Annual Report (ESEF) • Mar 22, 2022
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A t argen x, we are commi ed to improving the lives of people suering fr om sever e autoimmune diseases. Annual Report 2021 Each day at argenx, w e are motivated to pursue a better tomorro w alongside patients. W e See Y ou, W e Hear Y ou, W e Ar e Her e With Y ou As your ally , we pioneer innovaons to adv ance the underst anding of rar e diseases; we want to deliver immunology treatments to paen ts worldwide. W e listen to paents, supporter s and advocacy communies; we hear your stories and share your determina on. 2022 Universal Registration Document including the Annual Financial Statements 2021 Registration Document, dated 30 March 2021 | 5 argen x SE (he rein ar genx o r the Company and, toge ther with its subsid iaries , the Gr oup , we or us ) is a Euro pean publi c co mpany (So ciet as Europ aea) incor por ated un der the law s of th e Neth erland s wit h it s st atuto r y seat in Roer dam, the Nethe rland s, whic h is liste d in B elgium and the Un ited Sta tes of Am eric a ( U. S. ). The ap plic able regul aons with respe c t to pu blic i nforma on an d prote c on o f inves tors , as wel l as the commi tment s made by arge nx to s ecur ies and mar ket aut hori es, are desc rib ed in t his uni vers al re gistr ao n do cument (the Unive rs al Re gis tra on D ocu ment or URD ). This Univer sal Regis tra on D ocum ent was prep ared by argen x in a ccor dance with Regula on (EU) 201 7 /1129 (as amende d, the Prospec tus Regulaon ) in conjun c on with annex 1 and a nnex 2 of C ommis sion Dele gated Regula on (EU) 2019 /9 80. This Univer sal Regis tra on Do cument has be en app roved by the Dutc h Auth orit y for th e Finan cial Market s (Sch ng Auto ritei t Fina nciël e Mark ten, the AFM) on Marc h 21, 2022 as c ompe tent autho rit y p ursu ant to ar cle 9 of the Prosp ec tus Re g - ulao n. T he AFM only appr oves thi s URD as mee ng the s tand ards o f com pleten ess, compr ehensi bilit y and cons isten cy impos ed by the Pro spec tus Regula on. Such appr oval sh ould not b e con sider ed as a n endo rs ement of the issu er that is the subjec t o f this URD. This Univer sal Regis tra on D ocum ent is valid for a peri - od o f t welve m onths a er it s ap prova l. T he val idit y e nds upon expi rao n on March 21, 2023. Th ere is no ob liga - on to supp lement the Uni vers al Reg istr aon Do cument in the event o f signi c ant new fac tor s, ma terial mist akes or mate rial i naccu raci es whe n the U niver sal Re gist rao n Do cument is no longer vali d. This Univer sal Regis tra on D ocum ent may b e us ed for the p urpos es of an oe r to th e publ ic of s ecur ies or a d - missi on of secu ri es to tr adin g on a regul ated mar ket if appr oved by the AFM togeth er wi th any am endmen ts, if appli cab le, and a secu rie s note and sum mar y app roved in ac cord ance w ith th e Prosp ec tus Re gula on. T his Univer sal Regis tra on D ocum ent als o co ntains the inf or - mao n refer red t o in ar cle 4 of D irec v e 20 04/109/EG and as such – pur suant t o ar c le 9 parag raph 12 of the Prosp ec tus Re gulao n – s as es ar genx ’ s obli gao ns to publi sh an a nnual r epor t within the m eaning o f Dire c ve 20 0 4/10 9/EG. In ad dio n to hi stor ical infor maon, this Uni ver sal Regis tra on D ocum ent co ntains cer t ain for w ard- lo okin g st atement s. A for war d- loo king sta tement i s any s tate - ment t hat do es not relate to his tori cal f ac t s or ev ents or to fac t s or e vents as of the date of thi s Univer sal Regis tra on D ocum ent. F or ward -l ook ing s tatem ents are gen erall y ide ne d by th e use of fo rw ard -lo okin g words , suc h as “anci pate” , “ belie ve” , “can” , “could ” , “esmate ” , “expec t ” , “i ntend ” , “is desig ned to ” , “may” , “might ” , “objec ve” , “plan ” , “potenal ” , “proje c t ” , “predic t ” , “ tar get ” , “w ill ” , “should ” , or other varia - ons of suc h ter ms, or by dis cuss ion o f str ateg y. Thes e st atement s re late to a rgenx ’s future resul ts o f ope ra - ons and nancial posi on s, pro spec t s, de velopm ents , busin ess s trat egies, plans and ou r obje c ves f or fu ture oper ao ns, an d are b ased on anal yses or fo rec ast s of fut ure dev elopm ents and e smate s of am ount s not yet d etermina ble. T hese for war d- loo king s tate ment s repr esent t he vi ew of ar genx o nly a s of th e dates they are ma de, and a rgenx disc laims any obli gao n to up date for war d- loo king s tat ement s, exc ept as may be other - wise requir ed by law . The for ward - look ing s tatem ents in thi s Univer sal Regis tra on D ocum ent invo lve kn own and un known risk s, un cer tai nes a nd oth er fa ct ors that c ould c ause argen x ’ s ac tua l fut ure re sult s, pe r for - mance and ac hievem ents to di er mate riall y fro m thos e fore cas ted or sug geste d her ein. T hese inclu de c hanges in gene ral e cono mic an d busi ness cond ion s, as we ll as the f ac tor s des crib ed in chapte r 2 “R isk Fac tor s” o f this Univer sal Regis tra on D ocum ent. 6 | Patient Stories Patient Stories | 7 We integr ate our paent s as pira on in to how we innov ate, how we condu c t res earch a nd des ign tr ials, and h ow we c an supp or t yo u in th e dail y str ug gles you fac e liv ing w ith a r are d isease. The re is a comm on pu rpos e ac ross argen x that i s dri ven by your resili ence and we we lcom e this oppo r tunit y to be w ith you on thi s jou rney. T ogeth er we di scove r , T eam ar genx R ead her story on page 214 Patient Stories Kell y M. - CIDP Linda M. - ITP Zach M. - MG Victor Y . - MG David B. - PV Daniel A. - MG Lisa Ann T . - PV Kim V . - MG 37 48 70 120 173 192 214 236 Lisa Ann Patients living with a rar e disease Patient Story T able of Contents 8 | T able of Contents T able of Contents | 9 T o our Shareholders Message from the CE O and the chairman of our Board of Director s 15 2021 in brief 16 Outlook 2022 22 1 Presentation of the Group 1.1 Company Prole 30 1.2 Stra tegy and objecves 34 1.3 Our Products and Product Candida tes 38 1.4 Collabora on Agreements 56 1.5 License Agreemen ts 60 1.6 Distribuon Agr eements 66 1.7 Manufacturing and Supply 66 1.8 Intellectual Property 66 1.9 Regulaon 72 2 Risk F actors 2.1 Risk F actors R elated to argenx’ s Financial P osion and Need f or Addional Capital 98 2.2 Risk F actors R elated to the Development and Clinical T esng of argenx’ s Products and Product Candidates 100 2.3 Risk F actors R elated to Commercializaon of argenx’ s Pr oduct Candidates 108 2.4 Risk F actors R elated to argenx’ s Business and Indus try 114 2.5 Risk F actors R elated to argenx’ s Dependence on Thir d Pares 119 2.6 Risk F actors R elated to argenx’ s Intellectual Property 124 2.7 Risk F actors R elated to argenx’ s Org anizaon and Operaons 133 3 Non-financial Reporting Requirements 3.1 Disclosures pur suant to the EU Non-Financial Reporng Direcve 142 3.2 EU Envir onmental T axonom y 147 4 Corporate Governance 4.1 Dutch Corpor ate Gov ernance Code, “Comply or Explain” 150 4.2 Management Structur e 151 4.3 Report of the Non-Execuv e Director s 169 4.4 Remuner aon Report of the Remuner aon and Nominaon Commiee 174 4.5 Risk Appete & Control 202 5 General description of the Company and it’s Shar e Capital 5.1 Legal Informaon on the Company 208 5.2 Share Capit al 209 5.3 Share Classes and Principal Shareholder s 216 5.4 General meeng of Shareholder s and V ong Rights 217 5.5 An-T ak eover Provisions 218 5.6 Amendments of Arcles of Associaon 218 5.7 Obliga ons of Shareholders and Members of the Managing Board t o Disclose Holdings 219 5.8 Short P osions 220 5.9 Mark et Abuse Regime 220 5.10 T ransparency Dir ecve 221 5.11 Dutch Financial Reporng Supervision Act 221 5.12 Dividends and Other Distribuons 221 5.13 Financial Calendar 2022 222 6 Operating and Financial Review 6.1 Overview 226 6.2 Basis of Pr esentaon 227 6.3 Capitaliz aon and Indebtedness 233 6.4 Crical Accoun ng Policies and Signicant Judgements and Esmates 234 6.5 Results of Operaon 235 6.6 Liquidity and Capit al Resources 241 6.7 O-Balance Sheet Arrang ements 243 6.8 Contr actual Obligaons 243 6.9 Financial Sta tements 244 6.10 Informa on Reg arding the Independent Auditor 244 6.11 Material Contracts and R elated P arty T ransacons 244 6.12 Employees 246 6.13 Legal and Arbitraon Pr oceedings 247 6.14 Insurance 247 7 Consolidated Financial Statements Audited as of and for the years ended Dec ember 31, 2021, 2020 and 2019 7.1 Consolidated Statements of Financial Posion 250 7.2 Consolidated Statements of Prot or Loss 252 7.3 Consolidated Statements of Comprehensive Income and Loss 253 7.4 Consolidated Statements of Cash Flows 254 7.5 Consolidated Statements of Changes in E quity 255 7.6 Notes t o the Consolidated Financial Statements 256 8 Company Financial Statements For argenx SE F or the Y ear ended December 31, 2021 8.1 Signatures of Ex ecuve and Non-ex ecuve Director s 298 8.2 Company Balance Sheet on December 31, 2021 ar genx SE 300 8.3 Company Pr ot or Loss Account for the Y ear ended December 31, 2021 argen x SE 301 8.4 Notes to the Compan y Financial Statements of ar genx SE 302 8.5 Other Informa on 307 8.6 Independent Auditor’ Report 308 9 Information inc orporated by ref erence 318 10 Glossary 320 Cross R efer ence T able for Annual Reporng Requir ements 322 Glossary 324 The science of co-crea on drives our quest to engineer innovav e immunology soluons – but it is the resilient spirit of paents that fuels our urgency to deliver them. Our goal is to treat the person, not just the disease, across all of our progr ams. We believe that thr ough collabor aon with paents and their supporter s, we can creat e medicines that aim to address the real-life burden faced by r are disease communies. Cont ents Message fr om the CEO and the chairman of our Board of Dir ector s 15 2021 in brief 16 Outlook 2022 22 T o Our Shar eholders Message fr om the CEO and the chairman of our Board of Directors | 15 T o Our Shar eholders “ arg enx will continue to work diligentl y to bring VYVGAR T to as many patients as possible ar ound the world” Tim V an Hauwermeir en 14 | Message fr om the CEO and the chairman of our Board of Directors Message from the CEO and the chairman of our Board of Dir ectors Dear Shareowner s, W e will always remember 2021 as a pivotal momen t in the history of argen x. It mark ed the year of our rs t product appr oval and ocial transion into an indepen - dent, fully integr ated immunology company , owning the full value chain of a drug candidate – from idenfying an immunology breakthrough t o reaching paen ts. W e received approv al of VYVGART™ (e fgargimod) from the U.S. F ood and Drug Administr aon ( F DA ) on December 17, 2021, for the treatmen t of gener alized my asthenia gravis ( gMG ) in adult paents who are an-acetylcholine recep tor anbody posive. On Jan - uary 20, 2022, we received approv al in Japan and are on track f or an approv al in Europe by the end of 2022. When we ventur ed to bring this asset into the clinic year s ago , we made a commitment t o the gMG commu - nity that we would deliver an innova ve new treatment opon to these paents who carry the daily burden of living with this serious autoimmune disease. W e are honored and humbled by the opportunity to now turn to this community and tell them we follow ed through on our commitment, and that we will con nue to work diligently on their behalf to bring VY GART™ to as many paents as possible ar ound the world. The journey to arrive at our rs t product approvals was a fea t of true co-crea on, not just in 2021 but with the decade of work that led t o these achievements. E fgargimod w as rst built through our collabor aon with Prof essor Sally Ward and UT Southwes tern. It has now been evaluat ed in over 600 subjects across v e autoimmune indicaons, and we e xpect to be conduct - ing trials for ten high-v alue indicaons by the end of 2022. This will be a busy year with the start of mulple trials and plans for the readout of ve regis traonal trials over the next f our quarter s, which we expect t o set us up for four c ommercial launches in gMG, ITP , PV and CIDP by the end of 2024. It is an ambious plan, and we’r e condent in our team’ s ability to connue to deliver across the business. W e laid out our ‘argen x 2025’ vision during our R&D Day last July , which outlines the growth trajectory we are on as a company driven by our dierena ted pipeline candidates and growing commer cial franchis - es in neuromuscular , hematology , dermatology and nephrology . Our goal is to be in at least 15 ef gargimod indicaons by 2025. W e launched our rst Phase 2 trial of ARGX -117 at the end of 2021, which oer s a second pipeline-in-a-product opportunity across mulple fran - chises. And ARGX -119 was unv eiled as a third high-po - tenal candidat e within our neuromuscular franchise. Through our Immunology Innovaon Progr am, where we partner with leading disease biologists to uncover novel immunology breakthr oughs, we plan to connue our pipeline expansion with the goal of adding one new asset each year . W e know that gMG is just the beginning for ar genx. Our team is highly movated, bringing s trong experse to the table, and ready to e xecute on our ambious plan, and we have a str ong balance sheet to support our goals, thanks to our shareholder s. We wan t to extend our gra tude to all of our employees for their un wavering commitment to our mission of r edening immunology , our collabora tors across the enr e business and of course, the paen ts who put their trust in us to deliver . Thank you, Tim V an Hauwermeiren & P eter V erhaeghe Pet er V erhaeghe 16 | 2021 In Brief - Operational Highlights Global Efg artigimod Launch | 17 • On December 17, 2021, the FDA appr oved VYVGART™ (ef gargimod alfa-f cab) for the treatmen t of gMG in adult paents who are an-acetylcholine recept or (AChR) anbody posive. • A request for approv al of VYVGART™ (ef gargimod alfa) f or the treatmen t of adult paents with gMG who do not have sucient response to ster oids or non-ster oidal immunosuppressive therapies (IST s) was submied to the Japan Pharmaceucals and Medical Devices Agency (PMDA), which was subsequently approv ed on January 20, 2022. • Markeng Authoriz aon and Applicaon (MAA) of efg argimod for the treatmen t of gMG was submied and validated by the European Medicines Agency (the EMA), starng the formal review process. Global Efgartigimod Launch 2021 In Brief Operational Highlights 2021 was another pivotal year f or arg enx even thr ough the con - tinued challenges of the C OVID- 19 pandemic. W e transitioned to a full y integrated immunology c ompany following the approval of our first product, VYVGART™ for the treatment of gMG. In ad - dition, we advanced our late-stage efgartigimod trials acr oss f our indications, announced two new efg artigimod indications and started patient trials with our second candidate, ARGX- 117 . Efgartigimod 18 | Pipeline of Di erentiated Antibody Candidates Corporate Achiev ements | 19 Pipeline of Dier entiated Antibody Candidates • Ef gargimod (FcRn block er) • Regis traonal trials ongoing across four serious autoimmune indicaons, in - cluding gMG, primary immune thrombocytopenia ( ITP ), pemphigus foliaceous ( PF ) and vulgaris ( PV ), and chronic inammatory demy elinang polyneuropa - thy ( CIDP ). • T wo addional indicaons announced during R&D Day: idiopathic inammato - ry myopath y ( myosis ) and bullous pemphigoid ( BP ): – BALLAD: regis traonal trial of subcutaneous (SC) ef gargimod in BP iniat - ed at end of 2021. – ALKIVIA: trial design nalized of SC ef gargimod in myosis f ollowing inde - pendent data monitoring commi ee’ s advice. • New gMG data from Phase 3 ADAPT trial presented during American Associa - on of Neuromuscular and Electrodiagnosc Medicine (AANEM) Annual Meet - ing and Myasthenia Gra vis Founda on of America (MGF A) Scienc Session. • ADAPT Phase 3 trial results of efg argimod for tre atment of gMG published in The Lancet Neurology . • Full Phase 2 trial results of ef gargimod for treatment of pemphigus published in Brish Journal of Dermatology . • ARGX -117 (C2 block er): • Phase 1 data presented during July R&D day showing fav orable safety pr ole and potenal for infr equent dosing schedules. • Phase 2 trial in mulfocal motor neur opathy (MMN) iniated at end of 2021. • ARGX -119 (MuSK agonist): • Announced next pipeline candidate during July R&D day with pipeline-in-a- product potenal in neuromuscular indica ons. • Cusatuzumab (an-CD70): • Reg ained worldwide rights to cusatuzumab fr om Cilag GmbH Internaonal, one of the Janssen Pharmaceucal Companies of Johnson & Johnson (Cilag), and started ev aluaon process for potenal alternav es to advance program through partnership. Cusatuzumab Efgartigimod Corporate Achiev ements ARGX- 117 ARGX- 119 argen x expanded to 650 employees (per December 31, 2021) to support growth of business, including fully sta ed commercial teams in the U.S. and Japan. Appointed K arl Gubitz as Chief Financial Ocer . Prior to joining arg enx, Mr . Gubitz was Vice President of Finance within the Global Oncology business of Pzer . Chief Medical Ocer Wim P arys, M.D. announced plans to r ere on March 31, 2022 and ar genx announced that Luc T ruyen, M.D., Ph.D ., Vice President of R esearch & Development Oper aons is to assume the role of Chief Medic al Ocer . Prior to joining argen x, Dr . T ruyen was the Global Head of Development and Ext ernal Aairs – Neuroscience a t Johnson & Johnson. 650 Employees Karl Gubitz Wim Parys 20 | Collaborations Financial Highlights | 21 Collaborations • Announced exclusive partner ship agreement with Zai Lab Limited ( Zai Lab ) under which we received a total of $175 million in collabora on paymen ts in 2021 to develop and commercialize ef gargimod in Great er China. • Iniated collabora on and license agreement with Elektro, Inc. ( Elektro ) to explor e new SC formulaons f or current and future pipeline candidates. • Announced exclusive partner ship agreement with Medison Pharma Ltd. ( Medison ) for the commercializa on of ef gargimod in gMG in Israel. Financial Highlights $2.3 billion $1. 15 billion $348. 7 million $408.3 million Cash Cash posion of $2.3 billion (cash, cash-equivalen ts and current nancial assets) enabling e xecuon of our ambious str ategy objecves. Operating Income Opera ng income $348.7 million. Loss Loss $408.3 million. Raised Raised $1.15 billion in gross proceeds in global o ering of 3,593,750 ordinary shares (including or dinary shares represen ted by American Depositary Shares (ADSs)), which included the full ex ercise of the underwriters’ opon to purchase 468,750 addional ADSs. 2022 Outlook Global Efgartigimod Launch 22 | 2022 Outlook Global Efg artigimod Launch | 23 With the approval of VYVGAR T™ as the first-and-only appro ved neonatal F c rec eptor ( F cRn ) blocker in the U.S and Japan, we enter 2022 in a str ong position to execute on our plans f or a global launch and advance our pipeline of assets, including further efgartigimod dev elopment, across our four commercial franchises in neuromuscular , hematology , dermatology and nephrology . ARGX- 117 Efgartigimod ARGX- 113 • EMA decision expected in the second half of 2022. • argenx Canada was established in rs t quarter of 2022 in preparaon f or a potenal Health Canada approval r equest and, if grant ed, commer cial launch in Canada. • Zai Lab on track to le for approv al in Grea ter China of ef gargimod by mid-2022. • Addional distribuon partnership agreements for other territories expect ed to be announced in 2022 that would expand global paent reach. Pipeline of Dier entiated Antibody Candidates 24 | Pipeline of Di erentiated Antibody Candidates Pipeline of Di erentiated Antibody Candidates | 25 ARGX- 117 ARGX- 119 kidney transplant aon. • Phase 1 dose-escalaon trial of ARGX -119 to start aer Clinical T rial Applicaon ling in fourth quarter of 2022. During our July 2021 R&D Day , we introduced our long-term ‘arg enx 2025’ vision to becoming a global, integra ted immunology compan y including the following goals: • First, we hope to make ef gargimod globally av ailable to paents acr oss our expanding commer cial franchises. • Second, we aspire to make ef gargimod either commercially av ailable or in clini - cal development in een acve indicaons. • Third, we plan to make progr ess across our broader immunology pipeline with ARGX -117 in mulple late-s tage trials and demonstr ate proof -of-concept with ARGX -119. • Fourth and nally , we will invest in the connued expansion of our dierena ted pipeline through the IIP and aim to connue to gener ate one new asset into the pipeline each year . • T opline data from four registr aonal trials of efg argimod expect ed across f our indicaons, including gMG, ITP , PF and PV , and CIDP: • ADAPT -SC: T opline data of SC efg argimod for gMG expected in rst quarter of 2022. • ADHERE: T opline data of SC ef gargimod for CIDP expect ed in rst quarter of 2023. • ADV ANCE: T opline data of intra venous efg argimod for primary ITP expected in second quarter of 2022. • ADV ANCE-SC: T opline data of SC efg argimod for primary ITP expect ed in rst quarter of 2023. • ADDRESS: Timing of topline data of SC ef gargimod for PF and PV is currently under review given the geopolical events in Ukraine. • ALKIVIA registra onal trial of SC ef gargimod for m yosis to start in second quarter of 2022. • Clinical trials to start in 2022 in four addional indicaons through partnership agreements with Zai Lab and IQVIA L TD ( IQVIA ): • Zai Lab to launch proof-of -concept trials in two kidney indicaons, lupus ne - phris (LN) and membranous nephr opathy ( MN ). • IQVIA to launch proof -of-concept trials in primary Sjögren’ s syndrome ( SjS ) in second half of 2022 and COVID-19-mediat ed postur al orthostac tach ycardia syndr ome ( POT S ) in mid-2022. • Phase 2 trial of ARGX -117 for dela yed gra funcon and/or allogra f ailure aer 1 Pr esentation of the Gr oup Cont ents 1.1 Compan y Pr ole 30 1.2 Str ategy and objecv es 34 1.3 Our P roducts and Pr oduct Candidat es 38 1.4 Collabor aon Agr eements 56 1.5 License Agr eements 60 1.6 Dis tribuon Agreements 66 1.7 Manuf acturing and Supply 66 1.8 In tellectual Pr operty 66 1.9 R egulaon 72 PA RT I Co-Creation W e create through collabor aon. Humillity W e listen to paents and their communies. Excellenc e W e live by our reputa on for data-driv en decision-making. Empowerment W e build our people based on streng ths to benet the broader team. Innovation W e live to innovate and do so at every step. W e thrive on curiosity and trust in the power of the team t o help us idenfy immunology breakthr oughs. We ar e inspired by paents to tr anslate these break throughs into medicines. The resilience and hope of paen ts gives us purpose, empowering us to work with ur gency because we know the y are waing. Our values guide our business relationships and collaborations both within and beyond our walls. Our V alues PA RT I 28 | Our Values Our Values | 29 1 Pr esentation of the group 1. 1 Company Pr ofile 1. 1. 1 General W e are a commercial-s tage, global, fully-in tegrat ed biotechnology company dev eloping a deep pipeline of dierena ted ther - apies for the tr eatment of sever e autoimmune diseases. By combining our suite of anbody engineering t echnologies with the disease biology experse of our r esearch collabora tors, we aim to tr anslate immunology break throughs into a pipeline of nov el anbody -based medicines through our discovery engine, the Immunology Innov aon Program ( IIP ). W e hav e a parcular focus on neuromuscular , hematology , dermatology and nephrology indica ons through our growing commer cial franchises. Through the building and use of commercial fr anchises, we plan to lever age capabilies and an org anizaonal f ootprint for subsequent potenal launches acr oss our broad immunology pipeline. On December 17, 2021, the FDA appr oved ef gargimod, which will be mark eted as VYVGART™ (e fgargimod alf a-fcab), for the treatmen t of gMG in adult paents who are AChR anbody posiv e. On January 20, 2022, the Japan PMDA appro ved VYVGART™ (ef gargimod alf a) for the treatmen t of adult paents with gMG who do not have sucien t response to ste roids or non-ster oidal IST s. With these regulat ory milestones, VYVGART™ is the r st - and-only approv ed neonatal FcRn block er in the U.S and Japan. argen x is a Dutch European public company (Societas Europaea) with its statut ory seat in Roer dam, the Netherlands. argen x is regist ered with the trade regis ter of the Dutch Chamber of Commerce under number 24435214. argenx’ s regist ered oce is at Willemstr aat 5, 4811 AH, Breda, the Netherlands. argenx was incorpor ated on April 25, 2008 in the Netherlands and under Dutch law . Its commercial name is “ar genx” and, since April 26, 2017, its corporate name is “ar genx SE” . argenx has a one-er governance structure consisng of an ex ecuve director and non-ex ecuve directors. The ordinary shares in argenx are list ed on the regulated mark et of Eurone xt Brussels in Belgium under ISIN NL0010832176 under the symbol “ ARGX” . argenx’ s ADSs, each repr esenng one ordinary share in argen x (or a right to receive such share), are list ed on the Nasdaq Global Select Marke t (Nasdaq) under the symbol “ ARGX” . argen x is the top enty of the Group and the sole shareholder of • argenx IIP BV , a private compan y with limited liability ( besloten vennootschap ) incorporat ed under the laws of Belgium, having its register ed seat in Zwijnaar de, Belgium and its address at Industriepark-Z wijnaarde 7, 9052 Zwijnaar de, Belgium and • argenx BV , a private compan y with limited liability ( besloten vennootschap ) incorpora ted under the laws of Belgium, having its regist ered seat in Zwijnaarde, Belgium and its address at Industriepark -Zwijnaar de 7, 9052 Zwijnaarde, Belgium. argenx BV is the sole shareholder of • argenx US Inc, incorporat ed under the laws of Delaware, U.S., ha ving its regist ered oce in Wilmington, Delaw are and its address at 33 Arch Street, Boston, Massachuses 02110; • argenx Japan K.K., incorporated under the laws of Japan, having its register ed oce in T okyo, Japan and its address at HULIC JP Akasaka Building 2-5-8, Akasaka, Minat o-ku, T okyo, 107-0052, Japan; • argen x Switzerland SA, incorpor ated under the laws of S witzerland, having its regis tered oce in Genev a, Switzerland, and its address at Route de Chêne 30, 1208 Geneva, Switz erland; • ar genx France SAS, incorpora ted under the laws of France, having its regist ered oce in Paris, Fr ance, and its ad - dress at rue Camille Desmoulins 13, 92130 Issy Les Moulineaux, France; • argenx Germany GmbH, incorpor ated under the laws of Germany , having its register ed oce in Munich, Germany , and its address at Konrad-Zuse-Pla tz 8, 81829 Munich; and • ar genx Canada Inc., incorpor ated under the laws of Canada, having its register ed oce in T oronto , Canada and its address at 19 T oulon Crescent, V aughan, Ontario, Canada, L4H 2X3. The following chart provides with an overview of the Group as of December 31, 2021 and on the date of this Universal Regis traon Document. Per centages ref er to both the share of capital and vong rights. 1. 1.2 History W e were founded on April 25, 2008 as arGEN-X B. V . as a company with limited liability ( besloten vennootschap ) incor - pora ted under the laws of the Netherlands, having its register ed seat in Breda, the Netherlands. On May 28, 2014, the company was conv erted into a public limited company ( naamloze vennootschap ) with the legal name arGEN-X N. V , in prepar ation of our initial public off ering. Since the successful initial public offering on July 10, 2014, our shares are list - ed on the regulated marke t of Eurone xt Brussels. On April 28, 2016, we changed our legal name to arg enx N. V . to align with our logo and tradename. On April 26, 2017, the company was con verted into a Dutch European public company ( Societas Europaea or SE) with the legal name argenx SE, followed by the successful initial public offering of our ADSs on Nasdaq in New Y ork. On August 28, 2009, our rst subsidiary arg enx BV was incorporated in Belgium and on August 5, 2020, our subsidiary argen x IIP BV was incorpora ted also in Belgium. On December 17, 2021, our rst product VYVGAR T™ for the trea tment of gMG in the U.S. was appr oved by the FDA, moving us forward fr om a clinical-stag e to a commercial-s tage biotechnology company . On Januar y 20, 2022, VYVGART™ for the treatmen t of gMG was approved in Japan. 1. 1.3 Overview Our Pipeline • E fgargimod (FcRn block er) : E fgargimod is a human IgG1 Fc fragment that is designed to target the FcRn and reduce immunoglobulin G ( IgG ). FcRn is foundaonal to the immune sys tem and funcons to recycle IgG, ext ending its serum half-lif e over other immunoglobulins that are not recy cled by FcRn. IgGs that bind to FcRn are rescued from lysosomal. By binding to FcRn, ef gargimod can reduce IgG recycling and increase IgG degradaon. It has the potenal to addr ess a multude of sever e autoimmune diseases where pathogenic IgGs are believed to be mediator s of disease. • gMG: In May 2020, we announced positive topline results from the Phase 3 ADAPT trial of intra venous ( IV ), efgargimod for the treatmen t of gMG. The topline results from the ADAPT trial showed that efg argimod was well-toler ated, demonstr ated clinically meaningful improvements in streng th and quality of life measures, and 30 | Company Pr ofile Company Pr ofile | 31 PA RT I () argenx Canada Inc. was incorporated on February 14, 2022. provided the opon of an individualized dosing schedule for gMG paents. The full Phase 3 ADAPT results were pub - lished in The Lancet Neurology in July 2021. The data fr om the ADAPT trial and the subsequent open-label extension (ADAPT+) f ormed the basis for the regulatory approv als of VYVGART™ in the U.S. (December 17, 2021) and Japan (January 20, 2022). • R egistraonal trials are ongoing in four addional autoimmune indicaons with an addional regis traonal trial to start in the second quarter of 2022: − ITP: The ADV ANCE trial of IV efg argimod was iniated in the fourth quarter of 2019 and topline data are expect - ed in the second quarter of 2022. The ADV ANCE-SC trial of SC efg argimod started in the fourth quarter 2020 and topline data are e xpected in the rst quarter of 2023. − PV and PF: The ADDRESS trial of SC ef gargimod was iniated in 2020. Timing of topline dat a is currently under review given the geopolical eve nts in Ukraine. − CIDP: The ADHERE trial of SC efg argimod was iniated at the end of 2019 and topline data are e xpected in the rs t quarter of 2023. − BP: The BALLAD trial of SC ef gargimod was iniated at the end of 2021 and an interim analysis is planned of paents. − my osis: The ALKIVIA trial of SC ef gargimod will iniate in the second quarter of 2022. • Clinical trials to start in 2022 in four addional autoimmune indicaons through partnership agreements with Zai Lab and IQVIA: − Zai Lab to launch proof-of -concept trials in two kidney indicaons, LN and MN. − IQVIA to launch proof -of-concept trials in primary SjS in second half of 2022 and COVID-19-mediated PO TS in mid-2022. • ARGX -117 (C2 inhibitor) : ARGX -117 is a novel complement inhibitor t argeng complement component 2 ( C2 ), block - ing funcon of both the classical and lecn pathwa ys while leaving the alternave pathwa y intact. ARGX -117 has the potenal to be a pipeline-in-a-product candidate with indicaons that t within our four commercial fr anchises. • Phase 1 data of ARGX -117 were reported in July 2021 showing a fa vorable saf ety prole across single and mulple ascending doses of both IV and SC formula ons. Pharmacokinec ( PK ) and pharmacodynamic ( PD ) proles demon - str ated potenal for infr equent dosing schedules. • First Phase 2 proof-of -concept trial started at end of 2021 in MMN with second Phase 2 proof -of-c oncept trial to start in 2022 in delayed gra funcon and/or allogra f ailure aer kidney transplant aon. • ARGX -119 (MusK agonist) : ARGX-119 is an agonist SIMPLE Anbody™ to the muscle-specic kinase ( MuSK ) receptor with potenal in mulple neuromuscular indicaons. Phase 1 dose-escalaon trial to start aer Clinical T rial Applica - on ling in fourth quarter of 2022. • ARGX -118 (Galecn-10) : ARGX-118 is an anbody against Galecn-10, the protein of Charcot -Leyden cryst als which are implicat ed as a major contribut or to airwa y inammaon and to the persist ence of mucus plugs. • Cusatuzumab (An-CD70 Anbody) : Cusatuzumab is an an-CD70 monoclonal anbody . CD70, a tumor necrosis f actor recept or ligand, and its receptor CD27 are expr essed on leukemic st em cells and acute myeloid leuk emia ( AML ) blasts but not on hematopoie c stem cells. • In June 2021, we regained global rights to cusatuzumab from Cilag following the terminaon of a collabora on and licensing agreement to develop cusatuzumab in AML and myelodysplas c syndromes ( MDS ) • We con nue to evalua te potenal alternaves to advance cusatuz umab through partnership • In addion to our wholly-owned pipeline, we have candida tes that emerged from the IIP that have been out-licensed to a partner for further development and for which we have milestone, r oyalty or prot-shar e agreements. These candidat es include: • ARGX -109 (GB224), a SIMPLE Anbody™ inhibitor of IL-6 and out-licensed to Genor BioPharma • ARGX -112 (LP -0145), a SIMPLE Anbody™ inhibitor of IL-22R and out-licensed to LEO Pharma • ARGX -114 (AGMB-101), a SIMPLE Anbody™ agonist to the MET recept or and out-licensed to AgomAb Ther apeucs • ARGX -115 (ABBV -151), a SIMPLE Anbody™ inhibitor of GARP-T GF-b1 and out-licensed to AbbVie • ARGX -116 (STT -5058), a SIMPLE Anbody™ inhibitor of ApoC3 and out-licensed to Sta ten Biotechnology Immunology Innovaon Progr am Our IIP is a core business str ategy of co-creaon and innovaon. The IIP also ser ves as our discovery engine to idenfy novel tar gets and toge ther , in collabora on with our scienc and academic partners, to build potenal new pipeline candidat es. Ev ery current pipeline candidat e from both our wholly-owned and partnered pipeline emerged from an IIP collabor aon. As part of our long-term str ategy , we have commied to connued in vestment in the IIP . As at the date of this Universal Regis traon Document, we hav e ex ecuted on our commitment and aim to connue to bring forth at least one new asset per year from the IIP . Examples of k ey collaboraons with scienc and academic partners: • Ef gargimod emerged fr om a collabora on with Prof essor Sally W ard and UT Southwest ern that later became one of the blueprints for our IIP . Professor W ard’ s research idened the crucial role that FcRn play s in maintaining and distribung IgGs throughout the body , in 2013. Ef gargimod is a human IgG1 Fc fragment that is equipped with ABDE - GTM mutaons, which we in-licensed from UT Southwestern. These propriet ary mutaons modied ef gargimod to increase its anity for FcRn while retaining the pH-dependent binding that is characterisc of FcRn int eracons with its natur al ligand, endogenous IgG. • ARGX -117 was built in collaboraon with Brot eio Pharma which was launched in 2017 with support from Professor Erik Hack and the Univer sity of Utrecht, to conduct resear ch to demonstrate pr eclinical proof-of -concept of the mecha - nism of ARGX -117. Prof essor Hack has done renowned research in the role of inammaon in disease, specically in the complement sys tem, and has contribut ed resear ch and experse to the approval of two complement inhibitor s. His underst anding of the mild phenotype associated with a natural C2 deciency and C2’ s unique posioning at the juncon of the classical and lecn pathwa ys led to our interes t in engineering ARGX -117, which is equipped with our propriet ary NHANCE™ mutaons and LALA mutaons. Our Suite of T echnologies Through our IIP , we collaborat e with scienc and academic partners to idenfy immunology breakthroughs and build potenal pipeline candidat es. This is done through co-cr eaon where we bring to the collabor aon our unique suite of anbody engineering technologies and experience in clinical development and our partners bring a wealth of disease and targ et biology experse. • SIMPLE Antibody TM platform: Our proprie tary SIMPLE Antibody TM platform, based on the powerful llama immune sys tem, allows us to exploit novel and complex disease biology targets. The platform sources antibody V-r egions from the immune sys tem of outbred llamas, each of which has a diff erent genetic background. The llama produces highly diverse panels of antibodies with a high human homology , or similarity , in their V-r egions when immunized with targets of human disease. Our SIMPLE Antibody TM platform allows us to access and explore a broad tar get uni - ver se while potentially minimizing the long timelines associated with generating antibody candidates using traditional methods. • NHance® , ABDEGTM , POTELLIGENT® , and DHS mutaons focus on engineering the Fc region of anbodies in order to augment their intrinsic therapeuc properes. In addion, we obtained a non-exclusiv e resear ch license and opon from Chugai f or the SMART -Ig® and ACT -Ig® technologies. These technologies are designed to enable us to expand the therapeuc index of our product candidates, which is the rao between to xic and therapeuc dose, by potenally modifying their half-life, ssue penetr aon, rate of disease targe t clearance and potency . • Halozyme’ s ENHANZE® SC drug delivery technology: we hav e ex clusive access to ENHANZE® for the FcRn and C2 targe ts and four addional targe ts. The global collaboraon and license agreement with Halozyme was announced in February 2019 and extended in October 2020. The ENHANZE® technology has the potenal to shorten drug administr aon me, reduce healthcare pr aconer me, and oer addional exibility and convenience f or paents. 1. 1.4 Recent Dev elopments On February 21, 2022, Russia announced that it proposed to recognise the so-called Donetsk People’ s Republic and Lugansk P eople’ s Republic as independent republics and on February 24, 2022, Russia further announced the commence - ment of what it described as a “special military operaon” in Ukraine. Since such announcement, Russian forces hav e en - tered Ukr aine and, as at the date of this Univer sal Regis traon Document, there is an ongoing military conict in Ukraine. In connecon with these even ts, new sancons have been imposed by the U.S. and European Union, as well as many other countries around the world, on certain Russian companies and Russian individuals, with the nature and exten t of these sancons evolving on an ongoing basis. This ongoing conict between Russia and the Ukraine has a direct, limited impact on our opera ons, given that we are 32 | Company Pr ofile Strategy and objectiv es | 33 PA RT I conducng clinical trials in a large number of jurisdicons, including Russia and Ukraine. Due to the conict, we are in some cases unable to ship samples from research sites to our third party central labor atory for analysis, recruited paents may no longer be able to parcipate in our clinical trials, and dicules with recruing paen ts in Russia and Ukraine might hav e an indirect limited impact on our business acves as we seek alternave recruitment opons. Study data collect ed at Russian or Ukrainian sites may not be t for submission due to incompleteness or due praccal limit a - ons on auditability of the data. A t this me we do not expect a material nega ve impact on our operaons as a result of the crisis, but we do expect ming of topline data for the ADDRESS trial of SC ef gargimod for PF and PV may be delayed, although we currently cannot assess if this is the case and how signicant such delay could be. W e connue to assess the developments on a daily basis. W e do not genera te revenues in Russia or the Ukraine and we do not expect the conict as known to us at the date of this Universal Regis traon Document to hav e a material impact on our future sales. Our supply chains have been directly a ected in some cases, where we are unable to ship study drug to clinical sites, but as we are not supplying from Russia or the Ukraine but only to these countries for ongoing dev elopment acvies, we expect the impact will be limited to ongoing clinical studies in these countries. In addion, we expect an over all increase in prices caused by the conict and global inaon. Our economic performance is, at the date of this Univer sal Regis traon Document, not directly impacted by the conict. W e currently expect the addional costs for any delay s and the opening of addional trial sites to be rela vely limited and not material to our overall nancial performance. 1.2 Strategy and objectives 1.2. 1 Company’s Strategies Our goal is to deliver therapies that are either rst -in-class or best -in-class to paents suering from neur omuscular , hematology , dermatology and nephrology indicaons for which a signicant unmet medical need exists. W e focus on aaining this goal in a manner that is disciplined for a company of our size. W e plan to: • Execute our global launch. With the approval of VYVGAR T™ as the rst -and-only approved neonatal FcRn block er in the U.S and Japan, we have already tak en the rs t st eps in ex ecung our plans for a global launch f or VYVGART f or the treatment of gMG. W e expect EMA decision on approval in the second half of 2022 and aim for further approv - als in other jurisdicons in the course of the year . We ha ve already built our commercial infr astructure to support the launch of VYVGAR T™ in the U.S. and in Japan as well as build out addional commercializaon infr astructure to support a rapidly growing number of indicaons in our k ey territories, the U.S., Europe and Japan. • Expand applicaons for our lead product efg argimod. Our goal is to maximize the commercial poten al of our exisng pr oducts and product candidat es by exploring addional indicaons, as well as formulaons that may expand the targe t paent populaons within exisng indica ons. W e are further developing our lead product, ef gargimod, to mark et regulatory approv al for the treatmen t of gMG, ITP , PV , CIDP , BP , myosis, COVID-19 mediat ed PO TS, SjS, MN and LN. By the end of 2024, we aim to be ready for f our addional commercial launches of gMG (with SC ef gargimod), ITP , PV and CIDP . W e expand the use of our products and product candidates in exisng indicaons by developing new formula ons, such as a subcutaneous version of efg argimod, that may reach more paent groups by capturing di er - ent paent pre ferences and providing addional oponality with regards to dosing. • Advance our pipeline of assets. In addion to new indicaons for ef gargimod, we plan to advance our other product candidat es. In parcular , we plan to advance the clinical development of ARGX -117 in mulple Phase 2 proof of con - cept trials in MMN and delayed gr a funcon in the context of kidney transplan t; to advance ARGX -119 and early-stag e pipeline candidates in our commercial franchises, the neuromuscular , hematology , dermatology and nephrology fran - chises; and to expand our pipeline of future product candidat es through the IIP . • Lever age our suite of technologies to seek str ategic collabora ons and maximize the value of our pipeline. Our suite of technologies and producve discovery capabilies hav e yielded sever al potenal pr oduct candidat es for which we seek to capture value, while maintaining our focus and discipline. W e plan to collabora te on product candida tes that we believe hav e promising ulity in disease areas or paent populaons but fall outside our commercial fr anchises or are beer served by the resources of larger biopharmaceucal companies. In addion to collaborang on our products and product candidates, we ma y also elect to enter into collabor aons for access to partner technology pla orms or capabilies from which we can develop dier enated potenal pipeline assets. • Implement our “ argenx 2025” vision. W e hope to mak e ef gargimod globally available to paen ts across our expand - ing commercial franchises. W e aspire to make ef gargimod either commercially a vailable or in clinical development in een acve indicaons. W e plan to mak e progr ess across our broader immunology pipeline with ARGX -117 in mulple late-st age trials and demonstr ate proof -of-concept with ARGX -119. Finally , we will invest in the connued ex - pansion of our di erenated pipeline through the IIP and aim to connue to gener ate one new asset into the pipeline each year . • Connue to build innovaon into every step of our development, highlight ed by our collaborav e IIP translang immunology breakthroughs into medicines. The IIP is our cor e business stra tegy connecng the specializ ed insight into disease and targe t biology of our external scienc and academic collaborator s with our unparalleled experience as anbody engineers. Co-creaon has led to a deep pipeline of highly dierena ted product candidates. Through the IIP , we hope to together transcend breakthr ough research and publicaons to our ulmate and unifying mission of creang new poten al treatmen t opons for paents. 1.2.2 T rends Other than as disclosed in chapter 1 “Presentaon of the Group” , 2 “Risk Fact ors” and 3 “Sustainability at arg enx ” in this Universal R egistraon Document, we are not awar e of any trends, uncertain es, demands, commitments or events f or the current nancial period that are reasonably likely to ha ve a material e ect on our net revenues, income, pr otability , liquidity , capital resources or prospects, or that caused the disclosed nancial informaon to be not necessarily indicave of future operang results or nancial condions. Following the approv al of VYVGART™ for the trea tment of gMG in the U.S. by the FDA on December 17, 2021, we transi - oned from a clinical-stage to a commer cial-stage biotechnology company and are working on the ongoing launch of the commercializ aon of VYVGART™. There has been no signicant change in the nancial performance or the nancial posion of the Group since the balance sheet date of December 31, 2021 up to the date of this Universal Registr aon Document. For more inf ormaon, please re fer to chapter 2 “Risk Factor s” , chapter 1 “Present aon of the Group” and to note 29 “Commitments” of our consolidated nancial stat ements in chapter 7 “Consolidated Financial Stat ements – audited as of and for the years ended December 31, 2021, 2020 and 2019” . 1.2.3 Competitive position W e parcipate in a highly innovav e industry charact erized by a rapidly growing underst anding of disease biology , quickly changing technologies, strong int ellectual property barriers to entry , and a multude of companies involved in the creaon, dev elopment and commercializ aon of novel therapeucs. These companies are highly sophiscated and oen str ategically collabora te with each other . W e compete with a wide range of pharmaceucal companies, biotechnology companies, academic instuons and other research org anizaons for nov el therapeuc anbody tar gets, new technologies for opmizing anbodies, talent, nancial resources, int ellectual property rights and collabora on opportunies. Many of our competor s and poten - al competor s hav e subst anally greater scienc, resear ch and product development capabilies as well as greater nancial, manufacturing, markeng and sales and human resources than we do. In addion, there is intense compeon for est ablishing clinical trial sites and registering paen ts for clinical trials. Many specializ ed biotechnology rms have formed collabor aons with large, established companies to support the research, development and commer cializaon of products that may be compeve with ours. Accor dingly , our competors may be more successful than we may be in developing, commercializing and achieving widespread mark et acceptance. 34 | Strategy and objectiv es Strategy and objectiv es | 35 PA RT I 36 | Strategy and objectiv es Compeon in the autoimmune eld is intense and involv es mulple monoclonal anbodies, other biologics and small molecules either already market ed or in development by many di erent companies including large pharmaceucal com - panies such as AbbVie Inc. (Humira/rheumatoid arthris); Amgen Inc. (Enbrel/rheumatoid arthris); Biogen, Inc. (T ysabri/ mulple sclerosis); Glax oSmithKline plc ( GSK ) (Benlysta/lupus); F . Homan-La Roche AG ( Roche ) (Rituxan/ oen used o la - bel); and Janssen (Remic ade/rheumatoid arthris and Steler a/psoriasis). In addion, these and other pharmaceucal com - panies have monoclonal anbodies or other biologics in clinical development for the trea tment of autoimmune diseases. In addion to the curren t standar d of care, we are aw are that AstraZ eneca PLC is selling Soliris for the treatment of adult paents with gMG who are AChR anbody posive and that GSK, Roche, Novars AG, CSL Behring, Grifols, S.A., BioMarin Pharmaceucal Inc., Curav ac, UCB S.A./RA Pharma, DAS Therapeucs, T akeda, RemeGen, Immunovan t, Cartesian Thera - peucs, Horizon Therapeucs, Astr aZeneca PLC, Chug ai Pharma/Genentech, R egeneron/ Alnylam and Johnson & Johnson Innova on Inc., among others, are developing drugs that may have ulity for the trea tment of MG. Compeon for other (potenal) future indica ons is also erce, with signicant development acvies in almost all of the indicaons where we are currently dev eloping or planning to develop our product or product candidates. 1.2.4 Our Competitiv e Strengths W e believe that the combinaon of our technologies, experse and focus will enable us to over come many of the chal - lenges associated with anbody drug development and posions us to be a leader in delivering therapies to paen ts suering fr om sever e autoimmune, neuromuscular , hematology , dermatology and nephrology diseases for which the current trea tment paradigm is inadequate. Producve disc overy capabilies through our IIP fuel a deep pipeline of clinical and preclinical pr oduct candidates. W e are advancing a deep pipeline of both clinical- and preclinical-st age product candidates f or the treatment of severe aut oimmune diseases. Lever aging our technology suite and clinical e xperse, we have advanced sever al candidates and believe this lev el of producvity a ords us a breadth of opons with regard t o independently advancing or partnering our pipeline assets. In November 2020, we announced the agreement to acquire an FDA Priority Revie w V oucher ( P RV ) from Bayer Health - care Pharmaceucals, Inc. for $98 million. A PRV entles the holder to FDA priority review of a single new drug applica - on or biologic license applicaon ( BLA ), which reduces the target review me and may potenally lead to an expedited approv al. W e expect to redeem the PRV for a future marke ng applicaon f or ef gargimod for another indicaon. CIDP Patient | 37 CIDP Patient K ell y “ All I have ever wanted is to help pro vide a voic e for those who do no t have one and to offer support to patients like me. I am so fortunate to have found myself at the GBS|CIDP Foundation in a role that does just that. ’ ’ Regulation | 37 1.3 Our Products and Pr oduct Candidates The following t able summarizes k ey informaon on our por olio of lead product and product candida tes as of the date of this URD. 1.3. 1 VYVGART™ Approv al On December 17, 2021, the FDA approved VYVGAR T™ (ef gargimod alfa- fcab) for the treatmen t of gMG in adult paents who are AChR anbody posive. These paents represent appr oximately 85% of the total gMG populaon (Behin et al. New Pathw ays and Therapeucs T argets in Autoimmune Myasthenia Gr avis. J Neuromusc Dis 5. 2018. 265-277). On January 20, 2022, Japan’ s PMDA approv ed VYVGART™ (efg argimod alfa) for the treatment of adult paents with gMG who do not hav e sucient response to st eroids or non-steroidal IST s. With these regulat ory milestones, VYVGAR T™ is the rs t-and-only approved neonat al FcRn blocker in the U.S. and Japan. gMG is a rar e and chronic neuromuscular disease charact erized by debilitang and potenally lif e-threatening muscle weakness. VYVGART™ is a human IgG1 anbody fragmen t that binds to FcRn, resulng in the reducon of circulang IgG anbodies. The acon of AChR autoanbodies at the neuromuscular juncon is a key driver of gMG (Howard JF Jr , Ut - sugisawa K, Benatar M, et al. Safety and ecacy of ecacy of eculizumab in an-acetylcholine receptor anbody -posive refr actory generalised my asthenia gravis (REGAIN): a phase 3, randomised, double-blind, placebo-controlled, mulcent er study . Lancet Neurol. 