Silence Therapeutics agrees to about $1.3B sale
Sentiment and the balance of points
Rhea-AI Sentiment reads the wording of the document, how positive or negative its language is on a 1 to 5 scale. The balance of points shown with the takes weighs what the document actually discloses, so the two can disagree, for example when a trial that missed its main goal is described in upbeat language.
Silence Therapeutics plc (SLN) entered into an agreement on October 18, 2026, for Merck KGaA, Darmstadt, Germany, to acquire all issued and to-be-issued share capital for approximately $1.3 billion. The acquisition is expected to close in the first quarter of 2027 through a court-sanctioned UK scheme, subject to shareholder approval, court sanction and regulatory approvals; the transaction has no financing condition.
During the nine months ended September 30, 2026, SLN reported a $39.651 million net loss, compared with $76.842 million a year earlier, and collaboration revenue of $0.422 million versus $0.525 million. Net cash used in operations was $26.861 million, versus $44.984 million in the 2025 period.
Cash and cash equivalents were $247.659 million as of September 30, 2026; an August 2026 public offering generated $201.3 million in gross proceeds. SLN believes its cash is sufficient to fund forecast operating expenses and capital expenditures at least until 2028, while stating it will need additional funds for expenses and capital expenditures related to clinical development.
How this balance works
Rhea-AI gives every point it takes from this document a weight. Minor counts 1, Moderate 3 and Major 9, so one Major point outweighs several Minor ones. The bar adds up the weights on each side, and when neither side holds more than 65% of the total the balance reads Mixed.
It reads the document as published, with the same rules for every company, and it does not look at what the market expected or at how the stock traded, so a point can be objectively good on a day the stock falls.
Rhea-AI Sentiment measures something else, the tone of the wording.
Positive
- Moderate pointNine-month net loss: $39.651 million, versus $76.842 million.
- Moderate pointNine-month operating cash use: $26.861 million, versus $44.984 million.
Negative
- Minor pointNine-month collaboration revenue: $0.422 million, versus $0.525 million.
Filing Explained
Certain termination paths could require Silence to pay Merck $13 million; the fee is contingent on specified circumstances.
The agreed acquisition by Merck KGaA remains subject to shareholder, court and regulatory approvals. Before closing, the agreement restricts Silence Therapeutics from actions including issuing shares outside equity plans, taking on debt or selling intellectual property without Merck’s consent, subject to specified exceptions.
Key Figures
Key Terms
Scheme of Arrangement regulatory
Hart-Scott-Rodino Antitrust Improvements Act regulatory
siRNA stabilization chemistry technical
single performance obligation financial
cost-to-cost method financial
variable consideration financial
FAQ
AI-generated questions and answers. How Rhea-AI works. Not financial advice.
What is the value and expected closing date of the SLN acquisition?
How much cash did SLN have at September 30, 2026?
What shareholder approvals are required for the SLN-Merck transaction?
AI-generated analysis. How Rhea-AI works. Not financial advice.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from ____________ to ____________
Commission File Number:
(Exact name of registrant as specified in its charter) |
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Not Applicable |
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(State or other jurisdiction of incorporation or organization) |
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(I.R.S. Employer Identification No.) |
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(Address of principal executive offices) |
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(Zip Code) |
(Registrant’s telephone number, including area code) |
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(Former name, former address and former fiscal year, if changed since last report) |
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered |
* |
*
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.
|
Large accelerated filer ☐ |
Accelerated filer ☐ |
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Smaller reporting company |
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Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes
As of September 30, 2026, the registrant had
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q, or Quarterly Report, contains forward-looking statements that involve substantial risks and uncertainties. In some cases, you can identify forward-looking statements by the words “may,” “might,” “will,” “could,” “would,” “should,” “expect,” “intend,” “plan,” “objective,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “continue” and “ongoing,” or the negative of these terms, or other comparable terminology intended to identify statements about the future. These statements involve known and unknown risks, uncertainties and other important factors that may cause our actual results, levels of activity, performance or achievements to be materially different from the information expressed or implied by these forward-looking statements. The forward-looking statements and opinions contained in this Quarterly Report are based upon information available to us as of the date of this Quarterly Report and, while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. Forward-looking statements include, but are not limited to, statements about:
Any forward-looking statements in this Quarterly Report reflect our current views with respect to future events or to our future financial performance and involve known and unknown risks, uncertainties and assumptions that could cause our actual results and the timing of certain events to differ materially from future results expressed or implied by the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those identified herein, and those discussed in the section titled “Risk Factors,” set forth in Part II, Item 1A of this Quarterly Report (if any), as well as information provided elsewhere in this Quarterly Report and our Annual Report on Form 10-K filed with the Securities and Exchange Commission, or SEC, on March 5, 2026. As a result of these factors, we cannot assure you that the forward-looking statements in this Quarterly Report will prove to be accurate. Furthermore, if our forward-looking statements prove to be inaccurate, the inaccuracy may be material. In light of the significant uncertainties in these forward-looking statements, you should not regard these statements as a representation or warranty by us or any other person that we will achieve our objectives and plans in any specified time frame, or at all. Forward-looking statements speak only as of the date they are made, and we undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events
i
or otherwise, except as required by law. You should, therefore, not rely on these forward-looking statements as representing our views as of any date subsequent to the date of this Quarterly Report.
ii
TABLE OF CONTENTS
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PART I – FINANCIAL INFORMATION |
Page |
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ITEM 1. |
Financial Statements (Unaudited) |
1 |
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Condensed Consolidated Balance Sheets as of September 30, 2026, and December 31, 2025 |
1 |
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Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2026, and 2025 Condensed Comprehensive Loss for the three and nine months ended September 30, 2026, and 2025 |
2 |
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Condensed Consolidated Statements of Shareholders’ Equity for the three and nine months ended September 30, 2026, and 2025 |
4 |
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Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2026, and 2025 |
7 |
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Notes to the Condensed Consolidated Financial Statements |
8 |
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ITEM 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
18 |
ITEM 3. |
Quantitative and Qualitative Disclosures about Market Risk |
29 |
ITEM 4. |
Controls and Procedures |
29 |
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PART II – OTHER INFORMATION |
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ITEM 1. |
Legal Proceedings |
31 |
ITEM 1A. |
Risk Factors |
31 |
ITEM 2. |
Unregistered Sales of Equity Securities and Use of Proceeds |
34 |
ITEM 3. |
Defaults Upon Senior Securities |
34 |
ITEM 4. |
Mine Safety Disclosures |
34 |
ITEM 5. |
Other Information |
34 |
ITEM 6. |
Exhibits |
35 |
|
Signatures |
37 |
iii
PART I – FINANCIAL INFORMATION
Item 1. Financial Statements.
Silence Therapeutics plc
Condensed Consolidated Balance Sheets
(Unaudited, in thousands, except share and per share data)
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Note |
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September 30, 2026 |
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December 31, 2025 |
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Current assets |
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Cash and cash equivalents |
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$ |
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$ |
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Short-term investments |
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R&D benefit receivable |
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8 |
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Other current assets |
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Total current assets |
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Property, plant and equipment |
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Operating lease right-of-use assets |
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Goodwill |
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6 |
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Other intangible assets |
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Other long-term assets |
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Total assets |
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$ |
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$ |
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Current liabilities |
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Contract liabilities |
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7 |
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$ |
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$ |
( |
) |
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Trade and other payables |
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( |
) |
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( |
) |
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Operating lease liabilities, current |
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( |
) |
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( |
) |
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Total current liabilities |
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( |
) |
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( |
) |
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Contract liabilities |
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7 |
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( |
) |
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( |
) |
Operating lease liabilities |
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( |
) |
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Total liabilities |
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$ |
( |
) |
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$ |
( |
) |
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Commitments and contingencies (Note 11) |
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Shareholders’ equity |
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Ordinary shares - par value £ |
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|
9 |
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|
|
( |
) |
|
|
( |
) |
Additional paid-in capital |
|
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( |
) |
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( |
) |
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Accumulated deficit |
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Accumulated other comprehensive loss |
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Total shareholders' equity |
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( |
) |
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( |
) |
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Total liabilities and shareholders' equity |
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$ |
( |
) |
|
$ |
( |
) |
|
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
1
Silence Therapeutics plc
Condensed Consolidated Statements of Operations
(Unaudited, in thousands, except share and per share data)
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Three months ended September 30, |
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Nine months ended September 30, |
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|||||||||||
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Note |
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2026 |
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2025 |
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2026 |
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2025 |
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|||||
Revenue |
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3 |
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$ |
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|
$ |
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$ |
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$ |
|
||||
Cost of sales |
|
|
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|
|
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( |
) |
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( |
) |
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( |
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||
Gross profit |
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Research and development costs |
|
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( |
) |
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( |
) |
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( |
) |
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( |
) |
|
General and administrative expenses |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
Restructuring charges |
|
|
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|
|
|
|
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|
|
|
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( |
) |
||||
Operating loss |
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( |
) |
|
|
( |
) |
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( |
) |
|
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( |
) |
|
Foreign currency gain/(loss), net |
|
|
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|
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( |
) |
|
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( |
) |
