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目录

美国
证券交易委员会
华盛顿特区20549
形式 10-Q
(标记一)
根据1934年《证券交易法》第13或15(D)条规定的季度报告


截至本季度末2024年9月30日

根据1934年证券交易法第13或15(d)条提交的过渡报告
从_

佣金文件编号001-38547

AUTOLUS治疗公司
(注册人的确切姓名载于其章程)
英格兰和威尔士
不适用
(注册成立或组织的国家或其他司法管辖区)
(国际税务局雇主身分证号码)
媒体工厂
伍德巷191号
伦敦W12 7 FP联合王国
(主要行政办公室地址)
(44) 20
3829 6230
(注册人的电话号码,包括区号)

根据该法第12(B)条登记的证券:
每个班级的标题交易代码注册的每个交易所的名称
美国存托股份,每股代表一股普通股,每股面值0.000042美元
AUTL纳斯达克全球精选市场
普通股,面值每股0.000042美元 **
纳斯达克股市有限责任公司*
*
不用于交易,而仅与美国存托股票在纳斯达克证券市场有限责任公司上市有关。
用复选标记表示注册人(1)是否在过去12个月内(或注册人被要求提交此类报告的较短时间内)提交了1934年《证券交易法》第13条或15(D)节要求提交的所有报告,以及(2)在过去90天内是否符合此类提交要求。
是的 ☒ 没有预设
1

目录
通过勾选注册人是否以电子方式提交了根据S-t法规第405条(本章第232.405条)要求在过去12个月内(或要求注册人提交此类文件的较短期限内)提交的每个交互数据文件。 是的 ☒ 没有预设

如果注册人是《证券法》第405条所定义的知名经验丰富的发行人,则通过勾选标记进行验证。 是的 没有预设

通过勾选标记来确定注册人是大型加速申报人、加速申报人、非加速申报人、小型报告公司还是新兴成长型公司。请参阅《交易法》第120亿.2条规则中“大型加速备案人”、“加速备案人”、“小型报告公司”和“新兴成长型公司”的定义:
大型加速文件服务器加速文件管理器
非加速文件服务器规模较小的报告公司
新兴成长型公司

如果是一家新兴的成长型公司,用复选标记表示注册人是否已选择不使用延长的过渡期来遵守根据《交易所法》第13(A)节提供的任何新的或修订的财务会计准则。
是的 没有预设

通过勾选标记检查注册人是否是空壳公司(定义见该法案第120亿.2条规则)。 是的 没有

截至2024年11月8日,登记人已 266,121,689 普通股(包括ADS形式的股份),每股面值0.000042美元,已发行。






















2

目录
解释性说明

Autolus Therapeutics plc(“公司”)符合1934年证券交易法(“交易法”)第30亿.4条规定的“外国私人发行人”资格,并且根据交易法第13 a-13条和第15 d-13条,免于提交10-Q表格季度报告。该公司自愿选择提交截至2024年9月30日季度的10-Q表格季度报告。

目录
一般信息
除非上下文另有要求,否则本季度报告表格10-Q中所有提及“Autolus”、“公司”、“我们”、“我们”和“我们的”均指Autolus Therapeutics plc及其合并子公司(如适用)。
奥托卢斯,澳大利亚® 以及本季度报告中10-Q表格中出现的我们的其他商标或服务标记是我们的财产。仅为方便起见,本季度报告中的10-Q表格中的商标和商品名称未提及 ®TM 符号,但此类引用不应被解释为任何表明其各自所有者不会根据适用法律在最大程度上主张其权利。本季度报告(表格10-Q)中提到的其他公司的产品或服务名称可能是其各自所有者的商标、商品名称或服务标记。
有关前瞻性陈述的警示说明
这份Form 10-Q季度报告包含有关我们和我们的行业的前瞻性陈述,涉及重大风险和不确定因素。除本Form 10-Q季度报告中包含的历史事实的陈述外,其他所有陈述,包括有关我们的战略、未来财务状况、未来运营、研发成本、计划和管理目标的陈述,均为前瞻性陈述。在某些情况下,您可以通过诸如“目标”、“预期”、“假设”、“相信”、“考虑”、“继续”、“可能”、“设计”、“到期”、“估计”、“预期”、“目标”、“打算”、“可能”、“目标”、“计划”、“预测”、“定位”、“潜在”、“寻求”等术语来识别前瞻性陈述,“应该”,“目标”,“将”,“将”和其他类似的表达,是对未来事件和未来趋势的预测或指示,或这些术语或其他类似术语的否定。尽管我们相信本季度报告10-Q表格中包含的每个前瞻性陈述都有合理的依据,但我们提醒您,这些陈述是基于我们目前已知的事实和因素以及我们对未来的预期,而我们不能确定这些事实和因素。
3

目录
本季度报表10—Q表中的前瞻性陈述包括,除其他事项外,关于:
AUCATZSYS/obe-cel(obecabtagene autoleucel)对复发性或难治性b细胞前体急性淋巴细胞白血病(「r/r b-ALL」)成年患者的治疗潜力和预期临床益处;
我们从AUCATZSYS获得收入的能力取决于保持医生、患者和医疗保健付款人的市场认可度;
我们有能力在美国(「美国」)维持AUCATZSYS的监管批准,在其他地区获得并维持成人r/r b-ALL obe-cel的监管批准及其时间,以及在我们计划开发的适应症中获得并维持我们其他候选产品的监管批准,以及任何相关限制,已批准的药物或疗法标签中的限制或警告;
我们对成人r/r b-ALL的AUCATZSYS商业化和营销的期望,包括扩展到其他领域以及接触此类领域患者的相关时间;
我们的商业产品和候选产品的开发,包括有关临床研究或试验的启动、时间、进展和结果以及相关准备工作的声明、试验结果公布的期限以及我们的研究和开发计划;
我们对费用、未来收入、资本需求和额外融资需求的估计;
我们的商业化、营销和制造能力以及AUCATZSYS战略,包括我们成功招聘和留住销售和营销人员以及成功为AUCATZSYS建立市场的能力;
我们对医疗保健提供者愿意向成人r/r b-ALL患者推荐AUCATZyl的期望;
公共卫生危机的影响及其对我们运营和业务的影响,包括关键临床试验活动的中断,例如临床试验中心监测、获得资金,以及第三方制造商、临床中心、合同研究组织(「CROs」)、其他服务提供商和与我们开展业务的合作者的运营和业务的潜在中断;
我们对获得和维护智慧财产权保护的能力以及从第三方许可与我们的候选产品相关的额外智慧财产权以及遵守我们现有许可协议的能力的期望;
我们研究、开发、制造和商业化候选产品的计划;
我们的商业产品和候选产品的潜在好处;
我们候选产品的监管备案和批准的时间或可能性,以及美国、欧盟(「欧盟」)、英国(「英国」)的监管动态和其他国家;
我们的商业产品和候选产品的市场规模和增长潜力(如果获得批准),以及我们的商业产品和候选产品的市场接受率和程度,包括可能从付款人收到的报销;
我们需要并有能力以有利的条件或根本获得额外资金,包括由于宏观经济状况恶化,包括通货膨胀和利率变化以及不利的总体市场状况,以及乌克兰战争、涉及以色列的冲突和全球地缘政治紧张局势的影响;
我们的合作计划,或有关我们当前与BioNTech SE(「BioNTech」)和其他公司合作的声明;
我们与BioNTech的许可和期权协议,包括我们根据协议获得里程碑付款和特许权使用费的可能性;
我们有能力吸引具有开发、监管和商业化专业知识的合作者;
我们识别、招聘和留住合格员工和关键人员的能力;
我们与第三方供应商和制造商签订合同的能力及其充分履行职责的能力;
我们制造方法和流程的可扩展性和商业可行性;
现有或可能出现的竞争疗法的成功;
在当前和未来期间,我们是否被归类为被动外国投资公司(「PFIC」);
与我们在被要求这样做之前自愿遵守某些美国国内发行人报告义务的决定相关的额外成本和费用;以及
可能影响我们的美国存托股票(「ADS」)财务业绩或未来交易价格的任何其他因素,以及证券分析师报告对这些价格的影响。

4

目录
尽管我们认为这些前瞻性陈述中反映的预期是合理的,但这些陈述涉及我们的战略、未来运营、未来财务状况、未来收入、预计成本、前景、计划、管理目标和预期的市场增长,涉及已知和未知的风险、不确定因素和其他因素,包括但不限于有关宏观经济事件恶化的影响的风险、不确定性和假设,包括通胀和利率的变化、不利的总体市场状况和乌克兰战争的影响、涉及以色列的冲突以及全球地缘政治紧张局势对我们的业务、运营、战略、目标和预期时间表的影响,以及我们正在进行和计划中的临床前活动。我们启动、登记、进行或完成正在进行和计划中的临床试验的能力、我们提交监管报告的时间表以及我们的财务状况可能会导致我们的实际结果、活动水准、表现或成就与这些前瞻性陈述中明示或暗示的任何未来结果、活动水准、表现或成就存在实质性差异。我们敦促您仔细审阅我们在这份Form 10-Q季度报告中就这些风险和其他可能影响我们的业务和经营业绩的因素所作的披露。告诫您不要过度依赖这些前瞻性陈述,这些陈述仅在本文件发表之日发表。除非法律要求,我们不打算也不承担义务更新任何前瞻性资讯以反映事件或情况。
5

目录
第一部分-财务信息
项目1.财务报表
AutoLOS THERAPETICS PLC
未经审计的浓缩合并资产负债表
(In千,份额和每股金额除外)
注意9月30日,
2024
12月31日,
2023
资产
易变现资产:
现金及现金等价物
$657,067 $239,566 
受限制现金
1,470 769 
预付费用和其他易变现资产
759,577 34,967 
易变现资产总额
718,114 275,302 
非易变现资产:
财产和设备,净值844,258 34,862 
预付费用和其他非易变现资产193 380 
长期存款1,033 983 
经营租赁使用权资产,净值60,503 60,791 
递延税项资产3,389 3,063 
总资产
$827,490 $375,381 
负债及股东权益
流动负债:
应付帐款
$1,418 $103 
应计费用和其他负债
947,488 39,581 
经营租赁负债,流动3,568 5,053 
流动负债总额
52,474 44,737 
非流动负债:
经营租赁负债,非流动48,661 47,914 
与未来特许权使用费和里程碑相关的负债,净
12248,943 170,899 
其他长期应付447 357 
总负债
350,525 263,907 
承诺和意外情况 14
股东权益:
普通股,美金0.000042 面值; 490,909,783 截至2024年9月30日授权的股份和 290,909,783 截至2023年12月31日; 266,117,277174,101,361、分别于2024年9月30日和2023年12月31日发行的股份; 266,119,252174,158,985、分别于2024年9月30日和2023年12月31日发行在外的股票
12 8 
递延股份,英镑0.00001 面值; 34,425 2024年9月30日和2023年12月31日授权、发行和发行的股份
  
递延b股,英镑0.00099 面值; 88,893,548 2024年9月30日和2023年12月31日授权、发行和发行的股份
118 118 
延期C股,英镑0.000008 面值; 1 2024年9月30日和2023年12月31日授权、已发行和未发行股份
  
借记资本公积
1,549,351 1,018,902 
累计其他综合损失
(898)(28,992)
累计赤字
(1,071,618)(878,562)
股东权益总额
476,965 111,474 
负债总额和股东权益
$827,490 $375,381 
随附的附注是该等未经审核简明综合财务报表的组成部分。
6

目录
AutoLOS THERAPETICS PLC
未经审计的简明合并经营报表和全面亏损
(In千,份额和每股金额除外)

截至9月30日的三个月,截至9月30日的九个月,
注意
2024
2023
2024
2023
许可证收入3$ $406 $10,091 $1,698 
运营费用:
研发(40,323)(32,318)(107,606)(92,938)
一般和行政(27,330)(10,611)(67,410)(31,017)
财产和设备处置损失(223) (223)(3,791)
经营租赁使用权资产及相关财产和设备的减损
 (382)(414)(382)
净运营费用总额(67,876)(42,905)(165,562)(126,430)
其他净收入
54 136 161 109 
外汇损失
(11,884)(1,733)(12,368)(442)
利息收入8,320 3,646 24,908 10,495 
利息开支4(10,686)(5,014)(40,129)(14,939)
其他费用总额,净额
(14,196)(2,965)(27,428)(4,777)
所得税前净亏损(82,072)(45,870)(192,990)(131,207)
所得税(费用)福利
(22)21 (66)(5)
净亏损
(82,094)(45,849)(193,056)(131,212)
其他全面收益(损失):
外币兑换调整27,010 (5,837)28,094 5,104 
全面亏损总额$(55,084)$(51,686)$(164,962)$(126,108)
每股普通股基本和稀释净亏损5$(0.31)$(0.26)$(0.77)$(0.75)
加权平均基本股和稀释普通股5266,084,589 173,984,101 251,480,521 173,890,666 
随附的附注是该等未经审核简明综合财务报表的组成部分。

7

目录
AutoLOS THERAPETICS PLC
未经审计的简明合并股东权益报表
(In数千人,股份金额除外)
普通股递延股份递延b股延期C股资本公积累计其他综合损失累计赤字
股东权益总额
股份股份股份股份
2024年6月30日余额266,045,468 $12 34,425 $ 88,893,548 $118 1 $ $1,545,146 $(27,908)$(989,524)$527,844 
以股份为基础之补偿开支— — — — — — — — 4,020 — — 4,020 
扣除预扣税的股份后,限制性股票单位奖励的归属3,721 — — — — — — — — — —  
行使购股权68,088 — — — — — — — 185 — — 185 
外币兑换未实现收益— — — — — — — — — 27,010 — 27,010 
净亏损— — — — — — — — — — (82,094)(82,094)
2024年9月30日余额266,117,277 $12 34,425 $ 88,893,548 $118 1 $ $1,549,351 $(898)$(1,071,618)$476,965 
普通股递延股份递延b股延期C股资本公积累计其他综合损失累计赤字股东权益总额
股份股份股份股份
2023年6月30日余额173,680,872 $8 34,425 $ 88,893,548 $118 1 $ $1,012,709 $(27,957)$(755,542)$229,336 
以股份为基础之补偿开支— — — — — — — — 2,864 — — 2,864 
扣除预扣税的股份后,限制性股票单位奖励的归属253,851 — — — — — — — — — —  
行使购股权2,071 — — — — — — — 4 — — 4 
外币兑换未实现收益— — — — — — — — — (5,837)— (5,837)
净亏损— — — — — — — — — — (45,849)(45,849)
2023年9月30日余额173,936,794 $8 34,425 $ 88,893,548 $118 1 $ $1,015,577 $(33,794)$(801,391)$180,518 

随附的附注是该等未经审核简明综合财务报表的组成部分。


8

目录
AutoLOS THERAPETICS PLC
未经审计的简明合并股东权益报表
(In数千人,股份金额除外)
普通股递延股份递延b股延期C股资本公积累计其他综合损失累计赤字股东权益总额
股份股份股份股份
2023年12月31日余额174,101,361 $8 34,425 $ 88,893,548 $118 1 $ $1,018,902 $(28,992)$(878,562)$111,474 
普通股发行,扣除发行成本91,666,669 4 — — — — — — 520,613 — — 520,617 
以股份为基础之补偿开支— — — — — — — — 9,241 — — 9,241 
扣除预扣税的股份后,限制性股票单位奖励的归属134,849 — — — — — — — — — —  
行使购股权214,398 — — — — — — — 595 — — 595 
外币兑换未实现收益— — — — — — — — — 28,094 — 28,094 
净亏损— — — — — — — — — — (193,056)(193,056)
2024年9月30日余额266,117,277 $12 34,425 $ 88,893,548 $118 1 $ $1,549,351 $(898)$(1,071,618)$476,965 

普通股递延股份递延b股延期C股资本公积累计其他综合损失累计赤字股东权益总额
股份股份股份股份
2022年12月31日余额173,074,510 $8 34,425 $ 88,893,548 $118 1 $ $1,007,625 $(38,898)$(670,179)$298,674 
以股份为基础之补偿开支— — — — — — — — 7,948 — — 7,948 
扣除预扣税的股份后,限制性股票单位奖励的归属860,213 — — — — — — — — — —  
行使购股权2,071 — — — — — — — 4 — — 4 
外币兑换未实现损失— — — — — — — — — 5,104 — 5,104 
净亏损— — — — — — — — — — (131,212)(131,212)
2023年9月30日余额173,936,794 $8 34,425 $ 88,893,548 $118 1 $ $1,015,577 $(33,794)$(801,391)$180,518 
随附的附注是该等未经审核简明综合财务报表的组成部分。


9

目录
AutoLOS THERAPETICS PLC
未经审计的简明合并现金流量报表
(In数千)
截至9月30日的九个月,
20242023
经营活动产生的现金流量:
净亏损
$(193,056)$(131,212)
将净亏损与经营活动中使用的净现金进行调节的调整:
折旧及摊销
5,639 4,790 
扣除资本化金额的股份薪酬9,239 7,929 
利息支出,包括与未来特许权使用费和里程碑相关的负债的累计追赶调整,净额
39,709 14,878 
外汇差额(13,166)(366)
非现金经营租赁费用3,480 2,963 
经营租赁终止损失
176 95 
财产和设备处置损失223 3,812 
经营租赁使用权资产及相关财产和设备的减损414 382 
递延所得税(326)(520)
经营资产和负债变化:
预付费用和其他易变现资产增加
(21,851)(7,655)
预付费用和其他非易变现资产减少288 1,932 
长期存款减少
 937 
应付帐款增加
1,259 69 
应计费用和其他负债增加(减少)
3,713 (6,823)
经营租赁负债减少
(4,078)(11,965)
经营活动所用现金净额
(168,337)(120,754)
投资活动产生的现金流量:
购买财产和设备
(10,963)(9,509)
投资活动所用现金净额
(10,963)(9,509)
融资活动产生的现金流量:
普通股发行收益549,977  
支付股权发行成本
(29,360)(910)
行使购股权所得款项
595 4 
与未来特许权使用费和里程碑相关的负债收益,净额
40,000  
支付与未来特许权使用费和里程碑销售相关的负债相关的发行成本,净额
(1,665) 
融资活动提供(用于)的净现金
559,547 (906)
价位变化对现金、现金等值物和受限制现金的影响
37,955 5,257 
现金、现金等值物和限制性现金净增加(减少)
418,202 (125,912)
现金、现金等值物和受限制现金,期末
240,335 382,761 
现金、现金等值物和限制现金,期末
$658,537$256,849 

10

目录
截至9月30日的九个月,
2024
2023
未经审计的补充现金流信息
所得税支付的现金
$1,263 $ 
未经审计的补充非现金流信息
财产和设备采购包括在应付帐款或应计帐款中
费用
$2,889 $1,389 
为换取经营租赁负债而终止并获得的租赁资产,净额$(975)$(1,110)
换取经营租赁负债的租赁资产$1,640 $41,211 
资本化股份薪酬,扣除没收$2 $19 
已资本化的实施成本包含在应计费用中
$204 $74 
合并资产负债表内报告的现金、现金等值物和受限制现金的对帐:
现金及现金等价物$657,067 $256,415 
受限制现金1,470 434 
现金、现金等值物和限制现金总额
$658,537 $256,849 

随附的附注是该等未经审核简明综合财务报表的组成部分。
11

目录

AutoLOS THERAPETICS PLC
未经审计简明合并财务报表附注

注1. 业务性质
Autolus Treateutics公司(及其子公司,统称为Autolus或公司)是一家早期商业阶段的生物制药公司,开发用于治疗癌症和自身免疫性疾病的下一代程序化t细胞疗法。利用其广泛的专利和模块化t细胞编程技术,该公司正在设计精确靶向、受控和高活性的t细胞疗法,旨在更好地识别靶细胞,打破其防御机制,并攻击和杀死这些细胞。该公司相信,其程序化t细胞疗法有可能成为同类中最好的疗法,并为患者提供比现有护理标准更大的好处,包括对一些患者的治愈潜力。2024年11月8日,公司接到美国食品和药物管理局(“FDA”)的通知,公司的生物制品许可证申请(“BLA”)获得批准,允许在美国销售AUCATZYL(Obecabagene autolucel,也称为OBE-cel),用于治疗18岁及以上的r/r b-all成年患者。OBE-cel正在接受欧盟(EU)和英国(UK)的监管审查。用于治疗r/r成人b-ALL,并于2024年4月获得欧洲药品管理局(EMA)和2024年8月英国药品和保健产品监管机构(MHRA)接受的营销授权申请。
Autolus Therapeutics plc在英格兰和威尔士注册。其注册办事处为The MediaWorks,191 Wood Lane,London,W12 7 FP,United Kingdom。
该公司受到生物技术行业公司常见的风险和不确定因素的影响,包括但不限于竞争对手对新技术创新的开发、对关键人员的依赖、对专有技术的保护、对政府法规的遵守以及获得额外资本以资助运营的能力。该公司目前正在开发的候选产品在商业化之前将需要大量额外的研究和开发努力,包括临床前和临床测试以及监管部门的批准。尽管AUCATZYL已被FDA批准在美国上市,但该公司将继续为将其商业化而产生巨大的额外成本。这些努力将需要大量资金,以及额外的人员、基础设施和合规能力。即使该公司为OBE-cel及其其他候选产品所做的产品开发工作取得了成功,该公司何时(如果有的话)将从其产品销售中获得收入也是不确定的。
BioNTech协议
2024年2月6日(“执行日期”),公司同时签订了(i)证券购买协议(“BioNTech证券购买协议”),(ii)注册权协议(“BioNTech注册权协议”),(iii)书面协议(“BioNTech信函协议”)和(iv)与BioNTech签订的许可和期权协议(“BioNTech许可和期权协议”),统称为“BioNTech协议”。BioNTech协议是在相互考虑的情况下签订的,因此,公司评估了这些协议的总体会计处理。以下对BioNTech协议的描述并不完整,而是通过参考此类协议的全文来对其进行完整限定。
(i)BioNTech证券购买协议
根据BioNTech证券购买协议,公司向BioNTech ADS出售,每家ADS代表 面值为美元的普通股0.000042 私募交易(“私募”)中的每股公司(“普通股”)。 2024年2月13日,公司完成定向发行 33,333,333 ADSs (the“初始ADS”),代表 33,333,333 普通股 发行价为美元6.00 根据初始ADS。扣除承保折扣和发行费用后,公司净收益总额为美元193.81000万美元。
如果BioNTech和公司在以下时间内签订制造和商业服务协议(定义如下) 18 私募首次完成后的几个月,BioNTech将购买额外的ADS(“后续ADS”,以及与初始ADS一起购买“私募ADS”),但不超过 15,000,000 ADS,总购买价格高达美元20.0 万可能发行的后续ADS总数受到额外限制和限制。
BioNTech证券购买协议包含公司和BioNTech各自的习惯陈述、保证和契约。
(ii)BioNTech注册权协议
根据BioNTech注册权协议,公司同意向SEC提交注册声明,以登记私募ADS的转售。
12

目录
AutoLOS THERAPETICS PLC
简明合并财务报表附注(未经审计)-续
(iii)BioNTech信件协议
BioNTech信函协议为BioNTech提供了某些额外权利,并对BioNTech对公司的投资进行了某些限制。BioNTech获得了提名公司董事会董事的权利。如果BioNTech至少获得 30占公司已发行和发行普通股(包括以美国存托凭证形式)的% 五年 在执行日期后,BioNTech将有权指定一名独立的额外董事。当BioNTech普通股所有权低于某些指定百分比时,BioNTech的董事提名权将自动终止。此外,BioNTech有权购买公司在善意融资交易中出售的股权证券,其金额基于BioNTech在此类融资交易后维持指定所有权门槛。
除特定例外情况外,未经公司批准,BioNTech不得在一段时间内出售私募ADS 六个月 此类ADS的适用截止日期之后。
BioNTech信函协议于以下两项中较早者终止:(a)(i)2027年2月6日;(ii)BioNTech或其附属公司没有持有公司证券;(b)涉及公司的控制权变更交易完成。
(iv)BioNTech许可和期权协议
许可证和选项
该公司通过其全资子公司Autolus Limited和Autolus Holdings(UK)Limited与BioNTech签订了BioNTech许可证和期权协议,根据该协议,公司向BioNTech授予:
对某些粘合剂的独家、全球、可再许可许可(“Binder许可”)并利用体内表达此类粘合剂的产品(统称为“Binder许可产品”),以及
几项有时间限制的选项(“选项”),以获得公司指定临床阶段候选产品、粘合剂和技术的额外权利,下文将详细描述:
选择权获得共同资助公司开发阶段项目Auto 1/22和Auto 6 NG(“产品选项”)的开发成本的独家权利,以换取商定的经济条款,包括期权行使费、里程碑付款和每个此类产品候选的利润分享安排,以及共同推广或共同商业化每个此类产品候选的额外选项;
选择获得全球独家许可,以开发在体内表达某些额外结合剂的产品,或者对于某些结合剂,在抗体药物偶联物中表达某些额外结合剂的产品(“结合剂选项”);
选择获得全球共同独占许可,以利用在体内表达公司活动增强模块的产品,在某些商定的情况下,拥有非独占权利,以利用包括公司活动增强模块但不在体内表达此类模块的产品(“活动增强选项”);和
可以选择获得非独家全球许可,以利用包含公司安全开关的产品(“安全开关选项”,以及Binder选项和活动增强选项一起称为“技术选项”)。
为了获得Binder许可证和技术选项,BioNTech向该公司支付了初始付款美元10.0 万如果所有期权均被充分行使,公司将有资格获得最高总额付款额为美元582.0 根据许可协议,百万美元。该最高金额包括下文描述的Binder许可产品的潜在里程碑付款、所有期权行使费和期权产品和技术许可的潜在里程碑付款,以及BioNTech可能向公司支付的额外付款,以增加有关公司候选产品obe-cel的收入利息,如下所述。
每个技术期权的期权行使费为七位数的低金额。活动增强选项和安全切换选项都必须针对给定的生物目标或目标组合执行。如果针对特定目标行使多个期权,则期权行使总费用有上限。BioNTech行使一项或多项技术期权而签订的所有协议的里程碑付款也有上限,以及行使多项期权的任何特定产品的应付特许权使用费率也有上限。


13

目录
AutoLOS THERAPETICS PLC
简明合并财务报表附注(未经审计)-续
Obe-cel产品收入利息
BioNTech还同意为obe-cel的临床开发计划的扩大和计划的商业化提供财政支持。为了换取obe-cel产品销售未来收入的权利,BioNTech向该公司预付了美元40.0 万该公司将向BioNTech支付obe-cel产品年净销售额的较低个位数百分比,该比例可能会增加至中个位数百分比,以换取高达美元的里程碑付款100.0 BioNTech当选后,针对特定新适应症完成了某些监管活动,总计价值百万美元。
制造和商业服务协议
根据BioNTech许可和选择协议的条款,公司同意授予BioNTech谈判联合制造和商业服务协议的选择权,根据该协议,除了Autolus的商业站点网络和基础设施外,双方还可以访问和利用彼此的制造和商业能力,就双方的某些CAR t产品,包括BioNTech的候选产品BNT 211(“制造和商业服务协议”或“MCSA”)。如果达成MCSA,还将授予BioNTech访问该公司的商业站点网络和基础设施的权限。
该公司得出的结论是 因执行BioNTech协议而产生的独立金融工具,包括:
1.初始ADS代表根据 BioNTech证券购买协议;
2.潜在的后续ADS代表根据 BioNTech证券购买协议;
3.BioNTech许可和期权协议,以及
4.MCSA。
后续ADS被归类为远期工具,具体取决于正在执行的MCSA。 截至2024年9月30日,MCSA尚未签订。 由于行使价格接近公司在MCSA签署日期前最后一个交易日的股价,因此远期工具的市场价值微不足道。因此,根据BioNTech证券购买协议购买初始ADS产生的初始收益将不会在BioNTech协议开始时单独分配给该独立金融工具。此外,由于MCSA尚未签订,在BioNTech协议开始时不会向这一独立金融工具分配任何对价。
在BioNTech许可和期权协议中,有许多嵌入式功能,这些功能均已根据会计准则编码(ASC) 480 区分负债与股权.尽管这些嵌入式功能可以单独行使,但它们缺乏法律上的可执行性,因此,BioNTech许可和期权协议被核算为 独立的金融工具。然而,每个嵌入功能都根据ASC 815进行衍生品会计评估 衍生品和对冲 (“ASC 815”).
该公司分析了如何核算主合同(即,BioNTech许可证和期权协议),因为Binder许可证代表与客户就商品和服务达成的协议,因此应根据ASC 606进行核算 与客户签订合同的收入(“ASC 606”).然而,由于BioNTech许可和期权协议的其他嵌入功能属于指定如何初始衡量合同的其他主题的范围(即,ASC 470债务 (“ASC 470”)),公司确定主合同不应根据ASC 606进行核算和初步计量。此外,公司确定主合同(BioNTech许可和期权协议)符合ASC 815-10-15-59(d)的范围例外,因此不应根据ASC 815作为衍生品核算,而是根据ASC 470作为债务金融工具核算。



14

目录
AutoLOS THERAPETICS PLC
简明合并财务报表附注(未经审计)-续
会计单位在初始确认时按公允价值记录,随后将不再按公允价值计量。公司将BioNTech证券购买协议(即代表普通股的初始ADS)和BioNTech许可和期权协议产生的总收益分配给 交易时以相对公允价值为基础的会计单位如下:

会计单位
总收益(in数百万)
初始公平值
(in数百万)
基于相对公允价值分配的对价
(in数百万)
净分配对价基于扣除交易成本后的相对公允价值 *
(in数百万)
初始ADS,代表普通股
$200.0 $200.0 $200.0 $193.8 
后续ADS,代表普通股
$ $ $ $ 
BioNTech许可和期权协议
$50.0 $50.0 $50.0 $47.9 
与未来特许权使用费和里程碑相关的负债,净(Obe-cel产品收入利息)
$40.0 $40.0 $40.0 $38.3 
许可证收入 (装订器许可证)
$10.0 $10.0 $10.0 $9.6 
MCSA
$ $ $ $ 
$250.0 $250.0 $250.0 $241.7 
* 此外,总分担交易成本为美元8.3 与BioNTech协议相关的百万美元已分配给 以相对公允价值为基础的会计单位。
说明2. 重要会计政策摘要
呈列基准
随附的公司未经审计简明综合财务报表是根据美国公认会计原则(“美国公认会计原则”)编制的,并以美元呈列。公司与其子公司之间的所有公司间账户和交易均已在合并后消除。
编制这些未经审计的简明综合财务报表时使用的重要会计政策与公司于2024年3月21日向美国证券交易委员会提交的截至2023年12月31日年度10-k表格年度报告(“年度报告”)中注释2“重要会计政策摘要”中讨论的政策一致。
某些信息和脚注披露已在美国公认会计原则允许的范围内进行精简或省略。这些未经审计的简明综合财务报表中包含的信息应与年度报告中包含的截至2023年12月31日止年度的已审计综合财务报表及其相关附注一并阅读。然而,这些中期财务报表包括所有调整,仅包括正常的经常性调整,管理层认为这些调整是公平陈述中期业绩所必需的。中期业绩不一定表明截至2024年12月31日的全年、任何其他中期或任何未来一年或期间的预期业绩。
持续经营的企业
该公司自成立以来发生经常性亏损,包括净亏损#美元。82.1 亿和$45.8截至2024年和2023年9月30日的三个月分别为百万美元和193.1 亿和$131.2截至2024年9月30日和2023年9月30日的9个月分别为100万美元。该公司的累计赤字为#美元1,071.6 亿和$878.6分别截至2024年9月30日和2023年12月31日。该公司预计在可预见的未来将继续产生营业亏损。该公司无法在需要时筹集额外资本,这可能会对其财务状况和实施其业务战略的能力产生负面影响。然而,不能保证将实现目前的运营计划,也不能保证将以公司可以接受的条件提供额外资金,或者根本不能保证。公司预计其于2024年9月30日的现金及现金等价物为657.1于该等未经审核简明综合财务报表发出日期起计至少十二个月内,百万元将足以为本公司的营运提供资金,因此,该等财务报表乃以持续经营为基础编制。由于该公司继续亏损,向盈利的过渡取决于其候选产品的成功开发、批准和商业化,以及实现足以支持其成本结构的收入水平。即使是在公司的计划中的产品监管申请获得批准,公司的商业化努力取得成功,预计公司将达到现金盈亏平衡之前,还需要额外的资金。
15

目录
AutoLOS THERAPETICS PLC
简明合并财务报表附注(未经审计)-续
外币折算
公司的报告货币为美元。该公司已确定最终母公司Autolus Therapeutics plc的功能货币为英镑。各子公司运营的功能货币均为适用的当地货币。以公司功能货币以外货币计价的货币资产和负债,按资产负债表日的汇率兑换为功能货币。以外币计价的非货币资产和负债按交易日的汇率兑换为功能货币。
公司录得外汇损失美元11.9 亿和$1.7 截至2024年9月30日和2023年9月30日的三个月分别为100万美元,外汇损失为2024年9月30日12.4 亿和$0.4 截至2024年9月30日和2023年9月30日止九个月分别为百万美元,计入未经审计的简明综合经营报表和全面亏损中的外汇损失。
就财务报告而言,公司的财务报表已兑换成美元。资产和负债按资产负债表日的汇率兑换,收入和费用按报告期平均汇率兑换,股东权益金额按每笔交易发生日的历史汇率兑换。换算调整不包括在确定净利润(亏损)时,但包括在外币换算为其他全面亏损(股东权益的组成部分)中。
分部资料
公司的 首席运营决策者(“CODM”)及其首席执行官负责管理 公司的 综合运营,以合理配置资源。当评估 公司的 财务业绩时,Codm按职能审查总收入、总费用和费用,并在全球范围内使用此信息做出决策。该公司和CDC将公司的运营和业务管理视为 单个 运营部门,即开发和商业化CAR t疗法的业务。
预算的使用
根据美国公认会计原则编制合并财务报表时,管理层须作出估计及假设,以影响于合并财务报表日期的资产及负债额、或有资产及负债的披露,以及报告期内的收入及支出的报告金额。这些合并财务报表中反映的重大估计和假设包括但不限于研发费用的应计费用、基于股份的薪酬(包括评估满足业绩条件的可能性)、所得税、认股权证的初始公允价值、与未来特许权使用费和里程碑相关的负债的利息支出、净额和相关的累积追赶调整、公司新制造设施(“核心”)的租赁期限),与公司相关的增量借款利率S租赁物业的成交价和分配价采用了相对独立的售价。根据情况、事实和经验的变化,定期审查估计数。实际结果可能与这些估计不同。
使用相对独立售价分配交易价格
预付款在履约义务之间使用公司的对履约义务相对独立销售价格的最佳估计。通过确定开发和许可义务的市场价值来估计相对独立的销售价格。由于这些投入不能直接观察到,因此评估是考虑所有合理的可获得信息,包括合同谈判中使用的内部定价目标,并考虑到每个开发计划的不同发展阶段以及来自可比安排的调整后的市场数据而确定的。如已确认履约责任与重大权利有关,则厘定该等履约责任的相对独立售价亦包括评估行使期权的可能性及客户于行使权利时所触发的任何付款。这项评估涉及重大判断,并可能对收入确认的金额和时间产生重大影响。
截至2024年和2023年9月30日的三个月和九个月,需要使用相对独立售价评估BioNTech许可和期权协议以及与Cabaletta Bio Inc.的期权和许可协议的交易价格分配。(“卡巴莱塔),分别。有关这些协议交易价格分配的更多信息,请参阅注3。

16

目录
AutoLOS THERAPETICS PLC
简明合并财务报表附注(未经审计)-续
与未来特许权使用费和里程碑、净和累计追赶调整相关的负债
该公司对Blackstone协作协议中的每一项进行了核算(见附注12)(“Blackstone合作协议负债”)和BioNTech OBE-cel产品收入利息(“BioNTech负债”)作为负债按摊销成本计量,该负债是根据Blackstone合作协议负债开始时确定的与未来特许权使用费和里程碑相关的有效利率来计量的,净额是根据公司目前对预期未来特许权使用费、里程碑付款和在实现某些指定临床、制造和监管里程碑时预期收到的里程碑的时间和金额的估计而计量的(每笔该等付款为“Blackstone Development付款”,统称为“Blackstone Development Payments”)。同样,BioNTech与未来特许权使用费相关的责任是基于公司的目前对预期未来特许权使用费的时间和金额的估计,预计将在协议的估计期限内支付。根据BioNTech许可和期权协议支付的里程碑付款(“BioNTech里程碑付款”)应在BioNTech支付S当选,因此没有计入实际利率的确定或负债的计量。
负债使用实际利率摊销,从而在协议估计期限内确认利息费用。每个报告期,公司都会评估未来预期特许权使用费、里程碑付款、预计期限内Blackstone Development付款的估计可能性、时间和金额。如果估计发生变化,公司使用累积追赶法确认对负债摊销计划和相关利息费用的影响。
公司的 对公司将支付的预期未来特许权使用费和里程碑以及预计将向公司支付的Blackstone Development付款的可能性、时间和金额的估计考虑了重大不可观察输入。这些输入包括监管批准、估计患者人数、估计售价、估计销售额、估计峰值销售和销售增长、预期推出的时间及其对特许权使用费的影响以及成功的总体可能性。此外,与负债相关的交易成本将在协议的估计期限内摊销为利息费用。
Blackstone协作协议责任和BioNTech责任的账面金额基于 公司的 对未来特许权使用费的估计、公司将向Blackstone支付的里程碑以及在安排有效期内将收到的预期Blackstone Development付款(使用初始实际利率进行贴现)。收到的未来特许权使用费、里程碑付款和未来Blackstone Development付款的估计现值超出其公允价值,使用实际利率确认为利息费用内的累计追赶调整。
近期尚未采用的会计公告
2023年11月,财务会计准则委员会(“FASB”)发布了会计准则更新,或(“ASU”),2023-07,分部报告(主题280):对可报告分部披露的改进,或(“ASU 2023-07”),扩大了公共实体所作的可报告分部的披露。ASU 2023-07中的这些修订保留了ASC 280中的现有披露要求-分部报告(“ASC 280”),并在此基础上扩大至要求公共实体在中期和年度报告期披露应报告分部的重大支出,以及以前仅在中期基础上每年披露的项目,包括与应报告分部的损益和资产相关的披露。此外,拥有单一可报告分部的实体必须提供ASC 280要求的所有分部披露,包括ASU 2023-07修正案中针对可报告分部的新披露。修正案没有改变关于公共实体如何确定和确定其应报告部门的现有指导意见。公共实体应将ASU 2023-07中的修正案追溯适用于财务报表中列报的以前所有期间。在过渡时,前几期披露的分部费用类别和金额应以采用期间确定和披露的重大分部费用类别为基础。ASU 2023-07中的修正案对所有公共实体在2023年12月15日之后的财政年度内的年度期间和2024年12月15日之后的财政年度内的过渡期间有效。该公司将遵守截至2024年12月31日的年度报告10-k表格中的任何新的适用披露。本公司预计这项采用不会对其财务报表和相关披露产生实质性影响。
2023年12月,FASb发布了ASO 2023-09《所得税披露改进》。该亚利桑那州立大学通过要求利率调节中的一致类别和更大程度的信息细分以及按司法管辖区细分支付的所得税来提高所得税披露的透明度。该指南自2025年1月1日起对公司有效,允许提前采用。该等修订应前瞻性应用,并允许追溯应用。 该公司打算在2025年1月1日开始的财年采用该指南。 该公司预计采用ASO 2023-09不会对其截至2024年12月31日的全年10-Q表格季度报告或10-k表格年度报告中的财务报表和相关披露产生重大影响。
除非另有讨论,否则最近发布的尚未生效的标准的影响预计不会对 公司的 合并财务报表和披露。
17

目录
AutoLOS THERAPETICS PLC
简明合并财务报表附注(未经审计)-续
说明3. 许可证收入
截至2024年9月30日和2023年9月30日的三个月和九个月的许可收入按地理位置(单位:千)列出于下表中:
截至9月30日的三个月,
截至9月30日的9个月,
2024202320242023
许可证收入
英国$ $346 $ $346 
美国 60  1,352 
德国
  10,091  
许可证总收入$ $406 $10,091 $1,698 
主要客户
止九个月 2024年9月30日, 100该公司%的许可收入来自BioNTech。截至2023年9月30日的九个月内, 80%和20该公司%的许可收入主要分别来自Cabaletta和Syncona Portfolio Limited的投资对象。
与BioNTech的许可和期权协议
BioNTech许可和期权协议的描述请参阅注1,根据该协议,公司在截至2024年9月30日的九个月内确认了收入。有关BioNTech协议条款和会计处理考虑因素的更多详情,请参阅该等中期简明综合财务报表的以下附注:
注1,“业务性质”
注2,“重要会计政策摘要”
注10,“股东权益”
注12,“与未来特许权使用费和里程碑相关的负债,净额”
注14,“承诺和或有事项”
由于BioNTech许可证和期权协议已计入为 具有各种嵌入式功能的独立金融工具,包括Binder许可证和相关的专有技术转让、技术选项和产品选项,公司需要考虑是否需要将嵌入式功能与主合同分开,从而作为单独的衍生品核算。该公司签订了Binder许可证以及相关的专有技术、技术选项和产品选项转让符合ASC 815-10-15-59(d)规定的范围例外,因此不计入ASC 815下的衍生品。
装订器许可证
该公司应用ASC 606将Binder许可证和相关专业知识视为功能知识产权。Binder许可证和相关的专有技术转让彼此没有区别,必须作为一项绩效义务合并,因为BioNTech要求专有技术才能从许可证中受益。根据这些确定,公司确定 BioNTech许可和期权协议开始时的合并独特履行义务。
公司进一步确定,合同开始时包含在交易价格中的已收到对价将分配给 综合履行义务。公司确定,在向BioNTech转让专有技术和Binder许可证后的某个时间点确认了履行义务。该公司确认的总许可收入为美元10.1 截至2024年3月31日的三个月内,与BioNTech许可和期权协议相关的价值为百万(扣除外汇差异)。 不是 许可证收入于截至2024年9月30日的三个月内确认。
该公司有资格获得高达$的里程碑付款32.0在实现指定的临床开发和监管里程碑后,为实现这些里程碑的每个Binder许可产品提供总计600万美元。该公司还有资格从Binder许可产品的净销售额中获得较低的个位数特许权使用费,但须按惯例减价,并受特定限制。如果BioNTech、其联属公司或再被许可人在公司或其联属公司或被许可人也将含有相同粘合剂的产品商业化的国家和地区将活页夹许可产品商业化,则版税将增加。根据BioNTech许可和期权协议,BioNTech自费对Binder许可产品的开发承担唯一责任并拥有唯一决策权。里程碑付款和特许权使用费被视为可变对价,并将根据最可能的金额方法进行评估。里程碑付款和特许权使用费付款不包括在交易价格中,因为这些金额在2024年9月30日.
18

