6-K

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

 

FORM 6-K

 

 

Report of Foreign Private Issuer

Pursuant to Rule 13a-16 or 15d-16 of

the Securities Exchange Act of 1934

For the month of May 2023

Commission File Number: 001-40299

 

Achilles Therapeutics plc

(Exact name of registrant as specified in its charter)

 

 

245 Hammersmith Road

London W6 8PW

United Kingdom

Tel: +44 (0)20 8154 4600

(Address, Including Zip Code, and Telephone Number, Including Area Code, of Registrant’s Principal Executive Offices)

 

 

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F ☒ Form 40-F ☐

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ☐

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ☐

 

 

 

 

 


 

Achilles Therapeutics Reports First Quarter 2023 Financial Results and Recent Business Highlights

On May 10, 2023, Achilles Therapeutics plc (“Achilles” or the “Company”) issued a press release, a copy of which is furnished as Exhibit 99.1 to this Current Report on Form 6-K, reporting its financial results for the three month period ended March 31, 2023 and providing an update on recent business highlights. Furnished (i) as Exhibit 99.2 to this Current Report on Form 6-K are the Company’s unaudited consolidated financial statements for the three month period ended March 31, 2023 and (ii) as Exhibit 99.3 to this Current Report on Form 6-K is the Management’s Discussion and Analysis of Financial Condition and Results of Operations for the three month period ended March 31, 2023.

The statements contained in this “Achilles Therapeutics Reports First Quarter 2023 Financial Results and Recent Business Highlights” section of this Current Report on Form 6-K and the information contained in Exhibits 99.1 and 99.2 shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and is not incorporated by reference into any of the Company’s filings under the Securities Act of 1933, as amended, or the Exchange Act, whether made before or after the date hereof, except as shall be expressly set forth by specific reference in any such filing.
 

 

 


 

INDEX TO EXHIBITS

Number

Description

 

 

99.1

Press Release of Achilles Therapeutics plc dated May 10, 2023.

 

 

99.2

Unaudited Condensed Consolidated Financial Statements of Achilles Therapeutics plc for the three month period ended March 31, 2023.

 

 

99.3

Management’s Discussion and Analysis of Financial Condition and Results of Operations of Achilles Therapeutics plc for the three month period ended March 31, 2023.

 

 

 


 

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.

 

 

ACHILLES THERAPEUTICS PLC

 

 

 

 

Date: May 10, 2023

 

By:

/s/ Robert Coutts

 

 

 

Robert Coutts

 

 

 

Chief Financial Officer

 

 


EX-99

Exhibit 99.1

 

https://cdn.kscope.io/c3924bcf21297bd50deb4340b6d74f93-img60901631_0.jpg 

 

Achilles Therapeutics Reports First Quarter 2023 Financial Results and Recent Business Highlights

- Phase I/IIa clinical trials in NSCLC and melanoma progressing with additional clinical and translational science data expected in the fourth quarter of 2023 -

- Strong cash position of $158.5 million supports operations into mid-2025 -

London, UK 10 May 2023 – Achilles Therapeutics plc (NASDAQ: ACHL), a clinical-stage biopharmaceutical company developing AI-powered precision T cell therapies targeting clonal neoantigens to treat solid tumors, today announced its financial results for the first quarter ended March 31, 2023, and recent business highlights.

“We continue to make progress in our ongoing Phase I/IIa clinical trials evaluating our clonal neoantigen-reactive T cell (cNeT) therapy for the treatment of advanced NSCLC (CHIRON) and metastatic malignant melanoma (THETIS). Additionally, we continue to further develop PELEUS™, our patented AI-driven bioinformatics platform, that uses multi-region sequencing analysis to provide what we believe is the best method to accurately identify clonal neoantigens,” said Dr Iraj Ali, Chief Executive Officer of Achilles Therapeutics. “We are excited about the new AI immunogenicity prediction capability of the PELEUS™ platform and are very pleased with the recent grants of a US patent and MHRA Innovation Passport. We look forward to sharing more about the PELEUS™ platform at an upcoming scientific meeting and reporting additional clinical and translational science data in the fourth quarter of this year, which builds on the encouraging clinical results observed so far.”