|||
Other income, net |
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|
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|||||
Benefit from R&D credit |
|
8 |
|
|
|
|
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|
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|||||
Loss before income tax expense |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
Income tax expense |
|
|
|
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
||
Net Loss |
|
|
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
Loss per share (basic and diluted) |
|
5 |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
Weighted average shares outstanding (basic and diluted) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
2
Silence Therapeutics plc
Condensed consolidated statements of comprehensive income (loss)
(Unaudited, in thousands)
|
|
Three months ended September 30, |
|
|
Nine months ended September 30, |
|
||||||||||
|
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
||||
Net Loss |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
Other comprehensive (loss)/income: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Foreign exchange differences arising on consolidation of foreign operations |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
Total other comprehensive (loss)/income for the period |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
Total comprehensive loss for the period |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
3
Silence Therapeutics plc
Condensed Consolidated Statements of Shareholders’ Equity
(Unaudited, in thousands, except share data)
4
|
|
|
|
|
Ordinary Shares |
|
|
|
|
|
|
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|
||||||||||
|
|
Note |
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Shares |
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|
Cost |
|
|
Additional paid- |
|
|
Accumulated |
|
|
Accumulated |
|
|
Total |
|
|||||||
At January 1, 2025 |
|
|
|
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|||||
Net loss |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
|
Foreign currency translation adjustments (net of tax) |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
$ |
|
|
|
— |
|
|
|
|
|||
Recognition of share-based payments |
|
|
10 |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Options exercised in the period |
|
9/10 |
|
|
|
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
|
|
|
— |
|
|||
Proceeds from shares issued |
|
9 |
|
|
|
— |
|
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||||
At March 31, 2025 |
|
|
|
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|||||
Net loss |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
|
Foreign currency translation adjustments (net of tax) |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
$ |
|
|
|
— |
|
|
|
|
|||
Recognition of share-based payments |
|
|
10 |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Options exercised in the period |
|
9/10 |
|
|
|
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
|
|
|
— |
|
|||
Proceeds from shares issued |
|
9 |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|||
At June 30, 2025 |
|
|
|
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|||||
Net loss |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
|
Foreign currency translation adjustments (net of tax) |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
$ |
( |
) |
|
|
— |
|
|
|
( |
) |
|
Recognition of share-based payments |
|
|
10 |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Options exercised in the period |
|
9/10 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Proceeds from shares issued |
|
9 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
At September 30, 2025 |
|
|
|
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
|
|
|
|
|
|
|
|
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|
|
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|
|
|
|
|
|
|
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|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|||||||
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
At January 1, 2026 |
|
|
|
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|||||
Net loss |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
|
Foreign currency translation adjustments (net of tax) |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
Recognition of share-based payments |
|
|
10 |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Options exercised in the period |
|
9/10 |
|
|
|
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
|
|
|
— |
|
|||
Proceeds from shares issued |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
At March 31, 2026 |
|
|
|
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|||||
Net loss |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
|
Foreign currency translation adjustments (net of tax) |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|||
Recognition of share-based payments |
|
|
10 |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
- |
|
|
|
|
||
Options exercised in the period |
|
9/10 |
|
|
|
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
|
|
|
- |
|
|||
Proceeds from shares issued |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|||
At June 30, 2026 |
|
|
|
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|||||
Net loss |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
|
Foreign currency translation adjustments (net of tax) |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
$ |
( |
) |
|
|
— |
|
|
|
( |
) |
|
Recognition of share-based payments |
|
|
10 |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Options exercised in the period |
|
9/10 |
|
|
|
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
|
|
|
— |
|
|||
Proceeds from shares issued |
|
9 |
|
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|||||
5
At September 30, 2026 |
|
|
|
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
6
Silence Therapeutics plc
Condensed Consolidated Statements of Cash Flows
(Unaudited, in thousands)
|
|
Nine months ended September 30, |
|
|||||
|
|
2026 |
|
|
2025 |
|
||
Cash flow from operating activities |
|
|
|
|
|
|
||
Net loss |
|
$ |
( |
) |
|
$ |
( |
) |
Adjustments to reconcile net loss to net cash (used in) provided by operating |
|
|
|
|
|
|
||
Depreciation expense |
|
|
|
|
|
|
||
Amortization expense |
|
|
|
|
|
|
||
Share-based compensation expense |
|
|
|
|
|
|
||
Net foreign exchange impacts |
|
|
|
|
|
|
||
Other income, net |
|
|
( |
) |
|
|
( |
) |
Income tax expense |
|
|
|
|
|
|
||
Change in operating assets and liabilities: |
|
|
|
|
|
|
||
Decrease in trade receivables |
|
|
|
|
|
|
||
(Increase)/decrease in other current assets |
|
|
( |
) |
|
|
|
|
Decrease in R&D benefit receivable |
|
|
|
|
|
|
||
Decrease in other long-term assets |
|
|
|
|
|
|
||
Decrease in trade and other payables |
|
|
( |
) |
|
|
( |
) |
Decrease in contract liabilities |
|
|
( |
) |
|
|
( |
) |
Decrease in operating lease liabilities |
|
|
( |
) |
|
|
( |
) |
Net cash used in operations |
|
|
( |
) |
|
|
( |
) |
Cash flow from investing activities |
|
|
|
|
|
|
||
Redemption of term deposits |
|
|
|
|
|
|
||
Purchase of term deposits |
|
|
( |
) |
|
|
( |
) |
Purchase of property, plant and equipment |
|
|
|
|
|
( |
) |
|
Net cash provided by investing activities |
|
|
|
|
|
|
||
Cash flow from financing activities |
|
|
|
|
|
|
||
Proceeds from issue of ordinary shares |
|
|
|
|
|
|
||
Net cash provided by financing activities |
|
|
|
|
|
|
||
Increase/(decrease) in cash and cash equivalents |
|
|
|
|
|
( |
) |
|
Cash and cash equivalents at start of period |
|
|
|
|
|
|
||
Effect of exchange rate fluctuations on cash and cash equivalents held |
|
|
( |
) |
|
|
|
|
Cash and cash equivalents at end of period (1) |
|
$ |
|
|
$ |
|
||
Supplemental disclosures of cash flow information: |
|
|
|
|
|
|
||
Tax paid |
|
|
( |
) |
|
|
( |
) |
(1) |
|
|||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
7
Silence Therapeutics plc
Notes to the Condensed Consolidated Financial Statements
(Unaudited)
1. General information
1.1. Nature of the business
Silence Therapeutics plc and its subsidiaries, or together, the Group or Company, are primarily involved in the discovery, delivery and development of RNA therapeutics. Silence Therapeutics plc, a public company limited by shares registered in England and Wales, with company number 02992058, is the Group’s ultimate parent company. The Company’s registered office is 5 Brayford Square, London, United Kingdom E1 0SG and the principal place of business is 12 Hammersmith Grove, London, United Kingdom W6 7AP.
1.2 Proposed Transaction with Merck KGaA, Darmstadt, Germany
On October 18, 2026, the Company entered into a Transaction Agreement, or the Transaction Agreement, with Merck KGaA, Darmstadt, Germany, or Purchaser, pursuant to which Purchaser (or, in the case of the American Depositary Shares, or ADSs, of the Company, Purchaser’s nominee) will acquire the entire issued and to be issued share capital of the Company pursuant to a court-sanctioned scheme of arrangement under Part 26 of the UK Companies Act 2006, or the Scheme of Arrangement, and such acquisition, the Transaction, for a total transaction value of approximately $
2. Summary of significant accounting policies
2.1. Basis of preparation
The accompanying unaudited condensed consolidated interim financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America, or U.S. GAAP, for interim financial reporting and pursuant to the requirements for reporting on Form 10-Q and Article 10 of Regulation S-X. Accordingly, certain information and disclosures required by U.S. GAAP for complete consolidated financial statements are not included herein. These interim statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025 filed with the Securities and Exchange Commission, or the SEC, on March 5, 2026. In the opinion of management, all adjustments considered necessary for a fair statement of these interim statements have been included and are of a normal and recurring nature. The results for the three and nine months ended September 30, 2026 are not necessarily indicative of the results to be expected for the year ending December 31, 2026, any other interim periods, or any future year or period.
2.2. Functional and reporting currency
The reporting currency of the condensed consolidated financial statements is U.S. Dollars, or USD or $. The functional currency of the Group’s subsidiaries reflects the economic environment of their respective operations. All amounts disclosed have been rounded to the nearest thousand, unless otherwise stated.
The Group changed the functional currency of its U.K. entity from British pound sterling, or GBP, to USD on January 1, 2026. Management determined that changes in economic facts and circumstances, such as a significant shift in mix of the currencies used in the U.K. entity's operating cash flows, represented a significant change that was other-than-temporary and required a change in functional currency from GBP to USD. Accordingly, the change in functional currency from GBP to USD was accounted for prospectively beginning January 1, 2026.
8
Silence Therapeutics plc
Notes to the Condensed Consolidated Financial Statements
(Unaudited) - (Continued)
The translated balances of monetary and nonmonetary assets and liabilities recorded in the reporting entity’s consolidated financial statements as of the end of the prior reporting period become the new accounting basis for those assets and liabilities in the period of the change. To the extent that the distinct and separable operation has monetary assets and liabilities denominated in the old functional currency, such balances will create transaction gains and losses subsequent to the change in functional currency. The balances previously recorded in accumulated comprehensive loss for prior periods through December 31, 2025 were not reversed upon this prospective change in functional currency. Monetary assets and liabilities not denominated in the new functional currency, USD, will create transaction gains and losses subsequent to the change in functional currency. The Company does not expect that the impact of such gains and losses will be material to the Company’s consolidated statements of operations.
2.3. Principles of consolidation
The condensed consolidated financial information comprises the financial statements of Silence Therapeutics plc and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated on consolidation.
2.4. Use of estimates
The preparation of the condensed consolidated financial statements in conformity with U.S. 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 revenues, expenses, and compensation during the reporting period. The Group considers that the carrying amount of trade and other payables approximates their fair value. Significant estimates and assumptions reflected in the Group’s condensed consolidated financial statements include, but are not limited to, the recognition of revenue and research and development expenses. The Group 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. On an ongoing basis, management evaluates its estimates when there are changes in circumstances, facts and experience. Changes in estimates are recorded in the period in which they become known. Actual results could differ materially from those estimates.
2.5. Going concern
The Group has incurred recurring losses since inception, including net losses of $39.7 million for the nine months ended September 30, 2026. As of September 30, 2026, the Group had accumulated losses of $601.9 million and cash outflows from operating activities for the nine months ended September 30, 2026 was $26.9 million.
The Group expects to incur operating losses for the foreseeable future as it continues its research and development efforts, seeks to obtain regulatory approval of its product candidates and pursues any future product candidates the Group may develop.
To date, the Group has funded its operations through upfront payments and milestones from collaboration agreements, equity offerings and proceeds from private placements, as well as management of expenses and other financing options to support its continued operations. In 2024, the Group raised additional proceeds of $27.7 million before deducting $0.9 million in placement agent fees and other expenses, from sales of ADSs, under its Open Market Sale Agreement with Jefferies LLC, dated October 15, 2021, or the Sales Agreement. On February 5, 2024, the Group announced a private placement of 5,714,286 of the ADSs, each representing three ordinary shares, at a price of $21.00 per ADS, with new and existing institutional and accredited investors, or the Private Placement. The aggregate gross proceeds of the Private Placement were $120.0 million before deducting approximately $7.7 million in placement agent fees and other expenses. In 2024, the Group received a $10.0 million milestone payment from the AstraZeneca collaboration and received another $2.0 million in milestone payments from the Hansoh collaboration.
On August 11, 2026, the Group announced an underwritten public offering of 14,907,407 ADSs which includes the exercise in full by the underwriters of their option to purchase up to an additional 1,944,444 ADSs, each representing three ordinary shares, at a price of $13.50 per ADS, or the Offering. The aggregate gross proceeds of the Offering were $201.3 million before deducting approximately $13.3 million in underwriting discounts and commissions and other offering expenses.
As of September 30, 2026, the Group had cash and cash equivalents of $247.7 million.
