0001558370-21-006065 | 10-Q | XBRL Viewer

Document and Entity Information - shares	3 Months Ended
Document and Entity Information - shares	Mar. 31, 2021	May 03, 2021
Document Information [Line Items]
Document Type	10-Q
Document Period End Date	Mar. 31, 2021
Entity Registrant Name	BICYCLE THERAPEUTICS PLC
Entity Filer Category	Non-accelerated Filer
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Small Business	true
Entity Emerging Growth Company	true
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		24,077,665
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2021
Document Fiscal Period Focus	Q1
Entity Central Index Key	0001761612
Amendment Flag	false
Entity Ex Transition Period	true
Ordinary Shares
Document Information [Line Items]
Title of 12(b) Security	Ordinary shares, nominal value £0.01 per share *
None	true
Security Exchange Name	NASDAQ
American Depositary Shares
Document Information [Line Items]
Title of 12(b) Security	American Depositary Shares, each representing one ordinary share, nominal value £0.01 per share
Trading Symbol	BCYC
Security Exchange Name	NASDAQ

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Current assets:
Cash	$ 195,901	$ 135,990
Accounts receivable	2,000	5,456
Prepaid expenses and other current assets	5,962	5,100
Research and development incentives receivable	11,530	9,177
Total current assets	215,393	155,723
Property and equipment, net	2,550	2,317
Operating lease right-of-use assets	3,721	1,290
Other assets	2,178	1,822
Total assets	223,842	161,152
Current liabilities:
Accounts payable	996	1,365
Accrued expenses and other current liabilities	9,716	11,629
Deferred revenue, current portion	10,094	10,135
Total current liabilities	20,806	23,129
Long-term debt, net of discount	29,498	14,505
Operating lease liabilities, net of current portion	3,025	426
Deferred revenue, net of current portion	25,616	25,021
Other long-term liabilities	2,806	2,611
Total liabilities	81,751	65,692
Commitments and contingencies (Note 11)
Shareholders’ equity:
Ordinary shares, £0.01 nominal value; 31,995,653 shares authorized at March 31, 2021 and December 31, 2020; 23,516,587 and 21,094,557 shares issued and outstanding at March 31, 2021 and December 31, 2020, respectively	300	266
Additional paid-in capital	312,793	249,947
Accumulated other comprehensive loss	(3,251)	(3,193)
Accumulated deficit	(167,751)	(151,560)
Total shareholders’ equity	142,091	95,460
Total liabilities and shareholders’ equity	$ 223,842	$ 161,152

Condensed Consolidated Balance Sheets (Parenthetical) - £ / shares	Mar. 31, 2021	Dec. 31, 2020
Condensed Consolidated Balance Sheets
Ordinary shares, nominal value	£ 0.01	£ 0.01
Ordinary shares, shares authorized	31,995,653	31,995,653
Ordinary shares, shares issued	23,516,587	21,094,557
Ordinary shares, shares outstanding	23,516,587	21,094,557

Condensed Consolidated Statements of Operations and Comprehensive Loss - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Condensed Consolidated Statements of Operations and Comprehensive Loss
Collaboration revenues	$ 1,808	$ 1,129
Operating expenses:
Research and development	9,693	7,774
General and administrative	8,139	4,998
Total operating expenses	17,832	12,772
Loss from operations	(16,024)	(11,643)
Other income (expense):
Interest income	15	212
Interest expense	(522)
Total other income (expense), net	(507)	212
Net loss before income tax provision	(16,531)	(11,431)
Benefit from income taxes	(340)	(107)
Net loss	$ (16,191)	$ (11,324)
Net loss per share, basic and diluted	$ (0.73)	$ (0.63)
Weighted average ordinary shares outstanding, basic and diluted	22,100,840	17,997,929
Comprehensives Loss:
Net loss	$ (16,191)	$ (11,324)
Other comprehensive income (loss):
Foreign currency translation adjustment	(58)	(2,184)
Total comprehensive loss	$ (16,249)	$ (13,508)

Condensed Consolidated Statements of Shareholders’ Equity - USD ($) $ in Thousands	Ordinary Shares	Additional Paid-in Capital	Accumulated Other Comprehensive Income (Loss)	Accumulated Deficit	Total
Beginning balance at Dec. 31, 2019	$ 227	$ 195,056	$ (1,535)	$ (100,550)	$ 93,198
Beginning balance (in shares) at Dec. 31, 2019	17,993,701
Increase (decrease) in shareholders' equity (deficit)
Issuance of ADSs upon exercise of share options		2			2
Issuance of ADSs upon exercise of share options (in shares)	1,071
Issuance of ordinary shares upon exercise of warrants (in shares)	21,435
Share based compensation expense		2,121			2,121
Foreign currency translation adjustment			(2,184)		(2,184)
Net loss				(11,324)	(11,324)
Ending balance at Mar. 31, 2020	$ 227	197,179	(3,719)	(111,874)	81,813
Ending balance (in shares) at Mar. 31, 2020	18,016,207
Beginning balance at Dec. 31, 2020	$ 266	249,947	(3,193)	(151,560)	$ 95,460
Beginning balance (in shares) at Dec. 31, 2020	21,094,557				21,094,557
Increase (decrease) in shareholders' equity (deficit)
Issuance of ADSs upon exercise of share options	$ 1	283			$ 284
Issuance of ADSs upon exercise of share options (in shares)	63,545
Issuance of ADSs, net of commissions and offering expenses	$ 33	58,742			58,775
Issuance of ADSs, net of commissions and offering expenses (in shares)	2,358,485
Share based compensation expense		3,821			3,821
Foreign currency translation adjustment			(58)		(58)
Net loss				(16,191)	(16,191)
Ending balance at Mar. 31, 2021	$ 300	$ 312,793	$ (3,251)	$ (167,751)	$ 142,091
Ending balance (in shares) at Mar. 31, 2021	23,516,587				23,516,587

Condensed Consolidated Statements of Shareholders’ Equity (Parenthetical) $ in Millions	3 Months Ended
	Mar. 31, 2021 USD ($)
Condensed Consolidated Statements of Shareholders’ Equity
Offering expenses	$ 1.8

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Cash flows from operating activities:
Net loss	$ (16,191)	$ (11,324)
Adjustments to reconcile net loss to net cash used in operating activities:
Share-based compensation expense	3,821	2,121
Depreciation and amortization	325	305
Non-cash interest	93
Changes in operating assets and liabilities:
Accounts receivable	3,520	(846)
Research and development incentives receivable	(2,277)	(2,097)
Prepaid expenses and other current assets	(922)	347
Operating lease right-of-use assets	(2,434)	187
Other assets	(353)	(215)
Accounts payable	(304)	2,702
Accrued expenses and other current liabilities	(1,858)	(464)
Operating lease liabilities	2,466	191
Deferred revenue	236	30,103
Other long-term liabilities	171	152
Net cash (used in) provided by operating activities	(13,707)	21,162
Cash used in investing activities:
Purchases of property and equipment	(623)	(320)
Net cash used in investing activities	(623)	(320)
Cash flows from financing activities:
Proceeds from the issuance of ADSs, net of issuance costs	58,775
Proceeds from the exercise of share options and sale of ordinary shares	284	2
Proceeds from issuance of debt	15,000
Net cash provided by financing activities	74,059	2
Effect of exchange rate changes on cash	182	(3,324)
Net increase in cash	59,911	17,520
Cash at beginning of period	135,990	92,117
Cash at end of period	195,901	109,637
Supplemental disclosure of cash flow information
Cash paid for interest	429
Cash paid for income taxes		11
Cash paid for amounts included in the measurement of operating lease liabilities	199
Purchases of property and equipment included in accounts payable and accrued expenses	$ 76	$ 71

Nature of the business and basis of presentation	3 Months Ended
Nature of the business and basis of presentation	Mar. 31, 2021
Nature of business and basis of presentation
Nature of the business and basis of presentation	1. Nature of the business and basis of presentation Bicycle Therapeutics plc (collectively with its subsidiaries, the “Company”) is a clinical-stage biopharmaceutical company developing a novel class of medicines, which the Company refers to as Bicycles, for diseases that are underserved by existing therapeutics. Bicycles are a unique therapeutic modality combining the pharmacology usually associated with a biologic with the manufacturing and pharmacokinetic properties of a small molecule. The Company’s initial internal programs are focused on oncology indications with high unmet medical need. The Company is evaluating BT5528, a second-generation Bicycle Toxin Conjugate (“BTC”) targeting Ephrin type-A receptor 2 (“EphA2”), in a Company-sponsored Phase I/II clinical trial, and BT8009, a second-generation BTC targeting Nectin-4, in a Company-sponsored Phase I/II clinical trial. In addition, BT1718, a BTC that is being developed to target tumors that express Membrane Type 1 matrix metalloproteinase, is being investigated for safety, tolerability and efficacy in an ongoing Phase I/IIa clinical trial sponsored and fully funded by the Centre for Drug Development of Cancer Research UK. The Company’s discovery pipeline in oncology includes Bicycle-based systemic immune cell agonists and Bicycle tumor-targeted immune cell agonists (Bicycle TICAs). Beyond the Company’s wholly-owned oncology portfolio, the Company is collaborating with biopharmaceutical companies and organizations in immuno-oncology, anti-infective, cardiovascular, ophthalmology, dementia and respiratory indications. The accompanying condensed consolidated financial statements include the accounts of Bicycle Therapeutics plc and its wholly owned subsidiaries, BicycleTx Limited, BicycleRD Limited and Bicycle Therapeutics Inc. All intercompany balances and transactions have been eliminated on consolidation. The accompanying condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). Liquidity On June 5, 2020, the Company entered into a Sales Agreement (the “Sales Agreement”) with Cantor Fitzgerald & Co. and Oppenheimer & Co. Inc. (the “Sales Agents”) with respect to an at-the-market offering program (“ATM”) pursuant to which the Company may offer and sell through the Sales Agents, from time to time at the Company’s sole discretion, American Depositary Shares (“ADSs”), each ADS representing one ordinary share. As of March 31, 2021, the Company had issued and sold 5,287,298 ADSs, representing the same number of ordinary shares for gross proceeds of $110.6 million, resulting in net proceeds of $106.9 million after deducting sales commissions and offering expenses of $3.7 million. On September 30, 2020, Bicycle Therapeutics plc and certain of its subsidiaries (together with Bicycle Therapeutics plc, the “Borrowers”) entered into a loan and security agreement (the “Loan Agreement”) with Hercules Capital, Inc. (“Hercules”) as agent, which provided for maximum borrowings of up to $40.0 million in aggregate principal amount, consisting of (i) a term loan of $15.0 million, which was funded on September 30, 2020, (ii) subject to satisfaction of customary conditions, an additional term loan of up to $15.0 million available from September 30, 2020 through March 15, 2021, and (iii) subject to the achievement of certain performance milestones and satisfaction of customary conditions, an additional term loan of $10.0 million available until March 15, 2022. On March 10, 2021 (“the Amendment Closing Date”), the Borrowers entered into the First Amendment to the Loan and Security Agreement (the “First Amendment to LSA”) with Hercules, in its capacity as administrative agent and collateral agent, and the lenders named in the First Amendment to LSA. Pursuant to the First Amendment to LSA, payments on borrowings under the Company’s debt facility with Hercules will be interest-only until the first payment is due on August 1, 2023, which date was extended from November 1, 2022. If the Company achieves certain performance milestones, the interest-only period will be extended, with the first principal payment due on February 1, 2024, which date was extended from May 1, 2023. On the Amendment Closing Date and pursuant to the terms of the First Amendment to LSA, the Company borrowed the additional term loan of $15.0 million that had been available from September 30, 2020 to March 15, 2021. The Company is subject to risks common to companies in the biotechnology industry and in light of the ongoing COVID-19 pandemic, including but not limited to, risks of delays in initiating or continuing research programs and clinical trials, risks of failure of preclinical studies and clinical trials, the need to obtain marketing approval for any drug product candidate that it may identify and develop, the need to successfully commercialize and gain market acceptance of its product candidates, dependence on key personnel and collaboration partners, protection of proprietary technology, compliance with government regulations, development by competitors of technological innovations, and the ability to secure additional capital to fund operations. Product candidates currently under development will require significant additional research and development efforts, including preclinical and clinical testing and regulatory approval prior to commercialization. Even if the Company’s research and development efforts are successful, it is uncertain when, if ever, the Company will realize significant revenue from product sales. The accompanying condensed consolidated financial statements have been prepared on the basis of continuity of operations, realization of assets and the satisfaction of liabilities and commitments in the ordinary course of business. Since inception, the Company has devoted substantially all of its efforts to business planning, research and development, recruiting management and technical staff, and raising capital. The Company has funded its operations with proceeds from the sale of its ordinary shares and ADSs, convertible preferred shares, and proceeds received from its collaboration arrangements (Note 9), and proceeds from the Loan Agreement with Hercules (Note 6). The Company has incurred recurring losses since inception, including net losses of $16.2 million and $11.3 million, for the three months ended March 31, 2021 and 2020, respectively. As of March 31, 2021, the Company had an accumulated deficit of $167.8 million. The Company expects to continue to generate operating losses in the foreseeable future. The Company expects that its cash will be sufficient to fund its operating expenses and capital expenditure requirements through at least twelve months from the issuance date of these interim condensed consolidated financial statements. The Company expects its expenses to increase substantially in connection with ongoing activities, particularly as the Company advances its preclinical activities and clinical trials for its product candidates in development. Accordingly, the Company will need to obtain additional funding in connection with continuing operations. If the Company is unable to raise capital when needed, or on attractive terms, it could be forced to delay, reduce or eliminate its research or drug development programs or any future commercialization efforts. Although management continues to pursue these plans, there is no assurance that the Company will be successful in obtaining sufficient funding on terms acceptable to the Company to fund continuing operations, if at all.

