[PART I - FINANCIAL INFORMATION](index=8&type=section&id=PART%20I%20-%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements](index=8&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements and accompanying notes for the period [INDEX TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)](index=8&type=section&id=INDEX%20TO%20CONDENSED%20CONSOLIDATED%20FINANCIAL%20STATEMENTS%20(UNAUDITED)) - The index lists the unaudited condensed consolidated financial statements included in the report, such as Balance Sheets, Statements of Operations and Comprehensive Loss, Statements of Changes in Redeemable Convertible Preferred Shares and Shareholders' Deficit, Statements of Cash Flows, and Notes to Condensed Consolidated Financial Statements[18](index=18&type=chunk) [Condensed Consolidated Balance Sheets](index=9&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) ASSETS (in thousands) | ASSETS (in thousands) | March 31, 2021 | December 31, 2020 | | :-------------------- | :------------- | :---------------- | | Cash and cash equivalents | $155,935 | $43,266 | | Total current assets | $163,365 | $47,901 | | Total assets | $166,491 | $50,666 | | LIABILITIES (in thousands) | March 31, 2021 | December 31, 2020 | | :-------------------- | :------------- | :---------------- | | Convertible loan notes – non current | $- | $44,700 | | Total liabilities | $10,085 | $53,813 | | SHAREHOLDERS' DEFICIT (in thousands) | March 31, 2021 | December 31, 2020 | | :-------------------- | :------------- | :---------------- | | Series B redeemable convertible preferred shares | $175,501 | $- | | Accumulated deficit | $(72,988) | $(57,720) | | Total shareholders' deficit | $(52,831) | $(36,912) | - Cash and cash equivalents saw a substantial increase from **$43.3 million to $155.9 million**, contributing to a significant rise in total assets[20](index=20&type=chunk) - Convertible loan notes were fully converted, reducing non-current liabilities to zero, while the company issued **Series B redeemable convertible preferred shares totaling $175.5 million**[20](index=20&type=chunk) [Condensed Consolidated Statements of Operations and Comprehensive Loss](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) (IN THOUSANDS) | (IN THOUSANDS) | Three months ended March 31, 2021 | Three months ended March 31, 2020 | | :------------- | :-------------------------------- | :-------------------------------- | | Total revenue | $215 | $705 | | Total operating expenses | $6,387 | $5,354 | | Loss from operations | $(6,172) | $(4,649) | | Change in fair value of derivatives | $5,994 | $- | | Loss on extinguishment of convertible loan notes | $(13,789) | $- | | Interest expense | $(2,650) | $- | | Research and development incentives | $955 | $698 | | Net loss | $(15,386) | $(3,951) | | Net loss per share attributable to ordinary shareholders, basic and diluted | $(1.90) | $(0.49) | - Total revenue decreased by **69.5%** year-over-year, while total operating expenses increased by **19.3%**[24](index=24&type=chunk) - The company recognized a significant loss of **$13.8 million** on the extinguishment of convertible loan notes, leading to a substantial increase in net loss to **$15.4 million**[24](index=24&type=chunk) [Condensed Consolidated Statements of Changes in Redeemable Convertible Preferred Shares And Shareholders' Deficit](index=11&type=section&id=Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Redeemable%20Convertible%20Preferred%20Shares%20And%20Shareholders'%20Deficit) (IN THOUSANDS) | (IN THOUSANDS) | Series A Redeemable Preferred Shares Amount | Series B Redeemable Convertible Preferred Shares Amount | Additional Paid-in-capital | Accumulated Deficit | | :------------- | :------------------------------------------ | :------------------------------------------------------ | :------------------------- | :------------------ | | Balance, January 1, 2021, as restated | $33,765 | $- | $21,660 | $(57,720) | | Issue of Series B shares, net of issuance costs | $- | $121,837 | $- | $- | | Series B Shares issued on conversion of convertible notes | $- | $53,721 | $- | $- | | Net loss | $- | $- | $- | $(15,268) | | Balance, March 31, 2021 | $33,736 | $175,501 | $22,457 | $(72,988) | - The company issued Series B preferred shares totaling **$121.8 million** (net of issuance costs) and an additional **$53.7 million** from the conversion of convertible loan notes[27](index=27&type=chunk) - The accumulated deficit grew by **$15.3 million** due to the net loss for the period[27](index=27&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=13&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) (IN THOUSANDS) | (IN THOUSANDS) | Three months ended March 31, 2021 | Three months ended March 31, 2020 | | :------------- | :-------------------------------- | :-------------------------------- | | Net cash used in operating activities | $(7,969) | $(4,321) | | Net cash used