9
Silence Therapeutics plc
Notes to the Condensed Consolidated Financial Statements
(Unaudited) - (Continued)
In accordance with Accounting Standards Codification ("ASC") 205-40, Presentation of financial statements: Going concern, the Group has the responsibility to evaluate whether conditions and/or events raise substantial doubt about its ability to meet its future financial obligations as they become due within one year after the date that the financial statements are issued. The forecast for evaluating the going concern basis of the Group includes continued investment in our technology platform and product pipeline. The forecast does not include collaboration milestones which have not been fully achieved or other assumptions for potential future non-dilutive or dilutive funding sources. Based on this evaluation, the Group believes that its current cash and cash equivalents as of September 30, 2026 are sufficient to fund its forecasted operating expenses and capital expenditure requirements at least until 2028.
The Group will need to raise additional funds for its operating expenses and capital expenditure requirements in relation to its clinical development activities. The Group may seek additional funding through public or private financings, debt financing or collaboration agreements. Specifically, the Group may receive future milestone payments from collaboration agreements which will extend the ability to fund operations. However, these future milestone payments are dependent on achievement of certain development or regulatory objectives that may not occur. The inability to obtain future funding could impact the Group’s financial condition and ability to pursue its business strategies, including being required to delay, reduce or eliminate some of its research and development programs, or being unable to continue operations or unable to continue as a going concern.
These consolidated financial statements have been prepared assuming that the Group will continue as a going concern which contemplates the continuity of operations, realization of assets and the satisfaction of liabilities in the ordinary course of business and do not include adjustments that would result if the Group were unable to continue as a going concern.
2.6. Recently Issued Accounting Pronouncements
Recently adopted accounting standards
There were no accounting standards adopted in the current period.
Accounting standards issued but not yet adopted
In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40). Additionally, in January 2025, the FASB issued ASU 2025-01 to clarify the effective date of ASU 2024-03. The amendments in this update require disclosure, in the notes to financial statements, of specified information about certain costs and expenses at each interim and annual reporting period. The amendments are effective for annual periods beginning after December 15, 2026, and for interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. This guidance should be applied either prospectively to financial statements issued for reporting periods after the effective date or retrospectively to any or all prior periods presented in the financial statements. The Group is currently evaluating the impact of this guidance on its related disclosures.
In December 2025, the FASB issued ASU 2025-10, Accounting for Government Grants Received by Business Entities which adds guidance to ASC 832 on the recognition, measurement, and presentation of government grants. The amendments are effective for annual periods beginning after December 15, 2028. The Group is currently evaluating the impact to its consolidated financial statements.
3. Revenue
Revenue from collaboration agreements for the three and nine months ended September 30, 2026 related to the research collaboration agreement the Group entered into with AstraZeneca in March 2020.
There was
Revenue for the nine months ended September 30, 2026 was $
10
Silence Therapeutics plc
Notes to the Condensed Consolidated Financial Statements
(Unaudited) - (Continued)
Disaggregation of revenue from contracts with customers is as follows:
|
|
Three months ended September 30, |
|
|
Nine months ended September 30, |
|
||||||||||
|
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
||||
|
|
$000s |
|
|
$000s |
|
|
$000s |
|
|
$000s |
|
||||
Revenue from Contracts with Customers |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Research collaboration - AstraZeneca |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total revenue from contracts with customers |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Under its collaboration agreement with AstraZeneca, the Group received an upfront cash payment of $
4. Segment reporting
The accounting policies of its operating segment are the same as those described in the Group’s summary of significant accounting policies.
The Group derives revenues from customers through royalty income and research collaboration agreements, each representing a major customer, specifically related to the development of RNAi-based medicines. Refer to Note 3 – "Revenue" for a further description of the Group revenues.
11
Silence Therapeutics plc
Notes to the Condensed Consolidated Financial Statements
(Unaudited) - (Continued)
The measure of segment assets is reported on the balance sheet as total consolidated assets.
The table below provides segment information about the Group:
|
|
Three months ended September 30, |
|
|
Nine months ended September 30, |
|
||||||||||
|
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
||||
|
|
$000s |
|
|
$000s |
|
|
$000s |
|
|
$000s |
|
||||
Revenue |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|||
Less: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cost of sales |
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Contracted development costs (a) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Personnel research and development costs (b) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Other R&D costs (c) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
General & administrative expenses |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Restructuring charges |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
Tax expense |
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Other segment items (d) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Consolidated net loss |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
organizations and investigative sites that conduct its preclinical studies and clinical trials; costs related to manufacturing active pharmaceutical ingredients and drug products for its preclinical studies and clinical trials; and costs for materials used for in-house research and development activities.
An analysis of the Group’s assets and revenues by location is shown below:
|
|
U.S.A. |
|
|
U.K. |
|
|
Germany |
|
|
Total |
|
||||
|
|
$000s |
|
|
$000s |
|
|
$000s |
|
|
$000s |
|
||||
Non-current assets |
|
|
|
|
|
|
|
|
|
|
|
|
||||
As of December 31, 2025 |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|||
As of September 30, 2026 |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Revenue analysis for the nine months ended September 30, 2025 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Research collaboration |
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Revenue analysis for the nine months ended September 30, 2026 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Research collaboration |
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
12
Silence Therapeutics plc
Notes to the Condensed Consolidated Financial Statements
(Unaudited) - (Continued)
5. Loss per share (basic and diluted)
Basic net loss per share is computed by dividing net loss (the numerator) by the weighted average shares outstanding for the period (the denominator). Diluted net loss per share is computed by dividing net loss by the weighted average shares outstanding during the period adjusted for the dilutive effects of the exercise of the stock options. In periods when losses from continuing operations are reported, the weighted-average shares outstanding excludes common share equivalents because their inclusion would be anti-dilutive.
|
|
Three months ended September 30, |
|
|
Nine months ended September 30, |
|
||||||||||
|
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
||||
|
|
$000s |
|
|
$000s |
|
|
$000s |
|
|
$000s |
|
||||
Net loss |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Weighted-average shares outstanding (basic and diluted) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net loss per share (basic and diluted) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
The options outstanding at September 30, 2026 and 2025 were considered to be anti-dilutive as the Group is loss-making. These options outstanding are described in Note 10.
6. Goodwill
Goodwill is assessed annually at a reporting unit level, or whenever events and circumstances indicate impairment may have occurred. The Group has one reporting unit and performs a qualitative impairment test (also known as “Step 0"), and when necessary, a quantitative test. After assessing the totality of events and circumstances as part of the Step 0 test, it was determined that it is not more likely than not (a likelihood that is more than 50%) that the fair value of the reporting unit is less than its carrying amount and therefore a quantitative test is unnecessary. No triggering events were identified during the period.
The following table presents the changes in the carrying amount of goodwill:
|
|
|
|
|
|
|
||
|
|
2026 |
|
|
2025 |
|
||
|
|
$000s |
|
|
$000s |
|
||
Balance at January 1 |
|
|
|
|
|
|
||
Translation adjustment |
|
|
( |
) |
|
|
|
|
Balance at period-end |
|
|
|
|
|
|
||
7. Contract liabilities
Contract liabilities represent the Group’s obligation to transfer services to a customer for which the Group has received advanced consideration, before the performance obligation has been satisfied. These liabilities are recognized when a customer prepays for services or when the Group has an unconditional right to consideration before the performance obligation is fulfilled.
13
Silence Therapeutics plc
Notes to the Condensed Consolidated Financial Statements
(Unaudited) - (Continued)
Contract liabilities comprise entirely of advance consideration received from customers (deferred revenue) in respect of the AstraZeneca collaboration as of September 30, 2026. The current contract liabilities represent the amount of estimated revenue to be reported in the next 12 months related to amounts invoiced to its partners, while the non-current portion represents everything beyond 12 months.
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September 30, 2026 |
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December 31, 2025 |
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$000s |
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$000s |
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Contract liabilities: |
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Current |
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Non-current |
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Total contract liabilities at period end |
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Contract liabilities: |
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At January 1, 2025 |
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Foreign exchange impact |
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Additions during period |
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Revenue unwound during period |
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( |
) |
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At December 31, 2025 |
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Contract liabilities: |
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At January 1, 2026 |
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Foreign exchange impact |
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Additions during period |
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Revenue unwound during period |
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( |
) |
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At September 30, 2026 |
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8. Benefit from R&D credit
An additional $
$
The current asset at September 30, 2026 was $
9. Shareholders’ equity
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September 30, 2026 |
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December 31, 2025 |
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Number |
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Number |
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Number of shares in issue |
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Number of equivalent ADSs in issue |
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14
Silence Therapeutics plc
Notes to the Condensed Consolidated Financial Statements
(Unaudited) - (Continued)
The Group has only one class of shares. All ordinary shares have equal voting rights and rank pari passu for the distribution of dividends.
In March 2026, the Company entered into an Open Market Sale Agreement, or the Sales Agreement, with Jefferies LLC, or Jefferies, as sales agent, pursuant to which the Company may offer and sell, from time to time through Jefferies, at its option, its ordinary shares. The Company agreed to pay Jefferies a commission of up to
On August 11, 2026, the Group announced an underwritten public offering of 14,907,407 ADSs, which includes the exercise in full by the underwriters of their option to purchase up to an additional 1,944,444 ADSs, each representing three ordinary shares, at a price of $13.50 per ADS, or the Offering. The aggregate gross proceeds of the Offering were $201.3 million before deducting approximately $13.3 million in underwriting discounts and commissions and other offering expenses.
Details of the shares issued during the current nine months and prior year are as follows:
Number of shares in issue at January 1, 2025 |
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Number of ADSs in issue at January 1, 2025 |
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Shares issued during the year |
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Options exercised at $ |
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Options exercised at $ |
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Number of shares in issue at December 31, 2025 |
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Number of equivalent ADSs in issue at December 31, 2025 |
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Number of shares in issue at January 1, 2026 |
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Number of ADSs in issue at January 1, 2026 |
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Shares issued during the year |
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Options exercised at $ |
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Options exercised at $ |
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Options exercised at $ |
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Options exercised at $ |
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Options exercised at $ |
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Number of shares in issue at September 30, 2026 |
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Number of equivalent ADSs in issue at September 30, 2026 |
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|
|
The Group has outstanding ADSs and each ADS represents
10. Equity-settled share-based compensation
The Group has issued share options under the 2023 Equity Incentive Plan, or 2023 Plan, 2018 Long Term Incentive Plan, or LTIP, 2018 Non-Employee Long Term Incentive Plan, or Non-Employee LTIP, and individual share option contracts, each of which is or was open to all eligible service providers of the Group.
