ADAPY 10-K & 10-Q changes, risk factors and insider trading

Risks related to litigation

Economic uncertainty in various global markets or the global economy may adversely affect our business. Any severe or prolonged economic downturn could result in a variety of risks to our business, including the inability to raise additional capital when needed or on acceptable terms. Uncertainty or a prolonged downturn may impact third-party suppliers and service providers, resulting in their inability to meet their commitments to us. The global credit and financial markets have experienced significant volatility and disruptions in recent years, driven by factors such as geopolitical tensions, including the Russia-Ukraine and Israel-Hamas conflicts, rising inflation, interest rate fluctuations, and most recently changes in trade policies and tariffs. In addition, political instability, including ongoing debates over U.S. fiscal policies, government shutdowns, and budgetary concerns, could further exacerbate uncertainty in global economic conditions. This volatility and political instability has resulted in diminished liquidity and credit availability, declines in consumer confidence, reduced economic growth, and in some economies and regions higher unemployment. The full impact of these factors is difficult to predict. If these conditions persist or further deteriorate it could exacerbate global economic uncertainty, lead to recessions in key markets, and disrupt international supply chains. These factors could make it materially more difficult for us to obtain financing in the capital markets or otherwise and could have a material adverse effect on our business, financial condition and results of operations.

Our costs and expenses may increase significantly or our cashflow may be impacted significantly in the event of any of the following, any of which could have a material impact on our business and our ability to continue as a going concern:

Although our financial statements have been prepared on a going concern basis there is substantial doubt about our ability to continue as a going concern.

As of December 31, 2024, the Company had cash and cash equivalents of $91.1 million, marketable securities of $60.5 million, and stockholders’ equity of $11.8 million. During the year ended December 31, 2024, the Company incurred a net loss of $70.8 million, used cash of $73.2 million from its operating activities, and generated revenues of $178.0 million. The Company has incurred net losses in most periods since inception and it expects to incur operating losses in future periods. Having evaluated certain conditions and events, the Company has concluded that substantial doubt exists as to whether we can continue as an ongoing business within one year after the date the financial statements are issued.

We executed a restructuring of the company to reduce headcount and expenses in early 2025. We have paused spend on the PRAME and CD-70 preclinical programs. Despite this restructuring we must obtain additional capital to continue funding planned operations. We may be unable to obtain sufficient additional capital to continue funding our operations or, if we do, it may be insufficient and/or on terms that are unfavorable to our existing shareholders. Any future fundraising, if possible, is likely to be highly dilutive to our existing shareholders and may also divert our management from its day-to-day activities.

If the Company fails to obtain additional funding, it may be required to:

Inability to obtain additional funding may also impact on existing business relationships resulting in termination or variation of those relationship.

Our business is, in part, dependent on the successful commercialization of TECELRA in the United States.

TECELRA received FDA approval in August 2024. TECELRA is a genetically modified autologous T-cell immunotherapy indicated for the treatment of adult patients with unresectable or metastatic synovial sarcoma who have received prior systemic therapy, are positive for HLA-A*02:01P, -A*02:02P, -A*02:03P, or -A*02:06P, and negative for HLA-A*02:05P, and whose tumor expresses the MAGE-A4 antigen as detected by an FDA-approved test. The success of our business, including our ability to finance our company and generate any revenue in the future, will, at this point, depend on the successful commercialization of TECELRA in the U.S. Any failure to successfully commercialize TECELRA in the U.S. would have a material and adverse impact on our business.

The commercial success of TECELRA will depend on a number of factors, including the following:

These factors, many of which are beyond our control, could cause us to experience significant delays or an inability to obtain regulatory approvals or commercialize TECELRA. While we have obtained regulatory approval of TECELRA in the United States, we may never be able to successfully commercialize TECELRA in the United States or receive regulatory approval of TECELRA outside the United States. Accordingly, we cannot provide assurances as to the revenue obtainable through the sale of TECELRA.

