SLN

Silence Therapeutics Plc: Q1 2026 Financial Summary

Business Context and Reporting Period

This Form 10-Q covers the quarterly period ended March 31, 2026. Silence Therapeutics Plc is a biotechnology company focused on discovering and developing RNA therapeutics, specifically short interfering RNA (siRNA) molecules. The company operates as a single reportable segment and is currently in the pre-commercial stage, with no approved products. Revenue is derived primarily from collaboration agreements, notably with AstraZeneca.

Key Financial Metrics

Material Changes vs. Prior Period

• Net Loss Reduction: Net loss decreased by $13.6 million (48%) compared to Q1 2025, driven primarily by a significant reduction in Research and Development (R&D) costs.
• R&D Expenses: R&D costs fell from $20.8 million in Q1 2025 to $9.1 million in Q1 2026. This $11.7 million decrease was largely due to the completion of Phase 3 readiness activities for the product candidate zerlasiran in 2025 and reduced headcount.
• Revenue Increase: Revenue increased to $0.4 million from $0.1 million, attributed to ongoing recognition of upfront payments and milestones from the AstraZeneca collaboration.
• Functional Currency Change: Effective January 1, 2026, the functional currency of the U.K. entity changed from British Pound Sterling (GBP) to U.S. Dollar (USD). This resulted in a foreign currency loss of $0.5 million in Q1 2026, compared to a loss of $3.8 million in Q1 2025.
• Liquidity: Cash and cash equivalents decreased by $5.6 million during the quarter, primarily due to operating outflows, partially offset by net investing inflows from the redemption of term deposits.

Guidance, Outlook, and Risks

• Liquidity Outlook: Management believes current cash, cash equivalents, and short-term investments ($70.1 million) are sufficient to fund operating expenses and capital expenditures into 2028.
• Product Pipeline Updates:
  • Divesiran (SLN124): Phase 2 SANRECO trial for polycythemia vera is fully enrolled; topline results expected in Q3 2026.
  • Zerlasiran (SLN360): Phase 3 ready for cardiovascular disease; seeking a third-party partner for development and commercialization.
  • SLN312: AstraZeneca notified Silence on March 4, 2026, that they will not pursue development beyond Phase 1. Silence will regain full global rights to this asset.
• Risks and Contingencies:
  • Going Concern: The company has incurred recurring losses since inception and expects to continue doing so. Future funding will be required to support clinical development.
  • R&D Tax Credits: The company relies on U.K. R&D tax credits. Management does not expect to meet the "R&D-intensive" threshold for the full year 2026 but expects to claim under a grace period. Changes in tax regimes or disallowance of claims could materially impact cash flow.
  • Collaboration Dependency: Revenue is heavily dependent on the AstraZeneca collaboration. The decision by AstraZeneca to halt SLN312 development impacts future milestone potential for that specific asset.

Key Investor Verification Points

• Cash Runway: Verify the sufficiency of the $70.1 million cash balance to fund operations through 2028, considering the potential need for additional capital to advance clinical trials.
• R&D Tax Credit Eligibility: Monitor the company's ability to maintain "R&D-intensive" status or qualify for grace periods under U.K. tax laws to ensure continued cash rebates.
• SLN312 Strategy: Assess the company's plans and capital requirements for re-taking full control of the SLN312 asset following AstraZeneca's withdrawal.
• Partnership Progress: Track the status of partnership discussions for zerlasiran (SLN360) and SLN548, as these are critical for future funding and commercialization.
• Functional Currency Impact: Review future financial statements for the ongoing impact of the U.K. entity's functional currency change to USD on foreign exchange gains/losses.