological malignancies (acute myeloid leukemia and lymphoma) and solid tumors (renal cell carcinoma). We are using TRuC technology to develop a T-cell therapy (ADP-520) against CD70, with membrane bound IL-15 to enhance persistence. ADP-520 is currently in pre-clinical testing. The TRuC technology combines the targeting of CAR-T cells with T-cell TCR signaling.

Corporate News

In addition to the restructuring announced in November 2024, in March 2025 we announced implementation of additional cost reduction for the PRAME and CD70 programs. We also announced that we are currently evaluating all strategic options for the Company and its programs and this evaluation continues.

On March 24, 2025 we entered into an amendment to the Loan Agreement (the “Amendment”). Under the Amendment we have pre-paid $25 million of the loan amount under the Loan Agreement together with certain accrued interest up to the date of such pre-payment.

Financial Operations Overview

Revenue

The Company generates product revenue from sales of TECELRA.

The Company generates development revenue from collaboration agreements with customers. The Company had two development revenue-generating customers in the three months ended March 31, 2025 and 2024, respectively: the Genentech Collaboration Agreement (terminated September 23, 2024), the Galapagos Collaboration Agreement (effective from May 30, 2024) and the GSK Termination and Transfer Agreement (effective from April 11, 2023).

The Genentech Collaboration Agreement

On September 3, 2021, Adaptimmune Limited, a wholly-owned subsidiary of the Company, entered into the Genentech Collaboration Agreement. The collaboration has two components:

1) development of allogeneic T-cell therapies for up to five shared cancer targets; and

2) development of personalized allogeneic T-cell therapies utilizing αβ T-cell receptors (TCRs) isolated from a patient, with such therapies being administered to the same patient.

The parties would collaborate to perform a research program, initially during an eight-year period (which may be extended for up to two additional two-year terms at Genentech’s election upon payment of an extension fee for each two-year term), to develop the cell therapies, following which Genentech would determine whether to further develop and commercialize such therapies. The Company received an upfront payment of $150 million in October 2021 and milestone payments of $20 million and $15 million in December 2022 and 2023, respectively.

The Company identified the following performance obligations under the Genentech Collaboration Agreement: (i) research services and rights granted under the licenses for each of the initial “off-the-shelf” collaboration targets, (ii) research services and rights granted under the licenses for the personalized therapies, (iii) material rights relating to the option to designate additional “off-the-shelf” collaboration targets and (iv) material rights relating to the two options to extend the research term. The revenue allocated to the initial “off-the-shelf” collaboration targets and the personalized therapies was recognized as development progressed. The revenue allocated to the material rights to designate additional ‘off-the-shelf’ collaboration targets would have been recognized from the point that the options were exercised and then as development progressed, in line with the initial “off-the-shelf” collaboration targets, or at the point in time that the rights expired. The revenue from the material rights to extend the research term would have been recognized from the point that the options were exercised and then over the period of the extension, or at the point in time that the options expired.

On April 12, 2024, we announced the termination of the Genentech Collaboration Agreement. The termination was accounted for as a contract modification on a cumulative catch-up basis. The termination did not change the nature the performance obligations identified but resulted in a reduction of the transaction price as the additional payments and variable consideration that would have been due in periods after October 7, 2024 will now never be received. The termination resulted in a cumulative catch-up adjustment to revenue recognized at the date of the termination of $101.3 million.

On September 23, 2024, Adaptimmune Limited entered into a Mutual Release Agreement with Genentech. The Mutual Release Agreement, among other things, resolved and released each party from any and all past, present and future disputes, claims, demands and causes of action, whether known or unknown, related to the Genentech Collaboration Agreement in any way. Under the terms of the

Mutual Release Agreement, Genentech will pay $12.5 million, upon which the Genentech Collaboration Agreement will be terminated. The Mutual Release Agreement was effective immediately as of September 23, 2024. The Mutual Release Agreement resulted in all remaining performance obligations being fully satisfied and the remaining deferred revenue and the additional payment were both recognized as total revenue of $37.8 million in the third quarter of 2024.

