VACCITECH(VACC) - 2025 Q2 - Quarterly Report

PART I - FINANCIAL INFORMATION This section presents the company's unaudited condensed consolidated financial statements, management's analysis, and market risk disclosures - The company is a clinical-stage biopharmaceutical company focused on developing immunotherapeutic drug candidates for autoimmune and inflammatory diseases, utilizing proprietary viral vector platform technologies[20] - The company expects to incur losses for the foreseeable future and anticipates needing additional funding through equity financing, grants, debt, or collaborations to support operations beyond the next twelve months[24] Key Financial Highlights (Unaudited, In Thousands) | Metric | June 30, 2025 | December 31, 2024 | Change (vs. Dec 31, 2024) | | :----------------------------------- | :------------ | :---------------- | :-------------------------- | | Cash and cash equivalents | $86,259 | $110,662 | -$24,403 | | Total current assets | $100,414 | $125,742 | -$25,328 | | Total assets | $129,561 | $160,327 | -$30,766 | | Total current liabilities | $12,725 | $15,657 | -$2,932 | | Total liabilities | $27,080 | $30,192 | -$3,112 | | Total stockholders' equity | $102,481 | $130,135 | -$27,654 | | Metric (Six months ended) | June 30, 2025 | June 30, 2024 | Change (YoY) | | :----------------------------------- | :------------ | :------------ | :----------- | | Net loss | $(40,784) | $(32,463) | $(8,321) | | Net cash used in operating activities | $(33,011) | $(23,828) | $(9,183) | Item 1. Financial Statements This section presents unaudited consolidated financial statements, reporting a $40.8 million net loss and $87.8 million cash Condensed Consolidated Balance Sheets This section details the company's financial position, including assets, liabilities, and stockholders' equity as of specific dates Condensed Consolidated Balance Sheets (In Thousands) | ASSETS | June 30, 2025 | December 31, 2024 | | :-------------------------------- | :------------ | :---------------- | | Cash and cash equivalents | $86,259 | $110,662 | | Restricted cash | $1,525 | $1,738 | | Research and development incentives receivable | $4,536 | $7,139 | | Prepaid expenses and other current assets | $7,681 | $6,203 | | Assets held for sale | $413 | — | | Total current assets | $100,414 | $125,742 | | Property and equipment, net | $4,514 | $7,373 | | Intangible assets, net | $20,366 | $21,947 | | Right of use assets, net | $3,323 | $4,384 | | Other assets | $944 | $881 | | Total assets | $129,561 | $160,327 | | LIABILITIES AND STOCKHOLDERS' EQUITY | | | | Accounts payable | $1,800 | $2,474 | | Accrued expenses and other current liabilities | $7,364 | $9,525 | | Deferred income | $1,525 | $1,738 | | Operating lease liability - current | $2,036 | $1,920 | | Total current liabilities | $12,725 | $15,657 | | Operating lease liability - non-current | $9,952 | $10,087 | | Contingent consideration | $2,544 | $2,650 | | Other non-current liabilities | $1,468 | $1,360 | | Deferred tax liability, net | $391 | $438 | | Total liabilities | $27,080 | $30,192 | | Total stockholders' equity | $102,481 | $130,135 | | Total liabilities and stockholders' equity | $129,561 | $160,327 | Condensed Consolidated Statements of Operations and Comprehensive Loss This section outlines the company's revenues, expenses, and net loss for the reported periods Condensed Consolidated Statements of Operations and Comprehensive Loss (In Thousands, except per share amounts) | Operating expenses (Three months ended June 30) | 2025 | 2024 | | :---------------------------------------------- | :------ | :------ | | Research and development | $7,953 | $11,662 | | General and administrative | $15,384 | $7,201 | | Total operating expenses | $23,337 | $18,863 | | Other operating income | $13 | $577 | | Loss from operations | $(23,324) | $(18,286) | | Net loss | $(21,126) | $(16,943) | | Net loss per share, basic | $(0.52) | $(0.43) | | Operating expenses (Six months ended June 30) | 2025 | 2024 | | :---------------------------------------------- | :------ | :------ | | Research and development | $16,243 | $22,787 | | General and administrative | $28,023 | $13,195 | | Total operating expenses | $44,266 | $35,982 | | Other operating income | $342 | $782 | | Loss from operations | $(43,924) | $(35,200) | | Net loss | $(40,784) | $(32,463) | | Net loss per share, basic | $(1.01) | $(0.83) | Condensed Consolidated Statements of Changes in Stockholders' Equity This section presents the changes in the company's equity accounts over the specified periods Changes in Stockholders' Equity (In Thousands) | Metric (Six months ended June 30, 2025) | Amount | | :-------------------------------------- | :----- | | Balance, January 1, 2025 | $130,135 | | Share