in investing activities | $(392) | $(22) | | Net cash provided by financing activities | $121,815 | $- | | Net increase (decrease) in cash and cash equivalents | $112,669 | $(4,998) | | Cash and cash equivalents, end of the period | $155,935 | $6,435 | - Net cash provided by financing activities dramatically increased to **$121.8 million** from the issuance of Series B shares[31](index=31&type=chunk) - This resulted in a net increase of **$112.7 million** in cash and cash equivalents, bringing the period-end balance to **$155.9 million**[31](index=31&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=14&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) [1. Nature of Business and Basis of Presentation](index=14&type=section&id=1.%20Nature%20of%20Business%20and%20Basis%20of%20Presentation) - Vaccitech plc is a clinical-stage biopharmaceutical company focused on immunotherapeutics and vaccines for infectious diseases and cancer[34](index=34&type=chunk)[35](index=35&type=chunk) - The company operates in a high-risk environment with no approved products and expects to incur significant losses[36](index=36&type=chunk) - An error related to the omission of **$2.1 million** in share-based compensation expense for the period ended December 31, 2019, was corrected[40](index=40&type=chunk) [2. Summary of Significant Accounting Policies](index=16&type=section&id=2.%20Summary%20of%20Significant%20Accounting%20Policies) - The company's financial statements are prepared in conformity with U.S. GAAP, requiring management to make estimates and assumptions[46](index=46&type=chunk)[47](index=47&type=chunk) - The company adopted ASU No. 2018-15 on January 1, 2021, which had no impact on its financial position or results of operations[49](index=49&type=chunk) [3. Net Loss Per Share](index=17&type=section&id=3.%20Net%20Loss%20Per%20Share) (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) | (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) | Three months ended March 31, 2021 | Three months ended March 31, 2020 | | :--------------------------------------- | :-------------------------------- | :-------------------------------- | | Net loss attributable to Vaccitech shareholders | $(15,268) | $(3,821) | | Weighted-average ordinary shares outstanding, basic and diluted | 8,057,216 | 7,816,681 | | Net loss per share attributable to ordinary shareholders, basic and diluted | $(1.90) | $(0.49) | - Due to a net loss, basic and diluted net loss per share are identical, with potentially dilutive securities excluded as they would have an antidilutive impact[52](index=52&type=chunk) [4. Prepaid and other current assets](index=17&type=section&id=4.%20Prepaid%20and%20other%20current%20assets) (IN THOUSANDS) | (IN THOUSANDS) | March 31, 2021 | December 31, 2020 | | :------------- | :------------- | :---------------- | | Prepayments and accrued income | $1,272 | $1,075 | | Value Added Tax receivable | $542 | $305 | | Deferred Offering costs | $1,611 | $- | | Others | $2 | $29 | | Total | $3,427 | $1,409 | - Deferred offering costs significantly increased to **$1.6 million** as of March 31, 2021, reflecting expenses directly related to the Initial Public Offering[53](index=53&type=chunk) [5. Accrued Expenses and Other Current Liabilities](index=17&type=section&id=5.%20Accrued%20Expenses%20and%20Other%20Current%20Liabilities) (IN THOUSANDS) | (IN THOUSANDS) | March 31, 2021 | December 31, 2020 | | :------------- | :------------- | :---------------- | | Accrued manufacturing and clinical expenses | $946 | $462 | | Accrued professional fees | $1,385 | $806 | | Total | $3,273 | $2,537 | - Accrued manufacturing and clinical expenses nearly doubled to **$946 thousand**, and accrued professional fees increased by **71.8% to $1.4 million**[54](index=54&type=chunk) [6. Series B shares](index=19&type=section&id=6.%20Series%20B%20shares) - On March 15, 2021, the Company issued 28,957 Series B preferred shares for **$125.2 million**, net of transaction costs[58](index=58&type=chunk)[59](index=59&type=chunk) [7. Convertible loan notes](index=19&type=section&id=7.%20Convertible%20loan%20notes) - The company recognized **$2.7 million** in interest expense and a **$6.0 million** change in fair value related to convertible loan notes, which were converted into Series B Shares on March 15, 2021, resulting in a **$13.8 million loss on extinguishment**[60](index=60&type=chunk)[61](index=61&type=chunk)[62](index=62&type=chunk) [8. Deferred A Shares](index=19&type=section&id=8.%20Deferred%20A%20Shares) - On March 31, 2021, Series A and Series B shares were subdivided, creating Deferred A shares with a nominal value of £1.00 but limited rights to dividends or liquidation proceeds[63](index=63&type=chunk) [9. Fair value](index=20&type=section&id=9.