The GSK Termination and Transfer Agreement

On April 11, 2023, the Company announced its entry into the Termination and Transfer Agreement with GSK regarding the return to the Company of rights and materials comprised within the PRAME and NY-ESO cell therapy programs. The parties will work collaboratively to ensure continuity for patients in ongoing lete-cel clinical trials forming part of the NY-ESO cell therapy program.

As part of the Termination and Transfer Agreement, sponsorship of the ongoing IGNYTE and LTFU trials relating to the NY-ESO cell therapy program will transfer to the Company. In return for this, the Company received an upfront payment of £7.5 million in June 2023 following the execution of the Termination and Transfer Agreement and further milestone payments of £3 million, £12 million, £6 million and £1.5 million to the Company in September and December 2023 and June and August 2024, respectively. No further payments are due from GSK under the Termination and Transfer Agreement.

The Company has identified the following performance obligations under the Termination and Transfer Agreement: (i) to take over sponsorship and complete the IGNYTE trial and (ii) to take over sponsorship and complete the LTFU trial. The revenue allocated to both obligations is recognized over time from the point that sponsorship of the active trials that make up the trial transfer, based on the number of patients transferred and still actively enrolled to date on the trial at a given period-end relative to the total estimated periods of active patient enrollment over the estimated duration of the trial.

The Galapagos Collaboration and Exclusive License Agreement

On May 30, 2024, the Company entered into the Galapagos Collaboration Agreement. The Galapagos Collaboration Agreement includes an option for Galapagos to exclusively license the TCR T-cell therapy candidate uza-cel, manufactured on Galapagos’s decentralized manufacturing platform, in head and neck cancer and potential future solid tumor indications. Under the Galapagos Collaboration Agreement, we will conduct a clinical proof-of-concept trial to evaluate the safety and efficacy of uza-cel produced on Galapagos’ decentralized manufacturing platform in patients with head and neck cancer.

The Company will receive initial payments of $100 million, comprising $70 million upfront and $30 million of research and development funding, option exercise fees of up to $100 million (the amount depending on the number of indications in relation to which the option is exercised), additional development and sales milestone payments of up to a maximum of $465 million, plus tiered royalties on net sales. The $70 million upfront payment and $15 million of upfront research and development funding was received in June 2024.

The Company has identified a performance obligation relating to the various activities required to complete the POC trial and a material right associated with the exclusive license option. The Company expects to satisfy the POC Trial obligation over time over the period that the trial is completed, based on an estimate of the percentage of completion of the trial determined based on the costs incurred on the trial as a percentage of the total expected costs. The revenue allocated to the material right associated with the exclusive licence option will be recognized from the point that the option is either exercised and control of the license has passed to Galapagos or the option lapses.

Cost of Goods Sold

Cost of goods sold represents the costs involved in the manufacture of our commercial products including raw materials, internal manufacturing and staff costs including a share of overheads and other costs incurred in bringing inventories to their existing condition and location prior to sale. Cost of goods sold also includes the costs for excess or obsolete inventory.

Research and Development Expenses

Research and development expenditures are expensed as incurred. Research and development expenses consist principally of the following:

• salaries for research and development staff and related expenses, including benefits;
• costs for production of preclinical compounds and drug substances by contract manufacturers;
• fees and other costs paid to contract research organizations in connection with additional preclinical testing and the performance of clinical trials;
• costs associated with the development of a process to manufacture and supply our lentiviral vector and cell therapies for use in clinical trials;
• costs to develop manufacturing capability at our U.S. facility for manufacture of cell therapies for use in clinical trials;
• costs relating to facilities, materials and equipment used in research and development;
• costs of acquired or in-licensed research and development which does not have alternative future use;
• costs of developing assays and diagnostics;
• an allocation of indirect costs clearly related to research and development;
• amortization and depreciation of property, plant and equipment and intangible assets used to develop our cells therapies; and
• share-based compensation expenses.