Business Highlights

Announced that the new neoantigen immunogenicity prediction application of the PELEUS™ platform can uniquely identify the most potent clonal neoantigens for personalized cancer therapies, supporting potential implementation into the Company’s ongoing TIL-based clinical programs in advanced non-small cell lung cancer (NSCLC) and melanoma, and into other modalities including clonal neoantigen cancer vaccines
US patent number 11,634,773 granted covering the treatment of patients with an immunotherapy targeting neoantigens based on tumor HLA status
Innovation Passport granted for the treatment of NSCLC under the Innovative Licensing and Access Pathway (ILAP) by the Medicines and Healthcare products Regulatory Agency (MHRA), the regulatory body of the United Kingdom (UK), which aims to accelerate time to market and facilitate patient access to medicines in the UK for

 


 

life-threatening or seriously debilitating conditions by providing the opportunity for enhanced regulatory and other stakeholder input during development

 

Financial Highlights

Cash and cash equivalents: Cash and cash equivalents were $158.5 million as of March 31, 2023, as compared to $173.3 million as of December 31, 2022. The Company anticipates that its cash and cash equivalents are sufficient to fund its planned operations into the middle of 2025.
Research and development (R&D) expenses: R&D expenses were $13.9 million for the first quarter ended March 31, 2023, an increase of $0.9 million compared to $13.0 million for the first quarter ended March 31, 2022. The increase was primarily driven by increased activity related to our ongoing clinical trials, as well as spend associated with expansion of our manufacturing capacity and enhancements to PELEUSTM and VELOSTM.
General and administrative (G&A) expenses: G&A expenses were $4.7 million for the first quarter ended March 31, 2023, a decrease of $1.3 million compared to $6.0 million for the first quarter ended March 31, 2022. This decrease was primarily driven by lower personnel costs.
Net loss: Net loss for the first quarter ended March 31, 2023 was $17.5 million or $0.44 per share compared to $17.4 million or $0.45 per share for the first quarter ended March 31, 2022.

2023 Focus

Clinical Data: Report clinical and translational science data from 15 to 20 additional patients treated with cNeT monotherapy in NSCLC and melanoma, and with a cNeT/anti-PD-1 checkpoint inhibitor combination in melanoma, in the fourth quarter of the year
Translational Science: Leverage the Company’s world-class translational science platform to define the cNeT product features associated with clinical responses
Clinical Activity: Drive the potential for additional confirmed responses in CHIRON and THETIS patients by delivering higher cNeT doses and improved product design
Manufacturing Development: Continue VELOS™ and PELEUS™ development to optimize cNeT dose and functionality

About Achilles Therapeutics

Achilles is a clinical-stage biopharmaceutical company developing AI-Powered precision T cell therapies targeting clonal neoantigens: protein markers unique to the individual that are expressed on the surface of every cancer cell. The Company has two ongoing Phase I/IIa trials, the CHIRON trial in patients with advanced non-small cell lung cancer (NSCLC) and the THETIS trial in patients with recurrent or metastatic melanoma. Achilles uses DNA sequencing data from each patient, together with its proprietary PELEUS™ bioinformatics platform, to identify clonal neoantigens specific to that patient, and then develop precision T cell-based product candidates specifically targeting those clonal neoantigens.

 


 

About Innovation Passport and ILAP

ILAP was launched by the MHRA in January 2021 with an aim to accelerate the development of and facilitate patient access to medicines. The Innovation Passport is granted by the UK's ILAP Steering Group, which consists of representatives from MHRA, the National Institute for Health and Care Excellence (NICE), the Scottish Medicines Consortium (SMC), the All Wales Therapeutics and Toxicology Centre (AWTTC) and the National Health Service (NHS) England. It is the first step in the ILAP process and awarded to companies developing therapies with the potential to offer significant benefit to patients who have conditions that are life-threatening or seriously debilitating. Additional information is available on the UK government website.

