Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2020 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number 001-37368 ADAPTIMMUNE THERAPEUTICS PLC (Exact name of Registrant as specified in its charter) England and Wales Not Applicabl ...

Adaptimmune Therapeutics plc (NASDAQ:ADAP) Q4 2019 Earnings Conference Call February 27, 2020 8:00 AM ET Company Participants Juli Miller - Director of Investor Relations Adrian Rawcliffe - Chief Executive Officer Helen Tayton-Martin - Chief Business Officer Elliot Norry - Chief Medical Officer Conference Call Participants Tony Butler - Roth Capital Marc Frahm - Cowen and Company Kelsey Goodwin - Guggenheim Securities James Shannon - Citi Jonathan Chang - SVB Leerink Operator Ladies and gentlemen, thank you ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2019 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number 001-37368 ADAPTIMMUNE THERAPEUTICS PLC (Exact name of Registrant as specified in its charter) England and Wales Not Applicable (St ...

Adaptimmune Therapeutics PLC (NASDAQ:ADAP) Q3 2019 Earnings Conference Call November 6, 2019 8:00 AM ET Company Participants Juli Miller - Director, IR Adrian Rawcliffe - CEO, Principal Accounting Officer & Director Elliot Norry - Acting Chief Medical Officer John Lunger - Chief Patient Supply Officer Michael Garone - Interim CFO Conference Call Participants Mohit Bansal - Citigroup Marc Frahm - Cowen and Company Tony Butler - Roth Capital Partners Nicholas Abbott - Wells Fargo Securities Michael Schmidt - ...

Table of Contents ADAP The Nasdaq Global Select Market UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2019 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number 001-37368 ADAPTIMMUNE THERAPEUTICS PLC (Exact name of Registrant as specified in its charter) England and Wales Not Ap ...

Adaptimmune Therapeutics plc (NASDAQ:ADAP) Q2 2019 Results Conference Call August 1, 2019 8:00 AM ET Company Participants Juli Miller - IR James Noble - CEO Adrian Rawcliffe - Incoming CEO Rafael Amado - President, R&D Conference Call Participants Waleed Abdel-Naby - SunTrust Robinson Humphrey Kelsey Goodwin - Guggenheim Securities Marc Frahm - Cowen Keith Tapper - Citi Jonathan Chang - SVB Leerink Jim Birchenough - Wells Fargo Tony Butler - Roth Capital Partners Operator Good morning, and welcome to the Se ...

PART I — FINANCIAL INFORMATION This section presents Adaptimmune Therapeutics plc's unaudited condensed consolidated financial statements and management's discussion and analysis [Item 1. Financial Statements](index=5&type=section&id=Item%201.%20Financial%20Statements%3A) This section presents Adaptimmune Therapeutics plc's unaudited condensed consolidated financial statements, including balance sheets, operations, comprehensive loss, equity, and cash flows [Unaudited Condensed Consolidated Balance Sheets](index=6&type=section&id=Unaudited%20Condensed%20Consolidated%20Balance%20Sheets) Condensed Consolidated Balance Sheet Highlights (in thousands) | Metric | June 30, 2019 | December 31, 2018 | | :---------------------- | :------------ | :---------------- | | Cash and cash equivalents | $34,574 | $68,379 | | Marketable securities | $98,832 | $136,755 | | Total current assets | $175,133 | $231,095 | | Total assets | $239,521 | $276,736 | | Total current liabilities | $28,293 | $24,437 | | Total liabilities | $52,530 | $29,851 | | Total stockholders' equity| $186,991 | $246,885 | [Unaudited Condensed Consolidated Statements of Operations](index=8&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Operations) Condensed Consolidated Statements of Operations Highlights (in thousands, except per share data) | Metric (3 months ended June 30) | 2019 | 2018 | Change ($) | Change (%) | | :------------------------------ | :---------- | :---------- | :---------- | :--------- | | Revenue | $157 | $9,038 | $(8,881) | (98)% | | Operating loss | $(35,502) | $(28,877) | $(6,625) | 23% | | Net loss | $(41,087) | $(43,845) | $2,758 | (6)% | | Basic and diluted EPS | $(0.07) | $(0.08) | $0.01 | (12.5)% | | Metric (6 months ended June 30) | 2019 | 2018 | Change ($) | Change (%) | | :------------------------------ | :---------- | :---------- | :---------- | :--------- | | Revenue | $157 | $17,234 | $(17,077) | (99)% | | Operating loss | $(69,294) | $(57,277) | $(12,017) | 21% | | Net loss | $(68,499) | $(64,583) | $(3,916) | 6% | | Basic and diluted EPS | $(0.11) | $(0.11) | $0.00 | 0% | [Unaudited Condensed Consolidated Statements of Comprehensive Loss](index=9&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Loss) Condensed Consolidated Statements of Comprehensive Loss Highlights (in thousands) | Metric (3 months ended June 30) | 2019 | 2018 | | :------------------------------ | :---------- | :---------- | | Net loss | $(41,087) | $(43,845) | | Foreign currency translation | $4,842 | $6,107 | | Unrealized gains on securities | $68 | $5,223 | | Total comprehensive loss | $(36,190) | $(31,205) | | Metric (6 months ended June 30) | 2019 | 2018 | | :------------------------------ | :---------- | :---------- | | Net loss | $(68,499) | $(64,583) | | Foreign currency translation | $1,299 | $3,582 | | Unrealized gains on securities | $278 | $1,167 | | Total comprehensive loss | $(66,935) | $(57,361) | [Unaudited Condensed Consolidated Statements of Change in Equity](index=10&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Change%20in%20Equity) Condensed Consolidated Statements of Change in Equity Highlights (in thousands, except share data) | Metric | June 30, 2019 | January 1, 2019 (Adjusted) | | :----------------------------------- | :------------ | :------------------------- | | Common stock (shares) | 630,672,578 | 627,454,270 | | Common stock ($) | $943 | $939 | | Additional paid in capital | $581,245 | $574,208 | | Accumulated other comprehensive loss | $(8,199) | $(9,763) | | Accumulated deficit | $(386,998) | $(318,499) | | Total stockholders' equity | $186,991 | $246,885 | [Unaudited Condensed Consolidated Statements of Cash Flows](index=12&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Condensed Consolidated Statements of Cash Flows Highlights (in thousands) | Cash Flow Activity (6 months ended June 30) | 2019 | 2018 | | :------------------------------------------ | :---------- | :---------- | | Net cash used in operating activities | $(70,371) | $(82,642) | | Net cash provided by investing activities | $36,217 | $34,012 | | Net cash provided by financing activities | $366 | $2,424 | | Cash, cash equivalents and restricted cash at end of period | $38,977 | $46,507 | [Notes to Unaudited Condensed Consolidated Financial Statements](index=13&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) This section details notes accompanying the unaudited condensed consolidated financial statements, explaining policies and line items [Note 1 — General](index=13&type=section&id=Note%201%20%E2%80%94%20General) - Adaptimmune Therapeutics plc is a clinical-stage biopharmaceutical company focused on novel cell therapies for solid tumors, utilizing its proprietary SPEAR T-cell platform[26](index=26&type=chunk) - The Company reported an accumulated deficit of **$387.0 million** as of June 30, 2019, highlighting the early stage of clinical development and associated risks[27](index=27&type=chunk) [Note 2 — Summary of Significant Accounting Policies](index=13&type=section&id=Note%202%20%E2%80%94%20Summary%20of%20Significant%20Accounting%20Policies) - The Company adopted ASC 842 (Leases) on January 1, 2019, using a modified retrospective approach, which resulted in the recognition of **$22.2 million** in right-of-use assets and **$26.9 million** in operating lease liabilities[31](index=31&type=chunk)[42](index=42&type=chunk)[43](index=43&type=chunk) - The incremental borrowing rate used for lease liability calculations was increased from **4.65% to 7.2%**, leading to a **$2.6 million** reduction in both the right-of-use asset and corresponding lease liability[44](index=44&type=chunk) - New accounting pronouncements for future periods include guidance on credit losses (ASU 2016-13), cloud computing arrangement implementation costs (ASU 2018-15), and fair value measurement disclosures (ASU 2018-13), with the Company currently evaluating their impact[45](index=45&type=chunk)[46](index=46&type=chunk)[47](index=47&type=chunk) [Note 3 — Revenue](index=17&type=section&id=Note%203%20%E2%80%94%20Revenue) - Revenue for the three and six months ended June 30, 2019, was **$157 thousand**, a significant decrease from **$9,038 thousand** and **$17,234 thousand** in the corresponding periods of 2018, primarily due to the completion of the PRAME and NY-ESO programs in 2018[48](index=48&type=chunk)[52](index=52&type=chunk) - The current revenue is from the GSK Collaboration and License Agreement, following GSK's nomination of a **third target**, with **$3.0 million** of the transaction price allocated to unsatisfied performance obligations to be recognized over an estimated **18 months**[48](index=48&type=chunk)[49](index=49&type=chunk) Deferred Revenue Movements (in thousands) | Metric | Amount | | :---------------------------- | :--------- | | Deferred revenue at Jan 1, 2019 | $0 | | Revenue in the period | $(157) | | Amounts invoiced in the period| $3,217 | | Foreign exchange | $(44) | | Deferred revenue at Jun 30, 2019| $3,016 | [Note 4 – Operating leases](index=19&type=section&id=Note%204%20%E2%80%93%20Operating%20leases) Operating Lease Costs and Information (in thousands) | Metric (3 months ended June 30, 2019) | Amount | | :------------------------------------ | :------- | | Operating lease cost | $1,024 | | Short-term lease cost | $121 | | Total lease cost | $1,145 | | Metric (6 months ended June 30, 2019) | Amount | | :------------------------------------ | :------- | | Operating lease cost | $2,014 | | Short-term lease cost | $168 | | Total lease cost | $2,182 | | Operating cash flows from operating leases | $2,194 | | Weighted-average remaining lease term | 7.8 years| | Weighted-average discount rate | 7.2% | Maturities of Operating Lease Liabilities (in thousands) | Year | Operating Leases | | :----------- | :--------------- | | 2019 | $2,037 | | 2020 | $4,110 | | 2021 | $4,153 | | 2022 | $4,158 | | 2023 | $3,918 | | after 2023 | $16,302 | | Total lease