SEC Filing | Achilles Therapeutics plc

ACHILLES THERAPEUTICS PLC

Date: August 14, 2024

/s/ Robert Coutts

Robert Coutts

Chief Financial Officer

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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 August 2024

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 ☐

Achilles Therapeutics Reports Second Quarter 2024 Financial Results and Recent Business Updates

On August 14, 2024, 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 and six month periods ended June 30, 2024 and providing an update on recent business updates. Furnished (i) as Exhibit 99.2 to this Current Report on Form 6-K are the Company’s unaudited condensed consolidated financial statements for the three and six month periods ended June 30, 2024 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 and six month periods ended June 30, 2024.

Incorporation by Reference

This Report on Form 6-K, including the exhibits hereto (except for the statements contained in the “Achilles Therapeutics Reports Second Quarter 2024 Financial Results and Recent Business Updates” section of this Report on Form 6-K and Exhibit 99.1 hereto, which are not incorporated by reference into any of the Company’s filings under the Securities Act of 1933, as amended (the “Securities Act”), or the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and shall not be deemed “filed” for the purposes of Section 18 of the Exchange Act), is incorporated by reference into the Company’s filings under the Securities Act, including the Company’s Registration Statements on Forms F-3 (File No. 333-268239) and S-8 (File Nos. 333-278501, 333-270344, 333-263220, and 333-255063) to the extent not superseded by information subsequently filed or furnished (to the extent the Company expressly states that it incorporates such furnished information by reference) by the Company under the Securities Act or the Exchange Act.

INDEX TO EXHIBITS


Number	Description

99.1	Press Release of Achilles Therapeutics plc dated August 14, 2024.

99.2	Unaudited Condensed Consolidated Financial Statements of Achilles Therapeutics plc for the three and six month periods ended June 30, 2024.

99.3	Management’s Discussion and Analysis of Financial Condition and Results of Operations of Achilles Therapeutics plc for the three and six month periods ended June 30, 2024.


101.INS*	Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

101.SCH*	Inline XBRL Taxonomy Extension Schema Document.

104	Cover Page Interactive Data File (embedded within the Inline XBRL document)

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.

EX-99.1

Exhibit 99.1

Achilles Therapeutics Reports Second Quarter 2024 Financial Results and Recent Business Updates

– Announced research collaboration with Arcturus Therapeutics to explore second-generation mRNA cancer vaccines using Achilles’ AI-powered, tumor-targeting technology –

– Provided interim Phase I/IIa update on the use of cNeT in Advanced NSCLC and Melanoma including first patients with enhanced host conditioning (EHC), with the first three EHC patients showing improved cNeT persistence and engraftment –

– Cash position of $95.1 million supports operations through 2025 –

London, UK 14 August 2024 – 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 second quarter ended June 30, 2024, and recent business highlights.

“During the second quarter we shared interim Phase I/IIa data from our ongoing CHIRON and THETIS TIL-based cNeT clinical trials and established an important research collaboration with Arcturus Therapeutics to explore the use of clonal neoantigens in second-generation personalized mRNA cancer vaccines”, said Dr Iraj Ali, Chief Executive Officer of Achilles Therapeutics. “Our insights into the factors that drive durable engraftment and immune evasion led us to add an additional cohort in the CHIRON and THETIS trials to evaluate cNeT persistence and clinical activity in patients with enhanced host conditioning (EHC). These findings, along with the cancer vaccine research collaboration, continue to illustrate the potential value of our platform, including the unparalleled capability of PELEUS to select tumor targets with the highest potential for immune system recognition in a variety of modalities including TIL, neoantigen vaccines, ADCs, and TCR-T therapies.

Our financial position remains strong with more than $95 million in cash, which we expect to support operations through 2025, including the completion of the ongoing Phase I/IIa trials and the Arcturus collaboration.”