目录
AutoLOS THERAPETICS PLC
简明合并财务报表附注(未经审计)-续
技术选项
由于技术选项不在ASC 815的范围内,公司考虑了其他相关会计准则,以适用于BioNTech许可证和期权协议的这一部分。因此,本公司适用ASC 606,特别考虑到与授予客户在未来日期购买额外商品或服务的任何选择权有关的会计指导,因为这可能向客户提供实质性权利。实质性权利是包含在当前合同中的一项承诺,应作为单独的履行义务予以核算。该公司确定,技术选项没有以显著的递增折扣提供。因此,授予BioNTech的技术选择权不代表实质性权利,因此在安排开始时不是一项履约义务。技术期权行权费相当于每个期权所涉及的技术的独立售价,因此,交易价格为$10.0100万美元未分配给技术选项履行义务。截至本年度止三个月及九个月内,并无行使任何技术期权2024年9月30日.
产品选项
由于产品选项因范围例外而无法根据ASC 815进行核算,管理层考虑了产品选项的条款,并得出结论,它们应作为ASC 450范围内的收益或有事项核算 - 意外开支 (“ASC 450”)。与技术选项不同,产品选项1)仍需就各方将执行的具体活动进行谈判,这些活动将在行使产品选项之前确定和商定,2)在签署BioNTech许可和选项协议后尚未行使。因此,产品选项不会计入ASC 606,并且在产品选项被行使之前,也不需要根据ASC 450进行确认。截至三个月和九个月内没有行使产品期权 2024年9月30日.
与Cabaletta的期权和许可协议
2023年1月9日,公司与Cabaletta签订了期权和许可协议(“Cabaletta协议”)根据该规定,公司授予Cabaletta非独家许可,以研究、开发、制造、制造、使用和商业化包含以下内容的产品 公司的 安全开关技术(“RQR 8技术”)。签署《Cabaletta协议》后,公司向Cabaletta提供了RQR 8许可的专业知识,费用为美元,不可退还1.2 万公司不承担与卡巴莱塔协议相关的进一步重大履行义务。
公司进一步授予Cabaletta选择权,扩大根据Cabaletta协议授予的权利和许可,以包括在支付期权行使费后最多预定数量的目标期权的研究、开发、制造、使用或商业化许可产品。
该公司确定了以下与授予研究、开发、制造和商业化活动的非独家许可以及向Cabaletta初步转让专有技术和信息有关的重大承诺。该公司确定期权行使费并未以大幅增量折扣提供。因此,授予Cabaletta的期权并不代表重大权利,因此在安排开始时也不是绩效义务。该公司确定,研究许可证的授予和专有技术的初步转让彼此没有区别,必须作为一项绩效义务合并,因为Cabaletta需要专有技术才能从许可证中获益。根据这些确定,公司确定 合同开始时有明确的履行义务。
公司进一步确定,应付的许可费构成合同开始时交易价格中包含的全部对价,该对价分配给 履行义务。分配给履行义务的交易价格金额在公司履行履行义务时确认。公司确定,在向Cabaletta转让专有技术和研究许可证后的某个时间点确认了履行义务。该公司确认的总许可收入为美元1.2 截至2023年9月30日的九个月内,与《卡巴莱塔协议》相关的金额为百万美元。 不是 截至三个月和九个月内确认了与《Cabaletta协议》相关的许可证收入 2024年9月30日.
签署《卡巴莱塔协议》后,交易价格仅包括美元1.2 应支付给公司的百万不可退还的许可费。公司可能会在行使许可目标的期权、实现某些开发和销售里程碑以及根据许可知识产权涵盖的每种产品的净销售额支付进一步的付款后收到许可费。

19

目录
AutoLOS THERAPETICS PLC
简明合并财务报表附注(未经审计)-续
与Syncona Portfolio Limited的投资对象签订的研究、期权和许可协议
该公司于2020年9月2日与Syncona Portfolio Limited的投资对象签订了许可协议。 该协议的条款包括不可退还的许可费、根据实现临床开发和监管目标而支付的付款以及产品销售的特许权使用费。 在结束的三个月和九个月里 2023年9月30日,公司收到因实现发展里程碑而产生的可变对价,金额为 $0.4.因此,公司确认的许可收入为 $0.4 (net外汇差额) 三个月和九个月结束了 2023年9月30日。
代表可变对价的未来里程碑将按照最可能金额法进行评估,并且不包括在交易价格中,因为这些金额受到完全限制, 2024年9月30日。 在结束的三个月和九个月 2024年9月30日 2023年和2023年,该公司尚未确认与客户的开发里程碑和基于销售的里程碑有关的任何可变对价,因为它们被认为不可能发生。
说明4. 利息开支
利息费用包括以下费用(以千计):
截至9月30日的三个月,
截至9月30日的9个月,
2024202320242023
与未来特许权使用费和里程碑相关的负债的利息支出,净额(参见注12)
$10,280 $5,014 $28,839 $14,878 
与未来特许权使用费和里程碑相关的负债产生的累计追赶调整,净额(参见注12)
  10,870  
其他利息费用
406  420 61 
总利息支出
$10,686 $5,014 $40,129 $14,939 
说明5. 每股普通股净亏损
每股普通股基本和稀释净亏损计算如下(以千计,股份和每股金额除外):
截至9月30日的三个月,
截至9月30日的9个月,
2024202320242023
分子
净亏损$(82,094)$(45,849)$(193,056)$(131,212)
净亏损-基本和稀释$(82,094)$(45,849)$(193,056)$(131,212)
分母
用于每股净亏损的加权平均普通股数-基本和稀释266,084,589 173,984,101 251,480,521 173,890,666 
每股普通股基本及摊薄净亏损$(0.31)$(0.26)$(0.77)$(0.75)
对于所列的所有期间,已发行但未归属的限制性股票单位、购股权和认购证均被排除在计算之外,因为其影响具有反稀释性。因此,用于计算每股基本和稀释亏损的普通股加权平均股数在所列所有期间均相同。

20

目录
AutoLOS THERAPETICS PLC
简明合并财务报表附注(未经审计)-续
以下潜在稀释证券因其反稀释效应而被排除在每股稀释净亏损的计算之外:
截至9月30日的三个月和九个月,
20242023
未归属的限制性股票单位
36,186 264,326 
股票期权
20,382,429 14,074,842 
认股权证3,265,306 3,265,306 
潜在稀释证券总数
23,683,921 17,604,474 
说明6. 公平值计量
公司采用的估值方法最大限度地使用可观察输入数据并尽可能减少使用不可观察输入数据。公司根据市场参与者在主要或最有利市场中为资产或负债定价时使用的假设确定公允价值。当考虑公平价值计量中的市场参与者假设时,以下公平价值等级区分了可观察输入和不可观察输入,并分为以下级别:
·1级-相同资产或负债在活跃市场上的报价。
·第2级-第1级所含报价以外的可直接或间接观察资产或负债的输入。
·第3级-不可观察的输入,反映了公司自己对市场参与者在为资产或负债定价时使用的假设的假设。
由于这些工具的短期性质,资产负债表中报告的现金及现金等值物、受限制现金、预付费用和其他资产、应付账款和应计费用以及其他负债的公允价值接近其公允价值。
下表列出了有关公司经常性按公允价值计量的金融资产的信息,并指出了用于确定此类公允价值的公允价值等级(以千计):
2024年9月30日
相同资产活跃市场报价(1级)
其他重要可观察输入(2级)
重大不可观察输入(3级)
金融资产
现金及现金等值物:
货币市场基金
$596,387 $596,387 $ $ 
$596,387 $596,387 $ $ 
2023年12月31日
相同资产活跃市场报价(1级)
其他重要可观察输入(2级)
重大不可观察输入(3级)
金融资产
现金及现金等值物:
货币市场基金
$184,635 $184,635 $ $ 
$184,635 $184,635 $ $ 
截至2024年9月30日的三个月和九个月以及截至2023年12月31日的年度,公允价值水平之间没有发生转移。
21

目录
AutoLOS THERAPETICS PLC
简明合并财务报表附注(未经审计)-续
说明7. 预付费用和其他流动资产
预付费用和其他流动资产包括以下内容(以千计):
9月30日,12月31日,
20242023
应收研究与开发索赔$34,766 $19,209 
提前还款
14,057 8,638 
增值税应收账款3,140 2,771 
递延成本2,237 1,787 
其他应收税款
1,678  
应计利息收入
1,409 999 
应收租赁押金
993 938 
应收企业税
699  
其他应收款项
598 516 
应收账款 109 
预付费用和其他流动资产总额$59,577 $34,967 
说明8. 财产和设备,净额

财产和设备,净包括以下内容(以千计):
9月30日,
12月31日,
20242023
实验室设备
$42,857 $32,232 
办公设备
5,571 3,777 
家具和固定装置
2,519 2,360 
租赁权改进
15,055 12,728 
在建资产
13,513 12,539 
减:累计折旧
(35,257)(28,774)
财产和设备合计(净额)
$44,258 $34,862 

截至2024年9月30日和2023年9月30日的三个月折旧费用为美元1.9 亿和$1.4 分别为百万美元,截至2024年9月30日和2023年9月30日的九个月为美元5.6 亿和$4.8 分别为百万。

说明9. 应计费用和其他负债
应计费用和其他负债包括以下内容(以千计):
9月30日,12月31日,
20242023
研发成本
$20,093 $19,825 
薪酬和福利
15,444 14,757 
专业费用
7,584 4,466 
增值税应计
3,964  
其他应计负债
403 533 
应计费用和其他负债总额
$47,488 $39,581 
22

目录
AutoLOS THERAPETICS PLC
简明合并财务报表附注(未经审计)-续
说明10. 股东权益
普通股
每位普通股持有人均有权 每股普通股投票并在董事会建议股息时接受股息 公司的 董事会并由股东宣布。截至2024年9月30日,公司尚未宣派任何股息。
限制性股票单位
截至2024年9月30日,限制性股票单位奖励 1,975 普通股已归属,但相关股份尚未发行。然而,这些已归属的限制性股票单位奖励已计入公司2024年9月30日已发行股份的计算中,因为它们被认为可以以很少或没有现金对价发行。2024年9月30日之后,所有相关普通股均已发行。
2024年2月承销发行
2024年2月12日,公司完成承销发行 58,333,336 代表 58,333,336 发行价为美元的普通股6.00 根据ADS。扣除承保折扣和发行费用后,公司净收益总额为 $326.8.
BioNTech证券购买协议
在签署BioNTech许可和期权协议(见注1和注3)的同时,公司与BioNTech签订了BioNTech证券购买协议,根据该协议,公司出售了ADS,各自代表 普通股在私募交易中转让给BioNTech。 2024年2月13日,公司完成定向发行 33,333,333 代表 33,333,333 发行价为美元的普通股6.00 根据ADS。扣除承保折扣和发行费用后,公司净收益总额为 $193.8.
如果BioNTech和公司在年内签订MCSA 18 私募股权首次结束后的几个月内,BioNTech将购买最多 15,000,000 总购买价格高达美元的ADS20.0 百万,但受到额外的限制和限制。
注11。 基于股份的薪酬
下表概述了未经审核简明综合经营报表和全面亏损中包含的股份报酬费用总额(单位:千):
截至9月30日的三个月,
截至9月30日的9个月,
2024202320242023
研发$1,218 $1,525 $2,716 $4,982 
一般和行政2,802 1,335 6,525 2,947 
资本化 4 (2)19 
股份薪酬费用总额
$4,020 $2,864 $9,239 $7,948 

23

目录
AutoLOS THERAPETICS PLC
简明合并财务报表附注(未经审计)-续
购股权
下表总结了截至2024年9月30日止九个月内公司的股票期权活动:
数量:
选项
加权-
平均值
行使
每股价格
加权-
平均值
剩余
合同
术语
(年)
骨料
内在
(1)
(单位:千)
截至2023年12月31日未完成17,956,385 $5.64 8.35$48,968 
授予3,797,650 4.19 268 
行使(214,398)2.77 480 
没收(902,906)3.30 857 
过期(254,302)9.41 5 
截至2024年9月30日未完成20,382,429 $5.45 7.98$13,411 
截至2024年9月30日可撤销8,879,183 $8.13 6.88$4,561 
已归属并预计将于2024年9月30日归属20,382,429 $5.45 7.98$13,411 
(1)总内在价值计算为截至2024年9月30日标的期权的行使价与这些期权的普通股公允价值之间的差额
截至2024年9月30日止九个月内,公司修改了 571,352 导致确认增量股份薪酬费用为美元的购股权0.4
已行使期权的总内在价值为美元0.5 截至2024年9月30日的九个月内为百万美元。
已授出购股权于授出日期的加权平均公允价值为美元3.02 截至2024年9月30日止九个月的每股期权。
截至2024年9月30日,与不含业绩条件的未归属购股权相关的未确认薪酬费用总额为美元13.5 百万,公司预计将在加权平均归属期内确认 3.04好几年了。
截至2024年9月30日,与未归属的具有业绩条件的购股权相关的未确认股份报酬费用总额为美元2.9 百万,公司预计在业绩状况变得可能时确认这一金额。
限制性股票单位
下表总结 公司的 截至2024年9月30日止九个月内的限制性股票单位(“RSU”)奖励活动:
数量:
限制
单位
加权平均
授出日期
公允价值
截至2023年12月31日未投资和未偿还116,436 $3.43 
既得(79,200)2.94 
没收(1,050)6.20 
截至2024年9月30日未投资和未偿
36,186 $4.43 
截至2024年9月30日,不到美元0.1 与未归属的无绩效条件受限制单位相关的未确认股份报酬费用,预计将在加权平均期间确认 1.44
24

目录
AutoLOS THERAPETICS PLC
简明合并财务报表附注(未经审计)-续
说明12. 与未来特许权使用费和里程碑相关的负债,净
金额以千计
2023年1月1日余额
$125,900 
与未来特许权使用费和里程碑相关的负债的利息支出,净额
4,905 
2023年3月31日余额
$130,805 
与未来特许权使用费和里程碑相关的负债的利息支出,净额
4,959 
2023年6月30日余额
$135,764 
与未来特许权使用费和里程碑相关的负债的利息支出,净额
5,014 
2023年9月30日余额
$140,778 
与未来特许权使用费和里程碑相关的负债的利息支出,净额
5,014 
累计追赶调整
25,107 
2023年12月31日余额
$170,899 
BioNTech责任的初步确认38,335 
与未来特许权使用费和里程碑相关的负债的利息支出,净额
8,390 
累计追赶调整
10,870 
2024年3月31日余额
$228,494 
与未来特许权使用费和里程碑相关的负债的利息支出,净额
10,169 
2024年6月30日余额
$238,663 
与未来特许权使用费和里程碑相关的负债的利息支出,净额
10,280 
2024年9月30日余额
$248,943 
截至2024年9月30日和2023年9月30日的三个月内,与未来特许权使用费和里程碑相关的负债的利息支出净额为 $10.3百万$5.0百万,分别。截至2024年9月30日和2023年9月30日的九个月内,与未来特许权使用费和里程碑相关的负债的利息支出净额为 $28.8百万$14.9百万,分别。
截至2024年和2023年9月30日的三个月以及截至2023年9月30日的九个月内, 没有 累计追赶调整(包括在利息费用中)。截至2024年9月30日的九个月内,累计追赶调整金额为 $10.9百万.
黑石合作协议
2021年11月6日,公司同时与BXLS V - Autobahn LP签订了以下协议,(“Blackstone”):(i)战略合作协议(“Blackstone合作协议”)、(ii)证券购买协议(“Blackstone证券购买协议”),(iii)许可证协议(“Blackstone许可证”)和(iv)注册权协议(“Blackstone注册权协议”)。Blackstone合作协议、Blackstone证券购买协议、Blackstone令状和Blackstone注册权协议统称为“Blackstone协议”。Blackstone协议是在相互考虑的情况下订立的,因此,公司评估了Blackstone协议的总体会计处理。
有关这些合同的条款和会计处理考虑因素的更多详细信息,请参阅公司年度报告中所载的公司合并财务报表的以下注释:
注2,“重要会计政策摘要”
注11,“与未来特许权使用费和里程碑相关的责任,净额”
注12, 认股权证
注13,“股东权益”

25

目录
AutoLOS THERAPETICS PLC
简明合并财务报表附注(未经审计)-续
2021年11月,预付款$50.0 Blackstone在执行Blackstone合作协议后支付了100万美元。2022年12月, Blackstone支付了Blackstone开发付款美元35.0 每笔价值百万美元,原因是(i)联合指导委员会对公司对obe-cel在r/r b-ALL中的关键FELIX 2期临床试验的中期分析进行了审查,以及(ii)由于完成了计划活动,证明了公司obe-cel制造过程的性能和资格,实现了预先商定的制造里程碑。2024年11月8日,公司收到FDA通知,公司已获得AUCATZSYS的上市批准,用于治疗复发性或难治性b细胞前体急性淋巴细胞白血病(r/r b-ALL)的成年患者(18岁及以上)。其余$30.0 由于该批准,现在将向公司支付数百万美元的Blackstone Development付款。
BioNTech协议
2024年2月6日,公司同时签订BioNTech协议。
有关该等合同的条款和会计处理考虑因素的更多详情,请参阅该等中期简明综合财务报表的以下附注:
注1,“业务性质”
注2,“重要会计政策摘要”
注3,“许可收入”
注10,“股东权益”
注14,“承诺和意外情况”
Obe-cel产品收入利息
根据BioNTech许可和期权协议,BioNTech同意为obe-cel的临床开发计划的扩展和计划的商业化提供财政支持。为了换取obe-cel产品销售未来收入的权利,BioNTech向该公司预付了美元40.0 万该公司将向BioNTech支付obe-cel产品年净销售额的较低个位数百分比,该比例可能会增加至中个位数百分比,以换取高达美元的里程碑付款100.0 BioNTech当选后,针对特定新适应症完成了某些监管活动,总计价值百万美元。
由于BioNTech许可证和期权协议已计入为 具有各种嵌入功能的独立金融工具(例如Obe-cel产品收入利息、里程碑付款和特许权使用费),公司需要考虑这些嵌入功能是否需要从主合同中分出,从而作为单独的衍生品核算。该公司确定主合同是类似债务的,因此根据债务主合同分析了嵌入式功能。该公司得出结论,BioNTech许可和期权协议(主合同)不应根据ASC 815-10-15-59(d)被视为衍生品,而应根据ASC 470被视为债务工具。
公司已核算 Obe-cel产品收入利息 作为主要由于 公司的 持续大量参与产生版税流。该公司最初确认BioNTech责任为美元38.3 百万是面值减去债务发行成本。一旦公司开始对AUCATZSYS进行商业销售并产生特许权使用费,公司将确认向BioNTech支付的特许权使用费部分为负债减少,并相应减少现金。
BioNTech负债的公允价值基于公司对安排有效期内将支付给BioNTech的未来特许权使用费的估计,并使用实际利率进行贴现。未来特许权使用费的估计现值超过初始公允价值的超出或亏损,采用累积追赶法在使用初始有效利率的利息费用中确认。BioNTech负债未摊销部分的估算利率约为 28.70%截至BioNTech协议执行日期2024年2月6日和2024年9月30日。
该公司每季度结合内部预测和外部来源的预测评估预期特许权使用费的金额和时间。如果此类付款的现值大于或小于其初步估计,或者此类付款的时间与其最初估计存在重大差异,公司将使用累积追赶法调整BioNTech负债的摊销。





26

目录
AutoLOS THERAPETICS PLC
简明合并财务报表附注(未经审计)-续
注13。 租赁
经营租赁-
该公司租赁一定的办公空间、实验室空间和设备。在安排开始时,公司根据存在的独特事实和情况确定该安排是否是租赁或包含租赁。
自2017年9月以来,该公司与Cell Therapy Catapult Limited达成安排,租赁位于英国斯蒂夫尼奇的Cell and Gene Therapy Catapult制造中心的制造套房。2024年8月,其中一间租赁的制造套件结束,公司退出了该套件。2024年9月,公司将剩余制造套件的租期从2024年8月延长至2025年3月。
2023年9月19日,公司签订 20年 与The Nucleus房东签订的租赁协议。该公司支付了建筑物其他区域的装修费用,这些区域可能需要在租期结束时拆除。2024年9月10日,公司 完成了与现场额外工程相关的制造设施租赁变更。房东将为设施的某些指定改进提供资金(“工程),该公司承诺按照双方商定的时间表进行。根据ASC 842,为完成的工程收到的资金被视为租赁激励措施。工程完工后,租约项下的租金付款将根据租期剩余时间的指定公式增加。变更契约不影响租赁期限,租赁期限自2023年9月19日起继续有效20年。
截至2024年9月30日和2023年9月30日止三个月和九个月,公司作为承租人的成本如下(单位:千):
截至9月30日的三个月,
截至9月30日的9个月,
2024202320242023
经营租赁成本$2,155 $2,061 $6,340 $5,235 
可变成本157 573 1,186 657 
短期租赁成本72 227 276 451 
总租赁成本$2,384 $2,861 $7,802 $6,343 
截至2024年9月30日和2023年9月30日止九个月的补充现金流信息如下(单位:千):
截至9月30日的9个月,
其他信息20242023
就计入租赁负债计量的金额支付的现金:
经营租赁的经营现金流出
$7,067$7,817

2024年和2023年9月30日经营租赁的加权平均剩余租期和加权平均贴现率如下:
截至9月30日的9个月,
20242023
加权平均剩余租期-经营租赁
15.615.9
加权平均贴现率-经营租赁8.14 %7.44 %
27

目录
AutoLOS THERAPETICS PLC
简明合并财务报表附注(未经审计)-续
截至2024年9月30日,经营租赁负债的到期情况如下(单位:千):
2024年剩余时间(1)
$(1,941)
2025(1)
(2,952)
2026(1)
8,514 
2027
8,912 
20288,156 
此后88,819 
租赁付款总额109,508 
减:估算利息(57,279)
租赁负债现值$52,229 
(1)包括来自核心租赁变化的租赁激励,金额为美元4.5 百万美元11.3 亿和$0.9 截至2024年、2025年和2026年12月31日的年度分别为百万。
经营租赁-出租人(分包协议)
公司分包 英国恩菲尔德的制造空间给第三方。每个分包单位收到的年度租赁付款为£97,000 和英镑109,000,租期分别为2021年10月至2029年2月和2021年10月至2026年10月。
The following table shows the sublease rental income for the three and nine months ended September 30, 2024 and 2023 (in thousands):
截至9月30日的三个月,
截至9月30日的9个月,
转租租金收入而2024202320242023
分包租金收入(计入其他收入(费用),净额)
$63 $61 $186 $181 
转租租金收入总额$63 $61 $186 $181 
截至2024年9月30日生效的不可撤销经营性分包的未来固定应收收款如下(单位:千):
2024年剩余时间
$69
2025
$276
2026
$215
2027
$130
2028$112
应收租赁付款总额$802
注14。 承诺和意外情况
许可协议
该公司已与UCL Business Ltd(“UCLB”)签订了经修订的独家许可协议(“UCLb许可协议”)。就UCLb许可协议而言,公司必须支付年度许可费,并可能被要求在实现指定里程碑后向UCLb付款,包括在监管机构批准obe-cel后。截至2024年9月30日的三个月和九个月内,不到美元0.1 公司已向UCLb支付或应向UCLb支付100万美元,与可分配到转许可知识产权价值的收入有关。BLA于2024年第四季度批准了AUCATZyl,导致该公司现在有义务根据UCLb许可协议支付1000万英镑(按资产负债表日现货汇率兑换1340万美元)的监管里程碑付款,该公司预计将在2025年第一季度支付。
28

目录
AutoLOS THERAPETICS PLC
简明合并财务报表附注(未经审计)-续
2023年9月,公司与Miltenyi Biotech b. V.& Co. KG(Miltenyi)根据该规定,公司获得了与在 公司的 其产品的开发、制造和销售。根据该协议,公司有义务在实现某些监管和临床里程碑后向Miltenyi支付指定款项。公司认可美元0.4 截至2023年12月31日止年度,与预付许可付款和里程碑付款有关的总计数百万美元的费用。公司承认里程碑付款低于美元0.1 截至2024年9月30日的三个月和九个月内,销售额为百万美元。
合同义务
2022年7月,该公司与Adaptive Biotechnologies Corporation(自适应),其中Adaptive的检测试剂盒用于分析r/r b-ALL患者的患者样本。根据该协议,公司有义务在获得并收到某些监管批准并实现与以下相关的商业里程碑后向Adaptive支付指定付款 公司的 使用自适应分析。截至2023年12月31日止年度,公司确认了与该合同相关的所有合同里程碑,因此在截至2024年9月30日的三个月和九个月内没有确认合同里程碑。
在前期,该公司已与某些咨询公司达成协议。公司有义务在完成涉及公司的某些战略交易后支付指定款项。截至2024年9月30日的三个月和九个月内,公司根据这些协议支付了费用。
根据ASC 450,公司已估计公司实现与UCLb、Miltenyi协议及其与某些咨询公司协议相关的每个潜在里程碑的可能性。该公司认为,当实际实现时,监管批准、商业里程碑和合作协议的执行是可能的。此外,当临床里程碑被认为有可能实现时,公司会确认其费用。该公司得出的结论是,截至2024年9月30日,目前不存在其他可能实现的里程碑。
资本承诺
截至2024年9月30日,公司资本支出的无条件购买义务总计为美元27.1 百万美元,包括已签署的资本设备订单和建设资本支出以及与其在英国和美国的物业相关的相关支出。公司预计将在一年内承担全部这些义务。
主供应承诺
截至2024年9月30日,公司与Miltenyi Biotec GmbH的试剂和消耗品无条件采购义务总计为美元0.6 百万美元,该公司预计将在一年内发生。
分配承诺
该公司与Cardinal Health 105,LLC(“Cardinal Health”)签订了独家分销协议,于2024年4月25日(“生效日期”)生效。根据独家分销协议并遵守其条款和条件,公司聘请Cardinal Health作为其在美国销售AUCATZSYS的独家第三方物流分销代理。独家分销协议的初始有效期为 三年 商业发布后,并自动续订额外条款 一年 每个,除非任何一方选择不续签。根据独家分销协议的条款,公司必须向Cardinal Health支付一次性启动费,如果公司继续进行obe-cel的商业化,则在推出后,还必须支付每月账户管理费以及各种服务的其他费用,包括推出后计划实施、信息系统、仓库运营和金融服务。
Blackstone和BioNTech协议
有关BioNTech协议和Blackstone协议的更多详细信息,请参阅注释12“与未来特许权使用费和里程碑相关的负债,净额”。

29

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AutoLOS THERAPETICS PLC
简明合并财务报表附注(未经审计)-续
BioNTech许可证和期权协议-产品期权获得意外情况
由于BioNTech许可和期权协议中的产品期权是独立金融工具中的嵌入功能,因此公司评估了产品期权是否应根据ASC 815作为衍生品核算。然而,公司确定产品选项符合ASC 815下衍生品会计的范围例外,因此应计入ASC 450范围下的收益或有事项。截至2024年9月30日,产品期权尚未行使,因此未确认任何金额。
法律诉讼
公司可能不时成为诉讼的一方或在正常业务过程中受到索赔的影响。无论结果如何,诉讼都可能因辩护和和解成本、管理资源转移等因素对公司产生不利影响。该公司不是任何诉讼的一方,并且确实 已为截至2024年9月30日和2023年12月31日的任何负债设立应急准备金。
赔偿协议
在正常业务过程中,公司签订包含各种陈述和保证的合同和协议,并规定一般赔偿。该公司在这些协议下的风险尚不清楚,因为它们涉及未来可能针对该公司提出的索赔。迄今为止,该公司尚未支付任何索赔或被要求为其赔偿义务相关的任何诉讼进行辩护。然而,公司可能会因这些赔偿义务而在未来记录费用。
根据根据公司章程与相关个人签订的赔偿协议,公司在应公司要求以此类身份任职期间,有义务就某些事件或事件向其董事、高级管理人员和高级管理人员提供赔偿,但须遵守一定限制。迄今为止,尚未根据这些赔偿协议提出索赔,并且该公司拥有董事和高级职员保险,这可能使其能够收回为未来潜在索赔支付的部分金额。
说明15. 关联方交易
黑石协议
2021年11月,公司同时签订了Blackstone协议。截至Blackstone协议签署时,Blackstone成为公司的关联方,因为Blackstone成为多个 10% 公司的 未偿投票证券。此外,黑石集团还获得并行使了提名权 本公司董事会董事,因此被视为公司的主要所有者之一。
截至2024年9月30日,资产净值 Blackstone合作协议责任为美元203.4 百万,其中包括累计非现金利息支出总额和累计追赶调整美元32.5百万美元。截至2023年12月31日,Blackstone协作协议负债的账面值为美元170.9 百万美元,其中包括累计非现金利息支出总额(包括累计追赶调整),美元45.01000万美元。参见注释12, 与未来特许权使用费和里程碑相关的负债,净 了解更多详情。
BioNTech协议
2024年2月,公司同时签订BioNTech协议。签署BioNTech协议后,BioNTech成为公司的关联方。BioNTech拥有超过 10% 公司的 未发行的有投票权证券,因此是公司的主要所有者之一。此外,BioNTech还有权提名 BioNTech尚未行使的公司董事会董事职务。
截至2024年9月30日,BioNTech负债的公允价值为美元45.5 百万美元,其中包括累计利息支出总额和累计追赶调整美元5.5 万更多详细信息,请参阅注12“与未来特许权使用费和里程碑相关的负债,净额”。




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目录
AutoLOS THERAPETICS PLC
简明合并财务报表附注(未经审计)-续
说明16. 后续事件
公司评估了截至2024年11月12日(这些未经审计的简明综合财务报表的日期)的后续事件起诉了
2024年11月8日,该公司收到FDA通知,该公司已获得AUCATZSYS(obecabtagene autoleucel)的上市批准,用于治疗r/r b-ALL成年患者(18岁及以上)。
如注12所述,公司BLA批准obe-cel引发了根据Blackstone合作协议条款向公司支付的剩余3000万美元Blackstone Development付款。该公司预计将在2024年第四季度收到此类款项。该公司还有义务根据UCLb许可协议支付1000万英镑的监管里程碑付款,预计该付款也将在2025年第一季度发生,导致现金和现金等值物净增加1660万美元(基于截至2024年9月30日结算日的现货汇率)。这些净收益预计将用作公司资源的一部分,用于支持AUCATZSYS的商业化。
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项目2.管理层对财务状况和经营成果的讨论和分析
以下对我们财务状况和经营业绩的讨论和分析应与本季度报告10-Q表格中包含的未经审计的简明综合财务报表和这些报表的相关注释一起阅读。我们还建议您阅读我们对财务状况和运营结果的讨论和分析,以及我们的经审计财务报表及其注释,这些报表及其注释出现在我们向SEC提交的年度报告中。
我们以英镑保存我们的账簿和记录,我们的业绩随后转换为美元,我们根据FASB发布的美国公认会计准则编制综合财务报表。在本季度报告中,表格10-Q中对“$”的所有引用都是指美元,对“GB”的所有引用都是对英镑的引用。截至2024年9月30日和2023年9月30日的三个月,我们未经审计的简明综合经营报表和全面亏损和现金流量已从英镑折算为美元,汇率分别为GB 1.00至1.3008美元和GB 1.00至1.2657美元。 分别进行了分析。截至2024年和2023年9月30日的9个月,我们未经审计的简明综合经营报表和全面亏损和现金流量已分别按GB 1.00至1.2768美元和GB 1.00至1.2439美元的汇率从英镑折算为美元。我们截至2024年9月30日的未经审计简明综合资产负债表和截至2023年12月31日的经审计综合资产负债表已分别按GB 1.00至1.3387美元和GB 1.00至1.2730美元的汇率从英镑折算为美元。这些折算不应被视为任何此类金额已经、可能或可能在该日期或任何其他日期以该汇率或任何其他汇率兑换成美元的陈述。
本讨论和分析我们的财务状况和运营结果中有关我们对未来业绩、流动性和资本资源的预期的陈述以及其他非历史陈述均为前瞻性陈述。前瞻性陈述涉及已知和未知的风险、不确定性和其他因素,可能导致我们的实际结果、绩效或成就与前瞻性陈述中表达或暗示的任何未来结果、绩效或成就存在重大差异。这些风险和不确定性包括但不限于我们的年度报告、本季度报告以及我们向SEC提交的任何后续报告中“风险因素”部分列出的风险和不确定性。
Autolus、AUCATZyl和本报告中出现的其他商标或服务标记是我们的财产。仅为方便起见,本报告中提及的商标和商品名称没有 ®TM 符号,但此类引用不应被解释为任何表明其各自所有者不会根据适用法律在最大程度上主张其权利。本报告中提到的其他公司的产品或服务名称可能是其各自所有者的商标、商品名称或服务标记。
概述
我们是一家早期商业化阶段的生物制药公司,开发下一代程序化t细胞疗法,用于治疗癌症和自身免疫性疾病。使用我们广泛的专有和模块化t细胞编程技术,我们正在设计精确靶向、受控和高活性的t细胞疗法,旨在更好地识别目标细胞,分解其防御机制并攻击和杀死这些细胞。我们相信,我们的程序化t细胞疗法有潜力成为一流的,并为患者提供比现有护理标准更大的好处,包括治愈某些患者的潜力。
自成立以来,我们已经出现了重大的运营损失。截至2024年9月30日和2023年9月30日的三个月,我们分别出现净亏损8210万美元和4580万美元,截至2024年和2023年9月30日的九个月,我们分别出现净亏损19310万美元和13120万美元,截至2024年9月30日和2023年12月31日,累计赤字分别为107160万美元和87860万美元。
截至2024年9月30日,我们拥有现金及现金等值物65710万美元。根据我们当前的临床开发和商业化计划,我们相信我们现有的现金和现金等值物将足以在本报告中包含的未经审计的简明综合财务报表发布之日起至少未来十二个月内为我们当前和计划的运营费用和资本支出需求提供资金。
最新发展动态
美国批准obe-cel用于成人复发/难治性(“r/r”)成人b细胞急性淋巴细胞白血病(“b-ALL”) 品牌名称AUCATZSYS
2024年11月8日,我们收到美国食品和药物管理局(“FDA”)的通知,我们已获得AUCATZSYS/obe-cel(obecabtagene autoleucel)的上市批准,用于治疗患有r/r b-ALL的成年患者(18岁及以上)。适用于成人r/r b-ALL的AUCATZyl/obe-cel也在欧盟和英国接受监管审查,EMA于2024年4月接受了上市授权提交,英国也接受了上市授权提交MHRA于2024年8月发布。

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根据Blackstone合作协议的条款,我们对AUCATZyl的生物制品许可申请(“BLA”)的批准引发了Blackstone向我们支付的3000万美元里程碑付款,详情见本报告财务报表注释12。 我们还有义务根据UCLb许可协议支付1000万英镑的监管里程碑付款,导致现金和现金等值物净增加1660万美元(基于截至2024年9月30日的结算日的现货汇率)。这些净收益预计将用作我们部署的资源的一部分,以支持AUCATZyl的商业化。
r/r成人b-ALL中的Obe-cel-FELIX研究
我们在2024年8月的血液肿瘤学会(“SOHO”)会议上展示了FELIX试验的更新数据,通过分析接受obe-cel治疗的患者骨髓母细胞百分比的影响,支持了我们肿瘤负担引导给药的理论依据。数据表明了分剂量给药的重要性,并强调了obe-cel基于其结合特性和肿瘤负担引导方法的差异。
2024年10月,我们在2024年淋巴瘤、白血病和骨髓瘤大会上提交了数据,该数据表明,无论在输注obe-cel之前或之后进行干细胞移植(“CSC”)的时间如何,r/r b-ALL成年患者都可以获得相当的结果,这表明基于这项事后分析,巩固移植没有进一步的好处。此外,将obe-cel作为淋巴细胞清除时肿瘤负担较低的患者的唯一治疗方法与更好的结果相关。
B细胞介导的自身免疫性疾病中的Obe-cel
在难治性系统性红斑狼疮(“狼疮”)患者中进行的I期剂量确认试验(“CARLY狼疮”)正在进行中。我们预计将在2025年第一季度完成入组和患者给药,并提供初始数据。我们预计,经过充分跟进的完整数据将于2025年下半年在医学会议上提供。
与伦敦大学学院合作的管道项目
临床项目Auto 8、Auto 6 NG和Auto 1/22正在按预期进展,我们计划在2025年更新所有项目的数据。
我们运营业绩的组成部分
收入
我们根据ASC 606“客户合同收入”的规定核算收入。在2024年11月8日AUCATZyl获得批准之前,我们没有任何产品获准商业销售,截至2024年9月30日,我们也没有从商业产品销售中产生任何收入。迄今为止的总收入主要来自外包许可协议。截至2024年9月30日,我们已签订了各种许可协议,其中包括不可退还的前期许可费、未来商业许可的选择、基于实现临床开发和监管目标的付款、基于实现一定水平的产品销售的付款以及许可产品销售的特许权使用费。
在确定与每份许可协议相关的适当收入金额时,我们执行以下步骤:(i)识别合同中承诺的商品或服务;(ii)确定承诺的商品或服务是否是履行义务,包括它们在合同背景下是否不同;(iii)交易价格的衡量,包括对可变对价的限制;(iv)根据估计售价将交易价格分配至绩效义务;及(v)在我们履行各项绩效义务时(或同时)确认收入。
许可费和多要素安排
如果我们知识产权的许可被确定与安排中确定的其他绩效义务不同,我们将在许可转让给被许可人并且被许可人能够使用并受益于许可时确认分配给许可的不可退还预付费用的收入。对于与其他承诺捆绑在一起的许可证,我们利用判断来评估合并履行义务的性质,以确定合并履行义务是否随着时间的推移或在某个时间点得到满足,如果随着时间的推移,则确定衡量进展的适当方法,以确认不可退还的预付费的收入。我们评估每个报告期的进展衡量标准,并在必要时调整绩效衡量标准和相关收入确认。
衡量进展的适当方法包括输出法和输入法。在确定衡量进展的适当方法时,我们考虑了我们承诺向客户转移的服务的性质。当我们决定衡量方法时,我们将应用该单一方法来衡量随着时间的推移履行的每项绩效义务的进度,并将一致地将该方法应用于类似的绩效义务和类似的情况下。

