Legend Biotech Corporation
03/10/2026 | Press release | Distributed by Public on 03/10/2026 09:47
Annual Report for Fiscal Year Ending December 31, 2025 (Form 20-F)
OPERATING AND FINANCIAL REVIEW AND PROSPECTS
You should read the following discussion and analysis of our financial condition and results of operations together with our consolidated financial statements and related notes appearing elsewhere in this Annual Report. This discussion, particularly information with respect to our future results of operations or financial condition, business strategy and plans and objectives of management for future operations, includes forward-looking statements that involve risks and uncertainties as described under the heading "Cautionary Statement Regarding Forward-Looking Statements" in this Annual Report. In evaluating our business, you should also carefully consider the information provided under "Item 3.D. Risk Factors" for a discussion of important factors that could cause our actual results to differ materially from those projected in the forward-looking statements.
Overview
We are a global biopharmaceutical company engaged in the discovery, development, manufacturing and commercialization of novel cell therapies for oncology and other indications. Our team of approximately 2,900 employees in the United States, China and Europe, our differentiated technology, global development and manufacturing strategy and expertise provide us with the ability to generate, test and manufacture next-generation cell therapies targeting indications with high unmet needs. Our lead product candidate, cilta-cel, is a CAR-T therapy we are jointly developing with our strategic partner, Janssen, for the treatment of MM. Clinical trial results achieved to date demonstrate that cilta-cel has the potential to deliver deep and durable anti-tumor responses in RRMM patients with a manageable safety profile.
On February 28, 2022, the FDA approved our product CARVYKTI (cilta-cel) for the treatment of adults with RRMM who have received four or more prior lines of therapy, including a proteasome inhibitor, an immunomodulatory agent, and an anti-CD38 monoclonal antibody. In April 2024, the FDA approved CARVYKTI for the treatment of patients with relapsed or refractory multiple myeloma who have received at least one prior line of therapy, including proteasome inhibitor, and an immunomodulatory agent, and are refractory to lenalidomide. CARVYKTI is our first and only product approved by a health authority.
Since inception, we have incurred significant operating losses. Our net losses were $296.8 million and $177.0 million for the years ended December 31, 2025 and 2024, respectively. As of December 31, 2025, we had accumulated losses of $1,958.5 million. We believe that our cash and cash equivalents, deposits and investment of approximately $948.6 million, as of December 31, 2025, and cash that we expect to generate from our operations will provide sufficient resources to meet our operational needs and loan repayment needs for at least the next 12 months. We also believe that we have ability to access capital markets as sources of liquidity if needed.
We anticipate that our expenses will increase significantly in connection with our ongoing activities, as we:
•continue our ongoing and planned research and development of cilta-cel for the treatment of RRMM;
•continue to invest in our manufacturing capabilities, including investments in our facilities in the United States and Europe;
•continue our ongoing and planned clinical development for our other product candidates;
•continue our ongoing and planned research and development activities;
•seek to discover and develop additional product candidates and further expand our clinical product pipeline;
•seek regulatory or marketing approvals for any product candidates that successfully complete clinical trials;
•continue to scale up internal and external manufacturing capacity with the aim of securing sufficient quantities to meet our capacity requirements for clinical trials and potential commercialization;
•establish sales, marketing and distribution infrastructure to commercialize any product candidate for which we may obtain regulatory or marketing approval;
•develop, maintain, expand and protect our intellectual property portfolio;
•acquire or in-license other product candidates and technologies;
•hire additional clinical, quality control and manufacturing personnel;
•add clinical, operational, financial and management information systems and personnel, including personnel to support our product development and planned future commercialization efforts;
•expand our operations globally; and
•incur additional legal, accounting, investor relations and other expenses associated with operating as a public company.
Our Collaboration with Janssen
In December 2017, we entered into the Janssen Agreement with Janssen for the worldwide development and commercialization of cilta-cel.
Pursuant to the Janssen Agreement, we granted Janssen a worldwide, co-exclusive (with us) license to develop and commercialize cilta-cel. We and Janssen will collaborate to develop and commercialize cilta-cel for the treatment of MM worldwide pursuant to a global development plan and global commercialization plan.
Janssen will be responsible for conducting all clinical trials worldwide with participation by our team in the United States and Greater China for cilta-cel. We will be responsible for conducting regulatory activities, obtaining pricing approval and booking sales for Greater China, while Janssen will be responsible for conducting regulatory activities, obtaining pricing approval and booking sales for the rest of the world. We and Janssen will share development, production and commercialization costs and pre-tax profits or losses equally in all countries of the world except for Greater China, for which the cost-sharing and profit/loss split will be 70% for us and 30% for Janssen.
In consideration for the licenses and other rights granted to Janssen, Janssen has paid us an upfront fee and milestone payments, and we continue to be eligible to receive additional milestone payments. For a description of the upfront and milestone payments Janssen has made to us under the Janssen Agreement and potential future milestone payments Janssen may make to us under that agreement, see "Item 4. Information on the Company-B. Business Overview-Collaboration and License Agreement with Janssen Biotech, Inc."
Furthermore, pursuant to the terms of the Janssen Agreement, Janssen may recoup the aggregate amount of Funding Advances together with interest thereon from Company's share of pre-tax profits starting from the first calendar quarter following the first profitable year of the collaboration program and, subject to some limitations, from milestone payments due to the Company under the Janssen Agreement. The Company achieved a CARVYKTI profitable position by year end of 2025, and therefore the recoupment will be triggered in 2026. As of December 31, 2025, the aggregate outstanding principal amount of such advances and interest were approximately $250.0 million and $69.1 million, respectively. And the Company estimated that the entire balance of $319.1 million would be recouped by Janssen within the next 12 months.
Global Economic Conditions
Worldwide economic conditions remain uncertain and we continue to monitor the impact of macroeconomic conditions, including those related to the public health crises, international tension and conflicts, the failure and instability of financial institutions and rising inflation rates.
Changes in tariffs, supply chain constraints, logistics challenges, labor shortages, international tension and conflicts and steps taken by governments and central banks, have led to fluctuating inflation, which has led to an increase in costs and has caused changes in fiscal and monetary policy, including fluctuating interest rates. Our manufacturing activities in the United States, Europe and China have continued. Currently, we have not experienced any material impact to our supply chain as a result of inflation and fluctuating interest rates. Increased quantities of certain raw materials and consumables have been stocked as an appropriate safety measure. We believe we have established robust sourcing strategies for all necessary materials and do not expect any significant impact.
If these changes in economic conditions continue or if they increase in severity, it could result in further economic uncertainty and volatility in the capital markets in the near term, and could negatively affect our operations. Although we do not believe that these macroeconomic conditions have had a material impact on our financial position or results of operations to date, we may experience impacts in the near future (especially if inflation rates begin to rise again) on our operating costs, including our labor costs and research and development costs, due to supply chain constraints,
consequences associated with public health crises, international tension and conflicts, and employee availability and wage increases, which may result in additional stress on our working capital resources.