TECELRA is approved under accelerated approval in the United States, and additional confirmatory work is required in order to maintain that approval. Inability to maintain approval or to otherwise meet the requirements imposed by the FDA will have a significant impact on our ability to commercialize TECELRA.

TECELRA is approved under accelerated approval in the U.S. based on overall response rate and duration of response. Continued approval for this indication is contingent upon verification and description of clinical benefit in a confirmatory trial. Our ability to obtain traditional approval for TECELRA may require the conduct of additional studies and will require ongoing discussions with the FDA. Any additional work required to satisfy the conditions of accelerated approval will require additional finances, and any ability to obtain any additional required capital or equivalent sources of finance may delay or prevent our ability to maintain approval for TECELRA.

As part of the approval of TECELRA, certain post approval requirements apply which, if not satisfied, could impact continued approval of TECELRA.

TECELRA is subject to continuing regulation by the FDA Failure to meet any of these requirements may result in negative consequences including adverse publicity, judicial or administrative enforcement, warning letters from the FDA, mandated corrective advertising or communications with doctors, and civil or criminal penalties.

These requirements include submissions of safety and other postmarketing information and reports, registration and listing, as well as continued compliance with cGMPs and cGCPs for any clinical trials that we conduct post-approval. In addition, the FDA and other regulatory authorities may impose additional restrictions or require amendments to our product label after marketing approval in the event of additional adverse events with our cell therapy or of other adverse events seen with similar cell therapy products.

As part of the approval of Teclera, the FDA has imposed certain Postmarketing Commitments (“PMCs”) and Postmarketing Requirements (“PMRs”), including certain requirements to conduct additional studies under proscribed timelines. Failure to conduct these PMCs and PMRs in a timely manner could result in enforcement action from the FDA.

We and our contract manufacturers will be subject to periodic unannounced inspections by the FDA to monitor and ensure compliance with cGMPs. We must also comply with requirements concerning advertising and promotion for any cell therapies for which we obtain marketing approval. Promotional communications with respect to prescription drugs, including biologics, are subject to a variety of legal and regulatory restrictions and must be consistent with the information in the product’s approved labeling. Thus, we will not be able to promote any cell therapies we develop for indications or uses for which they are not approved.

The approval of TECELRA is limited to adult patients with unresectable or metastatic synovial sarcoma who have received prior chemotherapy, are positive for HLA-A*02:01P, -A*02:02P, -A*02:03P, or -A*02:06P, and negative for HLA-A*02:05P, and whose tumor expresses the MAGE-A4 antigen.

As is common for initial approval of cancer therapies, TECELRA has been approved by the FDA for use in a limited patient population, who have unresectable or metastatic synovial sarcoma and who have already received prior systemic therapy. As a result, our ability to market TECELRA is generally limited to that patient population.

The use of prior therapies or treatment for synovial sarcoma may reduce the effectiveness of our cell therapies.

This is the first time we as an organization are marketing a product and we have limited experience as a commercial company and have never generated revenue from product sales.

TECELRA is the first product for which we have obtained FDA approval. Accordingly, we will need to continue to transition from a company with a research and development focus to a company capable of supporting commercial activities. We have recruited experienced commercial and medical affairs teams and we will need to continue to develop those teams and the associated support network in order to supply TECELRA on a commercial basis.

We will have to compete with other pharmaceutical and biotechnology companies to recruit, hire, train, and retain suitably skilled and experienced marketing and sales personnel. This process may result in additional delays in bringing our cell therapies to market or in certain cases require us to enter into alliances with third parties in order to do so. However, there can be no assurance that we will be able to establish or maintain such collaborative arrangements, or even if we are able to do so, that they will result in effective sales forces. Any revenue we receive will depend upon the efforts of such third parties, which may not be successful. We may have little or no control over the efforts of such third parties, and our revenue from cell therapy sales may be lower than if we had commercialized our cell therapies ourselves.