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客户选项
如果一项安排被确定包含允许客户获得额外商品或服务的客户期权,则未被确定为重大权利的客户期权所依据的商品和服务在安排开始时不被视为履行义务,因为它们取决于期权行使。我们评估客户的物质权利选择,或免费或折扣购买额外商品或服务的选择。如果客户期权被确定代表重大权利,则该重大权利在安排开始时被确认为单独的履行义务。我们根据相对独立售价将交易价格分配给重大权利,该售价是根据任何已确定的折扣和客户行使选择权的可能性确定的。分配至重大权利的金额最早在期权被行使之前不会确认为收入。
或有研究里程碑付款
ASC 606限制交易价格中包含的可变对价金额,即可变对价金额的全部或一部分应包含在交易价格中。可变对价金额仅应在与可变对价相关的不确定性随后得到解决时确认的累计收入金额可能不会发生重大逆转的情况下计入。对变量考虑是否应受到限制的评估在很大程度上是一种定性评估,包含两个要素:估计发生变化的可能性及其幅度。例如,如果已确认的累计收入的潜在逆转并不重大,则可变对价不受限制。
如果合同中的对价包括可变金额,我们将估计换取承诺商品或服务转让的对价金额。如果我们获得对价的权利取决于未来事件的发生或不发生,对价也可能有所不同。我们认为或有研究里程碑付款属于可变对价的范围,应在合同开始时出于收入确认目的进行估计,并在每个报告期末进行重新评估。
我们评估或有研究里程碑是否应被视为可变考虑因素,应受到限制,因此不应成为交易价格的一部分。这包括评估当每个里程碑是否实现的不确定性得到解决时,所有或部分里程碑收入可以逆转的可能性,并且逆转的金额可能很大。
美国GAAP提供了评估是否应限制可变考虑因素时需要考虑的因素。所有因素都应该考虑,没有任何因素是确定的。我们考虑所有相关因素。
使用费收入
对于包括基于销售的特许权使用费(包括基于销售水平的里程碑付款)的安排,并且许可被视为与特许权使用费相关的主要项目,我们在(i)相关销售发生时,或(ii)当已分配的部分或全部特许权使用费的履行义务已经履行(或部分履行)时确认收入。
研发费用
研发费用(“R & D”)包括与我们候选产品的研发相关的成本,部分由研发税收抵免(包括来自英国的税收抵免)抵消。HMRC提供的中小企业(“SME”)制度和研发支出抵免(“RDEC”)制度。我们将研究和开发费用按发生时支付。这些费用包括:
根据与CROs以及开展临床试验、临床前研究和其他科学开发服务的研究中心和顾问的协议产生的费用;
生产规模扩大费用以及获取和生产临床前和临床试验材料的成本;
与员工相关的费用,包括从事研发职能的员工的工资、相关福利、差旅和股份补偿费用;
外包专业科学开发服务发生的费用;
用于支持我们研究活动的实验室材料和用品的成本;
分配的设施成本、折旧和其他费用,包括租金和水电费;以及
根据我们的第三方许可协议维护许可证的预付费、里程碑费和管理费。
我们根据使用服务提供商向我们提供的信息对特定任务完成进度的评估来确认外部开发成本。
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我们的直接研发费用是根据候选产品逐个项目跟踪的,主要包括外部成本,例如向外部顾问和CROs支付的与我们的临床前开发、制造和临床开发活动有关的费用。我们按计划列出的直接研发费用还包括根据许可协议产生的费用。我们不会将员工成本或设施费用(包括折旧或其他间接成本)分配给特定计划,因为这些成本分布在多个计划中,因此不会单独分类。我们主要利用内部资源来监督研究和开发以及管理我们的临床前开发、流程开发、制造和临床开发活动。
研究和开发活动是我们商业模式的核心。临床开发后期的候选产品通常比临床开发早期阶段的候选产品的开发成本更高,这主要是由于后期临床试验规模和持续时间的增加。因此,我们预计,随着我们增加人员成本、启动和进行额外的临床试验以及准备与我们的候选产品相关的监管文件,我们的研发费用将在未来几年大幅增加。我们还预计会产生与里程碑相关的额外费用、特许权使用费和应支付给我们已与第三方签订许可协议以获取与我们候选产品相关的权利的第三方的维护费。
经过咨询后,英国税务海关总署(“HMRC”)建议我们,任何向英国出售我们的obe-cel CAR t疗法未来的客户将被视为英国的豁免供应增值税观点。因此,我们评估并限制了英国的数量我们历史上回收的增值税,未来将继续这样做。该限制将基于英国的估计市场营业额占全球营业额的百分比。 我们目前预计来自英国的收入客户只占我们整体活动的一小部分。如果来自英国的收入比例客户增加这将进一步限制英国的数量输入VAT已恢复。研究与开发费用中包括历史不可收回的投入VA,此前就研究与开发费用索赔并随后被逆转。
我们候选产品的成功开发和商业化存在高度不确定性。目前,我们无法合理估计或了解完成任何候选产品的临床开发所需的工作的性质、时间和成本,或者何时(如果有的话)我们的任何候选产品的销售可能开始重大净现金流入。这种不确定性是由于与开发和商业化活动相关的众多风险和不确定性,包括以下方面的不确定性:
我们的临床试验和其他研发活动的范围、进展、结果和成本,包括通过IND指导的研究建立适当的安全性概况;
成功招募患者并启动和完成临床试验;
适用监管机构任何营销批准的时间、收到和条款;
建立商业制造能力或与第三方制造商做出安排;
开发和及时交付可用于临床试验和商业生产的商业级药物配方;
获取、维护、捍卫和执行专利主张和其他知识产权;
重大且不断变化的政府监管;
如果获得批准,启动我们候选产品的商业销售,无论是单独还是与他人合作;
批准后保持候选产品持续可接受的安全性特征;以及
生物制药行业内的激烈竞争和快速变化的技术。
我们可能永远不会成功地让我们的任何候选产品获得监管部门的批准。我们的临床试验可能会得到意想不到的结果。我们可能会选择停止、推迟或修改一些候选产品的临床试验,或者专注于其他产品。在临床开发中,这些变量中的任何变量的结果的任何变化都可能意味着与这些候选产品的开发相关的成本和时间的重大变化。例如,如果欧洲药品管理局(EMA),FDA,或其他监管机构推迟我们计划的临床试验开始,或要求我们进行超出我们目前预期的临床试验或其他测试,或者如果我们在任何计划中的临床试验的登记方面遇到重大延误,我们可能需要花费大量额外的财政资源和时间来完成该候选产品的临床开发。我们候选产品的商业化将需要数年时间和数百万美元的开发成本。

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目录
英国研究与开发税收抵免
英国实行研发税收激励制度。根据这些制度,英国产生的合格研发支出公司可以通过企业纳税申报表纳入研发索赔范围,从而获得英国的可报销税收抵免政府的
作为一家开展广泛研发活动的公司,我们在英国提出索赔研发税收抵免制度。该制度为具有类似税收概况的公司提供了一个会计期内合格研发支出的18.6%(中小企业)至27%(集约型制度)的有效退税。该制度的规则很复杂,如果税务机关质疑或寻求否决我们的主张(全部或部分),例如声称相关支出不符合授予税收抵免的技术条件,那么这种质疑或否决可能会对我们的现金流和财务表现产生重大影响。此外,英国未来的立法变化研发税收抵免制度可能意味着我们不再有资格享受它,或者对我们可以提出索赔(或从中受益)的程度产生重大影响。
中小企业制度对我们尤其有利,因为在该制度下,我们的合格研发活动产生的交易损失可以返还,以获得高达2023年4月1日之后合格支出18.6%的现金回扣。合格支出主要包括研究人员的雇佣成本、消耗品、外包合同研究组织成本以及作为我们不获得收入的研究项目一部分产生的公用事业成本。与我们的管道研究、临床试验管理和制造开发活动相关的大部分成本(所有这些都由我们的子公司Autolus Limited进行)有资格纳入这些税收抵免现金退税索赔中。
2023年4月1日,RDEC制度下的总体费率从13%增加到20%,并可为自该日期起发生的合格研发支出产生高达15%(从10.5%增加)的现金回扣。
英国的好处RDEC和英国中小企业计划在综合经营报表和全面损失中确认为收入,并按现行税率纳税(仅限RDEC)。
2024年2月22日颁布的《2024年金融法案》中包含的当前中小企业和RDEC计划的修正案将于2024年4月1日或之后生效,并且将(i)(除非适用有限例外)对分包研发活动或外部提供工人产生的支出可以申请的税收减免实行限制,如果此类分包活动不在英国进行或者此类工人不受英国的约束工资税,以及(ii)将中小企业和RDEC计划合并为一个单一计划,该计划将为盈利公司产生高达合格支出15%的净现金收益,为亏损公司产生高达16.2%的净现金收益。尽管如此,对于研发密集型中小企业来说,27%的更高税率将从2024年4月1日或之后的时期起仍然有效。
我们目前满足中小企业制度的条件,但我们也可以根据RDEC制度提出索赔,前提是我们的项目获得赠款资助。由于员工人数预计会增加,我们预计2024年12月31日之后将没有资格加入中小企业制度。如果我们不再符合中小企业制度下的资格,我们可以根据截至2024年12月31日的RDEC制度或截至2025年12月31日的合并研发制度提出索赔。然而,应该指出的是,在某些情况下,我们根据RDEC制度提出的符合资格的支出类型与中小企业制度下的符合资格的支出类型不同(例如,根据SME制度可能提出索赔的某些分包成本可能不符合当前RDEC制度下的救济资格)。合并制度下的分包规则与当前的中小企业制度更加一致。
一般和行政费用
一般和行政费用主要包括行政、财务、法律和其他行政职能人员的工资、相关福利、差旅和股份补偿费用。一般和行政费用还包括分配的设施相关成本、专利申请和起诉成本以及营销、保险、法律、咨询、会计和审计服务的专业费用。 一般和行政费用中包括历史不可收回的投入增值税,之前就一般和行政费用索赔,随后被逆转。
我们预计,随着我们增加员工人数以支持候选产品的计划开发,未来我们的一般和行政费用将会增加。 我们预计,由于我们为商业运营做好准备,工资和相关福利将会增加,特别是与产品的销售和营销有关的 奥卡茨yl 以及我们的其他候选产品。
作为一家上市公司,我们经历了并预计将继续经历费用增加的情况,包括与保持遵守纳斯达克上市规则和SEC要求相关的会计、审计、法律、监管和合规成本、董事和高级官员保险费以及更高的投资者和公共关系成本。此外,如果我们未能保持外国私人发行人的地位,我们预计将承担更多费用以保持符合适用的SEC和纳斯达克要求。

36

目录
财产和设备处置损失
处置财产和设备损失主要包括处置所有类别财产和设备产生的损失。
经营租赁使用权资产及相关财产和设备的减损
经营租赁使用权资产及相关财产和设备的减损 主要包括我们目前未利用的租赁物业和租赁物改良的减损产生的减损损失。
其他收入(费用),净额
其他收入(费用),净额主要包括转售收入和终止租赁产生的损益。
外汇(损失)收益
外汇(损失)收益主要包括以外币计价的交易产生的外币交易收益和损失。
利息收入
利息收入主要包括从银行和货币市场基金收取的现金及现金等值物余额的利息。我们将资金投资于各种短期生息工具。
利息支出
利息费用主要包括根据我们与Blackstone和BioNTech的合作协议,使用实际利率法摊销与未来特许权使用费和里程碑相关的负债所产生的利息费用。我们每季度评估Blackstone合作协议下未来Blackstone和BioNTech付款的预期现值, BioNTech协议 我们可能会收到这些费用,以及我们可能会支付给Blackstone和BioNTech的未来特许权使用费和销售里程碑付款。如果此类收款或付款的金额或时间与我们之前的估计存在重大差异,我们将记录与未来特许权使用费和里程碑相关的负债的累积追赶调整。对公允价值的调整确认为对估计发生变化期间利息费用的调整。
所得税(费用)福利
我们须缴纳英国、美国、德国和瑞士的企业税。由于我们业务的性质,我们自成立以来就产生了亏损。我们确认的所得税福利(费用)代表在英国可收回的研发税收抵免的总和并由美国应缴纳的所得税抵消。
未交出的英国亏损可无限期结转,以抵销未来的应税利润,但须遵守众多的使用标准和限制。每年可以抵销的金额限制为GB 500万外加英国的50%增量。应税利润。在计入应收税额抵免后,我们在英国累计了结转的税收损失。截至2023年12月31日,万为41810美元。已确认与英国有关的递延税项资产的估值备抵。损失。截至2024年9月30日,我们与美国实体相关的递延税项资产余额为340万美元万,没有估值津贴。于2024年9月30日,我们以英国递延税项净资产计提全额估值拨备,因未来应课税利润的可回收性尚不确定。2023年4月1日,英国的主要汇率。对于利润超过250,000 GB的公司,公司税提高到25%,或者对于利润在50,000 GB或以下的公司,公司税提高到19%的小额利润率(对利润在50,000 GB和250,000 GB之间的公司的主要税率略有减免)。
如果我们未来创造收入,我们可能会从英国受益“专利箱”制度允许对来自专利或专利产品的收入的利润按10%的实际税率征税。
37

目录
经营成果
截至2024年9月30日及2023年9月30日止三个月的比较
下表总结了截至2024年9月30日和2023年9月30日三个月的运营业绩(以千计):
截至9月30日的三个月,
变化
变化
20242023
(单位:千)
(in百分比)
许可证收入$— $406 $(406)(100)%
运营费用:
研发
(40,323)(32,318)(8,005)25 %
一般和行政
(27,330)(10,611)(16,719)158 %
财产和设备处置损失
(223)— (223)100 %
经营租赁使用权资产及相关财产和设备的减损— (382)382 (100)%
总运营费用(净额)
(67,876)(42,905)(24,971)58 %
其他净收入
54 136 (82)(60)%
外汇损失
(11,884)(1,733)(10,151)586 %
利息收入
8,320 3,646 4,674 128 %
利息开支
(10,686)(5,014)(5,672)113 %
其他费用总额,净额
(14,196)(2,965)(11,231)379 %
所得税前净亏损
(82,072)(45,870)(36,202)79 %
所得税(费用)福利
(22)21 (43)(205)%
净亏损
$(82,094)$(45,849)$(36,245)79 %
许可证收入
截至2024年9月30日的三个月内没有确认许可收入。截至2023年9月30日止三个月的许可收入为40万美元,主要与与Syncona Portfolio Limited投资对象签订的现有许可协议所确认的收入有关,Syncona Portfolio Limited持有我们10%以上的股本。
研发费用
下表提供了有关我们研究和开发费用(以千计)的更多详细信息:

截至9月30日的三个月,
变化
(单位:千)
变化
(in百分比)

20242023
直接研发费用



b细胞恶性肿瘤(Obe-cel、Auto 1/22和Auto 3)
$7,729 

$4,779 

$2,950 62 %
其他项目(Auto 4、Auto 5、Auto 6、Auto 7和Auto 8)
132 761 (629)(83)%
直接研发费用总额
$7,861 $5,540 $2,321 42 %
间接研发费用和未分配成本:



人员相关(包括股份薪酬)
$23,129 $15,603 7,526 48 %
间接研发费用 *
9,333 11,175 (1,842)(16)%
研发费用总额
$40,323 

$32,318 

$8,005 25 %
* 间接研发费用不含英国研究与开发税收抵免


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目录
截至2024年9月30日止三个月的研发费用从截至2023年9月30日止三个月的3230万美元增加800万美元至4030万美元,主要原因是:
工资和其他雇佣相关成本增加750万美元,包括股票薪酬费用,这主要是由于从事研发活动的员工数量增加,
一般办公室费用增加280万美元,主要与历史上无法收回的输入VA有关,因为VA处理方式的变化,
临床成本增加180万美元,主要与我们的研发活动有关,包括制造消耗品的运输成本,
与财产和设备相关的折旧和摊销增加80万美元,以及
信息技术基础设施维护费用增加10万美元,部分被以下因素抵消:
与我们的研发活动相关的专业咨询和法律费用减少350万美元,
设施成本减少120万美元,并且
英国增加30万美元研发税收抵免(研发费用减少)主要是由于与中小企业计划相关的合格研发支出增加。
一般和行政费用
截至2024年9月30日止三个月的一般和行政费用从截至2023年9月30日止三个月的1060万美元增加1670万美元至2730万美元,主要原因是:
工资和其他雇佣相关成本增加了910万美元,包括股票薪酬费用,这主要是由于从事一般和行政活动的员工数量增加,
与商业阶段准备活动相关的成本增加了720万美元,
与一般办公室费用相关的成本增加了120万美元,主要与由于增值税处理方式的变化而导致的历史不可收回的增值税有关,部分被以下因素抵消:
与我们的一般和行政活动相关的法律和专业费用减少70万美元,以及
与财产和设备相关的折旧和摊销减少10万美元。
财产和设备处置损失
截至2024年9月30日的三个月内,确认了与我们退出的英国斯蒂夫尼奇制造工厂有关的20万美元的处置损失。截至2023年9月30日的三个月内没有发生此类处置。
经营租赁使用权资产及相关财产和设备的减损
截至2023年9月30日止三个月,我们确认了与英国斯蒂夫尼奇租赁物业相关的经营租赁使用权资产以及相关物业和设备的损失40万美元。截至2024年9月30日止三个月,没有确认类似的减损。
外汇损失
截至2024年9月30日止三个月的外汇损失从截至2023年9月30日止三个月的170万美元增加至1190万美元。增加1020万美元主要是由于英镑兑美元汇率走强,导致净外汇损失。
利息收入
截至2024年9月30日止三个月的利息收入增加至830万美元,而截至2023年9月30日止三个月的利息收入为360万美元。利息收入增加470万美元,主要与截至2024年9月30日的三个月收益率增加以及与截至2023年9月30日的三个月相比,与我们的现金和现金等值项目相关的账户余额增加有关。
利息开支
截至2024年9月30日止三个月的利息费用增加至1070万美元,而截至2023年9月30日止三个月的利息费用为500万美元。利息费用增加570万美元,主要是由于未来特许权使用费和里程碑负债余额增加(与我们与Blackstone的合作协议以及2024年2月执行的BioNTech许可和期权协议相关)。

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Comparison of Nine Months Ended September 30, 2024 and 2023
The following table summarizes our results of operations for the nine months ended September 30, 2024, and 2023 (in thousands):

截至9月30日的9个月,
变化
(单位:千)
变化
(in百分比)
20242023
许可证收入$10,091 $1,698 $8,393 494 %
运营费用:
研发
(107,606)(92,938)(14,668)16 %
一般和行政
(67,410)(31,017)(36,393)117 %
财产和设备处置损失(223)(3,791)3,568 (94)%
经营租赁使用权资产及相关财产和设备的减损(414)(382)(32)%
总运营费用(净额)
(165,562)(126,430)(39,132)31 %
其他净收入
161 109 52 48 %
外汇损失
(12,368)(442)(11,926)2698 %
利息收入
24,908 10,495 14,413 137 %
利息开支
(40,129)(14,939)(25,190)169 %
其他费用总额,净额
(27,428)(4,777)(22,651)474 %
所得税前净亏损
(192,990)(131,207)(61,783)47 %
所得税开支
(66)(5)(61)1220 %
净亏损
$(193,056)$(131,212)$(61,844)47 %
许可证收入
截至2024年9月30日止九个月的许可收入为1010万美元,与根据 许可证和期权协议 BioNTech。截至2023年9月30日的九个月许可收入为170万美元,主要与Cabaletta Bio Inc.的执行有关。(“Cabaletta”)期权和许可协议,其中包括确认来自Syncona Portfolio Limited投资对象的不可退还许可费和许可收入,该公司持有我们10%以上的股本。
研发费用
下表提供了有关我们研究和开发费用(以千计)的更多详细信息:

截至9月30日的9个月,
变化
(单位:千)
变化
(in百分比)

20242023
直接研发费用



b细胞恶性肿瘤(Obe-cel、Auto 1/22和Auto 3)
$19,750 

$12,933 

$6,817 53 %
其他项目(Auto 4、Auto 5、Auto 6、Auto 7和Auto 8)
1,176 2,304 (1,128)(49)%
直接研发费用总额
$20,926 $15,237 $5,689 37 %
间接研发费用和未分配成本:



人员相关(包括股份薪酬)
56,604 46,485 10,119 22 %
间接研发费用
30,076 31,216 (1,140)(4)%
研发费用总额
$107,606 

$92,938 

$14,668 16 %
* 间接研发费用不含英国研究与开发税收抵免
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截至2024年9月30日止九个月的研发费用从截至2023年9月30日止九个月的9290万美元增加1470万美元至10760万美元,主要原因是:
工资和其他雇佣相关成本增加1010万美元,包括股票薪酬费用,这主要是由于从事研发活动的员工数量增加,
临床成本增加690万美元,主要与我们的研发活动有关,包括制造消耗品的运输成本,
一般办公室费用增加270万美元,主要与历史上无法收回的输入VA有关,因为VA处理方式的变化,
设施成本增加120万美元,主要与我们位于英国斯蒂夫尼奇的新制造工厂The Nucleus有关以及与维护我们当前租赁物业相关的成本增加,以及
与财产和设备相关的折旧和摊销增加100万美元,部分被以下因素抵消:
与我们的研发活动相关的专业咨询和法律费用减少500万美元,
英国增加160万美元研发税收抵免(研发费用减少)主要是由于与中小企业计划相关的合格研发支出增加,以及
信息技术基础设施维护成本减少60万美元。
一般和行政费用
截至2024年9月30日止九个月的一般和行政费用从截至2023年9月30日止九个月的3100万美元增加3640万美元至截至2024年9月30日止九个月的6740万美元,主要原因是:
工资和其他雇佣相关成本增加了2040万美元,包括股票薪酬费用,这主要是由于从事一般和行政活动的员工数量增加,
与商业阶段准备活动相关的成本增加了1200万美元,
与我们的一般和行政活动相关的法律和专业费用增加了170万美元,
与一般办公室费用相关的成本增加了120万美元,主要与由于增值税处理方式的变化而导致的历史不可收回的增值税有关,
增加90万美元,用于信息技术基础设施和与企业和商业运营相关的信息系统支持,以及
由于用于一般和行政活动以及与一般办公室费用相关的空间增加,设施成本增加20万美元,
财产和设备处置损失
截至2024年9月30日的九个月内,确认了与我们退出的英国斯蒂夫尼奇的一家制造工厂有关的20万美元出售损失。截至2023年9月30日的九个月内,我们确认了处置财产和设备的损失380万美元,与英国斯蒂夫尼奇退出的制造工厂不再使用的固定资产有关。
经营租赁使用权资产及相关财产和设备的减损
截至2024年9月30日止九个月,我们分别确认了与英国恩菲尔德租赁物业相关的经营租赁使用权资产以及相关物业和设备的40万美元的减损损失。截至2023年9月30日止九个月,我们确认了与英国斯蒂夫尼奇租赁物业相关的经营租赁使用权资产以及相关物业和设备的损失4000万美元。
Foreign exchange losses
Foreign exchange losses increased to $12.4 million for the nine months ended September 30, 2024 from $0.4 million for the nine months ended September 30, 2023. The increase of $12.0 million was primarily due to the strengthening of the pound sterling exchange rate relative to the U.S. dollar resulting in a net foreign exchange loss.
Interest Income
Interest income increased to $24.9 million for the nine months ended September 30, 2024, as compared to $10.5 million for the nine months ended September 30, 2023. The increase in interest income of $14.4 million primarily related to increase in yield and also higher account balances associated with our cash and cash equivalents during the nine months ended September 30, 2024 as compared to the nine months ended September 30, 2023.

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Interest expense
Interest expense increased to $40.1 million for the nine months ended September 30, 2024 as compared to $14.9 million for the nine months ended September 30, 2023. Interest expense increased by $25.2 million primarily due to an increase in the balance of the liabilities for future royalties and milestones, net associated with our Collaboration Agreement with Blackstone and the BioNTech License and Option Agreement which was executed in February 2024.
Liquidity and Capital Resources
Since our inception, we have not generated any commercial product revenue and have incurred operating losses and negative cash flows from our operations. We expect to incur significant expenses and operating losses for the foreseeable future as we market AUCATZYL and advance our other product candidates through preclinical and clinical development and seek regulatory approval and pursue commercialization of any additional approved products. As a result, we will need significant additional capital to fund our operations until such time as we can generate significant revenue from sales of AUCATZYL or other products.
As of November 8, 2024, we have one product approved for commercial sale in the United States, AUCATZYL, but have not yet generated any revenue from commercial product sales. We have funded our operations to date primarily with proceeds from government grants, sales of our equity securities, through public offerings and pursuant to our at-the-equity market facility, through U.K. research and development tax credits and receipts from the SME and RDEC schemes, out-licensing arrangements and strategic collaboration and financing agreements. From our inception in 2014 through September 30, 2024, we have raised an aggregate of $1.7 billion from these capital sources.
As of September 30, 2024, we had cash and cash equivalents of $657.1 million.
Cash Flows
The following table summarizes our cash flows for each of the periods presented (in thousands):
Nine Months Ended September 30,
20242023
Net cash used in operating activities
$(168,337)$(120,754)
Net cash used in investing activities
(10,963)(9,509)
Net cash provided by (used in) financing activities
559,547 (906)
Effect of exchange rate changes on cash, cash equivalents and restricted cash
37,955 5,257 
Net increase (decrease) in cash, cash equivalents and restricted cash
$418,202 $(125,912)
Net Cash Used in Operating Activities
During the nine months ended September 30, 2024, operating activities used $168.3 million of cash, resulting from our net loss of $193.1 million and net cash used resulting from changes in our operating assets and liabilities of $20.7 million, partially offset by non-cash charges of $45.4 million. The non-cash charges related to interest expense including cumulative catch-up adjustments on liabilities related to future royalties and milestones, net of $39.7 million, share-based compensation of $9.2 million, depreciation and amortization of $5.6 million, non-cash operating lease expense of $3.5 million, impairment of operating lease right-of-use assets and related property and equipment of $0.4 million, loss on disposal of property and equipment of $0.2 million and loss on termination of operating lease of $0.2 million, which was offset by foreign exchange differences of $13.1 million and deferred income tax movement of $0.3 million. Net cash used in operating activities resulting from changes in our operating assets and liabilities for the nine months ended September 30, 2024 consisted primarily of a net increase of $21.6 million in prepaid expenses and other current and non-current assets and a decrease of $4.1 million in our operating lease liability, offset by an increase in accrued expenses and other liabilities of $3.7 million and an increase in accounts payable of $1.3 million.

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During the nine months ended September 30, 2023, operating activities used $120.8 million of cash, resulting from our net loss of $131.2 million, and net cash used resulting from changes in our operating assets and liabilities of $23.5 million, partially offset by non-cash charges of $33.9 million. The non-cash charges related to interest expense including cumulative catch-up adjustments on liabilities related to future royalties and milestones, net of $14.9 million, share-based compensation of $7.9 million, depreciation and amortization of $4.8 million, loss on disposal of property and equipment of $3.8 million, non-cash operating lease expense of $2.9 million, impairment of operating lease right-of-use assets and related property and equipment of $0.4 million and loss on termination of operating lease of $0.1 million, which was offset by deferred income tax movement of $0.5 million and foreign exchange differences of $0.4 million. Net cash used in operating activities resulting from changes in our operating assets and liabilities for the nine months ended September 30, 2023 consisted primarily of a $12.0 million decrease in current and non-current operating lease liabilities, a decrease in accrued expenses and other liabilities of $6.8 million, net of operating lease right of use assets, and a net increase of $5.7 million in prepaid expenses and other current and non-current assets, offset by a decrease in long-term deposits of $0.9 million and an increase in accounts payable of $0.1 million.
Net Cash Used in Investing Activities
During the nine months ended September 30, 2024 and 2023, we used $11.0 million and $9.5 million, respectively, of cash in investing activities, all of which consisted of purchases of property and equipment.
Net Cash Provided by (Used in) Financing Activities
During the nine months ended September 30, 2024, net cash provided by financing activities of $559.5 million related to net aggregate proceeds raised from the BioNTech Agreements and our underwritten offering of ADSs. During the nine months ended September 30, 2023, net cash used in financing activities of $0.9 million was primarily for payments of issuance costs relating to a prior equity financing.
Funding Requirements
We expect our expenses to increase substantially in connection with our ongoing activities, particularly as we begin to market and sell AUCATZYL, operate our new commercial manufacturing facility and advance the preclinical activities and clinical trials of our other product candidates. Our expenses will increase as we:
establish and expand our sales, marketing and distribution infrastructure in connection with commercializing AUCATZYL and other product candidates for which we may obtain marketing approval and intend to commercialize on our own or jointly;
seek regulatory approvals for any other product candidates that successfully complete preclinical and clinical trials;
hire additional clinical, medical and development personnel;
expand our infrastructure and facilities to accommodate our growing employee base; and
maintain, expand and protect our intellectual property portfolio.
Our primary uses of capital are compensation and related expenses, clinical costs, external research and development services, laboratory and related supplies, legal and other regulatory expenses, and administrative and overhead costs. Our future funding requirements will be heavily determined by the resources needed to support the development of our product candidates and commercialization of AUCATZYL. We also expect to incur significant commercialization expenses related to product manufacturing, sales, marketing and distribution, depending on where we choose to commercialize. We may also require additional capital to pursue in-licenses or acquisitions of other product candidates.
Based on our current clinical development and commercial plans, we believe our current cash and cash equivalents will be sufficient to fund our current and planned operating expenses and capital expenditure requirements for at least the next twelve months from the date of the issuance of these unaudited condensed consolidated financial statements. We have based these estimates on assumptions that may prove to be wrong, and we could utilize our available capital resources sooner than we expect.
Because of the numerous risks and uncertainties associated with research, development and commercialization of pharmaceutical product candidates, we are unable to estimate the exact amount of our working capital requirements. Our future funding requirements will depend on and could increase significantly as a result of many factors, including:
our ability to continue to execute our commercialization strategies for AUCATZYL and, if approved, our other product candidates;
the scope, progress, outcome and costs of our clinical trials and other research and development activities;
the costs, timing, receipt and terms of any marketing approvals from applicable regulatory authorities;
the costs of future activities, including product sales, medical affairs, marketing, manufacturing and distribution, for AUCATZYL or any of our product candidates for which we receive marketing approval;
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the revenue, if any, received from commercial sale of AUCATZYL or our other product candidates, should any receive marketing approval;
the costs and timing of hiring new employees to support our continued growth;
the costs of preparing, filing and prosecuting patent applications, maintaining and enforcing our intellectual property rights and defending intellectual property-related claims; and
the extent to which we in-license or acquire additional product candidates or technologies.
Until such time, if ever, that we can generate product revenue sufficient to achieve profitability, we expect to finance our cash needs through a combination of public or private equity offerings, reimbursable U.K. research and development tax credits and receipts from the SME and RDEC schemes, out-licensing agreements, or strategic collaboration agreements. To the extent that we raise additional capital through the sale of equity, the ownership interest of existing shareholders will be diluted. If we raise additional funds through other third-party funding, collaborations agreements, strategic alliances, out-licensing agreements or marketing and distribution arrangements, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs or product candidates or grant licenses on terms that may not be favorable to us. If we are unable to raise additional funds when needed, we may be required to delay, limit, reduce or terminate our product development or future commercialization efforts or grant rights to develop and market products or product candidates that we would otherwise prefer to develop and market ourselves.
Critical Accounting Policies and Significant Judgments and Estimates
Our management's discussion and analysis of our financial condition and results of operations is based on our unaudited condensed consolidated financial statements, which we have prepared in accordance with U.S. GAAP. The preparation of our unaudited condensed consolidated financial statements and related disclosures requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, costs and expenses, and the disclosure of contingent assets and liabilities in our unaudited condensed consolidated financial statements. We base our estimates on historical experience, known trends and events and various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. We evaluate our estimates and assumptions on an ongoing basis. Our actual results may differ from these estimates under different assumptions or conditions.
Below we have included an update to our significant judgments and accounting estimates from those included in our Annual Report.
Allocation of transaction price using the relative standalone selling price
Upfront payments are allocated between performance obligations using our best estimate of the relative standalone selling price of the performance obligation. The relative standalone selling price is estimated by determining the market values of development and license obligations. As these inputs are not directly observable, the estimate is determined considering all reasonably available information including internal pricing objectives used in negotiating the contract, taking into account the different stage of development of each development program and consideration of adjusted-market data from comparable arrangements. Where performance obligations have been identified relating to material rights, the determination of the relative standalone selling price of these performance obligations also includes an assessment of the likelihood that the options will be exercised and any payments by the customer that are triggered upon exercising the right. This assessment involves significant judgment and could have a significant impact on the amount and timing of revenue recognition.
An assessment of the allocation of transaction price using the relative standalone selling price was required for the nine months ended September 30, 2024 and 2023 for the BioNTech License and Option Agreement, the Research, Option and License Agreement with Cabaletta and Research, Option and License Agreement with an investee of Syncona Portfolio Limited, respectively.
Liabilities related to future royalties and milestones, net and cumulative catch-up adjustments
We accounted for the Blackstone Collaboration Agreement and the BioNTech Obe-cel Product Revenue Interest, (“BioNTech Liability”) as liabilities measured at amortized cost based on an effective interest rate determined at the outset of the arrangement. The Blackstone Collaboration Agreement Liability related to future royalties and sales milestones, net is measured based on our current estimates of the timing and amount of expected future royalty and milestone payments to be paid and the Blackstone Development Payments expected to be received over the estimated term of the agreement. Similarly, the BioNTech Liability related to future royalties is measured based on our current estimates of the timing and amount of expected future royalty expected to be paid over the estimated term of the agreement. Milestone payments (“BioNTech Milestone Payments”) pursuant to the BioNTech License and Option Agreement are payable upon BioNTech's election, and therefore have not been included in the determination of the effective interest rate or in the measurement of the liability.
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The liabilities are amortized using the effective interest rate, resulting in recognition of interest expense over the estimated term of the agreement. Each reporting period we assess the estimated probability, timing and amount of the future expected royalty, milestone payments, the Blackstone Development Payment over the estimated term. If there are changes to the estimates, we recognize the impact to the liability’s amortization schedule and the related interest expense using the catch-up method.
Our estimate of the probability, timing and amount of expected future royalties and milestones to be paid by us and the expected Blackstone Development Payment to be paid to us, considers significant unobservable inputs. These inputs include regulatory approval, the estimated patient population, estimated selling price, estimated sales, estimated peak sales and sales ramp, timing of the expected launch and its impact on the royalties as well as the overall probability of a success. Additionally, the transaction costs associated with the liability will be amortized to interest expense over the estimated term of the agreements.
The carrying amount of the Blackstone Collaboration Agreement Liability and BioNTech Liability is based on our estimate of the future royalties, milestones to be paid to Blackstone by us and the expected Blackstone Development Payment to be received over the life of the arrangement as discounted using the initial effective interest rate. The excess or deficit of estimated present value of future royalty, milestone payments and the future Blackstone Development Payment received over the carrying amount is recognized as a cumulative catch-up adjustment within interest expense using the effective interest rate.
Contractual Obligations
As of September 30, 2024, other than disclosed within Notes 12 to 14 to our unaudited condensed consolidated financial statements included in this report, there have been no material changes to our contractual obligations and commitments from those described under “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our Annual Report.
Recent Accounting Pronouncements Not Yet Adopted
A description of recently issued accounting pronouncements that may potentially impact our financial position and results of operations is disclosed in Note 2, “Summary of Significant Accounting Policies,” to our unaudited condensed consolidated financial statements included in in this Quarterly Report.
Item 3. Quantitative and Qualitative Disclosures about Market Risk
We are exposed to market risks in the ordinary course of our business, which are principally limited to interest rate fluctuations and foreign currency exchange rate fluctuations. We maintain significant amounts of cash that are in excess of federally insured limits in various currencies, placed with one or more financial institutions for varying periods according to expected liquidity requirements.
Interest Rate Risk
Our exposure to interest rate sensitivity is primarily impacted by changes in the underlying U.S. and U.K. bank interest rates. As of September 30, 2024 and December 31, 2023, we had cash and cash equivalents of $657.1 million and $239.6 million, respectively. Our surplus cash has been invested in interest-bearing savings and money market funds. We have not entered into investments for trading or speculative purposes. An immediate hypothetical one percentage point change in interest rates would have resulted in a $1.8 million increase in interest income on our unaudited condensed Consolidated Statements of Operations and Comprehensive Loss for the nine months ended September 30, 2024.
As of September 30, 2024 the Blackstone Collaboration Agreement Liability has a fixed effective interest rate and is not subject to any fluctuations due to interest rates. However, the effective interest rate for the BioNTech Liability may be subject to fluctuations due to the discretionary nature of certain contractual payments to us. We have no other debt outstanding that is subject to interest rate variability. The carrying amount of the Blackstone Collaboration Agreement Liability and BioNTech Liability is based on our estimate of the future royalties, milestones to be paid to Blackstone by us and the expected Blackstone Development Payment to be received over the life of the arrangement as discounted using the initial effective interest rate. The excess or deficit of estimated present value of future royalty, milestone payments and the future Blackstone Development Payment received over the carrying amount is recognized as a cumulative catch-up adjustment within interest expense using the effective interest rate.

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Foreign Currency Exchange Risk
Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. Our exposure to the risk of changes in foreign exchange rates relates primarily to fluctuations in value of foreign currency cash and cash equivalent balances held by our main operating subsidiary in the United Kingdom, our operating activities in the United States, and outsourced supplier agreements denominated in currencies other than pound sterling. We minimize foreign currency risk by maintaining cash and cash equivalents of each currency at levels sufficient to meet foreseeable expenditure to the extent practical.    
As of September 30, 2024, substantially of our cash and cash equivalents were held by one of our U.K. subsidiaries, of which approximately 29% were denominated in pound sterling and approximately 71% were denominated in U.S. dollars, with immaterial amounts denominated in euros and Swiss francs. The significant remainder of our cash and cash equivalents are held by our U.S. subsidiary and denominated in U.S. dollars.
Changes in exchange rates had a material impact on U.S. dollar balances held by our main operating subsidiary in the U.K., which resulted in material foreign exchange gains and losses in the Consolidated Statements of Operations and Comprehensive Loss due to the appreciation and depreciation of the subsidiary’s U.S. dollars in pounds sterling terms. Further movements in exchange rates or returns to previous exchange rate levels have caused, and may continue to cause, material fluctuations or equivalent losses in the Consolidated Statements of Operations and Comprehensive Loss.
We maintain our accounting records in pounds sterling, our functional currency, and present our consolidated financial statements in U.S. dollars for financial reporting purposes. Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency at rates of exchange prevailing at the balance sheet dates. Non-monetary assets and liabilities denominated in foreign currencies are translated into the functional currency at the exchange rates prevailing at the date of the transaction. Exchange gains or losses arising from foreign currency transactions are included in the determination of net income (loss) for the respective periods. We recorded foreign exchange losses of $11.9 million and $1.7 million for the three months ended September 30, 2024 and 2023, respectively, and foreign exchange losses of $12.4 million and $0.4 million for the nine months ended September 30, 2024 and 2023, respectively, which are included in other income (expense), net in the unaudited condensed Consolidated Statements of Operations and Comprehensive Loss.
Assets and liabilities are translated at the exchange rates at the balance sheet dates and revenue and expenses are translated at the average exchange rates and shareholders’ equity is translated based on historical exchange rates. Translation adjustments are not included in determining net income (loss) but are included in foreign exchange adjustment to accumulated other comprehensive income (loss), a component of shareholders’ equity.
We do not currently engage in currency hedging activities in order to reduce our currency exposure, but we may begin to do so in the future. These instruments may be used to selectively manage risks, but there can be no assurance that we will be fully protected against material foreign currency fluctuations.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
We maintain “disclosure controls and procedures,” as defined in Rule 13a-15(e) and Rule 15d-15(e) under the Exchange Act, that are designed to ensure that information required to be disclosed by us in the reports that we file or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms, and is accumulated and communicated to our management, including our principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. In designing and evaluating our disclosure controls and procedures, management recognizes that disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the disclosure controls and procedures are met. Additionally, in designing disclosure controls and procedures, our management applied judgement in evaluating the cost-benefit relationship of possible disclosure controls and procedures.
The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, controls may become inadequate because of changes in conditions, or the degree of compliance with policies or procedures may deteriorate. Because of the inherent limitations in a control system, misstatements due to error or fraud may occur and not be detected.
Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e)) under the Exchange Act as of September 30, 2024. Based on such evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of September 30, 2024, our disclosure controls and procedures were not effective due to control deficiencies in our internal control over financial reporting which constituted a material weakness.
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In connection with the review of our unaudited condensed consolidated financial statements for the quarter ended March 31, 2024, we identified a material weakness in relation to accounting for complex transactions. The material weakness did not allow us to identify, understand and evaluate the impact of certain key aspects of the accounting for the BioNTech Agreements. Our process as designed was inadequate to deal with the complexity of the accounting for the transaction and did not allow for an effective and timely evaluation of key aspects of the agreements and their impact on the financial statements.
Our remediation plan includes a redesign of the process for dealing with complex accounting transactions which will allow us to identify, understand and evaluate the impact of any key judgements, estimates or other factors which might have a material impact on the financial statements. Our plan for remediation will encompass: (i) structured project plans allowing us to manage multiple stakeholders, including any specialists we use in our work on complex accounting transactions; (ii) the use of summary outputs allowing for earlier review of key judgements, estimates and other factors which impact the financial statements; and (iii) enhancing our review process and controls, including building in more time to allow for their effective operation.
Changes in Internal Control over Financial Reporting
Except as described above, there were no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) of the Exchange Act) that occurred during the three months ended September 30, 2024 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
From time to time, we may become involved in legal proceedings arising in the ordinary course of our business. We are not currently a party to any material legal proceedings, and we are not aware of any pending or threatened legal proceeding against us that we believe could have an adverse effect on our business, operating results or financial condition.
Item 1A. Risk Factors.
Our business is subject to numerous risks. You should carefully consider and evaluate each of the following factors as well as the other information in this Quarterly Report on Form 10-Q, including our financial statements, and related notes, the risk factors discussed in our Annual Report on Form 10-K, which we filed with the SEC on March 21, 2024, in evaluating our business and prospects. The risks and uncertainties described below are not the only ones we face. Additional risks and uncertainties not presently known to us or that we currently consider immaterial may also impair our business operations. If any of the following risks actually occur, our business and financial results could be harmed. In that case, the trading price our ADSs could decline. You should also consider the more detail description of our business contained in our Annual Report on Form 10-K.
Risks Related to Our Financial Position and Need For Capital
We are an early commercial stage biopharmaceutical company and have incurred significant losses since our inception. We expect to continue to incur losses for the foreseeable future.
We are an early commercial stage biopharmaceutical company with a limited operating history, and we have incurred significant net losses since our inception in 2014. We have incurred losses of $208.4 million, $148.8 million and $142.1 million for the years ended December 31, 2023, 2022 and 2021, respectively. As of December 31, 2023, we had an accumulated deficit of $878.6 million. We have funded our operations to date primarily with proceeds from the sale of our equity securities, including ADSs, licensing and collaboration arrangements and strategic financing.
We currently have one product, AUCATZYL (obe-cel), approved for commercial sale, and while we have generated revenue from licensing, we are devoting substantially all of our financial resources and efforts to manufacturing and commercializing AUCATZYL and for the research and development of our other programmed T cell product candidates and T cell programming technologies. Investment in biopharmaceutical product development is highly speculative because it entails substantial upfront operating and capital expenditures and significant risk that any potential product candidate will fail to demonstrate adequate effect or an acceptable safety profile, gain regulatory approval and become commercially viable.