based compensation | $468 | | Issue of ordinary shares, net of costs | $2 | | Foreign currency translation adjustments | $4,646 | | Net loss | $(19,658) | | Balance, March 31, 2025 | $115,593 | | Share based compensation | $(281) | | Issue of ordinary shares, net of costs | $0 | | Foreign currency translation adjustments | $8,295 | | Net loss | $(21,126) | | Balance, June 30, 2025 | $102,481 | | Metric (Six months ended June 30, 2024) | Amount | | :-------------------------------------- | :----- | | Balance, January 1, 2024 | $186,995 | | Share based compensation | $1,615 | | Issue of ordinary shares, net of costs | $503 | | Foreign currency translation adjustments | $(1,577) | | Net loss | $(15,520) | | Balance, March 31, 2024 | $172,016 | | Share based compensation | $1,195 | | Issue of ordinary shares, net of costs | $358 | | Foreign currency translation adjustments | $164 | | Net loss | $(16,943) | | Balance, June 30, 2024 | $156,790 | Condensed Consolidated Statements of Cash Flows This section summarizes the cash inflows and outflows from operating, investing, and financing activities Condensed Consolidated Statements of Cash Flows (In Thousands) | Cash Flow Activity (Six months ended June 30) | 2025 | 2024 | | :-------------------------------------------- | :-------- | :-------- | | Net cash used in operating activities | $(33,011) | $(23,828) | | Net cash used in investing activities | $(37) | $(500) | | Net cash provided by financing activities | $2 | $861 | | Effect of exchange rates on cash | $8,430 | $(849) | | Net decrease in cash, cash equivalents and restricted cash | $(24,616) | $(24,316) | | Cash, cash equivalents and restricted cash, beginning of period | $112,400 | $142,090 | | Cash, cash equivalents and restricted cash, end of period | $87,784 | $117,774 | Notes to Condensed Consolidated Financial Statements This section provides detailed explanations and additional information supporting the condensed consolidated financial statements 1. Nature of Business and Basis of Presentation This note describes the company's core business, its focus on immunotherapeutic drug candidates, and the basis for financial statement preparation - Barinthus Biotherapeutics plc is a clinical-stage biopharmaceutical company focused on developing immunotherapeutic drug candidates for autoimmune and inflammatory diseases (I&I), and also evaluating product candidates for infectious diseases and cancer using proprietary viral vector platform technologies[20] - The company had $87.8 million in cash, cash equivalents, and restricted cash and an accumulated deficit of $278.4 million as of June 30, 2025. It expects current cash to fund operations for at least the next twelve months but will seek additional funding[24] 2. Summary of Significant Accounting Policies This note outlines the key accounting principles and methods used in preparing the financial statements, including GAAP and SEC compliance - The financial statements are prepared in conformity with GAAP and SEC rules for interim statements, with certain information condensed or omitted[22] - The company qualifies as an 'emerging growth company' and has elected to use the extended transition period for complying with new or revised financial accounting standards[31] - New accounting pronouncements (ASU 2025-01, ASU 2024-03, ASU 2023-09) are being evaluated for their impact on future disclosures, with effective dates ranging from fiscal years beginning after December 15, 2024, to interim periods after December 15, 2027[34][35][36] 3. Segment information This note details the company's operating segments, primarily focusing on research and development of immunotherapies and vaccines - The company operates as one segment: the research and development of immunotherapies and vaccines, with the CEO using loss before income tax to monitor performance[37] Research and Development Expenses (In Thousands) | Expense Category (Three months ended June 30) | 2025 | 2024 | Change | | :-------------------------------------------- | :------ | :------ | :------ | | VTP-1000 Celiac | $1,782 | $1,371 | $411 | | VTP-300 HBV | $1,837 | $3,034 | $(1,197) | | Other clinical programs | $642 | $1,125 | $(483) | | Other pre-clinical programs | $449 | $908 | $(459) | | Total direct R&D expenses | $4,710 | $6,438 | $(1,728) | | Personnel-related R&D | $2,450 | $4,763 | $(2,313) | | Total R&D expenses | $7,953 | $11,662 | $(3,709) | | Expense Category (Six months ended June 30) | 2025 | 2024 | Change | | :-------------------------------------------- | :------ | :------ | :------ | | VTP-1000 Celiac | $2,764 | $2,744 | $20 | | VTP-300 HBV | $3,187 | $4,947 | $(1,760) | | Other clinical programs | $1,383 | $2,893 | $(1,510) | | Other pre-clinical programs | $868 | $1,693 | $(825) | | Total direct R&D expenses | $8,202 | $12,277 | $(4,075) | | Personnel-related R&D | $6,394 | $9,097 | $(2,703) | | Total R&D expenses | $16,243 | $22,787 | $(6,544) | - Total research and development expenses decreased by $3.7 million (3 months) and $6.5 million (6 months) year-over-year, primarily due to reduced spending on infectious disease and oncology programs and a reduction in personnel headcount[37][39] 4. Foreign Currency Translation in General and Administrative Expenses This note explains the impact of foreign currency exchange rate fluctuations on general and administrative expenses - The company recognized a net foreign exchange loss of $8.0 million for the three months ended June 30, 2025, compared to a $0.1 million loss in the prior year, and a $12.4 million loss for the six months ended June 30, 2025, compared to a $1.1 million gain in the prior year[40] 5. Net Loss Per Share This note provides details on the calculation of basic and diluted net loss per share for the reported periods Net Loss Per Share (In Thousands, except per share amounts) | Metric (Three months ended June 30) | 2025 | 2024 | | :---------------------------------- | :-------- | :-------- | | Net loss attributable to shareholders | $(21,124) | $(16,931) | | Weighted-average ordinary shares outstanding, basic | 40,343,521 | 39,041,111 | | Net loss per share, basic | $(0.52) | $(0.43) | | Metric (Six months ended June 30) | 2025 | 2024 | | :---------------------------------- | :-------- | :-------- | | Net loss attributable to shareholders | $(40,772) | $(32,420) | | Weighted-average ordinary shares outstanding, basic | 40,304,584 | 38,907,296 | | Net loss per share, basic | $(1.01) | $(0.83) | - Basic and diluted net loss per share are the same due to the company being in a loss position, making potential ordinary share equivalents anti-dilutive[42] 6. Property and Equipment, Net This note presents information on the company's property and equipment, including depreciation and asset disposals - Depreciation expense for the three and six months ended June 30, 2025, was $1.2 million and $2.5 million, respectively, an increase from $0.7 million and $1.3 million in the prior year periods[43] - The company recorded a $0.3 million gain from the sale of U.K. laboratory equipment during the three and six months ended June 30, 2025, with associated proceeds of $0.5 million[44] - As of June 30, 2025, $0.4 million of U.K. laboratory equipment was classified as held for sale[45] 7. Intangible Assets, Net This note details the company's intangible assets, including gross amounts, accumulated amortization, and amortization expense - Gross amortizable intangible assets remained at $31.6 million as of June 30, 2025, and December 31, 2024. Accumulated amortization increased to $11.2 million as of June 30, 2025, from $9.7 million as of December 31, 2024[46] - Amortization expense was $0.8 million for the three months and $1.6 million for the six months ended June 30, 2025, consistent with the prior year. Estimated annual amortization expense is $3.2 million through 2031[46] 8. Prepaid Expenses and Other Current Assets This note provides a breakdown of various prepaid expenses and other current assets held by the company Prepaid Expenses and Other Current Assets (In Thousands) | Category | June 30, 2025 | December 31, 2024 | | :-------------------- | :------------ | :---------------- | | Prepayments | $6,350 | $5,771 | | Value Added Tax receivable | $338 | — | | Accrued income | $139 | $88 | | Other | $854 | $344 | | Total | $7,681 | $6,203 | 9. Accrued Expenses and Other Current Liabilities This note details the company's accrued expenses and other current liabilities, including manufacturing, payroll, and professional fees Accrued Expenses and Other Current Liabilities (In Thousands) | Category | June 30, 2025 | December 31, 2024 | | :------------------------------------ | :------------ | :---------------- | | Accrued manufacturing and clinical expenses | $2,302 | $3,326 | | Value Added Tax payable | — | $2,416 | | Accrued bonus | $709 | $1,774 | | Accrued payroll and employee benefits | $950 | $656 | | Accrued professional fees | $2,176 | $737 | | Accrued other | $1,227 | $616 | | Total | $7,364 | $9,525 | - Accrued other liabilities include a $0.4 million provision for severance costs due to a workforce reduction announced in January 2025[49] 10. Grant Income This note describes the company's grant funding, particularly from CEPI, and its recognition as other operating income - The company has a Funding Agreement with CEPI for up to $34.8 million to develop VTP-500 (MERS vaccine candidate), which received PRIME designation[50] - In January 2025, the company announced a strategic focus on I&I, deprioritizing