These expenses are partially offset by:

• reimbursable tax and expenditure credits from the U.K. government.

Research and development expenditure is presented net of reimbursements from reimbursable tax and expenditure credits from the U.K. government.

As a company that carries out extensive research and development activities, we benefit from the U.K. merged research and development credit regime (“Merged RDEC Scheme”), whereby our principal research subsidiary company, Adaptimmune Limited, is able to surrender the trading losses that arise from its research and development activities for a payable tax credit of up to approximately 15% of eligible research and development expenditures. Qualifying expenditures largely comprise employment costs for research staff, consumables and certain internal overhead costs incurred as part of research projects. Subcontracted research expenditures are eligible for a cash rebate of up to approximately 9.75%. A large proportion of costs in relation to our pipeline research, clinical trials management and manufacturing development activities, all of which are being carried out by Adaptimmune Limited, are eligible for inclusion within these tax credit cash rebate claims.

The Merged RDEC scheme includes an exception for R&D Intensive SMEs. For entities which qualify as R&D Intensive SMEs, a higher effective cash tax benefit of 27% will be available. The Company is currently assessing whether it would qualify as an R&D Intensive SME.

Prior to introduced of the Merged RDEC Scheme on April 1, 2024 the Company benefitted from the U.K. research and development tax credit regime for small and medium sized companies (“SME R&D Tax Credit Scheme”) and, for certain expenditures that were not qualifying expenditures under the SME R&D Tax Credit Scheme, the U.K. research and development expenditure credit scheme (the “RDEC Scheme”). These schemes resulted in payable tax credits of 18.6% and 15%, respectively, for the period up to April 1, 2024.

Our research and development expenses may vary substantially from period to period based on the timing of our research and development activities, which depends upon the timing of initiation of clinical trials and the rate of enrollment of patients in clinical trials. The duration, costs, and timing of clinical trials and development of our cell therapies will depend on a variety of factors, including:

• the scope, rate of progress, and expense of our ongoing as well as any additional clinical trials and other research and development activities;
• uncertainties in clinical trial enrollment rates;
• future clinical trial results;
• significant and changing government regulation;
• the timing and receipt of any regulatory approvals; and
• supply and manufacture of lentiviral vector and cell therapies for clinical trials.

A change in the outcome of any of these variables may significantly change the costs and timing associated with the development of that cell therapy. For example, if the FDA, or another regulatory authority, requires us to conduct clinical trials beyond those that we currently anticipate will be required for regulatory approval, or if we experience significant delays in enrollment in any of our clinical trials, we could be required to expend significant additional financial resources and time on the completion of clinical development.

Selling, General and Administrative Expenses

Our general and administrative expenses consist principally of:

• salaries for employees other than research and development staff, including benefits;
• provisions for restructuring activity;
• business development expenses, including travel expenses;
• professional fees for auditors, lawyers and other consulting expenses;
• selling and other costs relating to our commercial product;
• costs of facilities, communication, and office expenses;
• cost of establishing commercial operations;
• information technology expenses;
• amortization and depreciation of property, plant and equipment and intangible assets not related to cost of goods sold or research and development activities; and
• share-based compensation expenses.

Interest Income

Interest income primarily comprises interest on cash, cash equivalents and marketable securities.

Interest Expense

Interest expense primarily comprises loan interest on the Hercules Capital loan facility.

Other Income (Expense), Net

Other income (expense), net primarily comprises foreign exchange gains (losses). We are exposed to foreign exchange rate risk because we currently operate facilities in the U.K. and U.S. Our expenses are generally denominated in the currency in which our operations are located, which are the U.K. and the U.S. However, our U.K.-based subsidiary incurs significant research and development costs in U.S. dollars and, to a lesser extent, Euros. Our U.K. subsidiary has an intercompany loan balance in U.S. dollars payable to the Comapny. Since July 1, 2019, the intercompany loan has been considered as being a long-term investment as repayment is not planned or anticipated in the foreseeable future. It is the Company’s intent not to request payment of the intercompany loan for the foreseeable future.