Summary of significant accounting policies	3 Months Ended
Summary of significant accounting policies	Mar. 31, 2021
Summary of significant accounting policies
Summary of significant accounting policies	2. Summary of significant accounting policies The Company’s significant accounting policies are disclosed in the audited consolidated financial statements for the year ended December 31, 2020 included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020, which was filed with the Securities and Exchange Commission (the “SEC”), on March 11, 2021 (the “2020 Annual Report”). Since the date of such consolidated financial statements, there have been no changes to the Company’s significant accounting policies, other than those disclosed below. Use of estimates The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of expenses during the reporting periods. Significant estimates and assumptions reflected in these condensed consolidated financial statements include, but are not limited to, the accrual for research and development expenses, revenue recognition, share-based compensation expense, valuation procedures for right-of-use assets and liabilities, and income taxes, including the valuation allowance for deferred tax assets. The Company bases its estimates on historical experience, known trends and other market‑specific or other relevant factors that it believes to be reasonable under the circumstances. Estimates are periodically reviewed in light of reasonable changes in circumstances, facts and experience. Changes in estimates are recorded in the period in which they become known. Actual results could differ from those estimates or assumptions. Significant Risks and Uncertainties In 2020, with the global spread of the ongoing COVID-19 pandemic, the Company established a cross-functional task force and implemented business continuity plans designed to address and mitigate the impact of the ongoing COVID-19 pandemic on the Company’s business. While the Company continues to experience limited financial impacts at this time, the extent to which the ongoing COVID-19 pandemic ultimately impacts the Company’s business, clinical development and regulatory efforts, corporate development objectives and the value of and market for the Company’s ADSs, will depend on future developments that are highly uncertain and cannot be predicted with confidence at this time, such as the ultimate duration of the pandemic, travel restrictions, quarantines, social distancing and business closure requirements in the United Kingdom, United States, Europe and other countries, and the effectiveness of actions taken globally to contain and treat the disease. The global economic slowdown, the overall disruption of global healthcare systems and the other risks and uncertainties associated with the pandemic could have a material adverse effect on the Company’s business, financial condition, results of operations and growth prospects. In addition, the Company is subject to other challenges and risks specific to its business and ability to execute its strategy, as well as risks and uncertainties common to companies in the biotechnology industry, including but not limited to: risks of failure of preclinical studies and clinical trials, the need to obtain marketing approval for any drug product candidate that it may identify and develop, the need to successfully commercialize and gain market acceptance of its product candidates, dependence on key personnel and collaboration partners, protection of proprietary technology, compliance with government regulations, development by competitors of technological innovations, and the ability to secure additional capital to fund operations. In addition, to the extent the ongoing COVID-19 pandemic adversely affects the Company’s business and results of operations, it may also have the effect of heightening many of the other risks and uncertainties discussed above. Unaudited Interim Financial Information Certain information in the footnote disclosures of the financial statements has been condensed or omitted pursuant to the rules and regulations of the SEC. These unaudited condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto for the year ended December 31, 2020 included in the Company’s 2020 Annual Report. The accompanying condensed consolidated balance sheet at March 31, 2021, condensed consolidated statements of operations and comprehensive loss, condensed consolidated statements of shareholders’ equity, and the condensed consolidated statements of cash flows for the three months ended March 31, 2021 and 2020, and the related financial information disclosed in these notes are unaudited. The unaudited interim financial statements have been prepared on the same basis as the audited annual financial statements for the year ended December 31, 2020, and, in the opinion of management, reflect all adjustments, consisting of normal recurring adjustments, necessary for the fair presentation of the Company’s financial position as of March 31, 2021, the results of its operations and its cash flows for the three months ended March 31, 2021 and 2020. The results for the three months ended March 31, 2021 are not necessarily indicative of the results to be expected for the year ending December 31, 2021, any other interim periods, or any future year or period. Government grants From time to time, the Company may enter into arrangements with governmental entities for the purposes of obtaining funding for research and development activities. The Company recognizes government grant funding in the condensed consolidated statements of operations and comprehensive loss as the related expenses being funded are incurred. The Company classifies government grants received under these arrangements as a reduction to the related research and development expense incurred. The Company analyzes each arrangement on a case-by-case basis. For the three months ended March 31, 2021 and March 31, 2020, the Company recognized $1.1 million and $0.2 million, respectively, as a reduction of research and development expense related to government grant arrangements. Recently adopted accounting pronouncements In 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (“ASU 2019-12”). ASU 2019-12 simplifies the accounting for income taxes and will be effective beginning after December 15, 2020. The adoption of ASU 2019‑12 did not have a material impact on the Company’s results of operations or cash flows. Recently issued accounting pronouncements In June 2016, the FASB issued ASU No. 2016-13, Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”). ASU 2016-13 will change how companies account for credit losses for most financial assets and certain other instruments. For trade receivables, loans and held-to-maturity debt securities, companies will be required to recognize an allowance for credit losses rather than reducing the carrying value of the asset. In November 2019, the FASB issued ASU No. 2019-10, Financial Instruments — Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842): Effective Dates to amend the effective date of ASU 2016-13, for entities eligible to be “smaller reporting companies,” as defined by the SEC, to be effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. Early adoption is permitted. The Company has not elected to early adopt ASU No. 2016-13. The Company is currently evaluating the potential impact that the adoption of ASU 2016-13 will have on the Company’s financial position and results of operations.

Fair value of financial assets and liabilities	3 Months Ended
Fair value of financial assets and liabilities	Mar. 31, 2021
Fair value of financial assets and liabilities
Fair value of financial assets and liabilities	3. Fair value of financial assets and liabilities Financial assets and liabilities carried at fair value are to be classified and disclosed in one of the following three levels of the fair value hierarchy, of which the first two are considered observable and the last is considered unobservable: Level 1, Quoted prices in active markets for identical assets or liabilities; Level 2, Observable inputs (other than Level 1 quoted prices), such as quoted prices in active markets for similar assets or liabilities, quoted prices in markets that are not active for identical or similar assets or liabilities, or other inputs that are observable or can be corroborated by observable market data; Level 3, unobservable inputs that are supported by little or no market activity that are significant to determining the fair value of the assets or liabilities, including pricing models, discounted cash flow methodologies and similar techniques. The carrying values of accounts receivable, research and development incentives receivable, other current assets, accounts payable and accrued expenses and other current liabilities approximate their fair values due to the short-term nature of these assets and liabilities. The carrying value of the long-term debt approximates its fair value as the debt arrangement is based on interest rates the Company believes it could obtain for borrowings with similar terms. As of March 31, 2021, and December 31, 2020, there were no assets or liabilities measured at fair value on a recurring basis. Cash and cash equivalents The Company considers all highly liquid investments with original maturities of three months or less at date of purchase to be cash equivalents. The Company had no cash equivalents at March 31, 2021 and December 31, 2020.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

Property and equipment, net

3 Months Ended

Mar. 31, 2021

Property and equipment, net

Property and equipment, net

4. Property and equipment, net

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


	March 31,		December 31,
	2021		2020
Laboratory equipment	$	5,979	$	5,583
Leasehold improvements		385		383
Computer equipment and software		188		188
Furniture and office equipment		196		195
		6,748		6,349
Less: Accumulated depreciation and amortization		(4,198)		(4,032)
	$	2,550	$	2,317

Depreciation expense was $0.3 million for both the three months ended March 31, 2021 and 2020, respectively.

Accrued expenses and other current liabilities

3 Months Ended

Mar. 31, 2021

Accrued expenses and other current liabilities

Accrued expenses and other current liabilities

5. Accrued expenses and other current liabilities

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


	March 31,		December 31,
	2021		2020
Accrued employee compensation and benefits	$	1,737	$	4,390
Accrued external research and development expenses		5,239		4,428
Accrued professional fees		1,905		1,759
Current portion of operating lease liabilities		708		844
Other		127		208
	$	9,716	$	11,629

Long-term debt

3 Months Ended

Mar. 31, 2021

Long-term debt

Long-term debt

6. Long-term debt

On September 30, 2020 (the “Closing Date”), Bicycle Therapeutics plc and its subsidiaries (the “Borrowers”) entered into the Loan Agreement with Hercules, which provided for aggregate maximum borrowings of up to $40.0 million, consisting of (i) a term loan of $15.0 million, which was funded on the Closing Date, (ii) subject to customary conditions, an additional term loan of up to $15.0 million available from the Closing Date through March 15, 2021, and (iii) subject to the Borrowers achieving certain performance milestones and satisfying customary conditions and available until March 15, 2022, an additional term loan of $10.0 million.

Borrowings under the Loan Agreement bear interest at an annual rate equal to the greater of (i) 8.85% or (ii) 5.60% plus the Wall Street Journal prime rate. On the Amendment Closing Date, the Borrowers entered into the First Amendment to LSA with Hercules, in its capacity as administrative agent and collateral agent, and the lenders named in the First Amendment to LSA. Pursuant to the First Amendment to LSA, payments on borrowings under the Company’s debt facility with Hercules will be interest-only until the first payment is due on August 1, 2023, which date was extended from November 1, 2022, followed by equal monthly payments of principal and interest through the scheduled maturity date on October 1, 2024 (the “Maturity Date”). If the Company achieves certain performance milestones, the interest-only period will be extended, with the first principal payment due on February 1, 2024, which date was extended from May 1, 2023.

At the Borrowers’ option, the Borrowers may prepay all or any portion greater than $5.0 million of the outstanding borrowings, subject to a prepayment premium equal to (i) 2.0% of the principal amount outstanding if the prepayment occurs during the first year following the Closing Date, (ii) 1.5% of the principal amount outstanding if the prepayment occurs during the second year following the Closing Date, and (iii) 1.0% of the principal amount outstanding if the prepayment occurs thereafter but prior to the Maturity Date. The Loan Agreement also provides for an end of term charge (the “End of Term Charge”), payable upon maturity or the repayment of obligations under the Loan Agreement, equal to 5.0% of the principal amount repaid. Borrowings under the Loan Agreement are collateralized by substantially all of the Borrower’s personal property and other assets, other than their intellectual property. Hercules has a perfected first-priority security interest in certain cash accounts. The Loan Agreement contains customary affirmative and restrictive covenants and representations and warranties, including a covenant against the occurrence of a change in control, as defined in the agreement. There are no financial covenants. The Loan Agreement also includes customary events of default, including payment defaults, breaches of covenants following any applicable cure period, cross acceleration to third-party indebtedness, certain events relating to bankruptcy or insolvency, and the occurrence of certain events that could reasonably be expected to have a material adverse effect. Upon the occurrence of an event of default, a default interest rate of an additional 5.0% may be applied to the outstanding principal and interest payments due, and Hercules may declare all outstanding obligations immediately due and payable and take such other actions as set forth in the Loan Agreement. The Company has determined that the risk of subjective acceleration under the material adverse events clause is not probable and therefore has classified the outstanding principal in long-term liabilities based on scheduled principal payments.

The Company incurred fees and transaction costs totaling $0.6 million associated with the initial term loan, which are recorded as a reduction to the carrying value of the long-term debt in the condensed consolidated balance sheets. The fees, transaction costs, and the End of Term Charge are amortized to interest expense through the Maturity Date using the effective interest method. The Company evaluated the First Amendment to LSA, and concluded that the amendment represented a modification, as such, the fees and transaction costs associated with the initial term loan will continue to be amortized to interest expense through the Maturity Date. The effective interest rate of the Hercules borrowings was 11.4% at March 31, 2021.

The Company assessed all terms and features of the Loan Agreement in order to identify any potential embedded features that would require bifurcation. As part of this analysis, the Company assessed the economic characteristics and risks of the debt. The Company determined that all features of the Loan Agreement are clearly and closely associated with a debt host and, as such, do not require separate accounting as a derivative liability. Interest expense for the three months ended March 31, 2021 was $0.5 million.

Long-term debt consisted of the following (in thousands):


	March 31,
	2021
Term loan payable	$	30,000
End of term charge		118
Unamortized debt issuance costs		(620)
Carrying value of term loan	$	29,498

Future principal payments, including the End of Term Charge, are as follows (in thousands):



Year Ending December 31,
2021	$	—
2022		—
2023		9,614
2024		21,886
Total	$	31,500

Ordinary shares	3 Months Ended
Ordinary shares	Mar. 31, 2021
Ordinary shares
Ordinary shares	7. Ordinary shares Each holder of ordinary shares is entitled to one vote per ordinary share and to receive dividends when and if such dividends are recommended by the board of directors and declared by the shareholders. Holders of ADSs are not treated as holders of the Company’s ordinary shares, unless they withdraw the ordinary shares underlying their ADSs in accordance with the deposit agreement and applicable laws and regulations. The depositary is the holder of the ordinary shares underlying the ADSs. Holders of ADSs therefore do not have any rights as holders of the Company’s ordinary shares, other than the rights that they have pursuant to the deposit agreement with the depositary. As of March 31, 2021, and 2020, the Company has not declared any dividends. As of March 31, 2021 and December 31, 2020, the Company’s authorized share capital consisted of 31,995,653 ordinary shares with a nominal value of £0.01 per share.

Share-based compensation

3 Months Ended

Mar. 31, 2021

Share-based compensation

Share-based compensation

8. Share‑based compensation

Employee incentive pool

2020 Share Option Plan

In June 2020, the Company’s shareholders approved the Bicycle Therapeutics plc 2020 Equity Incentive Plan (the “2020 Plan”), under which the Company may grant market value options, market value stock appreciation rights or restricted shares, restricted share units, performance restricted share units and other share-based awards to the Company’s employees. The Company’s non-employee directors and consultants are eligible to receive awards under the 2020 Non-Employee Sub-Plan to the 2020 Plan. All awards under the 2020 Plan, including the 2020 Non-Employee Sub-Plan, will be set forth in award agreements, which will detail the terms and conditions of awards, including any applicable vesting and payment terms, change of control provisions and post-termination exercise limitations. In the event of a change of control of the Company, as defined in the 2020 Plan, any outstanding awards under the 2020 Plan will vest in full immediately prior to such change of control. Share options issued under the 2020 Share Option Plan have a 10 year contractual life, and generally vest over either a three year service period for non-employee directors, or a four year service period with 25% of the award vesting on the first anniversary of the commencement date and the balance thereafter in 36 equal monthly installments for employees and consultants. Certain options granted to the Company’s non-employee directors vest immediately upon grant.

The Company initially reserved up to 4,773,557 ordinary shares for future issuance under the 2020 Plan, representing 574,679 new shares, 544,866 shares that remained available for future issuance under the Company’s 2019 Share Option Plan (the “2019 Plan”) immediately prior to the effectiveness of the 2020 Plan and up to 3,654,012 shares subject to options that were granted under the 2019 Plan and that were granted pursuant to option contracts granted prior to the Company’s IPO, in each case that expire, terminate, are forfeited or otherwise not issued from time to time, if any. Additionally, the number of ordinary shares reserved for issuance pursuant to the 2020 Plan will automatically increase on the first day of January of each year, commencing on January 1, 2021, in an amount equal to 5% of the total number of the Company’s ordinary shares outstanding on the last day of the preceding year, or a lesser number of shares determined by the Company’s board of directors. The number of shares reserved for issuance under the 2020 Plan was increased by 1,054,727 shares effective January 1, 2021. As of March 31, 2021, there were 5,690,652 shares available for issuance and options to purchase 1,480,335 shares outstanding under the 2020 Plan.

2019 Share Option Plan

In May 2019, the Company adopted the 2019 Plan, which became effective in conjunction with the IPO. As of March 31, 2021, there were 2,583,940 options to purchase ordinary shares outstanding under the 2019 Plan. In conjunction with the adoption of the 2020 Plan, all shares available for future issuance under the 2019 Plan as of June 29, 2020 became available for issuance under the 2020 Plan and the Company ceased making awards under the 2019 Plan. The 2020 Plan is the successor of the 2019 Plan.

Share options previously issued under the 2019 Share Option Plan have a 10 year contractual life, and generally either vest monthly over a three year service period, or over a four‑year service period with 25% of the award vesting on the first anniversary of the commencement date and the balance thereafter in 36 equal monthly installments. Certain awards granted to the Company’s non-employee directors were fully vested on the date of grant. The exercise price of share options issued under the 2019 Share Option Plan is not less than the fair value of ordinary shares as of the date of grant.

Employee Share Purchase Plan (“ESPP”)

In May 2019, the Company adopted the 2019 Employee Stock Purchase Plan (the “ESPP”), which became effective in conjunction with the IPO. The Company initially reserved 215,000 ordinary shares for future issuance under this plan. The ESPP provides that the number of shares reserved and available for issuance will automatically increase each January 1, beginning on January 1, 2020 and each January 1 thereafter through January 1, 2029, by the least of (i) 1% of the outstanding number of ordinary shares on the immediately preceding December 31; (ii) 430,000 ordinary shares or (iii) such lesser number of shares as determined by the Compensation Committee. The number of shares reserved under the ESPP is subject to adjustment in the event of a split-up, share dividend or other change in our capitalization. The number of shares reserved for issuance under the ESPP was increased by 210,945 shares effective January 1, 2021. As of March 31, 2021, the total number of shares available for issuance under the ESPP was 605,883 ordinary shares.