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Should we be unsuccessful in our commercialization efforts for AUCATZYL or if the rates of market acceptance do not meet our expectations, we may not generate sufficient revenue. We expect that it could take several years until any of our other product candidates receive marketing approval and are commercialized, and we may never be successful in obtaining marketing approval and commercializing any of our other product candidates, including obe-cel in additional indications. We expect to continue to incur significant expenses and increasing operating losses for the foreseeable future. These net losses will adversely impact our shareholders’ equity and net assets and may fluctuate significantly from quarter to quarter and year to year. We anticipate that our expenses will increase substantially as we:
expand our sales, marketing and distribution infrastructure to commercialize AUCATZYL/obe-cel and any other product candidate for which we may obtain regulatory approval;
make required milestone, royalty and revenue sharing payments to third parties under license and collaboration agreements;
continue to scale up internal and external manufacturing capacity with the aim of securing sufficient quantities to meet our capacity requirements for commercialization of AUCATZYL and clinical trials of our other product candidates;
continue our ongoing and planned research and development of our current programmed T cell product candidates for the treatment of hematological cancers, solid tumors and autoimmune diseases;
seek to discover and develop additional product candidates and further expand our clinical product pipeline;
initiate preclinical studies and clinical trials for any additional product candidates that we may pursue in the future, including our planned development of additional T cell therapies for the treatment of hematological cancers, solid tumors and autoimmune diseases;
seek regulatory approvals for any product candidates that successfully complete clinical trials;
develop, maintain, expand and protect our intellectual property portfolio;
acquire or in-license other product candidates and technologies;
hire additional clinical, quality control and manufacturing personnel;
add clinical, operational, financial and management information systems and personnel, including personnel to support the commercial development of AUCATZYL, as well as our other product development and future commercialization efforts;
expand our operations in the United States, Europe and other geographies; and
incur additional legal, accounting and other expenses associated with operating as a public company.
To become and remain profitable, we must succeed in commercializing AUCATZYL and developing and eventually commercializing other products that generate significant revenue. This will require us to be successful in a range of challenging activities, including marketing and selling AUCATZYL and any future products for which we may obtain regulatory approval, completing preclinical studies and clinical trials of our product candidates, preparing a satisfactory filing package for regulatory authorities, obtaining regulatory approval, manufacturing, marketing and selling any products for which we may obtain regulatory approval, as well as discovering and developing additional product candidates. We may never succeed in these activities and, even if we do, may never generate revenues that are significant enough to achieve profitability.
Because of the numerous risks and uncertainties associated with the development, manufacturing, delivery and commercialization of complex autologous cell therapies, we are unable to accurately predict the timing or amount of expenses or when, or if, we will be able to achieve profitability. If we are required by regulatory authorities to perform studies in addition to those currently expected, or if there are any delays in the initiation and completion of our clinical trials or the development of any of our product candidates, our expenses could increase and profitability could be further delayed.
Even if we achieve profitability, we may not be able to sustain or increase profitability on a quarterly or annual basis. Our failure to become and remain profitable would depress the value of our ADSs and could impair our ability to raise capital, expand our business, maintain our research and development efforts or continue our operations. A decline in the value of our ADSs could also cause you to lose all or part of your investment.
We will need additional funding to successfully commercialize AUCATZYL and to complete the development of and commercialize our other product candidates, which may not be available on acceptable terms, if at all.
Unless and until we are able to successfully commercialize AUCATZYL and achieve significant revenue from sales, we will require substantial additional funding to meet our financial needs and to pursue our business objectives. If we are unable to raise capital when needed, we could be forced to delay, reduce or altogether cease our product development programs or commercialization efforts.

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Since our inception, we have devoted substantially all of our resources to fund the operating expenses and capital expenditure requirements associated with the research and development of AUCATZYL and our other product candidates. Even once we begin to generate revenue from sales of AUCATZYL, we will need to raise additional capital to reach profitability as well as to complete the development and commercialization of our other programmed T cell product candidates, and in connection with our continuing operations, strategy and other planned activities. Our future capital requirements will depend on many factors, including:
our ability to execute our commercialization strategies for and generate revenue from sales of AUCATZYL and, if approved, our other product candidates;
the progress, results and costs of laboratory testing, manufacturing, and preclinical and clinical development of our current and future product candidates;
the timing and amounts of any milestone, royalty payments or revenue sharing payments we may be required to make under current or future license or collaboration agreements;
the costs of leasing, building out, equipping, and operating the facilities necessary to research, develop, manufacture and commercialize our product candidates, as well as to support our continuing operations;
the costs of hiring additional clinical, quality control and manufacturing personnel;
the costs, timing and outcome of regulatory review of our product candidates;
the costs and timing of commercialization activities, including product manufacturing, marketing, sales and distribution, for any future product candidates for which we receive marketing approval;
the costs and timing of preparing, filing and prosecuting patent applications, maintaining and enforcing our intellectual property rights and defending any intellectual property-related claims; and
the costs of operating as a public company.
Identifying potential product candidates and conducting preclinical testing and clinical trials is a time-consuming, expensive and uncertain process that takes years to complete, and we may never generate the necessary data or results required to obtain regulatory approval and achieve product sales. In addition, AUCATZYL, or our other product candidates, if approved, may not achieve commercial success. Our product revenues in the near term will be derived primarily from sales of AUCATZYL in the US, as we that we do not expect to generate material revenues from obe-cel in other jurisdictions or from other pipeline programs, for up to several years, if at all. Accordingly, we will need to continue to rely on additional financing to achieve our business objectives. Adequate additional financing may not be available to us on acceptable terms, or at all. In addition, we may seek additional capital due to favorable market conditions or strategic considerations even if we believe we have sufficient funds for our current or future operating plans.
To the extent that we raise additional capital through the sale of equity or convertible debt securities, our shareholders may experience substantial dilution. We may sell ordinary shares or ADSs, convertible securities or other equity securities in one or more transactions at prices and in a manner we determine from time to time. If we sell ordinary shares or ADSs, convertible securities or other equity securities in more than one transaction, investors may be materially diluted by subsequent sales. These sales may also result in material dilution to our existing shareholders, and new investors could gain rights superior to our existing shareholders. In February 2024, we issued an aggregate of approximately 91.7 million ADSs in an underwritten offering and a private placement, resulting in substantial dilution for existing shareholders. Debt financing and preferred equity financing, if available, could result in fixed payment obligations, and we may be required to accept terms that restrict our ability to incur additional indebtedness, force us to maintain specified liquidity or other ratios or restrict our ability to pay dividends or make acquisitions.
If we raise additional funds through collaborations, strategic alliances or marketing, distribution or licensing arrangements with third parties, we may be required to relinquish valuable rights to our technologies, future revenue streams, research programs or product candidates or to grant licenses on terms that may not be favorable to us. In addition, we could also be required to seek funds through arrangements with collaborators or others at an earlier stage than otherwise would be desirable. If we raise funds through research grants, we may be subject to certain requirements, which may limit our ability to use the funds or require us to share information from our research and development. If we are unable to raise additional funds through equity or debt financings when needed, we may be required to delay, limit, reduce or terminate our product development or future commercialization efforts or grant rights to a third party to develop and market product candidates that we would otherwise prefer to develop and market ourselves. Raising additional capital through any of these or other means could adversely affect our business and the holdings or rights of our shareholders and may cause the market price of our ADSs to decline.

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We have incurred substantial obligations under license and collaboration agreements, which could impair our flexibility and access to other capital and adversely affect our financial position, and our business would be adversely affected if we were unable to meet our obligations under these and similar future agreements.
In November 2021, we entered into a collaboration agreement with Blackstone (the “Blackstone Collaboration Agreement”) pursuant to which Blackstone agreed to pay us up to $150 million to support the continued development and commercialization of AUCATZYL/obe-cel and next-generation product candidates (collectively, the “Collaboration Products”) in exchange for our agreement to make substantial payments to Blackstone following approval of such Collaboration Products. These payments include a single-digit percentage payment on worldwide net sales of (i) the Collaboration Products in any indication and (ii) AUTO3 for the treatment of B-cell leukemias and lymphomas, by us and any of our licensees, as well as sales milestone payments relating to such net sales. Such payments to Blackstone could increase our cash requirements and could impair our liquidity. Through December 31, 2023, Blackstone paid $120 million to us under the terms of the Blackstone Collaboration Agreement. Following the approval of AUCATZYL, we expect to receive the remaining $30 million in the fourth quarter of 2024.
In connection with the Collaboration Agreement, Blackstone was granted a security interest in substantially all of our assets. The Collaboration Agreement also contains negative covenants that restrict us from (a) granting liens on certain of our assets, including liens on the intellectual property relating to the Collaboration Products, except for certain permitted liens, (b) making distributions or dividends, except for certain permitted distributions, (c) entering into development or commercialization license transactions with respect to the Collaboration Products, except that we are permitted to enter into any such development or commercialization license transactions with certain pharmaceutical companies, including those companies that have annual sales in excess of an agreed threshold, (d) consummating certain change in control transactions, (e) selling royalties or entering into similar financials transactions involving the sale of revenues or royalties, or (f) acquiring subsidiaries without joining such subsidiary as a party to the Blackstone Collaboration Agreement. These restrictions could inhibit our ability to pursue our business strategies and may limit our ability to, among other things, incur secured indebtedness, encumber assets, pay dividends or make other distributions to holders of our capital stock, license-out the Collaboration Products, complete mergers or acquisitions, or sell royalties. However, the security interest and negative covenants will expire upon the first commercial sale of AUCATZYL.
If we default under our obligations under the Blackstone Collaboration Agreement, we will be obligated to pay Blackstone liquidated damage payments in excess of the development payment paid by Blackstone. If we fail to make such payments, Blackstone could elect to exercise its remedies in respect of the security interest, which would seriously harm our business and ability to continue as a going concern.
Under the BioNTech License Agreement with BioNTech entered into in February 2024, we also agreed to pay BioNTech a low single-digit percentage of annual net revenue of AUCATZYL/obe-cel, which may be increased up to a mid-single digit percentage, in exchange for milestone payments of up to $100 million in the aggregate on achievement of certain regulatory events for specific new indications upon BioNTech's election. Such payments to BioNTech could increase our cash requirements and could impair our liquidity.
Risks Related to the Commercialization of AUCATZYL and Our Other Product Candidates
AUCATZYL and any other product candidates, if approved, may fail to achieve the degree of market acceptance by physicians, patients, third-party payors and others in the medical community necessary for commercial success, thereby limiting our potential to generate revenue.
AUCATZYL and any other product candidates, if approved, may not achieve market acceptance among physicians, patients, hospitals, including pharmacy directors, and third-party payors and, ultimately, may not be commercially successful. If these products do not achieve an adequate level of acceptance, we may not generate significant product revenue and may not become profitable. FDA’s investigation into secondary malignancies associated with CAR T cell therapies and other similar actions could result in increased government regulation, unfavorable public perception and publicity, stricter labeling requirements for AUCATZYL and those product candidates that are approved, and a decrease in demand for AUCATZYL or any such product candidates. The degree of market acceptance of AUCATZYL, and any other product candidates, if approved for commercial sale, will depend on a number of factors, including:
the timing of market introduction of those products compared to competitive products;
the continued safety and efficacy of those products;
the clinical indications for which our product candidates are approved;
physicians, hospitals, cancer treatment centers, and patients considering our product and product candidates as a safe and effective treatment;
hospitals and cancer treatment centers establishing the infrastructure required for the administration of redirected T cell therapies;
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the potential and perceived advantages of our product and product candidates over alternative treatments;
the prevalence and severity of any side effects;
product labeling or product insert requirements of the FDA, the European Commission or other regulatory authorities;
limitations or warnings contained in the labeling approved by the FDA or the European Commission;
the cost of treatment in relation to alternative treatments;
the amount of upfront costs or training required for physicians to administer our product and product candidates;
the availability of coverage, adequate reimbursement, and pricing by third-party payors and government authorities;
the willingness and ability of patients to pay out-of-pocket in the absence of comprehensive coverage and adequate reimbursement by third-party payors and government authorities;
relative convenience and ease of administration, including as compared to alternative treatments and competitive therapies; and
the effectiveness of our sales and marketing efforts and distribution support.
Our efforts to educate physicians, patients, third-party payors and others in the medical community on the benefits of AUCATZYL and our other product candidates, if approved, may require significant resources and may never be successful. Such efforts may require more resources than are typically required due to the complexity and uniqueness of our product candidates. Because we expect sales of AUCATZYL and any future products, if approved, to generate substantially all of our product revenue for the foreseeable future, the failure of those products to find market acceptance would harm our business and could require us to seek additional financing.
In addition, although we are not utilizing embryonic stem cells or replication competent vectors, adverse publicity due to the ethical and social controversies surrounding the therapeutic use of such technologies, and reported side effects from any clinical trials using these technologies or the failure of such trials to demonstrate that these therapies are safe and effective, may limit market acceptance our product candidates.
Even if our products achieve market acceptance, we may not be able to maintain that market acceptance over time if new products or technologies are introduced that are more favorably received than our products, are more cost effective or render our products obsolete.
If we are unable to fully develop our sales, marketing and distribution capability on our own , or enter into sales, marketing and distribution agreements with third parties, we may not be successful in commercializing AUCATZYL, or our other product candidates, if and when approved.
We have spent significant resources to build our global commercialization capabilities in anticipation of the commercial launch of AUCATZYL. To achieve commercial success for AUCATZYL or any other product candidate for which we may obtain marketing approval, we will need to maintain a sales and marketing organization and establish logistics and distribution processes to commercialize and deliver our product candidates to patients and healthcare providers. The development of sales, marketing and distribution capabilities has required and will continue to require substantial resources, will be time-consuming and could delay any product launch. We currently have limited resources compared to some of our competitors, and the continued development of our own commercial organization to market our medicines and any additional medicines we may acquire will be expensive and time-consuming. In addition, none of the members of our sales force have promoted any medicine for treatment of adult r/r B-ALL prior to the launch of AUCATZYL. We have spent and will continue to expend significant time and resources to train our sales force to be able to educate physicians on the benefits of prescribing and pharmacists dispensing AUCATZYL. Furthermore, we must train our sales force to ensure that a consistent and appropriate message about AUCATZYL is being delivered to our potential customers. We may experience turnover of the sales representatives that we hired or will hire, requiring us to train new sales representatives. If we are unable to effectively train our sales force and equip them with effective materials, including medical and sales literature to help them inform and educate physicians about the benefits of AUCATZYL and its proper administration and label indication, as well as our patient assistance programs, our efforts to successfully commercialize AUCATZYL could jeopardize, which could have a material adverse effect on our financial condition, share price and operations.
If we are unable or decide not to establish internal sales, marketing and distribution capabilities, in any territory, we would have to pursue collaborative arrangements regarding the sales and marketing of our products. However, we may not be successful in entering into arrangements with third parties to sell, market and distribute AUCATZYL/obe-cel or our other product candidates or may be unable to do so on terms that are favorable to us, or if we are able to do so, that they would be effective and successful in commercializing our products. Our product revenues and our profitability, if any, would likely be lower than if we were to sell, market and distribute AUCATZYL/obe-cel and any other product candidates that we develop ourselves. In addition, we would have limited control over such third parties, and any of them may fail to devote the necessary resources and attention to sell and market AUCATZYL/obe-cel and any of our other product candidates effectively.
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The incidence and prevalence for target patient populations for AUCATZYL and our other product candidates have not been established with precision. If the market opportunities for AUCATZYL and our other product candidates are smaller than we estimate, our revenue and ability to achieve profitability will be adversely affected, possibly materially.
The total addressable market opportunity for AUCATZYL and our other product candidates will ultimately depend upon, among other things, acceptance by the medical community and patient access, product pricing and reimbursement as well as expansion into additional markets. The number of patients who may benefit from AUCATZYL or our other future products may turn out to be lower than expected, patients may not be otherwise amenable to treatment with our products, or new patients may become increasingly difficult to identify or gain access to, all of which would adversely affect our results of operations and our business. We may not be successful in our efforts to identify additional product candidates. Due to our limited resources and access to capital, we must prioritize development of certain product candidates, which may prove to be the wrong choice and may adversely affect our business.
We operate in a rapidly changing industry and face significant competition, which may result in others discovering, developing or commercializing products before or more successfully than we do.
The development and commercialization of new biopharmaceutical products is highly competitive and subject to rapid and significant technological advancements. We face competition from major multi-national pharmaceutical companies, biotechnology companies and specialty pharmaceutical companies with respect to our current and future product candidates that we may develop and commercialize in the future. There are a number of large pharmaceutical and biotechnology companies that currently market and sell products or are pursuing the development of product candidates for the treatment of cancer. Smaller or early-stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large, established companies. Potential competitors also include academic institutions, government agencies and other public and private research organizations.
Due to their promising clinical therapeutic effect in clinical exploratory trials, engineered T cell therapies, redirected T cell therapies in general and antibody-drug conjugates are being pursued by multiple biotechnology and pharmaceutical companies, including Novartis AG (“Novartis”), Gilead Sciences, Inc. (“Gilead”), Bristol-Myers Squibb (“BMS”), Janssen Biotech Inc., TwoSeventy Bio Inc., Legend Biotech Corp., GSK plc, AstraZeneca Plc, Pfizer Inc., BioNTech, Astellas Pharma Inc., ADC Therapeutics SA, Roche Holding AG, Seattle Genetics, and Amgen Inc. Our competitors may succeed in developing, acquiring or licensing technologies and products that are more effective, more effectively marketed and sold or less costly than any product candidates that we may develop, which could render our product candidates non-competitive and obsolete.
We have received marketing approval from the FDA for AUCATZYL for the treatment of adult r/r B-ALL. Novartis, Gilead and BMS have also received marketing approval for anti-CD19 CAR T cell therapies. Gilead's therapy was approved for the treatment of adult ALL in October 2021. AUCATZYL is expected to compete directly with these companies and therapies. In addition, some companies, such as Cellectis, Inc., Les Laboratoires Servier SAS, Allogene Therapeutics Inc., Lyell Immunopharma, Cargo Therapeutics and Crispr Therapeutics AG are pursuing allogenic T cell products that could compete with our programmed T cell product candidates.
Novartis, Gilead and BMS may be successful in establishing a strong market position for their CD19-targeted CAR T cell products, and we may not be able to compete effectively against these therapies once they have been established.
Our commercial opportunity could be reduced or eliminated if our competitors develop and commercialize products that are safer, more effective, have fewer or less severe side effects, are more convenient or are less expensive or better reimbursed than any products that we may commercialize. Our competitors also may obtain FDA, European Commission or other regulatory approval for their products more rapidly than we may obtain approval for ours, which could result in our competitors establishing a strong market position for either the product or a specific indication before we are able to enter the market.
Many of our competitors, either alone or with their strategic collaborators, have substantially greater financial, technical and human resources than we do. Accordingly, our competitors may be more successful than we are in obtaining approval for treatments and achieving widespread market acceptance, which may render our treatments obsolete or non-competitive. Mergers and acquisitions in the biotechnology and pharmaceutical industries may result in even more resources being concentrated among a smaller number of our competitors.
These competitors also compete with us in recruiting and retaining qualified scientific and management personnel and establishing clinical trial sites and patient registration for clinical studies, as well as in acquiring technologies complementary to, or necessary for, our programs. Smaller or early-stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large and established companies.

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Coverage and adequate reimbursement may not be available for AUCATZYL or our current or any future product candidates, which could make it difficult for us to sell profitably, if approved.
Market acceptance and sales of our product and any product candidates that we commercialize, if approved, will depend in part on the extent to which reimbursement for these products and related treatments will be available from third-party payors, including government health administration authorities, managed care organizations and private health insurers. Third-party payors decide which therapies they will pay for and establish reimbursement levels. Third-party payors in the United States often rely upon Medicare coverage policy and payment limitations in setting their own coverage and reimbursement policies. However, decisions regarding the extent of coverage and amount of reimbursement to be provided for our product or any product candidates that we develop, once approved, will be made on a payor-by-payor basis. One payor’s determination to provide coverage for a drug does not assure that other payors will also provide coverage for the drug. Additionally, a third-party payor’s decision to provide coverage for a therapy does not imply that an adequate reimbursement rate will be approved. Third-party payors are increasingly challenging the price, examining the medical necessity and reviewing the cost-effectiveness of medical products, therapies and services, in addition to questioning their safety and efficacy. We may incur significant costs to conduct expensive pharmaco-economic studies in order to demonstrate the medical necessity and cost-effectiveness of our product, and product candidates, once approved, in addition to the costs required to obtain FDA approvals. Our product and product candidates, once approved, may not be considered medically necessary or cost-effective by third-party payors.
Each payor determines whether or not it will provide coverage for a therapy, what amount it will pay the manufacturer for the therapy, and on what tier of its list of covered drugs, or formulary, it will be placed. The position on a payor’s formulary, generally determines the co-payment that a patient will need to make to obtain the therapy and can strongly influence the adoption of such therapy by patients and physicians. Patients who are prescribed treatments for their conditions and providers prescribing such services generally rely on third-party payors to reimburse all or part of the associated healthcare costs. Patients are unlikely to use our products, and providers are unlikely to prescribe our products, unless coverage is provided and reimbursement is adequate to cover a significant portion of the cost of our products and their administration. Therefore, coverage and adequate reimbursement is critical to new medical product acceptance.
A primary trend in the U.S. healthcare industry and elsewhere is cost containment. Third-party payors have attempted to control costs by limiting coverage and the amount of reimbursement for particular medications. We cannot be sure that coverage and reimbursement will be available for our product or any product candidates and, if reimbursement is available, what the level of reimbursement will be. Even if favorable coverage and reimbursement status is attained for our product or any product candidates for which we receive regulatory approval, less favorable coverage policies and reimbursement rates may be implemented in the future. Inadequate coverage and reimbursement may impact the demand for, or the price of, any drug for which we obtain marketing approval. If coverage and adequate reimbursement are not available, or are available only to limited levels, we may not be able to successfully commercialize our current and any future product candidates that we develop.
Additionally, we are developing a proprietary diagnostic test for use with our product and certain of our product candidates. We will be required to obtain coverage and reimbursement for this test separate and apart from the coverage and reimbursement we seek for our products and product candidates, if approved. There is significant uncertainty regarding our ability to obtain coverage and adequate reimbursement for this proprietary diagnostic test for reasons similar to those applicable to our product and product candidates, if approved.
Product liability lawsuits against us could cause us to incur substantial liabilities and to limit commercialization of AUCATZYL or any other products that we may develop.
We face an inherent risk of product liability exposure related to the testing of our product and product candidates in human clinical trials and will face an even greater risk if we commercially sell any products that we may develop. If we cannot successfully defend ourselves against claims that our product candidates or products caused injuries, we will incur substantial liabilities. Regardless of merit or eventual outcome, liability claims may result in:
reduced resources of our management to pursue our business strategy;
decreased demand for any product candidates or products that we may develop;
injury to our reputation and significant negative media attention;
withdrawal of clinical trial participants;
initiation of investigations by regulators;
product recalls, withdrawals or labeling, marketing or promotional restrictions;
significant costs to defend the resulting litigation;
substantial monetary awards paid to clinical trial participants or patients;
loss of revenue; and
the inability to commercialize any products that we may develop.
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We currently hold £10.0 million in product liability insurance coverage in the aggregate, with a per incident limit of £10.0 million, which may not be adequate to cover all liabilities that we may incur. We may need to increase our insurance coverage as we expand our clinical trials or if we commence commercialization of our product candidates. Insurance coverage is increasingly expensive. We may not be able to maintain insurance coverage at a reasonable cost or in an amount adequate to satisfy any liability that may arise.
Risks Related to the Development of Our Product Candidates
Our product candidates are in clinical development or in preclinical development. If we are unable to advance our product candidates through clinical development, obtain regulatory approval and ultimately commercialize our product candidates, or experience significant delays in doing so, our business will be materially harmed.
Other than AUCATZYL, the rest of our product pipeline is in clinical or preclinical development. We have established clinical proof-of-concept for only one of our products, AUCATZYL, which recently received FDA approval in r/r adult B-ALL. There is no assurance that our current or any other future clinical trials of our product candidates will be successful or will generate positive clinical data. Although we received marketing approval from the FDA for AUCATZYL in the US, and have submitted MAAs to the MHRA and EMA, we may not be successful in receiving marketing approval from these regulatory agencies, including the European Commission, for obe-cel or for any of our other product candidates. In order to commence a clinical trial in the United States, we must submit an IND to the FDA and have the IND application go into effect. Trials in the United States must be conducted pursuant to an active IND. An investigator may not administer a drug candidate to human subjects until the IND goes into effect. Similar requirements apply to our conduct of trials in the UK and EU. We are sponsoring active, recruiting clinical trials for obe-cel in additional indications and AUTO4. We are also collaborating with our academic partner UCL to support clinical trials sponsored by them of obe-cel in additional indications, AUTO1/22, AUTO6NG and AUTO8. In addition, patients who have received an investigational product developed by us will be evaluated for long-term safety and disease response in a long-term follow-up protocol. There can be no assurance that the FDA, the competent authorities of EU Member States or other regulatory agencies will permit any future clinical trial application to go into effect for our product candidates in a timely manner or at all.
U.S. and EU regulations require parties seeking regulatory approval for product candidates in adult indications to define a development plan for such candidate in pediatric indications, commonly referred to as a PSP in the United States. and a PIP in the EU. Similar requirements apply in other jurisdictions. If these requirements are not met, a submission for marketing authorization cannot be submitted. A pediatric development plan must be approved by U.S., EU and other regulators, and the conduct of the respective pediatric studies, typically in parallel with the adult clinical development, must be conducted in the time frame described in the plan. Failure to comply with these requirements can lead to penalties and reputational damage. There can be no assurance that the FDA, EMA or other regulatory agencies will permit a pediatric development plan to go into effect in a timely manner, or at all.
If we are unable to agree upon appropriate pediatric development plans with these regulatory agencies, or if we are unable to perform the activities described in an agreed plan, we could experience significant delays or an inability to successfully commercialize our product candidates, which would materially harm our business.
Biopharmaceutical development is a long, expensive and uncertain process, and delay or failure can occur at any stage of any of our clinical trials. Failure to obtain regulatory approval for our product candidates will prevent us from commercializing and marketing our product candidates.
The success in the development of our programmed T cell product candidates will depend on many factors, including:
completing preclinical studies and receiving regulatory approvals or clearance for conducting clinical trials for our preclinical-stage programs;
obtaining positive results in our clinical trials demonstrating efficacy, safety, and durability of effect of our product candidates;
establishing pediatric development plans with respect to product candidates for which we seek regulatory approval;
receiving approvals for commercialization of our product candidates from regulatory authorities;
manufacturing our product candidates at an acceptable cost; and
maintaining and growing an organization of scientists, medical professionals and business people who can develop and commercialize our products and technology.
Many of these factors are beyond our control, including the time needed to adequately complete clinical testing and the regulatory submission process. It is possible that none of our other product candidates will ever obtain regulatory approval, even if we expend substantial time and resources seeking such approval. If we do not achieve one or more of these factors in a timely manner or at all, or any other factors impacting the successful development of biopharmaceutical products, we could experience significant delays or an inability to successfully develop our product candidates, which would materially harm our business.
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Our proprietary, next-generation T cell programming technologies, our modular approach for engineering T cells and our manufacturing platform for our programmed T cell product candidates, represent emerging therapeutic approaches that face significant challenges and hurdles.
We have concentrated our research and development efforts on our T cell technology platform using our expertise in disease biology and cell programming, and our future success is highly dependent on the successful development and manufacture of our programmed T cell product candidates. Some of our product candidates employ a dual-targeting mechanism. By targeting two separate antigens on the cancer cell surface, we believe these product candidates have the potential to improve durability of treatment response and reduce the frequency of cancer relapse as compared to other currently available single-targeting T cell therapies. AUTO4, our product candidate for the treatment of T cell lymphoma, employs a novel approach to killing malignant T cells that aims to preserve approximately half of the normal, healthy T cells. Some of our product candidates include a “safety switch” that is designed to allow for the elimination of the engineered T cells if a patient experiences severe adverse side effects from the treatment. However, this “safety switch” technology has not been activated to date in our clinical studies, and we do not know whether it would have the intended effect if used. Additionally, as with other targeted therapies, off-tumor or off-target activity could delay development or require us to re-engineer or abandon a particular product candidate. Because programmed T cell therapies represent a relatively new field of cellular immunotherapy and cancer treatment and autoimmune diseases generally, developing and commercializing our product candidates subjects us to a number of risks and challenges, including:
obtaining regulatory approval for our product candidates, as the FDA, the European Commission and other regulatory authorities have limited experience with programmed T cell therapies for cancer;
sourcing clinical and, if approved, commercial supplies of the materials used to manufacture our product candidates;
developing programming modules with the desired properties, while avoiding adverse reactions;
creating viral vectors capable of delivering multiple programming modules;
developing a reliable and consistent vector and cell manufacturing process;
establishing manufacturing capacity suitable for the manufacture of our product candidates in line with expanding enrollment in our clinical studies and our projected commercial requirements;
achieving cost efficiencies in the scale-up of our manufacturing capacity;
developing protocols for the safe administration of our product candidates;
educating medical personnel regarding our programmed T cell therapies and the potential side effect profile of each of our product candidates, such as potential adverse side effects related to CRS;
establishing integrated solutions in collaboration with specialty treatment centers in order to reduce the burdens and complex logistics commonly associated with the administration of T cell therapies;
establishing sales and marketing capabilities to successfully launch and commercialize our product candidates if and when we obtain any required regulatory approvals, and risks associated with gaining market acceptance of a novel therapy if we receive approval; and
obtaining coverage and adequate reimbursement from third-party payors for our novel and personalized therapies in connection with commercialization of any approved product candidates.
We may not be able to successfully develop our programmed T cell product candidates or our T cell programming technologies in a manner that will yield products that are safe and effective, scalable or profitable.
Additionally, because our technology involves the genetic modification of patient cells ex vivo, we are subject to additional regulatory challenges and risks, including regulatory requirements governing genetically modified organisms that have changed frequently and will likely continue to change in the future, and that may limit or delay our ability to import our product candidates into certain countries for use in clinical trials or for commercial sale even if we receive applicable marketing approvals.
Moreover, public perception and awareness of T cell therapy safety issues may adversely influence the willingness of subjects to participate in clinical trials of our product candidates, or if approved, of physicians to prescribe our products. Physicians, hospitals and third-party payors often are slow to adopt new products, technologies and treatment practices that require additional upfront costs and training. Treatment centers may not be willing or able to devote the personnel and establish other infrastructure required for the administration of programmed T cell therapies. Physicians may not be willing to undergo training to adopt this novel and personalized therapy, may decide the therapy is too complex to adopt without appropriate training and may choose not to administer the therapy. Based on these and other factors, hospitals and payors may decide that the benefits of this new therapy do not or will not outweigh its costs.

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Our future success is highly dependent on the regulatory approval of our other clinical-stage programmed T cell product candidates and our preclinical programs. Our product candidates will require significant clinical or preclinical testing before we can seek regulatory approval for and launch a product commercially.
Although we have received FDA approval for AUCATZYL in r/r adult B-ALL, our business remains substantially dependent on our ability to successfully obtain regulatory approval for, and, if approved, to successfully commercialize our other programmed T cell product candidates. We cannot commercialize product candidates in the United States without first obtaining regulatory approval for the product from the FDA; similarly, we cannot commercialize product candidates in countries outside of the United States without obtaining regulatory approval from comparable regulatory authorities in relevant jurisdictions, such as the European Commission in the EU (granted on the basis of a positive opinion from the CHMP of the EMA). Additionally, to file for licensure in any jurisdiction outside of the UK we must first receive GMP certification from the MHRA. Before obtaining regulatory approvals for the commercial sale of any product candidate for a particular indication, if approved, we must demonstrate with substantial evidence gathered in preclinical and clinical studies, that the product candidate is safe and effective for that indication and that the manufacturing facilities, processes and controls are adequate with respect to such product candidate. The obe-cel Regenerative Medicine Advanced Therapy (“RMAT”) designation was submitted to FDA in February 2022 and was granted in April 2022. Similarly, in the UK, Autolus utilized the MHRA Innovative Licensing and Access Pathway (“ILAP”) and applied for ‘Innovative Passport’ designation (“Innovation Passport”) which aims to accelerate the timeline to regulatory approval. The UK ILAP designation in r/r adult B-ALL was granted in June 2021 and we submitted an MAA to the MHRA at the end of July 2024. Additionally, EMA PRIME designation in r/r B-ALL was obtained in March 2021 and we submitted an MAA to the EMA, which was accepted in April 2024. Moreover, Orphan Designation in B-ALL was granted by the FDA in November 2019 and by the European Commission in March 2022. Prior to seeking approval for any of our other product candidates, we will need to confer with the FDA, MHRA, the EMA and other regulatory authorities regarding the design of our clinical trials and the type and amount of clinical data necessary to seek and gain approval for our product candidates.
The time required to obtain approval by the FDA, MHRA, the European Commission and other regulatory authorities is unpredictable but typically takes many years following the commencement of preclinical studies and clinical trials and depends upon numerous factors, including the substantial discretion of the regulatory authorities. In addition, approval policies, regulations, or the type and amount of clinical data necessary to gain approval may change during the course of a product candidate’s clinical development and may vary among jurisdictions. It is possible that none of our other existing product candidates or any future product candidates will ever obtain regulatory approval.
Our product candidates could fail to receive regulatory approval from the FDA, MHRA, the European Commission or other regulatory authorities and, consequently, fail to achieve suitable commercial success for many reasons, including:
disagreement with the design, protocol or conduct of our clinical trials;
failure to demonstrate that a product candidate is safe and effective for its proposed indication;
failure of clinical trials to meet the level of statistical significance required for approval;
failure to demonstrate that a product candidate’s clinical and other benefits outweigh its safety risks;
disagreement with our interpretation of data from preclinical studies or clinical trials;
insufficiency of data collected from clinical trials of our product candidates to support the submission and filing of a BLA or other submission or to obtain regulatory approval;
failure to obtain approval of the manufacturing processes or our facilities;
failure to receive timely handover of our planned commercial launch facility to enable on-time completion of all operational qualification activities;
failure to achieve timely acceptance of Technical Transfer and Performance Qualification of our commercial manufacturing facility;
augmentation of the requirements to satisfy facility qualification or licensure submission by the regulating authorities, thus delaying time to submission and licensure of;
failure to achieve a competitive value proposition in terms of product release specifications and our vein-to-vein delivery time;
failure to achieve approval of state of the art in-process and release assays critical to optimizing intent to treat and achieving a competitive vein to vein time;
failure to have adequate funding to sustain the full complement of staff required to facilitate targeted product launch volumes;
changes in the approval policies or regulations that render our preclinical and clinical data insufficient for approval; or
lack of adequate funding to complete a clinical trial in a manner that is satisfactory to the applicable regulatory authority.

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The FDA, the EMA or the European Commission, or a comparable regulatory authority may require more information, including additional preclinical or clinical data to support approval, including data that would require us to perform additional clinical trials or modify our manufacturing processes, which may delay or prevent approval and our commercialization plans, or we may decide to abandon the development program. If we change our manufacturing processes or manufacturing facilities, we may be required to conduct additional clinical trials or other studies, which also could delay or prevent approval of our product candidates. If we were to obtain approval, regulatory authorities may approve any of our product candidates for fewer indications than we request (including failing to approve the most commercially promising indications) or for different indications from those obtained in other territories, may limit indications, may grant approval contingent on the performance of costly post-marketing clinical trials or other post-marketing commitments, or may approve a product candidate with a label that does not include the labeling claims necessary or desirable for the successful commercialization of that product candidate. Furthermore, the indication granted by health authorities may vary from region to region, which may impair our commercialization plans. Finally, even with licensures in the relevant regions we initially do not have production redundancy. Due to this, we are at higher risk of supply disruptions to regional factors that could impair our supply chains.
Even though we have received FDA approval for AUCATZYL in r/r adult B-ALL, and even if any of our other product candidates were to successfully obtain approval from the FDA, the European Commission or other comparable regulatory authorities in other jurisdictions, any approval might contain significant limitations related to use restrictions for specified age groups, warnings, precautions or contraindications, or may be subject to burdensome post-approval study or risk management requirements. If we are unable to obtain regulatory approval for one of our product candidates in one or more jurisdictions, or any approval contains significant limitations, we may not be able to obtain sufficient funding to continue the development of that product or generate revenues attributable to that product candidate. Also, the regulatory approval of AUCATZYL, or of any of our other current or future product candidates, once obtained, may be withdrawn. See the risk factor titled “—Even if we complete the necessary preclinical studies and clinical trials, the regulatory approval process is expensive, time-consuming and uncertain and may prevent us from obtaining approvals for the commercialization of some or all of our product candidates. As a result, we cannot predict when or if, and in which territories, we will obtain marketing approval to commercialize a product candidate.”
We may not be successful in our efforts to build a pipeline of product candidates.
A key element of our strategy is to use our expertise in tumor biology and cell programming and our proprietary and modular T cell programming technologies to develop what we believe are safer and more effective T cell therapies. Our initial focus is on the development of a pipeline of product candidates for the treatment of hematological cancers and the progression of these product candidates through clinical development. We also intend to develop follow-on, or next-generation, product candidates with additional elements of programming built into the programmed T cell product candidate to offer enhanced characteristics as compared to the earlier product generation, such as pharmacological control or insensitivity to checkpoint inhibition. However, we may not be able to develop product candidates that are safe and effective, or which compare favorably with our existing product candidates.
Even if we are successful in continuing to build our pipeline and developing next-generation product candidates or expanding into solid tumor indications or autoimmune diseases, the potential product candidates that we identify may not be suitable for clinical development, including as a result of lack of safety, lack of tolerability, lack of anti-tumor activity, or other characteristics that indicate that they are unlikely to be products that will receive marketing approval, achieve market acceptance or obtain reimbursements from third-party payors. If we do not successfully develop and commercialize product candidates or collaborate with others to do so, we will not be able to obtain product revenue in future periods, which could significantly harm our financial position and adversely affect the trading price of our ADSs.
Our preclinical programs may experience delays or may never advance to clinical trials, which would adversely affect our ability to obtain regulatory approvals or to commercialize these programs on a timely basis or at all, which would have an adverse effect on our business.
Many of our product candidates are in the preclinical development stage. The risk of failure of preclinical programs is high. Before we can commence clinical trials for a product candidate, we must complete extensive preclinical testing and studies to obtain regulatory clearance to initiate human clinical trials, including based on IND applications in effect in the United States and clinical trial applications (CTAs) in the EU and other European countries. We cannot be certain of the timely completion or outcome of our preclinical testing and studies and cannot predict if the FDA, the competent authorities of EU Member States or other regulatory authorities will accept our proposed clinical programs or if the outcome of our preclinical testing and studies will ultimately support the further development of our programs. As a result, we cannot be sure that we will be able to submit INDs or similar applications for our preclinical programs on the timelines we expect, if at all, and we cannot be sure that submission of INDs or similar applications will result in the FDA, the competent authorities of EU Member States or other regulatory authorities allowing clinical trials to begin.

