Business context and reporting period
Immunocore Holdings plc’s Form 20-F is an annual report for the fiscal year ended December 31, 2020—not a standalone Q4 report. The audited consolidated statements are for Immunocore Limited, the operating group before the February 2021 reorganization and IPO. They are prepared under IFRS as issued by the IASB and presented in pounds sterling.
Immunocore is a clinical-stage biotechnology company developing ImmTAX T-cell receptor bispecific medicines. It had no approved products and generated no product-sales revenue; reported revenue came from collaboration agreements. Its lead candidate, tebentafusp, targets metastatic uveal melanoma.
Key financial metrics
| Metric | FY 2020 | FY 2019 |
|---|---|---|
| Collaboration revenue | £30.1m | £25.7m |
| Research and development expense | £74.8m | £100.0m |
| Administrative expense | £45.7m | £44.2m |
| Operating loss | £86.2m | £118.3m |
| Loss before tax | £87.4m | £126.2m |
| Income tax credit | £13.3m | £22.3m |
| Net loss | £74.1m | £103.9m |
| Net cash used in operating activities | £60.6m | £101.4m |
| Cash and cash equivalents at year-end | £129.7m | £74.0m |
Revenue increased about 17% year over year, while net loss narrowed about 29%. Product margins are not meaningful because there were no product sales. The loss improvement and lower operating cash use chiefly reflect lower R&D spend and cash tax-credit receipts, rather than commercial product revenue.
At December 31, 2020, working capital was £97.9m, total assets £197.2m, total equity £55.3m and accumulated deficit £349.9m. Deferred collaboration revenue was £52.0m, down from £76.4m. The company reported £36.7m of non-current Oxford Finance borrowings, corresponding to the first $50m loan tranche drawn in November 2020; the facility is secured by substantially all assets, including intellectual property. Lease liabilities were £27.2m.
Cash flows were £0.5m provided by investing activities and £115.9m provided by financing activities in 2020, including preferred-share financing and Oxford Finance proceeds. Capital expenditure was £3.1m. The filing reports no dividends paid or declared.
Material changes versus the prior comparable period
- R&D expense fell £25.2m, mainly because tebentafusp enrollment and regulatory-supply manufacturing had substantially progressed in 2019; lower activity also reflected COVID-19 disruption and an IMC-F106C clinical hold. Spending on other programs increased.
- Administrative expense rose £1.6m, including higher share-based compensation and professional fees, partly offset by lower pre-commercial and travel costs and foreign-exchange effects.
- Net other operating income increased to £4.2m from £0.2m. This included a £3.7m gain on lease terminations and £0.8m from a settlement related to the internal investigation; these are not recurring operating revenue.
- Finance costs declined to £3.4m from £9.4m, principally because 2019 included a £5.1m fair-value loss on a derivative liability. The liability was settled in 2020.
- Operating cash use decreased by £40.8m, supported in part by £40.3m of net tax receipts in 2020 versus £13.5m in 2019. Financing inflows increased, lifting year-end cash.
Outlook, risks, contingencies and unusual items
- Clinical and regulatory outlook: Tebentafusp met the primary overall-survival endpoint at the first planned interim analysis of its Phase 3 trial in previously untreated metastatic uveal melanoma: hazard ratio 0.51 (95% CI 0.36–0.71; p<0.0001). Estimated one-year survival was approximately 73% versus 58% for investigator’s choice. Management expected to submit a U.S. BLA in Q3 2021, followed by an EMA application; approval was not assured.
- Pipeline: IMC-C103C and IMC-F106C were in early clinical development; IMC-I109V was in development for chronic hepatitis B. Initial data timing and trial progress remain subject to clinical, regulatory, enrollment, manufacturing and funding risks.
- Safety and manufacturing: The FDA’s partial hold on IMC-F106C followed a patient death that the investigator concluded was unrelated to study drug; the hold was lifted after protocol changes. The filing also describes a separate IMC-C103C hold related to drug-release assay specifications, later lifted. The company relies on contract manufacturers and disclosed single-source API supply risks.
- COVID-19: The pandemic delayed early pipeline progress by up to six months, particularly the HBV program, and could further affect enrollment, trial sites, suppliers and timelines.
- Liquidity and funding: Management expected cash, debt availability and the February 2021 IPO and concurrent private placement proceeds to fund planned operations through at least the end of 2022. The report cautions that plans may change and additional financing may be needed. The February 2021 IPO raised approximately $297.1m gross and $271.9m net; the concurrent Gates Foundation placement raised approximately $15.0m gross.
- Investigation and controls: A 2020 whistleblower investigation concerned an alleged kickback scheme involving an employee and two vendors. The employee resigned, the remaining vendor contract was terminated, proceedings were initiated, and the company reported recovery of £1.8m. A material weakness in procurement and delegation-of-authority controls was reported as remediated at December 31, 2020; continued effectiveness is not assured.
- Other contingencies: Four European patent opposition proceedings were disclosed; two patents were revoked in decisions issued in January and March 2021, which the company said would not materially affect product development. A U.S. trademark opposition concerning ImmTAX was also pending. Management said no pending litigation was expected to have a material adverse effect.
- Audit and reporting: KPMG issued an unqualified opinion on the IFRS statements. The company reported effective disclosure controls, but the annual report did not include management’s internal-control assessment or auditor attestation under the transition relief applicable to newly public companies and emerging growth companies.
Most important facts an investor should verify
- Review final, complete tebentafusp Phase 3 data—including safety, follow-up and regulatory submissions—against the interim results cited in this annual report.
- Reconcile the runway estimate through at least year-end 2022 with actual post-IPO cash, operating burn, collaboration receipts and the Oxford Finance repayment schedule and covenants.
- Assess how much of 2020’s lower cash use depended on tax-credit receipts, and whether those receipts and collaboration revenue are sustainable.
- Check progress on remediation of the procurement-control weakness and any subsequent control findings, given the investigation and reported recovery.
- Track clinical holds, trial enrollment, contract manufacturing and single-source supply exposure, as well as the status and potential impact of patent and trademark proceedings.