The foreign exchange gains or losses arising on the revaluation of intercompany loans of a long-term investment nature are reported within other comprehensive (loss) income, net of tax.

Our results of operations and cash flows will be subject to fluctuations due to changes in foreign currency exchange rates, which could harm our business in the future. We seek to minimize this exposure by maintaining currency cash balances at levels appropriate to meet forthcoming expenditure in U.S. dollars and pounds sterling. To date, we have not used hedging contracts to manage exchange rate exposure, although we may do so in the future.

In addition to currency fluctuations, adverse macroeconomic conditions, including inflation, slower growth or recession, new or increased tariffs, changes to fiscal and monetary policy, tighter credit, and higher interest rates, could materially adversely affect the Company by, for example, driving higher input costs and/or impacting the Company’s ability to raise future financing.

Taxation

We are subject to corporate taxation in the U.K. and the U.S. We typically incur tax losses and tax credit carryforwards in the U.K. No net deferred tax assets are recognized on our U.K. losses and tax credit carryforwards because there is currently no indication that we will make sufficient taxable profits to utilize these tax losses and tax credit carryforwards. The rate of U.K. corporation tax is 25% for the year ended December 31, 2025.

We benefit from reimbursable tax credits in the U.K. through the Merged RDEC Scheme and previously benefitted from the SME R&D Tax Credit Scheme and the RDEC Scheme, all of which are presented as a deduction to research and development expenditure.

Our Philadealphia-based subsidiary in the U.S., Adaptimmune LLC, has generated taxable profits due to a Service Agreement between our U.S. and U.K. operating subsidiaries and is subject to U.S. federal corporate income tax of 21%. Due to its activity in the U.S., and the sourcing of its revenue, the Adaptimmune LLC is not currently subject to any state or local income taxes. The Company also benefits from the U.S Research Tax Credit and Orphan Drug Credit.

TCR2 has incurred net losses since acquisition and generates research and development tax credits. TCR2’s operating loss and tax credit carryforwards and other tax attributes are reduced by a valuation allowance to the amount supported by reversing taxable temporary differences because there is currently no indication that we will make sufficient taxable profits to utilize these deferred tax assets.

In the future, if we generate taxable income in the U.K., we may benefit from the U.K.’s “patent box” regime, which would allow certain profits attributable to revenues from patented products to be taxed at a rate of 10%. As we have many different patents covering our products, future upfront fees, milestone fees, product revenues, and royalties may be taxed at this favorably low tax rate.

U.K. Value Added Tax (“VAT”) is charged on all qualifying goods and services by VAT-registered businesses. An amount of 20% of the value of the goods or services is added to all relevant sales invoices and is payable to the U.K. tax authorities. Similarly, VAT paid on purchase invoices paid by Adaptimmune Limited and the Company is reclaimable from the U.K. tax authorities.

Critical Accounting Policies and Significant Judgments and Estimates

The preparation of our unaudited condensed consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities, and the revenues and expenses incurred during the reported periods. We base our estimates on historical experience and on various other factors that we believe are relevant under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. The accounting policies considered to be critical to the judgments and estimates used in the preparation of our financial statements are disclosed in the Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our 2024 Annual Report.

No accounting policies or estimates were considered to be critical to the judgements and estimates used in the preparation of our financial statements for the three months ended March 31, 2025.

Results of Operations

Comparison of three months ended March 31, 2025 and 2024

The following table summarizes the results of our operations for the three months ended March 31, 2025 and 2024, together with the changes to those items (in thousands):

Revenue

The revenue recognized in the three months ended March 31, 2025 relates to TECELRA product sales and development revenue under the Galapagos Collaboration Agreement and the GSK Termination and Transfer Agreement.