Clinical and Business Updates

•

Announced research collaboration with Arcturus Therapeutics to explore second-generation mRNA cancer vaccines

Combines Achilles’ AI-powered, tumor-targeting technology with Arcturus’ self-amplifying mRNA platform

Combined technologies have the potential to generate potent and durable T cell responses in pre-clinical IND-enabling studies 

•

Provided an interim Phase I/IIa update on the use of clonal neoantigen reactive T cells (cNeT) in advanced NSCLC and melanoma

Dosed first EHC patients in CHIRON and THETIS, with the first three EHC patients showing improved cNeT persistence and engraftment

Delivered 10 products containing over 100 million cNeT and five containing over one billion cNeT

•

Matilde Saggese, MD, has been appointed as Interim Chief Medical Officer. Dr. Saggese has served as Vice President and Medical Director of Achilles Therapeutics since March 2021.

Financial Highlights

•

Cash and cash equivalents: Cash and cash equivalents were $95.1 million as of June 30, 2024, as compared to $131.5 million as of December 31, 2023. The Company believes that its cash and cash equivalents are sufficient to fund its planned operations through 2025.

•

Research and development (R&D) expenses: R&D expenses were $13.6 million for the second quarter ended June 30, 2024, compared to $13.8 million for the second quarter ended June 30, 2023. The decrease was primarily driven by decreased activity in THETIS and lower personnel costs, partially offset by increased activity in CHIRON.

•

General and administrative (G&A) expenses: G&A expenses were $4.2 million for the second quarter ended June 30, 2024, compared to $4.3 million for second quarter ended June 30, 2023. This decrease was primarily driven by lower personnel costs and lower insurance premiums.

•

Net loss: Net loss for the second quarter ended June 30, 2024 was $16.4 million or $0.41 per share compared to $16.8 million or $0.42 per share for the second quarter ended June 30, 2023.

2024 Focus

•

Clinical Data: Report clinical activity and translational science data from patients in CHIRON and THETIS, evaluating the benefit of EHC, with a meaningful data update expected in the second half of 2024

•

Arcturus Collaboration: Ongoing evaluation of best-in-class, self-amplifying mRNA (sa-mRNA) personalized cancer vaccines (PCVs) targeting clonal neoantigens with the potential to generate IND-enabling data

•

Translational Science: Leverage the Company’s unique bioinformatics platform to better understand the drivers associated with clinical responses

•

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.

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. Forward-looking statements in this press release include, but are not limited to, statements regarding the timing of the Company’s clinical and translational data updates and the Company’s beliefs about recent data updates, and expectations related to the Company’s cash runway and operating expenses and capital expense requirements. 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.

For further information, please contact:

Investors:

Meru Advisors

Lee M. Stern

lstern@meruadvisors.com

Media:

ICR Consilium
Sukaina Virji, Tracy Cheung, Dylan Wilks
+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)


	June 30,	December 31,
	2024	2023
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$ 95,111	$ 131,539
Prepaid expenses and other current assets	22,706	14,094
Total current assets	117,817	145,633
Property and equipment, net	6,954	9,171
Operating lease right of use assets	4,165	4,372
Deferred tax assets	41	41
Restricted cash	53	33
Other assets	2,156	2,206
Total non-current assets	13,369	15,823
Total assets	$ 131,186	$ 161,456
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable	$ 2,865	$ 5,629
Accrued expenses and other liabilities	7,225	7,828
Operating lease liabilities - current	4,205	3,539
Total current liabilities	14,295	16,996
NON-CURRENT LIABILITIES:
Operating lease liabilities - non-current	258	1,076
Other long-term liability	1,158	1,015
Total non-current liabilities	1,416	2,091
Total liabilities	15,711	19,087

Commitments and contingencies
SHAREHOLDERS’ EQUITY:
Ordinary shares, £0.001 par value; 41,087,901 and 41,082,948 shares authorized, issued and outstanding at June 30, 2024 and December 31, 2023, respectively	54	54
Deferred shares, £92,451.85 par value, one share authorized, issued and outstanding at June 30, 2024 and December 31, 2023, respectively	128	128
Additional paid in capital	417,914	415,210
Accumulated other comprehensive income	(14,015)	(13,071)
Accumulated deficit	(288,606)	(259,952)
Total shareholders’ equity	115,475	142,369
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$ 131,186	$ 161,456

