We have identified material weaknesses in the design and operating effectiveness of our internal control over financial reporting. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis. If we are unable to remediate these material weaknesses, or if we identify additional material weaknesses in the future or otherwise fail to maintain an effective system of internal controls, we may not be able to accurately or timely report our financial condition or results of operations, which may adversely affect investor confidence in us and, as a result, our stock price.

We cannot assure you that the measures we have taken to date, and actions we may take in the future, will be sufficient to remediate the control deficiencies that led to the material weaknesses in our internal control over financial reporting or that they will prevent or avoid potential future material weaknesses. In addition, neither our management nor an independent registered public accounting firm has performed an evaluation of our internal control over financial reporting in accordance with the provisions of the Sarbanes-Oxley Act. Had we or our independent registered public accounting firm performed an evaluation of our internal control over financial reporting in accordance with the provisions of the Sarbanes-Oxley Act, additional significant deficiencies or material weaknesses may have been identified.

In connection with the audits of our financial statements, we have identified material weaknesses in our internal control over financial reporting across the principles for each component of the COSO framework at the entity level and accordingly, across the business and IT processes of the Company. Although the Company does have oversight and compliance processes in place, these processes are currently not sufficiently formalized as controls to identify and address the risks of material misstatements and risks arising from IT. Where such control activities exist, there is not formalized control descriptions for our relevant controls to evaluate the design and operating effectiveness of such controls. In addition, where control activities are dependent on Information Used in a Control, the Company does not perform or document controls to determine the completeness and accuracy of such information. We also did not have controls in place to monitor control activities and identified control deficiencies.

As a result, we have identified material weaknesses in the control environment, risk assessment, monitoring, information & communication and control activities of the entity. In addition, the company did not maintain a sufficient complement of accounting and financial reporting resources commensurate with the financial reporting requirements. Deficiencies in control activities contributed to the potential for there to have been material accounting errors in substantially all financial statements account balances and disclosures.

We are in the process of remediating the material weaknesses identified including further developing and implementing formal policies, processes, internal controls and documentation relating to our financial reporting. We are also currently in the process of finalizing a risk assessment framework and scoping to identify key processes and controls that will require additional enhanced controls to be designed and implemented.

Future sales of our ordinary shares or ADSs, or the perception that such sales may occur, could depress the prices of such ordinary shares or ADSs.

Sales of a substantial number of ~~our~~the ADSs in the public market, or the perception that these sales might occur, could depress the market price of the ADSs and could impair our ability to raise capital through the sale of

additional equity securities. We are unable to predict the effect that such sales may have on the prevailing market price of our ADSs.

~~Holders of our ADSs have fewer rights than our shareholders and are subject to certain additional risks.~~

~~ADS holders do not hold ordinary shares directly and, as such, are subject to, among others, the following additional risks:~~

•as an ADS holder, we will not treat you as one of our shareholders and you will not be able to exercise shareholder rights, except through the depositary as permitted by the deposit agreement and except that you will have meeting rights to attend our general meetings;

•distributions on the ordinary shares represented by your ADSs will be paid to the depositary, and before the depositary makes a distribution to you on behalf of your ADSs, any fees and expenses, including withholding taxes, that must be paid will be deducted. Additionally, if the exchange rate fluctuates during a time when the depositary cannot convert the foreign currency, you may lose some or all of the value of the distribution; and

•~~we and the depositary may amend or terminate the deposit agreement without the ADS holders’ consent in a manner that could prejudice ADS holders.~~

~~An active and liquid market for our securities may fail to develop, which could harm the market price of our ADSs.~~

There is currently no public market on a U.S. national securities exchange for our ADSs or our ordinary shares. Although our ADSs have been approved for listing on the Nasdaq, an active trading market for our ADSs may never develop or be sustained. In the absence of an active trading market for our ADSs, investors may not be able to sell their ADSs at the time that they would like to sell.

We are a Dutch public company with limited liability. The rights of our shareholders and ADS holders may be different from the rights of shareholders in companies governed by the laws of U.S. jurisdictions and may not protect investors in a similar fashion afforded by incorporation in a U.S. jurisdiction.

We are a public company (naamloze vennootschap) organized under the laws of ~~the~~The Netherlands. Our corporate affairs are governed by our ~~articles~~Amended and Restated Articles of ~~association,~~Association, the rules of our board of directors and by the laws governing companies incorporated in ~~the~~The Netherlands. However, there can be no assurance that Dutch law will not change in the future or that it will serve to protect investors in a similar fashion afforded under corporate law principles in the United States, which could adversely affect the rights of investors.

The rights of shareholders and ADS holders and the responsibilities of directors may be different from the rights and obligations of shareholders, ADS holders and directors in companies governed by the laws of U.S. jurisdictions. In the performance of their duties, our directors are required by Dutch law to consider the interests of our ~~company,~~Company, its shareholders, its employees and other stakeholders, in all cases with due observation of the principles of reasonableness and fairness. It is possible that some of these parties will have interests that are different from, or in addition to, your interests as an ADS holder.

For more information on relevant provisions of Dutch corporation law and of our ~~articles~~Amended and Restated Articles of ~~association,~~Association, see “Description of ~~Share Capital and Articles of Association” and “Comparison of Dutch Corporate Law and U.S. Corporate Law.”~~Securities” included as Exhibit 2.1 to this Annual Report.

Provisions of our Amended and Restated Articles of Association or Dutch corporate law might deter acquisition bids for us that might be considered favorable and prevent, delay or frustrate any attempt to replace or remove the members of our board of directors.

Under Dutch law, various protective measures are possible and permissible within the boundaries set by Dutch law and Dutch case law.

Certain provisions of our ~~articles~~Amended and Restated Articles of ~~association~~Association may make it more difficult or less attractive for a third party to acquire control of us or to effect a change in our board of directors. These provisions include: a provision that our directors are appointed on the basis of a binding nomination prepared by our board of directors which can only be overruled by a simple majority of votes cast representing at least one third of our issued share capital; a

provision that our directors may only be removed by the general meeting of shareholders by a simple majority of votes cast representing at least one third of our issued share capital; and a requirement that certain matters, including an amendment of our ~~articles~~Amended and Restated Articles of ~~association,~~Association, may only be brought to our shareholders for a vote upon a proposal by our board of directors. Currently we have no such protective measures in place.

Shareholders and ADS holders may not be able to exercise preemptive rights and, as a result, may experience substantial dilution upon future issuances of ordinary shares.

In the event of an issuance of ordinary shares, subject to certain exceptions, each shareholder will have a pro rata preemptive right in proportion to the aggregate nominal value of the ordinary shares held by such holder. These preemptive rights may be restricted or excluded by a resolution of the general meeting or by another corporate body designated by the general meeting. ~~This could~~For example, at our 2022 Annual General Meeting, our shareholders approved a proposal to exclude preemptive rights for up to 10% of our issued share capital for general corporate purposes and for up to 10% of our issued share capital for financing of mergers, acquisitions, and strategic alliances, each for a period of eighteen months. The issuance of additional equity securities in the absence of preemptive rights would cause existing shareholders to experience ~~substantial~~ dilution of their interest in us.

We are not obligated to, and do not, comply with all best practice provisions of the Dutch Corporate Governance Code.

We are subject to ~~the Dutch Corporate Governance Code, or~~ the DCGC. The DCGC contains both principles and best practice provisions for boards of directors, shareholders and general meetings, auditors, disclosure, compliance and enforcement standards. As a Dutch company listed on a stock exchange, we are subject to the DCGC and are required to disclose in our annual board report to what we extent comply with the principles and best practice provisions of the DCGC, and where we do not (for example, because of a conflicting Nasdaq requirement or otherwise), we must state why and to what extent we deviate in our Annual Report. We do not comply with all best practice provisions of the DCGC. See “Description of ~~Share Capital and Articles of Association.”~~Securities” included as Exhibit 2.1 to this Annual Report. This may affect your rights as a shareholder or ADS holder and you may not have the same level of protection as a shareholder or ADS holder in a Dutch company that fully complies with the DCGC.

We have never declared or paid dividends on our ordinary shares since our ordinary shares were listed on Euronext Amsterdam, and we do not anticipate paying dividends in the foreseeable future.

We have never declared or paid cash dividends on our ordinary shares since our ordinary shares were listed on Euronext Amsterdam. We intend to retain any earnings for use in our business and do not currently intend to pay dividends on our ordinary shares. Subject to restrictions under applicable law, any future determination to pay dividends or other distribution will be at the discretion of our board of directors and will depend upon a number of factors, including our results of operations, cash requirements, financial condition, future prospects, contractual restrictions, any future debt agreements, restrictions under applicable laws and other factors that our board of directors may deem relevant. We do not anticipate paying any cash dividends or other distributions on our ordinary shares in the foreseeable future. As a result, a return on any investment will only occur if the price of our ordinary shares or the ADSs increases.

ADS holders may not receive distributions on the ordinary shares represented by ~~our~~the ADSs or any value for such distribution if it is illegal or impractical to make them available to ADS holders.

While we do not anticipate paying any dividends or other distributions on our ordinary shares in the foreseeable future, if such a dividend or distribution is declared, the depositary for the ADSs has agreed to pay to you the cash dividends or other distributions it or the custodian receives on our ordinary shares or other deposited securities after deducting its fees and expenses, including any applicable withholding taxes. You will receive these distributions in proportion to the number of ordinary shares your ADSs represent. However, in accordance with the limitations set forth in the deposit agreement, it may be unlawful or impractical to make a distribution available to ADS holders. We have no obligation to take any other action to permit the distribution of the ADSs, ordinary shares, rights or anything else to holders of ~~our~~the ADSs. This means that you may not receive the distributions we make on our ordinary shares or any value from them if it is unlawful or impractical to make them available to you. These restrictions may have a material adverse effect on the value of your ADSs.

Dividends distributed by us on the ordinary shares or ADSs to certain related parties in low-taxed jurisdictions might in the future become subject to an additional Dutch withholding tax on dividends.

Under current Dutch tax law, dividends paid on ordinary shares or ADSs are in principle subject to Dutch dividend withholding tax at a rate of 15% under the Dutch Dividend Withholding Tax Act 1965 (Wet op de

dividendbelasting 1965), unless a domestic or treaty exemption or reduction applies. ~~In a letter to the Dutch parliament dated May 29, 2020, the Dutch State Secretary for Finance announced that~~Since January 1, 2024, the Dutch government ~~intends to introduce~~has introduced an additional withholding tax on dividends paid to related entities in jurisdictions that have a corporate tax rate below 9% or to jurisdictions included on the EU’s blacklist of non-cooperative jurisdictions and in certain abusive ~~situations, effective January 1, 2024.~~situations. The legislative proposal has been published by the Dutch government on March 24, 2021. Pursuant to the proposal, the conditional withholding tax on dividend payments will be an addition to the conditional withholding tax on interest and royalty payments pursuant to the Dutch Withholding Tax Act 2021 (Wet bronbelasting 2021)~~, which act has become effective as of January 1, 2021.~~. The rate will be as high as the highest Dutch corporate income tax rate (currently ~~25%~~25.8%) at the time of the dividend payment, which will be the statutory rate applicable to interest and royalty payments to related entities in jurisdictions that have a corporate tax rate below 9% or to jurisdictions included on the EU’s blacklist of non-cooperative jurisdictions, to hybrid entities and in certain abusive situations. At the same time, the current Dutch dividend withholding tax regime is anticipated to remain in place. However, if the dividend withholding tax and the conditional withholding tax on dividends

cumulate, the conditional withholding tax will be reduced by the dividend withholding tax levied. As a result, if the shareholder being a related entity is established in a jurisdiction that has a corporate tax rate below 9% or in a jurisdiction included on the EU’s blacklist of non-cooperative jurisdictions, the tax rate on dividends may rise from 15% to ~~25%~~25.8%.

ADS holders must act through the depositary to exercise their voting rights and, as a result, may be unable to exercise their voting rights on a timely basis.

We will not treat holders of ~~our~~the ADSs (rather than the ordinary shares underlying the ADSs) as shareholders, and they will not be able to exercise shareholder rights, except through our depositary and except that the ADS holders will have meeting rights to attend our general meetings. The depositary will be the holder of the ordinary shares underlying the ADSs, and ADS holders will be able to exercise voting rights with respect to the ordinary shares represented by the ADSs only in accordance with the deposit agreement relating to the ADSs. There are practical limitations on the ability of ADS holders to exercise their voting rights due to the additional procedural steps involved in communicating with these holders. For example, holders of our ordinary shares will be able to exercise their voting rights by either attending the shareholders meeting in person or voting by proxy. ADS holders, by comparison, will not receive any notice directly from us. Instead, in accordance with the deposit agreement, we will use commercially reasonable endeavors to provide at least 30 days’ notice to the depositary of any such shareholders’ meeting and details concerning the matters to be voted on in advance of the meeting date. If we so instruct, the depositary will ~~mail~~distribute to ADS holders the notice of the meeting and a statement as to the manner in which voting instructions may be given, or deemed given in accordance with the deposit agreement by holders as soon as practicable after receiving notice from us of any such meeting. To exercise their voting rights, ADS holders must then instruct the depositary as to voting the ordinary shares represented by their ADSs. Due to these procedural steps involving the depositary, the process for exercising voting rights may take longer for ADS holders than for holders of ordinary shares. The ordinary shares represented by ADSs for which the depositary fails to receive timely voting instructions will not be voted.

The trading of our ordinary shares on Euronext Amsterdam and of our ADSs on the Nasdaq may adversely affect the liquidity and value of our ADSs.

Our ordinary shares are traded on Euronext Amsterdam, our ADSs have been approved for listing on the Nasdaq. We cannot predict the effect of this listing on the value of our ordinary shares and ADSs. However, these arrangements may dilute the liquidity of these securities in one or more markets and may adversely affect the development of an active trading market for the ADSs in the United States or the ordinary shares on Euronext Amsterdam. The price of our ADSs could also be adversely affected by trading in our ordinary shares on Euronext Amsterdam and the price of our ordinary shares traded on Euronext Amsterdam could be adversely affected by trading in ADSs on the Nasdaq. The speed by which ADSs can be exchanged for ordinary shares and subsequently traded on Euronext Amsterdam and vice versa might cause differences between the market price for an ADS and the market price for an ordinary share. Additionally, our ordinary shares are quoted in Euros on Euronext Amsterdam, and the ADSs are quoted in U.S. dollars on Nasdaq. Movements in the Euro-U.S. dollar exchange rate may adversely affect the U.S. dollar price of the ADSs on Nasdaq or the Euro price on Euronext Amsterdam. For example, if the Euro weakens against the U.S. dollar, the U.S. dollar price of the ADSs could decline, even if the price of our ordinary shares in Euros increases or remains unchanged. Investors might arbitrate between stock exchanges to exploit such differences, exacerbating potential volatility in our market price.

ADS holders may have difficulty in effecting service of process on our ~~company~~Company and certain directors or officers in the United States in enforcing U.S. ~~judgements~~judgments in ~~the~~The Netherlands or in enforcing U.S. securities laws in Dutch courts.

We are incorporated and located outside the United States and certain of our directors and officers are located outside of the United States. As a result, it may not be possible for ADS holders to effect service of process

within the United States upon all such persons or our ~~company,~~Company, or to obtain discovery of relevant documents and/or the testimony of witnesses. ADS holders based in the United States may also have difficulty enforcing in courts outside the United States judgments obtained in U.S. courts against our ~~company~~Company or our directors (including actions under the civil liability provisions of the U.S. securities laws). ADS holders may also have

difficulty enforcing liabilities under the U.S. securities laws in legal actions originally brought in jurisdictions located outside the United States.

~~ADS holders may be subject to limitations on transfer of the ADSs.~~

The ADSs are only transferable on the books of the depositary. However, the depositary may close its transfer books at any time or from time to time when it deems expedient in connection with the performance of its duties. In addition, the depositary may refuse to deliver, transfer or register transfers of ADSs generally when our books or the books of the depositary are closed, or at any time if we or the depositary deem it advisable to do so because of any requirement of law or of any government or governmental body, or under any provision of the deposit agreement, or for any other reason.

~~Our ability to utilize our net operating loss carryforwards and to realize our deferred tax asset may be limited.~~

As of December 31, 2020, we had €18.8 million ($23.1 million) net operating loss carryforwards in the Netherlands and none in the U.S. and France. These losses are reflected in a deferred tax asset of €4.7 million ($5.8 million) as per December 31, 2020. Being able to utilize these losses requires that the company is sufficiently profitable and also depends on the stand-alone results of the group’s entities as the losses are ringfenced.

At the end of 2018, the group performed an internal reorganization in order to refresh part of the Dutch tax losses: certain intangibles and activities were transferred within the group resulting in a higher tax book value and relating deferred tax asset in one of the Dutch companies for the assets that have been transferred. The Dutch tax authorities might not agree to the transaction and the valuation applied, in which case e.g. (a part of) the deferred tax asset might have to be written-off. The refreshment program has been disclosed in the notes to the financial statements. The total amount of the losses available for carryforward – and the corresponding amount of the deferred tax asset – as well as the amount of the deferred tax asset relating to the intangible fixed assets depends on the acceptance of aforementioned transaction.

To the extent that we incur net operating losses in the United States, our ability to utilize our federal net operating loss carryforwards may be limited under Section 382 of the Internal Revenue Code of 1986, as amended, or the Code. The limitations apply if we experience an “ownership change,” which is generally defined as a greater than 50 percentage point change (by value) in the ownership of our equity by certain stockholders over a rolling three-year period. Similar provisions of state tax law may also apply to limit the use of our state net operating loss carryforwards. We have not assessed whether such an ownership change has previously occurred. If we have experienced an ownership change at any time since our incorporation, we may already be subject to limitations on our ability to utilize our existing net operating loss carryforwards to offset taxable income. In addition, future changes in our stock ownership, which may be outside of our control, may trigger an ownership change and, consequently, the limitations under Section 382 of the Code. As a result, if or when we earn net taxable income, our ability to use our pre-change net operating loss carryforwards to offset such taxable income may be subject to limitations, which could adversely affect our future cash flows.

We cannot assure you that we will not be a passive foreign investment company, or PFIC, for U.S. federal income tax purposes for any taxable year, which could result in adverse U.S. federal income tax consequences to holders of our ordinary shares.

capitalization for 2020, we anticipate we will not likely be a PFIC for 2020. Whether we are treated as a PFIC is a factual determination that must be made on an annual basis after the close of each taxable year. This determination will depend on, among other things, the ownership and the composition of our income and assets, as well as the value of our assets (which may fluctuate with our market capitalization) and our subsidiaries’ assets from time to time. The United States Internal Revenue Service, or IRS, or a court may disagree with our expectations. Therefore, we cannot assure you that we will not be a PFIC for the current taxable year or for any future taxable year.

~~If a United States person is treated as owning at least 10% of the value or voting power of our ordinary shares, such holder may be subject to adverse U.S. federal income tax consequences.~~

Depending upon the aggregate value and voting power of our ordinary shares that United States persons are treated as owning (directly, indirectly or constructively), we could be treated as a controlled foreign corporation, or CFC. Additionally, because our group includes one or more U.S. subsidiaries, certain of our non-U.S. subsidiaries could be treated as CFCs, regardless of whether or not we are treated as a CFC. If a United States person (as defined in the United States Internal Revenue Code of 1986, as amended) is treated as owning (directly, indirectly or constructively) at least 10% of the value or voting power of our shares, such person may be treated as a “United States shareholder” with respect to each CFC in our group (if any), which may subject such person to adverse U.S. federal income tax consequences. Specifically, a United States shareholder of a CFC may be required to report annually and include in its U.S. taxable income its pro rata share of each CFC’s “Subpart F income,” “global intangible low-taxed income” and investments of earnings in “United States property” by CFCs, whether or not we make any distributions of profits or income of a CFC to such United States shareholder. If you are treated as a United States shareholder of a CFC, failure to comply with these reporting obligations may subject you to significant monetary penalties and may prevent the statute of limitations with respect to your U.S. federal income tax return for the year for which reporting was due from starting. Additionally, a non-corporate U.S. shareholder would generally be denied certain tax deductions or foreign tax credits in respect of its income that may otherwise be allowable to a United States shareholder that is a U.S. corporation. We cannot provide any assurances that we will assist holders of our ordinary shares in determining whether we or any of our non-U.S. subsidiaries are treated as CFCs or whether any holder of our ordinary shares is treated as a United States shareholder with respect to any such CFC, nor do we expect to furnish to any United States shareholders information that may be necessary to comply with the aforementioned reporting and tax paying obligations. The Internal Revenue Service, or IRS, has provided limited guidance on situations in which investors may rely on publicly available information to comply with their reporting and taxpaying obligations with respect to foreign-controlled CFCs. U.S. holders of our ordinary shares should consult their advisors regarding the potential application of these rules to their investment in our ordinary shares.

ADS holders may not be entitled to a jury trial with respect to claims arising under the deposit agreement, which could result in less favorable results to the plaintiff(s) in any such action.

The deposit agreement governing our ADSs provides that owners and holders of ADSs irrevocably waive the right to a trial by jury in any legal proceeding arising out of or relating to the deposit agreement or the ADSs, including claims under U.S. federal securities laws, against us or the depositary to the fullest extent permitted by applicable law. As the waiver relates to claims arising as a matter of contract in relation to the ADSs, we believe that, as a matter of construction of the clause, the waiver would likely to continue to apply to ADS holders who withdraw the ordinary shares represented by the ADSs from the ADS facility with respect to claims arising before the withdrawal, and the waiver would most likely not apply to ADS holders who subsequently withdraw the ordinary shares represented by ADSs from the ADS facility with respect to claims arising after the withdrawal. However, to our knowledge, the enforceability of a contractual pre-dispute jury trial waiver in connection with claims arising under the federal securities laws has not been finally adjudicated by the United States Supreme Court. If this jury trial waiver provision is prohibited by applicable law, an action could nevertheless proceed under the terms of the deposit agreement with a jury trial. Although we are not aware of a specific federal decision that addresses the enforceability of a jury trial waiver in the context of U.S. federal securities laws, it is our understanding that jury trial waivers are generally enforceable. Moreover, insofar as the deposit agreement is governed by the laws of the State of New York, New York laws similarly recognize the validity of jury trial waivers in appropriate circumstances. In determining whether to enforce a jury trial waiver provision, New York courts and federal courts will consider whether the visibility of the jury trial waiver provision within the agreement is sufficiently prominent such that a party has knowingly waived any right to trial by jury. We believe that this is the case with respect to the deposit agreement and the ADSs.

In addition, New York courts will not enforce a jury trial waiver provision in order to bar a viable set off or counterclaim of fraud or one which is based upon a creditor’s negligence in failing to liquidate collateral upon a guarantor’s demand, or in the case of an intentional tort claim (as opposed to a contract dispute). No condition, stipulation or provision of the deposit agreement or ADSs serves as a waiver by any holder or beneficial owner of ADSs or by us or the depositary of compliance with any provision of U.S. federal securities laws and the rules and regulations promulgated thereunder.

If any owner or holder of ~~our~~the ADSs, including purchasers of ADSs in secondary market transactions, brings a claim against us or the depositary in connection with matters arising under the deposit agreement or the ADSs, including claims under U.S. federal securities laws, such owner or holder may incur increased costs of bringing a claim and may not be entitled to a jury trial with respect to such claims, which may have the effect of limiting and discouraging lawsuits against us or the depositary. Any legal suit, action or proceeding against or involving us brought by the ~~Depositary~~depositary or any holder or beneficial owner of ADSs, arising out of or based upon the deposit agreement, the ADSs, the American Depositary Receipts, or ADRs, or the transactions contemplated therein or thereby, may be instituted only in any state or federal court in New York, New York. Any legal suit, action or proceeding against or involving the ~~Depositary~~depositary brought by us, arising out of or based upon the ~~Deposit Agreement,~~deposit agreement, the ADSs, the ADRs or the transactions contemplated therein or thereby, may only be instituted in a state or federal court in New York, New ~~York~~York.

ADS holders may be subject to limitations on transfer of the ADSs.

A non-U.S. corporation will be a Passive Foreign Investment Company, or PFIC, for any taxable year if either (i) at least 75% of its gross income for such year consists of certain types of “passive” income or (ii) at least 50% of the value of its assets (generally based on an average of the quarterly values of the assets) during such year is attributable to assets that produce passive income or are held for the production of passive income. If we are a PFIC for any taxable year during which a U.S. Holder (as defined in “Material Income Tax Considerations - Material U.S. Federal Income Tax Considerations”) holds our ordinary shares or ADSs, the U.S. Holder may be subject to adverse tax consequences, including (1) the treatment of all or a portion of any gain on disposition as ordinary income, (2) the application of an interest charge with respect to such gain and certain dividends and (3) compliance with certain reporting requirements. Based on our estimated income, assets and market capitalization for 2024, we anticipate we will likely not be a PFIC for 2024. However, whether we are treated as a PFIC is a factual determination that must be made on an annual basis after the close of each taxable year. This determination will depend on, among other things, the ownership and the composition of our income and assets, as well as the value of our assets (which may fluctuate with our market capitalization) and our subsidiaries’ assets from time to time. The United States Internal Revenue Service, or IRS, or a court may disagree with our expectations. Therefore, we cannot assure you that we will not be a PFIC for the current taxable year or for any future taxable year.

If a United States person is treated as owning at least 10% of the value or voting power of our ordinary shares, such holder may be subject to adverse U.S. federal income tax consequences.

Depending upon the aggregate value and voting power of our ordinary shares that United States persons are treated as owning (directly, indirectly or constructively), we could be treated as a controlled foreign corporation, or CFC. Additionally, because our group includes one or more U.S. subsidiaries, certain of our non-U.S. subsidiaries could be treated as CFCs, regardless of whether or not we are treated as a CFC. If a United States person (as defined in the United States Internal Revenue Code of 1986, as amended, or the Code) is treated as owning (directly, indirectly or constructively) at least 10% of the value or voting power of our shares, such person may be treated as a “United States shareholder” with respect to each CFC in our group (if any), which may subject such person to adverse U.S. federal income tax consequences. Specifically, a United States shareholder of a CFC may be required to report annually and include in its U.S. taxable income its pro rata share of each CFC’s “Subpart F income,” “global intangible low-taxed income” and certain investments of earnings in “United States property” by CFCs, whether or not we make any distributions of profits or income of a CFC to such United States shareholder. If you are treated as a United States shareholder of a CFC, failure to comply with these reporting obligations may subject you to significant monetary penalties and may prevent the statute of limitations with respect to your U.S. federal income tax return for the year for which reporting was due from starting. Additionally, a non-corporate U.S. shareholder would generally be denied certain tax deductions or foreign tax credits in respect of its income that may otherwise be allowable to a United States shareholder that is a U.S. corporation. We cannot provide any assurances that we will assist holders of our ordinary shares in determining whether we or any of our non-U.S. subsidiaries are treated as CFCs or whether any holder of our ordinary shares is treated as a United States shareholder with respect to any such CFC, nor do we expect to furnish to any United States shareholders information that may be necessary to comply with the aforementioned reporting and tax paying obligations. The Internal Revenue Service, or IRS, has provided limited guidance on situations in which investors may rely on publicly available information to comply with their reporting and taxpaying obligations with respect to foreign-controlled CFCs. U.S. holders of our ordinary shares should consult their advisors regarding the potential application of these rules to their investment in our ordinary shares.

Item 4. Information on ~~Pharming Group N.V.~~the Company.

A. History and Development of the Company

We were incorporated as a private company with limited liability (besloten vennootschap met beperkte aansprakelijkheid) under the laws of ~~the~~The Netherlands on November 11, 1988 under the name GENFARM B.V. On May 29, 1997, ~~Pharming~~the Company was converted from a private company with limited liability (besloten vennootschap met beperkte aansprakelijkheid) into a public company (naamloze vennootschap) named Pharming Holding N.V. Effective July 2, 1998, Pharming Holding N.V. was renamed Pharming Group N.V.

~~Pharming is~~We are registered with the Dutch Chamber of Commerce under number 28048592. Our ordinary shares are traded on Euronext Amsterdam under the symbol “PHARM”. As of December 22, 2020, our ADSs were

admitted for listing on the Nasdaq under the symbol “PHAR” and began trading on Nasdaq Global Market. The address of our registered office is Darwinweg 24, 2333 CR Leiden, The Netherlands. The telephone number of the registered office is +31 (0)71 5247 400. Our agent for service of process in the United States is Pharming Healthcare Inc. The Pharming Healthcare Inc. office is located at 10 Independence Blvd, ~~4th floor,~~Suite 401, Warren, New Jersey 07059. The telephone number is +1 908 524 0888.

Our actual capital expenditures for the years ended December 31, 2023, 2022 and 2021 amounted to $1.4 million, $1.4 million and $10.7 million, respectively. Our capital expenditures primarily consist of property, plant and equipment, such as investments in new machinery and equipment in The Netherlands.