For TECELRA, we are using certain third parties to supplement the internal commercial facing teams. We are also using a third party distributor to supply TECELRA and third parties to provide some of the systems required to supply TECELRA and support patients prescribed with TECELRA. We are reliant on those third parties to provide the services we require in accordance with our planned timelines. If any critical third party supplier fails to provide the services as required that may result in a delay to the commercialization of TECELRA. Any inability on our part to develop inhouse sales and commercial distribution capabilities or to establish and maintain relationships with third-party collaborators that can successfully commercialize any cell therapy in the U.S. or elsewhere will have a materially adverse effect on our business and results of operations.

As a novel cell therapy, TECELRA may not gain market acceptance among physicians, patients, hospitals, cancer treatment centers and others in the medical community, including referral centers.

The use of engineered T-cells and cell therapies more generally as a potential cancer treatment is a recent development and may not become broadly accepted by physicians, patients, hospitals, cancer treatment centers and others in the medical community. For example, the product labelling and prescribing information for TECELRA describe certain limitations of use, adverse events, and warnings and precautions, including a boxed warning related to Cytokine Release Syndrome (CRS), which may be severe or life threatening and which occurred in patients receiving TECELRA in clinical trials. Additional factors will influence whether TECELRA is accepted in the market, including:

The product labelling and prescribing information for TECELRA includes a boxed warning for CRS as well as other warnings and precautions. As TECELRA is used commercially, the rate and nature of adverse reactions may increase and as afamitresgene autoleucel (afami-cel) is studied in additional indications and populations, toxicities may further limit its development and use.

Coverage, price flexibility, and reimbursement may be limited or unavailable in certain market segments for TECELRA.

Successful sales of TECELRA may depend on the availability of coverage and adequate reimbursement from third-party payors. In addition, because TECELRA represents a new approach to the treatment of synovial sarcoma, we cannot accurately estimate the potential revenue from TECELRA.

Patients who are provided medical treatment for their conditions generally rely on third-party payors to reimburse all or part of the costs associated with their treatment. Obtaining coverage and adequate reimbursement from governmental healthcare programs, such as Medicare and Medicaid, and commercial payors is critical to new product acceptance. Government authorities and third-party payors, such as private health insurers and health maintenance organizations, decide which drugs and treatments they will cover and the amount of reimbursement. Reimbursement by a third-party payor may depend upon a number of factors, including, but not limited to, the third-party payor’s determination that use of a product is:

Obtaining coverage and reimbursement approval of TECELRA from a government or other third-party payor is a time consuming and costly process which could require us to provide to the payor supporting scientific, clinical and cost-effectiveness data for the use of our products. Even if we obtain coverage for TECELRA, the resulting reimbursement payment rates might not be adequate for us to achieve or sustain profitability or may require co-payments that patients find unacceptably high. Patients are unlikely to use TECELRA unless coverage is provided and reimbursement is adequate to cover a significant portion of the cost of TECELRA.

In the U.S., no uniform policy of coverage and reimbursement for products exists among third-party payors. Therefore, coverage and reimbursement for products can differ significantly from payor to payor. As a result, the coverage determination process is often a time-consuming and costly process that will require us to provide scientific and clinical support for the use of our cell therapies to each payor separately, with no assurance that coverage and adequate reimbursement will be obtained.

There have been, and likely will continue to be, legislative and regulatory proposals at the foreign, national and state levels directed at broadening the availability of healthcare and containing or lowering the cost of healthcare, including the Affordable Care Act (“ACA”) or provisions of the Inflation Reduction Act (“IRA”). Such regulatory changes may bring prescription drug pricing reform or healthcare affordability programs that, for example, seek to lower prescription drug costs by allowing governmental healthcare programs to negotiate prices with drug companies, put an inflation cap on drug prices, and lower out-of-pocket expenses for recipients of governmental healthcare programs. We cannot predict the initiatives that may be adopted in the future.

