Immunocore(IMCR) - 2025 Q1 - Quarterly Report

PART I – FINANCIAL INFORMATION This section presents the company's unaudited condensed consolidated financial statements and related disclosures for the quarter ended March 31, 2025 Item 1. Financial Statements The unaudited condensed consolidated financial statements for Q1 2025 show total assets of $1.028 billion, a net income of $5.0 million, and a 33.5% revenue increase from KIMMTRAK Condensed Consolidated Balance Sheets As of March 31, 2025, total assets increased to $1.028 billion, driven by a rise in cash and cash equivalents to $476.8 million, while total liabilities remained stable Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $476,845 | $455,731 | | Marketable securities | $360,185 | $364,645 | | Total current assets | $948,625 | $929,864 | | Total assets | $1,028,008 | $1,009,506 | | Liabilities & Equity | | | | Total current liabilities | $149,163 | $212,181 | | Interest-bearing loans and borrowings | $391,530 | $391,013 | | Total liabilities | $649,529 | $648,790 | | Total shareholders' equity | $378,479 | $360,716 | Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) For Q1 2025, the company reported a net income of $5.0 million, a significant improvement from a $24.4 million net loss in Q1 2024, primarily due to a 33.5% increase in net revenue Statement of Operations Summary (in thousands, except per share data) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Revenue from sale of therapies, net | $93,881 | $70,342 | | Total revenue | $93,881 | $70,502 | | Research and development expense | ($56,468) | ($57,459) | | Selling, general and administrative expense | ($40,198) | ($39,287) | | Loss from operations | ($3,616) | ($26,490) | | Net income (loss) | $5,023 | ($24,436) | | Diluted net income (loss) per share | $0.10 | ($0.49) | Condensed Consolidated Statements of Cash Flows Net cash provided by operating activities was $0.4 million in Q1 2025, a positive shift from the prior year, with total cash and cash equivalents ending at $476.8 million Cash Flow Summary (in thousands) | Activity | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $435 | ($4,587) | | Net cash provided by (used in) investing activities | $9,702 | ($430) | | Net cash provided by financing activities | $2,551 | $396,012 | | Increase in net cash and cash equivalents | $12,688 | $390,995 | | Cash and cash equivalents at end of period | $476,845 | $832,821 | Notes to the Condensed Consolidated Financial Statements The notes detail accounting policies, a 33.5% year-over-year increase in KIMMTRAK revenue driven by Europe and International markets, and the issuance of $402.5 million in convertible senior notes - The company's lead product, KIMMTRAK, is now approved in 39 countries and commercially launched in 26 countries for the treatment of unresectable or metastatic uveal melanoma[23] Revenue from Sale of Therapies by Region (in thousands) | Region | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | United States | $56,607 | $50,026 | | Europe | $32,804 | $18,952 | | International | $4,470 | $1,364 | | Total | $93,881 | $70,342 | - In February 2024, the company issued $402.5 million in 2.50% convertible senior notes due 2030, with net proceeds of $389.1 million after issuance costs[50][51] - The company has noncancellable manufacturing commitments totaling $27.5 million, primarily for the development and supply of product candidates like brenetafusp[71] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses a 33.5% increase in KIMMTRAK net revenue to $93.9 million for Q1 2025, stable R&D expenses, and a net income of $5.0 million, affirming sufficient capital for the next twelve months Overview and Recent Developments The company, a commercial-stage biotechnology firm, highlights KIMMTRAK's approval in 39 countries and recent positive Phase 1/2 data for its HIV candidate IMC-M113V - KIMMTRAK is now approved in 39 countries and commercially launched in 26 for the treatment of unresectable or metastatic uveal melanoma[76] - Initial data from the Phase 1/2 STRIVE trial of HIV candidate IMC-M113V was presented, showing the drug was well-tolerated and demonstrated delayed viral rebound or viremia control in 3 out of 10 evaluable patients at the two highest doses[82][84] - The company has successfully completed pricing negotiations for KIMMTRAK in France and Germany[83] Results of Operations Total revenue increased by 33.2% to $93.9 million in Q1 2025, driven by strong KIMMTRAK sales, particularly in Europe and International markets, while R&D expenses slightly decreased Revenue from Sale of Therapies, Net (in thousands) | Region | Q1 2025 | Q1 2024 | % Change | | :--- | :--- | :--- | :--- | | United States | $56,607 | $50,026 | 13.2% | | Europe | $32,804 | $18,952 | 73.1% | | International | $4,470 | $1,364 | 227.7% | | Total | $93,881 | $70,342 | 33.5% | Research & Development Expenses (in thousands) | Category | Q1 2025 | Q1 2024 | % Change | | :--- | :--- | :--- | :--- | | PRAME programs | $17,305 | $26,700 | (35.2)% | | Tebentafusp programs | $7,990 | $5,894 | 35.6% | | Infectious disease programs | $1,405 | $2,246 | (37.4)% | | All other external clinical and preclinical costs | $11,231 | $6,499 | 72.8% | | Total internal R&D expenses | $18,537 | $16,120 | 15.0% | | Total R&D expenses | $56,468 | $57,459 | (1.7)% | - The decrease in external R&D expenses was primarily due to a $9.4 million reduction in PRAME program costs related to the timing of manufacturing batches and drug consumable purchases in the prior year[108] Liquidity and Capital Resources As of March 31, 2025, the company held $476.8 million in cash and cash equivalents and $360.2 million in marketable securities, with management confident in funding operations for at least the next twelve months - As of March 31, 2025, the company held $476.8 million in cash and cash equivalents and $360.2 million in marketable securities[116] - In February 2024, the company completed a private offering of $402.5 million in convertible notes, receiving net proceeds of $389.1 million[118] - Based on current plans, the company expects existing cash, marketable securities, and anticipated revenue will fund operating expenses and capital requirements for at least twelve months from the filing date of this report[127] Critical Accounting Estimates The most critical accounting estimate involves revenue deductions for rebates and chargebacks, with a $6.0 million net decrease in accrued deductions due to completed price negotiations in Q1 2025 - Estimating expected rebate and chargeback percentages for revenue deductions is a critical accounting estimate due to the time delay and uncertainty in determining actual amounts[142][143] - The completion of price negotiations in France and Germany in Q1 2025 resulted in a change in estimate, causing a $6.0 million net decrease to total accrued revenue deductions as of March 31, 2025[146] Item 3. Quantitative and Qualitative Disclosures about Market Risk The company faces currency risk from its UK subsidiary's multi-currency holdings, while interest rate risk is mitigated by fixed-rate convertible notes, and credit risk is low - The company's $402.5 million in convertible notes carry a fixed interest rate of 2.50%, mitigating exposure to interest rate fluctuations on its debt[150] - As of March 31, 2025, 75% of cash and cash equivalents were held by the U.K. subsidiary, with balances denominated in U.S. dollars (45%), pounds sterling (40%), and euros (15%), creating exposure to foreign currency fluctuations[153] - A hypothetical 5% adverse change in foreign exchange rates would reduce the carrying value of net financial assets by $5.7 million as of March 31, 2025[154] Item 4. Controls and Procedures Management concluded that the company's disclosure controls and procedures were effective as of March 31, 2025, with no material changes to internal control over financial reporting during the quarter - Based on an evaluation as of March 31, 2025, the Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were effective[158] - No changes occurred during the quarter ended March 31, 2025, that materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[159] PART II – OTHER INFORMATION This section covers legal proceedings, risk factors, and other standard disclosures, confirming no material changes or significant new events Item 1. Legal Proceedings The company reports no material legal proceedings that would significantly adversely affect its business, operating results, or financial condition - As of the reporting date, the company is not involved in any material legal proceedings[160] Item 1A. Risk Factors The company states that there have been no material changes to the risk factors previously disclosed in its Annual Report on Form 10-K for the year ended December 31, 2024 - There were no material changes during the quarter to the risk factors previously disclosed in the company's Annual Report[162] Items 2-6. Other Information This section confirms no unregistered sales of equity securities, no defaults on senior securities, and no new insider trading plans for directors or officers during the quarter - The company reports no unregistered sales of equity securities, defaults upon senior securities, or new insider trading plans for directors and officers during the quarter[163][164][165]