Components of Our Results of Operations
Revenue
Our revenue to date has primarily been driven by the collaboration with Janssen which generates collaboration revenue from product sales of CARVYKTI. Additionally our revenue consists of license revenue pursuant to the milestone payments received under the Janssen Agreement.
Starting in fiscal year 2024, we have also received License revenue under the Novartis Licensing Agreement due to progress toward the satisfaction of the performance obligation satisfied over time. We granted Novartis the worldwide rights to develop, manufacture and commercialize LB2102 and other potential CAR-T therapies selectively targeting DLL-3. Revenue is recognized when the value of the right to use of the license is transferred to the customer which occurs over time during the Phase 1 trial.
Operating Expenses
Research and Development Expenses
Research and development expenses consist primarily of costs incurred in connection with our research activities and include:
•personnel expenses, including salaries, benefits and share-based compensation expense;
•costs of funding research performed by third parties;
•costs of purchasing lab supplies and non-capital equipment used in designing, developing and manufacturing preclinical study and clinical trial materials;
•consultant fees;
•expenses related to regulatory activities, including filing fees paid to regulatory agencies;
•facility costs including rent, depreciation and maintenance expenses; and
•fees for maintaining licenses under our third-party licensing agreements.
Research and development costs are expensed as incurred. Costs for certain activities, such as manufacturing and preclinical studies and clinical trials, are generally recognized based on an evaluation of the progress to completion of specific tasks using information and data provided to us by our vendors and collaborators.
We typically use our employee, consultant and infrastructure resources across our development programs. We track outsourced development costs by allocating these costs to either our BCMA program or to all our other non-BCMA programs, but we do not allocate personnel costs, other internal costs or external consultant costs to specific product candidates or preclinical programs. For the years ended December 31, 2025 and 2024, our total research and development expenses were $199.1 million and $266.6 million, respectively, for our BCMA program and $215.6 million and $146.9 million, respectively, for all other non-BCMA programs.
From inception through December 31, 2025, we have incurred approximately $2.3 billion in research and development expenses to research and advance the development of our product candidates and preclinical programs. We expect our research and development expenses will increase for the foreseeable future as we seek to advance our preclinical programs and product candidates. At this time, we cannot reasonably estimate or know the nature, timing and estimated costs of the efforts that will be necessary to complete the development of our product candidates. We are also unable to predict when, if ever, material net cash inflows will commence from sales of our product candidates. This is due to the numerous risks and uncertainties associated with developing such product candidates, including the uncertainty of:
•successful enrollment in and completion of clinical trials;
•establishing an appropriate safety profile;
•establishing commercial manufacturing capabilities or making arrangements with third-party manufacturers;
•receipt of marketing approvals from applicable regulatory authorities;
•commercializing the product candidates, if approved, whether alone or in collaboration with others;
•obtaining and maintaining patent and trade secret protection and regulatory exclusivity for our product candidates;
•continued acceptable safety profiles of products following approval; and
•retention of key research and development personnel.
A change in the outcome of any of these variables with respect to the development of any of our product candidates would significantly change the costs, timing and viability associated with the development of that product candidate.
Administrative Expenses
Administrative expenses consist primarily of expenses, including salaries, benefits and share- based compensation expense, for personnel in executive, finance, accounting, business development, IT, legal and human resource functions. Administrative expenses also include corporate facility costs not otherwise included in research and development expenses, legal fees related to intellectual property and corporate matters and fees for accounting and consulting services.
We anticipate that our administrative expenses will increase in the future to support continued research and development activities, including our ongoing and planned research and development of cilta-cel for the treatment of RRMM and the initiation and continuation of our preclinical and clinical trials for our other product candidates. Following our initial public offering, our accounting, audit, legal, regulatory, investor and public relations, and compliance and director and officer insurance costs have increased, and we anticipate that they will continue to increase as we continue to further enhance our public company infrastructure.
Selling and Distribution Expenses
Selling and distribution expenses consist primarily of costs incurred in connection with our commercial function's activities and include salaries and related costs for personnel, including share-based compensation, travel expenses, recruiting expenses, costs of sponsorships and consulting fees paid to external parties related to the marketing and development of cilta-cel.
Revenue recognition
Upfront fees
For collaboration and license agreements we have or may enter into, the transaction price is generally comprised of an upfront payment due at contract inception and variable consideration in the form of payments for our services and materials and milestone payments due upon the achievement of specified events.
An upfront payment of $350 million was allocated to the single performance obligation in the Janssen Agreement, which has been fully received and recognized in revenue in 2018.
An upfront payment was allocated to a single performance obligation in the Novartis License Agreement. The $100.0 million upfront fees from Novartis were included in the transaction price upon contract inception in 2023 and will be recognized when the performance obligation to deliver the intellectual property and complete the Phase 1 trial are finished over time. The $100.0 million upfront fees were fully received by us in early 2024.
Milestone payments
Milestone payments represent a form of variable consideration which are included in the transaction price to the extent that it is highly probable that a significant reversal of accumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. At the inception of each arrangement that includes milestone payments, we evaluate whether the milestones are considered highly probable of being achieved and estimate the amount to be included in the transaction price using the most likely amount method. If it is highly probable that a significant reversal of cumulative revenue would not occur, the associated milestone value is included in the transaction price. Milestone payments that are not within our control, such as regulatory approvals, are not considered highly probable of being achieved until those approvals are received. We evaluate factors such as the scientific, clinical,
regulatory, commercial and other risks that must be overcome to achieve the particular milestone in making this assessment. There is considerable judgment involved in determining whether it is highly probable that a significant reversal of cumulative revenue would not occur. At the end of each subsequent reporting period, we re-evaluate the probability of achievement of all milestones subject to constraint and, if necessary, adjust our estimate of the overall transaction price.
Certain milestone payments were allocated to the single performance obligation in the Janssen Agreement to deliver the license of intellectual property, including a technology transfer service.
We recognized license revenue of $4.9 million for the year ended December 31, 2025 for milestones achieved under the Janssen Agreement. License revenue from the licensing of intellectual property is recognized at a point in time when the achievement of the milestones are no longer constrained (e.g. when the milestone event is highly probable of being achieved and that it is highly probable a significant reversal of the cumulative revenue recognized for the IFRS 15 contract would not occur).
Additionally, under the Janssen Agreement, we are eligible to receive further milestone payments up to $125 million for the achievement of specified manufacturing milestones, up to $210 million for the achievement of specified net trade sales milestones, and up to an additional $600 million for the achievement of specified future development and regulatory milestones. We have received $415.0 million in milestone payments through December 31, 2025. Subsequent development, manufacturing and regulatory milestones will be recognized in full in the period in which it is highly probable a significant reversal of the cumulative revenue recognized for the IFRS 15 contract will not occur, as they are associated with the performance obligation to deliver the license of intellectual property, including a technology transfer service, that was satisfied in 2018. We will recognize revenue for sales-based milestones when the milestone is achieved pursuant to the royalty recognition constraint. We have assessed that achievement of the remaining milestones is highly uncertain and the related milestone payments are not included in the transaction price.