2017; 16: 976-86). The approval of VYVGART™ is based on results from the global Phase 3 ADAPT trial, which were published in the July 2021 issue of The Lancet Neurology . Input from the gMG community was integrat ed into the ADAPT trial design. Through listening to and learning from the gMG paent community , we understood that every gMG paent expe riences the course of disease dier ently . As a result, we designed a trial to re ect the individualized nature of gMG with a dosing approach that would be adapted to each paent’ s individual response. The Phase 3 ADAPT trial was a randomiz ed, double-blind, placebo-contr olled, mul-center , global trial evalua ng the saf ety and ecacy of efg argimod in paents with gMG. A total of 167 adult paents with gMG in North America, Europe and Japan enrolled in the trial and were treated. P aents were eligible to enroll in ADAPT reg ardless of anbody sta tus, including paents with AChR anbodies (AChR-Ab+) and paents where AChR anbodies were not detected. Pa ents wer e randomiz ed in a 1:1 ra o to receive ef gargimod or placebo for a total of 26 weeks. ADAPT was designed to enable an individualized trea tment approach with an inial treatmen t cycle follow ed by a variable number of subse - quent treatment cycles. The ADAPT trial met its primar y endpoint, demonstra ng that signicantly more an-AChR anbody posive gMG pa - ents were responder s on the MG-ADL scale following treatmen t with VYVGART™ compared with placebo (68% vs. 30%; p<0.0001). Responders wer e dened as having at least a two-point reducon on the MG-ADL scale sustained for four or more consecuve week s during the rst treatmen t cycle. Addionally , there were signicantly more responder s on the quantave m yasthenia gra vis ( QMG ) scale following treatmen t with VYVGART™ compar ed with placebo (63% vs. 14%; p<0.0001). Responders wer e dened as having at least a three-point reducon on the QMG scale sustained for four or more consecuve week s during the rst treatmen t cycle. As shown in gure 1, minimal symptom e xpression ( MSE ) is an increasingly important data point f or phy sicians and pa - ents because it is a measure of sympt om-free status. In ADAPT , 40% of paents achiev ed MSE – or an MG-ADL score of 0 or 1 - at any me during cycle one. The right side shows depth of response. Over half of paents trea ted with ef gargi - mod experienced an improvement of ve points or more on the MG-ADL scale by week four . 38 | Our Products and Pr oduct Candidates Our Pr oducts and Product Candidates | 39 PA RT I Figure 1: Percen tage of paents with MG-ADL and QMG total score change four week s aer inial infusion of the rst cycle in AChR-Ab posive populaon. VYVGART Placebo VYVGART Placebo 0 5 10 15 20 25 30 ≥10 9 8 7 6 5 4 3 2 1 No Change Worsening Improvements in T otal QMG at Week 4 Percent 26% 0% 0% 0% 3% 3% 3% 2% 8% 8% 7% 7% 5% 5% 5% 6% 5% 10% 10% 19% 24% 24% 10% 10% 0 5 10 15 20 ≥9 8 7 6 5 4 3 2 1 No Change Worsening 14% 0% 2% 2% 6% 6% 5% 5% 5% 5% 15% 17% 3% 8% 13% 16% 12% 12% 13% 20% 13% 10% Improvements in T otal MG-ADL at Week 4 Percent Autoi mm une Pipeline Program Indica ti on P re clinical Phase 1 Pr oo f of Concept Re gistra ti onal Co mm er cial Upd at e VYVGART gMG US Launch O ng oi ng Efgartigimod gMG Data 1Q22 CIDP Data 1Q23 Myo si tis Tri al to ini tiate 1Q22 Pemphigus Data 4Q22 Bu llo us Pemphi go id En ro ll ment Ong oi ng ITP Data 2Q22 ITP Data 1Q23 Membr an ous Nephropathy POC t ri al to start in 2022 L upu s Nephrit is POC t ri al to start in 2022 Sj og ren's S yn drome POC t ri al to start in 2H22 COVID-19 Media te d Postural Orthostatic Ta c hy cardia S yn drome POC t ri al to start in mid-2022 ARGX- 11 7 Multifocal Motor Neuropath y En ro ll ment Ong oi ng D el ayed Graft Fun ction Af te r Kidney Tr ans pl an t POC t ri al to start in 2022 ARGX- 11 9 Neuromuscular Indications Ph as e 1 to start in 2022 ARGX-120 Undisc lo sed No n-Autoi mm une Programs Cu satuzumab AML ARGX- 11 8 Airway Inflamm at ion NEUR OM USCULAR HEM AT OLOGY DE RM AT OLOGY NEPHROLOGY Key: Autoi mm une Pipeline Program Indica ti on P re clinical Phase 1 Pr oo f of Concept Re gistra ti onal Co mm er cial Upd at e VYVGART gMG US Launch O ng oi ng Efgartigimod g MG Data 1Q22 C IDP Data 1Q23 M yo si tis Tri al to ini tiate 1Q22 P emphigus Data 4Q22 B u llo us Pemphi go id En ro ll ment Ong oi ng I TP Data 2Q22 I TP Data 1Q23 M embr an ous Nephropathy POC t ri al to start in 2022 L upu s Nephrit is POC t ri al to start in 2022 S j og ren's S yn drome POC t ri al to start in 2H22 C OVID-19 Media te d Postural Orthostatic Ta c hy cardia S yn drome POC t ri al to start in mid-2022 ARGX- 11 7 Multifocal Motor Neuropath y En ro ll ment Ong oi ng D el ayed Graft Fun ction Af te r Kidney Tr ans pl an t POC t ri al to start in 2022 ARGX- 11 9 Neuromuscular Indications Ph as e 1 to start in 2022 ARGX-120 Undisc lo sed No n-Autoi mm une Programs Cu satuzumab AML ARGX- 11 8 Airway Inflamm at ion NEUR OM USCULAR HEM AT OLOGY DE RM AT OLOGY NEPHROLOGY Key: VYVGART™ had a demonstra ted safety prole in the ADAPT clinical trial. The most common adverse events in ADAPT were respir atory tract inf econ (33% vs 29% placebo), headache (32% vs 29% placebo), and urinary tract infecon (10% vs. 5% placebo). There is a pre-approv al access progr am ( PA A ) for gMG paents that remains open in the EU, the United Kingdom, Hong Kong and Canada for eligible paents. Commercializa on and Regulat ory Plans The U.S. commercial launch for VYVGAR T™ is ongoing following the December 17, 2021 FDA appro val. The Japan com - mercial launch of VYVGART™ is intended to start aer the Naonal Health Insurance ( NHI ) drug price lisng, expected appro ximately 90 days aer the approv al on January 20, 2022. W e hav e est ablished our own sales force in the U.S. and Japan for VYVGART™ f or the treatmen t of gMG. We plan to expand our own sales and mark eng capabilies and pro - mote our products and product candidates if and when regulatory approv al has been obtained in the relevant jurisdic - ons. An MAA for ef gargimod f or the treatment of gMG is currently under review with the EMA with an ancipated decision in the second half of 2022. argenx Canada was established in rst quarter of 2022 in preparaon f or a potenal Health Canada approval reques t and if granted commer cial launch in Canada. Development and c ommercializaon ma y also be done through collabora ons with third pares. In January 2021, we en - tered in to an exclusiv e license agreement with Zai Lab f or the development and commercializ aon of ef gargimod in China, T aiwan, Hong Kong and Macau. W e expect Z ai Lab to be able to le for appro val in Greater China b y mid-2022. Under the terms of the str ategic agreemen t with Zai Lab, we received a $75 million upfr ont payment in the f orm of 568,182 newly is - sued Zai Lab shares calcula ted at a price of $132 per share and a $75 million guar anteed development c ost sharing payment and are entled t o a $25 million milestone payment in c onnecon with FDA approval of VYV GART™. We will also be eligible for er ed royales based on annual net sales of e fgargimod in China, T aiwan, Hong Kong and Macau. In October 2021, w e announced an ex clusive distribuon agreement with Medison t o commercialize e fgargimod f or gMG in Israel. Medison will also be responsible f or seeking requisite regulat ory approvals, and we e xpect Medison to be able to le for appr oval in Israel in the second quarter of 2022. W e intend t o sign addional distribuon partnerships for other t erritories. 1.3.2 Efgartigimod (f ormerly ARGX -113 ) Development Mechanism of Acon As shown in gure 3, ef gargimod is a human IgG1 Fc fragment equipped with our ABDEG™ mutaons that is designed to targ et the FcRn and reduce IgG. FcRn is foundaonal to the immune syst em and funcons to recycle IgG, extending its serum half-lif e over other immunoglobulins that are not recycled by FcRn. IgGs that bind to FcRn are rescued from lysosomal. By binding to FcRn, ef gargimod can reduce IgG recycling and increase IgG degradaon. Compared to alternav e immunosuppressiv e approaches, such as B-lymphocyte ( B-cell ), depleng agents, ef gargimod acts in a highly selecve manner . At the date of this URD, E fg argimod has been evaluat ed in over 600 subjects and has been observed to signicantly reduce concentr aons of all IgG subtypes without decreasing levels of other immunoglob - ulins or human serum albumin, which is also recycled by FcRn. In a r andomized, double-blind, placebo-con trolled rst -in-human study of 62 health y volunteer s, ef gargimod treatmen t resulted in rapid and specic clearance of serum IgG levels. Single ad - ministr aon of ef gargimod reduced IgG levels up to 50% while mulple dosing further lower ed IgGs on av erage by 75% fr om baseline. Appro ximately eight w eeks following the last adminis - tra on, IgG levels returned to baseline. E fgargimod did not alter homeosta s of albumin or immunoglobulins other than IgG and no serious adver se events as de ned by the competen t authori - es rela ted to ef gargimod infusion w ere observed. Based on its mechanism of acon in tar geng FcRn to selec - vely reducing IgGs, ef gargimod has the potenal to address a multude of sever e autoimmune diseases where pathogenic IgGs are believed to be mediators of disease. At the date of this URD, we are ev aluang efg argimod in six autoimmune indicaons where signican t unmet need exists despite the availability of commonly used therapies. These in - clude gMG, CIDP and myosis within our neuromuscular fran - chise; ITP within our hematology franchise; and PV and PF and BP within our dermatology fr anchise. In 2022, we announced that we will expand into four addional autoimmune indica - ons, including LN and MN within our nephrology fr anchise and primary SjS and post -COVID-19 mediated PO TS. Indicaon Selecon Strat egy In selecng our indicaons f or ef gargimod, we ulize the follo wing str ategy: • We r st start with a str ong , unifying biological raonal. The indicaons in our pipeline are unied in that there exists a wide range of supporve evidence that demonstra tes that each is IgG-mediated. This rang es from published liter ature, clinical trials with currently used therapies such as intr avenous immunoglobulin ( IVIg ), PLEX, or Rituximab, and other experiments, such as passive transf er models. • We also look at indicaons where a signicant clinical or commercial opportunity exists. These are disease areas where there is a signicant unmet need for innovaon as paents are oen not well-managed by current ther apies and their respecve side e ects. For example, ster oids and IST s are oen used to treat a multude of autoimmune diseases, but for the indicaons in our pipeline thus far , these hav e been observed to be lacking in both safety and toler ability . • Furthermore, for each indicaon, there is a dened path forward with established pr ecedent for how to run proof -of- concept and registr aonal trials with gener ally accepted clinical and regulat or y endpoints. • Finally , as we work towards achieving our ‘ar genx 2025’ vision, we select indicaons where there is a reasonable t within our growing neuromuscular , hematology , dermatology , and nephrology fr anchises. Formulaons Overview W e are developing two formulaons of ef gargimod to address the needs of paents, phy sicians, and payor s across indi - caons and geographies, including IV efg argimod and the ENHANZE® (licensed from Haloz yme) SC formulaon. IV W e conducted a Phase 1 clinical trial in healthy volun teers to evaluat e the saf ety , tolerability , pharmacokinecs, phar - macodynamics, and immunogenicity of single and mulple doses of ef gargimod. In the rst part of the clinical trial, 30 40 | Our Products and Pr oduct Candidates Our Pr oducts and Product Candidates | 41 Endosome Lysosome Endothelial Cell Ig G Antibody VYGART FcRn -5 -4 -3 -2 -1 0 Placebo VYVGART Mean chane (+/-SE) Week 0 1 2 3 4 5 6 7 8 10 Figure 2: Mean change in total MG-ADL from cycle 1 baseline over me in AChR-Ab posive populaon. PA RT I Figure 3: Ef gargimod’ s mechanism of acon blocks the recycling of IgG anbodies and removes them from circulaon subjects were randomiz ed to receive a single dose of ef gargimod or placebo ranging fr om 0.2 mg /kg to 50 mg /kg. In the second part of the clinical trial, 32 subjects were r andomized to receive mulple ascending doses of ef gargimod or placebo up to a maximum of 25 mg /kg. In the mulple ascending dose part of the Phase 1 clinical trial, repeat administr aon of both 10 mg /kg and 25 mg /kg of ef gargimod every seven day s, four doses in total, and 10 mg /kg every four days, six doses in total, was associated with a gradual reducon in levels of all four classes of IgG anbodies by 60% to 85%, with 10 mg /kg dose results shown in gure 4. For all doses in the mulple ascending dose part of the Phase 1 clinical trial, we observed the reducon in circulang IgG anbody levels to persist f or more than four week s aer the last dose with levels below 50% at appro ximately three weeks and did not return to baseline levels for more than one month. Pharmacokinec analysis of serum baseline levels of ef gargimod indicates that it has a half -life of approxima tely three to four days with no drug accumulaon following subsequent weekly dosing. The prolonged acvity on the levels of IgG anbodies is consistent with the mechanism of acon of efg argimod and the eect of our propriet ar y ABDEG™ technology (detailed in secon 1.8.2 “Plaorm T echnol - ogies”) on increasing the intracellular recycling of ef gargimod. In both the single and mulple ascending dose porons, no signicant reducons in IgM, IgA or serum albumin were observed. SC - Partnership with Halozyme In 2020, we and Halozyme e xpanded the exisng global collabor aon and license agreement that was signed in February 2019. Under the expansion, we g ained the ability to access Haloz yme’ s ENHANZE® drug delivery technology for three addional ex clusive targets upon nominaon bringing the total to six potenal targets under the collabora on. T o date, two targ ets have been nominated including the human neonatal Fc r eceptor FcRn and complement component C2. In July 2019, we evalua ted a SC formula on of ef gargimod that incorporat es Halozyme’ s ENHANZE® drug delivery technology in a Phase 1 clinical trial in healthy volunteer s, which demonstra ted retained pharmacodynamic prole of IV -formula ted efg argimod. ENHANZE® has demonstrat ed across mulple FDA-appr oved products the ability to remove tradional limita ons on the volume of biologics that can be delivered subcutaneously , potenally shortening drug administr aon me, reducing healthcare pr aconer me, and oering addional exibility and convenience f or paents. SC – Partnership with Elektro In April 2021, we enter ed into a collaboraon and license agreement with Elektro to explore new SC formula ons uliz - ing Elektro’ s small volume injecon technology for ef gargimod, and up to one addional targ et. See secon 1.5.1 “Our Exclusiv e License with Elektro for ef gargimod” for more inf ormaon. 1.3.3 Efgartigimod ( formerly ARGX- 113) Indications Generaliz ed Myasthenia Gra vis (gMG) Overview gMG is a rar e and chronic autoimmune disease where IgG autoanbodies disrupt communicaon betw een nerves and muscles, causing debilitang and potenally life-thr eatening muscle weakness. In myas thenia gravis ( MG ), IgG autoanbodies either bind and occupy or cross-link and internalize the receptor on the muscle cells, thereby prevenng the binding of acetylcholine, the signal sent by the nerve cell. In addion, these autoan - bodies can cause destrucon of the neuromuscular juncon by recruing complement, a potent cell-destr oying mecha - nism of the human immune syst em. The muscle weakness associated with MG usually presents inially in ocular muscles and can then spread into a generaliz ed form a ecng mulple muscles, known as gMG. Approximat ely 85% of people with MG progress to gMG within 24 months (source: Behin et al. New Pathw ays and Therapeucs T argets in Autoimmune Myasthenia Gr avis. J Neuromusc Dis 5. 2018. 265-277). MG in the ocular form inially causes droopy eyelids and blurred or double vision due to paral paralysis of eye movemen ts. As MG becomes generaliz ed it aects muscles in the neck and jaw , causing problems in speaking, chewing and swallowing. MG can also cause weakness in sk eletal muscles leading to problems in limb funcon. In the most severe cases, respir atory funcon can be weakened to the point where it becomes life-thr eatening. These respira tory crises occur at least once in the lives of approxima tely 15% to 20% of MG paents. The U.S. prev alence of MG is esmated at appro ximately 20 cases per 100,000 (source: Philips et al, Ann NY Acad Sci. 2003; Pa ents with conrmed AChR anbodies account f or appro ximately 85% of the total gMG populaon (Behin et al. New Pa thways and Therapeucs T arge ts in Autoimmune Myasthenia Gr avis. J Neuromusc Dis 5. 2018. 265-277). ADAPT -SC T rial Design In January 2021, we iniated ADAP T -SC, a registr aonal non-inferiority bridging study of SC ef gargimod for the treat - ment of gMG. The design of the bridging study is based on the demonstr ated associaon between total IgG reducon and clinical benet in gMG, and incorpora tes feedback from the FDA. The study is comparing the PD eect of 1000 mg SC ef gargimod with 10 mg /kg IV ef gargimod. The primar y endpoint is the percent change from baseline of total IgG levels measured at day 29. W e expect to announce topline results f or the ADAPT -SC trial in the rst quarter of 2022. Other trials In addion, we are currently evaluang ef gargimod in IV formulaon, in clinical trials exploring variaons on dosing in the gMG, in children with gMG, as well as in a healthy volunteer trial evalua ng the immune response aer vaccinaon (PNEUMOV AX 23) while receiving efg argimod. Primary Immune Thrombocytopenia (ITP) Overview Primary ITP is an acquired autoimmune bleeding disorder , characteriz ed by a low platelet count (<100×109/L) in the ab - sence of other causes associated with thrombocytopenia. In most paents, IgG autoanbodies dir ected against platelet recept ors can be detect ed. They accelera te platelet clearance and destrucon, inhibit platelet producon, and impair platelet funcon, resulng in increased risk of bleeding and impaired quality of life. Primary ITP is dierena ted from sec - ondary immune thrombocytopenia, which is associated with other illnesses, such as inf econs or autoimmune diseases, or which occurs a er transfusion or taking other drugs, such as cancer drugs. Pla telet deciency , or thrombocytopenia, can cause bleeding in ssues, bruising and slow blood clong aer injury . Paen ts may suer fr om depression and fague as well as side e ects of exisng ther apies, impairing their quality of life. Current ther apeuc approaches include non-specic immunosuppression (e.g., ster oids and rituximab), inhibion of platelet clearance (e.g., splenectom y , IVIg, an-D globulin, 42 | Our Products and Pr oduct Candidates Our Pr oducts and Product Candidates | 43 PA RT I Days post infusion IgG1 placebo (n=2) active (n=6) % T 150 100 50 0 0 20 40 60 Days post infusion IgG2 placebo (n=2) active (n=6) % T 150 100 50 0 0 20 40 60 Days post infusion IgG3 placebo (n=2) active (n=6) % T 150 100 50 0 0 20 40 60 Days post infusion IgG4 placebo (n=2) active (n=6) % T 150 100 50 0 0 20 40 60 Days post infusion Total IgG placebo (n=2) active (n=6) % T 150 100 50 0 0 20 40 60 Figure 4: Reducon in the levels of four IgG anbody classes and total IgG levels in the mulple ascending dose part of our Phase 1 clinical trial of ef gargimod in healthy volunteers at a dose of 10 mg /kg every seven days. and Syk inhibitor f ostamanib13) or s mulaon of platelet producon (e.g., thrombopoie n receptor agonist TPO-RA). Splenectomy r emains the only treatment tha t provides sustained r emission o therapy for one y ear or longer for a high pro - poron of paents. ITP a ects appro ximately 72,000 paents in the United St ates (sources: Curr ent Medical Research and Opinion, 25:12, 2961-2969; Am J Hematol. 2012 Sep; 87(9): 848–852; P ediatr Blood Cancer . 2012 Feb; 58(2): 216–220). Phase 3 ADV ANCE Trials In the fourth quarter of 2019, the rst of two regis traonal trials, the ADV ANCE Phase 3 trial, was iniated to evaluat e 10 mg /kg IV ef gargimod for the treatmen t of primary ITP . The second registr aonal ADV ANCE-SC trial of 1000mg SC ef gargimod for the treatment of primary ITP was iniated in the fourth quarter of 2020. W e expect to enroll approxi - mately 156 paents in each trial. T opline data ar e expect ed for the ADV ANCE trial in the second quarter of 2022 and for the ADV ANCE-SC trial in the rs t quarter of 2023, respecvely . The primary endpoint of both trials is the proporon of chronic ITP paents with a sustained platelet coun t response, dened as achieving platelet coun ts of at least 50×109/L for at least f our of the six visits between weeks 19 and 24 of the trial. Phase 2 T rial W e completed a randomized, double-blind, placebo-contr olled Phase 2 clinical trial to evaluate the saf ety , ecacy and pharmacokinecs of ef gargimod in 38 adult primary ITP paents, who had platelet counts low er than 30 x 109/L while being on a st able dose of standard-of -care treatme nts consisng of corcoster oids, permied immunosuppressants or thrombopoien recep tor agonists, or aer having undergone a splenectomy or while being monitored under a ‘watch & wait ’ approach. W e conducted the clinical trial at 19 clinical centers acr oss eight countries in the European Union. Pa - ents were r andomly assigned to three arms of twelve or 13 paents f or the placebo or efg argimod arms, respecvely . All paents in this clinical trial on a drug standard-of -care treatment wer e to connue to receive their stable dose of stan - dard-of -care treatmen t as per the protocol. One treatment arm received 5 mg /kg ef gargimod, the second arm receiv ed 10 mg /kg efg argimod and the third arm received placebo. Dosing took place in a three-week period, which included four weekly doses of ef gargimod or placebo. Pa ent follow-up con nued for 21 weeks a er treatmen t. Pa ents from all three cohorts were eligible to enroll in a one-year open-label extension study at the 10mg /kg dose of ef gargimod, subject to meeng enrollment criteria, including platelet counts low er than 30 x 109/L. Full results from the Phase 2 trial were published in the peer-r eviewed American Journal of Hematology . Ef gargimod was well-toler ated and showed a correlaon of reduced IgG levels, increased platelet counts and reduced bleeding in ITP paents. The primary endpoint analysis demonstra ted efg argimod to be well-tolera ted in all paents, with most treatmen t emergen t adverse even ts ( TEAE ) observed characteriz ed as mild (CTCAE Grading 1 and 2). There were no dose-related saf ety observaons and the safety prole was consist ent with previous observaons in healthy volunteer s and myas - thenia gravis paents. No increased risk of inf econ was apparent in the efg argimod-treated groups compared to the placebo group. T argeng FcRn with ef gargimod resulted in rapid and selecve IgG reducon, and a greater numerical reducon was observed in the efg argimod 10 mg /kg group, without impacng the levels of other immunoglobulin isotypes. E fgargi - mod administra on did not result in a reducon of albumin levels, suggesng that the Fc fragment ef gargimod is not interf ering with albumin binding or inuencing the fat e of FcRn. Reducon in platelet -associated autoan bodies were observed in the majority of paents with clinically meaningful platelet incr ease. E fgargimod-tr eated groups achieved a higher maximum mean platelet count change from baseline compared to the pla - cebo group. Pos t hoc analyses requiring greate r frequency or duraon of platele t count ≥50×109/L, or increased platelet count to ≥100×109/L, demonstra ted the ecacy of ef gargimod. Six paents (46%) treated in both efg argimod groups showed an increase in platelet count >50×109/L on at least two occasions. Addionally , substan ally more acve-tr eated paents achieved a platele t count ≥50×109/L for more than 10 cumulave day s compared to the placebo group (10 [38%] vs. 0 [0%], respecvely). Adverse ev ent reporng showed no severe bleeding events in any paent, mild bleeding events only were reported in the 10 mg /kg arm and mild and modera te in the 5 mg /kg and placebo arm. Incidence of bleeding events was reduced by ef gargimod treatment as assessed by the World Health Org anizaon bleeding scale, with separaon from placebo as early as the third dose in the 10 mg /kg arm. Incidence of bleeding events in the skin was reduced by efg argimod trea t - ment as assessed by the ITP -BA T bleeding scale, with no clear signal of bleeding events in the mucosa or organs in either treatmen t arm. Low ter of an-drug anbodies was det ected in 16.7% of placebo paents and 30.8% of treat ed paents in the 10 mg /kg arm with no apparent e ect on pharmacokinecs or pharmacodynamics. Phase 3 - IV and SC Trials In the fourth quarter of 2019, the rst poten al registra onal Phase 3 trial of IV efg argimod in ITP , the ADV ANCE trial, was iniated to ev aluate a dose of 10 mg /kg IV ef gargimod. W e expect to enroll 156 paents in this Phase 3 trial. The second potenal regis traonal Phase 3 trial of SC efg argimod in ITP , the ADV ANCE SC trial was iniated in the fourth quarter of 2020 to evaluate a dose of 1000 mg SC efg argimod. We expect to enr oll 156 paents in this trial as well. W e expect to announce topline results f or the ADV ANCE and ADV ANCE-SC trials in the second quarter of 2022 and rst quarter of 2023, respecvely . Pemphigus V ulgaris (PV) Overview PV is an autoimmune disorder associated with mucosal and skin blister s that lead to pain, diculty swallowing and skin inf econ. This chronic, potenally lif e-threatening disease is triggered by IgG autoanbodies targeng desmoglein-1 and -3, which are present on the surface of ker anocytes and important for cell-to-cell adhesion in the epithelium. Auto - anbodies targ eng desmogleins result in loss of cell adhesion, the primary cause of blister forma on in Pemphigus. Similar to MG and ITP , disease severity of Pemphigus correlat es to the amount of pathogenic IgGs targeng desmogleins. Currently , there are an esmated 17,400 pemphigus paents in the United States, of which an esmated 13,100 paents are su ering from PV . Several disease acvity measurements exist f or the clinical evaluaon of PV paents, including the pemphigus disease area index ( PDAI ), autoimmune bullous skin disorder intensity score ( ABSIS ), and the PV acvity score ( P VA S ). The PDAI is reported to ha ve the highest validity and is recommended for use in clinical trials of PV . Phase 3 ADDRESS Trial In the fourth quarter of 2020, the registr aonal ADDRESS trial was iniated of SC ef gargimod for the treatmen t of PV and PF . This is a randomiz ed, double-blinded, placebo-contr olled study , where the objecve is to assess ecacy , safety and tolerability in up to 150 newly diagnosed or relapsing paents with modera te to severe pemphigus. Paents ar e ran - domized to receiv e either SC efg argimod or placebo for 30 weeks. P aents start on concomitant s teroids based on what we determine to be the opmized dosing regimen from the Phase 2 study . The primary endpoint will assess the propor - on of paents who achieve complete remission on a minimal st eroid dose at 30 weeks. The ADDRESS trial will evaluate ecacy and saf ety , including the potenal to drive f ast onset of disease contr ol and complete remission and the ability to taper corcos teroids. A relevant minority poron of the paents in the ADDRESS trial are parcipang in studies con - ducted in Ukraine or Russia. Due to the conict between Russian and Ukraine, we may be unable to fully benet from the study data collect ed to date and we may need to recruit addional paents which could delay data read-out points f or our studies, although we are currently unable to assess if and by how much such delays would occur . Accordingly , ming of topline data for the ADDRESS trial of SC ef gargimod for PF and PV may be impacted but we are currently unable to assess the full impact due to the rapidly developing situaon. Phase 2 T rial W e completed an open-label Phase 2 adapve trial in which, through sequenal cohorts, 34 paents were dosed at 10 or 25mg /kg IV efg argimod with various dosing frequencies, as monotherapy or add-on therapy to low dose oral predni - sone. The primary endpoint of the trial was saf ety and toler ability . The full Phase 2 trial results were published in The Brish Journal of Dermatology . In this trial, we observed: • a favor able tolerability prole, consist ent with dat a from previous ef gargimod studies and those adverse even ts wer e mostly mild. 44 | Our Products and Pr oduct Candidates Our Products and Pr oduct Candidates | 45 PA RT I • a major decrease in serum total IgG and an-desmoglein (DSG) autoan bodies and correlated with impr oved PDAI scor es. • that 90% (28/31) of paents demonstr ated early disease contr ol; median me to disease control for monother apy and combinaon ther apy was 17 days. • complete clinical remission in 64% (14/22) of paents receiving opmiz ed prolonged treatment with ef gargimod in combinaon with a median dose of 0.26mg /kg /day prednisone within 2-41 weeks. • a favor able tolerability prole, consist ent with dat a from previous ef gargimod studies. Chronic Inammatory Dem yelinang Polyneuropath y (CIDP) Overview of Chronic Inammatory Demyelinang P olyneuropathy CIDP is a chronic autoimmune disorder of peripheral nerves and nerve roots caused by an autoimmune-mediated de - strucon of the myelin sheath, or myelin pr oducing cells, insulang the axon of the nerves and enabling speed of signal transducon. The cause of CIDP is unknown, but abnormalies in both cellular and humoral immunity have been shown. CIDP is a chronic and progr essive disease: onset and progression occur over at least eight weeks in contr ast with the more acute Guillain-Barré-s yndrome. Demyelina on and ax onal damage in CIDP lead to loss of sensory and/or motor neuron funcon, which can lead to weakness, sensor y loss, imbalance and/or pain. CIDP a ects appro ximately 16,000 paents in the United States. Most CIDP paen ts require treatmen t and IVIg which is the preferr ed rst -line therapy . Glucocorcoids and plasma e x - change are used t o a lesser extent as they ar e either limited by side eects upon chr onic use, in the case of glucocorcoids, or inv asiveness of the procedure and access, which is res tricted to specialized cen ters in case of plasma e xchange. Alter - nave immunosuppr essant agents are typically r eserved for paents ineligible f or or refr actory to IVIg, glucocorcoids or plasma ex change. While IVIg therapy can usually c ontrol CIDP , most paen ts require repeat ed treatments ev ery two to six weeks f or many year s. This is due to the fact that IVIg monother apy does not usually lead to long-term remission. ADHERE T rial At the end of 2019, we iniated the registra onal ADHERE trial evaluang SC ef gargimod for the treatment of CIDP . The ADHERE trial is a randomiz ed, withdrawal study evalua ng 1000mg weekly SC efg argimod expected to enroll appro x - imately 130 paents. The trial consists of an open-label Stage A follo wed by a randomiz ed, placebo-controlled Stage B with a planned interim responder analysis aer the rs t 30 paents enroll in Stage A. In order to enter Stage A and receive ef gargimod, both paents who are treatmen t-naïve or on therapy must rs t receive a conrmed diagnosis of CIDP by an independent panel of experts and demonstrat e acve disease. T o show acve disease, paents who are on current CIDP therap y have to demons trate a minimal clinically meaningful worsening aer treatmen t withdra wal based on at least one CIDP clinical assessment tool, including Inammatory Neuropa thy Cause and T reatment ( INCA T ) Disability Score, Inammat ory Rasch-built Overall Disability Scale ( I-RODS ) or mean grip str ength. T o advance to Stag e B, paents need to demonstra te a minimal clinically meaningful response to efg argimod equivalent with the loss observed on the same ecacy scale on which worsening is observed during the withdraw al period. In Stage B, paents are r andomized to either SC efg argimod or placebo for up to 48 weeks. The primary endpoint is event -driven and based on the adjusted INCA T ecacy score in Stage B. Interim Analysis from ADHERE T rial In February 2021, we announced a “ go” decision to transion int o the second, placebo controlled st age of this trial based on a planned ecacy and saf ety assessment following the enrollment of 30 paents into the inial part of the ADHERE trial. The ADHERE trial is expected to enroll appro ximately 130 paents in total to support potenal registr aon of SC ef gargimod for the treatment of CIDP . The interim analysis achieved the pre-dened threshold f or connua on, which was based on response rates seen in precedent clinical trials of current standar d of care in CIDP . The decision to connue enrollment was con rmed by an independent data monitoring commiee. In addion, the safety and tolerability dat a observed to date is consisten t with that of efg argimod in other clinical trials. W e expect to announce the topline data of the ADHERE trial in the rst quarter of 2023. Idiopathic Inammatory Myopa thy (Myosis) Overview of Myosis Myosis are a rar e group of autoimmune diseases that can be muscle specic or aect mulple org ans including the skin, joints, lung, gastroin tesnal tract and heart. Myosis can be very sever e and disabling and have a material impact on quality of life. Inially these m yopathies wer e classied as either dermatomyosis ( DM ) or polym yosis, but as the underly - ing pathophy siology of myosis has become be er understood, including thr ough the idencaon of charact erisc auto - anbodies, new polym yosis subgroups hav e emerged. T wo of these subtypes are immune-mediat ed necrozing my opathy ( IMNM ) and an-syn thetase syndr ome ( ASyS ). Pro ximal muscle weakness is a unifying feature of each m yosis subset. • IMNM is charact erized by skelet al muscle weakness due to muscle cell necrosis. The muscle weakness is typically sym - metrical – on both sides of the body – and aects pro ximal muscles including hips, thighs, upper arms, shoulder and neck. The muscle weakness can be severe and lead to diculty in compleng daily tasks. Char acterisc autoanbodies of IMNM, include an-signal recognion parcle (an-SRP) and an-3-hy droxy -3-methylglutaryl-coenz yme A reductase (an-HMGCR) autoanbodies. • ASyS is characteriz ed by muscle inammaon, inammatory arthris, inter sal lung disease, thick ening and cracking of the hands (mechanic’ s hands) and Raynaud phenomenon. Autoanbodies associated with ASyS aack tRNA synthe - tase enzymes and include an-Jo-1 and an-PL1 and PL-12 most commonly . • DM is charact erized by muscle inammaon and degener aon and skin abnormalies, including heliotrope rash, Got - tron papules, erythematous, calcinosis and edema. DM is associated with myosis-specic autoan bodies, including an-Mi-2, an-MDA -5, an-TIF-1γ and others. There are no current FDA -approved therapies f or IMNM or ASyS. IVIg (Octagam 10%) was approved by the FDA for the treatmen t of dermatom yosis in July 2021. Myosis paents are most oen treat ed with high-dose ster oids. ALKIVIA T rial W e intend to iniate the registr aonal ALKIVIA trial of SC efg argimod for the treatmen t of my osis in the second quar - ter of 2022. We will enroll 180 paents dosed with 1000mg SC ef gargimod in three myosis subtype cohorts, IMNM, ASys and DM. An interim analysis is planned aer the rs t 30 paents of each myosis subtype. The primary endpoint will be based on the mean total improv ement score and addional k ey secondary endpoints will include me to response, durability of benets, the quality of life and the individual components of the total impr ove - ment score. Bullous Pemphigoid (BP) Overview BP is the most common autoimmune blistering disease and is driven by autoanbodies aecng the skin. The disease typically a ects elderly people and early k ey symptoms are itch and rash and paents develop uid-lled blister s during disease progression. The prev alence of bullous pemphigoid is twelve per 100,000 adults and the incidence increases with age. BP is associated with a high disease burden and can hav e a signicant impact on the quality of life of paents. The mortality of BP in the U.S. is 2.4% or higher than the mortality in the general populaon of the same age. There are currently no approv ed therapies a vailable for BP . First line treatmen t consists of topical or sy stemic corcoster oids, which result in substan al morbidity and increased mortality , convenonal immunosuppressan ts as corcost eroid-sparing agents, rituximab and IVIg. BP is a well characteriz ed autoimmune disease in which the binding of autoanbodies to hemidesmosomal prot eins, BP180 and BP230, iniates a cascade of inammatory ev ents resulng in blister forma on. BP180 and BP230 are inv olved in the stable a achment of ker anocyte to the underlying matrix. The autoanbody acons include mechanical disrupon of ker anocyte adhesion and cytokine release. Immune complex f ormaon iniates complement acv aon leading to the recruitment mas t cells, neutrophils, eosinophils and other immune cells and to the release of proteases and inammat ory mediator s. All these e ects, which start with the binding of the autoanbodies, induce the blist ering obser ved in BP . BALLAD T rial W e iniated the BALLAD registra onal trial evaluang SC ef gargimod in BO, in the second half of 2021, in which we will enroll 160 paents. The study populaon will be newly diagnosed and relapsing paents within one year diagnosis. P aents will be random - ized 1-to-1 to receiv e efg argimod or placebo for total dura on of 36 weeks. Standard of care conc omitant medicaon will consist of prednisone at a starng dose of 0.5 milligram per kilogram per day , and the dose will be adjusted if the 46 | Our Products and Pr oduct Candidates Our Pr oducts and Product Candidates | 47 PA RT I Linda “ It is very important to me and others like me, that new innovations are developed in clinics so that we c an continue to have hope f or better treatments and an impro ved quality of life. ’ ’ ITP Patient ITP Patient | 49 48 | ITP Patient paent achieves sust ained control of disease acvity . The primar y endpoint is the proporon of parcipants in complete remission while on minimal steroids (≤0.1mg /kg /day) f or at least eight weeks at week 26. Secondary endpoints relat e to cumulave st eroid doses, IGA BP score, complet e remission o ster oids, av erage itch, contr ol of disease acvity , and quality of life measures. An interim analysis of the BALLAD trial is expected ae r the rst 40 paents. New Ef gargimod Indicaons In January 2022, we announced that we will be iniang proof -of-c oncept trials in four new autoimmune indicaons through our partnership agreements with Zai Lab and IQVIA: • Membranous Nephropath y (MN) is an autoimmune, glomerular disease and the most frequent cause of nephroc syndr ome. MN is characteriz ed by thi ck ening of the glomerular capillary walls caused by immune complex deposion. 70% of MN paents ha ve IgG autoanbodies ag ainst PLA2R. In paents without PLA2R autoanbodies, there can be detect able an-THSd7A or an-NELL1 anbodies. 20-30% of paents pr ogress to end-stage renal disease. There are no current appr oved therapies for MN. • Lupus Nephris (LN) is a glomerulonephris and one of the most severe and common org an manifesta ons of the autoimmune disease sys temic lupus erythematosus (SLE). LN is a substan al cause of morbidity and death among paents with SLE. Autoanbodies associated with LN include an-dsDNA and an-nuclear anbodies. 5-20% of LN paents progr ess to end-stage renal disease. Oral corcos teroids and broad immunosuppressants are curren t standar d of care but are not uniformly e ecve. • Primary Sjögren’ s Syndrome (primary SjS) is a sys temic autoimmune disease of the exocrine glands that can aect salivary and lacrimal glands, mostly , and result in severe dryness of mucosal surfaces, primarily in the eyes and mouth. In addion to sicca symptoms, paents can experience signican t fa gue, chronic pain, major organ in volvement, neuropathies and lymphomas. Autoanbodies are presen t in the majority of paents and include annuclear anbod - ies and anbodies against SjS-relat ed angen A and B (an-SSA Ro and SSB La). There are no curren t FDA-appr oved therapies and paents are most oen tr eated with IVIg , in severe cases, or eyes drops and corcos teroids in more mild to modera te paents. • COVID-19 mediated postur al orthostac tachy cardia syndr ome (COVID-19 mediat ed POTS) has been emerging aer resoluon of COVID-19 inf econ in previously healthy paen ts. PO TS is a disorder of the autonomic ner vous sys tem that is characteriz ed by a rise in heart ra te when moving to a standing posion and addional symptoms of shortness of breath, headache, fague, poor concentr aon, weakness and anxiety . The large majority of paents are women between 15 and 50 years of age. There is a str ong associaon of POTS to acv ang autoanbodies to autonomic G-pro - tein coupled receptor s (GPCR), including the β1 and β2-adrener gic recept ors and M2 and M3 muscarinic receptors. There are no current FDA -approved therapies and sympt omac treatments focus on blood volume, kidney sodium levels, heart rat e reducon and vessel constricon. Zai Lab Limited Our Zai Lab stra tegic collaboraon, which was announced in January 2021, allows us to accelera te development of ef gar - gimod into new autoimmune indica ons with Zai Lab taking opera onal leadership of the Phase 2 proof -of-c oncept trials. Zai Lab will iniate Phase 2 proof -of-concep t trials in 2022 in MN and LN, which both fall within our emerging nephrology franchise. IQVIA On December 2, 2021 we enter ed into a str ategic asset development agreement (the Asset Development Agreemen t ) with IQVIA. Pursuant to the Asset Development Agreement, IQVIA shall perform asset and indicaon development services for ef gargimod through an advanced outsourcing model. Such services include, but are not limited to , over all product indicaon dev elopment strategy , design of clinical trial prot ocol, set-up, ex ecuon and oversight of clinical devel - opment plans for an indicaon for ef gargimod selected by us. T o enable and encour age fast and innovav e delivery of the ser vices by IQVIA, the Asset Development Agreement con - tains an innovav e earn-back and bonus plan based upon the performance of IQVIA. Primary SjS and COVID-media ted POTS are the rst indica ons idened by argen x to be further developed under the Asset Development Agreemen t. 1.3.4 ARGX- 117 Development ARGX -117 is a highly dier enated therapeuc monoclonal anbody targ eng complement component C2 equipped with our proprietary NHANCE™ mutaons. By addressing a novel tar get at the intersecon of the complement and lecn path - wa ys of the complement cascade, we believe ARGX -117 represen ts a broad pipeline opportunity across several sev ere autoimmune indicaons. Acva on of the classical and lecn pathwa y of complement ma y contribut e to ssue damage and organ dys funcon in a number of autoimmune inammatory diseases and ischemia-reperfusion condions. T argeng C2 also leaves the alternave pathw ay of the complement s ystem intact, which is an important component of the innate def ense sy stem ARGX -117 exhibits both pH- and calcium dependent bind - ing. These unique characteris cs enable ARGX -117 to cap - ture free C2 in circulaon and release it in the endosome to be sorted for degradaon in the lysosome. ARGX -117 is equipped with NHANCE mutaons increasing its anity for FcRn and allowing it to recycle back into circulaon to capture more C2. W e obtained the rights to ARGX -117 as part of our Immu - nology Innovaon Progr am. argen x and Broteio Pharma launched a collabor aon in 2017 to conduct resear ch, with support from the Univer sity of Utrecht, to demonstra te preclinical proof -of-c oncept of the mechanism of ARGX - 117. Based on promising preclinical data gener ated under this collaboraon agreemen t, we ex ercised the ex clusive opon to license the program and assumed responsibility for further development and commercializa on. In addion to an intra venous formulaon, we have ex - clusive access to Halozyme’ s ENHANZE® SC drug delivery technology for the C2 tar get. Phase 1 Data W e conducted a Phase 1 healthy volunt eer trial of IV and SC ARGX -117. This rst -in-human clinical study was a double-blind placebo-controlled study designed to assess the safety , tolerability , PK and PD of a broad dose r ange of ARGX -117 in 102 healthy subjects. In the single ascending dose ( SAD ) part, we evaluat ed 70 subjects and test ed up to 80 mg /kg administer ed IV and up to 60mg /kg admin - ister ed SC. In the mulple ascending dose ( MAD ) part of the study , we evaluat ed 32 subjects to unders tand the saf ety and tolerability of repeated administr aons and in parcular to generat e a data-set to opmally inform a PK/ PD model. The majority of the observed TEAEs were cat egorized as grade 1 (or mild). Few gr ade 2 (or moderat e) TEAE were ob - served and, in the MAD part of the study , no grade 2 or higher TEAEs were observed. Overall, we concluded that single and mulple administraons of ARGX -117 or placebo hav e a fa vorable safe ty and tolerability pr ole supporng the inves - ga on of study drug in paent studies. W e obser ved a dose-dependent reducon of free C2 levels. Aer one dose of 30mg /kg ARGX -117, free C2 levels wer e reduced by 95% for more than 100 days. In the MAD part of the study , we could reach full complement blockade with more than 99% reducon of free C2 levels. 50 | Our Products and Pr oduct Candidates Our Pr oducts and Product Candidates | 51 Figure 5 PA RT I their V -regions when immunized with human disease targ ets. We then combine these llama V -regions with Fc regions of fully human anbodies, resulng in anbodies that we then produce in industry- validated producon cell lines. The re - sulng anbodies are diverse and, due to their similarity to human anbodies, we believe they are well suited to human therapeuc use. With this breadth of anbodies, we are able to test man y di erent epitopes. Being able to tes t many dier ent epitopes with our anbodies enables us to search for an opmized combinaon of saf ety , potency and species cross-r eacvity with the potenal for maximum therapeuc e ect on disease. These anbodies are oen cross-reacv e with the rodent version of chosen disease targets. This roden t cross-r eacvity enables more ecient preclinic al develop - ment of our product candidates because most animal ecacy models are rodent -based. By contras t, most other anbody discovery pla orms start with anbodies generated in inbred mice or synthec anbody libr aries, approaches that we believe are limited by insucient anbody repertoir es and limited diver sity , respecvely . Our SIMPLE Anbody™ plaorm allows us to access and explore a broad targe t univer se, including novel and complex targ ets, while minimizing the long melines associated with genera ng anbody candidat es using tradional methods. Our proprietary Fc Engineering T echnologies Our anbody engineering technologies – NHance®, ABDEG™, POTELLIGENT® and DHS mutaons – focus on engineer - ing the Fc region of anbodies in order to augment their inter acons with components of the immune system, ther eby potenally expanding the therapeuc inde x of our product candidates by modifying their half-lif e, ssue penetra on, ra te of disease targ et clear ance and potency . In addion, we obtained a non-exclusiv e resear ch license and opon for the SMART -Ig® and ACT -Ig® technologies. For example, our NHance® and ABDEG™ engineering technologies enable us to modulate the inter acon of the Fc region with FcRn, which is responsible for regulang half-lif e, ssue distribuon and pharmacodynamic properes of IgG anbodies. Similarly , our POTELLIGENT® engineering technology modulates the in - ter acon of the anbody Fc region with receptors loca ted on specializ ed immune cells known as natur al killer ( NK ) cells. These NK cells can destr oy the targ et cell, resulng in enhanced anbody-dependen t cell-mediated cytoto xicity ( ADCC ) . NHance® and ABDEG™: Modulaon of Fc Int eracon with FcRn. An illustra on of the FcRn-mediat ed anbody recycling mechanism is shown in gure 6. Serum proteins, including IgG anbodies, are rounely r emoved from the circulaon by cell uptak e. Anbodies can bind to FcRn, which serves as a dedicated r ecycling receptor in the endosomes, which have an acidic environmen t, and then return to the circula on by binding with their Fc region to FcRn. Unbound anbod - ies end up in the lysosomes and are degraded by enzymes. Because this Fc/FcRn in teracon is highly pH-dependent, anbodies ghtly bind to FcRn at acidic pH (pH 6.0) in the endosomes but release again at neutr al pH (pH 7. 4) in the circulaon. NHANCE® NHance® ref ers to two mutaons that we introduce int o the Fc region of an IgG anbody . NHance® is designed to extend anbody serum half-lif e and increase ssue penetra on. In certain cases, it is advan tageous to engineer anbod - ies that remain in the circulaon longer , allowing them to potenally ex ert a greater therapeuc e ect or be dosed less frequently . As shown in gure 7, NHance® anbodies bind to FcRn with higher anity , specically under acidic pH condions. Due to these ghter bonds, NHance® FcRn-mediat ed anbody recy cling is strongly f avored over lysosomal degrada on, although some degradaon does occur . NHance® allows a grea ter proporon of anbodies to re turn to the circulaon poten ally resulng in increased bioav ailability and reduced dosing frequency . ARGX -111, ARGX - 109, ARGX -117 and a number of our discovery -stage pr ograms ulize NHance®. Following analysis of Phase 1 data, and the observed fa vorable saf ety and toler ability prole and consist ent PK/PD pro - le, we launched a Phase 2 proof -of-concept trial in mulfocal motor neuropa thy in the fourth quarter of 2021 within our neuromuscular franchise. Overview of Mulfocal Motor Neuropath y and Current T reatmen t Mulfoc al Motor Neuropath y ( MMN ) is a debilitang neuromuscular autoimmune disorder that is charact erized by slowly progressiv e muscle weakness due to motor neuron degenera on. It mainly aects hands and forearms, mainly in males, and the median age of diagnosis is around 40 years. Diagnosis tak es about 1.5 year s and is usually misdiagnosed as amyotr ophic lateral sclerosis ( ALS ). There are esmat ed to be around 13,000 paents with MMN in the U.S. and this number is increasing. Specic pathophysiologic char acteriscs of MMN include the presence of immunoglobulin M ( IgM ) autoanbodies agains t the ganglioside GM1 and conducon block, i.e., impaired propag aon of acon potenals along the axon. GM1 is widely expressed in the nervous syst em by neurons, parcularly around the nodes of Ranvier , and Schwann cells. IVIg is the only approved trea tment for MMN and needs to be dosed regularly to address the disease’ s progr essive nature. Delay ed gra funcon and/or allogra failur e A second proof -of-concept trial will be iniated in the second half of 2022 evaluang ARGX -117 for the prevenon of de - lay ed gra funcon (n) and/or allogra failur e aer kidney transplanta on. This occurs in up to 40% of kidney transplant recipients, and is oen a result of ischemia reperfusion injury . There is compelling evidence from kidney biopsies of mannose-binding lecn and C4d co-st aining indicang involvemen t of both the classical and lecn pathwa ys, making C2 an ideal target. Furthermore, there is a well-established pr ocess to measure kidney funcon and establish proof -of-concept and achieve regis traon. On this basis, combined with the signif - icant unmet medical need, we have chosen delay ed gra funcon ( n ) and allogra f ailure aer kidney transplanta on as second indicaon for ARGX -117. 