Once the Company commences offerings under the ESPP, each offering to the employees to purchase shares under the ESPP will begin on each June 1 and December 1 and will end on the following November 30 and May 31, respectively. On each purchase date, which will fall on the last date of each offering period, ESPP participants will purchase ordinary shares at a price per share equal to 85% of the lesser of (1) the fair market value of the shares on the offering date or (2) the fair market value of the shares on the purchase date. The occurrence and duration of offering periods under the ESPP are subject to the determinations of the Company’s compensation committee. As of March 31, 2021, there have been no offering periods to employees under ESPP.

Share‑based compensation

The Company recorded share‑based compensation expense in the following expense categories of its condensed consolidated statements of operations and comprehensive loss (in thousands):


	Three Months Ended
	March 31,
	2021		2020
Research and development expenses	$	1,211	$	675
General and administrative expenses		2,610		1,446
	$	3,821	$	2,121

Share options

The following table summarizes the Company’s option activity since December 31, 2020:


				Weighted
		Weighted		Average	Aggregate
	Number of	Average		Contractual	Intrinsic
	Shares	Exercise Price		Term	Value
				(in years)	(in thousands)
Outstanding as of December 31, 2020	3,736,663	$	10.51	8.54	$	27,553
Granted	1,297,999		18.74	—		—
Exercised	(63,545)		4.47	—		—
Forfeited	(20,509)		15.89	—		—
Outstanding as of March 31, 2021	4,950,608	$	12.73	8.69	$	80,172
Vested and expected to vest as of March 31, 2021	4,950,608	$	12.73	8.69	$	80,172
Options exercisable as of March 31, 2021	2,018,352	$	9.87	8.18	$	39,782

The weighted average grant‑date fair value of share options granted during the three months ended March 31, 2021 and 2020 was $12.60 per share and $6.68 per share, respectively.

Total share-based compensation expense for share options granted was $3.8 million and $2.1 million for the three months ended March 31, 2021, and 2020, respectively. Expense for non-employee consultants for the three months ended March 31, 2021 and 2020 was immaterial.

The aggregate intrinsic value of share options is calculated as the difference between the exercise price of the share options and the fair value of the Company’s ordinary shares. The aggregate intrinsic value of share options exercised was $1.5 million for the three months ended March 31, 2021, and immaterial for the three months ended March 31, 2020.

The following table presents, on a weighted average basis, the assumptions used in the Black‑Scholes option‑pricing model to determine the fair value of share options granted to employees and directors:


	Three Months Ended
	March 31,
	2021		2020
Risk-free interest rate	0.5	%	1.6	%
Expected volatility	79.5	%	73.7	%
Expected dividend yield	—		—
Expected term (in years)	5.95		5.95

As of March 31, 2021, total unrecognized compensation expense related to the unvested employee and director share‑based awards was $26.0 million, which is expected to be recognized over a weighted average period of 3.1 years.

Significant Agreements

3 Months Ended

Mar. 31, 2021

Significant Agreements

Significant Agreements

9. Significant agreements

For the three months ended March 31, 2021 and 2020, the Company recognized revenue for its collaborations with Genentech Inc. (“Genentech”), AstraZeneca AB (“AstraZeneca”), and the Dementia Discovery Fund (“DDF”). The following table summarizes the revenue recognized in the Company’s condensed consolidated statements of operations and comprehensive loss from these arrangements (in thousands):


	Three Months
	Ended
	March 31,
	2021		2020
Collaboration revenues
AstraZeneca	$	277	$	412
Dementia Discovery Fund		83		56
Genentech		1,448		661
Total collaboration revenues	$	1,808	$	1,129

Genentech Collaboration Agreement

On February 21, 2020, the Company entered into a Discovery Collaboration and License Agreement (the “Genentech Collaboration Agreement”) with Genentech. The collaboration is focused on the discovery and development of Bicycle peptides directed to biological targets selected by Genentech and aimed at developing up to four potential development candidates against multiple immuno-oncology targets suitable for Genentech to advance into further development and commercialization.

Under the terms of the Genentech Collaboration Agreement, Bicycle received a $30.0 million upfront, non-refundable payment. The initial discovery and optimization activities will focus on utilizing Bicycle’s phage screening technology to identify product candidates aimed at two immuno-oncology targets (“Genentech Collaboration Programs”), which may also include additional discovery and optimization of Bicycles as targeting elements for each Genentech Collaboration Program (each a “Targeting Arm”). Genentech has the option to nominate up to two additional immuno-oncology targets (each, an “Expansion Option”), which may also include an additional Targeting Arm for each Expansion Option, as additional Genentech Collaboration Programs during a specified period following completion of certain activities under an agreed research plan. If Genentech exercises one or more Expansion Options, Genentech will pay to the Company an expansion fee of $10.0 million per Expansion Option. Genentech also has rights, under certain limited circumstances, to select an alternative target to be the subject of a Genentech Collaboration Program, in some cases subject to payment of an additional target selection fee.

If Genentech elects for Bicycle to perform discovery and optimization services for certain Targeting Arms, the Company will be entitled to receive an additional advance payment for the additional research services. Genentech exercised its right to select a Targeting Arm for one of the initial Genentech Collaboration Programs at the inception of the arrangement, which entitled the Company to an additional $1.0 million payment. If a Targeting Arm achieves specified criteria in accordance with the research plan, Genentech will be required to pay a further specified amount in the low single digit millions for each such Targeting Arm as consideration for the additional services to be provided.

Bicycle granted to Genentech a non-exclusive research license under Bicycle’s intellectual property solely to enable Genentech to perform any activities under the agreement. The activities under the Genentech Collaboration Agreement are governed by a joint research committee (“JRC”) with representatives from each of the Company and Genentech. The JRC will oversee, review and recommend direction of each Genentech Collaboration Program, achievement of development criteria, and variations of or modifications to the research plans.

After the Company performs the initial discovery and optimization activities in accordance with an agreed research plan and achieves specified criteria, Genentech will have the option to have the Company perform initial pre-clinical development and optimization activities in exchange for an additional specified milestone payment in the mid-single digit millions for each Genentech Collaboration Program (the “LSR Go Option”). Upon completion of such initial pre-clinical development and optimization activities for each Genentech Collaboration Program, Genentech will have the option to obtain an exclusive license to exploit any compound developed under such Genentech Collaboration Program in exchange for an additional specified payment in the mid to high single digit millions for each of the initial two Genentech Collaboration Programs and each of the two Expansion Option Genentech Collaboration Programs (the “Dev Go Option”).

On a Genentech Collaboration Program by Genentech Collaboration Program basis, if Genentech elects to obtain exclusive development and commercialization rights and pays the applicable LSR Go Option and Dev Go Option fees, Genentech will be required to make milestone payments to the Company upon the achievement of specified development, regulatory, and initial commercialization milestones for products arising from each collaboration program, totaling up to $200.0 million. Specifically, the Company is eligible for additional development milestones totaling up to $65.0 million, as well as regulatory milestones of up to $135.0 million for each collaboration program. In addition, the Company is also eligible to receive up to $200.0 million in sales milestone payments on a Genentech Collaboration Program-by-Genentech Collaboration Program basis. In addition, to the extent any of the product candidates covered by the licenses conveyed to Genentech are commercialized, the Company would be entitled to receive tiered royalty payments on net sales at percentages ranging from the mid-single to low double-digits, subject to certain standard reductions and offsets. Royalties will be payable, on a product by product and country by country basis, until the later of the expiration of specified licensed patents covering such product in such country, or ten years from first commercial sale of such product in such country.

Accounting Analysis

Upon the execution of the Genentech Collaboration Agreement, the Company has identified the following performance obligations:

(i)

Research license, and the related research and development and preclinical services through LSR Go for a first Genentech Collaboration Program (Genentech Collaboration Program #1);

(ii)

Research license, and the related research and development and preclinical services through LSR Go for a second Genentech Collaboration Program with a specified Targeting Arm (Genentech Collaboration Program #2);

(iii)

Material right associated with an option to a specified Targeting Arm for Genentech Collaboration Program #1;

(iv)

Two material rights associated with the LSR Go Option for Genentech Collaboration Program #1 and Genentech Collaboration Program #2, which includes research services to be provided through the Dev Go Option and an option to receive an exclusive license;

(v)

Material rights associated with certain limited substitution rights with respect to a limited number of collaboration targets;

(vi)

Two material rights related to each Genentech Expansion Option, which upon exercise include the services for an additional immuno-oncology target through the LSR Go Option, an LSR Go Option which includes the services to be provided through the Dev Go Option and an option to receive an exclusive license, limited substitution rights, and an option to select a specified Targeting Arm.

The Company concluded that certain substitution rights that require the payment of additional consideration, which approximate the standalone selling price of the underlying services to be provided, do not provide the customer with a material right and therefore, are not considered as performance obligations and are accounted for as separate contracts upon exercise, if ever. The Company’s participation in the joint steering committee was assessed as immaterial in the context of the contract.

The Company has concluded that the research license is not distinct from the research and development services as Genentech cannot obtain the benefit of the research license without the Company performing the research and development services. The services incorporate proprietary technology and unique skills and specialized expertise, particularly as it relates to constrained peptide technology that is not available in the marketplace. As a result, for each research program, the research license has been combined with the research and development services into a single performance obligation. In addition, the Company concluded that the Dev Go Option is not distinct or separately exercisable from the LSR Go Option, as the customer cannot benefit from the Dev Go Option unless and until the LSR Go Option is exercised.

In assessing whether the various options under the Genentech Collaboration Agreement represent material rights, the Company considered the additional consideration the Company would be entitled to upon the option exercise, the standalone selling price of the underlying goods, services, and additional options. For the material rights identified above the Company concluded that each of the options provided Genentech with a discount that it otherwise would not have received.

The total transaction price was initially determined to be $31.0 million, consisting of the $30.0 million upfront fee and the additional $1.0 million for Genentech’s selection of a new Targeting Arm at inception. The Company utilizes the most likely amount method to determine the amount of research and development funding to be received. Additional consideration to be paid to the Company upon the exercise of options by Genentech and subsequent milestones are excluded from the transaction price as they relate to option fees and milestones that can only be achieved subsequent to the exercise of an option. In addition, other variable consideration for development milestones not subject to option exercises was fully constrained, as a result of the uncertainty regarding whether any of the milestones will be achieved.

During the three months ended March 31, 2021, the Company achieved specified criteria in accordance with the research plan under the Genentech Collaboration agreement and therefore updated its estimate of the variable consideration to include an additional $2.0 million, that is no longer constrained. The arrangement consideration was increased to $33.0 million.

The transaction price was allocated to the performance obligations based on the relative estimated standalone selling prices of each performance obligation. The estimated standalone selling prices for the Genentech Collaboration Programs was based on the nature of the services to be performed and estimates of the associated effort and costs of the services, adjusted for a reasonable profit margin for what would be expected to be realized under similar contracts. The estimated standalone selling price for the material rights was determined based on the fees Genentech would pay to exercise the options, the estimated value of the underlying goods and services, and the probability that Genentech would exercise the option and any underlying options. Based on the relative standalone selling price, the allocation of the transaction price as of March 31, 2021 to the separate performance obligations is as follows (in thousands):


	Allocation of
Performance Obligations	Transaction Price
Genentech Collaboration Program #1 Performance Obligation	$	4,019
Genentech Collaboration Program #2 Performance Obligation		8,037
Specified Targeting Arm Material Right Arm for Genentech Collaboration Program #1		352
Two material rights associated with the LSR Go Option for Collaboration Programs #1 and #2		12,400
Material rights associated with limited substitution rights		1,187
Two material rights for Expansion Options		7,005
	$	33,000

The Company is recognizing revenue related to amounts allocated to the Genentech Collaboration Program #1 and #2 Performance Obligations as the underlying services are performed using a proportional performance model over the period of service using input‑based measurements of total full‑time equivalent efforts and external costs incurred to date as a percentage of total full‑time equivalent time and external expected, which best reflects the progress towards satisfaction of the performance obligation. The amount allocated to the material rights is recorded as deferred revenue and the Company commences revenue recognition upon exercise of or upon expiry of the respective option. The Company anticipates that the Genentech Collaboration Performance Program #1 and #2 obligations will be performed over a period of approximately two years, and the material rights will be exercised or expire within approximately four years from contract execution.

During the three months ended March 31, 2021 and 2020, the Company recognized revenue of $1.4 million and $0.7 million, and as of March 31, 2021 and December 31, 2020, the Company recorded $28.4 million and $27.6 million of deferred revenue in connection with the Genentech Collaboration Agreement.

Dementia Discovery Fund Agreement

In May 2019, the Company entered into a collaboration with the DDF to use Bicycle technology for the discovery and development of novel therapeutics for dementia (the “DDF Collaboration Agreement”). In October 2019, the collaboration with DDF was expanded to include Oxford University’s Oxford Drug Discovery Institute (“ODDI”). Under the terms of the DDF Collaboration Agreement, the Company and DDF will collaborate to identify Bicycles that bind to clinically validated dementia targets (the “DDF Research Plan”). The Company is obligated to use commercially reasonable efforts to perform research activities under the DDF Research Plan. DDF shall not be directly engaged in the conduct of any research activities under the arrangement. ODDI will then profile these Bicycles in a range of target-specific and disease-focused assays to determine their therapeutic potential. The activities under the DDF Collaboration Agreement will be governed by a project advisory panel, composed of two representatives from the Company and DDF. The Research Advisory Panel will oversee, review and recommend direction for the Research Plans and variations of or modifications of research plans.

The Company received an upfront payment of $1.1 million in May 2019. The DDF arrangement provided the Company could receive up to an additional $0.7 million, of which $0.5 million has been received as of March 31, 2021, upon achievement of certain milestones such as the identification of lead Bicycle candidates with a certain affinity, which would be used to fund additional research and development services including lead optimization.

Intellectual property created by the collaboration shall be owned by the Company, and background intellectual property improvements shall be owned by the party from whose background intellectual property they exclusively relate. If promising lead compounds are identified, the Company, ODDI and DDF have the option (the “DDF Option”) to establish a jointly owned new company (“NewCo”) to advance the compounds through further development towards commercialization. NewCo will receive a royalty and milestone-bearing assignment and license of intellectual property from the Company for this purpose. The DDF Option is exercisable at any time until 90 days following the completion of the Research Plan and delivery of a final report. If DDF does not elect to exercise the DDF Option during the Option period, then DDF shall have no right in the collaboration intellectual property. NewCo will initially be owned 66% by the Company and 34% by DDF; however, the Company shall not be entitled to exercise more than 50% of the total voting rights related to its ownership interests. After completion of the DDF Option exercise, for a period of two years following the option exercise, NewCo shall have the right to initiate a new research program to develop up to three additional dementia targets, on a target by target basis, and the Company will be entitled to charge NewCo an agreed upon FTE rate for peptide screening and optimization for the active targets.

Either party may terminate the DDF Collaboration Agreement upon providing not less than 60 days written notice. A party may terminate the DDF Collaboration Agreement with immediate effect without notice if at any time the other party files for protection under bankruptcy or insolvency laws, makes an arrangement for the benefit of creditors, appoints a receiver, administrator, manager or trustee over its property, proposes a written agreement of composition or extension of its debts, is a party to any dissolution, winding-up or liquidation, or is in material breach that has not been remedied.

Accounting Analysis

The Company identified a single performance obligation associated with the performance of research and development services under the DDF Research Plan.