infectious disease and oncology programs, and intends to exit the CEPI Funding Agreement[52] Grant Income and Deferred Income (In Thousands) | Metric (Three months ended June 30) | 2025 | 2024 | | :---------------------------------- | :---- | :---- | | Other operating income recognized | $13 | $577 | | Metric (Six months ended June 30) | 2025 | 2024 | | :---------------------------------- | :---- | :---- | | Proceeds received | — | $1,600 | | Other operating income recognized | $342 | $782 | | Deferred Income (In Thousands) | June 30, 2025 | June 30, 2024 | | :---------------------------------- | :------------ | :------------ | | Ending balance | $1,525 | $839 | 11. Ordinary Shares This note outlines the rights and characteristics of the company's ordinary shares, including voting and distribution entitlements - Ordinary shares rank pari passu, with holders entitled to proportional distribution of assets upon liquidation and one vote per share[58][60] - Shareholders approved the disapplication of preemptive rights for five years on April 21, 2021, and further authorized the board to allot shares free from pre-emption rights up to £1,928 nominal amount on November 6, 2023[62][64] 12. Deferred Shares This note describes the characteristics of the company's deferred shares, including their limited rights to dividends and liquidation proceeds - Deferred shares do not have dividend rights or participation in profits. Upon liquidation, holders are entitled to the paid-up amount after ordinary shareholders receive their paid-up amounts plus £1.0 million per share[65] - The company's deferred A shares remain in issue to satisfy minimum share capital requirements for a public limited company[65] 13. Fair Value This note discusses the fair value measurements of the company's financial instruments, including contingent consideration - The company's financial instruments include cash, cash equivalents, restricted cash, accounts payable, certain accrued expenses, and contingent consideration, with carrying amounts approximating fair value for short-term instruments[66] - As of June 30, 2025, the contingent consideration liability related to the Avidea acquisition was $2.5 million, a Level 3 valuation based on the probability and expected date of milestone achievement[67] Changes in Level 3 Fair Value Financial Instruments (In Thousands) | Metric (Three months ended June 30) | 2025 | 2024 | | :---------------------------------- | :---- | :---- | | Beginning balance | $2,652 | $1,867 | | Change in fair value | $(260) | $18 | | Foreign exchange translation | $152 | $3 | | Ending balance | $2,544 | $1,888 | | Metric (Six months ended June 30) | 2025 | 2024 | | :---------------------------------- | :---- | :---- | | Beginning balance | $2,650 | $1,823 | | Change in fair value | $(339) | $78 | | Foreign exchange translation | $233 | $(13) | | Ending balance | $2,544 | $1,888 | 14. Share-Based Compensation This note provides details on the company's share-based compensation plans, including options granted and related expenses - The total number of ordinary shares available for issuance under the Award Plan 2021 increased by 4% of outstanding shares as of January 1, 2025[69] Share-Based Compensation Details | Metric (Six months ended June 30) | 2025 | 2024 | | :-------------------------------- | :------------ | :------------ | | Options granted | 1,470,812 | 1,951,377 | | Weighted average grant date fair value | $0.85 | $2.71 | | Weighted average exercise price | $1.00 | $3.41 | | Options forfeited | 1,016,357 | 229,430 | | Outstanding options (June 30) | 7,625,728 | 7,779,884 | | Unrecognized compensation cost | $2.0 million | N/A | | Weighted average recognition period | 2.0 years | N/A | Share-Based Compensation Expense (In Thousands) | Expense Classification (Three months ended June 30) | 2025 | 2024 | | :-------------------------------------------------- | :---- | :---- | | Research and development | $(1) | $505 | | General and administrative | $(280) | $690 | | Total | $(281) | $1,195 | | Expense Classification (Six months ended June 30) | 2025 | 2024 | | :-------------------------------------------------- | :---- | :---- | | Research and development | $67 | $1,217 | | General and administrative | $120 | $1,593 | | Total | $187 | $2,810 | 15. Commitments and Contingencies This note outlines the company's contractual obligations, including in-license agreements and operating lease liabilities - The company has in-license agreements for intellectual property, with future payments contingent on drug candidate development and market success, including milestone payments and royalties (1% to 7%)[74] - The company leases laboratory and office space in Harwell, Oxfordshire (expires Sept 2031) and Germantown, Maryland (expires Feb 2034). Research and development activities in Harwell ceased in August 2025, and the building is being marketed for the remainder of the lease[78][79][80] Operating Lease Liabilities (In Thousands) | Metric (June 30) | 2025 | 2024 | | :-------------------------------- | :------ | :------ | | Right-of-use asset | $3,323 | $4,384 | | Lease liability, current | $2,036 | $1,920 | | Lease liability, non-current | $9,952 | $10,087 | | Total lease liability | $11,988 | N/A | | Weighted average remaining lease term (years) | 7.45 | 8.71 | | Weighted average discount rate | 7.5% | 7.5% | 16. Related Party Transactions This note discloses transactions with related parties, such as clinical study costs incurred with a subsidiary of a company shareholder - The company incurred $0.1 million (three months) and $0.3 million (six months) in clinical study costs from Oxford University Innovation Limited, a subsidiary of a company shareholder[85] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses financial condition, operational results, and future outlook, highlighting I&I pipeline focus and net losses - Barinthus Bio is a clinical-stage biopharmaceutical company focused on developing immunotherapeutic drug candidates for autoimmune and inflammatory diseases (I&I), prioritizing its SNAP-TI platform[87][88] - The lead candidate, VTP-1000 for celiac disease, is in a Phase 1 clinical trial, with the first two cohorts dosed and screening for the third ongoing. The multiple ascending dose part of the trial opened in July 2025[96][97] - The company incurred net losses of $21.2 million (three months) and $40.8 million (six months) ended June 30, 2025, and expects to continue incurring losses for the foreseeable future[91] - Existing cash, cash equivalents, and restricted cash are expected to fund operating expenses and capital expenditure requirements into the start of 2027, but additional funding will be required thereafter[93][151] Overview This section provides a high-level summary of the company's strategic focus, pipeline development, and financial performance trends - The company is prioritizing the development of a pipeline for I&I indications using its SNAP-TI platform, with VTP-1000 for celiac disease as its lead candidate[88] - VTP-300 for Hepatitis B virus is also being evaluated, with plans to complete ongoing clinical trials and seek a partner for further development[89] - The company has incurred significant net losses and negative cash flows, with an accumulated deficit of $278.4 million as of June 30, 2025, and expects this trend to continue[91] Recent Developments This section highlights recent progress in clinical trials, potential impacts of global events, and economic factors affecting the company - VTP-1000 for Celiac disease: The first and second cohorts of the Phase 1 AVALON clinical trial have been dosed without serious adverse events. Screening for the third cohort is ongoing, and the multiple ascending dose part of the trial commenced in July 2025[96][97] - The company believes international conflicts (Gaza, Ukraine, Iran) will have minimal impact on its business due to no operations or suppliers in those regions[98] - Global economic instability, inflationary pressures, and volatile interest rates could adversely affect future financing capabilities and operating costs[99] Components of Our Operating Results This section explains the primary drivers of the company's operating expenses, income, and other financial items - Operating expenses consist primarily of research and development (R&D) and general and administrative (G&A) costs. R&D expenses are expected to increase as product candidates advance through clinical development[100][101] - G&A expenses include personnel, professional fees, rent, depreciation, foreign exchange gains/losses, and changes in contingent consideration fair value, and are expected to increase with operational expansion and public company compliance[102][103] - Other operating income includes grant funding from CEPI for VTP-500 development, recognized systematically over the periods related expenses are incurred[104] - Other income/(expense) includes interest income from cash deposits and research and development incentives from the UK government's tax relief programs[105][106] Critical Accounting Policies and Use of Estimates This section discusses the significant accounting policies and the use of management estimates that impact the financial statements - Management makes estimates and assumptions for financial statements, particularly for fair value of contingent consideration and impairment of long-lived assets[111] - Following a strategic shift to I&I and a sustained decline in ADS price, a qualitative and quantitative assessment in