We maintain a website at www.pharming.com. The reference to our website is an inactive textual reference only and the information contained in, or that can be accessed through, our website is not a part of this Annual ~~Report on Form 20-F.~~Report. The SEC maintains an Internet site that contains reports and other information that we file electronically with the SEC at http://www.sec.gov.

B. Business Overview

Overview

~~Pharming is~~We are a global ~~commercial stage~~ biopharmaceutical company dedicated to transforming the lives of patients with rare, debilitating, and life-threatening diseases. We are commercializing and developing an innovative portfolio of protein replacement therapies and precision medicines ~~for~~to serve the ~~treatment of~~unserved rare diseases and unmet medical needs. The flagship of our portfolio is our recombinant human C1 esterase inhibitor, or rhC1INH, franchise. C1INH is a naturally occurring protein that down-regulates the complement cascade in order to control swelling in affected tissues. disease patient.

Our ~~lead~~first commercialized product, RUCONEST®, is the first and only ~~plasma-free~~recombinant C1 esterase inhibitor, or rhC1INH, protein replacement therapy. It is approved for the treatment of acute attacks in adult and adolescent patients with hereditary angioedema, or ~~HAE, attacks. We are commercializing~~HAE. RUCONEST® is commercialized in the United States, the European ~~Union~~Economic Area, and the United Kingdom through our own sales and marketing organization, and in the rest of the world through our distribution network. ~~The~~

Our second commercialized product, Joenja® (leniolisib), is ~~available~~a small molecule kinase inhibitor that was licensed from Novartis International Pharmaceutical AG, or Novartis, in 2019. Joenja® received FDA approval on ~~a named-patient basis~~March 24, 2023 for the treatment of activated phosphoinositide 3-kinase delta, or PI3Kδ, syndrome, or APDS, in ~~other territories where it has not yet obtained~~adult and pediatric patients 12 years and older. Joenja® is commercialized in the United States through our own sales and marketing ~~authorization.~~organization.

We have filed for regulatory approval of leniolisib for APDS in additional key markets and have ongoing clinical trials to support regulatory filings for approval in Japan and for pediatric label expansion. In the

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European Economic Area, we are working closely with the Committee for Human Medicinal Products, or CHMP, to address the remaining outstanding issues and we are awaiting CHMP's opinion on the leniolisib MAA. In the United Kingdom, we submitted an MAA for leniolisib for APDS patients ages 12 and older under the International Recognition Procedure, or IRP, on the basis of the FDA approval on March 12, 2024.

We are also developing ~~rhC1INH~~leniolisib for subsequent indications, including pre-eclampsia, Acute Kidney Injury and we are also investigating the clinical efficacy of rhC1INH in COVID-19. In addition, we are studying our oral precision medicine, leniolisib (a phosphoinositide 3-kinase delta,additional primary immunodeficiencies, or ~~PI3K delta, inhibitor),~~PIDs, with greater prevalence than APDS.

OTL-105, an investigational gene therapy for the treatment of activated PI3K delta syndrome, or APDS, in a registration enabling Phase 2/3 study in the US and Europe. Furthermore, we are also leveraging our transgenic manufacturing technology to develop next-generation protein replacement therapies most notably for Pompe disease, whichHAE, is in preclinical ~~stage.~~

Our unique, scalable, reproducible methodology is a GMP validated process for the production of high-quality recombinant human proteins. The process is supported by clinically proven safety and efficacy data, which demonstrate lower immunogenicity compared with current cell-line methods. Through our proprietary transgenesis method, we are able to make complex therapeutic proteins which are often difficult to make in other types of bioreactors and which are accepted as human by the body. We have optimized our platform to allow us to generate large quantities of recombinant proteins in a controlled, easily transferable and scalable fashion.development.

We are headquartered in Leiden, the Netherlands with our U.S. headquarters located in Warren, New Jersey. We are dually listed on the Euronext Amsterdam (PHARM) and Nasdaq Global Select (PHAR) exchanges.

To further build out our rare disease portfolio, we continue to pursue a strategy focused on the in-licensing or acquisition of clinical-stage assets.

Our Portfolio

The following chart summarizes the status of our commercialized product and ~~our main product candidate portfolio.~~development program portfolio:

RUCONEST® approved for the treatment of acute attacks in adult and adolescent patients with HAE ~~attacks~~

Our lead product, RUCONEST® is the first and only ~~rhC1INH~~recombinant C1 inhibitor protein replacement therapy that is approved for the treatment of acute ~~hereditary angioedema, or~~ attacks in adult and adolescent patients with HAE.

HAE ~~attacks.~~is a serious, debilitating, and potentially life-threatening disease. HAE is a rare genetic condition that occurs in between approximately 1 in 10,000 and 1 in 50,000 people worldwide.

In ~~the United States, the market for HAE treatment is estimated to be between 7,000 and 8,000 patients for both acute and prophylactic treatment.~~its most common forms, HAE is caused by a functional deficiency of ~~the~~a plasma protein called C1INH. ~~This~~The patients’ C1INH deficiency leads to the uncontrolled activation of the complement cascade, resulting in the over-production of some mediators, leading to the leaking of fluid from blood vessels to the tissue space. The most common symptoms of an HAE attack are caused by overproduction of the bradykinin initiator protein, kallikrein, and thus excessive leakage of fluid into tissue spaces (edema or swelling). Patients may suffer bouts of excruciating abdominal pain, nausea and vomiting that is exacerbated by swelling in the intestinal wall.

Airway, or laryngeal, swelling is particularly dangerous and can lead to death by asphyxiation. Untreated, attacks can last ~~between 48 and 120 hours and can be fatal.~~for several days.

~~Our revenues~~The approach to treatment has been initially focused on replacing the missing protein with exogenous C1INH, either collected from pooled plasma or derived recombinantly. More recently, with greater understanding of the ~~sale of RUCONEST® were €185.7 million, €169 million and €135,1 million for~~pathogenesis, treatments have been developed to block the years ended December 31, 2020, 2019 and 2018 respectively. We are currently marketing RUCONEST® in the United States, the United Kingdom and the European Union through our own sales force, and RUCONEST® is being sold in South Korea, Israel and certain Central and South American countries through our distributor network.patients’ contact system.

RUCONEST® has been shown to normalize C1INH ~~effects in HAE patients. Returning C1INH~~ activity levels to normal and has been shown to be clinically relevant in HAE attack treatment. The standard posology for the treatment of HAE attacks is 50 units per kilogram of the reconstituted product. RUCONEST® is administered through a slow intravenous, ~~(IV)~~or IV, injection. One vial contains 2100 U of lyophilized product to be reconstituted with 14ml of water for injection. RUCONEST® irreversibly binds to several target molecules, including, importantly the coagulation factor FXII and the protease kallikrein, which (when unbound) cleaves a plasma protein into bradykinin and other products. By binding to and chemically deactivating these molecules, RUCONEST® stops the production of bradykinin and all other mediators and thereby stops the HAE attack.

We ~~are~~ currently developing a next-generation low-volume formulation of RUCONEST® for intramuscular administration or other routes of administration, to increase convenience of therapy. We have received approval from the EMA for the extension of the RUCONEST® label to include pediatric patients (aged 2-13 years).

~~RUCONEST® has regulatory exclusivity in the European Union expiring in 2025 and in the United States biologics reference product exclusivity expiring July 16, 2026.~~

~~HAE~~

HAE is a rare genetic disorder in which the patient’s body is unable to manufacture sufficient amounts of a fully functioning version of C1 esterase inhibitor, a protein which is responsible in the body for stopping inflammatory responses to antigen or situation challenges and associated swelling at an appropriate point in the challenge cycles. Abdominal attacks cause abdominal swelling and vomiting, potentially leading to misdiagnosis and unnecessary surgery, and swelling of the skin can lead to disfigurement, disability and pain. Untreated, attacks can last between 48 and 120 hours and can be fatal, especially if the swelling starts at or reaches the throat area. Estimates of the prevalence of the disease vary between 1 in 10,000 and 1 in 50,000, depending on the genetic diversity of the population. Although acute attacks usually begin to be noticed in childhood or adolescence, due to the disorder’s rarity, the condition is often not correctly diagnosed for several years. The condition is stress-related, and there can be considerable variability in the incidence of attacks even within one patient’s year, depending on the stresses they encounter during the year. The frequency of HAE attacks varies between patients, from extreme cases with two to three attacks per week to milder cases with a few attacks per year, with patients experiencing an average of approximately 27 swelling attacks per year.

~~The figure above demonstrates the importance of C1INH on the complement cascade, and its significance for HAE~~

~~We are currently marketing~~market RUCONEST® in the United States, the United Kingdom and the European ~~Union~~Economic Area through our own ~~internal commercialization organization,~~sales force. We have various access programs designed to ensure that physicians can request RUCONEST® on behalf of individual patients, who meet the eligibility criteria and receive local health authority approval, in certain countries where RUCONEST® is ~~being sold in South Korea, Israel and certain Central and South American countries through our distributor network.~~

not commercially available. For a breakdown of total revenues by categories of geographic market for each of the last three financial years, see “Item 5—A. Operating Result.” of this Annual Report.

~~Next-generation RUCONEST®~~

We are developing a new low-volume injectable version of the full dose of RUCONEST® which could be used for clinical trial for intravenous, intramuscular or subcutaneous delivery to improve convenience of treatment. Subject to approval, the new form of RUCONEST® will be tested in appropriate clinical settings for intramuscular and/or intravenous delivery. This development program is progressing slower than previously planned, mainly due to high sales demand and patient need for RUCONEST® utilizing existing supplies of rhC1INH, which therefore could not be diverted to validate the manufacturing processes for this new formulation and to produce clinical trial material.

~~Additional development programs for rhC1INH~~

~~C1INH Protein Biology~~

Inside the body, C1INH works by inhibiting the formation of the most important complexes at the top of the complement system and in the contact pathway. The complement system, sometimes known as the complement cascade, is a major component of the immune system, responsible for certain immune-mediated inflammation reactions, including most reactions that cause vascular edema (swelling). Inflammation enables the movement of immune cells through vascular leakage of plasma into tissues that are normally difficult to access. Inflammation

also raises the local temperature to activate immune defense mechanisms and inhibit pathogen chemistry. The complement cascade and the contact activation pathway also enhance the ability of antibodies and phagocytic cells (a type of white blood cells) to clear microbes and damaged cells from our bodies, and attack the cell membranes of pathogens.

The complement system can be recruited and brought into action by antibodies and other challenge triggers generated by the adaptive immune system. The complement system consists of a number of complex proteins found in the blood, in general synthesized by the liver, and normally circulating as inactive precursors. When stimulated by one of several triggers, enzymes called proteases cleave specific proteins to release active fragments called cytokines which initiate an amplifying cascade of further cleavages. The end result of this complement activation cascade is stimulation of the phagocytes to clear foreign and damaged material, inflammation to attract and enable the movement of additional phagocytes, and activation of the cell-killing membrane attack complex.

Over 30 proteins and protein fragments make up the complement system, including plasma proteins and specific cell membrane receptors. Once the complement cascade has been triggered, the body also produces a counter-protein, C1INH to start to slow the reaction down. The rate at which the reaction can be slowed down is constant as the body can only produce up to a maximum level of C1INH. This means that serious trigger events can take much longer to resolve than minor ones, because the level of C1INH existing in the plasma, as well as new production can meet the demands of minor releases of cytokines more quickly than major releases.

The most powerful releases of cytokines, sometimes known as “cytokine storms”, can occur so fast that a fatal “shock” reaction or severe damage to organs occurs before the C1INH production can bring the release under control. This dynamic is thought to play an important role in many disease conditions and injury situations, where inflammation or vascular leakage running out of control are responsible for many of the symptoms of those conditions. It can be these resulting symptoms that do the most damage.

rhC1INH may also be useful in the body’s recovery from hypoxic situations, where blood has not been able to circulate properly to bring oxygen to various tissues. The detrimental effects of such hypoxia can be exacerbated upon reperfusion with blood by local activation of the complement cascade caused by the reperfusion itself. In

some of these conditions, therefore, there may be a role to play for externally administered C1INH which could act to normalize that situation more quickly, allowing the body to have a less dangerous or more measured response, or to prevent the symptoms entirely. While C1INH is unlikely to cure the underlying problem, this extra supply might allow for the damage caused or even the risk of death to be reduced and/or delayed long enough for the problem to be resolved either naturally or through the intervention of the patient’s physician team.

~~We have developed the only plasma-free recombinant human C1INH commercial product. Our rhC1NH product has been approved~~Joenja® (leniolisib) for the treatment of ~~acute HAE attacks,~~APDS

We announced the FDA approval of Joenja® (leniolisib) on March 24, 2023 as the first and ~~we and our collaborators are studying rhC1INH~~only treatment indicated for the treatment of ~~other large~~adults and ~~unmet indications,~~adolescents aged 12 years and older with APDS, a rare primary immunodeficiency.

Discovered in 2013, APDS is a genetic condition which affects approximately 1.5 people per million globally. It is a clinically heterogenous disease that can lead to end-organ damage and early mortality. APDS is a progressive primary immunodeficiency and regulatory disorder characterized by severe, recurrent sinopulmonary infections; persistent, severe, or recurrent herpesvirus infections, particularly Epstein-Barr virus, or EBV, and Cytomegalovirus, or CMV; lymphadenopathy, hepatomegaly, splenomegaly, and/or nodular lymphoid hyperplasia; autoimmune cytopenias; enteropathy; bronchiectasis; possible malignancy, especially lymphoma; and dysregulated B and T cell function.

Although awareness of APDS has increased since its discovery in 2013, the disease may still be misdiagnosed in patients not seen by a specialist. Increased education among physicians is needed to aid early diagnosis and accurate treatment. Diagnostic delay may lead to an accumulation of damage over time, including ~~COVID-19, certain acute kidney injuries and pre-eclampsia.~~

~~The following diagram shows~~bronchiectasis. APDS patients also have a significant risk of developing lymphoma due to the ~~most important indications in this area~~unchecked lymphoproliferation. Management of APDS frequently includes treatment such as prophylactic antibiotics, immunoglobulin replacement, immunosuppression, chemotherapy for ~~which there are scientific findings highlighting the involvement of complement.~~lymphoma, or stem cell transplantation. Many of these ~~conditions are entirely unmet medical needs, often~~drugs can cause serious side effects and transplant has significant morbidity and mortality. Patients with ~~no approved therapy. A few do~~APDS have ~~approved treatments, largely because other mechanisms are also involved or are more important, such as for asthma.~~

~~COVID-19~~

~~We are currently investigating rhC1INH for~~been reported to experience early mortality with their survival probability being up to 28% lower than the ~~treatment of severe pneumonia resulting from COVID-19 infection. COVID-19 is the disease caused by the novel coronavirus SARS-COV-2, which was declared~~global population. Lymphoma has been reported to be ~~a pandemic by~~ the ~~World Health Organization in March 2020. Systemic hyper inflammation is a hallmark~~leading cause of more severe stages of COVID-19 leading to acute respiratory distress syndrome, mechanical ventilation and ultimately death. We believe that complement activation may lead to a cytokine storm, a dangerous biochemical process that worsens the complications of COVID-19 infection, such as organ failure and death. Because C1INH mediates the complement cascade and inhibits the kallikrein-kinin system, we believe rhC1INH may dampen uncontrolled complement activation and collateral lung damage, reduce capillary leakage and subsequent pulmonary edema and reduce the generation of micro thrombi by inhibiting MASP-1 (a human enzyme) induced clot formation and factor XII amplified thrombo-inflammation.

In April 2020, we reported results from a compassionate use program at the University Hospital Basel, Switzerland, in which four male patients and one female patient (between 53-82 years of age) with COVID-19, suffering from related severe pneumonia, who did not improve despite standard treatment, including hydroxychloroquine and lopinavir/ritonavir, had been administered rhC1INH. Following treatment, fever resolved in four of the five patients within 48 hours, and levels of C-reactive protein and the inflammatory cytokine IL-6 decreased significantly. Soon thereafter, four of the five patients were discharged from the hospital as fully recovered. One patient had increased oxygen requirement and was eventually transferred to the ICU for intubation but has also since made a full recovery.

Based on the results of the compassionate use program, on August 10, 2020 enrollment commenced in a randomized, controlled, investigator-initiated clinical trial in up to 150 patients of rhC1INH for the treatment with confirmed COVID-19 infections hospitalized with related severe pneumonia at the University Hospital Basel in Basel, Switzerland. The study was extended to several other centers in Switzerland, Brazil and Mexico. In addition, on December 10, 2020 enrollment commenced in a second investigator-initiated randomized, open label, parallel group, controlled, pilot clinical trial in up to 120 patients hospitalized with confirmed COVID-19 treated with RUCONEST® (recombinant human C1 inhibitor) for the prevention of severe SARS-CoV-2 infections at the Valley Hospital in Ridgewood, New Jersey in the United States. Both clinical studies in hospitalized patients with COVID-19 seek to identify if the administration of additional C1 INH can control or stop the systemic hyper inflammation syndrome or cytokine storm.

~~Acute Kidney Injury (AKI)~~

We are developing a rhC1INH therapy for the prevention and treatment of acute kidney damage resulting from contrast medium, which is injected as part of a contrast-enhanced examination, for example coronarography. Especiallydeath in patients with ~~impaired kidney function the difficulty in clearing the injected contrast medium can result in further kidney damage which might be irreversible and ultimately requiring permanent dialysis or renal~~APDS (24%), followed by infections (17%).

~~transplantation. AKI often leads to prolonged hospitalization or intensive care, which~~Joenja® (leniolisib) is ~~extremely expensive and often results in poor long-term outcomes for patients, or even death.~~

Contrast medium injury is responsible for 11% of cases of hospital-acquired renal insufficiency, and is the third most common cause of renal failure after impaired renal function. AKI affects between 1% and 2% of the general population, and up to 50% of high-risk subgroups following coronary angiography or percutaneous coronary intervention.

In October 2018, we announced positive results from a Phase 2 investigator-initiated study of rhC1INH in a double-blind, placebo-controlled clinical trial in 75 patients at risk of nephropathy resulting from contrast-enhanced examinations. The study was led by Dr. Michael Osthoff at the University Hospital Basel, Basel, Switzerland. In the study, patients were given either rhC1INH (<84kg: 50 U/kg; >84kg: 4,200 U) or placebo (0.9% sodium chloride). In the sub-group of patients (n=38) undergoing percutaneous coronary interventions, or PCI, such as stent insertions, the intent-to-treat analysis in this group showed that patients on rhC1INH had a median increase in peak urinary Neutrophil Gelatinase-Associated Lipocalin, or NGAL, concentration within 48 hours of 1.8 ng/ml, compared with an ~~increase of 26.2 ng/ml~~oral small molecule PI3Kẟ inhibitor approved in the placebo arm (p=0.038). As set forth below, this corresponds to a clear difference in the median percentage change in the peak urinary NGAL level within 48 hours of 11.3% in the rhC1INH arm and 205.2% in the placebo arm (p=0.001).

Following this positive outcome, we have completed preparations for a new Phase 2b study of the effects of RUCONEST® in patients undergoing PCI accompanied by contrast-enhanced examinations. The Phase 2b study will also be initiated by us and led by Dr. Osthoff. This study was planned for the first half of 2020, but was halted due to COVID-19. Subject to COVID-19-related delays, the study is now planned to start in 2021.

~~Pre-eclampsia (PE)~~

We are developing a rhC1INH protein replacement therapy for the treatment of pre-eclampsia. Pre-eclampsia is a life-threatening multisystem disorder in pregnancies leading to maternal and neonatal mortality and morbidity, usually first detected by hypertension. Proteinuria is a common symptom. Abnormal or impaired placental spiral artery development may be a possible trigger of the complement cascade. Treatments may include abortion or premature birth, the latter being often associated with high rates of mortality. Palliative care of pregnant women suffering from PE and neonatal care of premature babies can drive the costs of pre-eclampsia patients very high. Complications after birth can be severe and affect more than 50% of all newborns under these conditions, with growth restrictions, learning difficulties and moderate to severe disabilities.

World-wide almost 2.5 million cases of pre-eclampsia are reported annually, with rates running at between 3% and 10% of all pregnancies in developed countries. In the United States alone, estimated annual cases of pre-eclampsia exceed 120,000. Each year, 50,000 maternal deaths are recorded for patients who proceed to full-blown eclampsia.

~~As shown in the table below, a study of C1INH levels in pregnant women has demonstrated that women suffering from PE have reduced circulating C1INH levels.~~

~~Analytical data (mean ±1SD) in normal pregnancy, preeclampsia and in non-pregnant women~~

(A)
Normal
pregnancy
(n=20)

(B)
Mild
pre-eclampsia
(n=17)

(D)
Non-pregnant women
(n=20)

~~C1-INH activity (%)~~

~~74.3 ± 15.5~~

~~64.4 ± 14.0~~

~~55.5 ± 15.8~~

~~95. ± 10.8~~

~~C1-INH antigen (%)~~

~~68.2 ± 10.4~~

~~62.7 ± 13.3~~

~~53.1 ± 8.8~~

~~86.5 ± 12.2~~

~~We believe that protein replacement therapy with rhC1INH may slow the rate of progress of the condition and thereby reduce the level of damage that it can cause to mother and the unborn baby.~~

We are conducting an open label, single-arm, multi-stage, multi-center Phase 1/2 study in late-stage pre-eclampsia in the Netherlands and Australia. Recently the study was extended to include a center in Mauritius. The study will initially be conducted to assess the tolerability and safety of treatment with RUCONEST® in 30 patients with mid- to late-stage symptomatic PE. This study was approved in 2019, but was halted due to COVID-19.

~~Additional pipeline development~~

~~Leniolisib for the treatment of Activated Phosphoinositide 3-kinase Delta Syndrome~~

We are developing leniolisib (a phosphoinositide 3-kinase delta, or PI3K delta, inhibitor), for the treatment of activated PI3K delta syndrome, or APDS. In partnership with our Novartis we are currently carrying out a double blind, placebo controlled, randomized, registration-enabling Phase 2/3 trial followed by an open label extension safety trial which is currently enrolling patients in clinical sites in the United States and Europe.

APDS, is a chronic primary immunodeficiency. Primary immunodeficiencies, or PIDs, lead to immune system dysregulation with numerous complications. More than 300 gene mutations are known to cause PIDs, and the estimated prevalence of PIDs are 1 in 1,200. APDS is caused by a mutation in the PIK3CD gene that results in an increase of activity of phosphoinositide-3-kinase delta, a promoter of activity in the immune system. APDS has an estimated prevalence of 1-2 patients per million. Individuals suffering from APDS often have lymphoproliferation and poorly functioning white blood cells, particularly B cells and T cells. Beginning in childhood, people with APDS develop recurrent infections, particularly in the lungs, sinuses, and ears. Over time, recurrent respiratory tract infections can lead to a condition called bronchiectasis, leading to serious breathing problems. People with APDS may also suffer from chronic active viral infections, for example Epstein-Barr virus or cytomegalovirus infections. Sufferers also frequently develop lymphomas and other types of tumors. Another possible feature of activated PI3K delta syndrome is abnormal aggregation of white blood cells leading to enlarged lymph nodes (lymphadenopathy or nodular lymphoid hyperplasia) usually in the epithelial tissues of the airways or intestines. While lymphadenopathy and nodular lymphoid hyperplasia are benign, activated PI3K delta syndrome also increases the risk of developing a form of cancer called B-cell lymphoma.

~~Leniolisib is a small molecule inhibitor of one isoform of the catalytic subunit of class IA PI3K. It has immunomodulating and potentially antineoplastic activities. Leniolisib~~U.S. Joenja® inhibits the production of phosphatidylinositol-3-4-5-trisphosphate, ~~or PIP3. PIP3~~which serves as an important cellular messenger ~~specifically activating the protein-serine/threonine kinase AKT (via PDK1)~~ and regulates a multitude of cell functions such as proliferation, differentiation, cytokine production, cell survival, angiogenesis, and metabolism. ~~Unlike PI3K alpha~~Results from a randomized, placebo-controlled Phase II/III clinical trial demonstrated clinical efficacy of Joenja® in the coprimary endpoints; demonstrating statistically significant impact on immune dysregulation and ~~PI3K beta which are ubiquitously expressed, PI3K delta~~normalization of immunophenotype within these patients, and ~~PI3K gamma are expressed primarily~~interim open label extension data has supported the safety and tolerability of long-term Joenja® administration. Leniolisib is also being evaluated in ~~cells that are hematopoietic~~two Phase III clinical trials in ~~origin. The central role~~children with APDS and a Phase III clinical trial is ongoing in Japan in adult and pediatric patients 12 years of ~~PI3K delta in regulating numerous functions of cells of the adaptive immune system (B cells~~age and T cells) as well as the innate immune system (neutrophil, mast cells, and macrophages) strongly indicates the PI3K delta is a valid and potentially effective therapeutic target for several immune diseases.older with APDS.

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Clinical studies

In partnership with Novartis, ~~we are currently studying~~Pharming studied leniolisib to assess the efficacy and safety of leniolisib in patients with APDS. The study, a ~~phase 2/3~~Phase II/III potentially registration enabling study iswas composed of 2two sequential ~~parts, the~~parts. The first part ~~including 6~~included six patients ~~was~~in an open-label dose escalation study ~~that was~~ designed to assess the safety, tolerability, pharmacodynamics and pharmacokinetics of leniolisib, a dose-finding study that has since completed. The second part is a randomized, blinded, placebo-controlled study that that includes 30 additional patients and is designed to assess the efficacy of leniolisib in APDS patients. (NCT: NCT02435173) The co-primary endpoints of the second part of the study are (i) change in the size of lesions from baseline and (ii) change in baseline in percentage f naive B cells out of total B cells.leniolisib.

The first part of the study showed that oral leniolisib led to a dose-dependent reduction in PI3K/AKT pathway activity assessed ex-vivo and improved immune dysregulation. We observed normalization of circulating transitional and naive B-cells, reduction in PD-11CD41 and senescent CD571CD42 T cells and decreases in elevated serum immunoglobulin M and inflammatory markers including interferon g, tumor necrosis factor, CXCL13, and CXCL10. After 12 weeks of treatment, all patients showed amelioration of lymphoproliferation with lymph node sizes and spleen volumes reduced by 39% (mean; range, 26%-57%) and 40% (mean; range, 13%- 65%), respectively. Leniolisib was well tolerated and improved laboratory and clinical parameters in APDS, supporting the specific inhibition of ~~PI3Kd~~PI3Kδ as a potential therapy in APDS and other diseases characterized by over-activation of the ~~PI3Kd~~PI3Kδ pathway. ~~(Blood, 23 November 2017 – Volume 130, Number 21.)~~

~~Previous~~The second part was a randomized, blinded, placebo-controlled study, which enrolled 31 patients with APDS who were 12 years of age or older. Patients were randomized 2:1 to ~~the ongoing phase 2/3~~receive either leniolisib 70 mg twice daily or placebo for 12 weeks. Following this, patients were permitted to rollover to an open-label extension study ~~five~~to evaluate long-term safety, tolerability, and efficacy. Primary outcome measures were differences from baseline in lymph node size and in percentage of naïve B cells in peripheral blood, assessed as proxies for immune dysregulation and deficiency.

The primary efficacy results demonstrated clinical studies, 3 studies in healthy volunteers and 2 in-patients have been conducted. As of June 26, 2020, 238 healthy subjects have been investigated, 168 had received leniolisib and 70 had received placebo. Single dosesefficacy of leniolisib upover placebo with a statistically significant reduction in the size of the lymph nodes (p=0.0006) and normalization of immune dysfunction, as evidenced by increased proportion of naïve B cells (p=0.0002). Key secondary evaluations were supportive, including patient and physician global assessment tools which showed increased well-being and less disease activity, respectively, of patients randomized to ~~400 mg and multiple doses up~~leniolisib as compared to ~~140 mg bid for 14 days have been administered~~placebo.

In the study, leniolisib was generally well-tolerated. The majority of reported adverse events in both treatment groups were classified as mild. There were no adverse events that led to ~~168 subjects and were assessed to have been well tolerated. Across the entire clinical development one SAR case~~discontinuation of ~~skin rash has occurred (in a patient with Primary Sjögren`s syndrome “pSS”)~~study treatment, there were ~~n=15 other cases~~no deaths, and the incidence of ~~leniolisib-related skin rash~~serious adverse events, ofor SAEs, was lower ~~intensity. These were observed both in healthy subject studies (n=5) and~~ in the ~~study investigating patients with pSS (n=10). In all~~leniolisib group than the placebo group. None of ~~these cases skin rash was~~the SAEs were suspected to be related to study treatment.

The ongoing open-label extension, or OLE, study includes 37 patients with APDS aged 12 years or older who, at the time of data cutoff for the interim analysis, had received 70 mg of the selective PI3Kδ inhibitor leniolisib twice a day for at least 25 weeks; 66% were exposed for 96 weeks or longer, with a median duration on study therapy of approximately two years; four patients had more than five years exposure. The OLE study was primarily designed to assess the safety and tolerability of long-term leniolisib treatment in adolescent and adult patients with APDS who previously participated in a Phase II/III leniolisib study. The OLE study’s secondary endpoints are intended to evaluate the efficacy and pharmacokinetics of long-term leniolisib treatment in these patients.