For a description of the upfront and milestone payments Janssen has made to us under the Janssen Agreement and potential future milestone payments Janssen may make to us under the Agreement, see "Item 4. Information on the Company-B. Business Overview-Collaboration and License Agreement with Janssen Biotech, Inc."
With respect to the Novartis Licensing agreement we have concluded that that all potential future development, regulatory and sales milestones are considered fully constrained at the inception of the License Agreement since the Company could not conclude it was highly probable since we are not able to reasonably estimate the probability of success. This remains the case at the end of fiscal year 2025.
Licenses of intellectual property
In assessing whether a license is distinct from the other promises contained in a collaboration or license agreement, we consider factors such as the research, development, manufacturing and commercialization capabilities of the collaboration partner and the availability of the associated expertise in the general marketplace. In addition, we consider whether the counterparty can benefit from a license for its intended purpose without the receipt of the remaining promise(s) by considering whether the value of the license is dependent on the unsatisfied promise(s), whether there are other vendors that could provide the remaining promise(s), and whether it is separately identifiable from the remaining promise(s). We evaluate the nature of a promise to grant a license in order to determine whether the promise is satisfied over time or at a point in time. We evaluated that the license is a single performance obligation in the Janssen Agreement, including a technology transfer service, which represent a right to use our license as it exists at the point in time that the license is granted. Revenue from licenses is recognized when the control of the right to use of the license is transferred to the customer.
We have concluded that revenue associated with the Novartis License Agreement will be recognized over time using the input method as the delivery of the license is not distinct from the Legend Phase 1 trial.
Cost of Collaboration Revenue
Cost of collaboration revenue relates to the sale of CARVYKTI and includes costs incurred by us as well as our pro-rata share of cost of collaboration revenue. Cost of collaboration revenue includes the cost of inventory sold, manufacturing
costs, other costs attributable to production, and provisions to write down inventory, such as for excess and obsolete inventory or inventory that did not meet quality specifications.
Research and development costs
All research costs are charged to the statement of profit or loss and other comprehensive income as incurred.
Expenditures incurred on projects to develop new product candidates is capitalized and deferred only when we can demonstrate the technical feasibility of completing the intangible asset so that it will be available for use or sale, our intention to complete and our ability to use or sell the asset, how the asset will generate future economic benefits, the availability of resources to complete the project and the ability to measure reliably the expenditure during the development. Product candidate development expenditure which does not meet these criteria is expensed when incurred.
Share-based compensation
We operate a share option scheme and a restricted share unit ("RSU") scheme for the purpose of providing incentives and rewards to eligible participants who contribute to the success of our operations. Our employees and directors can receive remuneration in the form of share-based payments, whereby employees render services as consideration for equity instruments, or equity-settled transactions.
The cost of equity-settled transactions with employees is measured by reference to the fair value at the date at which they are granted. The fair value of share option is determined by using a binomial model, and the fair value of each RSU is determined by reference to market price of our shares at the respective grant date. See note 20 and note 21 to our consolidated financial statements in this Annual Report for further details.
The cost of equity-settled transactions is recognized, together with a corresponding increase in equity, over the period in which the performance and/or service conditions are fulfilled in employee benefit expense. The cumulative expense recognized for equity-settled transactions at the end of each reporting period until the vesting date reflects the extent to which the vesting period has expired and our best estimate of the number of equity instruments that will ultimately vest. The charge or credit to the statement of profit or loss for a period represents the movement in the cumulative expense recognized as at the beginning and end of that period.
Service and performance conditions are not taken into account when determining the grant date fair value of awards, but the likelihood of the conditions being met is assessed as part of our best estimate of the number of equity instruments that will ultimately vest.
We measure stock options and other stock-based awards granted to employees and directors based on the fair value on the date of grant and recognize the corresponding compensation expense of those awards, net of estimated forfeitures, over the requisite service period, which is generally the vesting period of the respective award. Generally, we issue stock options that include performance vesting conditions and are subject to forfeiture if the participants cannot meet certain performance targets set by our board of directors.
For awards that do not ultimately vest because performance and/or service conditions have not been met, no expense is recognized.
A.Operating Results
Comparison of Fiscal Years Ended December 31, 2025 and 2024
The following table summarizes our results of operations for the fiscal years ended December 31, 2025 and 2024:
|
Fiscal Year Ended
December 31,
|
Variance | ||||||||||||||||
|
(Dollars in millions)
|
2025 | 2024 | |||||||||||||||
| Consolidated Statement of Operations Data: | |||||||||||||||||
| Revenue | |||||||||||||||||
|
License and other revenue
|
$ | 84.1 | $ | 144.7 | $ | (60.6) | |||||||||||
| Collaboration revenue | 944.8 | 482.6 | 462.2 | ||||||||||||||
| Total revenue | 1,028.9 | 627.3 | 401.6 | ||||||||||||||
| Cost of collaboration revenue | (397.1) | (216.4) | (180.7) | ||||||||||||||
| Cost of license and other revenue | (11.0) | (18.2) | 7.2 | ||||||||||||||
| Research and development expenses | (414.7) | (413.5) | (1.2) | ||||||||||||||
| Administrative expenses | (135.8) | (136.8) | 1.0 | ||||||||||||||
| Selling and distribution expenses | (205.8) | (147.5) | (58.3) | ||||||||||||||
|
Other operating expenses
|
(1.0) | (4.4) | 3.4 | ||||||||||||||
| Operating loss | (136.5) | (309.5) | 173.0 | ||||||||||||||
| Finance costs | (21.4) | (21.6) | 0.2 | ||||||||||||||
|
Finance income
|
40.1 | 61.2 | (21.1) | ||||||||||||||
|
Other (Expense)/Income, net
|
(164.8) | 111.8 | (276.6) | ||||||||||||||
| Loss before tax | (282.6) | (158.1) | (124.5) | ||||||||||||||
|
Income tax expense
|
(14.2) | (18.9) | 4.7 | ||||||||||||||
| Net loss | $ | (296.8) | $ | (177.0) | $ | (119.8) | |||||||||||
Revenue
License and Other Revenue
License and other revenue for the year ended December 31, 2025 was $84.1 million, compared to $144.7 million for the year ended December 31, 2024. There was a decrease of $70.2 million, driven by the timing of $75.1 million of milestones achieved for the year ended December 31, 2024 under the Janssen Agreement, compared to $4.9 million milestones from the Janssen Agreement for the year ended December 31, 2025. Additionally, a decrease in license revenue of $10.8 million, from $63.3 million for the year ended December 31, 2024 to $52.5 million for the year ended December 31, 2025, was attributed to revenue recognized under the Novartis License Agreement, which was recognized over time as we conduct a Phase 1 clinical trial for LB2102. These decreases were offset by an increase in license revenue recognized under an exclusive agreement with a related party. For the year ended December 31, 2025, we recognized approximately $26.4 million in license revenue under this agreement. No license revenue was recognized under this agreement during the year ended December 31, 2024.