%20Fair%20value) (IN THOUSANDS) | (IN THOUSANDS) | Three months ended March 31, 2021 | | :------------- | :-------------------------------- | | Beginning balance | $20,109 | | Change in fair value recognized in net loss | $(5,994) | | Settlement via conversion | $(14,375) | | Foreign exchange translation | $260 | | Ending balance | $- | - The embedded derivative liability of **$20.1 million** was fully settled via conversion by March 31, 2021, with a **$6.0 million fair value gain** recognized in net loss[67](index=67&type=chunk)[68](index=68&type=chunk) [10. Share-Based Compensation](index=20&type=section&id=10.%20Share-Based%20Compensation) (IN THOUSANDS) | (IN THOUSANDS) | Three months ended March 31, 2021 | Three months ended March 31, 2020 | | :------------- | :-------------------------------- | :-------------------------------- | | Research and development | $319 | $183 | | General and administrative | $478 | $673 | | Total | $797 | $856 | - The company granted 364,620 stock options in Q1 2021, with total share-based compensation expense for the period at **$797 thousand**[69](index=69&type=chunk)[75](index=75&type=chunk) - Unrecognized compensation cost related to stock options was **$5.5 million** and **$1.5 million** for RSUs outstanding[70](index=70&type=chunk)[71](index=71&type=chunk) [11. Commitments and Contingencies](index=21&type=section&id=11.%20Commitments%20and%20Contingencies) - The company is party to in-licensing agreements involving upfront fees, milestone payments, and future royalties (1-7%)[76](index=76&type=chunk)[77](index=77&type=chunk) - Future minimum lease payments under an operating lease expiring in 2028 total **$2.1 million**[80](index=80&type=chunk) [12. Related Party Transactions](index=22&type=section&id=12.%20Related%20Party%20Transactions) - The company incurred expenses to related parties, including Oxford Sciences Innovation Plc (**$40 thousand**) and the University of Oxford (**$19 thousand**)[82](index=82&type=chunk) - Oxford Sciences Innovation PLC subscribed to **$15.0 million** in Series B Shares, and the company recognized a **$2.1 million** loss on the conversion of convertible loan notes held by related parties[86](index=86&type=chunk)[87](index=87&type=chunk) [13. Subsequent Events](index=22&type=section&id=13.%20Subsequent%20Events) - On April 29, 2021, the company priced its IPO, issuing 6.5 million ADSs at $17.00 per ADS, generating **$102.8 million** in net proceeds[88](index=88&type=chunk) - On May 4, 2021, all Series A and B Shares were converted into ordinary and deferred B shares, followed by a **309-for-1 stock split** of ordinary shares[89](index=89&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=24&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's financial condition, operational results, liquidity, and critical accounting policies [Overview](index=24&type=section&id=Overview) - Vaccitech is a clinical-stage biopharmaceutical company developing immunotherapeutics and vaccines for infectious diseases and cancer[93](index=93&type=chunk)[94](index=94&type=chunk) - The company co-invented the AZD1222 COVID-19 vaccine with the University of Oxford and completed its IPO in May 2021, raising **$102.8 million** in net proceeds[94](index=94&type=chunk)[95](index=95&type=chunk) - The company has incurred significant net losses since inception, with an accumulated deficit of **$73.0 million** as of March 31, 2021[97](index=97&type=chunk) Financial Metric (in millions) | Financial Metric (in millions) | Three months ended March 31, 2021 | Three months ended March 31, 2020 | | :----------------------------- | :-------------------------------- | :-------------------------------- | | Net Loss | $(15.4) | $(4.0) | | Accumulated Deficit (as of March 31, 2021) | $(73.0) | N/A | [Impact of the COVID-19 Pandemic](index=26&type=section&id=Impact%20of%20the%20COVID-19%20Pandemic) - The COVID-19 pandemic has adversely impacted Vaccitech's business, causing delays and pauses in clinical trial activities for VTP-200 and VTP-500[101](index=101&type=chunk) - The company is still assessing the full impact of the pandemic on its ability to advance product development and secure financing[102](index=102&type=chunk) [Components of Our Operating Results](index=27&type=section&id=Components%20of%20Our%20Operating%20Results) [Revenue](index=27&type=section&id=Revenue) - Vaccitech has not generated revenue from product sales to date, with revenue derived from research grants, collaboration agreements, and the OUI License Agreement[104](index=104&type=chunk)[105](index=105&type=chunk) - The company recognized **$2.4 million** in revenue from OUI in 2020, with future amounts to be recognized when received[105](index=105&type=chunk)[106](index=106&type=chunk) [Operating Expenses](index=27&type=section&id=Operating%20Expenses) [Research and Development Expenses](index=27&type=section&id=Research%20and%20Development%20Expenses) - Research and development (R&D) expenses constitute the major portion of operating costs and