The Company concluded that the DDF Option is an immaterial obligation at the inception of the arrangement, as it represents a right to acquire shares of NewCo that have de minimis value. The DDF Option also does not contain a material right that otherwise would not have been received. The Company’s participation in the Research Advisory Panel was assessed as immaterial in the context of the contract. In addition, the Company concluded that the option for NewCo to obtain additional peptide screening and optimization services is not an obligation at the inception of the arrangement, as they are optional services and the amount that will be paid for the services do not reflect a discount that the customer would otherwise receive and do not provide the customer with material rights.

The total transaction price was initially determined to be $1.1 million, consisting of the upfront payment for research and development funding. The Company may receive additional milestone payments during the DDF Research Plan, as well as for research and development services for additional targets following the exercise of DDF Option. These variable amounts are excluded from the transaction price as they relate to fees that can only be achieved subsequent to the exercise of an option, and therefore are treated as separate contracts.

The transaction price was allocated to the single performance obligation of research and development services. The Company is recognizing revenue as the underlying services are performed using a proportional performance model, over the period of service using input‑based measurements of total costs, including total full‑time equivalent effort incurred to date as a percentage of total costs expected, which best reflects the progress towards satisfaction of the performance obligation. In December 2020, the Company received a payment of $0.5 million upon the achievement of specified scientific criteria. The Company concluded that the payment represents consideration for a single performance obligation to perform lead optimization activities, and will recognize revenue as the underlying services are performed using a proportional performance model, over the period of service using input based measurements of total costs, including total full time equivalent effort incurred to date as a percentage of total costs expected, which best reflects the progress towards satisfaction of the performance obligation.

For both of the three months ended March 31, 2021 and 2020, the Company recognized $0.1 million of revenue. As of March 31, 2021 and December 31, 2020, the Company recorded deferred revenue of $0.7 million and $0.8 million, respectively, related to its collaboration with DDF.

AstraZeneca Collaboration Agreement

In November 2016, the Company entered into a Research Collaboration Agreement (the “AstraZeneca Collaboration Agreement” with AstraZeneca. The collaboration activities initially focused on two targets within respiratory, cardiovascular and metabolic disease, for which collaboration activities were terminated by AstraZeneca in October 2020 and March 2021, respectively.

In May 2018, AstraZeneca made an irrevocable election to exercise an option to nominate up to four additional targets (“Additional Four Target Option”). As a result, AstraZeneca was entitled to obtain research and development services from the Company with respect to Bicycle peptides that bind to up to four additional targets, along with license rights to those selected targets, in exchange for an option fee of $5.0 million. After discovery and initial optimization of such Bicycle peptides, AstraZeneca will be responsible for all research and development, including lead optimization and drug candidate selection. AstraZeneca has option rights, at drug candidate selection, which allow it to obtain development and exploitation license rights with regard to such drug candidate. Each research program is to continue for an initial period of three years, referred to as the research term, including one year for the Bicycle Research Term and two for the AZ Research Term. AstraZeneca may extend the research term for each research program by twelve months (or fifteen months, if needed to complete certain toxicology studies) or could be shorter if it is ceased due to a screening failure, a futility determination, or abandonment by AstraZeneca. AstraZeneca has certain target substitution rights should a screening failure or futility determination be reached, but was obligated to fund these additional efforts related to substitution. AstraZeneca is obligated to fund two FTEs during the Bicycle Research Term, for each research program, based on an agreed upon FTE reimbursement rate. Payment is made quarterly in advance of services being provided. AstraZeneca has the option to obtain worldwide development and commercialization licenses associated with each designated drug candidate in return for a fee of $8.0 million per drug candidate, upon the selection of such drug candidate. AstraZeneca is required to make certain milestone payments to the Company upon the achievement of specified development, regulatory and commercial milestones. More specifically, for each research program, the Company is eligible to receive up to $29.0 million in development milestone payments and up to $23.0 million in regulatory milestone payments. The Company is also eligible for up to $110.0 million in commercial milestone payments, on a research program by research program basis. In addition, to the extent any of the drug candidates covered by the licenses conveyed to AstraZeneca are commercialized, the Company would be entitled to receive tiered royalty payments of mid-single digits based on a percentage of net sales, subject to certain reductions, including in certain countries where the licensed product faces generic competition. AstraZeneca may terminate the AstraZeneca Collaboration Agreement, entirely or on a licensed product by licensed product or country by country basis, for convenience.

Accounting Analysis

Upon the execution of the Additional Four Target Option, the Company identified the following five performance obligations associated with the May 2018 AstraZeneca Agreement:

(i)

Research license and the related research and development services during the Bicycle Research Term for the third target (the “Target Three Research License and Related Services”),

(ii)

Material right associated with the development and exploitation license option for the third target (“Target Three Material Right”),

(iii)

Material right associated with the research services option, including the underlying development and exploitation license option for the fourth target (“Target Four Material Right”),

(iv)

Material right associated with the research services option, including the underlying development and exploitation license option for the fifth target (“Target Five Material Right”), and

(v)

Material right associated with the research services option, including the underlying development and exploitation license option for the sixth target (“Target Six Material Right”).

The Company concluded that the fourth, fifth and sixth targets available for selection are options. Upon exercise, AstraZeneca will obtain a research license and the related research and development services and an option to a development and exploitation license. The Company has concluded that the research services option, including the underlying development and exploitation license options related to each respective target results in a material right as the option exercise fee related to the development and exploitation license contains a discount that AstraZeneca would not have otherwise received.

The research license and the related research and development services related to the fourth, fifth and sixth targets were not performance obligations at the inception of the arrangement, as they are optional services that will be performed if AstraZeneca selects additional targets and they reflect their standalone selling prices and do not provide the customer with material rights. The Company’s participation in the joint steering committee was assessed as immaterial in the context of the contract.

The total transaction price was initially determined to be $5.7 million, consisting of the $5.0 million option exercise fee and research and development funding of an estimated $0.7 million. The research and development funding is being provided based on the costs that are incurred to conduct the research and development services. The Company utilizes the most likely amount method to determine the amount of research and development funding to be received. Additional consideration to be paid to the Company upon the exercise of the license options by AstraZeneca or upon reaching certain milestones are excluded from the transaction price as they relate to option fees and milestones that can only be achieved subsequent to the license option exercise or are outside of the initial contact term.

The transaction price was allocated to the performance obligations based on the relative estimated standalone selling prices of each performance obligation. The estimated standalone selling prices for each Research License and Related Services obligation was primarily based on the nature of the services to be performed and estimates of the associated effort and costs of the services, adjusted for a reasonable profit margin what would be expected to be realized under similar contracts. The estimated standalone selling price for the material rights was determined based on the fees AstraZeneca would pay to exercise the license options, the estimated value of the License Option using comparable transactions, and the probability that (i) AstraZeneca would opt into the target development, and (ii) the license options would be exercised by AstraZeneca. Based on the relative standalone selling price, the allocation of the transaction price to the separate performance obligations was as follows (in thousands):


	Allocation of
Performance Obligations	Transaction Price
Target Three Research License and Related Services	$	650
Target 3 Material Right		1,504
Target 4 Material Right		1,204
Target 5 Material Right		1,165
Target 6 Material Right		1,127
	$	5,650

The Company recognizes revenue related to amounts allocated to the Target Three Research License and Related Services as the underlying services are performed using a proportional performance model over the period of service using input‑based measurements of total full‑time equivalent effort incurred to date as a percentage of total full‑time equivalent time expected, which best reflects the progress towards satisfaction of the performance obligation. The amount allocated to the material rights is recorded as deferred revenue and the Company commences revenue recognition upon exercise of or upon expiry of the option. The optional future research license and the related research and development services related to the fourth, fifth and sixth targets reflect their standalone selling prices and do not provide the customer with a material right and, therefore, are not considered performance obligations and are accounted for as separate contracts. In June 2019, AstraZeneca selected a replacement target for the third target, and as such a new Research Term was started related to the Target Three Research License and Related Services. The total transaction price under the arrangement increased to $6.3 million for the additional research and development funding to be received. In October 2020, AstraZeneca terminated the collaboration activities related to the third target. As a result, deferred revenue related to the amount allocated to the Target 3 Material Right of $1.5 million was recognized during the year ended December 31, 2020. As of March 31, 2021, two research programs were in the AZ Research Term, and one program was in the Bicycle Research Term.

For the three months ended March 31, 2021, the Company recognized $0.3 million of revenue related to the research and development services for the sixth target related to the exercise of the Additional Four Target Option, and for the three months ended March 31, 2020 the Company recognized $0.4 million for the Target Three Research License and Related Service, and research and development services for the fourth target and fifth targets. As of March 31, 2021 and December 31, 2020, the Company recorded $3.6 million and $3.8 million, respectively, of deferred revenue in connection with the Additional Four Target Option and related contracts.

Evaluation and Option Agreement

On December 31, 2020 (the “Effective Date”), the Company entered into the Evaluation and Option Agreement. Under the terms of the Evaluation and Option Agreement, the Company agreed to transfer Bicycles (the “Option Materials”) to the recipient in order to evaluate a particular application of the Company’s technology platform for a period of up to four months (the “Evaluation Period”). The recipient agreed to pay, a non-refundable, $3.0 million option fee within five business days after the Effective Date. The Evaluation Period may be extended by up to two months by written notice and the payment of an extension fee of $2.0 million.

At any point during the term of the agreement and continuing through 30 days after the expiration of the Evaluation Period, the recipient has the option to obtain an exclusive license to the Company’s intellectual property for the purpose of continued research, development, manufacture and commercialization of products within a particular application of the Company’s platform technology. The recipient may terminate the agreement for convenience upon 30 days written notice to the Company. The upfront payment of $3.0 million and extension payment of $2.0 million are fully creditable against any upfront payment to be paid upon the execution of a license agreement.

For the three months ended March 31, 2021, the Company recognized zero revenue and $3.0 million of deferred revenue related to the Evaluation and Option Agreement. The Company concluded that the transaction price is $3.0 million, and all other amounts are excluded from the transaction price as they relate to fees that can only be achieved subsequent to the exercise of an option. The transaction price was allocated to the single performance obligation, an option to enter into a future license agreement which is a material right, as the Evaluation and Option Agreement payment is creditable against the upfront payments to paid for a license agreement. The Company concluded that all other performance obligations were immaterial in the context of the contract. The Company will begin to recognize revenue when the option is exercised or when the option expires.

Summary of Contract Assets and Liabilities

Up‑front payments and fees are recorded as deferred revenue upon receipt or when due until such time as the Company satisfies its performance obligations under these arrangements. A contract asset is a conditional right to consideration in exchange for goods or services that the Company has transferred to a customer. Amounts are recorded as accounts receivable when the Company’s right to consideration is unconditional.

The following table presents changes in the balances of the Company’s contract assets and liabilities (in thousands):


	Beginning Balance						Impact of		Ending Balance
	January 1,						Exchange		March 31,
	2021		Additions		Deductions		Rates		2021
Contract assets	$	—	$	—	$	—	$	—	$	—
Contract liabilities:
Deferred revenue
AstraZeneca collaboration deferred revenue		3,756		54		(277)		27		3,560
DDF collaboration deferred revenue		821		—		(83)		8		746
Genentech collaboration deferred revenue		27,579		2,000		(1,448)		246		28,377
Evaluation and Option Agreement deferred revenue		3,000		—		—		27		3,027
Total deferred revenue	$	35,156	$	2,054	$	(1,808)	$	308	$	35,710


	Beginning Balance						Impact of		Ending Balance
	January 1,						Exchange		December 30,
	2020		Additions		Deductions		Rates		2020
Contract assets	$	—	$	—	$	—	$	—	$	—
Contract liabilities:
Deferred revenue
AstraZeneca collaboration deferred revenue		4,913		585		(2,696)		954		3,756
DDF collaboration deferred revenue		744		500		(436)		13		821
Genentech collaboration deferred revenue		—		31,000		(4,896)		1,475		27,579
Evaluation and Option Agreement deferred revenue		—		3,000		—		—		3,000
Total deferred revenue	$	5,657	$	35,085	$	(8,028)	$	2,442	$	35,156

The contract assets represent research and development services which have been performed but have not yet been billed, and are reduced when they are subsequently billed.

The AstraZeneca deferred revenue balance as of March 31, 2021 includes $3.6 million allocated to the Target 4, Target 5 and Target 6 Material Rights, which will commence revenue recognition when the respective option is exercised at the end of AZ Research Term or when the option expires.

The Genentech deferred revenue balance at March 31, 2021 includes $20.7 million allocated to material rights that will commence revenue recognition when the respective option is exercised or when the option expires.

During the years ended March 31, 2021 and 2020, the Company recognized the following revenues as a result of changes in the contract asset and the contract liability balances in the respective periods (in thousands):


	Three Months Ended
	March 31,
	2021		2020
Revenue recognized in the period from:
Revenue recognized based on proportional performance	$	1,652	$	1,129
Revenue recognized based on changes in transaction price		156		—
Total	$	1,808	$	1,129

Cancer Research UK

BT1718

On December 13, 2016, the Company entered into a Clinical Trial and License Agreement with Cancer Research Technology Limited (“CRTL”), a wholly owned subsidiary of Cancer Research UK that Cancer Research UK’s commercial activities operate through, and Cancer Research UK (the “Cancer Research UK Agreement”). Pursuant to the Cancer Research UK Agreement, as amended in March 2017 and June 2018, Cancer Research UK’s Centre for Drug Development will sponsor and fund a Phase I/IIa clinical trial for BT1718, a Bicycle Toxin Conjugate, in patients with advanced solid tumors.

Cancer Research UK is responsible for designing, preparing, carrying out and sponsoring the clinical trial at its cost. The Company is responsible for supplying agreed quantities of GMP materials for the trial, the supply of which has been completed. In the event that additional quantities are needed, the Company will provide Cancer Research UK with all reasonable assistance to complete the arrangements necessary for the generation and supply of such additional GMP materials, but Cancer Research UK will be responsible for supplying and paying for such additional quantities of GMP materials.

The Company granted Cancer Research UK a license to its intellectual property in order to design, prepare for, sponsor, and carry out the clinical trial. The Company retains the right to continue the development of BT1718 during the clinical trial. Upon the completion of the Phase I/IIa clinical trial, the Company has the right to obtain a license to the results of the clinical trial upon the payment of a milestone, in cash and ordinary shares, with a combined value in the mid six digit dollar amount. If such license is not acquired, or if it is acquired and the license is terminated and the Company decides to abandon development of all products that deliver cytotoxic payloads to the MT1 target antigen, the Company will assign or grant to CRTL an exclusive license to develop and commercialize the product on a revenue sharing basis (in which case the Company will receive tiered royalties of 70% to 90% of the net revenue depending on the stage of development when the license is granted). The Cancer Research UK Agreement contains additional future milestone payments upon the achievement of development and regulatory milestones, payable in cash and shares, with an aggregate total value of $50.9 million, as well as royalty payments based on a single digit percentage on net sales of products developed.