Other revenue for the year ended December 31, 2025 was $0.3 million, compared to $6.3 million for the year ended December 31, 2024. Other revenue primarily relates to the supply of materials to Novartis under the Novartis License Agreement which was substantially complete in 2024.
Collaboration Revenue
Collaboration revenue for the year ended December 31, 2025 was $944.8 million, compared to $482.6 million for the year ended December 31, 2024. This increase of $462.2 million was due to an increasein revenue generated from sales of CARVYKTI in connection with the Janssen Agreement.
Cost of Collaboration Revenue
Cost of collaboration revenue for the year ended December 31, 2025 was $397.1 million, compared to $216.4 million for the year ended December 31, 2024. This increase of $180.7 million was primarily due to an increase in our share of costs of sales of CARVYKTI as part of the Janssen Agreement and expenditures to support expansion in manufacturing capacity.
Cost of License and Other Revenue
Cost of license and other revenue for the year ended December 31, 2025 was $11.0 million compared to $18.2 million for the year ended December 31, 2024 and consisted of costs in connection with the Novartis License Agreement.
Research and Development Expenses
Research and development expenses for the year ended December 31, 2025 were $414.7 million, compared to $413.5 million for the year ended December 31, 2024. This remained relatively flat due to higher pipeline-related research and development activities, offset by lower expenditures in BCMA clinical programs as the patient dosing phases of major programs concluded.
Administrative Expenses
Administrative expenses for the year ended December 31, 2025 were $135.8 million, compared to $136.8 million for the year ended December 31, 2024, remaining relatively flat.
Selling and Distribution Expenses
Selling and distribution expenses for the year ended December 31, 2025 were $205.8 million, compared to $147.5 million for the year ended December 31, 2024. This increase of $58.3 million was due to higher commercial costs, including sales force expansion and Janssen-related marketing and market access activities, which rose with collaboration revenue.
Finance Income
Finance income for the year ended December 31, 2025 was $40.1 million, compared to $61.2 million for the year ended December 31, 2024. The decrease of $21.1 million was primarily driven by less interest income earned from various bank accounts and time deposits, reflecting lower average balances during the year and reduced interest rates.
Finance Costs
Finance costs for the year ended December 31, 2025 was $21.4 million, compared to $21.6 million for the year ended December 31, 2024. Finance costs for year ended December 31, 2025 and 2024 were primarily related to the interest on advance funding, which is interest-bearing borrowings funded by Janssen under the Janssen Agreement and constituted by principal and applicable interests upon such principal.
Other (Expense)/Income, net
Other expense was $164.8 million for the year ended December 31, 2025, compared to $111.8 million for the year ended December 31, 2024.
Other (expense)/income, net is primarily driven by unrealized foreign exchange gain/(loss) on our intercompany loan and cash balances due to exchange rate changes between U.S. dollars and the euro.
Income Tax (Expense)
We had an income tax expense of $14.2 million for the year ended December 31, 2025, compared to an income tax expense of $18.9 million for the year ended December 31, 2024. The $4.7 million decrease is primarily related to a nonrecurring 2024 special tax adjustment and an income tax reserve for an uncertain tax position related to the PRC.
Comparison of Fiscal Years Ended December 31, 2024 and 2023
The following table summarizes our results of operations for the fiscal years ended December 31, 2024 and 2023:
|
Fiscal Year Ended
December 31,
|
Variance | ||||||||||||||||
|
(Dollars in millions)
|
2024 | 2023 | |||||||||||||||
| Consolidated Statement of Operations Data: | |||||||||||||||||
|
Revenue
|
|||||||||||||||||
|
License and other revenue
|
$ | 144.7 | $ | 35.3 | $ | 109.4 | |||||||||||
| Collaboration revenue | 482.6 | 249.8 | 232.8 | ||||||||||||||
| Total revenue | 627.3 | 285.1 | 342.2 | ||||||||||||||
| Cost of collaboration revenue | (216.4) | (144.2) | (72.2) | ||||||||||||||
|
Cost of license and other revenue
|
(18.2) | - | (18.2) | ||||||||||||||
| Research and development expenses | (413.5) | (382.2) | (31.3) | ||||||||||||||
| Administrative expenses | (136.8) | (106.8) | (30.0) | ||||||||||||||
| Selling and distribution expenses | (147.5) | (94.2) | (53.3) | ||||||||||||||
|
Other operating expenses
|
(4.4) | (85.8) | 81.4 | ||||||||||||||
| Operating loss | (309.5) | (528.1) | 218.6 | ||||||||||||||
| Finance costs | (21.6) | (21.8) | 0.2 | ||||||||||||||
|
Finance income
|
61.2 | 54.5 | 6.7 | ||||||||||||||
|
Other income/(expense), net
|
111.8 | (24.8) | 136.6 | ||||||||||||||
| Loss for the year | (158.1) | (520.2) | 362.1 | ||||||||||||||
| Income tax (expense)/benefit | (18.9) | 1.9 | (20.8) | ||||||||||||||
| Net loss | $ | (177.0) | $ | (518.3) | $ | 341.3 | |||||||||||
Revenue
License and Other Revenue
License revenue for the year ended December 31, 2024 was $144.7 million, compared to $35.3 million for the year ended December 31, 2023. This increase of $109.4 million was primarily driven by the revenue recognized in 2024 pursuant to the Novartis License Agreement of $63.3 million compared to no license revenue with Novartis in 2023. The increase was also driven by the nature of and timing of milestones achieved as outlined in the Global Development Plan under the Janssen Agreement in the amount of $75.1 million in 2024 compared to $35.2 million in 2023.
Other revenue for the year ended December 31, 2024 was $6.3 million, compared to $0.1 million for the year ended December 31, 2023. Other revenue primarily relates to the supply of materials to Novartis under the Novartis License Agreement which was substantially complete in 2024.
Collaboration Revenue
Collaboration revenue for the year ended December 31, 2024 was $482.6 million, compared to $249.8 million for the year ended December 31, 2023. This increase of $232.8 millionwas due to an increasein revenue generated from sales of CARVYKTI in connection with the Janssen Agreement.
Cost of Collaboration Revenue
Cost of collaboration revenue for the year ended December 31, 2024 was $216.4 million, compared to $144.2 million for the year ended December 31, 2023. This increase of $72.2 million was primarily due to our share of
costs of sales of CARVYKTI as part of the Janssen Agreement and expenditures to support expansion in manufacturing capacity.