are expensed as incurred[108](index=108&type=chunk) [General and Administrative Expenses](index=27&type=section&id=General%20and%20Administrative%20Expenses) - General and administrative (G&A) expenses primarily cover personnel costs and professional fees, which are expected to increase as a public company[109](index=109&type=chunk) [Other Income (Expense)](index=29&type=section&id=Other%20Income%20(Expense)) [Change in Fair Value of Derivatives](index=29&type=section&id=Change%20in%20Fair%20Value%20of%20Derivatives) - The company recognized a change in fair value related to conversion and redemption features embedded in convertible loan notes[111](index=111&type=chunk) [Loss on Extinguishment of Convertible Loan Notes](index=29&type=section&id=Loss%20on%20Extinguishment%20of%20Convertible%20Loan%20Notes) - On March 15, 2021, the conversion of convertible loan notes into Series B Shares was accounted for as an extinguishment, resulting in a recognized loss[112](index=112&type=chunk)[113](index=113&type=chunk) [Interest Expense](index=29&type=section&id=Interest%20Expense) - Interest expense primarily stemmed from convertible loan notes issued in 2020, which were converted into Series B Shares on March 15, 2021[114](index=114&type=chunk) [Research and Development Incentives](index=29&type=section&id=Research%20and%20Development%20Incentives) - Research and development incentives represent payments received from the United Kingdom and Australian governments for corporation tax relief[115](index=115&type=chunk) [Critical Accounting Policies and Use of Estimates](index=29&type=section&id=Critical%20Accounting%20Policies%20and%20Use%20of%20Estimates) - The preparation of financial statements requires management to make estimates and judgments, particularly for revenue recognition and R&D expenses[116](index=116&type=chunk)[117](index=117&type=chunk) [Results of Operations](index=30&type=section&id=Results%20of%20Operations) [Comparison of the Three Months Ended March 31, 2021 and March 31, 2020](index=30&type=section&id=Comparison%20of%20the%20Three%20Months%20Ended%20March%2031,%202021%20and%20March%2031,%202020) (IN THOUSANDS) | (IN THOUSANDS) | Three months ended March 31, 2021 | Three months ended March 31, 2020 | Change | | :------------- | :-------------------------------- | :-------------------------------- | :----- | | Revenue from Licenses, Grants & Services | $215 | $705 | $(490) | | Research & development | $4,610 | $4,242 | $368 | | General and administrative | $1,777 | $1,112 | $665 | | Total operating expenses | $6,387 | $5,354 | $1,033 | | Loss from operations | $(6,172) | $(4,649) | $(1,523) | | Change in fair value of derivatives | $5,994 | $- | $5,994 | | Loss on extinguishment of convertible loan notes | $(13,789) | $- | $(13,789) | | Interest expense | $(2,650) | $- | $(2,650) | | Research and development incentives | $955 | $698 | $257 | | Net loss | $(15,386) | $(3,951) | $(11,435) | [Revenue](index=30&type=section&id=Revenue_30) - Revenue decreased from **$0.7 million** in Q1 2020 to **$0.2 million** in Q1 2021, primarily from BARDA reimbursement and service revenue from Enara Bio[120](index=120&type=chunk) [Research and Development Expenses](index=31&type=section&id=Research%20and%20Development%20Expenses_31) (IN THOUSANDS) | (IN THOUSANDS) | Three months ended March 31, 2021 | Three months ended March 31, 2020 | Change | | :------------- | :-------------------------------- | :-------------------------------- | :----- | | VTP-200 HPV | $677 | $836 | $(159) | | VTP-300 HBV | $1,686 | $815 | $871 | | VTP-600 NSCLC | $414 | $610 | $(196) | | VTP-800/850 Prostate cancer | $373 | $- | $373 | | Other and earlier stage programs | $438 | $927 | $(489) | | Personnel-related | $968 | $883 | $85 | | Total research and development expense | $4,610 | $4,242 | $368 | - Total R&D expenses increased by **$0.4 million to $4.6 million** in Q1 2021, driven by higher spending on the VTP-300 HBV and VTP-800/850 prostate cancer programs[122](index=122&type=chunk)[123](index=123&type=chunk) [General and Administrative Expenses](index=31&type=section&id=General%20and%20Administrative%20Expenses_31) - General and administrative expenses increased by **$0.7 million to $1.8 million** in Q1 2021, primarily due to higher personnel expenses and professional fees[124](index=124&type=chunk) [Change in fair value of derivatives](index=31&type=section&id=Change%20in%20fair%20value%20of%20derivatives_31) - A **$6.0 million gain** was recognized in Q1 2021 from the change in fair value of derivatives embedded in convertible loan notes[125](index=125&type=chunk) [Loss on extinguishment of convertible loan notes](index=31&type=section&id=Loss%20on%20extinguishment%20of%20convertible%20loan%20notes_31) - A **$13.8 million loss** was recognized in Q1 2021 due to the extinguishment of convertible loan notes upon their conversion into Series B preferred