The interim analysis found that leniolisib was well tolerated to this point in the OLE study. It also indicated the durability of the efficacy results seen in the randomized, controlled trial, which showed significant improvement over placebo in the co-primary endpoints of reduction in lymph node size and increase in naïve B cells.

The majority of adverse events, or AEs, reported in the interim analysis were grades 1 and 2, and included upper respiratory tract infection, headache and pyrexia. Grade 1 AEs are the least severe and grade 5 the most severe. Overall, 13.5% of AEs were study drug-related; these affected five patients and included weight gain (n=3), arthralgia (n=1), hyperglycemia (n=1), and decreased neutrophil count (n=1). Of all AEs assessed in the analysis, 16.2% were classified as serious, but none of these were identified as related to study treatment. There was one death among study participants which was identified as not related to study treatment.

Among study participants, some experienced reductions in APDS disease markers, with levels of response varying between individuals. Responses included:

• reduced lymphadenopathy, splenomegaly, and IgM levels;

• improved or resolved anemia, thrombocytopenia, and lymphopenia; and

• resolved neutropenia in all affected patients.

Two post-hoc analyses were performed to assess infection rates and immunoglobin replacement therapy, or IRT, usage. 37% of participants who were on IRT were able to reduce their IRT use while taking leniolisib. Six patients became IRT-independent, with four of those patients having been IRT-independent for one to two-and-a-half years at the data cutoff. The median time to IRT reduction was 12.1 months and the median time to IRT discontinuation was 11.9 months. IRT use was captured by the investigator as concomitant medication at each study visit per protocol. IRT utilization was not prespecified as an endpoint or analysis and is observational only; no determination of statistical significance can be made and no conclusions should be drawn.

Patients on leniolisib were also observed to have a reduction in the number of infection days. This decrease in annualized infection rates was accompanied by no appreciable increase in antibiotic use despite the reduction in IRT utilization. Although safety was the primary objective of the OLE study, this post hoc analysis was not powered to provide any statistical significance of efficacy and therefore no conclusions should be drawn.

APDS patient finding

On March 2, 2021, we announced the launch of a sponsored genetic testing program, “navigateAPDS”, designed to assist clinicians in identifying patients and their family members with APDS, which may lead to earlier diagnosis. A genetic test enables a clinician to confirm their clinical suspicions and definitively diagnose APDS.

Our support of the navigateAPDS program will continue to facilitate genetic testing and counselling for eligible individuals in the United States and Canada at no charge. The navigateAPDS program offers testing with comprehensive immunodeficiency panels, providing critical information on potential genetic causes of immunodeficiencies and dysregulation that a patient may have. In addition to providing genetic testing to individuals who may present with a clinical picture known to be associated with APDS, navigateAPDS offers pre-test and post-test genetic counseling through a third party, and all blood relatives of patients found to have a positive molecular diagnosis of APDS are qualified for familial variant testing through the program. By offering this testing, physicians and patients are able to better understand the genetic underpinnings of their disease and manage their condition more precisely.

In Europe, we are intensifying our patient identification efforts together with leading immunology centers of excellence treating patients with APDS and other rare immune deficiencies.

Based on available literature, we estimate APDS prevalence to be 1.5 patients per million. Our U.S. and global APDS patient finding efforts progressed during the year. As of December 31, 2023, Pharming has identified over 840 diagnosed APDS patients of all ages in global markets, including over 200 patients in the United States. Of the identified patients in the U.S., approximately 75% are 12 years of age or older, the majority of whom are currently eligible for treatment with Joenja®. Over 730 of these patients are in the U.S., Europe, the U.K., Japan, Asia Pacific, Middle East, and Canada, key markets for Pharming with estimated total prevalence of approximately 2,000 APDS patients.

We advanced several initiatives during 2023 to assist in the diagnosis of additional APDS patients, including our sponsored genetic testing program in the U.S. and Canada, partnerships with several genetic testing companies who undertake their own testing efforts and family testing programs. We have initiated a number of programs collaborating with clinicians and patients to aid in reducing the barriers and allowing the appropriate testing in families with APDS, to help identify family members of APDS patients who may also be affected by this disease. APDS is an inherited genetic disease and we believe that many of the over 200 APDS patients already identified in the U.S. are likely to have family members who remain undiagnosed.

Variant of Uncertain Significance, or VUS, resolution
APDS is diagnosed based on clinical symptoms, assessment of immune cell function and genetic testing. For a patient to receive a definitive APDS diagnosis, a genetic test revealing a disease-causing (pathogenic or likely pathogenic) variant in either the PIK3CD or PIK3R1 genes is required. Patients with clinical symptoms compatible with APDS frequently receive inconclusive genetic variant test results, i.e., previously unseen variants in the PIK3CD or PIK3R1 genes. It is important to determine if these VUSs cause APDS.

As of December 31, 2023, Pharming has identified more than 1,100 patients in the U.S. with a number of VUSs in the PIK3CD or PIK3R1 genes and is setting up validation studies with various laboratories to confirm which of these variants should be classified as APDS. As results become available, patients with validated variants could be diagnosed with APDS and, therefore, potentially be eligible for Joenja® treatment. We expect completion of these studies during the fourth quarter of 2024.

Regulatory status

United States

On March 24, 2023 the FDA approved our New Drug Application, or NDA, of Joenja® (leniolisib) for the treatment of patients ages 12 and older with APDS. The FDA evaluated the Joenja® application for APDS under Priority Review, which is granted to therapies that have the potential to provide significant improvements in the treatment, diagnosis or prevention of serious conditions. Joenja® launched in the U.S. in early April 2023.

European Economic Area

In October 2020, we announced that the European Commission had granted orphan drug designation for leniolisib for the treatment of APDS, based on a positive opinion from the Committee for Orphan Medicinal Products, or COMP, of the European Medicines Agency, or EMA.

In January 2022, a positive decision was made by the EMA on the Pediatric Investigation Plan, or PIP, for leniolisib. For the registration of new medicines in Europe, biopharmaceutical companies are required to provide a PIP which outlines the strategy for investigation of a new medicinal product in the pediatric population. The positive PIP opinion from the Pediatric Committee, or the PDCO, is an endorsement of the clinical program to evaluate the safety and efficacy of leniolisib in patients from 1 year of age to less than 18 years of age with APDS.

In August 2022, we announced the leniolisib MAA was granted accelerated assessment by EMA’s CHMP. The accelerated assessment reduces the review timeframe from 210 days to 150 days. Upon request, EMA will grant an accelerated assessment of an MAA if they decide the product is of major interest for public health, and in particular, from the viewpoint of therapeutic innovation.

In October 2022, we submitted an MAA to EMA for leniolisib as a treatment for APDS in adults and adolescents 12 years or older.

The MAA was supported by positive data from a Phase II/III study of leniolisib, announced on February 2, 2022, which met its co-primary endpoints of reduction in lymph node size and increase in percentage of naïve B cells in patients with APDS. Furthermore, ~~skin rash~~safety data from the study showed that leniolisib was well tolerated by participants. Also submitted as part of the MAA were data from a long-term OLE study in patients with APDS treated with leniolisib.

On October 28, 2022, we announced that our MAA for leniolisib had been validated for scientific evaluation under an accelerated assessment by EMA's CHMP.

In February 2023, we announced that the CHMP decided to shift its assessment of the MAA for leniolisib to a standard review timetable. The list of questions we received from the EMA included a request to submit updated data from the ongoing OLE study collected after the interim analysis included in the original MAA.

In May 2023, we submitted our response to the CHMP Day 120 list of questions. Subsequently, as part of the MAA review procedure timetable, we received the CHMP Day 180 list of outstanding issues in July 2023. In August 2023, we announced that considering the rarity of the disease and the unmet need for the treatment of APDS patients, the EMA's CHMP would consult an Ad-hoc Expert Group, or AEG, at a closed meeting also involving our representatives including leniolisib investigators and APDS patients. Under EMA regulations, the CHMP may call an AEG meeting when a medicine is being assessed that requires input from specialized scientific advisors on matters that may fall outside the expertise of the EMA’s established Scientific Advisory Groups, as is typically the case for rare diseases with few experts.

We submitted our response to the CHMP Day 180 list of outstanding issues, or LoOI, in October 2023. In November 2023, we received a Day 180 Second LoOI from the CHMP. The CHMP consulted the AEG at a meeting held at the end of November 2023.

We are working closely with the CHMP to address the remaining outstanding issues and we are now awaiting the CHMP's opinion on the leniolisib MAA.

United Kingdom

In February 2022, the MHRA granted Promising Innovative Medicine, or PIM, designation to leniolisib for the treatment of APDS. A PIM designation is an early indication that leniolisib is a ~~known class effect~~candidate for the MHRA’s Early Access to Medicines Scheme. This scheme provides an opportunity for treatment options to be used in clinical practice in parallel with the later stages of ~~PI3Kd inhibitors.~~the regulatory process.

~~This~~In November 2023, we announced our intention to file an MAA with the MHRA for APDS patients ages 12 and older, through the IRP which replaced the European Commission Decision Recognition Procedure, or ECDRP, beginning January 1, 2024. The IRP allows a company to submit an MAA for a product on an abbreviated review timeline if the same product has already received a marketing authorization from one of the MHRA’s specified reference regulators, or RRs, including the EMA and the FDA.

We submitted an MAA for leniolisib under the IRP on the basis of the FDA approval on March 12, 2024. The MHRA has 110 days with an option to enforce a 60 day clock stop, if needed, from the date the IRP submission is validated, to review and issue its decision.

Canada, Australia, and Israel

Pharming filed regulatory submissions for APDS patients ages 12 and older in Canada and Australia in the third quarter of 2023, and Israel in the second quarter. These submissions are progressing as expected and we anticipate regulatory action in 2024 for Canada, Australia, and Israel.

Market access

We currently market Joenja® (leniolisib) for the treatment of APDS in adults and adolescents 12 years of age and older in the United States. We have named patient and expanded access programs designed to ensure that physicians can request leniolisib on behalf of individual patients living with APDS, who meet the eligibility criteria and receive local health authority approval, in certain countries where leniolisib is not commercially available.

Pipeline development

Japan clinical trial

In May 2023, the Ministry of Health, Labour and Welfare of Japan, or MHLW, granted leniolisib orphan drug designation, or ODD, for the treatment of APDS. In August 2023, the first patient was enrolled in a Phase III clinical trial in Japan evaluating leniolisib for the treatment of APDS in adult and pediatric patients 12 years of age and older. Patient enrollment in this study ~~was temporarily halted~~is now complete.

The single-arm, open-label clinical trial will evaluate the safety, tolerability, and efficacy of leniolisib in three patients, 12 years of age and older, who have a confirmed APDS diagnosis. Each patient will receive weight-based dosing up to 70 mg of leniolisib twice daily for 12 weeks. The study’s primary efficacy endpoints and secondary endpoints mirror those used to evaluate the clinical outcomes in each of the earlier leniolisib APDS trials.

We plan to file an application for the approval of leniolisib with Japan’s Pharmaceuticals and Medical Devices Agency, or PMDA, following completion of the appropriate clinical trials. An approval decision would be expected in nine months based on priority review of the application due to ~~COVID-19 but has since resumed. Subject~~ODD. Eligible patients enrolled in the trial will continue to ~~COVID-19-related delays, data is expected during~~receive the ~~second half~~investigational drug for at least an additional year through an open-label extension trial.

Pediatric clinical trials

We have developed a clinical plan to include children as young as one year of ~~2021, followed by review by regulatory authorities during~~age. During the first half of ~~2022. If approved,~~2022, we received positive decisions from the EMA and MHRA on the PIP for leniolisib as a treatment for APDS in children. The leniolisib PIP includes two planned, global clinical trials in pediatric patients with APDS aged 4 to 11 years old and aged 1 to 6 years old. These two studies were initiated in 2023 and will support regulatory filings worldwide for pediatric label expansion.

Patients aged 4 to 11 years

This Phase III clinical trial is evaluating the investigational drug ~~is planned to launch~~leniolisib in children with APDS at sites in the ~~second half~~United States, Japan, and the EU.

The single-arm, open-label, multinational clinical trial will evaluate the safety, tolerability, and efficacy of ~~2022.~~leniolisib in 15 children aged 4 to 11 years who have a confirmed APDS diagnosis. The study's primary efficacy endpoints and secondary endpoints mirror those used to evaluate the clinical outcomes in the previous leniolisib Phase II/III APDS trials for patients aged 12 and older.

~~Next-Generation Enzyme Replacement Therapies:~~ The first patient was enrolled in February 2023 and we are nearing completion of enrollment in the clinical trial.

Patients aged 1 to 6 years

This Phase III pediatric clinical trial is evaluating a new pediatric formulation of the investigational drug leniolisib in children with APDS at sites in the United States, Japan, and the EU.

The single-arm, open-label, multinational clinical trial will evaluate the safety, tolerability, and efficacy of leniolisib in 15 children aged 1 to 6 years of age who have a confirmed APDS diagnosis. These patients will receive a specific, pediatric granulated formulation of leniolisib. The study’s primary efficacy endpoints and secondary endpoints mirror those used to evaluate the clinical outcomes in the previous leniolisib Phase II/III APDS trials for patients aged 12 and older.

The first patient was dosed in November 2023 and enrollment in the study is continuing as planned.

Additional indications (PI3Kδ platform)

PIDs beyond APDS
As we continue to work towards regulatory approvals of leniolisib for APDS in additional geographies and pediatric label expansion, we have also commenced work to identify and prioritize other indications where leniolisib has the potential to deliver value for patients. PI3Kδ has been identified as an important player in a variety of disease states, and leniolisib has demonstrated an attractive, long-term efficacy, safety and tolerability profile in clinical trials conducted in both healthy volunteers and APDS patients. This provides a solid basis for our plans for the investigation and investment in further leniolisib indications.

PIDs with immune dysregulation
In December 2023, Pharming announced the expansion of its rare disease pipeline with plans to develop leniolisib for additional PIDs with greater prevalence than APDS. Pharming has engaged with and received feedback from the FDA on its plans to develop leniolisib for PID disorders with immune dysregulation.

Leniolisib, by reducing PI3Kδ activity, could help rebalance immune dysregulation in PIDs, positively impacting clinical manifestations including lymphoproliferation and autoimmunity. Based on Pharming's APDS experience, leniolisib has potential to be an effective and tolerable chronic treatment approach for PIDs with immune dysregulation linked to PI3Kδ signaling.

Pharming is now in the final stages of preparation for the start of an initial Phase II, proof of concept, clinical trial in targeted PID genetic disorders with immune dysregulation linked to PI3Kẟ signaling in lymphocytes, with similar clinical phenotypes and unmet medical need to APDS. These PID disorders include ALPS-FAS,

CTLA4 haploinsufficiency and PTEN deficiency. The epidemiology of these targeted PID genetic disorders suggests a prevalence of approximately five patients per million.

The Phase II clinical trial is a single arm, open-label, dose range-finding study to be conducted in approximately 12 patients. The objectives for the trial will be to assess safety and tolerability, pharmacokinetics, pharmacodynamics, and explore clinical efficacy of leniolisib in this new PID population. The trial has been designed to inform a subsequent Phase III program.

The Phase II clinical trial will be conducted at the National Institute of Allergy and Infectious Diseases, NIAID – part of the National Institutes of Health, or NIH – with lead investigator Gulbu Uzel, M.D., Senior Research Physician, and co-investigator V. Koneti Rao, M.D., FRCPA, Senior Research Physician, Primary Immune Deficiency Clinic (ALPS Clinic).

Pre-clinical pipeline

OTL-105

In 2021, we entered into a license agreement with Orchard to research, develop, manufacture and commercialize OTL-105, an ex-vivo autologous gene therapy for the treatment of patients with HAE due to a deficiency of C1INH. This novel approach has the potential of being curative, allowing HAE patients to live a normal life, without being dependent on acute or prophylactic use of HAE medication.

OTL-105 is based on Orchard’s ex-vivo autologous gene therapy platform approach which is designed to use the HAE patients’ own blood stem cells and insert those cells into a working copy of the gene that is reduced in HAE. In pre-clinical proof of concept studies, gene-corrected stem cells produced relevant active C1-esterase inhibitor.

Preclinical development of OTL-105 continued during 2023 including work towards the preparation of preclinical proof of concept studies.

On January 24, 2024, Kyowa Kirin Co., Ltd., a Japan-based global specialty pharmaceutical company, completed an acquisition of Orchard. We are responsible for funding of the OTL-105 program and do not anticipate any negative impact of the acquisition on OTL-105.

Pompe Disease program - discontinued
As announced in our first quarter 2023 results, we decided that, based on our preclinical investigations and evaluations for potential differentiating features of Alpha-Glucosidase, for the treatment of Pompe Disease

~~We are developing a next-generation alpha-glucosidase replacement therapy for the treatment~~, we would discontinue further development of Pompe disease. Pompe disease, also known as Acid Maltase Deficiency or Glycogen Storage Disease type II, is an inherited muscular myopathy disorder caused by the build-up of a polymer sugar called glycogen in the body’s cells. It affects around 1 in 40,000 people, varying within different ethnic groups. Pompe disease is a rare multisystem genetic disorder that is characterized by absence or deficiency of the lysosomal enzyme alpha-glucosidase, or GAA. This enzyme is required to break down, or metabolize, the complex carbohydrate glycogen and convert it into the simple sugar glucose. Failure to achieve its proper breakdown results in massive accumulation of lysosomal glycogen in cells, particularly in cardiac, smooth, and skeletal muscle cells.

Pompe disease is a single-disease continuum with variable rates of disease progression and different ages of onset. The infantile form is characterized by severe muscle weakness and abnormally diminished muscle tone, or hypotonia, without muscle wasting, and usually manifests within the first few months of life. Additional abnormalities may include enlargement of the heart (cardiomegaly), the liver (hepatomegaly) and/or the tongue 9macroglossia). Without treatment, progressive cardiac failure usually causes life-threatening complications by the age of 12 to 18 months. Pompe disease can also present in childhood, adolescence or adulthood, collectively known as late-onset Pompe disease. The extent of organ involvement may vary among affected individuals, but skeletal muscle weakness is usually present with minimal cardiac involvement. Initial symptoms of late-onset Pompe disease may be subtle and may go unrecognized for years.

~~We are currently studying our alpha-glucosidase therapy in IND-enabling studies.~~

~~Next-Generation Enzyme Replacement Therapies: Alpha-Galactosidase for the treatment of Fabry’s Disease~~

this asset.

Fabry’s disease (also known as Anderson-Fabry disease, angiokeratoma corporis diffusum, or alpha-galactosidase A deficiency) is another rare genetic lysosomal storage disease resulting from the deficient activity of a different enzyme, alpha-galactosidase A (αGalA), caused by an X-chromosome mutation of the GLA gene. Fabry’s disease can cause a wide range of systemic symptoms. It is a form of sphingolipidosis, as it involves dysfunctional metabolism of sphingolipids. Fabry’s disease affects around 1 in 40,000 men and 1 in 60,000 women and is less dependent on ethnicity than Pompe Disease. This disorder belongs to the same group of diseases known as lysosomal storage disorders.

Lysosomes function as the primary digestive units within cells. Enzymes within lysosomes break down or digest particular compounds and intracellular structures. αGalA functions to break down specific complex sugar-lipid molecules called glycolipids, by removing the terminal galactose sugar from the end of these glycolipid molecules. The enzyme deficiency causes a continuous build-up of the glycolipids in the body’s cells, resulting in cell abnormalities and organ dysfunction that particularly affect the heart and kidneys. The GLA gene is located on the X-chromosome and therefore, Fabry’s disease is inherited as an X-linked disorder. Males are typically more severely affected than females. Females have a more variable course and may be asymptomatic or as severely affected as males.

~~There are two major disease phenotypes: the type 1 “classic” and type 2 “later-onset” subtypes. Both lead to renal failure, and/or cardiac disease, and early death.~~

As for Pompe disease, the approved treatments at present use a recombinant form of the human enzyme αGalA produced in cell lines. As for alpha-glucosidase, Pharming believes that its own platform technology can produce a pure, less immunogenetic αGalA that will compare favorably with existing therapies on safety, efficacy and immunogenicity.

Manufacturing

~~Our Transgenic Production Technology Platform~~
RUCONEST®

Our proprietary transgenic manufacturing technology platform is the foundation upon which we have built our ~~company.~~Company. We have developed a unique, scalable, reproducible, current Good Manufacturing Practices, or cGMP, validated methodology for the production of high-quality recombinant human proteins. Our manufacturing process utilizes transgenic animals to produce human recombinant proteins in their milk. This process enables the production of the protein in the milk of the animals without the animals suffering or being altered in other aspects of their biology. ~~We are leveraging this process to manufacture RUCONEST®, as well as clinical trial supplies for our rhC1INH and other protein replacement therapy product candidates.~~

~~Our Manufacturing Facilities~~

Once the ~~animal~~rabbit lines ~~(rabbits and cattle)~~ are produced, we raise them at specialized facilities ~~that incorporate protections against contamination of their environment,~~with high standards of animal husbandry, welfare and security. These facilities further incorporate protections against contamination from the outside environment. Special attention is given to strict identification and segregation of transgenic and non-transgenic materials and animals. Moreover, our Company also follows strict pharmaceutical procedures to prevent the prohibited release of transgenic animals, their semen or any other reproductive transgenic material into nature. In these facilities, the consistent and regulated handling of animals is carefully monitored. The resulting milk goes through several ~~stage~~stages of cGMP processes. We have multiple “upstream” manufacturing facilities of our own. The “downstream” processes ~~includes~~include the purification, involving standard technologies

such as various chromatography and filtration steps, followed by formulation and sterile filling into lyophilized powder product in vials ready for reconstitution. ~~As the demand for RUCONEST® and the needs of our clinical trials continue to increase, we have and continue to invest substantially in expanding all of these capabilities.~~ We have entered into ~~downstream~~ manufacturing and supply agreements for RUCONEST® with, among others, Sanofi S.A., or Sanofi, and BioConnection Investments B.V. (formerly BioConnection B.V.), or BioConnection, for these downstream processes, as we do not have a GMP-certified lab capable of performing the quality control procedures necessary for the ~~production~~release of ~~rhC1INH,~~product.

Joenja®

Pursuant to our agreement with Novartis relating to Joenja®, we have agreed to manufacture both the drug substance as well as the drug product via our own Contract Manufacturing Organizations, or CMOs. For the drug substance, Ardena Holding N.V., or Ardena, has been chosen as the CMO. For the film coated tablets, Skyepharma Production SAS, or Skyepharma, has been chosen as the CMO. The 70 mg film coated tablet manufactured by Skyspharma have been launched for patients 12 years of ~~RUCONEST®. We~~age and older. In addition, two pediatric formulations are also inbeing developed; the ~~process of developing additional upstream manufacturing facilities of our own~~first, lower strengths tablets that also will be manufactured at Skyepharma, and ~~have also initiated~~ the design stage for the construction of our first purification plant. In the future, if successful with development of any of the subsequent indications for rhC1INH, additional facilities may have to be built or rented and we may also have to contract additional (downstream) purification capacity beyond that. second, film coated granules that are being developed by Almac Group.

As we continue to expand the capacity and range of products, it is uncertain whether and to what extent we will be able to ~~develop such capabilities or~~ enter into ~~such~~manufacturing partnerships or agreements on a timely basis and on acceptable terms. We have established a contract and supplier relationship management process to facilitate the timely onboarding of new contractors or the expansion of contracts at current contractors. Even if a partnership or agreement has been concluded, the possibility exists that these partners will fail to live up to the agreements made with them or that we are unable to maintain such agreements. A failure to develop and/or sufficiently contract additional manufacturing capacity on a timely basis could have significant ~~detrimental~~

consequences for our business, to our financial position, results of operations, prospects and as result ~~of that~~ may also have a negative effect on the market price of our shares.

Our Strategy

Our ~~goal~~vision is to ~~be a~~become the leading ~~biopharmaceutical~~global rare disease company ~~focused on offering treatment options~~of choice for patients and partners with ~~unmet medical needs, focused~~a specific focus on transformative medicines in rare diseases. Our ~~three-pillar strategy for achieving our goal is:~~

•~~Continuing~~mission is to ~~grow sales of RUCONEST® through further country launches and increasing our market share of~~bring the ~~treatment of acute HAE attacks. We have fully transitioned commercialization of RUCONEST® in major international markets with our own commercialization organization, including our own sales force. This pertains to~~unserved rare disease patients the ~~United States, the United Kingdom and the European Union. RUCONEST® is being sold in South Korea, Israel and certain Central and South American countries~~solutions they need through our ~~distributor network.~~

•~~Expanding indications for rhC1INH~~fully integrated and ongoing clinical development and commercialization ~~of new recombinant human proteins using~~expertise.Our core values enable our ~~platform technology~~.mission and create a clear pathway forward to meet our strategic goals and objectives.

◦~~Developing rhC1INH for additional large unmet indications.~~ We ~~are currently developing rhC1INH for the treatment of several indications with unmet medical need, including severe pneumonia resulting from COVID-19 infection, acute kidney injury and pre-eclampsia.~~

◦~~Developing next-generation RUCONEST®. We are developing more convenient next-generation forms of RUCONEST®~~create sustainable long-term value by leveraging our core strengths in order to address the needs of patients with HAE. In particular, we are developing a new low-volume injection version of the full dose of RUCONEST® which can be used in future clinical trials for intravenous, intramuscular or subcutaneous delivery to increase convenience of treatment.

◦Leverage our transgenic manufacturing technology to develop next-generation protein replacement therapies. We will continue to leverage our transgenic manufacturing technology to develop next-generation protein replacement therapies, such as our product candidate for Pompe disease. We believe protein replacement therapies that are manufactured utilizing our transgenic technology may be less immunogenic than current therapies, which are manufactured using traditional biologic cell-line approaches.

•~~In-licensing or acquiring drug candidates that are in the late-stages of~~ clinical development and rare-disease drug commercialization. To sustain longer-term growth, we continue to build a risk-balanced portfolio while taking on more development activities, including life cycle management of leniolisib. This portfolio could include a broad range of acquired and in-licensed clinical stage assets that ~~can potentially leverage~~further build upon our strategy.

Moreover, we have made progress on our strategy to move from revenue dependency on one product in one geography, to a company with multiple commercialized products in multiple geographies generating revenues across key markets.

For leniolisib, our strategy is to make the ~~Company’s commercial infrastructure~~

◦Developing leniolisib for the treatment of APDS. In 2019, we entered into a collaboration with Novartis, pursuant to which we acquired rights to market leniolisib. Leniolisib is currently being studieddrug available in ~~a Phase 2/3 clinical trial in patients with APDS. If the trial is successful, and leniolisib is approved, we will leverage our immunologist-focused sales and marketing infrastructure in~~key markets including the United States, ~~the United Kingdom~~Europe, U.K., Japan, Asia Pacific, Middle East and ~~the European Union for commercialization.~~

◦

◦Developing or acquiring new programs or companies that can be commercialized using our sales and marketing infrastructure. We intend to continue our search to develop acquire new programs that will be synergistic with our own commercialization organization and its expertise and experience. We acquired leniolisib from Novartis in 2019 in furtherance of this strategy. We will continue to evaluate additional opportunities to expand our pipeline through acquisitions of complementary programs or companies.Canada.

Competition

The life sciences industry is characterized by rapidly advancing technologies, intense competition and a strong emphasis on proprietary products. We face potential competition from many different sources, including major pharmaceutical, specialty pharmaceutical and biotechnology companies, academic institutions, governmental agencies and public and private research institutions. Any product candidates that we successfully develop and

commercialize will compete with existing products and new products that may become available in the future. These competitors also compete with us in recruiting and retaining qualified scientific and management personnel and establishing clinical study sites and patient registration for clinical studies, as well as in acquiring technologies complementary to, or necessary for, our programs.

Companies that complete clinical trials, obtain required ~~regulatory~~health authority approvals and commence commercial sale of their drugs before their competitors may achieve a significant competitive advantage, and our commercial opportunity could be reduced or eliminated if competitors develop and commercialize products that are safer, more effective, have fewer or less severe side effects, are more convenient or are less expensive than any products that we may develop and commercialize. Our competitors may also obtain FDA, ~~EMA~~European Commission, or other regulatory approval for their products more rapidly than we obtain approval, which could result in our competitors establishing a strong market position for either the product or a specific indication before we are able to enter the market. Drugs resulting from our research and development efforts or from our joint efforts with collaboration partners therefore may not be commercially competitive with our competitors’ existing products or products under development.