The Cancer Research UK Agreement can be terminated by either party upon an insolvency event, material breach of the terms of the contract, or upon a change in control (and the new controlling entity develops, sells or manufactures tobacco products or generates the majority of its profits from tobacco products or is an affiliate of such party). Cancer Research UK may also terminate the arrangement for safety reasons or if it determines that the objectives of the clinical trial will not be met. The Company was obligated to reimburse Cancer Research UK for certain costs if the Cancer Research UK agreement was terminated by Cancer Research UK prior to the completion of the dose escalation (Phase I) part of the clinical trial for an insolvency event of, or material breach by, the Company or upon termination for safety reasons or if Cancer Research UK determined that the objectives of the clinical trial would not be met, however, these reimbursement obligations expired unexercised upon the completion of the Phase I portion of the clinical trial in 2020. If the Company is subject to a change in control and the new controlling entity develops, sells or manufactures tobacco products or generates the majority of its profits from tobacco products or is an affiliate of such party prior to the last cycle of treatment under the Phase IIa clinical trial, the Company will reimburse Cancer Research UK in full for all costs paid or committed in connection with the clinical trial and no further license payments, where applicable, shall be due. In such case, Cancer Research UK will not be obliged to grant a license to the Company in respect of the results of the clinical trial and the Company will assign or grant to CRTL an exclusive license to develop and commercialize the product without CRTL being required to make any payment to the Company.

The Company concluded that the costs incurred by Cancer Research UK is a liability in accordance with ASC 730, Research and Development, as certain payments are not based solely on the results of the research and development having future economic benefit. As such, the Company recorded a liability of $2.8 million and $2.6 million at March 31, 2021 and at December 31, 2020, which is recorded in other long‑term liabilities in the condensed consolidated balance sheets. The liability is recorded as incremental research and development expense in the condensed consolidated statements of operations and comprehensive loss.

BT7401

In December 2019, the Company entered into a clinical trial and license agreement with Cancer Research Technology Limited and Cancer Research UK. Pursuant to the agreement, Cancer Research UK’s Centre for Drug Development will fund and sponsor development of BT7401, a multivalent Bicycle CD137 agonist, from current preclinical studies through the completion of a Phase IIa trial in patients with advanced solid tumors.

The Company granted to Cancer Research UK a license to the Company’s intellectual property in order to design, prepare for, sponsor, and carry out the clinical trial and all necessary preclinical activities to support the trial. The Company retains the right to continue the development of BT7401 during the clinical trial. Upon the completion of the Phase I/IIa clinical trial, the Company has the right to obtain a license to the results of the clinical trial upon the payment of a milestone, in cash and ordinary shares, with a combined value in the mid six digit dollar amount. If such license is not acquired, or if it is acquired and the license is terminated and the Company decides to abandon development of all products that contain BT7401 or all the pharmaceutically active parts of BT7401, CRTL may elect to receive an exclusive license to develop and commercialize the product on a revenue sharing basis (in which case the Company will receive tiered royalties of 55% to 80% of the net revenue depending on the stage of development when the license is granted) less certain costs, as defined by the agreement. The BT7401 Cancer Research UK agreement contains additional future milestone payments upon the achievement of development, regulatory and commercial milestones, payable in cash, with an aggregate total value of up to $60.3 million for each licensed product, as well as royalty payments based on a single digit percentage on net sales of products developed, and sublicense royalties to the Cancer Research UK in the low double digit percentage of sublicense income depending on the stage of development when the license is granted.

The BT7401 Cancer Research UK agreement can be terminated by either party upon an insolvency event, material breach of the terms of the contract, or upon a change in control (and the new controlling entity develops, sells or manufactures tobacco products or generates the majority of its profits from tobacco products or is an affiliate of such party), or upon written notice by Cancer Research UK prior to the last cycle of treatment has been completed under the clinical trial. If the trial is terminated by the Company prior to the filing of a clinical trial authorization, or by Cancer Research UK for an insolvency event or a material breach by the Company prior to the start of a clinical trial, the Company will reimburse Cancer Research UK for certain costs paid or committed prior to the start of the clinical trial. In such case where the Company is subject to a change in control and the new controlling entity develops, sells or manufactures tobacco products or generates the majority of its profits from tobacco products or is an affiliate of such party, Cancer Research UK will not be obliged to grant a license to the Company in respect of the results of the clinical trial and CRTL may elect to receive an exclusive license to develop and commercialize the product without CRTL being required to make any payment to the Company. The Company concluded that the BT7401 Cancer Research UK arrangement does not represent a liability in accordance with ASC 730, Research and Development, as the payments are based solely on the results of the research and development having future economic benefit and risk of repayment is substantive and genuine, and as such there was no accounting impact as of March 31, 2021.

Income Taxes	3 Months Ended
Income Taxes	Mar. 31, 2021
Income Taxes
Income Taxes	10. Income Taxes During the three months ended March 31, 2021, and 2020, the Company recorded an income tax benefit of $0.3 million and $0.1 million, respectively. The Company is subject to United Kingdom corporate taxation. Due to the nature of its business, the Company has generated losses since inception and has therefore not paid United Kingdom corporation tax. The Company’s income tax benefit is mainly the result of deferred tax assets benefitted in the United States that do not have a valuation allowance against them because of profits that will be generated by an intercompany service agreement. The Company regularly assesses its ability to realize its deferred tax assets. Assessing the realization of deferred tax assets requires significant judgment. In determining whether its deferred tax assets are more likely than not realizable, the Company evaluated all available positive and negative evidence, and weighed the evidence based on its objectivity. After consideration of the evidence, including the Company’s history of cumulative net losses in the United Kingdom, and the Company has concluded that it is more likely than not that the Company will not realize the benefits of its U.K. deferred tax assets and accordingly the Company has provided a valuation allowance for the full amount of the net deferred tax assets in the United Kingdom. The Company has considered the Company’s history of cumulative net profits in the United States, estimated future taxable income and concluded that it is more likely than not that the Company will realize the benefits of its United States deferred tax assets and has not provided a valuation allowance against the net deferred tax assets in the United States. The Company recorded a valuation allowance against all of its U.K. deferred tax assets as of March 31, 2021 and December 31, 2020. The Company intends to continue to maintain a full valuation allowance on its U.K. deferred tax assets until there is sufficient evidence to support the reversal of all or some portion of these allowances. The release of the valuation allowance would result in the recognition of certain deferred tax assets and an increase to the benefit from income taxes for the period the release is recorded. However, the exact timing and amount of the valuation allowance release are subject to change on the basis of the level of profitability that the Company is able to actually achieve. The benefit from income taxes shown on the condensed consolidated statements of operations differs from amounts that would result from applying the statutory tax rates to income before taxes primarily because of certain permanent expenses that were not deductible, U.K., federal and state research and development credits, as well as the application of valuation allowances against the U.K. deferred tax assets.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References + Details

Commitments and Contingencies

3 Months Ended

Mar. 31, 2021

Commitments and Contingencies

Commitments and Contingencies

11. Commitments and Contingencies

Leases

In September 2017, Bicycle Therapeutics Inc. entered into a lease agreement for office and laboratory space in Lexington, Massachusetts, which commenced on January 1, 2018 and expires on December 31, 2022. Bicycle Therapeutics Inc. has the option to extend for a successive period which is not included in the lease term as it is not reasonably certain that the option will be exercised. In conjunction with the lease agreement, Bicycle Therapeutics Inc. paid a security deposit of $0.2 million as well as prepaid rent of $0.1 million for the first month of the third, fourth, and fifth year of the lease. The deposit is recorded in other assets in the condensed consolidated balance sheets. The Company has recorded a right‑of‑use asset (inclusive of the impact of prepaid rent) and corresponding lease liability, by calculating the present value of lease payments, discounted at 9%, the incremental borrowing rate, over the lease term.

In October 2017, BicycleRD Limited entered into a lease agreement for office and laboratory space in Building 900, Babraham Research Campus, Cambridge, U.K. which expires on December 11, 2021. The annual rent is approximately $0.5 million. The lease agreement provides that the Company has the right to renew the lease for five years commencing December 12, 2021. The renewal period was not included in the original lease term as it was not reasonably certain that the right would be exercised. In March 2021, the Company concluded that it was reasonably certain that it will exercise the lease renewal option, and accounted for the lease extension as a modification of the existing lease. The Company remeasured the right of use asset and lease liability by calculating the present value of lease payments, discounted at 7.70%, the Company’s incremental borrowing rate, over the new lease term. The payments for the modified lease are approximately $0.5 million through December 31, 2021, and $0.8 million annually thereafter. Service charges are also payable based on floor area and are estimated to be approximately $0.1 million per year. In conjunction with the 2017 lease agreement, the Company paid a security deposit of $0.6 million, which is recorded in other current assets in the condensed consolidated balance sheets.

The components of the Company’s lease expense, which are recorded as a component of research and development expenses and general and administrative expenses in the condensed consolidated statement of operations and comprehensive loss are as follows (in thousands):


	March 31,			March 31,
	2021			2020
Operating lease cost	$	232		$	223
Variable lease cost		80			139
Total lease cost	$	312		$	362
Weighted‑average remaining operating lease term (years)		5.0			2.4
Weighted‑average discount rate		7.93	%		8.56	%

The following table summarizes the maturities of the Company’s operating leases as of March 31, 2021, including the payments for the U.K. lease renewal which is reasonably certain of being extended (in thousands):


Year Ending December 31,
2021	$	713
2022		1,104
2023		662
2024		662
2025		662
2026		662
Present value adjustment		(732)
Total lease liabilities		3,733
Less: current lease liabilities		(708)
Long term lease liabilities	$	3,025

The Company has entered into various agreements with contract manufacturing organizations to provide clinical trial materials and with vendors for preclinical research studies, synthetic chemistry and other services for operating purposes. These payments are not included in the table of operating lease payments above since the contracts are generally cancelable at any time upon less than 90 days’ prior written notice. The Company is not contractually able to terminate for convenience and avoid any and all future obligations to these vendors. Under such agreements, the Company is contractually obligated to make certain minimum payments to the vendors, with the payments in the event of a termination with less than 90 days’ notice based on the timing of the termination and the exact terms of the agreement.

Legal proceedings

From time to time, the Company may become involved in various legal proceedings and claims, either asserted or unasserted, which arise in the ordinary course of business.

In September 2016, BicycleRD Limited, filed a complaint in the District Court of the Hague against Pepscan Systems B.V. and its affiliates (“Pepscan”) to contest the right of Pepscan to terminate a non‑exclusive patent license agreement entered into with Pepscan in 2009. On November 20, 2020, the Company entered into a settlement and license agreement with Pepscan regarding Bicycle’s use of Pepscan’s CLIPS peptide technology. The companies agreed to settle all intellectual property disputes worldwide. Under the terms of the settlement, Bicycle has been granted a license to use CLIPS peptide technology in the development of its product candidates BT1718 and THR-149. Bicycle paid €3.0 million in November 2020, will pay €1.0 million on the first anniversary of the date of settlement, and will make additional future milestone payments upon the achievement of development, regulatory and commercial milestones, with an aggregate total value of $92.4 million. The Company recorded $4.7 million of expense related to the settlement and license agreement with Pepscan during the year ended December 31, 2020, and a liability of $1.2 million related to the Pepscan litigation as of December 31, 2020, which is included in current liabilities in the condensed consolidated balance sheet.

Founder Royalty arrangements

At the time BicycleRD Limited was organized, BicycleRD Limited entered into a royalty agreement with its founders and initial investors (the “Founder Royalty Agreement”). Pursuant to the Founder Royalty Agreement, as amended, the Company will pay a royalty rate in the low single digit percentages on net product sales under the collaborations with Oxurion and AstraZeneca to its founders and initial investors, for a period of 10 years from the first commercial sale on a country by country basis. No royalties have been earned or paid under the royalty arrangements to date.

Indemnification obligations

In the ordinary course of business, the Company may provide indemnification of varying scope and terms to vendors, lessors, business partners and other parties with respect to certain matters including, but not limited to, losses arising out of breach of such agreements or from intellectual property infringement claims made by third parties. In addition, the Company has indemnification obligations towards members of its board of directors and officers that will require the Company, among other things, to indemnify them against certain liabilities that may arise by reason of their status or service as directors or officers. The maximum potential amount of future payments the Company could be required to make under these indemnification arrangements is, in many cases, unlimited. To date, the Company has not incurred any material costs as a result of such indemnification obligations. The Company is not aware of any claims under indemnification arrangements, and therefore it has not accrued any liabilities related to such obligations in its condensed consolidated financial statements as of March 31, 2021 and December 31, 2020.

Net loss per share

3 Months Ended

Mar. 31, 2021

Net loss per share

Net loss per share

12. Net loss per share

Basic and diluted net loss per share attributable to ordinary shareholders was calculated as follows (in thousands, except share and per share amounts):


	Three Months Ended
	March 31,
	2021		2020
Numerator:
Net loss	$	(16,191)	$	(11,324)
Denominator:
Weighted average ordinary shares outstanding, basic and diluted		22,100,840		17,997,929
Net loss per share, basic and diluted	$	(0.73)	$	(0.63)

The Company’s potentially dilutive securities, which include share options and warrants to subscribe for ordinary shares, have been excluded from the computation of diluted net loss per share as the effect would be to reduce the net loss per share. Therefore, the weighted average number of ordinary shares outstanding used to calculate both basic and diluted net loss per share attributable to ordinary shareholders is the same. The Company excluded the following potentially dilutive ordinary shares, presented based on amounts outstanding at each period end, from the computation of diluted net loss per share attributable to ordinary shareholders for the periods indicated because including them would have had an anti‑dilutive effect:


	Three Months Ended
	March 31,
	2021	2020
Warrants to subscribe for ordinary shares (1)	—	71,450
Options to purchase ordinary shares	4,950,608	3,654,888
	4,950,608	3,726,338

⁽¹⁾

At March 31, 2020, 50,000 warrants are outstanding which are exercisable into 71,450 ordinary shares.

Benefit plans	3 Months Ended
Benefit plans	Mar. 31, 2021
Benefit plans
Benefit plans	13. Benefit plans The Company established a defined‑contribution savings plan under Section 401(k) of the Code (the “401(k) Plan”). The 401(k) Plan covers all U.S. employees and allows participants to defer a portion of their annual compensation on a pre‑tax basis. Matching contributions to the 401(k) Plan may be made at the discretion of the Company’s board of directors. During each of the three months ended March 31, 2021 and 2020, the Company made contributions totaling $0.1 million to the 401(k) Plan. The Company provides a pension contribution plan for its employees in the United Kingdom, pursuant to which the Company may make contributions each year (“U.K Plan”). During the three months ended March 31, 2021 and 2020, the Company made contributions totaling $0.2 million, and $0.1 million, respectively, to the U.K. Plan.

- Definition

The entire disclosure for retirement benefits.