15
Silence Therapeutics plc
Notes to the Condensed Consolidated Financial Statements
(Unaudited) - (Continued)
|
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Number of |
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Weighted |
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$ |
|
||
Options |
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Outstanding at January 1, 2026 |
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Granted during the period |
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Lapsed or forfeited during the period |
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( |
) |
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Exercised during the period |
|
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( |
) |
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Outstanding at September 30, 2026 |
|
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|
|
$ |
|
||
Exercisable at the period-end |
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The table above shows the number of options in relation to ordinary shares and equivalent ADSs outstanding and exercisable at period end, on the conversion ratio of three ordinary shares to one ADS.
As previously reported, the Company and its former chief executive officer entered into a separation agreement in July 2026. The agreement resulted in a modification to the terms of the former executive’s unvested stock options in the event of a “change in control,” as such term is defined in the Company’s equity incentive plan to be through December 14, 2026. The related value of this modification would be $
11. Capital commitments and contingent liabilities
There were
12. Related party transactions
None.
13. Subsequent events
On October 18, 2026, the Company entered into the Transaction Agreement with Purchaser, pursuant to which Purchaser has agreed to acquire the entire issued and to be issued share capital of the Company by means of the Scheme of Arrangement.
Under the Transaction Agreement, at the effective time of the Scheme of Arrangement, or the Effective Time, all ordinary shares of the Company, nominal value £
The Transaction Agreement contains customary representations, warranties and covenants, including the obligation of the Company to conduct its business in the ordinary course of business and covenants by each of the parties to refrain from taking specified actions without the consent of the other party. The parties have agreed to use their respective reasonable best efforts to complete the Transaction as promptly as reasonably practicable, including in obtaining each third party consent or regulatory approval necessary, proper or advisable to complete the Transaction. The Transaction Agreement also provides that, during the period from the date of the Transaction Agreement until the Effective Time, the Company is subject to certain restrictions on its ability to solicit alternative acquisition proposals from third parties, to provide information to third parties, to engage in discussions with third parties regarding alternative acquisition proposals or to change the recommendation of the Company’s board in favor of the Transaction, subject to customary exceptions.
16
Silence Therapeutics plc
Notes to the Condensed Consolidated Financial Statements
(Unaudited) - (Continued)
Under the Transaction Agreement, at the Effective Time, each Company Other Share Option (as defined in the Transaction Agreement) (i.e., each Company Share Option other than a Company Exercised CSOP Option (each as defined in the Transaction Agreement)) that is outstanding and unexercised, whether vested or unvested, will be deemed fully vested and will be canceled and converted into the right to receive an all-cash payment equal to the product of (i) the aggregate number of Company ADSs underlying such option and (ii) the excess, if any, of the Per ADS Consideration over the per Company ADS exercise price of such option, subject, in the case of certain options, to the holder executing a cancellation agreement. For the avoidance of doubt, no amount will be payable in respect of any Company Other Share Option where such excess is zero. Prior to Closing, the Company will make arrangements for each Company CSOP Option (as defined in the Transaction Agreement) (i.e., each Company Share Option intended to qualify as a “company share option” under Schedule 4 to the Income Tax (Earnings and Pensions) Act 2003) that is outstanding and unexercised, whether vested or unvested, to be deemed fully vested and exercised by the holder, conditional upon, and effective as of immediately prior to, the Court’s sanction of the Scheme of Arrangement, with the holder becoming a Scheme Shareholder (as defined in the Transaction Agreement) in respect of the Company ADSs acquired on exercise and the aggregate exercise price and any applicable withholding taxes to be satisfied by retention from the resulting Per ADS Consideration otherwise payable to such holder.
The Transaction Agreement contains certain customary termination rights, including, among others, if (1) the Transaction is not completed on or before 11:59 p.m. London time on April 30, 2027, or the End Date, subject to extension if the Scheme of Arrangement has not been sanctioned by the Court less than five business days before such date, then the end date will be automatically extended by five business days, (2) a governmental authority of competent jurisdiction has issued a final non-appealable governmental order prohibiting the Transaction, (3) the Company’s shareholders do not provide the requisite approvals for the Transaction at the applicable shareholder meetings or (4) the Court declines or refuses to sanction the Scheme of Arrangement and any associated appeal is unsuccessful.
The consummation of the Transaction is subject to certain customary closing conditions, including, among other things, (1) approval by the Company’s shareholders of the Scheme of Arrangement by a majority in number representing not less than three-fourths (
In connection with the execution of the Transaction Agreement, certain securityholders of the Company holding approximately
The Transaction is expected to close in the first quarter of 2027.
17
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
You should read the following discussion and analysis of our financial condition and results of operations together with our condensed consolidated financial statements, the related notes thereto appearing elsewhere in this Quarterly Report. The following discussion is based on our financial information prepared in accordance with accounting principles generally accepted in the U.S., or U.S. GAAP, as found in the Accounting Standards Codification and Accounting Standards Update of the Financial Accounting Standards Board and the rules and regulations of the SEC. Some of the information contained in this discussion and analysis or set forth elsewhere in this Quarterly Report, including information with respect to our plans and strategy for our business, includes forward-looking statements that involve risks and uncertainties. Our actual results, performance or experience could differ materially from what is indicated by any forward-looking statement due to various important factors, risks and uncertainties, including, but not limited to, those set forth under “Risk Factors” included elsewhere in this Quarterly Report on Form 10-Q.
Overview
We are a biotechnology company focused on discovering and developing novel molecules incorporating short interfering ribonucleic acid, or siRNA, to inhibit the expression of specific target genes thought to play a role in the pathology of diseases with significant unmet medical need. Our siRNA molecules are designed to harness the body’s natural mechanism of RNAi by specifically binding to and degrading messenger RNA, or mRNA, molecules that encode specific targeted disease-associated proteins in a cell. By degrading the message that encodes the disease-associated protein, the production of that protein is reduced and its level of activity is lowered. In the field of RNAi therapeutics, this reduction of disease-associated protein production and activity is referred to as “gene silencing.” Our proprietary mRNAi GOLD™ (GalNAc Oligonucleotide Discovery) platform consists of siRNA product candidates designed to precisely target and ‘silence’ specific disease-associated genes in the liver. Using our mRNAi GOLD platform, we have generated siRNA product candidates targeting areas of high unmet need across rare and common diseases where treatments are limited or inadequate.
The Proposed Acquisition by Merck KGaA, Darmstadt, Germany
On October 18, 2026, we entered into a Transaction Agreement, or the Transaction Agreement, with Merck KGaA, Darmstadt, Germany, or Purchaser, pursuant to which Purchaser (or, in the case of the American Depositary Shares, or ADSs, of the Company, Purchaser’s nominee) will acquire our entire issued and to be issued share capital pursuant to a court-sanctioned scheme of arrangement under Part 26 of the UK Companies Act 2006, or the Scheme of Arrangement, and such acquisition, the Transaction, for a total transaction value of approximately $1.3 billion, on the terms and subject to the conditions set forth therein. Under the Transaction Agreement, at the effective time of the Scheme of Arrangement, all of our ordinary shares issued and outstanding will be acquired by Purchaser (or, in the case of ADSs, Purchaser’s nominee), and the holders of such ordinary shares as of the record time for the Scheme of Arrangement, on the terms set out in the Scheme of Arrangement, will have the right to receive, for each such share, $6.6667 in cash, without interest. Because each ADS represents a beneficial interest in three (3) ordinary shares, holders of ADSs will be entitled to receive three (3) times the foregoing cash amount, or $20.00 in cash, per ADS. The Transaction is expected to close first quarter of 2027, subject to customary closing conditions, including the approval of the Scheme of Arrangement by our shareholders, the sanction of the Scheme of Arrangement by the High Court of Justice of England and Wales and receipt of the required regulatory approvals. Refer to Note 13 in the notes to our condensed consolidated financial statements appearing elsewhere in this Quarterly Report on Form 10-Q for additional discussion of the Transaction.
Rare Diseases
Divesiran (SLN124) is our potentially best-in-class, Phase 3-ready siRNA investigational therapy, in development for polycythemia vera, or PV. Divesiran is dosed subcutaneously once every 3 months. PV is a rare myeloproliferative neoplasm characterized by the overproduction of red blood cells, or RBCs. Elevated hematocrit, or HCT, - an index of RBC mass - is a hallmark of the disease and HCT levels above 45% increase the risk of thrombotic and cardiovascular events. The current standard of care in all PV patients to control HCT is phlebotomy, daily low-dose aspirin therapy, sometimes in combination with cytoreductive therapies. PV patients have low levels of hepcidin the body’s master regulator of iron. Divesiran works by "silencing" the TMPRSS6 gene, lifting the natural
18
brake on hepcidin - the body's master iron regulator. When TMPRSS6 is turned down in people living with PV, hepcidin levels rise, reducing iron availability to the bone marrow. With less iron available, the overproduction of RBCs seen in PV is reduced. This helps keep HCT levels in a safer range and can reduce or eliminate the need for phlebotomies. In August 2026, we announced positive topline results from the Phase 2 SANRECO study evaluating divesiran in 48 phlebotomy-dependent PV patients. Results from the study showed divesiran met its primary endpoint with an 88% responder rate versus 19% for placebo (p<0.0001) and reduced mean phlebotomies to 0.2 per patient versus 2.1 on placebo over weeks 0–36 (p<0.0001). Divesiran was observed to be well-tolerated and no new safety findings were observed in the trial. The U.S. Food and Drug Administration, or FDA, has granted divesiran Fast Track and orphan drug designations for PV. Divesiran has also been granted orphan drug designation by the European Commission for PV in Europe. While our initial focus is on PV, divesiran has shown the potential in preclinical studies to address multiple hematological conditions through the unifying mechanism of elevating hepcidin in conditions with dysregulation of iron homeostasis.
SLN548 is our Phase 1 ready siRNA product candidate that works by "silencing" the complement factor B, or CFB, gene, potentially playing a therapeutic role in conditions associated with over activation of this pathway, including complement-mediated renal diseases, among others. SLN548 has demonstrated positive preclinical results and is well positioned for a potential third-party partner to initiate clinical development.