We anticipate that we will face increasing competition as new products and therapies enter the market and advanced technologies become available in both the HAE space and relating to upcoming pipeline projects. We expect any treatments that we develop and commercialize to compete on the basis of, among other things, efficacy, safety, delivery, patient convenience, price and the availability of reimbursement from government and other third-party payors.

Competition in HAE

In the core U.S. market for RUCONEST®, there are four approved therapies available to treat acute HAE attacks and an additional four therapies for attack prevention. These therapies have transformed the lives of HAE patients. The early years of treatment focused on limiting the consequences of attacks, and very few patients used prophylactic medications. With the improvement of prophylactic therapy, many patients now use this and have had significant benefit.

Nevertheless, patients taking prophylactic medications still experience breakthrough attacks and immediate access to an acute treatment medication is required and recommended in all HAE treatment guidelines. With

two of the prophylactic medications (HAEGARDA® and TAKHZYRO®), published data from randomized-controlled studies indicate that approximately 50% of patients still had breakthrough attacks. Likewise, with the oral prophylactic medication ORLADEYO® showed that 90% of patients had breakthrough attacks in a randomized-controlled clinical trial. Lastly, many patients need to re-dose acute therapies that do not address the underlying C1INH deficiency.

RUCONEST®, a recombinant C1 esterase inhibitor that blocks production of bradykinin, is an option for patients who continue to experience breakthrough attacks while on prophylaxis or for patients who need to re-dose other acute therapies due to relapse of their attacks. As RUCONEST® is intravenously delivered it is immediately and completely bioavailable to stop the progression of an HAE attack.

We consider several companies to be our current and future competitors in the HAE space, including, but not limited to, BioCryst, ~~Kalvista,~~BioMarin, CSL Behring, Intellia, Ionis, Kalvista, Pharvaris and Takeda. ~~However, other companies may also develop alternative treatments for the diseases we have identified as being potentially treated with rhC1INH.~~ To the extent ~~those alternative~~these companies develop treatments that are more efficacious, less expensive, more convenient or produce fewer side effects, our market opportunity would be reduced.

Leniolisib competition

With regards to competition for ~~leniolisib. We~~leniolisib, we are currently not aware of any ~~continuing~~active APDS clinical development ~~programs with regards to APDS, however,~~programs. However, as several programs were halted in early stage of development, these could be ~~re- started~~re-started at any time and may deliver products that, if efficacious and safe, could compete successfully against leniolisib and may significantly reduce our future market opportunity.

We anticipate that we will face intense and increasing competition as new products and therapies enter the market and advanced technologies become available in both the HAE space and in upcoming pipeline projects. We expect any treatments that we develop and commercialize to compete on the basis of, among other things, efficacy, safety, delivery, patient friendliness, price and the availability of reimbursement from government and other third-party payors.

Intellectual Property

Patents

Patents, ~~know how,~~know-how, trade secrets and other intellectual property rights are important to the success of our business. We use patents and licensing to protect our products and technology and are careful to develop products that don’t infringe on the intellectual property rights of third parties. Currently, we have several patent applications granted and pending in jurisdictions including the United States, Europe and Japan. The patent positions of pharmaceutical companies can be uncertain and may involve complex legal and factual questions.

It is uncertain whether pending patent applications will be successful, that these patents will afford adequate protection and that the existing patents will not be challenged. Failure to obtain patents may result in expensive and protracted proceedings to defend our proprietary rights. The success of our ~~company~~Company also depends, in part, on the ability of our licensors to obtain, maintain and enforce their intellectual property rights to the extent required for us to develop and commercialize our products.

We actively seek to protect the intellectual property and proprietary technology that we believe is important to our business, including seeking, maintaining, enforcing and defending patent rights and protecting ~~our related~~ know-how for our technology platform and related therapeutics and processes, whether developed internally or licensed to or from third parties. Our success will depend on our ability to obtain and maintain patent and other protections including data/market exclusivity for our product candidates and platform technology, preserve the confidentiality of our know-how and operate without infringing the valid and enforceable patents and proprietary rights of third parties. See ~~the “Risk~~“Item 3 – D. Risk Factors – Risks Related to Intellectual Property” ~~section~~ of this Annual Report.

Our policy is to seek to protect our proprietary position early, generally by filing an initial priority filing in the European Patent Office. This is followed by the filing of an international patent application under the Patent Cooperation Treaty, or PCT, claiming priority from the initial application(s) and then filing regional and national applications for patent grant in territories including, for example, the United States and Europe. In each case, we determine the strategy and territories required after discussion with our patent attorneys, and, where applicable, collaboration partners so that we obtain relevant coverage in territories that are commercially important to our technologies and product candidates. With respect to our product candidates and related methods that we intend to develop and commercialize in the normal course of business, we will seek patent protection covering formulation, the indicated use, and the method of administration. We may also pursue patent protection with respect to manufacturing and drug development processes when possible. We intend to

additionally rely on data exclusivity, market exclusivity, other regulatory exclusivities and patent term extensions when available. We also rely on trade secrets and know-how relating to our underlying platform technology and product candidates. In each case, we seek to balance the value of patent protection against the advantage of keeping know-how confidential.

Issued patents can provide exclusivity on claimed subject matter for varying periods of time, typically starting on the date of patent grant and expiring at the end of the legal term of a patent in the country in which it is granted. From the date of filing, provisional protection is present to the scope of the later granted claims. In general, patents provide exclusionary rights for 20 years from the filing date of a non-provisional patent application in a particular country, or for a PCT international patent application, from the international filing date, assuming all maintenance fees are paid. In some instances, patent terms may be increased or decreased, depending on the laws and regulations of the country or jurisdiction that grants the patent. In the United States, a patent term may be shortened if a patent is terminally disclaimed over another patent or as a result of delays in patent prosecution by the patentee. A U.S. patent’s term may be lengthened by a patent term adjustment which compensates a patentee for administrative delays by the USPTO in granting a patent. The patent term of a European patent is 20 years from its filing date, which ~~unlike in the United States,~~ is not subject to patent term adjustments in the same way as U.S. patents. When using a priority filing, the priority year can be added to the patent term of 20 years from the filing; the patent term may thus be 21 years from the priority date.

The level of protection afforded by a patent may vary and depends upon many factors, including the type of patent, the scope of its claim coverage, claim interpretation and patent law in the country or region that granted the patent, the validity and enforceability of the patent under such laws, and the availability of legal remedies in each particular country.

In certain regions or countries, regulatory-related patent extensions may be available to extend the term of a patent that claims ana regulatorily approved product or method. Regulatory-based patent term extensions allow patentee to recapture a portion of patent term effectively lost as a result of the regulatory review period for a product candidate. The term of a United States patent that covers an FDA-approved drug or biologic, for example, may be eligible for patent term extension, which permits patent term restoration as compensation for the patent term lost during the FDA regulatory review process. The Drug Price Competition and Patent Term Restoration Act of 1984, or the Hatch-Waxman Act, permits a patent term extension of up to five years beyond the expiration of the patent. Patent extension cannot extend the remaining term of a patent beyond a total of 14 years from the date of product approval and only one patent applicable to an approved drug may be extended. Similar provisions are available in Europe, Japan and other jurisdictions to extend the term of a patent that covers an approved drug, for example Supplementary Protection Certificates in Europe. In particular, a maximum of five and a half years of supplementary protection can be achieved in Europe for an active ingredient or combinations of active ingredients of a medicinal product protected by a basic patent, if a valid marketing authorization exists (which must be the first authorization to place the product on the market as a medicinal product) and if the product has not already been the subject of supplementary protection. In the future, if and when our additional products receive FDA approval, we expect to apply for regulatory patent term extensions on patents covering those products. We anticipate that some of our issued patents may be eligible for patent term extensions in certain jurisdictions based on an approved product or method, but such extensions may not be available and therefore its commercial monopoly may be restricted solely to patent term.

RUCONEST® has patent protection in the U.S. and EU until October 7, 2026, as well as biologics reference product exclusivity in the United States expiring July 16, 2026.

As of December 31, ~~2020,~~2023, we solely owned ~~142~~110 granted patents, of which 8 are U.S.-issued, and 3312 pending patent applications, of which 2 are U.S. pending patent applications. Commercially or strategically important non-U.S. jurisdictions in which we hold issued or pending patent applications include (in addition to Europe):

the United Kingdom, China, Japan, Canada, Israel, Australia and New Zealand. We also have exclusive license to ~~211~~161 patents and patent applications from Novartis related to leniolisib.

Our granted patents and pending patent applications include the making of C1INH in the milk of transgenic mammals. In addition, our pending patent applications also include claims for the use of C1INH in ~~pre-eclampsia.~~PE.

~~Our current~~Pharming expects to have patent ~~application family directed to C1INH~~protection for leniolisib in APDS under the Novartis composition of matter patent (U.S. Patent No. 8,653,092, EU patent EP259094B1) through July 2036 in the ~~milk of transgenic mammals expires in 2026~~U.S. and EU, which we

anticipate may be extended to January 2037 if we obtain a pediatric extension. The USPTO adjusted the expiration when the patent was granted to account for delays in the ~~United States by~~approval of the patent, ~~term extension;~~and an extension was applied for shortly after the ~~regular expiry dates~~FDA approved Joenja® (leniolisib). Similarly, in the ~~rest~~E.U., a supplemental protection certificate will be applied for shortly after approval in the E.U. It is these extensions which we anticipate will result in the 2036 expiration.

In the European Economic Area, upon successful completion of the ~~world is 2021;~~agreed PIP, leniolisib would be eligible for up to an additional two years of marketing exclusivity in ~~Europe there is~~the EU, on top of the ten-year EU market exclusivity after market approval as result of its EU Orphan Drug Designation. Thus, we anticipate that the patent ~~term extension until 2025 in some countries. Our current patent families covering use of C1INH in pre-eclampsia, if and when granted, would not be expected to expire until at least 2039.~~protection will extend beyond the marketing exclusivity.

Trademarks

We currently have registered trademarks in the EU, the United States and key international markets we intend to focus on for our ~~company~~Company name “Pharming” with the associated logo, “RUCONEST®” with its associated logo, as well as ~~on “RUCONEST®” with~~for Joenja® and its associated logo. We have obtained trademark protection for other marks, including ones for ~~potential names of certain products in development.~~patient support services associated with our products. With the assistance of outside counsel we regularly assess which marks we should register and where, and we have effective systems to ensure that renewals are timely filed. We also maintain watch services and ensure that our marks are not being infringed internationally.

Government Regulation and Product Approval

United States

In the United States, the FDA regulates drugs under the Federal Food, Drug, and Cosmetic Act, ~~or FDCA,~~ and its implementing regulations. The process of obtaining regulatory approvals and the subsequent compliance with appropriate federal, state, local and non-U.S. statutes and regulations requires the expenditure of substantial time and financial resources. Failure to comply with the applicable United States requirements at any time during the drug development process, approval process or after approval, may subject an applicant to a variety of administrative or judicial sanctions, such as the FDA’s refusal to approve a pending New Drug Application, or NDA, or Biologics License Application, or BLA, withdrawal of an approval, imposition of a clinical hold, issuance of warning or untitled letters, product recalls, product seizures, total or partial suspension of production or distribution, injunctions, fines, refusals of government contracts, restitution, disgorgement or civil or criminal penalties.

The process required by the FDA before a drug may be marketed in the United States generally involves:

•completion of preclinical laboratory tests, animal studies and formulation studies in compliance with the FDA’s good laboratory practice, or GLP, regulations;

•submission to the FDA of an IND, which must become effective before human clinical trials may begin;

•approval by an independent institutional review board, or IRB, at each clinical site before each trial may be initiated;

•performance of adequate and well-controlled clinical trials, in accordance with good clinical practice, or GCP, requirements to establish the safety and efficacy of the proposed drug for each indication;

•payment of user ~~fees; s~~fees,if applicable;

•submission to the FDA of ana registration filing (i.e., NDA or ~~BLA;~~BLA);

•~~satisfactory completion of an FDA advisory committee review, if applicable;~~ satisfactory completion of an FDA inspection of the manufacturing facility or facilities at which the product is produced to assess compliance with cGMP requirements, and to assure that the facilities, methods and controls are adequate to preserve the drug’s identity, strength, quality and purity;

•satisfactory completion of an FDA inspection of selected clinical sites to assure compliance with GCPs and the integrity of the clinical data;

•satisfactory completion of an FDA advisory committee review; if applicable, and

•FDA review and approval of the ~~NDA or BLA.~~registration filing.

Preclinical Studies

Preclinical studies include laboratory evaluation of product chemistry, toxicity and formulation, as well as animal studies to assess potential safety and efficacy. An IND ~~sponsor~~Sponsor must submit the results of the nonclinical tests, together with manufacturing information, analytical data and any available clinical data or literature, among other things, to the FDA as part of an IND. Some nonclinical testing may continue even after the IND is

submitted. An IND automatically becomes effective 30 days after receipt by the FDA, unless before that time the FDA raises concerns or questions related to one or more proposed clinical trials and places the clinical trial on a clinical hold. In such a case, the IND ~~sponsor~~Sponsor and the FDA must resolve any outstanding concerns before the clinical trial can begin. As a result, submission of an IND may not result in the FDA allowing clinical trials to commence.

Clinical Trials

Clinical trials involve the administration of the investigational new drug or biologic to human subjects under the supervision of qualified investigators in accordance with GCP requirements, which include the requirement that all research subjects provide their informed consent in writing for their participation in any clinical trial. Clinical trials are conducted under protocols detailing, among other things, the objectives of the trial, the parameters to be used in monitoring safety and the effectiveness criteria to be evaluated. A protocol for each clinical trial and any subsequent protocol amendments must be submitted to the FDA as part of the IND. In addition, an IRB at each institution participating in the clinical trial must review and approve the plan for any clinical trial before it commences at that institution, and the IRB must continue to oversee the clinical trial while it is being conducted. Human clinical trials are typically conducted in three sequential phases, which may overlap or be combined. In Phase 1,I, the drug or biologic is initially introduced into healthy human subjects or patients with the target disease or condition and tested for safety, dosage tolerance, absorption, metabolism, distribution, excretion and, if possible, to gain an initial indication of its effectiveness. In Phase 2,II, the drug ~~typically~~or biologic is administered to a limited patient population to identify possible adverse effects and safety risks, to preliminarily evaluate the efficacy of the product for specific targeted diseases and to determine dosage tolerance and optimal dosage. In Phase 3,III, the drug or biologic is administered to an expanded patient population, generally at geographically dispersed clinical trial sites, in well-controlled clinical trials to generate enough data to statistically evaluate the safety and efficacy of the product for registration approval, to establish the overall risk-benefit profile of the product and to provide adequate information for the labeling of the product.

Progress reports detailing the results of the clinical trials must be submitted, at least annually, to the FDA, and more frequently if SAEs occur. Phase 1,I, Phase 2II and Phase 3III clinical trials may not be completed successfully within any specified period, or at all. Furthermore, the FDA or the ~~sponsor~~Sponsor may suspend or terminate a clinical trial at any time on various grounds, including a finding that the research subjects are being exposed to an unacceptable health risk. Similarly, an IRB can suspend or terminate approval of a clinical trial at its institution if the clinical trial is not being conducted in accordance with the IRB’s requirements, or if the drug has been associated with unexpected serious harm to patients.

Drugs or biologics used in clinical trials must be manufactured in accordance with cGMP.

During the development of a product, the FDA provides the opportunity for dialogue and guidance on the development program. There are several categories of formal meetings which are dependent upon the stage of development, and the product type. Advice from the FDA is typically provided based on questions concerning, for example, quality (chemistry, manufacturing and controls testing), nonclinical testing and clinical studies. Such advice is not legally binding with regard to any future registration applications of the product concerned however is helpful in product development and understanding FDA expectations.

Marketing Approval

Assuming successful completion of the required clinical testing, the results of the preclinical studies and clinical trials, together with detailed information relating to the product’s chemistry, manufacture and controls, and proposed labeling, among other things, are submitted to the FDA as part of an NDA or BLA requesting approval to market the product for one or more indications. In most cases, the submission of an NDA or BLA is subject to a substantial application user fee. Under the ~~Prescription Drug User Fee Act, or~~ PDUFA, guidelines that are currently in effect, the FDA has a goal of ten months from the date of “filing” of a standard NDA or BLA for a new molecular entity ~~respectively~~or biological entity, respectively, and to review and act on the ~~submission.~~submission of such. This review typically takes twelve months

from the date the NDA or BLA is submitted to the FDA because the FDA has approximately two months to make a “filing” decision.

In addition, under the Pediatric Research Equity Act, certain NDAs, BLAs or supplements to an NDA or BLA must contain data that are adequate to assess the safety and effectiveness of the drug for the claimed indications in all relevant pediatric subpopulations, and to support dosing and administration for each pediatric subpopulation for which the product is safe and effective. The FDA may, on its own initiative or at the request of the applicant, grant deferrals for submission of some or all pediatric data until after approval of the product for use in adults, or full or partial waivers from the pediatric data requirements. Unless otherwise required by regulation, the pediatric data requirements do not apply to products with orphan designation.

The FDA also may require submission of a risk evaluation and mitigation strategy, or REMS, plan to ensure that the benefits of the drug outweigh its risks. The REMS plan could include medication guides, physician

communication plans, assessment plans, and/or elements to assure safe use, such as restricted distribution methods, patient registries or other risk minimization tools.

The FDA conducts a preliminary filing review of all NDAs or BLAs within the first 60 days after submission, before accepting them, ~~for filing,~~ to determine whether they are sufficiently complete to permit substantive review. The FDA may request additional information rather than accept an NDA or BLA for filing. In this event, the application must be resubmitted with the additional information. The resubmitted application is also subject to review before the FDA accepts it for filing. Once the submission is accepted for filing, the FDA begins an in-depth substantive review. The FDA reviews an NDA or BLA to determine, among other things, whether the drug is safe and effective and whether the facility in which it is manufactured, processed, packaged or held meets standards designed to assure the product’s continued safety, quality and purity.

The FDA may refer an application ~~for a novel drug~~ to an advisory committee. An advisory committee is a panel of independent experts, including clinicians and other scientific experts, that reviews, evaluates and provides a recommendation as to whether the application should be approved and under what conditions. The FDA is not bound by the recommendations of an advisory committee, but it considers such recommendations carefully when making decisions.

Before approving an NDA or BLA, the FDA typically will inspect the facility or facilities where the product is manufactured. The FDA will not approve an application unless it determines that the manufacturing processes and facilities are in compliance with cGMP requirements and are adequate to assure consistent production of the product within required specifications. Additionally, before approving an NDA or BLA, the FDA will typically inspect one or more clinical trial sites to assure compliance with GCP requirements.

The testing and ~~approval~~data acquisition process for an approvable NDA or BLA requires substantial time, effort and financial resources, and takes several years to complete. Data obtained from preclinical and clinical testing are not always conclusive and may be susceptible to varying interpretations, which could delay, limit or prevent regulatory approval. The FDA may not grant approval of an NDA or BLA on a timely basis, or at all.

After evaluating the NDA or BLA and all related information, including the advisory committee recommendation, if any, and inspection reports regarding the manufacturing facilities and clinical trial sites, the FDA may issue an approval letter, or, in some cases, a complete response letter. A complete response letter generally contains a statement of specific conditions that must be met in order to secure final approval of the NDA or BLA and may require additional clinical or preclinical testing in order for FDA to reconsider the application. Even with submission of this additional information, the FDA ultimately may decide that the application does not satisfy the regulatory criteria for approval. If and when those conditions have been met to the FDA’s satisfaction, the FDA will typically issue an approval letter. An approval letter authorizes commercial marketing of the drug with specific prescribing information for specific indications.

Even if the FDA approves a product, it may limit the approved indications for use of the product, require that contraindications, warnings or precautions be included in the product labeling, require that post-approval studies, including Phase 4IV clinical trials, be conducted to further assess a drug’s safety after approval, require testing and surveillance programs to monitor the product after commercialization, or impose other conditions, including distribution and use restrictions or other risk management mechanisms under a REMS, which can materially affect the potential market and profitability of the product. The FDA may prevent or limit further marketing of a product based on the results of post-marketing studies or surveillance programs. After approval, some types of changes to the approved product, such as adding new indications, manufacturing changes, and additional labeling claims, are subject to further testing requirements and additional FDA review and ~~approval.~~approval procedures.

Orphan Drug Designation

Under the Orphan Drug Act, the FDA may grant orphan drug designation to a drug intended to treat a rare disease or condition, which is a disease or condition that affects fewer than 200,000 individuals in the United States, or if it affects more than 200,000 individuals, there is no reasonable expectation that sales of the drug in the United States will be sufficient to offset the costs of developing and making the drug available in the United States. Orphan drug designation must be requested before submitting an NDA or BLA. Orphan drug designation does not convey any advantage in or shorten the duration of, the regulatory review and approval process. If the FDA approves a ~~sponsor’s~~Sponsor’s marketing application for a designated orphan drug for use in the rare disease or condition

for which it was designated, the ~~sponsor~~Sponsor is eligible for a seven-year period of marketing exclusivity, during which the FDA may not approve another ~~sponsor’s~~Sponsor’s marketing application for a drug with the same active moiety and intended for the same use or indication as the approved orphan drug, except in limited circumstances, such as if a subsequent ~~sponsor~~Sponsor demonstrates its product is clinically superior. During a ~~sponsor’s~~Sponsor’s orphan drug exclusivity period, competitors, however, may receive approval for drugs with different active moieties for the same indication as the approved orphan drug, or for drugs with the same active moiety as the approved orphan drug, but for different indications. Orphan drug exclusivity could block the approval of one of our products for seven years if a competitor obtains approval for a drug with the same active moiety intended for the same indication, ~~before we do,~~ unless we are able to demonstrate that grounds for withdrawal of the orphan drug exclusivity exist, or that our product is clinically superior. Further, if a designated orphan drug receives marketing approval for an indication broader than the rare disease or condition for which it received orphan drug designation, it may not be entitled to exclusivity.

Pediatric Development

Under the Pediatric Research Equity Act, certain NDAs, BLAs or supplements to an NDA or BLA must contain data that are adequate to assess the safety and effectiveness of the drug for the claimed indications in all relevant pediatric subpopulations, and to support dosing and administration for each pediatric subpopulation for which the product is safe and effective. The FDA may, on its own initiative or at the request of the applicant, grant deferrals for submission of some or all pediatric data until after approval of the product for use in adults, or full or partial waivers from the pediatric data requirements. Unless otherwise required by regulation, the pediatric data requirements do not apply to products with orphan designation.

Data Exclusivity

In the U.S., applications for generic small molecule medicinal products may not need to include the results of preclinical and clinical trials, but instead can refer to the data included in the marketing authorization of a reference product for which regulatory data exclusivity has expired.

In the U.S., the Abbreviated New Drug Application, or ANDA, contains data which is submitted to FDA for the review and potential approval of a small molecule generic drug product. Once approved, an applicant may manufacture and market the generic drug product to provide a safe, effective, lower cost alternative to the brand-name drug it references.

Post-approval Requirements

Drugs manufactured or distributed pursuant to FDA approvals are subject to pervasive and continuing regulation by the FDA, including, among other things, requirements relating to recordkeeping, periodic reporting, product sampling and distribution, advertising and promotion and reporting of adverse experiences with the product. After approval, ~~most~~ changes to the approved product, such as adding new indications, manufacturing changes or other labeling claims, are subject to further testing requirements and in many cases prior FDA review and approval. There also are continuing annual user fee requirements for ~~any~~ marketed products and the establishments at which such products are manufactured, as well as application fees for supplemental applications with clinical data. Even if the FDA approves a product, it may limit the approved indications for use of the product, require that contraindications, warnings or precautions be included in the product labeling, including a boxed warning, require that post-approval studies, including Phase 4IV clinical trials, be conducted to further assess a drug’s safety after approval, require testing and surveillance programs to monitor the product after commercialization, or impose other conditions, including distribution restrictions or other risk management mechanisms under a REMS, which can materially affect the potential market and profitability of the product. The FDA may prevent or limit further marketing of a product based on the results of post-marketing studies or surveillance programs.

In addition, ~~drug~~ manufacturers and other entities involved in the manufacture and distribution of approved drugs ~~are required to register their establishments with the FDA and state agencies, and~~or biologics are subject to periodic unannounced inspections by the FDA ~~and these state agencies~~ for compliance with cGMP requirements. Changes to the manufacturing process are strictly regulated and often require prior FDA approval before being implemented. FDA regulations also require investigation and correction of any deviations from cGMP and impose reporting and documentation requirements upon the sponsor and any third-party manufacturers that the sponsor may decide to use. Accordingly, manufacturers must continue to expend time, money and effort in the area of production and quality control to maintain cGMP compliance.

Once an approval is granted, the FDA may withdraw the approval if compliance with regulatory requirements and standards is not maintained or if problems occur after the product reaches the market.

Later discovery of previously unknown problems with a product, including AEs of unanticipated severity or frequency, or with manufacturing processes, or failure to comply with regulatory requirements, may result in mandatory revisions to the approved labeling to add new safety information; imposition of post-market studies or clinical trials to assess new safety risks; or imposition of distribution or other restrictions under a REMS program. Other potential consequences include, among other things:

•restrictions on the marketing or manufacturing of the product, complete withdrawal of the product from the market or product recalls;

•fines, warning letters or holds on post-approval clinical trials;

•refusal of the FDA to approve pending NDAs, BLAs or supplements to approved NDAs, BLAs, or suspension or revocation of product approvals;

•product seizure or detention, or refusal to permit the import or export of products; or

•injunctions or the imposition of civil or criminal penalties.

The FDA strictly regulates marketing, labeling, advertising and promotion of products that are placed on the market. Drugs or biologics may be promoted only for the approved indications and in accordance with the provisions of the

approved label, although physicians, in the practice of medicine, may prescribe approved ~~drugs~~products for unapproved indications. The FDA and other agencies actively enforce the laws and regulations prohibiting the promotion of off-label uses, and a company that is found to have improperly promoted off-label uses may be subject to significant liability.

In addition, the distribution of prescription pharmaceutical products is subject to the Prescription Drug Marketing Act, or PDMA, which regulates the distribution of drugs and drug samples at the federal level, and sets minimum standards for the registration and regulation of drug distributors by the states. Both the PDMA and state laws limit the distribution of prescription pharmaceutical product samples and impose requirements to ensure accountability in distribution.

Federal and State Fraud and Abuse, Data Privacy and Security, and Transparency Laws and Regulations

In addition to FDA restrictions on marketing of pharmaceutical products, federal and state healthcare laws and regulations restrict business practices in the biopharmaceutical industry. These laws may impact, among other things, our current and future business operations, including our clinical research activities, and sales, marketing and education programs and constrain the business or financial arrangements and relationships with healthcare providers and other parties through which we market, sell and distribute RUCONEST® and other products for which we obtain marketing approval. These laws include anti-kickback and false claims laws and regulations, data privacy and security, and transparency laws and regulations, including, without limitation, those laws described below.

The federal Anti-Kickback Statute prohibits, among other things, knowingly and willfully offering, paying, soliciting or receiving remuneration to induce or in return for purchasing, leasing, ordering or arranging for or recommending the purchase, lease or order of any item or service reimbursable under Medicare, Medicaid or other federal healthcare programs. The term “remuneration” has been broadly interpreted to include anything of value. The Anti-Kickback Statute has been interpreted to apply to arrangements between pharmaceutical manufacturers on the one hand and prescribers, purchasers and formulary managers on the other. Although there are a number of statutory exemptions and regulatory safe harbors protecting some common activities from prosecution, the exemptions and safe harbors are drawn narrowly. Practices that involve remuneration that may be alleged to be intended to induce prescribing, purchases or recommendations may be subject to scrutiny if they do not qualify for an exemption or safe harbor. Several courts have interpreted the statute’s intent

requirement to mean that if any one purpose of an arrangement involving remuneration is to induce referrals of federal healthcare covered business, the statute has been violated.

A person or entity does not need to have actual knowledge of this statute or specific intent to violate it in order to have committed a violation. In addition, the government may assert that a claim including items or services resulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the federal civil False Claims Act or the civil monetary penalties statute, which imposes penalties against any person who is determined to have presented or caused to be presented a claim to a federal health program that the person knows or should know is for an item or service that was not provided as claimed or is false or fraudulent.

Federal false claims laws, including the federal civil False Claims Act, prohibits any person or entity from knowingly presenting, or causing to be presented, a false claim for payment to the federal government or knowingly making, using or causing to be made or used a false record or statement material to a false or fraudulent claim to the federal government. A claim includes “any request or demand” for money or property presented to the U.S. government. Pharmaceutical and other healthcare companies have been prosecuted under these laws for, among other things, allegedly providing free product to customers with the expectation that the customers would bill federal programs for the product. Additionally, pharmaceutical and other companies also have been prosecuted for causing false claims to be submitted because of the companies’ marketing of products for unapproved, and thus non-reimbursable, uses.