January 2025 determined intangible assets were recoverable, with no further impairment identified as of June 30, 2025[114][115] - Contingent consideration liability from the Avidea acquisition is remeasured at fair value each reporting period, with changes recognized in G&A expenses[116] Results of Operations This section provides a detailed analysis of the company's financial performance, including changes in revenues and expenses Summary of Results of Operations (In Thousands) | Metric (Three months ended June 30) | 2025 | 2024 | Change | | :---------------------------------- | :-------- | :-------- | :-------- | | Research and development | $7,953 | $11,662 | $(3,709) | | General and administrative | $15,384 | $7,201 | $8,183 | | Total operating expenses | $23,337 | $18,863 | $4,474 | | Other operating income | $13 | $577 | $(564) | | Loss from operations | $(23,324) | $(18,286) | $(5,038) | | Net loss | $(21,126) | $(16,943) | $(4,183) | | Metric (Six months ended June 30) | 2025 | 2024 | Change | | :---------------------------------- | :-------- | :-------- | :-------- | | Research and development | $16,243 | $22,787 | $(6,544) | | General and administrative | $28,023 | $13,195 | $14,828 | | Total operating expenses | $44,266 | $35,982 | $8,284 | | Other operating income | $342 | $782 | $(440) | | Loss from operations | $(43,924) | $(35,200) | $(8,724) | | Net loss | $(40,784) | $(32,463) | $(8,321) | - R&D expenses decreased by $3.7 million (3 months) and $6.5 million (6 months) due to reduced spending on infectious disease/oncology programs and headcount reductions[119][120][128][129] - G&A expenses increased significantly by $8.2 million (3 months) and $14.8 million (6 months), primarily driven by foreign exchange losses and increased professional fees, partially offset by reduced personnel-related expenses[121][130] Liquidity and Capital Resources This section discusses the company's ability to generate and manage cash, its funding sources, and future capital requirements - The company has funded operations through equity offerings, grants, research incentives, and payments from Oxford University Innovation, raising approximately $330.1 million in gross proceeds through June 30, 2025[135] - As of June 30, 2025, cash, cash equivalents, and restricted cash totaled $87.8 million. The company expects these resources to fund operations into early 2027[135][151] Cash Flow Summary (In Thousands) | Cash Flow Activity (Six months ended June 30) | 2025 | 2024 | | :-------------------------------------------- | :-------- | :-------- | | Net cash used in operating activities | $(33,011) | $(23,828) | | Net cash used in investing activities | $(37) | $(500) | | Net cash provided by financing activities | $2 | $861 | | Effect of exchange rates on cash | $8,430 | $(849) | | Net decrease in cash | $(24,616) | $(24,316) | - Net cash used in operating activities increased to $33.0 million (2025) from $23.8 million (2024), primarily due to the net loss, adjusted for non-cash items and changes in operating assets/liabilities[140][141] - Future funding requirements are substantial and depend on the progress and costs of R&D, clinical trials, regulatory approvals, manufacturing, and commercialization efforts[148][150] Emerging Growth Company Status This section explains the company's status as an 'emerging growth company' and its implications for financial reporting - The company is an 'emerging growth company' under the JOBS Act, allowing it to delay adoption of certain accounting standards[157] - This status will continue until the earliest of the fifth anniversary of its IPO, achieving $1.235 billion in annual gross revenue, becoming a 'large accelerated filer' (market value > $700 million), or issuing over $1.0 billion in non-convertible debt[158] Recent Accounting Pronouncements This section refers to disclosures regarding new accounting standards and their potential impact on the company's financial statements - A description of recently issued accounting pronouncements that may potentially impact the company's financial position and results of operations is disclosed in Note 2 to the condensed consolidated financial statements[159] Item 3. Quantitative and Qualitative Disclosure About Market Risk The company faces market risks primarily from foreign currency fluctuations (USD vs. GBP) and minimal interest rate risk - The company is exposed to foreign currency exchange rate fluctuations, mainly between the United States dollar (reporting currency) and the pound sterling (functional currency for UK subsidiaries)[160] - A hypothetical 10% weakening of the United States dollar relative to the pound sterling would materially impact current and projected expenses denominated in pound sterling[162] - Interest