Cardiometabolic Diseases
Zerlasiran (SLN360) is our Phase 3 ready siRNA product candidate for cardiovascular disease that works by "silencing" the LPA gene, lowering production of apolipoprotein(a), a key component of lipoprotein(a), or Lp(a), that has been associated with an increased risk of cardiovascular events. High Lp(a), defined as 125nmol/L or higher, is a genetically determined cardiovascular risk factor affecting at least 20% of the world’s population and is associated with a high risk of heart attack, stroke and aortic stenosis. Unlike low-density lipoprotein, or LDL, Lp(a) levels are predominantly genetically determined, typically by age five, and unaffected by diet or lifestyle. There are currently no approved medicines that selectively lower Lp(a). Guidelines from the European Atherosclerosis Society, or EAS, Canadian Cardiovascular Society, or CCS, and the National Lipid Association, or NLA, suggest at least one test in an adult lifetime. The American College of Cardiology, or ACC, and American Heart Association, or AHA, recommend testing for those with a family history of premature atherosclerotic cardiovascular disease, or ASCVD, or personal history of ASCVD. In Phase 1 and Phase 2 clinical trials, zerlasiran showed the potential to substantially lower Lp(a) levels in ASCVD patients with persisting effects following infrequent dosing and was well tolerated with no major safety concerns. Zerlasiran is well positioned for a potential third-party partner to initiate Phase 3 development.
SLN312 is our siRNA product candidate under our collaboration with AstraZeneca that works by "silencing" ANGPTL3, an important modulator of lipid metabolism. Inhibition of ANGPTL3 has emerged as a promising new therapeutic approach to reduce triglycerides (TG) and LDL-C levels, the latter independent of the LDL-C receptor (LDLR) function. Since ANGPTL3 suppresses lipoprotein lipase, or LPL, and endothelial lipase, or EL, activity, its inhibition facilitates the clearance of very low-density lipoprotein cholesterol, decreasing both LDL-C and TG levels. AstraZeneca presented results from its Phase 1 randomized, single-blind, placebo-controlled trial assessing SLN312 in 98 patients with dyslipidemia. Results showed SLN312 produced durable dose-dependent reductions in ANGPTL3, triglycerides and atherogenic lipoproteins after single and multiple doses. SLN312 was well tolerated with no safety concerns identified. On March 4, 2026, AstraZeneca notified Silence that they will not pursue further development of SLN312 beyond Phase 1 and we will re-gain full development, manufacturing and commercialization rights globally to this clinical asset.
SLN365 is our potential first-in-class siRNA product candidate that works by "silencing" GPR146, a novel mechanism of action for the management of cholesterol levels in patients, independent of LDLR function. Hypercholesterolemia is a highly prevalent indication with an estimated one in 300 individuals worldwide living with the familial form HeFH (heterozygous) and around one in 300,000 individuals suffering from the form HoFH (homozygous) globally. SLN365 has demonstrated promising preclinical results in non-human primates and the program is well positioned for a potential IND filing in 2027.
SLN098 is our siRNA product candidate that works by "silencing" INHBE, a novel target for obesity supported by human genetics, strong preclinical data and emerging third-party clinical data demonstrating early efficacy and safety. Despite recent advances in obesity treatment, limitations of current standards of care leave millions at risk of
19
further complications. Around one billion patients worldwide are affected by obesity and associated co-morbidities. Current obesity treatments offer weight loss around 15-20% which plateaus after 12-24 months and are associated with up to 40% lean muscle mass loss. More than two thirds of weight loss is regained within the first year after discontinuation of treatment. There is also poor tolerability and compliance with up to 30% of patients discontinuing GLP/GIP agonists treatment. SLN098 has the opportunity to address unmet needs including increasing fat loss, preventing muscle mass loss and slowing weight regain. SLN098 has demonstrated deep and durable knockdown in nonhuman primates and the program is well positioned for a potential IND filing in 2027. We believe there is an opportunity to develop SLN098 either as a monotherapy or add-on to GLP/GIP agonists or as a weight maintenance treatment.
Collaborations
AstraZeneca
In March 2020, we entered into a collaboration agreement with AstraZeneca to discover, develop and commercialize siRNA therapeutics for the treatment of cardiovascular, renal, metabolic and respiratory diseases. Under this agreement, AstraZeneca made an upfront cash payment to us of $20.0 million in May 2020. AstraZeneca made an additional unconditional cash payment to us of $40.0 million which was received in May 2021. In March 2020, an affiliate of AstraZeneca also subscribed for 4,276,580 new ordinary shares for an aggregate subscription price of $20.0 million.
The collaboration covered five targets initially with AstraZeneca opting to extend the collaboration to a further five targets. AstraZeneca agreed to pay us $10.0 million upon the exercise of each option to collaborate on an additional target. For each target selected, we are eligible to receive up to $140.0 million in potential milestone payments upon the achievement of milestones relating to the initiation of specified clinical trials, the acceptance of specified regulatory filings and the first commercial sale in specified jurisdictions. For each target selected, we are also eligible to receive up to $250.0 million in potential commercial milestone payments, upon the achievement of specified annual net sales levels, as well as tiered royalties as a percentage of net sales ranging from the high single digits to the low double digits.
In May 2023, AstraZeneca nominated the first product candidate under our collaboration, SLN312 (ANGPTL3), triggering a $10.0 million option fee to us. In February 2024, AstraZeneca initiated a Phase 1 clinical trial for SLN312 which triggered another $10.0 million milestone payment to us. On March 4, 2026, AstraZeneca notified Silence that they will not pursue further development of SLN312 beyond Phase 1. We will re-gain full development, manufacturing and commercialization rights globally to this clinical asset following Phase 1 and are evaluating plans for further clinical development.
Components of Results of Operations
Revenue
We do not have any approved products. Accordingly, we have not generated any revenue from product sales, and we do not expect to generate any revenue from the sale of any products unless and until we obtain regulatory approvals for, and commercialize any of, our product candidates. In the future, we will seek to generate revenue primarily from product sales and, potentially, regional or global strategic collaborations with third parties.
We recognize the upfront payment, milestone payments, payments for personnel costs and other research funding payments over time.
Under the AstraZeneca collaboration, we received an upfront cash payment of $20.0 million and an additional payment of $40.0 million in May 2021. We are also eligible to receive specified development and commercial milestone payments as well as tiered royalties on net sales, if any. We recognize the upfront payment and milestone payments over time. There was no revenue for the three months ended September 30, 2026 (three months ended September 30,
20
2025: $0.2 million). During the nine months ended September 30, 2026, we recognized a total of $0.4 million in revenue under the AstraZeneca collaboration (nine months ended September 30, 2025: $0.5 million).
Cost of Sales
Cost of sales consists of research and development expenditure that is directly related to work carried out on revenue generating contracts. This includes salary costs that are apportioned based on time spent by employees working on these contracts as well as costs of materials and costs incurred under agreements with contract research organizations, or CROs.
Operating Expenses
We classify our operating expenses into two categories: research and development costs and general and administrative expenses. Personnel costs, including salaries, benefits, bonuses and share-based payment expenses, comprise a significant component of each of these expense categories. We allocate expenses associated with personnel costs based on the function performed by the respective employees.
Research and Development Costs
The largest component of our total operating expenses since inception has been costs related to our research and development activities, including the preclinical and clinical development of our product candidates. We expense research and development costs as they are incurred and classify them as contracted development, personnel and other.
Our contracted development costs primarily consists of:
Our personnel research and development expense primarily consists of:
Our other research and development costs primarily consists of:
The successful development of our product candidates is highly uncertain. Product candidates in later stages of clinical development generally have higher development costs than those in earlier stages of clinical development, primarily due to the increased size and duration of later-stage clinical trials. Accordingly, we expect research and development costs to increase significantly for the foreseeable future as programs progress.
The duration, costs and timing of clinical trials and development of our product candidates will depend on a variety of factors, including:
21
General and Administrative Expenses
General and administrative expenses consist of personnel costs, allocated expenses and other expenses for outside professional services, including legal, audit, tax and accounting services, public relations and investor relations services. Personnel costs consist of salaries, bonuses, benefits, recruitment costs and share-based payment expenses for personnel in executive, finance, business development and other support functions. Other administrative expenses include office space-related costs not otherwise allocated to research and development costs, insurance expenses, and costs of our information systems and costs for compliance with the day-to-day requirements of being a public company listed in the United States. We anticipate that our administrative expenses will remain consistent to support our continued research and development and potential commercialization of our product candidates. We also expect to continue incurring additional expenses as a public company in the United States, including expenses related to compliance with the rules and regulations of the SEC and the Nasdaq Stock Market, or Nasdaq, additional insurance expenses, expenses related to investor relations activities and other administrative and professional services.
Foreign Currency Gain (loss), net
Foreign exchange gains and losses primarily relate to cash and short-term investments held in foreign currencies (primarily GBP and Euros).
Other Income, net
Other income (expense) primarily relates to interest earned on our cash, cash equivalents, as well as accretion earned on our U.S. treasury bills.
Taxation and Benefit from R&D Tax Credit
We are subject to corporate taxation in the United Kingdom, the United States and Germany. Due to the nature of our business, we have generated losses since inception. Our income tax credit recognized represents the sum of the research and development, or R&D, tax credits recoverable in the United Kingdom.
As a company that carries out extensive research and development, or R&D, activities, we seek to benefit from the U.K. R&D tax credit regime. In respect of accounting periods in which we qualify as a Small and Medium-sized Enterprise, or SME, and in which our qualifying R&D expenditure represents 30% (for periods from April 1, 2024) or more of the total (meaning we are considered as “R&D-intensive” during such accounting period), we may, under this regime, surrender the trading losses that arise from our R&D activities for a cash rebate of up to 26.97% of qualifying R&D expenditure. Based on our current forecast, we do not expect to meet the qualifying R&D expenditure threshold for the year ended December 31, 2026; however, we still expect to claim at the R&D intensive rate as we expect to meet conditions for a grace period under the U.K. R&D tax credit regime. Accordingly, if we cease to qualify as an R&D-intensive SME, in future, we will either cease to be able to claim cash rebates in respect of our R&D activities, or only be able to receive cash payments or other tax relief (under other provisions of the U.K. R&D tax credit regime) at a significantly lower rate than at present. Further, the regime’s rules are complex, and if a tax authority were to challenge or seek to disallow our claims (in whole or in part), for example by asserting that we do not (or the relevant expenditure does not) meet the technical conditions to be granted tax credits (or cash rebates), then such
22
challenge or disallowance, if successful, could have a material impact on our cash-flow and financial performance. In addition, future changes to the U.K. R&D tax credit regime may mean that we no longer qualify for it or have a material impact on the extent to which we can make claims (or benefit from them).
