Expenses by nature

9 Months Ended

Sep. 30, 2024

3.	Expenses by nature

The following table provides the consolidated statement of comprehensive income classification of our expense by nature:

	Three months ended September 30,				Nine months ended September 30,
	2024		2023		2024		2023
	$’000		$’000		$’000		$’000
External research and development expenses		6,728		5,207		21,651		16,521
Employee expenses^{1, 3}		1,606		1,812		4,964		4,857
Depreciation		5		8		16		28
Other expenses		58		61		179		164
Total research and development expenses		8,397		7,088		26,810		21,570

External costs		3,016		1,725		7,253		5,834
Employee expenses^{2, 3}		1,134		834		3,084		2,450
Depreciation		74		72		221		209
Total general and administrative expenses		4,224		2,631		10,558		8,493
Total operating expenses		12,621		9,719		37,368		30,063

¹Included in employee expenses is a share based compensation expense of $0.1 million and $0.2 million for the three and nine months ended September 30, 2024, respectively, relating to employees in the research and development department (three and nine months ended September 30, 2023, $0.4 million and $1.0 million, respectively).

² Included in employee expenses is share based compensation expense of $0.1 million and $0.2 million for the three and nine months ended September 30, 2024, respectively, relating to employees in the general and administrative department (three and nine months ended September 30, 2023, $0.2 million and $0.7 million, respectively).

³Includes termination expenses incurred in the nine months ended September 30, 2024.

Foreign exchange gain/loss

Foreign exchange loss of $1.8 million for the three months ended September 30, 2024 (gain of $1.8 million for the three months ended September 30, 2023), and foreign exchange loss of $0.1 million for the nine months ended September 30, 2024 (gain of $0.2 million for the nine months ended September 30, 2023) consists primarily of gains and losses related to the translation of the U.S. dollar cash and other financial assets balance into euro in the accounts of the Company’s subsidiary, GH Research Ireland Limited, whose functional currency is euro as explained in the Group’s consolidated financial statements for the year ended December 31, 2023.

At September 30, 2024, if the U.S. dollar had weakened/strengthened by 10% against the euro with all other variables held constant, the loss before tax for the nine months ended September 30, 2024, would have been $3.4 million higher/lower, mainly related to the translation of cash and other financial assets held in U.S. dollar in the Company’s subsidiary, GH Research Ireland Limited. This would be offset by an equivalent amount within Other Comprehensive Income.