TECELRA represents a novel approach to treatment of synovial sarcoma that could result in heightened regulatory scrutiny.

Use of TECELRA to treat a patient involves genetically engineering a patient’s T-cells. This is a relatively novel treatment approach that carries inherent development risks including the following, any of which can result in delays to our ability to provide confirmatory evidence of TECELRA’s effectiveness:

Manufacturing and supply of cell therapies is complex, and if we encounter any difficulties in manufacture or supply of TECELRA or our ability to provide supply for confirmatory clinical trials commercial supply of TECELRA could be delayed or stopped.

The process of manufacturing and administering TECELRA is complex and highly regulated. Manufacture requires the harvesting of white blood cells from the patient, isolating certain T-cells from these white blood cells, combining patient T-cells with our lentiviral delivery vector through a process known as transduction, expanding the transduced T-cells to obtain the desired dose, and ultimately infusing the modified T-cells back into the patient. As a result of the complexities, our manufacturing and supply costs are likely to be higher than those at more traditional manufacturing processes and the manufacturing process is less reliable and more difficult to reproduce.

Delays or failures in the manufacture of TECELRA (whether by us, any collaborator or our third party contract manufacturers) may result in a patient being unable to receive TECELRA or a requirement to re-manufacture which itself then causes delays in manufacture for other patients. Any delay or failure or inability to manufacture on a timely basis can adversely affect a patient’s outcomes and delay the timelines for our confirmatory clinical trials and commercialization. With a commercial product delays or failure to manufacture could additionally lead to claims by patients for reimbursement or damages. Such delays or failure or inability to manufacture can result from, inter alia:

We will be subject to ongoing regulatory obligations and continued regulatory review, which may result in significant additional expense as well as significant penalties if we fail to comply with regulatory requirements or experience unanticipated problems with TECELRA.

FDA approval is accompanied by requirements to conduct surveillance to monitor the safety and efficacy of TECELRA.

Later discovery of previously unknown problems with TECELRA, including adverse events of unanticipated severity or frequency, or with our third-party manufacturers or manufacturing processes, or failure to comply with regulatory requirements, may result in, among other things:

The FDA’s and other regulatory authorities’ policies may change, and additional government regulations may be enacted that could adversely impact the approval of TECELRA. We cannot predict the likelihood, nature or extent of government regulation that may arise from future legislation or administrative action, either in the U.S. or abroad. If we are slow or unable to adapt to changes in existing requirements or the adoption of new requirements or policies, or if we are not able to maintain regulatory compliance, we may lose marketing approval and we may not achieve or sustain profitability.

In addition, FDA has required us to conduct a confirmatory trial to verify the clinical benefit of TECELRA. The results from the confirmatory trial or trials may not support the clinical benefit, which could result in the approval being withdrawn.

We are a commercial-stage biopharmaceutical company working to redefine the treatment of solid tumor cancers with cell therapies. With the approval by the U.S. Food and Drug Administration (“FDA”) of our first biologics license application (“BLA”) for TECELRA, which is the first engineered T-cell therapy for the treatment of a solid tumor cancer approved in the U.S., we are now focused on its launch and commercialization.

We are planning commercial launch for our second T-cell immunotherapy, lete-cel, for people with synovial sarcoma and myxoid liposarcoma in 2026. This product will significantly expand our treatable patient population within our commercial sarcoma franchise with up to $400 million annual peak combined US sales from TECELRA and lete-cel. We estimate that approximately 400 newly diagnosed patients per year are biomarker eligible for TECELRA, and an incremental 600 newly diagnosed synovial sarcoma and myxoid liposarcoma patients per year in the US will be biomarker eligible for lete-cel.

In addition to our commercial sarcoma franchise we remain committed to our collaboration with Galapagos which uses our uza-cel candidate manufactured using the Galapagos manufacturing process. A clinical trial authorization to start a Phase 1 trial in head and neck cancer is planned for 2025.