payments | $34,678 | | Less: Imputed interest | $(8,674) | | Present value of lease liability | $26,004 | [Note 5 — Other expense, net](index=20&type=section&id=Note%205%20%E2%80%94%20Other%20expense%2C%20net) Other Expense, Net (in thousands) | Metric (3 months ended June 30) | 2019 | 2018 | | :------------------------------ | :---------- | :---------- | | Foreign exchange losses | $(6,403) | $(14,022) | | Gains (losses) on securities | $13 | $(1,310) | | Other | $113 | $(74) | | Total | $(6,277) | $(15,406) | | Metric (6 months ended June 30) | 2019 | 2018 | | :------------------------------ | :---------- | :---------- | | Foreign exchange losses | $(1,013) | $(5,605) | | Gains (losses) on securities | $13 | $(2,473) | | Other | $153 | $(198) | | Total | $(847) | $(8,276) | [Note 6 — Loss per share](index=20&type=section&id=Note%206%20%E2%80%94%20Loss%20per%20share) - Stock options totaling **97,292,240** as of June 30, 2019, and **87,434,329** as of June 30, 2018, were excluded from diluted loss per share calculations due to their anti-dilutive effect[56](index=56&type=chunk) [Note 7 — Accumulated other comprehensive income (loss)](index=20&type=section&id=Note%207%20%E2%80%94%20Accumulated%20other%20comprehensive%20income%20%28loss%29) Reclassification from Accumulated Other Comprehensive Income (in thousands) | Component (3 months ended June 30) | 2019 | 2018 | | :--------------------------------- | :----- | :----- | | Unrealized gains (losses) on AFS debt securities | $(13) | $1,310 | | Component (6 months ended June 30) | 2019 | 2018 | | :--------------------------------- | :----- | :----- | | Unrealized gains (losses) on AFS debt securities | $(13) | $2,473 | [Note 8 — Fair value measurements](index=21&type=section&id=Note%208%20%E2%80%94%20Fair%20value%20measurements) Marketable Securities Fair Value Measurements (in thousands) as of June 30, 2019 | Asset Category | Total Fair Value | Level 1 | Level 2 | Level 3 | | :---------------------- | :--------------- | :--------- | :--------- | :------ | | Corporate debt securities | $91,831 | $91,831 | $— | $— | | Agency bond | $3,999 | $— | $3,999 | $— | | Certificate of deposit | $3,002 | $— | $3,002 | $— | | Total | $98,832 | $91,831 | $7,001 | $— | [Note 9 — Available-for-sale debt securities](index=21&type=section&id=Note%209%20%E2%80%94%20Available-for-sale%20debt%20securities) Available-for-Sale Debt Securities (in thousands) as of June 30, 2019 | Security Type | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Aggregate Estimated Fair Value | | :---------------------- | :------------- | :--------------------- | :---------------------- | :----------------------------- | | Money market funds | $10,241 | $— | $— | $10,241 | | Corporate debt securities | $91,730 | $103 | $(2) | $91,831 | | Agency bond | $3,992 | $7 | $— | $3,999 | | Certificate of deposit | $3,002 | $— | $— | $3,002 | | Total | $108,965 | $110 | $(2) | $109,073 | - The aggregate fair value of securities in an unrealized loss position decreased significantly to **$9.6 million** as of June 30, 2019, from **$117.2 million** as of December 31, 2018[59](index=59&type=chunk) [Note 10 — Other current assets](index=22&type=section&id=Note%2010%20%E2%80%94%20Other%20current%20assets) Other Current Assets (in thousands) | Asset Category | June 30, 2019 | December 31, 2018 | | :--------------------- | :------------ | :---------------- | | Corporate tax receivable | $26,328 | $16,459 | | Prepayments | $8,600 | $6,279 | | Clinical materials | $1,755 | $1,087 | | VAT receivable | $636 | $1,505 | | Other current assets | $599 | $439 | | Total | $37,918 | $25,769 | [Note 11 — Accrued expenses and other current liabilities](index=22&type=section&id=Note%2011%20%E2%80%94%20Accrued%20expenses%20and%20other%20current%20liabilities) Accrued Expenses and Other Current Liabilities (in thousands) | Liability Category | June 30, 2019 | December 31, 2018 | | :--------------------------------- | :------------ | :---------------- | | Accrued clinical & development expenditure | $9,769 | $9,637 | | Accrued employee expenses | $5,678 | $7,553 | | Other accrued expenditure | $2,739 | $2,422 | | Other | $409 | $742 | | Total | $18,595 | $20,354 | [Note 12 — Share-based compensation](index=22&type=section&id=Note%2012%20%E2%80%94%20Share-based%20compensation) Share-Based Compensation Expense (in thousands) | Expense Category (3 months ended June 30) | 2019 | 2018 | | :---------------------------------------- | :----- | :----- | | Research and development | $786 | $2,071 | | General and administrative | $2,410 | $2,008 | | Total | $3,196 | $4,079 | | Expense Category (6 months ended June 30) | 2019 | 2018 | | :---------------------------------------- | :----- | :----- | | Research and development | $2,807 | $4,285 | | General and administrative | $3,868 | $4,126 | | Total | $6,675 | $8,411 | Share Options Granted | Metric (3 months ended June 30) | 2019 | 2018 | | :------------------------------ | :---------- | :---------- | | Ordinary shares options granted | 936,696 | 1,435,685 | | Wtd. avg. fair value of options | $0.39 | $1.18 | | Nominal exercise price options granted | 459,240 | 151,056 | | Wtd. avg. fair value of nominal options | $0.70 | $1.88 | | Metric (6 months ended June 30) | 2019 | 2018 | | :------------------------------ | :---------- | :---------- | | Ordinary shares options granted | 11,743,896 | 11,430,341 | | Wtd. avg. fair value of options | $0.54 | $0.80 | | Nominal exercise price options granted | 6,957,366 | 6,703,692 | | Wtd. avg. fair value of nominal options | $0.93 | $1.35 | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=23&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the company's financial condition, operational results, clinical pipeline, significant events, and liquidity [Overview](index=23&type=section&id=Overview) - Adaptimmune is a clinical-stage biopharmaceutical company focused on developing novel cell therapies, specifically SPEAR (Specific Peptide Enhanced Affinity Receptor) T-cells, for the treatment of solid tumors[66](index=66&type=chunk) - The company aims to be the first to achieve regulatory approval for a TCR T-cell therapy in a solid tumor indication[66](index=66&type=chunk) [Update on Clinical Pipeline Progress](index=23&type=section&id=Update%20on%20Clinical%20Pipeline%20Progress) - The company has ongoing clinical trials for wholly-owned SPEAR T-cells (ADP-A2M4, ADP-A2M10, ADP-A2AFP) across **ten** solid tumor types, including synovial sarcoma, MRCLS, NSCLC, head and neck, ovarian, urothelial, melanoma, hepatocellular, esophageal, and gastric cancers[67](index=67&type=chunk) - For ADP-A2M4, a **Phase 2 trial** (SPEARHEAD-1) has been initiated in synovial sarcoma and MRCLS, and a **Phase 1** multi-tumor trial is in its Expansion Phase, showing a favorable safety profile and tumor shrinkage in some synovial sarcoma patients (**3** confirmed partial responses, **1** unconfirmed PR out of **8** assessed)[68](index=68&type=chunk)[69](index=69&type=chunk)[72](index=72&type=chunk) - A **Phase 1 trial** for the next-generation SPEAR T-cell, ADP-A2M4CD8 (SURPASS Trial), has been initiated, featuring a CD8α homodimer to enhance potency[74](index=74&type=chunk) - Safety concerns led to protocol amendments for ADP-A2M4 and ADP-A2M10 trials after reports of prolonged severe pancytopenia with aplastic anemia and neurotoxicity/stroke in patients receiving the highest lymphodepletion regimen[71](index=71&type=chunk)[77](index=77&type=chunk) - Under the GSK Collaboration and License Agreement, GSK has nominated a **third target program**, which has commenced, and retains rights to nominate a **fourth** and potentially a **fifth target**[78](index=78&type=chunk) [Significant Events in the Three Months Ended June 30, 2019](index=27&type=section&id=Significant%20Events%20in%20the%20Three%20Months%20Ended%20June%2030%2C%202019) - Adaptimmune entered into a collaboration and license agreement with Alpine Immune Sciences, Inc. to develop next-generation SPEAR T-cell products incorporating Alpine's immunomodulatory protein technology[79](index=79&type=chunk) - Adrian Rawcliffe, the CFO, was announced to succeed James Noble as CEO, effective **September 1, 2019**[79](index=79&type=chunk) [Subsequent Events since June 30, 2019](index=27&type=section&id=Subsequent%20Events%20since%20June%2030%2C%202019) - Dr. Rafael Amado, President of Research and Development, departed on **August 12, 2019**, and John Lunger was appointed Chief Patient Supply Officer from **August 1, 2019**. The company is actively recruiting for a Chief Medical Officer and a Chief Financial Officer[80](index=80&type=chunk) [Financial Operations Overview](index=27&type=section&id=Financial%20Operations%20Overview) - The Company adopted ASC 842 (Leases) on **January 1, 2019**, using a modified retrospective approach, with no impact on the opening balance of equity[81](index=81&type=chunk) - Revenue is primarily derived from the GSK Collaboration and License Agreement, with future revenues dependent on the progress of development programs and GSK's NY-ESO program[82](index=82&type=chunk)[83](index=83&type=chunk) - Research and development expenses are expensed as incurred and are offset by reimbursable tax and expenditure credits from the U.K. government, including the SME R&D Tax Credit Scheme (up to **33.4%** of eligible R&D) and the RDEC Scheme (approx. **9.7%** of qualifying expenditure)[86](index=86&type=chunk)[87](index=87&type=chunk)[88](index=88&type=chunk) - Other expense, net, primarily consists of foreign exchange gains and losses, with the company exposed to fluctuations in U.S. dollar and pounds sterling exchange rates[92](index=92&type=chunk) - The Company benefits from U.S. Research Tax Credit and Orphan Drug Credit, and potentially the U.K.'s 'patent box' regime (**10%** tax rate on patented product profits) in the future[96](index=96&type=chunk)[97](index=97&type=chunk) [Results of Operations](index=34&type=section&id=Results%20of%20Operations) Comparison of Three Months Ended June 30, 2019 and 2018 (in thousands) | Metric | 2019 | 2018 | Change ($) | Change (%) | | :-------------------------------- | :---------- | :---------- | :---------- | :--------- | | Revenue | $157 | $9,038 | $(8,881) | (98)% | | Research and development