1.3.5 Immunology Inno vation Program Overview Our IIP is a core business str ategy of co-creaon and innovaon. The IIP also ser ves as our discovery engine to idenfy novel tar gets and toge ther , in collabora on with our scienc and academic partners, to build potenal new pipeline candidat es. The IIP has been foundaonal in building our pipeline, and every current pipeline candidat e from both our wholly-owned and partnered pipeline emerged fr om an IIP collaboraon. As part of our long-term str ategy , we have commied to connued in vestment in the IIP . As at the date of this Universal Registr aon Document, we have ex ecuted on our commitment and aim to connue to bring forth at least one new asset per year from the IIP . Our Suite of T echnologies Through our IIP , we collaborat e with scienc and academic partners to idenfy immunology breakthroughs and build potenal pipeline candidat es. This is done through co-cr eaon where we bring to the collabor aon our unique suite of anbody engineering technologies and experience in clinical development and our partners bring a wealth of disease and targ et biology experse. T ogether with our anbody discovery and development experse, this suite of technologies has enabled us to build our broad pipeline of products and product candidates, across all st ages of development and we believe will ensure connu - ous development of innovav e and relev ant programs. Our ke y technologies are outlined below: Anbody Engineering and Other T echnology Capabilies Our Proprietary SIMPLE Anbody™ Plaorm Our proprietary SIMPLE Anbody™ pla orm sources V -regions from con venonal anbodies exisng in the immune sys tem of outbred llamas. Outbred llamas are those that have been bred from genec ally diver se paren ts, and each has a dier ent genec background. The llama produces highly diverse panels of anbodies with a high human homology in 52 | Our Products and Pr oduct Candidates Our Pr oducts and Product Candidates | 53 PA RT I 1 1 3A 2 2 3 3B Blood Circulation ( pH 7.4 ) Cell Antibody L ysosome Endosome ( pH 6.0 ) FcRn Degraded serum pro teins Figure 6: The FcRn-mediated recycling mechanism Cell Antibody with NHance L ysosome Endosome FcRn Degraded serum pro teins Cell SIMPLE Antibody with ABDE G L ysosome Endosome FcRn T arget ABDEG™ ABDEG™ ref ers to ve mutaons that we intr oduce in the Fc region that increase its anity for FcRn at both neutral and acidic pH. In contr ast to NHance®, ABDEG™ -modi - ed Fc regions remain bound to FcRn if the pH changes, occupying FcRn with such high anity that they deprive endogenous IgG anbodies of their recy cling mechanism, leading to enhanced clearance of such anbodies by the lysosomes. Some diseases mediated by IgG anbodies are direct ed agains t self -angens. These self-directe d anbodies are ref erred to as autoanbodies. W e use our ABDEG™ technology to reduce the level of these patho - genic autoanbodies in the circulaon by increasing the ra te at which they are cleared by the lysosomes. ABDEG™ is a component in a number of our products and product candidat es, including ef gargimod. As shown in gure 8, our ABDEG™ technology can also be used with our pH-dependent SIMPLE Anbodies in a mechanism refe rred to as sweeping. Certain SIM - PLE Anbodies bind to their tar get in a pH-dependent manner . These anbodies bind ghtly to a target at neutral pH while in circulaon, and release the targe t at acidic pH in the endosome. The unbound target is degraded in the lysosome. Howev er , when equipped with our ABDEG™ technology , the therapeuc anbodies remain ghtly bound to FcRn at all pH levels and are not degraded themselves. Inst ead, they are returned to the circulaon wher e they can bind new targets. W e believe this is especially useful in situaons where high levels of the targe t are circula ng or where the targe t needs to be cleared very quickly from the syst em. POTELLIGENT® POTELLIGENT® modulat es the inter acon of the Fc region with the Fc gamma receptor IIIa locat ed on specialized immune cells, known as NK cells. These NK cells can destro y the targ et cell, resulng in enhanced ADCC. POTELLIGENT® changes the Fc structur e by ex cluding a parcular sugar unit such that it enables a ghter t with the Fc gamma recept or IIIa. The strength of this inter ac - on is a k ey factor in determining the killing potenal of NK cells. An independent publicaon report ed that the ex clusion of this sugar unit of the Fc region increases the ADCC-mediated cell-killing potenal of anbod - ies by 10- to 1000-fold. Cusatuzumab and ARGX -111 ulize PO TELLIGENT® (source: Expert Opin Biol Ther 2006; 6:1161-1173; hp://www .tandf online.com/doi/ full/10.1517/14712598.6.11.1161%20). Chugai and Clayton In 2020, we enter ed into a r esearch license and opon agreement with Chug ai under which we may access Chugai’ s SMART -Ig® (“Recy cling Anbody ” and part of “Sweeping An body ” technology) and ACT -Ig® (Anbody half -life extending t echnology). In 2020, we also enter ed into a non-exclusiv e resear ch agreement with the Clayton Founda on under which we may access the Clayton F oundaon’ s proprietary DHS muta ons to extend the serum half-lif e of therapeu - c anbodies. Subcutaneous drug delivery technologies W e have ex clusive access to Halozyme’ s ENHANZE® SC drug delivery technology for the FcRn and C2 targets and four addional targe ts. The global collaboraon and license agreement with Halozyme was announced in February 2019 and extended in October 2020. The ENHANZE® technology has the potenal to shorten drug administra on me, reduce healthcare pr aconer me, and oer addional exibility and convenience f or paents. In addion, in April 2021, we entered int o a collabora on and license agreement with Elektro to explore new SC formu - laons ulizing Elektro’ s small volume injecon technology for ef gargimod, and up to one addional targe t. For more inf ormaon on our collabora ons, see secon 1.4 “Collaboraon Agreements” Other wholly-owned IIP Pr ograms Cusatuzumab (formerly ARGX -110) In June 2021, we announced that we regained worldwide rights to our an-CD70 anbody cusatuzumab from Cilag. Following terminaon of our collabora on, we hav e elected that Cilag connues to opera onally support the treatment and follow -up of paents enrolled in ongoing cusatuzumab clinical trials. Cusatuzumab is being developed for the rare and aggressive hematological cancer AML, as well as high risk MDS. The CULMINA TE trial and ELEV A TE trial, described below , remain ongoing. In January 2021, we announced interim data fr om the Phase 2 CULMINA TE trial, evaluang cusatuzumab in combinaon with azacidine in newly diagnosed, elderly AML paents who are ineligible for intensive chemother apy . The 20 mg /kg dose has been selected f or ongoing and future trials. Cusatuzumab was observed to be well tolerated and the safe ty data were consis tent with prior studies. Final results from the CULMINA TE trial will be presented in a peer reviewed forum. A set of interim data from the ELEV A TE trial, which is ev aluang cusatuzumab in combinaon with venet oclax and azac - idine in newly diagnosed, elderly paents with AML who are ineligible for int ensive chemotherapy , has been presente d at American Society of Hematology in December 2021. Final results from the ELEV A TE trial will be present ed in a peer review ed forum. ARGX -119 In January 2022, we announced that ARGX -119 is an anbody that targe ts MUSK, a protein locat ed at the neuromuscular juncon, in an agonisc or acva ng manner . W e intend to develop ARGX -119 in a range of neuromuscular diseases, po - tenally including congenial MG, a rare heredit ary subtype of myas thenia gr avis, MUSK MG, a rare autoimmune subtype of myas thenia gravis, spinal muscular atrophy ( SMA ) and ALS, both rar e, severe neuromuscular indicaons. ARGX -118 W e have ex ercised our opon to ex clusively acquire rights to ARGX -118, a highly dier enated anbody against Galec - n-10, the protein of Charcot -Leyden crystals, which are implica ted as a major contributor to severe asthma and to the persis tence of mucus plugs. ARGX -118 has the following dier enated fea tures: • it acts on a novel target int ended to address mucus plugging, a large unmet need in airway inammaon; • it has a unique mechanism of acon with obser ved cryst al-dissolving properes; and • its broad potenal in severe airway inamma on diseases where mucus plugging play s a k ey role, including lung aack or asthma exacerba on, allergic bronchopulmonary aspergillosis, and chronic rhinosinusis with nasal polyps. ARGX -118 was developed under a collaboraon with VIB. Lead opmiz aon work on ARGX -118 for airway inammaon will connue in 2022. 54 | Our Products and Pr oduct Candidates Our Pr oducts and Product Candidates | 55 Figure 8: SIMPLE AnbodyTM and ABDEGTM technologies work in concert to sweep diseases targets. PA RT I 1 3 2 4 Figure 7 ARGX -120 In addion, w e are developing ARGX-120, an anbody ag ainst an undisclosed t arget with applicaon in autoimmune diseases. Other Partner ed Programs See secons 1.4 “Collabora on Agreements” and 1.5 “License Agreements” for a descripon of collabora on and license agreements that we ha ve entered into to further lever age our IIP . 1. 4 Collaboration Agr eements W e follow a disciplined str ategy to maximize the value of our pipeline by planning to ret ain all development and commer - cializaon rights to those products and product candidat es that we believe we can ulmat ely commercializ e successfully , if approved. W e have partnered, and plan to connue to partner , products and product candidat es that we believe have promising ulity in disease areas or have paen t populaons that may benet fr om resour ces of other biopharmaceucal com - panies. We e xpect to connue to collabor ate selecvely with pharmaceucal and biotechnology companies to leverage our plaorm technology and accelera te product candidate developmen t. W e have entered int o mulple collabora on agreements with pharmaceucal partners, which are described below . 1.4. 1 Our Strategic Partnership with Abb Vie f or AR GX- 115 (ABBV -151) In April 2016, we enter ed into a collaboraon agreement with AbbVie S.Á.R.L. ( AbbVie ) to develop and commercializ e ARGX -115 (ABBV -151) as a cancer immunotherapy ag ainst the novel tar get GARP (the AbbVie Collaboraon Agreemen t ) . ARGX -115 (ABBV -151) employs our SIMPLE Anbody™ technology and works by smulang a paent’ s immune sy s - tem aer a tumor has suppressed the immune sys tem by co-opng immunosuppressive cells such as T regs. Under the terms of the AbbVie Collabor aon Agreement, we are responsible for conducng and funding all ARGX -115 (ABBV -151) resear ch and development acvies up to compleon of IND-enabling studies. W e have grant ed AbbVie an exclusiv e opon, for a specied period following compleon of IND-enabling studies, to ob - tain a worldwide, ex clusive license to the ARGX -115 (ABBV -151) program to develop and commercializ e products. Follow - ing the exer cise of the opon, AbbVie will be subject to diligence obligaons in respect of connuaon of development and commercializ aon of the licensed product(s), and AbbVie will be solely responsible for all research, development and regulat ory costs rela ng to the products. In August 2018, AbbVie ex ercised its opon to develop and commercialize ARGX -115 (ABBV -151) and has now assumed development oblig aons, including the sole responsibility for all research, developmen t and regulat ory costs rela ng to ARGX -115 (ABBV -151)-based products. Subject to the connuing pr ogress of ARGX -115 (ABBV -151) by AbbVie, we are eligible to receive developmen t, regulat ory and commercial milestone pa yments in aggreg ate amounts of up to $110.0 million, $190.0 million and $325.0 million, respecvely , as well as ered roy ales on product sales at percentag es ranging from the mid-single digits to the lower teens, subject to customary reducons. Pursuant to the AbbVie Collaboraon Agr eement, we have the right, on a product -by-pr oduct basis, to co-promot e ARGX - 115 (ABBV -151)-based products in the European Economic Area ( EEA ) and Switzerland and to combine the product with our own future oncology programs (if any). The co-promoon e ort would be gov erned by a co-promoon agreement negoated in good faith by the pares. Unless earlier terminat ed upon mutual agreement, for ma terial breach or as otherwise specied in the AbbVie Collabora on Agreement, the t erm of the opon and license agreement ends, with respect t o the ARGX -115 (ABBV -151) program, upon the earliest of (i) a technic al failure of the IND-enabling studies which is outside of our c ontrol, (ii) AbbVie’ s elecon to not ex er - cise its opon, or (iii) follo wing AbbVie’ s exer cise of the opon, fullment of all paymen t obligaons under the agreement. AbbVie may terminat e the AbbVie Collaboraon Agreement f or any reason upon prior wrien noce to us. AbbVie’ s roy - alty payment obliga ons expir e, on a product -by-product and country -by-coun try basis, on the date that is the later of (i) such me as there are no valid claims covering such product, (ii) expir aon of regula tory or mark et ex clusivity in respect of such product or (iii) ten year s aer the rs t commercial sale of such product sold in that country under the AbbVie Collabora on Agreement. 1.4.2 Our Strategic Partnership with Zai Lab for efgartigimod In January 2021, we enter ed into a collabor aon agreement with Zai Lab, a commercial-s tage biopharmaceucal com - pany , relang to an ex clusive out-license for the development and commer cializaon of efg argimod in Great er China, including mainland China, Hong Kong, T aiwan and Macau (the Zai Lab Agreement ). Pursuan t to the Zai Lab Agreement, Zai Lab obtains the exclusiv e right to develop and commercializ e efg argimod in Great er China. Zai Lab will also con - tribute Chinese paents to our global Phase 3 trials of efg argimod. Addionally , the Zai Lab Agreement is expected to accelera te efg argimod global development by iniang mulple Phase 2 proof-of -concept trials in new autoimmune indicaons under our supervision. In parcular , Zai Lab will launch proof-of -concept trials in two new kidney condions in 2022: LN and MN. Pursuant t o the Zai Lab Agreement, we ha ve received $150.0 million in collabor aon payments, c omprised of a $75.0 million upfron t payment in the form of 568,182 ne wly issued shares in Zai Lab at a price of $132.00 per share, and a $75.0 million as a guaran teed non-creditable, non-re fundable development cost -sharing payment, and w e trig ger ed an addional $25.0 million milestone pa yment following the appr oval of ef gargimod in the U.S. W e are also eligible to r eceive ered roy ales (mid-teen to low -twenes on a percen tage basis) based on annual net sales of ef gargimod in Great er China. 1.4.3 Our Collabor ation with Genor Biopharma for ARGX 109 In October 2012, we entered into an ex clusive license agreement with Bird Rock Bio, Inc. ( Bird Rock Bio , formerly known as RuiYi Inc. and Anaphore, Inc.), to develop and commercializ e ARGX -109, which employs our SIMPLE Anbody™ and NHance® technologies and blocks interleukin 6 (IL 6), a cell signaling prot ein that is an important driver of inammatory response implicat ed in the transion from acute to chronic inammaon. In 2018, we and Bird Rock Bio mutually agreed to terminat e this ex clusive license agreement. F ollowing the terminaon of our agreement with Bird Rock Bio, we agreed a direct licensing agreement with Genor Biopharma Co. Ltd ( Genor Biopharma ) and Genor Biopharma connues to de - velop ARGX -109 for the Chinese market. 1.4.4 Our Strategic Partnership with LEO Pharma f or LP0145 In May 2015, we entered int o a collabora on agreement with LEO Pharma A/S ( LEO Pharma ) to develop and commercial - ize LP0145 for the treatmen t of dermatologic indicaons in volving inammaon (the LEO Pharma Collabora on Agree - ment ). LP0145 employs our SIMPLE Anbody™ technology and blocks the interleukin-22 receptor (IL-22R) in order to neu - traliz e the signaling of cytokines implicated in autoimmune diseases of the skin. Pursuant to the LEO Pharma Collaboraon Agreement, LE O Pharma funded more than half of all product development costs up to CT A approval of a rst product in a Phase 1 clinical trial, with our share of such costs capped, which was achieved in April 2018. Since then, LEO Pharma has been solely responsible f or funding the clinical development of the program. In May 2021, CT A approv al of a Phase 2a clinical trial for LP0145 was received. Up through specied periods, LEO Pharma may , agains t paymen t of an opon fee to us, exer cise an opon to obtain an ex clusive, worldwide license to further develop and commercializ e a product, f ollowing which LEO Pharma will assume full responsibility for the connued development, manuf acture and commercializaon of such product and be subject to diligence obligaons in respect of connuaon of developmen t and commercializ aon of such product. W e are eligible to receive addional developmen t, regulat ory and commercial milest one paymen ts in aggregat e amount of up to €120.0 mil - lion, as well as ered ro yales on product sales at percen tages ranging from the low single digits to the low teens, subject to customary reducons. 56 | Collaboration Agr eements Collaboration Agr eements | 57 PA RT I If the opon is not ex ercised, if LEO Pharma does not meet agreed development diligence obligaons within a specied me, or if the LEO Pharma Collaboraon Agreemen t is terminat ed other than for reasons of our breach or insolvency , we have the right to develop and commercializ e LP0145 alone, subject to our obligaon to pay LEO Pharma low-single digit percent age royales on net sales of any product covered by an y LEO Pharma patents, know -how or rights in research results gener ated under the collabor aon. Unless earlier terminated, the term of the LEO Pharma Collabora on Agreement ends upon the later of (i) the expir a - on of the opon period, (ii) the expir aon of the last license grant ed under the agreement, and (iii) the fullment of all payment oblig aons under the agreement. LEO Pharma may termina te the LEO Pharma Collabora on Agreemen t for an y reason upon prior wrien noce to us. LEO Pharma’ s roy alty payment obligaons e xpire, on a product -by-pr oduct and country -by-country basis, upon the later of (i) a me when no valid claims covering such product, and (ii) (a) in major mar - k et countries with no composion of maer patent co vering such product, the expir aon of the data ex clusivity period or (b) in countries that are not major mark et countries, a double-digit number of years aer the rs t commer cial sale of such product sold in that country . In 2021, we signed two amendments to the LEO Pharma Collaboraon Agreemen t, to ext end LEO Pharma’ s opon period with six months, to allow LEO Pharma to undertak e chemistry , manufacturing and contr ol (CMC) development work in advance of the exer cise by LEO Pharma of its opon, and updang the provisions reg arding the management of patents. 1.4.5 Our Research Collaboration with Staten f or STT -5058 In January 2015, we enter ed into a collabor aon agreement with Sta ten Biotechnology B. V . ( Staten ) t o develop and commer - cialize pr oducts in the area of dyslipidemia ther apy (the Staten Collabor aon Agreement ). The pares sought to disc over and charact erize anbodies ag ainst a human targe t with therapeuc relev ance in the eld of dyslipidemia and / or cardiov ascular disease and commence further resear ch programs f or targe ts with therapeuc relev ance in these areas. The rst r esearch progr am under the Staten Collabor aon Agreement idened S T T -5058 for the trea tment of dyslipidemia as the inial product candida te. STT -5058 employs our SIMPLE Anbody™ technology and blocks APOC3, a met abolic target in volved in tri - glyceride met abolism. Staten iniat ed dosing in rst -in-human clinical trial of STT -5058. Staten ex ercised its ex clusive opon to license STT -5058 in March 2017. Pursuant t o the Staten Collabor aon Agreement, the pares wer e and are jointly responsible f or conducng resear ch under a mutually agreed resear ch plan, with Staten r eimbursing us for all c osts of carrying out our research r esponsibilies under each resear ch program. Sta ten is responsible for addional clinic al development. On a resear ch program-by -research pr ogram basis, we hav e granted St aten an opon to obt ain an exclusive, worldwide, permanent license to r esearch, develop and commer cialize products iden ed in that program within a specied period of me. If Stat en exer cises this opon for a product (as it has f or STT -5058), it will be obligated to pa y us a percentag e of any payments pa yable to or on behalf of St aten’ s shareholder s in certain events, including the chang e of control, an y licensing , sale, disposion or similar transacon of such pr oduct, or otherwise from the research, de velopment or commercializ aon of that product, in each c ase, depending on the stage of dev elopment and ranging up to the low -twenes, subject to down ward proporonal adjustme nt in the event a poron of the proceeds fr om the applicable transacon does not include pa yment for such pr oduct candidate. Sta ten is under the diligence obliga on to connue to dev elop and commercialize a t least one product during the term of the St aten Collabora on Agreement. The Stat en Collaboraon Agreemen t ended automacally in 2021. In addion, we te rminated the research pr ogram in con - necon with the Stat en Collaboraon Agreemen t since no targets ha ve been selected within 24 months of the e ecve date of the relev ant research pr ogram agreement, other than the t arget selected f or the STT -5058 research progr am. 1.4.6 Our S trategic Collaboration with Shire In February 2012, we entered into a collabor aon agreement with Shire AG ( Shire , now known as Shire Internaonal GmbH) to discov er , develop and commercializ e novel human therapeutic antibodies against up to three targets to address diverse, rar e and unmet diseases (the Shire Collabora tion Agreement ). Pursuant to the Shire Collaboration Agreement, for any tar get selected for study under the collaboration, the parties work ed toge ther to conduct resear ch and development through discovery of antibodies with certain specificity for and functional activity against those targ ets. Up through a specied period, we hav e gran ted Shire an exclusive opon, agains t payment of a one-me opon fee, to obtain all right, tle and interest in any anbodies discov ered under a study and to obtain an exclusiv e, worldwide license under our intellectual property which is necessary to further develop and commercializ e products incorpor ang such anbodies. Following such ex ercise, Shire has the diligence obligaon to connue to develop and commercializ e at least one licensed product. Shire may e xercise ex clusive opons to develop and commercialize progr ams arising under our expanded agreement agains t an opon fee. In July 2018, Shire ex ercised such an exclusiv e opon to in-license an anbody discovered and developed using our licensed technologies, trig gering a milestone paymen t by Shire to us. In addion to opon fees, Shire is obligated to pa y us on a per-product basis upon achievement of specied develop - ment, regulat ory and commercial milestones and a percent age of net sales as a roy alty . Accordingly , we are eligible to receive pa yments in aggrega te amounts of up to $3.8 million, $4.5 million and $22.5 million, upon achievement of development, r egulatory and commer cial milestones, r especvely , for a product gener ated against one of the three inial targ ets named in the Shire Collaboraon Agreemen t. For products gener ated agains t addional targe ts, developmen t and regulatory milest one paymen ts remain the same, and we are eligible to receiv e paymen ts in aggregat e amounts of up to $60.0 million for achiev ement of commercial miles tones. The roy ales payable to us are ered, single digit and are subject to customary reducons. If Shire does not exer cise its opon with respect to any discovered anbody within a specied period, we are free to resear ch, develop and commercializ e anbodies in relaon to the applicable study tar get, subject to negoaon of a li - cense from Shire for the use of any anbodies that were discover ed during the applicable study , or any Shire conden al informa on, Shire intellectual property or Shire’ s inter est in any joint int ellectual property . If (a) Shire (i) does not exer - cise its opon, or (ii) ex ercises its opon but later abandons development of such anbody or (iii) the Shire Collabora on Agreement is terminat ed other than for our breach or insolvency , and (b) Shire is no longer pursuing a development progr am with respect to the applicable study targ et, we may elect to connue the developmen t of such anbody at our sole cost and expense, subject to negoaon of a license from Shire under which Shire will receive either specied royal - es, if we commercialize the progr am ourselves, or a percentage of sublicensing revenues, if the progr am is subsequently sublicensed to a third party . Unless earlier terminated, the collabora on term ends with the expiry of the last roy alty term under the Shire Collabora - on Agreement. Each ro yalty term expires, on a product -by-product and country -by-country basis, on the date that is the later of (i) such me as there are no valid claims covering such product or (ii) ten years aer the rst commer cial sale of such product sold in that country under the Shire Collabora on Agreement. Shire ma y terminate the agreement for any reason upon prior wrien noce to us. 1.4. 7 Our S trategic Partnership with Janssen for cusatuzumab In December 2018, we enter ed into a collaboraon agreement with Cilag, an aliate of Janssen Pharmaceucals, Inc. ( Janssen ), a subsidiary of Johnson & Johnson, to jointly develop and commercializ e cusatuzumab (the Janssen Collabora - on Agreement ). W e were noed of Janssen’ s decision to disconnue the collaboraon agr eement during a regularly scheduled steering commiee meeng on June 4, 2021. Following termina on of our collaboraon, we hav e elected that Cilag connue to opera onally support the treatment and follow -up of paents enrolle d in ongoing cusatuzumab clinical trials. See secon 1.3.5 “Immunology Innovaon Progr am” . 58 | Collaboration Agr eements Collaboration Agr eements | 59 PA RT I 1.5 License Agr eements W e are party to sever al license agreements under which we license patents, paten t applicaons and other intellectual property to third pares. W e have also entered into sev eral license agreements under which we license patents, pat ent applicaons and other intellectual property from third pares. License agreements can rela te to research and develop - ment and/or commer cializaon of the relev ant product candidates (and technologies) or products. The licensed intel - lectual property cover s some of our product candidates and some of the Fc engineering technologies that we use. Some of these licenses impose various diligence and nancial payment obliga ons on us. We expect to con nue to enter int o these types of license agreements in the future. 1.5. 1 Our Exclusiv e License with Elektrofi for efgartigimod In April 2021, we enter ed into a collaboraon and license agreement with Elektro, to explore new SC formula ons for therapeuc pr oducts directed at the human FcRn, including efg argimod, and up to one addional target (the Elektro Agreement ). The Elektro-enabled f ormulaons are aimed to promot e addional oponality for paents through at - home and self-administr aon capabilies. Under the terms of the Elektro Agreemen t, we will make an upfr ont payment and future milestones payments acr oss both targe ts pending achievement of pre-dened developmen t, regulatory , and commercial milest ones. Elektr o will also receive a mid-single digit royalty on sales of commercializ ed products. 1.5.2 Our Non-Ex clusive Research License with Chugai for SMART -lg® and A CT -lg® In September 2020, we entered into a non-ex clusive research license and opon agreement with Chugai Pharmaceucal Co., Ltd. ( Chugai ) allowing us access Chugai’ s SMART -lg® and ACT -lg® Fc engineering technologies for conducng feasi - bility studies. These technologies are designed to enable us to expand the therapeuc index of our product candidates, which is the ra o between to xic and therapeuc dose, by potenally modifying their half-lif e, ssue penetra on, ra te of disease targe t clearance and potency . 1.5.3 Our Non-exclusiv e License with the Clayton Foundation for DHS mutations In October 2020, we entered into a non-ex clusive research agreemen t with the Clayton Foundaon rela ng to the non-ex clusive in-license for the Clayton Foundaon’ s proprietary DHS mutaons to extend the serum half-lif e of thera - peuc candidates. 1.5.4 Our Exclusiv e License with Halozyme f or ENHANZE® In February 2019, we entered into an in-license agreement with Halozyme Inc. ( Halozyme ) for the use of certain patents, materials and know-ho w owned by Halozyme and relang to its ENHANZE® technology ( ENHANZE® ), f or applicaon in the eld of prev enon and trea tment of human diseases (the ENHANZE® License Agreement ). Pursuant to the EN - HANZE® License Agreement, we were gran ted exclusiv e rights to apply ENHANZE® to biologic products ag ainst pre-speci - ed targe ts, in order to research, dev elop and commercializ e SC formula ons of our therapeuc anbody -based product candidat es. Our rst ther apeuc tar get for which we have received an ex clusive license from Halozyme is FcRn, which allows us to apply ENHANZE® to efg argimod and any other product candidat es selecve and specic for FcRn. Moreov er , the breadth of our exclusiv e license to FcRn precludes either Halozyme itself or any of its current or future partners fr om ulizing ENHANZE® in the cont ext of an FcRn-tar geted product. Our second therapeuc tar get for which we received an ex clusive license from Halozyme is human C2 associated with the product candida te ARGX-117, which is being developed to treat sever e autoimmune diseases. Pursuant to the ENHANZE® License Agreement, we also have the right to nominate future targ ets for an exclusive ENHANZE® license if the target in queson has not already been licensed by Halozyme or is not already being pursued by Halozyme. From the e ecve date of the ENHANZE® License Agreement, we hav e a four -year period in which to conduct resear ch and preclinical studies on other targe t-specic molecules in combinaon with EN - HANZE® and may nominate a maximum of one addional targ et we hav e not yet nominated f or an ex clusive commercial license during the four -year term. In return for achieving the rst paen t dosed for ef gargimod -113 Ph3 for ITP we made a $15 million milestone payment in February 2021. Upon nominaon of any future tar get for an exclusiv e commer cializaon license and conrma on by Halozyme that such a license is av ailable, we will pay $10 million to Halozyme per targe t. W e will be obligat ed to pay clin - ical development, re gulatory and commer cial milestones tot aling $160 million for the rst product that uses ENHANZE® and is specic for a given tar get. Throughout the term of the ENHANZE® License Agreement, we must provide Halozyme on an annual basis a guidance forecas t seng out all projected milestone paymen ts f or products for the f ollowing four calendar quarters. W e are also obligated to pa y Halozyme a percen tage of net sales as a royalty of any licensed prod - uct that uses ENHANZE®. This roy alty varies with net sales volume, ranging from the low to mid-single digits, and it is reduced by a maximum of 50% if following ten year s from the rst commercial sale of the product in a country , the last valid claim within the licensed ENHANZE® patent(s) expir es. We hav e diligence obliga ons with respect to the connu - aon of development and commercializ aon of product candida tes, but we are not obligat ed to ulize ENHANZE® for every product candidat e directed to a given exclusive t arget(s). In October 2020, we have expanded our collabora on with Halozyme for ENHANZE® drug delivery technology to include three addional ex clusive targets upon nominaon bringing the total to six potenal targe ts. Pursuant to the ENHANZE® License Agreement, we have the right to gran t sublicenses to our subsidiaries and to third pares both for research/pr eclinical work (for example, to subcon tractors) and for dev elopment and commercializ aon. Halozyme has no rights to any of our current or future product candidates which use ENHANZE®. Halozyme provides ded - icat ed specialist support to us which it has accrued over ten years of licensing ENHANZE® to its collabor ators. W e may terminate the ENHANZE® License Agreement at any me, either in its enrety or on a target -by-t arget basis, by sending Halozyme prior wrien noce. Absent early terminaon, the ENHANZE® License Agreement will automacally expir e upon the expiry of our roy alty payment obligaons under the agreement. In the event the ENHANZE® License Agreement is terminat ed f or any reason, the license grant ed to us would terminate but Haloz yme would gran t our sublicensees a direct license following such terminaon. In the even t the ENHANZE® License Agreement is terminated other than for our breach, we would retain the right to sell licensed products then on hand for a certain period of me post -terminaon. As also set out in chapter 4 “Corporate Gov ernance” , our non-ex ecuve director James M. Daly is also a non-execuv e member of the board of director s of Halozyme. Despite this, our entering into the ENHANZE® License Agreement with Halozyme was not a related party tr ansacon in accordance with IAS 24 - Relat ed Party Disclosures, since Mr . Daly , in his role as non-ex ecuve director , does not contr ol or have signican t inuence over arg enx or Halozyme. Mr . Daly did not parcipate in any discussions and decision making relang to the ENHANZE® License Agreement. Consequently , no further disclosures regar ding Halozyme have been added in chapter 6.11.2 – Relat ed Party T ransacons. 1.5.5 Our Exclusiv e License with AgomAb for ARGX -114 ( AGMB- 101) In March 2019, we entered into an ex clusive out-license with AgomAb Therapeucs NV ( AgomAb ) for the use of certain paten ts rights relang to our propriet ary suite of technologies for the development and commercializ aon of a series of agonisc an-MET SIMPLE Anbodies, including ARGX-114 (AGMB-101), an HFG-mimec SIMPLE Anbody™ directed agains t the MET receptor . AgomAb is require d to use commercially reasonable e orts to develop and commer cialize at least one licensed product. In connecon with our entry into this agreement, we received a prot -sharing cercate which entles us to 20% of all distribuons to AgomAb’ s shareholders (which shall be reduced to 10% following the ling of an invesg aonal new drug ( IND ) and is subject to further adjustment upon the occurrence of certain nancings). 60 | License Agreements License Agr eements | 61 PA RT I Upon the occurrence of a qualied inial public o er of AgomAb, the prot-sharing cerca te will automacally be conv erted into the equivalent number of ordinary shares in AgomAb. This agreement is subject to mutual terminaon for mat erial breach or insolvency and automacally expir es upon the expira on of the last to expire of our licensed paten t rights. 1.5.6 Our Ex clusive License with Broteio for ARGX -117 In March 2017, we entered into a collabor aon with Broteio in connecon with our immunology innovaon progr am, to develop an anbody against a novel tar get in the complement cascade, ARGX -117 (the Brot eio Agreement ). Under the terms of the Broteio Agreement, we and Brot eio jointly developed the complement -targe ted anbody to seek to estab - lish preclinical proof -of-concep t using our proprietary suite of technologies. Upon successful compleon of these studies, we ex ercised an exclusiv e opon to in-license the program in March 2018 and assumed responsibility f or further devel - opment and commercializ aon. Pursuant to the Broteio Agreement, we are oblig ated to make milest one payments upon the occurrence of certain development milestones (up to an aggregat e of €4.0 million), commercializa on milestones (up to an ag greg ate of €10.0 million) and pay ered roy ales on net sales in the low single digits. We may termina te the Broteio Agr eement for convenience upon 90 days prior wrien noce. The Broteio Agreement is also subject to mutual terminaon f or material breach or insolvency and automacally e xpires upon the expir aon of our nancial obligaons thereunder . 1.5. 7 Our Exclusive License with VIB for ARGX -118 In November 2016, we entered into a collabor aon under our immunology innovaon progr am with VIB to develop anbodies agains t Galecn-10, the protein of Charcot -Ley-den Cryst als, which play a major role in severe asthma and the persis tence of mucus plugs, including ARGX-118 (the VIB Agreement ). Pursuan t to the VIB Agreement, we and VIB jointly developed anbodies agains t Galecn-10 using our proprietary suite of technologies. Upon successful compleon of this inial research, we ex ercised an ex clusive opon to in-license the program and assumed responsibility for further devel - opment and commercializ aon. Under the VIB Agreement, including as amended in November 2018, we are obligated to mak e milestone pa yments upon the occurrence of certain development milest ones (up to an ag greg ate of €4.0 million), commercializ aon milestones (up to an ag greg ate of €11.0 million) and pay ered roy ales on net sales in the low single digits. We ma y termina te the VIB Agreement for con venience upon 90 day s prior wrien noce. The VIB Agreement is also subject to mutual terminaon f or material breach, insolvency or certain patent challenges and automacally expir es upon the expiraon of VIB’ s licensed patent rights. 1.5.8 Our Exclusiv e License with the University of T exas for NHance® and ABDE G™ In February 2012, we entered into an ex clusive in-license with The Board of Regents of The University of T ex as Sy stem ( UoT ) for use of certain pat ents rights relang to the NHance® pla orm for an y use worldwide (the UoT Agreement ). The UoT Agreement was amended on December 23, 2014 to also include certain addional patent rights rela ng to the ABDEG™ pla orm. Upon commercializ aon of any of our products that use the in-licensed paten t rights, we will be obli - ga ted to pay UoT a percent age of net sales as a royalty unl the expira on of any paten ts cov ering the product. This roy - alty varies with net sales volume and is subject to an adjustment f or roy ales we receive from a sublicensee of our rights under the UoT Agreemen t, but in any event does not exceed 1%. In addion, we must make annual license maintenance payments to UoT unl terminaon of the UoT Agreement and we have assumed certain development and commercial milestone pa yment and reimbur sement obligaons W e also have diligence requir ements with respect to development and commercializ aon of products which use the in-licensed paten t rights. Pursuant to the UoT Agreement, we ma y gran t sublicenses to third pares. If we receive any non-roy alty income in connecon with such sublicenses, we must pay UoT a percent age of such income varying from low-middle single digits to middle-upper single digits depending on the nature of the sublicense. Such fees are waived if a sublicensee agrees to pay the milestone paymen ts as set forth in the UoT Agreement. W e may unilaterally termina te the UoT Agreement f or con venience upon prior wrien noce. Absent early terminaon, the UoT Agreement will automacally expir e upon the expira on of all issued paten ts and led patent applicaons within the patent rights cov ered by the UoT Agreement. Our roy alty paymen t obliga ons expir e, on a product -by-product and country -by-country basis, at such me as there are no valid claims covering such product. 1.5.9 Our Non-Ex clusive License with BioWa for POTELLIGENT® In October 2010, we entered into a non-ex clusive in-license agreement with BioWa, Inc. ( BioWa ) f or use of certain paten ts and know-how owned by BioW a and relang to its POTELLIGENT® pla orm technology , for use in the eld of prev enon and treatmen t of human diseases (the POTELLIGENT® License Agreement ). Pursuan t to the POTELLIGENT® License Agreement, we are gr anted a non-exclusive right to use PO TELLIGENT® to resear ch, develop and commercializ e anbodies and products containing such anbodies using POTELLIGENT®. BioW a retains a right of rst negoaon f or the ex clusive right to develop and commercialize, in certain countries only , any product we develop using POTELLIGENT®. W e successfully applied POTELLIGENT® to cusatuzumab, an an-CD70 mAb, and ARGX -111, an an-c-Met mAb, under the POTELLIGENT® License Agreemen t. Upon commercializ aon of our products developed using POTELLIGENT®, we will be obligat ed to pay BioW a a percentage of net sales of a licensed product as a roy alty . This royalty varies with net sales volume, ranging in the low single digits, and it is reduced by half if during the following ten year s from the rst commercial sale of the product in a country the last valid claim within the licensed paten t(s) that cover s the product e xpires or ends. In addion, we must make annual resear ch license maintenance paymen ts which cease with commencement of our roy alty paymen ts to BioW a. We hav e diligence requiremen ts with respect to the connuaon of development and commercializ aon of products. We ha ve also assumed certain development, regulat or y and commercial milestone pa yment obligaons and must report on our progress tow ard achieving these milest ones on an annual basis. Milestones are to be paid on a commer cial tar - get -by-commer cial target basis, and we are obligat ed to mak e milestone payments in aggregat e amounts of up to $36.0 million per commercial targ et should we achieve annual global sales of over $1.0 billion. Pursuant to the PO TELLIGENT® License Agreement, we hav e the right to grant sublicenses to third pares. W e may terminate the POTELLIGENT® License Agreement at an y me by sending BioWa prior wrien noce. Absent early terminaon, the POTELLIGEN T® License Agreement will automacally e xpire upon the expiry of our royalty obliga ons under the POTELLIGENT® License Agreement. In the event the POTELLIGENT® License Agreement is terminat ed for an y reason, the license granted to us would terminat e but BioW a would gran t our sublicensees a direct license following such terminaon. In the event the POTELLIGENT® License Agreement is terminat ed other than for our breach or insolvency , we would ret ain the right to sell licensed products then on hand for a certain period of me post -terminaon. 1.5. 10 Our Non-Exclusiv e Licenses with BioW a and Lonza for POTELLIGENT® CHOK1SV T o scale up producon of our product candidat es cusatuzumab and ARGX -111 for clinical trial and commercial supply , we required a license to a GMP cell line in which POTELLIGENT® anbodies could be expressed. This cell line, POTELLI - GENT® CHOK1SV , was jointly developed by BioWa and Lonza. In December 2013 and August 2014, respecvely , we en - tered int o non-ex clusive commercial in-license agreements f or cusatuzumab and ARGX -111 with BioW a and Lonza Sales AG (Lonza) for the use of certain patents and know-how r elang to the POTELLIGENT® CHOK1SV technology , which is a combinaon of Lonza’ s GS sy stem and BioWa’ s POTELLIGENT® plaorm technology , for use in the eld of preven on and treatmen t of human diseases. Under the terms of each commer cial license, we received a non-ex clusive right to resear ch, develop and commercializ e products containing an anbody genera ted specically against a specic target using POTELLIGENT® CHOK1SV , namely the target CD70 in the case of cusatuzumab and c-Met in the case of ARGX -111. Both targe ts are designated as reserved tar gets under the PO TELLIGENT® License Agreement, which connues to gov ern our research, developmen t and commercializ aon of products ulizing PO TELLIGENT®. Under the terms of each commer - cial license, BioWa ret ains a right of rst negoa on for the ex clusive right to develop and commercializ e, in certain coun - tries only , any product we dev elop using POTELLIGENT® CHOK1SV . This right of rst negoa on is not applicable in cases 62 | License Agreements License Agreements | 63 PA RT I where we intend to gr ant a global license to a third party to develop and commercializ e a product. BioWa ret ains a right of rst negoaon f or the ex clusive right to develop and commercialize our an-c-Met anbody ARGX -111, in certain countries only . Upon commercializ aon of our products developed using POTELLIGENT® CHOK1SV , we will be obligated to pay both Bio - W a and Lonza a percent age of net sales as a royalty . We are r equired to pay a royalty to BioW a on net sales for an y specif - ic licensed product under only one license – either the POTELLIGENT® License Agreement or the agreement in relaon to POTELLIGENT® CHOK1SV , but not both. The BioW a royalty is ered, ranging in the low single digits and is reduced by half if during the follo wing ten year s from the rs t commercial sale of the product in a country the last valid claim within the licensed BioWa pat ent(s) that covers the product expir es or ends. The Lonza royalty v aries based on whether the product is manufactured by Lonza, us or a third party , but in any event is in the low single digits and is reduced by half if during the following ten year s from the rs t commer cial sale of the product in a country the last valid claim within the licensed Lonza paten t(s) that cov ers the product expires or ends. In addion, we must mak e annual commercial license mainte - nance payments to BioW a on a per product basis which cease with commencement of payment of the BioWa ro yalty for the respecve product, and annual payments to Lonza in the event that any pr oduct is manufactur ed by a party other than Lonza, us or one of our aliates or stra tegic partners named in the agreement. W e have assumed certain development, regulat ory and commercial milestone pa yment obligaons to both BioWa and Lonza and must report on our progress towar d achieving these milestones on an annual basis. W e are required to pay such milestones to BioW a under only one license – either the POTELLIGENT® License Agreement or the agreement in relaon to PO TELLIGENT® CHOK1SV , but not both. Pa yments related to the development and commercializ aon of cusatuzumab and ARGX -111 are foreseen under their respecve PO TELLIGENT® CHOK1SV agreements. Milest ones are to be paid on a product -by-pr oduct basis, and we are obligated to mak e development, regulat ory and commercial milestone payments to BioW a in ag greg ate amounts of up to $36.0 million per product should we achieve global annual sales of $1.0 billion. We are oblig ated to make developmen t, regula tory and commercial milest one paymen ts to Lonza per prod - uct, also depending on such product being manufactured by Lonza, us or one of our aliates or str ategic partners or otherwise. Under the terms of both cusatuzumab and ARGX -111 commercial licenses, we have the right to grant sublicenses to cer - tain pre-appr oved third pares, but otherwise must obtain BioW a and Lonza’ s prior wrien consent. W e may terminate any of the non-ex clusive commercial license agreements at any me by sending BioWa and/or Lonza prior wrien noce. Absent early terminaon, the agreements will automacally expire upon the expiry of our royalty obligaons under the respecve agreemen t. In the event an agreement is terminated f or any reason, the license gran ted to us would terminate but BioW a and Lonza would gran t our respecve sublicensees a direct license following such terminaon. In the event an agreement is terminat ed other than for our failure to mak e milestone or royalty paymen ts, we would ret ain the right to sell the respecve products then on hand for a certain period of me post-termina on. Our roy alty payment obligaons expir e, on a product -by-pr oduct and country-b y-country basis, on the date that is the later of (i) ten years a er the rst commer cial sale of such product sold in that country under the agreement or (ii) such me as there are no valid claims covering such product. 1.5. 11 Our non-e xclusive license with Lonza for Multi-product GS Xceed-Lic ense On February 4, 2015 we enter ed into a non-exclusive mul-pr oduct in-license agreement with Lonza (the Mul-Product Agreement ) f or use of Lonza’ s propriet ary glutamine syn thetase gene expression sy stem known as GS Xceed™ consisng of Chinese hamster ovary cell line and the vector s for the manufacturing of drug substance (the Sys tem). The System is used for the manufacturing of ef gargimod, cusatuzumab ARGX -117, ARGX-119 and LP0145. Pursuant to the Mul-Product Agreemen t, we have the right to grant sublicenses to certain pre-approv ed third pares without prior wrien consent of Lonza, but other wise must obtain Lonza’ s prior wrien consent. W e have assumed certain development, regulat ory and commercial milestone pa yment obligaons to Lonza. W e are require d to pay such milestones only in respect of the rst product manufactur ed using the Syst em. W e are obligated to mak e developmen t, regulat ory and commercial milestone paymen ts to Lonza in aggrega te amounts of up to £575,000 for the rst product manuf actured by Lonza, us or one of our aliates or strat egic partners. Through December 31, 2021, we have paid Lonza an aggrega te amount of £0.4 million, which includes milestone pa yments made under the Mul-Product Agreement. Upon commercializ aon of our products developed using the Sys tem, we will be obligat ed to pay Lonz a a percent age of net sales as a royalty for each product manufactur ed. The Lonza ro yalty is ered, ranging in the low single digits and is reduced by half if the product in a country is not protected by a valid claim. W e may terminate the Mul-Product Agreement on a product -by-pr oduct basis by giving Lonza prior wrien noce. Lonza may termina te the Mul-Product Agreement solely in case of breach or insolvency events. Absent early termina - on, the Mul-Product Agreement will automacally expir e upon the expiry of the last valid claim for such product. W e or our strat egic partners would re tain the right to sell the respecve products then on hand post-t erminaon. 1.5. 12 Our Collaboration with UCL and Sopartec f or GARP In January 2013, we enter ed into a collabor aon and ex clusive product license agreement with Universit é Catholique de Louvain ( UCL ) and its technology transf er company Sopart ec S.A. (Sopartec) to discover and develop novel human thera - peuc anbodies against GARP (the GARP Agreement ). Pursuant to the GARP Agreement, each party was responsible for all of its own costs and in connecon with the acvies assigned to it under a mutually agreed research plan. In January 2015, we ex ercised the opon we had been grant ed under the GARP Agreement to enter into an ex clusive, worldwide commercial in-license for use of certain GARP-r elated intellectual property rights owned by UCL and the Ludwig Instute for Cancer Resear ch to further develop and commercializ e licensed products, including the GARP-neu - tralizing anbody ARGX -115 (ABBV -151) which was discovered under the original collaboraon (the GARP License ) . Upon the expiraon of the GARP Agreement, the GARP License would become a fully paid up, perpetual worldwide ex clusive license under the GARP intellectual property for any purpose, subject to UCL ’ s retenon of non-commercial resear ch rights. Pursuant to the GARP License, we may grant sublicenses to third pares and aliates of such third pares. From any income we receive in connecon with these sublicenses, such as in connecon with AbbVie Collaboraon Agreemen t, we must pay Sopartec a percent age of that income in the lower teen digit range. Roy alty payment obligaons expir e on a product -by-product and country -by-coun try basis when there are no valid claims covering the ARGX-115 (ABB V-151) product. W e also hav e diligence obliga ons with respect to the connued development and commercializ aon of ARGX- 115 (ABBV -151) products. 1.5. 13 Our Ex clusive License with NYU Lang one Health and LUMC f or ARGX- 119 In 2019 and 2020, we enter ed into collabor aon and exclusive license agreements with NYU Langone Health and LUMC under our immunology innova on progr am to develop anbodies targeng the MuSK, for the treatmen t neuromuscular diseases, which play a major role at the neuromuscular juncon (the NYU and LUMC Agr eements ). Pursuant to the NYU and LUMC Agreements, we, NYU and LUMC jointly developed anbodies ag ainst MuSK using our proprietary suite of technologies. Under the NYU and LUMC Agreemen ts, as amended, we are obligat ed to mak e milestone pa yments upon the occurrence of certain development milestones, commer cializaon milestones and pay ered r oyales on net sales in the low single digits. 64 | License Agreements License Agreements | 65 PA RT I 1.6 Distribution Agr eements 1.6. 1 Our Ex clusive Distribution Agreement with Medison for efgartigimod In October 2021, we announced an ex clusive distribuon agreement with Medison to commercialize ef gargimod for gMG in Israel; under the agreemen t, Medison will also be responsible for seeking requisit e regulat ory approv als. 1.6.2 Our Exclusiv e Distribution Agreement with Genpharm for efgartigimod On January 18, 2022, we entered int o a partnership agreement with Genpharm Services FZ-LLC ( Genpharm ), under which Genpharm shall purchase VYVGART™ from us for the resale in the Gulf Coopera on Council ( GCC ) on an ex clusive basis for Genpharm’ s own account and own name (the Genpharm Agreement ). 1. 7 Manufacturing and Suppl y W e ulize third-party contr act manufactur ers who act in accordance with the FDA ’ s good laboratory pr acces ( GLP ) and current good manuf acturing pracces ( cGMP ) for the manufactur e of drug substance and drug product. At the date of this URD, we contr act with Lonza based in Slough, United Kingdom, Portsmouth, U.S. and Singapore f or all acvies relat - ing to the development of our cell banks, development of our manufacturing processes and the manufacturing of all drug subst ance, thereby using validat ed and scalable sys tems broadly accepted in our industry . We use addional contr act manufactur ers to ll, label, packag e, stor e and distribute in vesgaonal drug products. E fgargimod, cusatuz umab, ARGX -111, ARGX -117, ARGX-119 and LP0145 are each manufactured using the Syst em, which includes an industry-st andard mammalian cell culture of a Chinese hamster ovary cell line that expr esses the product, follow ed by mulple puricaon and ltraon st eps typically used in producing monoclonal anbodies. See also secon 1.5.11 “Our non-ex clusive license with Lonza for Mul-product GS Xceed-License” . All of our anbodies are manuf actured by starng with cells, which are stor ed in a cell bank. W e have one master cell bank for each product manufactur ed in accordance with cGMP . Half of each master cell bank is stored at a separat e site to ensure that, in case of a cat astrophic event at one site, sucient vials of the master cell bank would remain at the alternav e stor age site to connue manufacturing. 