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Clinical trials are difficult to design and implement, involve uncertain outcomes and may not be successful.
Human clinical trials are difficult to design and implement, in part because they are subject to rigorous regulatory requirements. The design of a clinical trial can determine whether its results will support approval of a product, and flaws in the design of a clinical trial may not become apparent until the clinical trial is well advanced. As an organization, we have limited experience designing clinical trials and may be unable to design and execute a clinical trial to support regulatory approval. There is a high failure rate for biologic products proceeding through clinical trials, which may be higher for our product candidates because they are based on new technology and engineered on a patient-by-patient basis. Many companies in the pharmaceutical and biotechnology industries have suffered significant setbacks in late-stage clinical trials even after achieving promising results in preclinical testing and earlier-stage clinical trials. Data obtained from preclinical and clinical activities are subject to varying interpretations, which may delay, limit or prevent regulatory approval. In addition, we may experience regulatory delays or rejections as a result of many factors, including changes in regulatory policy during the period of our product candidate development. Any such delays could negatively impact our business, financial condition, results of operations and prospects.
Success in preclinical studies or clinical trials may not be indicative of results in future clinical trials.
Results from preclinical studies are not necessarily predictive of future clinical trial results, and interim results of a clinical trial are not necessarily indicative of final results. For example, we have treated only a small number of patients in some of our ongoing clinical trials. For that reason, we do not know whether these candidates will be effective for the intended indications or safe in humans. Our product candidates may fail to show the desired safety and efficacy in clinical development despite positive results in preclinical studies or having successfully advanced through initial clinical trials. This failure to establish sufficient efficacy and safety could cause us to abandon clinical development of our product candidates.
We depend on enrollment of patients in our clinical trials for our product candidates. If we encounter difficulties enrolling patients in our clinical trials, our clinical development activities could be delayed or otherwise adversely affected.
Identifying and qualifying patients to participate in clinical trials of our product candidates is critical to our success. We may experience difficulties in patient enrollment in our clinical trials for a variety of reasons. The timely completion of clinical trials in accordance with their protocols depends, among other things, on our ability to enroll a sufficient number of patients who remain in the trial until its conclusion. The enrollment of patients depends on many factors, including:
the patient eligibility criteria defined in the protocol;
the number of patients with the disease or condition being studied;
the perceived risks and benefits of the product candidate in the trial;
clinicians’ and patients’ perceptions as to the potential advantages of the product candidate being studied in relation to other available therapies, including any new drugs that may be approved for the indications we are investigating or drugs that may be used off-label for these indications;
the size and nature of the patient population required for analysis of the trial’s primary and secondary endpoints;
the proximity of patients to trial sites;
the design of the clinical trial;
our ability to recruit clinical trial investigators with the appropriate competencies and experience;
competing clinical trials for similar therapies or other new therapeutics not involving T cell-based immunotherapy;
our ability to obtain and maintain patient consents;
disruptions to healthcare systems caused by global disease pandemics;
the risk that patients enrolled in clinical trials will drop out of the clinical trials before completion of their treatment; and
other public health factors.
In particular, some of our clinical trials will look to enroll patients with characteristics which are found in a very small population. For example, our clinical trial for AUTO4 seeks to enroll patients with peripheral T cell lymphoma, a rare and heterogeneous form of non-Hodgkin lymphoma (“NHL”). Other companies are conducting clinical trials with their redirected T cell therapies in multiple myeloma, pediatric or adult r/r B-ALL, or pediatric or adult ALL, and r/r DLBCL, r/r MCL and seek to enroll patients in their studies that may otherwise be eligible for our clinical trials, which could lead to slow recruitment and delays in our clinical programs. In addition, since the number of qualified clinical investigators is limited, we expect to conduct some of our clinical trials at the same clinical trial sites that some of our competitors use, which could further reduce the number of patients who are available for our clinical trials in these clinical trial sites.
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Moreover, because our product candidates represent a departure from more commonly used methods for cancer treatment and autoimmune diseases, potential trial participants and their doctors may be inclined to use conventional therapies, such as chemotherapy and antibody therapy, rather than participate in our clinical trials.
Delays in patient enrollment may result in increased costs or may affect the timing or outcome of the planned clinical trials, which could prevent completion of these clinical trials and adversely affect our ability to advance the development of our product candidates. In addition, many of the factors that may lead to a delay in the commencement or completion of clinical trials may also ultimately lead to the denial of regulatory approval of our product candidates.
The market opportunities for our product candidates may be limited to those patients who are ineligible for or have failed prior treatments and may be small, and our projections regarding the size of the addressable market may be incorrect.
Cancer therapies are sometimes characterized as first line, second line or later lines, and the FDA often approves new therapies initially only for later line use. When blood cancers are detected, they are treated with the first line of therapy with the intention of curing the cancer. This generally consists of chemotherapy, radiation, antibody drugs, tumor-targeted small molecules, or a combination of these. In addition, sometimes a bone marrow transplantation can be added to the first line therapy after the combination chemotherapy is given. If the patient’s cancer relapses, e.g. a B-cell malignancy, then they are given salvage therapies which can consist of more chemotherapy, radiation, CAR T cell products, antibody drug conjugates, tumor-targeted small molecules, or a combination of these, or a bone marrow transplant. Generally, the higher the line of therapy, the lower the chance of a cure. With third or higher line, the goal of the therapy in the treatment of lymphoma and myeloma is to control the growth of the tumor and extend the life of the patient, as a cure is unlikely to happen. Patients are generally referred to clinical trials in these situations.
Our product candidate AUTO4 is currently being developed as a treatment option for r/r TRBC1-positive T cell lymphoma patients. If AUTO4 is eventually approved as a second line therapy, we may seek to initiate a trial to position it as a consolidation therapy after first line chemotherapy in T cell lymphoma. There is no guarantee that any of our product candidates, even if approved in later lines, would be approved for an earlier line of therapy. In addition, we may have to conduct additional large randomized clinical trials prior to gaining approval for the earlier line of therapy.
Our projections of both the number of people who have the cancers we are targeting, as well as the size of the patient population subset of people with these cancers in a position to receive first, second, third and fourth line therapy and who have the potential to benefit from treatment with our product candidates, are based on our beliefs and estimates. These estimates have been derived from a variety of sources, including scientific literature, surveys of clinics, patient foundations, or market research and may prove to be incorrect. Further, new studies may change the estimated incidence or prevalence of these cancers.
The number of patients may turn out to be fewer than expected. Additionally, the potentially addressable patient population for our product candidates may be limited or may not be amenable to treatment with our product candidates. For instance, in our clinical trial for AUTO4, we are initially targeting a small patient population that suffers from peripheral T cell lymphoma, a rare and heterogeneous form of NHL. Even if we obtain significant market share for our product candidates, because the potential target populations are small, we may never achieve significant revenues without obtaining regulatory approval for additional indications or as part of earlier lines of therapy.
Adverse side effects or other safety risks associated with our product candidates could delay or preclude approval, cause us to suspend or discontinue clinical trials, cause us to abandon product candidates, limit the commercial profile of an approved label, or result in significant negative consequences following any potential marketing approval.
In clinical trials conducted by other companies involving CAR T cells, the most prominent acute toxicities included symptoms thought to be associated with CRS, such as fever, low blood pressure and kidney dysfunction. Some patients also experienced toxicity of the central nervous system, or neurotoxicity, such as confusion, tremor, cranial nerve dysfunction, seizures and speech impairment. CAR T cell associated neurotoxicity is also known as ICANS. Adverse events with the worst grades and attributed to CAR T cells were severe and life threatening in some patients. The life-threatening events were related to cardiac dysfunction, kidney dysfunction and neurotoxicity. Severe and life-threatening toxicities occurred mostly in the first two weeks after cell infusion and generally resolved within three - four weeks, but several patients died in clinical trials involving CAR T cells developed by other companies and academic institutions. For example, the FDA-approved label for AUCATZYL carries a boxed warning for, among other adverse side effects, the risk of developing secondary T-cell malignancies.
There can be no assurance that patients in ongoing or future trials of obe-cel in additional indications, AUTO4 or any of our other product candidates will not experience more severe CRS, unacceptable levels of neurotoxicity or other serious adverse events.

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Our clinical trials include cancer patients who are very sick and whose health is deteriorating, and we expect that additional clinical trials of our other product candidates will include similar patients with deteriorating health. It is possible that some of these patients may experience similar adverse side effects as were observed in clinical trials conducted by other companies and academic institutions involving CAR T cells, and that additional patients may die during our clinical trials for various reasons, including as a result of receiving our product candidates, because the patient’s disease is too advanced, or because the patient experiences medical problems that may not be related to our product candidate. Even if the deaths are not related to our product candidate, the deaths could affect perceptions regarding the safety of our product candidate.
Patient deaths and severe side effects caused by our product candidates, or by products or product candidates of other companies that are thought to have similarities with our therapeutic candidates, could result in the delay, suspension, clinical hold or termination of clinical trials by us, the FDA, the competent authorities of EU Member States or other regulatory authorities for a number of reasons. If we elect or are required to delay, suspend or terminate any clinical trial of any product candidates that we develop, the commercial prospects of such product candidates will be harmed and our ability to generate product revenues from any of these product candidates would be delayed or eliminated. Serious adverse events observed in clinical trials could hinder or prevent market acceptance of the product candidate at issue. Any of these occurrences may harm our business, prospects, financial condition and results of operations significantly.
If the clinical trials of any of our product candidates fail to demonstrate safety and efficacy to the satisfaction of the FDA, the EMA and the European Commission or other comparable regulatory authorities, or do not otherwise produce favorable results, we may incur additional costs or experience delays in completing, or ultimately be unable to complete, the development and commercialization of our product candidates.
We may not commercialize, market, promote or sell any product candidate without obtaining marketing approval from the FDA, the European Commission or other comparable regulatory authority, and we may never receive such approvals. Although we have received FDA approval for AUCATZYL in r/r adult B-ALL, it is impossible to predict accurately when or if any of our other product candidates will prove effective or safe in humans and will receive regulatory approval. Before obtaining marketing approval from regulatory authorities for the commercial sale of any of our product candidates, we must demonstrate through lengthy, complex and expensive preclinical testing and clinical trials that our product candidates are both safe and effective for use in each target indication. The potential label for the same product may differ in different territories based on the approval by different health authorities. Clinical testing is expensive, difficult to design and implement, can take many years to complete and is uncertain as to outcome. A failure of one or more clinical trials can occur at any stage of testing.
We may experience numerous unforeseen events prior to, during, or as a result of, clinical trials that could delay or prevent our ability to receive marketing approval or commercialize any of our product candidates, including:
the FDA, the EMA, the European Commission or other comparable regulatory authority may disagree as to the number, design or implementation of our clinical trials, or may not interpret the results from clinical trials as we do;
regulators or IRBs may not authorize us or our investigators to commence a clinical trial or conduct a clinical trial at a prospective trial site;
we may not reach agreement on acceptable terms with prospective clinical trial sites, the terms of which can be subject to extensive negotiation and may vary significantly among different clinical trial sites;
clinical trials of our product candidates may produce negative or inconclusive results;
we may decide, or regulators may require us, to conduct additional clinical trials or abandon product development programs;
the number of patients required for clinical trials of our product candidates may be larger than we anticipate, enrollment in these clinical trials may be slower than we anticipate, participants may drop out of these clinical trials at a higher rate than we anticipate or we may fail to recruit suitable patients to participate in a trial;
our third-party contractors may fail to comply with regulatory requirements or meet their contractual obligations to us in a timely manner, or at all;
regulators may issue a clinical hold, or regulators or IRBs may require that we or our investigators suspend or terminate clinical research for various reasons, including noncompliance with regulatory requirements or a finding that the participants are being exposed to unacceptable health risks;
the cost of clinical development of our product candidates may be greater than we anticipate;
the FDA, the competent authorities of EU Member States or other comparable regulatory authorities may fail to approve our manufacturing processes or facilities;
the supply or quality of our product candidates or other materials necessary to conduct clinical trials of our product candidates may be insufficient or inadequate;
our product candidates may have undesirable side effects or other unexpected characteristics, particularly given their novel, first-in-human application, such as cytokine-induced toxicity and T cell aplasia, causing us or our investigators, regulators or IRBs to suspend or terminate the clinical trials; and
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the approval policies and related requirements of the FDA, the EMA of the European Commission, or other comparable regulatory authorities may significantly change in a manner rendering our clinical data insufficient for approval.
To the extent that the results of the trials are not satisfactory for the FDA, the EMA, the European Commission, or regulatory authorities in other countries or jurisdiction to approve our BLA, MAA, or other comparable application, the commercialization of our product candidates may be significantly delayed, or we may be required to expend significant additional resources, which may not be available to us, to conduct additional trials in support of potential approval of our product candidates.
We may not be able to successfully create our own manufacturing infrastructure for supply of our, or our current or future collaborators', requirements of programmed T cell product candidates for use in clinical trials and for commercial sale.
Our manufacturing and commercialization strategy is based on establishing a fully integrated vein-to-vein product delivery cycle. We have constructed and use a new facility (which we call “The Nucleus”) in Stevenage, UK which we believe will support our commercial manufacturing needs for AUCATZYL and any future products. Although we have received approval and licensure from health authorities to enter into operations at this facility, we may not be able to maintain ongoing licensure requirements. At present, we currently also use facilities and equipment at the Cell and Gene Therapy Catapult, as well as third party vendors, for vector and cell manufacturing. Over time we can add additional manufacturing sites in the United States and in Europe as needed.
The implementation of this plan is subject to many risks. For example, the establishment of a cell-therapy manufacturing facility is a complex endeavor requiring knowledgeable individuals. Creating an internal manufacturing infrastructure will rely upon finding personnel with an appropriate background and training to staff and operate the facility. Should we be unable to find these individuals, we may need to rely on external contractors or train additional personnel to fill the needed roles. There are a small number of individuals with experience in cell therapy and the competition for these individuals is high.
We have limited experience as a company in designing and operating a commercial cell therapy or vector manufacturing facility and may not be successful in sustaining our own manufacturing capability. We may establish additional manufacturing sites as we expand our commercial footprint to multiple geographies, which may lead to regulatory delays or prove costly. Our manufacturing operations could be affected by cost-overruns, unexpected delays, equipment failures, labor shortages, natural disasters, power failures and numerous other factors, or we may not be successful in establishing sufficient capacity to produce our product candidates in sufficient quantities to meet the requirements for the potential launch or to meet potential future demand, all of which could prevent us from realizing the intended benefits of our manufacturing strategy and have a material adverse effect on our business.
We may not be successful in achieving cost of goods at commercial scale that provide for an attractive margin.
We believe that our current, enclosed manufacturing processes are fit for commercial scale and we anticipate they will enable commercial supply at an economical cost. However, we have not yet sustained manufacturing capacity at commercial scale and may underestimate the cost and time required to do so, and may overestimate cost reductions from economies of scale that can be realized with our manufacturing processes. We may ultimately be unable to manage the cost of goods for our product candidates to levels that will allow for a margin in line with our expectations and return on investment if and when those product candidates are commercialized.
Our products and product candidates are biologics and the manufacture of such biologics is complex and we may encounter difficulties in production, particularly with respect to process development or scaling-out of our manufacturing capabilities. If we encounter such difficulties, our ability to provide supply of our product candidates for clinical trials or our products for patients could be delayed or stopped.
We have developed a process for manufacturing programmed T cells in a fully enclosed system designed to minimize the risk of contamination, and we have improved the viral transduction process to help eliminate processing inconsistencies. We believe that our current processes are suitable for commercialization. While we have established a process which we believe is scalable for commercial production, each manufacturing process must be validated through the performance of process validation runs to guarantee that the facility, personnel, equipment, and process work as designed. We have not yet manufactured or processed our product candidates on a commercial scale and may not be able to do so for any of our products or product candidates.
We, like other manufacturers of biologic products, may encounter difficulties in production, particularly in scaling up or out, validating the production process, and assuring high reliability of the manufacturing process. These problems include delays or break-downs in logistics and shipping, difficulties with production costs and yields, quality control, and product testing, operator error, lack of availability of qualified personnel, as well as failure to comply with strictly enforced federal, state and foreign regulations, which are updated regularly.

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Furthermore, if microbial, viral or other contaminants are discovered in our supply of products or product candidates, or in the manufacturing facilities, such manufacturing facilities may need to be closed for an extended period of time to investigate and remedy the contamination. We cannot assure you that any of these or other issues relating to the manufacture of our products or product candidates will not occur in the future. Any delay or interruption in the supply of clinical trial supplies could delay the completion of clinical trials, increase the costs associated with maintaining clinical trial programs and, depending upon the period of delay, require us to begin new clinical trials at additional expense or terminate clinical trials completely.
The manufacture and delivery of programmed T cell therapies to patients involves complex, integrated processes, including harvesting T cells from patients, programming the T cells ex vivo, multiplying the T cells to obtain the desired dose, and ultimately infusing the T cells back into a patient’s body. As a result of the complexities, the cost to manufacture biologics in general, and our programmed T cell products and product candidates in particular, is higher than traditional small molecule chemical compounds, and the manufacturing process is less reliable and is more difficult and costly to reproduce. In addition, our manufacturing process will be susceptible to product loss or failure due to logistical issues associated with the collection of white blood cells from the patient, shipping such patient material to the manufacturing site, storing and processing such patient material, shipping the patient material with the programmed T cells back to the patient, and infusing the patient with the final product. Other manufacturing issues include the differences in patient starting materials, inconsistency in cell growth, variability in product characteristics, interruptions in the manufacturing process, equipment or reagent failure, improper installation or operation of equipment, and vendor or operator error. Even minor deviations from normal manufacturing processes could result in reduced production yields, product defects, and other supply disruptions. For example, in the FELIX clinical trial of obe-cel reported at the ASH Annual Meeting in December 2023, 7 patients out of the 153 patients enrolled on to the clinical trial did not receive an infusion of obe-cel due to manufacturing related reasons. If we lose, destroy or otherwise impair the patient materials at any point in the vein-to-vein supply chain, the manufacturing process for that patient will need to be restarted and the resulting delay may adversely affect that patient’s outcome due to the risk of disease progression.
In addition, because our products and product candidates are manufactured for each particular patient, we will be required to maintain a chain of identity with respect to materials as they move from the patient to the manufacturing facility, through the manufacturing process, and back to the patient. Maintaining such a chain of identity is difficult and complex, and failure to do so could result in adverse patient outcomes, loss of product, or regulatory action including withdrawal of our products from the market. Further, as product candidates are developed through preclinical to late-stage clinical trials towards approval and commercialization, changes may be considered in an effort to optimize processes or clinical approach. Any changes to a process or clinical approach must serve the needs of the patient and delivery must be economically viable. Such changes carry the risk that they will not achieve these intended objectives, and any of these changes could cause our product candidates to perform differently and affect the results of planned clinical trials or other future clinical trials.
Our manufacturing facilities also require commissioning and validation activities to demonstrate that they operate as designed, and are subject to government inspections by the FDA, the MHRA, the competent authorities of EU Member States and other comparable regulatory authorities. If we are unable to reliably produce products to specifications acceptable to the regulatory authorities, we may not obtain or maintain the approvals we need to manufacture our products. Further, our facilities may fail to pass government inspections prior to or after the commercial launch of our product candidates, which would cause significant delays and additional costs required to remediate any deficiencies identified by the regulatory authorities. Any of these challenges could delay completion of clinical trials, require bridging clinical trials or the repetition of one or more clinical trials, increase clinical trial costs, delay approval of our product candidates, impair commercialization efforts of our products, increase our cost of goods, and have an adverse effect on our business, financial condition, results of operations and growth prospects.
Prior treatments can alter the patient's disease and negatively impact chances for achieving clinical activity with our programmed T cells.
Patients with hematological cancers receive highly toxic lympho-depleting chemotherapy as their initial treatments. These therapies can impact the viability of the T cells collected from the patient and can contribute to highly variable responses to programmed T cell therapies. Patients could also have received prior therapies that target the same target antigen on the cancer cells as our intended programmed T cell product candidate and thereby lead to a selection of cancer cells with low or no expression of the target. As a result, our programmed T cell product candidates may not recognize the cancer cell and may fail to achieve clinical activity. For example, patients with autoimmune diseases receive multiple types of treatment including toxic lympho-depleting chemotherapies, which may have an impact on the viability of T cells collected from a patient and may also contribute to highly variable responses to programmed T cell therapies. If any of our product candidates do not achieve a sufficient level of clinical activity, we may discontinue the development of that product candidate, which could have an adverse effect on the value of our ADSs.

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We may expend our resources to pursue a particular product candidate or indication and fail to capitalize on product candidates or indications that may be more profitable or have a greater likelihood of success.
Because we have limited financial and management resources, we focus on research programs and product candidates that we identify for specific indications. As a result, we may forego or delay pursuit of opportunities with other product candidates or for other indications that later prove to have greater commercial potential. Our resource allocation decisions may cause us to fail to capitalize on viable commercial products or profitable market opportunities. Our spending on current and future research and development programs and product candidates for specific indications may not yield any commercially viable products. If we do not accurately evaluate the commercial potential or target market for a particular product candidate, we may relinquish valuable rights to that product candidate through collaboration, licensing or other royalty arrangements in cases in which it would have been more advantageous for us to retain sole development and commercialization rights to such product candidate.
We plan to seek, but may fail to obtain breakthrough therapy designation or RMAT designation from the FDA and PRIME designation from the EMA, and may pursue accelerated approval for some or all of our programmed T cell product candidates, which may prolong the regulatory approval process for our product candidates.
In 2012, the FDA established a breakthrough therapy designation which is intended to expedite the development and review of product candidates that treat serious or life-threatening diseases when “preliminary clinical evidence indicates that the drug may demonstrate substantial improvement over existing therapies on one or more clinically significant endpoints, such as substantial treatment effects observed early in clinical development.” The designation of a product candidate as a breakthrough therapy provides potential benefits that include more frequent meetings with FDA to discuss the development plan for the product candidate and ensure collection of appropriate data needed to support approval; more frequent written correspondence from the FDA about such things as the design of the proposed clinical trials and use of biomarkers; guidance on an efficient drug development program, beginning as early as Phase 1; organizational commitment involving senior managers; and eligibility for rolling review and priority review. The frequency of communication from the FDA is intended to allow for questions and issues to be resolved quickly, which often leads to earlier drug approval and access by patients.
RMAT was introduced as a new designation under the 21st Century Cures Act for the development and review of certain regenerative medicine therapies. To receive RMAT designation, a regenerative medicine product candidate must be intended to treat, modify, reverse, or cure a serious or life-threatening disease or condition with preliminary clinical evidence indicating that the drug has the potential to address unmet medical need. RMAT designation does not require evidence to indicate that the drug may offer a substantial improvement over available therapies, as breakthrough designation requires. In February 2019, the FDA released guidance that clarified that gene therapies, including genetically modified cells, that lead to a durable modification of cells or tissues, may meet the definition of a regenerative medicine therapy for RMAT designation.
Similar to breakthrough designation, an RMAT product candidate receives: intensive guidance on an efficient drug development program; intensive involvement of senior managers and experienced staff on a proactive, collaborative and cross-disciplinary review; and a rolling review. Regenerative medicine therapies that qualify for RMAT designation may also qualify for other FDA expedited programs, if they meet the criteria for such programs.
Similarly, the EMA has established the PRIME scheme to expedite the development and review of product candidates that show a potential to address to a significant extent an unmet medical need, based on early clinical data. Likewise, the MHRA has established the ILAP scheme to expedite the development and review of product candidates that show a potential to address to a significant extent an unmet medical need, based on early clinical data.
We intend to seek breakthrough therapy designation, RMAT designation, ILAP or PRIME designation for some or all of our programmed T cell product candidates that may qualify. There is no assurance that we will obtain breakthrough therapy designation or RMAT designation, or that we will obtain access to PRIME or ILAP for any of our product candidates.
Breakthrough therapy designation, RMAT designation ILAP and PRIME eligibility do not change the standards for product approval, and there is no assurance that such designation or eligibility will result in expedited review or approval. Additionally, breakthrough therapy designation, RMAT designation and access to PRIME or ILAP can each be revoked if the criteria for eligibility cease to be met as clinical data emerges.
We may also seek accelerated approval for certain of our product candidates. Under the FDA’s fast track and accelerated approval programs, the FDA may approve a drug or biologic for a serious or life-threatening illness that provides meaningful therapeutic benefit to patients over existing treatments based upon a surrogate endpoint that is reasonably likely to predict clinical benefit, or on a clinical endpoint that can be measured earlier than irreversible morbidity or mortality, that is reasonably likely to predict an effect on irreversible morbidity or mortality or other clinical benefit, taking into account the severity, rarity, or prevalence of the condition and the availability or lack of alternative treatments. For drugs granted accelerated approval, post-marketing confirmatory trials have been required to describe the anticipated effect on irreversible morbidity or mortality or other clinical benefit. These confirmatory trials must be completed with due diligence.

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Moreover, the FDA may withdraw approval of our indication approved under the accelerated approval pathway if, for example:
the trial or trials required to verify the predicted clinical benefit of our product candidates fail to verify such benefit or do not demonstrate sufficient clinical benefit to justify the risks associated with the drug;
other evidence demonstrates that our product candidates are not shown to be safe or effective under the conditions of use;
we fail to conduct any required post-approval trial of our product candidates with due diligence; or
we disseminate false or misleading promotional materials relating to the relevant product candidate.
Risks Related to Our Business Operations
As a company based outside of the United States, our business is subject to economic, political, regulatory and other risks associated with international operations.
Our business is subject to risks associated with conducting business outside of the United States, as our company is based in the UK and conducts operations internationally. Many of our suppliers and clinical trial relationships are located outside the United States. Accordingly, our future results could be harmed by a variety of factors, including:
economic weakness, including inflation, or political instability in particular non-U.S. economies and markets;
differing and changing regulatory requirements for product approvals;
differing jurisdictions could present different issues for securing, maintaining or obtaining freedom to operate in such jurisdictions;
potentially reduced protection for intellectual property rights;
difficulties in compliance with different, complex and changing laws, regulations and court systems of multiple jurisdictions and compliance with a wide variety of foreign laws, treaties and regulations;
changes in non-U.S. regulations and customs, tariffs and trade barriers;
changes in non-U.S. currency exchange rates of the pound sterling, U.S. dollar, euro and currency controls;
changes in a specific country’s or region’s political or economic environment, including the implications of the UK's withdrawal from the EU;
trade protection measures, import or export licensing requirements or other restrictive actions by governments;
differing reimbursement regimes and price controls in certain non-U.S. markets;
negative consequences from changes in tax laws;
compliance with tax, employment, immigration and labor laws for employees living or traveling abroad, including, for example, the variable tax treatment in different jurisdictions of options granted under our share option schemes or equity incentive plans;
workforce uncertainty in countries where labor unrest is more common than in the United States;
litigation or administrative actions resulting from claims against us by current or former employees or consultants individually or as part of class actions, including claims of wrongful terminations, discrimination, misclassification or other violations of labor law or other alleged conduct;
difficulties associated with staffing and managing international operations, including differing labor relations;
production shortages resulting from any events affecting raw material supply or manufacturing capabilities abroad; and
business interruptions resulting from geopolitical actions, including war and terrorism, natural disasters, including earthquakes, typhoons, floods and fires, or health epidemics, such as the coronavirus pandemic.

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The United Kingdom’s withdrawal from the EU may have a negative effect on global economic conditions, financial markets and our business, which could reduce the price of our ordinary shares.
Following Brexit, the UK and the EU signed an EU-UK Trade and Cooperation Agreement (“TCA”), which became provisionally applicable on January 1, 2021 and entered into force on May 1, 2021. This agreement provides details on how some aspects of the UK and EU’s relationship will operate going forwards however there are still uncertainties. The TCA primarily focuses on ensuring free trade between the EU and the UK in relation to goods, including medicinal products. Among the changes that have occurred are that Great Britain (England, Scotland and Wales) is treated as a “third country,” a country that is not a member of the EU and whose citizens do not enjoy the EU right to free movement. Northern Ireland continues to follow many aspects of the EU regulatory rules, particularly in relation to trade in goods. As part of the TCA, the EU and the UK recognize GMP inspections carried out by the other party and the acceptance of official GMP documents issued by the other party. The TCA also encourages, although it does not oblige, the parties to consult one another on proposals to introduce significant changes to technical regulations or inspection procedures. Among the areas of absence of mutual recognition are batch testing and batch release. The UK has unilaterally agreed to accept EU batch testing and batch release.
However, the EU continues to apply EU laws that require batch testing and batch release to take place in the EU territory. This means that medicinal products that are tested and released in the UK must be retested and re-released when entering the EU market for commercial use.
As it relates to marketing authorizations, Great Britain has a separate regulatory submission process, approval process and a separate national marketing authorization. Northern Ireland continues, however, to be covered by the marketing authorizations granted by the European Commission. For example, the scope of a marketing authorization for a medicinal product granted by the European Commission or by the competent authorities of EU Member States no longer encompasses Great Britain (England, Scotland and Wales). In these circumstances, a separate marketing authorization granted by the UK competent authorities is required to place medicinal products on the market in Great Britain. Northern Ireland continues, however, to be covered by the marketing authorizations granted by the European Commission.
On February 27, 2023, the UK Government and the European Commission reached a political agreement on the so-called “Windsor Framework”. The Framework is intended to revise the Northern Ireland Protocol to address some of the perceived shortcomings in its operation. The agreement was adopted at the Withdrawal Agreement Joint Committee on March 24, 2023. If the changes are adopted in the form proposed, medicinal products to be placed on the market in the UK will be authorized solely in accordance with UK laws. Northern Ireland would be reintegrated back into a UK-only regulatory environment under the authority of the MHRA with respect to all medicinal products. The implementation of the Windsor Framework would occur in stages, with new arrangements relating to the supply of medicinal products into Northern Ireland anticipated to take effect in 2025.
A significant proportion of the regulatory framework in the UK applicable to medicinal products is currently derived from EU Directives and Regulations. The potential for UK legislation to diverge from EU legislation following Brexit could materially impact the regulatory regime with respect to the development, manufacture, import, approval, and commercialization of our product candidates in the UK or the EU. If we are slow or unable to adapt to changes in existing requirements or the adoption of new requirements or policies governing clinical trials, our development plans may be impacted.
All of these changes could increase our costs and otherwise adversely affect our business. Any delay in obtaining, or an inability to obtain, any regulatory approvals, as a result of Brexit or otherwise, would prevent us from commercializing our product candidates in the UK or the EU and restrict our ability to generate revenue and achieve and sustain profitability. In addition, we may be required to pay taxes or duties or be subjected to other hurdles in connection with the importation of our product candidates into the EU. If any of these outcomes occur, we may be forced to restrict or delay efforts to seek regulatory approval in the UK or the EU for our product candidates, or incur significant additional expenses to operate our business, which could significantly and materially harm or delay our ability to generate revenues or achieve profitability of our business. Any further changes in international trade, tariff and import/export regulations as a result of Brexit or otherwise may impose unexpected duty costs or other non-tariff barriers on us. These developments, or the perception that any of them could occur, may significantly reduce global trade and, in particular, trade between the impacted nations and the UK. It is also possible that Brexit may negatively affect our ability to attract and retain employees, particularly those from the EU.
Exchange rate fluctuations may materially affect our results of operations and financial condition.
Our functional currency and that of our subsidiaries is the pound sterling, the U.S. dollar, the euro and Swiss franc and our reporting currency is the U.S. dollar. Given that our functional currency and that of our subsidiaries differ from our reporting currency, fluctuations in currency exchange rates between the U.S. dollar and the functional currencies of our subsidiaries could materially and adversely affect our business. There may be instances in which costs and revenue will not be matched with respect to currency denomination. Currently, we do not have any exchange rate hedging arrangements in place.

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Additionally, although we are based in the UK, we source research and development, manufacturing, consulting and other services from the United States and other countries. Further, potential future revenue may be derived from the United States, countries within the euro zone, and various other countries around the world. As a result, our business and the price of our ADSs may be affected by fluctuations in foreign exchange rates not only between the pound sterling and the U.S. dollar, but also the euro, swiss franc, and other currencies, which may have a significant impact on our results of operations and cash flows from period to period. As a result, to the extent we continue our expansion on a global basis, we expect that increasing portions of our revenue, cost of revenue, assets and liabilities will be subject to fluctuations in currency valuations. We may experience economic loss and a negative impact on earnings or net assets solely as a result of currency exchange rate fluctuations.
We expect to continue to expand our development, commercial and regulatory capabilities and have recently developed sales, marketing and distribution capabilities, and as a result, we may encounter difficulties in managing our growth, which could disrupt our operations.
As of September 30, 2023, we had 610 employees, 607 of whom are full-time. We expect to experience significant growth in the number of our employees and the scope of our operations, particularly as our development and commercialization plans and strategies develop, and as we further develop as a public company, we may need additional managerial, operational, financial and other personnel, including personnel to support our product development and commercialization efforts. Future growth will impose significant added responsibilities on members of management, including:
identifying, recruiting, integrating, maintaining and motivating additional employees;
managing our internal development efforts effectively, including the clinical, FDA and EMA review processes for our product candidates; and
improving our operational, financial and management controls, reporting systems and procedures.
There are a small number of individuals with experience in cell therapy and the competition for these individuals is high. Our future financial performance and our ability to commercialize our product candidates will depend, in part, on our ability to effectively manage any future growth, and our management may also have to divert a disproportionate amount of its attention away from day-to-day activities in order to devote a substantial amount of time to managing these growth activities.
If we are not able to effectively manage the size of our organization, we may not be able to successfully implement the tasks necessary to further develop and commercialize our product candidates and, accordingly, may not achieve our research, development and commercialization goals.
In addition to expanding our organization, we are building out our development and manufacturing capabilities, which requires significant capital expenditures. If these capital expenditures are higher than expected, it may adversely affect our financial condition and capital resources. In addition, if the availability of manufacturing capacity is delayed, it may limit our ability to rapidly expand the size of our organization in order to meet our corporate goals.
Our future success depends on our ability to retain key members of senior management and to attract, retain and motivate qualified personnel.
Our ability to compete in the highly competitive biopharmaceutical industry depends upon our ability to attract and retain highly qualified management, research and development, clinical, financial and business development personnel. We are highly dependent on our management, scientific and medical personnel. Each member of our senior management may terminate their employment with us at any time. We do not maintain ‘‘key person’’ insurance for any of our employees.
Recruiting and retaining qualified scientific and clinical personnel and, if we progress the development of any of our product candidates, commercialization, manufacturing and sales and marketing personnel, will be critical to our success. The loss of the services of members of our senior management or other key employees could impede the achievement of our research, development and commercialization objectives and seriously harm our ability to successfully implement our business strategy. Furthermore, replacing members of our senior management and key employees may be difficult and may take an extended period of time because of the limited number of individuals in our industry with the breadth of skills and experience required to successfully develop, gain regulatory approval of and commercialize our product candidates. Our success also depends on our ability to continue to attract, retain and motivate highly skilled junior, mid-level and senior managers, as well as junior, mid-level and senior scientific and medical personnel. Competition to hire from this limited candidate pool is intense, and we may be unable to hire, train, retain or motivate these key personnel on acceptable terms given the competition among numerous pharmaceutical and biotechnology companies for similar personnel.
We also experience competition for the hiring of scientific and clinical personnel from universities and research institutions. In addition, we rely on consultants and advisors, including scientific and clinical advisors, to assist us in formulating our research and development and commercialization strategy. Our consultants and advisors may have commitments under consulting or advisory contracts with other entities that may limit their availability to us. If we are unable to continue to attract and retain high-quality personnel, our ability to pursue our growth strategy will be limited.
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If we engage in future acquisitions or strategic collaborations, this may increase our capital requirements, dilute our shareholders, cause us to incur debt or assume contingent liabilities and subject us to other risks.
From time to time, we may also evaluate various acquisitions and strategic collaborations, including collaborating with respect to our product candidates, or licensing or acquiring complementary products, intellectual property rights, technologies or businesses, as we may deem appropriate to carry out our business plan. Any potential acquisition or strategic collaboration, such as the Blackstone Collaboration Agreement and the BioNTech License Agreement, may entail numerous risks, including:
increased operating expenses and cash requirements;
the assumption of additional indebtedness or contingent liabilities;
negative covenants that may affect our ability to develop and commercialize our product candidates;
assimilation of operations, intellectual property and products of an acquired company, including difficulties associated with integrating new personnel;
the diversion of our management’s attention from our existing programs and initiatives in pursuing such a strategic partnership, merger or acquisition;
retention of key employees, the loss of key personnel and uncertainties in our ability to maintain key business relationships;
risks and uncertainties associated with the other party to such a transaction, including the prospects of that party and their existing products or product candidates and regulatory approvals; and
our inability to generate revenue from acquired technology sufficient to meet our objectives in undertaking the acquisition or even to offset the associated acquisition and maintenance costs.
Additionally, if we undertake acquisitions, we may issue dilutive securities, assume or incur debt obligations, incur large one-time expenses and acquire intangible assets that could result in significant future amortization expenses. Moreover, we may not be able to locate suitable acquisition opportunities and this inability could impair our ability to grow or obtain access to technology or products that may be important to the development of our business.
If our information technology systems or data, or those of third parties upon which we rely, are or were compromised, we could experience adverse consequences resulting from such compromise, including but not limited to regulatory investigations or actions; litigation; fines and penalties; disruptions of our business operations; reputational harm; loss of revenue or profits; and other adverse consequences.
In the ordinary course of our business, we and the third parties upon which we rely, collect, receive, store, process, generate, use, transfer, disclose, make accessible, protect, secure, dispose of, transmit, and share (collectively, process) personal data and other sensitive information, including proprietary and confidential business data, trade secrets, intellectual property, data we collect about trial participants in connection with clinical trials and sensitive third-party data (collectively, sensitive data). As a result, we and the third parties upon which we rely face a variety of evolving threats, including but not limited to ransomware attacks, which could cause security incidents.
Cyber-attacks, malicious internet-based activity, online and offline fraud, and other similar activities threaten the confidentiality, integrity, and availability of our sensitive data and information technology systems, and those of the third parties upon which we rely. Such threats are prevalent and continue to rise, are increasingly difficult to detect, and come from a variety of sources, including traditional computer “hackers,” threat actors, “hacktivists,” organized criminal threat actors, personnel (such as through theft or misuse), sophisticated nation states, and nation-state-supported actors.
Some actors now engage and are expected to continue to engage in cyber-attacks, including without limitation nation-state actors for geopolitical reasons and in conjunction with military conflicts and defense activities. During times of war and other major conflicts, we, and the third parties upon which we rely, may be vulnerable to a heightened risk of these attacks, including retaliatory cyber-attacks, that could materially disrupt our systems and operations, supply chain, and ability to produce, sell and distribute our products and services.
We and the third parties upon which we rely are subject to a variety of evolving threats, including but not limited to social-engineering attacks (including through deep fakes, which may be increasingly more difficult to identify as fake, and phishing attacks), malicious code (such as viruses and worms), malware (including as a result of advanced persistent threat intrusions), denial-of-service attacks, credential stuffing, credential harvesting, personnel misconduct or error, ransomware attacks, supply-chain attacks, software bugs, server malfunctions, software or hardware failures, loss of data or other information technology assets, adware, attacks enhanced or facilitated by artificial intelligence (“AI”), telecommunications failures, earthquakes, fires, floods, and other similar threats.

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In particular, severe ransomware attacks are becoming increasingly prevalent and can lead to significant interruptions in our operations (including our clinical trial activities), ability to provide our products or services, loss of sensitive data and income, reputational harm, and diversion of funds. Extortion payments may alleviate the negative impact of a ransomware attack, but we may be unwilling or unable to make such payments due to, for example, applicable laws or regulations prohibiting such payments.
Remote work has become more common and has increased risks to our information technology systems and data, as more of our employees utilize network connections, computers, and devices outside our premises or network, including working at home, while in transit and in public locations. Additionally, future or past business transactions (such as acquisitions or integrations) could expose us to additional cybersecurity risks and vulnerabilities, as our systems could be negatively affected by vulnerabilities present in acquired or integrated entities’ systems and technologies. Furthermore, we may discover security issues that were not found during due diligence of such acquired or integrated entities, and it may be difficult to integrate companies into our information technology environment and security program.
We rely on third-party service providers and technologies to operate critical business systems to process sensitive data in a variety of contexts, including, without limitation, cloud-based infrastructure, data center facilities, encryption and authentication technology, employee email, content delivery to customers, and other functions. We also rely on third-party research collaborators, CROs, contract manufacturers, and suppliers for many aspects of our business, including research and development in connection with our clinical trial activities. Our reliance on such third-party service providers, technologies and collaborators could introduce new cybersecurity risks and vulnerabilities, including supply-chain attacks, and other threats to our business operations. Our ability to monitor these third parties’ information security practices is limited, and these third parties may not have adequate information security measures in place. If our third-party service providers experience a security incident or other interruption, we could experience adverse consequences. While we may be entitled to damages if our third-party service providers fail to satisfy their privacy or security-related obligations to us, any award may be insufficient to cover our damages, or we may be unable to recover such award. In addition, supply-chain attacks have increased in frequency and severity, and we cannot guarantee that third parties’ infrastructure in our supply chain or our third-party partners’ supply chains have not been compromised.
While we have implemented security measures designed to protect against security incidents, there can be no assurance that these measures will be effective. We take steps designed to detect, mitigate, and remediate vulnerabilities in our information systems (such as our hardware and/or software, including that of third parties upon which we rely). We may not, however, be able to detect and remediate all such vulnerabilities, including on a timely basis. Further, we may experience delays in developing and deploying remedial measures and patches designed to address any such identified vulnerabilities. Vulnerabilities could be exploited and result in a security incident.
Any of the previously identified or similar threats could cause a security incident or other interruption that could result in unauthorized, unlawful, or accidental acquisition, modification, destruction, loss, alteration, encryption, disclosure of, or access to our sensitive data or our information technology systems, or those of the third parties upon which we rely. A security incident or other interruption could disrupt our ability (and that of third parties upon which we rely) to provide our products and services.
We may expend significant resources or modify our business activities (including our clinical trial activities) to try to protect against security incidents. Additionally, certain data privacy and security obligations may require us to implement and maintain specific security measures or industry-standard or reasonable security measures to protect our information technology systems and sensitive data. Applicable data privacy and security obligations may require us to notify relevant stakeholders, including affected individuals, customers, regulators, and investors, of security incidents or to implement other requirements, such as providing credit monitoring. Such disclosures and compliance with such requirements are costly, and the disclosure or the failure to comply with such requirements could lead to adverse consequences.
If we (or a third party upon which we rely) experience a security incident or are perceived to have experienced a security incident, we may experience adverse consequences, such as government enforcement actions (for example, investigations, fines, penalties, audits, and inspections); additional reporting requirements and/or oversight; restrictions on processing sensitive data (including personal data); litigation (including class claims); indemnification obligations; negative publicity; reputational harm; monetary fund diversions; diversion of management attention; interruptions in our operations (including in connection with our clinical trial activities); financial loss; and other similar harms. Security incidents and attendant consequences may prevent or cause customers to stop using our products and services, deter new customers from using our products and services, and negatively impact our ability to grow and operate our business.
Our contracts may not contain limitations of liability, and even where they do, there can be no assurance that limitations of liability in our contracts are sufficient to protect us from liabilities, damages, or claims related to our data privacy and security obligations. We maintain cybersecurity insurance coverage for claims related to cyber crime (up to £250,000 per occurrence) and other cybersecurity incidents (up to £6,000,000 per occurrence). However, we cannot be sure that our insurance coverage will be adequate or sufficient to protect us from or to mitigate liabilities arising out of our privacy and security practices, that such coverage will continue to be available on commercially reasonable terms or at all, or that such coverage will pay future claims.