Cost of License and Other Revenue
Cost of license and other revenue for the year ended December 31, 2024 was $18.2 million and consisted of costs in connection with the Novartis License Agreement. We did not incur any cost of license and other revenue for the year ended December 31, 2023.
Research and Development Expenses
Research and development expenses for the year ended December 31, 2024 were $413.5 million, compared to $382.2 million for the year ended December 31, 2023. This increase of $31.3 million was primarily due to research and development activities in BCMA, including start-up costs for clinical production in Belgium, as well as continued investment in our solid tumor programs.
Administrative Expenses
Administrative expenses for the year ended December 31, 2024 were $136.8 million, compared to $106.8 million for the year ended December 31, 2023. This increase of $30.0 million was due to the expansion of administrative functions and the additional headcount needed to provide administrative support as a result of our expanded infrastructure, driven by increased manufacturing capacity.
Selling and Distribution Expenses
Selling and distribution expenses for the year ended December 31, 2024 were $147.5 million, compared to $94.2 million for the year ended December 31, 2023. This increase of $53.3 million was due to increased costs associated with commercial activities for BCMA, including the expansion of the sales force and second line indication launch.
Other Operating Expenses
Other operating expenses for the year ended December 31, 2024 was $4.4 million, compared to $85.8 million for the year ended December 31, 2023. The decrease was primarily due to the fair value loss recorded on the full exercise of the warrant we issued to an institutional investor in May 2021, which warrant was fully exercised on May 11, 2023.
Finance Income
Finance income for the year ended December 31, 2024 was $61.2 million, compared to $54.5 million for the year ended December 31, 2023. This decrease of $6.7 million was primarily driven by less interest income earned from various bank accounts and time deposits.
Finance Costs
Finance costs for the year ended December 31, 2024 was $21.6 million, compared to $21.8 million for the year ended December 31, 2023. Finance costs for the year ended December 31, 2024 and 2023 were primarily related to the interest on advance funding, which is interest-bearing borrowings funded by Janssen under the Janssen Agreement and constituted by principal and applicable interests upon such principal.
Other Income/(Expense), net
Other income was $111.8 million for the year ended December 31, 2024, compared to an other expense of $24.8 million for the year ended December 31, 2023.
Other income/(expense), net is primarily driven by unrealized foreign exchange gain/(loss) on our intercompany loan and cash balances due to exchange rate changes between U.S. dollars and EUR.
Income Tax (Expense)/ Benefit
We had an income tax expense of $18.9 million for the year ended December 31, 2024, compared to an income tax benefit of $1.9 million for the year ended December 31, 2023. The $20.8 million increase is primarily related to a special tax adjustment and an income tax reserve for an uncertain tax position to the PRC.
Critical Accounting Policies
Our consolidated financial statements are prepared in accordance with IFRS as issued by the International Accounting Standards Board. The preparation of our consolidated financial statements requires us to make estimates, assumptions and judgments that affect the reported amounts of assets, liabilities, costs and expenses. We base our estimates and assumptions on historical experience and other factors that we believe to be reasonable under the circumstances. We evaluate our estimates and assumptions on an ongoing basis. Our actual results may differ from these estimates. Our most critical accounting policies are summarized below. See note 2.4 to our consolidated financial statements included in this Annual Report for a description of our other significant accounting policies.
Revenue Recognition
Upfront fees
For collaboration and license agreements we have or may enter into, the transaction price is generally comprised of an upfront payment due at contract inception and variable consideration in the form of payments for our services and materials and milestone payments due upon the achievement of specified events.
Upfront payment is allocated to a single performance obligation in the Novartis Licensing Agreement. The $100.0 million upfront fees from Novartis were included in the transaction price upon contract inception in 2023 and will be recognized when the performance obligation to deliver the intellectual property and complete the Phase 1 trial are finished over time. The $100.0 million upfront fees were fully received by us in early 2024.
Milestone payments
Milestone payments represent a form of variable consideration which are included in the transaction price to the extent that it is highly probable that a significant reversal of accumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. At the inception of each arrangement that includes milestone payments, we evaluate whether the milestones are considered highly probable of being achieved and estimate the amount to be included in the transaction price using the most likely amount method. If it is highly probable that a significant reversal of cumulative revenue would not occur, the associated milestone value is included in the transaction price. Milestone payments that are not within our control, such as regulatory approvals, are not considered highly probable of being achieved until those approvals are received. We evaluate factors such as the scientific, clinical, regulatory, commercial and other risks that must be overcome to achieve the particular milestone in making this assessment. There is considerable judgment involved in determining whether it is highly probable that a significant reversal of cumulative revenue would not occur. At the end of each subsequent reporting period, we re-evaluate the probability of achievement of all milestones subject to constraint and, if necessary, adjust our estimate of the overall transaction price.
Certain milestone payments were allocated to the single performance obligation in the Janssen Agreement to deliver the license of intellectual property, including a technology transfer service.
Additionally, under the Janssen Agreement, we are eligible to receive further milestone payments up to $125 million for the achievement of specified manufacturing milestones, up to $210 million for the achievement of specified net trade sales milestones, and up to an additional $600 million for the achievement of specified future development and regulatory milestones. We have received $415.0 million in milestone payments through December 31, 2025. Subsequent development, manufacturing and regulatory milestones will be recognized in full in the period in which it is highly probable a significant reversal of the cumulative revenue recognized for the IFRS 15 contract will not occur, as they are associated with the performance obligation to deliver the license of intellectual property, including a technology transfer service, that was satisfied in 2018. We will recognize revenue for sales-based milestones when the milestone is achieved
pursuant to the royalty recognition constraint. We have assessed that achievement of the remaining milestones is highly uncertain and the related milestone payments are not included in the transaction price.
For a description of the upfront and milestone payments Janssen has made to us under the Janssen Agreement and potential future milestone payments Janssen may make to us under the Agreement, see "Item 4. Information on the Company-B. Business Overview-Collaboration and License Agreement with Janssen Biotech, Inc."
Under the Novartis License Agreement, Novartis has agreed to pay up to $1.01 billion in milestone payments upon achievement of specified clinical, regulatory and commercial milestones, as well as tiered royalties on net sales. We determined that any milestone payments will be recognized when the milestone is achieved as they were determined to relate predominately to the license granted and therefore have been excluded from the transaction price.
For a description of the upfront and milestone payments Novartis has made to us under the Novartis License Agreement and potential future milestone payments Novartis may make to us under the Agreement, see "Item 4. Information on the Company-B. Business Overview-Novartis License Agreement."