1.8 Intellectual Pr operty 1.8. 1 Introduction W e strive to protect the proprietary technologies that we believ e are important to our business, including pursuing and maintaining pat ent protecon intended to cover the pla orm technologies incorporated int o, or used to produce, our product candidat es, the composions of maer of our product candidates and their methods of use, as well as other inven ons that are importan t to our business. In addion to paten t prot econ, we also rely on trademarks and trade secrets to prot ect aspects of our business that are not amenable to, or that we do not consider appropriate for , patent protecon, including certain aspects of our llama immunizaon and anbody anity matura on approaches. 66 | Distribution Agr eements Our commercial success depends in part upon our ability to obtain and maintain pat ent and other propriet ar y protecon for commer cially importan t technologies, inv enons and know-how r elated to our business, def end and enfor ce our intellectual property rights, parcularly our patent rights, preserv e the condenality of our trade secrets and operat e without infringing valid and enforceable int ellectual property rights of others. Specically , we are materially dependent on patent and other proprietary prot econ related to our core pla orm technologies, described in chapter 1.8.2 –Plat - form T echnologies, and our product candidates, as described in chapter 1.8.3 – Product Candidates: Our Wholly-Owned Progr ams and chapter 1.8.4 – Product Candidates: Our Partner ed Progr ams. The patent posions for biotechnology companies lik e us are gener ally uncertain and can involv e complex legal, scienc and factual issues. In addion, the cover age claimed in a patent applica on can be signicantly reduced bef ore a paten t is issued, and its scope can be reinterpr eted and even challenged aer issuance. As a result, we cannot guarant ee that any of our plaorm technologies and product candidat es will be protectable or remain prot ected by enforceable pat ents. W e cannot predict whether the patent applica ons we are curren tly pursuing will issue as patents in any parcular juris - dicon or whether the claims of any issued patents will provide sucient propriet ary prot econ from compet ors. Any paten ts that we hold may be challenged, circumv ented or invalidat ed by third pares. As of January 1, 2022, our patent porolio (which includes both proprie tary and in-licensed patent f amilies) comprises appro ximately 300 granted pat ents and appro ximately 308 pending patent applicaons, including appro ximately 35 issued U.S. patents, appr oximately 15 gran ted European patents and appro ximately 250 issued paten ts in other jurisdicons. 1.8.2 Platform T echnologies With regar d to our pla orm technologies, we own or have intellectual pr operty rights directed to our SIMPLE Anbody™ discovery pla orm, the ABDEG™ and NHance® plaorms and the POTELLIGENT® pla orm. With regar d to our SIMPLE Anbody™ discovery plaorm, we own a patent f amily containing six issued U.S. patents with composion of maer claims directed to chimeric anbodies containing variable domains comprising CDRs obtained from con venonal heterot etrameric llama anbodies fused to one or more domains of a human anbody , polynucle - odes encoding such chimeric anbodies, libraries of expr ession vect ors comprising cDNA sequences encoding camelid anbodies, method claims directed to the prepara on of such chimeric anbodies, and methods of modulang the bind - ing of a human targ et angen to its ligand or recept or by administering such a chimeric anbody . The U.S. patents are expected to e xpire in 2029 to 2033. In addion, the patent f amily cont ains paten ts that have been granted in Austr alia, Canada, Europe, the United Kingdom, Israel, India and Japan, and pending applicaons in China and Japan (divisional). In addion, we have a second patent family con taining patents gran ted in the United States (two), Austr alia, Europe, the United Kingdom, Israel, India and Japan, and one patent applicaon pending in Canada, with composion of maer claims directed to a chimeric anbody containing variable regions with CDRs derived from a llama anbody and certain amino acid substuons corresponding to amino acids present in a human germline variable region. The grant ed paten ts have a basic patent e xpiry date in 2031. With regar d to the ABDEG™ pla orm, we co-own with, and exclusiv ely license from, the University of T ex as, a patent f am - ily containing a gran ted U.S. patent with composion of maer claims directed to an isolated FcRn-ant agonist comprising a variant immunoglobulin Fc region having an increased anity for an Fc gamma recep tor relave to a wild-type IgG1 Fc region, and method of use claims directed to a method of using such an FcRn-antag onist to treat certain anbody medi - ated disorder s. The U.S. paren t pate nt expires in 2036 (including paten t term adjustment). In addion, in this patent fam - ily , we also have gr anted patents in Austr alia, China, Eurasia, Europe, Japan, Macao , Mexic o, New Zealand and Singapore, and we have 13 patent applica ons pending in U.S. (divisional) and various other countries and regions in North America, South America, Europe, Asia and South Africa. The grant ed paten ts hav e a basic expiry date in 2034. In addion, we own a second patent family con taining pending patent applicaons in the United States and 15 other jurisdicons with claims directed to methods of reducing the serum levels of an Fc-c ontaining agent in a subject by administering to the subject an FcRn-antag onist containing a variant immunoglobulin Fc region cont aining certain amino acid substuons. A U.S. paten t, if issued from the U.S. patent applicaon, is expect ed to expir e in 2036. PA RT I Intellectual Pr operty | 67 68 | Intellectual Pr operty With regar d to the NHance® plaorm, we hav e exclusively licensed from the University of T ex as two U.S. patents with composion of maer claims directed to an IgG molecule comprising a variant human Fc domain, and method of use claims directed to a method of blocking FcRn funcon in a subject by providing to the subject such an IgG molecule. The U.S. pat ents are expected to expire earliest in 2027 to 2028. The patent family also includes a granted European pat ent. With regar d to the POTELLIGENT® pla orm, which is currently used in the producon of our cusatuzumab product candi - date, we hav e non-exclusively licensed from BioW a certain intellectual property rights that relat e to di erent aspects of the POTELLIGENT® pla orm. 1.8.3 Product Candidates: Our Wholly-Owned Pr ograms Ef gargimod With regar d to efg argimod, ef gargimod incorpora tes the ABDEG™ plaorm technology . Our ARGX -117 Product Candidate With regar d to the ARGX -117 product candidate, we own or have rights in three paten t families (including one in-licensed paten t family from Br oteio) with sever al granted pat ents and pending patent applica ons in mulple jurisdicons in North America, South America, Europe and Asia, directed to composion of maer claims and method of treatment claims. The in-licensed paten t family from Broteio has grant ed patents in Australia, China, Europe, Hong Kong, Mexico and U.S. (two issued patents in U.S.), which have a basic expiry date in 2034. The other two patent f amilies have basic expiry dates in 2039 and 2040. Our ARGX -119 Product Candidate With regar d to the ARGX -119 product candidate, we in-licensed two paten t families from/with NYU Langone Health, a U.S. medical center based in New Y ork, and three patent familie s from/with the Leiden University Medical Center ( LUMC ), a Dutch University Hospital based in Leiden, with one U.S. gr anted patent and sever al pending applicaons in mulple jurisdicons. Our ARGX -118 Product Candidate With reg ard to the ARGX -118 product candidate, we co-own one pat ent family with VIB vzw (VIB), an inammaon re - search cent er in Ghent, Brussels, and Universit eit Gent, with one U.S. grant ed paten t and pending paten t applicaons in mulple jurisdicons in North America, South America, Europe and Asia. The patent family has a basic expiry dat e in 2039. Our Cusatuzumab Product Candidate With regar d to the cusatuzumab product candidat e, we have four issued U.S. paten ts, and one allowed U.S. patent applicaon, including, one U.S. granted pat ent with composion of maer claims directed to the cusatuzumab anbody , one U.S. gran ted patent with claims directed to the epitope cusatuzumab binds to, one U.S. grant ed paten t with claims directed to a polynucleode that encodes anbodies that bind to the epitope cusatuzumab binds to , and, one U.S. grant - ed patent and one U.S. allowed paten t applicaon with method of use claims directed to the trea tment of cancer and immunological disorder s with the cusatuzumab anbody . The issued U.S. patents expir e in 2032 and 2033, without taking a potenal paten t term extension int o account. In addion, we have pat ents that have been granted in Austr alia, China, Europe, Indonesia, Israel, India, Japan and Russia and patent applica ons pending in Brazil and Canada. Cusatuzumab incorpor ates or employs the SIMPLE Anbody™ and POTELLIGENT® pla orm technologies. 1.8.4 Product Candidates: Our Partner ed Programs Our ARGX -115 (ABBV -151) Product Candidate With regar d to the ARGX -115 (ABBV -151) product candidate, we co-own with, and ex clusively license from, the Ludwig Instute f or Cancer Resear ch and Universit é Catholique de Louvain, a grant ed U.S. pat ent with composion of maer claims directed to an anbody that binds GARP the presence of TGF-β and method of use claims directed to the use of such an anbody in the treatment of cancer . The U.S. patent has a basic expiry date in 2034, without taking a potenal paten t term extension int o account. In addion, the patent family con tains at least 18 paten t applicaons pending in U.S. (connua on-in-part) and various other countries and regions in North America, South America, Europe and Asia. Further , we co-own with, and ex clusively license from, the Université Catholique de Louvain two more paten t families with composion of maer claims directed to an anbody that binds an epitope of a complex formed by human GARP and TGF-β as well as method of use claims directed to the use of such an anbody in the treatmen t of cancer . These two paten t families ha ve basic expiry dates in 2036 and 2038. Furthermore, ARGX-115 (ABBV -151) incorporates or employs the SIMPLE Anbody™ plaorm technology . Our ARGX -109 Product Candidate With regar d to the ARGX -109 product candidate, we hav e one patent f amily with composion of maer claims directed to ARGX -109. This patent family has grant ed paten ts i n Austr alia, Canada, Chile, China, Colombia, Hong Kong, Israel, Japan, Mexico , New Zealand, Russia, U.S. and South Africa, and pending paten t applicaons in Brazil, India and U.S. (di - visional applicaon). The patent family has a basic expiry date in 2033. Furthermore, ARGX -109 incorpor ates or employs the SIMPLE Anbody™ plaorm technology and the NHance® pla orm technology . Our ARGX -112 (LP-0145) Product Candidat e With regar d to the ARGX -112 (LP-0145) product candida te, we have one patent family with composion of maer claims directed to an anbody that binds human IL-22R. The patent f amily has a basic expiry date in 2037. Furthermore, ARGX - 112 (LP-0145) incorpor ates the SIMPLE Anbody™ plaorm technology . The term of individual paten ts depends upon the legal term of the paten ts in the countries in which they are obtained. In most countries in which we le, the patent term is 20 years fr om the earliest date of ling a non-provisional patent applicaon. In the U.S., the term of a patent cov ering an FDA-appr oved drug may be eligible for a paten t term ext ension under the Hatch-W axman Act as compensaon for the loss of pat ent term during the FDA regulat or y review process. The period of extension ma y be up to ve years beyond the expir aon of the paten t but cannot extend the remaining term of a patent beyond a total of 14 years from the date of product appr oval. Only one paten t among those eligible for an extension may be extended. Similar provisions are av ailable in Europe and in certain other jurisdicons to ext end the term of a patent that cover s an approv ed drug. It is possible that issued U.S. patents co vering each of our product candidates may be entled to paten t term extensions. If our product candidat es receive FD A approv al, we intend to apply for patent term extensions, if av ailable, to extend the term of paten ts that cover the appro ved product candidates. W e also intend to seek patent term ext ensions in any jurisdicons where they are av ailable, howev er , there is no guarantee that the appli - cable authories, including the FDA, will agree with our assessment of whether such extensions should be granted, and if gran ted, the length of such extensions. 1.8.5 T rade Secret Protection In addion to patent protecon, we also rely on trade secre t prot econ for our propriet ary inf ormaon that is not amenable to, or that we do not consider appropriate for , patent protecon, including, for ex ample, certain aspects of our llama immunizaon and anbody anity maturaon approaches. How ever , trade secrets can be dicult to protect. Although we tak e st eps to prot ect our propriet ar y informa on, including restricng access to our premises and our condenal inf ormaon, as well as entering int o agreements with our employees, consultan ts, advisors and potenal collabor ators, third pares may independently develop the same or similar proprie tary informaon or may otherwise gain access to our proprietary inf ormaon. As a result, we may be unable to meaningfully protect our trade secrets and propriet ary inf ormaon. PA RT I Intellectual Pr operty | 69 Zach Leans on his Support S ystem to Help Manage his My asthenia Gravis Zach Three year s passed between the beginning of Zach’ s symptoms and his my asthenia gravis (MG) diagnosis. Already dealing with mulple health problems rela ted to a primary immune deciency , he was frustr ated when these new , undiagnosed symptoms muddied the water s and made it more dicult to get the care he needed. 70 | Patient Story Patient Story | 71 PA RT I How has life changed because of myasthenia gravis ? Ev ery thing changed. I used to be able to do everyday things, like cooking, cleaning and going shopping. I was able to paint and draw , as I had done all my life. Ev en aer I was on disability , I was sll able to do most things with a lile help. However , by the me I was diagnosed with MG, I could barely breathe and hardly stand. I couldn’t hold a paintbrush or a sket chbook. It felt lik e so much had been tak en away from me. Shortly aer I was diagnosed, I bought a house in Oregon with accessibility modicaons that would allow me to sll be able to do some things on my own. It has a kitchen with low counter s so I can do things while in my chair , a stair li to get me between oors and accessible bathrooms with a roll-in shower . By the me I was diagnosed with MG, I could barely breathe and hardly st and. How did you adapt to all these changes going on in your life ? Mentally , I had to accept that e verything had changed. I redened m y enre sense of self . How we see ourselves is connected t o what we do, and when I wen t on disability and received m y MG diagnosis, I had to stop dening m yself as a user interf ace designer . I’ve s trug gled with health prob - lems for mos t of my life, but MG w as the one that really made me refr ame my lif e. But I didn’t slip into a “woe is me” men tality aer my MG diagnosis. I try not to let my limit aons from my MG frus - tra te me. Also, I see a therapis t and I’m acve in sev eral online communies for m yasthenia gr avis. Having people that I can t alk to who know what it ’ s lik e to have MG has been a comf ort, and I’ve learned so much from them. Where do you turn for support during a bad day? I’ve f ound a lot of support from online communies. The people in my gr oups don’t live close by , but they are there to give me men tal and emoonal support when I need it. My sister liv es in T ennessee, but she’ s always ther e to talk when I want. Patient Story Paid c ontributor to MG United. 72 | Regulation 1.9 Regulation Government authories in the U.S., at the feder al, sta te and local level, and in the European Union and other countries and jurisdicons, extensively regulat e, among other things, the resear ch, development, tesng, manufacture, quality contr ol, approv al, packaging, storage, r ecordk eeping , labeling, adversing, promoon, distribuon, mark eng, post-ap - prov al monitoring and reporng, and import and export of pharmaceucal products, including biological products. In addion, some jurisdicons regula te the pricing of pharmaceucal products. The processes for obtaining mark eng approv als in the U.S. and in other countries and jurisdicons, along with subsequent compliance with applicable sta tutes and regulaons and other regulatory authories, require the expenditur e of substan al me and nancial resour ces. 1.9. 1 Licensure and R egulation of Biologics in the U .S. In the U.S., our product candidat es and products are regulat ed as biological products, or biologics, under the Public Health Ser vice Act ( PHSA ), and the Federal Food, Drug, and Cosmetic Act ( FDCA ) and their implementing regula - tions. The failur e to comply with the applicable U.S. requirements at any time during the product development process, including nonclinical testing and clinical tes ting , the approv al process or post -approv al process may subject an applicant to delay s in the conduct of a study , regulatory review and approval, and/or administra tive or judicial sanctions. These sanctions may include, but are not limited to , the FDA ’ s refusal to allow an applicant to proceed with clinical testing, refusal to approve pending applications, license suspension or revoca tion, warning or untitled lett ers, adverse publicity , product recalls, product seizures, total or partial suspension of production or distribution, injunctions, fines and civil or criminal investig ations and penalties brought by the FDA or the Department of Justice or other government al entities. An applicant seeking approval to mark et and distribute a new biologic in the U.S. generally must sas factorily complete each of the follo wing step s: • nonclinical laboratory tes ts, animal studies and formulaon studies all performed in accordance with applicable regulaons, including the GLP regulaons; • submission to the FDA of an IND applicaon for human clinical tesng, which must become eecve bef ore human clinical trials may begin; • approval by an instuonal review board (IRB) repr esenng each clinical site bef ore each clinical trial may be iniated; • performance of adequate and well-contr olled human clinical trials to establish the safety , potency and purity of the product candidat e f or each proposed indicaon, in accordance with Good Clinical Pracces ( GCP ); • prepara on and submission to the FDA of a BLA for a biological product requesng mark eng for one or more pro - posed indicaons, including submission of detailed inf ormaon on the manufactur e and composion of the product in clinical development and proposed labeling; • review of the product by an FDA advisory commiee, if applicable; • one or more FDA inspecons of the manufacturing facility or facilies, including those of third pares, at which the product, or components thereof , are produced to assess compliance with cGMP requiremen ts and to assure that the facilies, methods and contr ols are adequate to pr eser ve the product’ s identy , streng th, quality and purity; • FDA audits of the clinical study sit es to assure compliance with GCPs, and the in tegrity of clinical data in support of the BLA; • payment of user fees and securing FDA approval of the BLA and licensure of the new biological product; and • compliance with any post-appr oval requiremen ts, including the potenal requiremen t to implement a risk evaluaon and migaon str ategy ( REMS ) and any post-appr oval studies required by the FDA. Nonclinical Studies and Invesga onal New Drug Applicaon Bef ore tesng any biological product candidat e in humans, the product candidate must undergo nonclinical tes ng. Nonclinical tests include labora tory evaluaons of product chemistry , formula on and stability , as well as animal studies to evalua te the potenal f or acvity and toxicity . The conduct of the nonclinical tests and formulaon of the compounds for tes ng must comply with feder al regulaons and requirements. The results of the nonclinical tests, together with manufacturing inf ormaon and analycal data, are submie d to the FDA as part of an IND applicaon. The IND automat - ically becomes e ecve 30 day s aer receip t by the FDA, unless before that me the FDA raises concerns or quesons about the product candidate or conduct of the proposed clinical trial, including concerns that human research subjects will be exposed to unreasonable health risks. In that case, the IND sponsor and the FDA must resolve an y outstanding FDA concerns bef ore the clinical trial can begin. As a result, submission of the IND may result in the FDA not allowing the trial to commence or on the terms originally specied by the sponsor in the IND. If the FDA raises concerns or quesons either during this inial 30-day period, or at any me during the IND process, it may choose to impose a paral or complete clinical hold. This order issued by the FDA would delay either a proposed clinical study or cause suspension of an ongoing study , or in the case of a paral clinical hold place limitaons on the conduct of the study such as dura on of treatment, unl all outst anding concerns have been adequately addressed and the FDA has noed the company that in vesgaon ma y proceed and then only under terms authorized by the FDA. This could cause signicant delays or dicules in compleng planned clinical trials in a mely manner . The FDA may impose clinical holds on a biological product candidate at an y me befor e or during clinical trials due to safety concerns or non-compliance. Human Clinical T rials in Support of a BLA Clinical trials involv e the administr aon of the invesg aonal product candidate t o healthy volunteer s or paents with the disease to be treated under the supervision of a qualied principal invesg ator in accordance with GCP requiremen ts. Clinical trials are conducted under s tudy prot ocols detailing, among other things, the objecves of the study , inclusion and ex clusion criteria, the parameter s to be used in monitoring saf ety , and the e ecveness criteria to be evaluated. A pr oto - col for each clinical trial and any subsequen t protocol amendments must be submied to the FD A as part of the IND. A sponsor who wishes to conduct a clinical trial outside the U.S. may , but need not, obtain FDA authoriza on to conduct the clinical trial under an IND. If a foreign clinical trial is not conducted under an IND , the sponsor may submit data from the clinical trial to the FDA in support of the BLA so long as the clinical trial is well-designed and well-conducted in accor - dance with GCP , including review and approv al by an independent ethics commiee, and the FDA is able to validat e the study data thr ough an onsite inspecon, if necessar y . Further , each clinical trial must be re viewed and approved by the IRB either cen trally or individually at each instuon at which the clinical trial will be conducted. The IRB will consider , among other things, clinical trial design, paent inf ormed consent, ethic al factors and the sa fety of human subjects. An IRB must oper ate in compliance with FDA r egulaons. The FDA, IRB, or the clinic al trial sponsor may suspend or disconnue a clinical trial at an y me for various r easons, including a nding that the clinical trial is not being conduct ed in accordance with FDA requir ements or the subjects or paents are being exposed to an unaccept able health risk. Clinical tesng also must sa sfy extensive GCP rules and the requir ements for informed c onsent. Addionally , some clinical trials are o verseen by an independent gr oup of qualied experts organiz ed by the clinical trial sponsor , known as a data sa fety monitoring boar d or commiee. This group ma y recommend connuaon of the study as planned, changes in study c onduct, or cessaon of the study at designat ed check points based on access to certain dat a from the study . Informaon about cert ain clinical studies must be submied within specic mefr ames to the Naonal Instut es of Health for public disseminaon at www .clinicaltrials. gov . Clinical trials typically are conducted in three sequenal phases, but the phases may overlap or be combined. Addional studies may be required a er approv al. • Phase 1 clinical trials are inially conducted in a limited populaon to tes t the product candidat e for saf ety , including adverse e ects, dose tolerance, absorpon, metabolism, distribuon, ex creon and pharmacodynamics in healthy humans or , on occasion, in paents, such as cancer paents. • Phase 2 clinical trials are generally conduct ed in a limited paent populaon to idenfy possible adverse e ects and saf ety risks, evaluate the ecacy of the product candidate f or specic targe ted indicaons and determine dose toler - ance and opmal dosage. Mulple Phase 2 clinical trials may be conducted by the sponsor to obtain informa on prior to beginning larger Phase 3 clinical trials. • Phase 3 clinical trials proceed if the Phase 2 clinical trials demonstrat e that a dose range of the product candidate is potenally e ecve and has an acceptable saf ety prole. Phase 3 clinical trials are undertak en within an expanded paent populaon to ga ther addional informa on about safe ty and e ecveness necessary to evalua te the over all benet -risk relaonship of the drug and to provide an adequate basis for physician labeling. PA RT I Regulation | 73 74 | Regulation In some cases, the FDA may appr ove a BLA for a product candidat e but require the sponsor to conduct addional clinical trials to further assess the product candidat e’ s safety and eecv eness aer approval. Such post -approval trials are typically ref erred to as Phase 4 clinical trials. These studies are used to gain addional experience from the treatment of paents in the intended therapeuc indica on and to document a clinical benet in the case of biologics approv ed under accelera ted approval regulaons. If the FDA approv es a product while a company has ongoing clinical trials that were not necessary for approv al, a company ma y be able to use the data from these clinical trials to meet all or part of any Phase 4 clinical trial requirement or to request a change in the product labeling. Failure to exhibit due diligence with regar d to conducng required Phase 4 clinical trials could result in withdrawal of approv al for pr oducts. Progr ess reports detailing the results of the clinical trials, among other informa on, must be submied at least annually to the FDA and wrien IND safety reports must be submied to the FDA and the inv esgat ors een days aer the trial sponsor determines the informaon qualies for reporng f or serious and unexpected suspected adver se events, nd - ings from other studies or animal or in vitro tesng that suggest a signicant risk for human subjects and any clinically important increase in the rat e of a serious suspected adverse reacon over that listed in the protoc ol or inves gator brochur e. The sponsor must also nof y the FDA of any unexpected fa tal or lif e-threatening suspected adver se reacon as soon as possible but in no case later than seven calendar days aer the sponsor ’ s inial receipt of the informa on. A drug being studied in clinical trials may be made available to individual paents in certain circumstances. Pur suant to the 21st Century Cures Act, as amended, the manufacturer of an inves gaonal drug for a serious disease or condion is required to mak e available, such as by posng on its website, its policy on evaluang and responding to requests for individual paent access to such invesg aonal drug. This requiremen t applies on the earlier of the rst iniaon of a Phase 2 or Phase 3 trial of the inves gaonal drug, or as applicable, 15 days aer the drug receives a designaon as a breakthr ough ther apy , fast tr ack product, or regener ave advanced therap y . Compliance with cGMP Requir ements Bef ore approving a BLA, the FDA typically will inspect the facility or facilies where the product is manufactur ed. The FDA will not approve an applicaon unless it determines that the manufacturing processes and facilies are in full compliance with cGMP requirements and adequate to assure consis tent producon of the product within requir ed specicaons. The PHSA emphasizes the importance of manufacturing control f or products like biologics whose aributes cannot be precisely dened. The manufacturing process must be capable of consisten tly producing quality batches of the product candidat e and, among other things, the sponsor must develop methods for tesng the identy , strength, quality , potency , and purity of the nal biological product. Addionally , appropriat e packaging must be selected and test ed, and stability studies must be conducted to demonstr ate that the biological product candidate does not undergo unacceptable deterio - ra on over its shelf life. Manufactur ers and others involved in the manufacture and distribuon of products must also regist er their establish - ments with the FDA and certain state agencies. Both domesc and foreign manuf acturing est ablishments must register and provide addional informaon to the FDA upon their inial parcipaon in the manufacturing process. An y product manufactur ed by or imported from a facility that has not registered, whether f oreign or domesc, is deemed misbrand - ed under the FDCA. Establishments ma y be subject to periodic unannounced inspecons by government authories to ensure compliance with cGMPs and other laws. Manufacturer s may have to provide, on request, electr onic or physic al re - cords reg arding their establishments. Delaying, denying, liming, or refusing inspecon by the FDA may lead to a product being deemed to be adulter ated. Review and Appr oval of a BLA The results of product candidate developmen t, nonclinical tesng and clinical trials, including negave or ambiguous results as well as posive ndings, are submied to the FDA as part of a BLA requesng a license to marke t the product. The BLA must contain extensiv e manufacturing inf ormaon and detailed informaon on the composion of the product and proposed labeling as well as paymen t of a user f ee. The FDA has 60 days aer submission of the applicaon to conduct an inial review to determine whether the BLA is sucient to accept for ling based on the agency’ s threshold determinaon that it is suciently complete to permit subst anve review . If the FDA determines the BLA is not suciently complete, it will refuse the BLA. Once the submission has been accepted for ling, the FDA begins an in-depth review of the applicaon. Under the goals and policies agreed to by the FDA under the Prescripon Drug User Fee Act ( PDUF A ) the FDA has ten months in which to complete its inial review of a standar d applicaon and respond to the applicant, and six months for a priority review of an applicaon. The FDA does not always meet its PDUF A goal dates for st andard and priority review s. The review process ma y be signicantly extended by FDA reques ts for addional informaon or claricaon. The review process and the PDUF A goal date may also be extended by three months if the FDA reques ts or if the applicant otherwise pro vides addional informaon or claricaon reg arding informaon alr eady provided in the submission within the last three months bef ore the PDUF A goal date. On the basis of the FDA ’ s evaluaon of the applicaon and accompanying informa on, including the results of the inspecon of the manufacturing f acilies and any FDA audits of clinical trial sites to assure compliance with GCPs, the FDA may issue an approv al leer , or a complete response leer . An approval leer authoriz es commer cial mark eng of the product with specic prescribing informaon f or specic indicaons. Under the PHSA, the FDA may approv e a BLA if it determines that the product is safe, pure and potent and the facility where the product will be manufactured meets standar ds designed to ensure that it connues to be safe, pure and potent. If the applicaon is not approved, the FDA may issue a complete response leer , which will contain the condions that must be met in order to secure nal approval of the applicaon, and when possible will outline recommended acons the sponsor might tak e to obtain approval of the applicaon. Sponsors that receiv e a complete response leer ma y submit to the FDA informaon that r epresents a complete r esponse to the issues idened by the FDA or withdraw the applicaon or request a hearing. The FDA will not approv e an applicaon unl issues idened in the complet e response leer ha ve been addressed. The FDA may also ref er the applicaon to an advisory commiee for revie w , evalua on and recommendaon as to whether the applicaon should be approved. In parcular , the FDA may re fer applicaons for nove l biological products or biological products that present dicult quesons of saf ety or ecacy to an advisory commiee. T ypically , an advisory commiee is a panel of independent experts, including clinicians and other scienc experts, that re views, evaluates and provides a recommendaon as to whether the applicaon should be approved and under what condions. The FDA is not bound by the recommendaons of an advisory commiee, but it consider s such recommendaons car efully when making decisions. If the FDA approves a new product, it may limit the approved indicaons for use of the product. It may also require that contr aindicaons, warnings or precauons be included in the product labeling. In addion, the FDA may call f or post -ap - prov al studies, including Phase 4 clinical trials, to further assess the product ’ s safety a er approv al. The agency may also require tesng and surveillance progr ams to monitor the product aer commer cializaon, or impose other condions, including distribuon restricons or other risk management mechanisms, including REMS, to help ensure that the bene - ts of the product outweigh the potenal risks. REMS can include medicaon guides, communicaon plans for healthcare prof essionals, and elements to assure saf e use ( ET ASU ). ET ASU can include, but are not limited to, special tr aining or cercaon f or prescribing or dispensing, dispensing only under certain circumstances, special monitoring and the use of patent regis tries. The FDA may pre vent or limit further marke ng of a product based on the results of post -market studies or surveillance programs. Aer appro val, many types of changes to the approved pr oduct, such as adding new indicaons, manufacturing changes and addional labeling claims, are subject to further tesng requir ements and FDA review and approv al. Such regulatory revie ws can result in denial or modicaon of the planned changes, or requiremen ts to conduct addion - al tests or evaluaons that can subst anally delay or increase the cost of the planned changes. Fas t Tr ack, Breakthrough Therap y and Priority Review Designaons The FDA is authorized to designate certain products f or expedited review if they are intended to address an unmet medical need in the treatmen t of a serious or lif e-threatening disease or condion. These progr ams are ref erred to as fast track designaon, break through therapy designaon and priority review designaon. The FDA may designate a product f or fas t track r eview if it is intended, whether alone or in combinaon with one or more other products, for the treatmen t of a serious or life-thr eatening disease or condion, and it demonstra tes the potenal to address unmet medical needs for such a disease or condion. For fas t track products, sponsors may hav e great er inter acons with the FDA and the FDA may iniate revie w of secons of a fas t track pr oduct ’ s applicaon befor e the applicaon is complete. This rolling review ma y be available if the FDA determines, aer pr eliminar y evaluaon of PA RT I Regulation | 75 clinical data submied by the sponsor , that a fast track product ma y be eecv e. The sponsor must also provide, and the FDA must approv e, a schedule for the submission of the remaining informa on and the sponsor must pay applicable user fees. Howe ver , the FDA ’ s me period goal for reviewing a fast tr ack applicaon does not begin unl the last secon of the applicaon is submied. Fas t tr ack designaon may be withdrawn by the FDA if the FDA believes that the designaon is no longer supported by data emerging in the clinical trial process. A product may be designated as a breakthrough ther apy if it is intended, either alone or in combinaon with one or more other products, to treat a serious or life-threat ening disease or condion and preliminary clinical evidence indicates that the product may demonstr ate substan al improv ement over exisng therapies on one or more clinically signicant endpoints, such as substanal trea tment eects observed early in clinical development. The FDA may tak e certain acons with respect to breakthr ough therapies, including holding meengs with the sponsor throughout the development pro - cess; providing mely advice to the product sponsor reg arding development and approv al; involving mor e senior sta in the review process; assigning a cross-disciplinary project lead for the review team; and taking other steps to design the clinical trials in an ecient manner . The FDA may designate a product f or priority review if it is a product that trea ts a serious condion and, if approv ed, would provide a signicant improv ement in safety or eecv eness. The FDA determines, on a case-by-c ase basis, wheth - er the proposed product represen ts a signicant improv ement when compared with other available ther apies. Signicant improv ement may be illustrated by evidence of increased e ecveness in the treatmen t of a condion, eliminaon or subst anal reducon of a treatment -liming product reacon, documented enhancement of paent compliance that may lead to improv ement in serious outcomes and evidence of safety and eecv eness in a new subpopulaon. A priori - ty designaon is intended to direct over all aen on and resources to the evalua on of such applicaons, and to shorten the FDA ’ s goal for taking acon on a mark eng applicaon from ten months to six months. Accelera ted Approval Pa thway The FDA may gran t accelera ted approval to a product for a serious or life-threa tening condion that provides meaningful therapeuc advan tage to paents over exis ng trea tments based upon a determinaon that the product has an e ect on a surrogat e endpoint that is reasonably lik ely to predict clinical benet or on a clinical endpoint that can be measured earlier than an e ect on irrev ersible morbidity or mortality ( IMM ) and that is reasonably lik ely to predict an e ect on IMM or other clinical benet, taking into accoun t the severity , rarity , or prev alence of the condion and the av ailability or lack of alternave treatmen ts. Products gr anted accelerat ed approv al must meet the same statut ory standar ds for safety and eecv eness as those grant ed tradional appr oval. For the purposes of accelerated approv al, a surrog ate endpoint is a marker , such as a labora tory measurement, ra - dio-graphic image, ph ysical sign, or other measure that is thought to predict clinical benet but is not itself a measure of clinical benet. Surroga te endpoints can oen be measured more easily or more rapidly than clinical endpoints. An intermedia te clinical endpoint is a measurement of a therapeuc eect that is consider ed reasonably lik ely to predict the clinical benet of a product, such as an eect on IMM. The FDA has limited experience with accelera ted approvals based on intermediate clinical endpoints, but has indicated that such endpoints generally ma y support accelerat ed approv al where the therapeuc e ect measured by the endpoint is not itself a clinical benet and basis for tradional approv al, if there is a basis f or concluding that the therapeuc e ect is reasonably lik ely to predict the ulmate clinical benet of a product. The accelerat ed approv al pathway is most oen used in sengs in which the course of a disease is long and an extended period of me is required to measure the intended clinical benet of a product, even if the eect on the surroga te or intermedia te clinical endpoint occurs rapidly . Thus, accelerat ed approval has been used ext ensively in the development and approval of products f or trea tment of a variety of cancers in which the goal of therapy is gener ally to impro ve sur - vival or decrease morbidity and the dura on of the typical disease course requires length y and somemes large trials to demonstr ate a clinical or survival benet. The accelerat ed approv al pathway is usually conngent on a sponsor ’ s agreement to conduct, in a diligent manner , addional post -approval conrmat ory studies to verify and describe the product’ s clinical benet. As a result, a product candidat e approv ed on this basis is subject to rigorous post -marke ng compliance requir ements, including the comple - on of Phase 4 or post-appr oval clinical trials to conrm the eect on the clinical endpoint. Failure to conduct requir ed post -approval studies, or conrm a clinical benet during post -markeng studies, would allow the FDA to withdraw the product from the mark et on an expedited basis. Unless otherwise informed by the FDA, all promoonal mat erials for product candidat es appro ved under accelera ted regulaons are subject to prior review by the agency . Post -Approv al Regulaon If regulatory appro val for marke ng of a product or new indicaon for an exisng product is obtained, the sponsor will be required to comply with all post-appr oval regulat ory requiremen ts as well as any post -approval requir ements that the FDA has imposed as part of the approv al process. The sponsor will be required to report certain adver se reacons and producon problems to the FDA, provide updated saf ety and ecacy informaon and comply with requirements concerning adversing and promoonal labeling. Manufacturer s and other pares involved in the drug supply chain for prescripon drug and biological products must also comply with product tr acking and tracing requir ements and for no - fying the FDA of count erfeit, diverted, st olen and intenonally adulter ated products or products that are otherwise unt for distribuon in the U.S. Manufactur ers and certain of their subcontr actors are requir ed to regist er their establishmen ts with the FDA and certain state agencies, and are subject to periodic unannounced inspecons by the FDA and certain sta te agencies for compliance with ongoing regulatory requiremen ts, including cGMP regulaons, which impose certain procedur al and documenta on requir ements upon manufactur ers. Accordingly , the sponsor and its third-party man - ufactur ers must connue to expend me, money and eort in the areas of producon and quality contr ol to maintain compliance with cGMP regulaons and other regula tory requirements. A biological product may also be subject to ocial lot release, meaning that the manufacturer is required to perform certain tests on each lot of the product bef ore it is released f or distribuon. If the product is subject to ocial lot release, the manufacturer must submit samples of each lot, together with a release protoc ol showing a summary of the history of manufactur e of the lot and the results of all of the manufacturer’ s tests performed on the lot, to the FDA. The FDA may in addion perform certain conrmat ory tests on lots of some products before r eleasing the lots for distribuon. Finally , the FDA will conduct laborat ory resear ch relat ed to the saf ety , purity , potency and eecv eness of pharmaceucal products. Any distribuon of prescripon biological products and pharmaceucal samples must comply with the U.S. Pr escripon Drug Marke ng Act and the PHSA. Once an approval is grant ed, the FDA may re voke or suspend the approval of the BLA if compliance with regulatory require ments and standar ds is not maintained or if problems occur aer the product reaches the market. Later discov - ery of previously unknown problems with a product, including adverse ev ents of unancipat ed severity or frequency , or with manufacturing processes, or failur e to comply with regulatory requir ements, may result in revisions to the approved labeling to add new safety inf ormaon; imposion of post -market studies or clinical trials to assess new saf ety risks; or imposion of distribuon or other restricons under a REMS program. FDA also has authority to require post -marke t studies, in certain circumst ances, on reduced e ecveness of a product and may requir e labeling changes related to new reduced e ecveness informaon. Other potenal consequences f or a failure to maint ain regulatory compliance include, among other things: • restricons on the markeng or manufacturing of the product, complete withdr awal of the product from the mark et or product rec alls; • nes, untled leers or warning leers or holds on post-appr oval clinical trials; • refusal of the FDA to approve pending applicaons or supplements to approved applicaons, or suspension or rev oca - on of product license approvals; • product seizure or detenon, or refusal to permit the import or export of products; or • injuncons or the imposion of civil or criminal penales. The FDA strictly regulat es mark eting, labeling, advertising and promotion of products that are placed on the mark et. Pharmaceutical products may be promoted only for the approv ed indications and in accordance with the provi - sions of the approved label. Although physicians may prescribe legally available products for unapproved uses or in patient populations that are not described in the product’ s approv ed labeling (known as “off -label use”), companies with approved products may not mark et or promote such off -label uses. The FDA does not regulate the behavior of phy sicians in their choice of treatments, but the FDA regulations do impose stringent restrictions on manufactur - ers’ communications reg arding off-label uses. The FDA and other agencies actively enfor ce the laws and regulations prohibiting the promotion of off-label uses, and a company that is found to have improperly promoted off -label uses PA RT I 76 | Regulation Regulation | 77 may be subject to significant liability , including inves tigation by federal and state authorities. Prescription biological product promotional materials must be submitted to the FDA in conjunction with their firs t use or first publication. Orphan Drug Designaon Orphan drug designaon in the U.S. is designed to encourage sponsor s to develop products int ended for r are diseases or condions. In the U.S., a rar e disease or condion is statutorily dened as a condion that aects f ewer than 200,000 individuals in the U.S. or that a ects more than 200,000 individuals in the U.S. and for which there is no reasonable expect aon that the cost of developing and making available the product for the disease or condion will be recov ered from sales of the product in the U.S. Orphan drug designaon qualies a company f or tax cr edits and marke t ex clusivity for seven years f ollowing the date of the product’ s mark eng approval if grant ed by the FDA and if it is the rst FDA appro val for that product for the disease for which it has such designaon. An applicaon for designaon as an orphan product can be made any me prior to the ling of an applicaon f or approv al to market the product. A product becomes an orphan when it receives orphan drug designaon from the Oce of Orphan Products Developmen t ( OOPD ) at the FDA based on an acceptable condenal request made under the regulatory provisions. Aer the FDA gr ants orphan drug designaon, the generic identy of the product and its potenal orphan use are disclosed publicly by the FDA. The product must then go through the review and approv al process lik e any other product in order to be marketed. A sponsor may request orphan drug designaon of a previously unappro ved product or new orphan indicaon for an already mark eted product. In addion, a sponsor of a product that is otherwise the same product as an already approved orphan drug may seek and obtain orphan drug designaon for the subsequent product for the same rare disease or condion if it can present a plausible hypothesis that its product may be clinically superior to the rst drug. More than one sponsor may receive orphan drug designaon for the same product for the same rar e disease or condion, but each sponsor seeking orphan drug designaon must le a complete request f or designaon. The period of ex clusivity begins on the date that the markeng applica on is approved by the FDA and applies only to the indicaon f or which the product has been designated. The FDA may appr ove a second applicaon for the same product for a dier ent use or a second applicaon for a clinically superior version of the product for the same use. The FDA can - not, however , approv e the same product made by another sponsor for the same indicaon during the market ex clusivity period unless it has the consent of the sponsor or the sponsor is unable to provide sucient quanes of the product. Pediatric Studies and Exclusivity Under the Pediatric Resear ch Equity Act of 2003 (as amended, PREA ), a BLA or supplement theret o must cont ain dat a that are adequate to assess the safe ty and eecv eness of the product for the claimed indicaons in all relevant pediatric sub-populaons, and to support dosing and administra on f or each pediatric subpopulaon for which the product is safe and eecv e. Sponsors must also submit pediatric study plans prior to the assessment data. Those plans must contain an outline of the proposed pediatric study or studies the applicant plans to conduct, including study objecves and design, any def erral or waiver requests and other informa on requir ed by regulaon. The applicant, the FDA, and the FDA ’ s inter - nal review commiee must then revie w the informaon submi ed, consult with each other and agree upon a nal plan. The FDA or the applicant may request an amendment to the plan at any me. The FDA may , on its own iniave or at the request of the applicant, grant def errals for submission of some or all pediatric data unl aer appr oval of the product f or use in adults, or full or paral waiv ers from the pediatric data require ments. Unless otherwise required by regulaon, PREA does not apply to a biologic for an indicaon for which orphan designaon has been gran ted, except that PREA will apply to an original BLA for a new acve ingredient that is orphan-designated if the biologic is a molecularly target ed cancer product intended for the treatment of an adult cancer and is directed at a molecular target that FDA determines to be subst anally relevant to the growth or progr ession of a pediatric cancer . Pedia tric ex clusivity is another type of non-patent marke ng ex clusivity in the U.S. and, if granted, pr ovides for the at - tachment of an addional six months of mark eng prot econ to the term of any exisng regula tory exclusivity , including the non-patent and orphan ex clusivity . This six -month exclusivity may be gran ted if a BLA sponsor submits pediatric data that fairly respond to a wrien request fr om the FDA for such data. The data do not need to show the product to be e ecve in the pediatric populaon studied; rather , if the clinical trial is deemed to fairly respond to the FDA ’ s request, the addional protecon is grant ed. If reports of requested pediatric studies are submied to and accepted by the FDA within the statutory me limits, whatever st atutory or regulatory periods of exclusivity or patent pr otecon cover the product are ext ended by six months. This is not a patent term ext ension, but it eecvely e xtends the regulat ory period during which the FDA cannot appro ve another applicaon. Biosimilars and Exclusivity The Biologics Price Compeon and Innovaon Act ( BPCIA ) established a regulatory scheme authorizing the FDA to ap - prov e biosimilars and inter changeable biosimilars. Under the BPCIA, an applicant may submit an applicaon for licensure of a biologic product that is “biosimilar to” or “in - terchang eable with” a previously approved biological pr oduct or “ref erence product. ” For the FDA to approve a biosimilar product, it must nd that there are no clinically meaningful dierences