The ~~federal Health Insurance Portability and Accountability Act of 1996, or~~ HIPAA, created additional federal criminal statutes that prohibit, among other things, knowingly and willfully executing, or attempting to execute a scheme to defraud any healthcare benefit program, including private third-party payors and knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false, fictitious or fraudulent statement in connection with the delivery of or payment for healthcare benefits, items or services. Also, many states have

similar fraud and abuse statutes or regulations that apply to items and services reimbursed under Medicaid and other state programs, or, in several states, apply regardless of the payor.

In addition, we may be subject to data privacy and security regulation by both the federal government and the states in which we conduct our business. HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act, or HITECH, and their respective implementing regulations, imposes specified requirements on certain types of individuals and entities, including covered entities (health plans, health clearinghouses, and certain healthcare providers) and their business associates and their subcontractors relating to the privacy, security and transmission of individually identifiable health information. Among other things, HITECH makes HIPAA’s security standards directly applicable to “business ~~associates,”~~associates”, defined as independent contractors or agents of covered entities that create, receive, maintain or transmit protected health information in connection with providing a service for or on behalf of a covered entity. HITECH also increased the civil and criminal penalties that may be imposed against covered entities, business associates and possibly other persons, and gave state attorneys general new authority to file civil actions for damages or injunctions in federal courts to enforce the federal HIPAA laws and seek attorney’s fees and costs associated with pursuing federal civil actions. In addition, state laws govern the privacy and security of health information in certain circumstances, many of which are not pre-empted by HIPAA, differ from each other in significant ways and may not have the same effect, thus complicating compliance efforts.

The federal Physician Payments Sunshine Act requires certain manufacturers of drugs, devices, biologics and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program ~~with~~(with specific ~~exceptions,~~exceptions) to report annually to the CMS, information related to payments or other transfers of value made to physicians as(as defined by such ~~law,~~law) and other healthcare professionals (such as physicians assistants and nurse practitioners), teaching hospitals, and applicable manufacturers and applicable group purchasing organizations to report annually to CMS, as well as ownership and investment interests held by the physicians and their immediate family members. Beginning in 2022, applicable manufacturers also will be required to report such information regarding its relationships with physician assistants, nurse practitioners, clinical nurse specialists, certified registered nurse anesthetists and certified nurse midwives during the previous year.

We may also be subject to state laws that require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government, as well as state laws that require drug manufacturers to report information related to payments and other transfers of value to physicians and other healthcare providers or marketing expenditures. Additionally, certain state and local laws require the registration of pharmaceutical sales representatives.

Because of the breadth of these laws and the narrowness of available statutory and regulatory exemptions, it is possible that some of our business activities could be subject to challenge under one or more of such laws. If our operations are found to be in violation of any of the federal and state laws described above or any other governmental regulations that apply to us, we may be subject to penalties, including criminal and significant civil monetary penalties, damages, fines, imprisonment, additional reporting requirements and oversight if we become subject to a corporate integrity agreement or similar agreement to resolve allegations of non-compliance with these laws, contractual damages, reputational harm, diminished profits and future earnings, disgorgement, exclusion from participation in government healthcare programs and the curtailment or restructuring of our operations, any of which could adversely affect our ability to operate our business and our results of operations. To the extent that any of our products are sold in a foreign country, we may be subject to similar foreign laws and regulations, which may include, for instance, applicable post-marketing requirements, including safety surveillance, anti-fraud and abuse laws and implementation of corporate compliance programs and reporting of payments or transfers of value to healthcare professionals.

~~Coverage and Reimbursement~~

The future commercial success of RUCONEST®, and our product candidates or any of our collaborators’ ability to commercialize any approved product candidates successfully will depend in part on the extent to which governmental payor programs at the federal and state levels, including Medicare and Medicaid, private health insurers and other third-party payors provide coverage for and establish adequate reimbursement levels for our product candidates. Government health administration authorities, private health insurers and other organizations generally decide which drugs they will pay for and establish reimbursement levels for healthcare. In particular, in the United States, private health insurers and other third-party payors often provide

reimbursement for products and services based on the level at which the government, through the Medicare or Medicaid programs, provides reimbursement for such treatments. In the United States, the European Union, or EU, and other potentially significant markets for our product candidates, government authorities and third-party payors are increasingly attempting to limit or regulate the price of medical products and services, particularly for new and innovative products and therapies, which often has resulted in average selling prices lower than they would otherwise be. Further, the increased emphasis on managed healthcare in the United States will put additional pressure on product pricing, reimbursement and usage, which may adversely affect our future product sales and results of operations. These pressures can arise from rules and practices of managed care groups, judicial decisions and laws and regulations related to Medicare, Medicaid and healthcare reform, pharmaceutical coverage and reimbursement policies and pricing in general.

Third-party payors are increasingly imposing additional requirements and restrictions on coverage and limiting reimbursement levels for medical products. For example, federal and state governments reimburse covered prescription drugs at varying rates generally below average wholesale price. These restrictions and limitations influence the purchase of healthcare services and products. Third-party payors may limit coverage to specific drug products on an approved list, or formulary, which might not include all of the FDA-approved drug products for a particular indication. Third-party payors are increasingly challenging the price and examining the medical necessity and cost-effectiveness of medical products and services, in addition to their safety and efficacy. We may need to conduct expensive pharmacoeconomic studies in order to demonstrate the medical necessity and cost-effectiveness of our products, in addition to the costs required to obtain the FDA approvals. Our product candidates may not be considered medically necessary or cost-effective. A payor’s decision to provide coverage for a drug product does not imply that an adequate reimbursement rate will be approved. Further, one payor’s determination to provide coverage for a drug product does not assure that other payors will also provide coverage for the drug product. Adequate third-party reimbursement may not be available to enable us to maintain price levels sufficient to realize an appropriate return on our investment in drug development. Additionally, coverage policies and third-party reimbursement rates may change at any time. Therefore, even if favorable coverage and reimbursement status is attained, less favorable coverage policies and reimbursement rates may be implemented in the future. Legislative proposals to reform healthcare or reduce costs under government insurance programs may result in lower reimbursement for RUCONEST® and product candidates or exclusion of RUCONEST® or our product candidates from coverage. The cost containment measures that healthcare payors and providers are instituting and any healthcare reform could significantly reduce our revenues from the sale of any approved product candidates. We cannot provide any assurances that we will be able to obtain and maintain third-party coverage or adequate reimbursement for RUCONEST® and our product candidates in whole or in part.

There have been several U.S. government initiatives over the past few years to fund and incentivize certain comparative effectiveness research, including creation of the Patient-Centered Outcomes Research Institute under the Patient Protection and Affordable Care Act of 2010, as amended by the Health Care and Education Reconciliation Act of 2010, or collectively the ACA. It is also possible that comparative effectiveness research demonstrating benefits in a competitor’s product could adversely affect the sales of our product candidates. If third-party payors do not consider RUCONEST® or our product candidates, once approved, to be cost-effective compared to other available therapies, they may not cover such products as a benefit under their plans or, if they do, the level of payment may not be sufficient to allow us to sell our product on a profitable basis. In addition, there has been increasing legislative and enforcement interest in the United States with respect to specialty drug pricing practices. Specifically, there have been several recent U.S. Congressional inquiries and proposed federal and proposed and enacted state legislation designed to, among other things, bring more transparency to drug pricing, review the relationship between pricing and manufacturer patient programs, and reform government program reimbursement methodologies for drugs. At the federal level, the Trump administration’s budget proposal for fiscal year 2021 includes a $135 billion allowance to support legislative proposals seeking to reduce drug prices, increase competition, lower out-of-pocket drug costs for patients, and increase patient access to lower-cost generic and biosimilar drugs. On March 10, 2020, the Trump administration sent “principles” for drug pricing to Congress, calling for legislation that would, among other things, cap Medicare Part D beneficiary out-of-pocket pharmacy expenses, provide an option to cap Medicare Part D beneficiary monthly out-of-pocket expenses, and place limits on pharmaceutical price increases. Further, the Trump administration previously released a “Blueprint” to lower drug prices and reduce out of pocket costs of drugs that contained proposals to increase drug manufacturer competition, increase the negotiating power of certain federal healthcare programs, incentivize manufacturers to lower the list price of their products, and reduce the out of pocket costs of drug products paid by consumers. The Department of Health and Human Services, or HHS, has

solicited feedback on some of these measures and has implemented others under its existing authority. On July 24, 2020, the Trump administration announced four executive orders related to prescription drug pricing that attempt to implement several of the administration’s proposals, including a policy that would tie Medicare Part B drug prices to international drug prices; one that directs HHS to finalize the Canadian drug importation proposed rule previously issued by HHS and makes other changes allowing for personal importation of drugs from Canada; one that directs HHS to finalize the rule-making process on modifying the anti-kickback law safe harbors for discounts for plans, pharmacies, and pharmaceutical benefit managers; and one that reduces costs of insulin and EpiPens to patients of federally qualified health centers. While some of these and other measures may require additional authorization to become effective, Congress and the Trump administration have each indicated that it will continue to seek new legislative and/or administrative measures to control drug costs. At the state level, legislatures have increasingly passed legislation and implemented regulations designed to control pharmaceutical and biological product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing. These and other healthcare reform initiatives may result in additional reductions in Medicare and other healthcare funding. Further, it is possible that additional governmental action is taken in response to the COVID-19 pandemic. For example, on August 6, 2020, the Trump administration issued another executive order that instructs the federal government to develop a list of “essential” medicines and then buy them and other medical supplies from U.S. manufacturers instead of from companies around the world, including China. The order is meant to reduce regulatory barriers to domestic pharmaceutical manufacturing and catalyze manufacturing technologies needed to keep drug prices low and the production of drug products in the United States. It is unclear whether the Biden administration will work to reverse these measures or pursue similar policy initiatives.

~~Foreign Corrupt Practices Act,~~FCPA, Dutch ~~anti- bribery laws~~Anti- Bribery Laws and Other Laws

The FCPA prohibits any U.S. individual or business from paying, offering, or authorizing payment or offering of anything of value, directly or indirectly, to any foreign official, political party or candidate for the purpose of influencing any act or decision of the foreign entity in order to assist the individual or business in obtaining or retaining business. The FCPA also obligates companies whose securities are listed in the United States to comply with accounting provisions requiring the ~~company~~Company to maintain books and records that accurately and fairly reflect all transactions of the corporation, including international subsidiaries, and to devise and maintain an adequate system of internal accounting controls for international operations. Activities that violate the FCPA, even if they occur wholly outside the United States, can result in criminal and civil fines, imprisonment, disgorgement, oversight, and debarment from government contracts.

Our operations are also subject to non-U.S. anti-corruption laws such as Dutch anti-bribery laws as contained in the Dutch Criminal Code (Wetboek van Strafrecht). These laws generally prohibit companies and persons (including us and our employees) and intermediaries from offering, providing, requesting or accepting, directly or indirectly, a gift promise or service, or anything else of value, to or from domestic or foreign government officials or to or from other persons employed or acting as an agent in relation to an act or omission to be committed or having been committed in the official’s office or, as it concerns other persons employed or agents, in violation of the other person’s duty.

We are also subject to other laws and regulations governing our international operations, including regulations administered by the governments of ~~the~~The Netherlands and the United States and authorities in the ~~European Union,~~EU, including, for example, applicable export control regulations, trade and economic sanctions and embargoes on certain countries, persons, groups, entities, projects or activities, anti-money laundering laws, import and customs requirements and currency exchange regulations, collectively referred to as trade control laws.

Failure to comply with the FCPA, Dutch anti-bribery laws and other anti-corruption laws and trade control laws could subject us and others involved to criminal and civil penalties, disgorgement and other sanctions and remedial measures, and legal expenses.

~~Review and Approval of New Drug Products in the~~

European Union

InThe process required by the ~~European Union,~~EMA and EC before a medicinal product may be marketed, is similar to that described for the FDA, and it generally involves:

•completion of preclinical laboratory tests, animal studies and formulation studies in compliance with good laboratory practice, or GLP;

•CTA submissions, which must be approved by each Member State concerned before human clinical trials may begin;

•a positive opinion by an independent Ethics Committee in each Member State concerned;

•performance of adequate and well-controlled clinical trials, in accordance with good clinical practice, or GCP, requirements to establish the efficacy of the proposed drug for each indication;

•submission of an MAA;

•satisfactory completion of an inspection of the manufacturing facility or facilities at which the product is produced to assess compliance with GMP requirements, and to assure that the facilities, methods and controls are adequate to preserve the drug’s identity, strength, quality and purity;

•satisfactory completion of an inspection of selected clinical sites to assure compliance with GCP and the integrity of the clinical data;

•EMA evaluation and opinion on the MAA; and

•granting of the Marketing Authorization, or MA, by the EC based on EMA recommendation.

Additionally, medicinal products, including advanced therapy medicinal products, or ATMPs, are subject to extensive pre- and post-market regulation by regulatory authorities at both the ~~European Union~~EU and

national levels. ATMPs comprise gene therapy products, somatic-cell therapy products and tissue engineered products. Tissue engineered products ~~which~~ are engineered cells or and tissues (i.e., cells/tissues that have undergone substantial manipulation, ~~and~~so that biological characteristics, physiological functions or structural properties relevant for the intended regeneration, repair or replacement are achieved) that are presented has having properties for, or is used in or administered to human beings ~~in order~~with a view to ~~regenerate, repair~~regenerating, repairing or ~~replace~~replacing a human tissue. RUCONEST® is regulated as ~~ATMPs~~an ATMP in the ~~European Union.~~ EU.

There is, furthermore, legislation at ~~a European Union~~an EU level relating to the standards of quality and safety for the collection and testing of human blood and blood components for use in human cell-based therapies, which ~~could apply~~is applicable to the manufacturing of our human blood and/or cell based products. ~~Additionally, there may be local~~There is national legislation in various ~~European Union~~EU Member States, which may be more restrictive than the ~~European Union legislation,~~EU legislation. Differing national requirements of the EU Member States may make setting up compliant cross border supply chains challenging.

Pharmaceutical and ~~we would need~~Preclinical Tests

Applicants that submit full applications (i.e., they are not biolosimilars or generics), must submit the results of pharmaceutical and pre-clinical tests. The pharmaceutical tests evaluate physico-chemical, biological and microbiological characteristics of the product. The pre-clinical tests consider the pharmacological and toxicological characteristics. These provide important information on the quality, safety and efficacy of the product. Such non-clinical data will form part of the MA application. Additionally, a Sponsor must submit the results of the non-clinical tests, together with manufacturing information, analytical data and any available clinical data or literature, among other things, in the CTA. Some non-clinical testing may continue even after the CTA has been granted. As discussed further below, before a clinical trial can commence, the competent authorities of the Member States in which clinical trials are performed will review the CTA and determine whether to ~~comply~~approve the clinical trial. As such, issues with ~~such legislation~~non-clinical test results may lead to competent authorities refusing to approve the ~~extent it applies.~~clinical trials.

Clinical Trials

Clinical trials of medicinal products in the ~~European Union~~EU must be conducted in accordance with ~~European Union~~EU and national regulations and the International Conference on Harmonization, or ICH, guidelines on Good Clinical Practices, or GCP. Additional GCP guidelines from the ~~European Commission,~~EC, focusing in particular on traceability, apply to clinical trials of ATMPs. The sponsor must take out a clinical trial insurance policy, and in most ~~European Union countries,~~EU Member States, the sponsor is liable to provide “no fault” compensation to any study subject injured in the clinical trial.

Prior to commencing a clinical trial, the ~~sponsor~~Sponsor must obtain a clinical trial authorization from the competent authority, and a positive opinion from an independent ~~ethics committee.~~Ethics Committee in each Member State in which the trial is conducted. The ~~application for a~~Sponsor of the clinical trial ~~authorization~~must submit an application dossier, which must include, among other things, a copy of the trial protocol, an investigator’s brochure, documentation relating to compliance with GMP and an investigational medicinal product dossier containing information about the manufacture and quality of the medicinal product under investigation. ~~Currently,~~

Ongoing clinical ~~trial authorization~~trials may continue to be governed by the previous Clinical Trials Directive 2001/20/EC. However, as of January 31, 2023, all new applications ~~must be submitted~~for clinical trials are governed in accordance with the Clinical Trials Regulation (EU) No 536/2014, or CTR. The CTR allows Sponsors to submit one combined CTA to the Competent Authorities, or CAs, and Ethics Committees for all trial sites in EU countries intended to participate in a given trial via a centralized system. The application entails a two-part assessment process where Part 1 is the scientific assessment coordinated by a reporting member state, or RMS, and Part 2 is the member state specific ethical assessment. Clinical trial approvals for all Member States will be released as a decision following both, competent authority and Ethics Committee assessment per country (under the Directive, applications and approvals/opinions were given on a country-by-country basis. Optimally, this efficiency will condense milestones for site activations in ~~each EU Member State in which~~ the trial will be conducted. Under the new Regulation on Clinical Trials, which is currently expected to take effect in 2021, there will be a centralized application procedure where one national authority takes the lead in reviewing the application and the other national authorities have only a limited involvement. Any substantial changes to the trial protocol or other information submitted with the clinical trial applications must be notified to or approved by the relevant competent authorities and ethics committees. MedicinesEU.

Medicinal products used in clinical trials must be manufactured in accordance with ~~cGMP.~~GMP. Other national and ~~European Union-wide~~EU-wide regulatory requirements also apply.

During the development of a medicinal product, the EMA and national ~~medicines regulators~~medicinal products competent authorities within the ~~European Union~~EU provide the opportunity for dialogue and guidance on the development program. At the EMA level, this is usually done in the form of scientific advice, which is given by the Scientific Advice Working Party of the ~~Committee for Medicinal Products for Human Use, or~~ CHMP. A fee is incurred with each scientific advice procedure. Advice from the EMA is typically provided based on questions concerning, for example, quality (chemistry, manufacturing and controls testing), nonclinical testing and clinical studies, and pharmacovigilance (also known as drugs safety) plans and risk-management programs. ~~Given the current stage of the development of our product candidates, we have not yet sought any such advice from the EMA. However, to the extent that we do obtain such~~Such scientific advice, in ~~the future, such advice will, in~~ accordance with ~~the EMA’s~~EMA policy, beis not legally binding with regard to any future ~~marketing authorization application~~MAA of the product ~~concerned.~~concerned however it is helpful in product development and understanding EMA expectations.

Orphan Drug Designation and Exclusivity

Regulation (EC) No. 141/2000 as implemented by Regulation (EC) No. 847/2000 provides that a product can be designated as an orphan medicinal drug by the European Commission if its sponsor can establish: that the product is intended for the diagnosis, prevention or treatment of (1) a life-threatening or chronically debilitating condition affecting not more than five in ten thousand persons in the EU when the application is made, or (2) a life-threatening, seriously debilitating or serious and chronic condition in the EU and that without incentives it is unlikely that the marketing of the drug in the EU would generate sufficient return to justify the necessary investment. For either of these conditions, the applicant must demonstrate that there exists no satisfactory method of diagnosis, prevention, or treatment of the condition in question that has been authorized in the EU or, if such method exists, the applicant’s medicinal product has to be of significant benefit compared to products available for the condition.

In the EU, an application for designation as an orphan product can be made any time prior to the filing of the MAA. Orphan medicinal product designation entitles an applicant to incentives such as fee reductions or fee waivers, protocol assistance, and access to the centralized MA procedure. Upon grant of an MA, orphan medicinal products are entitled to a ten-year period of market exclusivity for the approved therapeutic indication, which means that the EMA cannot accept another MAA, or grant an MA, or accept an application to extend an MA for a similar product for the same indication for a period of ten years. The period of market exclusivity is extended by two years for orphan medicinal products that have also complied with an agreed PIP. No extension to any supplementary protection certificate can be granted on the basis of pediatric studies for orphan indications. Orphan medicinal product designation does not convey any advantage in, or shorten the duration of, the regulatory review and approval process.

The period of market exclusivity may, however, be reduced to six years if, at the end of the fifth year, it is established that the product no longer meets the criteria on the basis of which it received orphan medicinal product destination, including where it can be demonstrated on the basis of available evidence that the original

orphan medicinal product is sufficiently profitable not to justify maintenance of market exclusivity or where the prevalence of the condition has increased above the threshold. Additionally, an MA may be granted to a similar medicinal product with the same orphan indication during the ten-year period if: (i) the MA holder of the authorized product consents to a second original orphan medicinal product application, (ii) the manufacturer of the original orphan medicinal product is unable to supply sufficient quantities; or (iii) the second applicant can establish that its product, although similar, is safer, more effective or otherwise clinically superior to the authorized orphan medicinal product. A company may voluntarily remove a product from the register of orphan products. A “similar medicinal product” is defined as a medicinal product containing a similar active substance or substances as contained in an authorized orphan medicinal product, and which is intended for the same therapeutic indication. A “similar active substance” is “an identical active substance, or an active substance with the same principal molecular structural features (but not necessarily all of the same molecular structural features) and which acts via the same mechanism. However, in the case of advanced therapy medicinal products, for which the principal molecular structural features cannot be fully defined, the similarity between two active substances shall be assessed on the basis of the biological and functional characteristics.”

Marketing Authorizations

~~In order to market~~To obtain a ~~new medicinal~~MA, for a product in the ~~European Union, a company~~EU, an applicant must submit ~~and obtain approval from regulators of~~an MAA, either under a ~~marketing authorization application,~~centralized procedure administered by the EMA, or ~~MAA. The process for doing this depends, among other things, on the nature~~one of the ~~medicinal product.~~procedures administered by competent authorities in the EU Member States (decentralized procedure, national procedure or mutual recognition procedure). An MA may be granted only to an applicant established in the EU.

The centralized procedure ~~results in~~provides for the grant of a single ~~marketing authorization, or~~ MA ~~granted~~ by the European Commission that is valid ~~across~~for all EU and European Economic Area, or EEA, Member States. Pursuant to Regulation (EC) No 726/2004, the ~~EEA (i.e., the European Union as well as Iceland, Liechtenstein and Norway). The~~ centralized procedure is compulsory for ~~human drugs that are:~~specific products, including for (i) medicinal products derived from ~~biotechnology~~biotechnological processes, ~~such~~(ii) products designated as ~~genetic engineering, (ii) contain~~orphan medicinal products, (iii) ATMPs, and (iv) products with a new active substance indicated for the treatment of ~~certain diseases, such as~~ HIV/AIDS, cancer, ~~diabetes,~~ neurodegenerative diseases, ~~autoimmune~~diabetes, auto-immune and other immune dysfunctions and viral diseases. For products with a new active substance indicated for the treatment of other diseases ~~(iii) officially designated orphan medicines~~ and ~~(iv) advanced-therapy medicines, such as gene therapy, somatic cell therapy~~products that are highly innovative or ~~tissue-engineered medicines. The~~for which a centralized ~~procedure may at~~process is in the ~~request~~interest of ~~the applicant also be used in certain other cases. Therefore,~~patients' authorization through, the centralized procedure ~~would be mandatory~~is optional on related approval.

Under the centralized procedure, the EMA’s CHMP is responsible for conducting the initial assessment of a product. The CHMP is also responsible for several post-authorization and maintenance activities, such as the assessment of modifications or extensions to an existing MA.

Under the centralized procedure in the EU, the maximum timeframe for the ~~products we are developing.~~evaluation of an MAA is 210 days, excluding clock stops when additional information or written or oral explanation is to be provided by the applicant in response to questions of the CHMP. Accelerated assessment may be granted by the CHMP in exceptional cases, when a medicinal product targeting an unmet medical need is expected to be of major interest from the point of view of public health and, in particular, from the viewpoint of therapeutic innovation. If the CHMP accepts a request for accelerated assessment, the time limit of 210 days will be reduced to 150 days (not including clock stops). The CHMP can, however, revert to the standard time limit for the centralized procedure if it considers that it is no longer appropriate to conduct an accelerated assessment.

~~The~~For the evaluation of ATMPs such as RUCONEST®, the Committee for Advanced Therapies, or CAT, is responsible in conjunction with the CHMP for ~~the evaluation of ATMPs.~~their evaluation. The CAT is primarily responsible for the scientific evaluation of ATMPs and prepares a draft opinion on the quality, safety and efficacy of each ATMP for which ~~a marketing authorization application~~an MAA is submitted. The CAT’s opinion is then taken into account by the CHMP when giving its final ~~recommendation~~opinion regarding the authorization of a product in view of the balance of benefits and risks identified. ~~Although the~~The CAT’s ~~draft~~ opinion is submitted to the CHMP for final approval, as such the CHMP may depart from the ~~draft~~ opinion, if it provides detailed scientific justification. The CHMP and CAT are also responsible for providing guidelines on ATMPs and have published numerous guidelines, including specific guidelines on gene therapies and cell therapies. These guidelines provide additional guidance on the factors that the EMA will consider in relation to the development and evaluation of ATMPs and include, among other things, the preclinical studies required to characterize ATMPs; the manufacturing and control information that should be submitted in ~~a marketing authorization application;~~an MAA; and post-approval measures required to monitor patients and evaluate the ~~long term~~long-term efficacy and potential adverse reactions of ATMPs. ~~Although these guidelines are not legally binding, we believe that our compliance with them is likely necessary to gain and maintain approval for any of our product candidates.~~

~~Under~~

Unlike the centralized authorization procedure, in the ~~European Union, the maximum timeframe for the evaluation of an MAA~~decentralized MA procedure requires a separate application to, and leads to separate approval by, the ~~EMA is 210 days. This excludes so-called clock stops, during~~competent authorities of each EU Member State in which ~~additional written or oral information~~the product is to be ~~provided by~~marketed. This application is identical to the ~~applicant in response~~application that would be submitted to ~~questions asked by~~the EMA for authorization through the centralized procedure. The reference EU Member State prepares a draft assessment and drafts of the related materials within 120 days after receipt of a valid application. The resulting assessment report is submitted to the concerned EU Member States who, within 90 days of receipt, must decide whether to approve the assessment report and related materials. If a concerned EU Member State cannot approve the assessment report and related materials due to concerns relating to a potential serious risk to public health, disputed elements may be referred to the Heads of Medicines Agencies’ Coordination Group for Mutual Recognition and Decentralized Procedures – Human, or CMDh. If the CMDh cannot reach an agreement within 60 days, the matter is brought to the attention of the CHMP. ~~At the end of the review period, the~~The CHMP ~~provides an~~will forward its opinion to the European ~~Commission. If~~Commission, who will then make a final decision. The subsequent decision of the European Commission is binding on all EU Member States.

The mutual recognition procedure allows companies that have a medicinal product already authorized in one EU Member State to apply for this authorization to be recognized by the competent authorities in other EU Member States. Like the decentralized procedure, the mutual recognition procedure is ~~opinion favorable,~~based on the ~~Commission~~acceptance by the competent authorities of the EU Member States of the MA of a medicinal product by the competent authorities of other EU Member States. The holder of a national MA may ~~then adopt a decision~~submit an application to ~~grant an MA. In exceptional cases,~~ the ~~CHMP might perform an accelerated review~~competent authority of an ~~MAA~~EU Member State requesting that this authority recognize the MA delivered by the competent authority of another EU Member State.

An MA granted by any route has an initial validity of five years in ~~no more than 150 days. This is usually when~~principle. The MA may be renewed after five years on the basis of a re-evaluation of the risk-benefit balance by the EMA or by the competent national authority of the EU Member State in which the original MA was granted. To support the application, the MA holder must provide the EMA or the competent national authority with a consolidated version of the Common Technical Document, or the eCTD, providing up-to-date data concerning the quality, safety and efficacy of the product, including all variations introduced since the MA was granted, at least nine months before the MA ceases to be valid. The European Commission or the competent authorities of the EU Member States may decide, on justified grounds relating to pharmacovigilance, to proceed with one further five year renewal period for the MA. Once subsequently definitively renewed, the MA shall be valid for an unlimited period. However, any authorization which is not followed by the actual placing of the medicinal product on the EU market (for a centralized MA) or on the market of the authorizing EU Member State within three years after authorization ceases to be valid (the so-called sunset clause).

Innovative products that target an unmet medical need and are expected to be of major ~~interest from the point of view of~~ public health interest may be eligible for a number of expedited development and review programs, such as the Priority Medicines, or PRIME, scheme, which provides incentives similar to the breakthrough therapy designation in ~~particular, from~~ the ~~viewpoint~~U.S. PRIME is a voluntary scheme aimed at enhancing the EMA’s support for the development of medicinal products that target unmet medical needs. Eligible products must target conditions for which there is an unmet medical need (there is no satisfactory method of diagnosis, prevention or treatment in the EU or, if there is, the new medicinal product will bring a major therapeutic ~~innovation.~~advantage) and they must demonstrate the potential to address the unmet medical need by introducing new methods of therapy or improving existing ones. Benefits accrue to sponsors of product candidates with PRIME designation, including but not limited to, early and proactive regulatory dialogue with the EMA, frequent discussions on clinical trial designs and other development program elements, and potentially accelerated MAA assessment once a dossier has been submitted.

