IMCR

Business Context and Reporting Period

Immunocore Holdings Plc, a commercial-stage biotechnology company, reported results for the quarter ended March 31, 2025. The company focuses on immunomodulating medicines, primarily through its lead product KIMMTRAK (tebentafusp) for metastatic uveal melanoma, which is approved in 39 countries and commercially launched in 26. The company operates as a single segment: immunotherapies.

Key Financial Metrics

Material Changes vs. Prior Period

• Revenue Growth: Total revenue increased 33.2% year-over-year, driven by a 33.5% increase in therapy sales. European revenue surged 73.1% to $32.8 million, and International revenue grew 227.7% to $4.5 million. U.S. revenue grew 13.2% to $56.6 million.
• Profitability: The company reported a net income of $5.0 million, a significant improvement from a net loss of $24.4 million in Q1 2024. This turnaround was aided by a $3.1 million foreign currency gain (vs. a $2.4 million loss previously) and $5.5 million in other income (unrealized gains on marketable securities).
• Expense Management: R&D expenses decreased slightly by 1.7% to $56.5 million, primarily due to a $9.4 million reduction in PRAME program costs, partially offset by increased spending on tebentafusp Phase 3 trials. SG&A expenses rose modestly by 2.3% to support commercial expansion.
• Liquidity: Cash and cash equivalents increased by $21.1 million to $476.8 million. Operating cash flow turned positive at $0.4 million, compared to a $4.6 million outflow in the prior year.

Guidance, Outlook, and Risks

• Clinical Progress: The company presented positive data from the Phase 1/2 STRIVE trial for IMC-M113V (HIV functional cure candidate) at CROI 2025, showing viral control in some participants. Price negotiations for KIMMTRAK were completed in France and Germany.
• Capital Resources: Management expects existing cash, marketable securities, and anticipated revenue to fund operations for at least 12 months. However, the company anticipates continued significant operating losses and increasing expenses as it advances its pipeline and expands commercialization.
• Risks: Key risks include the ability to maintain regulatory approval for KIMMTRAK, the success of ongoing clinical trials (including brenetafusp), reimbursement challenges, and the need for additional financing to support long-term development. The company also faces macroeconomic risks, including supply chain disruptions and currency fluctuations.
• Debt: The company holds $402.5 million in convertible senior notes maturing in 2030 with a 2.50% coupon. The Pharmakon loan was fully repaid in November 2024.

Investor Verification Checklist

• Revenue Sustainability: Verify the durability of the 73% revenue growth in Europe following the completion of price negotiations in France and Germany.
• Non-Operating Income: Assess the impact of the $5.5 million unrealized gain on marketable securities and $3.1 million foreign currency gain on the reported net income, as these are non-recurring or volatile items.
• Cash Burn vs. Runway: Confirm the 12-month liquidity runway given the continued high R&D spend ($56.5M/quarter) and the need for future capital raises.
• Debt Conversion Risk: Monitor the share price relative to the $94.70 conversion price of the convertible notes to assess potential dilution.
• Rebate Accruals: Review the $121.3 million in accrued rebates and chargebacks, noting the $6.0 million adjustment in Q1 2025 due to pricing negotiations, which highlights estimation uncertainty.