between the ref erence product and proposed biosimilar product in terms of safety , purity and potency . For the FDA to approve a biosimilar product as interchangeable with a refer ence product, the agency must nd that the biosimilar product can be expected to produce the same clinical results as the ref erence product, and (for products administer ed mulple mes) that the biologic and the ref erence bio - logic may be switched aer one has been previously administered without increasing saf ety risks or risks of diminished ecacy rela ve to exclusive use of the ref erence biologic. Under the BPCIA, an applicaon for a biosimilar product may not be submied to the FDA unl four years f ollowing the date of approv al of the ref erence product. The FDA may not approve a biosimilar product unl twelve year s from the date on which the ref erence product was approved. E ven if a product is considered to be a ref erence product eligible for ex clusivity , another company could mark et a compeng version of that product if the FDA approves a full BLA for such product containing the sponsor ’ s own nonclinical data and data from adequate and well-contr olled clinical trials to demonstr ate the safety , purity and potency of their product. However , to rely on such ex clusivies for est ablishing or protecng our mark et posion is not without risk, as such laws are subject to changes by the legislature. The BPCIA also creat ed certain ex clusivity periods for biosimilars approved as inter changeable products. At this juncture, it is unclear whether products deemed “inter changeable” by the FDA will, in fact, be readily substuted by pharmacies, which are governed by st ate pharmacy law . U.S. Pa tent T erm Restor aon Depending upon the ming, duraon and specics of FDA approval of our product candidates, some of our U.S. patents may be eligible for limited paten t term extension under the Drug Price Compeon and Pa tent T erm Restor aon Act of 1984 (the Hatch-W axman Amendments ). The Hatch-W axman Amendments permit rest oraon of the patent term of up to ve year s as compensaon for pat ent term lost during the FDA regulat ory review pr ocess. Pa tent -term restor aon, howev er , cannot extend the remaining term of a patent beyond a total of 14 years fr om the product’ s approval date and only those claims covering such approv ed product, a method for using it or a method for manufacturing it may be extended. The paten t-term res toraon period is generally one-half the me between the eecve dat e of an IND and the submission date of a BLA plus the me between the submission date of a BLA and the approval of that applicaon, ex cept that the revie w period is reduced by any me during which the applicant failed to ex ercise due diligence. Only one patent applicable to an approv ed biologic is eligible for the ext ension and the applicaon for the extension must be submied prior to the expir aon of the paten t. The USPT O, in consultaon with the FDA, reviews and approves the applicaon f or any pat ent term extension or restor aon. In the future, we may apply for res toraon of paten t term for our currently owned or licensed patents to add patent lif e beyond its current e xpiraon date, depending on the expected length of the clinical trials and other factor s involved in the ling of the relevan t BLA. 1.9.2 Regulation and Procedures Gov erning Appro val of Medicinal Products in the European Union and the United Kingdom In order to mark et any medicinal pr oduct outside of the U.S., a compan y also must comply with numerous and varying r eg - ulatory requir ements of other countries and jurisdicons reg arding quality , safety and ec acy and governing, among other things, clinical trials, mark eng authorizaon, commer cial sales and distribuon of products. Whether or not it obtains FD A approv al for a product, an applican t will need to obtain the necessary approv als by the comparable regula tory authories PA RT I 78 | Regulation Regulation | 79 bef ore it can iniate clinical trials or mark eng of the product in those c ountries or jurisdicons. Specically , the process governing appr oval of medicinal products in the Eur opean Union and the United Kingdom generally f ollows the same lines as in the U.S. It ent ails sasfact or y compleon of pharmaceuc al development, non-clinical studies and adequat e and well-contr olled clinical trials to establish the sa fety and ecacy of the medicinal pr oduct for each proposed indica on. It also requires the submission t o relevant c ompetent authories for clinic al trials authorizaon and to the EMA or to compe - tent authories in Eur opean Union member states f or a MAA and granng of a mark eng authoriza on by these authories bef ore the product can be mark eted and sold in the European Union. F ollowing the United Kingdom’ s departure from the European Union, a separ ate mark eng authorizaon will be requir ed in order to place medicinal products on the mark et in the United Kingdom (under the Northern Ir eland Protocol, the Eur opean Union regulatory framew ork will connue to apply in Northern Ireland and centr alized European Union authoriz aons will connue to be r ecognized). Clinical T rial Approval In April 2014, the European Union adopted the new Clinical T rials Regulation (EU) No 536/2014, which replaced the Clinical T rials Directive 2001/20/EC effective as of January 31, 2022. The transitory provisions of the new Regulation off er sponsors the possibility to choose between the requir ements of the previous Directive and the new Regu - lation if the request for authorization of a clinical trial is submitted in the year after the new Regula tion became applicable. If the sponsor chooses to submit under the previous Directive, the clinical trial continues to be governed by the Directive until three years after the new Regulation became applicable. If a clinical trial continues for more than three years after the Regulation became applicable, the new Regulation will at that time begin to apply to the clinical trial. The new Regulation (EU), which is directly applicable in all European Union member states, aims at simplifying and streamlining the approv al of clinical trials in the European Union. The main characteris tics of the new Regula tion include: a streamlined application procedure via a single-entry point through the Clinical T rials Informa tion Sys tem; a single set of documents to be prepared and submitted for the application as well as simplified reporting procedures for clinical trial sponsors; and a harmonized procedur e for the assessment of applications for clinical trials, which is divided in two parts (Part I contains scientific and medicinal product documentation and Part II contains the national and patient-le vel documenta tion). Part I is assessed by a coordinated review by the com - petent authorities of all European Union member states in which an application f or authorization of a clinical trial has been submitted ( Concerned Member States ) of a draft report prepare d by a ref erence member sta te. Part II is assessed separately by each Concerned Member Stat e. Strict deadlines have also been established for the assess - ment of clinical trial applications. The United Kingdom has implemented Direcve 2001/20/EC into naonal law thr ough the Medicines for Human Use (Clinical T rials) Regulaons 2004 (as amended). The ext ent to which the regulaon of clinical trials in the United Kingdom will mirror the new European Union Clinical T rials Regulaon that has come into eect is not yet known, however the Medicines and Healthcare products Regulat ory Agency ( MHRA ), the United Kingdom medicines regula tor , has opened a consulta on on a set of proposals designed to improv e and streng then the United Kingdom clinical trials legislaon. Such consulta on is open unl March 14, 2022. Orphan Designaon and Exclusivity Regulaon (E C) No. 141/2000 and Regula on (EC) No. 847/2000 provide that a product can be designated as an orphan drug by the European Commission if its sponsor can establish: (1) that the product is intended f or the diagnosis, preven - on or treatment of a life-threa tening or chronic ally debilitang condion, (2) either (i) the prev alence of the condion is not more than ve in ten thousand persons in the European Union when the applicaon is made, or (ii) without incen - ves it is unlikely that the marke ng of the product in the European Union would gener ate sucient return to jusfy the necessary investmen t in its development and (3) there exists no sasf actory method of diagnosis, prevenon, or treat - ment of the condion in queson that has been authorized in the European Union or , if such method exists, the product has to be of a signicant benet compared to pr oducts av ailable for the condion. An orphan designaon provides a number of benets, including fee reducons and, regulat or y assistance. If a marke ng authorizaon is gran ted for an orphan medicinal product, this results in a ten-year period of market ex clusivity . During this marke t ex clusivity period, neither the EMA nor the European Commission or the European Union member stat es can accept an applicaon or grant a marke ng authorizaon f or a “similar medicinal product. ” A “similar medicinal prod - uct ” is dened as a medicinal product containing a similar acve substance or subst ances as contained in an authorized orphan medicinal product, and which is intended for the same therapeuc indicaon. The mark et exclusivity period for the authorized therapeuc indica on may , however , be reduced to six years if , at the end of the h year , it is established that the product no longer meets the criteria f or orphan designaon because, for ex ample, the product is suciently prot able not to jusfy market e xclusivity . Mark et exclusivity may also be revok ed in very select cases, such as if (i) it is established that a similar medicinal product is safer , more e ecve or otherwise clinically superior; (ii) the mark eng authorizaon holder for the authoriz ed orphan product consents to the second orphan applicaon; or (iii) the mark eng authorizaon holder for the authoriz ed orphan product cannot supply enough orphan medicinal product. Orphan desig - naon must be requested bef ore subming an applicaon for mark eng approv al. Orphan designaon does not convey any advan tage in, or shorten the duraon of , the regula tory revie w and approv al process. Since January 1, 2021, a separa te process for orphan designation has applied in Great Britain. There is now no pre-mark eting authorization orphan designation (as there is in the European Union) and the application for orphan designation will be reviewed by the MHRA, at the time of an MAA for a United Kingdom or Great Britain marketing au - thorization. The criteria are the same as in the European Union, save that they apply to Great Britain only (e.g., there must be no satisfact ory method of diagnosis, prevention or treatment of the condition concerned in Great Britain, as opposed to the European Union, and the prev alence of the condition must be no more than five in 10,000 persons in Great Britain). Marke ng Authoriza on T o obtain a markeng authoriz aon for a product under the European Union regulat or y sys tem, an applicant must submit an MAA, either to the EMA using the centraliz ed procedure or to competen t authories in the European Union using the other procedures (decentr alized procedur e, naonal procedur e, or mutual recognion procedur e). A marke ng authori - zaon ma y be grant ed only to an applicant established in the European Union. Regulaon (EC) No. 1901/2006 provides that prior to obtaining a markeng authoriz aon in the European Union, an applicant must demonstra te compliance with all measures included in an EMA-appro ved Pediatric Inves gaon Plan ( PIP ), cov ering all subsets of the pediatric popu - laon, unless the EMA has grant ed a product -specic waiver , class waiver , or a def erral for one or more of the measures included in the PIP . The centraliz ed procedure provides f or the grant of a single markeng authoriz aon by the European Commission that is valid for all EEA Member Stat es. Pursuant to R egulaon (EC) No. 726/2004, the centraliz ed procedure is compulsory for specic products, including for medicines produced by certain biotechnological processes, products designat ed as orphan medicinal products, advanced therapy medicinal products (gene ther apy , somac cell therapy or ssue engineered prod - ucts) and products with a new acve substance indica ted for the treatment of certain diseases, including products for the treatment of cancer and auto-immune diseases and other immune dysfuncons and neurodegener ave disorders. The centraliz ed procedure is oponal for products that cont ain a new acve substance for an y other indicaons, which are a signicant therapeuc, scienc or technical innov aon and whose authorizaon would be in the interest of public health in the European Union. Under the centraliz ed procedur e, the Commiee for Medicinal Products for Human Use ( CHMP ), established at the EMA is responsible for conducng the assessment of a product to dene its risk/benet prole. The CHMP recommendaon is then sent to the European Commission, which adopts a decision binding in all EEA Member Stat es. Under the central - ized pr ocedure, the maximum mefr ame for the evaluaon of an MAA is 210 days, ex cluding clock stops when addional informa on or wrien or oral explanaon is to be provided by the applicant in response to quesons asked by the CHMP . Clock stops may e xtend the mefr ame of evaluaon of an MAA considerably beyond 210 day s. Accelera ted evaluaon may be gran ted by the CHMP in exceponal cases, when a medicinal product is of major interes t from the point of view of public health and, in parcular , from the viewpoint of therapeuc innov aon. If the CHMP accepts such a request, the me limit of 210 days will be reduced to 150 days (ex cluding clock stop s), but it is possible that the CHMP may revert to the standard me limit for the centraliz ed procedure if it determines that it is no longer appropriat e to conduct an accelera ted assessment. Since the United Kingdom has le the European Union, Grea t Britain will no longer be covered by centraliz ed markeng authoriz aons (under the Northern Ireland Protocol, centr alized European Union authorizaons will connue to be recogniz ed in Northern Ireland). All medicinal products with a current centr alized authorizaon wer e automacally con verted to United Kingdom mark eng authorizaons on 1 January 2021. For a period of two years fr om 1 January 2021, the MHRA may rely on a decision taken by the European Commission on the appro val of a new marke ng authorizaon in the centraliz ed procedure, in order to more quickly grant a new Great Britain mark eng authorizaon. A separa te applicaon will, however , sll be required. PA RT I 80 | Regulation Regulation | 81 European Data and Mark et Ex clusivity In the European Union, innovave medicinal products, approv ed on the basis of a complete independent dat a package, qualify for eight years of data e xclusivity upon markeng authoriza on and an addional two years of market e xclusivity . The data ex clusivity , if granted, pr events generic or biosimilar applicants fr om ref erencing the innovator’ s preclinical and clinical trial data cont ained in the dossier of the ref erence product when applying for a generic or biosimilar markeng authorizaon in the European Union, for a period of eight years from the date on which the re ference product was r st authorized in the European Union. During the addional two-year period of mark et exclusivity a generic or biosimilar MAA can be submied, and the innovat or ’ s dat a may be ref erenced, but no generic or biosimilar product can be market - ed in the European Union unl the expir aon of the marke t ex clusivity period. The overall ten y ear period will be extend - ed to a maximum of eleven year s if , during the rst eight year s of those ten years, the mark eng authorizaon holder obtains a mark eng authoriza on for one or more new therapeuc indicaons which, during the scienc evaluaon prior to their authorizaon, are determined to bring a signicant clinical benet in comparison with curren tly approv ed therapies. There is no guarant ee that a product will be considered by the EMA to be an innovave medicinal product, and products may not qualify for data ex clusivity . Even if a product is considered to be an innovave medicinal product so that the innovator gains the prescribed period of data ex clusivity , another company nevertheless could also mark et another version of the product if such company obtained a markeng authoriz aon based on an MAA with a complete independent data pack age of pharmaceucal tests, preclinic al tests and clinical trials. Periods of Authorizaon and Renewals A marke ng authorizaon is valid f or ve year s, in principle, and it may be renew ed aer ve year s on the basis of a reev aluaon of the risk benet balance by the EMA for a centrally authoriz ed product, or by the competent authority of the authorizing member st ate for a naonally authorized product. Once renewed, the mark eng authorizaon is valid for an unlimited period, unless the European Commission or the competent authority decides, on jused grounds rela ng to pharmacovigilance, to proceed with one addional ve-year renew al period. Any authoriza on that is not followed by the placement of the drug on the European Union market (in the case of the centraliz ed procedure) or on the market of the authorizing member st ate (for a naonally authorized product) within three year s aer authoriza on, or if the drug is remov ed from the mark et for three consecuve years, ceases to be valid. Regulat ory Requiremen ts aer Markeng Authorizaon Following appr oval, the holder of the mark eng authorizaon is requir ed to comply with a rang e of requirements applicable to the manuf acturing , mark eng, promoon and sale of the medicinal product. These include compliance with the Eur opean Union’ s stringent pharmacovigilance or saf ety reporng rules, pur suant to which post -authorizaon studies and addional mon - itoring oblig aons can be imposed. In addion, the manufacturing of authoriz ed products, for which a separ ate manuf acturer ’ s license is mandatory , must also be conducted in s trict compliance with the EMA ’ s GMP requirements and c omparable require - ments of other regula tory bodies in the European Union, which mandate the me thods, facilies and contr ols used in manufac - turing, processing and packing of products t o assure their safe ty and identy . Finally , the markeng and pr omoon of autho - rized pr oducts, including industry-sponsor ed connuing medical educaon and adv ersing directed towar d the prescribers of products and/ or the general public, are s trictly regulated in the Eur opean Union under Direcve 2001/83/EC, as amended. The afor emenoned European Union rules are gener ally applicable in the EEA. Brexit and the R egulatory Frame work in the United Kingdom In June 2016, the elector ate in the United Kingdom voted in fa vor of leaving the European Union (commonly ref erred to as “Brexit”), and the United Kingdom ocially withdrew from the European Union on Januar y 31, 2020. Pursuant to the formal withdr awal arrangements agr eed between the United Kingdom and the European Union, the United Kingdom was subject to a transion period unl December 31, 2020, during which European Union rules connued to apply . Howev er , the European Union and the United Kingdom hav e concluded a trade and coopera on agreement ( TCA ), which was pro - visionally applicable since January 1, 2021 and has been formally applicable since May 1, 2021. The TCA includes specic provisions concerning pharmaceucals, which include the mutual rec ognion of GMP , inspecons of manufacturing fa - cilies for medicinal products and GMP documents issued, but does not foresee wholesale mutual recognion of United Kingdom and European Union pharmaceucal regulaons. At pr esent, Great Britain has implemented European Union legislaon on the markeng, promoon and sale of medicinal products through the Human Medicines Regulaons 2012 (as amended). The regula tory regime in Great Britain ther efore larg ely aligns with current European Union regulaons, howev er it is possible that these regimes will diverge in future now that Great Britain’ s regulatory sy stem is independent from the European Union and the TCA does not provide f or mutual recognion of United Kingdom and European Union pharmaceucal legislaon. For ex ample, the new Clinical T rials Regulaon which became e ecve in the European Union on January 31, 2022 has not been implemented int o United Kingdom law , and a separate applicaon will need to be submied for clinical trial authorizaon in the United Kingdom. 1.9.3 Regulation and Procedures Go verning Appro val of Medicinal Products in Japan In order to marke t any medical pr oducts in Japan, a compan y must comply with numerous and varying regulatory re - quirements in Japan regar ding quality , safety and ecacy in the conte xt, among other things, of clinical trials, markeng approv al, commercial sales and distribuon of products. A person who manufactures or mark ets medical products in Japan is subject to the supervision of the Minister of Health, Labour and W elfare (the Minister ), primarily under the Act on Securing Quality , Ecacy and Saf ety of Pharmaceucals and Medical Devices ( Pharmaceucal and Medical Device Act ). This entails the sasfact or y compleon of pharmaceucal development, nonclinical studies and adequate and well-contr olled clinical trials to establish the saf ety and ecacy of the medical product for each proposed indicaon. It also requires the ling of a nocaon of clinical trials with the PMDA and the obtaining of markeng appr oval from the relev ant authories bef ore the product can be mark eted and sold in the Japanese market. Business License Under the PMDA, a person is requir ed to obtain from the Minister a mark eng license in order to conduct the business of mark eng, leasing or providing medical products that are manufactur ed (or outsourced to a third party for manufactur - ing) or imported by such person. Also, in order to conduct the business of manufacturing medical pr oducts which will be marketed in Japan, a person is require d to obtain from the Minister a manufacturing license for each manufacturing site. Marke ng Approv al Under the PMDA, it is generally requir ed to obtain markeng appro val from the Minister for the marke ng of each medical product. An applicaon for mark eng approval must be made through the PMDA, which implements a mark eng approv al revie w . Clinical T rial Under the PMDA, it is required to le nocaon of clinical trials with the PMDA. Also, the data of clinical trials and other pernent data, which must be aached for an applicaon f or mark eng approval, must be obtained in compliance with the standar ds established by the Minister , such as GLP and GCP spulated by the ministerial ordinances of the Minister . Regulat ory Requiremen ts aer Markeng Approv al A marke ng license-holder that has obtained markeng appr oval for a new medical product must have that medical product re-e xamined by the Minister or by the PMDA for a specied period aer receiving marke ng approv al. The pur - pose of this re-e xaminaon process is to ensure the safety and ecacy of a newly approved medical product by imposing on the markeng license-holder the obligaon to ga ther clinical data f or a certain period aer the marke ng approv al was gran ted so that the Minister has the opportunity to re-examine the product. Results of usage and other pernent data must be aached f or an applicaon for a re-e xaminaon. A marke ng license holder that has obtained a mark eng approv al is also required to inv esgat e, among other things, the results of usage and to periodically report to the Minis - ter pursuant to the PMDA. Price Regulaon In Japan, public medical insurance s ystems cover virtually the enre Japanese populaon. The public medical insurance sys tem, however , does not cover any medical product which is not listed on the NHI price list published by the Minister . Accordingly , a markeng license-holder of medical products must rs t hav e a new medical product listed on the NHI price list in order to obtain its cover age under the public medical insurance sys tem. The NHI price of a medical product is determined either by price comparison of comparable medical products with neces - sary adjustments for innova veness, usefulness or siz e of the market; or , in the absence of compar able medical products, PA RT I 82 | Regulation Regulation | 83 by the cost calculaon method, determined aer considering of the opinion of the manufactur er . Prices on the NHI price list will be subject to revision, gener ally once every year , on the basis of the actual prices at which the medical products are purchased by medical instuons. 1.9.4 Cov erage, Pricing and Reimbursement Signicant uncertain ty exis ts as to the coverag e and reimbursemen t status of any product candidat es for which we may obtain regula tory approv al. Even if our product candidates are appr oved for marke ng , sales of such product candidat es will depend, in part, on the extent to which third-party payor s, including governmen t health progr ams in the U.S. (such as Medicare and Medicaid), commercial health insurers, and managed car e org anizaons, provide cov erage and establish adequate reimbur sement levels for such product candidat es. Moreov er , increasing e orts by governmen tal and third-par - ty payor s in the European Union, the U.S. and other mark ets to cap or reduce healthcare cos ts may cause such org aniza - ons to limit both cov erage and the level of reimbur sement for newly approved products and, as a result, they may not cover or provide adequat e paymen t for our product candida tes. We expect to e xperience pricing pressures in connecon with the sale of any of our product candidates due to the trend towar d managed healthcare, the increasing inuence of health maintenance org anizaons and addional legislave changes. The downward pressure on healthcare costs in gen - eral, parcularly prescripon drugs and surgical procedur es and other treatments, has become very intense. As a result, increasingly high barriers are being erected to the entry of new products. In the U.S. and markets in other countries, paents gener ally rely on third-party pay ors to reimburse all or part of the costs associat ed with their treatment. Adequate co verage and reimbursemen t from governmental healthcar e progr ams, such as Medicare and Medicaid, and commer cial pay ors is crical to new product accept ance. Pa ents are unlikely to use any product candida tes we may develop unless cover age is provided and reimbur sement is adequate to cov er a signi - cant poron of the cost of such product candidat es. Fact ors payor s consider in determining reimbur sement are based on whether the product is (i) a cover ed benet under its health plan; (ii) safe, e ecve and medically necessary; (iii) appropriat e for the specic paent; (iv) cost -eecv e; and (v) neither experimental nor inves gaonal. The Medicare and Medicaid programs incr easingly are used as models for how private pay ors and other gov ernmental pay ors develop their coverag e and reimbursemen t policies for drugs and biologics. Some third-party pay ors may requir e pre-appr oval of coverag e for new or innovav e devices or drug therapies befor e they will reimbur se health care pro - viders who use such therapies. It is dicult to predict at this me what third-party payor s will decide with respect to the cover age and reimbur sement for our product candidates. The process for det ermining whether a payor will provide cover age for a product may be separat e from the process f or seng the price or reimbur sement rate that the pay or will pay f or the product once cover age is approv ed. Third-party pa yors are increasingly challenging the price and ex amining the medical necessity and cost -e ecveness of medical products and services and imposing contr ols to manage costs, especially drugs when an equivalent generic drug or a less expensiv e therap y is available. It is possible that a third-par - ty payor ma y consider our product candidate and other therapies as substutable and only oer to reimbur se paents for the less expensive product. E ven if we show improv ed ecacy or improv ed con venience of administr aon with our product candidat e, pricing of exisng drugs may limit the amount we will be able to charge for our product candidat e. These payor s may deny or revok e the reimbur sement status of a given drug product or est ablish prices for new or exisng mark eted products at levels that are too low to enable us to realize an appropriate r eturn on our investmen t in product development. If reimbur sement is not av ailable or is available only at limited levels, we may not be able to successfully commercializ e our product candidates and may not be able to obtain a sasf actory nancial return on products that we may develop. Thir d-party pay ors may limit cover age to specic products on an approved list, also known as a f ormular y , which might not include all of the approved products for a parcular indicaon. In China, the newly creat ed Naonal Healthcar e Security Administra on ( NHSA ) an agency responsible for administe ring China’ s social security syste m, org anized a price negoaon with drug companies for certain new drugs that had not been included in the Naonal Reimbur sable Drug List ( NRDL ) at the me of the negoaon in November 2019, which resulted in an aver age price reducon by over 60% f or 70 of the 119 drugs that passed the negoaon. NHSA, togeth - er with other governmen t authories, review the inclusion or removal of drugs from China’ s Naonal Drug Catalog for Basic Medical Insurance, W ork-r elated Injury Insurance and Maternity Insurance, or provincial or local medical insurance cat alogues for the naonal medical insurance pr ogram regularly , and the er under which a drug or device will be clas - sied, both of which aect the amounts reimbur sable to program parcipants for their purchases of those drugs. These determinaons ar e made based on a number of factors, including price and ecacy . W e may also be invit ed to aend the price negoaon with NHSA upon receiving regulatory approv al in China, but we will lik ely need to signicantly reduce our prices, and to negoat e with each of the provincial healthcar e security administr aons on reimbur sement raos. On the other hand, if the NHSA or any of its local counterpart includes our drugs and devices in the NRDL or provincial RDL, which may increase the demand for our drug candidates and devices, our potenal re venue from the sales of our drug candidat es and devices may sll decrease as a result of lower prices. Moreov er , eligibility for reimbur sement in China does not imply that any drug or device will be paid for in all cases or at a ra te that covers our costs, including licensing fees, r esearch, development, manufactur e, sale and distribuon. In order to secure cover age and reimbursement f or any product that might be approv ed for sale, we hav e needed and may need to conduct expensive pharmacoec onomic studies in order to demonstr ate the medical necessity and cost -ef - fecv eness of the product, and the cost of these studies would be in addion to the costs requir ed to obtain FDA or other comparable mark eng approvals. E ven aer pharmacogenomic studies are conducted, product candida tes may not be considered medically necessary or cost-e ecve. A decision by a third-party payor not to cover any product candi - dates we ma y develop could reduce phy sician ulizaon of such product candida tes once approv ed and have a material adverse e ect on our sales, results of operaons and nancial condion. Addionally , a payor ’ s decision to provide cov - erag e for a product does not imply that an adequate r eimbursement rat e will be approved. For ex ample, the pay or may require co-paymen ts that paents nd unacceptably high. Further , one payor ’ s determinaon to pr ovide coverage f or a product does not assure that other payor s will also provide cover age and reimbur sement for the product, and the level of cover age and reimbur sement can dier signicantly from pay or to payor . Third-party reimbursement and cover age may not be adequate to enable us to maintain price levels sucient to realize an appropriat e return on our inves tment in product developmen t. The insurance cover age and reimbursement st atus of newly approv ed products for orphan diseas - es is parcularly uncertain, and failur e to obtain or maintain adequat e cover age and reimbursement f or any such product candidat es could limit our ability to gener ate revenue. Further , due to the COVID-19 pandemic, millions of individuals have los t/will be losing employer -based insurance cov erage, which may adver sely a ect our ability to commercializ e our products, As noted above, in the U.S., we plan to have various progr ams to help paents a ord our products, including paent assist ance progr ams and co-pa y coupon progr ams for eligible paents. The containmen t of healthcare costs also has become a priority of U.S. f ederal, stat e and internaonal gov ernments and the prices of pharmaceucals hav e been a focus in this eort. Governments hav e shown signicant int erest in imple - menng cost -containmen t progr ams, including price contr ols, res tricons on reimbursemen t and requiremen ts for subs - tuon of generic products. Net prices f or drugs may be reduced by mandatory discounts or rebates re quired by govern - ment healthcare pr ograms or private pay ors and by any future relax aon of laws that presently restrict imports of drugs from countries where they ma y be sold at lower prices than in the United States. Increasingly , third-party pay ors are requiring that drug companies provide them with predetermined discounts from list prices and are challenging the prices charged f or medical products. W e cannot be sure that reimbursement will be available f or any future pr oduct candidat e that we commercializ e and, if reimbur sement is av ailable, the level of reimbursemen t. In addion, many pharmaceucal manufactur ers must calculate and report certain price reporng metrics to the government, such as aver age sales price (ASP) and best price. Pe nales may apply in some cases when such metrics are not submied accurately and mely . Further , these prices for drugs may be reduced by mandatory discounts or rebat es required by government healthcar e progr ams. Adopon of price controls and cost -containmen t measures, and adopon of more restricve policies in juris - dicons with exisng contr ols and measures, could further limit our potenal re venue from the sale of any products for which we may obtain approv al. Coverage policies and third-party reimbursemen t ra tes may change at any me. Even if fa vorable cover age and reimbursement st atus is a ained for one or more of our products for which we or our collabor a - tors r eceive markeng approv al, less fa vorable cov erage policies and reimbursement r ates may be implemented in the future. Obtaining and maintaining reimbur sement status is me-consuming and costly . No uniform policy for cover age and reimbursement f or drug products exists among third-party pa yors in the U.S. Theref ore, cover age and reimbursement for drug products can di er signicantly fr om pay or to pay or . As a result, the cover age determinaon process is oen a me-consuming and costly process that will require us to provide scienc and clinical support for the use of our products to each payor separa tely , with no assurance that cover age and adequate PA RT I 84 | Regulation Regulation | 85 reimbur sement will be applied consistently or obtained in the rst inst ance. Furthermore, rules and regulaons reg arding reimbur sement change frequently , in some cases at short noce, and we believe that changes in these rules and regula - ons are likely . Outside the U.S., we will face challenges in ensuring obtaining adequate cov erage and payment f or any product candidat es we may dev elop. Pricing of prescripon pharmaceucals is subject to governmen tal control in many countries. Pricing negoaons with government al authories can extend well bey ond the receipt of regulatory mark et - ing approval f or a product and may requir e us to conduct a clinical trial that compares the e ecveness of any product candidat es we may develop to other av ailable therapies to support cost-e ecveness. The conduct of such a clinical trial could be expensive, inv olve addional risk and result in delays in our commercializaon e orts. In the European Union, pricing and reimbursemen t schemes vary widely from country to country . Some countries pro vide that products may be mark eted only aer a reimbursement price has been agreed. Some countries may require the com - pleon of addional studies that compare the cost -eecveness of a parcular product candidate to curren tly av ailable therapies (so called health technology assessments) in order to obtain reimbursemen t or pricing approval. For ex ample, the European Union provides opons for its member states to r estrict the rang e of products for which their naonal health insurance sy stems provide reimbur sement and to contr ol the prices of medicinal products f or human use. Euro - pean Union member st ates may approve a specic price for a product or may instead adopt a syst em of direct or indirect contr ols on the protability of the company placing the product on the mark et. Other member sta tes allow companies to x their own prices for products but monitor and contr ol prescripon volumes and issue guidance to physicians to limit prescripons. Recen tly , many countries in the European Union have increased the amount of discounts required on phar - maceucals and these eorts could connue as countries aempt to manage healthcar e expenditures, especially in l ight of the severe scal and debt crises experienced by many coun tries in the European Union. The downward pressure on health care costs in gener al, parcularly prescripon products, has become intense. As a result, increasingly high barriers are being erected to the entry of new products. Polical, economic and regulatory developmen ts may further complica te pricing negoaons, and pricing negoaons may connue aer reimbur sement has been obtained. Re ference pricing used by various European Union Member States and parallel trade (arbitr age between low-priced and high-priced mem - ber stat es) can further reduce prices. Special pricing and reimbursemen t rules may apply to orphan drugs. Inclusion of orphan drugs in reimbur sement syst ems tend to focus on the medical usefulness, need, quality and economic benets to paents and the healthcare sy stem as for any drug. Acceptance of any medicinal product for reimbur sement may come with cost, use and oen volume restricons, which again can vary by country . In addion, results-based rules of reim - bursement ma y apply . There can be no assurance that any coun try that has price controls or reimbursemen t limitaons for pharmaceucal products will allow fa vorable reimbur sement and pricing arrangemen ts for an y of our products, if approv ed in those countries. Historically , products launched in the European Union do not follow price structures of the U.S. and gener ally prices tend to be signicantly lower . Outside the U.S., internaonal oper aons are generally subject to extensive gov ernmental price controls and other mark et regulaons, and we believe the increasing emphasis on cost -containmen t iniaves in Europe, Canada and other countries has and will connue to put pressure on the pricing and usage of our product candidat es. In many countries, the prices of medical products are subject to varying price contr ol mechanisms as part of naonal health syst ems. Other countries allow companies to x their own prices for medical products but monitor and contr ol company pr ots. Addi - onal foreign price contr ols or other changes in pricing regula on could restrict the amount that we are able to charge for our product candidat es. Accordingly , in marke ts outside the U.S., the reimbursement f or our products may be reduced compared with the U.S. and may be insucient to generat e commercially reasonable revenue and prots. The delivery of healthcare in the European Union, including the establishment and operaon of health services and the pricing and reimbursement of medicines, is almost exclusiv ely a maer for naonal, r ather than European Union, law and policy . Naonal governments and health service providers hav e dier ent priories and approaches to the delivery of healthcare and the pricing and reimbursement of products in that conte xt. In general, howe ver , the healthcare budget ary constr aints in most European Union member sta tes have resulted in restricons on the pricing and reimbursement of medicines by relevant health service providers. Coupled with ever -increasing European Union and naonal regulatory burdens on those wishing to develop and mark et products, this could prevent or delay mark eng approval of our product candidat es, restrict or regula te post-appr oval acvies and a ect our ability to commercializ e any products for which we obtain mark eng approval. 86 | Regulation PA RT I Infinity Our commitment t o paents and innova on has no bounds 1.9.5 Healthcare Law and Regulation Healthcare pr oviders and third-party payor s play a primary role in the recommendaon and prescripon of pharmaceu - cal products that are gr anted markeng appr oval. Our current and future arrangements with provider s, researchers, con - sultants, third-party pa yors and customer s are subject to broadly applicable feder al and st ate fraud and abuse, an-kick - back, false claims, transparency and paent priv acy laws and regulaons and other healthcare laws and regulaons that may cons train our business and/or nancial arrange ments. Restricons under applicable feder al and stat e healthcar e laws and regulaons include, without limitaon, the following: • the U.S. feder al An-Kickback Statut e ( AKS ) which prohibits, among other things, persons and enes from knowingly and willfully solicing , receiving, oering, or paying remunera on, directly or indirectly , in cash or in kind, to induce or rew ard either the ref erral of an individual f or , or the purchase, order or recommendaon of , any good or service, for which payment may be made, in whole or in part, under a feder al healthcare progr am such as Medicare and Medicaid. This statut e has been interpret ed to apply to arrang ements between pharmaceucal manufacturer s on the one hand and prescribers, purchaser s and formulary manager s on the other . A person or enty can be found guilty of violang the AKS without actual knowledge of the statut e or specic intent to violate it. In addion, the government may assert that a claim including items or services resulng from a violaon of the AKS constutes a false or fraudulen t claim for purposes of the f ederal False Claims Act or federal civil money penales statut e. Violaons of the AKS carry potenally signicant civil and criminal penales, including imprisonment, nes, administrav e civil monetary penales, and ex - clusion from parcipaon in feder al healthcare pr ograms. On December 2, 2020, the Oce of Inspector General (OIG) published further modicaons to the federal An-Kickback Sta tute. Under the nal rules, OIG added safe harbor pro - tecons under the An-Kickback Statute for certain coor dinated care and value-based arrang ements among clinicians, provider s, and others. This rule (with excepons) became e ecve January 19, 2021. W e connue to ev aluate what e ect, if any , the rule will have on our business; • the U.S. feder al false claims and civil monetary penales laws, including the civil False Claims Act and federal civil mon - etary penalty laws, which, among other things, impose criminal and civil penales, including through civil whistleblow - er or qui tam acons, agains t individuals or enes for knowingly presenng, or causing to be present ed, to the U.S. feder al government, claims for paymen t or approv al that are false or fraudulen t, knowingly making, using or causing to be made or used, a false recor d or stat ement material to a false or fraudulent claim or obligaon to pay or trans - mit money to the federal gov ernment, or from knowingly making a false sta tement to avoid, decrease or conceal an obligaon to pa y money to the U.S. fede ral government. In addion, the government may assert that a claim including items and services resulng fr om a violaon of the U.S. f ederal An-Kickback Statute cons tutes a false or fraudulent claim for purposes of the F alse Claims Act. Manufacturer s can be held liable under the False Claims Act even when they do not submit claims directly to governmen t pay ors if they are deemed to “ cause” the submission of false or fraudu - lent claims. The False Claims Act also permits a private individual acng as a “whistleblower” to bring qui tam acons on behalf of the feder al government alleging violaons of the F alse Claims Act and to share in any monet ar y recov ery . When an enty is determined to ha ve violated the federal civil F alse Claims Act, the gov ernment may impose civil nes and penales for each false claim, plus treble damages, and ex clude the enty from parcipaon in Medicare, Medic - aid and other f ederal healthcare progr ams; • the U.S. feder al Health Insurance Port ability and Accountability Act of 1996 ( HIP AA ) which imposes criminal and civil liability for , among other things, knowingly and willfully execung, or aempng to ex ecute, a scheme to defraud any healthcare benet pr ogram, or obtaining by means of false or fraudulent pre tenses, represent aons, or promises, any of the money or property owned by , or under the custody or control of , any healthcare benet progr am, reg ardless of the pay (e.g., public or privat e) or knowingly and willfully falsifying, concealing or covering up a material fact or making any mat erially false st atement, in connecon with the delivery of , or payment f or , healthcare benets, items or ser - vices relang to healthcare ma ers; similar to the U.S. f ederal An-Kickback Statute, a person or enty does not need to have actual knowledge of the statut e or specic intent to violate it in order to have commi ed a violaon; • HIP AA, as amended by the Health Informaon T echnology for Economic and Clinical Health Act of 2009 ( HITECH ) and its implemenng regulaons, and as amended again by the Omnibus Rule in 2013, which imposes certain obligaons, including mandatory contr actual terms, with respect to saf eguarding the privacy , security and transmission of individ - ually idenable health informaon without appropriat e authoriza on by cover ed enes subject to the Final HIP AA Omnibus Rule, i.e., certain cov ered health plans, healthcare clearinghouses and healthcare provider s, as well as their business associates, those independent contr actors or agents of covered enes that perform cert ain services for or on their behalf inv olving the use or disclosure of individually idenable health informaon. HITECH also creat ed new ers of civil monetary penales, amended HIP AA to make civil and criminal penales directly applicable to business associates and possibly other persons, and gave st ate aorney s gener al new authority to le civil acons for damages or injuncons in f ederal courts to enfor ce the feder al HIP AA laws and seek aorne ys’ fees and costs associated with pursuing f ederal civil acons; • the federal tr ansparency requirements known as the feder al Phy sician Pa yments Sunshine Act, under the Paent Pr o - tecon and Aordable Car e Act, as amended by the Health Care and Educaon Reconcilia on Act of 2010 (collecvely , the ACA ), which requires certain manufactur ers of drugs, devices, biologics and medical supplies to report annually to the Center s for Medicar e & Medicaid Services ( CMS ) within the U.S. Department of Health and Human Services, informa on rela ted to payments and other transf ers of value made by that enty to physicians (curr ently dened to include doctors, densts, optometris ts, podiatrists and chiropr actors) and teaching hospitals, as well as ownership and inves tment interes ts held by physicians and their immediate family members. F ailure to submit required informa on may result in civil monetary penales for all payments, trans fers of value or ownership or inves tment interes ts that are not mely , accura tely , and completely report ed in an annual submission. E ecve January 1, 2022, these report - ing obligaons wer e extended to include tr ansfers of value made to certain non-phy sician provider s such as physician assistan ts and nurse praconer s; • feder al governmen t price reporng laws, which require us to calculat e and report complex pricing metrics in an accu - ra te and mely manner to government progr ams; • feder al consumer prot econ and unfair compeon laws, which broadly regula te marketplace acvies and acvies that potenally harm consumers; • analogous state law s and regulaons, including: sta te an-kickback and false claims laws, which may apply to our business pracces, including, but not limited to, r esearch, distribuon, sales and mark eng arrangements and claims involving healthcar e items or services reimbursed by any third party pay or , including commercial insurer s; state laws that require pharmaceucal companies to comply with the pharmaceucal industry ’ s volunt ary compliance guidelines and the relevant compliance guidance promulg ated by the U.S. feder al governmen t, or otherwise restrict payments that may be made to healthcare provider s and other potenal ref erral sources; st ate and local laws that require the licensure of sales represent aves; stat e laws that requir e drug manufactur ers to report informaon r elated to pay - ments and other transf ers of value to physicians and other healthcare provider s or marke ng expenditur es and pricing informa on; state laws gov erning the privacy and security of health informa on in certain circumst ances, many of which dier from each other in signicant ways and may not hav e the same eect; and sta te laws related to insur ance fraud in the case of claims inv olving priva te insurers; and • European and other f oreign law equivalents of each of the laws, including reporng requirements det ailing inter acons with and payments to healthcare pro viders and data privacy and security laws and regulaons that ma y be more strin - gent than those in the U.S. Some stat e laws requir e pharmaceucal companies to comply with the April 2003 Oce of Inspector General Compliance Progr am Guidance for Pharmaceucal Manuf acturers and/or the Pharmaceucal Research and Manufactur ers of Ameri - ca’ s Code on Interacons with Healthcar e Prof essionals, in addion to requiring pharmaceucal manufactur ers to report informa on rela ted to payments to physicians and other health care provider s or mark eng expenditur es. Several sta tes also impose other mark eng restricons or require pharmaceucal companies to mak e mark eng or price disclosures to the stat e and require the regis traon of pharmaceucal sales representa ves State and foreign law s, including for ex ample the European Union General Data Prot econ Regulaon, which became eecve Ma y 2018, also govern the privacy and se - curity of health inf ormaon in some circumst ances, many of which dier from each other in signicant way s and oen are not preempted by HIP AA, thus complicang compliance e orts. There are ambiguies as to what is required to comply with these stat e requir ements and if we fail to comply with an applicable state law requir ement we could be subject to penales. W e will be required to spend substan al me and money to ensure that our business arrang ements with third pares comply with applicable healthcare laws and regulaons. Recen t healthcar e ref orm legislaon has str engthened these feder al and state healthcar e laws. Because of the breadth of these laws and the narrowness of the statutory ex cepons and safe harbor s av ailable, it is possible that some of our business acvies could be subject to challenge under one or more of such laws. Other laws that may a ect our ability to operat e include: • the an-inducement law prohibits, among other things, the oering or giving of remuner aon, which includes, without limitaon, an y trans fer of items or ser vices for free or for less than fair mark et value (with limited ex cepons), to a PA RT I 88 | Regulation Regulation | 89 Medicare or Medicaid beneciary that the person know or should know is likely to inuence the beneciary ’ s selecon of a parcular supplier of items or ser vices reimbursable by a feder al or state gov ernmental program; and • European and other f oreign law equivalents of each of the laws, including reporng requirements det ailing inter acons with and payments to healthcare pro viders. In the U.S., to help paents aor d our approved product, we may ulize progr ams to assist them, including paent assistance