During the fourth quarter of 2024 we announced that we were ceasing further investment in all non-core programs. We are undertaking a reduction in headcount of approximately 29% and a reduction of total operating expenses of approximately 25% (as compared to 2024 operating expenses). As of the end of February 2025, the majority of the headcount reduction has been completed. As part of this restructuring in December 2024, we also announced changes to our executive leadership team. In addition, we are implementing additional cost reduction for our preclinical PRAME and CD70 programs and are evaluating all strategic options to maximize shareholder value.

We are focused on the commercialization of TECELRA for the treatment of advanced synovial sarcoma and for which we received FDA approval on August 1, 2024. As of March 18, 2025, 20 ATCs are available to initiate the treatment journey for our patients and ten patients have been apheresed. We are confident that our full network of approximately 30 ATCs will be active by the end of 2025, covering an estimated 80% of patients treated in sarcoma centers of excellence. Companion diagnostics for biomarker detection are approved and available and we have adequate manufacturing capacity to meet orders. AdaptimmuneAssist is available to support our patients and HCPs.

Letetresgene autoleucel (“lete-cel”)

Lete-cel targets the NY-ESO antigen and has been in clinical trials (the IGNYTE-ESO trial) for people with synovial sarcoma and myxoid round cell liposarcoma (myxoid liposarcoma). It is the second product in our sarcoma franchise. Final data for the IGNYTE-ESO trial were reported at the Connective Tissue Oncology Society Annual Meeting (“CTOS”) in November 2024.

In January 2025, lete-cel was granted breakthrough therapy designation by the U.S. FDA for the treatment of patients with unresectable or metastatic myxoid liposarcoma who have received prior anthracycline-based chemotherapy, are positive for HLA-A*02:01, HLA-A*02:05, or HLA-A*02:06, and whose tumor expresses the NY-ESO-1 antigen.

During 2025 we anticipate filing an IND for ADP-5701 for a Phase 1 trial in Head and Neck Cancer in collaboration with Galapagos. The trial will utilize the uza-cel engineered T-cell Receptor (TCR) and Galapagos’ innovative decentralized cell therapy manufacturing platform. Uza-cel has shown encouraging results in head and neck cancer with partial responses in four out of five patients to date in a Phase 1 trial using Adaptimmune’s manufacturing platform.

We entered into a clinical collaboration agreement with Galapagos in May 2024. Under the collaboration agreement we will conduct a clinical proof-of-concept trial to evaluate the safety and efficacy of uza-cel produced on Galapagos’ decentralized manufacturing platform (ADP-5701) in patients with head and neck cancer.

Prior collaborations with Genentech, relating to the research of “off-the-shelf” cell therapies, and GSK, relating to the transition of the NY-ESO and PRAME programs, have now either terminated or been concluded.

We have facilities in the U.S. in Philadelphia and Boston, and in the U.K.

During the fourth quarter of 2024 we announced that we were ceasing further investment in all non-core programs. We are undertaking a reduction in headcount of approximately 29% and a reduction of total operating expenses of approximately 25% (as compared to 2024 operating expenses). As of the end of February 2025, the majority of the headcount reduction has been completed. The restructuring aims to prioritize the commercial sarcoma franchise and R&D programs with the highest potential return on invested capital and transformational benefit to patients. As part of this restructuring the Company plans to focus an increasing proportion of its corporate functions in the US. We are also seeking strategic alternatives for our off-the shelf allogeneic cell therapy program. As part of this restructuring, we announced in December 2024 that Helen Tayton-Martin, our Co-founder and Chief Business and Strategy Officer, and Gavin Wood, our Chief Financial Officer, would step down on March 31, 2025 and May 31, 2025 respectively.

In addition to the restructuring announced in 2024, in March 2025 we announced implementation of additional cost reduction for the PRAME and CD70 programs. We are currently evaluating all strategic options for the Company and its programs.

On March 24, 2025 we entered into an amendment to the Loan Agreement. Under the amendment we will pre-pay $25 million of the loan amount under the Loan Agreement together with certain accrued interest up to the date of such pre-payment.