Revenue increased by $1.6 million to $7.3 million in the three months ended March 31, 2025 compared to $5.7 million for the three months ended March 31, 2024 primarily due to product sales commencing following the FDA approval of TECELRA on August 1, 2024. The revenue included under development revenue from Galapagos and GSK in the three months ended March 31, 2025 was $0.5 million and $2.7 million respectively, compared to revenue from Genentech and GSK in the three months ended March 31, 2024 of $2.8 million and $2.9 million, respectively. Revenue from development activities decreased for the three months ended March 31, 2025, compared to the same period in 2024. This decline was primarily due to the transition from Genentech to Galapagos as a collaboration partner. Revenue recognized from the Galapagos collaboration was lower because the project is at an earlier stage of development than the Genentech collaboration was during the first quarter of 2024.

Research and Development Expenses

Research and development expenses decreased by 18% to $28.9 million for the three months ended March 31, 2025 from $35.2 million for the three months ended March 31, 2024.

Our research and development expenses comprise the following (in thousands):

(1) These costs are not analyzed by project since employees may be engaged in multiple projects simultaneously.

The net decrease in our research and development expenses of $6.4 million for the three months ended March 31, 2025 compared to the same period in 2024 was primarily due to the following:

• a decrease of $4.2 million in salaries, materials, equipment, depreciation of property, plant and equipment and other employee-related costs, which is driven primarily by an decrease in the average number of employees engaged in research and development and a reduction in temporary staff following the restructuring and reprioritization of activities that was announced in November 2024;
• a decrease of 0.9 million in share-based compensation due to forfeiture credits as a result of redundancies arising as part of the restructuring; and
• a decrease of $2.8 million on subcontracted expenditure primarily due to a reduction in outsourced research costs; offset by
• a decrease of $2.3 million in reimbursements receivable for research and development tax and expenditure credits due to decreases in the associated research and development costs for which the credits may be claimed and changes to the tax credit schemes effective from April 1, 2024 that affected the effective rate at which we claim credits.

Our subcontracted costs for the three months ended March 31, 2025 were $8.7 million, compared to $11.5 million in the same period of 2024. This includes $6.5 million of costs directly associated with our afami-cel, lete-cel and uza-cel T-cells and $2.2 million of other development costs.

Selling, General and Administrative Expenses

Selling, general and administrative expenses increased by 18% to $23.3 million for the three months ended March 31, 2025 from $19.7 million in the same period in 2024. Our selling, general and administrative expenses consist of the following (in thousands):

The net increase in our selling, general and administrative expenses of $3.6 million for the three months ended March 31, 2025 compared to the same period in 2024 was largely due to:

• an increase in restructuring charges of $1.7 million, which related to the restructuring programme that was initiated in November 2024 and ongoing in the first quarter of 2025; and
• an increase of $2.9 million in other corporate costs due to an increase in accounting, legal and professional fees, due primarily to an increase in legal fees relating to business development work; offset by
• a reduction of $1.5 million in share-based compensation due to forfeiture credits arising as a result of redundancies in the first quarter of 2025 arising from the restructuring program.

Interest income

Interest income primarily relates to interest on cash, cash equivalents and available-for-sale debt securities and is presented net of amortization/accretion of the premium/discount on purchase of the debt securities. Interest income was $0.9 million for the three months ended March 31, 2025, compared to $1.3 million for the three months ended March 31, 2024.

Interest expense

Interest expense primarily relates to interest arising on the loan with Hercules Capital.

Income Taxes

Income taxes arise in the U.S. due to Adaptimmune LLC generating taxable profits. We typically incur taxable losses in the U.K. on an annual basis and have incurred losses in TCR2 since the acquisition.