progr ams and co-pay coupon progr ams for eligible paents. Government enf orcement agencies have shown increased inter est in pharmaceucal companies’ product and paent assist ance progr ams, including reimbursemen t support services, and a number of invesg aons into these progr ams have result ed in signicant civil and criminal set - tlements. In addion, at least one insurer has directed its network pharmacies to no longer accept co-pay coupons for certain specialty drugs the insurer idened. Our co-pa y coupon programs could become the target of similar insurer acons. In addion, in November 2013, the CMS issued guidance to the issuers of qualied health plans sold through the ACA ’ s mark etplaces encouraging such plans to reject paent cost -sharing support from third pares and indicang that the CMS intends to monitor the provision of such support and may tak e regulatory acon to limit it in the future. The CMS subsequently issued a rule requiring individual market qualied health plans to accept third-party premium and cost -sharing paymen ts from certain government -rela ted enes. In September 2014, the OIG of the HHS issued a Special Advisory Bullen warning manufacturer s that they may be subject to sancons under the feder al an-kickback sta tute and/or civil monetary penalty laws if they do not tak e appropriate steps to ex clude Part D beneciaries from using co-pay coupons. Accordingly , companies exclude these Part D beneciaries from using co-pay coupons. It is possi - ble that changes in insurer policies regarding co-pa y coupons and/or the introducon and enactment of new legislaon or regulatory acon could restrict or otherwise negavely a ect these paent support programs, which could result in fe wer paents using aect ed products, and theref ore could have a material adver se e ect on our sales, business, and nancial condion. Third party paent assistance progr ams that receive nancial support from companies hav e become the subject of enhanced government and regulatory scruny . The OIG has est ablished guidelines that sug gest that it is lawful for phar - maceucal manufacturer s to mak e donaons to charitable organiz aons who provide co-pa y assist ance to Medicare paents, provided that such organiz aons, among other things, are bona de charies, are enrely independent of and not controlled by the manufacturer , provide aid to applicants on a rst -come basis according to consistent nancial cri - teria and do not link aid to use of a donor ’ s product. However , donaons to paent assistance programs hav e received some negave publicity and have been the subject of mulple government enf orcement acons, related to allegaons reg arding their use to promote branded pharmaceucal products over other less costly alternav es. Specically , in recent year s, there hav e been mulple selements resulng out of government claims challenging the legality of their paent assistance pr ograms under a variety of federal and sta te laws. It is possible that we may mak e gran ts to indepen - dent charitable foundaons that help nancially needy paents with their premium, co-pa y , and co-insur ance obliga - ons. If we choose to do so, and if we or our vendors or donaon recipients are deemed to fail to comply with relev ant laws, regulaons or evolving government guidance in the opera on of these progr ams, we could be subject to damages, nes, penales, or other criminal, civil, or administr ave sancons or enfor cement acons. W e cannot ensure that our compliance contr ols, policies, and procedur es will be sucient to protect agains t acts of our employees, business part - ners, or vendors that may violate the laws or regulaons of the jurisdicons in which we operate. Reg ardless of whether we have complied with the law , a government inves gaon could impact our business pracces, harm our reputaon, divert the aenon of management, increase our expenses, and reduce the availability of foundaon support for our paents who need assistance. On December 2, 2020, the HHS published a regulaon removing saf e harbor prot econ for price reducons from phar - maceucal manufactur ers to plan sponsors under Part D, either directly or through pharmacy benet managers (PBMs), unless the price reducon is required by law . The rule also creates a new saf e harbor for price reducons reect ed at the point -of-sale, as well as a saf e harbor for certain x ed fee arrangemen ts between PBMs and manufacturer s. Implemen - taon of this change and new safe harbors for point -of-sale reducons in price for prescripon pharmaceucal products and PBM ser vice fees are curr ently under review by the current U .S. presidenal administr aon and may be amended or repealed. Further , on December 31, 2020, CMS published a new rule, eecve January 1, 2023, requiring manufacturer s to ensure the full value of co-pay assistance is passed on to the paent or these dollars will count towar d the Av erage Manufactur er Price and Best Price calculaon of the drug. On May 21, 2021, PhRMA sued the HHS in the U.S. District Court for the District of Columbia, to stop the implementaon of the rule claiming that the rule contr adicts federal law surrounding Medicaid reba tes. It is unclear how the outcome of this ligaon will a ect the rule. We cannot predict how the implementaon of and any further changes to this rule will aect our business. Although a number of these and oth - er proposed measures may requir e authorizaon through addional legislaon to become eecv e, and the current U.S. presidenal administr aon may rev erse or otherwise change these measures, both the current U .S. presiden al adminis - tra on and Congress have indica ted that they will connue to seek new legislave measures to contr ol drug costs. Violaons of these laws can subject us to criminal, civil and administra ve sancons including monetary penales, dam - ages, nes, disgorg ement, individual imprisonment and exclusion from parcipa on in governmen t funded healthcar e progr ams, such as Medicare and Medicaid, addional r eporng requirements and over sight if we become subject to a corpor ate integrity agreemen t or similar agreement to r esolve allegaons of non-compliance with these laws, reput aonal harm, and we may be requir ed to curtail or restructure our oper aons. Moreover , we expect that ther e will connue t o be feder al and state la ws and regulaons, proposed and implemented, that c ould impact our future opera ons and business. Because of the breadth of these laws and the narrowness of the statutory ex cepons and saf e harbors available, it is pos - sible that some of our business acvies could be subject to challenge under one or more of such laws. Ensuring that our internal oper aons and future business arrangemen ts with third pares comply with applicable healthcare laws and reg - ulaons will involve subs tanal costs. It is possible that governmen tal authories will conclude that our business pracc - es do not comply with current or future sta tutes, regulaons, agency guidance or case l aw inv olving applicable fraud and abuse or other healthcare laws and regulaons. If our operaons are f ound to be in violaon of any of the laws described above or any other government al laws and regulaons that ma y apply to us, we may be subject to signicant penales, including administra ve, civil and criminal penales, damages, nes, disgorg ement, the ex clusion from parcipaon in feder al and state healthcar e progr ams, individual imprisonment, reputa onal harm, and the curtailment or restructuring of our operaons, as well as addional reporng obliga ons and over sight if we become subject to a corporat e integrity agreement or other agreement to resolv e allega ons of non-compliance with these laws. Further , def ending against any such acons can be costly and me consuming, and may r equire signicant nancial and personnel resour ces. Therefor e, even if we are successful in defending ag ainst any such acons that may be brought ag ainst us, our business may be impaired. If any of the physicians or other providers or enes with whom we expect to do business are found to not be in compliance with applicable laws, they may be subject to criminal, civil or administrave sancons, including ex clusions from gov ernment funded healthcare pr ograms and imprisonment. If any of the above occur , our ability to operat e our business and our results of opera ons could be adversely a ected. 1.9.6 Healthcare Reform In the U.S., the European Union and other foreign jurisdicons, there hav e been a number of legislave and regulat o - ry changes to the healthcare syst em that could a ect our future results of operaons. In parcular , there have been and connue to be a number of iniaves at the U.S. feder al and state levels that seek to reduce healthcar e costs and improv e the quality of healthcare. For example, in March 2010, the ACA entered int o for ce. The ACA is a sweeping law in - tended to broaden access to health insurance, reduce or constr ain the growth of healthcare spending, enhance remedies agains t fraud and abuse, add new transparency requir ements for the healthcare and health insurance industries, impose new tax es and f ees on the health industry and impose addional health policy ref orms. Among the provisions of the ACA of importance to our potenal product candidat es are the following: • an annual, nondeducble fee on any enty that manufactur ers or imports specied branded prescripon drugs and biologic products, apporoned among these enes according to their mark et share in certain government healthcare progr ams, although this fee would not apply to sales of certain products appro ved exclusively f or orphan indicaons; • expansion of eligibility criteria for Medicaid pr ograms by , among other things, allowing sta tes to oer Medicaid cover - age to certain individuals with income at or below 133% of the f ederal poverty level, thereby potenally increasing a manufactur er ’ s Medicaid rebate liability; • expansion of manufacturer s’ rebat e liability under the Medicaid Drug Reba te Program by increasing the minimum rebat e for both br anded and generic drugs and revising the denion of “a verage manuf acturer price, ” or AMP , for calculang and reporng Medicaid drug rebates on outpaent prescrip on drug prices and extending rebate liability to prescripons f or individuals enrolled in Medicare Advant age plans; PA RT I 90 | Regulation Regulation | 91 • a new methodology by which rebates owed by manufactur ers under the Medicaid Drug Rebat e Program are calculat ed for products that ar e inhaled, infused, inslled, implanted or injected; • expanding the types of enes eligible for the 340B drug discount progr am; • establishing the Medicare Part D cover age gap discount progr am, which requires manufacturer s to provide a 50% (in - creased to 70% eecv e Januar y 1, 2019 pursuant to subsequent legislaon) point -of-sale-discount o the negoated price of applicable products to eligible beneciaries during their cover age gap period as a condion for the manufac - turer s’ outpaent pr oducts to be covered under Medicar e Part D; • a new Pa ent-Cen tered Outcomes Resear ch Instute to oversee, idenfy priories in and conduct compar ave clinical e ecveness research, along with funding for such resear ch; and • establishment of the Center f or Medicare and Medicaid Innov aon ( CMMI ) within CMS, to test innov ave paymen t and service delivery models to lower Medicar e and Medicaid spending, potenally including prescripon pr oduct spending. Since its enactment, some of the provisions of the ACA have yet to be fully implemented, while certain provisions have been subject to judicial, congr essional, and ex ecuve challenges. As a result, there hav e been delays in the implementa - on of , and acon tak en to repeal or replace, certain aspects of the ACA. Since its enactment, there have been judicial, Congressional and execuve challenges to certain aspects of the ACA. On June 17, 2021, the U.S. Supreme Court dismissed the most recent judicial challenge to the ACA brough t by sever al sta tes without specically ruling on the constuonality of the ACA. Prior to the Supreme Court ’ s decision, President Biden issued an execuv e order to iniat e a special enrollment period from February 15, 2021 through August 15, 2021 for pur - poses of obtaining health insurance cover age through the ACA mark etplace. The ex ecuve order also instructed certain governmen tal agencies to review and reconsider their exisng policies and rules that limit access to healthcare, including among others, reex amining Medicaid demonstraon pr ojects and waiver progr ams that include work requir ements, and policies that create unnecessary barriers to obtaining access to health insurance cover age through Medicaid or the ACA. It is unclear how other healthcare ref orm measures of the Biden administra on or other eorts, if any , to challenge, repeal or replace the ACA will impact our business. Prior to the Biden administr aon, on October 13, 2017, former President T rump signed an ex ecuve order terminang the cost -sharing subsidies, or CSRs, that reimburse insurer s under the ACA. Several st ate Aorne ys General led suit to stop the administr aon from terminang the subsidies, but their request f or a restr aining order was denied by a feder al judge in California on October 25, 2017. On August 14, 2020, the Court of Appeals for the Federal Circuit armed a lower court ruling that the federal gov ernment is liable to insurer s selling marke tplace health plans for the loss of cost -sharing reducon reimbur sements mandated under the ACA. It is unclear what impact this will have on our business. Further , on June 14, 2018, the U.S. Court of Appeals for the Federal Circuit ruled that the feder al governmen t was not required to pay more than $12 billion in ACA risk corridor payments to third-party pa yors who argued were owed to them. On April 27, 2020, the U.S. Supre me Court rever sed the Feder al Circuit decision and remanded the case to the U.S. Court of Feder - al Claims, concluding the governmen t has an obligaon to pay these risk corridor payments under the relevan t formula. It is unclear what eect this will have on our business. In addion, CMS published a nal rule that would give sta tes greater exibility as of 2020 in seng benchmarks for in - surer s in the individual and small group mark etplaces, which may hav e the e ect of relaxing the essenal health benets require d under the ACA for plans sold through such mark etplaces. On December 20, 2019, former Presiden t T rump signed into law the Further Consolidated Appropriaons Act (H.R. 1865), which repeals the Cadillac tax, the health insurance pr ovider tax, and the medical device ex cise tax. It is impossible to determine whether similar tax es could be insta ted in the future. In addion, other legislave changes ha ve been proposed and adopted since the ACA was enacted. These new laws ma y result in addional reducons in Medicare and other healthcar e funding. For example, on August 2, 2011, the Budget Control Act of 2011, among other things, included aggregate r educons of Medicare paymen ts to provider s of 2% per nancial year . These reducons went into e ect on April 1, 2013 and, due to subsequent legislave amendments to the sta tute, including without limitaon the Biparsan Budget Act of 2015, will remain in eect through 2030, with the ex - cepon of a temporary suspension from May 1, 2020 through March 31, 2022 due to the COVID-19 pandemic. Following the suspension, a 1% payment reducon will occur beginning April 1, 2022 through June 30, 2022, and the 2% payment PA RT I 92 | Regulation Regulation | 93 reducon will resume on July 1, 2022. Proposed legislaon, if passed, would extend this suspension unl the end of the pandemic. On January 2, 2013, the American T axpay er Relief Act of 2012 was signed into law , which, among other things, further reduced Medicare paymen ts to sever al types of provider s, including hospitals, imaging centers and cancer trea t - ment center s, and increased the statut e of limitaons period for the governmen t to reco ver overpayments to pro viders from three to ve year s. These new laws may result in addional reducons in Medicare and other health care funding, which could have a material adver se e ect on our customer s and accordingly , our nancial opera ons. On May 23, 2019, CMS issued a nal rule to allow Medicare Advan tage Plans the opon of using step therapy for P art B drugs beginning January 1, 2020. This nal rule codied CMS’ s policy change that was eecve January 1, 2019. However , it is unclear whether the Biden administraon will challenge, rev erse, revok e or other wise modify these ex ecuve and administr ave acons aer January 20, 2021. Recently ther e has been other types of heightened governmen tal scruny over the manner in which manufacturer s set prices for their marke ted products. Specically , there hav e been sever al recent U .S. Congressional inquiries and proposed bills designed to, among other things, bring more transpar ency to drug pricing, reduce the cost of prescripon drugs under Medicare, review the rela onship between pricing and manufacturer paen t progr ams and ref orm government progr am reimbursement methodologies for drugs. At a f ederal level, President Biden signed an Execuve Order on July 9, 2021 arming the administra on’ s policy to (i) support legislave ref orms that would lower the prices of prescripon drug and biologics, including by allowing Medicare to negoate drug prices, by imposing inaon caps, and, by supporng the development and mark et entry of lower -cost generic drugs and biosimilars; and (ii) support the enactment of a public health insurance opon. Among other things, the Execuve Or der also directs HHS to provide a report on acons to combat e xcessive pricing of prescripon drugs, enhance the domesc drug supply chain, reduce the price that the Feder al governmen t pay s f or drugs, and address price gouging in the industry; and directs the FDA to work with stat es and Indian T ribes that propose to develop secon 804 Importaon Pr ograms in accordance with the Medicare Pr escripon Drug, Improvemen t, and Modernizaon Act of 2003, and the FDA ’ s implemenng regulaons. FDA released such implemenng regulaons on September 24, 2020, which went into e ect on November 30, 2020, providing guidance for st ates to build and submit importaon plans for drugs from Canada. On September 25, 2020, CMS sta ted drugs imported by sta tes under this rule will not be eligible for feder al rebat es under Secon 1927 of the Social Security Act and manufacturer s would not report these drugs for “best price” or Av erage Manufactur er Price purposes. Since these drugs are not considered cover ed outpaent drugs, CMS further stat - ed it will not publish a Naonal Averag e Drug Acquision Cost for these drugs. If implemented, import aon of drugs from Canada may materially and adversely a ect the price we receive f or any of our product candidat es. Further , on November 20, 2020 CMS issued an Interim Final Rule implemenng the Most F avored Naon (MFN) Model under which Medicare Part B reimbur sement rates would hav e been calculat ed for certain drugs and biologicals based on the lowest price drug manufacturer s receive in Organiz aon for Economic Coopera on and Development countries with a similar gross domesc product per capita. Howev er , on December 29, 2021 CMS rescinded the MFN rule. Addionally , on November 30, 2020, HHS published a regulaon removing saf e harbor protecon f or price reducons from pharmaceucal manu - factur ers to plan sponsors under Part D, either directly or through pharmacy benet managers, unless the price reducon is required by law . The rule also creates a new safe harbor for price reducons reect ed at the point -of-sale, as well as a safe harbor for certain x ed fee arrangemen ts between pharmacy benet managers and manufactur ers. Pursuant to court order , the removal and addion of the aforemenoned saf e harbors were delay ed and recent legislaon imposed a morat orium on implementaon of the rule unl January 1, 2026. Although a number of these and other proposed measures may requir e authorizaon through addional legislaon to become eecv e, and the Biden administraon may rev erse or other wise change these measures, both the Biden administra on and Congress hav e indicat ed that they will connue to seek new legislave measures to contr ol drug costs. W e expect that addional U.S. f ederal healthcare re form measures will be adopted in the future, any of which could limit the amounts that the U.S. f ederal government will pay f or healthcar e products and services, which could result in reduced demand for our product candidat es or addional pricing pressures. Further , legislave and regulatory proposals ha ve been made to expand post -approval requir ements and restrict sales and promoonal acvies for pharmaceucal products. W e cannot be sure whether addional legislave changes will be enacted, or whether FDA regulaons, guidance or interpret aons will be changed, or what the impact of such changes on 94 | Regulation 94 | Regulation the marke ng approv als, if any , of our product candida tes, may be. In addion, increased scruny by the U.S. Congress of the FDA ’ s approval pr ocess may signican tly delay or prev ent markeng approv al, as well as subject us to more string ent product labeling and post -markeng condions and other requirements. Individual stat es in the U.S. have also become increasingly aggressive in passing legislaon and implemenng regulaons designed to control pharmaceucal and biological product pricing, including price or paent reimbur sement constraints, discounts, res tricons on certain product access and markeng cos t disclosure and transpar ency measures, and, in some cases, designed to encourage import aon from other countries and bulk purchasing. Legally mandat ed price controls on payment amounts by third-party pay ors or other res tricons could harm our business, results of opera ons, nan - cial condion and prospects. In addion, regional healthcar e authories and individual hospitals are increasingly using bidding procedures to determine what pharmaceucal pr oducts and which suppliers will be included in their prescripon drug and other healthcar e progr ams. This could reduce the ulmate demand for our products or put pressure on our product pricing, which could negavely a ect our business, results of operaons, nancial condion and prospects. In the European Union, similar polical, economic and regulatory developmen ts may a ect our ability to protably com - mercializ e our current or any future pr oducts. In addion to connuing pressure on prices and cost containment mea - sures, legislave dev elopments at the European Union or member state level ma y result in signicant addional require - ments or obstacles that may incr ease our operang cos ts. The delivery of healthcare in the European Union, including the establishment and opera on of health services and the pricing and reimbur sement of medicines, is almost exclusiv ely a maer for naonal, r ather than European Union, law and policy . Naonal governments and health service pro viders have di erent priories and approaches to the delivery of health care and the pricing and reimbur sement of products in that conte xt. In general, howe ver , the healthcare budget ary constr aints in most European Union member st ates have resulted in res tricons on the pricing and reimbur sement of medicines by relevan t health service providers. Coupled with ever -increasing European Union and naonal regula tory burdens on those wishing to develop and market products, this could prevent or delay mark eng approval of our product candidat es, res trict or regulate post -approv al acvies and aect our ability to commercializ e any products for which we obtain marke ng approv al. In interna onal mark ets, reimbur sement and healthcare pa yment syst ems vary signicantly by country , and many countries have instut ed price ceilings on specic products and therapies. W e cannot predict the lik elihood, natur e or extent of governmen t regulaon that may arise from future legislaon or administr ave acon, either in the U.S. or abroad. If we or our collabora tors are slow or unable to adapt to changes in exisng r equirements or the adopon of new requirements or policies, or if we or our collaborat ors are not able to main - tain regulat ory compliance, our product candidates ma y l ose any regula tory approv al that may have been obtained and we may not achieve or sustain prot ability , which would adversely a ect our business. 1.9. 7 Environmental issues which may influence the use of our material fixed assets Our primary research and development acvies tak e place in our facilies in Zwijnaarde, Belgium. For these acvies we require, and hav e obtained, the necessary environmen tal and biohazar d permits from the responsible governmen ts, require d by us for the manner in which we use said facilies 2 Cont ents 2.1 Risk F actor s Rela ted to arg enx ’ s Financial Posion and 98 Need f or Addional Capital 2.2 Risk F actor s Rela ted to the Developmen t and Clinical T esng 100 of arg enx ’ s Products and P roduct Candida tes 2.3 Risk F actor s Rela ted to Commercializ aon of ar genx ’ s 108 Pr oduct Candidates 2.4 Risk F actor s Rela ted to arg enx ’ s Business and Industry 114 2.5 Risk F actor s Rela ted to arg enx ’ s Dependence on Third P ares 119 2.6 Risk F actor s Rela ted to arg enx ’ s Intellectual P roperty 124 2.7 Risk F actor s Rela ted to arg enx ’ s Org anizaon and Oper aons 133 P ART II Risk F actors 2 Risk F actors The occurrence of any of the events or circumstances described in these risk f actors, individually or together with other circums tances, could ha ve a ma terial adverse eect on the business, results of operaons, nancial condion and pros - pects of ar genx. These ar e not the only risk s argenx f aces. Addional risks and uncertaines not presently known t o argenx or that it currently consider s immaterial or not specic may also impair its business, r esults of operaon and nancial condion. 2. 1 Risk F actors Related to argenx’ s Financial Position and Need for Additional Capital 2. 1. 1 We have incurr ed significant losses since our inception and expect to incur losses for the foreseeable future. We may never achieve or maintain profitability . W e are a commercial-stag e biopharmaceutical company with a limited operating history and we have only very recently commenced our transition from clinical-st age to a commercial-stag e company . Only VYVGART™ (ef gartigi - mod alfa fcab) for the trea tment of gMG has obtained regulatory approval in the U.S. on December 17, 2021 and in Japan on Januar y 20, 2022 and we do not currently have any approvals in any other jurisdictions or for any other product candidates. Since our inception, we have incurred significant operating losses, totaling USD 1,400.2 million of cumulative losses. Our losses resulted principally from costs incurred in research and developmen t, preclinical testing, clinical development of our product and our product candidat es as well as costs incurred for research progr ams, pre-commer cial activities and from general and administrativ e costs associated with our operations. In addition, we expect to continue to incur significant costs associated with our listings in the U.S. and in Europe. In the future, we intend to continue to conduct research and developmen t, preclinical testing, clinical trials and regulat ory compliance activities as well as the commercializ ation of VYVGART™ for the trea tment of gMG in the U.S. and in Japan and we intend to continue our efforts to establish and maintain a sales, mark eting and distribu - tion infrastructur e. These expenses, toge ther with anticipated general and administrative expenses, will result in incurring further significant losses for at least the next sever al year s. W e anticipate that our expenses will increase subst antially if and as we ex ecute our stra tegic objectives and as we experience delays or encount er issues relating theret o, including failed studies, ambiguous trial results, saf ety issues or other regulatory challenges. If our losses become greater than expected, we may require additional financing than anticipated and such financing may not be available to us on acceptable terms or at all. T o become and remain profitable, we must succeed in developing and eventually commercializing products that gener ate significant revenue. This will require us to be successful in a range of challenging activities, including com - pleting preclinical testing and clinical trials of our product and our product candidates, discovering and developing additional product candidates, obtaining regulatory approval for any product candidat es that successfully complete clinical trials, est ablishing manufacturing and mark eting capabilities and ultimately selling any products for which we may obtain regulatory approv al. We may never succeed in these activities and, even if we do, may never gener - ate rev enue that is significant enough to achieve profitability . For instance, even though we have received approv al of and commercializ e VYVGART™ for the treatment of gMG in the U.S. and in Japan, we can provide no assurances that we will be able to achieve profitability based on sales in that indication alone or that we will be able to receive approv al of and commercializ e VYVGART™ in other indications or in other countries. Ev en if we do generat e product r oyales or product sales, we may never achieve or sustain protability on a quarterly or annual basis. Our failur e to achieve or sust ain prot ability could impair our ability to r aise capital, e xpand our business, diver sif y our product oerings or connue our operaons and as such could have a material adver se impact on our busi - ness, nancial condion and results of opera ons. 2. 1.2 Substantial additional funding may be required in order to complete the development and commer cialization of our products and product candidates, but may not be available to us on acc eptable terms or at all. Notwithstanding our signicant posion of cash and cash equivalents of USD 1,334.7 million and other current nancial assets of USD 1,002.0 million as of December 31, 2021, as disclosed in our consolidated nancial stateme nts for the nancial year ended December 31, 2021, we expect to require addional funding in the future to suciently nance our opera ons, to advance developmen t of our products and product candidates and to connue our business acvies re - lang to research and developmen t and the commercializa on of our products. Our future capital requiremen ts f or VYV - GART™ and our current or any future product candidat es will depend on many factors, including (i) the progress, ming and compleon of preclinical tesng and clinical trials for our current or any future product candidat es, (ii) the number of potenal new product candidat es we idenfy and decide to develop, (iii) the me and costs involved in obtaining reg - ulatory approv al for our product candidates and any delay s we may encount er as a result of evolving regulatory requir e - ments or adverse results with respect to any of our product candidat es, (iv) selling and mark eng acvies undertaken in connecon with the potenal commer cializaon of our current products or product candidates or any future pr oduct candidat es, if approved, and costs in volved in the creaon of an eecv e sales and marke ng org anizaon, (v) manufac - turing acvies undertaken ahead of the potenal commercializ aon of our current products or product candida tes or any future pr oduct candidat es, if approved, and costs in volved in the creaon of an e ecve supply chain, (vi) the costs involv ed in growing our org anizaon to the size needed to allow for the research, development and potenal commer - cializaon of our current products or product candida tes or any future pr oduct candidat es, (vii) the costs involv ed in ling paten t applicaons and maintaining and enfor cing patents or defending ag ainst claims or infringements raised by third pares, (viii) the maintenance of our exisng collabor aon agreements and entry into new collabora on agreements, (ix) the amount of revenues, if any , we may derive either directly or in the form of royalty pa yments from future sales of our current pr oducts or product candidates or any futur e product candidat es, if approv ed, and (x) developments relat ed to COVID-19 and its impact on the costs and ming associated with the conduct of our clinical trials, preclinical progr ams, manufacturing acvies and other related acvies. In prepara on of our commercial launch of VYVGART™, our cash burn increased signican tly in 2021 as compar ed to 2020 and previous nancial years. As disclosed in our consolidated nancial sta tements for the nancial year ended December 31, 2021, net cash oulow from our operang acvies increased by $208.3 million to a net oulow of $606.8 million for the year ended December 31, 2021, compared to a net oulow of $398.5 million for the year ended December 31, 2020. As disclosed in our previous consolidated nancial stat ements, our cash ows from our opera ng acvies amounted to a net inow from of $151.3 million (€134.6 million) for the year ended December 31, 2019, a net oulow of $63.5 million (€53.8 million) for the year ended December 31, 2018 and a net oulow of $41.1 million (€36.5 million) for the year ended December 31, 2017. Based on our current plans to expand our commercial infr astructure and dieren at - ed pipeline of assets, we expect our cash burn to connue to signicantly increase in 2022. The increased spend will support our transion to an integra ted immunology compan y and is, in parcular , expected to be used to build our commercial infr astructure to support the commercializa on of VYVGART™ in the U.S. and in Japan for the treatmen t of gMG and, if approv ed, for a rapidly growing number of indicaons in the U.S. and Japan and our other ke y territories (in the EU), to advance the development of efg argimod to market regulat ory approv al for the treatment of ITP , PV , CIDP , BP , my osis, COVID-19 mediat ed PO TS, SjS, MN and LN, to advance clinical development of ARGX -117 in mulple Phase 2 proof of concept trials in MMN and DGF in the cont ext of kidney transplan t, to advance ARGX -119 and early stage pipeline candidates in our commercial franchises, the neuromuscular , hematology , dermatology and nephrology franchis - es, to build out a commercial supply chain to support our global launches of any approved products, to expand our pipeline of future product candidates through the IIP , and to fund other current and future resear ch and development acvies and technology development and for working capital and other general corpor ate purposes. 98 | Risk F actors Related to argenx’s Financial Position and Need for Additional Capital Risk F actors Related to argenx’s Financial Position and Need for Additional Capital | 99 P ART II Any failur e by us to k eep the cash burn under contr ol by applying our funds eecvely and managing our cash and inv est - ments appropriat ely could result in nancial losses that could have a material adverse e ect on our business. Unl such me as we can generate signicant re venue from product sales, if ever , we expect to nance our operaons through a combina on of public or private equity or debt nancings or other sour ces, which may include collabor aons with third pares. Our ability to r aise addional funds will depend on nancial, economic and mark et condions and other fact ors, over which we ma y have no or limited c ontrol. Adequate addional nancing ma y not be available t o us on accept - able terms, or at all. The inability f or us to raise capit al as and when needed would have a neg ave impact on our nancial condion and our ability to pur sue our business strat egy and as a result we may be f orced to dela y , reduce or termina te the development or c ommercializaon of all or part of our r esearch progr ams or products or product candida tes, we may be requir ed to signicantly curtail, dela y or disconnue one or more of our resear ch or development pr ograms or the com - mercializ aon of any of our products or pr oduct candidates, or be unable to e xpand our operaons or otherwise capit alize on our business opportunies, as desired or we ma y be unable to tak e advantag e of future business opportunies, all of which may ha ve a material adver se impact on our business, nancial condion and results of oper aons. 2. 1.3 The investment of our cash and cash equivalents may be subject to risks which may cause losses and aect the liquidity of these inv estments. As of December 31, 2021, we had cash and cash equivalents and current nancial assets of USD 2,336.7 million. W e historic ally hav e inves ted substanally all of our available cash and cash equivalents and current nancial assets in either current accounts, savings accoun ts, term accounts or highly liquid money market funds, pending their use in our business. Any future inv estments may include term deposits, corporate bonds, commer cial paper , cercate of deposit, governmen t securies and money market funds in accordance with our cash management policy . These investments ma y be subject to general credit, liquidity , and mark et and inter est rate risks. F or ex ample, we may r ealize losses in the fair value of these investmen ts or a complete loss of these inv estments, which would have a negave e ect on our nancial condion. In addion, should our inves tments cease paying or reduce the amount of interes t paid to us, our interest income would suer . The market risks associate d with our investment por olio may have an adverse e ect on our results of operaons, liquidity and nancial condion. 2.2 Risk F actors Related to the Development and Clinical T esting of ar genx’s Pr oducts and Product Candidates 2.2. 1 All but one o f our pr oducts and product candidates are either in preclinical, earl y-stage clinical or clinical dev elopment or market appr oval has been requested f or them, but has not ( yet ) been granted, and only VYV GART™ for the tr eatment of gMG has obtained regulatory approval in the U.S. and in Japan. Our trials may fail and ev en if the y succeed we may be unable to commercialize any or all of our products and pr oduct candidates due to a lack of , or delay in, regulatory approval or f or other r easons. For our clinical trials to succeed and in order to obtain the requisite regulat ory approv als to market and sell any of our products and product candidat es, we or our collaborat ors for such candidates must successfully demonstr ate through extensiv e preclinic al studies and clinical trials that our products are saf e, pure and potent or eecve in humans. Clinical tesng is expensive and can tak e many years to comple te, and its outcome is inherently uncertain. F ailure can occur at any me during the clinical trial process and our future clinical trial results may not be successful. There is a high failure ra te for drugs and biologics proceeding through clinical trials. A number of companies in the pharmaceucal and bio - technology industries hav e suer ed signicant setbacks in clinical development even aer achieving promising results in earlier studies, and any such setbacks in our clinical development could ha ve a material adver se eect on our business, opera ng results and nancial condion. W e may experience delays in our ongoing clinical trials, including as a result of COVID-19, and we do not know whether planned clinical trials will begin on me, need to be redesigned, enroll paents on me or be complet ed on schedule, if at all. Clinical trials can be delay ed, suspended, or terminated f or a large variety of reasons outside our control, includ - ing delays of approv al from regula tory authories, instuonal revie w boards or ethics commiees, delay s or failure to recruit or retain paen ts, failur es of third pares to comply with regulatory or contr actual requir ements or issues relang to the quanty , quality or stability of the product or product candidate. W e could encount er delays, for ex ample if a clinical trial is suspended or terminated by us, by the instuonal review boards ( IRBs ) of the instuons in which such trials are being conducted or ethics commiees, by the Data Revie w Commiee ( DRC ) or Data Saf ety Monitoring Board ( DSMB ) for such trial or by the EMA , FDA, PMDA or other regulatory authories. Such authories may impose a suspension or terminaon due to a number of factors, including failur e to conduct the clinical trial in accordance with regulat ory requir ements or our clinical protoc ols, inspecon of the clini - cal trial operaons or trial site by the EMA , FDA, PMDA or other regulatory authories resulng in the imposion of a clinical hold, unfore seen saf ety issues or adverse side e ects, including those relang to the class to which our products and product candidates belong, failure to demonstr ate a benet from using products or product candida te, changes in governmen tal regulaons or administrav e acons or lack of adequate funding to connue the clinical trial. We could also experience operaonal challenges as we undertak e an increasing number of clinical trials. If we experience delays in the compleon of , or terminaon of , any clinical trial of our products or product candidat es, the commercial pr ospects of our products and product candidates will be harmed, and our ability to generate pr oduct rev enues from an y of these products and product candidat es will be delayed. In addion, any delays in compleng our clinical trials will increase our costs, slow down our product candidate development and approv al process and jeopardize our ability to commence product sales and generat e revenues. Signicant clinical trial delays could also allow our competors to bring products to mark et before we do or shorten any periods during which we hav e the ex clusive right to commercialize our products and product candidates and impair our ability to commercialize our products and product candidat es and may harm our business, results of operaons and nancial condion. Clinical trials must be c onducted in accordance with the EMA, FDA, PMDA and other applic able regulatory authories’ legal r equirements and regulaons and ar e subject to oversigh t by these government al agencies and IRBs at the medical ins - tuons where the clinical trials ar e conducted or ethics commiees. In addion, clinic al trials must be conducted with supplies of our products and pr oduct candidates produced under cGMP r equirements and other regula ons. Furthermore, we rely on contr act research org anizaons ( CROs ) and clinic al trial sites to ensure the pr oper and mely conduct of our clinical trials and while we hav e agreements governing their c ommied acvies, we hav e limited inuence over their actual perf ormance. W e depend on our collaborat ors and on medical instuons and CROs t o conduct our clinical trials in compliance with GCP requiremen ts. T o the extent our collabor ator s or the CROs or invesg ators f ail to enroll parcipants f or our clinical trials, fail to conduct the s tudy to GCP standards or ar e delayed f or a signicant me in the ex ecuon of trials, including achieving full enrollment, w e may be a ected by increased costs, pr ogram dela ys or both, which may harm our business. In addion, clinical trials that are c onducted in countries outside the European Union and the U .S. may subject us to further dela ys and expenses as a result of increased shipme nt costs, addional regulat ory requirements and the eng agement of non-European Union and non-U.S. CR Os, as well as expose us to risks associa ted with clinical inves gator s who are unknown to the EMA, FDA, PMDA or other regulat ory authories, and apply dierent s tandards of diagnosis, screening and medic al care. Bef ore we can commence clinical trials f or a product candidat e, we must complete e xtensive preclinical t esng and studies that support our planned IND applicaons in the U .S. or Japan, or a clinical trial applicaons ( C TA s ) in Europe, or a c ompa - rable applica on in other jurisdicons. We cannot be cert ain of the mely compleon or outcome of our preclinic al tesng and studies and cannot pr edict if the EMA , FDA, PMDA or other r egulatory authories will accept our proposed clinical progr ams or if the outcome of our preclinical t esng and studies will ulmately support the further dev elopment of these 100 | Risk F actors Related to the Development and Clinical T esting of argenx’ s Products and Product Candidates Risk Factors Related to the Development and Clinical T esting of arg enx’s Products and Product Candidates | 101 P ART II product candida tes. Thus, we cannot be sure that w e will be able to submit INDs or CT As or compar able applicaons for our preclinical pr ograms on the melines we expect, if a t all, and we cannot be sure that submission of INDs or CT As or compa - rable applica ons will result in the EMA, FDA, PMDA or other regula tory authories allowing clinical trials to begin. Ev en if clinical trials do begin for these preclinical pr ograms, our development eorts ma y not be successful, and clinical trials that we conduct or that third pares conduct on our behalf may not demonstrate sucient saf ety , purity and po - tency or ecacy to obtain the requisite regula tory approvals for an y of our products and product candidates or products and product candidates employing our technology . Many of our clinical trials are blinded, which may cause us to incur signicant expenses without any visibility as to the likelihood of successful results. For instance, we e xpect to receive topline data f or the Phase 3 ADV ANCE trial of 10 mg /kg ef gargimod for the treatmen t of primary ITP in the second quar - ter of 2022. As such study results are blinded, we will not know whether such trial has been successful unl we receive the data and cannot assure you that such data will contain posive results. E ven if we obtain posive results fr om preclin - ical studies or inial clinical trials, we may not achieve the same success in future trials. Any of these occurrences may harm our business, results of opera ons and nancial condion signicantly . In addion, many of the factor s that cause, or lead to, a delay in the commencement or compleon of clinical trials may also ul - mately lead to the denial of regula tory appro val of our product candidat es or result in the development of our product candidat es being stopped early . The me required to obtain approv al by the FDA, EMA, PMDA and compar able foreign authories is unpredictable but typically tak es many years, if obtained at all, following the commencement of clinical trials and depends upon numerous fact ors, including the substan al discreon of the regulat ory authories. In addion, approv al policies, regulaons, or the type and amount of clinical data necessary to gain approv al may change during the course of a product candidate’ s clinical development and may vary among jurisdicons. Only VYVGART™ for the treatment of gMG has obtained regulato - ry approval in the U.S. and in Japan and we do not currently have any appr ovals for any other indicaon, in any other ju - risdicons or for any other product candidates and it is possible that none of our other exis ng product candida tes or any product candidat es we may seek to develop in the future will ever obtain regulat or y approv al in any other jurisdicon or indicaon. Approv al by one regulatory authority does not guarantee appro val by another regulat ory authority on the basis of the same data or at all. We ha ve limited experience in subming and supporng the applicaons necessary to seek regulatory appro vals and expect to rely on third-party CROs to assist us in this process. Securing regulatory approv al require s the submission of ext ensive nonclinical and clinical data and supporng informaon to r egulatory authories for each therapeuc indica on to establish the product candida te’ s safety and ecacy . Securing regulatory approv al also require s the submission of inf ormaon about the product manufacturing process to , and inspecon of manufacturing facilies by , the regulatory authories. If we are unable to obtain regulatory approv al of our products and product candidates on a mely basis or at all, our business will be materially impacted. F or instance, we ha ve incurred signicant me and expense rela ted to preparaon for the build-out of our global commercial infr astructure and drug product invent ory ahead of the launch of VYVGART™ for the treatmen t of gMG. An MAA for ef gargimod for the trea tment of gMG is currently under review with the EMA with an ancipated decision in the second half of 2022 and we expect Zai Lab to be able to le for approv al in Great er China by mid-2022 and Medison in Israel in the second quarter of 2022. If VYVGART™ is not approv ed in one or more jurisdicons other than the U.S. and Japan, or if such approvals ar e signicantly dela yed, it could hav e a material adver se e ect on our business. 