shares[126](index=126&type=chunk) [Interest Expense](index=31&type=section&id=Interest%20Expense_31) - Interest expense was **$2.7 million** in Q1 2021, primarily from convertible loan notes, with no comparable expense in Q1 2020[127](index=127&type=chunk) [Research and Development Incentives](index=32&type=section&id=Research%20and%20Development%20Incentives_32) - Research and development incentives increased from **$0.7 million** in Q1 2020 to **$1.0 million** in Q1 2021[129](index=129&type=chunk) [Liquidity and Capital Resources](index=32&type=section&id=Liquidity%20and%20Capital%20Resources) [Sources of Liquidity](index=32&type=section&id=Sources%20of%20Liquidity) - Since inception, Vaccitech has funded operations through private placements, grants, and research incentives, with cash and cash equivalents totaling **$155.9 million** as of March 31, 2021[130](index=130&type=chunk) - Key financing milestones include **$125.2 million** from Series B shares (March 2021) and **$110.5 million** gross proceeds from the IPO (May 2021)[133](index=133&type=chunk)[134](index=134&type=chunk)[135](index=135&type=chunk) [Cash Flows](index=32&type=section&id=Cash%20Flows) (IN THOUSANDS) | (IN THOUSANDS) | Three months ended March 31, 2021 | Three months ended March 31, 2020 | | :------------- | :-------------------------------- | :-------------------------------- | | Net cash used in operating activities | $(7,969) | $(4,321) | | Net cash used in investing activities | $(392) | $(22) | | Net cash provided by financing activities | $121,815 | $- | | Net increase (decrease) in cash and cash equivalents | $112,669 | $(4,998) | [Cash Used in Operating Activities](index=33&type=section&id=Cash%20Used%20in%20Operating%20Activities) - Net cash used in operating activities increased to **$8.0 million** in Q1 2021, up from **$4.3 million** in Q1 2020, primarily due to a higher net loss[137](index=137&type=chunk) [Net Cash Used in Investing Activities](index=33&type=section&id=Net%20Cash%20Used%20in%20Investing%20Activities) - Cash used in investing activities increased to **$0.4 million** in Q1 2021, mainly for capital expenditures related to new labs and equipment[138](index=138&type=chunk) [Net Cash Provided by Financing Activities](index=33&type=section&id=Net%20Cash%20Provided%20by%20Financing%20Activities) - Net cash provided by financing activities was **$121.8 million** in Q1 2021, entirely from the net proceeds of Series B shares issuance[139](index=139&type=chunk) [Future Funding Requirements](index=33&type=section&id=Future%20Funding%20Requirements) - Vaccitech expects to continue incurring significant losses and will require substantial additional financing for development and commercialization[140](index=140&type=chunk)[144](index=144&type=chunk) - The net proceeds from the IPO, combined with existing cash, are expected to fund operations into 2024[149](index=149&type=chunk) [Emerging Growth Company Status](index=35&type=section&id=Emerging%20Growth%20Company%20Status) - The company qualifies as an 'emerging growth company' under the JOBS Act, allowing it to delay adoption of certain accounting standards[150](index=150&type=chunk)[151](index=151&type=chunk) [Off-Balance Sheet Arrangements](index=35&type=section&id=Off-Balance%20Sheet%20Arrangements) - The company did not have any off-balance sheet arrangements during the periods presented[152](index=152&type=chunk) [Recent Accounting Pronouncements](index=35&type=section&id=Recent%20Accounting%20Pronouncements) - A description of recently issued accounting pronouncements is disclosed in Note 2 to the condensed consolidated financial statements[153](index=153&type=chunk) [Item 3. Quantitative and Qualitative Disclosure About Market Risk](index=35&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosure%20About%20Market%20Risk) The company outlines its exposure to market risks, primarily foreign currency exchange and interest rate fluctuations [Foreign Currency and Currency Translation](index=35&type=section&id=Foreign%20Currency%20and%20Currency%20Translation) - Vaccitech is exposed to foreign currency exchange rate fluctuations, particularly with the euro, pound sterling, and Australian dollar[154](index=154&type=chunk) - Translation adjustments are recorded in accumulated other comprehensive loss, and exchange rate changes on transactions are included in operating expenses[156](index=156&type=chunk) [Interest Rate Sensitivity](index=36&type=section&id=Interest%20Rate%20Sensitivity) - The company is not significantly exposed to interest rate market risk due to the absence of significant interest-bearing liabilities[157](index=157&type=chunk) [Item 4. Controls and Procedures](index=36&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concludes that disclosure controls were ineffective due to identified material weaknesses in financial reporting - As of March 31, 2021, the company's