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In addition to experiencing a security incident, third parties may gather, collect, or infer sensitive data about us from public sources, data brokers, or other means that reveals competitively sensitive details about our organization and could be used to undermine our competitive advantage or market position. Additionally, sensitive data of ours could be leaked, disclosed, or revealed as a result of or in connection with our employees’, personnel’s, or vendors’ use of generative AI technologies.
We are subject to stringent and evolving U.S. and foreign laws, regulations and rules, contractual obligations, industry standards, policies and other obligations related to data privacy and security. Our actual or perceived failure to comply with such obligations could lead to regulatory investigations or actions; litigation (including class claims) and mass arbitration demands; fines and penalties; disruptions of our business operations; reputational harm; loss of revenue or profits; loss of customers or sales; and other adverse business consequences.
In the ordinary course of business, we process personal data and other sensitive information, including proprietary and confidential business data, trade secrets, intellectual property, and data we collect about trial participants in connection with clinical trials. Our data processing activities may subject us to numerous data privacy and security obligations, such as various laws, regulations, guidance, industry standards, external and internal privacy and security policies, contractual requirements, and other obligations relating to data privacy and security.
An increasing number of laws, regulations, and industry standards may govern data privacy and security. For example, the EU GDPR and the UK GDPR impose strict requirements for processing personal data. Under the EU GDPR, companies may face temporary or definitive bans on data processing and other corrective actions; fines of up to 20 million Euros under the EU GDPR, 17.5 million pounds sterling under the UK GDPR or, in each case, 4% of annual global revenue, whichever is greater; or private litigation related to processing of personal data brought by classes of data subjects or consumer protection organizations authorized at law to represent their interests.
In addition, the processing of “special category personal data”, such as health information, may also impose heightened compliance burdens under the EU GDPR and the UK GDPR and is a topic of active interest among relevant regulators.
The EU GDPR provides that European Economic Area (“EEA”) Member States may make their own further laws and regulations to introduce specific requirements related to the processing of “special categories of personal data”, including personal data related to health.
This fact may lead to greater divergence on the law that applies to the processing of such data types across the EEA and/or UK, compliance with which, as and where applicable, may increase our costs and could increase our overall compliance risk. Such country-specific regulations could also limit our ability to collect, use and share data in the context of our EEA and/or UK operations, and/or could cause our compliance costs to increase, ultimately having an adverse impact on our business, and harming our business and financial condition.
In the ordinary course of business, we transfer personal data from Europe and other jurisdictions to the United States. Europe and other jurisdictions have enacted laws requiring data to be localized or limiting the transfer of personal data to other countries. In particular, the EEA, the UK, and Switzerland have significantly restricted the transfer of personal data to the United States and other countries whose privacy laws it believes are inadequate. Other jurisdictions may adopt similarly stringent interpretations of their data localization and cross-border data transfer laws. Although there are currently various mechanisms that may be used to transfer personal data from the EEA, the UK, and Switzerland to the United States in compliance with law, such as the EEA standard contractual clauses, the UK’s International Data Transfer Agreement/Addendum, the Swiss-U.S. Data Privacy Framework (once officially recognized as a valid data transfer mechanism by the Swiss government), and the EU-U.S. Data Privacy Framework and the UK Extension thereto (which allows for transfers to relevant U.S.-based organizations who self-certify compliance and participate in the Framework), these mechanisms are subject to legal challenges, and there is no assurance that we can satisfy or rely on these measures to lawfully transfer personal data to the United States. If there is no lawful manner for us to transfer personal data from the EEA, the UK, Switzerland, or other jurisdictions to the United States, or if the requirements for a legally-compliant transfer are too onerous, we could face significant adverse consequences, including the interruption or degradation of our operations, the need to relocate part of or all of our business or data processing activities to other jurisdictions at significant expense, increased exposure to regulatory actions, substantial fines and penalties, the inability to transfer data and work with partners, vendors and other third parties, and injunctions against our processing or transferring of personal data necessary to operate our business. Additionally, companies that transfer personal data out of the EEA and UK to other jurisdictions, particularly to the United States, are subject to increased scrutiny from regulators, individual litigants, and activist groups. Some European regulators have ordered certain companies to suspend or permanently cease certain transfers out of Europe for allegedly violating the EU GDPR’s cross-border data transfer limitations.

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In the United States, federal, state and local governments have enacted numerous data privacy and security laws, including data breach notification laws, data privacy laws, consumer protection laws (e.g., Section 5 of the Federal Trade Commission Act), and other similar laws (e.g., wiretapping laws). For example, HIPAA, as amended by the HITECH, imposes specific requirements relating to the privacy, security and transmission of protected health information. Additionally, in the past few years, numerous U.S. states—including California, Virginia, Colorado, Connecticut, and Utah—have enacted comprehensive privacy laws that impose certain obligations on covered businesses, including providing specific disclosures in privacy notices and affording residents with certain rights concerning their personal data. As applicable, such rights may include the right to access, correct, or delete certain personal data, and to opt-out of certain data processing activities, such as targeted advertising, profiling, and automated decision-making. The exercise of these rights may impact our business and ability to provide our products and services. Certain states also impose stricter requirements for processing certain personal data, including sensitive data, such as conducting data privacy impact assessments. These state laws allow for statutory fines for noncompliance. For example the CCPA provides fines of up to $7,500 per intentional violation and allows private litigants affected by certain data breaches to recover significant statutory damages.
Although the CCPA exempts some data processed in the context of clinical trials, the CCPA increases compliance costs and potential liability with respect to other personal data we maintain about California residents. Similar laws are being considered in several other states, as well as at the federal and local levels, and we expect more states to pass similar laws in the future. While these state laws, like the CCPA, also exempt some data processed in the context of clinical trials, these developments may further complicate compliance efforts, and increase legal risk and compliance costs for us and the third parties upon whom we rely.
In addition to data privacy and security laws, we are subject to industry standards adopted by industry groups and may become subject to such obligations in the future. We are also bound by other contractual obligations related to data privacy and security, and our efforts to comply with such obligations may not be successful.
We publish privacy policies, marketing materials, and other statements regarding data privacy and security. If these policies, materials or statements are found to be deficient, lacking in transparency, deceptive, unfair, or misrepresentative of our practices, we may be subject to investigation, enforcement actions by regulators, or other adverse consequences.
Obligations related to data privacy and security (and consumers' data privacy expectations) are quickly changing, becoming increasingly stringent, and creating uncertainty. Additionally, these obligations may be subject to differing applications and interpretations, which may be inconsistent or conflict among jurisdictions. Preparing for and complying with these obligations requires us to devote significant resources, which may necessitate changes to our services, information technologies, systems, and practices and to those of any third parties that process personal data on our behalf.
We may at times fail (or be perceived to have failed) in our efforts to comply with our data privacy and security obligations. Moreover, despite our efforts, our personnel or third parties upon whom we rely may fail to comply with such obligations, which could negatively impact our business operations. If we or the third parties upon whom we rely fail, or are perceived to have failed, to address or comply with applicable data privacy and security obligations, we could face significant consequences, including but not limited to: government enforcement actions (e.g., investigations, fines, penalties, audits, inspections, and similar); litigation (including class-action claims) and mass arbitration demands; additional reporting requirements and/or oversight; bans on processing personal data; orders to destroy or not use personal data; and imprisonment of company officials. Any of these events could have a material adverse effect on our reputation, business, or financial condition, including but not limited to: loss of customers; interruptions or stoppages in our business operations (including, as relevant, clinical trials); inability to process personal data or to operate in certain jurisdictions; limited ability to develop or commercialize our products; expenditure of time and resources to defend any claim or inquiry; adverse publicity; or substantial changes to our business model or operations. In particular, plaintiffs have become increasingly more active in bringing privacy-related claims against companies, including class claims and mass arbitration demands. Some of these claims allow for the recovery of statutory damages on a per violation basis, and, if viable, carry the potential for monumental statutory damages, depending on the volume of data and the number of violations.
Business disruptions, including those caused by the ongoing geopolitical conflicts, could seriously harm our future revenue and financial condition and increase our costs and expenses.
Our operations, and those of our vendors and suppliers, could be subject to earthquakes, power shortages, telecommunications failures, water shortages, floods, hurricanes, typhoons, fires, extreme weather conditions, medical epidemics and other natural or man-made disasters, geopolitical conflict or business interruptions, for which we are predominantly self-insured. The occurrence of any of these business disruptions could seriously harm our operations and financial condition and increase our costs and expenses. We currently rely on third-party suppliers to produce and process our product candidates on a patient-by-patient basis. Our ability to obtain clinical supplies of our product candidates could be disrupted if the operations of these suppliers are affected by a man-made or natural disaster or other business interruption.

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The global economy has experienced volatility and disruptions from the impacts of the international conflicts, terrorism and other geopolitical events, including the ongoing war in Ukraine and the current Israel-Hamas conflict in Gaza. Although the length and impact of the ongoing military conflict is highly unpredictable, the war in Ukraine has led to market disruptions, including significant volatility in commodity prices, credit and capital markets, as well as supply chain interruptions, which contributed to record inflation globally. In addition, global markets may experience additional disruptions as a result of the current Israel-Hamas conflict, with Israel having declared war on Hamas, a U.S. designated Foreign Terrorist Organization, due to recent attacks. Although, to date, our business has not been materially impacted by the events described above, it is impossible to predict the extent to which our operations will be impacted in the short and long term, or the ways in which such matters may impact our business. The extent and duration of the conflicts in Ukraine and Gaza, geopolitical tensions, record inflation and resulting market disruptions are impossible to predict but could be substantial. Any such disruptions may also magnify the impact of other risks we face.
As a public company with operations in the EU, we may be subject to the sustainability disclosure requirements set out in the EU Corporate Sustainability Reporting Directive.
A growing number of investors, regulators, self-regulatory organizations and other stakeholders have expressed an interest in Environmental, Social and Corporate Governance (“ESG”) matters, and are requiring more robust ESG disclosures. The related legislative landscape in the EU has been evolving accordingly. For example, EU Directive No 2464/2022 on Corporate Sustainability Reporting (“CSRD”) was adopted and entered into force on January 5, 2023, amending the current EU Accounting Directive No 2013/34. The CSRD introduces new mandatory reporting obligations that will require the publication of audited sustainability information. The CSRD is supplemented by EU Delegated Regulation No 2023/2772 which establishes the first set of European Sustainability Reporting Standards (“ESRS”), which are applicable to in-scope EU entities. Further reporting standards are due to be adopted by June 2026, including for in-scope non-EU entities.
The CSRD and ESRS require certain mandatory disclosures, as well as disclosures of certain “material” sustainability matters in the company’s own operations, those of their subsidiaries and those of their value chain. The identification of material sustainability matters requires a “double materiality” assessment. This means that in-scope entities will have to assess both financial materiality, which are sustainability matters which generate risks or opportunities that affect, or could reasonably be expected to affect, the company’s financial position, financial performance, cash flows, access to finance or cost of capital over the short-, medium- or long-term, and impact materiality, which are the company’s material actual or potential, positive or negative impacts on people or the environment over the short-, medium- and long-term.). Sustainability matters are material if they satisfy one or both of these materiality tests.
The CSRD applies to entities with securities admitted to trading on an EU regulated market, as well as large EU companies, EU parents of a “large group”, and to listed EU small or medium-sized enterprises, amongst others. It will also apply to non-EU companies that have a certain threshold of EU-generated turnover and an in-scope EU subsidiary or EU branch meeting the turnover thresholds. Companies subject to the CSRD are required to fulfil their reporting obligations in accordance with a staggered timeline depending on the category of company. The first reports are expected in 2025 for the 2024 financial year, predominantly for entities with securities admitted to trading on an EU regulated market, and in 2026 for the 2025 financial year for many other EU companies (including EU subsidiaries of non-EU parents) that are not listed on an EU regulated market but meet the relevant size thresholds.
In response to new ESG initiatives and regulations we may voluntarily elect, or be required, to adopt strategies, policies, or procedures related to ESG matters and report on these. Reporting on ESG goals and objectives may cause us to expend significant capital and human resources, and could divert management’s attention from central operational matters. Reports could also lead to the disclosure of information that which may have a negative impact on our operations and reputation which may lead to additional exposure. Failure to accurately comply with any ESG reporting obligations may result in enforcement actions, sanctions, reputational harm or private litigation.
Risks Related to Our Dependence on Third Parties
We are dependent on intellectual property obtained or licensed from third parties, and if we were to fail to comply with our obligations under our existing and any future intellectual property licenses with third parties, we could lose intellectual property rights that are important to our business and we may not be able to continue developing or commercializing our product candidates, if approved.
We are party to an exclusive intellectual property license agreement with UCLB, the technology-transfer company of UCL, which is important to our business and under which we have acquired or licensed patent rights related to 17 patent families and other intellectual property related to our business. We expect to enter into additional license agreements in the future. Our existing license agreement with UCLB imposes, and we expect that future license agreements will impose, various due diligence, milestone payment, royalty, insurance and other obligations on us. Any uncured, material breach under the UCLB license agreement could result in our loss of rights to practice the patent rights (including those that have been assigned to us from UCLB) and other intellectual property licensed to us, and could compromise our development and commercialization efforts for our products and product candidates.
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Licensing of intellectual property is of critical importance to our business and involves complex legal, business and scientific issues. For example, under our license agreement with UCLB, our exclusive rights under certain of the patents is subject to specified exclusions. Our right to enforce any patents that may issue from such patent rights similarly excludes enforcing them in such excluded fields, and obligates us to coordinate our enforcement efforts with a third-party licensee, if any, with rights in that excluded field. If a third party-licensee has the right to enforce those patents in their field, it could put a patent that may issue from this family at risk of being invalidated or construed narrowly, in which case we would no longer have the benefit of the patents for our own exclusivity.
Disputes may arise between us and our licensors regarding intellectual property subject to a license agreement, including disputes regarding:
the scope of rights granted under the license agreement and other interpretation-related issues;
whether and the extent to which our technology and processes infringe on intellectual property of the licensor that is not subject to the licensing agreement;
our obligations to third parties;
our diligence obligations with respect to the use of the licensed technology in relation to our development and commercialization of our product candidates, and what activities satisfy those diligence obligations;
the ownership of inventions and know-how resulting from the joint creation or use of intellectual property by our licensors and us;
our right to transfer or assign the license; and
the effects of termination.
If disputes over intellectual property that we have licensed prevent or impair our ability to maintain our current licensing arrangement on acceptable terms, we may be unable to successfully develop and commercialize the affected product candidates.
We rely, and expect to continue to rely, on third parties to conduct the preclinical and clinical trials for our product candidates, and those third parties may not perform satisfactorily, including failing to meet deadlines for the completion of such trials or failing to comply with applicable regulatory requirements.
We depend and will continue to depend upon independent investigators and collaborators, such as universities, medical institutions, and strategic partners to conduct our preclinical and clinical trials. Agreements with such third parties might terminate for a variety of reasons, including a failure to perform by the third parties. If we need to enter into alternative arrangements, our product development activities would be delayed.
Our reliance on these third parties for research and development activities will reduce our control over these activities but will not relieve us of our responsibilities. For example, we will remain responsible for ensuring that each of our clinical trials is conducted in accordance with the general investigational plan and protocols for the trial. Moreover, the FDA requires us to comply with regulatory standards, commonly referred to as GLP and GCP, for conducting, recording and reporting the results of preclinical and clinical trials to assure that data and reported results are credible and accurate and that the rights, integrity and confidentiality of trial participants are protected. Similar regulatory requirements apply outside the United States, including the International Council for Harmonisation of Technical Requirements for the Registration of Pharmaceuticals for Human Use (the “ICH”).
Furthermore, these third parties may also have relationships with other entities, some of which may be our competitors. If these third parties do not successfully carry out their contractual duties, meet expected deadlines or conduct our clinical trials in accordance with regulatory requirements or our stated protocols, we will not be able to obtain, or may be delayed in obtaining, marketing approvals for our product candidates and will not be able to, or may be delayed in our efforts to, successfully commercialize our product candidates.
In addition, principal investigators for our clinical trials may serve as scientific advisors or consultants to us from time to time and may receive cash or equity compensation in connection with such services. If these relationships and any related compensation result in perceived or actual conflicts of interest, or the FDA or comparable foreign regulatory authorities concludes that the financial relationship may have affected the interpretation of the trial, the integrity of the data generated at the applicable clinical trial site may be questioned and the utility of the clinical trial itself may be jeopardized, which could result in the delay or rejection by the FDA or comparable foreign regulatory authorities. Any such delay or rejection could prevent us from commercializing our clinical-stage product candidates or any future product candidates.
We are also required to register certain ongoing clinical trials and post the results of certain completed clinical trials on a government-sponsored databases, such as ClinicalTrials.gov and foreign equivalents, within specified timeframes. Failure to do so by us or third parties can result in FDA or comparable foreign regulatory authority refusal to approve applications based on the clinical data, enforcement actions, adverse publicity and civil and criminal sanctions.
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Cell-based therapies rely on the availability of reagents, specialized equipment, and other specialty materials, which may not be available to us on acceptable terms or at all. For some of these reagents, equipment, and materials, we rely or may rely on sole source vendors or a limited number of vendors, which could impair our ability to manufacture and supply our products.
Manufacturing our product and product candidates will require many reagents, which are substances used in our manufacturing processes to bring about chemical or biological reactions, and other specialty materials and equipment, some of which are manufactured or supplied by small companies with limited resources and experience to support commercial biologics production. We currently depend on a limited number of vendors for access to facilities and supply of certain materials and equipment used in the manufacture of our product and product candidates. For example, we currently use facilities and equipment at the Cell and Gene Therapy Catapult, as well as third party vendors, for vector and clinical cell manufacturing. In addition, we purchase equipment and reagents critical for the manufacture of our product and product candidates from Miltenyi and other suppliers on a purchase order basis. Some of our suppliers may not have the capacity to support commercial products manufactured under cGMP by biopharmaceutical firms or may otherwise be ill-equipped to support our needs.
We also do not have supply contracts with many of these suppliers, and may not be able to obtain supply contracts with them on acceptable terms or at all. Accordingly, we may not be able to obtain key materials and equipment to support clinical or commercial manufacturing.
For some of these reagents, equipment, and materials, we rely and may in the future rely on sole source vendors or a limited number of vendors. An inability to continue to source product from any of these suppliers, which could be due to regulatory actions or requirements affecting the supplier, adverse financial or other strategic developments experienced by a supplier, labor disputes or shortages, unexpected demands, or quality issues, could adversely affect our ability to satisfy demand for our product candidates, which could adversely and materially affect our product sales and operating results or our ability to conduct clinical trials, either of which could significantly harm our business.
As we continue to develop and scale our manufacturing process, we may need to obtain rights to and supplies of certain materials and equipment to be used as part of that process. We may not be able to obtain rights to such materials on commercially reasonable terms, or at all, and if we are unable to alter our process in a commercially viable manner to avoid the use of such materials or find a suitable substitute, it would have a material adverse effect on our business.
We operate a manufacturing facility to manufacture materials for AUCATZYL and our product candidates, which requires significant resources. A failure to successfully operate our manufacturing facility could lead to substantial delays and adversely affect our research and development efforts, including clinical trials, and commercial success of AUCATZYL and our product candidates, if approved. We are also obligated to share some of the capabilities of the manufacturing facility with BioNTech under the BioNTech License Agreement.
Our clinical and commercial manufacturing facility, The Nucleus, must be periodically inspected and licensed by the appropriate authorities. While we will continue to source raw materials from external CMOs, we plan to make the transition from external CMOs to our manufacturing facility and we expect our manufacturing facility to be the sole source supplier of clinical materials for our clinical trials and for commercial products, once approved. This sole source reliance increases the risk that we will not have sufficient quantities of our CAR T product candidates at an acceptable cost or quality, which could delay, prevent or impair our development or commercialization efforts, if approved.
In addition, under the terms of the BioNTech License Agreement, we granted BioNTech the option to negotiate a joint Manufacturing and Commercial Agreement pursuant to which the parties may access and leverage each other’s manufacturing and commercial capabilities, in addition to Autolus’ commercial site network and infrastructure, with respect to certain of each parties’ CAR T products, including BioNTech’s product candidate BNT211 (the “Manufacturing and Commercial Agreement”). The Manufacturing and Commercial Agreement, if entered into, would also grant BioNTech access to our commercial site network and infrastructure. If required under the Manufacturing and Commercial Agreement, we may need to subordinate production of our CAR T products in order to BioNTech’s products. Sharing The Nucleus facility with BioNTech increases the risk that we will not have sufficient quantities of our CAR T product candidates at an acceptable cost or quality, which could delay, prevent or impair our development or commercialization efforts, if approved.
In either case, if we are unable to manufacture sufficient clinical or commercial materials at our manufacturing facility, we may be forced to contract with external CMOs, which we may not be able to do on commercially reasonable terms, if at all. Even if commercially reasonable terms are available, any transition of manufacturing from our manufacturing facility to an external CMO could be time-consuming and require significant effort and expertise because there may be a limited number of qualified replacements. In some cases, the technical skills or technology required to manufacture our CAR T product candidates may be unique or proprietary and we may have difficulty transferring such skills or technology to another CMO and a feasible alternative may not exist. If we fail to manufacture at our manufacturing facility, or obtain from a CMO, a sufficient supply of clinical materials for our clinical trials, or commercial materials for our commercial product in accordance with applicable specifications on a timely basis, our research and development efforts, including clinical trials, and the commercial success of our CAR T product, and product candidates, if approved, and our business, financial condition, results of operations and growth prospects could be materially adversely affected.
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We, and the third parties on whom we rely in part for sales, marketing and distribution capabilities, may not be able to effectively market, sell and distribute AUCATZYL or our other product candidates, if approved.
We have invested, and expect to continue to invest, significant financial and management resources to develop internal our sales, distribution and marketing capabilities, particularly in anticipation of the commercial launch of AUCATZYL. With respect to jurisdictions outside the US, we will need to commit resources to buildings these capabilities prior to any confirmation that obe-cel or our other product candidates will be approved in a territory.
We utilize a hybrid model that includes in-house and contracted resources in the United States and Europe, and we have engaged third parties and may engage additional third parties to provide these services. We may enter into agreements with third parties to develop our commercial infrastructure for the commercial launch and continued sale of AUCATZYL and any product candidates that receive approval, including to potentially retain, train and deploy a direct sales force, but we have limited experience operating or managing a third-party sales force as a company. There can be no assurance that the capabilities of the third parties will be more effective than an internally developed sales organization. If third parties fail to hire, train, and retain qualified sales personnel, market our product successfully or on a cost-effective basis or otherwise terminates our relationship, our ability to generate revenue will be limited and we will need to identify and retain an alternative organization or develop our own sales and marketing capability. This could involve significant delays and costs, including the diversion of our management’s attention from other activities. We may also need to retain additional consultants or external service providers to assist us in sales, marketing and distribution functions, and may be unsuccessful in retaining such services on acceptable financial terms or at all.
There are risks involved with both establishing our own sales and marketing capabilities and entering into arrangements with third parties to perform these services. For example, recruiting and training a commercial organization is expensive and time consuming and could delay any product launch. If the commercial launch of a product candidate for which we recruit a sales force and establish marketing capabilities is delayed or does not occur for any reason, we would have prematurely or unnecessarily incurred these commercialization expenses. This may be costly and our investment would be lost if we cannot retain or reposition our sales and marketing personnel.
Factors that may inhibit our efforts to commercialize our product candidates on our own include:
the inability to recruit, train and retain adequate numbers of effective sales and marketing personnel;
the inability of sales personnel to obtain access to physicians or educate adequate numbers of physicians on the benefits of prescribing any future product that we may develop;
the lack of complementary treatments to be offered by sales personnel, which may put us at a competitive disadvantage relative to companies with more extensive product lines; and
unforeseen costs and expenses associated with creating an independent sales and marketing organization.
If we enter into arrangements with third parties to perform sales, marketing and distribution services, our product revenue or the profitability to us from these revenue streams is likely to be lower than if we were to market and sell any product candidates that we develop ourselves. In addition, we may not be successful in entering into arrangements with third parties to sell and market our product candidates or may be unable to do so on terms that are favorable to us. We likely will have little control over such third parties and any of them may fail to devote the necessary resources and attention to sell and market our product candidates effectively. If we do not establish sales and marketing capabilities successfully, either on our own or in collaboration with third parties, we may not be successful in commercializing our product candidates.
We collaborate with third parties in the research, development and commercialization of certain of our product and product candidates. If our collaborators do not perform as expected or if we are unable to maintain existing or establish additional collaborations, our ability to develop and commercialize our product candidates may be adversely affected.
We have collaboration and license agreements with, for example, BioNTech SE, Cabaletta Bio Inc., Moderna Inc., Bristol-Myers Squibb Company, and an investee of Syncona Portfolio Limited. These agreements provide us with important funding for our programs. If our therapeutic programs and related collaborations do not result in the successful development and commercialization of products or if one of our collaborators or licensees terminates its agreement with us, we may not receive any future research funding or milestone or royalty payments associated with such collaboration or license arrangement. In addition, any termination of an agreement by the relevant collaborators could affect our ability to develop further such product candidates or adversely affect how we are perceived in scientific and financial communities. All of the risks we face relating to product development, regulatory approval and commercialization also apply to the activities of our program collaborators.

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In our collaboration arrangements, we depend on the performance of our collaborators. Our licensees have the right to make decisions regarding the development and commercialization of product candidates under the collaborations without consulting us and may make decisions with which we do not agree. Our collaborators may fail to perform their obligations under the collaboration agreements or may not perform their obligations in a timely manner. If conflicts arise between our collaborators and us, the other party may act in a manner adverse to us and could limit our ability to implement our strategies. Furthermore, our collaborators may not properly obtain, maintain, enforce or defend our intellectual property or proprietary rights or may use our proprietary information in such a way as to invite litigation that could jeopardize or invalidate our proprietary information or expose us to potential litigation.
In addition, we cannot control the amount and timing of resources our collaborators may devote to our product candidates. They may separately pursue competing products, therapeutic approaches or technologies to develop treatments for the diseases targeted by us. Competing products, either developed by the collaborators or to which the collaborators have rights, may result in the withdrawal of support for our product candidates. Even if our collaborators continue their contributions to the strategic collaborations, they may nevertheless determine not to actively pursue the development or commercialization of any resulting products.
Additionally, if our collaborators pursue different clinical or regulatory strategies with their product candidates based on similar technology as used in our product candidates, adverse events with their product candidates could negatively affect our product candidates. Any of these developments could harm our product development efforts.
If our collaborators terminate or breach our agreements with them, or otherwise fail to complete their obligations in a timely manner, it may have a detrimental effect on our financial position by reducing or eliminating the potential for us to receive technology access and license fees, milestones and royalties, reimbursement of development costs, as well as possibly requiring us to devote additional efforts and incur costs associated with pursuing internal development of product candidates. Furthermore, if our collaborators do not prioritize and commit sufficient resources to our product or product candidates, we or our partners may be unable to develop or commercialize these products or product candidates, which would limit our ability to generate revenue and become profitable.
We do not and will not have access to all information regarding the product candidates we license to our collaborators. Consequently, our ability to inform our shareholders about the status of such product candidates, and to make informed operational and investment decisions about the product candidates to which we have retained development and commercialization rights, may be limited.
We do not and will not have access to all information regarding the product candidates being developed and potentially commercialized by BioNTech, including potentially material information about clinical trial design and execution, regulatory affairs, process development, manufacturing, marketing and other areas known by BioNTech. In addition, we have confidentiality obligations under our agreement with BioNTech. Thus, our ability to keep our shareholders informed about the status of product candidates under our collaboration will be limited by the degree to which BioNTech keeps us informed and allows us to disclose such information to the public.
We may form or seek strategic alliances or enter into additional licensing arrangements in the future, and we may not realize the benefits of such alliances or licensing arrangements.
We may form or seek strategic alliances, create joint ventures or collaborations or enter into additional licensing arrangements with third parties that we believe will complement or augment our development and commercialization efforts with respect to our product candidates and any future product candidates that we may develop. Additionally, although we intend to develop product candidates through our own internal research, we may need to obtain additional licenses from others to advance our research or allow commercialization of our product candidates and it is possible that we may be unable to obtain additional licenses at a reasonable cost or on reasonable terms, if at all. Any of these relationships may require us to incur non-recurring and other charges, increase our near and long-term expenditures, issue securities that dilute our existing shareholders or disrupt our management and business.
We face significant competition in seeking appropriate collaborative partners. Our ability to reach a definitive agreement for a collaboration will depend, among other things, upon an assessment of the collaborator's resources and expertise, the terms and conditions of the proposed partnership and the proposed collaborator's evaluation of a number of factors. These factors may include the design or results of clinical trials, the likelihood of regulatory approval, the potential market for the subject product candidate, the costs and complexities of manufacturing and delivering such product candidate to patients, the potential of competing products, the existence of uncertainty with respect to our ownership of technology, which can exist if there is a challenge to such ownership regardless of the merits of the challenge and industry and market conditions generally. The collaborator may also consider alternative product candidates or technologies for similar indications that may be available to collaborate on and whether such a partnership could be more attractive than the one with us.

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We may not be able to negotiate collaborations on a timely basis, on acceptable terms, or at all. If we are unable to do so, we may have to curtail the development of the product candidate for which we are seeking to collaborate, reduce or delay its development program or one or more of our other development programs, delay its potential commercialization or reduce the scope of any sales or marketing activities or increase our expenditures and undertake development or commercialization activities at our own expense. If we elect to increase our expenditures to fund development or commercialization activities on our own, we may need to obtain additional capital, which may not be available to us on acceptable terms or at all. If we do not have sufficient funds, we may not be able to further develop product candidates or bring them to market and generate product revenue.
Risks Related to Regulatory Approval of Our Product Candidates and Other Legal Compliance Matters
Even if we complete the necessary preclinical studies and clinical trials, the regulatory approval process is expensive, time-consuming and uncertain and may prevent us from obtaining approvals for the commercialization of our product candidates. As a result, we cannot predict when or if, and in which territories, we will obtain marketing approval to commercialize a product candidate.
Our product candidates and the activities associated with their development and commercialization, including their design, research, testing, manufacture, safety, efficacy, quality control, recordkeeping, labeling, packaging, storage, approval, advertising, promotion, sale, distribution, import, export, and reporting of safety and other post-market information, are subject to comprehensive regulation by the FDA, the EU and other comparable regulatory authorities in other jurisdictions. Failure to obtain marketing approval for a product candidate will prevent us from commercializing the product candidate. We have not received approval to market any of our product candidates from regulatory authorities in any jurisdiction.
We have only limited experience in filing and supporting the applications necessary to gain marketing approvals and may rely on third-party CROs, to assist us in this process. Securing marketing approval requires the submission of extensive preclinical and clinical data and supporting information to regulatory authorities for each therapeutic indication to establish the product candidate’s safety and efficacy. Securing marketing approval also requires the submission of information about the product manufacturing process to, and inspection of manufacturing facilities by, the regulatory authorities. Our product candidates may not be effective, may be only moderately effective or may prove to have undesirable or unintended side effects, toxicities or other characteristics that may preclude our obtaining marketing approval or prevent or limit commercial use. If any of our product candidates receives marketing approval, the accompanying label may limit its approved use, which could limit sales of the product.
The process of obtaining marketing approvals, both in the United States and abroad, is expensive and may take many years, if approval is obtained at all, and can vary substantially based upon a variety of factors, including the type, complexity and novelty of the product candidates involved. Securing marketing approval requires the submission of extensive preclinical and clinical data and supporting information to regulatory authorities for each therapeutic indication to establish the product candidate’s safety and efficacy.
Securing marketing approval also requires the submission of information about the product manufacturing process demonstrating the products quality to, and inspection of manufacturing facilities by, the regulatory authorities. The FDA, the EMA or the European Commission or other regulatory authorities may determine that our product candidates are not safe and effective, only moderately effective or have undesirable or unintended side effects, toxicities or other characteristics that preclude our obtaining marketing approval or prevent or limit commercial use.
In addition, changes in marketing approval policies during the development period, changes in or the enactment of additional statutes or regulations, or changes in regulatory review for each submitted product application, may cause delays in the approval or rejection of an application. Regulatory authorities have discretion in the approval process and may refuse to accept any application or may decide that our data is insufficient for approval and require additional preclinical, clinical or other studies including further manufacturing process or quality control data. In addition, varying interpretations of the data obtained from manufacturing procedures, quality control, preclinical and clinical testing could delay, limit or prevent marketing approval of a product candidate. Any marketing approval we ultimately obtain may be limited or subject to restrictions or post-approval commitments that render the approved product not commercially viable.
If we experience delays in obtaining approval or if we fail to obtain approval of our product candidates, the commercial prospects for our product candidates may be harmed and our ability to generate revenues will be impaired.
In order to market and sell our products in the EU and any other jurisdictions, we must obtain separate marketing approvals and comply with numerous and varying regulatory requirements. The approval procedure varies among countries and can involve additional testing. The time required to obtain approval may differ substantially from that required to obtain approval from the FDA. The regulatory approval process outside the United States generally includes all of the risks associated with obtaining approval from the FDA. In addition, in many countries outside the United States, it is required that the product be approved for reimbursement before the product can be approved for sale in that country. We may not obtain approvals from regulatory authorities outside the United States on a timely basis, if at all.
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Approval by the FDA does not ensure approval by regulatory authorities in other countries or jurisdictions, and approval by one regulatory authority outside the United States does not ensure approval by regulatory authorities in other countries or jurisdictions or by the FDA. However, failure to obtain approval in one jurisdiction may impact our ability to obtain approval elsewhere. We may not be able to file for marketing approvals and may not receive necessary approvals to commercialize our products in any market.
Obtaining and maintaining regulatory approval of AUCATZYL or our other product candidates in one jurisdiction does not mean that we will be successful in obtaining regulatory approval of our product candidates in other jurisdictions.
Obtaining and maintaining regulatory approval of our product candidates in one jurisdiction does not guarantee that we will be able to obtain or maintain regulatory approval in any other jurisdiction, but a failure or delay in obtaining regulatory approval in one jurisdiction may have a negative effect on the regulatory approval process in others. For example, even though the FDA granted marketing approval for AUCATZYL in the US for the treatment of r/r adult B-ALL, comparable regulatory authorities in other jurisdictions must also approve the manufacturing, marketing and promotion of AUCATZYL/obe-cel in those countries. Approval procedures vary among jurisdictions and can involve requirements and administrative review periods different from those in the United States, including additional manufacturing quality controls, or additional preclinical studies or clinical trials, as clinical studies conducted in one jurisdiction may not be accepted by regulatory authorities in other jurisdictions. In many jurisdictions outside the United States, a product candidate must be approved for reimbursement before it can be approved for sale in that jurisdiction. In some cases, the price that we intend to charge for our products is also subject to approval.
Obtaining foreign regulatory approvals and compliance with foreign regulatory requirements could result in significant delays, difficulties and costs for us and could delay or prevent the introduction of our products in certain countries. If we fail to comply with the regulatory requirements in international markets and/or to receive applicable marketing approvals, our target market will be reduced and our ability to realize the full market potential of our product or product candidates will be harmed.
Even though we have obtained marketing approval by the FDA for AUCATZYL, the terms of approvals and ongoing regulation of AUCATZYL may limit how we manufacture and market AUCATZYL and compliance with such requirements may involve substantial resources, which could materially impair our ability to generate revenue.
Even though we have been granted marketing approval by the FDA for AUCATZYL, an approved product and its manufacturer and marketer are subject to ongoing review and extensive regulatory requirements for manufacturing processes, labeling, packaging, distribution, adverse event reporting, pharmacovigilance oversight, storage, advertising, promotion, sampling, and recordkeeping, including the potential requirements to implement a REMS program in the United States or comparable foreign strategies, or similar schemes in other countries, or to conduct costly post-marketing studies or clinical trials and surveillance to monitor the safety or efficacy of the product. We must also comply with requirements concerning advertising and promotion for AUCATZYL/obe-cel and for any of our other product candidates for which we obtain marketing approval. Promotional communications with respect to prescription drugs 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 products we develop for indications or uses for which they are not approved. In addition, manufacturers of approved products and those manufacturers’ facilities are required to comply with extensive regulatory requirements of the FDA, the EU and national competent authorities of EU Member States and other regulatory authorities, including ensuring that quality control and manufacturing procedures conform to cGMP and other comparable regulations and standards, which include requirements relating to quality control and quality assurance as well as the corresponding maintenance of records and documentation and reporting requirements. We or our suppliers could be subject to periodic unannounced inspections by the FDA, the competent authorities of EU Member States, or other regulatory authorities to monitor and ensure compliance with cGMP. Failure to comply with applicable regulations could result in sanctions being imposed on us, including shutdown of the third-party vendor or invalidation of drug product lots or processes, fines, injunctions, civil penalties, delays, suspension, variation or withdrawal of approvals, license revocation, seizures or recalls of product candidates or drugs, operating restrictions and criminal prosecutions, any of which could significantly and adversely affect supplies of our products, and product candidates, if approved, and significantly harm our business, financial condition, results of operations and prospects.
Accordingly, we and suppliers will continue to expend time, money and effort in all areas of regulatory compliance, including manufacturing, production, product surveillance and quality control. If we are not able to comply with post-approval regulatory requirements, we could have the marketing approvals for our products withdrawn by regulatory authorities and our ability to market any future products could be limited, which could adversely affect our ability to achieve or sustain profitability. Thus, the cost of compliance with post-approval regulations may have a negative effect on our operating results and financial condition.

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AUCATZYL, and any other product candidate for which we obtain marketing approval, could be subject to post-marketing restrictions or recall or withdrawal from the market, and we may be subject to penalties if we fail to comply with regulatory requirements or if we experience unanticipated problems with our product candidates, when and if any of them are approved.
The FDA and other federal and state agencies, including the U.S. Department of Justice (“DOJ”), closely regulate compliance with all requirements governing prescription drug products, including requirements pertaining to marketing and promotion of products in accordance with the provisions of the approved labeling and manufacturing of products in accordance with cGMP requirements. Similar legislation or provisions may also apply in other jurisdictions. The FDA and DOJ impose stringent restrictions on manufacturers’ communications regarding off-label use and if we do not market our products for their approved indications, or if other of our marketing claims are deemed false or misleading, we may be subject to enforcement action. Physicians, on the other hand, may prescribe products for off-label uses. The FDA and other regulatory authorities do not regulate a physician’s choice of drug treatment made in the physician’s independent medical judgment. However, companies may only share truthful and not misleading information that is otherwise consistent with a product’s FDA approved labeling.
Violations of such requirements may lead to investigations alleging violations of the FDCA and other statutes, including the U.S. federal False Claims Act and other federal and state healthcare fraud and abuse laws as well as state consumer protection laws. Similar legislation or provisions may also apply in other jurisdictions. In the EU, the advertising and promotion of medicinal products are subject to both EU and EU Member States’ laws governing promotion of medicinal products, interactions with physicians and other healthcare professionals, misleading and comparative advertising and unfair commercial practices. General requirements for advertising and promotion of medicinal products, such as direct-to-consumer advertising of prescription medicinal products are established in EU law. However, the details are governed by regulations in individual EU Member States and can differ from one country to another. For example, applicable laws require that promotional materials and advertising in relation to medicinal products comply with the product’s Summary of Product Characteristics, or SmPC, which may require approval by the competent national authorities in connection with an MA. The SmPC is the document that provides information to physicians concerning the safe and effective use of the product. Promotional activity that does not comply with the SmPC is considered off-label and is prohibited in the EU.
Our failure to comply with all regulatory requirements, and later discovery of previously unknown adverse events or other problems with our products, manufacturers or manufacturing processes, may yield various results, including:
litigation involving patients taking our products;
restrictions on such products, manufacturers or manufacturing processes;
restrictions on the labeling or marketing of a product;
restrictions on product distribution or use;
requirements to conduct post-marketing studies or clinical trials;
warning or untitled letters;
withdrawal of the products from the market;
refusal to approve pending applications or supplements to approved applications that we submit;
recall of products;
fines, restitution or disgorgement of profits or revenues;
suspension, variation or withdrawal of marketing approvals;
suspension of any ongoing clinical trials;
damage to relationships with any potential collaborators;
unfavorable press coverage and damage to our reputation;
refusal to permit the import or export of our products;
product seizure; or
injunctions or the imposition of civil or criminal penalties.
Non-compliance by us or any future collaborator with regulatory requirements regarding safety monitoring or pharmacovigilance, and with requirements related to the development of products for the pediatric population, can also result in significant financial penalties and reputational damage. Similarly, failure to comply with regulatory requirements regarding the protection of personal data can also lead to significant penalties and sanctions.
Failure to comply with EU and EU Member State laws that apply to the conduct of clinical trials, manufacturing approval, marketing authorization of medicinal products and marketing of such products, both before and after grant of the marketing authorization, or with other applicable regulatory requirements may result in administrative, civil or criminal penalties. These penalties could include delays or refusal to authorize the conduct of clinical trials, or to grant marketing authorization, product withdrawals and recalls, product seizures, suspension, withdrawal or variation of the marketing authorization, total or partial suspension of production, distribution, manufacturing or clinical trials, operating restrictions, injunctions, suspension of licenses, fines and criminal penalties.
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Non-compliance with EU requirements regarding safety monitoring or pharmacovigilance, and with requirements related to the development of products for the pediatric population, also can result in significant financial penalties. Similarly, failure to comply with the EU’s requirements regarding the protection of personal data can also lead to significant penalties and sanctions.
If any of these events occurs, our ability to sell such product may be impaired, and we may incur substantial additional expense to comply with regulatory requirements, which could adversely affect our business, financial condition and results of operations.
Our employees, independent contractors, principal investigators, consultants, commercial partners and vendors may engage in misconduct or other improper activities, including non-compliance with regulatory standards and requirements.
We are exposed to the risk of employee fraud or other misconduct or failure to comply with applicable regulatory requirements. Misconduct by employees and independent contractors, such as principal investigators, consultants, commercial partners, and vendors, could include failures to comply with regulations of the FDA, the EU, EU Member States and other comparable regulatory authorities, to provide accurate information to such regulators, to comply with manufacturing standards we have established, to comply with healthcare fraud and abuse laws, to report financial information or data accurately or to disclose unauthorized activities to us. In particular, sales, marketing and other business arrangements in the healthcare industry are subject to extensive laws and regulations intended to prevent fraud, misconduct, kickbacks, self-dealing and other abusive practices. These laws and regulations may restrict or prohibit a wide range of business activities, including, but not limited to, research, manufacturing, distribution, pricing, discounting, marketing and promotion, sales commission, customer incentive programs and other business arrangements.
Employee and independent contractor misconduct could also involve the improper use of individually identifiable information, including, without limitation, information obtained in the course of clinical trials, which could result in regulatory sanctions and serious harm to our reputation. In addition, federal procurement laws impose substantial penalties for misconduct in connection with government contracts and require certain contractors to maintain a code of business ethics and conduct.
It is not always possible to identify and deter employee and independent contractor misconduct, and any precautions we take to detect and prevent improper activities may not be effective in controlling unknown or unmanaged risks or losses or in protecting us from governmental investigations or other actions or lawsuits stemming from a failure to be in compliance with such laws. If any such actions are instituted against us, those actions could have a significant impact on our business, including the imposition of civil, criminal and administrative penalties, damages, monetary fines, disgorgement of profits, possible exclusion from participation in Medicare, Medicaid and other federal healthcare programs, National Health Service in the UK, or other government supported healthcare in other jurisdictions, contractual damages, reputational harm, diminished profits and future earnings, additional reporting or oversight obligations if we become subject to a corporate integrity agreement or other agreement to resolve allegations of non-compliance with the law and curtailment or restructuring of our operations, any of which could adversely affect our ability to operate.
Our business operations and current and future relationships with healthcare professionals, principal investigators, consultants, customers and third-party payors in the United States and elsewhere may be subject, directly or indirectly, to applicable anti-kickback, fraud and abuse, false claims, physician payment transparency, health information privacy and security and other healthcare laws and regulations, which could expose us to substantial penalties.
Healthcare providers, physicians and third-party payors in the United States and elsewhere will play a primary role in the recommendation and prescription of any products or product candidates for which we obtain marketing approval. Our current and future arrangements with healthcare professionals, principal investigators, consultants, customers and third-party payors may expose us to broadly applicable fraud and abuse and other healthcare laws, including, without limitation, the U.S. federal Anti-Kickback Statute and the U.S. federal False Claims Act, that may constrain the business or financial arrangements and relationships through which we sell, market and distribute any products or product candidates for which we obtain marketing approval, and foreign equivalents. In addition, we will be subject to physician payment transparency laws and patient privacy and security regulation by the U.S. federal government and by the states and foreign jurisdictions in which we conduct our business.