2.2.2 Business interruptions resulting fr om the COVID- 19 pandemic could cause a disruption of the development of our products and product candidates and adversel y impact our business. Public health crises such as pandemics or similar outbreaks could adver sely impact our business, such as the COVID-19 pandemic. The COVID-19 pandemic is evolving and has already endured sever al wa ves and varian ts, and, as of the date of this Universal Regis tration Document, has led to the implementation of various responses, including government - imposed quarannes, tr avel restricons and other public health saf ety measures. The extent to which the COVID-19 pandemic impacts our business and operaons and those of our collabor ators, in - cluding clinical development and regulatory e orts, will depend on future developments that are highly uncertain and cannot be predicted with condence at this me, such as the ulmate geographic spread of the disease, the duraon of the outbreak, the eecv eness of vaccines and other treatments agains t new variants or mutaons of the disease, the dura on and eect of business disrupons and the short -term eects and ulmate e ecveness of the tra vel restricons, quaran nes, social distancing requir ements and business closures to cont ain and treat the disease. Accordingly , we do not yet know the full ext ent of potenal dela ys or impacts on our business, our clinical and regulatory acvies and those of our partners, healthcare sy stems or the global economy as a whole. However , these impacts could adversely aect our business, nancial condion, results of oper aons and growth prospects. In addion, to the extent the ongoing COVID-19 pandemic adversely a ects our business and results of operaons, it may also have the eect of heightening man y of the other risks and uncertaines described herein. Opera onal impacts of COVID-19 W e conduct our clinical trials globally , including in areas impacted by COVID-19 in North America, Europe and Japan. The connued spread of COVID-19 has and could connue to adversely impact our business and operaons, including our or our third-party partners’ discovery acvies, preclinical studies and clinical trials. The COVID-19 pandemic, and measures undertak en to control the spread of the COVID-19 virus, could impair our or our third-party partners’ ability to iniate clinical trial sites and recruit and retain paents because principal invesg ator s and site sta , as healthcare providers, may hav e heighte ned exposur e to COVID-19 if an outbreak occurs in their geograph y or due to priorizaon of hospital resour ces towar d the outbreak and restricons in tra vel. Furthermore, some paents may be unwilling to enroll in our or our third-party partners’ trials or be unable to comply with clinical trial protoc ols if quaranne s or tra vel restricons impede paent movement or interrupt healthcar e ser vices. Paen ts in our and our third-party partners’ trials are at increased risk for COVID-19-r elated health issues due to a number of fact ors, including their age, the nature of their disease or stage of their disease. If paents in our or our third-party partners’ trials contr act COVID-19, it could adversely impact the outcome of the trial, including by liming the quality , complet eness and interpre tability of dat a that we are able to collect. As a result of these restricons, enrollmen t in some of the ongoing trials we or our third-party partners are conducng has been or ma y be delayed, but the e xtent of the full impact is not quanable as a result of the connued mutaon of the virus and uncertain ty as to the eecveness of vaccines and treatmen ts there for . The pandemic may also lead to delay ed and missed dosing or delayed and missed disease ev aluaons for paents tha t have already been enr olled in ongoing trials. We and our third-party partners will connue to monitor the impact of COVID-19 on all ongoing clinical trials and will implement changes as necessary . W e and/or our respecv e partners ev aluate the advancement of each clinical progr am on a connuous basis taking into account the traject or y of COVID-19. If we and/or one of our partners elect not to move forwar d with some or all of these clinical progr ams as a result of the COVID-19 pandemic or otherwise, we would not be entled to some or all of the future paymen ts which we are eligible to receive under the collaboraon agreemen t with such partner . W e have been informed by our drug subst ance and drug product manufacturing partners about potenal limita ons in the availability of crical manufacturing mat erials due to the demand outweighing the av ailable manufacturing capacity for these materials and priorizaons imposed by the U.S. governmen t on the manufacturing of COVID-19 vaccines and therapeucs. There fore, we may e xperience limitaons in manufacturing capacity which could impact our ability to build adequate inv entory as we support the commercial launch of VYVGART™ in gMG, and as we prepare f or the commercial launch of efg argimod in addional indicaons, if approved. W e are working closely with our manufacturing partners to miga te those risks to the extent possible. Since March 2020 when f oreign and domestic inspections by the FDA of facilities were larg ely placed on hold, the FDA has been working to resume routine surveillance, bioresearch monitoring and pre-appro val inspections on a prioritized basis. Since April 2021, the FDA has conducted limited inspections and employed remot e inter active evalua tions, using risk management methods, to meet user fee commitments and goal dates. The FDA is continuing to complete mission-critical work, prioritize other higher-tier ed inspectional needs (e.g., for -cause inspections), and carry out surveillance inspections using risk-based approaches for evaluating public health. As of the date of this Univer sal Registr ation Document, ongoing trav el restrictions and other uncertainties continue to impact over sight opera tions. Should the FDA determine that an inspection is necessary for approv al of a marketing application and 102 | Risk F actors Related to the Development and Clinical T esting of argenx’ s Products and Product Candidates Risk F actors Related to the Development and Clinical T esting of argenx’ s Products and Product Candidates | 103 P ART II an inspection cannot be completed during the review cycle due to res trictions on travel, the FDA has stat ed that it generally intends to issue, depending on the circums tances, a complete response letter or defer action on the application until an inspection can be completed. A complete response letter indicates that the review cycle of the application is complete and the application will not be approved in its present form, and usually describes all of the specific deficiencies in the new drug application identified by the FDA. The applicant may either resubmit the new drug application, addressing all of the deficiencies identified in the letter , withdra w the application, or request a hearing. In 2020 and 2021, a number of companies announced receipt of complete response lett ers due to the FDA ’ s inability to complet e required inspections for their applications. Regulat ory authorities outside the U.S. may adopt similar restrictions or other policy measures in response to the COVID-19 pandemic and may experience delays in their regulatory activities. Such restrictions and delay s could adversely aff ect our ability to obtain regulatory approval for and to commer cialize our products and product candidat es and have a material adverse eff ect on our business and financial results. Economic impacts of COVID-19 The spread of COVID-19, which has caused a broad impact globally , may materially aect us economically . While the potenal economic impact brought by , and the dur aon of , COVID-19 may be dicult to assess or predict, a worsening of the severity or spread of the pandemic could result in signicant disrupon of global nancial markets, reducing our ability to access capital, which could in the future negavely a ect our liquidity . In addion, a recession or marke t correcon resulng from the spread of COVID-19 could materially aect our business and the value of our ADSs and/or our ordinary shares. Impacts of COVID-19 on employees or other st akeholders COVID-19 ma y also negav ely impact our employees and our other stak eholders. Prec auonary measures that we hav e tak en, such as tempor arily requiring employees to work remot ely , suspending all non-essenal travel f or our employees and discouraging employee a endance at i ndustry even ts, may not succeed in minimizing the risk of infecon to our employees, and such measures, together with the COVID-19 pandemic, could negavely impact the producvity or emoonal health and wellbeing of our employees. 2.2.3 We may fac e ongoing obligations and additional expenses ev en when and if our product candidates are appro ved, and we may face r estrictions, market withdrawal and penalties if we fail to compl y with regulatory requirements or experienc e unanticipated problems with our products. When and if the EMA, FDA, PMDA or a comparable regulatory authority approves any of our product candidates, the manufacturing processes, labelling, packaging, distribution, adverse event reporting, storag e, advertising, promo - tion and recor dkeeping for the product will be subject to ext ensive and ongoing regula tory requiremen ts. These requiremen ts include submissions of safety and other post -marketing informa tion and reports, registr ation, as well as continued compliance with cGMPs and GCPs for any clinical trials that we conduct post -approval, all of which may result in significant expense and limit our ability to commercializ e such products. In addition, any regulat ory approv - als that we receive for our product candidates may also be subject to limitations on the approved indicated uses for which the product may be mark eted or to the conditions of approval, or cont ain requiremen ts for potentially expen - sive post -marketing testing, including Phase 4 clinical trials, and surveillance to monitor the saf ety and efficacy of the product candidate. Our products and product candidates are classied as biologics in the U.S. and, theref ore, can only be sold if we obtain a BLA from the FDA and there fore cannot be sold in the U.S. if we do not obtain a BLA. The holder of a BLA is obliga ted to monitor and report adverse even ts and any failur e of a product to meet the specicaons in the BLA. The holder of a BLA must also submit new or supplemental applicaons and obtain FDA approv al for certain changes to the approved product, product labelling or manufacturing process. If there are chang es in the applicaon of legislaon, regulaons or r egulatory policies, or if problems are disc overed with a product or our manuf acture of a product, or if we or one of our distribut ors, licensees or co-mark eters f ails to comply with regulat ory requirements, the regula tors could tak e various acons. These include imposing nes on us, imposing res tricons on the product or its manuf acture and requiring us to rec all or remove the product fr om the market. The r egulators c ould also revok e, suspend or withdra w our markeng authoriz aons, requiring us to conduct addional clinical trials, change our product labeling or submit addional applicaons f or marke ng authorizaon. If any of these ev ents occurs, our ability to sell such product ma y be impaired, and we ma y incur substanal addional expense t o comply with regulatory requir e - ments, which could mat erially adversely a ect our business, nancial condion and results of opera ons. 2.2.4 Our pr oducts and product candidates may hav e serious adverse, undesirable or unac ceptable side eects or ev en cause death, and we or others may identify undesirable or unac ceptable side eects caused by VYVGART™ or any of our product candidates after they receive mark eting approval. Undesirable side effects that may be caused by our product candidates or by the combination of our product candi - dates with other medical products could cause us or regulatory authorities to interrup t, delay or halt clinical trials and could result in a more restrictive label or the delay or denial of regulatory approval by the EMA, FDA, PMDA or other compar able regulatory authorities. While our preclinical and clinical studies for our product candidates to date show that our product candidat es have gener ally been well toler ated from a risk-bene fit perspective, we have observed adver se events and TEAEs in our clinical studies to date, and we may see additional adver se events and TEAEs in our ongoing and future trials, which may be more serious than those observed to date, and as a result, our ongoing and future trials may be negatively impacted. The drug-related side effects could affect patient recruitmen t or the ability of enrolled patients to complete the trial or result in potential product liability claims. Any of these occurrences may harm our business, results of operation and financial condition significantly . Further , because all of our product candi - dates and preclinical programs, which have not yet received approv al by at least one regulatory authority other than VYVGART™ for the treatment of gMG, are based on our SIMPLE Antibody™ platf orm, any adverse saf ety or efficacy findings related to any product candidate or preclinical progr am may adver sely impact the viability of our other prod - uct candidates or preclinical progr ams. Addionally , if we or others idenfy undesirable or unacceptable side eects caused by VYVGART™ or any of our other product candidat es aer they receiv e markeng approv al, a number of potenally signicant negav e consequences could arise, including: • regulatory authories may withdra w approv als or rev oke licenses of such products and requir e us to tak e such products o the market; • regulatory authories may requir e the addion of labeling sta tements, specic warnings, or a contr aindicaon or request the issuance of eld alerts to physicians and pharmacies; • regulatory authories may requir e a medicaon guide outlining the risks of such side eects for distribuon to paents, or that we implement a REMS plan to ensure that the benets of the product outweigh its risks; • we may be required to change the way the product is administer ed, conduct addional clinical trials or change the labeling of the product; • we ma y be subject to limitaons on how we may promote the product; • sales of the product may decrease signicantly; • we ma y be subject to ligaon or product liability claims; and • our reputaon may su er . Any of these events could prev ent us, our collabora tors or our potenal future partners from achieving or maintaining mark et acceptance of the aect ed product or could subst anally increase commercializa on costs and expenses, which in turn could delay or prevent us from gener ang signicant revenue from the sale of our products. For e xample, we unders tand that another compan y developing an FcRn antag onist recently iniated a voluntary pause of its ongoing clinical trials aer an observed signal of elevat ed total cholesterol and low -density lipoprot ein (LDL) levels in one of its ongoing trials. We ha ve evaluated VYVGAR T™ in over 600 subjects and paents and to date we hav e not seen evidence of evaluaon in cholester ol markers r elated to treatment with VYVGART™. Howev er , if we were to observe unexpect ed adverse ev ents of whate ver kind, our trials could be similarly paused and it could hav e a material adver se e ect on our ability to further the advancemen t of our product candidates. Further , the FDA or the PMDA could requir e a change of 104 | Risk F actors Related to the Development and Clinical T esting of argenx’ s Products and Product Candidates Risk Factors Related to the Development and Clinical T esting of argenx’ s Products and Product Candidates | 105 P ART II label or even revok e the license, which could harm our reput aon and hav e a material adver se e ect on our ability to commercializ e VYVGART™. 2.2.5 We face significant competition for our drug disco very and de velopment eorts. The mark et for pharmaceucal products is highly compeve. Our compet ors we face in the autoimmune eld, the eld of leuk emia and lymphoma and the monoclonal anbody drug discovery eld include many established pharmaceucal companies, biotechnology companies, univer sies and other research or commercial instuons, man y of which hav e subst anally greater nancial, resear ch and developmen t resour ces than we have. Large pharmaceucal c ompanies, in parcular , have e xtensive experience in clinical tesng, obtaining r egulatory approvals, r ecruing paents and manufactur - ing pharmaceucal products. Smaller and early stage companies may also pr ove to be signicant competor s, parcularly through collabor ave arrang ements with large and established companies. These third pares compe te with us in recruit - ing and retaining qualied scienc and managemen t personnel, es tablishing clinical trial sites and paent registr aon for clinical trials, as well as in acquiring technologies complementary to , or necessar y for , the development of our products. The elds in which we operat e are characteriz ed by rapid technologic al change and innovaon. There can be no assur - ance that our competors are not curr ently developing, or will not in the future develop, technologies and products that are equally or mor e eecv e or are mor e economically a racve than any of our curr ent or future technology or pr oduct. Compet - ing products or technology pla orms may gain fas ter or grea ter mark et acceptance than our products or technology plaorms and medical advances or r apid technological dev elopment by compe tors ma y result in our products and pr oduct candidates or technology plaorms becoming non-compeve or ob solete bef ore we ar e able to r ecover our research and de velopment and commer cializaon e xpenses. If we, our products and pr oduct candidates or our technology pla orms do not compe te e ecvely , it is lik ely to ha ve a material adverse e ect on our business, nancial condion and results of oper aon. 2.2.6 We depend on enrollment o f patients in our clinical trials for our product candidates. Idenfying and qualifying paents to parcipa te in our clinic al trials is crical t o our success. P aent enrollmen t depends on many factors, including the size and nature of the paent populaon, eligibility criteria f or the trial, the pr oximity of pa ents to clinical sit es, the design of the clinical protoc ol, the availability of compeng clinical trials, the av ailability of new drugs approved for the indicaon the clinic al trial is inv esgang, and clinicians’ and paents’ percepons as to the potenal adv antages of the drug being s tudied in relaon to other av ailable therapies. Since some of our pr oduct candidates ar e focused on addressing r are diseases and c ondions, there are limited paent pools available to complete our clinical trials in a mely and cost -e ecve manner . For ex ample, the number of paents su ering from each of MG, ITP , PV , PF , CIDP , T -cell lymphoma ( TCL ) and AML is small and has not been established with precision. If the actual number of paents with these disorder s is smaller than w e an - cipate, we may enc ounter dicules in enrolling paents in our clinical trials, thereby delaying or prevenng development and approv al of our drug c andidates. E ven once enrolled we may be unable to r etain a sucient number of paents to complete any of our trials. In addion, a limited number of paents enr olled in our clinical trials are loca ted in Russia or Ukraine. The con ict between Russia and Ukraine (also see risk fact or 2.7.4 “Global ec onomic uncertainty and weakening product demand caused by polical ins tability , changes in trade agr eements and conicts, such as the con ict between Russia and Ukraine, could adv ersely a ect our business and nancial perf ormance. ”) may pr event their c onnued parcipaon in such trials and may prevent us from enr olling new paen ts from such c ountries which, in turn, may cause dela ys in cert ain ongoing clinical trials. For ex ample, a rele vant minority of the paents in the ADDRESS trial of SC efg argimod for PF and PV are parcipang in studies c onducted in Ukr aine or Russia. Accor dingly , we e xpect that the c onict between Russia and Ukraine will delay our ADDRESS trials, with the ming of t opline data f or the ADDRESS trial of SC ef gargimod f or PF and PV currently under r eview . Furthermore, our eorts to build relaonship s with paent communies may not succeed, which could result in delay s in paent enrollmen t in our clinical trials. In addion, any nega ve results we may report in clinical trials of our drug candi - date ma y mak e it dicult or impossible to recruit and retain paen ts in other clinical trials of that same drug candidate. Delay s in the compleon of any clinical trial of our product candidates will increase our costs, slow down our product candidat e development and approv al process and delay or potenally jeopardize our ability to commence product sales and genera te revenue. In addion, some of the factor s that cause, or lead to, a delay in the commencement or comple - on of clinical trials may also ulmately lead to the denial of regulatory approval of our product candidat es. 2.2. 7 Regional political instability , changes in trade agreements and c onflicts, such as the c onflict between Russia and Ukraine could cause a disruption of the development of our products and pr oduct candidates, by impairing regulatory approv al processes, and could thereby adversel y impact our business. W e are conducng certain clinical trials in a large number of jurisdicons, including in Russia and Ukraine. Global con - icts, including the conict between Russia and Ukraine, as well as economic sancons implemented by the U.S., the European Union and other countries against Russia in response thereto , may cause disrupon of regulat ory acvies relang to clinical developmen t acvies performed in a ected regions, including the ability of regulatory authories to conduct inspecons at our clinical trial sites. For ex ample, study data collected at Russian or Ukrainian sites may not be t for submission as part of a regulatory approv al process due to incompleteness or due to the fact that auding of the data was not (fully) possible. This could delay dat a read-out points for our studies although we are curren tly insuciently certain if and by how much such delays would occur . While at the date of this Universal Registr aon Document we have no indicaon that the conict between Russia and Ukraine and the corresponding sancons imposed on Russia will hin - der regulatory acvies relev ant for our pending or expected appro val requests, we cannot predict the eect the conict may hav e on regulat ory acvies in aected areas in the near future, and we cannot predict the rang e of areas that will be ulmately a ected, and the direct or indirect negav e impact this may have on our business. For example, as of the date of this Universal Regis traon Document, ongoing tra vel restricons, the COVID-19 pandemic and other uncertaines connue to impact FDA ’ s oversigh t oper aons including roune surveillance, bioresear ch monitoring and pre-approv al inspecons. In addion, we perform dev elopment acvies in a number of countries neighboring Russia and Ukraine. If the conict between Russia and Ukraine would escalate further , neighboring and other countries may be impacted which could also have an impact on our development acvies in those countries. 2.2.8 We may become exposed to costly and damaging liability claims. W e are exposed to potenal pr oduct liability and prof essional indemnity risks that are inherent in the resear ch, devel - opment, manufacturing, mark eng and use of pharmaceucal products. Currently , we have only VYVGAR T™ has been approv ed in the U.S. and in Japan for commer cial sale for the treatment of gMG; howev er , the current and future use of product candida tes by us and our collabor ators in clinical trials, and the sale of any approve d products, ma y expose us to liability claims. These claims might be made by paents who use the product, healthcare pro viders, pharmaceucal companies, our collabor ators or others selling such products. An y claims agains t us, regardless of their merit, could be dicult and costly to def end and could materially adversely a ect the marke t for our pr oducts and product candida tes or any pr ospects f or commer cializaon of our products and product candidat es. Although the clinical trial process is designed to idenfy and assess potenal side e ects, it is alwa ys possible that a drug , even a er regula tory approval, may e xhibit unfor eseen side eects. If any of our product candida tes were to cause adver se side eects during clinical trials or aer approv al of the product candida te, we may be exposed to subs tanal liabilies. Physicians and paents ma y not comply with any warnings that idenfy known poten al adverse e ects and paents who should not use our product candidat es. Reg ardless of the merits or eventual outcome, liability claims may result in: • decreased demand f or our products due to neg ave public percepon; • damage to our reput aon; • withdr awal of clinical trial parcipants or dicules in recruing new trial parcipants; • iniaon of inv esgaons by r egulators; • cos ts to def end or sele the related liga on; • a diver sion of management’ s me and our resources; • subst anal monetary awar ds to trial parcipants or paents; • product r ecalls, withdrawals or labeling, mark eng or promoonal restricons; • loss of rev enues from pr oduct sales; and • the inability to commer cialize any of our product candidat es, if approved. Although we maintain product liability insurance f or our product candidates, the cov erage of which we have extended to include the sale of VYVGART™, and we expect to expand our insurance cov erage further if we obtain markeng appr ov - 106 | Risk F actors Related to the Development and Clinical T esting of argenx’ s Products and Product Candidates Risk F actors Related to the Development and Clinical T esting of argenx’ s Products and Product Candidates | 107 P ART II al for any of our other product candidates, we may not be able to maintain insurance cov erage at a reasonable cost or to obtain insurance co verage that will be adequate to sasfy any liability that may arise. If a successful product liability claim or series of claims is brought against us for uninsured liabilies or in excess of insured liabilies, our assets may not be sucient to cover such claims and our business operaons could be impaired. Should any of the events described above occur , this could have a material adver se eect on our business, nancial con - dion and results of operaons. 2.3 Risk F actors Related to Commer cialization of arg enx’s Pr oducts and Pr oduct Candidates 2.3. 1 We will fac e significant challenges in successfull y commercializing our pr oducts. W e are in the process of connuing to setup our sales and mark eng infrastructure, ha ve limited experience in the sale or mark eng of pharmaceucal products and may not or not mely have the appropria te infrastructur e in place (including, such as informaon technology , enterprise resour ce planning and forecas ng). T o achieve commercial success for an y ap - prov ed product, we must develop or acquire a sales and markeng org anizaon, outsource these funcons to third pares or enter into collabor aon arrangements with third pares. While we have established our own sales force in the U.S. and in Japan for VYV GART™ for the treatment of gMG, we plan to expand our own sales and mark eng capabilies and promote our products and product candidates if and when regulatory approv al has been obtained in the relevant jurisdic - ons and/or for other product candidat es or other indicaons. There are risks involv ed should we decide to expand our own sales and markeng capabilies or enter into arr angements with third pares to perform these services. Even if we have es tablished or expanded our own sales and markeng capabilies, we may fail to launch our products e ecvely or to mark et our products e ecvely . Recruing and training a sales force is expensiv e and costs of creang an independent sales and markeng org anizaon and of markeng and promoon could be above those ancipated by us. In addion, re - cruing and training a sales f orce is me consuming and could delay any product launch. In the event that any such launch is delayed or does not occur for an y reason, we would have prematur ely or unnecessarily incurred these commercializa - on expenses, and our investment would be lost if we cannot retain or reposion our sales and markeng personnel. If we enter int o arrangements with third pares to perf orm sales and mark eng services, e.g., such as our agreement with Medison in connecon with the commercializa on of VYVGART™ f or gMG in Israel, our product revenues or the pr otabil - ity of these product revenues t o us could be lower than if we were t o market and sell any products tha t we develop our - selves. Such collabor ave arrangemen ts may place the commer cializaon of our products outside of our control and would mak e us subject to a number of risks. This includes the risk that we may not be able to control the amount or ming of resour ces that our collabor ave partner devotes to our pr oducts or that our collabor ator ’ s willingness or ability to comply with and complete its obliga ons under our arrang ements may be adversely a ected by business combinaons or signi - cant changes in our collabor ator ’ s business stra tegy . In addion, we may not be successful in entering int o arrang ements with third pares to sell and marke t our products or ma y be unable to do so on terms that are fa vorable to us. Accept able third pares may f ail to devote the necessary resources and a enon to sell and market our products e ecvely . If we do not est ablish sales and markeng capabilies successfully , either on our own or in collabor aon with third pares, we may not be successful in commer cializing our products, which in turn would hav e a material adver se e ect on our business, nancial condion and results of operaons. 2.3.2 The futur e commercial succ ess of our products and product candidates will depend on the degr ee of market ac ceptance. When available on the marke t, our products may not achieve an adequate level of acceptance by phy sicians, paents and the medical community , and we may not become protable. For inst ance, our products and product candidat es may not achieve an adequate level of acceptance by phy sicians because of dosing complexity or from paents because of infusion fa gue. In addion, eorts to educat e the medical community and third-party payer s on the benets of our products may require signicant resour ces and may never be successful which would preven t us from gener ang signicant revenues or becoming protable. Mark et acceptance of our future products by phy sicians, paents and healthcare payer s will depend on a number of factor s, many of which are beyond our contr ol, including, but not limited to: • the wor ding of the product label; • changes in the standar d of care for the tar geted indicaons for an y product and product candidat e; • sales, mark eng and distribuon support; • poten al product liability claims; • accept ance by physicians, paen ts and healthcare pa yers of each product as safe, eecv e and cost -e ecve; • r elave convenience, ease of use, ease of administr aon and other perceived advan tages over alternave pr oducts; • pr evalence and severity of adver se even ts or publicity; • limitaons, precauons or warnings listed in the summary of product char acteriscs, paent informa on leaet, package labeling or instrucons for use; • the cost of trea tment with our products in relaon to alternav e treatmen ts; • the extent to which products are approv ed for inclusion and reimbursed on formularies of hospitals and managed care org anizaons; and • whether our products are designat ed in the label, under phy sician trea tment guidelines or under reimbursement guidelines as a rs t-line, second-line, or third-line or last-line therapy . If our products or product candidates fail to g ain mark et acceptance, this will have a material adver se impact on our abili - ty to genera te revenues. Ev en if some products achieve marke t acceptance, the mark et may prove not to be large enough to allow us to generat e signicant re venues. 2. 3 .3 Our pr oducts and product candidates for which w e have obtained or intend to seek approv al as biological pr oducts may face competition sooner than anticipated. The BPCIA created an abbreviat ed approv al pathway f or biological products that are biosimilar to or inter changeable with an FDA-licensed ref erence biological product. Under the BPCIA, an applicaon for a biosimilar product may not be sub - mied to the FDA unl four year s f ollowing the date that the ref erence product was rs t licensed by the FDA. In addion, the approval of a biosimilar product may not be made e ecve by the FDA unl twelve years from the date on which the ref erence product was rst licensed. During this twelve-year period of ex clusivity , another company may sll mark et a compeng version of the ref erence product if the FDA approves a full BLA for the compeng product containing the sponsor ’ s own preclinical data and data from adequat e and well-contr olled clinical trials to demonstr ate the safety , purity and potency of their product. The law is complex and is sll being interpreted and implemented by the FDA. As a result, its ulmate impact, implementaon and meaning are subject to uncertainty . W e believe that any of our product candidat es approved as a biological product under a BLA should qualif y for the twelve- year period of ex clusivity , as was the case with VYVGART™. Howev er , there is a risk that this ex clusivity could be shortened due to congressional acon or other wise, or that the FDA will not consider our product candidates to be ref erence products for compe ng products, poten ally creang the opportunity for generic compeon sooner than ancipat ed. Other aspects of the BPCIA, some of which may impact the BPCIA ex clusivity provisions, have also been the subject of recent ligaon. Moreo ver , the exten t to which a biosimilar product, once appro ved, will be substuted f or any one of our refer ence products in a wa y that is similar to tradional generic substuon for non-biological products is not yet clear , and will depend on a number of marketplace and regulat or y factor s that are sll developing. 108 | Risk F actors Related to Commercialization of argenx’s Product Candidates Risk F actors Related to Commercialization of argenx’s Product Candidates | 109 P ART II 2.3.4 Enacted and future legislation may increase the diculty and cost for us to ob- tain marketing appr oval of and commercialize our products and product candi- dates and may aect the prices we may set. In the U.S., the European Union and other foreign jurisdicons, there hav e been a number of legislave and regulat ory changes to the healthcare sy stem that could aect our future results of operaons. In parcular , there have been and connue to be a number of iniaves at the U.S. f ederal and state lev els that seek to reduce healthcare cos ts and improve the quality of healthcar e. If such legislave and/or regulat or y iniaves and changes would lead to increased restricons on marke ng our products, or lead to liming the funds available for healthcar e in jurisdicons relevan t to us which may reduce reimbur sement levels and is lik ely to a ect the prices we may set, we would be negavely impacted in our ability to successfully and protably mark et our products and product candida tes. W e cannot predict the lik elihood, natur e or extent of governmen t regulaon that may arise from future legislaon or administr ave acon, either in the U.S. or abroad. If we or our collabora tors are slow or unable to adapt to changes in exisng r equirements or the adopon of new requirements or policies, or if we or our collaborat ors are not able to main - tain regulat ory compliance, our products and product candidates ma y lose any regulat ory approv al that may have been obtained and we may not achieve or sustain prot ability , which would adversely aect our business. 2.3.5 We may not obtain or maintain adequate cov erage or reimbursement status for our products and product candidates. Our ability to successfully c ommercialize VYVGAR T™ or any other products and pr oduct candidate appro ved for commer cial - izaon will depend, in part, on the e xtent to which thir d-party payors, including g overnment health progr ams in the United Stat es (such as Medicare and Medicaid) and other coun tries, commercial health insurer s, and managed care org anizaons, provide c overage and es tablish adequate reimbur sement levels f or such products and product candida tes. Moreover , in - creasing e orts by government al and third-party pay ors in the European Union, the U.S., China and abroad to cap or reduce healthcare c osts may cause such or ganizaons t o limit both coverag e and the level of reimbursemen t for newly appro ved products and, as a r esult, they may not cover or pr ovide adequate pa yment for VYVGAR T™ or any other of our products and product candida tes approved f or commercializ aon. Limitaons on reimbur sement and reimbur sement levels may diminish or prev ent altogether any signic ant demand for VYVGAR T™ or our other product candidates once appr oved and/or ma y prev ent us enrely from en tering certain mark ets, which would preven t us from genera ng signicant rev enues or becoming prot able, which would adversely a ect our business, nancials and results of opera ons. 2.3.6 We may be subject to healthcar e laws, regulation and enforcement. Our failure to c omply with these laws c ould harm our resul ts of operations and financial conditions. Our current and future operaons ma y be directly , or indirectly through our customers and third-party pay ors, subject to various U.S. f ederal and stat e, European, Japanese and Chinese healthcare laws and regulaons, including, without limitaon, the U.S. f ederal An-Kickback Statute. Healthcar e providers, phy sicians and others play a primary role in the recommenda on and prescripon of any products for which we obtain mark eng approval. These laws ma y impact, among other things, our proposed sales, marke ng and educaon progr ams and constr ain our business and nancial arrang ements and relaonship s with third-party payor s, healthcare prof essionals who parcipate in our clinical research progr am, healthcare professionals and others who recommend, pur chase, or provide our approved pr oducts, and other pares through which we market, sell and distribute our products for which we obtain mark eng approval. In addion, we may be subject to paent data privacy and security regulaon by both the U.S. feder al gov ernment and the other sta tes and countries in which we conduct our business. Finally , our curren t and future operaons are subject to addion - al healthcare-rela ted statutory and regulat ory requir ements and enfor cement by regulatory authories in jurisdicons in which we conduct our business. For ex ample, the provision of benets or advant ages to physicians to induce or encour - age the prescripon, recommenda on, endorsement, purchase, supply , order or use of medicinal products is generally not permied in the countries that f orm part of the European Union. Some European Union member stat es hav e enacted laws explicitly pr ohibing the provision of these types of benets and advantag es to induce or rewar d improper perf or - mance generally , and the United Kingdom has enacted such laws through the Bribery Act 2010. Infringements of these laws can result in substan al nes and imprisonment. EU Direcve 2001/83/EC, which is the EU direcve governing medicinal products for human use, further provides that, where medicinal products are being promoted to persons qual - ied to prescribe or supply them, no gis, pecuniary advant ages or benets in kind may be supplied, oered or promised to such persons unless they are inexpensive and relev ant to the pracce of medicine or pharmacy . This provision has been transposed into the Human Medicines Regulaons 2012 and remains applicable in the United Kingdom. Any acon agains t us for violaon of these laws, even if we successfully defend agains t it, could cause us to incur signicant legal expenses and divert our management ’ s aen on from the opera on of our business. The shiing compliance environment and the need to build and maintain robus t and expandable sy stems to comply with mulple jurisdicons with dier ent compliance or reporng requir ements increases the possibility that a healthcare company ma y run afoul of one or more of the requir ements. We hav e limited experience in the sale or mark eng of phar - maceucal products and we are building and, in light of any future approv al and commercializ aon, will need to connue building an internal program to ensur e compliance with the dieren t health care laws and regulaons. The establish - ment, expansion and maintenance of an internal compliance progr am will involv e subst anal costs and the progr am may not be successful in complying with the dieren t reporng requir ements. It is possible that governmen tal authorities will conclude that our business practices do not comply with current or future statut es, regulations or case law involving applicable fraud and abuse or other healthcare laws and regulations. If our operations are found to be in violation of any of these laws or any other governmental regulations that may apply to us, we may be subject to significant civil, criminal and administr ative penalties, damages, fines, disgorg ement, imprisonment, ex clusion of drugs from government funded healthcare programs, such as Medicare and Medicaid, additional reporting requirements and over sight if we become subject to a corporat e integrity agreement or sim - ilar agreement to resolve allegations of non-compliance with these laws, reputational harm and the curtailment or restructuring of our operations. Defending agains t any such actions can be costly and time-consuming and may require significant financial and personnel resource s. Theref ore, even if we are successful in defending against any such actions that may be brought agains t us, our business may be impaired. Further , if any of the phy sicians or other healthcare provider s or entities with whom we expect to do business is found to be not in compliance with applicable laws, they may be subject to criminal, civil or administrativ e sanctions, including ex clusions from government funded healthcare progr ams. The scope and enforcemen t of each of these laws is uncertain and subject to rapid change in the current en vironment of healthcare re form. Federal and st ate enfor cement bodies have recently increased their scruny of inter acons between healthcare companies and healthcare pr oviders, which has led to a number of inves gaons, prosecuons, con vicons and selements in the healthcare industry . Ensuring business arrangements comply with applicable healthcare laws, as well as responding to possible invesg aons by government authories, can be me and resource consuming and can divert a company’ s aenon from the business. E orts to ensure that our business arrang ements with third pares will comply with applicable healthcare laws and regulaons will inv olve substanal costs. In addion, in the United Stat es, the European Union and other f oreign jurisdicons, there hav e been a number of legislave and regulat ory changes to the healthcare sy stem that could aect our future results of operaons. In parc - ular , there have been and connue to be a number of iniaves at the U.S. feder al and st ate levels that seek to reduce healthcare cos ts, including the cost of prescripon drugs, and improve the quality of healthcare. If such legislave and/ or regulatory iniaves and changes would lead to increased restricons on the marke ng of VYVGART™ or any of our products and product candidat es approv ed f or commercializ aon, or lead to liming the funds available for healthcar e in jurisdicons relevant to us which may reduce reimbur sement levels and is lik ely to aect the prices we may set, we would be negav ely impacted in our ability to successfully and protably mark et VYVGART™ or any of our products and product candidat es appro ved for commercializa on. 110 | Risk F actors Related to Commercialization of argenx’s Product Candidates Risk F actors Related to Commercialization of argenx’s Product Candidates | 111 P ART II 2.3. 7 We are subject to privacy laws, regulation and potential enfor cement. Our failure to c omply with these laws c ould harm our resul ts of operations and financial conditions. In Europe, Dir ecve 2002/58/EC of the European P arliament and of the Council of July 12, 2002 concerning the processing of personal dat a and the protecon of priv acy in the electronic communicaons sect or (as amended, the e-Privacy -Direcve ) required the EU member s tates to implemen t data prot econ laws to meet strict priv acy requirements. Violaons of these requiremen ts can result in administr ave measures, including nes, or criminal sancons. The e-Privacy Dir ecve will likely be replaced in me by a new e-Priv acy Regulaon which ma y impose addional obligaons and risk for our business. Since May 25, 2018, Regulaon (EU) 2016/679 of the European Parliamen t and of the Council of April 27, 2016 on the protecon of natur al persons with reg ard to the processing of personal data and on the free movemen t of such data (the GDPR ) imposes a broad r ange of strict requir ements on companies, including requiremen ts relang to ha ving legal bases for processing per sonal inf ormaon relang to idenable individuals and tr ansferring such informaon outside the EEA including to the U.S. or China, pr oviding details to those individuals reg arding the processing of their per sonal informaon, k eeping personal inf ormaon secure, having data processing agr eements with third pares who process personal infor - maon, responding to individuals’ requests to ex ercise their rights in respect of their personal inf ormaon, reporng security breaches involving personal dat a to the competen t naonal dat a prot econ authority and aected individuals, appoinng data prot econ ocers, conducng data protecon impact assessments, and record-k eeping. The GDPR subst anally increases the penales to which we could be subject in the event of any non-compliance, including nes of up to 10,000,000 Euros or up to 2% of our total worldwide annual turnover for certain compara vely minor o enses, or up to 20,000,000 Euros or up t o 4% of our total worldwide annual turnover f or more serious oenses. W e face uncertainty as to the exact interpr etaon of the requirements under the GDPR, and we may be unsuccessful in implemenng all measures requir ed by data prot econ authories or courts in interpret aon of the GDPR. In parcular , naonal laws of member sta tes of the EU have been adapted to the requirements under the GDPR, thereby implemenng naonal laws which may parally deviate from the GDPR and impose dierent oblig aons from country to country , so that we do not expect to operat e in a uniform legal landscape in the EU. Also, in the eld of handling genec data, the GDPR specically allows EU member states laws to impose addional and more specic requirements or restric - ons, and European laws have hist orically diered quite subst anally in this eld, leading to addional uncertainty . W e must also ensure that we maintain adequat e saf eguards to enable the trans fer of personal data outside of the EEA, in parcular to the U.S. and China, in compliance with EU data prot econ laws, including the GDPR. We expect that we will connue to face uncertain ty as to whether our eorts to comply with our obligaons under European privacy laws will be sucient. If we are inv esgat ed by any EU data prot econ authority , we may face nes and other penales. Any such invesg aon or charges by EU data protecon authories could have a nega ve eect on our exisng business and on our ability to ar act and ret ain new clients or pharmaceucal partners. W e may also experience hesitancy , reluctance, or refusal by EU or mul-naonal clients or pharmaceucal partners to connue to use our products and soluons due to the potenal risk exposure as a result of the current (and, in parcular , future) data prot econ obliga ons imposed on them by certain data protecon authories in interpr etaon of current law , including the GDPR. Such clients or phar - maceucal partners may also view any alterna ve approaches to compliance as being too costly , too burdensome, too legally uncertain, or otherwise objeconable and theref ore decide not to do business with us. Any of the for egoing could materially harm our business, prospects, nancial condion and results of operaons. 2.3.8 If we fail to obtain orphan drug designation or obtain or maintain orphan drug exclusivity for our products, our competitors may sell products to treat the same conditions and our rev enue will be reduced. Under the Orphan Drug Act, the FDA may designate a product as an orphan drug if it is intended to trea t a rare disease or condion, dened as a paent populaon of fewer than 200,000 in the U.S., or a paent populaon great er than 200,000 in the U.S. where there is no reasonable expectaon that the cost of developing the drug will be recov ered from sales in the U.S. In the European Union, aer a recommenda on from the EMA ’ s Commiee for Orphan Medicinal Products ( COMP ) the European Commission grants orphan drug designaon to promote the development of products that are intended f or the diagnosis, preven on or treatmen t of a life-thr eatening or chronically debilitang condion either a ect - ing not more than ve in 10,000 persons in the European Union or when, without incenves, it is unlik ely that sales of the drug in the European Union would be sucient to jusfy the necessary investmen t in developing the drug or biolog - ical product. In each case there must be no sasf actory method of diagnosis, preven on or treatmen t of such condion, or , if such a method exists, the medicine must be of signicant benet to those a ected by the condion. In the U.S., orphan drug designaon entles a party to nancial incenves such as opportunies for grant funding to - wards clinical trial costs, ta x advan tages and user-f ee waivers. In addion, if a product receiv es the rst FD A approv al for the indicaon for which it has orphan designaon, the product is entled to orphan drug ex clusivity , which means the FDA may not approv e any other applicaon to mark et the same drug for the same indicaon for a period of seven years, ex cept in limited circums tances, such as a showing of clinical superiority over the product with orphan exclusivity or where the manufacturer is unable to assure sucient product quanty . In the European Union, orphan drug designaon entles a party to nancial incenves such as reducon of fees or fee waiv ers and ten years of market e xclusivity follow - ing drug or biological product appro val. This period may be reduced to six years if the orphan drug designaon criteria are no longer met, including where it is shown that the product is suciently protable not to jusfy maintenance of mark et exclusivity . If we fail to obt ain or if we lose orphan drug status f or one or more of our products and product candi - dates, the afor emenoned incenves and market e xclusivity may not or no longer be available to us, which is likely to in - crease the over all cost of development and to decrease the compeve posion of such product and product candidate. W e may from me to me seek orphan drug designaon in the U.S. or Europe for certain indicaons addr essed by our products and product candidat es. For ex ample, in September 2017, the FDA grant ed orphan drug designaon for the use of VYVGART™ for gMG, in January 2019, the FDA grant ed orphan drug designaon for the use of ef gargimod for the treatment of Primary Immune Thrombocytopenia and for the use of cusatuzumab for the treatmen t of AML and in August 2021, the FDA granted orphan drug designaon for the use of efg argimod co-f ormulated with rHuPH20 for the treatmen t of Inammatory Demy elinang Polyneuropa thy . Ev en if we are able to obtain orphan designaon, we may not be the rst to obtain mark eng approval for such indicaon due to the uncertaines associated with developing pharma - ceucal products. In addion, exclusiv e mark eng rights in the U.S. may be limited if we seek approval f or an indicaon broader than the orphan-designated indicaon or may be lost if the FDA later determines that the request for designa - on was materially def ecve or if the manufacturer is unable to assure sucient quanes of the product to meet the needs of paents with the rar e disease or condion. Further , even if we obtain orphan drug ex clusivity for a product, that ex clusivity may not eecvely prot ect the product from compeon because di erent drugs with dierent acve moiees can be approved for the same condion. Eve n aer an orphan drug is approv ed, the FDA or the EMA can subse - quently approv e the same drug with the same acve moiety for the same condion if the FDA or the EMA concludes that the later drug is safer , more e ecve, or makes a major contribuon to paent care. Orphan drug designaon neither shortens the development me or regulatory revie w me of a drug nor gives the drug any advan tage in the regulatory review or approv al process. 2.3.9 We may not obtain or maintain adequate cov erage or reimbursement status for our pr oducts and product candidates. Ev en when and if our products and product candidat es are appro ved for markeng, sales of such products and product candidat es will depend, in part, on the extent to which third-party payor s, including governmen t health progr ams in the U.S. (such as Medicare and Medicaid) and other countries, commer cial health insurer s, and managed care org anizaons, provide cov erage and establish adequate reimbur sement levels for such products and product candidates. Mor eover , increasing e orts by governmen tal and third-party pa yors in the European Union, the U.S., China and abroad to cap or reduce healthcare cos ts may cause such org anizaons to limit both coverag e and the level of reimbursement f or newly approv ed products and, as a result, they may not cover or provide adequate paymen t for our products and product can - didates. For inst ance, access to VYVGART™ f or the treatment of gMG may be restrict ed by limited pay er cover age due to treatmen t criteria, which may prev ent us from realizing its full commercial poten al. 112 | Risk F actors Related to Commercialization of argenx’s Product Candidates Risk F actors Related to Commercialization of argenx’s Product Candidates | 113 P ART II Limitaons on reimbur sement and reimbur sement levels may diminish or prevent altoge ther any signicant demand for our products and/or may pre vent us enrely from entering certain mark ets, which would prevent us from gener ang sig - nicant rev enues or becoming protable, which would adver sely a ect our business, nancials and results of opera ons. 2.3. 10 We may not be able to successfull y achie ve support among healthcare pro vid- ers and third-party payors for our products and product candidates, and our relationships with such parties are subject to regulations. Our current and future arrangemen ts with provider s, researchers, consult ants, third-party payor s and customer s are subject to broadly applicable naonal, feder al and sta te fraud and abuse, an-kickback, false claims, transparency and paent privacy law s and regulaons and other healthcare laws and regulaons that may cons train our business and/or nancial arrangemen ts. W e will be required to spend substan al me and money to ensure that our business arrang ements with third pares comply with applicable healthcare laws and regulaons. Recen t healthcar e ref orm legislaon has str engthened these feder al and state healthcar e laws. Violaons of these laws can subject us to criminal, civil and administrave sancons including monetary penales, damages, nes, disgorgement, individual imprisonment and exclusion from parcipaon in government funded healthcare pr ograms, such as Medicare and Medicaid, addional reporng requiremen ts and over - sight if we become subject to a corpor ate integrity agreement or similar agreement to resolv e allega ons of non-com - pliance with these laws, reput aonal harm, and the required curtailmen t or restructuring of our operaons. Moreov er , we expect that there will connue to be feder al and sta te laws and regulaons, proposed and implemented, that could impact our business, nancial condion and results of operaons. 2. 4 Risk F actors Related to arg enx’s Business and Industry 2.4. 