rate risk is not significant as the company has no substantial interest-bearing liabilities, and a 10% change in interest rates would not materially impact financial statements[163] Item 4. Controls and Procedures Disclosure controls were effective as of June 30, 2025, with no material changes in internal control over financial reporting - The principal executive officer and principal financial officer concluded that the company's disclosure controls and procedures were effective as of June 30, 2025[166] - No material changes in internal control over financial reporting occurred during the three and six months ended June 30, 2025[167] PART II - OTHER INFORMATION This section covers legal proceedings, risk factors, equity sales, and other miscellaneous information relevant to the company Item 1. Legal Proceedings No material legal claims, but proceedings could negatively impact operations due to costs and resource diversion - As of June 30, 2025, the company does not believe it is party to any claim or litigation that would individually or in the aggregate have a material adverse effect on its business[170] - Legal proceedings, regardless of outcome, can adversely impact the company due to defense and settlement costs and diversion of management resources[170] Item 1A. Risk Factors Updated risk factors include inadequate government funding, U.S. policy changes, and U.K. Takeover Code non-applicability - Inadequate funding for U.S. government agencies (FDA, SEC) or disruptions like government shutdowns could delay product development and regulatory approvals, negatively impacting the business[172][173][175] - Changes in U.S. fiscal, tax, and other federal policies, including tariffs and healthcare reforms, could adversely affect the company's business and results of operations[176][177][178][180] - Shareholder protections under the U.K. City Code on Takeovers and Mergers currently do not apply to the company, but this may change from February 3, 2027, if its securities are quoted on a UK regulated market[181][183] - Changes in U.S. tax law, such as the OBBBA, could adversely affect financial condition and results of operations, particularly regarding the capitalization and amortization of R&D expenses[185] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds No unregistered equity sales; $102.8 million IPO proceeds redirected to immune tolerance R&D and corporate purposes - No unregistered sales of equity securities occurred during the three and six months ended June 30, 2025[191] - Net proceeds from the May 2021 IPO were approximately $102.8 million[193] - The planned use of IPO net proceeds has changed due to pipeline prioritization, now focusing on advancing immune tolerance R&D programs and general corporate purposes[194] Item 3. Defaults Upon Senior Securities This section states that there are no defaults upon senior securities to report - Not Applicable[196] Item 4. Mine Safety Disclosures This section indicates that mine safety disclosures are not applicable to the company - Not Applicable[197] Item 5. Other Information No directors or officers adopted, modified, or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement during the fiscal quarter ended June 30, 2025 - None of the company's directors or officers adopted, modified, or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement during the fiscal quarter ended June 30, 2025[198] Item 6. Exhibits This section lists the exhibits filed with the Form 10-Q, including the Articles of Association, certifications from the Principal Executive and Financial Officers, and Inline XBRL documents List of Exhibits | Exhibit Number | Description | | :------------- | :---------- | | 3.1 | Articles of Association of the Registrant | | 31.1* | Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) | | 31.2* | Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) | | 32.1** | Certification of Principal Executive Officer and Principal Financial Officer Pursuant to 18 U.S.C. Section 1350 | | 101.INS* | Inline XBRL Instance Document | | 101.SCH* | Inline XBRL Taxonomy Extension Schema Document | | 101.CAL* | Inline XBRL Taxonomy Extension Calculation Linkbase Document | | 101.DEF* | Inline XBRL Taxonomy Extension Definition Linkbase Document | | 101.LAB* | Inline XBRL Taxonomy Extension Label Linkbase Document | | 101.PRE* | Inline XBRL Taxonomy Extension Presentation Linkbase Document | | 104* | Cover Page Interactive Data File | SIGNATURES This section contains the official signatures of the company's authorized officers, attesting to the report's accuracy - The report was signed on August 7, 2025, by William Enright, Chief Executive Officer (Principal Executive Officer and Principal Financial Officer) of Barinthus Biotherapeutics PLC[204]