ACHILLES THERAPEUTICS PLC

Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited)

(in thousands, except share and per share amounts)

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


		Three Months Ended		Six Months Ended
		June 30,		June 30,
		2024	2023	2024	2023
OPERATING EXPENSES:
	Research and development	$ 13,635	$ 13,774	$ 23,775	$ 27,642
	General and administrative	4,164	4,318	8,323	9,003
	Total operating expenses	17,799	18,092	32,098	36,645
LOSS FROM OPERATIONS:		(17,799)	(18,092)	(32,098)	(36,645)
OTHER INCOME (EXPENSE), NET:
	Other income (expense)	1,427	1,212	3,429	2,303
	Total other income (expense), net	1,427	1,212	3,429	2,303
Loss before income taxes		(16,372)	(16,880)	(28,669)	(34,342)
	(Provision) benefit for income taxes	(8)	34	15	(10)
Net loss		(16,380)	(16,846)	(28,654)	(34,352)
Other comprehensive (loss) income:
	Foreign exchange translation adjustment	195	3,817	(944)	7,794
Comprehensive loss		$ (16,185)	$ (13,029)	$ (29,598)	$ (26,558)
Net loss per share attributable to ordinary shareholders—basic and diluted		$ (0.41)	$ (0.42)	$ (0.71)	$ (0.86)
Weighted average ordinary shares outstanding—basic and diluted		40,355,972	39,899,944	40,318,690	39,816,528

EX-99.2

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)


	June 30,			December 31,
	2024			2023
ASSETS
Current assets:
Cash and cash equivalents	$	95,111		$	131,539
Prepaid expenses and other current assets		22,706			14,094
Total current assets		117,817			145,633
Non-current assets:
Property and equipment, net		6,954			9,171
Operating lease right of use assets		4,165			4,372
Deferred tax assets		41			41
Restricted cash		53			33
Other assets		2,156			2,206
Total non-current assets		13,369			15,823
TOTAL ASSETS	$	131,186		$	161,456
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	2,865		$	5,629
Accrued expenses and other liabilities		7,225			7,828
Operating lease liabilities-current		4,205			3,539
Total current liabilities		14,295			16,996
Non-current liabilities:
Operating lease liabilities-non-current		258			1,076
Other long-term liability		1,158			1,015
Total non-current liabilities		1,416			2,091
Total liabilities		15,711			19,087
Commitments and contingencies (Note 12)
Shareholders’ equity:
Ordinary shares, £0.001 par value; 41,087,901 and 41,082,948 shares authorized, issued and outstanding at June 30, 2024 and December 31, 2023, respectively		54			54
Deferred shares, £92,451.85 par value, one share authorized, issued and outstanding at June 30, 2024 and December 31, 2023		128			128
Additional paid in capital		417,914			415,210
Accumulated other comprehensive loss		(14,015	)		(13,071	)
Accumulated deficit		(288,606	)		(259,952	)
Total shareholders’ equity		115,475			142,369
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	131,186		$	161,456

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

ACHILLES THERAPEUTICS PLC

Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited)

(in thousands, except share and per share amounts)


	Three Months Ended June 30,						Six Months Ended June 30,
	2024			2023			2024			2023
OPERATING EXPENSES:
Research and development	$	13,635		$	13,774		$	23,775		$	27,642
General and administrative		4,164			4,318			8,323			9,003
Total operating expenses		17,799			18,092			32,098			36,645
Loss from operations		(17,799	)		(18,092	)		(32,098	)		(36,645	)
OTHER INCOME, NET:
Other income		1,427			1,212			3,429			2,303
Total other income, net		1,427			1,212			3,429			2,303
Loss before provision for income taxes		(16,372	)		(16,880	)		(28,669	)		(34,342	)
(Provision) benefit for income taxes		(8	)		34			15			(10	)
Net loss		(16,380	)		(16,846	)		(28,654	)		(34,352	)
Other comprehensive income:
Foreign exchange translation adjustment		195			3,817			(944	)		7,794
Comprehensive loss	$	(16,185	)	$	(13,029	)	$	(29,598	)	$	(26,558	)
Net loss per share attributable to ordinary shareholders—basic and diluted	$	(0.41	)	$	(0.42	)	$	(0.71	)	$	(0.86	)
Weighted average ordinary shares outstanding—basic and diluted		40,355,972			39,899,944			40,318,690			39,816,528