Profit Sharing and Collaboration Revenue
We and Janssen share equally profits on sales of CARVYKTI in all areas other than the People's Republic of China, excluding Greater China, where we retain or bear 70% of pre-tax profits or losses. In all areas other than Greater China, as Janssen is the principal in the sale transaction with the customer, we recognize a pro-rata share of collaboration net trade sales in the period Janssen completes the sale and delivers the product to the customer. Our share of collaboration net trade sales in all areas other than Greater China are recognized within collaboration revenue on the statement of profit or loss and other comprehensive income. Subsequent to regulatory approval and commercial launch, revenue from sales of product in Greater China will be recognized within Product sales on the statement of profit or loss and other comprehensive income as we will be the principal in the sale to the customer.
Collaborative activities
In addition to the license of intellectual property, the Janssen Agreement includes joint development, manufacturing and commercial activities that are performed by us and our collaboration partner. These activities and the related consideration for these activities are outside the scope of IFRS 15 as we and our collaboration partner are both active participants in the activities and are exposed to significant risks and rewards of such activities. We recognize a pro-rata share of costs associated with these collaboration activities when incurred.
Issued But Not Yet Effective International Financial Reporting Standards
See note 2.3 to our consolidated financial statements in this Annual Report for a description of recent accounting pronouncements applicable to our consolidated financial statements.
B.Liquidity and Capital Resources
Sources of Liquidity
Since our inception, we have incurred significant operating losses. We believe that our cash and cash equivalents, deposits and investment of approximately $948.6 million, as of December 31, 2025, and cash that we expect to generate from our operations will provide sufficient resources to meet our operational needs and loan repayment needs for at least the next 12 months. We also believe that we have ability to access capital markets as sources of liquidity if needed.
With the exception of our first product, CARVYKTI, which was initially approved by the FDA on February 28, 2022, we do not currently have any approved products and we have not generated any revenue from product sales for other products. From inception through December 31, 2025, we have funded our operations primarily with approximately:
•$3.9 million in capital contributions from Genscript;
•$160.5 million in gross proceeds from the sale of our Series A preference shares;
•$760.0 million in upfront and milestone payments from Janssen under our collaboration and license agreement;
•$450.1 million in net proceeds from our U.S. initial public offering and an additional $12.0 million from a concurrent private placement with Genscript;
•$300.0 million in net proceeds from our private placement to an investor and related warrant issuance in May 2021;
•$323.4 million in net proceeds from our public offering of ADSs that closed in December 2021
•$250.0 million in advances from Janssen under the Janssen Agreement;
•$377.6 million in net proceeds from our public offering of ADSs that closed in July 2022;
•$234.4 million in net proceeds from private placements to certain investors in May and June 2023;
•$349.3 million in net proceeds from our public offering of ADS that closed in May 2023;
•$199.7 million in net proceeds from the exercise in full of a warrant held by one of our investors; and
•$100.0 million upfront payment from Novartis under the Novartis License Agreement.
As of December 31, 2025, we had approximately $901.9 million of cash and cash equivalents, approximately $46.7 million of time deposits, and accumulated losses of $1,958.5 million.
Certain of our subsidiaries, including those registered as wholly foreign-owned enterprises in the PRC, are required to set aside at least 10.0% of their after-tax profits to their general reserves until such reserves reach 50.0% of their registered capital. Under PRC regulations, foreign-invested enterprises may pay dividends only out of their accumulated profit, if any, as determined in accordance with PRC accounting standards and regulations. A PRC company is not permitted to distribute any profits until any losses from prior fiscal years have been offset. Profits retained from prior fiscal years may be distributed together with distributable profits from the current fiscal year. Although we do not currently require any such dividends from our PRC subsidiaries to fund our operations, should we require additional sources of liquidity in the future, such restrictions may have a material adverse effect on our liquidity and capital resources. For more information, see "Item 4.B-Business Overview - Government Regulation - PRC Regulation - Other PRC National- and Provincial-Level Laws and Regulations - Regulations Relating to Dividend Distributions."
Cash Flows
The following table shows a summary of our cash flows:
| Year Ended December 31, | |||||||||||||||||
|
(Dollars in millions)
|
2025 | 2024 | 2023 | ||||||||||||||
| Net cash used in operating activities | $ | (100.2) | $ | (144.0) | $ | (393.3) | |||||||||||
| Net cash provided by (used in) investing activities | 709.6 | (850.6) | 92.9 | ||||||||||||||
| Net cash (used in) provided by financing activities | (0.3) | 5.7 | 791.4 | ||||||||||||||
| Effect of foreign exchange rate changes, net | 6.1 | (2.1) | 0.7 | ||||||||||||||
| Net increase (decrease) in cash and cash equivalents | $ | 615.2 | $ | (991.0) | $ | 491.7 | |||||||||||
Operating Activities
Net cash used in operating activities for the year ended December 31, 2025 was $100.2 million, primarily as a result of net loss before tax of $282.6 million after adjusting for non-cash items, and changes in operating assets and liabilities. The year-over-year change was primarily due to a decrease in operating losses and an increase in interest income received partially offset by a decrease in working capital and an increase in income taxes paid.
Net cash used in operating activities for the year ended December 31, 2024 was $144.0 million, primarily as a result of net loss before tax of $158.1 million after adjusting for non-cash items, changes in operating assets and liabilities, and cash items. Non-cash items mainly include $61.2 million of finance income, $21.6 million of finance cost, $12.7 million for the provision for the inventory reserves, $10.7 million of depreciation expense of property, plant and equipment, an asset impairment loss of $4.4 million, $10.7 million of depreciation of right-of-use assets, $109.3 million of foreign exchange gain and $68.9 million of equity-settled share-based compensation expenses. Changes in operating assets and liabilities mainly include a decrease in trade receivables of $93.8 million primarily resulting from a $100 million receivable in connection with the Novartis License Agreement which was received in 2024, an increase in prepayment, other receivable and other assets of $61.7 million, an increase in collaboration inventories of $17.2 million, an increase in trade payables of $14.1 million, an increase in other payables and accruals of $43.9 million, and a decrease in contract liabilities (current and non-current) of $49.7 million. Cash items primarily include interest income received of $37.3 million.
Net cash used in operating activities for the year ended December 31, 2023 was $393.3 million, primarily as a result of net loss before tax of $520.1 million after adjusting for non-cash items, changes in operating assets and liabilities, and cash items. Non-cash items mainly include $54.5 million of finance income, $21.8 million of finance cost, $3.6 million for the provision for the inventory reserves, $10.7 million of depreciation expense of property, plant and equipment, $7.8 million of depreciation of right-of-use assets, $85.8 million of fair value gain of warrant liability, $28.2 million of foreign exchange loss and $47.7 million of equity-settled share-based compensation expenses. Changes in operating assets and liabilities mainly include an increase in trade receivables of $99.0 million primarily resulted from a $100 million receivable in connection with the Novartis License Agreement which was received after December 31 2023, an increase in prepayment, other receivable and other assets of $8.7 million, an increase in collaboration inventories of $12.7 million, a decrease in trade payables of $50.2 million, a decrease in other payables and accruals of $2.7 million, an increase in contract liabilities (current) of $52.5 million and an increase in contract liabilities (non-current) of $47.5 million. Cash items primarily include interest income received of $47.3 million, income tax received of $1.0 million, which is a refund of prior year's income tax return previously paid.