Forward Looking Statements

This press release contains express or implied forward-looking statements that are based on our management's belief and assumptions and on information currently available to our management. Although we believe that the expectations reflected in these forward-looking statements are reasonable, these statements relate to future events or our future operational or financial performance, and involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance, or achievements to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements. The forward-looking statements in this press release represent our views as of the date of this press release. We anticipate that subsequent events and developments will cause our views to change. However, while we may elect to update these forward-looking statements at some point in the future, we have no current intention of doing so except to the extent required by applicable law. You should therefore not rely on these forward-looking statements as representing our views as of any date subsequent to the date of this press release.

 

Investors:


Meru Advisors

Lee M. Stern

ir@achillestx.com

 

Media:

Consilium Strategic Communications
Mary-Jane Elliott, Sukaina Virji, Melissa Gardiner
+44 (0) 203 709 5000
achillestx@consilium-comms.com


 

 

 

 

 


 

 

 


 

 

ACHILLES THERAPEUTICS PLC

Condensed Consolidated Balance Sheets (Unaudited)

(in thousands, except share and per share amounts)

(expressed in U.S. Dollars, unless otherwise stated)

March 31,

December 31,

2023

2022

ASSETS

Current assets:

Cash and cash equivalents

$

158,460

$

173,338

Prepaid expenses and other current assets

26,802

23,242

Total current assets

185,262

196,580

Non-current assets:

Property and equipment, net

11,800

12,399

Operating lease right of use assets

7,216

8,081

Deferred tax assets

185

251

Restricted cash

33

33

Other assets

3,139

3,014

Total non-current assets

22,373

23,778

TOTAL ASSETS

$

207,635

$

220,358

LIABILITIES AND SHAREHOLDERS’ EQUITY

Current liabilities:

Accounts payable

$

7,650

$

5,187

Income taxes payable

304

326

Accrued expenses and other liabilities

5,955

8,292

Operating lease liabilities-current

4,038

4,188

Total current liabilities

17,947

17,993

Non-current liabilities:

Operating lease liabilities-non-current

3,563

4,388

Other long-term liability

954

933

Total non-current liabilities

4,517

5,321

Total liabilities

22,464

23,314

Commitments and contingencies (Note 12)

Shareholders’ equity:

Ordinary shares, £0.001 par value; 40,938,453 and 40,932,727 shares authorized, issued and outstanding at March 31, 2023 and
  December 31, 2022, respectively

54

54

Deferred shares, £92,451.851 par value, one share authorized, issued
  and outstanding at March 31, 2023 and December 31, 2022

128

128

Additional paid in capital

410,500

408,844

Accumulated other comprehensive loss

(17,718

)

(21,695

)

Accumulated deficit

(207,793

)

(190,287

)

Total shareholders’ equity

185,171

197,044

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY

$

207,635

$

220,358

 


 

 

 

 

ACHILLES THERAPEUTICS PLC

Consolidated Statements of Operations and Comprehensive Loss (Unaudited)

(in thousands, except share and per share amounts)

 

Three Months Ended March 31,

2023

2022

OPERATING EXPENSES:

Research and development

$

13,868

$

13,014

General and administrative

4,685

5,955

Total operating expenses

18,553

18,969

Loss from operations

(18,553

)

(18,969

)

OTHER INCOME, NET:

Other income (expense)

1,091

1,629

Total other income, net

1,091

1,629

Loss before provision for income taxes

(17,462

)

(17,340

)

Provision for income taxes

(44)

(15

)

Net loss

(17,506

)

(17,355

)

Other comprehensive income:

Foreign exchange translation adjustment

3,977

(7,677

)

Comprehensive loss

$

(13,529

)

$

(25,032

)

Net loss per share attributable to ordinary shareholders—basic and diluted

$

(0.44

)

$

(0.45

)

Weighted average ordinary shares outstanding—basic and diluted

39,732,186

38,891,822

 


EX-99

Exhibit 99.2

INDEX TO FINANCIAL STATEMENTS

 

 

Page

Condensed Consolidated Balance Sheets

2

Condensed Consolidated Statements of Operations and Comprehensive Loss

3

Condensed Consolidated Statements of Shareholders’ Equity

4

Condensed Consolidated Statements of Cash Flows

5

Notes to Condensed Consolidated Financial Statements

6

 

 

 

 

 

 


 

ACHILLES THERAPEUTICS PLC

Condensed Consolidated Balance Sheets (Unaudited)

(in thousands, except share and per share amounts)