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

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, 2023		41,082,948	$	54		1	$	128	$	415,210	$	(13,071	)	$	(259,952	)	$	142,369
Issuance of ordinary shares under employee share program		4,953		—		—		—		5		—			—			5
Share-based compensation expense		—		—		—		—		1,387		—			—			1,387
Unrealized loss on foreign currency translation		—		—		—		—		—		(1,139	)		—			(1,139	)
Net loss		—		—		—		—		—					(12,274	)		(12,274	)
Balance at March 31, 2024		41,087,901	$	54		1	$	128	$	416,602	$	(14,210	)	$	(272,226	)	$	130,348
Issuance of ordinary shares under employee share program				—		—		—		—		—			—			—
Share-based compensation expense		—		—		—		—		1,312		—			—			1,312
Unrealized gain on foreign currency translation		—		—		—		—		—		195			—			195
Net loss		—		—		—		—		—		—			(16,380	)		(16,380	)
Balance at June 30, 2024		41,087,901	$	54		1	$	128	$	417,914	$	(14,015	)	$	(288,606	)	$	115,475


											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		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
Issuance of ordinary shares		7,786		—		—		—		—		—			—			—
Share-based compensation expense		—		—		—		—		1,701		—			—			1,701
Unrealized gain on foreign currency translation		—		—		—		—		—		3,817			—			3,817
Net loss		—		—		—		—		—		—			(16,846	)		(16,846	)
Balance at June 30, 2023		40,946,239	$	54		1	$	128	$	412,201	$	(13,901	)	$	(224,639	)	$	173,843

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

ACHILLES THERAPEUTICS PLC

Condensed Consolidated Statements of Cash Flows

(unaudited)

(in thousands)


	Six Months Ended June 30,
	2024			2023
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(28,654	)	$	(34,352	)
Adjustments to reconcile net loss to net cash used in operating activities
Depreciation and amortization		2,357			2,361
Loss on disposal of property and equipment		5			—
Loss on impairment		—			16
Changes in right of use assets and operating lease liabilities, net		57			(260	)
Non-cash loss on foreign currency remeasurement		—			25
Non-cash share-based compensation		2,699			3,353
Changes in operating assets and liabilities
Prepaid expenses and other current assets		(8,711	)		(7,069	)
Accounts payable		(2,372	)		1,873
Income taxes payable		—			(319	)
Accrued expenses and other liabilities		(379	)		(930	)
Deferred tax assets		—			65
Other long-term liability		151			—
Other assets		34			(25	)
Net cash used in operating activities		(34,813	)		(35,262	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment		(731	)		(991	)
Net cash used in investing activities		(731	)		(991	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from the issuance of shares under the employee share purchase plan		5			1
Net cash provided by financing activities		5			1
Effect of exchange rate changes on cash, cash equivalents and restricted cash		(869	)		6,625
Net decrease in cash, cash equivalents and restricted cash		(36,408	)		(29,627	)
Cash, cash equivalents and restricted cash, beginning of period		131,572			173,371
Cash, cash equivalents and restricted cash, end of period	$	95,164		$	143,744
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Right of use assets obtained in exchange for new operating lease liabilities	$	1,743		$	2,090
Property and equipment purchases in accounts payable and accrued expenses	$	9		$	113
Cash paid for income taxes	$	60		$	264

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


	Six Months Ended June 30,
	2024		2023
Cash and cash equivalents	$	95,111	$	143,711
Restricted cash		53		33
Total cash, cash equivalents and restricted cash	$	95,164	$	143,744

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

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

In accordance with the Financial Accounting Standards Board, or FASB, Accounting Standards Update, or ASU, 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern (Subtopic 205-40), the Company has evaluated whether there are conditions and events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a 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 $288.6 million as of June 30, 2024. 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 Company continues to assess the impact of the disruption of global financial markets, including as a result of global health concerns or pandemics, global economic uncertainty and geo-political events, including the war between Russia and Ukraine and the unrest in the Middle East resulting from the Israel-Hamas war 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. These events may in turn adversely impact the Company’s ability to deliver its goals.