Investing Activities
Net cash provided by investing activities for the year ended December 31, 2025 was $709.6 million, compared to $850.6 million of cash used in investing activities for the year ended December 31, 2024. This change mainly reflects the timing of time deposit investments and maturities.
Net cash used in investing activities for the year ended December 31, 2024 was $850.6 million, consisting primarily of purchases of time deposits of $784.6 million, a $14.1 million purchase of property, plant, and equipment, and a $54.9 million prepayment to collaborator for collaboration assets.
Net cash provided by investing activities for the year ended December 31, 2023 was $92.8 million, consisting primarily of cash received from withdrawal of financial assets measured at fair value through profit or loss of $185.0 million, maturities of time deposits of $19.6 million and cash receipt of investment income of $8.8 million partially offset by prepayment to collaborator for collaboration assets of $98.8 million, purchases of property, plant and equipment of $20.1 million and purchase of intangible assets of $2.6 million.
Financing Activities
Net cash used in financing activities for the year ended December 31, 2025 was $0.3 million, compared to $5.7 million of cash provided by financing activities for the year ended December 31, 2024. The year over year change is primarily attributable to the decrease in proceeds from the exercise of stock options.
Net cash provided by financing activities for the year ended December 31, 2024 was $5.7 million, consisting primarily of proceeds from exercise of share option of $9.7 million, partially offset by principal portion of lease payments of $4.0 million.
Net cash provided by financing activities for the year ended December 31, 2023 was $791.5 million, consisting primarily of net proceeds from issuance of ordinary shares for follow-on public offering of $349.3 million in May 2023, proceeds from issuance of ordinary shares for institutional investors, net of issuance cost of $234.4 million, proceeds from exercise of warrant by warrant holder, net of issuance cost of $199.7 million and proceeds from exercise of share option of $11.8 million, partially offset by principal portion of lease payments of $3.8 million.
Capital Expenditure
Our capital expenditures for the years ended December 31, 2025, 2024 and 2023 amounted to $69.3 million, $64.6 million and $104.0 million, respectively. These expenditures primarily consisted of property, plant, equipment and collaboration assets.
As of December 31, 2025, 2024, and 2023 we had commitments for capital expenditures of approximately $11.5 million, $3.0 million, and $11.3 million respectively, primarily for contracts that are enforceable and legally binding and that specify all significant terms, including fixed or minimum services to be used, fixed, minimum or variable price provisions, and the approximate timing of the actions under the contracts. We anticipate our capital expenditure in 2026 to be financed from our cash and cash equivalents on hand and cash that will be generated from our operations of
CARVYKTI. Primarily, the capital expenditure will be made in the United States, Europe and China, where our principal manufacturing, and research and development facilities are currently located.
Funding Requirements
The following table sets forth our contractual obligations and commitments as of December 31, 2025:
|
Less than
1 Year
|
1 to 3
Years
|
4 to 5
Years
|
More than
5 Years
|
Total | |||||||||||||||||||||||||
|
(Dollars in millions)
|
|||||||||||||||||||||||||||||
| Lease obligations | $ | 14.5 | $ | 30.2 | $ | 28.4 | $ | 78.9 | $ | 152.0 | |||||||||||||||||||
| Capital commitment | 11.5 | - | - | - | 11.5 | ||||||||||||||||||||||||
| Total | $ | 26.0 | $ | 30.2 | $ | 28.4 | $ | 78.9 | $ | 163.5 | |||||||||||||||||||
This includes capital commitments, as well as payments due under operating leases for our facilities in New Jersey, Pennsylvania, Ireland, Belgium and China.
The commitment amounts in the table above are associated with contracts that are enforceable and legally binding and that specify all significant terms, including fixed or minimum services to be used, fixed, minimum or variable price provisions, and the approximate timing of the actions under the contracts. The table does not include obligations under agreements that we can cancel without a significant penalty.
We also enter into cancelable contracts in the normal course of business with CROs for clinical trials, preclinical studies, manufacturing and other services and products for operating purposes.
We expect to continue to incur expenses in connection with our ongoing activities, particularly as we continue the research and development of, continue or initiate clinical trials of, and seek marketing approval for, our product candidates. In addition, following FDA's approval of CARVYKTI, we continue to incur significant commercialization expenses related to program sales, marketing, manufacturing and distribution. For example, in addition to investing in our own facilities, we have supplemented our manufacturing capabilities and infrastructure by entering into agreements with a CMO and may enter into additional CMO agreements in the future. Furthermore, we expect to incur additional costs associated with operating as a public company. Accordingly, we may need to obtain substantial additional funding in connection with our continuing operations. If we are unable to raise capital when needed or on attractive terms, we would be forced to delay, reduce or eliminate our research and development programs or future commercialization efforts.
Although consequences of the macroeconomic conditions, including global conflicts and inflation, and resulting economic uncertainty could adversely affect our liquidity and capital resources in the future, and cash requirements may fluctuate based on the timing and extent of many factors such as those discussed below, we currently expect our existing cash and cash equivalents and cash that we expect to generate from our operations will provide sufficient resources to meet our operational needs and loan repayment needs for at least the next 12 months. Our future capital requirements will depend on many factors, including:
•the amount and timing of revenue we receive from commercial sales of CARVYKTI under the Janssen Agreement;
•the scope, progress, results and costs of product discovery, preclinical studies and clinical trials;
•the scope, prioritization and number of our research and development programs;
•the costs, timing and outcome of regulatory review of our product candidates;
•our ability to establish and maintain collaborations on favorable terms, if at all;
•the achievement of milestones or occurrence of other developments that trigger payments under the Janssen Agreement and any other collaboration agreements we enter into;
•the extent to which we are obligated to reimburse, or entitled to reimbursement of, clinical trial costs under collaboration agreements, if any;
•the costs of preparing, filing and prosecuting patent applications, maintaining and enforcing our intellectual property rights and defending intellectual property-related claims;
•the extent to which we acquire or in-license other product candidates and technologies;
•the costs of securing manufacturing arrangements for commercial production; and
•the costs of establishing or contracting for sales and marketing capabilities if we obtain regulatory approvals to market our product candidates.
In addition to our commercial product CARVYKTI, we have a broad portfolio of earlier-stage product candidates. Identifying potential product candidates and conducting preclinical studies and clinical trials is a time-consuming, expensive and uncertain process that takes many years to complete, and we may never generate the necessary data or results required to obtain marketing approval and achieve product sales for such product candidates. In addition, our product candidates, if approved, may not achieve commercial success. Our commercial revenues from earlier-stage product candidates, if any, will be derived from sales of product candidates that we do not expect to be commercially available for many years, if at all. Accordingly, we may need to continue to rely on additional financing to achieve our business objectives. Adequate additional financing may not be available to us on acceptable terms, or at all.