expenses | $(25,511) | $(26,624) | $1,113 | (4)% | | General and administrative expenses | $(10,148) | $(11,291) | $1,143 | (10)% | | Operating loss | $(35,502) | $(28,877) | $(6,625) | 23% | | Other income (expense), net | $(6,277) | $(15,406) | $9,129 | (59)% | | Loss for the period | $(41,087) | $(43,845) | $2,758 | (6)% | - Revenue decreased by **98%** for the three months ended June 30, 2019, primarily due to the completion of the NY-ESO transition program and PRAME development plan in 2018, with current revenue from the new GSK **third target** development[103](index=103&type=chunk)[104](index=104&type=chunk) - Research and development expenses decreased by **4%** for the three months ended June 30, 2019, driven by a **$2.5 million** decrease in subcontracted expenditures and a **$1.3 million** decrease in share-based compensation, partially offset by a **$2.0 million** increase in payments for in-process R&D (Alpine collaboration) and a **$1.3 million** increase in employee-related costs[106](index=106&type=chunk)[108](index=108&type=chunk)[109](index=109&type=chunk) Comparison of Six Months Ended June 30, 2019 and 2018 (in thousands) | Metric | 2019 | 2018 | Change ($) | Change (%) | | :-------------------------------- | :---------- | :---------- | :---------- | :--------- | | Revenue | $157 | $17,234 | $(17,077) | (99)% | | Research and development expenses | $(47,530) | $(52,016) | $4,486 | (9)% | | General and administrative expenses | $(21,921) | $(22,495) | $574 | (3)% | | Operating loss | $(69,294) | $(57,277) | $(12,017) | 21% | | Other expense, net | $(847) | $(8,276) | $7,429 | (90)% | | Loss for the period | $(68,499) | $(64,583) | $(3,916) | 6% | - For the **six months** ended June 30, 2019, revenue decreased by **99%**, and R&D expenses decreased by **9%**, primarily due to similar factors as the three-month period, including reduced subcontracted expenditures and increased R&D tax credits[116](index=116&type=chunk)[121](index=121&type=chunk)[123](index=123&type=chunk) [Liquidity and Capital Resources](index=40&type=section&id=Liquidity%20and%20Capital%20Resources) - Since inception, the Company has financed operations through equity sales (**$513.8 million**), GSK Collaboration receipts (**$148.3 million**), government grants (**$2.8 million**), and UK R&D tax credits (**$24.6 million**)[128](index=128&type=chunk) Total Liquidity (Non-GAAP) (in thousands) | Metric | June 30, 2019 | December 31, 2018 | | :---------------------- | :------------ | :---------------- | | Cash and cash equivalents | $34,574 | $68,379 | | Marketable securities | $98,832 | $136,755 | | Total Liquidity | $133,406 | $205,134 | - Total Liquidity (cash, cash equivalents, and marketable securities) was **$133.4 million** as of June 30, 2019, down from **$205.1 million** at December 31, 2018, and is expected to fund operations through the **third quarter of 2020**[130](index=130&type=chunk)[136](index=136&type=chunk) - Net cash used in operating activities decreased by **$12.2 million** to **$70.4 million** for the **six months** ended June 30, 2019, primarily due to decreased manufacturing expenses and clinical trial costs following the transfer of NY-ESO to GSK[132](index=132&type=chunk) - The Company paid an upfront exclusive license option fee of **$2 million** to Alpine Immune Sciences, Inc. in June 2019, with potential future development and commercialization milestone payments up to **$288 million** and low single-digit royalties[139](index=139&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=42&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section refers to the 2018 Annual Report on Form 10-K for market risk disclosures, noting no material changes for the six months ended June 30, 2019 - No material changes in quantitative and qualitative disclosures about market risk were reported for the **six months** ended June 30, 2019[141](index=141&type=chunk) [Item 4. Controls and Procedures](index=42&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls were effective as of June 30, 2019, and reported new internal controls implemented due to ASC 842 adoption - The Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were effective as of June 30, 2019[142](index=142&type=chunk) - New internal controls were implemented in the **quarter** ended March 31, 2019, to address the accounting for leases under ASC 842[145](index=145&type=chunk) - No changes in internal control over financial reporting materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting during the **quarter** ended June 30, 2019[146](index=146&type=chunk) PART II — OTHER INFORMATION This section provides other required information, including legal proceedings, risk factors, equity sales, and exhibits [Item 1. Legal Proceedings](index=44&type=section&id=Item%201.%20Legal%20Proceedings%2E) As of June 30, 2019, Adaptimmune Therapeutics plc was not a party to any material legal proceedings - The Company was not involved in any material legal proceedings as of June 30, 2019[147](index=147&type=chunk) [Item 1A. Risk Factors](index=44&type=section&id=Item%201A.