Liquidity and Capital Resources

Sources of Funds

Since our inception, we have incurred significant net losses and negative cash flows from operations. We financed our operations primarily through sales of equity securities, cash receipts under our collaboration arrangements and research and development tax and expenditure credits. From inception through to March 31, 2025, we have raised:

• $900.3 million, net of issuance costs, through the issuance of shares;
• $49.5 million, net of discount, drawn from the Hercules Capital loan facility;
• $545.8 million through collaborative arrangements with Galapagos, Genentech, GSK and Astellas Pharma Inc. (terminated on March 6, 2023);
• $154.9 million in the form of reimbursable U.K. research and development tax credits and receipts from the U.K. RDEC Scheme; and
• $45.3 million in cash and cash equivalents and restricted cash and $39.5 million of marketable securities acquired as part of the strategic combination with TCR2.

We use a non-GAAP measure, Total Liquidity, which is defined as the total of cash and cash equivalents and marketable securities, to evaluate the funds available to us in the near-term. A description of Total Liquidity and reconciliation to cash and cash equivalents, the most directly comparable U.S. GAAP measure, are provided below under “Non-GAAP measures”.

As of March 31, 2025, we had cash and cash equivalents of $41.1 million and Total Liquidity of $59.6 million.

The Company needs to acquire additional funding to finance its operating activities. We are actively looking at a variety of strategic opportunities and have engaged TD Cowen to evaluate strategic options for the Company and all of its programs. These could include potential mergers with third parties, acquisitions of part or all of the business together with other collaborations or partnerships. We are also considering acquiring additional funding through use of the Company ATM and/or other methods of raising equity financing. In addition the Company is also reducing its operating costs and has taken the decision to pause spending on its PRAME and CD70 programs. Although we are currently progressing plans to acquire additional funding, we may be unable to obtain sufficient additional capital to continue funding our operations or at all..

In accordance with Accounting Standards Codification (“ASC”) 205-40, Going Concern, we evaluated whether there are conditions and events, considered in the aggregate, that raise substantial doubt about our ability to continue as a going concern within one year after the date the financial statements are issued. Management concluded that substantial doubt exists as to whether we can continue as a going concern within one year after the date the financial statements are issued. See Note 2(c) to the Consolidated Financial Statements for further detail.

None of the potential mitigating actions above are under the direct control of the Company. As a result, the substantial doubt over the Company’s ability to continue as a going concern within 12 months from the date of filing of this Quarterly Report on Form 10-Q is not alleviated as of the date of filing.

Cash Flows

The following table summarizes the results of our cash flows for the three months ended March 31, 2025 and 2024 (in thousands):

Operating Activities

Net cash used in operating activities was $66.6 million for the three months ended March 31, 2025 compared to $32.0 million for the three months ended March 31, 2024. Our activities typically result in net use of cash in operating activities. The net cash used in operating activities for the three months ended March 31, 2025 increased, primarily due to the receipt of research and development credits of $30.8 million in three months ended March 31, 2024 relating to the 2022 credits, whereas the equivalent credit for 2023 was received in the fourth quarter of 2024. Operating cash flows also increased due to redundancy payments relating to the restructuring announced in November 2024.

Net cash used in operating activities of $66.6 million for the three months ended March 31, 2025 comprised a net loss of $47.6 million and a net cash outflow of $21.3 million from changes in operating assets and liabilities, offset by non-cash items of $2.3 million. The non-cash items consisted primarily of depreciation expense on plant and equipment of $2.3 million, share-based compensation expense of $0.7 million, unrealized foreign exchange gains of $0.4 million and other items of $0.2 million.

Investing Activities

Net cash provided by investing activities was $41.2 million for the three months ended March 31, 2025 compared to $0.4 million used in investing activities for the three months ended March 31, 2024. The net cash used in or provided by investing activities for the respective periods consisted primarily of:

• purchases of property, plant and equipment of $1.2 million and $0.1 million for the three months ended March 31, 2025 and 2024, respectively.
• there were no purchases of intangible assets in the three months ended March 31, 2025 compared to $0.2 million for the three months ended March 31, 2024; and
• investments in marketable securities of $16.1 million in the three months ended March 31, 2025 compared to none in the three months ended March 31, 2024; offset by
• cash inflows of $58.4 million from the maturity, redemption or sale of marketable securities in the three months ended March 31, 2025 compared to none for the three months ended March 31, 2024.