+ References

Reference 1: http://www.xbrl.org/2003/role/exampleRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 715
-SubTopic 20
-Section 55
-Paragraph 17
-URI http://asc.fasb.org/extlink&oid=118257860&loc=d3e4179-114921

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 715
-SubTopic 20
-Section S99
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=21916913&loc=d3e273930-122802

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 715
-SubTopic 20
-Section 50
-Paragraph 1
-Subparagraph (d)(i)
-URI http://asc.fasb.org/extlink&oid=118255775&loc=d3e1928-114920

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 715
-SubTopic 20
-Section 50
-Paragraph 1
-Subparagraph (o)
-URI http://asc.fasb.org/extlink&oid=118255775&loc=d3e1928-114920

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 715
-SubTopic 20
-Section 50
-Paragraph 1
-Subparagraph (p)
-URI http://asc.fasb.org/extlink&oid=118255775&loc=d3e1928-114920

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 715
-SubTopic 70
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=49170846&loc=d3e28014-114942

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 715
-URI http://asc.fasb.org/topic&trid=2235017

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 715
-SubTopic 60
-Section 50
-Paragraph 3
-Subparagraph (c)
-URI http://asc.fasb.org/extlink&oid=6414203&loc=d3e39689-114964

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 715
-SubTopic 20
-Section 50
-Paragraph 1
-Subparagraph (d)(iv)(03)
-URI http://asc.fasb.org/extlink&oid=118255775&loc=d3e1928-114920

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 715
-SubTopic 20
-Section 50
-Paragraph 1
-Subparagraph (q)
-URI http://asc.fasb.org/extlink&oid=118255775&loc=d3e1928-114920

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 715
-SubTopic 20
-Section 50
-Paragraph 1
-Subparagraph (r)(1)
-URI http://asc.fasb.org/extlink&oid=118255775&loc=d3e1928-114920

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 715
-SubTopic 20
-Section 50
-Paragraph 1
-Subparagraph (d)(iii)
-URI http://asc.fasb.org/extlink&oid=118255775&loc=d3e1928-114920

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 715
-SubTopic 20
-Section 50
-Paragraph 1
-Subparagraph (l)
-URI http://asc.fasb.org/extlink&oid=118255775&loc=d3e1928-114920

Reference 14: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 715
-SubTopic 20
-Section 50
-Paragraph 1
-Subparagraph (r)(2)
-URI http://asc.fasb.org/extlink&oid=118255775&loc=d3e1928-114920

+ Details

Related party transactions	3 Months Ended
Related party transactions	Mar. 31, 2021
Related party transactions
Related party transactions	14. Related party transactions The Company has entered into Founder Royalty Agreements with its founders and initial investors (Note 11). No royalties have been earned or paid under the Founder Royalty Agreements to date. The Chairman of the Company’s board of directors is associated with Stone Sunny Isles Inc., which provided consultancy services to the Company totaling $43,000 and $40,000 during each of the three months ended March 31, 2021 and 2020, respectively.

Geographic information

3 Months Ended

Mar. 31, 2021

Geographic information

Geographic information

15. Geographic information

The Company operates in two geographic regions: the United States and the United Kingdom. Information about the Company’s long‑lived assets, including operating lease right‑of‑use assets, held in different geographic regions is presented in the table below (in thousands):


	March 31,		December 31,
	2021		2020
United States	$	1,579	$	1,708
United Kingdom		4,692		1,899
	$	6,271	$	3,607

The Company’s collaboration revenues are attributed to the operations of the Company in the United Kingdom.

- Definition

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 31
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8924-108599

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 34
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8981-108599

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 21
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8721-108599

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 40
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e9031-108599

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (f)
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8933-108599

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (e)
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8933-108599

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 26
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8844-108599

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 41
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e9038-108599

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (d)
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8933-108599

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 22
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8736-108599

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 42
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e9054-108599

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 15
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8657-108599

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 21
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8721-108599

Reference 14: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-URI http://asc.fasb.org/topic&trid=2134510

+ Details

Subsequent events	3 Months Ended
Subsequent events	Mar. 31, 2021
Subsequent events
Subsequent events	16. Subsequent events Previously, on October 2, 2020, the Company entered into a Sales Agreement with Cantor Fitzgerald & Co. and Oppenheimer & Co. Inc. with respect to an ATM program under which the Company may offer and sell, from time to time at its sole discretion, ADSs through the Sales Agents, representing the same number of ordinary shares, having an aggregate offering price of up to $75.0 million. In April 2021, the Company issued and sold 482,299 ADSs, representing the same number of ordinary shares, pursuant to its ATM program for gross proceeds of $14.4 million, resulting in net proceeds of $14.0 million, after deducting sales commissions and offering expenses of $0.4 million, completing the sale of $75.0 million under the ATM Sales Agreement.

Summary of significant accounting policies (Policies)	3 Months Ended
Summary of significant accounting policies (Policies)	Mar. 31, 2021
Summary of significant accounting policies
Use of estimates	Use of estimates The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of expenses during the reporting periods. Significant estimates and assumptions reflected in these condensed consolidated financial statements include, but are not limited to, the accrual for research and development expenses, revenue recognition, share-based compensation expense, valuation procedures for right-of-use assets and liabilities, and income taxes, including the valuation allowance for deferred tax assets. The Company bases its estimates on historical experience, known trends and other market‑specific or other relevant factors that it believes to be reasonable under the circumstances. Estimates are periodically reviewed in light of reasonable changes in circumstances, facts and experience. Changes in estimates are recorded in the period in which they become known. Actual results could differ from those estimates or assumptions.
Significant Risks and Uncertainties	Significant Risks and Uncertainties In 2020, with the global spread of the ongoing COVID-19 pandemic, the Company established a cross-functional task force and implemented business continuity plans designed to address and mitigate the impact of the ongoing COVID-19 pandemic on the Company’s business. While the Company continues to experience limited financial impacts at this time, the extent to which the ongoing COVID-19 pandemic ultimately impacts the Company’s business, clinical development and regulatory efforts, corporate development objectives and the value of and market for the Company’s ADSs, will depend on future developments that are highly uncertain and cannot be predicted with confidence at this time, such as the ultimate duration of the pandemic, travel restrictions, quarantines, social distancing and business closure requirements in the United Kingdom, United States, Europe and other countries, and the effectiveness of actions taken globally to contain and treat the disease. The global economic slowdown, the overall disruption of global healthcare systems and the other risks and uncertainties associated with the pandemic could have a material adverse effect on the Company’s business, financial condition, results of operations and growth prospects. In addition, the Company is subject to other challenges and risks specific to its business and ability to execute its strategy, as well as risks and uncertainties common to companies in the biotechnology industry, including but not limited to: risks of failure of preclinical studies and clinical trials, the need to obtain marketing approval for any drug product candidate that it may identify and develop, the need to successfully commercialize and gain market acceptance of its product candidates, dependence on key personnel and collaboration partners, protection of proprietary technology, compliance with government regulations, development by competitors of technological innovations, and the ability to secure additional capital to fund operations. In addition, to the extent the ongoing COVID-19 pandemic adversely affects the Company’s business and results of operations, it may also have the effect of heightening many of the other risks and uncertainties discussed above.
Unaudited Interim Financial Information	Unaudited Interim Financial Information Certain information in the footnote disclosures of the financial statements has been condensed or omitted pursuant to the rules and regulations of the SEC. These unaudited condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto for the year ended December 31, 2020 included in the Company’s 2020 Annual Report. The accompanying condensed consolidated balance sheet at March 31, 2021, condensed consolidated statements of operations and comprehensive loss, condensed consolidated statements of shareholders’ equity, and the condensed consolidated statements of cash flows for the three months ended March 31, 2021 and 2020, and the related financial information disclosed in these notes are unaudited. The unaudited interim financial statements have been prepared on the same basis as the audited annual financial statements for the year ended December 31, 2020, and, in the opinion of management, reflect all adjustments, consisting of normal recurring adjustments, necessary for the fair presentation of the Company’s financial position as of March 31, 2021, the results of its operations and its cash flows for the three months ended March 31, 2021 and 2020. The results for the three months ended March 31, 2021 are not necessarily indicative of the results to be expected for the year ending December 31, 2021, any other interim periods, or any future year or period.
Government grants	Government grants From time to time, the Company may enter into arrangements with governmental entities for the purposes of obtaining funding for research and development activities. The Company recognizes government grant funding in the condensed consolidated statements of operations and comprehensive loss as the related expenses being funded are incurred. The Company classifies government grants received under these arrangements as a reduction to the related research and development expense incurred. The Company analyzes each arrangement on a case-by-case basis. For the three months ended March 31, 2021 and March 31, 2020, the Company recognized $1.1 million and $0.2 million, respectively, as a reduction of research and development expense related to government grant arrangements.
Recently adopted accounting pronouncements	Recently adopted accounting pronouncements In 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (“ASU 2019-12”). ASU 2019-12 simplifies the accounting for income taxes and will be effective beginning after December 15, 2020. The adoption of ASU 2019‑12 did not have a material impact on the Company’s results of operations or cash flows. Recently issued accounting pronouncements In June 2016, the FASB issued ASU No. 2016-13, Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”). ASU 2016-13 will change how companies account for credit losses for most financial assets and certain other instruments. For trade receivables, loans and held-to-maturity debt securities, companies will be required to recognize an allowance for credit losses rather than reducing the carrying value of the asset. In November 2019, the FASB issued ASU No. 2019-10, Financial Instruments — Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842): Effective Dates to amend the effective date of ASU 2016-13, for entities eligible to be “smaller reporting companies,” as defined by the SEC, to be effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. Early adoption is permitted. The Company has not elected to early adopt ASU No. 2016-13. The Company is currently evaluating the potential impact that the adoption of ASU 2016-13 will have on the Company’s financial position and results of operations.

Property and equipment, net (Tables)

3 Months Ended

Mar. 31, 2021

Property and equipment, net

Schedule of property and equipment, net

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


	March 31,		December 31,
	2021		2020
Laboratory equipment	$	5,979	$	5,583
Leasehold improvements		385		383
Computer equipment and software		188		188
Furniture and office equipment		196		195
		6,748		6,349
Less: Accumulated depreciation and amortization		(4,198)		(4,032)
	$	2,550	$	2,317

Accrued expenses and other current liabilities (Tables)

3 Months Ended

Mar. 31, 2021

Accrued expenses and other current liabilities

Schedule of accrued expenses and other current liabilities

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


	March 31,		December 31,
	2021		2020
Accrued employee compensation and benefits	$	1,737	$	4,390
Accrued external research and development expenses		5,239		4,428
Accrued professional fees		1,905		1,759
Current portion of operating lease liabilities		708		844
Other		127		208
	$	9,716	$	11,629

Long-term debt (Tables)

3 Months Ended

Mar. 31, 2021

Long-term debt

Schedule of long term debt instruments

Long-term debt consisted of the following (in thousands):


	March 31,
	2021
Term loan payable	$	30,000
End of term charge		118
Unamortized debt issuance costs		(620)
Carrying value of term loan	$	29,498

Schedule of maturities of long term debt

Future principal payments, including the End of Term Charge, are as follows (in thousands):



Year Ending December 31,
2021	$	—
2022		—
2023		9,614
2024		21,886
Total	$	31,500

- Definition

Tabular disclosure of long-debt instruments or arrangements, including identification, terms, features, collateral requirements and other information necessary to a fair presentation. These are debt arrangements that originally required repayment more than twelve months after issuance or greater than the normal operating cycle of the entity, if longer.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 210
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.5-02.22)
-URI http://asc.fasb.org/extlink&oid=120391452&loc=d3e13212-122682

Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 835
-SubTopic 30
-Section 45
-Paragraph 1A
-URI http://asc.fasb.org/extlink&oid=119993939&loc=d3e28541-108399

Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 6
-URI http://asc.fasb.org/extlink&oid=109259400&loc=d3e21506-112644

Reference 4: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08.(e),(f))
-URI http://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690

Reference 5: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 835
-SubTopic 30
-Section 45
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=119993939&loc=d3e28551-108399

Reference 6: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 7
-URI http://asc.fasb.org/extlink&oid=109259400&loc=d3e21521-112644

Reference 7: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 8
-URI http://asc.fasb.org/extlink&oid=109259400&loc=d3e21538-112644

Reference 8: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 942
-SubTopic 470
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=75038535&loc=d3e64711-112823

Reference 9: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 835
-SubTopic 30
-Section 55
-Paragraph 8
-URI http://asc.fasb.org/extlink&oid=114775985&loc=d3e28878-108400

Reference 10: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=109259400&loc=d3e21475-112644

+ Details

Share-based compensation (Tables)

3 Months Ended

Mar. 31, 2021

Share-based compensation

Schedule of share based compensation expense

The Company recorded share‑based compensation expense in the following expense categories of its condensed consolidated statements of operations and comprehensive loss (in thousands):


	Three Months Ended
	March 31,
	2021		2020
Research and development expenses	$	1,211	$	675
General and administrative expenses		2,610		1,446
	$	3,821	$	2,121

Schedule of share option activity


				Weighted
		Weighted		Average	Aggregate
	Number of	Average		Contractual	Intrinsic
	Shares	Exercise Price		Term	Value
				(in years)	(in thousands)
Outstanding as of December 31, 2020	3,736,663	$	10.51	8.54	$	27,553
Granted	1,297,999		18.74	—		—
Exercised	(63,545)		4.47	—		—
Forfeited	(20,509)		15.89	—		—
Outstanding as of March 31, 2021	4,950,608	$	12.73	8.69	$	80,172
Vested and expected to vest as of March 31, 2021	4,950,608	$	12.73	8.69	$	80,172
Options exercisable as of March 31, 2021	2,018,352	$	9.87	8.18	$	39,782

Schedule of assumptions used to determine the fair value of share options granted


	Three Months Ended
	March 31,
	2021		2020
Risk-free interest rate	0.5	%	1.6	%
Expected volatility	79.5	%	73.7	%
Expected dividend yield	—		—
Expected term (in years)	5.95		5.95

Significant Agreements (Tables)

3 Months Ended

Mar. 31, 2021

Significant agreements.

Summary of revenue recognized from collaboration arrangements

The following table summarizes the revenue recognized in the Company’s condensed consolidated statements of operations and comprehensive loss from these arrangements (in thousands):


	Three Months
	Ended
	March 31,
	2021		2020
Collaboration revenues
AstraZeneca	$	277	$	412
Dementia Discovery Fund		83		56
Genentech		1,448		661
Total collaboration revenues	$	1,808	$	1,129

Summary of changes in the balances of the Company’s contract assets and liabilities

The following table presents changes in the balances of the Company’s contract assets and liabilities (in thousands):


	Beginning Balance						Impact of		Ending Balance
	January 1,						Exchange		March 31,
	2021		Additions		Deductions		Rates		2021
Contract assets	$	—	$	—	$	—	$	—	$	—
Contract liabilities:
Deferred revenue
AstraZeneca collaboration deferred revenue		3,756		54		(277)		27		3,560
DDF collaboration deferred revenue		821		—		(83)		8		746
Genentech collaboration deferred revenue		27,579		2,000		(1,448)		246		28,377
Evaluation and Option Agreement deferred revenue		3,000		—		—		27		3,027
Total deferred revenue	$	35,156	$	2,054	$	(1,808)	$	308	$	35,710


	Beginning Balance						Impact of		Ending Balance
	January 1,						Exchange		December 30,
	2020		Additions		Deductions		Rates		2020
Contract assets	$	—	$	—	$	—	$	—	$	—
Contract liabilities:
Deferred revenue
AstraZeneca collaboration deferred revenue		4,913		585		(2,696)		954		3,756
DDF collaboration deferred revenue		744		500		(436)		13		821
Genentech collaboration deferred revenue		—		31,000		(4,896)		1,475		27,579
Evaluation and Option Agreement deferred revenue		—		3,000		—		—		3,000
Total deferred revenue	$	5,657	$	35,085	$	(8,028)	$	2,442	$	35,156

Summary of recognition of revenues as a result of changes in contract asset and contract liability balances


	Three Months Ended
	March 31,
	2021		2020
Revenue recognized in the period from:
Revenue recognized based on proportional performance	$	1,652	$	1,129
Revenue recognized based on changes in transaction price		156		—
Total	$	1,808	$	1,129

AstraZeneca

Significant agreements.

Summary of allocation of transaction price to separate performance obligations

Based on the relative standalone selling price, the allocation of the transaction price to the separate performance obligations was as follows (in thousands):


	Allocation of
Performance Obligations	Transaction Price
Target Three Research License and Related Services	$	650
Target 3 Material Right		1,504
Target 4 Material Right		1,204
Target 5 Material Right		1,165
Target 6 Material Right		1,127
	$	5,650

Genentech

Significant agreements.