In the EU, a “conditional” MA may be granted in cases where all the required safety and efficacy data are not yet available. The European Commission may grant a ~~so-called “marketing authorization under exceptional circumstances”. Such authorization is~~conditional MA to medicinal products intended for ~~products for which the applicant~~treating, preventing or diagnosing seriously debilitating or life-threatening diseases. A conditional MA can ~~demonstrate that~~be granted if it is ~~unable to provide comprehensive data on the efficacy and safety under normal conditions of use, because the indications for which the product in question is intended are encountered so rarely~~demonstrated that the applicant cannot reasonably be expected to provide comprehensive evidence, or in the present state of scientific knowledge, comprehensive information cannot be provided, or it would be contrary to generally accepted principles of medical ethics to collect such information. Consequently, marketing authorization under exceptional circumstances may be granted subject to certain specific obligations, which may include the following:

•~~the applicant must complete an identified program of studies within a time period specified by the competent authority, the results of which form the basis of a reassessment~~all of the ~~benefit/risk profile;~~

•following criteria are met: (i) the benefit-risk balance of the medicinal product in question may be supplied on medical prescription only and may in certain cases be administered only under strict medical supervision, possibly in a hospital and in the case of a radiopharmaceutical, by an authorized person; and

•the package leaflet and any medical information must draw the attention of the medical practitioner to the fact that the particulars available concerning the medicinal product in question are as yet inadequate in certain specified respects.

~~A marketing authorization under exceptional circumstances~~ is ~~subject to annual review to reassess the risk-~~

benefit balance in an annual reassessment procedure. Continuation of the authorization is linked to the annual reassessment and a negative assessment could potentially result in the marketing authorization being suspended or revoked. The renewal of a marketing authorization of a medicinal product under exceptional circumstances, however, follows the same rules as a “normal” marketing authorization. Thus, a marketing authorization under exceptional circumstances is granted for an initial five years, after which the authorization will become valid indefinitely, unless the EMA decides that safety grounds merit one additional five-year renewal.

The European Commission may also grant a so-called “conditional marketing authorization” prior to obtaining the comprehensive clinical data required for an application for a full marketing authorization. Such conditional marketing authorizations may be granted for product candidates (including medicines designated as orphan medicinal products), if (i) the risk-benefit balance of the product candidate is positive,positive; (ii) it is likely that the applicant will be ~~in a position~~able to provide ~~the required~~ comprehensive ~~clinical trial~~ data post-authorization; (iii) the medicinal product fulfills an unmet medical ~~need,~~need; and (iv) the benefit ~~to public health~~ of the immediate availability ~~on the market~~to patients of the medicinal product ~~concerned outweighs~~is greater than the risk inherent in the fact that additional data are still required. AThe conditional ~~marketing authorization may contain specific obligations~~MA is subject to conditions to be fulfilled byfor generating the ~~marketing~~missing data or ensuring increased safety measures. It is valid for one year and must be renewed annually until all related conditions have been fulfilled. Once any pending studies are provided, the conditional MA can be converted

~~authorization holder, including obligations with respect~~into a standard MA. However, if the conditions are not fulfilled within the timeframe set by the EMA and approved by the European Commission, the MA will cease to be renewed.

An MA may also be granted “under exceptional circumstances” where the ~~completion~~applicant can show that it is unable to provide comprehensive data on efficacy and safety under normal conditions of ~~ongoing~~use even after the product has been authorized and subject to specific procedures being introduced. These circumstances may arise in particular when the intended indications are very rare and, in the state of scientific knowledge at that time, it is not possible to provide comprehensive information, or ~~new studies, and with respect to the collection of pharmacovigilance data. Conditional marketing authorizations are valid for one year, and~~when generating data may be ~~renewed~~contrary to generally accepted ethical principles. Like a conditional MA, an MA granted in exceptional circumstances is reserved to medicinal products intended to be authorized for treatment of rare diseases or unmet medical needs for which the applicant does not hold a complete data set that is required for the grant of a standard MA. However, unlike the conditional MA, an applicant for authorization in exceptional circumstances is not subsequently required to provide the missing data. Although the MA “under exceptional circumstances” is granted definitively, the risk-benefit balance of the medicinal product is reviewed annually and the MA will be withdrawn if the risk-benefit ~~balance remains positive,~~ratio is no longer favorable.

In addition to an MA, various other requirements apply to the manufacturing and ~~after an assessment~~placing on the EU market of medicinal products. Manufacture of medicinal products in the EU requires a manufacturing authorization, and import of medicinal products into the EU requires a manufacturing authorization allowing for import, collectively known as MIAs. The manufacturing authorization holder must comply with various requirements set out in the applicable EU laws, regulations and guidance. These requirements include compliance with EU GMP standards when manufacturing medicinal products and APIs, including the manufacture of APIs outside of the ~~need~~EU with the intention to import the APIs into the EU. Similarly, the distribution of medicinal products within the EU is subject to compliance with the applicable EU laws, regulations and guidelines, including the requirement to hold appropriate authorizations for ~~additional or modified conditions and/or specific obligations. The timelines for the centralized procedure described above also apply with respect to the review~~distribution granted by the ~~CHMP~~competent authorities of ~~applications for a conditional marketing authorization.~~

~~The European Union medicines rules expressly permit~~ the EU Member States. MA holders and/or manufacturing and import authorization, or MIA holders and/or distribution authorization holders may be subject to civil, criminal or administrative sanctions, including suspension of manufacturing authorization, in cases of non-compliance with the EU or EU Member States’ requirements applicable to the manufacturing of medicinal products.

EU Member States tomay adopt national legislation prohibiting or restricting the sale, supply or use of any medicinal product containing, consisting of or derived from a specific type of human or animal cell, such as embryonic stem cells. While the products we have in development do not make use of embryonic stem cells, it is possible that the national laws in certain EU Member States may prohibit or restrict us from commercializing our products, even if they have been granted an EU marketing authorization.

~~Data Exclusivity~~

Marketing authorization applications for generic medicinal products do not need to include the results of preclinical and clinical trials, but instead can refer to the data included in the marketing authorization of a reference product for which regulatory data exclusivity has expired. If a marketing authorization is granted for a medicinal product containing a new active substance, that product benefits from eight years of data exclusivity, during which generic marketing authorization applications referring to the data of that product may not be accepted by the regulatory authorities, and a further two years of market exclusivity, during which such generic products may not be placed on the market. The two-year period may be extended to three years if during the first eight years a new therapeutic indication with significant clinical benefit over existing therapies is approved. There is no guarantee that a product will be considered by the EU regulatory authorities to be a new active substance, and products may not qualify for data exclusivity.

There is a special regime for biosimilars, or biological medicinal products that are similar to a reference medicinal product but that do not meet the definition of a generic medicinal product, for example, because of differences in raw materials or manufacturing processes. For such products, the results of appropriate preclinical or clinical trials must be provided, and guidelines from the EMA detail the type of quantity of supplementary data to be provided for different types of biological product. There are no such guidelines for complex biological products, such as gene or cell therapy medicinal products, and so it is unlikely that biosimilars of those products will currently be approved in the European Union. However, guidance from the EMA states that they will be considered in the future in light of the scientific knowledge and regulatory experience gained at the time.

Pediatric Development

In the ~~European Union,~~EU, companies developing a new medicinal product must agree to a ~~Pediatric Investigation Plan, or~~ PIP, covering all subsets of pediatric population, ~~with the EMA~~ and must conduct pediatric clinical trials in accordance with that PIP, unless a deferral or waiver applies, (for example, because the relevant disease or condition occurs only in adults). The ~~marketing authorization application~~MAA for the product must include the results of pediatric clinical trials conducted in accordance with the PIP, unless a waiver applies (in which case pediatric clinical trials need not be performed), or a deferral has been granted in(in which case the pediatric clinical trials must be completed at a later ~~date.~~date). Products that are granted a marketing authorization on the basis of the pediatric clinical trials conducted in accordance with the PIP are eligible for a ~~six month~~six-month extension of the protection under a supplementary protection certificate (if any is in effect at the time of approval) or, in the case of orphan medicinal products, a two year extension of the orphan market exclusivity. This pediatric reward is subject to specific conditions and is not automatically available when data in compliance with the PIP are developed and submitted.

~~Post-Approval Controls~~Data and Market Exclusivity

The EU provides opportunities for data and market exclusivity related to MAs. Innovative medicinal products are generally entitled to benefit from eight years of data exclusivity and a further two years of market exclusivity (providing a total of 10 years of regulatory data protection). Data exclusivity prevents regulatory authorities in the EU from referencing the innovator’s data to assess a generic application or biosimilar application for eight years from the date of authorization of the innovative product. After this period has expired an MAA for a generic or biosimilar may be submitted, and the innovator’s data may be referenced. The market

exclusivity period prevents a successful generic or biosimilar applicant from commercializing its product (i.e., until 10 years have elapsed from the initial MA for the reference product in the EU). The market exclusivity period may be extended for a further year to a maximum of 11 years from the initial MA if, during the first eight years of those ten years, the MA holder obtains an authorization for one or more new therapeutic indications which, during the scientific evaluation prior to their authorization, are held to bring a significant clinical benefit in comparison with existing therapies. However, there is no guarantee that a product will be considered by the EU’s regulatory authorities to be a new chemical/biological entity, and products may not qualify for data exclusivity.

Post-approval Requirements

Similar to the post-approval process in the United States, drugs or biologics manufactured or distributed pursuant to marketing authorizations in the EU are subject to continuing regulation, including, among other things, requirements relating to periodic safety reporting, product sampling and distribution, advertising and promotion and reporting of adverse experiences with the product. After authorization, changes to the approved product, such as adding new indications, manufacturing changes or other labeling claims, are subject to further testing requirements and prior EMA review and/or EC approval.

Additionally, the holder of a marketing authorization must establish and maintain a pharmacovigilance system and appoint an individual qualified person for pharmacovigilance, or QPPV, who is responsible for oversight of that system. Key obligations include expedited reporting of suspected serious adverse reactions and submission of periodic safety update reports, or PSURs.

All new ~~marketing authorization applications~~MAAs must include a risk management plan, or RMP, describing the risk management system that the ~~company~~Company will put in place and documenting measures to prevent or minimize the risks associated with the product. The regulatory authorities may also impose specific obligations as a condition of the marketing authorization. Such risk-minimization measures or post-authorization obligations may include additional safety monitoring, more frequent submission of PSURs, or the conduct of additional clinical trials or post-authorization safety studies. RMPs and PSURs are routinely available to third parties requesting access, subject to limited redactions. ~~All~~

Advertising Regulation

In the EU, the advertising and ~~promotional activities for the product must~~promotion of medicinal products are subject to both EU and EU Member States’ laws (as well as codes of conduct that can be ~~consistent~~enforced on members of those codes) governing promotion of medicinal products, interactions with ~~the approved summary of product characteristics,~~physicians and ~~therefore all off-label promotion is prohibited. Direct-to-consumer~~other healthcare professionals, misleading and comparative advertising ~~of prescription medicines is also prohibited in the European Union.~~and unfair commercial practices. Although general requirements for advertising and promotion of medicinal products are established under EU directives, the details are governed by regulations in ~~each~~individual EU Member ~~State~~States and can differ from one country to another. For example, applicable laws require that promotional materials and advertising in relation to medicinal products comply with the product’s Summary of Product Characteristics, or SmPC, as approved by the competent authorities in connection with an MA. The SmPC is the document that provides information to physicians concerning the safe and effective use of the product. Promotional activity that does not comply with the SmPC is considered off-label and is prohibited in the EU. Direct-to-consumer advertising of prescription medicinal products is also prohibited in the EU.

EU Pharmaceutical Legislation Review

The European Commission is in the process of amending the EU’s general pharmaceutical legislation. Although, the updated legislation will not enter into force for a number of years, it should be noted that there will be wide ranging changes to the laws as set out above. Notably, the Commission intends to change rules on data protection/market exclusivity, orphan medicinal products and pediatric development.

United Kingdom

On January 31, 2020, the United Kingdom left the EU (commonly referred to as Brexit) and accordingly is no longer an EU Member State. A transition period began on February 1, 2020, during which EU pharmaceutical law remained applicable to the United Kingdom, however this period ended on December 31, 2020. After this

date, EU law no longer applied. On December 24, 2020, the United Kingdom and the EU announced that they had reached agreement on the terms of their future relationship as set out in the Trade and Cooperation Agreement, or the TCA. The EU and the United Kingdom had agreed to provisionally apply the terms of the TCA, while the formal execution was still ongoing. The TCA formally entered into force on May 1, 2021. While the TCA governs tariff and quota free trade between the United Kingdom and the EU markets, it does not provide for regulatory alignment. The regulatory framework for medicinal products in the United Kingdom is predominantly derived from EU law.

As the United Kingdom is no longer an EU Member State, the United Kingdom’s participation in the European Medicines Regulatory Network has ceased and the MHRA has assumed the functions that were previously undertaken by the EU institutions for human medicines on the United Kingdom market. This is, with the exception of Northern Ireland, which, pursuant to the Protocol on Ireland/Northern Ireland has remained aligned with EU regulations; however, following the UK Government and European Commission’s political agreement in principle on the Windsor Framework, the MHRA will be responsible for all medicinal products placed on the market anywhere in the United Kingdom. The MHRA has published detailed guidance for industry and organizations that is updated as the United Kingdom’s regulatory position on medicinal products evolves over time.

Currently, the EU centralized MAs do not apply in Great Britain but do apply in Northern Ireland. However, the Windsor Framework provides that in future all MAs in the United Kingdom (including those for Northern Ireland) will require the MHRA to grant a UK MA. As such, in addition to the pre-existing standard 210 day assessment route for national MA in the United Kingdom, at the moment the United Kingdom offers new assessment procedures to obtain marketing authorization in the United Kingdom. The procedures can lead to a marketing authorization in Great Britain (England, Scotland, and Wales), the United Kingdom, or Northern Ireland, depending on the procedure and pre-existing authorizations, as further explained below. The new assessments include:

•The IRP which replaced the ECDRP from January 1, 2024. The IRP allows a company to submit an MAA for a product on an abbreviated review timeline if the same product has already received approval from one of the MHRA’s specified RRs, including the EMA, the national regulators of the EU Member States and the FDA. A positive CHMP opinion is deemed to be an RR approval for these purposes. If the RR approval was granted within the past 2 years and the manufacturing supply chain for the UK is identical to that approved under the RRA approval, the product may be eligible for Recognition Route A, which gives the MRHA 60 days from the date the IRP submission is validated to reach a decision, and there is no possibility of a clock-stop. For other products, including all ATMPs, the MAA will be assessed under Recognition Route B, which gives the MHRA 110 days from the date the IRP submission is validated to reach a decision, and the MHRA may impose a 60 day clock stop if necessary to request additional information from the applicant;

•A full assessment as a national authorization, that industry can choose for new active substances, with high-quality new MAAs with a timeline of no more than 150 days (excluding clock-off periods where further information is requested) which can lead to the grant of a marketing authorization in Great Britain, the United Kingdom, or Northern Ireland. If the application includes Northern Ireland then it must comply with the relevant EU requirements;

•The Unfettered Access Procedure for medicines already approved in Northern Ireland via the EU procedures or via the Northern Ireland national route which if successful will lead to a Great Britain marketing authorization. This procedure means that the MHRA will recognize such MAs in Great Britain within 67 days of MAA validation, unless a major objection is identified; and

•A “rolling review”, for new active substances and biosimilars, which would allow companies to make an application in stages, throughout the product’s development, to better manage development risk which can lead to the grant of a marketing authorization in Great Britain, the United Kingdom, or Northern Ireland. If the application includes Northern Ireland then it must comply with the relevant EU requirements.

However, these may change in future due, for example, to the Windsor Framework and the changes to the EU’s general pharmaceutical legislation.

Domestic UK law provided that all existing EU law in force on December 31, 2020 was retained in UK national law, subject to certain revisions that have become necessary as a result of Brexit. However, the Retained EU Law (Revocation and Reform) Act 2023 came into force on January 1, 2024. This revoked some retained EU laws (although not any relating to medicines regulation). All other retained EU laws have been renamed as “assimilated laws” and are no longer subject to the EU principles of interpretation. Thus, while at least initially the United Kingdom and the European Union laws relating to medicines are largely aligned, there is the potential for further divergence in the future..

Rest of World, or ROW

Similar to that in the U.S. and in Europe, countries around the globe have their own health authority(ies), legal basis of regulation of medicinal products, and independent clinical trial and registration procedures and processes. Conformance and compliance with International Council for Harmonization of Technical Requirements for Pharmaceuticals for Human Use, or ICH, is typically acceptable in countries worldwide with additional local particulars.

In general, from a clinical trial perspective, requirements for conduct of a trial are similar to that of the U.S. and EU and consist of a CTA and Ethics Committee review.

In both the United States and the EU, there are dedicated regulatory pathways for biosimilars, or biological medicinal products that are highly similar to a reference medicinal product but that do not meet the definition of a generic medicinal product, for example, because of inherent biological differences present in such biological systems. For such products, the results of appropriate preclinical or clinical trials must be provided, and guidelines from FDA or EMA detail the type of quantity of additional nonclinical, clinical and CMC data to be provided for submission of a highly similar biological product. Given the complexity of the requirements in the biosimilar route when compared to the generic drug pathway(s), there have been limited biosimilar approvals globally, however this pathway appears to be gaining momentum as innovator companies leverage the process to develop and market their own biosimilars of their own biologic product.

EU and UK Data Privacy

In May 2018, the EU General Data Protection Regulation (EU) 2016/679, or GDPR, went into effect in the EEA. The GDPR imposes stringent data protection requirements for processing the information of individuals in the EEA. In the United Kingdom, the GDPR continues to form part of law in the United Kingdom following the United Kingdom’s withdrawal from the EU, as the UK GDPR, (by virtue of Section 3 of the EU (Withdrawal) Act 2018, as amended (including by the various Data Protection, Privacy and Electronic Communications (Amendments etc.) (EU Exit) Regulations)), thus imposing similarly stringent data protection requirements in the United Kingdom, as in the EEA. To date, the GDPR and UK GDPR have increased compliance burdens on us, such as requiring the following: processing personal data only for specified, explicit and legitimate purposes for which personal data were collected; establishing a legal basis for processing personal data; creating obligations for controllers and processors to appoint data protection officers in certain circumstances; increasing transparency obligations to data subjects for controllers (including presentation of certain information in a concise, intelligible and easily accessible form about how their personal data is used and their rights vis-à-vis that data and its use); introducing the obligation to carry out so-called data protection impact assessments in certain circumstances; establishing limitations on collection and retention of personal data through “data minimization” and “storage limitation” principles; establishing obligations to implement “privacy by design”; introducing obligations to honor increased rights for data subjects (such as rights for individuals to be “forgotten,” rights to data portability, rights to object etc. in certain circumstances); formalizing a heightened and codified standard of data subject consent; establishing obligations to implement certain technical and organizational safeguards to protect the security and confidentiality of personal data; introducing obligations to agree to certain specific contractual terms and to take certain measures when engaging third party processors and joint controllers; introducing the obligation to provide notice of certain significant personal data breaches to the relevant supervisory authority or authorities and affected individuals; and mandating the appointment representatives in the United Kingdom and/or EU in certain circumstances. The processing of sensitive personal data, such as health information, may impose heightened compliance burdens under the GDPR/UK GDPR and is a topic of active interest among foreign regulators. The GDPR/UK GDPR increases our obligations with respect to clinical trials conducted in Europe (including the EEA and United Kingdom) by expressly expanding the definition of personal data to include “pseudonymized” or key-coded data and requiring changes to informed

consent practices and more detailed notices for clinical trial subjects and investigators. Further guidance on how to comply with these obligations in the context of clinical trials may be provided by European regulators in the future, as the European Data Protection Board, or EDPB, has announced back in 2021 that it was working on guidelines on the processing of personal data for scientific research purposes.

The GDPR/UK GDPR also provides for more robust regulatory enforcement and greater penalties for non-compliance than previous data protection laws, including fines of up to €20 million or 4% of global annual revenue of any non-compliant company for the preceding financial year, whichever is higher. In addition to administrative fines, a wide variety of other potential enforcement powers are available to competent supervisory authorities in respect of potential and suspected violations of the GDPR, including extensive audit and inspection rights, and powers to order temporary or permanent bans on all or some processing of personal data carried out by non-compliant actors. The GDPR also confers a private right of action on data subjects and consumer associations to lodge complaints with supervisory authorities, seek judicial remedies, and obtain compensation for damages resulting from violations of the GDPR.

European data protection laws, including the GDPR/UK GDPR, generally restrict the transfer of personal data from Europe, including the EEA, United Kingdom and Switzerland, to the United States and most other countries unless the parties to the transfer have implemented specific safeguards to protect the transferred personal data. One of the primary safeguards allowing U.S. companies to import personal data from Europe had been certification to the EU-U.S. Privacy Shield and Swiss-U.S. Privacy Shield frameworks administered by the U.S. Department of Commerce. However, both the EU-U.S. and Swiss-U.S. Privacy Shield frameworks were invalidated following a decision from the Court of Justice of the European Union, or CJEU, in July 2020, in a case known colloquially as “Schrems II.” In the aftermath of this case, a new framework known as the Data Privacy Framework, or DPF, was adopted in 2023 to allow participating U.S. companies to transfer personal data from Europe to the U.S. The DPF entered into force in July 2023 for transfers from the EEA to the U.S., and in October 2023 for transfers from the United Kingdom to the U.S. As a result, U.S. companies who have certified to the DPF can rely on their certification to import personal data from the EEA and the United Kingdom. While the Swiss-U.S. DPF Principles have technically been effective since July 2023, the Swiss Federal Council has yet to recognize the Swiss-U.S. DPF as an adequate safeguard for the transfer of Swiss personal data to the U.S. under Swiss data protection laws. As a result, and until the Swiss Federal Council issues an adequacy decision for the Swiss-U.S.DPF, companies cannot rely on the Swiss-U.S. DPF to transfer personal data from Switzerland to the U.S.. The CJEU’s decision in Schrems II also raised questions about whether another transfer mechanism, namely, the European Commission’s Standard Contractual Clauses, can lawfully be used for personal data transfers from Europe to the United States or other third countries that are not the subject of an adequacy decision of the European Commission. While the CJEU upheld the adequacy of the Standard Contractual Clauses in principle in Schrems II, it made clear that reliance on those Clauses alone may not necessarily be sufficient in all circumstances.

Use of the Standard Contractual Clauses must now be assessed on a case-by-case basis taking into account the legal regime applicable in the destination country, in particular regarding applicable surveillance laws and relevant rights of individuals with respect to the transferred data. In the context of any given transfer, where the legal regime applicable in the destination country may or does conflict with the intended operation of the Standard Contractual Clauses and/or applicable European law, the decision in Schrems II and subsequent draft guidance from the EDPB would require the parties to that transfer to implement certain supplementary technical, organizational and/or contractual measures to rely on the Standard Contractual Clauses as a compliant “transfer mechanism.” However, the EDPB recommendations 01/2020 on measures that supplement transfer tools to ensure compliance with the EU level of protection of personal data, as last adopted on June 18, 2021 conclude that no combination of such measures could be sufficient to allow effective reliance on the Standard Contractual Clauses in the context of transfers of personal data “in the clear” to recipients in countries where the power granted to public authorities to access the transferred data goes beyond that which is “necessary and proportionate in a democratic society” – which may, following the CJEU’s conclusions in Schrems II on relevant powers of United States public authorities and commentary in that draft EDPB guidance, include the United States in certain circumstances (e.g., where Section 702 of the U.S. Foreign Intelligence Surveillance Act applies).

The decision in Schrems II also affects transfers from the United Kingdom to the United States. As such, if we are unable to implement a valid solution for personal data transfers from Europe, including, for example, obtaining individuals’ explicit consent to transfer their personal data from Europe to the United States or other

countries, we will face increased exposure to regulatory actions, substantial fines and injunctions against processing personal data from Europe. Inability to import personal data from the EEA, United Kingdom or Switzerland may also restrict our clinical trials activities in Europe; limit our ability to collaborate with contract research organizations as well as other service providers, contractors and other companies subject to European data protection laws; and require us to increase our data processing capabilities in Europe at significant expense. Additionally, other countries outside of Europe have enacted or are considering enacting similar cross-border data transfer restrictions and laws requiring local data residency, which could increase the cost and complexity of delivering our services and operating our business. The type of challenges we face in Europe will likely also arise in other jurisdictions that adopt laws similar in construction to the GDPR or regulatory frameworks of equivalent complexity.

The GDPR applies across the EEA and, by virtue of the UK GDPR in the United Kingdom, in a broadly uniform manner. However, the GDPR provides that EEA countries may make their own further laws and regulations to introduce specific requirements related to the processing of “special categories of personal data,” including personal data related to health, biometric data used for unique identification purposes and genetic information; as well as personal data related to criminal offences or convictions – in the United Kingdom, the DPA complements the UK GDPR in this regard, and a draft data protection bill has recently been introduced to Parliament to reform the UK data protection legal framework.. This fact may lead to greater divergence on the law that applies to the processing of such data types across the EEA and/or United Kingdom, compliance with which, as and where applicable, may increase our costs and could increase our overall compliance risk. Such country-specific regulations could also limit our ability to collect, use and share data in the context of our EEA and/or United Kingdom establishments (regardless of where any processing in question occurs), and/or could cause our compliance costs to increase, ultimately having an adverse impact on our business, and harming our business and financial condition.

Further, the United Kingdom’s vote in favor of exiting the EU and ongoing developments in the United Kingdom have created uncertainty with regard to data protection regulation in the United Kingdom. Following the United Kingdom’s withdrawal from the EU on January 31, 2020, pursuant to the transitional arrangements agreed to between the United Kingdom and EU, the GDPR continued to have effect in law in the United Kingdom, and continued to do so until December 31, 2020 as if the United Kingdom remained an EU Member State for such purposes. After December 31, 2020, and the expiry of those transitional arrangements, the data protection obligations of the GDPR continue to apply to United Kingdom related to processing of personal data in substantially unvaried form and fashion under the UK GDPR. In the future, however, there will be increasing scope for divergence in application, interpretation and enforcement of the data protection law as between the United Kingdom and the EEA. Furthermore, the relationship between the United Kingdom and the EEA in relation to certain aspects of data protection law remains unclear. However, on June 28, 2021, the European Commission adopted an adequacy decision in relation to the United Kingdom. This decision permits personal data to flow freely from the EEA to the United Kingdom where it benefits from an essentially equivalent level of protection to that guaranteed under EU law. This adequacy decision has, however, a limited duration of four years, meaning that the decision will automatically expire after this period. After expiry of the period, the adequacy decision will be renewed only if the United Kingdom continues to ensure an adequate level of data protection. The reform of the UK data protection regime that is currently considered will likely be decisive as to whether or not the United Kingdom can maintain its adequacy status in the future. Additionally, as noted above, the United Kingdom has transposed the GDPR into United Kingdom domestic law by way of the UK GDPR with effect from in January 2021, and is further looking into reforming its data protection framework, which could expose us to two parallel regimes, each of which potentially authorizes similar fines and other potentially divergent enforcement actions for certain violations.

Additionally, other countries outside of Europe have enacted or are considering enacting similar cross-border data transfer restrictions and laws requiring local data residency, which could increase the cost and complexity of delivering our services and operating our business.

It is possible that the GDPR or other laws and regulations relating to privacy and data protection may be interpreted and applied in a manner that is inconsistent from jurisdiction to jurisdiction or inconsistent with our current policies and practices and compliance with such laws and regulations could require us to change our business practices and compliance procedures in a manner adverse to our business. We cannot guarantee that we are in compliance with all such applicable data protection laws and regulations and we cannot be sure how these regulations will be interpreted, enforced or applied to our operations. Furthermore, other jurisdictions outside

the EEA are similarly introducing or enhancing privacy and data security laws, rules, and regulations, which could increase our compliance costs and the risks associated with non-compliance. It is possible that these laws may be interpreted and applied in a manner that is inconsistent with our practices and our efforts to comply with the evolving data protection rules may be unsuccessful. We cannot guarantee that we, our third-party collaborators, or our vendors are in compliance with all applicable data protection and privacy laws and regulations as they are enforced now or as they evolve. Further, for example, our privacy policies may be insufficient to protect any personal information we collect, or may not comply with applicable laws. Our non-compliance could result in government-imposed fines or orders requiring that we change our practices, which could adversely affect our business. In addition to the risks associated with enforcement activities and potential contractual liabilities, our ongoing efforts to comply with evolving laws and regulations at the federal and state level may be costly and require ongoing modifications to our policies, procedures and systems. In addition, if we are unable to properly protect the privacy and security of protected health information, we could be found to have breached our contracts.

Our actual or perceived failure to adequately comply with applicable laws and regulations relating to privacy and data protection, or to protect personal data and other data we process or maintain, could result in regulatory enforcement actions against us, including fines, penalties, orders that require a change in our practices, additional reporting requirements and/or oversight, imprisonment of company officials and public censure, claims for damages by affected individuals, other lawsuits or reputational and damage, all of which could materially affect our business, financial condition, results of operations and growth prospects.