disclosure controls and procedures were deemed **ineffective** by management[158](index=158&type=chunk) - **Material weaknesses** identified include a lack of sufficient personnel with U.S. GAAP knowledge and an insufficiently designed IT general control environment[159](index=159&type=chunk) - Remediation steps are being implemented, including hiring a Chief Financial Officer with public company experience[160](index=160&type=chunk) [Changes in Internal Control over Financial Reporting](index=36&type=section&id=Changes%20in%20Internal%20Control%20over%20Financial%20Reporting) - No material changes in internal control over financial reporting occurred during the quarter, other than those intended to remediate the identified material weaknesses[161](index=161&type=chunk) [PART II - OTHER INFORMATION](index=36&type=section&id=PART%20II%20-%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=36&type=section&id=Item%201.%20Legal%20Proceedings) The company is not involved in any legal proceedings expected to have a material adverse financial effect - The company is subject to various legal proceedings and claims in the ordinary course of business[163](index=163&type=chunk) - As of March 31, 2021, the company does not believe the resolution of these matters will have a **material adverse effect** on its financial position[163](index=163&type=chunk) [Item 1A. Risk Factors](index=37&type=section&id=Item%201A.%20Risk%20Factors) The company details significant risks related to its financial position, clinical development, and business operations - Investing in Vaccitech's ADSs involves a **high degree of risk**, encompassing financial, operational, clinical, regulatory, and intellectual property challenges[165](index=165&type=chunk) - The company is a clinical-stage biopharmaceutical company with **no approved products**, a limited operating history, and has incurred significant losses since inception[166](index=166&type=chunk)[167](index=167&type=chunk) - Future success is **highly speculative**, dependent on successful clinical development, regulatory approval, and commercialization of product candidates[167](index=167&type=chunk)[199](index=199&type=chunk)[204](index=204&type=chunk) [Risks Related to Our Financial Position and Capital Needs](index=37&type=section&id=Risks%20Related%20to%20Our%20Financial%20Position%20and%20Capital%20Needs) - The company is a clinical-stage biopharmaceutical company with no approved products and has incurred **significant losses** since inception, which are expected to continue[166](index=166&type=chunk)[167](index=167&type=chunk) - Actual payments from the AstraZeneca License Agreement may differ materially from expectations, and there is **no assurance of receiving any such payments**[171](index=171&type=chunk)[174](index=174&type=chunk) - The company has not generated any material revenue from its product candidates and its ability to become profitable depends on **successful commercialization**[178](index=178&type=chunk) - **Substantial additional funding** will be required in the future, and an inability to raise capital could compel delays or elimination of programs[183](index=183&type=chunk)[184](index=184&type=chunk) [Risks Related to Our Business and Industry](index=43&type=section&id=Risks%20Related%20to%20Our%20Business%20and%20Industry) [Risks Related to Clinical Development](index=43&type=section&id=Risks%20Related%20to%20Clinical%20Development) - Failure to advance product candidates through clinical trials, obtain marketing approval, or commercialize them would **materially harm the business**[199](index=199&type=chunk) - Clinical development is a **lengthy, expensive, and uncertain process**, with earlier results not always predictive of future outcomes[204](index=204&type=chunk) - Interim, 'topline,' and preliminary data from clinical trials are **subject to change** as more participant data become available[214](index=214&type=chunk) - Product candidates may cause **serious adverse events or side effects**, which could halt clinical development or prevent marketing authorization[229](index=229&type=chunk) [Risks Related to Our Approach](index=48&type=section&id=Risks%20Related%20to%20Our%20Approach) - The company's product candidates are based on a **novel approach to cancer treatment**, making it difficult to predict the time and cost of development[219](index=219&type=chunk)[220](index=220&type=chunk) - **Difficulty in enrolling participants** could delay or prevent clinical trials, impacting commercial potential[222](index=222&type=chunk)[223](index=223&type=chunk)[224](index=224&type=chunk) - The market opportunities for certain oncology product candidates may be **relatively small**, and estimates of target patient populations may be inaccurate[236](index=236&type=chunk)[238](index=238&type=chunk) - **Negative developments** in infectious disease and immuno-oncology could damage