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The applicable federal, state and foreign healthcare laws that may affect our ability to operate include the following:
the U.S. federal Anti-Kickback Statute, which prohibits, among other things, persons or entities from knowingly and willfully soliciting, offering, receiving or providing remuneration, directly or indirectly, in cash or in kind, to induce or reward, or in return for, either the referral of an individual for, or the purchase, lease, order or recommendation of, any good, facility, item or service, for which payment may be made, in whole or in part, under federal and state healthcare programs such as Medicare and Medicaid. The term ‘‘remuneration’’ has been broadly interpreted to include anything of value. This statute has been interpreted to apply to arrangements between pharmaceutical manufacturers on the one hand and prescribers, purchasers and formulary managers on the other hand. Although there are a number of statutory exceptions and regulatory safe harbors protecting certain common activities from prosecution or other regulatory sanctions, the exceptions and safe harbors are drawn narrowly, and practices that involve remuneration that are alleged to be intended to induce prescribing, purchases or recommendations may be subject to scrutiny if they do not qualify for an exception or safe harbor. Failure to meet all of the requirements of a particular applicable statutory exception or regulatory safe harbor does not make the conduct per se illegal under the U.S. federal Anti-Kickback Statute. Instead, the legality of the arrangement will be evaluated on a case-by-case basis based on a cumulative review of all its facts and circumstances. Several courts have interpreted the statute’s intent requirement to mean that if any one purpose of an arrangement involving remuneration is to induce referrals of federal healthcare covered business, the U.S. federal Anti-Kickback Statute has been violated;
U.S. federal civil and criminal false claims laws, including the U.S. federal False Claims Act, which can be enforced though civil whistleblower or qui tam actions, and civil monetary penalty laws, which prohibit, among other things, individuals or entities from knowingly presenting, or causing to be presented, to the federal government, including the Medicare and Medicaid programs, claims for payment that are false or fraudulent or making a false statement to avoid, decrease or conceal an obligation to pay money to the federal government. Pharmaceutical and other healthcare companies have been prosecuted under these laws for, among other things, allegedly inflating drug prices they report to pricing services, which in turn were used by the government to set Medicare and Medicaid reimbursement rates, and for allegedly providing free product to customers with the expectation that the customers would bill federal programs for the product. In addition, certain marketing practices, including off-label promotion, may also violate false claims laws. Further, pharmaceutical manufacturers can be held liable under the U.S. federal False Claims Act even when they do not submit claims directly to government payors if they are deemed to “cause” the submission of false or fraudulent claims;
HIPAA, which created new federal criminal statutes that prohibit knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program or obtain, by means of false or fraudulent pretenses, representations or promises, any of the money or property owned by, or under the custody or control of, any healthcare benefit program, regardless of whether the payor is public or private, knowingly and willfully embezzling or stealing from a healthcare benefit program, willfully obstructing a criminal investigation of a healthcare offense and knowingly and willfully falsifying, concealing or covering up by any trick or device a material fact or making any materially false statements in connection with the delivery of, or payment for, healthcare benefits, items or services relating to healthcare matters;
HIPAA, as amended by HITECH, and their respective implementing regulations, which impose obligations on “covered entities,” including certain healthcare providers, health plans, and healthcare clearinghouses, as well as their respective “business associates” that create, receive, maintain or transmit individually identifiable health information for or on behalf of a covered entity, and their covered subcontractors, with respect to safeguarding the privacy, security and transmission of individually identifiable health information. Additionally, HITECH also created four new tiers of civil monetary penalties, amended HIPAA to make civil and criminal penalties directly applicable to business associates, and gave state attorneys general new authority to file civil actions for damages or injunctions in U.S. federal courts to enforce HIPAA and seek attorneys’ fees and costs associated with pursuing federal civil actions;
the FDCA, which prohibits, among other things, the adulteration or misbranding of drugs, biologics and medical devices;
the U.S. federal Physician Payments Sunshine Act, created under Section 6002 of Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act (collectively, the “ACA”), and its implementing regulations, created annual reporting requirements for certain manufacturers of drugs, devices, biologicals and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program (with certain exceptions), to annually report to the CMS, information related to certain payments and “transfers of value” provided to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors), certain other health care professionals (such as physicians assistants and nurse practitioners) and teaching hospitals, as well as ownership and investment interests held by physicians and their immediate family members;

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analogous state laws and regulations and foreign laws, such as state anti-kickback and false claims laws, which may apply to sales or marketing arrangements and claims involving healthcare items or services reimbursed by non-governmental third-party payors, including private insurers; state and foreign laws that require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government or to adopt compliance programs as prescribed by state laws and regulations, or that otherwise restrict payments that may be made to healthcare providers; state and foreign laws that require drug manufacturers to report information related to payments and other transfers of value to physicians and other healthcare providers or marketing expenditures; state and local laws that require the registration of pharmaceutical sales representatives; and state and foreign laws governing the privacy and security of health information in certain circumstances, many of which differ from each other in significant ways and often are not preempted by HIPAA, thus complicating compliance efforts; and
similar healthcare laws and regulations in the EU and other jurisdictions, including reporting requirements detailing interactions with and payments to healthcare providers and laws governing the data privacy and security of certain protected information, such as the EU GDPR and UK GDPR, which imposes obligations and restrictions on the collection and use of personal data relating to individuals located in the EU and UK (including health data).
Outside the United States, interactions between pharmaceutical companies and health care professionals are also governed by strict laws, such as national anti-bribery laws of European countries, national sunshine rules, regulations, industry self-regulation codes of conduct and physicians’ codes of professional conduct. Failure to comply with these requirements could result in reputational risk, public reprimands, administrative penalties, fines or imprisonment.
Further, the ACA, among other things, amended the intent requirement of the U.S. federal Anti-Kickback Statute and certain criminal statutes governing healthcare fraud. A person or entity no longer needs to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation. In addition, the ACA provided that the government may assert that a claim including items or services resulting from a violation of the U.S. federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the U.S. federal False Claims Act.
Because of the breadth of these laws and the narrowness of their exceptions and safe harbors, it is possible that our business activities can be subject to challenge under one or more of such laws. The scope and enforcement of each of these laws is uncertain and subject to rapid change in the current environment of healthcare reform. Federal and state enforcement bodies have continued their scrutiny of interactions between healthcare companies and healthcare providers, which has led to a number of significant investigations, prosecutions, convictions and settlements in the healthcare industry.
Efforts to ensure that our internal operations and future business arrangements with third parties will comply with applicable healthcare laws and regulations will involve substantial costs. If our operations are found to be in violation of any of these laws or any other governmental regulations that may apply to us, we may be subject to significant civil, criminal and administrative penalties, including, without limitation, damages, monetary fines, imprisonment, disgorgement of profits, possible exclusion from participation in Medicare, Medicaid and other federal healthcare programs, contractual damages, reputational harm, diminished profits and future earnings, additional reporting or oversight obligations if we become subject to a corporate integrity agreement or other agreement to resolve allegations of non-compliance with the law and curtailment or restructuring of our operations, any of which could adversely affect our ability to operate our business and pursue our strategy. If any of the physicians or other healthcare providers or entities with whom we expect to do business, including future collaborators, are found not to be in compliance with applicable laws, they may be subject to criminal, civil or administrative sanctions, including exclusions from participation in government healthcare programs, which could also affect our business.
Our products and product candidates are subject to government price controls in certain jurisdictions that may affect our revenue.
There has been heightened governmental scrutiny in the UK, United States, EU and other jurisdictions of pharmaceutical pricing practices in light of the rising cost of prescription drugs and biologics. In the United States, such scrutiny has resulted in several recent Congressional inquiries and proposed and enacted federal and state legislation designed to, among other things, bring more transparency to product pricing, review the relationship between pricing and manufacturer patient programs, and reform government program reimbursement methodologies for products. For example, in the United States, at the federal level in July 2021, the Biden administration released an executive order, “Promoting Competition in the American Economy,” with multiple provisions aimed at prescription drugs. In response to Biden’s executive order, on September 9, 2021, the HHS, released a Comprehensive Plan for Addressing High Drug Prices that outlines principles for drug pricing reform and sets out a variety of potential legislative policies that Congress could pursue to advance these principles. Further, on August 16, 2022, the Inflation Reduction Act was signed into law, which among other things (i) directed HHS to negotiate the price of certain high-expenditure, single-source drugs and biologics covered under Medicare and (ii) imposed rebates under Medicare Part B and Medicare Part D to penalize price increases that outpace inflation. These provisions took effect progressively starting in fiscal year 2023. On August 15, 2024, HHS announced the agreed-upon reimbursement prices of the first ten drugs that were subject to price negotiations, although the Medicare drug price negotiation program is currently subject to legal challenges. HHS will select up to fifteen additional drugs covered under Part D for price negotiation in 2025.
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In response to the Biden administration’s October 2022 executive order, on February 14, 2023, HHS released a report outlining three new models for testing by the CMS Innovation Center which will be evaluated on their ability to lower the cost of drugs, promote accessibility, and improve quality of care. It is unclear whether the models will be utilized in any health reform measures in the future. Further, on December 7, 2023, the Biden administration announced an initiative to control the price of prescription drugs through the use of march-in rights under the Bayh-Dole Act. On December 8, 2023, the National Institute of Standards and Technology published for comment a Draft Interagency Guidance Framework for Considering the Exercise of March-In Rights which for the first time includes the price of a product as one factor an agency can use when deciding to exercise march-in rights. While march-in rights have not previously been exercised, it is uncertain if that will continue under the new framework.
At the state level, legislatures have increasingly enacted legislation and implemented regulations designed to control pharmaceutical and biological product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing.
We cannot predict the likelihood, nature or extent of government regulation that may arise from future legislation or administrative or executive action, either in the United States or abroad, particularly in light of the upcoming U.S. presidential and Congressional elections. We expect that additional state and federal health care reform measures will be adopted in the future, any of which could limit the amounts that federal and state governments will pay for health care products and services, which could result in reduced demand for our development candidates or additional pricing pressures, or otherwise adversely impact our operations.
Outside of the United States, particularly in the UK and EU, the pricing of prescription pharmaceuticals is subject to governmental control by individual EU Member States. In these countries, pricing negotiations with governmental authorities can take considerable time after the receipt of marketing approval for a product. In the EU, EU Member States may restrict the range of medicinal products for which their national health insurance systems provide reimbursement and to control the prices of medicinal products for human use. An EU Member State may approve a specific price for the medicinal product, it may refuse to reimburse a product at the price set by the manufacturer or it may instead adopt a system of direct or indirect controls on the profitability of the company placing the medicinal product on the market. Many EU Member States also periodically review their reimbursement procedures for medicinal products, which could have an adverse impact on reimbursement status. Moreover, in order to obtain reimbursement for our products in some European countries, including some EU Member States, we may be required to compile additional data comparing the cost-effectiveness of our products to other available therapies. This Health Technology Assessment (“HTA”) of medicinal products is becoming an increasingly common part of the pricing and reimbursement procedures in some EU Member States, including those representing the larger markets. The HTA process is the procedure to assess therapeutic, economic and societal impact of a given medicinal product in the national healthcare systems of the individual country.
The outcome of an HTA will often influence the pricing and reimbursement status granted to these medicinal products by the competent authorities of individual EU Member States. The extent to which pricing and reimbursement decisions are influenced by the HTA of the specific medicinal product currently varies between EU Member States. To obtain coverage and reimbursement or pricing approval in some countries, we may be required to conduct a clinical trial that compares the cost-effectiveness of our product candidate to other available therapies. If reimbursement of our products is unavailable or limited in scope or amount, or if pricing is set at unsatisfactory levels, our business could be harmed.
Current and future legislation in the United States and other countries may affect the prices we may obtain for our products and future candidates and increase the difficulty and cost for us to commercialize our product candidates.
In the United States and many other countries, rising healthcare costs have been a concern for governments, patients and the health insurance sector, which has resulted in a number of changes to laws and regulations, and may result in further legislative and regulatory action regarding the healthcare and health insurance systems that could affect our ability to profitably sell any product candidates for which we obtain marketing approval.
For example, the ACA was enacted in the United States in March 2010 with the stated goals of containing healthcare costs, improving quality and expanding access to healthcare, and includes measures to change healthcare delivery, increase the number of individuals with insurance, ensure access to certain basic healthcare services, and contain the rising cost of care. There have been executive, judicial and Congressional challenges to certain aspects of the ACA. While Congress has not passed repeal legislation, several bills affecting the implementation of certain taxes under the ACA have been signed into law. Further, the Bipartisan Budget Act of 2018, among other things, amended the ACA, effective January 1, 2019, to increase from 50% to 70% the point-of-sale discount that is owed by pharmaceutical manufacturers who participate in Medicare Part D and to close the coverage gap in most Medicare drug plans, commonly referred to as the “donut hole”. On June 17, 2021, the U.S. Supreme Court dismissed a challenge on procedural grounds that argued the ACA is unconstitutional in its entirety because the “individual mandate” was repealed by Congress. Further, the IRA, among other things, extends enhanced subsidies for individuals purchasing health insurance coverage in ACA marketplaces through plan year 2025. The IRA also eliminates the “donut hole” under the Medicare Part D program beginning in 2025 by significantly lowering the beneficiary maximum out-of-pocket cost and creating a new manufacturer discount program.
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In addition, other federal health reform measures have been proposed and adopted in the United States. For example, as a result of the Budget Control Act of 2011, providers are subject to Medicare payment reductions of 2% per fiscal year until 2032 unless additional Congressional action is taken. Further, the American Taxpayer Relief Act of 2012 reduced Medicare payments to several providers and increased the statute of limitations period for the government to recover overpayments from providers from three to five years. The Medicare Access and CHIP Reauthorization Act of 2015 also introduced a quality payment program (“Quality Payment Program”), under which certain individual Medicare providers will be subject to certain incentives or penalties based on new program quality standards. The Quality Payment Program provides clinicians with two ways to participate, including through the Advanced Alternative Payment Models (“APMs”), and the Merit-based Incentive Payment System (“MIPS”). Under both APMs and MIPS, performance data collected each performance year will affect Medicare payments in later years, including potentially reducing payments. Any reduction in reimbursement from Medicare or other government programs may result in a similar reduction in payments from private payors.
In December 2021, Regulation No 2021/2282 on HTA amending Directive 2011/24/EU, was adopted in the EU. This Regulation, which entered into force in January 2022 and will apply as of January 2025, is intended to boost cooperation among EU Member States in assessing health technologies, including new medicinal products, and providing the basis for cooperation at EU level for joint clinical assessments in these areas. The Regulation foresees a three-year transitional period and will permit EU Member States to use common HTA tools, methodologies, and procedures across the EU, working together in four main areas, including joint clinical assessment of the innovative health technologies with the most potential impact for patients, joint scientific consultations whereby developers can seek advice from HTA authorities, identification of emerging health technologies to identify promising technologies early, and continuing voluntary cooperation in other areas.
Individual EU Member States will continue to be responsible for assessing non-clinical (e.g., economic, social, ethical) aspects of health technologies, and making decisions on pricing and reimbursement. If we are unable to maintain favorable pricing and reimbursement status in EU Member States for product candidates that we may successfully develop and for which we may obtain regulatory approval, any anticipated revenue from and growth prospects for those products in the EU could be negatively affected.
The combination of healthcare cost containment measures, increased health insurance costs, reduction of the number of people with health insurance coverage, as well as future legislation and regulations focused on reducing healthcare costs by reducing the cost of or reimbursement and access to pharmaceutical products, may limit or delay our ability to generate revenue, attain profitability, or commercialize our products.
We cannot predict the likelihood, nature or extent of government regulation that may arise from future legislation or administrative action, either in the United States or abroad. As an example, the regulatory landscape related to clinical trials in the EU has evolved. The EU Clinical Trials Regulation, or CTR, which was adopted in April 2014 and repeals the EU Clinical Trials Directive, became applicable on January 31, 2022. The CTR permits trial sponsors to make a single submission to both the competent authority and an ethics committee in each EU Member State, leading to a single decision for each EU Member State. The assessment procedure for the authorization of clinical trials has been harmonized as well, including a joint assessment of some elements of the application by all EU Member States in which the trial is to be conducted, and a separate assessment by each EU Member State with respect to specific requirements related to its own territory, including ethics rules. Each EU Member State’s decision is communicated to the sponsor through a centralized EU portal, the Clinical Trial Information System, or CTIS. The CTR provides a three-year transition period. The extent to which ongoing clinical trials will be governed by the CTR varies. For clinical trials in relation to which an application for approval was made on the basis of the Clinical Trials Directive before January 31, 2023, the CTD will continue to apply on a transitional basis until January 31, 2025. By that date, all ongoing trials will become subject to the provisions of the CTR. The CTR will apply to clinical trials from an earlier date if the related clinical trial application was made on the basis of the CTR or if the clinical trial has already transitioned to the CTR framework before January 31, 2025.
In addition, on April 26, 2023, the European Commission adopted a proposal for a new Directive and Regulation to revise the existing pharmaceutical legislation. If adopted in the form proposed, the recent European Commission proposals to revise the existing EU laws governing authorization of medicinal products may result in a decrease in data and market exclusivity opportunities for our product candidates in the EU and make them open to generic or biosimilar competition earlier than is currently the case with a related reduction in reimbursement status.
We are subject to the U.K. Bribery Act, the FCPA, and other anti-corruption laws, as well as export control laws, import and customs laws, trade and economic sanctions laws and other laws governing our operations.
Our operations are subject to anti-corruption laws, including the UK Bribery Act, the FCPA, the U.S. domestic bribery statute contained in 18 U.S.C. §201, the U.S. Travel Act, and other anti-corruption laws that apply in countries where we do business. The UK Bribery Act, the FCPA and these other laws generally prohibit us and our employees and intermediaries from authorizing, promising, offering, or providing, directly or indirectly, improper or prohibited payments, or anything else of value, to government officials or other persons to obtain or retain business or gain some other business advantage. The FCPA also obligates companies whose securities are listed in the United States to comply with accounting provisions requiring us to maintain books and records that accurately and fairly reflect all transactions of the corporation, including international subsidiaries, and to devise and maintain an adequate system of internal accounting controls.
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Under the UK Bribery Act, we may also be liable for failing to prevent a person associated with us from committing a bribery offense. We and those acting on our behalf operate in a number of jurisdictions that pose a high risk of potential UK Bribery Act or FCPA violations, and we participate in collaborations and relationships with third parties whose corrupt or illegal activities could potentially subject us to liability under the UK Bribery Act, FCPA or local anticorruption laws, even if we do not explicitly authorize or have actual knowledge of such activities. In addition, we cannot predict the nature, scope or effect of future regulatory requirements to which our international operations might be subject or the manner in which existing laws might be administered or interpreted.
Compliance with the UK Bribery Act, the FCPA and these other laws is expensive and difficult, particularly in countries in which corruption is a recognized problem. In addition, anti-corruption laws present particular challenges in the pharmaceutical industry, because, in many countries, hospitals are operated by the government, and doctors and other hospital employees are considered foreign officials.
We are also subject to other laws and regulations governing our international operations, including regulations administered by the governments of the United States and the UK, and authorities in the EU, including applicable export control regulations, economic sanctions and embargoes on certain countries and persons, anti-money laundering laws, import and customs requirements and currency exchange regulations, collectively referred to as the Trade Control laws.
There is no assurance that we will be completely effective in ensuring our compliance with all applicable anti-corruption laws, including the UK Bribery Act, the FCPA or other legal requirements, including Trade Control laws. If we are not in compliance with the UK Bribery Act, the FCPA and other anti-corruption laws or Trade Control laws, we may be subject to criminal and civil penalties, disgorgement and other sanctions and remedial measures, and legal expenses, which could have an adverse impact on our business, financial condition, results of operations and liquidity. Likewise, any investigation of any potential violations of the UK Bribery Act, the FCPA, other anti-corruption laws or Trade Control laws by United States, UK or other authorities could also have an adverse impact on our reputation, our business, results of operations and financial condition. Further, the failure to comply with laws governing international business practices may result in substantial civil and criminal penalties and suspension or debarment from government contracting.
If we fail to comply with environmental, health and safety laws and regulations, we could become subject to fines or penalties or incur costs that could harm our business.
We are subject to numerous environmental, health and safety laws and regulations, including those governing laboratory procedures and the handling, use, storage, treatment and disposal of hazardous materials and wastes. Our operations involve the use of hazardous materials, including chemicals and biological materials. Our operations also produce hazardous waste products. We generally contract with third parties for the disposal of these materials and wastes. We cannot eliminate the risk of contamination or injury from these materials. In the event of contamination or injury resulting from our use of hazardous materials, we could be held liable for any resulting damages, and any liability could exceed our resources. We also could incur significant costs associated with civil or criminal fines and penalties for failure to comply with such laws and regulations.
Although we maintain insurance to cover us for costs and expenses we may incur due to injuries to our employees resulting from the use of hazardous materials, this insurance may not provide adequate coverage against potential liabilities. We do not maintain insurance for environmental liability or toxic tort claims that may be asserted against us in connection with our storage or disposal of biological or hazardous materials.
In addition, we may incur substantial costs in order to comply with current or future environmental, health and safety laws and regulations. These current or future laws and regulations may impair our research, development or production efforts. Our failure to comply with these laws and regulations also may result in substantial fines, penalties or other sanctions.
We have identified material weaknesses in our internal control over financial reporting, which could continue to adversely affect our ability to report our results of operations and financial condition accurately and in a timely manner.
As a public company, we are subject to the reporting requirements of the Exchange Act, as well as the requirements of the Sarbanes-Oxley Act of 2002, as amended (the “Sarbanes-Oxley Act”), and the listing standards of the Nasdaq Stock Market.
The Sarbanes-Oxley Act requires, among other things, that we maintain effective disclosure controls and procedures and internal control over financial reporting. It also requires management to perform an annual assessment of the effectiveness of our internal control over financial reporting and disclosure of any material weaknesses in such controls. In connection with the audit of our financial statements for the year ended December 31, 2023, we identified a material weakness in our internal control over financial reporting in connection with the historic misinterpretation and application of ASC 740, resulting in our UK SME tax credits being incorrectly presented in income tax benefit (expense). Refer to Note 3, Restatement of Previously Issued Consolidated Financial Statements, in the Consolidated Financial Statements in Part II, Item 8 of our Annual Report for additional information. We have taken steps to remediate the material weakness by (i) enhancing the training provided to the individuals operating the income taxation controls and related financial reporting controls and (ii) improving the design of our controls related to the use of taxation subject matter experts in the determination of our U.K. SME tax credits balances. We believe this material weakness was remediated at June 30, 2024, but there can be no assurance that we will not identify further control deficiencies in this area.
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In addition, in connection with our review procedures for the three months ended March 31, 2024, we identified an additional material weakness due to an insufficiency of controls over complex accounting transactions. The lack of controls did not allow us to identify, understand and evaluate the impact of certain key judgments that arose during the three months ended March 31, 2024 related to the BioNTech Agreements. Our process, as designed, was inadequate to deal with the complexity of the accounting for the transaction and did not allow for an effective and timely evaluation of these matters and their impact on our financial statements.
Any failure to remediate the identified material weakness, or to develop or maintain effective controls, or any difficulties encountered in the implementation or improvement of such controls, could harm our operating results or cause us to fail to meet our reporting obligations and may result in a restatement of our financial statements for prior periods, such as the restatement of our previously issued consolidated financial statements described in more detail in our most Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on March 21, 2024.
Any failure to remediate the identified material weakness, or to implement and maintain effective internal control over financial reporting also could adversely affect the results of management evaluations and, to the extent they are required in the future, attestations of our independent registered public accounting firm with respect to our internal control over financial reporting. We can provide no assurance that the measures we are taking and plan to take in the future will remediate the material weaknesses described above, or that any additional material weaknesses or restatements of financial results will not arise in the future due to a failure to implement and maintain adequate internal control over financial reporting or circumvention of these controls. In addition, even if we are successful in strengthening our controls and procedures, in the future those controls and procedures may not be adequate to prevent or identify irregularities or errors or to facilitate the fair presentation of our financial statements. We continue to evaluate steps to remediate the material weakness identified. Any failure to maintain effective internal control over financial reporting could adversely impact our ability to report our financial position and results from operations on a timely and accurate basis. If our financial statements are not accurate, investors may not have a complete understanding of our operations.
Likewise, if our financial statements are not filed on a timely basis, we could be subject to sanctions or investigations by the Nasdaq, the SEC or other regulatory authorities, or other potential claims or litigation. Ineffective internal control over financial reporting could also cause investors to lose confidence in our reported financial information, which could have a negative effect on the trading price of our ADSs.
Ineffective disclosure controls and procedures and internal control over financial reporting could also cause investors to lose confidence in our reported financial and other information, which may have a negative effect on the trading price of our ADSs. In addition, if we are unable to continue to meet these requirements, we may not be able to remain listed on the Nasdaq Global Select Market.
Risks Related to Our Intellectual Property
If we are unable to obtain and maintain patent protection for our T cell programming technologies and product candidates, or if the scope of the patent protection obtained is not sufficiently broad, our competitors could develop and commercialize technology and biologics similar or identical to ours, and our ability to successfully commercialize our technology and product candidates may be impaired.
Our success depends, in large part, on our ability to obtain and maintain patent protection in the United States, the EU, the UK and other countries with respect to our product candidates. We seek to protect our proprietary position by filing patent applications related to our technology and product candidates in the major pharmaceutical markets, including the United States, major countries in Europe and Japan. If we do not adequately protect our intellectual property, competitors may be able to use our technologies and erode or negate any competitive advantage that we may have, which could harm our business and ability to achieve profitability.
To protect our proprietary positions, we file patent applications in the United States and other countries related to our novel technologies and product candidates that are important to our business. The patent application and prosecution process is expensive and time-consuming. We may not be able to file and prosecute all necessary or desirable patent applications at a reasonable cost or in a timely manner. We may also fail to identify patentable aspects of our research and development before it is too late to obtain patent protection. It is possible that defects of form in the preparation or filing of our patents or patent applications may exist, or may arise in the future, such as with respect to proper priority claims, inventorship, claim scope or patent term adjustments. If any current or future licensors or licensees are not fully cooperative or disagree with us as to the prosecution, maintenance or enforcement of any patent rights, such patent rights could be compromised and we might not be able to prevent third parties from making, using and selling competing products. If there are material defects in the form or preparation of our patents or patent applications, such patents or applications may be invalid and unenforceable. Moreover, our competitors may independently develop equivalent knowledge, methods and know-how. Any of these outcomes could impair our ability to prevent competition from third parties.
Prosecution of our owned and in-licensed patent portfolio is at an early stage for some of our patent families. We currently have 39 patents that have been issued from our pending applications in the United States, and 16 patents that have been issued from our pending applications in Europe. Some of our patent portfolio consists of pending priority applications that are not examined and pending applications under the Patent Cooperation Treaty (“PCT”).
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Neither priority applications nor PCT applications can themselves give rise to issued patents. Rather, protection for the inventions disclosed in these applications must be further pursued by applicable deadlines via applications that are subject to examination. As applicable deadlines for the priority and PCT applications become due, we will need to decide whether and in which countries or jurisdictions to pursue patent protection for the various inventions claimed in these applications, and we will only have the opportunity to pursue and obtain patents in those jurisdictions where we pursue protection.
It is also possible that we will fail to identify patentable aspects of our research and development output before it is too late to obtain patent protection. The patent applications that we own or in-license may fail to result in issued patents with claims that cover our current and future product candidates in the United States or in other foreign countries. Our patent applications cannot be enforced against third parties practicing the technology claimed in such applications unless, and until, a patent issues from such applications, and then only to the extent the issued claims cover the technology.
If the patent applications we hold or have in-licensed with respect to our development programs and product candidates fail to issue, if their breadth or strength of protection is threatened, or if they fail to provide meaningful exclusivity for our current and future product candidates, it could threaten our ability to commercialize our product candidates. Any such outcome could have a negative effect on our business.
The patent position of biotechnology and pharmaceutical companies generally is highly uncertain. Changes in either the patent laws or interpretation of the patent laws in the United States and other countries may diminish the value of our patents or narrow the scope of our patent protection. In addition, the protections offered by laws of different countries vary. No consistent policy regarding the breadth of claims allowed in biotechnology and pharmaceutical patents has emerged to date in the United States or in many foreign jurisdictions. In addition, the determination of patent rights with respect to pharmaceutical compounds and technologies commonly involves complex legal and factual questions, which has in recent years been the subject of much litigation.
As a result, the issuance, scope, validity, enforceability and commercial value of our patent rights, whether owned or in-licensed, are highly uncertain. Furthermore, recent changes in patent laws in the United States, may affect the scope, strength and enforceability of our patent rights or the nature of proceedings that may be brought by or against us related to our patent rights. Additionally, the U.S. Supreme Court has ruled on several patent cases in recent years either narrowing the scope of patent protection available in certain circumstances or weakening the rights of patent owners in certain situations. In addition to increasing uncertainty with regard to our ability to obtain patents in the future, this combination of events has created uncertainty with respect to the value of patents, once obtained. Depending on decisions by the U.S. Congress, the U.S. federal courts, and the USPTO, the laws and regulations governing patents could change in unpredictable ways that could weaken our ability to obtain patents or to enforce any patents that we might obtain in the future.
We may not be aware of all third-party intellectual property rights potentially relating to our current and future our product candidates. Publications of discoveries in the scientific literature often lag behind the actual discoveries, and patent applications in the United States and other jurisdictions are typically not published until 18 months after filing, or in some cases not at all. Therefore, we cannot be certain that we or our licensors were the first to make the inventions claimed in our patents or pending patent applications, or that we or our licensors were the first to file for patent protection of such inventions. Similarly, should we own or in-license any patents or patent applications in the future, we may not be certain that we or the applicable licensor were the first to file for patent protection for the inventions claimed in such patents or patent applications. As a result, the issuance, scope, validity and commercial value of our patent rights cannot be predicted with any certainty. Moreover, we may be subject to a third-party pre-issuance submission of prior art to the USPTO, or become involved in opposition, derivation, reexamination, inter partes review or interference proceedings, in the United States or elsewhere, challenging our patent rights or the patent rights of others. An adverse determination in any such submission, proceeding or litigation could reduce the scope of, or invalidate, our patent rights, allow third parties to commercialize our technology or product candidates and compete directly with us, without payment to us, or result in our inability to manufacture or commercialize products without infringing third-party patent rights, which could significantly harm our business and results of operations.
Our pending and future patent applications, whether owned or in-licensed, may not result in patents being issued that protect our technology or product candidates, in whole or in part, or which effectively prevent others from commercializing competitive technologies and products. Even if our patent applications issue as patents, they may not issue in a form that will provide us with any meaningful protection against competing products or processes sufficient to achieve our business objectives, prevent competitors from competing with us or otherwise provide us with any competitive advantage. Our competitors may be able to circumvent our owned or licensed patents, should they issue, by developing similar or alternative technologies or products in a non-infringing manner. Our competitors may seek approval to market their own products similar to or otherwise competitive with our products. In these circumstances, we may need to defend and/or assert our patents, including by filing lawsuits alleging patent infringement. In any of these types of proceedings, a court or other agency with jurisdiction may find our patents invalid and/or unenforceable.