Unsurrendered U.K. tax losses may be carried forward indefinitely to be offset against future taxable profits, subject to numerous utilization criteria and restrictions. The amount that can be offset each year is limited to $6.5 million (£5.0 million) plus an incremental 50% of U.K. taxable profits. After accounting for tax credits receivable, we had accumulated tax losses for carry forward in the United Kingdom of $265.4 million as of September 30, 2026 ($221.0 million as of September 30, 2025). However, in the event of a change in ownership of a U.K. company, certain provisions may apply to restrict the utilization of carried forward tax losses in future periods. These provisions apply where there is a major change in the nature or conduct of a trade in connection with the change in ownership. For the avoidance of doubt, we do not recognize a deferred tax asset in respect of the accumulated tax losses. In addition to our accumulated tax losses in the United Kingdom, we also had $47.8 million of accumulated tax losses as of September 30, 2026 ($52.3 million as of September 30, 2025), related to our operations in Germany for corporate income taxes. We also had $46.8 million of accumulated losses related to trade taxes in our German entity ($50.6 million as of September 30, 2025). We had a foreign tax expense in Germany of nil for the nine months ended September 30, 2026 (nine months ended September 30, 2025: nil). Tax losses in the United States were negligible.
In the event we generate revenues in the future, we may benefit from the U.K. “patent box” regime that allows profits attributable to revenues from patents or patented products to be taxed at an effective rate of 10%.
Value Added Tax, or VAT, is charged on all qualifying goods and services by VAT-registered businesses. Where U.K. VAT applies at a standard rate, an amount of 20% of goods and services is added to all sales invoices and is payable to the U.K. tax authorities. Similarly, U.K. VAT paid on purchase invoices may be reclaimable from the U.K. tax authorities.
Withholding tax is deductible from dividends, interest, lease of property, royalties, and other China-source passive income since we do not have an establishment or place of business in China.
Comparison of the three and nine months ended September 30, 2026, and 2025
The following table summarizes the results of our operations for the three months and nine months ended September 30, 2026, and 2025 (in thousands).
|
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Three months ended |
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Three months ended |
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Nine months ended |
Nine months ended |
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September 30, 2026 |
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September 30, 2025 |
|
|
|
|
|
September 30, 2026 |
September 30, 2025 |
|
|
|
|
|||||||||
|
|
$000s |
|
|
$000s |
|
|
Change |
|
|
$000s |
|
|
$000s |
|
|
Change |
|
|||||||
Revenue |
|
$ |
|
— |
|
|
|
159 |
|
|
|
(159 |
) |
|
|
422 |
|
|
|
525 |
|
|
|
(103 |
) |
Cost of sales |
|
|
|
— |
|
|
|
(64 |
) |
|
|
64 |
|
|
|
(11 |
) |
|
|
(203 |
) |
|
|
192 |
|
Gross profit |
|
|
|
- |
|
|
|
95 |
|
|
|
(95 |
) |
|
|
411 |
|
|
|
322 |
|
|
|
89 |
|
Research and development costs |
|
|
|
(9,304 |
) |
|
|
(20,544 |
) |
|
|
11,240 |
|
|
|
(27,574 |
) |
|
|
(59,004 |
) |
|
|
31,430 |
|
General and administrative expenses |
|
|
|
(4,920 |
) |
|
|
(5,795 |
) |
|
|
875 |
|
|
|
(16,663 |
) |
|
|
(18,610 |
) |
|
|
1,947 |
|
Restructuring charges |
|
|
|
— |
|
|
|
- |
|
|
|
- |
|
|
|
— |
|
|
|
(1,324 |
) |
|
|
1,324 |
|
Operating loss |
|
|
|
(14,224 |
) |
|
|
(26,244 |
) |
|
|
12,020 |
|
|
|
(43,826 |
) |
|
|
(78,616 |
) |
|
|
34,790 |
|
Foreign currency gain/loss, net |
|
|
|
21 |
|
|
|
1,934 |
|
|
|
(1,913 |
) |
|
|
(310 |
) |
|
|
(8,448 |
) |
|
|
8,138 |
|
Other income, net |
|
|
|
1,080 |
|
|
|
770 |
|
|
|
310 |
|
|
|
2,320 |
|
|
|
2,600 |
|
|
|
(280 |
) |
Benefit from R&D credit |
|
|
|
697 |
|
|
|
2,583 |
|
|
|
(1,886 |
) |
|
|
2,166 |
|
|
|
7,633 |
|
|
|
(5,467 |
) |
Loss for the period before taxation |
|
|
|
(12,426 |
) |
|
|
(20,957 |
) |
|
|
8,531 |
|
|
|
(39,650 |
) |
|
|
(76,831 |
) |
|
|
37,181 |
|
Taxation |
|
|
|
- |
|
|
|
(1 |
) |
|
|
1 |
|
|
|
(1 |
) |
|
|
(11 |
) |
|
|
10 |
|
Loss for the period after taxation |
|
$ |
|
(12,426 |
) |
|
|
(20,958 |
) |
|
|
8,532 |
|
|
|
(39,651 |
) |
|
|
(76,842 |
) |
|
|
37,191 |
|
Loss per ordinary share (basic and diluted) |
|
$ |
|
(0.08 |
) |
|
|
(0.15 |
) |
|
|
|
|
|
(0.26 |
) |
|
|
(0.54 |
) |
|
|
|
||
23
Revenue
Revenue for the three months ended September 30, 2026 was nil, reflecting a decrease of $0.2 million as compared to the same period in 2025 due to a reduction in activity associated with the AstraZeneca collaboration.
Revenue for the nine months ended September 30, 2026 was $0.4 million, reflecting a decrease of $0.1 million as compared to the same period in 2025, due to a reduction in activity associated with the AstraZeneca collaboration.
Cost of sales
Cost of sales movement was negligible for the three and nine months ended September 30, 2026, as compared to the same periods in 2025. Cost of sales is related to activity associated with our collaboration agreements, which fluctuates based on the timing of activities and project progression.
Research and development costs
The following table summarizes our research and development costs for the three and nine months ended September 30, 2026 and 2025, based on their classification (in thousands).
|
|
Three months ended |
|
|
Nine months ended |
|
||||||||||
|
|
September 30, 2026 |
|
|
September 30, 2025 |
|
|
September 30, 2026 |
|
|
September 30, 2025 |
|
||||
|
|
$000s |
|
|
$000s |
|
|
$000s |
|
|
$000s |
|
||||
Research and development costs |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Contracted development costs |
|
|
4,697 |
|
|
|
13,147 |
|
|
|
13,791 |
|
|
|
40,052 |
|
Personnel costs |
|
|
3,904 |
|
|
|
4,725 |
|
|
|
11,759 |
|
|
|
14,760 |
|
Other costs |
|
|
703 |
|
|
|
2,672 |
|
|
|
2,024 |
|
|
|
4,192 |
|
Total |
|
|
9,304 |
|
|
|
20,544 |
|
|
|
27,574 |
|
|
|
59,004 |
|
Research and development costs for the three months ended September 30, 2026 decreased by $11.2 million, as compared to the same period in 2025. This change was mainly due to a decrease in contracted development costs of $8.5 million associated with the Phase 3 readiness for zerlasiran in 2025, as well as a decrease in other costs of $2.0 million, including $1.4 million associated with the reduction of a prepayment, in 2025, to a manufacturing provider that we will no longer use for preferred access to manufacturing services. Personnel costs also decreased by $0.8 million mainly due to reduced headcount.
Research and development costs for the nine months ended September 30, 2026 decreased by $31.4 million, as compared to the same period in 2025. This change was mainly due to a decrease in contracted development costs of $26.3 million, including $24.8 million associated with the Phase 3 readiness for zerlasiran in 2025, as well as a decrease in personnel costs of $3.0 million mainly due to reduced headcount. We also had a decrease in other costs of $2.2 million, including $1.4 million associated with the reduction of a prepayment, in 2025, to a manufacturing provider that we will no longer use for preferred access to manufacturing services.
|
|
Three months ended |
|
|
Nine months ended |
|
||||||||||
|
|
September 30, 2026 |
|
|
September 30, 2025 |
|
|
September 30, 2026 |
|
|
September 30, 2025 |
|
||||
|
|
$000s |
|
|
$000s |
|
|
$000s |
|
|
$000s |
|
||||
Contracted development costs |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Zerlasiran |
|
|
208 |
|
|
|
9,164 |
|
|
|
1,797 |
|
|
|
26,564 |
|
Divesiran |
|
|
4,154 |
|
|
|
2,803 |
|
|
|
9,279 |
|
|
|
9,705 |
|
Other contracted development costs |
|
|
335 |
|
|
|
1,180 |
|
|
|
2,715 |
|
|
|
3,783 |
|
Total |
|
|
4,697 |
|
|
|
13,147 |
|
|
|
13,791 |
|
|
|
40,052 |
|
24
Contracted development costs for the three months ended September 30, 2026 decreased by $8.5 million and $26.3 million for the nine months ended September 30, 2026, compared to the same periods in 2025. The decrease was largely due to a decrease in costs related to contract manufacturing activities related to our zerlasiran Phase 3 readiness completed in 2025. The remaining change is due to the timing of clinical manufacturing and clinical studies for divesiran.
General and administrative expense
General and administrative expenses decreased by $0.9 million for the three months ended September 30, 2026 and $1.9 million for the nine months ended September 30, 2026, compared to the same periods in 2025. These decreases were mainly due to an effort to reduce administrative costs.
Restructuring Charges
During the nine months ended September 30, 2025, we incurred non-recurring restructuring charges associated with a limited reduction in force.
Foreign currency gain (loss), net
As of January 1, 2026, the functional currency of our U.K. entity changed to USD and as a result, foreign currency activity included in negligible net gain for the three months ended September 30, 2026 and a net loss of $0.3 million for the nine months ended September 30, 2026. In the prior year, foreign exchange gains and losses included in net income resulted primarily from foreign currency (USD and EUR) denominated bank accounts. The foreign exchange gains and losses for the three and nine months ended September 30, 2025 were primarily due to remeasurement of U.S. treasury bills held in USD to the related functional currency.
Other Income (expenses), net
Other income primarily relates to accretion from U.S. treasury bills and interest on cash accounts.
Benefit from R&D credit
Benefit from R&D tax credit relates to U.K. research and development tax credits. The decrease in benefit in the current year was mainly related to a reduction in research and development spend.
Taxation
Tax expense was negligible in the current and prior periods.
Liquidity and Capital Resources
Overview
Since our inception, we have incurred significant operating losses and negative cash flows. We anticipate that we will continue to incur losses for the foreseeable future. We expect that our research and development and administrative expenses will increase in connection with conducting clinical trials and seeking marketing approval for our product candidates, as well as costs associated with operating as a public company.
As of September 30, 2026, we had cash and cash equivalents of $247.7 million. We believe that our cash and cash equivalents will be sufficient to fund our anticipated operating and capital expenditure requirements at least until 2028.
25
To date, we have financed our operations primarily through the issuances of our equity securities and from the receipt of upfront, milestone and research payments under collaboration agreements with third parties.