public perception and negatively affect the business[240](index=240&type=chunk)[241](index=241&type=chunk) [Risks Related to Sales, Marketing and Competition](index=52&type=section&id=Risks%20Related%20to%20Sales,%20Marketing%20and%20Competition) - The company faces **substantial competition** in a rapidly changing technological environment[248](index=248&type=chunk) - The company currently **lacks a marketing and sales organization** and experience in product marketing[269](index=269&type=chunk)[270](index=270&type=chunk) [Risks Related to the Development of Our Product Candidates](index=53&type=section&id=Risks%20Related%20to%20the%20Development%20of%20Our%20Product%20Candidates) - The **COVID-19 pandemic has adversely impacted** the company's business, causing delays in clinical trials and disruptions to supply chains[251](index=251&type=chunk)[252](index=252&type=chunk)[254](index=254&type=chunk) - Preclinical studies and clinical trials may **fail to adequately demonstrate safety and efficacy**, with early success not predictive of future results[256](index=256&type=chunk)[257](index=257&type=chunk)[258](index=258&type=chunk) - The company **relies heavily on third parties** (CROs, CMOs) to conduct preclinical studies and clinical trials[277](index=277&type=chunk)[279](index=279&type=chunk)[281](index=281&type=chunk) - Reliance on a **limited number of third-party manufacturers** exposes the company to risks of insufficient capacity and non-compliance with cGMP regulations[290](index=290&type=chunk)[294](index=294&type=chunk)[299](index=299&type=chunk) [Risks Related to Government Regulation](index=62&type=section&id=Risks%20Related%20to%20Government%20Regulation) - The marketing authorization processes of the FDA, EMA, and other authorities are **lengthy, time-consuming, and inherently unpredictable**[302](index=302&type=chunk)[303](index=303&type=chunk) - Seeking **Orphan Drug Designation may be unsuccessful** or the benefits may not be maintained or protect against competition[310](index=310&type=chunk)[315](index=315&type=chunk) - **Breakthrough Therapy or Fast Track designations do not guarantee** faster development, regulatory review, or ultimate marketing approval[316](index=316&type=chunk)[319](index=319&type=chunk)[322](index=322&type=chunk) - Future changes to tax laws, including those related to R&D tax relief programs, could **materially adversely affect** the company's financial condition[332](index=332&type=chunk)[339](index=339&type=chunk)[340](index=340&type=chunk) [Risks Related to Ongoing Regulatory Obligations](index=68&type=section&id=Risks%20Related%20to%20Ongoing%20Regulatory%20Obligations) - Even with marketing authorization, product candidates will be subject to **ongoing regulatory obligations and review**[342](index=342&type=chunk)[343](index=343&type=chunk) - The FDA and other regulatory authorities strictly enforce laws prohibiting **off-label promotion**, which could lead to significant liability[345](index=345&type=chunk) - The **insurance coverage and reimbursement status** of newly-approved products are uncertain and could limit market access[347](index=347&type=chunk)[349](index=349&type=chunk)[353](index=353&type=chunk) - The company's business is subject to healthcare **fraud and abuse laws** (e.g., AKS, FCA, HIPAA, GDPR), with non-compliance resulting in substantial penalties[372](index=372&type=chunk)[373](index=373&type=chunk)[375](index=375&type=chunk)[388](index=388&type=chunk)[393](index=393&type=chunk) [Risks Related to Our Intellectual Property](index=82&type=section&id=Risks%20Related%20to%20Our%20Intellectual%20Property) - **Inability to obtain and maintain broad patent protection** could allow competitors to commercialize similar products[401](index=401&type=chunk)[402](index=402&type=chunk) - Rights to technology are partly subject to **third-party licenses**, and failure to comply with obligations could lead to loss of critical rights[409](index=409&type=chunk)[410](index=410&type=chunk) - **Failure to protect the confidentiality of trade secrets** would harm the business and competitive position[416](index=416&type=chunk)[417](index=417&type=chunk) - The intellectual property landscape is crowded, and **third parties may initiate legal proceedings** alleging infringement of their IP rights[420](index=420&type=chunk)[421](index=421&type=chunk) [Risks Related to Employee Matters, Managing Our Growth and Other Risks](index=95&type=section&id=Risks%20Related%20to%20Employee%20Matters,%20Managing%20Our%20Growth%20and%20Other%20Risks) [Risks Related to Our Employee Matters](index=95&type=section&id=Risks%20Related%20to%20Our%20Employee%20Matters) - The company is **highly dependent on key managerial, scientific, and medical personnel** and failure to retain them could impede its strategy[466](index=466&type=chunk)[467](index=467&type=chunk) [Risks Related to Our Business Operations