Immunocore Holdings plc — FY2022 Form 20-F
Reporting period: Fiscal year ended December 31, 2022; this is an annual report, not a standalone fourth-quarter filing. Financial statements are prepared under IFRS as issued by the IASB and reported in pounds sterling (£).
Business context and reporting period
Immunocore is a commercial-stage biotechnology company developing TCR bispecific immunotherapies using its ImmTAX platform. 2022 was its first year of marketed-product revenue, following approvals of KIMMTRAK (tebentafusp) for unresectable or metastatic uveal melanoma in the United States, European Union and other markets. KIMMTRAK was approved in more than 30 countries, with commercial launches underway in multiple territories. The company reported 48,088,346 ordinary shares outstanding at year-end.
Key financial metrics
| Metric (£ millions, except per-share data) | FY2022 | FY2021 |
|---|---|---|
| Total revenue | 143.7 | 26.5 |
| KIMMTRAK product revenue | 108.1 | — |
| Tebentafusp pre-product revenue | 8.7 | 3.0 |
| Collaboration revenue | 26.9 | 23.5 |
| Operating loss | (39.6) | (135.2) |
| Net loss | (41.2) | (131.5) |
| Basic and diluted loss per share | (£0.90) | (£3.10) |
| Research and development expense | 89.2 | 73.2 |
| Selling and administrative expense | 93.7 | 88.4 |
| Net cash used in operating activities | (25.9) | (96.1) |
| Cash and cash equivalents at year-end | 332.5 | 237.9 |
FY2022 operating margin was approximately (27.6%) and net margin approximately (28.7%), calculated from reported revenue and losses. Cost of product revenue was £0.5 million; the filing does not present a meaningful product gross-margin measure. Working capital was £308.8 million. Total assets were £435.5 million, total equity £278.8 million and total liabilities £156.8 million.
At year-end, borrowings were £39.5 million in the statement of financial position. The company had drawn the first $50 million tranche of its Pharmakon facility, carrying fixed interest of 9.75% and maturing in November 2028; a further $50 million tranche was available subject to conditions. Lease liabilities were £29.8 million. The loan is secured by substantially all company assets, including intellectual property.
Material changes versus the prior comparable period
- Total revenue rose to £143.7 million from £26.5 million, principally reflecting KIMMTRAK commercialization after 2022 approvals. Therapy sales were £116.8 million, including £80.4 million in the United States, £35.5 million in Europe and £0.9 million in the rest of the world.
- Net loss narrowed to £41.2 million from £131.5 million, while operating expenses increased overall as R&D and commercial activity expanded. R&D expense increased £16.0 million; selling and administrative expense increased £5.3 million.
- Operating cash outflow decreased to £25.9 million from £96.1 million, reflecting therapy-sale receipts. Financing cash flow included £114.5 million net, mainly from the July 2022 PIPE, which generated approximately $140 million gross proceeds.
- Collaboration revenue increased to £26.9 million from £23.5 million, including Genentech revenue and recognition of remaining Lilly deferred revenue. The GSK and Lilly agreements terminated in 2022; Genentech was the remaining revenue collaboration at year-end.
- Pharmakon financing replaced the Oxford Finance loan in November 2022. The company incurred £1.4 million on derecognition of the Oxford loan and £3.3 million of early-settlement and related financing fees.
Outlook, commentary, risks and unusual items
- Management expected year-end cash, together with anticipated KIMMTRAK revenue, to fund planned operations and liabilities into 2026. This depends on sales and operating-plan assumptions; the company expects continued losses and may need additional financing for longer-term development.
- 2023–2024 priorities include expanding KIMMTRAK globally, advancing PRAME-A02 clinical expansion with data expected by the first half of 2024, submitting INDs for three new ImmTAC candidates, and enrolling patients in the multiple-ascending-dose portion of the IMC-M113V HIV trial. No quantified revenue or earnings guidance is provided.
- Management expects R&D and selling and administrative expenses to increase as trials, commercialization and international operations expand; inflation and supply-chain costs may add pressure. UK R&D tax-credit changes expected from April 2023 may reduce the SME rebate and restrict certain eligible costs.
- Revenue estimates carry material uncertainty: accrued rebates, chargebacks and other deductions were £25.5 million, including £22.5 million subject to greater estimation uncertainty. A 20% change in specified rebate assumptions would change FY2022 therapy revenue by £4.5 million. The auditor identified these estimates as a critical audit matter.
- Management warned that U.S. Medicare rules on discarded single-use drug amounts could affect KIMMTRAK revenue beginning in the fourth quarter of 2023 if the product does not receive an exemption or adjusted threshold. Pricing reforms, reimbursement, competition, safety, regulatory approvals, clinical-trial outcomes, manufacturing and single-source API supply are key risks.
- After year-end, the company elected to stop co-funding the Genentech IMC-C103C MAGE-A4 program; Genentech is to assume further development and commercialization. This is a subsequent development disclosed in the filing.
- The company reported no material pending litigation. A European patent opposition remains on appeal, and IMMTAX trademark challenges remain pending in the UK, EU and U.S. A prior procurement-control material weakness was reported as remediated; management and KPMG concluded internal control over financial reporting was effective at December 31, 2022.
Important facts for investors to verify
- Whether KIMMTRAK sales, payer access, pricing and launches in additional countries support management’s cash runway estimate into 2026.
- The eventual rebate and chargeback amounts, especially U.S. government-program deductions and French and German pricing outcomes.
- Debt terms, collateral, covenant compliance, future interest and principal payments, and conditions for drawing the second Pharmakon tranche.
- Clinical-trial progress and safety for IMC-F106C, IMC-I109V, IMC-M113V and tebentafusp in advanced melanoma; assess reported interim data against final results.
- Manufacturing capacity and supply continuity, including reliance on third-party manufacturers and single-source active ingredients.
- Potential effects of drug-pricing legislation, UK R&D tax-credit changes, currency movements and inflation on revenue, cash needs and operating costs.