On February 2, 2024, we entered into a securities purchase agreement, or the Purchase Agreement, with the purchasers named therein, or the Investors. Pursuant to the Purchase Agreement, we agreed to sell an aggregate of 5,714,286 of our ADSs to the Investors, at a purchase price equal to $21.00 per ADS, or the Private Placement. The Purchase Agreement contained customary representations and warranties from us and the investors and customary closing conditions. The closing of the Private Placement occurred on February 7, 2024, and we received aggregate gross proceeds from the Private Placement of approximately $120.0 million before deducting $7.7 million in placement agent fees and other expenses.
In March 2026, we entered into an Open Market Sale Agreement, or the Sales Agreement, with Jefferies LLC, or Jefferies, as sales agent, pursuant to which we may offer and sell, from time to time through Jefferies, at our option, our ordinary shares. We agreed to pay Jefferies a commission of up to 3.0% of the aggregate gross proceeds for the ordinary shares sold through the Sales Agreement. During the three months ended September 30, 2026, no sales were made under the Sales Agreement.
On August 11, 2026, we announced an underwritten public offering of 14,907,407 ADSs, which includes the exercise in full by the underwriters of their option to purchase up to an additional 1,944,444 ADSs, each representing three ordinary shares, at a price of $13.50 per ADS, or the Offering. The aggregate gross proceeds of the Offering were $201.3 million before deducting approximately $13.3 million in underwriting discounts and commissions and other offering expenses.
We have no ongoing material financing commitments, such as lines of credit or guarantees, that are expected to affect our liquidity over the next five years, other than operating leases.
Refer to Note 2.5 in the notes to our condensed consolidated financial statements appearing elsewhere in this Quarterly Report on Form 10-Q for additional discussion of liquidity and capital resources.
Cash Flows
The following table summarizes the results of our cash flows for the nine months ended September 30, 2026 and 2025.
|
|
Nine months ended |
|
|||||
|
|
September 30, 2026 |
|
|
September 30, 2025 |
|
||
|
|
$000s |
|
|
$000s |
|
||
Net cash (outflow) from operating activities |
|
|
(26,861 |
) |
|
|
(44,984 |
) |
Net cash inflow/(outflow) from investing activities |
|
|
74,940 |
|
|
|
5,346 |
|
Net cash inflow from financing activities |
|
|
188,335 |
|
|
|
15 |
|
Increase/(decrease) in cash and cash equivalents |
|
|
236,414 |
|
|
|
(39,623 |
) |
Operating activities
Net cash outflow from operating activities decreased by $18.1 million for the nine months ended September 30, 2026, as compared with the same period in 2025. This decrease was mainly due to reduction in our research and development spend in 2026.
Investing activities
Net cash inflow from investing activities relates to $139.4 million redemptions of U.S. treasury bills, offset by $64.4 million in purchases for the nine months ended September 30, 2026. The same period in 2025 reflected $92.6 million in purchases of U.S. treasury bills offset by $98.0 million in redemptions.
26
Financing activities
On August 11, 2026, we announced an underwritten public offering of 14,907,407 ADSs, which includes the exercise in full by the underwriters of their option to purchase up to an additional 1,944,444 ADSs, each representing three ordinary shares, at a price of $13.50 per ADS, or the Offering. The aggregate gross proceeds of the Offering were $201.3 million before deducting approximately $13.3 million in underwriting discounts and commissions and other offering expenses. Cash flows from financing activities were negligible for the period ended September 30, 2025.
Operating and Capital Expenditure Requirements
We have not achieved profitability on an annual basis since our inception, and we expect to incur net losses in the future. We expect to continue to incur expenses in connection with our ongoing research and development activities related to our product candidates, including outsourced manufacturing activities and other associated costs. We also expect to continue to incur costs associated with operating as a domestic filer listed on Nasdaq.
Additionally, as a public company, we incur significant additional audit, legal and other expenses. We believe that our existing capital resources will be sufficient to fund our operations, including currently anticipated research and development activities and planned capital spending, at least for the next twelve months.
Our future funding requirements will depend on many factors, including but not limited to:
Contractual Obligations and Commitments
The following table summarizes our contractual commitments and obligations as of September 30, 2026 and December 31, 2025.
|
|
September 30, 2026 |
|
|
December 31, 2025 |
|
||
|
|
$000s |
|
|
$000s |
|
||
Lease liability - Non-current |
|
|
— |
|
|
|
71 |
|
Lease liability - Current |
|
|
87 |
|
|
|
89 |
|
Total lease liability |
|
|
87 |
|
|
|
160 |
|
The lease liability recognized on the balance sheet comprises our London office. Our balance sheet also reflects two short-term leases in Berlin, Germany and a lease in New Jersey, United States, neither of which is included in the "lease liability" line of the table above. Both leases in Berlin are on a rolling contract basis with either party being able to end the lease with a cancellation notice period of 11.5 months, while the leases in the United States are on a rolling contract basis with a notice period of three months, thus allowing the exemption for short-term leases.
27
At September 30, 2026, we had a gross commitment on our office rental in Berlin, Germany and in the United States equal to an aggregate of $0.5 million in the next year. No amounts are payable after more than one year.
We have agreed to make payments to CROs and manufacturers under various CRO and manufacturing agreements that generally provide for our ability to terminate on short notice. We have not included any such contingent payment obligations in the table above as the amount, timing and likelihood of such payments are not fixed or determinable.
Critical Accounting Policies and Critical Accounting Estimates
Our financial statements are prepared in accordance with U.S. GAAP. The preparation of the financial statements and related disclosures requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, costs and expenses, and the disclosure of contingent assets and liabilities in our financial statements. We base our estimates on historical experience, known trends and events and various other factors that management believes are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Management evaluates estimates and assumptions on a periodic basis. Our actual results may differ from these estimates.
While our significant accounting policies are described in more detail in the notes to our condensed consolidated financial statements appearing elsewhere in this Quarterly Report on Form 10-Q, we believe the following accounting policies to be most critical to the judgments and estimates used in the preparation of our condensed consolidated financial statements.
Revenue Recognition under Collaboration Agreements
During the nine months ended September 30, 2026 and 2025, our revenue from collaboration agreements was derived from the AstraZeneca collaboration.
We have out-licensed the rights to some of our intellectual property associated with our siRNA stabilization chemistry technology to AstraZeneca in the context of a Research Collaboration, Option and License Agreement dated March 24, 2020, under which we and AstraZeneca will collaborate to discover, develop and commercialize siRNA therapeutics for the treatment of cardiovascular, renal, metabolic and respiratory diseases. AstraZeneca made an upfront cash payment of $60.0 million, of which $20.0 million was paid in May 2020 and the remaining $40.0 million was paid in May 2021. The upfront payment has been allocated evenly between the ten targets on the basis of a benchmarking exercise that took into account the standalone selling price per target, of similar precedent transactions that had been publicly announced by comparable companies. Subsequent milestones are allocated to the target to which they are related. The upfront and milestone payments will be recognized as revenue as the services are provided. We anticipate initiating work on up to five targets in the early stages of the collaboration, with AstraZeneca having the option to extend the collaboration to a further five targets. Under the collaboration, utilizing our technology, we are responsible for designing siRNA molecules against gene targets selected by AstraZeneca, and for manufacturing of material to support GLP toxicology studies and phase 1 clinical trials. We and AstraZeneca will collaborate during the discovery phase, and AstraZeneca will lead clinical development and commercialization of molecules arising from the collaboration. For each target selected under the collaboration, we will be eligible to receive up to $140.0 million in milestone payments upon the achievement of milestones relating to the initiation of specified clinical trials, the acceptance of specified regulatory filings and the first commercial sale in specified jurisdictions. AstraZeneca has the right to terminate the agreement in its entirety or on a target-by-target basis, for any reason upon specified prior written notice to us. We may terminate the agreement on a target-by-target basis in the event that AstraZeneca begins a legal or administrative proceeding challenging the patentability, validity, ownership or enforceability of our patents. Either party may terminate the agreement on a target-by-target basis upon a material breach by the other party that is not cured within a specified period after receiving written notice, or in its entirety upon giving written notice following the other party’s bankruptcy, insolvency or similar instance. The license of the intellectual property and the R&D services are not distinct, as AstraZeneca cannot benefit from the intellectual property absent the R&D services, as those R&D services are used to discover and develop a drug candidate and to enhance the value in the underlying intellectual property, which could not be performed by another party, indicating that the two are highly interrelated. On this basis, we have concluded that there is a single performance obligation covering both the R&D services and the license of the intellectual property in respect of each target (i.e., one for the initial target and one for each additional
28
optioned complement-mediated disease target). We recognize revenue over the duration of the contract based on an input method based on percentage of cost incurred.
For the collaboration agreement listed above, as there is only a single performance obligation per target, the revenue for each element of consideration will be recognized over the contract period based on a cost-to-cost method, which is considered to be the best available measure of our effort during the contract period. The total cost estimate for the contract includes costs expected to be incurred during the contract period. Other variable elements of consideration will only begin to be recognized when it is considered highly probable that a significant reversal of the amounts will not occur.
For the nine months ended September 30, 2026 and 2025, we determined actual costs and forecast costs for the remainder of the contract. We calculated total contract costs across the contract term, including costs that will be reimbursed to us, and costs incurred to date as a percentage of total contract costs. We multiplied this percentage by the consideration deemed highly probable of not having a significant reversal, calculating the cumulative revenue to be recognized. When variable consideration increases due to a further milestone becoming highly probable that a significant reversal of revenue will not occur, a catch-up in revenue is recorded to reflect efforts already expended by us up to that point. In the nine months ended September 30, 2026, the estimated forecasted cost for partnered programs was not material and the related judgment was not significant.
Recognition of Clinical Trial Expenses
As part of the process of preparing our condensed consolidated financial statements, we may be required to estimate accrued expenses related to our preclinical studies and clinical trials. To obtain reasonable estimates, we review open contracts and purchase orders. In addition, we communicate with applicable personnel in order to identify services that have been performed, but for which we have not yet been invoiced. In most cases, our vendors provide us with monthly invoices in arrears for services performed. We confirm our estimates with these vendors and make adjustments as needed. Examples of our accrued expenses include fees paid to CROs for services performed on preclinical studies and clinical trials and fees paid for professional services.
Recent Accounting Pronouncements
We discuss the effect of recently issued and adopted pronouncements in Note 2.6, "Recently Issued Accounting Pronouncements" to the condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q and Note 2.20, “Summary of Significant Accounting Policies” to our audited consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2025.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
We are a smaller reporting company as defined in Item 10(f)(1) of Regulation S-K. As a result, pursuant to Item 305(e) of Regulation S-K, we are not required to provide the information required by this Item 3.
Item 4. Controls and Procedures.