and Growth](index=95&type=section&id=Risks%20Related%20to%20Our%20Business%20Operations%20and%20Growth) - The company needs to **grow its organization**, which may lead to difficulties in managing this growth[469](index=469&type=chunk)[470](index=470&type=chunk) - Internal computer systems are **vulnerable to security breaches**, potentially leading to disclosure of confidential information and reputational damage[476](index=476&type=chunk)[477](index=477&type=chunk) - **Business disruptions** from natural disasters or pandemics could seriously harm future revenue and financial condition[481](index=481&type=chunk) - **Product liability lawsuits** could result in substantial liabilities and require limitations on commercialization[482](index=482&type=chunk)[485](index=485&type=chunk) [Risks Related to Our International Operations](index=98&type=section&id=Risks%20Related%20to%20Our%20International%20Operations) - Operating internationally exposes the company to various risks, including **differing regulatory requirements and political instability**[487](index=487&type=chunk)[491](index=491&type=chunk) - Claims of U.S. civil liabilities **may not be enforceable** against the company, as it is incorporated under English law[492](index=492&type=chunk)[494](index=494&type=chunk) - **Fluctuations in the exchange rate** between the U.S. dollar and the pound sterling may materially affect results of operations[496](index=496&type=chunk)[497](index=497&type=chunk) [Risks Related to Ownership of Our ADSs](index=101&type=section&id=Risks%20Related%20to%20Ownership%20of%20Our%20ADSs) - An **active trading market for the company's ADSs may not be sustained**, making it difficult for holders to sell shares[501](index=501&type=chunk)[502](index=502&type=chunk) - Principal shareholders and management own **68.9% of voting stock**, allowing them to exert significant influence over shareholder matters[503](index=503&type=chunk) - The price of the company's ADSs is **highly volatile** and subject to wide fluctuations, leading to potential loss of investment[504](index=504&type=chunk)[506](index=506&type=chunk)[507](index=507&type=chunk) - As an English public limited company, certain capital structure decisions **require shareholder approval**, limiting flexibility[542](index=542&type=chunk)[544](index=544&type=chunk) - The UK's withdrawal from the EU (**Brexit**) may negatively impact the business by increasing currency risk and creating new regulatory challenges[579](index=579&type=chunk)[581](index=581&type=chunk)[583](index=583&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=118&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reports on unregistered option grants and the use of proceeds from its recent Initial Public Offering [Recent Sales of Unregistered Equity Securities](index=118&type=section&id=Recent%20Sales%20of%20Unregistered%20Equity%20Securities) - Between January 1 and March 31, 2021, the company issued options to purchase **364,620 ordinary shares** to employees and advisors[594](index=594&type=chunk) [Use of Proceeds from Initial Public Offering](index=118&type=section&id=Use%20of%20Proceeds%20from%20Initial%20Public%20Offering) - The company completed its IPO on May 4, 2021, generating approximately **$99.9 million in net proceeds**[595](index=595&type=chunk)[597](index=597&type=chunk) - There has been **no material change** in the planned use of the net proceeds from the IPO[598](index=598&type=chunk) [Item 3. Defaults Upon Senior Securities](index=119&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This section is not applicable as the company has no defaults upon senior securities to report - This item is marked as **'Not Applicable'**[600](index=600&type=chunk) [Item 4. Mine Safety Disclosures](index=119&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section is not applicable as the company is not engaged in mining operations - This item is marked as **'Not Applicable'**[601](index=601&type=chunk) [Item 5. Other Information](index=119&type=section&id=Item%205.%20Other%20Information) The company reports no other material information for the period covered by this report - This item states **'None'**[603](index=603&type=chunk) [Item 6. Exhibits](index=119&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the report, including articles of association and key agreements - Exhibits include the Articles of Association, Form of American Depositary Receipt, employee share plans, and employment agreements for key executives[605](index=605&type=chunk)[606](index=606&type=chunk)[607](index=607&type=chunk) [SIGNATURES](index=122&type=section&id=SIGNATURES) The report is duly signed by the Chief Executive Officer and Chief Financial Officer as of June 14, 2021 - The report is signed by William Enright, Chief Executive Officer, and Georgy Egorov, Chief Financial Officer, on **June 14, 2021**[613](index=613&type=chunk)