The Company generates product revenue from sales of TECELRA.

On April 12, 2024, we announced the termination of the Genentech Collaboration Agreement. The termination was accounted for as a contract modification on a cumulative catch-up basis. The termination did not change the nature the performance obligations identified but resulted in a reduction of the transaction price as the additional payments and variable consideration that would have been due in periods after October 7, 2024 will now never be received. The termination resulted in a cumulative catch-up adjustment to revenue recognized at the date of the termination of $101.3 million.

On September 23, 2024, Adaptimmune Limited entered into a Mutual Release Agreement with Genentech. The Mutual Release Agreement, among other things, resolved and released each party from any and all past, present and future disputes, claims, demands and causes of action, whether known or unknown, related to the Genentech Collaboration Agreement in any way. Under the terms of the Mutual Release Agreement, Genentech will pay $12.5 million which was received in October 2024, upon which the Genentech Collaboration Agreement was terminated. The Mutual Release Agreement was effective immediately as of September 23, 2024. The Mutual Release Agreement resulted in all remaining performance obligations being fully satisfied and the remaining deferred revenue and the additional payment were both recognized as total revenue of $37.8 million in the third quarter of 2024.

The Galapagos Collaboration and Exclusive License Agreement

On May 30, 2024, the Company entered into the Galapagos Collaboration Agreement. The Galapagos Collaboration Agreement includes an option for Galapagos to exclusively license the TCR T-cell therapy candidate uza-cel, manufactured on Galapagos’s decentralized manufacturing platform, in head and neck cancer and potential future solid tumor indications. Under the Galapagos Collaboration Agreement, we will conduct a clinical proof-of-concept trial to evaluate the safety and efficacy of uza-cel produced on Galapagos’ decentralized manufacturing platform in patients with head and neck cancer.

The Company will receive initial payments of $100 million, comprising $70 million upfront and $30 million of research and development funding, option exercise fees of up to $100 million (the amount depending on the number of indications in relation to which the option is exercised), additional development and sales milestone payments of up to a maximum of $465 million, plus tiered royalties on net sales. The $70 million upfront payment and $15 million of upfront research and development funding was received in June 2024.

The Company has identified a performance obligation relating to the various activities required to complete the POC trial and a material right associated with the exclusive license option. The Company expects to satisfy the POC Trial obligation over time over the period that the trial is completed, based on an estimate of the percentage of completion of the trial determined based on the costs incurred on the trial as a percentage of the total expected costs. The revenue allocated to the material right associated with the exclusive license option will be recognized from the point that the option is either exercised and control of the license has passed to Galapagos or the option lapses.

Cost of Goods Sold

Cost of goods sold represents the costs involved in the manufacture of our commercial products including raw materials, internal manufacturing and staff costs including a share of overheads and other costs incurred in bringing inventories to their existing condition and location prior to sale. Cost of goods sold also includes the costs for excess or obsolete inventory.

Comparison of Years Ended December 31, 2024 and 2023

The following table summarizes the results of our operations for the years ended December 31, 2024, and 2023, together with the changes to those items (in thousands):

Total revenue increased by $117.8 million to $178.0 million in the year ended December 31, 2024, compared to $60.3 million for the year ended December 31, 2023, primarily due to the termination of the Genentech Collaboration Agreement in April 2024, resulting in a cumulative catch-up adjustment of $101.3 million in the second quarter of 2024, and the subsequent Mutual Release Agreement, resulting in the remaining deferred revenue and additional payment being recognized as $37.8 million of revenue in the third quarter of 2024. This compares to the termination of the Astellas Collaboration Agreement in the first quarter of 2023, which resulted in the remaining deferred revenue for the collaboration of $42.4 million being recognized as revenue in March 2023.