%2E%20Risk%20Factors%2E) This section details significant risks affecting Adaptimmune's business, financial condition, and operations, including financial stability, product development, regulatory compliance, and market factors [Risks Related to Our Financial Condition and Capital Requirements](index=44&type=section&id=Risks%20Related%20to%20Our%20Financial%20Condition%20and%20Capital%20Requirements) - As a clinical-stage biopharmaceutical company with no commercial products, Adaptimmune has incurred significant net losses since its inception, with an accumulated deficit of **$387.0 million** as of June 30, 2019[150](index=150&type=chunk)[151](index=151&type=chunk)[152](index=152&type=chunk) - The company's ability to generate revenue and achieve profitability is highly dependent on the successful development, regulatory approval, and commercialization of its SPEAR T-cells, which is a highly speculative and risky endeavor[153](index=153&type=chunk)[154](index=154&type=chunk) - Adaptimmune will require substantial additional financing to complete development and commercialization, and there is no guarantee that such funding will be available on acceptable terms, potentially leading to delays or discontinuation of programs and dilution for existing shareholders[157](index=157&type=chunk)[158](index=158&type=chunk)[159](index=159&type=chunk)[160](index=160&type=chunk) [Risks Related to the Development of Our SPEAR T-cells](index=48&type=section&id=Risks%20Related%20to%20the%20Development%20of%20Our%20SPEAR%20T-cells) - The success of Adaptimmune's business is highly dependent on its wholly-owned SPEAR T-cell candidates (ADP-A2M4, ADP-A2M4CD8, ADP-A2AFP), which require significant additional clinical testing and face no guarantee of regulatory approval[162](index=162&type=chunk)[163](index=163&type=chunk)[164](index=164&type=chunk) - There is a risk of potentially fatal cross-reactivity to other peptides or protein sequences within the human body, as demonstrated by a prior MAGE-A3 program, despite preclinical safety testing programs[170](index=170&type=chunk)[171](index=171&type=chunk) - The novel gene therapy approach of SPEAR T-cells may lead to heightened regulatory scrutiny, delays in clinical development, and potential long-term adverse events like insertional oncogenesis or new pathogenic strains of virus[173](index=173&type=chunk)[174](index=174&type=chunk)[177](index=177&type=chunk)[178](index=178&type=chunk) - Clinical trials are subject to significant risks, including serious adverse events (e.g., cytokine release syndrome, prolonged severe pancytopenia with aplastic anemia, neurotoxicity, stroke), low efficacy, and less favorable benefit-risk profiles, which could halt or delay programs[188](index=188&type=chunk)[190](index=190&type=chunk)[191](index=191&type=chunk)[192](index=192&type=chunk) - Manufacturing and administering SPEAR T-cells is complex and highly regulated, with risks including failures in the manufacturing process, lack of reproducibility, variations in patient material, logistical issues, and inability to secure manufacturing slots or raw materials, potentially delaying clinical trials or commercial supply[213](index=213&type=chunk)[214](index=214&type=chunk)[215](index=215&type=chunk)[216](index=216&type=chunk) [Risks Related to Government Regulation](index=70&type=section&id=Risks%20Related%20to%20Government%20Regulation) - The FDA regulatory approval process is lengthy, complex, and uncertain, especially for novel SPEAR T-cells, potentially leading to significant delays, additional clinical trials, or denial of approval[253](index=253&type=chunk)[254](index=254&type=chunk)[255](index=255&type=chunk) - Obtaining regulatory approval in one jurisdiction does not guarantee approval in others, and foreign regulatory processes can involve different requirements, longer timelines, and pricing controls[262](index=262&type=chunk)[263](index=263&type=chunk)[264](index=264&type=chunk) - The company may seek breakthrough therapy, fast track, or accelerated approval designations, but there is no assurance of obtaining or maintaining such designations or their associated benefits[265](index=265&type=chunk)[268](index=268&type=chunk)[269](index=269&type=chunk)[270](index=270&type=chunk) - Post-approval, SPEAR T-cells will be subject to ongoing regulatory obligations, including surveillance, manufacturing compliance (cGMPs), and restrictions on promotion, with non-compliance potentially leading to severe penalties[273](index=273&type=chunk)[274](index=274&type=chunk)[275](index=275&type=chunk) - The company relies on UK R&D tax credits (SME R&D Tax Credit Scheme, RDEC Scheme) and potentially the 'patent box' regime, but changes to these schemes or failure to qualify could adversely impact financial condition[300](index=300&type=chunk)[301](index=301&type=chunk)[302](index=302&type=chunk)[303](index=303&type=chunk) [Risks Related to the Commercialization of Our SPEAR T-cells](index=89&type=section&id=Risks%20Related%20to%20the%20Commercialization%20of%20Our%20SPEAR%20T-cells) - Market opportunities for SPEAR T-cells may be limited to patients who have failed prior treatments (e.g., third-line use), and