Until such time, if ever, as we can generate substantial product revenues, we expect to finance our cash needs through a combination of equity offerings, debt financings, collaborations, strategic alliances and licensing arrangements. To the extent that we raise additional capital through the sale of equity or convertible debt securities, holders of our ADSs will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of our shareholders. Debt financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends.
If we raise funds through additional collaborations, strategic alliances or licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs or product candidates or to grant licenses on terms that may not be favorable to us. If we are unable to raise additional funds through equity or debt financings when needed, we may be required to delay, limit, reduce or terminate our product development or future commercialization efforts or grant rights to develop and market that we would otherwise prefer to develop and market ourselves.
Under the Janssen Agreement, the collaborator may recoup the aggregate amount of Funding Advances together with interest thereon from Company's share of pre-tax profits starting from the first calendar quarter following the first profitable year of the collaboration program and, subject to some limitations, from milestone payments due to the Company under the Janssen Agreement. The Company achieved a CARVYKTI profitable position by year end of 2025, and therefore the recoupment will be triggered. As of December 31, 2025, the aggregate outstanding principal amount of such advances and interest were approximately $250.0 million and $69.1 million, respectively. As of December 31, 2025, we estimated that the entire balance of $319.1 million would be recouped by Janssen within the next 12 months.
Certain Supplemental Non-IFRS Metrics
As described in this section, our management uses various financial metrics, including certain metrics that are not prepared in accordance with IFRS, to measure and assess the performance of our business, to make critical business decisions, and to assess our compliance with certain financial obligations. We therefore believe that presentation of certain of these non-IFRS metrics alongside the IFRS measures in this Annual Report will aid investors in understanding our business.
The non-IFRS metrics should be considered in addition to, and not as a substitute for, or as superior to, measures of financial performance, financial position or cash flows reported in accordance with IFRS. We strongly encourage investors to review our historical financial statements in their entirety and to use the measures presented in accordance with IFRS as the primary means of evaluating our performance. Moreover, we encourage investors to review the definitions and reconciliations of non-IFRS financial measures to their most directly comparable IFRS measures. In addition, non-IFRS metrics are not uniformly defined by all companies, including those in our industry. Accordingly, non-IFRS metrics may not be comparable with similarly titled measures and disclosures by other companies, and we therefore encourage investors to review the discussions of these non-IFRS financial measures particularly the limitations on their usefulness-and to understand how such measures differ from similarly titled measures that may be presented by other companies in the pharmaceutical industry or in general.
Adjusted Net Income (Loss) and Adjusted Net Income (Loss) per Share
We use Adjusted Net Income (Loss) and Adjusted Net Income (Loss) per Share (which we sometimes refer to as "Adjusted EPS" "ANI per Share") as performance metrics. Adjusted Net Income (Loss) and ANI per share are not defined
under IFRS, are not a measure of operating income, operating performance, or liquidity presented in accordance with IFRS, and are subject to important limitations. Our use of Adjusted Net Income (Loss) has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our results as reported under IFRS. For example:
•Although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and Adjusted Net Income (Loss) does not reflect cash capital expenditure requirements for such replacements or for new capital expenditure requirements.
•Adjusted Net Income (Loss) excludes unrealized foreign exchange gain (loss) which resulted primarily from changes in the intercompany loan balances and cash balances as a result of exchange rate changes between U.S. dollars and EUR.
•Adjusted Net Income (Loss) does not reflect changes in, or cash requirements for, our working capital needs.
•In addition, Adjusted Net Income (Loss) excludes such as share based compensation expense, which has been, and will continue to be for the foreseeable future, a significant recurring expense for our business and an important part of our compensation strategy.
Also, our definition of Adjusted Net Income (Loss) and Adjusted Net Income (Loss) per Share may not be the same as similarly titled measures used by other companies.
However, we believe that providing information concerning Adjusted Net Income (Loss) and Adjusted Net Income (Loss) per Share enhances an investor's understanding of our financial performance. We use Adjusted Net Income (Loss) as a performance metric that guides management in its operation of and planning for the future of the business. We believe that adjusted Net Income (Loss) provides a useful measure of our operating performance from period to period by excluding certain items that we believe are not representative of our core business. We define Adjusted Net Income (Loss) as net loss adjusted for (1) non-cash items such as depreciation and amortization, share based compensation, fair value loss of warrant liability, and loss on impairment asset, and (2) unrealized foreign exchange gain or loss mainly related to intercompany loan balances and cash deposit balances as a result of exchange rate changes between U.S. dollars and EUR.
Adjusted Net Income (Loss) per Share is computed by dividing Adjusted Net Income (Loss) by the weighted average shares outstanding.
A reconciliation between Adjusted Net Income (Loss) and Net Loss, the most directly comparable measure under IFRS, has been provided in below.
| December 31, 2025 | December 31, 2024 | December 31, 2023 | ||||||||||||||||||
|
Dollars in millions, except per share data
|
||||||||||||||||||||
| Net loss | $ | (296.8) | $ | (177.0) | $ | (518.3) | ||||||||||||||
| Depreciation and amortization | 29.0 | 23.4 | 20.5 | |||||||||||||||||
| Share based compensation | 64.6 | 68.9 | 47.7 | |||||||||||||||||
| Impairment loss | 1.0 | 4.4 | - | |||||||||||||||||
| Unrealized foreign exchange loss/(gain) (included in Other (expense)/income, net) | 169.1 | (108.5) | 28.6 | |||||||||||||||||
| Fair value loss of warrant liability | - | - | 85.8 | |||||||||||||||||
| Adjusted net loss | $ | (33.1) | $ | (188.8) | $ | (335.7) | ||||||||||||||
| ANL per share: | ||||||||||||||||||||
| ANL per share - basic | $ | (0.09) | $ | (0.52) | $ | (0.95) | ||||||||||||||
| ANL per share - diluted | $ | (0.09) | $ | (0.52) | $ | (0.95) | ||||||||||||||
C.Research and Development, Patents and Licenses, etc
Full details of our research and development activities and expenditures and patents and licenses are given in the "Item 4.B.- Information on the Company-Business Overview" and "Item 5- Operating and Financial Review and Prospects" sections of this Annual Report above.
D.Trend Information
Other than as described elsewhere in this Annual Report, including under Item 5.A-Operating Results" and "Item 5.B. -Liquidity and Capital Resources," we are not aware of any trends, uncertainties, demands, commitments or events that are reasonably likely to have a material adverse effect on our revenue, income from continuing operations, profitability, liquidity or capital resources, or that would cause our reported financial information not necessarily to be indicative of future operation results or financial condition.
E.Critical Accounting Estimates
Not Applicable.
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