(expressed in U.S. Dollars, unless otherwise stated)

 

 

March 31,

 

 

December 31,

 

 

 

2023

 

 

2022

 

ASSETS

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

158,460

 

 

$

173,338

 

Prepaid expenses and other current assets

 

 

26,802

 

 

 

23,242

 

Total current assets

 

 

185,262

 

 

 

196,580

 

Non-current assets:

 

 

 

 

 

 

Property and equipment, net

 

 

11,800

 

 

 

12,399

 

Operating lease right of use assets

 

 

7,216

 

 

 

8,081

 

Deferred tax assets

 

 

185

 

 

 

251

 

Restricted cash

 

 

33

 

 

 

33

 

Other assets

 

 

3,139

 

 

 

3,014

 

Total non-current assets

 

 

22,373

 

 

 

23,778

 

TOTAL ASSETS

 

$

207,635

 

 

$

220,358

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

7,650

 

 

$

5,187

 

Income taxes payable

 

 

304

 

 

 

326

 

Accrued expenses and other liabilities

 

 

5,955

 

 

 

8,292

 

Operating lease liabilities-current

 

 

4,038

 

 

 

4,188

 

Total current liabilities

 

 

17,947

 

 

 

17,993

 

Non-current liabilities:

 

 

 

 

 

 

Operating lease liabilities-non-current

 

 

3,563

 

 

 

4,388

 

Other long-term liability

 

 

954

 

 

 

933

 

Total non-current liabilities

 

 

4,517

 

 

 

5,321

 

Total liabilities

 

 

22,464

 

 

 

23,314

 

Commitments and contingencies (Note 12)

 

 

 

 

 

 

Shareholders’ equity:

 

 

 

 

 

 

Ordinary shares, £0.001 par value; 40,938,453 and 40,932,727 shares authorized, issued and outstanding at March 31, 2023 and
  December 31, 2022, respectively

 

 

54

 

 

 

54

 

Deferred shares, £92,451.851 par value, one share authorized, issued
  and outstanding at March 31, 2023 and December 31, 2022

 

 

128

 

 

 

128

 

Additional paid in capital

 

 

410,500

 

 

 

408,844

 

Accumulated other comprehensive loss

 

 

(17,718

)

 

 

(21,695

)

Accumulated deficit

 

 

(207,793

)

 

 

(190,287

)

Total shareholders’ equity

 

 

185,171

 

 

 

197,044

 

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY

 

$

207,635

 

 

$

220,358

 

 

The accompanying notes are an integral part of these financial statements.

2


 

ACHILLES THERAPEUTICS PLC

Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited)

(in thousands, except share and per share amounts)

 

 

 

Three Months Ended March 31,

 

 

 

2023

 

 

2022

 

OPERATING EXPENSES:

 

 

 

 

 

 

Research and development

 

$

13,868

 

 

$

13,014

 

General and administrative

 

 

4,685

 

 

 

5,955

 

Total operating expenses

 

 

18,553

 

 

 

18,969

 

Loss from operations

 

 

(18,553

)

 

 

(18,969

)

OTHER INCOME, NET:

 

 

 

 

 

 

Other income (expense)

 

 

1,091

 

 

 

1,629

 

Total other income, net

 

 

1,091

 

 

 

1,629

 

Loss before provision for income taxes

 

 

(17,462

)

 

 

(17,340

)

Provision for income taxes

 

 

(44

)

 

 

(15

)

Net loss

 

 

(17,506

)

 

 

(17,355

)

Other comprehensive income:

 

 

 

 

 

 

Foreign exchange translation adjustment

 

 

3,977

 

 

 

(7,677

)

Comprehensive loss

 

$

(13,529

)

 

$

(25,032

)

Net loss per share attributable to ordinary shareholders—basic and diluted

 

$

(0.44

)

 

$

(0.45

)

Weighted average ordinary shares outstanding—basic and diluted

 

 

39,732,186

 

 

 

38,891,822

 

 

The accompanying notes are an integral part of these financial statements.