patient population estimates may be inaccurate, especially given HLA type variability[304](index=304&type=chunk)[306](index=306&type=chunk)[307](index=307&type=chunk) - The company currently lacks a marketing and sales organization and will need to invest significantly or rely on third parties to commercialize products, facing competition in recruiting personnel or securing collaborations[308](index=308&type=chunk)[309](index=309&type=chunk) - Product liability lawsuits pose an inherent risk, potentially leading to substantial liabilities, limitations on commercialization, and significant financial and management resource diversion, with current insurance coverage possibly being inadequate[310](index=310&type=chunk)[311](index=311&type=chunk)[312](index=312&type=chunk) - Even with regulatory approval, SPEAR T-cells may not gain market acceptance among physicians, patients, and the medical community due to factors like perceived safety, efficacy, cost, and competition from alternative treatments[314](index=314&type=chunk)[315](index=315&type=chunk)[316](index=316&type=chunk) - Successful sales depend on obtaining coverage and adequate reimbursement from third-party payors, which is a time-consuming and costly process, and government healthcare reforms could further impact profitability[317](index=317&type=chunk)[318](index=318&type=chunk)[319](index=319&type=chunk)[320](index=320&type=chunk)[321](index=321&type=chunk)[325](index=325&type=chunk) [Risks Related to Our Reliance Upon Third Parties](index=96&type=section&id=Risks%20Related%20to%20Our%20Reliance%20Upon%20Third%20Parties) - The company relies heavily on GSK for the progression of collaboration programs and associated payments, but GSK has control over development decisions, may terminate agreements, and has competing interests (e.g., Novartis opt-in rights)[330](index=330&type=chunk)[331](index=331&type=chunk)[332](index=332&type=chunk)[335](index=335&type=chunk)[336](index=336&type=chunk) - Dependence on ThermoFisher for Dynabeads® CD3/CD28 technology carries risks of supply disruption, increased costs, or the need to find alternative sources, which could delay clinical programs[339](index=339&type=chunk)[340](index=340&type=chunk)[341](index=341&type=chunk)[342](index=342&type=chunk) - Reliance on outside contract manufacturing organizations (CMOs) and other third parties for SPEAR T-cell manufacturing and supply exposes the company to risks of inability to contract, quality issues, delays, and non-compliance with cGMP regulations[344](index=344&type=chunk)[345](index=345&type=chunk)[346](index=346&type=chunk)[347](index=347&type=chunk)[352](index=352&type=chunk) - The use of sole or limited source suppliers for raw materials (e.g., lentiviral delivery vector, Dynabeads®) and precursor materials creates significant supply chain risks, potentially leading to delays or necessitating costly manufacturing process changes[356](index=356&type=chunk) - Reliance on third parties to conduct clinical trials (e.g., CROs, investigators) means the company has limited day-to-day control, and their failure to meet duties or deadlines could delay or terminate clinical programs[364](index=364&type=chunk)[365](index=365&type=chunk)[366](index=366&type=chunk)[368](index=368&type=chunk) [Risks Related to Our Intellectual Property](index=107&type=section&id=Risks%20Related%20to%20Our%20Intellectual%20Property) - SPEAR T-cells could face competition from biosimilar development through expedited regulatory pathways, potentially impacting market price and commercialization[376](index=376&type=chunk) - The company may be forced into costly and time-consuming litigation to enforce or defend its intellectual property rights, risking invalidation, unenforceability, or narrowing of patent scope[377](index=377&type=chunk)[378](index=378&type=chunk)[379](index=379&type=chunk) - Protecting proprietary technology through patents and trade secrets is challenging; patent protection may not be available, and enforcement can be expensive, especially in foreign jurisdictions with weaker IP laws[380](index=380&type=chunk)[381](index=381&type=chunk)[383](index=383&type=chunk)[385](index=385&type=chunk) - Changes in U.S. patent law, such as recent Supreme Court rulings, could diminish the value of patents and impair the ability to protect products[400](index=400&type=chunk)[401](index=401&type=chunk) - The company may require licenses from third parties for intellectual property rights related to SPEAR T-cell development, commercialization, or manufacturing, which may not be available on acceptable commercial terms[392](index=392&type=chunk)[393](index=393&type=chunk)[394](index=394&type=chunk) [Risks Related to Employee Matters and Managing Growth](index=115&type=section&id=Risks%20Related%20to%20Employee%20Matters%20and%20Managing%20Growth) - The company's success depends on key personnel and the ability to attract and retain experienced employees, with current recruitment ongoing for critical roles like Chief Medical Officer and Chief Financial Officer[405](index=405&type=chunk)[406](index=406&type=chunk)[407](index=407&type=chunk) - Managing