Total revenue from Galapagos, Genentech and GSK in the year ended December 31, 2024 was $0.5 million, $163.9 million and $12.3 million respectively, compared to $44.0 million, $15.8 million and $0.5 million from Astellas, Genentech and GSK in 2023, respectively. The revenue recognized in 2024 and 2023 for Genentech and Astellas, respectively, includes the impact of the events noted above, as well as revenue recognized as research and development work for the collaborations was performed.

Research and development expenses increased by $22.6 million to $149.1 million for the year ended December 31, 2024 from $126.5 million for the year ended December 31, 2023. Our research and development expenses comprise the following (in thousands):

On July 27, 2025, we entered into an asset purchase agreement (the “Asset Purchase Agreement”) with USWM CT, LLC (“Purchaser”), a subsidiary of US WorldMeds Partners, LLC (together with Purchaser, “US WorldMeds”). Pursuant to the terms set forth in the Asset Purchase Agreement, we agreed to sell to Purchaser the assets and rights related to Adaptimmune’s TECELRA, letecel, afami-cel and uza-cel cell therapies (the “Products”), and Purchaser agreed to assume certain liabilities related to the Products (the “Transaction”). We also agreed to transfer to Purchaser specified intellectual property, product rights, regulatory authorizations, contracts, equipment, inventory, and other related assets. We continue to look for strategic options in relation to our pre-clinical assets and in particular our PRAME directed T-cell therapy and our CD70 directed TRuC therapy. In connection with the transaction, US WorldMeds intends to offer employment to approximately half of the Company’s existing employees. Further detail can be found in Note 17 to the financial statements.

We have been focused on the commercialization of TECELRA for the treatment of advanced synovial sarcoma and for which we received FDA approval on August 1, 2024. Commercialization of TECELRA will now pass to US WorldMeds and we will work with them to ensure a smooth transition.

On July 27, 2025, the Company entered into the Asset Purchase Agreement. Pursuant to the terms set forth in the Asset Purchase Agreement, Adaptimmune agreed to sell to Purchaser the assets and rights related to Adaptimmune’s TECELRA, letecel, afami-cel and uza-cel cell therapies, and Purchaser agreed to assume certain liabilities related to the Products. The Transaction was completed on July 31, 2025.

At the same time and in connection with the consummation of the Asset Purchase Agreement, Hercules Capital, Inc. (“Hercules”) was paid an amount equal to approximately $29.1 million in satisfaction of all indebtedness owed to Hercules pursuant to the Loan and Security Agreement (the “Loan Agreement”), dated May 14, 2024, by and among Adaptimmune, Hercules and the other parties thereto. The Loan Agreement was irrevocably terminated as of July 31, 2025.

On July 28, 2025, the Company also announced a restructuring in connection with the Transaction. Following consummation of the Transaction, the Company plans to further reduce its remaining workforce by approximately 62%. The Company anticipates that the majority of the reduction in workforce will be completed during the third quarter of 2025. As a result of these actions, the Company expects to incur approximately $7 to $8 million in pre-tax costs, relating to employee severance and other employee related expenses. The Company expects to incur the majority of such costs during the third quarter of 2025. These estimates are subject to certain assumptions and actual results may differ. As part of the restructuring, Elliot Norry, our Chief Medical Officer, and Cintia Piccina, our Chief Commercial Officer, ceased to be employed by Adaptimmune LLC as of August 8, 2025 and Joanna Brewer, our Chief Scientific Officer, will cease to be employed by Adaptimmune Limited as of August 31, 2025. As previously disclosed, Gavin Wood, our Chief Financial Officer, will cease to be employed by Adaptimmune Limited as of August 31, 2025.

After, the Company received FDA approval on August 1, 2024, for TECELRA for the treatment of advanced MAGE-A4+ synovial sarcoma in adults with certain HLA types who have received prior chemotherapy, the Company started generating product revenue from sales of TECELRA. There are 20 Authorized Treatment Centers (“ATCs”) available to initiate the treatment journey for the patients.