3


 

ACHILLES THERAPEUTICS PLC

Condensed Consolidated Statements of Shareholders’ Equity

(unaudited)

(in thousands, except share amounts)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

Ordinary $0.001
par value

 

 

Deferred shares

 

 

Additional
paid-in

 

 

other
comprehensive

 

 

Accumulated

 

 

 

 

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

capital

 

 

income (loss)

 

 

deficit

 

 

Total

 

Balance at December 31, 2022

 

 

40,932,727

 

 

$

54

 

 

 

1

 

 

$

128

 

 

$

408,844

 

 

$

(21,695

)

 

$

(190,287

)

 

$

197,044

 

Issuance of ordinary shares under employee share purchase plan

 

 

5,726

 

 

 

 

 

 

 

 

 

 

 

 

4

 

 

 

 

 

 

 

 

 

4

 

Share-based compensation expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,652

 

 

 

 

 

 

 

 

 

1,652

 

Unrealized gain on foreign currency translation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3,977

 

 

 

 

 

 

3,977

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(17,506

)

 

 

(17,506

)

Balance at March 31, 2023

 

 

40,938,453

 

 

$

54

 

 

 

1

 

 

$

128

 

 

$

410,500

 

 

$

(17,718

)

 

$

(207,793

)

 

$

185,171

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

Ordinary $0.001
par value

 

 

Deferred shares

 

 

Additional
paid-in

 

 

other
comprehensive

 

 

Accumulated

 

 

 

 

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

capital

 

 

income (loss)

 

 

deficit

 

 

Total

 

Balance at December 31, 2021

 

 

40,603,489

 

 

$

54

 

 

 

1

 

 

$

128

 

 

$

401,821

 

 

$

6,636

 

 

$

(119,111

)

 

$

289,528

 

Issuance of ordinary shares

 

 

150,738

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

-

 

Share-based compensation
   Expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,959

 

 

 

 

 

 

 

 

 

1,959

 

Unrealized loss on foreign
   currency translation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(7,677

)

 

 

 

 

 

(7,677

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(17,355

)

 

 

(17,355

)

Balance at March 31, 2022

 

 

40,754,227

 

 

$

54

 

 

 

1

 

 

$

128

 

 

$

403,780

 

 

$

(1,041

)

 

$

(136,466

)

 

$

266,455

 

 

The accompanying notes are an integral part of these financial statements.

4


 

ACHILLES THERAPEUTICS PLC

Condensed Consolidated Statements of Cash Flows

(unaudited)

(in thousands)

 

 

Three Months Ended March 31,

 

 

 

2023

 

 

2022

 

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

 

 

 

 

Net loss

 

$

(17,506

)

 

$

(17,355

)

Adjustments to reconcile net loss to net cash used in operating activities

 

 

 

 

 

 

Depreciation and amortization

 

 

1,108

 

 

 

1,053

 

Changes in right of use assets and operating lease liabilities, net

 

 

(122

)

 

 

(370

)

Loss on impairment

 

 

16

 

 

 

 

Gain on disposal of property and equipment

 

 

 

 

 

(11

)

Non-cash (gain) loss on foreign currency remeasurement

 

 

(3

)

 

 

5

 

Non-cash share-based compensation

 

 

1,652

 

 

 

1,959

 

Changes in operating assets and liabilities

 

 

 

 

 

 

Prepaid expenses and other current assets

 

 

(2,997

)

 

 

(4,052

)

Accounts payable

 

 

2,421

 

 

 

423

 

Income taxes payable

 

 

(22

)

 

 

15

 

Accrued expenses and other liabilities

 

 

(2,392

)

 

 

(2,070

)

Deferred tax assets

 

 

65

 

 

 

 

Other assets

 

 

(73

)

 

 

(232

)

Net cash used in operating activities

 

 

(17,853

)

 

 

(20,635

)

CASH FLOWS FROM INVESTING ACTIVITIES:

 

 

 

 

 

 

Purchases of property and equipment

 

 

(454

)

 

 

(1,862

)

Net cash used in investing activities

 

 

(454

)

 

 

(1,862

)

CASH FLOWS FROM FINANCING ACTIVITIES:

 

 

 

 

 

 

      Proceeds from the issuance of shares under the employee share purchase plan

 

 

1

 

 

 

 

Net cash used in financing activities

 

 

1

 

 

 