organizational growth, including expanding personnel and operational capabilities, poses significant challenges and could divert management attention and resources[408](index=408&type=chunk)[409](index=409&type=chunk)[410](index=410&type=chunk) - Operating its own manufacturing facility at Navy Yard introduces risks related to regulatory approval, reliable and reproducible manufacturing, compliance, and potential increased costs[412](index=412&type=chunk)[413](index=413&type=chunk)[415](index=415&type=chunk)[416](index=416&type=chunk) - The biopharmaceutical industry is intensely competitive, with numerous companies developing various immunotherapy approaches (e.g., CAR-T, TCR T-cells, allogeneic therapies), many with greater resources and experience[417](index=417&type=chunk)[418](index=418&type=chunk)[419](index=419&type=chunk)[420](index=420&type=chunk)[421](index=421&type=chunk)[422](index=422&type=chunk) - Brexit introduces risks of negative impacts on global economic conditions, financial markets, regulatory processes, trade barriers, and currency exchange rate volatility[425](index=425&type=chunk)[426](index=426&type=chunk)[428](index=428&type=chunk) - The company is exposed to risks from information technology system failures, business disruptions (e.g., natural disasters, epidemics), and currency exchange rate fluctuations, which could harm operations and financial results[429](index=429&type=chunk)[430](index=430&type=chunk)[431](index=431&type=chunk)[432](index=432&type=chunk) [Risks Related to Ownership of our American Depositary Shares (ADSs)](index=125&type=section&id=Risks%20Related%20to%20Ownership%20of%20our%20American%20Depositary%20Shares%20%28ADSs%29) - The price of the company's ADSs may be volatile due to various factors, including clinical trial results, regulatory approvals, competition, financial performance, and general market conditions[436](index=436&type=chunk)[437](index=437&type=chunk)[438](index=438&type=chunk) - Substantial future sales of ADSs in the public market, or the perception of such sales, could cause the price to decline and dilute existing shareholders[439](index=439&type=chunk)[440](index=440&type=chunk) - Operating as a U.S. public company incurs increased legal, accounting, and compliance costs, diverting management time and potentially impacting financial results and the ability to attract qualified personnel[441](index=441&type=chunk)[442](index=442&type=chunk) - Failure to establish and maintain proper internal controls could impair the ability to produce accurate financial statements and comply with regulations, leading to loss of investor confidence and potential sanctions[443](index=443&type=chunk)[444](index=444&type=chunk) - U.S. investors may face difficulties enforcing civil liabilities against the company or its non-U.S. directors and officers due to differences in English and U.S. law and the lack of a treaty for judgment enforcement[445](index=445&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=129&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds%2E) This section states that there were no unregistered sales of equity securities or use of proceeds to report for the period - No unregistered sales of equity securities or use of proceeds were reported[449](index=449&type=chunk) [Item 3. Defaults Upon Senior Securities](index=129&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities%2E) This section indicates that there were no defaults upon senior securities to report for the period - No defaults upon senior securities were reported[449](index=449&type=chunk) [Item 4. Mine Safety Disclosures](index=129&type=section&id=Item%204.%20Mine%20Safety%20Disclosures%2E) This section states that mine safety disclosures are not applicable to the company - Mine safety disclosures are not applicable to the Company[449](index=449&type=chunk) [Item 5. Other Information](index=129&type=section&id=Item%205.%20Other%20Information%2E) This section indicates that there is no other information to report for the period - No other information was reported[449](index=449&type=chunk) [Item 6. Exhibits](index=130&type=section&id=Item%206.%20Exhibits%2E) This section lists the exhibits filed as part of the Quarterly Report on Form 10-Q, including corporate governance documents, collaboration agreements, employment agreements, and certifications - Key exhibits include the Articles of Association, a Collaboration Agreement with AIS Operating Co., Inc. (f/k/a Alpine Immune Sciences, Inc.) dated **May 14, 2019**, and employment agreements for Adrian Rawcliffe and James Noble[450](index=450&type=chunk) - The report also includes certifications from the Principal Executive Officer and Principal Financial Officer as required by the Sarbanes-Oxley Act of 2002[450](index=450&type=chunk) [SIGNATURES](index=131&type=section&id=SIGNATURES) The Quarterly Report on Form 10-Q was signed on August 1, 2019, by James Noble, CEO, and Adrian Rawcliffe, CFO, for Adaptimmune Therapeutics plc - The report was signed by James Noble, Chief Executive Officer, and Adrian Rawcliffe, Chief Financial Officer, on **August 1, 2019**[452](index=452&type=chunk)