The Company invests surplus cash and cash equivalents in marketable securities.

Financing Activities

Net cash used in financing activities was $25.3 million for the three months ended March 31, 2025 compared to net cash provided by financing activities of $29.2 million for the three months ended March 31, 2024. The net cash used in financing activities in the three months ended March 31, 2025 consisted of a $25.5 million repayment of the Hercules Capital loan facility, offset by net proceeds of $0.1 million from shares issued in an ATM offering. The net cash provided by financing activities in the three months ended March 31, 2024 consisted primarily of net proceeds of $29.2 million from shares issued in an ATM offering, net of commissions and issuance costs.

Non-GAAP Measures

Total Liquidity

Total Liquidity (a non-GAAP financial measure) is the total of cash and cash equivalents and marketable securities. Each of these components appears in the condensed consolidated balance sheet. The U.S. GAAP financial measure most directly comparable to Total Liquidity is cash and cash equivalents as reported in the condensed consolidated financial statements, which reconciles to Total Liquidity as follows (in thousands):

We believe that the presentation of Total Liquidity provides useful information to investors because management reviews Total Liquidity as part of its management of overall solvency and liquidity, financial flexibility, capital position and leverage. The definition of Total Liquidity includes marketable securities, which are highly-liquid and available to use in our current operations.

Safe Harbor

See the section titled “Information Regarding Forward-Looking Statements” at the beginning of this Quarterly Report.

There have been no material changes to the Company’s market risk during the three months ended March 31, 2025. For a discussion of the Company’s exposure to market risk, please refer to the Company’s market risk disclosures set forth in Part II, Item 7A, “Quantitative and Qualitative Disclosures About Market Risk” in our 2024 Annual Report.

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e)) under the Securities and Exchange Act of 1934, as amended (“Exchange Act”) as of March 31, 2025.

Based on such evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures were effective at March 31, 2025.

Changes in Internal Control over Financial Reporting

No changes in our internal control over financial reporting (as defined in Rules 13a-15(e) and 15d – 15(e)) under the Exchange Act) occurred during the quarter ended March 31, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Our business has significant risks. You should carefully consider the risk factors set out in Part I, Item 1A “Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2024 and the disclosures and risk factors set out in this Quarterly Report, including our condensed consolidated financial statements and the related notes, before making an investment decision regarding our securities. The risks and uncertainties described are those material risk factors currently known and specific to us that we believe are relevant to our business, results of operations and financial condition. Additional risks and uncertainties not currently known to us or that we now deem immaterial may also impair our business, results of operations and financial condition.

As of and for the period ended March 31, 2025, save as provided below there have been no material changes from the risk factors previously disclosed by us in Part I, Item 1A. Risk Factors of our Annual Report on Form 10-K for the year ended December 31, 2024.

We may not be able to maintain compliance with the continued listing requirements of Nasdaq.

Our Americal Depository Shares (ADSs) are listed on Nasdaq. In order to maintain that listing, we must satisfy minimum financial and other requirements including, without limitation, a requirement that our closing bid price must not fall below $1.00 per ADS for 30 consecutive business days. On November 1, 2024, we received a notice from The Nasdaq Stock Market (“Nasdaq”) that the Company is not in compliance with Nasdaq’s Listing Rule 5450(a)(1), because the minimum bid price of the Company’s American Depositary Shares (“ADSs”) had been below $1.00 per share for 30 consecutive business days (the “Notice”). The Notice had no immediate effect on the listing or trading of the Company’s ADSs on The Nasdaq Global Select Market.