As of June 30, 2024, the Company had cash and cash equivalents of $95.1 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.

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, 2023 in the Form 20-F filed with the Securities and Exchange Commission, or the “SEC”, on April 4, 2024. There have been no material changes to the significant accounting policies during the six months ended June 30, 2024, 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, 2023, 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 June 30, 2024, the results of its operations and comprehensive loss for the three and six months ended June 30, 2024, its statements of shareholders’ equity for the three and six months ended June 30, 2024 and 2023 and its statements of cash flows for the six months ended June 30, 2024 and 2023.

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 and six months ended June 30, 2024 are not necessarily indicative of the results to be expected for the year ended December 31, 2024, any other interim periods, or any future year or period. The balance sheet information as of December 31, 2023, was derived from the audited financial statements included in the Company's Form 20-F filed with the SEC on April 4, 2024. These interim financial statements should be read in conjunction with the audited financial statements as of and for the year ended December 31, 2023, and the notes thereto, which are included elsewhere in the Company’s Form 20-F filed with the SEC on April 4, 2024.

3. Fair Value of Financial Instruments

The following tables show assets measured at fair value on a recurring basis as of June 30, 2024 and December 31, 2023 (in thousands):


	June 30, 2024
	Level 1		Level 2		Level 3
Cash equivalents:
Money market funds	$	49,428	$	—	$	—
Total	$	49,428	$	—	$	—


	December 31, 2023
	Level 1		Level 2		Level 3
Cash equivalents:
Money market funds	$	76,257	$	—	$	—
Total	$	76,257	$	—	$	—

There were no liabilities measured at fair value on a recurring basis as of June 30, 2024 and December 31, 2023.

4. Prepaid expenses and other current assets

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


	June 30,		December 31,
	2024		2023
U.K. R&D tax credit	$	17,659	$	9,558
Prepaid research and development		700		1,074
Prepaid insurance		1,528		690
VAT recoverable		693		793
Other current assets		2,126		1,979
	$	22,706	$	14,094

5. Property and equipment, net

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


	June 30,			December 31,
	2024			2023
Lab equipment	$	9,849		$	9,914
Leasehold improvements		9,536			9,451
Office equipment and computers		1,640			1,636
Fixtures and fittings		1,068			1,085
		22,093			22,086
Less: Accumulated depreciation		(15,139	)		(12,915	)
	$	6,954		$	9,171

Depreciation expense was $2.4 million and $2.4 million for the six months ended June 30, 2024 and 2023, respectively. Depreciation expense was $1.2 million and $1.3 million for the three months ended June 30, 2024 and 2023, respectively.

6. Accrued expenses and other liabilities

Accrued expenses and other liabilities consisted of the following (in thousands):


	June 30,		December 31,
	2024		2023
Compensation and benefits	$	2,109	$	2,949
External research and development expenses		3,318		3,227
Facility costs		154		373
Professional services		538		115
Property and equipment		—		314
Other liabilities		1,106		850
	$	7,225	$	7,828

7. Shareholders’ equity

Ordinary shares

As of June 30, 2024 and December 31, 2023, the Company had the following number of ordinary shares with a par value £0.001 (equivalent to $0.001) issued and outstanding:


	June 30,		December 31,
	2024		2023
Ordinary shares		41,087,901		39,466,581
Class A non-voting ordinary shares		—		1,616,367
Deferred Shares		1		1
Total ordinary and deferred shares		41,087,902		41,082,949

On the completion of the initial public offering, or "IPO", on April 6, 2021, all the Employee Shares, Convertible Preferred Shares (see below) and B ordinary shares were converted into ordinary shares or Class A non-voting ordinary shares. Class A non-voting ordinary shares have the same rights and privileges as ordinary shares, except for the voting rights. As of June 30, 2024, all Class A non-voting shares had been converted into ordinary shares.

