Barinthus Biotherapeutics plc.BRNS
Barinthus Biotherapeutics plc. Commitments Disclosure
Commitments and Contingencies
In-License Agreements
The Company is party to a number of licensing agreements, most of which are with related parties. These agreements serve to provide the Company with the right to develop and exploit the counterparties’ intellectual property for certain medical indications. As part of execution of these arrangements, the Company paid certain upfront fees, which have been expensed as incurred because the developing technology has not yet reached technical feasibility, the lack of alternative use, and the lack of proof of potential value. The agreements cover a variety of fields, including influenza, cancer, HPV, HBV and MERS. The Company’s obligations for future payments under these arrangements are dependent on its ability to develop promising drug candidates, the potential market for these candidates and potential competing products, and the payment mechanisms in place in countries where the Company retains the right to sell. Each agreement provides for specific milestone payments, typically triggered by achievement of certain testing phases in human candidates, and future royalties ranging from 1 to 5% for direct sales of a covered product to 3% to 7% of net payments received for allowable sublicenses of technology developed by the Company. The obligation to make these payments is contingent upon the Company’s ability to develop candidates for submission for phased testing and approvals, and for the development of markets for the products developed by the Company. The Company has not made or accrued any material payments under these license agreements during the years ended December 31, 2025, and 2024.
Leases
The Company leases certain laboratory and office space under operating leases, which are described below.
The Harwell Science and Innovation Campus, Oxfordshire
On September 3, 2021, the Company entered into a lease agreement for the lease of approximately 31,000 square feet in Harwell, Oxfordshire, which expires in September 2031. As the Company’s leases typically do not provide an implicit rate, the Company uses an estimate of its incremental borrowing rate based on the information available at the lease commencement date, being the rate incurred to borrow on a collateralized basis over a similar term at an amount equal to the lease payments in a similar economic environment. The Company has provided the lessor with a refundable security deposit of $0.7 million which is included in Other assets.
In 2024, an impairment charge to write down the U.K. operating lease right-of-use asset to the estimated recoverable amount was recorded and the estimated useful life of the asset reduced. In August 2025, the Company ceased the research and development activities undertaken in the laboratory and transitioned the remaining clinical and operational workforce to remote roles. The U.K. operating lease right-of-use asset has a value of nil as of December 31, 2025. The Company is actively marketing the building in Harwell, Oxfordshire, for the remainder of the lease.
Germantown, Maryland
On June 14, 2022, the Company entered into a lease agreement for the lease of approximately 19,700 square feet in Germantown, Maryland. The site houses the Company’s state-of-the-art wet laboratory in the United States of America.
The lease expires on February 28, 2034, with the Company having a single right to extend for an additional five years on the same terms and conditions other than for the base rent. The Company had a rent-free period up to February 29, 2024 and was entitled to up to $3.5 million for leasehold improvements to the premises desired by the Company. The Company has provided the lessor with a refundable security deposit of $0.2 million which is included in Other assets.