Disclosure Controls and Procedures
We maintain “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended, or the Exchange Act, that are designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to our management, including our Interim Principal Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.
29
Our management, with the participation of our Interim Principal Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of September 30, 2026. Based on such evaluation, our Interim Principal Executive Officer and Chief Financial Officer have concluded that, as of September 30, 2026, our disclosure controls and procedures were effective at the reasonable assurance level.
Changes in Internal Control Over Financial Reporting
There have been no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the fiscal quarter ended September 30, 2026, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
30
PART II – OTHER INFORMATION
Item 1. Legal Proceedings.
We are not party to any material legal proceedings at this time. From time to time, we may become involved in various legal proceedings that arise in the ordinary course of our business.
Item 1A. Risk Factors.
Our business has significant risks. In addition to the other information set forth in this Quarterly Report on Form 10-Q, you should carefully consider the risks described in Part I, Item 1A. “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025, filed with the Securities and Exchange
Commission, or SEC, on March 5, 2026. These are not the only risks facing our business. Other risks and uncertainties that we are not currently aware of or that we currently consider immaterial also may materially adversely affect our business, financial condition and future results. Risks we have identified but currently consider immaterial could still also materially adversely affect our business, financial condition and future results of operations if our assumptions about those risks are incorrect or if circumstances change.
There were no material changes during the period covered in this Quarterly Report on Form 10-Q to the Risk Factors previously disclosed in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2025, other than as set forth below.
Risks Relating to the Transaction with Merck KGaA, Darmstadt, Germany
The Transaction may not be completed within the expected timeframe, or at all, and significant delay or the failure to complete the Transaction could adversely affect our business and the market price of our ADSs.
On October 18, 2026, we entered into a Transaction Agreement, or the Transaction Agreement, with Merck KGaA, Darmstadt, Germany, or Purchaser, pursuant to which Purchaser (or, in the case of ADSs, Purchaser’s nominee), has agreed to acquire all of our ordinary shares issued and outstanding, or the Transaction, by means of a court-sanctioned scheme of arrangement under Part 26 of the UK Companies Act 2006, or the Scheme of Arrangement.
The consummation of the Transaction is subject to certain customary closing conditions, including, among other things, (1) approval by our shareholders of the Scheme of Arrangement by a majority in number representing not less than three-fourths (75%) in value of the members or class of members (as the case may be) present and voting either in person or by proxy at the Scheme Meeting (as defined in the Transaction Agreement) and the passing of the special resolution to amend our organizational documents and other related matters by members representing not less than three-fourths (75%) of the total voting rights of eligible members present and voting either in person or by proxy at our GM (as defined in the Transaction Agreement), or the Company Shareholder Approvals; (2) the expiration or early termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the approval or deemed approval under the antitrust laws of the Federal Republic of Germany; (3) compliance by the other party in all material respects with such other party’s obligations under the Transaction Agreement; (4) accuracy of the other party’s representations and warranties, subject to certain materiality standards set forth in the Transaction Agreement; (5) sanction of the Scheme of Arrangement by the High Court of Justice of England and Wales, or the Court; (6) the absence of any law or order prohibiting consummation of the Transaction; (7) delivery of certain customary closing documents by the other party; and (8) the absence of a Company material adverse effect. The consummation of the Transaction is not subject to any financing condition.
Many of the conditions to consummation of the Transaction are not within our control or the control of Merck KGaA, Darmstadt, Germany, and we cannot predict when or if these conditions will be satisfied. There can be no assurance that our business, our relationships or our financial condition will not be adversely affected, as compared to the condition prior to the announcement of the Transaction, if the Transaction is not consummated within the expected timeframe, or at all. Failure to complete the Transaction within the expected timeframe, or at all, could adversely affect our business and the market price of our ADSs in a number of ways, including the following:
31
The announcement and pendency of our acquisition by Merck KGaA, Darmstadt, Germany could adversely affect our business, prospects, financial condition, and results of operations.
The announcement and pendency of the Transaction could cause disruptions in and create uncertainty surrounding our business, which could have an adverse effect on our business, prospects, financial condition, and results of operations, regardless of whether the Transaction is completed. These risks to our business include the following, all of which could be exacerbated by a delay in the completion of the Transaction:
The Transaction Agreement contains provisions that could discourage a potential competing acquirer of our Company or could result in any competing proposal being at a lower price than it might otherwise be.
We are subject to certain restrictions on our ability to solicit alternative acquisition proposals from third parties, to provide information to third parties and to enter into or continue discussions or negotiations with third parties regarding alternative acquisition proposals, subject to customary exceptions. In addition, we may be required to pay Merck KGaA, Darmstadt, Germany a termination fee equal to $13 million in specified circumstances, including if our board of directors changes or fails to reaffirm its recommendation in favor of the Transaction, if our uncured breach of our representations, warranties or covenants causes a closing condition not to be satisfied, or if we terminate the Transaction Agreement in order to accept a Superior Proposal (as defined in the Transaction Agreement). These provisions could discourage a potential competing acquirer that might have an interest in acquiring all or a significant part of our company from considering or proposing such an acquisition, including, if the Transaction Agreement is terminated prior to the consummation of the Transaction, after such termination of the Transaction Agreement, even if it were prepared to pay a purchase price per share higher than the purchase price per share proposed to be paid in
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the Transaction, or might result in a potential competing acquirer proposing to pay a lower price than it might otherwise have proposed to pay because of the added expense of the termination fee that may become payable in specified circumstances under the Transaction Agreement, including, in certain circumstances, after a valid termination of the Transaction Agreement in accordance with the terms thereof.
While the Transaction Agreement is in effect, we are subject to restrictions on our business activities.
The Transaction Agreement includes restrictions on the conduct of our business prior to the completion of the Transaction, generally requiring us to use reasonable efforts to conduct our business and operations in all material respects in the ordinary course and to preserve intact our business organization and significant business relationships. In addition, we are subject to a variety of specified restrictions. Unless we obtain Merck KGaA, Darmstadt, Germany’s prior written consent (which consent may not be unreasonably withheld, conditioned or delayed), except as specifically required by the Transaction Agreement or required by applicable law, we may not, among other things and subject to certain exceptions, limitations and qualifications, incur additional indebtedness, issue additional shares of our ADSs outside of our equity incentive plans, repurchase our ADSs, pay dividends, acquire certain assets or securities, sell or dispose of intellectual property, or enter into material contracts or make certain capital expenditures. We may find that these and other contractual restrictions in the Transaction Agreement delay or prevent us from responding, or limit our ability to respond, effectively to competitive pressures, industry developments and future business opportunities that may arise during such period, even if our management believes they may be advisable. If any of these effects were to occur, it could materially and adversely impact our operating results, financial position, cash flows or the price of our ADSs.
Failure to complete the Transaction could negatively impact our business, financial results and the market price of the ADSs.
If the Transaction is delayed or not completed, our ongoing businesses may be adversely affected and will be subject to several risks and consequences, including the following:
Litigation against us, Merck KGaA, Darmstadt, Germany, or the members of the respective boards, could prevent or delay the completion of the Transaction or result in the payment of damages following completion of the Transaction.
It is a condition to the Transaction that no injunction or other order preventing the consummation of the Transaction shall have been issued by any court of competent jurisdiction or other governmental authority of competent jurisdiction and remain in effect. It is possible that lawsuits may be filed by our shareholders and/or Merck KGaA, Darmstadt, Germany’s stockholders challenging the Transaction. The outcome of such lawsuits cannot be assured, including the amount of costs associated with defending these claims or any other liabilities that may be incurred in connection with the litigation of these claims. If plaintiffs are successful in obtaining an injunction prohibiting the parties from completing the Transaction on the agreed-upon terms, such an injunction may delay the consummation of the Transaction in the expected timeframe, or may prevent the Transaction from being consummated
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at all. Whether or not any plaintiff’s claim is successful, this type of litigation can result in significant costs and divert management’s attention and resources from the closing of the Transaction and ongoing business activities, which could adversely affect our operations.
We have incurred, and will continue to incur, significant costs, expenses and fees for professional advisors, printing and other transaction costs in connection with the Transaction, and a significant portion of these fees and costs are payable by us regardless of whether the Transaction is consummated.
We have incurred, and will continue to incur, significant costs, expenses and fees for professional advisors, printing and other transaction costs in connection with the Transaction, and a significant portion of these fees and costs are payable by us regardless of whether the Transaction is consummated.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
None.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Mine Safety Disclosures.
Not applicable.
Item 5. Other Information.
During the nine months ended September 30, 2026,
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Item 6. Exhibits.
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Incorporation by Reference |
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Exhibit Number |
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Description |
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Schedule/ Form |
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File Number |
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Exhibit |
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Filing Date |
2.1† |
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Transaction Agreement, dated as of October 18, 2026, by and between the Registrant and Merck KGaA, Darmstadt, Germany |
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8-K |
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001-39487 |
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2.1 |
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October 19, 2026 |
3.1 |
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Amended and Restated Articles of Association |
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10-Q |
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001-39487 |
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3.1 |
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August 7, 2025 |
10.1† |
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Form of Voting and Support Agreement, by and between Merck KGaA, Darmstadt, Germany and the Securityholder signatory thereto |
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8-K |
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001-39487 |
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10.1 |
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October 19, 2026 |
10.2 |
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Separation and Release Agreement, dated July 10, 2026, by and between the Registrant and Craig Tooman |
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10-Q |
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001-39487 |
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10.1 |
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August 10, 2026 |
31.1* |
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Certification by the Principal Executive Officer pursuant to Securities Exchange Act Rules 13a-14(a) and 15d-14(a) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
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31.2* |
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Certification by the Principal Financial Officer pursuant to Securities Exchange Act Rules 13a-14(a) and 15d-14(a) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
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32.1** |
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Certification by the Principal Executive Officer and the Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
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101.INS* |
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Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document). |
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101.SCH* |
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Inline XBRL Taxonomy Extension Schema with |
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104* |
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Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101). |
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† Schedules and exhibits have been omitted pursuant to Item 601(b)(2) of Regulation S-K. The Company agrees to furnish supplementally to the U.S. Securities and Exchange Commission a copy of any omitted schedule or exhibit upon request.
* Filed herewith.
** This certification is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
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SILENCE THERAPEUTICS PLC |
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Date: |
November 12, 2026 |
By: |
/s/ Iain Ross |
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Name |
Iain Ross |
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Title: |
Interim Principal Executive Officer |
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(Principal Executive Officer) |
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Date: |
November 12, 2026 |
By: |
/s/ Rhonda Hellums |
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Name |
Rhonda Hellums |
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Title: |
Chief Financial Officer |
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(Principal Financial Officer and Principal Accounting Officer) |
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