As of June 30, 2024, the Company has not declared any dividends.

Deferred shares

On April 6, 2021, all the deferred shares were cancelled. In addition, a single deferred share with a nominal value of £92,451.85 in the capital of the Company was created as part of the Company’s reorganization. As of June 30, 2024, the Company had one deferred share which could be repurchased at any time by the Company for nil consideration.

8. Share-based compensation

2020 Share Omnibus Plan

Under the Company’s shareholder and subscription agreements, which were effective until the date of IPO, the Company was authorized to grant equity awards to individuals including a director of and/or a person who is employed by or who directly or indirectly provides consultancy services to the Company, in the form of D, E, F, G, H, I, J, K, L, M and N ordinary shares, collectively referred to as Employee Shares and share options. All Employee Shares converted into ordinary shares in accordance with the reverse share split implemented on IPO. The share options were granted pursuant to the terms of the 2020 Share Omnibus Plan, or the 2020 Plan.

Upon and following closing of the IPO, no further equity awards were granted under the 2020 Plan. To the extent outstanding options granted under the 2020 Plan are cancelled, forfeited or otherwise terminated without being exercised and would otherwise have been returned to the share reserve under the 2020 Plan, the number of shares underlying such awards will be available for future grant under the Company’s 2021 Omnibus Plan (see below). In anticipation of IPO, the holders of Employee Shares and the Company entered into individual vesting agreements, or Vesting Agreements, which apply the same terms to vesting of Employee Shares as applied prior to IPO under the Company’s pre-IPO Articles of Association, except that following the IPO Employee Shares that would pre-IPO have converted to deferred shares, will be transferred back to the Company and cancelled within twelve months of an employee leaving the Company.

2021 Share Omnibus Plan

In March 2021, the Company’s board of directors adopted, and the Company’s shareholders approved, the 2021 Share Omnibus Plan, or the 2021 Plan, which became effective upon the effectiveness of the Company’s Registration Statement on Form F-1 in connection with the IPO. The 2021 Plan allows the remuneration committee to make equity-based and cash-based incentive awards to our officers, employees, directors and other key persons (including consultants).

The Company committee initially reserved 2,572,558 of its ordinary shares for the issuance of awards under the 2021 Plan. The 2021 Plan provides that the number of shares reserved and available for issuance under the plan will automatically increase each January 1, beginning on January 1, 2022, by 4% of the outstanding number of ordinary shares on the immediately preceding December 31, or such lesser number of shares as determined by our remuneration committee. This number is subject to adjustment in the event of a sub-division, consolidation, share dividend or other change in our capitalization. The total number of ordinary shares that may be issued under the 2021 Plan was 7,471,315 shares as of June 30, 2024, of which 752,914 shares remained available for future grant after taking into account options granted and adding back forfeitures in the period.

2021 Employee Share Purchase Plan

The Company’s 2021 Employee Share Purchase Plan, or ESPP, was adopted by the Board in March 2021 and approved by shareholders in March 2021 and became effective upon the effectiveness of the Company’s Registration Statement on Form F-1 in connection with the IPO. The ESPP initially reserved and authorized the issuance of up to a total of 467,738 ordinary shares to participating employees. The ESPP provides that the number of shares reserved and available for issuance will automatically increase each January 1, beginning on January 1, 2022 and each January 1 thereafter through January 1, 2022, by the least of: (i) 1% of the outstanding number of ordinary shares on the immediately preceding December 31; (ii) 467,738 ordinary shares or (iii) such number of shares as determined by the remuneration committee. The number of shares reserved

under the ESPP is subject to change in the event of a share split, share dividend or other change in our capitalization. The purpose of the ESPP is to: (i) provide U.S. employees the opportunity to purchase ordinary shares or ADSs at 85% of the fair market value of the ADSs on the offering date or the exercise date, whichever is lower, and (ii) provide UK-based employees with ordinary shares or ADSs under the SIP Plan as further discussed below.