Pricing and Reimbursement

United States

The future commercial success of RUCONEST®, Joenja® and our product candidates or any of our collaborators’ ability to commercialize any approved product candidates successfully will depend in part on the extent to which governmental payor programs at the federal and state levels, including Medicare and Medicaid, private health insurers and other third-party payors provide coverage for and establish adequate reimbursement levels for our product candidates. Government health administration authorities, private health insurers and other organizations generally decide which drugs they will pay for and establish reimbursement levels for healthcare. In particular, in the United States, private health insurers and other third-party payors may provide reimbursement for products and services based on the level at which the government, through the Medicare or Medicaid programs, provides reimbursement for such treatments. In the United States, the EU, and other potentially significant markets for our product candidates, government authorities and third-party payors are increasingly attempting to limit or regulate the price of medical products and services, particularly for new and innovative products and therapies, which often has resulted in average selling prices lower than they would otherwise be. Further, the increased emphasis on managed healthcare in the United States will put additional pressure on product pricing, reimbursement and usage, which may adversely affect our future product sales and results of operations. These pressures can arise from rules and practices of managed care groups, judicial decisions and laws and regulations related to Medicare, Medicaid and healthcare reform, pharmaceutical coverage and reimbursement policies and pricing in general.

Third-party payors are increasingly imposing additional requirements and restrictions on coverage and limiting reimbursement levels for medical products. For example, federal and state governments reimburse covered prescription drugs at varying rates generally below average wholesale price. These restrictions and limitations influence the purchase of healthcare services and products. Third-party payors may limit coverage to specific products on an approved list, or formulary, which might not include all of the FDA-approved products for a particular indication. Third-party payors are increasingly challenging the price and examining the medical necessity and cost-effectiveness of medical products and services, in addition to their safety and efficacy. We may need to conduct expensive pharmacoeconomic studies in order to demonstrate the medical necessity and cost-effectiveness of our products, in addition to the costs required to obtain the FDA approvals. Our product candidates may not be considered medically necessary or cost-effective. A payor’s decision to provide coverage for a drug product does not imply that an adequate reimbursement rate will be approved. Further, one payor’s determination to provide coverage for a drug product does not assure that other payors will also provide coverage for the drug product. Adequate third-party reimbursement may not be available to enable us to maintain price levels sufficient to realize an appropriate return on our investment in drug development. Additionally, coverage policies and third-party reimbursement rates may change at any time. Therefore, even if favorable coverage and reimbursement status is attained, less favorable coverage policies and reimbursement rates may be implemented in the future. Legislative proposals to reform healthcare or reduce costs under

government insurance programs may result in lower reimbursement for RUCONEST®, Joenja® and product candidates or exclusion of RUCONEST®, Joenja® or our product candidates from coverage. The cost containment measures that healthcare payors and providers are instituting and any healthcare reform could significantly reduce our revenues from the sale of any approved product candidates. We cannot provide any assurances that we will be able to obtain and maintain third-party coverage or adequate reimbursement for RUCONEST®, Joenja® and our product candidates in whole or in part.

There have been several U.S. government initiatives over the past few years to fund and incentivize certain comparative effectiveness research, including creation of the Patient-Centered Outcomes Research Institute under the ACA. It is also possible that comparative effectiveness research demonstrating benefits in a competitor’s product could adversely affect the sales of our product candidates. If third-party payors do not consider RUCONEST®, Joenja® or our product candidates, once approved, to be cost-effective compared to other available therapies, they may not cover such products as a benefit under their plans or, if they do, the level of payment may not be sufficient to allow us to sell our product on a profitable basis.

In addition, there have been and continue to be a number of initiatives at the United States federal and state levels that seek to reduce healthcare costs. Furthermore, there has been heightened governmental scrutiny over specialty drug pricing practices, which has resulted in several congressional inquiries and executive orders designed to, among other things, bring more transparency to drug pricing, review the relationship between pricing and manufacturer patient programs, and reform government program reimbursement methodologies for drugs.

At the both the federal and state level, legislative proposals seeking to reduce drug prices, increase competition, lower out-of-pocket drug costs for patients, and increase patient access to lower-cost generic and biosimilar drugs are pervasive and a continuing theme subject to review and re-review for alignment with changes in administration(s), as well as with key stakeholders.

These and other healthcare reform initiatives within the U.S. may result in additional reductions in Medicare or other healthcare funding which may impact our ability to achieve the desired pricing for newly developed indications and/or products.

European Union

In the EU, pricing and reimbursement schemes vary widely from country to country. Some countries provide that products may be marketed only after a reimbursement price has been agreed. Some countries may require the completion of additional studies that compare the cost effectiveness of a particular product candidate to currently available therapies (so-called health technology assessments) in order to obtain reimbursement or pricing approval. In general, governments influence the price of medicinal products in the ~~European Union~~EU through their pricing and reimbursement rules and control of national healthcare systems that fund a large part of the cost of those products to consumers. Some jurisdictions operate positive and negative list systems under which products may only be marketed once a reimbursement price has been agreed. To obtain reimbursement or pricing approval, some of these countries may require the completion of clinical trials that compare the cost-effectiveness of a particular product candidate to currently available therapies. Other EU Member States allow companies to fix their own prices for ~~medicines,~~medicinal products but monitor and control company profits. The downward pressure on healthcare costs in general, particularly prescription medicines, has become very intense. As a result, increasingly high barriers are being erected to the entry of new products.

~~Pricing outside~~In various EU Member States, continuous cost-cutting measures, such as lower maximum prices, lower or lack of reimbursement coverage and incentives to use cheaper products as an alternative apply. Health Technology Assessment, or HTA, of medicinal products is becoming an increasingly common part of the ~~USA~~pricing and ~~European Union~~

~~Outside~~reimbursement procedures in some EU Member States, including countries representing major markets. The HTA process, which is currently governed by the ~~USA and European Union~~national laws of these countries, is the procedure according to which the assessment of the public health impact, therapeutic impact and the ~~territories where our distributors are active, no commercialization exists, except~~economic and societal impact of use of a given medicinal product in the national healthcare systems of the individual country is conducted. The outcome of HTA regarding specific medicinal products will often influence the pricing and reimbursement status granted to these medicinal products by the competent authorities of individual EU Member States. On January 31, 2018, the European Commission adopted a proposal for a regulation on health technologies assessment, or the HTA Regulation. In December 2021, the HTA Regulation was adopted and entered into force

on January 11, 2022. It will apply from 2025. The Regulation is intended to boost cooperation among EU Member States in assessing health technologies, including new medicinal products, and providing the ~~product on a name patient basis.~~basis for cooperation at the EU level for joint clinical assessments in these areas. Entry into application of the Regulation could impose stricter and more detailed procedures to be followed by MAHs concerning conduct of HTA in relation to their products which may influence related pricing and reimbursement decisions.

Outside of the United States and EU

Middle East & North Africa, or the MENA

Pharming creates access to RUCONEST® in the MENA through a mixture of direct sales and marketing, local partnerships, commercial partners and the ongoing utilization of the HAEi GAP program (as defined below) in certain territories. In Israel, our existing partner Kamada has consolidated its RUCONEST® activities. In addition, in 2021, we entered into an exclusive license agreement with Newbridge Pharmaceuticals for the distribution of RUCONEST® in the MENA.

China

We have granted the CSIPI an exclusive license to commercialize RUCONEST® in China, and the CSIPI is collaborating with the CDIBP. On December 15, 2023, the CDIBP announced that it received clinical trial approval from the Center for Drug Evaluation of the National Medical Product Administration for the clinical development of rhC1INH in China. We may receive certain regulatory and manufacturing-associated milestones, and we are eligible to receive low to mid-single digit royalties from sales in China by the CSIPI, affiliates of the CSIPI and sublicensees of the CSIPI.

Other markets

RUCONEST® continues to be commercialized in Colombia, Costa Rica, the Dominican Republic and Panama through our partner, Cytobioteck.

HAEi global access program, or HAEi GAP

RUCONEST® is the first therapy available under the HAEi GAP. This program ensures that in countries where no HAE therapies are approved or otherwise available, all eligible HAE patients can have access to safe and effective treatment through their treating physician. As part of this program, several requests have been received and treatments were started in countries such as South Africa and the Democratic Republic of the Congo. It is the only known program of this type which has been initiated through a patient group (HAEi).

C. Organizational Structure

Pharming Group N.V. is a limited liability public company. Pharming Group N.V. is the ultimate parent company of Pharming Group. A list of our significant subsidiaries at December 31, 2023 is provided in ~~below~~the table ~~which provides an overview of our subsidiaries and minority investments at December 31, 2020:~~

below:


Entity	Registered office		Ownership percentage
Pharming B.V.	The Netherlands		100		%
Pharming Americas B.V.	The Netherlands		100		%
Pharming Intellectual Property B.V.	The Netherlands		100		%
Pharming Technologies B.V.	The Netherlands		100		%
Pharming Research & Development B.V.	The Netherlands	100		%
~~BioConnection B.V.~~	~~The Netherlands~~		44		%
Broekman Instituut B.V.	The Netherlands		100		%
Pharming Healthcare, Inc.	The United States		100		%
ProBio, Inc.	The United States		100		%

6774

D. Property, ~~Plant~~Plants and Equipment

Our Facilities

In Leiden, ~~the~~The Netherlands, we have our administrative offices (including laboratories) and offices for executive management located on Darwinweg 24, 2333 CR, Leiden and Vondellaan 47, 2332 AA, Leiden, respectively. In the Leiden facilities, we ~~occupy~~:occupy:

•Approximately 1,877 square meters (equivalent to approximately 20,204 square feet) of office space under a lease that has an initial term that expires on June 1, 2029 and can be extended for a period of 5 years.

•Approximately 1,295 square meters (equivalent to approximately 13,939 square ~~feet~~feet) of laboratory space under a lease which will expire on June 30, ~~2021~~2026 and will automatically be renewed for an additional period of 5 years.

•Approximately 76 square meters (equivalent to approximately 818 square ~~feet~~feet) of storage space under a lease which will expire on June 30, ~~2021~~2026 and will automatically be renewed for an additional period of 5 years.

In addition, in the province of Noord Brabant, The Netherlands, we occupy approximately 3,459 square meters (equivalent to approximately 37,232 square feet), ~~which is partly still being developed and realized,~~ of which 2405 m2square meters (equivalent to approximately 25,887 square feet) is production space, 926 m2square meters (equivalent to approximately 9,967 square feet) is office space and 128 m2square meters (equivalent to approximately 1,378 square feet) is used for support purposes.

At our other production facility in the province of Noord Brabant, The Netherlands, we own approximately 950 square meters (equivalent to approximately 10,226 square feet) of production, warehouse and office space.

At the (cattle) facility in the province of Zuid Holland, The Netherlands, we ~~occupy~~occupied approximately 150 square meters (equivalent to approximately 1,615 square feet) of storage space under a lease that ~~has~~had an expiry date of September 1, ~~2021 but which will be renewed for an additional period~~2026. With the discontinuation of ~~5 years.~~the cattle program, we terminated the lease as of January 1, 2024.

Since 2022, we lease approximately 4,514 square meters (equivalent to approximately 48,588 square feet) of production, warehouse and office space in the province of Noord Brabant. We currently do not use this facility and remain exploring alternative utilization possibilities.

At our research and development facility near Paris, France, we occupy approximately 884 square meters (equivalent to approximately 9,515 square feet) of office space under a lease which has an expiry date of February 28, 2026. We also occupy approximately 214 square meters of laboratory space (equivalent to approximately 2,303 square feet) under a lease that expires on August 31, 2027.

In New Jersey, ~~US,~~United States, we occupy approximately 1,732.64 square meters (equivalent to approximately 18,650 square feet) of office space under a lease that runs until 2025.

~~The company~~We invested ~~€4.1~~$1.4 million and $1.4 million in ~~2020,~~2023 and 2022 respectively, mainly in ~~operational facilities, research and development facilities~~new machinery and laboratory equipment (2019: €2.4 million). We have committed to building a new facility to expand the Company’s downstream processing capacity for its lead product, RUCONEST® in Oss, the Netherlands. We may require additional space and facilities as our business expands.equipment.

Item 4A. Unresolved Staff Comments

~~Not applicable.~~None.

Item 55. Operating and Financial Review and Prospects

You should read the following ~~"Operating~~“Operating and Financial Review and ~~Prospects"~~Prospects” together with ~~the information in “Selected Consolidated Financial Data” and~~ our financial statements and ~~notes~~Notes included elsewhere in this Annual ~~Report~~Report. The following discussion is based on our financial information prepared in accordance with IFRS, as issued by the International Accounting Standards Board, or IASB.

The statements in this discussion with respect to our plans and strategy for our business, including expectations regarding our future liquidity and capital resources and other non-historical statements, are forward-looking

statements. These forward-looking statements are subject to numerous risks and uncertainties, including the

risks and uncertainties described in the section of this Annual Report titled “Risk Factors.” Our actual results may differ materially from those contained in or implied by any forward-looking statements.

A. Operating Results

Overview

~~We are a global, commercial stage biopharmaceutical company developing innovative protein replacement therapies and precision medicines for~~RUCONEST's® importance continued to be felt throughout 2023 as we increased the ~~treatment~~number of ~~rare diseases and unmet medical needs. The flagship~~physicians prescribing RUCONEST®, as well as the number of ~~our portfolio is our recombinant human C1 esterase inhibitor, or rhC1INH, franchise. C1INH is a naturally occurring protein that down-regulates the complement cascade~~patients. RUCONEST® revenues in order to control swelling in affected tissues. Our lead product, RUCONEST® is the first and only plasma-free rhC1INH protein replacement therapy. It is approved for the treatment of acute hereditary angioedema, or HAE, attacks. We are commercializing RUCONEST®2023 increased by 10%, driven by revenue growth in the United States, European Union and the United Kingdom through our own sales and marketing organization, and the rest of the world through our distribution network. We are also developing rhC1INH for subsequent indications, including pre- eclampsia, Acute Kidney Injury andU.S.

With respect to Joenja® (leniolisib), we are also investigating the clinical efficacy of rhC1INH in COVID-19. In addition, we are studying our oral precision medicine, leniolisib (a phosphoinositide 3-kinase delta, or PI3K delta, inhibitor), for the treatment of activated PI3K delta syndrome, or APDS, in a registration enabling Phase 2/3 studyincreased investment in the USU.S. as we began commercialization. During the nine months following the launch in April 2023, we made strong and Europe. Furthermore, we are also leveraging our transgenic manufacturing technology to develop next-generation protein replacement therapies, most notably for Pompe disease, which program is in the pre-clinical stage.

~~Our~~rapid progress transitioning known patients onto commercial therapy. Joenja® revenues ~~from the sale of RUCONEST® for the treatment of acute HAE attacks~~ were ~~€185.7 million, €169.0 million and €135.1~~$18.2 million for the years ended December 31, 2020, 2019 and 2018, respectively. We are currently marketing RUCONEST® in the United States, the United Kingdom and the European Union through our own sales force, and RUCONEST® is being sold in South Korea, Israel and certain Central and South American countries through our distributor network.full year 2023.

~~Key Factors Affecting Our Performance~~The U.S. launch of Joenja®, and preparations for anticipated approvals in the European Economic Area and additional geographies, resulted in additional expenses in research and development, marketing and sales and payroll. Research and clinical development activities related to leniolisib were further focused on pediatric and Japan clinical trials for APDS and research on the use of leniolisib for additional PIDs beyond APDS. We believe that these investments will support our continued growth following approvals.

~~Our ability~~In addition, research and clinical development activities were further focused as the program related to ~~expand approved indications and markets for rhC1INH~~Pompe was discontinued. As such, we maintained a strong financial position in 2023.

We are working to expand the rhC1INH franchise through clinical investigations. In particular, we are developing rhC1INH for use in indications such as COVID-19, pre-eclampsia and acute kidney injury. We are also developing leniolisib for the treatment of APDS and applying our transgenic manufacturing technology to develop an ERT for the treatment of Pompe disease. Our ability to generate revenue from these potential new indications and markets depends on our success in completing development of and commercializing such products and product candidates, which will require a significant investment of time and resources, as well as regulatory approval, and may not ultimately prove successful.

~~Our ability to commercialize leniolisib, if approved~~

We entered into a collaboration with Novartis AG, a Swiss multinational pharmaceutical company, in August 2019, pursuant to which we acquired rights to market leniolisib. Upon entering into the collaboration agreement, we paid €17.9 million ($20 million) in upfront payments to Novartis for the leniolisib program. Leniolisib is currently being studied in a Phase 2/3 clinical trial in patients with APDS in the United States and Europe and we expect to report data from the Phase 2/3 trial of leniolisib in the second half of 2021. If the trial is successful, we intend to apply for approval of leniolisib and, if approved, we plan to start commercializing the drug in the second half of 2022 through our existing commercial infrastructure. If the commercialization effort requires more than the minimal additions we are anticipating, our financial results could suffer.

~~Our ability to maintain and grow our revenues from our existing commercial product, RUCONEST®, given the impact of the current COVID-19 pandemic~~

Since a novel strain of coronavirus (SARS-CoV-2) causing a disease referred to as COVID-19 was first reported in December 2019, the disease has spread across the world, including countries in which we have patients and in which we have planned or active clinical trial sites. The outbreak and government measures taken in response

thereto have had a significant impact, both direct and indirect, on businesses and commerce as supply chains have been disrupted, facilities and production have been suspended and demand for certain goods and services has spiked while demand for other goods and services has fallen. As COVID-19 continues to spread around the globe, we may experience disruptions that could affectintensified our business ~~preclinical studies and~~development activities for in-licensing or acquisition of additional clinical ~~trials. We have experience delays~~stage assets in ~~our planned Phase 2b study of the effects of RUCONEST®~~rare or ultra-rare diseases, but did not engage in ~~patients undergoing PCI accompanied by contrast-enhanced examinations and our open label, single-arm, multi-stage, multi-center Phase 1/2 study~~any such transactions in late-stage pre-eclampsia. It remains uncertain when these clinical trials will resume or the degree to which COVID-19 will impact future clinical trials. See “Risk Factors” for additional information.

~~International operations and foreign currency exchange~~

We operate on a global basis with offices, sales and activities throughout the world. Our worldwide operations and sales have increased as a result of the re-acquisition of commercialization rights to RUCONEST® in the United States, the European Union and the United Kingdom and the subsequent and continued expansion of our commercial organizations in the United States, the European Union and the United Kingdom. Our global operations subject our financial results to fluctuations in foreign currency exchange rates, changes in general economic and political conditions in countries where we operate, particularly as a result of ongoing economic instability within foreign jurisdictions, sensitivity to governmental actions relating to tariffs or trade agreements, complex and restrictive employment and labor laws and regulations, as well as union and works council restrictions, sensitivity to changes in tax laws or rulings in jurisdictions across the world, longer payment cycles from customers in certain geographies, and legal compliance costs and risks. In addition, because the majority of our revenues are in dollars, and our presentation currency is in euros, our revenues are subject to fluctuation due to the US dollar to Euro exchange rate.

~~Our ability to add rare disease assets to our portfolio~~

Identifying, acquiring and developing new products and product candidates to build shareholder value is key to our goal of becoming a global leader in the treatment of rare diseases. Our future profitability and growth will depend on our ability to acquire and in-license product candidates on favorable terms.

~~Our ability to shift our marketing efforts and sales from third party distributors to our internal infrastructure~~

We have fully transitioned the commercialization of RUCONEST® in major international markets to our own sales force, and we currently market RUCONEST® in the United States, the United Kingdom and the European Union through our internal infrastructure. We market RUCONEST® in South Korea, Israel and certain Central and South American countries through our third party distributor network. Our ability to continue transitioning the marketing and sale of RUCONEST® in other jurisdictions from third party distributors to our internal infrastructure could require a significant investment and affect our business.2023.

Components of our Results of Operations

Revenues

We generate revenues ~~from~~ primarily from the sale of ~~vials of~~ RUCONEST® ~~in the United States, the European Union~~ and the United Kingdom through our own sales and marketing organization, and the rest of the world through our distribution network. In accordance with IFRS 15, revenues are recognized when the customer obtains control of the goods. Pursuant to our contracts, the customer obtains control of the product immediately after shipment of the product, which arrives at the customer within a short time frame.Joenja®. Most of our contracts for revenues with customers are subject to chargebacks, discounts and/or rebates relating to customers or to reimbursement claims from government or insurance payers, which we account for on an estimated net basis, with any actual discounts and rebates used to refine the estimates in due course. These variable elements are deducted from revenues in the same period as the related sales are recorded in accordance with our accounting policy as described further in “Critical Accounting Policies and Estimates” and Note 2 to our annual financial statements as of December 31 2020 and 2019 and for the year three-years period ended December 31 2020 included elsewhere in this Annual Report, (the "Annual Financial Statements" or the "Audited Consolidated Financial Statements").

payers.

Costs of Sales

Costs of sales consist of cost of product sales, relating to actual product sales, royalty expenses and inventory impairments. The impairment stems from the valuation of the inventories against lower net realizable value.

Other income

Other income ~~comprises~~is comprised largely of grants in the form of annual payroll-tax reimbursement granted by the Dutch and French governments for research and development activities that we conduct in those ~~countries.~~countries and the proceeds from the sale of a Pediatric Disease Priority Voucher, or PRV, to Novartis, as discussed below.

Cost of research and development

~~Costs relating~~Research and development costs relate to the preparation and initiation of our product candidates ~~pipeline. Expenditures for development can be recognized as an intangible asset when we can demonstrate that the following criteria are being met:~~

•~~Technical feasibility of completing the asset so that it will be available for use of sale is clear;~~

•~~Our intention to complete the asset and use or sell it is clear;~~

•~~Its ability to use or sell it is clear;~~

•~~The probability of future economic benefits is good (there is an existing market for the product which is likely to be available once the product is ready for launch);~~

•~~The availability of resources to complete the development is not in question;~~

•~~The ability to measure the expenditures on the project reliably is not in question.~~

lifecycle. Development expenditures that meet ~~these~~the capitalization criteria are ~~being~~ capitalized. Expenditures which do not meet these criteria are ~~taken~~recorded as expenses through the income statement.

Historically, substantially all of our research and development expenditures have been focused on the development of our rhC1INH franchise. In 2020, a small percentage of our research and development expenditures have been focused on the development of leniolisib. As we continue developing leniolisib until we reach NDA submission, we expect our research and development expenditures related to leniolisib to increase in future periods.

We capitalize certain research and development costs that relate to improvements in our approved product, RUCONEST®. These costs will be reflected in cost of research and development in the event of impairment, or will be amortized after the launch of a product including these improvements, if such improvements are approved. In addition, we have capitalized the cost of the up-front payment to Novartis for leniolisib. If leniolisib is approved for marketing, we will amortize such costs in costs of research and development.

Cost of general and administrative activities

Consists of costs related to administration resources, service fees, legal and due diligence costs ~~(related to transactions with Sobi~~ and ~~Novartis),~~impairment and depreciation costs for property, plant &and equipment and intangible assets. ~~In addition, we expect further increases in our general and administrative costs in future periods as our company continues to grow.~~

Cost of marketing and sales activities

These costs relate to all expenses incurred to commercialize ~~the~~a product.

Other finance expense

Other finance expense comprise primarily interest paid on our convertible bonds due 2025 ~~a provision for contingent consideration~~ and our lease ~~payments~~liabilities and foreign currency results.

In 2016 we completed the acquisition of all North American commercialization rights for our own product RUCONEST® from Valeant. Valeant Pharmaceuticals International changed its name in 2018 to Bausch Health Companies after it acquired Bausch & Lomb. The re-acquired rights are determined as an intangible asset, as part of a business combination. We have paid an upfront amount of $60 million and agreed to pay future

amounts up to a further $65 million, of which $40 million has already been paid, based on achievement of sales milestones. In the fourth quarter of 2019, we achieved the sales level which triggered the second US$20 million milestone payment to Bausch Health Companies Inc., which was paid in February 2020. Due to continued sales growth the final US$25 million was triggered in 2020 and will be paid in the second quarter of 2021. Payment of the remaining milestone in the future will not affect profits, because a provision is taken gradually as the likelihood of the milestones being achieved increases. On the balance sheet, this provision is shown under Other Financial Liabilities. As the payments will be made in cash the contingent consideration is classified as a financial liability. It is recognized at its fair value at the acquisition date, as part of the total consideration transferred, according IFRS 3.39. Fair value at acquisition-date was based on the probability of achieving the milestones. These fair values are based on risk-adjusted future cash flows discounted using appropriate discount rates. The fair values are reviewed on a regular basis, at least annually, and any changes are reflected in the income statement under financial cost, net.

The amount for the contingent consideration originally arose on the acquisition of the commercialization rights from Valeant Pharmaceuticals in 2016. This represents the present value of the estimated amount probably payable by us in the event of achieving the final sales milestone and is calculated by applying the milestone criteria to probabilities of forecast future revenues and cash flows. The assumptions relating to future revenues and discount rates are based on business forecasts and are therefore inherently judgmental. Future events could cause the assumptions used in these projections to change with a consequent adverse effect on our future results. In 2020 the last sales milestone was achieved. Accordingly Pharming will pay the last milestone in 2021 of €20.4 million (US$25 million) to reach the US$65 million based on achievement of sales milestones. The last payment as such is no longer an estimate.

Share of net profits in associates using the equity method

Share of net profits in associates comprises the profit resulting from our investment in BioConnection. During the second quarter of 2022, Pharming entered into a share purchase agreement, following receipt of an offer for all shares in BioConnection ~~BV (BioConnection). In 2019, we acquired~~B.V. by Gimv, a ~~43.85%~~European investment company listed on Euronext Brussels. The existing shareholders (including Pharming) reached agreement with Gimv on the sale of all issued and outstanding shares to a new holding company (BioConnection Investments B.V.) incorporated by Gimv, followed by a partial re-investment by existing shareholders of the purchase price in the share capital of BioConnection Investments B.V. The re-investment relates to the purchase of ordinary shares and a preference share. The transaction diluted Pharming’s stake in ~~the equity of our fill and finish partner,~~ BioConnection ~~BV. In the Board of Management’s judgement, the investment~~from 43.85% in ~~BioConnection constitutes an investment~~2021 to 22.98% in an unconsolidated structured entity, as we have significant influence but do not have control of BioConnection. In particular, the shareholders of BioConnection are prohibited from influencing any activity between the two parties which is in any significant way different from the relationship which existed between the two prior to the investment.2022. We ~~do not control the voting rights or the economic benefits of the entity. Accordingly, we~~ account for our investment in BioConnection by the equity method and do not consolidate the entity as a subsidiary.

Income tax credit (expense)

Income tax credit reflects credit/(expenses) of income tax. ~~As a result~~The income tax expense or credit for the period is the tax payable on the current period’s taxable income based on the applicable income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to temporary differences and to unused tax losses. The realization of deferred tax assets is dependent upon the ~~growth~~generation of future taxable income, the amount and timing of which are subject to uncertainties. Despite the loss in ~~sales,~~2023, it is probable that going forward we will be able to use all our remaining net operating tax losses from previous years. During the years ended December 31, ~~2020, 2019~~2023, 2022 and ~~2018,~~2021, we incurred state and federal income taxes in the United States, in which jurisdiction we have no remaining tax losses available, while in ~~the~~The Netherlands we continue to use up our accumulated tax losses. The tax shielding effect of those remaining tax losses is shown on the balance sheet as a deferred tax asset. The deferred tax asset is utilized by being written down by the amount of the tax charge each reporting period, instead of paying the tax due from cash. Once all the tax losses are used up, the deferred tax asset relating to these losses will be completely extinguished and the tax due thereafter will be paid. This is reflected in the fact that although the tax charges are getting larger as we grow in net profits before tax, the amount actually paid (as shown in the cash flow statement) is considerably less.

Results of Operations

The following table sets forth our results of operations for the periods presented.