 

Effect of exchange rate changes on cash, cash equivalents and restricted cash

 

 

3,428

 

 

 

(6,891

)

Net decrease in cash, cash equivalents and restricted cash

 

 

(14,878

)

 

 

(29,388

)

Cash, cash equivalents and restricted cash, beginning of period

 

 

173,371

 

 

 

266,352

 

Cash, cash equivalents and restricted cash, end of period

 

$

158,493

 

 

$

236,964

 

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:

 

 

 

 

 

 

Right of use assets obtained in exchange for new operating lease liabilities

 

$

32

 

 

$

1,354

 

Property and equipment purchases in accrued expenses

 

$

472

 

 

$

1,006

 

Deferred offering costs included in accrued expenses

 

$

 

 

$

230

 

 

The following table provides a reconciliation of the cash, cash equivalents and restricted cash balances as of each of the periods, shown above:

 

 

 

Three Months Ended March 31,

 

 

2023

 

 

2022

 

Cash and cash equivalents

 

$

158,460

 

 

$

236,931

 

Restricted cash

 

 

33

 

 

 

33

 

Total cash, cash equivalents and restricted cash

 

 

158,493

 

 

 

236,964

 

 

The accompanying notes are an integral part of these financial statements.

5


 

ACHILLES THERAPEUTICS PLC

Notes to Condensed Consolidated Financial Statements

1. Nature of the business

Achilles Therapeutics plc (formerly Achilles TX Limited) and subsidiaries, or the Company, is a biopharmaceutical company developing AI-powered precision T cell therapies targeting clonal neoantigens to treat solid tumors. The Company is focused on advancing immuno-oncology therapeutics by exploiting its pioneering work in the field of tumor evolution and clonal neoantigens.

 

The Company is a public limited company originally incorporated pursuant to the laws of England and Wales in November 2020 as a private limited company named Achilles TX Limited, with nominal assets and liabilities, for the purposes of becoming the ultimate holding company for Achilles Therapeutics UK Limited (formerly Achilles Therapeutics Limited). Achilles Therapeutics UK Limited was incorporated in May 2016 under the laws of England and Wales and its registered office and principal place of business is currently 245 Hammersmith Road, London W6 8PW. Achilles TX Limited and Achilles Therapeutics Holdings Limited (a wholly owned direct subsidiary of Achilles TX Limited formed in November 2020 for the purpose of becoming the direct holding company of Achilles Therapeutics UK Limited and Achilles Therapeutics US, Inc.) have not conducted any operations prior to the corporate reorganization other than activities incidental to their formation.

 

The Company has devoted its efforts principally to research and development since formation. The Company has not yet completed product development, filed for or obtained regulatory approvals for any products, nor verified the market acceptance and demand for such products. As a result, the Company is subject to risks that are common to emerging companies in the biotech industry, including the uncertainties of the product discovery and development process, dependence on key individuals, development of the same or similar technological innovations by the Company’s competitors, protection of proprietary technology, compliance with government regulations and approval requirements, the Company’s ability to access capital and uncertainty of market acceptance of products.

Going concern

The Company has historically been loss making and anticipates that it will continue to incur losses for the foreseeable future and had an accumulated deficit of $207.8 million as of March 31, 2023. The Company has funded these losses principally through the issuance of ordinary and preferred shares. The Company expects to continue to incur operating losses and negative cash outflows until such time as it generates a level of revenue that is sufficient to support its cost structure.

The spread of the coronavirus has impacted the global economy and has impacted the Company’s operations, including the interruption of preclinical and clinical trial activities and potential interruption to supply chains. The Company has maintained operations at its GMP manufacturing and research and development sites through the coronavirus pandemic to date. The Company continues to assess the impact the coronavirus may have on its ability to advance the development of drug candidates or to raise financing to support the development of drug candidates, but no assurances can be given that this analysis will enable it to avoid part or all of any impact from the spread of the coronavirus or its consequences, including downturns in business sentiment generally or in its sector in particular. Further, disruption of global financial markets and a recession or market correction, including as a result of the coronavirus, the ongoing military conflict between Russia and Ukraine and the related sanctions imposed against Russia, and other global macroeconomic factors such as inflation, increases in commodity prices, energy and fuel prices, credit and capital markets instability and supply chain interruptions could reduce our ability to access capital, which could, in the future, negatively affect our business and the value of our common shares.