In accordance with Nasdaq Listing Rule 5810(c)(3)(A), the Company had 180 calendar days, or until April 30, 2025, to regain compliance with the minimum bid price requirement. To regain compliance, the closing bid price of the Company’s ADSs had to be at least $1.00 per ADS for a minimum of ten consecutive business days during this 180 calendar day grace period, unless Nasdaq exercised its discretion to extend this ten-day period. On April 22, 2025, the Company made an application to transfer its listing to the Nasdaq Capital Market and requested an additional 180 calendar day compliance period. On May 1, 2025, Nasdaq approved the Company’s application to transfer its listing to the Nasdaq Capital Market, effective at the opening of business on May 2, 2025. To regain compliance with the minimum bid price requirement and qualify for continued listing on the Nasdaq Capital Market, the minimum bid price per ADS must be at least $1.00 per share for a minimum of ten consecutive business days during the additional 180 calendar day compliance period. However, if it appears to Nasdaq’s staff that the Company will not be able to cure the deficiency or if the Company is otherwise not eligible, Nasdaq would notify the Company that its securities would be subject to delisting. The Company may appeal any such determination to delist its securities, but there can be no assurance that any such appeal would be successful.

The Company intends to monitor the closing bid price of its ADSs and assess potential actions to regain compliance with Nasdaq’s Listing Rule 5450(a)(1). However, there can be no assurance that we will be able to regain compliance with the minimum bid price requirement or that we will otherwise maintain compliance with other Nasdaq listing requirements. If we fail to regain and maintain compliance with the minimum bid price requirement or to meet the other applicable continued listing requirements in the future and Nasdaq decides to delist our ADSs, the delisting could adversely affect the market price and liquidity of our ADSs, reduce our ability to raise additional capital and result in operational challenges and damage to investor relations and market reputation.

Although our financial statements have been prepared on a going concern basis there is substantial doubt about our ability to continue as a going concern.

As of March 31, 2025, the Company had cash and cash equivalents of $41.1 million, marketable securities of $18.5 million, and negative stockholders’ equity of $37.4 million. During the three months ended March 31, 2025, the Company incurred a net loss of $47.6 million, used cash of $66.6 million in its operating activities, and generated revenues of $7.3 million. The Company has incurred net losses in most periods since inception and it expects to incur operating losses in future periods. Having evaluated certain conditions and events, the Company has concluded that substantial doubt exists as to whether we can continue as an ongoing business within one year after the date the financial statements are issued.

We executed a restructuring of the Company to reduce headcount and expenses in early 2025. We have paused spend on the PRAME and CD-70 preclinical programs. Despite this restructuring we must obtain additional capital to continue funding planned operations. We are exploring strategic options. Despite this we may be unable to obtain sufficient additional capital to continue funding our operations or, if we do, it may be insufficient and/or on terms that are unfavorable to our existing shareholders. Any future fundraising, if possible, is likely to be highly dilutive to our existing shareholders and may also divert our management from its day-to-day activities.

If the Company fails to obtain additional funding, it may be required to:

• further reduce or stop activities and operations of the business in order to reduce or eliminate ongoing expenditure. Any such reduction could significantly delay the timelines under which we can bring new products to the market (including lete-cel) or our ability to commercialize TECELRA;
• further reduce headcount and expenditure which will in turn reduce the activities and operations of the business;
• repay all or part of the remaining loan advances received under the Loan Agreement in accordance with the terms of the Loan Agreement (including any applicable repayment charges or costs);
• seek further third party alliances for existing assets, including TECELRA, on terms that are less favorable than might otherwise be available;
• seek an acquirer for all or part of the business on terms that are less favorable than might otherwise be available; and
• relinquish or license on unfavorable terms or rights to technologies, intellectual property or product candidates we would otherwise seek to develop or commercialize ourselves.

Inability to obtain additional funding may also impact on existing business relationships resulting in termination or variation of those relationship.