7277

CONSOLIDATED STATEMENT OF INCOME


		Years ended December 31,
Amounts in € ‘000		2020	2019	2018
	Years ended December 31,							Years ended December 31,
Amounts in $ ‘000					Amounts in $ ‘000	2023	2022		2021
Revenues	Revenues	185,694	169,022	135,130
Costs of sales	Costs of sales	(20,601)	(21,355)	(22,180)
Gross profit	Gross profit	165,093	147,667	112,950
Other income	Other income	1,601	435	684
Research and development	Research and development	(33,712)	(28,368)	(28,882)
General and administrative	General and administrative	(21,079)	(18,913)	(12,221)
Marketing and sales	Marketing and sales	(45,164)	(39,914)	(34,539)
Other Operating Costs	Other Operating Costs	(99,955)	(87,195)	(75,642)
Operating profit		66,739	60,907	37,992
Fair value gain (loss) on revaluation derivatives		60	(209)	(495)
Operating profit / (loss)
Fair value gain (loss) on revaluation
Other finance income	Other finance income	626	1,011	18
Other finance expenses	Other finance expenses	(29,151)	(15,259)	(36,658)
Finance cost, net		(28,465)	(14,457)	(37,135)
Share of net profits in associates using the equity method		317	229	—
Profit before tax		38,591	46,679	857
Income tax credit (expense)		(5,556)	(10,484)	24,136
Profit for the year		33,035	36,195	24,993
Basic earnings per share (€)		0.051	0.058	0.041
Diluted earnings per share (€)		0.048	0.054	0.038
Finance result, net
Share of net profits (loss) in associates using the equity method
(Loss) / Profit before tax
Income tax expense
(Loss) / Profit for the year
Basic (loss) / earnings per share ($)					Basic (loss) / earnings per share ($)	(0.016)	0.021		0.025
Diluted (loss) / earnings per share ($)					Diluted (loss) / earnings per share ($)	(0.016)	0.019		0.023



The Netherlands	2834	Not applicable
(Jurisdiction of incorporation or organization)	(Primary Standard Industrial Classification Code Number)	(Translation of Registrant’s name into English)


TABLE OF CONTENTS
		PAGE
	~~GENERAL INFORMATION REGARDING FORWARD-LOOKING STATEMENTS~~	5
Part I
Item 1.	IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS	6
Item 2.	OFFER STATISTICS AND EXPECTED TIMETABLE	6
Item 3.	KEY INFORMATION	6
	AA. . ~~SELECTED FINANCIAL DATA~~[RESERVED]	6
	B. CAPITALIZATION AND INDEBTEDNESS	6
	C. REASONS FOR THE OFFER AND USE OF PROCEEDS	67
	D. RISK FACTORS	67
Item 4.	INFORMATION OF THE COMPANY	4341
	A. HISTORY AND DEVELOPMENT OF THE COMPANY	4341
	B. BUSINESS OVERVIEW	4342
	C. ORGANIZATIONAL STRUCTURE	6774
	D. PROPERTY, PLANT AND EQUIPMENT	6775
Item 4 A.	UNRESOLVED STAFF COMMENTS	6875
Item 5.	OPERATING AND FINANCIAL REVIEW AND PROSPECTS	6875
	A. OPERATING RESULTS	6976
	B. LIQUIDITY AND CAPITAL RESOURCES	8287
	C. RESEARCH AND DEVELOPMENT, PATENT AND LICENSES,ETC.	8589
	D. TREND INFORMATION	8589
	E. ~~OFF-BALANCE SHEET ARRANGEMENTS~~CRITICAL ACCOUNTING ESTIMATES	85
	~~G. SAFE HARBOR~~	8590
Item 6.	DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES	8590
	A. DIRECTORS AND SENIOR MANAGEMENT	8590
	B. COMPENSATION	8894
	C. BOARD PRACTICES	97100
	D. EMPLOYEES	98101
	E. SHARE OWNERSHIP	98102
Item 7.	MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS	99102
	A. MAJOR SHAREHOLDERS	99102
	B. RELATED PARTY TRANSACTIONS	~~100~~103
	C. INTERESTS OF EXPERTS AND COUNSEL	~~101~~104
Item 8.	FINANCIAL INFORMATION	~~101~~104
	A. CONSOLIDATED STATEMENTS AND OTHER FINANCIAL ~~INFORMATIO~~NINFORMATION	~~101~~104
	B. SIGNIFICANT CHANGES	~~101~~105
Item 9.	THE OFFER AND LISTING	~~102~~105
	A. OFFER AND LISTING DETAILS	~~102~~105
	B. PLAN OF DISTRIBUTION	~~102~~
	~~C. MARKETS~~	~~102~~
	~~D. SELLING SHAREHOLDERS~~	~~102~~
	~~E. DILUTION~~	~~102~~105


Amounts in US$ ‘000	2023			2022
	RUCONEST®	Joenja®	Total	RUCONEST®	Joenja®	Total
Revenues:
US	221,213	17,894	239,107	200,082	—	200,082
Europe and RoW	5,921	288	6,209	5,540	—	5,540
Total revenues	227,134	18,182	245,316	205,622	—	205,622
Gross profit:
US	202,441	15,417	217,858	186,263	—	186,263
Europe and RoW	2,026	220	2,246	1,797	—	1,797
Total gross profit	204,467	15,637	220,104	188,060	—	188,060


	Years ended December 31,
Amounts in $ ‘000	2023	2022
Cost of inventories recognized as expenses	(21,404)	(17,398)
Royalty fees	(2,145)	—
Obsolete inventory impairments	(1,663)	(164)
Total	(25,212)	(17,562)


	Years ended December 31,
Amounts in $ ‘000	2023	2022
U.S.	217,858	186,263
Europe and RoW	2,246	1,797
Total gross profit	220,104	188,060


U.S. GAAP ☐			International Financial Reporting Standards as issued by the International Accounting Standards Board ☒			Other ☐


Amounts in $’000	2023	2022	2021
Net cash flows generated from (used in) operating activities	(17,302)	22,458	37,842
Net cash flows generated from (used in) investing activities	(129,388)	5,323	(21,305)
Net cash flows generated from (used in) financing activities	(1,039)	(4,982)	(27,947)
Exchange rate effects	2,128	(7,381)	(1,825)
Net change in cash and cash equivalents	(145,601)	15,418	(13,235)


Amounts in € ‘000	Less than 1 year	1 to 3 Years	3 to 5 Years	More than 5 Years	Total cash Outflows
Trade and other payables	38,816	—	—	—	38,816
Derivative financial liabilities	147	—	—	—	147
Other financial liabilities	20,530	—	—	—	20,530
Lease liabilities	2,109	3,458	2,415	2,615	10,597
Convertible bonds	3,750	7,500	130,625	—	141,875
Total	65,352	10,958	133,040	2,615	211,965


Amounts in € ‘000	Fixed remuneration	Short term variable: annual bonus	Share based payments	Post- employment benefits	Other	Total
Sijmen de Vries, CEO	538	377	1,522	94	32	2,563

Bruno Giannetti, CMO	352	176	620	74	24	1,246


Amounts in $ ‘000	Fixed remuneration	Short-term variable: annual bonus	Share-based payments	Post-employment benefits	Other	Total
Dr Sijmen de Vries, CEO and Executive Director	673	615	1,371	115	35	2,809


	January 1, 2019	Granted 2019-2020	Exercised 2019-2020	Forfeited/ Expired 2019-2020	December 31, 2020	Exercise Price (€)	Expiration date
S.de Vries	2,400,000			-2,400,000	—	1.130	June 17, 2019
		2,800,000			2,800,000	0.805	Sept 20, 2023

Total	2,400,000	2,800,000	—	-2,400,000	2,800,000
B.M. Giannetti	1,440,000			-1,440,000	—	1.130	June 17, 2019
		1,600,000			1,600,000	0.805	Sept 20, 2023

Total	1,440,000	1,600,000	—	-1,440,000	1,600,000
R. Wright	1,000,000		-1,000,000		—	0.355	October 28, 2020
	4,000,000		-1,000,000		3,000,000	0.209 - 1.130	May 25, 2021

Total	5,000,000	—	-2,000,000	—	3,000,000
In service:
December 31	8,840,000	4,400,000	(2,000,000)	(3,840,000)	7,400,000


	January 1, 2023	Granted 2023	Exercised in 2023	Forfeited/Expired in 2023	December 31, 2023	Exercise price ($)	Expiration date
Dr. Sijmen de Vries	2,800,000	—	—	—	2,800,000	0.886	5/22/2024
Total	2,800,000	—	—	—	2,800,000


	Year	Granted	Settled	Forfeited	Not vested	Reserved at December 31, 2020
S. de Vries	2020	—	—	—	—	—
	2019	201,050	—	—	—	201,050
	2018	130,131	—	—	—	130,131
	2017	657,902	(657,902)	—	—	—
B.M. Giannetti	2020	—	—	—	—	—
	2019	131,331	—	—	—	131,331
	2018	85,005	—	—	—	85,005
	2017	429,762	(429,762)	—	—	—
R. Wright	2020	—	—	—	—	—
	2019	125,476	—	—	—	125,476
	2018	81,215	—	—	—	81,215
	2017	410,599	(410,599)	—	—	—
Total	2020	—	—	—	—	—
	2019	457,857	—	—	—	457,857
	2018	296,351	—	—	—	296,351
	2017	1,498,263	(1,498,263)	—	—	—


Participant category			~~2020~~2023
~~Non Executive members of the Board of Directors~~			—
Executive Members of the Board of Directors			—1,681,570
Executive Committee			~~105,000~~4,221,870
~~Senior managers~~			~~930,000~~
Total			~~1,035,000~~5,903,440
Fair value per share award (€($)			~~0.752~~0.880


Participant category	Granted	Issued	Forfeited / Unvested	Reserved at December 31, 2023
Executive Members of the Board of Directors	5,382,913	0	0	5,382,913
Executive Committee	16,444,353	(1,261,595)	(3,708,270)	11,474,488
Senior managers	1,742,500	(36,654)	(1,052,346)	653,500
Total	23,569,766	(1,298,249)	(4,760,616)	17,510,901


Amounts in € ‘000	2020	2019
Salaries	(32,217)	(26,363)
Social security costs	(3,765)	(3,364)
Pension costs	(1,614)	(1,577)
Share-based compensation	(7,356)	(4,449)
Total	(44,952)	(35,753)


Amounts in $ ‘000	2023	2022
Salaries	(71,690)	(53,328)
Social security costs	(8,604)	(6,317)
Pension costs	(2,980)	(2,284)
Share-based compensation	(9,251)	(6,392)
Total	(92,525)	(68,321)


Amounts in € ‘000	2020	2019
Loan settlement	(3,775)	—
Foreign currency results	(16,832)	(460 )
Interest loans and borrowings	(4,532)	(11,255 )
Interest leases	(670)	(662 )
Contingent consideration	(3,277)	(2,882 )
Other financial expenses	(65)	—
Other finance expenses	(29,151)	(15,259 )


Amounts in $ ‘000	2022	2021
Salaries	(53,328)	(44,202)
Social security costs	(6,317)	(5,318)
Pension costs	(2,284)	(2,179)
Share-based compensation	(6,392)	(9,055)
Total	(68,321)	(60,754)


~~Position~~						~~Fixed remuneration amount (€)~~
~~CEO~~						~~538,000~~
~~Other Executive Directors~~						~~400,000~~


Position	Fixed remuneration amount ($ ‘000)	Fixed remuneration amount (EUR ‘000)
CEO	673	624


Amounts in $ ‘000	Year	Cash	Share-Based Payment	Total
Dr. Richard Peters	2023	26	20	46
	2022	—	—	—
	2021	—	—	—
Mr. Paul Sekhri	2023	55	32	87
	2022	72	42	114
	2021	77	55	132
Ms. Deborah Jorn	2023	55	32	87
	2022	55	32	87
	2021	64	42	106
Ms. Barbara Yanni	2023	62	32	94
	2022	53	32	85
	2021	60	36	96
Dr. Mark Pykett	2023	55	32	87
	2022	50	32	82
	2021	57	36	93
Ms. Jabine van der Meijs	2023	62	32	94
	2022	57	32	89
	2021	47	24	71
Mr. Leonard Kruimer	2023	58	32	90
	2022	57	32	89
	2021	47	24	71
Mr. Steven Baert	2023	58	32	90
	2022	55	32	87
	2021	45	24	69
Mr. Barrie Ward	2023	—	—	—
	2022	—	—	—
	2021	23	20	43
Mr. Juergen Ernst	2023	—	—	—
	2022	—	—	—
	2021	—	6	6
Mr. Aad de Winter	2023	—	—	—
	2022	—	—	—
	2021	26	21	47
Total	2023	431	244	675
	2022	399	234	633
	2021	446	288	734


Weighted average full time equivalent	2020	2019	2018
The Netherlands	145	116	93
France	14	13	11
Germany	2	2	3
United Kingdom	3	1	1
United States	66	57	48
Total	229	189	156

Weighted average full time equivalent
General & Administration	43	31	21
Research & Development	136	115	96
Marketing & Sales	50	43	39
Total	229	189	156


Average full time equivalent	2023	2022	2021
The Netherlands	201	198	186
France	21	19	16
Germany	4	1	1
Italy	2	1	0
United Kingdom	15	10	5
United States	136	102	77
Spain	2	—	—
Turkey	1	—	—
Total	382	332	285

Average full time equivalent
General and administrative	104	69	60
Research and development	131	138	169
Marketing and sales	100	77	56
Production	47	48	—
Total	382	332	285



Name of Beneficial Owner	Number of Ordinary Shares Beneficially Owned	Percentage of Ordinary Shares Beneficially Owned
Executive Officers and Executive Directors:	14,800,237	2.30
Sijmen de Vries, MD MBA(1).....................	9,438,869	1.47
Bruno M.L. Giannetti, MD PhD(2).............	3,307,714	*
Anne-Marie de Groot(3)................................	1,078,654	*
Mireille Sanders, MSc(4)..............................	262,500	*
Stephen Toor(5)..............................................	712,500	*

Non-Executive Directors:	1,259,751	*
Paul Sekhri(6)..................................................	340,000	*
Juergen H.L. Ernst, MBA(7).........................	378,313	*
J. Barrie Ward, PhD(8)..................................	328,313	*
Deborah Jorn, MBA.....................................	—	*
Aad de Winter, LLM(9).................................	213,125	*


Name of Beneficial Owner	Number of Ordinary Shares Beneficially	Percentage of Ordinary Shares Beneficially Owned
Executive Officers and Executive Directors:	14,984,557	2.2%
Sijmen de Vries, MD MBA (1)	11,344,736	1.7%
Mireille Sanders, MSc (2)	967,770	*
Stephen Toor (3)	862,700	*
Jeroen Wakkerman (4)	1,105,844	*
Anurag Relan (5)	353,000	*
Ruud van Outersterp (6)	285,157	*
Alexander Breidenbach (7)	65,350	*
Non-Executive Directors:	685,833
Deborah Jorn, MBA (8)	135,133	*
Barbara Yanni (9)	119,542	*
Mark Pykett (9)	119,542	*
Jabine van der Meijs (10)	94,704	*
Leon Kruimer (10)	94,704	*
Steven Baert (10)	94,704	*
Richard Peters (11)	27,504	*


Board Diversity Matrix (As of March 31, 2024)
Country of Principal Executive Offices:			The Netherlands
Foreign Private Issuer:			Yes
Disclosure Prohibited under Home Country Law:			No
Total Number of Directors:			8


Part I: Gender Identity	Female	Male	Non-Binary	Did Not Disclose Gender
Directors	3	5	—	—
Part II: Demographic Background
Underrepresented Individual in Home Country Jurisdiction	0
LGBTQ+	0
Did Not Disclose Demographic Background	0


		Incorporated by Reference
Exhibit Number	Description of Exhibit	Schedule/form	File Number	Exhibit	File Date (mm/dd/yyyy)
3.1	Amended and Restated Articles of Association of Pharming Group N.V. effective as of December 11, 2020 (English translation)	Form F-1/A	333-250984	3.1	12/17/2020
3.2	Board Rules of Pharming Group N.V.	Form F-1	333-250984	3.2	11/25/2020
4.1	Form of Deposit Agreement	Form F-1/A	333-250984	4.1	12/17/2020
4.2	Form of American Depositary Receipt (included in exhibit 4.1)	Form F-1/A	333-250984	4.1	12/17/2020
4.3	Description of Securities.
10.1	Revised Stock Option Plan for Employees	Form F-1/A	333-250984	10.1	12/17/2020
10.3†+	License Agreement, by and between the registrant and Novartis International Pharmaceutical AG, dated August 12, 2019	Form F-1	333-250984	10.5	11/25/2020
10.4	Form of Indemnity Agreement between the registrant and its directors and executive officers	Form F-1	333-250984	10.8	11/25/2020
10.5†	Asset Purchase Agreement, dated as of August 9, 2016, by and among Salix Pharmaceuticals, Inc., Santarus, Inc., Valeant Pharmaceuticals Luxembourg S.a r.l., Valeant Pharmaceuticals North America LLC, the Registrant and Pharming Americas B.V.	Form F-1/A	333-250984	10.5	12/17/2020
12.1	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
12.2	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
13.1	Certification by the Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
13.2	Certification by 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
21.1	Subsidiaries of the registrant	Form F-1	333-250984	21.1	11/25/2020


15.1			C o nsent of Deloitte Accountant B.V., independent registered public accounting firm.
97.1			R egistrant Clawback Policy .
101.INS			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
101.SCH			Inline XBRL Taxonomy Extension Schema Document
101.CAL			Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF			Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB			Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE			Inline XBRL Taxonomy Extension Presentation Linkbase Document
104			Cover Page Interactive Data File (Formatted as Inline XBRL and contained in Exhibit 101)


Contents
Reports of Independent Registered Public Accounting Firm (PCAOB ID No. 1243)			F- 2
Consolidated Statement of Income			F- 64
Consolidated Statement of Comprehensive Income			F- 74
Consolidated Balance Sheet			F- 86
Consolidated Statement of Changes in Equity			F- 97
Consolidated Statement of Cash Flows			F- 118
Notes to the Consolidated Financial Statements			F- 129


Amounts in € ‘000	notes	2020	2019	2018

Revenues	4	185,694	169,022	135,130
Costs of sales	6	(20,601)	(21,355)	(22,180)
Gross profit		165,093	147,667	112,950
Other income	5	1,601	435	684
Research and development		(33,712)	(28,368)	(28,882)
General and administrative		(21,079)	(18,913)	(12,221)
Marketing and sales		(45,164)	(39,914)	(34,539)
Other operating costs	6	(99,955)	(87,195)	(75,642)
Operating profit		66,739	60,907	37,992
Fair value gain (loss) on revaluation derivatives	7	60	(209)	(495)
Other finance income	8	626	1,011	18
Other finance expenses	8	(29,151)	(15,259)	(36,658)
Finance cost, net		(28,465)	(14,457)	(37,135)
Share of net profits in associates using the equity method	13	317	229	0
Profit before tax		38,591	46,679	857
Income tax credit (expense)	9	(5,556)	(10,484)	24,136
Profit for the year		33,035	36,195	24,993
Basic earnings per share (€)	29	0.051	0.058	0.041
Diluted earnings per share (€)	29	0.048	0.054	0.038


Amounts in € ‘000		Number of shares (in '000)	Share capital	Share premium
Balance at 1 January 2018		579,015	5,790	363,818
Profit for the year		—	—	—
Other comprehensive income (loss) for the year		—	—	—
Total comprehensive income (loss) for the year		—	��	—
Legal reserves		—	—	—
Share-based compensation		—	—	—
Bonuses settled in shares		1,625	16	1,284
Shares issued for cash/ conversion of bonds		2,746	28	3,117
Warrants exercised/ issued		11,122	111	6,031
Options exercised / LTIP shares issued		26,993	270	13,275
Total transactions with owners, recognised directly in equity		42,486	425	23,707
Balance at December 31, 2018		621,501	6,215	387,525
Profit for the year			—	—
Other comprehensive income (loss) for the year			—	—
Total comprehensive income (loss) for the year			—	—
Legal reserves		—	—	—
Share-based compensation		—	—	—
Bonuses settled in shares		6	0	6
Shares issued for cash/ conversion of bonds		1,662	17	228
Warrants exercised/ issued		240	2	234
Options exercised / LTIP shares issued		7,914	79	4,273
Total transactions with owners, recognized directly in equity		9,822	98	4,741
Balance at December 31, 2019		631,323	6,313	392,266
Amounts in US$ ‘000					Amounts in US$ ‘000	Notes	Share capital	Share premium	Other reserves	Accumulated deficit	Total equity
Balance at January 1, 2021
Profit for the year	Profit for the year		—	—
Other comprehensive income (loss) for the year	Other comprehensive income (loss) for the year		—	—
Total comprehensive income (loss) for the year	Total comprehensive income (loss) for the year		—	—
Legal reserves	Legal reserves	—	—	—
Income tax benefit from excess tax deductions related to share-based payments	Income tax benefit from excess tax deductions related to share-based payments	—	—	—
Share-based compensation	Share-based compensation	—	—	—
Bonuses settled in shares		34	0	45
Value conversion rights of convertible bonds		—	—	—
Warrants exercised		60	1	78
Warrants exercised/ issued
Options exercised / LTIP shares issued	Options exercised / LTIP shares issued	7,404	74	4,410
Total transactions with owners, recognized directly in equity		7,498	75	4,533
Balance at December 31, 2020		638,821	6,388	396,799
Balance at Total transactions with owners, recognized directly in equity
Balance at January 1, 2022
Profit (loss) for the year
Other comprehensive income (loss) for the year
Total comprehensive income (loss) for the year
Other reserves
Income tax benefit from excess tax deductions related to share-based payments
Share-based compensation
Options exercised / LTIP shares issued
Balance at Total transactions with owners, recognized directly in equity
Balance at December 31, 2022
Profit (loss) for the year
Other comprehensive income (loss) for the year
Total comprehensive income (loss) for the year
Other reserves
Income tax benefit from excess tax deductions related to share-based payments
Share-based compensation
Options exercised / LTIP shares issued
Balance at Total transactions with owners, recognized directly in equity
Balance at December 31, 2023


		Legal reserves
Amounts in € ‘000	Reserve participating interest	Capitalized development cost	Translation reserve	Accumulated deficit	Total equity

Balance at January 1, 2018	0	0	(938)	(352,560)	16,110
Result for the year	—	—	—	24,993	24,993
Other comprehensive income (loss) for the year	—	—	348	—	348
Total comprehensive income (loss) for the year	—	—	0	24,993	25,341
Legal reserves	—	2,237	—	(2,237)	0
Share-based compensation	—	—	—	3,889	3,889
Bonuses settled in shares	—	—	—	(1,964)	(664)
Shares issued for cash/ conversion of bonds	—	—	—	—	3,145
Warrants exercised/ issued	—	—	—	—	6,142
Options exercised	—	—	—	(5,757)	7,788
Total transactions with owners, recognised directly in equity	—	2,237	—	(6,069)	20,300
Balance at December 31, 2018	0	2,237	(590)	(333,636)	61,751
Profit for the year	—	—		36,195	36,195
Other comprehensive income (loss) for the year	—	—	(39)	—	(39)
Total comprehensive income (loss) for the year	—	—	(39)	36,195	36,156
Legal reserves	—	2,110	—	(2,110)	0
Share-based compensation	—	—	—	3,825	3,825
Bonuses settled in shares	—	—	—	—	6
Shares issued for cash/ conversion of bonds	—	—	—	(245)	0
Warrants exercised/ issued	—	—	—	—	236
Options exercised / LTIP shares issued	—	—	—	(1,647)	2,705
Total transactions with owners, recognized directly in equity	—	2,110	0	(177)	6,772
Balance at December 31, 2019	0	4,347	(629)	(297,618)	104,679
Profit for the year	—	—	—	33,035	33,035
Other comprehensive income (loss) for the year	—	—	(17)	0	(17)
Total comprehensive income (loss) for the year	—	—	(17)	33,035	33,018
Legal reserves	544	96	—	(640)	0
Income tax credit from excess tax deductions related to share-based payments	—	—	—	2,066	2,066
Share-based compensation	—	—	—	5,721	5,721
Bonuses settled in shares	—	—	—	—	45
Value conversion rights of convertible bonds	—	—	—	1,405	1,405
Warrants exercised	—	—	—	—	79
Options exercised / LTIP shares issued	—	—	—	(2,120)	2,364
Total transactions with owners, recognized directly in equity	544	96	0	6,432	11,680
Balance at December 31, 2020	544	4,443	(646)	(258,151)	149,377


Amounts in €’000		notes	2020	2019	2018
Profit before tax			38,591	46,679	857
Non-cash adjustments:
Depreciation, amortization, impairment		6, 10, 11, 12	7,276	5,177	6,559

Amounts in $ ‘000						Amounts in $ ‘000	Notes	2023	2022	2021
Profit (loss) before tax
Adjustments to reconcile net profit (loss) to net cash used in operating activities:
Depreciation, amortization, impairment of non-current assets
Depreciation, amortization, impairment of non-current assets
Depreciation, amortization, impairment of non-current assets
Equity settled share based payments	Equity settled share based payments	22	5,721	3,825	3,270
Non-current assets			0	0	1,315
Fair value gain (loss) on revaluation of derivatives		7	(60)	209	495
Gain on disposal of investment in associate
Fair value gain (loss) on revaluation
Gain on disposal from PRV sale
Other finance income	Other finance income	8	(624)	(1,011)	(18)
Other finance expenses	Other finance expenses	8	29,151	15,259	36,658
Share of net profits in associates using the equity method	Share of net profits in associates using the equity method	13	(317)	(229)	0
Other	Other		(1,421)	(39)	(2,413)
Operating cash flows before changes in working capital	Operating cash flows before changes in working capital		78,317	69,870	46,723

Changes in working capital:	Changes in working capital:
Changes in working capital:
Changes in working capital:
Inventories
Inventories
Inventories	Inventories	15	(2,762)	3,067	1,019
Trade and other receivables	Trade and other receivables	16	(3,499)	(8,492)	(6,554)
Payables and other current liabilities	Payables and other current liabilities	21	2,569	8,677	1,391
Restricted cash	Restricted cash	14	1,043	(1,064)	132
Release contract liabilities			0	(1,467)	(804)
Total changes in working capital	Total changes in working capital		(2,649)	721	(4,816)

Interest received	Interest received	8	626	1,011	18
Income taxes paid		9	(2,326)	(5,098)	(1,417)
Interest received
Interest received
Income taxes received (paid)

Net cash flows generated from (used in) operating activities	Net cash flows generated from (used in) operating activities		73,968	66,504	40,508
Net cash flows generated from (used in) operating activities
Net cash flows generated from (used in) operating activities
Capital expenditure for property, plant and equipment	Capital expenditure for property, plant and equipment	11	(4,076)	(2,362)	(2,496)
Proceeds on PRV sale
Investment intangible assets	Investment intangible assets	10	(7,929)	(1,650)	(1,273)
Investment associate		13	(288)	(2,503)	0
Proceed from sale of Investment associate
Investment in equity instruments designated as at FVTOCI
Acquisition of license	Acquisition of license	10	(1,385)	(18,702)	0
Net cash flows used in investing activities			(13,678)	(25,217)	(3,769)
Repayment on loans and borrowings		18	(50,088)	(31,406)	(15,137)
Purchases of marketable securities
Proceeds from sale of marketable securities
Net cash flows generated from (used in) investing activities
Payment on contingent consideration	Payment on contingent consideration	26	(18,136)	(17,634)	0
Payment of lease liabilities	Payment of lease liabilities		(1,913)	(1,967)	0
Redemption Bonds			0	0	(2,257)
Proceeds of issued convertible bond		17	125,000	0	0
Transaction costs related to issued convertible bond		17	(2,318)	0	0
Interests on loans		17,18	(1,875)	(8,418)	(11,063)
Proceeds of equity and warrants			2,443	2,778	10,496
Interests on loans and leases
Settlement of share based compensation awards
Net cash flows generated from (used in) financing activities	Net cash flows generated from (used in) financing activities		53,113	(56,647)	(17,961)

Increase (decrease) of cash	Increase (decrease) of cash		113,403	(15,360)	18,778
Increase (decrease) of cash
Increase (decrease) of cash
Exchange rate effects	Exchange rate effects		(12,634)	1,348	2,876

Cash and cash equivalents at January 1,		14	66,299	80,311	58,657
Cash and cash equivalents at January 1
Cash and cash equivalents at January 1
Cash and cash equivalents at January 1

Total cash and cash equivalents at December 31	Total cash and cash equivalents at December 31		167,068	66,299	80,311
Total cash and cash equivalents at December 31
Total cash and cash equivalents at December 31


Category			Depreciation period
Land			Not depreciated
~~Land improvements~~			~~20 years~~
Operational facilities			10-20 years
Leasehold improvements			~~5-10~~5-15 years
Manufacturing equipment*Machinery and equipment			5-10 years
Other property, plant & equipment			5-10 years



~~Amounts in € ‘000~~			~~January 1, 2019~~
~~Operating lease commitments disclosed under IAS 17 at December 31, 2018~~			~~8,457~~
~~Short-term and low value lease commitments straight-line expensed under IFRS 16~~			~~(2,033)~~
~~Effect of discounting~~			~~(1,633)~~
~~Lease liabilities recognized at January 1, 2019~~			~~4,791~~


~~Amounts in € ‘000~~			~~January 1, 2019~~
~~Current lease liabilities~~			~~1,441~~
~~Non-current lease liabilities~~			~~3,350~~
~~Lease liabilities recognized at January 1, 2019~~			~~4,791~~


~~Amounts in € ‘000~~			~~January 1, 2019~~
~~Buildings~~			~~4,228~~
~~Cars~~			~~563~~
~~Lease liabilities recognized at January 1, 2019~~			~~4,791~~