As of March 31, 2023, the Company had cash and cash equivalents of $158.5 million. The Directors have reviewed the financial projections of the Company for the 12 months subsequent to the date of issuance of these financial statements including consideration of severe but plausible scenarios that may affect the Company in that period. These show that the Company will be able to pay (or otherwise discharge) its debts as they fall due immediately following the date of signing of this Balance Sheet and for the period considered by the forecast.

 

Accordingly, the financial statements have been prepared on a basis that assumes the Company will continue as a going concern and which contemplates the realization of assets and settlement of liabilities and commitments as they fall due in the ordinary course of business for at least 12 months from the date of issuance of the financial statements.

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2. Summary of significant accounting policies

The Company's significant accounting policies are described in Note 2, Summary of Significant Accounting Policies, to the financial statements for the year ended December 31, 2022 in the Form 20-F filed with the Securities and Exchange Commission, or the “SEC”, on March 7, 2023. There have been no material changes to the significant accounting policies during the three months ended March 31, 2023, except as described below.

Basis of presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America or U.S. GAAP.

 

The unaudited condensed consolidated interim financial statements have been prepared on the same basis as the audited annual consolidated financial statements as of and for the year ended December 31, 2022, and, in the opinion of management, reflect all adjustments, consisting of normal recurring adjustments, necessary for the fair statement of the Company’s financial position as of March 31, 2023, the results of its operations and comprehensive loss for the three months ended March 31, 2023, its statements of shareholders’ equity for the three months ended March 31, 2023 and 2022 and its statements of cash flows for the three months ended March 31, 2023 and 2022.

 

Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted from these interim financial statements. However, these interim financial statements include all adjustments, consisting only of normal recurring adjustments, which are, in the opinion of management, necessary to fairly state the results of the interim period. The results for the three months ended March 31, 2023 are not necessarily indicative of the results to be expected for the year ended December 31, 2023, any other interim periods, or any future year or period. The balance sheet information as of December 31, 2022, was derived from the audited financial statements included in the Company's Form 20-F filed with the SEC on March 7, 2023. These interim financial statements should be read in conjunction with the audited financial statements as of and for the year ended December 31, 2022, and the notes thereto, which are included elsewhere in the Company’s Form 20-F filed with the SEC on March 7, 2023.

3. Fair Value of Financial Instruments

The following tables show assets measured at fair value on a recurring basis as of March 31, 2023 and December 31, 2022 (in thousands):

 

 

 

March 31, 2023

 

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

Cash equivalents:

 

 

 

 

 

 

 

 

 

Money market funds

 

$

65,738

 

 

$

 

 

$

 

     Total

 

$

65,738

 

 

$

 

 

$

 

 

 

 

December 31, 2022

 

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

Cash equivalents:

 

 

 

 

 

 

 

 

 

Money market funds

 

$

51,901

 

 

$

 

 

$

 

     Total

 

$

51,901

 

 

$

 

 

$

 

 

There were no liabilities measured at fair value on a recurring basis as of March 31, 2023 and December 31, 2022.

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4. Prepaid expenses and other current assets

Prepaid expenses and other current assets consisted of the following (in thousands):

 

 

 

March 31,

 

 

December 31,

 

 

 

2023

 

 

2022

 

U.K. R&D tax credit

 

$

19,296

 

 

$

15,232

 

Prepaid research and development

 

 

3,362

 

 

 

3,473

 

Prepaid insurance

 

 

350

 

 

 

1,151

 

VAT recoverable

 

 

777

 

 

 

771

 

Other current assets

 

 

3,017

 

 

 

2,615

 

 

$

26,802

 

 

$

23,242

 

 

5. Property and equipment, net

Property and equipment, net consisted of the following (in thousands):

 

 

 

March 31,

 

 

December 31,

 

 

 

2023

 

 

2022

 

Lab equipment

 

$

9,211

 

 

$

8,707

 

Leasehold improvements

 

 

9,119

 

 

 

8,929

 

Office equipment and computers

 

 

1,610