Buried in Immunocore's IPO filings? A kickback scheme from a now former employee
Immunocore spent much of 2019 dealing with the fallout of the Neil Woodford scandal, as the former star investor’s fall crashed the biotech’s valuation out of unicorn range. Now it turns out that the company spent 2020 dealing with another internal scandal.
The longtime UK biotech darling disclosed in their IPO filing last week that they had fallen victim to an alleged kickback scheme involving one of their employees. After a whistleblower came forward, they said in their F-1, they spent the summer and spring investigating, finding fraud on the part of an employee and two outside vendors.
Immunocore offered sparse details, but estimated the scheme cost them between £1.1 million to £1.8 million ($1.5 million to $2.6 million). They said they terminated the remaining contract they had with one of the vendors and the employee resigned. The company was able to recover £1.8 million in court in December, they said, but acknowledged that the events pointed to “a material weakness in our internal controls” in delegating authority and procuring equipment.
The details were first reported by The Times in the UK.
References to the scheme appear throughout the company’s S-1, as management cautions that their estimates for how much they lost are preliminary.
Still, the details are unlikely to impede their IPO. At a time when companies years away from the clinic are filing S-1s at multi-billion dollar valuations, CEO Bahija Jallal has waited until relatively late in the game to take Immunocore public. As a result, she comes to Wall Street with a rare asset for a hitherto private biotech: Phase III data.
In November, Immunocore announced its T cell receptor therapy improved overall survival in a rare form of melanoma. The company has larger indications on the horizon, but Jallal touted the results as the first pivotal evidence that TCR therapies work, as well as the first successful bispecific T cell engager for solid tumors.
It also provided vindication for the investors who poured over $650 million into the biotech since its founding and may now be poised to cash in.