The Company recorded a right-of-use asset and a lease liability on the effective date of the lease term. The Company’s right-of-use asset and lease liabilities are as follows (in thousands):
| December 31, 2025 | December 31, 2024 | ||||||||||
| Right-of-use asset | $ | 1,638 | $ | 4,384 | |||||||
| Lease liability, current | $ | 2,023 | $ | 1,920 | |||||||
| Lease liability, non-current | $ | 9,258 | $ | 10,087 | |||||||
| Other information | |||||||||||
| Operating cash flows from operating leases | $ | 1,979 | $ | 1,789 | |||||||
| Weighted average remaining lease term (years) | 6.98 | 7.98 | |||||||||
| Weighted average discount rate | 7.5 | % | 7.5 | % | |||||||
Lease Costs | |||||||||||
| Operating leases | $ | 3,332 | $ | 1,443 | |||||||
Total lease cost | $ | 3,332 | $ | 1,443 | |||||||
The Company identified circumstances that could indicate that the carrying amount of the U.S. operating lease right-of-use asset and the leasehold improvements located in the U.S. may not be recoverable as of December 31, 2025, as it was more likely than not that the Company would cease some of the operating activities undertaken in the laboratory and office space in Germantown, Maryland in 2026, before the end of the previously estimated useful lives. The Company performed an impairment assessment of the U.S. operating lease right-of-use asset, which is part of the U.S. asset group, using the income approach and recorded an impairment charge within general and administrative expenses of $0.4 million (December 31, 2024: U.K. impairment $2.6 million) to write down the asset to the estimated recoverable amount. The impairment charge is subject to a number of assumptions and actual results may differ. The Company will continue to refine these assumptions as additional information becomes available. The significant assumptions used in determining the estimated fair value of the U.S. operating lease right-of-use asset are the timing of successful sub-leasing of the Company's U.S. lease obligations and the value of any charges associated with sub-leasing the Company's U.S. lease obligations. Significant changes in these inputs could have a material effect on the fair value measurement. See Note 6 Property and Equipment, Net for details of the impairment assessment performed over the property and equipment within the U.S. asset group.
Maturities of the Company’s minimum lease liabilities as of December 31, 2025 were as follows (in thousands):
| Maturity of lease liabilities: | |||||
| 2026 | $ | 2,025 | |||
| 2027 | 2,050 | ||||
| 2028 | 2,076 | ||||
| 2029 | 2,102 | ||||
| 2030 | 2,129 | ||||
| Thereafter | 3,940 | ||||
| Total minimum lease payments | 14,322 | ||||
| Less: imputed interest | (3,041) | ||||
| Total lease liability | $ | 11,281 | |||
Non-lease and other costs paid to the lessors are primarily related to services provided by the lessors in operating the premises that includes fees, operating costs, taxes, and insurance related to the leased premises.
Contemplated Transactions
On September 29, 2025, the Company entered into a merger agreement to combine with Clywedog, a private company advancing novel breakthrough medicines in diabetes. The Contemplated Transactions are expected to close in the second quarter of 2026, subject to customary closing conditions. In connection with this strategic combination, the Company may incur additional or contingent costs, including transaction-related legal and advisory fees, and other expenses. The Company accrued transaction-related legal and advisory fees in the amount of $2.8 million for the year ended December 31, 2025 (December 31, 2024: nil). Regardless of the outcome, there are anticipated additional costs and a focus of management resources on the strategic transaction which may or may not complete.
Other contingencies
As of the date of issuance of the audited financial statements included herein, the Company does not believe it is party to any claim or litigation the outcome of which, if determined adversely to it, would individually or in the aggregate be reasonably expected to have a material adverse effect on the Company's business. However, from time to time, the Company could be subject to various legal proceedings and claims that arise in the ordinary course of its business activities. Regardless of the outcome, legal proceedings can have an adverse impact on the Company because of defense and settlement costs, diversion of management resources and other factors.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 13, 2026 | Showing above |
| 2024 | Mar 20, 2025 | |
| 2023 | Mar 20, 2024 | |
| 2022 | Mar 24, 2023 | |
| 2021 | Mar 25, 2022 | |
About Commitments Disclosures
Commitments and contingencies disclosures catalog a company's off-balance-sheet obligations and legal exposures — purchase commitments, guarantee arrangements, pending litigation, and regulatory proceedings. These items represent potential future cash outflows that may not appear as liabilities on the balance sheet until they become probable and estimable.
Key signals: litigation reserves and disclosed loss ranges quantify management's estimate of legal exposure, but unquantified "reasonably possible" losses often represent the larger risk. Watch for changes in language around pending cases — shifts from "remote" to "reasonably possible" or increases in estimated loss ranges signal deteriorating outcomes. Unconditional purchase obligations and take-or-pay contracts create fixed cost structures that reduce operational flexibility. Guarantee arrangements for subsidiaries or joint ventures can create cascading obligations. Compare the total commitment schedule against projected free cash flow to assess whether the company can meet its obligations without additional financing.