Summary of allocation of transaction price to separate performance obligations

Based on the relative standalone selling price, the allocation of the transaction price as of March 31, 2021 to the separate performance obligations is as follows (in thousands):


	Allocation of
Performance Obligations	Transaction Price
Genentech Collaboration Program #1 Performance Obligation	$	4,019
Genentech Collaboration Program #2 Performance Obligation		8,037
Specified Targeting Arm Material Right Arm for Genentech Collaboration Program #1		352
Two material rights associated with the LSR Go Option for Collaboration Programs #1 and #2		12,400
Material rights associated with limited substitution rights		1,187
Two material rights for Expansion Options		7,005
	$	33,000

Commitments and Contingencies (Tables)

3 Months Ended

Mar. 31, 2021

Commitments and Contingencies

Schedule of components of lease expense


	March 31,			March 31,
	2021			2020
Operating lease cost	$	232		$	223
Variable lease cost		80			139
Total lease cost	$	312		$	362
Weighted‑average remaining operating lease term (years)		5.0			2.4
Weighted‑average discount rate		7.93	%		8.56	%

Schedule of maturities of operating leases


Year Ending December 31,
2021	$	713
2022		1,104
2023		662
2024		662
2025		662
2026		662
Present value adjustment		(732)
Total lease liabilities		3,733
Less: current lease liabilities		(708)
Long term lease liabilities	$	3,025

Net loss per share (Tables)

3 Months Ended

Mar. 31, 2021

Net loss per share

Schedule of basic and diluted net loss attributable to ordinary shareholders

Basic and diluted net loss per share attributable to ordinary shareholders was calculated as follows (in thousands, except share and per share amounts):


	Three Months Ended
	March 31,
	2021		2020
Numerator:
Net loss	$	(16,191)	$	(11,324)
Denominator:
Weighted average ordinary shares outstanding, basic and diluted		22,100,840		17,997,929
Net loss per share, basic and diluted	$	(0.73)	$	(0.63)

Schedule of antidilutive securities excluded from computation of net loss per share attributable to ordinary shareholders


	Three Months Ended
	March 31,
	2021	2020
Warrants to subscribe for ordinary shares (1)	—	71,450
Options to purchase ordinary shares	4,950,608	3,654,888
	4,950,608	3,726,338

At March 31, 2020, 50,000 warrants are outstanding which are exercisable into 71,450 ordinary shares

Geographic information (Tables)

3 Months Ended

Mar. 31, 2021

Geographic information

Schedule of long-lived assets, including operating lease right-of-use assets, held in different geographic regions

Information about the Company’s long‑lived assets, including operating lease right‑of‑use assets, held in different geographic regions is presented in the table below (in thousands):


	March 31,		December 31,
	2021		2020
United States	$	1,579	$	1,708
United Kingdom		4,692		1,899
	$	6,271	$	3,607

Nature of the business and basis of presentation- Liquidity (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Dec. 31, 2020	Sep. 30, 2020
Offering expenses	$ 1,800
Net loss	16,191	$ 11,324
Accumulated deficit	$ 167,751		$ 151,560
At the market offering
Shares issued (in shares)	5,287,298
Gross proceeds before discounts and commissions	$ 110,600
Net proceeds	106,900
Offering expenses	$ 3,700
Loan and Security Agreement \| Term Loan
Maximum borrowing				$ 40,000
Loan and Security Agreement \| Initial Term Loan
Term loan				15,000
Loan and Security Agreement \| Additional Term Loan One
Term loan				15,000
Loan and Security Agreement \| Additional Term Loan Two
Term loan				$ 10,000

Summary of significant accounting policies - Government grants (Details) - USD ($) $ in Millions	Mar. 31, 2021	Mar. 31, 2020
Summary of significant accounting policies
Proceeds from government grants	$ 1.1	$ 0.2

Fair value of financial assets and liabilities - Financial assets and liabilities measured at fair value (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Fair value of financial assets and liabilities
Assets at fair value	$ 0	$ 0
Liabilities at fair value	0	0
Cash equivalents	$ 0	$ 0

Property and equipment, net (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Dec. 31, 2020
Property and equipment, net
Property and equipment, gross	$ 6,748		$ 6,349
Less: Accumulated depreciation and amortization	(4,198)		(4,032)
Property and equipment, net	2,550		2,317
Depreciation expense	300	$ 300
Laboratory equipment
Property and equipment, net
Property and equipment, gross	5,979		5,583
Leasehold improvements
Property and equipment, net
Property and equipment, gross	385		383
Computer equipment and software
Property and equipment, net
Property and equipment, gross	188		188
Furniture and office equipment
Property and equipment, net
Property and equipment, gross	$ 196		$ 195

Accrued expenses and other current liabilities (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Accrued expenses and other current liabilities
Accrued employee compensation and benefits	$ 1,737	$ 4,390
Accrued external research and development expenses	5,239	4,428
Accrued professional fees	1,905	1,759
Current portion of operating lease liabilities	708	844
Other	127	208
Accrued expenses and other current liabilities	$ 9,716	$ 11,629

Long-term debt (Details) - USD ($) $ in Millions	3 Months Ended
Long-term debt (Details) - USD ($) $ in Millions	Mar. 31, 2021	Sep. 30, 2020
Debt Instrument [Line Items]
Borrowing option to prepay subject to minimum debt outstanding	$ 5.0
End term charge rate	5.00%
Additional interest rate event of default	5.00%
Prepayment occurs in first year
Debt Instrument [Line Items]
Prepayment rate	2.00%
Prepayment occurs in second year
Debt Instrument [Line Items]
Prepayment rate	1.50%
Prepayment occurs after year two
Debt Instrument [Line Items]
Debt instrument stated percentage	1.00%
Prime Rate
Debt Instrument [Line Items]
Debt instrument stated percentage	8.85%
Basis spread variable rate	5.60%
Initial Term Loan
Debt Instrument [Line Items]
Fees and transaction costs	$ 0.6
Debt instrument effective percentage	11.40%
Interest expense	$ 0.5
Loan and Security Agreement \| Term Loan
Debt Instrument [Line Items]
Maximum borrowing		$ 40.0
Loan and Security Agreement \| Initial Term Loan
Debt Instrument [Line Items]
Term loan		15.0
Loan and Security Agreement \| Additional Term Loan One
Debt Instrument [Line Items]
Term loan		15.0
Loan and Security Agreement \| Additional Term Loan Two
Debt Instrument [Line Items]
Term loan		$ 10.0

Long-term debt - Debt (Details) $ in Thousands	Mar. 31, 2021 USD ($)
Long-term debt
Term loan payable	$ 30,000
End of term charge	118
Unamortized debt issuance costs	(620)
Carrying value of term loan	$ 29,498

Long-term debt - Future Principal Payments (Details) $ in Thousands	Mar. 31, 2021 USD ($)
Long-term debt
2023	$ 9,614
2024	21,886
Total	$ 31,500

Ordinary shares (Details)	3 Months Ended
Ordinary shares (Details)	Mar. 31, 2021 item £ / shares shares	Dec. 31, 2020 £ / shares shares
Ordinary shares
Vote per ordinary share \| item	1
Ordinary shares, shares authorized \| shares	31,995,653	31,995,653
Ordinary shares, nominal value \| £ / shares	£ 0.01	£ 0.01

Share-based compensation (Details) - $ / shares	1 Months Ended		3 Months Ended
Share-based compensation (Details) - $ / shares	Jun. 30, 2020	May 31, 2019	Mar. 31, 2021	Jan. 01, 2021	Dec. 31, 2020
Stock option
Share-based compensation.
Shares outstanding	3,654,012		4,950,608		3,736,663
Exercise price			$ 12.73		$ 10.51
Employee Share Purchase Plan
Share-based compensation.
Number of shares reserved for issuance				210,945
Percentage of annual increase in reserves on total number of ordinary shares outstanding		1.00%
Number of ordinary shares reserved for issuance		215,000	605,883
Number of shares available for issuance		430,000
Percentage of ordinary shares at a price per share equal to the fair market value on offering date or purchase date		85.00%
2020 Plan
Share-based compensation.
Number of shares reserved for issuance	4,773,557		5,690,652
Shares issued (in shares)	574,679
Shares outstanding			1,480,335
Percentage of annual increase in reserves on total number of ordinary shares outstanding	5.00%
2020 Plan \| Stock option
Share-based compensation.
Contractual life	10 years
Number of shares reserved for issuance			1,054,727
2020 Plan \| Stock option \| Non-employee Director
Share-based compensation.
Vesting period	3 years
2020 Plan \| Stock option \| First anniversary
Share-based compensation.
Vesting Percentage	25.00%
2020 Plan \| Stock option \| 36 equal monthly installments
Share-based compensation.
Number of equal monthly installments for vesting remaining awards	36 months
2020 Plan \| Stock option \| Employee
Share-based compensation.
Vesting period	4 years
2019 Plan
Share-based compensation.
Shares issued (in shares)	544,866
2019 Plan \| Stock option
Share-based compensation.
Contractual life			10 years
Shares outstanding			2,583,940
2019 Plan \| Minimum \| Stock option
Share-based compensation.
Vesting period			3 years
2019 Plan \| Maximum \| Stock option
Share-based compensation.
Vesting period			4 years
Pre-IPO Share Options and restricted shares \| Stock option \| First anniversary
Share-based compensation.
Vesting Percentage		25.00%
Pre-IPO Share Options and restricted shares \| Stock option \| 36 equal monthly installments
Share-based compensation.
Number of equal monthly installments for vesting remaining awards			36 months

Share-based compensation - Share based compensation expense (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Share based compensation expense
Total share-based compensation expense	$ 3,821	$ 2,121
Research and development expenses
Share based compensation expense
Total share-based compensation expense	1,211	675
General and administrative expenses
Share based compensation expense
Total share-based compensation expense	$ 2,610	$ 1,446

Share-based compensation - Share options (Details) - USD ($) $ / shares in Units, $ in Thousands	1 Months Ended	3 Months Ended		12 Months Ended
	Jun. 30, 2020	Mar. 31, 2021	Mar. 31, 2020	Dec. 31, 2020
Additional Information
Total share-based compensation expense		$ 3,821	$ 2,121
Ordinary Shares
Number of Shares
Exercised		(63,545)	(1,071)
Stock option
Number of Shares
Outstanding number of shares at beginning		3,736,663
Granted		1,297,999
Exercised		(63,545)
Forfeited		(20,509)
Outstanding number of shares at end	3,654,012	4,950,608		3,736,663
Number of shares, vested and expected to vest		4,950,608
Number of shares, options exercisable		2,018,352
Weighted Average Exercise Price
Weighted average exercise price at beginning		$ 10.51
Granted		18.74
Exercised		4.47
Forfeited		15.89
Weighted average exercise price at ending		12.73		$ 10.51
Weighted average exercise price, vested and expected to vest		12.73
Weighted average exercise price, options exercisable		$ 9.87
Weighted Average Contractual Term
Weighted average contractual term, outstanding		8 years 8 months 9 days		8 years 6 months 15 days
Weighted average contractual term, vested and expected to vest		8 years 8 months 9 days
Weighted average contractual term ,options exercisable		8 years 2 months 5 days
Aggregate Intrinsic Value
Aggregate intrinsic value outstanding		$ 80,172		$ 27,553
Granted		$ 12.60	$ 6.68
Exercised		$ 1,500
Aggregate intrinsic value, vested and expected to vest		80,172
Aggregate intrinsic value, options exercisable		$ 39,782
Additional Information
Granted		$ 12.60	$ 6.68
Total share-based compensation expense		$ 3,800	$ 2,100
Exercised		$ 1,500

Share-based compensation - Assumptions used in the Black Scholes option pricing model to determine the fair value of share options (Details) - Stock option - Employees and directors - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Share-based compensation.
Risk-free interest rate	0.50%	1.60%
Expected volatility	79.50%	73.70%
Expected term (in years)	5 years 11 months 12 days	5 years 11 months 12 days
Unrecognized compensation expense
Total unrecognized compensation expense related to the unvested employee and director	$ 26.0
Unrecognized compensation cost expected to be recognized over a weighted average period	3 years 1 month 6 days

Significant agreements - Collaboration revenues (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Significant agreements.
Collaboration revenues	$ 1,808	$ 1,129
AstraZeneca
Significant agreements.
Collaboration revenues	277	412
Dementia Discovery Fund
Significant agreements.
Collaboration revenues	83	56
Genentech
Significant agreements.
Collaboration revenues	$ 1,448	$ 661

- Definition

Amount, excluding tax collected from customer, of revenue from satisfaction of performance obligation by transferring promised good or service to customer. Tax collected from customer is tax assessed by governmental authority that is both imposed on and concurrent with specific revenue-producing transaction, including, but not limited to, sales, use, value added and excise.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 30
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8906-108599

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 40
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e9031-108599

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 41
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e9038-108599

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8933-108599

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8933-108599

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 4
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130543-203045

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 22
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8736-108599

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 22
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8736-108599

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 42
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e9054-108599

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 5
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130545-203045

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 924
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SAB Topic 11.L)
-URI http://asc.fasb.org/extlink&oid=6472922&loc=d3e499488-122856

+ Details

Significant agreements - Genentech Collaboration Agreement (Details) $ in Thousands			3 Months Ended
	Feb. 21, 2021 USD ($) item	Feb. 21, 2020 USD ($) item	Mar. 31, 2021 USD ($) item	Mar. 31, 2020 USD ($)	Dec. 31, 2020 USD ($)	Dec. 31, 2019 USD ($)
Significant agreements.
Collaboration revenues			$ 1,808	$ 1,129
Deferred revenue			35,710		$ 35,156	$ 5,657
Genentech
Significant agreements.
Number of potential development candidates \| item	4
Upfront cash payment	$ 30,000
Number of immuno oncology targets \| item	2
Additional number of immuno oncology targets \| item	2
Expansion Fee	$ 10,000
Sales milestone payments, receivable			2,000
Transaction price		$ 31,000	$ 33,000
Period over which performance obligations will be performed			2 years
Material rights exercise period			4 years
Collaboration revenues			$ 1,448	$ 661
Deferred revenue			$ 28,377		$ 27,579
Genentech \| Royalty
Significant agreements.
Number of years over which royalty is payable			10 years
Genentech \| Maximum
Significant agreements.
Sales milestone payments, receivable		200,000
Genentech \| Development milestone \| Maximum
Significant agreements.
Sales milestone payments, receivable		65,000
Genentech \| Regulatory milestone \| Maximum
Significant agreements.
Sales milestone payments, receivable		$ 135,000
Genentech \| Collaboration Program 1 Performance Obligation
Significant agreements.
Transaction price			$ 4,019
Genentech \| Collaboration Program 2 Performance Obligation
Significant agreements.
Transaction price			8,037
Genentech \| Specified Targeting Arm Material Right Arm Program One
Significant agreements.
Number of initial collaboration programs exercised \| item		1
Sales milestone payments, receivable		$ 1,000
Transaction price			$ 352
Genentech \| Two material rights associated with the LSR Go Option for Collaboration Programs One And Two
Significant agreements.
Number of expansion option collaboration programs \| item			2
Number of collaboration programs \| item		2	2
Transaction price			$ 12,400
Genentech \| Material rights for associated and limited substitution rights
Significant agreements.
Transaction price			1,187
Genentech \| Two material rights for Expansion Options
Significant agreements.
Number of expansion option collaboration programs \| item		2
Transaction price			$ 7,005
Genentech \| Collaboration Program One and Two Performance Obligation \| Maximum
Significant agreements.
Regulatory, and initial commercialization milestones, payments receivable		$ 200,000