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The issuance of a patent is not conclusive as to its inventorship, scope, validity or enforceability, and our owned and licensed patents may be challenged in the courts or patent offices in the United States and abroad. Such challenges may result in loss of exclusivity or freedom to operate or in patent claims being narrowed, invalidated or held unenforceable, in whole or in part, which could limit our ability to stop others from using or commercializing similar or identical technology and products, or limit the duration of the patent protection of our technology and products. In addition, given the amount of time required for the development, testing and regulatory review of new product candidates, patents protecting such candidates might expire before or shortly after such candidates are commercialized.
Third parties may initiate legal proceedings alleging that we are infringing their intellectual property rights, the outcome of which would be uncertain and could significantly harm our business.
Our commercial success depends, in part, on our ability to develop, manufacture, market and sell our product candidates and use our proprietary and modular T cell programming technology without infringing the intellectual property and other proprietary rights of third parties. Numerous third-party U.S. and non-U.S. issued patents exist in the area of biotechnology, including in the area of programmed T cell therapies and including patents held by our competitors. If any third-party patents cover our product candidates or technologies, we may not be free to manufacture or commercialize our product candidates as planned.
There is a substantial amount of intellectual property litigation in the biotechnology and pharmaceutical industries, and we may become party to, or threatened with, litigation or other adversarial proceedings regarding intellectual property rights with respect to our technology or product candidates, including interference proceedings before the USPTO. Intellectual property disputes arise in a number of areas including with respect to patents, use of other proprietary rights and the contractual terms of license arrangements. Third parties may assert claims against us based on existing or future intellectual property rights and claims may also come from competitors against whom our own patent portfolio may have no deterrent effect. The outcome of intellectual property litigation is subject to uncertainties that cannot be adequately quantified in advance. Other parties may allege that our product candidates or the use of our technologies infringes patent claims or other intellectual property rights held by them or that we are employing their proprietary technology without authorization.
As we continue to develop and, if approved, commercialize our current and future product candidates, competitors may claim that our technology infringes their intellectual property rights as part of business strategies designed to impede our successful commercialization. There are and may in the future be additional third-party patents or patent applications with claims to, for example, materials, compositions, formulations, methods of manufacture or methods for treatment related to the use or manufacture of any one or more of our product candidates. For example, we are aware of third-party U.S. patents that may claim technology related to obe-cel. patents that claim technology potentially related to obe-cel. These U.S. patents will expire between 2025 and 2038. There are no counterpart patents in Europe or the rest of the world that extend beyond the earliest expected regulatory approval date of obe-cel in those jurisdictions. Unless we are able to obtain a license or licenses to the third-party U.S. patent or patents on commercially reasonable terms or any applicable patent or patents are invalidated, held to be unenforceable, or deemed uninfringed by our activities. As a result, the future commercial opportunity of AUCATZYL in the United States could be adversely impacted.
Moreover, we may fail to identify relevant third party patents or patent applications, or we may incorrectly conclude that the claims of an issued patent are invalid or are not infringed by our activities. Because patent applications can take many years to issue, third parties may have currently pending patent applications which may later result in issued patents that any of our product candidates may infringe, or which such third parties claim are infringed by our technologies.
If we are found to infringe a third party’s intellectual property rights, we could be forced, including by court order, to cease developing, manufacturing or commercializing the infringing product candidate or product. Alternatively, we may be required or may choose to obtain a license from such third party in order to use the infringing technology and continue developing, manufacturing or marketing the infringing product candidate. However, we may not be able to obtain any required license on commercially reasonable terms or at all. Even if we were able to obtain a license, it could be non-exclusive, thereby giving our competitors access to the same technologies licensed to us. In addition, we could be found liable for monetary damages, including treble damages and attorneys’ fees if we are found to have willfully infringed a patent. A finding of infringement could prevent us from commercializing our product candidates or force us to cease some of our business operations. Claims that we have misappropriated the confidential information or trade secrets of third parties could have a similar negative effect on our business. Even if successful, the defense of any claim of infringement or misappropriation is time-consuming, expensive and diverts the attention of our management from our ongoing business operations.
We may need to license intellectual property from third parties, and such licenses may not be available or may not be available on commercially reasonable terms.
A third party may hold intellectual property rights, including patent rights, that are important or necessary to the development or manufacture of our product candidates. It may be necessary for us to use the patented or proprietary technology of third parties to commercialize our product candidates, in which case we would be required to obtain a license from these third parties. Such a license may not be available on commercially reasonable terms, or at all, and we could be forced to accept unfavorable contractual terms. If we are unable to obtain such licenses on commercially reasonable terms, our business could be harmed.
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We may become involved in lawsuits to protect or enforce our intellectual property, which could be expensive, time-consuming and unsuccessful.
Competitors may infringe our patents, trademarks, copyrights or other intellectual property. To counter infringement or unauthorized use, we may be required to file infringement claims, which can be expensive and time-consuming and divert the time and attention of our management and scientific personnel. Any claims we assert against perceived infringers could provoke these parties to assert counterclaims against us alleging that we infringe their patents, trademarks, copyrights or other intellectual property. In addition, in a patent infringement proceeding, there is a risk that a court will decide that a patent of ours is invalid or unenforceable, in whole or in part, and that we do not have the right to stop the other party from using the invention at issue. There is also a risk that, even if the validity of such patents is upheld, the court will construe the patent’s claims narrowly or decide that we do not have the right to stop the other party from using the invention at issue on the grounds that our patents do not cover the invention. An adverse outcome in a litigation or proceeding involving our patents could limit our ability to assert our patents against those parties or other competitors and may curtail or preclude our ability to exclude third parties from making and selling similar or competitive products.
Similarly, if we assert trademark infringement claims, a court may determine that the marks we have asserted are invalid or unenforceable, or that the party against whom we have asserted trademark infringement has superior rights to the marks in question. In this case, we could ultimately be forced to cease use of such trademarks.
In any infringement litigation, any award of monetary damages we receive may not be commercially valuable. Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation, there is a risk that some of our confidential information could be compromised by disclosure during litigation. In addition, there could be public announcements of the results of hearings, motions or other interim proceedings or developments and if securities analysts or investors perceive these results to be negative, it could have a substantial adverse effect on the price of our ADSs.
Moreover, there can be no assurance that we will have sufficient financial or other resources to file and pursue such infringement claims, which typically last for years before they are concluded. Some of our competitors may be able to sustain the costs of such litigation or proceedings more effectively than we can because of their greater financial resources and more mature and developed intellectual property portfolios. Even if we ultimately prevail in such claims, the monetary cost of such litigation and the diversion of the attention of our management and scientific personnel could outweigh any benefit we receive as a result of the proceedings. Accordingly, despite our efforts, we may not be able to prevent third parties from infringing, misappropriating or successfully challenging our intellectual property rights. Uncertainties resulting from the initiation and continuation of patent litigation or other proceedings could have a negative impact on our ability to compete in the marketplace.
We may be subject to claims by third parties asserting that we or our employees have misappropriated their intellectual property, or claiming ownership of what we regard as our own intellectual property.
Many of our employees were previously employed at universities or other biotechnology or pharmaceutical companies, and our founder and Chief Scientific Officer, Dr. Martin Pulé, is currently employed both by us and UCL. Although we try to ensure that our employees do not use the proprietary information or know-how of third parties in their work for us, we may be subject to claims that these employees or we have inadvertently or otherwise used intellectual property, including trade secrets or other proprietary information, of any such employee’s former employer. We may also in the future be subject to claims that we have caused an employee to breach the terms of his or her non-competition or non-solicitation agreement. Litigation may be necessary to defend against these potential claims.
In addition, while it is our policy to require our employees and contractors who may be involved in the development of intellectual property to execute agreements assigning such intellectual property to us, such employees and contractors may breach the agreement and claim the developed intellectual property as their own.
As of September 30, 2024, our patent portfolio was comprised of 77 patent families, of which 17 patent families originated from UCLB, the technology-transfer company of UCL, 3 patent families are in-licensed from Noile-Immune Biotech, Inc., and 57 patent families we own and have originated from our own research. Of the 17 live patent families that were originally in-licensed from UCL, 16 have been assigned to us. Because we have acquired or licensed certain of our patents from UCLB and licensed certain other patents from third parties, we must rely on their prior practices with regard to the assignment of such intellectual property. Our and their assignment agreements may not be self-executing or may be breached, and we may be forced to bring claims against third parties or defend claims they may bring against us, to determine the ownership of what we regard as our intellectual property.
If we fail in prosecuting or defending any such claims, in addition to paying monetary damages, we may lose valuable intellectual property rights or personnel. A court could prohibit us from using technologies or features that are essential to our products if such technologies or features are found to incorporate or be derived from the trade secrets or other proprietary information of the former employers. Even if we are successful in prosecuting or defending against such claims, litigation could result in substantial costs and could be a distraction to management. In addition, any litigation or threat thereof may adversely affect our ability to hire employees or contract with independent service providers. Moreover, a loss of key personnel or their work product could hamper or prevent our ability to commercialize our products.
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We may be subject to claims challenging the inventorship or ownership of our owned or in-licensed patent rights and other intellectual property.
We generally enter into confidentiality and intellectual property assignment agreements with our employees, consultants, outside scientific collaborators, sponsored researchers and other advisors. However, these agreements may not be honored and may not effectively assign intellectual property rights to us. For example, disputes may arise from conflicting obligations of consultants or others who are involved in developing our technology and product candidates. Litigation may be necessary to defend against these and other claims challenging inventorship or ownership. The owners of intellectual property in-licensed to us could also face such claims. If we or our licensors fail in defending any such claims, in addition to paying monetary damages, we may lose valuable intellectual property rights, such as exclusive ownership of, or right to use, valuable intellectual property.
Such an outcome could have a material adverse effect on our business. Even if we or our licensors are successful in defending against such claims, litigation could result in substantial costs and be a distraction to management and other employees.
Our existing trademarks and any trademarks we may obtain may be infringed or successfully challenged, resulting in harm to our business.
We expect to rely on trademarks as one means to distinguish AUCATZYL from the products of competitors, and also expect to rely in the future trademarks to protect any of our other product candidates that are approved for marketing. We have a U.S. trademark for AUCATZYL but we have not yet selected trademarks for our other product candidates, including obe-cel for r/r adult B-ALL in other jurisdictions. For each selected trademark, we will need to apply to register them and our trademark applications may not be approved. Third parties may oppose our trademark applications, or otherwise challenge our use of the trademarks. In the event that our trademarks are successfully challenged, we could be forced to rebrand our products, which could result in loss of brand recognition and could require us to devote resources to advertising and marketing new brands. Our competitors may infringe our trademarks and we may not have adequate resources to enforce our trademarks.
In addition, any proprietary name we propose to use with our clinical-stage product candidates or any other product candidate in the United States must be approved by the FDA, regardless of whether we have registered it, or applied to register it, as a trademark. The FDA typically conducts a review of proposed product names, including an evaluation of the potential for confusion with other product names. If the FDA objects to any of our proposed proprietary product names, we may be required to expend significant additional resources in an effort to identify a suitable proprietary product name that would qualify under applicable trademark laws, not infringe the existing rights of third parties and be acceptable to the FDA.
If we are unable to protect the confidentiality of our trade secrets, our business and competitive position would be harmed.
In addition to seeking patent and trademark protection for our product candidates, we also rely on trade secrets, including unpatented know-how, technology and other proprietary information, to maintain our competitive position. We seek to protect our trade secrets, in part, by entering into non-disclosure and confidentiality agreements with parties who have access to them, such as our employees, consultants, advisors and other third parties. We also enter into confidentiality and invention or patent assignment agreements with our employees and consultants. Despite these efforts, any of these parties may breach the agreements and disclose our proprietary information, including our trade secrets. Monitoring unauthorized uses and disclosures of our intellectual property is difficult, and we do not know whether the steps we have taken to protect our intellectual property will be effective. In addition, we may not be able to obtain adequate remedies for any such breaches. Enforcing a claim that a party illegally disclosed or misappropriated a trade secret is difficult, expensive and time-consuming, and the outcome is unpredictable. In addition, some courts inside and outside the United States are less willing or unwilling to protect trade secrets.
Moreover, our competitors may independently develop knowledge, methods and know-how equivalent to our trade secrets. Competitors could purchase our products and replicate some or all of the competitive advantages we derive from our development efforts for technologies on which we do not have patent protection. If any of our trade secrets were to be lawfully obtained or independently developed by a competitor, we would have no right to prevent them, or those to whom they communicate it, from using that technology or information to compete with us. If any of our trade secrets were to be disclosed to or independently developed by a competitor, our competitive position would be harmed.
We may not be able to protect our intellectual property rights throughout the world.
Filing, prosecuting and defending patents on product candidates in all countries throughout the world would be prohibitively expensive, and our intellectual property rights in some countries outside the United States could be less extensive than those in the United States. In some cases, we may not be able to obtain patent protection for certain technology outside the United States. In addition, the laws of some foreign countries do not protect intellectual property rights to the same extent as federal and state laws in the United States, even in jurisdictions where we do pursue patent protection. Consequently, we may not be able to prevent third parties from practicing our inventions in all countries outside the United States, even in jurisdictions where we do pursue patent protection or from selling or importing products made using our inventions in and into the United States or other jurisdictions.
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Competitors may use our technologies in jurisdictions where we have not pursued and obtained patent protection to develop their own products and, further, may export otherwise infringing products to territories where we have patent protection, but enforcement is not as strong as that in the United States. These products may compete with our product candidates and preclinical programs and our patents or other intellectual property rights may not be effective or sufficient to prevent them from competing.
Many companies have encountered significant problems in protecting and defending intellectual property rights in foreign jurisdictions. The legal systems of certain countries, particularly certain developing countries, do not favor the enforcement of patents, trade secrets and other intellectual property protection, particularly those relating to biotechnology products, which could make it difficult for us to stop the infringement of our patents, if pursued and obtained, or marketing of competing products in violation of our proprietary rights generally. Proceedings to enforce our patent rights in foreign jurisdictions could result in substantial costs and divert our efforts and attention from other aspects of our business, could put our patents at risk of being invalidated or interpreted narrowly and our patent applications at risk of not issuing and could provoke third parties to assert claims against us. We may not prevail in any lawsuits that we initiate, and the damages or other remedies awarded, if any, may not be commercially meaningful. Accordingly, our efforts to enforce our intellectual property rights around the world may be inadequate to obtain a significant commercial advantage from the intellectual property that we develop or license.
Obtaining and maintaining our patent protection depends on compliance with various procedural, document submission, fee payment and other requirements imposed by governmental patent agencies, and our patent protection could be reduced or eliminated for non-compliance with these requirements.
Periodic maintenance and annuity fees on any issued patent are due to be paid to the USPTO and patent agencies outside the United States in several stages over the lifetime of the patent. The USPTO and various foreign governmental patent agencies require compliance with a number of procedural, documentary, fee payment and other similar provisions during the patent application process. While an inadvertent lapse can in many cases be cured by payment of a late fee or by other means in accordance with the applicable rules, there are situations in which noncompliance can result in abandonment or lapse of the patent or patent application, resulting in partial or complete loss of patent rights in the relevant jurisdiction.
Non-compliance events that could result in abandonment or lapse of a patent or patent application include failure to respond to official actions within prescribed time limits, non-payment of fees and failure to properly legalize and submit formal documents.
If we or our licensors fail to maintain the patents and patent applications covering our products or product candidates, our competitors might be able to enter the market, which would harm our business. In addition, to the extent that we have responsibility for taking any action related to the prosecution or maintenance of patents or patent application in-licensed from a third party, any failure on our part to maintain the in-licensed rights could jeopardize our rights under the relevant license and may expose us to liability.
Risks Related to Ownership of Our Securities and Our Status as a Public Company
The trading price of our ADSs has been and may continue to be highly volatile and may fluctuate due to factors beyond our control.
The trading price of our ADSs has been volatile. The stock market in general, and the market for biopharmaceutical and pharmaceutical companies in particular, has experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of these companies. Broad market and industry factors, including economic conditions and other adverse effects or developments relating to geopolitical instability, may negatively affect the market price of our ADSs, regardless of our actual operating performance.
As a result of this volatility, you may not be able to sell your ADSs at or above the price paid for the ADSs. In addition to the factors discussed in this “Risk Factors” section and elsewhere in this report, the trading price for our ADSs may be influenced by the following:
our failure to successfully execute our commercialization strategy with respect to AUCATZYL;
actions or announcements by third-party or government payers with respect to coverage and reimbursement of AUCATZYL;
the commencement, enrollment or results of our planned or future clinical trials our product candidates;
the clinical or commercial success of competitive drugs, therapies or technologies;
positive or negative results from, or delays in, testing and clinical trials by us, collaborators or competitors;
the loss of any of our key scientific or management personnel;
regulatory or legal developments in the US, UK and other countries;
adverse actions taken by regulatory agencies with respect to our clinical trials or manufacturers;
changes or developments in laws or regulations applicable to our product candidates and preclinical programs;
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changes to our relationships with collaborators, manufacturers or suppliers;
concerns regarding the safety of AUCATZYL or our product candidates or programmed T cells in general;
announcements concerning our competitors or the pharmaceutical industry in general;
actual or anticipated fluctuations in our operating results;
changes in financial estimates or recommendations by securities analysts;
potential acquisitions, financing, collaborations or other corporate transactions;
the results of our efforts to discover, develop, acquire or in-license additional product candidates;
the trading volume of our ADSs on Nasdaq;
sales of our ADSs or ordinary shares by us, members of our senior management and directors or our shareholders or the anticipation that such sales may occur in the future;
general economic, political, and market conditions and overall fluctuations in the financial markets in the United States or the UK;
price and volume fluctuations of the listed securities of comparable companies and, in particular, those that operate in the biopharmaceutical industry;
investors’ general perception of us and our business; and
other events and factors, many of which are beyond our control.
These and other market and industry factors may cause the market price and demand for our ADSs to fluctuate substantially, regardless of our actual operating performance, which may limit or prevent investors from selling their ADSs and may otherwise negatively affect the liquidity of our ADSs. In addition, the stock market in general, and biopharmaceutical companies in particular, have experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of these companies.
Some companies that have experienced volatility in the trading price of their securities have been the subject of securities class action litigation. Any lawsuit to which we are a party, with or without merit, may result in an unfavorable judgment. We also may decide to settle lawsuits on unfavorable terms. Any such negative outcome could result in payments of substantial damages or fines, damage to our reputation or adverse changes to our business practices. Defending against litigation is costly and time-consuming, and could divert our management’s attention and our resources. Furthermore, during the course of litigation, there could be negative public announcements of the results of hearings, motions or other interim proceedings or developments, which could have a negative effect on the market price of our ADSs.
Our ADSs are thinly traded and our shareholders may be unable to sell their ADSs quickly or at market price.
Although we have had periods of high volume daily trading in our ADSs, generally our ADSs are thinly traded. As a consequence of this lack of liquidity, the trading of relatively small quantities of ADSs by our shareholders may disproportionately influence the price of those ADSs in either direction. The price for our ADSs could, for example, decline significantly in the event that a large number of ADSs are sold on the market without commensurate demand, as compared to a seasoned issuer that could better absorb those sales without adverse impact on the price of the security.
Future sales of our ADSs in the public market could cause our share price to decline, even if our business is doing well.
Sales of a substantial number of shares of our ADSs in the public market, or the perception that these sales might occur, could depress the market price of our ADSs and could impair our ability to raise capital through the sale of additional equity securities.
We have filed registration statements on Form S-8 under the Securities Act to register ordinary shares (including in the form of ADSs) subject to options or other equity awards issued or reserved for future issuance under our equity incentive plans, and we have also filed an automatic shelf registration statement on Form S-3 under the Securities Act to register an unspecified number of securities. In addition, in the future, we may issue ordinary shares, ADS or other securities if we need to raise additional capital. The number of new ordinary shares or ADSs, or securities convertible into our ordinary shares or ADSs, issued in connection with raising additional capital could represent a material portion of our then-outstanding ordinary shares. For example, in February 2024, we sold ADSs representing 58.3 million ordinary shares in an underwritten offering resulting in gross proceeds of $350.0 million, and we also sold ADSs representing 33.3 million ordinary shares to BioNTech in a private placement, resulting in gross proceeds of $200.0 million.
We filed a resale registration statement on Form S-3 to register the ADSs we sold to BioNTech in February 2024. Additionally, in 2022, we filed two “resale” registration statements on Form F-3 under the Securities Act to register a total of approximately 33.4 million of our ordinary shares, or securities convertible into our ordinary shares, held by certain of our investors, allowing these shares or ADSs to be sold in the public market. If these shares or ADSs are sold, or if it is perceived that they will be sold, in the public market, the trading price of our ADSs could decline.
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Our senior management, directors and principal shareholders, if they choose to act together, have the ability to control or significantly influence all matters submitted to our shareholders for approval.
Members of our senior management, directors and current beneficial owners of 5% or more of our ordinary shares and their respective affiliates beneficially own, in the aggregate, a majority of our outstanding ordinary shares (including ordinary shares in the form of ADSs). As a result, if these shareholders were to choose to act together, they would be able to control or significantly influence all matters submitted to our shareholders for approval, as well as our management and affairs. For example, these persons, if they choose to act together, would control or significantly influence the election of directors and approval of any merger, consolidation or sale of all or substantially all of our assets.
This concentration of ownership control may harm the market price of our ADSs by:
delaying, deferring, or preventing a change in control;
entrenching our management and/or the board of directors;
impeding a merger, scheme of arrangement, consolidation, takeover, or other business combination involving us; or
discouraging a potential acquirer from making a tender offer or otherwise attempting to obtain control of us.
In addition, some of these persons or entities may have interests different than yours. For example, because many of these shareholders purchased their shares at prices substantially lower than our current trading price and have held their shares for a longer period, they may be more interested in selling our company to an acquirer than other investors, or they may want us to pursue strategies that deviate from the interests of other shareholders.
The rights of our shareholders may differ from the rights typically offered to shareholders of a U.S. corporation.
We are incorporated under English law. The rights of holders of ordinary shares and, therefore, certain of the rights of holders of our ADSs, are governed by English law, including the provisions of the U.K. Companies Act 2006 (the “Companies Act”), and by our Articles of Association. These rights differ in certain respects from the rights of shareholders in typical U.S. corporations.
Holders of our ADSs may not have the same voting rights as the holders of our ordinary shares and may not receive voting materials in time to be able to exercise their right to vote.
Holders of the ADSs do not have the same rights as our shareholders and in accordance with the provisions of the deposit agreement, will not be able to exercise voting rights attaching to the ordinary shares evidenced by the ADSs on an individual basis. The Depositary or its nominee will act as the representative for the holders of the ADSs and will exercise the voting rights attached to the ordinary shares represented by the ADSs. Holders of our ADSs may not receive voting materials in time to instruct the Depositary to vote, and it is possible that they, or persons who hold their ADSs through brokers, dealers or other third parties, will not have the opportunity to exercise a right to vote. Furthermore, the Depositary will not be liable for any failure to carry out any instructions to vote, for the manner in which any vote is cast or for the effect of any such vote. As a result, holders of our ADSs may not be able to exercise voting rights and may lack recourse if their ADSs are not voted as requested. In addition, holders of our ADSs will not be able to call a shareholders’ meeting.
Holders of our ADSs may not receive distributions on our ordinary shares represented by the ADSs or any value for them if it is illegal or impractical to make them available to holders of ADSs.
Although we do not have any present plans to declare or pay any dividends, in the event we declare and pay any dividend, the Depositary for the ADSs has agreed to pay to holders of our ADSs the cash dividends or other distributions it or the custodian receives on our ordinary shares or other deposited securities after deducting its fees and expenses. Holders of our ADSs will receive these distributions in proportion to the number of our ordinary shares their ADSs represent. However, in accordance with the limitations set forth in the deposit agreement, it may be unlawful or impractical to make a distribution available to holders of the ADSs. We have no obligation to take any other action to permit distribution on the ADSs, ordinary shares, rights or anything else to holders of the ADSs. This means that holders of our ADSs may not receive the distributions we make on our ordinary shares or any value from them if it is unlawful or impractical to make them available to you. These restrictions may have an adverse effect on the value of the ADSs.
Because we do not anticipate paying any cash dividends on our ADSs in the foreseeable future, capital appreciation, if any, will be our ADS holders’ and shareholders’ sole source of gains and they may never receive a return on their investment.
Under current English law, a company’s accumulated realized profits must exceed its accumulated realized losses (on a non-consolidated basis) before dividends can be paid. Therefore, we must have distributable profits before issuing a dividend. We have never declared or paid a dividend on our ordinary shares in the past, and we currently intend to retain our future earnings, if any, to fund the development and growth of our business. As a result, capital appreciation, if any, on our ADSs will be our ADS holders’ sole source of gains for the foreseeable future, and they will suffer a loss on their investment if they are unable to sell their ADSs at or above the price at which they purchased the ADSs.
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If we are a PFIC, there could be adverse U.S. federal income tax consequences to U.S. Holders.
Under the Internal Revenue Code of 1986, as amended, (the “Code”), we will be a PFIC, for any taxable year in which (1) 75% or more of our gross income consists of passive income or (2) 50% or more of the average quarterly value of our assets consists of assets that produce, or are held for the production of, passive income, including cash (other than certain cash held in non-interest bearing accounts for short-term working capital needs). For purposes of these tests, passive income includes dividends, interest, gains from the sale or exchange of investment property and certain rents and royalties. In addition, for purposes of the above calculations, a non-U.S. corporation that directly or indirectly owns at least 25% by value of the shares of another corporation is treated as if it held its proportionate share of the assets and received directly its proportionate share of the income of such other corporation.
If we are a PFIC for any taxable year during which a U.S. holder holds our ADSs, the U.S. holder may be subject to adverse tax consequences regardless of whether we continue to qualify as a PFIC, including ineligibility for any preferred tax rates on capital gains or on actual or deemed dividends, interest charges on certain taxes treated as deferred, and additional reporting requirements.
Based on our analysis of our income, assets, activities and market capitalization, we believe we were not a PFIC for our taxable year ended December 31, 2023. However, the determination of whether we are a PFIC is a fact-intensive determination made on an annual basis and the applicable law is subject to varying interpretation. In particular, the characterization of our assets as active or passive may depend in part on our current and intended future business plans, which are subject to change. In addition, for our current and future taxable years, the total value of our assets for PFIC testing purposes may be determined in part by reference to the market price of our ordinary shares or ADSs from time to time, which may fluctuate considerably. Under the income test, our status as a PFIC depends on the composition of our income which will depend on the transactions we enter into in the future and our corporate structure. The composition of our income and assets is also affected by how, and how quickly, we spend the cash we raise in any offering. Even if we determine that we are not a PFIC for a taxable year, there can be no assurance that the Internal Revenue Service (“IRS”), will agree with our conclusion and that the IRS would not successfully challenge our position. Accordingly, our U.S. counsel expresses no opinion with respect to our PFIC status for our taxable year ended December 31, 2023, or any future taxable year.
If a United States person is treated as owning at least 10% of our ordinary shares, including ordinary shares represented by ADSs, such holder may be subject to adverse U.S. federal income tax consequences.
If a U.S. Holder is treated as owning (directly, indirectly or constructively through the application of attribution rules) at least 10% of the value or voting power of our ordinary shares, including ordinary shares represented by ADSs, such U.S. Holder may be treated as a “United States shareholder” with respect to each “controlled foreign corporation” in our group (if any). Because our group includes at least one U.S. subsidiary (Autolus Inc.), certain of our non-U.S. subsidiaries may be treated as controlled foreign corporations (regardless of whether Autolus Therapeutics plc is treated as a controlled foreign corporation). A United States shareholder of a controlled foreign corporation may be required to annually report and include in its U.S. taxable income its pro rata share of “Subpart F income,” “global intangible low-taxed income” and investments in U.S. property by controlled foreign corporations, regardless of whether we make any distributions. An individual that is a United States shareholder with respect to a controlled foreign corporation generally would not be allowed certain tax deductions or foreign tax credits that would be allowed to a United States shareholder that is a U.S. corporation. We cannot provide any assurances that we will assist investors in determining whether any of our non-U.S. subsidiaries, if any, are treated as a controlled foreign corporation or whether such investor is treated as a United States shareholder with respect to any of such controlled foreign corporations.
Further, we cannot provide any assurances that we will furnish to any U.S. shareholder information that may be necessary to comply with the reporting and tax paying obligations discussed above. Failure to comply with these reporting obligations may subject you to significant monetary penalties and may prevent the statute of limitations with respect to your U.S. federal income tax return for the year for which reporting was due from starting. U.S. Holders should consult their tax advisors regarding the potential application of these rules to their investment in our ADSs.
Future changes to tax laws could materially adversely affect our company and reduce net returns to our shareholders.
Our business and our ADSs and ordinary shares are subject to changes in tax laws, regulations and treaties, or the interpretation thereof, and tax policy initiatives and reforms under consideration or being implemented by tax authorities in the jurisdictions in which we operate, including in connection with the Base Erosion and Profit Shifting, or BEPS, Project of the Organization for Economic Co-Operation and Development, or OECD, and initiatives of the European Commission.
Such changes may include (but are not limited to) the taxation of operating income, investment income, dividends received or (in the specific context of withholding tax) dividends paid, or the stamp duty or stamp duty reserve tax treatment of our ADSs or ordinary shares. We are unable to predict what tax reform may be proposed or enacted in the future or what effect such changes would have on our business, but such changes, to the extent they are brought into tax legislation, regulations, policies or practices, could affect our financial position and overall or effective tax rates in the future in countries where we have operations, reduce post-tax returns to our shareholders, and increase the complexity, burden and cost of tax compliance.

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The IRA enacted in the United States introduced, among other changes, a 15% corporate minimum tax on certain United States corporations and a 1% excise tax on certain stock redemptions by United States corporations (which the U.S. Treasury indicated may also apply to certain stock redemptions by a foreign corporation funded (or deemed funded) by certain United States affiliates. In addition, effective in 2022, the Tax Cuts and Jobs Act of 2017 eliminates the option to deduct research and development expenditures in the current period and requires taxpayers to capitalize and amortize them over five or fifteen years pursuant to Internal Revenue Code Section 174.
Tax authorities may disagree with our positions and conclusions regarding certain tax positions, or may apply existing rules in an unforeseen manner, resulting in unanticipated costs, taxes or non-realization of expected benefits.
A tax authority may disagree with tax positions that we have taken, which could result in increased tax liabilities. For example, His Majesty’s Revenue & Customs (“HMRC”), the U.S. IRS or another tax authority could challenge our allocation of income by tax jurisdiction and the amounts paid between our affiliated companies pursuant to our intercompany arrangements and transfer pricing policies, including amounts paid with respect to our intellectual property development. Similarly, a tax authority could assert that we are subject to tax in a jurisdiction where we believe we have not established a taxable connection, often referred to as a ‘‘permanent establishment’’ under international tax treaties, and such an assertion, if successful, could increase our expected tax liability in one or more jurisdictions. A tax authority may take the position that material income tax liabilities, interest and penalties are payable by us, in which case, we expect that we might contest such assessment. Contesting such an assessment may be lengthy and costly and if we were unsuccessful in disputing the assessment, the implications could increase our anticipated effective tax rate, where applicable.
We may be unable to use net operating loss and tax credit carryforwards and certain built-in losses to reduce future tax payments or benefits from favorable UK tax legislation.
As a UK resident trading entity, we are subject to UK corporate taxation. Due to the nature of our business, we have generated losses since inception. As of December 31, 2023, we had cumulative carryforward tax losses of $418.1 million. Subject to any relevant utilization criteria and restrictions (including those that limit the percentage of profits that can be reduced by carried forward losses and those that can restrict the use of carried forward losses where there is a change of ownership of more than half the ordinary shares of the company and a major change in the nature, conduct or scale of the trade), we expect these to be eligible for carry forward and utilization against future operating profits.
Research and development, or R&D, expenditure is presented net of reimbursements from reimbursable tax and expenditure credits from the UK government. As a company that carries out extensive R&D activities, we benefit from the UK R&D tax credit regime.
In respect of accounting periods in which we qualify as a Small and Medium-sized Enterprise, or SME, we may surrender trading losses that arise from our R&D activities for a cash rebate of up to 18.6% of qualifying R&D expenditure. If our qualifying R&D expenditure represents 40% or more of the total (meaning we also qualify as “R&D intensive”) during such accounting period, the cash rebate would increase to 27% of qualifying R&D expenditure. A large proportion of costs in relation to our pipeline research, clinical trials management and manufacturing development activities, all of which are being carried out by our subsidiary Autolus Limited, are currently eligible for inclusion within these tax credit cash rebate claims. However, if we do not qualify as R&D intensive, or as an SME, during that or future accounting periods (noting that the threshold for qualifying as “R&D intensive” will decrease from 40% qualifying R&D expenditure to 30% for accounting periods commencing after April 1, 2024), we will either not be able to claim cash rebates in respect of our R&D activities, or will only be able to receive cash payments or other tax relief at a significantly lower rate than at present. Further, the regime’s rules are complex, and if a tax authority were to challenge or seek to disallow our claims (in whole or in part), for example by asserting that we do not (or the relevant expenditure does not) meet the technical conditions to be granted tax credits (or cash rebates), then such challenge or disallowance, if successful, could have a material impact on our cash-flow and financial performance. In addition, future changes by HMRC to the UK R&D tax credit regime may mean that we no longer qualify or have a material impact on the extent to which we can make claims (or benefit from them).We may also benefit in the future from the UK’s “Patent Box” regime, which allows certain profits attributable to revenues from patented products (and other qualifying income) to be taxed at an effective rate of 10% by giving an additional tax deduction.
We are the exclusive licensee or owner of one patent and several patent applications which, if issued, would cover our product candidates, and accordingly, future upfront fees, milestone fees, product revenues and royalties could be eligible for this deduction. When taken in combination with the enhanced relief available on R&D expenditures, we expect a long-term rate of corporation tax lower than statutory to apply to us. If, however, there are unexpected adverse changes to the UK R&D tax credit regime or the “patent box” regime, or for any reason we are unable to qualify for such advantageous tax legislation, or we are unable to use net operating loss and tax credit carryforwards and certain built-in losses to reduce future tax payments then our business, results of operations and financial condition may be adversely affected. This may impact our ongoing requirement for investment and the timeframes within which additional investment is required.

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We have been advised by HMRC that the sale of our obe-cel CAR T therapy to UK customers in the future will be considered an Exempt supply from a UK VAT perspective. Consequently, Autolus Limited will be reassessing and restricting the amount of U.K. VAT it has reclaimed and will continue to do so in the future. The restriction will be based on the estimated UK market turnover as a percentage of global turnover. We currently expect revenue from UK customers to only represent a small proportion of our overall activity. If the proportion of revenue from UK customers increases this would further restrict the amount of UK input VAT recovered.
We have incurred, and will continue to incur, significant costs and demands upon management as a result of being a public company, and our management have devoted, and will continue to devote, substantial time to existing and new compliance initiatives.
As a public company listed in the United States, we incur significant legal, accounting and other expenses. These expenses will likely become even more significant now that we no longer qualify as an emerging growth company under SEC rules. The Sarbanes-Oxley Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act, the listing requirements of Nasdaq and other applicable securities rules and regulations impose various requirements on public companies in the United States, including the establishment and maintenance of effective disclosure and financial controls and corporate governance practices. Our senior management and other personnel will need to devote a substantial amount of time to these compliance initiatives. Moreover, these rules and regulations increase our legal and financial compliance costs and will make some activities more time-consuming and costly. For example, we expect that these rules and regulations may make it more difficult and more expensive for us to maintain director and officer liability insurance, which in turn could make it more difficult for us to attract and retain qualified senior management personnel or members for our board of directors.
As a foreign private issuer, we are permitted to and follow certain home country practices in relation to corporate governance matters that differ significantly from Nasdaq corporate governance listing standards applicable to public companies organized in the United States. These practices may afford less protection to shareholders than they would enjoy if we complied fully with Nasdaq corporate governance listing standards.
We are entitled to rely on a provision in Nasdaq’s corporate governance rules that allows us to follow English corporate law with regard to certain aspects of corporate governance. This allows us to follow certain corporate governance practices that differ in significant respects from the corporate governance requirements applicable to domestic issuers listed on Nasdaq.
We are not subject to Nasdaq Listing Rule 5605(b)(2) because English law does not require that independent directors regularly have scheduled meetings at which only independent directors are present. Similarly, we have adopted a compensation committee, but English law does not require that we adopt a compensation committee or that such committee be fully independent. As a result, our practice varies from the requirements of Nasdaq Listing Rule 5605(d), which sets forth certain requirements as to the responsibilities, composition and independence of compensation committees. English law requires that we disclose information regarding compensation of our directors for services as a director of an undertaking that is our subsidiary undertaking and as a director of any other undertaking of which a director is appointed by virtue of our nomination (directly or indirectly) but not other third-party compensation of our directors or director nominees. As a result, our practice varies from the third-party compensation disclosure requirements of Nasdaq Listing Rule 5250(b)(3). In addition, while we have a compensation committee, English law does not require that we adopt a compensation committee or that such committee be fully independent. Additionally, we are not subject to Nasdaq Listing Rule 5605(e) because, under English law, director nominees are not required to be selected or recommended for selection by either a majority of the independent directors or a nominations committee comprised solely of independent directors.
Furthermore, English law does not have a regulatory regime for the solicitation of proxies applicable to us, thus our practice varies from the requirement of Nasdaq Listing Rule 5620(b), which sets forth certain requirements regarding the solicitation of proxies. In addition, we have opted out of shareholder approval requirements for the issuance of securities in connection with certain events such as the acquisition of stock or assets of another company, the establishment of or amendments to equity-based compensation plans for employees, a change of control of us and certain private placements.
To this extent, our practice will vary from the requirements of Nasdaq Listing Rule 5635, which generally requires an issuer to obtain shareholder approval for the issuance of securities in connection with such events. In addition, while we have adopted a code of business conduct and ethics, English law does not require us to publicly disclose waivers from this code that have been approved by our board within four business days. We expect to report any such waivers on our website in lieu of any SEC filing. Moreover, we are not required to comply with Regulation FD, which restricts the selective disclosure of material information, although we have voluntarily adopted a corporate disclosure policy substantially similar to Regulation FD. These exemptions and leniencies will reduce the frequency and scope of information and protections to which you may otherwise have been eligible in relation to a U.S. domestic issuer.
As a result, our practice varies from the requirements for domestic issuers pursuant to Nasdaq Listing Rule 5610.

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In accordance with our Nasdaq listing, our audit committee is required to comply with the provisions of Section 301 of the Sarbanes-Oxley Act and Rule 10A-3 of the Exchange Act, both of which are also applicable to Nasdaq listed U.S. companies. Because we are a foreign private issuer, however, our audit committee is not subject to additional requirements applicable to Nasdaq listed U.S. companies, including an affirmative determination that all members of the audit committee are “independent,” using more stringent criteria than those applicable to us as a foreign private issuer, subject to certain phase-in requirements permitted by Rule 10A-3 of the Exchange Act.
We may lose our foreign private issuer status in the future, which could result in significant additional costs and expenses.
As discussed above, we are a foreign private issuer, and therefore, we are not required to comply with all of the periodic disclosure and current reporting requirements of the Exchange Act. The determination of foreign private issuer status is made annually on the last business day of an issuer’s most recently completed second fiscal quarter, and, accordingly, the next determination will be made with respect to us on June 30, 2025. We would lose our foreign private issuer status if, for example, more than 50% of our ordinary shares are directly or indirectly held by residents of the United States and we fail to meet additional requirements necessary to maintain our foreign private issuer status.
If we lose our foreign private issuer status on this determination date, we would have to comply with U.S. federal proxy requirements, and our officers, directors and principal shareholders would become subject to the short-swing profit disclosure and recovery provisions of Section 16 of the Exchange Act. In addition, we would lose our ability to rely upon exemptions from certain corporate governance requirements under the Nasdaq listing rules. As a U.S. listed public company that is not a foreign private issuer, we would incur significant additional legal, accounting and other expenses that we do not currently incur as a foreign private issuer, as well as increased accounting, reporting and other expenses in order to maintain a listing on a U.S. securities exchange. If we lose our foreign private issuer status and are unable to devote adequate funding and the resources needed to maintain compliance with U.S. securities laws, while continuing our operations, we could be forced to deregister with the SEC. A deregistration would substantially reduce or effectively terminate the trading of our securities in the United States. We also expect that if we were required to comply with the rules and regulations applicable to U.S. domestic issuers, it would make it more difficult and expensive for us to obtain director and officer liability insurance, and we may be required to accept reduced coverage or incur substantially higher costs to obtain coverage. These rules and regulations could also make it more difficult for us to attract and retain qualified members of our board of directors.
Provisions in the U.K. City Code on Takeovers and Mergers that may have anti-takeover effects do not currently apply to us.
The U.K. City Code on Takeovers and Mergers (the “Takeover Code”), applies to an offer for, among other things, a public company whose registered office is in the UK if the company is considered by the Panel on Takeovers and Mergers (the “Takeover Panel”), to have its place of central management and control in the UK (or the Channel Islands or the Isle of Man). This is known as the “residency test.” The test for central management and control under the Takeover Code is different from that used by the UK tax authorities.
Under the Takeover Code, the Takeover Panel will determine whether we have our place of central management and control in the UK by looking at various factors, primarily where the directors are resident.
In June 2019, the Takeover Panel Executive confirmed that, based on our current circumstances, we are not subject to the Takeover Code. As a result, our shareholders are not entitled to the benefit of certain takeover offer protections provided under the Takeover Code. We believe that this position is unlikely to change at any time in the near future but, in accordance with good practice, we will review the situation on a regular basis and consult with the Takeover Panel if there is any change in our circumstances which may have a bearing on whether the Takeover Panel would determine our place of central management and control to be in the UK.
You may face difficulties in protecting your interests, and your ability to protect your rights through the U.S. federal courts may be limited, because we are incorporated under the laws of England and Wales, conduct most of our operations outside the United States and most of our directors and senior management reside outside the United States.
We are incorporated and have our registered office in, and are currently existing under the laws of, England and Wales. In addition, most of our tangible assets are located, and most of our senior management and directors reside, outside of the United States. As a result, it may not be possible to serve process within the United States on certain directors or us or to enforce judgments obtained in U.S. courts against such directors or us based on civil liability provisions of the securities laws of the United States. As a result, it may not be possible for investors to effect service of process within the United States upon such persons or to enforce judgments obtained in U.S. courts against them or us, including judgments predicated upon the civil liability provisions of the U.S. federal securities laws.

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The United States and the UK do not currently have a treaty providing for recognition and enforcement of judgments (other than arbitration awards) in civil and commercial matters. Consequently, a final judgment for payment given by a court in the United States, whether or not predicated solely upon U.S. securities laws, would not automatically be recognized or enforceable in the UK. In addition, uncertainty exists as to whether English courts would entertain original actions brought in the UK against us or our directors or senior management predicated upon the securities laws of the United States or any state in the United States. Any final and conclusive monetary judgment for a definite sum obtained against us in U.S. courts would be treated by English courts as a cause of action in itself and sued upon as a debt at common law so that no retrial of the issues would be necessary, provided that certain requirements are met.
Whether these requirements are met in respect of a judgment based upon the civil liability provisions of the U.S. securities laws, including whether the award of monetary damages under such laws would constitute a penalty, is subject to determination by the court making such decision. If an English court gives judgment for the sum payable under a U.S. judgment, the English judgment will be enforceable by methods generally available for this purpose. These methods generally permit the English court discretion to prescribe the manner of enforcement.
As a result, U.S. investors may not be able to enforce against us or certain of our directors any judgments obtained in U.S. courts in civil and commercial matters, including judgments under the U.S. federal securities laws.
As an English public limited company, certain capital structure decisions will require shareholder approval, which may limit our flexibility to manage our capital structure.
On June 18, 2018, we altered the legal status of our company under English law from a private limited company by re-registering as a public limited company and changing our name from Autolus Therapeutics Limited to Autolus Therapeutics plc. English law provides that a board of directors may only allot shares (or rights to subscribe for or convertible into shares) with the prior authorization of shareholders, such authorization stating the aggregate nominal amount of shares that it covers and valid for a maximum period of five years, each as specified in the articles of association or relevant shareholder resolution.
We obtained authority from our shareholders at our Annual General Meeting held on June 28, 2024 to allot additional shares (or to grant rights to subscribe for or to convert any security into our shares) for a period of five years from June 28, 2024, up to a maximum nominal amount of $8,400, which authorization will need to be renewed upon expiration (i.e., at least every five years) but may be sought more frequently for additional five-year terms (or any shorter period).
English law also generally provides shareholders with preemptive rights when new shares are issued for cash. However, it is possible for the articles of association, or for shareholders to pass a special resolution at a general meeting, being a resolution passed by at least 75% of the votes cast, to disapply preemptive rights. Such a disapplication of preemptive rights may be for a maximum period of up to five years from the date of adoption of the articles of association, if the disapplication is contained in the articles of association, or from the date of the shareholder special resolution, if the disapplication is by shareholder special resolution. In either case, this disapplication would need to be renewed by our shareholders upon its expiration (i.e., at least every five years). We obtained authority from our shareholders at our Annual General Meeting held on June 28, 2024 to disapply preemptive rights for a period of five years from June 28, 2024 up to a maximum nominal amount of $8,400, which disapplication will need to be renewed upon expiration (i.e., at least every five years) to remain effective, but may be sought more frequently for additional five-year terms (or any shorter period).
English law also generally prohibits a public company from repurchasing its own shares without the prior approval of shareholders by ordinary resolution, being a resolution passed by a simple majority of votes cast, and other formalities. Such approval may be for a maximum period of up to five years.
Our articles of association provide that the courts of England and Wales are the exclusive forum for the resolution of all shareholder complaints other than complaints asserting a cause of action arising under the Securities Act and the Exchange Act, and that the U.S. District Court for the Southern District of New York will be the exclusive forum for the resolution of any shareholder complaint asserting a cause of action arising under the Securities Act or the Exchange Act.
Our articles of association provide that the courts of England and Wales are to be the exclusive forum for resolving all shareholder complaints (i.e., any derivative action or proceeding brought on behalf of us, any action or proceeding asserting a claim of breach of fiduciary duty owed by any of our directors, officers or other employees, any action or proceeding asserting a claim arising out of any provision of the Companies Act or our articles of association or any action or proceeding asserting a claim or otherwise related to the affairs of our company) other than shareholder complaints asserting a cause of action arising under the Securities Act or the Exchange Act, and that the U.S. District Court for the Southern District of New York will be the exclusive forum for resolving any shareholder complaint asserting a cause of action arising under the Securities Act or the Exchange Act. In addition, our articles of association provide that any person or entity purchasing or otherwise acquiring any interest in our shares is deemed to have notice of and consented to these provisions.

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This choice of forum provision may limit a shareholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers or other employees, which may discourage such lawsuits. The enforceability of similar exclusive forum provisions (including exclusive federal forum provisions for actions, suits or proceedings asserting a cause of action arising under the Securities Act) in other companies’ organizational documents has been challenged in legal proceedings, and there is uncertainty as to whether courts would enforce the exclusive forum provisions in our articles of association. Additionally, our shareholders cannot waive compliance with the federal securities laws and the rules and regulations thereunder. If a court were to find either choice of forum provision contained in our articles of association to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could adversely affect our results of operations and financial condition.
If equity research analysts do not publish research or reports, or publish unfavorable research or reports, about us, our business or our market, the price and trading volume of our ADSs could decline.
The trading market for our ADSs is influenced by the research and reports that equity research analysts publish about us and our business. We currently have research coverage by several equity research, industry or financial analysts. The price of our ADSs could decline if one or more analysts covering our business downgrade our ADSs or issue other unfavorable commentary or research about us. If one or more equity research analysts ceases coverage of us or fails to publish reports on us regularly, demand for our ADSs could decrease, which in turn could cause the trading price or trading volume of our ADSs to decline.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
None.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Mine Safety Disclosures.
Not applicable.
Item 5. Other Information.
Insider Trading Arrangements
During the three months ended September 30, 2024, none of our directors or officers (as defined in Rule 16a-1(f) under the Exchange Act) adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.














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Item 6. Exhibits.
The following exhibits are either provided with this Quarterly Report on Form 10-Q or are incorporated herein by reference:
Exhibit numberDescription
101.INS*Inline XBRL Instance Document
101.SCH*
Inline XBRL Taxonomy Extension Schema With Embedded Linkbase Documents
104
Cover Page Interactive Data File (embedded within the Inline XBRL document)
+
Indicates management contract or compensatory plan.
Certain portions of the exhibit (indicated by asterisks) have been omitted pursuant to Item 601(b)(10)(iv) of Regulation S-K. The registrant hereby undertakes to furnish supplementally a copy of any omitted exhibit or schedule upon request by the SEC.
#Certain exhibits and schedules have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The registrant hereby undertakes to furnish supplementally a copy of any omitted exhibit or schedule upon request by the SEC.
*
Filed herewith
**
This certification is being furnished solely to accompany this Quarterly Report on Form 10-Q pursuant to 18 U.S.C. Section 1350, and is not being filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference into any filing of the registrant under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date hereof, regardless of any general incorporation language in such filing.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 
 Autolus Therapeutics plc
 
Date: November 12, 2024By:
/s/ Christian Itin, Ph.D.
  NameChristian Itin, Ph.D.
  Title:Chief Executive Officer
(On Behalf of the Registrant)
Date:November 12, 2024By:/s/ Robert Dolski
NameRobert Dolski
Title:Chief Financial Officer
(Principal Financial Officer)



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