This collaboration includes an initial payments of $100 million, comprised of $70 million upfront and $30 million of research and development funding, option exercise fees of up to $100 million (the amount depending on the number of indications in relation to which the option is exercised), additional development and sales milestone payments of up to a maximum of $465 million, plus tiered royalties on net sales. The $70 million upfront payment and $15 million of upfront research and development funding was received in June 2024.

Revenue decreased by $114.6 million to $13.7 million in the three months ended June 30, 2025 compared to $128.2 million for the three months ended June 30, 2024. Revenue from development activities decreased by 98% for the three months ended June 30, 2025, compared to the same period in 2024. This decline was primarily due to the termination of the Genentech collaboration in April 2024 which resulted in the recognition of a cumulative catch-up adjustment of $101.3 million for the three months ended June 30, 2024. The product revenue has increased due to product sales commencing following the FDA approval of TECELRA on August 1, 2024.

These costs are not analyzed by project since employees may be engaged in multiple projects simultaneously.

Interest expense primarily relates to interest arising on the loan with Hercules Capital. For the three months ended June 30, 2025, the interest expense is $1.0 million compared to $0.5 million for the three months ended June 30, 2024, as the Loan and Securities agreement was only entered into in May 2024.

Income Taxes

Income taxes arise in the U.S. due to Adaptimmune LLC generating taxable profits. We typically incur taxable losses in the U.K. on an annual basis and have incurred losses in TCR2 since the acquisition.

Results of Operations

Comparison of six months ended June 30, 2025 and 2024

The following table summarizes the results of our operations for the six months ended June 30, 2025 and 2024, together with the changes to those items (in thousands):

The revenue recognized in the six months ended June 30, 2025 relates to TECELRA product sales and development revenue under the Galapagos Collaboration Agreement and the GSK Termination and Transfer Agreement.

Revenue decreased by $112.9 million to $21.0 million in the six months ended June 30, 2025 compared to $133.9 million for the six months ended June 30, 2024. Revenue from development activities decreased by 96% for the six months ended June 30, 2025, compared to the same period in 2024. This decline was primarily due to the termination of the Genentech collaboration in April 2024 which resulted in the recognition of a cumulative catch-up adjustment of $101.3 million for the six months ended June 30, 2024. The product revenue has increased due to product sales commencing following the FDA approval of TECELRA on August 1, 2024.

Research and Development Expenses

Research and development expenses decreased by 31% to $51.8 million for the six months ended June 30, 2025 from $75.7 million for the six months ended June 30, 2024.

Our research and development expenses comprise the following (in thousands):

The net decrease in our research and development expenses of $23.8 million for the six months ended June 30, 2025 compared to the same period in 2024 was primarily due to the following:

Our subcontracted costs for the six months ended June 30, 2025 were $18.4 million, compared to $25.4 million in the same period of 2024. This includes $13.6 million of costs directly associated with our afami-cel, lete-cel and uza-cel T-cells and $4.8 million of other development costs.

Selling, General and Administrative Expenses

Selling, general and administrative expenses increased by 8% to $41.8 million for the six months ended June 30, 2025 from $38.8 million in the same period in 2024. Our selling, general and administrative expenses consist of the following (in thousands):

The net increase in our selling, general and administrative expenses of $3.0 million for the six months ended June 30, 2025 compared to the same period in 2024 was largely due to:

Interest income primarily relates to interest on cash, cash equivalents and available-for-sale debt securities and is presented net of amortization/accretion of the premium/discount on purchase of the debt securities. Interest income was $1.1 million for the six months ended June 30, 2025, compared to $2.7 million for the six months ended June 30, 2024. The decrease in the interest income is inline with the reduction in the investment in marketable securities.

Interest expense primarily relates to interest arising on the loan with Hercules Capital. For the six months ended June 30, 2025, the interest expense is $2.8 million compared to $0.5 million for the six months ended June 30, 2024, as the Loan and Securities agreement was only entered into in May 2024.