The total number of ordinary shares that had been approved for issue under the ESPP was 1,286,392 shares as of June 30, 2024. The initial purchase period under the ESPP commenced in February 2022. The Company estimated the fair value of the option component of the ESPP at the date of grant using a Black-Scholes valuation model. During the three and six months ended June 30, 2024, the compensation expense from ESPP shares, including SIP shares was $0.1 million and was less than $0.1 million, respectively. During the three and six months ended June 30, 2023, the compensation expense from ESPP shares was less than $0.1 million.

2021 Share Incentive Plan

The Achilles Therapeutics plc Share Incentive Plan, or SIP Plan is a sub plan of the ESPP.  This SIP Plan is an HMRC approved Plan for UK tax-paying employees. Under the SIP Plan, eligible employees can receive "Free Shares" within HMRC guidelines, purchase ordinary shares from the market, or Partnership Shares, as well as receive "Matching Shares" which are issued without any consideration payment in connection with an acquisition of Partnership Shares (collectively referred to as "SIP Shares"). For any award of Matching Shares, the renumeration committee must specify the ratio of Matching Shares to Partnership Shares. Under HMRC rules, the ratio determined by the renumeration committee must not exceed two Matching Shares for every Partnership Share. 

There is no minimum service condition on the Partnership Shares, and the participants can sell/transfer the shares after their acquisition from the market. There is a minimum service condition for the Free and Matching Shares that requires the participants to provide continuing service for at least 36 months from the date of grant. If the participants are no longer with the Company or its subsidiaries before the completion of 36 months' service (with the relevant date determined as the last day of employment), the Free and Matching Shares generally will be 100% forfeited and available for future issuance.

During the six months ended June 30, 2024, 44,026 shares were issued under the ESPP, including SIP shares. This reduced the number of shares reserved and available to grant under the ESPP to 643,408 shares available to grant as of June 30, 2024.

Employee Shares and SIP Shares

Prior to the IPO, the Company typically granted shares which vested over a four-year service period with 25% of the award vesting on the first anniversary of the vesting commencement date, and the balance vesting periodically over the remaining three years.

Post IPO, the Company typically grants SIP Shares under the SIP Plan. SIP Shares effectively vest in full on the third anniversary of the service commencement date.

Unvested Employee Shares are forfeited upon the termination of employment or service relationship in accordance with the process set out in the Articles of the Company prior to IPO, and in accordance with the process set out in the Vesting Agreements post-IPO and 2020 Plan, or in the case of the SIP Plan, SIP shares in accordance with the rules of the SIP Plan. Before IPO, the forfeited shares were converted into deferred shares, with a repurchase right for a nominal amount in favor of the Company. As of December 31, 2020, the Company repurchased 1,509,384 deferred shares for consideration of £0.01 to each holder for all of the deferred shares held by that holder. As part of the Company’s reorganization, 109,058 outstanding deferred shares in existence immediately before the IPO were cancelled upon the IPO, and a single deferred share with a nominal value of £92,451.85 in the capital of the Company was created. As of June 30, 2024, the Company had one deferred share which could be repurchased by the Company at any time for nil consideration. SIP shares forfeited under the rules of the SIP Plan are made available under the ESPP for future issuances.

The Company measures all share-based awards using the fair value on the date of grant and recognizes compensation expense for those awards over the requisite service period, which is generally the vesting period of the respective award. The Company has granted Employee Shares to employees and non-employees with service-based conditions and SIP Shares to employees with service-based conditions, and in both cases records expense for these awards using the straight-line method.

A summary of the changes in the Company’s unvested ordinary shares from December 31, 2023 through June 30, 2024 are as follows:


	Number of	Weighted
	unvested	average
	ordinary	grant date
	shares	fair value
Unvested ordinary shares as of December 31, 2023