Significant agreements - Dementia Discovery Fund Agreement (Details) - USD ($) $ in Thousands	1 Months Ended		3 Months Ended
	Dec. 31, 2020	May 31, 2019	Mar. 31, 2021	Mar. 31, 2020	Dec. 31, 2019
Significant agreements.
Potential milestone payments			$ 500
Collaboration revenues			1,808	$ 1,129
Deferred revenue	$ 35,156		35,710		$ 5,657
Dementia Discovery Fund
Significant agreements.
Upfront cash payment		$ 1,100
Potential milestone payments		$ 700
Threshold period for exercising option to establish a jointly-owned new company		90 days
Option to purchase ownership of new entity		34.00%
Threshold period of notice required for termination of agreement		60 days
Transaction price		$ 1,100
Collaboration revenues			83	$ 56
Deferred revenue	821		$ 746
Dementia Discovery Fund \| NewCo
Significant agreements.
Option to purchase ownership of new entity		66.00%
Threshold period in which Newco shall have the right to initiate a new research program		2 years
Dementia Discovery Fund \| NewCo \| Maximum
Significant agreements.
Total voting rights related to ownership interests		50.00%
Specific scientific criteria milestone \| Dementia Discovery Fund
Significant agreements.
Milestone payment received	$ 500

Significant agreements - AstraZeneca Collaboration Agreement (Details) $ in Thousands		1 Months Ended		3 Months Ended
	Feb. 21, 2020 USD ($)	May 31, 2018 USD ($) employee	Nov. 30, 2016 item	Mar. 31, 2021 USD ($)	Mar. 31, 2020 USD ($)	Dec. 31, 2020 USD ($)	Dec. 31, 2019 USD ($)	Jun. 30, 2019 USD ($)
Significant agreements.
Customer option payment				$ 500
Collaboration revenues				1,808	$ 1,129
Deferred revenue				35,710		$ 35,156	$ 5,657
Option fee for development and exploitation rights		$ 5,000
Target 3 Material Right
Significant agreements.
Deferred revenue				400
Target 4 Material Right
Significant agreements.
Collaboration revenues				300
Deferred revenue				3,600		3,800
AstraZeneca
Significant agreements.
Transaction price		5,700
Collaboration revenues				277	412
Deferred revenue				3,560		3,756	$ 4,913
AstraZeneca \| Development milestone
Significant agreements.
Transaction price		700
AstraZeneca \| Development Milestone \| Development milestone
Significant agreements.
Customer option payment		29,000
AstraZeneca \| Regulatory Milestone \| Regulatory milestone
Significant agreements.
Customer option payment		23,000
AstraZeneca \| Commercial milestone \| Commercial milestone
Significant agreements.
Customer option payment		110,000
AstraZeneca \| 2016 Collaboration Agreement
Significant agreements.
Biological Targets \| item			2
AstraZeneca \| May 2018 Option Exercise
Significant agreements.
Transaction price		$ 5,000		5,650				$ 6,300
Number of FTE \| employee		2
AstraZeneca \| May 2018 Option Exercise \| Commercialization license per candidate
Significant agreements.
Customer option payment		$ 8,000
AstraZeneca \| May 2018 Option Exercise \| Target Three Research License and Related Services
Significant agreements.
Transaction price				650
AstraZeneca \| May 2018 Option Exercise \| Target 3 Material Right
Significant agreements.
Transaction price				1,504
Deferred revenue						1,500
AstraZeneca \| May 2018 Option Exercise \| Target 4 Material Right
Significant agreements.
Transaction price				1,204
AstraZeneca \| May 2018 Option Exercise \| Target 5 Material Right
Significant agreements.
Transaction price				1,165
AstraZeneca \| May 2018 Option Exercise \| Target 6 Material Right
Significant agreements.
Transaction price				1,127
Genentech
Significant agreements.
Transaction price	$ 31,000			33,000
Collaboration revenues				1,448	$ 661
Deferred revenue				$ 28,377		$ 27,579
Option fee for development and exploitation rights	$ 30,000

Significant agreements - Evaluation and Option Agreement (Details) - USD ($) $ in Thousands	3 Months Ended		12 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Dec. 31, 2020	Dec. 31, 2019
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Collaboration revenues	$ 1,808	$ 1,129
Deferred revenue	$ 35,710		$ 35,156	$ 5,657
Evaluation and Option Agreement
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Term, Bicycle Research Team (in months)	4 months
Threshold period for receipt of revenue after receipt of the materials and related data package	5 days
Term extension (in years)	2 months
Extension fees receivable	$ 2,000		2,000
Threshold period of notice required for termination of agreement	30 days
Upfront cash payment	$ 3,000
Collaboration revenues	0		3,000
Deferred revenue	3,027		$ 3,000
Transaction price	$ 3,000

Significant agreements - Material Transfer Agreement (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Significant Agreements
Collaboration revenues	$ 1,808	$ 1,129

- Definition

+ References

+ Details

Significant agreements - Summary of Contract Assets and Liabilities (Details) - USD ($) $ in Thousands	3 Months Ended		12 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Dec. 31, 2020
Contract assets
Beginning Balance	$ 0	$ 0	$ 0
Additions			0
Deductions			0
Impact of Exchange Rates			0
Ending Balance			0
Contract liabilities:
Beginning Balance	35,156	5,657	5,657
Additions	2,054		35,085
Deductions	1,808	1,129
Impact of Exchange Rates	308		2,442
Ending Balance	35,710		35,156
Deductions	(1,808)		(8,028)
AstraZeneca
Contract liabilities:
Beginning Balance	3,756	4,913	4,913
Additions	54		585
Impact of Exchange Rates	27		954
Ending Balance	3,560		3,756
Deductions	(277)		(2,696)
Dementia Discovery Fund
Contract assets
Beginning Balance	821	744	744
Additions			500
Deductions			(436)
Impact of Exchange Rates			13
Ending Balance			821
Contract liabilities:
Beginning Balance	821
Impact of Exchange Rates	8
Ending Balance	746		821
Deductions	(83)
Genentech
Contract assets
Beginning Balance	27,579	0	0
Additions			31,000
Deductions			(4,896)
Impact of Exchange Rates			1,475
Ending Balance			27,579
Contract liabilities:
Beginning Balance	27,579
Additions	2,000
Impact of Exchange Rates	246
Ending Balance	28,377		27,579
Deductions	(1,448)
Evaluation and Option Agreement
Contract assets
Beginning Balance	3,000	$ 0	0
Additions			3,000
Deductions			0
Impact of Exchange Rates			0
Ending Balance			3,000
Contract liabilities:
Beginning Balance	3,000
Impact of Exchange Rates	27
Ending Balance	$ 3,027		$ 3,000

Significant agreements - Deferred revenue (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Deferred revenue
Deferred revenue	$ 35,710	$ 35,156	$ 5,657
AstraZeneca
Deferred revenue
Deferred revenue	3,560	3,756	$ 4,913
AstraZeneca \| Target 3, Target 4, Target 5 and Target 6 Material Rights
Deferred revenue
Deferred revenue	3,600
Genentech
Deferred revenue
Deferred revenue	28,377	$ 27,579
Genentech \| Deferred revenue material rights option
Deferred revenue
Deferred revenue	$ 20,700

Significant agreements - Revenue recognition due to changes in contract assets and liabilities (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Significant Agreements
Revenue recognized based on proportional performance	$ 1,652	$ 1,129
Revenue recognized based on changes in transaction price	156
Total	$ (1,808)	$ (1,129)

Significant agreements - Cancer Research UK (Details) - USD ($) $ in Millions	3 Months Ended
	Dec. 31, 2019	Dec. 31, 2016	Mar. 31, 2021	Dec. 31, 2020	Dec. 13, 2016
Research and development arrangement obligation to repay other parties
Contingent future milestones payments under research and development arrangement	$ 60.3				$ 50.9
Other long term liabilities
Research and development arrangement obligation to repay other parties
Liability from research and development			$ 2.8	$ 2.6
BT1718 \| Minimum
Research and development arrangement obligation to repay other parties
Tiered royalties (percentage)		70.00%
BT1718 \| Maximum
Research and development arrangement obligation to repay other parties
Tiered royalties (percentage)		90.00%
BT7401 \| Minimum
Research and development arrangement obligation to repay other parties
Tiered royalties (percentage)	55.00%
BT7401 \| Maximum
Research and development arrangement obligation to repay other parties
Tiered royalties (percentage)	80.00%

Income Taxes (Details) - USD ($) $ in Thousands	3 Months Ended
Income Taxes (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Mar. 31, 2020
Income Taxes
Benefit from income taxes	$ 340	$ 107

- Definition

Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.

+ References + Details

Commitments and Contingencies - Leases (Details) - USD ($) $ in Millions	1 Months Ended
	Sep. 30, 2017	Oct. 31, 2017
Leases
Security deposit		$ 0.6
Office and laboratory space in Lexington, Massachusetts
Leases
Security deposit	$ 0.2
Payment under the lease	$ 0.1
Discounted percentage for present value of lease payments	9.00%	7.70%

Commitments and Contingencies - Leases, Office and laboratory space Cambridge (Details) - USD ($) $ in Millions	Oct. 31, 2017	Sep. 30, 2017	Jul. 31, 2017
Leases
Renewal term	5 years
Security deposit	$ 0.6
Office and laboratory space in Building 900, Babraham Research Campus, Cambridge
Leases
Annual rent	0.5
Estimated service charges payable			$ 0.1
Security deposit	0.8
Office and laboratory space in Lexington, Massachusetts
Leases
Estimated service charges payable	$ 0.5
Security deposit		$ 0.2
Discounted percentage for present value of lease payments	7.70%	9.00%

Commitments and Contingencies - Components of lease expense (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Commitments and Contingencies
Operating lease cost	$ 232	$ 223
Variable lease cost	80	139
Total lease cost	$ 312	$ 362
Weighted-average remaining operating lease term (years)	5 years	2 years 4 months 24 days
Weighted-average discount rate	7.93%	8.56%

Commitments and Contingencies - Leases, Maturities of operating leases (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Dec. 31, 2020
Commitments and Contingencies
2021	$ 713
2022	1,104
2023	662
2024	662
2025	662
2026	662
Present value adjustment	(732)
Total lease liabilities	3,733
Less: current lease liabilities	(708)	$ (844)
Long term lease liabilities	$ 3,025	$ 426
Maximum days allowed for cancellation of contracts prior written notice	90 days

Commitments and Contingencies - Legal proceedings (Details) € in Millions, $ in Millions	1 Months Ended	12 Months Ended
	Nov. 30, 2020 EUR (€)	Dec. 31, 2020 USD ($)
Commitments and Contingencies
Payments for Legal Settlements \| €	€ 3.0
Settlement payable on first anniversary \| €	€ 1.0
Milestone payments		$ 92.4
Litigation settlement amount		4.7
Litigation liability		$ 1.2

Commitments and Contingencies - Founder Royalty arrangements (Details)	3 Months Ended
	Mar. 31, 2021 USD ($)
Commitments and Contingencies
Period of royalty payments agreed under arrangement	10 years
Royalties earned	$ 0

Net loss per share - Basic and diluted net loss per share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Numerator:
Net loss attributable to ordinary shareholders	$ (16,191)	$ (11,324)
Denominator:
Weighted average ordinary shares outstanding, basic and diluted	22,100,840	17,997,929
Net loss per share attributable to ordinary shareholders, basic and diluted	$ (0.73)	$ (0.63)

- Definition

Amount, after deduction of tax, noncontrolling interests, dividends on preferred stock and participating securities; of income (loss) available to common shareholders.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 250
-SubTopic 10
-Section 50
-Paragraph 4
-URI http://asc.fasb.org/extlink&oid=109234566&loc=d3e22595-107794

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 260
-SubTopic 10
-Section 45
-Paragraph 10
-URI http://asc.fasb.org/extlink&oid=121326447&loc=d3e1448-109256

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 250
-SubTopic 10
-Section 50
-Paragraph 11
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=109234566&loc=d3e22694-107794

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 260
-SubTopic 10
-Section 45
-Paragraph 11
-URI http://asc.fasb.org/extlink&oid=121326447&loc=d3e1377-109256

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 260
-SubTopic 10
-Section 50
-Paragraph 1
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=6371337&loc=d3e3550-109257

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 22
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8736-108599

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 250
-SubTopic 10
-Section 50
-Paragraph 11
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=109234566&loc=d3e22694-107794

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 260
-SubTopic 10
-Section 45
-Paragraph 60B
-Subparagraph (c)
-URI http://asc.fasb.org/extlink&oid=121326447&loc=SL5780133-109256

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (f)
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8933-108599

Reference 10: http://www.xbrl.org/2003/role/exampleRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 31
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8924-108599

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 30
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8906-108599

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 250
-SubTopic 10
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=109234566&loc=d3e22583-107794

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (c)
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8933-108599

+ Details

Net loss per share - Securities excluded from the diluted per share calculation (Details) - shares	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Antidilutive securities
Antidilutive securities (in shares)	4,950,608	3,726,338
Warrants to subscribe for convertible preferred shares (as adjusted to reflect the impact of the share capital reorganization and issuance of bonus shares
Antidilutive securities
Antidilutive securities (in shares)	50,000	71,450
Remaining warrants exercisable	71,450
Options to purchase ordinary shares
Antidilutive securities
Antidilutive securities (in shares)	4,950,608	3,654,888

Benefit plans (Details) - USD ($) $ in Millions	3 Months Ended
Benefit plans (Details) - USD ($) $ in Millions	Mar. 31, 2021	Mar. 31, 2020
United States \| 401(k) Plan
Benefit plans
Contributions made	$ 0.1	$ 0.1
Foreign Plan \| U.K. Plan
Benefit plans
Contributions made	$ 0.2	$ 0.1

Related party transactions (Details) - USD ($)	3 Months Ended
Related party transactions (Details) - USD ($)	Mar. 31, 2021	Mar. 31, 2020
Related party transactions
Royalties earned	$ 0
Consultancy services with Stone Sunny Isles Inc.
Related party transactions
Amount of transaction	$ 43,000,000	$ 40,000,000

Geographic information (Details) $ in Thousands	3 Months Ended
Geographic information (Details) $ in Thousands	Mar. 31, 2021 USD ($) segment	Dec. 31, 2020 USD ($)
Geographic information
Number of geographic regions \| segment	2
Long lived assets, including operating lease right of use assets	$ 6,271	$ 3,607
United States
Geographic information
Long lived assets, including operating lease right of use assets	1,579	1,708
United Kingdom
Geographic information
Long lived assets, including operating lease right of use assets	$ 4,692	$ 1,899

Subsequent events (Details) - USD ($) $ in Thousands		1 Months Ended	3 Months Ended
Subsequent events (Details) - USD ($) $ in Thousands	Oct. 02, 2020	Apr. 30, 2021	Mar. 31, 2021
Subsequent events
Offering expenses			$ 1,800
Shares issued			58,775
At the market offering
Subsequent events
Gross proceeds before discounts and commissions			110,600
Net proceeds			106,900
Offering expenses			$ 3,700
At the market offering \| Sales Agreement \| Maximum
Subsequent events
Aggregate offering price	$ 75,000
At the market offering \| Sales Agreement \| Subsequent events
Subsequent events
Shares sold (in shares)		482,299
Gross proceeds before discounts and commissions		$ 14,400
Net proceeds		14,000
Offering expenses		400
Shares issued		$ 75,000