1 Nearly all aspects of our activities are subject to substantial regulation. No assurance can be given that any of our products and pr oduct candidates will fulfill r egulatory compliance. F ailure to c omply with such regulations could resul t in delays, suspension, refusals and withdrawal of appr ovals, as well as fines. The international biopharmaceutical and medical technology industries are subject to a high level of regula tion by the FDA, the EMA, the PMDA and other compar able regulatory authorities and by other national or supra-na tional regulat ory authorities. Applicable regulations impose substantial requiremen ts covering nearly all aspects of our activities and the activities of our partners and licensees, notably on research and development, manufacturing, preclinical tests, clinical trials, labeling , marketing, sales, stor age, record k eeping , promotion and pricing of our products and product candidates. Failur e to (mely) comply with regulatory requir ements could have far reaching consequences f or us, including signicant delay in our product development as a result of regulatory authories recommending non-approv al or restricons on, or withdraw al of , approval of a product candidate. Any f ailure or delay of any of our product candidat es in clinical studies or to receive or maintain regula tory approv al could have a material adverse e ect on our business, results of operaons and nancial condion. If any of our product candidate s fails to obtain appr oval on the basis of any applicable condensed regulat ory approv al process, this will preven t such product candidat e from obtaining appr oval in a shortened me frame, or at all, resulng in increased expenses which would materially harm our business. Regulaons di er substanally per jurisdicon and are subject to const ant change. In order to mark et our future products in regions such as the EEA, the U.S., Asia Pacic and many other foreign jurisdicons, we must obtain separa te regulatory approv als. The approv al procedur es vary among countries and can require addional clinical tesng, and the me required to obtain approv al may dier from that requir ed to obtain appr oval. Moreover , clinical studies conducted in one country may not be accepted by regulatory authories in other countries. Approval by the EMA, the FDA or the PMDA does not ensure approv al by the comparable authories in other countries, and approval by one or more foreign regula tory authori - es does not ensure appro val by regulatory authories in other for eign countries or by the EMA, the FDA or the PMDA. There can be no assurance that our product candidates will fulfil the criteria required to obtain necessary regulat ory approv al to access the market. Also, at this time, we cannot guaran tee or know the exact nature, precise timing and detailed costs of the eff orts that will be necessary to complete the remainder of the development of our research progr ams and product candidates. Each of the FDA, EMA, PMDA and other compar able regulatory authorities may impose its own requirements, may discontinue an approval or rev oke a license, may refuse to grant approval, or may require additional data befor e granting approv al, notwithstanding that approv al may have been granted by the FDA, EMA, PMDA or one or more other comparable for eign authority . The FDA, EMA, PMDA or other comparable regula - tory authorities may also approve a product candidat e for few er or more limited indications or patient sub-segments than requested or may grant approval subject to the performance of post -marke ting studies. The EMA ’ s, the FDA ’ s, the PMDA ’ s or other regulatory authority ’ s approval may be delayed, limited or denied for a number of reasons, most of which are beyond our control. Such reasons could include, among others, the production process or site not meet - ing the applicable requirements for the manufacture of regulated products, or the products not meeting applicable requiremen ts for saf ety , purity or potency , or effic acy , during the clinical development stag e or after marketing. The FDA, EMA, PMDA and other compar able regulat or y authorities hav e substan tial discretion in the approval process and determining when or whether regulat or y approval will be obtained for any of our product candidates. Any of the FDA, EMA, PMDA and other comparable regulat or y authorities may disagree with our interpre tation of data submit - ted for their revie w . E ven if we believe the data collected from clinical trials of our product candidates are promising, such data may not be sufficient to support approval by the FDA, EMA, PMDA or any other regulatory authority . For instance, we have submitted a request for approval of VYVGART™ in gMG to the EMA and anticipate receipt of such approv al in the first quarter of 2022 and the second half of 2022, respectively , but can provide no assurances that such approval will be obtained on the timeline that we expect or at all. In addition, we anticipate to file requests for approv al of VYVGART™ in new indications, but can provide no assurances that such reques ts will be accepted or that approv al will be obtained on the timeline that we expect or at all. Furthermore, the FDA has resumed inspections of certain domestic clinical trial opera tions and trial sites. We cannot be sure to be ready for such an inspection of the clinical trial operations or trial site by the FDA or other regula tory authorities in view of the substantial time and att ention devot ed by our personnel to the commercial launch of VYVGART™ for the treatment of gMG. W e and our collabora tive partners are, or may become subject to, numerous ongoing other regulatory obligations, such as data protection, envir onmental, health and safety laws and restrictions on the experimental use of animals. The costs of compliance with such applicable regulations, requir ements or guidelines could be subst antial, and failure to comply could result in sanctions, including fines, injunctions, civil penalties, denial of applications for mark eting authorization of our products, delays, suspension or withdra wal of approvals, license revoca tion, seizures or recalls of products, operating res trictions and criminal prosecutions, any of which could significantly increase our or our collabo - ra tive partners’ costs or delay the development and commercializa tion of our product candidates. The time required to obtain approval by the FDA, EMA, PMDA and comparable regulatory authorities is unpredictable but typically tak es many years, if obtained at all, following the commencement of clinical trials and depends upon nu - merous factor s, including the subst antial discretion of the regulat or y authorities. This lengthy approv al process as well as the unpredictability of future clinical trial results may result in our failing to obtain regulatory approval to mark et any of our product candidates, including VYVGART™ for the treatmen t of gMG in jurisdictions outside the U.S. and Japan or for other indications, which would significantly harm our business, results of opera tions and prospects. In addition, even when and if we obtain approval, regulat ory authorities may approve any of our products and product candidat es for few er or more limited indications than we request, may not approve the price we intend to charge for our products, may grant approval contingen t on the performance of costly post-mark eting clinical trials, or may ap - prov e a product candidat e with a label that does not include the labeling claims necessary or desirable for the success - ful commercializa tion of that product candidate. Any of the for egoing scenarios could materially harm the commercial prospects for our product candidates. 114 | Risk F actors Related to argenx’s Business and Industry Risk F actors Related to argenx’s Business and Industry | 115 P ART II 2.4.2 We may become exposed to liability and substantial expenses in connection with environmental compliance or r emediation activities. Our operaons, including our research, developmen t, tes ng and manufacturing acvies, are subject to numerous envir onmental, health and saf ety laws and regulaons. These laws and regulaons govern, among other things, the con - trolled use, handling, release and disposal of and the maintenance of a registry for , hazardous materials and biological materials, such as chemical solvents, human cells, carcinogenic compounds, mutagenic compounds and compounds that have a to xic eect on reproducon, labora tory procedures and exposure to blood-borne pathogens. If we fail to comply with such laws and regulaons, we could be subject to nes or other sancons. W e face a risk of environmen tal liability inheren t in our current and historical acvies, including liability relang to releases of or exposure to hazar dous or biological materials. Envir onmental, health and safety laws and regulaons are becoming more stringen t. W e may be required to incur substanal expenses in connecon with future envir onmental compliance or remediaon acvies, in which case, our producon and development e orts may be interrupted or delay ed, and our nancial condion and results of operaons ma y be materially adver sely a ected. 2.4.3 Our employ ees and relevant thir d parties may engage in misconduct or other improper activities, including non-c ompliance with regulatory standards and requirements, which could have a material adverse eect on our business. W e are exposed to the risk that our employees, independent contract ors, principal inves gator s, CROs, consultan ts, vendors and collabora on partners may eng age in fraudulent conduct or other illegal acvies. Misconduct by these pares could include inten onal, reckless and negligent conduct, data manipulaon (scienc fraud) or unauthorized acvies that violate: (i) the regulaons of the FDA, EMA, PMDA and other comparable regulat or y authories, including those laws that require the reporng of true, complete and accurate inf ormaon to such authories; (ii) manufacturing standar ds; (iii) feder al and stat e data privacy , security , fraud and abuse and other healthcare laws and regulaons in the U.S. and in other countries; or (iv) laws that require the reporng of true, complete and accurat e nancial informaon and data. Specically , sales, markeng and business arrangements in the healthcare industry are subject to extensive laws and regulaons intended to preven t fraud, misconduct, kickbacks, self-dealing and other abusive pracces. These laws and regulaons may restrict or prohibit a wide rang e of pricing , discounng, markeng and promoon, sales commission, customer incenve progr ams and other business arrang ements. Acvies subject to these laws could also involve the improper use or misrepresen taon of informaon obtained in the course of clinical trials or creang fraudulen t data in our preclinical studies or clinical trials, which could result in regulatory sancons and cause serious harm to our reputa on. It is not alway s possible to idenfy and deter misconduct by employees and other third pares, and the precauons we tak e to detect and prev ent this acvity may not be eecv e in controlling unknown or unman - aged risks or losses or in protecng us from governmen tal invesg aons or other acons or lawsuits stemming from a failur e to comply with such laws or regulaons. Addionally , we are subject to the risk that a person could allege such fraud or other misconduct, even if none occurred. If any such acons are instuted ag ainst us, and we are not success - ful in def ending ourselv es or asserng our rights, those acons could have a signicant impact on our business, results of operaons and nancial condion, including the imposion of signicant civil, criminal and administr ave penales, damages, monetary nes, disgorgements, possible exclusion from parcipaon in Medicare, Medicaid and other U.S. or internaonal healthcare progr ams, individual imprisonment, addional reporng requirements and oversight if we become subject to a corporat e integrity agreemen t or similar agreemen t to resolve allega ons of non-compliance with these laws, other sancons, contractual damages, reputa onal harm, diminished prots and future earnings and curtailment of our operaons, any of which could adversely a ect our ability to opera te our business and our results of operaons. These risks may be parcularly heightened given our lack of experience with commercializ aon and the rapid growth of our sales and markeng funcon. Furthermore, due to the highly regulated envir onment in which we opera te and our heavy reliance on approv al of our products by government al enes and healthcare provider s, reputa - onal risks related to the misconduct or other improper behavior as described above are likely to have a bigger impact on us than on most companies opera ng in other industries. 2.4.4 Our high dependency on public perception of our products may negativel y influence the success of these products. When and if any of our product candidat es are approved for commercial sale, we will be highly dependent upon consumer perceptions of the safety and quality of our products. We could be adversely affect ed if we were subject to negativ e publicity or if any of our products or any similar products distributed by other companies prove to be, or are asserted to be, harmful to patients. Because of our dependence upon consumer perception, any adver se publicity associated with illness or other adverse eff ects resulting from patients’ use or misuse of our products or any similar products distributed by other companies could have a material adverse impact on our business, prospects, financial condition and results of operations. Future adver se even ts in research into the cancer , inammaon and sever e autoimmune diseases that we focus our re - search e orts on, or the biopharmaceucal industry more generally , could also result in great er governmen tal regulaon, stricter labeling requir ements and potenal regula tory delays in the tesng or approvals of our products. Any increased scruny could delay or increase the costs of obtaining regula tory approv al for our product candidates. 2.4.5 We face the risk of computer s ystem failures, data leaks and cybercrimes. Despite the implement ation of security measures, our internal computer sy stems and those of our third-party service provider s are vulnerable to damage from computer viruses, unauthorized access, natur al disaster s, terr orism, war and telecommunic ation and electrical failur e. Cyber -attacks are increasing in their frequency , sophistication and intensity , and have become increasingly difficult to detect. Cyber-at tacks have been threa tened by stat e actors and private citi - zens as a method of potential interna tional sabotage in furtherance of national or political goals. Cyber -attack s could include the deployment of harmful malware, ransom-w are, denial-of -service attack s, social engineering and other means to aff ect ser vice reliability and threaten the confidentiality , integrity and availability of information. Cyber-a t - tacks also could include phishing att empts or e-mail fraud to cause payments or inf ormation to be transmit ted to an unintended recipient. Any sy stem failure, accident or security breach that causes interrupons in our own or in third-party service vendors’ opera ons could result in a material disrupon of our product development progr ams. For example, the loss of clinical trial data from completed or future clinical trials could result in delays in our or our partners’ regula tory approv al e orts and signicantly increase our costs in order to recover or reproduce the lost data. T o the ext ent that any disrupon or security breach results in a loss or damage to our data or applicaons, or inappropriate disclosure of condenal or propriet ary informa on, we may incur liability , our product developmen t progr ams and compeve posion may be adver sely aect ed and the further development of our product candidates may be delayed. If the integrity of our cyber -security sys tems is breached, we may incur signicant eects such as remediaon expenses, lost revenues, liga on costs and increased insurance premiums and may also experience reputa onal damage and the erosion of shareholder value. Furthermore, we may incur addional costs to remedy the damage caused by these disrupons or security breaches. Like other companies, we have on occasion experienced, and will connue to experience, threa ts to our data and systems, including malicious codes and viruses, phishing , business email compromise a acks, or other cy - ber -aacks. Whereas none of these instances had a material impact so far , the number and complexity of these threats connue to increase over me. If a material breach of our informa on technology sys tems or those of our third party service providers occurs, the market percep on of the e ecveness of our security measures could be harmed and our reputa on and credibility could be damaged. W e could be required to e xpend signicant amounts of money and other resources to respond to these threats or breaches and to repair or replace informaon s ystems or networks, and could suer nancial loss or the loss of valuable condenal inf ormaon. In addion, we could be subject to regulatory acons and/or claims made by individuals and groups in privat e ligaon involving privacy issues relat ed to dat a collecon and use pracces and other data privacy laws and regulaons, including claims for misuse or inappropriate disclosure of data, as well as unfair or decepve pracces. Although we develop and maintain sys tems and contr ols designed to prev ent these even ts from occurring, and we have 116 | Risk F actors Related to argenx’s Business and Industry Risk F actors Related to argenx’s Business and Industry | 117 P ART II a process to idenfy and migate threa ts, the development and maintenance of these sys tems, controls and processes is costly and requires ongoing monitoring and updang as technologies change and eorts to over come security measures become increasingly sophisca ted. This risk is further increased by the growing amount of data tr ansferred by us be - tween Europe, China and the U.S. Moreover , despite our eorts, the possibility of these events occurring cannot be elim - inated enr ely and there can be no assurance that any measures we tak e will prev ent cyber-a acks or security breaches that could adversely a ect our business. In order to successfully commercializ e and mark et our products in the future we may need to implement addional en - terprise resour ce management s ystems which is a complex pr ocess that may cause us to face dela ys. We may also need to implement computer sy stems such as addional global enterprise resear ch sy stems ( ERP syst ems ) in which we have limited experience and which may prove a comple x process that could cause delay s in our commercializa on process. 2.4.6 We may face service, manufacturing or supply chain failures or other failures, business interruptions or other disasters. Our products and product candidates are biologics and require pr ocessing step s that are more dicult than those re - quired for most chemical pharmaceucals. Accor dingly , mulple steps are needed to control the manufacturing pr ocess - es. Problems with these manufacturing processes, such as capacity issues, or even minor deviaons from the normal process or from the materials used in the manufacturing process, which may not be detect able by us in a mely manner , could lead to manufacturing failur es or product def ects, resulng in lot failures, pr oduct recalls, pr oduct liability claims and insucient invent ory . Furthermore, our supply chain failures would crea te a risk of non-compliance toward partner s due to shortages, for ex ample, if we are not able to deliver our product to our partner in China. Also, certain r aw materials or other products necessary for the manufactur e and formulaon of our products and prod - uct candidates, some of which are dicult to source, are provided by single-source unaliated third-party supplier s. In addion, we rely on certain third pares to perform lling, nishing, distribuon, laborat or y tesng and other services relat ed to the manufactur e of our products and product candidates, and to supply various raw materials and other products. W e would be unable to obtain these raw mat erials, other products, or services f or an indeterminate period of me if any of these third pares were to cease or interrupt producon or otherwise fail to supply these materials, prod - ucts, or ser vices to us for any reason, including due to regulatory requir ements or acons (including recalls), adver se nancial developments at or aecng the supplier , failure by the supplier to comply with cGMPs, contaminaon, busi - ness interrupons, or labor shortages or disputes. Interrupons in the supply of these materials, products or services may result fr om interna onal conict, tr ade disputes or economic sancons enacted by , or imposed on, the U.S., the European Union or any other country . In any such circumstance s, we may not be able to engage a backup or alternave supplier or ser vice provider in a mely manner or at all. This, in turn, could materially and adversely a ect our ability to supply products and product candidates, which could materially and adver sely a ect our business, nancial condion and results of operaons. Certain of the ra w materials requir ed in the manufactur e and the formulaon of our products and product candidates may be derived from biological sources, including mammalian ssues, bovine serum and human serum albumin. There are certain European regulat ory restricons on using these biological source materials. If there are changes in the regulaon requir ements, our clinical development or commercial acvies may be delay ed or interrupted. 2.4. 7 Failure to suc cessfully identify , develop and commercialize additional products or product candidates could impair our ability to grow. Although a substanal amount of our eorts will f ocus on the connued preclinical and clinical tes ng and potenal approv al of our product candidat es in our current pipeline, a key element of our long-term growth str ategy is to develop and mark et additional products and product candidates. Because we have limited financial and managerial resour ces, resear ch progr ams to identify product candidates will require substan tial additional technical, financial and human resour ces, whether or not any product candidat es are ultimately identified. The success of this str ategy depends partly upon our ability to identify , select and develop promising product candidates and products. Our technology platforms may fail to discover and to genera te additional product candidates that are suitable for further development. All prod - uct candidates are prone to risks of failure typical of pharmaceutical product development, including the possibility that a product candidat e may not be suitable for clinical developmen t as a result of its harmful side effects, limited efficacy or other charact eristics that indicate that it is unlikely to be a product that will receive approv al by the FDA, EMA, PMDA and other compar able regulatory authorities and achieve marke t acceptance. If we do not successfully develop and commercialize product candidates based upon our technological approach, we may not be able to obtain prod uct o r c oll abo ration re venu es in future periods, which would adver sely a ect our business, prospects, nancial condion and results of operaons. Our long-term growth str ategy to develop and market addional products and product candidat es is heavily dependent on precise, accurat e and reliable scienc data to idenfy , select and develop promising pharmaceucal pr oduct candi - dates and products. Our business decisions may theref ore be adver sely inuenced by improper or fraudulent scienc data sourced fr om third pares. Any irregularies in the scienc data used by us to determine our focus in research and development of product candida tes and products could hav e a material adver se e ect on our business, prospects, nan - cial condion and results of oper aons. 2.5 Risk F actors Related to ar genx’s Dependence on Thir d Parties 2.5. 1 We rel y , and expect to continue to rely , on third parties, including independent clinical inv estigators and CROs, to conduct our preclinical studies and clinical trials. If these third parties do not suc cessfully carry out their contractual duties or meet expected deadlines, we may not be able to obtain regulatory approv al for or c ommercialize our products and product candidates and our business could be substantiall y harmed. W e have relied upon and plan to connue to rely upon third pares, including licensees, independent clinical invesg a - tors and third-party CROs, to conduct our preclinical studies and clinical trials and to monitor and manage dat a for our ongoing preclinical and clinical progr ams. W e rely on these pares for ex ecuon of our preclinical studies and clinical trials, and control only certain aspects of their acvies. Nevertheless, we are responsible f or ensuring that each of our studies and trials is conducted in accor dance with the applicable protocol, legal and regula tory requir ements and scien - c standards, and our reliance on these third pares does not relieve us of our regulat ory responsibilies. W e and our partners, third-party contr actors and CROs are required to comply with GCP requir ements, which are regulations and guidelines enforced by the FDA, EMA, PMDA and comparable regulatory authorities for all of our products in clinical development. Regula tory authorities enforce these GCPs through periodic inspections of trial sponsors, principal inves tigator s and trial sites. If we, our investig ators or any of our CROs fail to comply with applicable GCPs, the clinical data gener ated in our clinical trials may be deemed unreliable and the FDA, EMA, PMDA or compar able regulat ory authorities may require us to perform additional clinical trials before approving our marketing applications. Upon inspection by a given regula tory authority , such regulatory authority may determine that our clinical trials do not fully comply with GCP regulations. In addition, our clinical trials must be conducted with product produced under cGMP regulations. Our failure to comply with these regula tions may require us to repeat clinical trials, which would delay the regulatory approval process. Further , these invesg ators and CROs are not our employees and we will not be able to control, other than by contract, the amount of resources, including me, which they devote to our product candida tes and clinical trials. If independent inves gator s or CROs fail to devot e sucient resources to the development of our product candidates, or if their per - formance is subst andard, it may dela y or compromise the prospects f or approv al and commercializ aon of any product candidat es that we develop. In addion, the use of third-party service providers requir es us to disclose our proprietary informa on to these pares, which could increase the risk that this informaon will be misappropriat ed. 118 | Risk F actors Related to argenx’s Business and Industry Risk F actors Related to argenx’s Dependenc e on Third Parties | 119 P ART II P ART VII Victor and Iris Yipp Find Hope in MG Victor & Iris Victor Y ipp and his wife, Iris, hav e been an unstoppable team through the highs and low s of Victor ’ s MG diagnosis. 120 | Patient Story Patient Story | 121 Can you describe the journey to Victor’s MG diagnosis ? Iris: The enre year of 2017 led up to that MG diagnosis. Victor start ed geng s ymptoms, one by one. The rst one was an issue with swallowing. Victor: The doctors thought it was a GI problem. Iris: Y eah, but the GI treatmen ts didn’t help. Then you had double vision, so we went to the ophthalmologist. Victor: They couldn’t nd anything wrong. But everything was adding up: the swallowing issue, the double vision, the inability to hold up my head… Iris: W e went to a bunch of doctor s. But it was our own doctor who even tually gured it out. He had start ed resear - ching MG aer we c ame in because he’ d never seen it befo - re. But things wen t downhill quickly aer that—the diagno - sis and the hospitaliz aon were only day s apart. Victor was diagnosed on W ednesday , November 1, 2017. By Sunda y he couldn’t drink wa ter and needed to go to the hospital. I was in the hospital f or 32 days. What happened after you got out of the hospital ? How did life change ? Iris: It took months for him to recover . With MG you can look ne, but you may be unable to get through the day . Y ou have to rest. For inst ance, when he rst got out, we got a temporary handicap parking permit. I always f elt lik e people were going to judge us. Victor: Because I didn’t look lik e I needed handicap par - king. I think that’ s the one thing many people misunders - tand. Y ou look normal, but there’ s a lot going on inside that people can’t see. How did you think MG would a ect your future? Iris: I didn’t really think ahead, beyond dealing with the symptoms right then. W e did try some MG support groups. And in one of them, there was someone in remis - sion for about 15 years. I thought, ‘W ow that would be amazing. ’ It ga ve us hope. I thought, ‘ Y ou can do it Victor . ’ Patient Story P ART II Paid c ontributor to MG United. Our CROs have the right to terminate their agreements with us in the event of an uncured material breach. In addion, some of our CROs hav e an ability to terminate their respecve agreemen ts with us if it can be reasonably demonstra ted that the safety of the subjects parcipang in our clinical trials warran ts such terminaon, if we make a gener al assign - ment for the benet of our creditors or if we are liquidated. There is a limited number of third-party service provider s that specializ e or hav e the experse r equired to achieve our business objecves. If any of our relaonships with these third-party CR Os or clinical inv esgat ors terminate, we ma y not be able to enter int o arr angements with alternave CROs or inv esgat ors or to do so on commercially reasonable terms. If CROs or clinical inves gator s do not successfully carry out their contr actual dues or obliga ons or meet expect ed deadlines, if they need to be replaced or if the quality or accuracy of the clinical data they obtain is compr omised due to the failur e to adhere t o our clinical prot ocols, regulatory requir ements or for other reasons, our clinical trials may be ex - tended, delay ed or terminated and we may not be able to obtain regula tory approval f or or successfully commer cialize our products and product candida tes. As a result, our results of operaons and the commercial pr ospects for our products and product candida tes would be harmed, our costs c ould increase and our ability to gener ate rev enues could be delay ed. Switching or adding additional CROs (or investig ators) involv es additional cost and requires management time and focus. In addion, there is a natural transion period when a new CRO commences work. As a result, delays occur , which can materially impact our ability to meet our desired clinical development melines. Though we care fully manage our relaonships with our CROs, there can be no assurance that we will not encount er similar challenges or delays in the future or that these delays or challenges will not hav e a material adver se impact on our business, nancial condion and results of operaons. 2.5.2 We rel y and will continue to rel y on collaborative partners r egarding the development of our resear ch programs and product candidates. If we fail to enter into new strategic relationships our business, financial c ondition, commercialization prospects and r esults of operations may be materiall y adversel y aected. W e are, and expect to connue to be, dependent on partnerships with partners rela ng to the development and com - mercializ aon of our exisng and future resear ch progr ams and product candida tes. We currently ha ve collaborav e resear ch relaonship s with various pharmaceucal companies such as AbbVie, Shire, Zai Lab and with various academic and research instuons worldwide, f or the development of product candidat es resulng from such collabor aons. We had, have and will connue to have discussions on potenal partnering opportunies with various pharmaceucal com - panies. If we fail to enter into or maintain collabor aons on reasonable terms or at all, our ability to develop our exis ng or future research pr ograms and product candidates could be delayed, the commercial poten al of our products could change and our costs of development and commercializa on could increase. Our dependence on collabor ave partners subjects us to a number of risks, including, but not limited to the termina on of the collaboraon agreemen ts with all its consequences, disagreement on the interpr etaon of contractual t erms or no adherence or uncertaines as part of the ongoing collabora on. In addion, we may not be able to contr ol our collabo - ra ve partners’ compliance with all applicable requiremen ts f or the commercializ aon of our products, which could ad - versely a ect such commercializing and the prot ability of such products (also see risk factor 2.4.3 “Our employees and relev ant third pares may engage in misconduct or other improper acvies, including non-compliance with regulatory standar ds and require ments, which could have a material adver se eect on our business. ”). W e face signicant compeon in seeking appropriate collabor ave partners. Our ability to reach a denive agr eement for a partnership will depend, among other things, upon an assessment of the collabora tor ’ s resources and experse, the terms and condions of the proposed partnership and the proposed collabora tor ’ s evaluaon of a number of factor s. These factor s may include the design or results of clinical trials, the likelihood of regulat ory approv al, the potenal mar - k et for the subject product candidat e, the costs and complexies of manufacturing and delivering such product candidat e to paents, the potenal of compeng products, the exist ence of uncertainty with respect to our ownership of tech - nology , which can exist if there is a challenge to such ownership regar dless of the merits of the challenge and industry and marke t condions gener ally . The collabor ator may also consider alternave product candida tes or technologies f or similar indicaons that may be available to collabor ate on and whether such a partnership could be more aracv e than the one with us. 2.5.3 We rel y on third parties to suppl y and manufacture our products and product candidates, and w e expect to continue to rely on third parties to manufacture our pr oducts, if approv ed. The development of such products and product candidates and the c ommercialization of any products, when and if approved, could be stopped, delayed or made less profitable if any such thir d party fails to provide us with sucient quantities of product candidates or products or fails to do so at ac ceptable quality lev els or prices or fails to maintain or achieve satisfactory regulatory compliance. W e do not currently hav e, nor do we plan to acquire, the infr astructure or capability int ernally to manufacture our pr od - ucts or product candida tes for use in the conduct of our clinical s tudies or for commercial supply , when and if our products are appr oved. Instead, we r ely on, and expect to connue t o rely on contr act manufacturing organiz aons ( CMOs ). W e are for ced to rely on limited and single sources of manuf acturing. W e currently rely mainly on Lonza f or the manufacturing of the drug substance of all our pr oducts. Furthermore, we use V eer Pharma In ternaonal GmbH’ s ll and nish services for our products. R eliance on third-party providers ma y expose us to mor e risk than if we were to manuf acture our products and product candida tes ourselves. W e do not contr ol the manufacturing processes of the CMOs we con tract with and are dependent on those third pares f or the producon of our products and pr oduct candidates in accordance with r elevant regulaons (such as cGMP), which includes, among other things, quality con trol, quality assurance and the maint enance of recor ds and documentaon. If we wer e to experience an unexpect ed loss of supply of or if any supplier was unable to meet our demand f or any of our products and pr oduct candidates, we could e xperience delays in our resear ch or planned clinical studies or commercializ a - on. W e could be unable to nd alternave supplier s of acceptable quality , in the appropriate v olumes and at an acceptable cost. Mor eover , our suppliers are o en subject to strict manufacturing r equirements and rigorous t esng requirements, which could limit or delay pr oducon. The long transion periods necessary to switch manuf acturers and supplier s, if necessary , would signicantly delay our clinical s tudies and the commercializa on of our products, if approved, which w ould materially adv ersely aect our business, nancial c ondion and results of operaon. W e and our third-party suppliers may also be subject to audits by the FDA, EMA, PMDA or other comparable regula tory authories. If any of our third-party suppliers f ails to comply with cGMP or other applicable manufacturing regula ons, our ability to develop and commercialize the products could su er signicant int errupons. We face risks inheren t in relying on a single CMO, as any disrupon, such as a re, pandemic, natural hazar ds or vandalism at the CMO could signicantly interrup t our manufacturing capability . Alternave producon plans in place or disaster -recov ery facilies av ailable to us may not be sucient. In case of a disrupon, we may have to est ablish addional alternave manuf ac - turing sources. This would require subst anal investment on our part, which we may not be able to obtain on commer - cially acceptable terms or at all. Addionally , we may experience signicant manufacturing dela ys as we build or locate replacement f acilies and seek and obtain necessary regulat ory approv als. If this occurs, we will be unable to sasfy manufacturing needs on a mely basis, if at all. Also, operang any new facilies ma y be more expensive than opera ng our current facilies. Further , business interrupon insurance ma y not adequately compensat e us for any losses that may occur , and we would have to bear the addional cost of any disrupon. For these reasons, a signicant disrupve event of the manufacturing facility could have dr asc consequences, including placing our nancial stability at risk. The manufacturing of all of our products and product candidates requir es using cells which are stored in a cell bank. W e hav e one master cell bank for each product manufactured in accordance with cGMP . Half of each master cell bank is stored at a separate site so that in case of a cat astrophic event at one site we believe sucient vials of the master cell banks are le at the alternave stor age site to connue manufacturing. We believe sucient working cell banks could be produced from the vials of the master cell bank stor ed at a given site to assure product supply for the future. Howev er , it is possible that we could lose mulple cell banks and have our manufacturing signicantly impacted by the need to replace these cell banks, which could materially adversely a ect our business, prospects, nancial condion and results of opera ons. 122 | Risk F actors Related to argenx’s Dependenc e on Third Parties Risk F actors Related to argenx’s Dependenc e on Third Parties | 123 P ART II 2.5.4 Accuracy and timing of our financial reporting is partiall y dependent on information receiv ed from third party partners, which we do not control. W e have collabora ted, and plan to connue to collabor ate, with third pares on product candidat es that we believe hav e promising ulity in disease areas or paent populaons that are be er served by resources of larger biopharmaceucal companies. As part of some of these collaboraons, our collabora on partners are r esponsible for pr oviding us with nancial informaon r egarding specic projects, including funds spent, liabilies incurred and expected future cos ts, on which we rely for our own nancial reporng. If our collabora on partners f ail to provide us with the necessary nancial informa on within the agreed upon meframes, or if such nancial informa on prov es parally inaccura te, this is likely to impact the accuracy of our own nancial reporng. Our reliance on nancial inf ormaon received from our collab - ora on partners ma y impact our own internal and external nancial reporng and any delay in the provision of such nancial informaon to us or any failur e by us to idenfy mistak es in the nancial informaon pr ovided to us may cause our own nancial statements to be parally inaccurat e. Any inaccuracy in our nancial reporng could cause inves tors to lose condence in our nancial reporng. This in turn may lead to reputaonal damage and/or a ect our ability to, and the terms on which we may , obtain future (equity) nancing which may harm our business. 2.6 Risk F actors Related to ar genx’s Intellectual Property 2.6. 1 We rel y on patents and other intellectual property rights to pro tect our prod- ucts and product candidates and platform technologies. Failure to enforce or protect these rights adequately could harm our ability to compete and impair our business. Our commercial success depends in part on obtaining and maintaining patents and other forms of intellectual proper - ty rights for our products and product candidates, methods used to manufactur e those products and the methods for treang paen ts using those products, or on licensing in such rights. Specically , we are materially dependent on patent and other proprietary prot econ relat ed to our core pla orm technologies and our products and product candidates. Failur e to protect or to obtain, maintain or extend adequate pat ent and other intellectual property rights could mat erially adversely a ect our ability to develop and mark et our products and product candidat es. The enfor cement, defense and maintenance of such patents and other intellectual property rights may be challenging and costly . W e cannot be certain that paten ts will be issued or grant ed with respect to applicaons that are curr ently pending. As a biopharmaceucal company our paten t posion is uncertain because it involves comple x legal and factual consider aons. The standards applied by the European Pa tent Oce, the U.S. P atent and T rademark Oce ( USPTO ) and for eign patent oces in granng paten ts are not alway s applied uniformly or predictably . For example , there is no uniform worldwide policy regar ding patentable subject maer or the scope of claims allowable in biopharmaceucal patents. Consequently , paten ts may not issue from our pending patent applicaons. As such, we do not know the degree of future protecon that we will have on our proprietary products and technology . The scope of patent pr otecon that the European P atent Oce and the USPT O will gran t with respect to the anbodies in our anbodies product pipeline is uncertain. It is pos - sible that the European Pat ent Oce and the USPTO will not allow broad anbody claims that cov er anbodies closely relat ed to our products and product candidat es as well as the specic anbody . As a result, upon receipt of EMA or FDA approv al, competors may be free to mark et anbodies almost idencal to ours, including biosimilar anbodies, thereby decreasing our marke t potenal. Howe ver , a competor cannot submit to the FDA an applicaon for a biosimilar product based on one of our products unl four year s follo wing the date of approval of our “ref erence product, ” and the FDA may not approve such a biosimilar product unl twelve years fr om the date on which the refer ence product was approved. The patent prosecuon pr ocess is expensive and me-consuming, and we and our current or future licensors, licensees or collabora on partners may not be able to prepare, le and prosecute all necessary or desirable pat ent applicaons at a reasonable cost or in a mely manner . It is also possible that we or our licensors, licensees or collabor aon partners will fail to idenfy patent able aspects of invenons made in the course of development and commercializ aon acvi - es befor e it is too late to obtain paten t prot econ on them. Further , the issuance, scope, validity , enforceability and commercial v alue of our and our current or future licensors’ , licensees’ or collabor aon partners’ patent rights are highly uncertain. Our and our licensors’ pending and future paten t applicaons ma y not result in patents being issued that pro - tect our technology or products, in whole or in part, or that e ecvely prevent others fr om commer cializing compeve technologies and products. Moreover , in some circumst ances, we may not hav e the right to control the prepar aon, ling and prosecuon of patent applicaons, or to maintain the paten ts, or we may need to enter into new license or royalty agreements, cov ering technology that we license from or license to third pares or hav e developed in collabor aon with our collabora on partners and are reliant on paten t procur ement acvies of our licensors, licensees or collaboraon partners. There fore, these patents and applicaons ma y not be prosecuted and enfor ced in a manner consistent with the best interes ts of our business. If our current or future licensors, licensees or collabora on partners fail to es tablish, maintain or prot ect such patents and other intellectual property rights, such rights may be reduced or eliminated. If our licensors, licensees or collaboraon partners ar e not fully cooperav e or disagree with us as to the prosecuon, maintenance or enfor cement of any patent rights, such patent rights could be compromised. The paten t ex aminaon process may r equire us or our licensors, licensees or collaboraon partners to narro w the scope of the claims of our or our licensors’ , licensees’ or collaboraon partner s’ pending and future patent applicaons, which may limit the scope of patent prot econ that may be obtained. W e cannot be assured that all of the potenally relev ant prior art relang to our patents and paten t applicaons has been found. If such prior art exists, it can inv alidate a patent or prevent a paten t from issuing from a pending patent applicaon. E ven if paten ts do issue and even if such paten ts cover our products and product candidat es, third pares may iniat e an opposion, interf erence, re-examina on, post-gr ant review , inter panes review , nullicaon or derivaon acon in court or befor e patent oces, or similar proceedings challenging the validity , enfor ceability or scope of such patents, which may result in the patent claims being narrowed or invalida ted. Our and our licensors’ , licensees’ or collaboraon partner s’ paten t applicaons cannot be enf orced against third pares praccing the technology claimed in such applicaons unless and unl a patent issue from such applicaons, and then only to the exten t the issued claims cover the technology . Because paten t applicaons are conden al for a period of me aer ling, and some remain so unl issued, we cannot be certain that we or our licensors wer e the rs t to le any patent applica on rela ted to a product and product candi - date. Furthermore, as to the U.S., if third pares have led such patent applicaons on or befor e March 15, 2013, an interf erence proceeding can be iniated by such third pares to determine who was the rs t to inv ent any of the subject maer cov ered by the paten t claims of our applicaons. If third pares hav e led such applicaons aer March 15, 2013, a derivaon proceeding can be iniated by such third pares to determine whether our invenon was derived from theirs. E ven where we have a valid and enfor ceable paten t, we may not be able to exclude other s from pr accing our invenon wher e the other party can show that they used the invenon in commerce bef ore our ling date, or if the other party is able to obtain a compulsory license. Any of the afor emenoned situaons could cause harm to our ability to protect our intellectual pr operty , which in turn would allow competor s to mark et comparable products which could materially adver sely aect our compeve posion and as such our business, nancial condion and results of operaon. 2.6.2 Issued patents c ould be found invalid or unenforceable if challeng ed in court. T o protect our compeve posion, we may from me to me need to resort to ligaon in order to enf orce or def end any pat ents or other intellectual property rights owned by or licensed to us, or to determine or challenge the scope or validity of patents or other intellectual property rights of third pares. Enfor cement of intellectual pr operty rights is dicult, unpredictable and expensive, and many of our or our licensors’ or collabor aon partners’ adversaries in these proceedings may ha ve the ability to dedicate subs tanally greater resour ces to prosecung these legal acons than we or our licensors or collaboraon partners can. Accor dingly , despite our or our licensors’ or collabora on partners’ e orts, we or our licensors or collaboraon partners ma y not preven t third pares from infringing upon or misappropriang intellectual property rights we own or contr ol, parcularly in countries where the laws may not protect those rights as fully as in the European Union and the U.S. We may f ail in enfor cing our rights, in which case our compet ors may be permied to use our technology without being required to pa y us any license fees and/or r oyales. In addion, liga - 124 | Risk F actors Related to argenx’s Intellectual Property Risk F actors Related to argenx’s Intellectual Property | 125 P ART II on involving our patents carries the risk that one or more of our patents will be held invalid (in whole or in part, on a claim-by-claim basis) or held unenfor ceable. Such an adverse court ruling could allow third pares to commercialize our products or use our SIMPLE Anbody™, NHance® and ABDEG™ plaorm technologies, and then compete directly with us, without payment to us. If we were to iniate leg al proceedings ag ainst a third party to enfor ce a paten t covering one of our products, the defen - dant could counter claim that our paten t is invalid or unenf orceable. In patent ligaon in the U.S. or in Europe, defen - dant counter claims alleging inv alidity or unenfor ceability are commonplace. A claim for a validity challenge may be based on failure to meet any of sever al statutory requir ements, for example, lack of novelty , obviousness or non-enablement. A claim for unenfor ceability could involve an allegaon that someone connected with prosecuon of the patent withheld relev ant informaon from the European P atent Oce or the USPT O or made a misleading st atement, during prosecuon. The outcome following leg al asserons of invalidity and unenfor ceability during paten t liga on is unpredictable. With respect to the validity queson, for ex ample, we cannot be certain that there is no invalida ng prior art, of which we and the patent ex aminer were unaware during prosecuon. If a defendan t wer e to prev ail on a legal asseron of invalidity or unenfor ceability , we would lose at least part, and perhaps all, of the paten t prot econ on one or more of our products or certain aspects of our SIMPLE Anbody™, NHance® and ABDEG™ plaorm technologies. Such a loss of patent pr otecon could have a material adver se impact on our business. Further , ligaon could r esult in substan al costs and diver sion of management resour ces, regardless of the outcome, and this could harm our business and nancial results. P atents and other intellectual property rights also will not protect our technology if competors design around our protect ed tech - nology without infringing our paten ts or other intellectual property rights. 2.6.3 Intellectual property rights of third parties could adversel y aect our ability to commercialize our products and product candidates and may harm our compet- itive position. Our competitive position may suff er if patents issued to third parties or other third-party intellectual property rights cover our products or elements thereof , our manufactur e or uses relev ant to our developmen t plans, the targe ts of our products and product candidates, or other attribut es of our products and product candidates or our technology . In such cases, we may not be in a position to develop or commercialize products or product candidat es unless we successfully pursue litigation to nullify or invalidate the third-party intellectual property right concerned, or enter into a license agreement with the intellectual property right holder , if available on commercially reasonable terms. W e are aware of certain U.S. issued patents held by third parties that some may argue cover certain aspects of our product candidates, including cusatuzumab. One such third party patent family of potential relevance to cusatuzum - ab is scheduled to expir e in 2028. In the event that a patent has not expir ed at the time of approv al of such product candidat e and the patent owner were to bring an infringement action against us, we may hav e to argue that our product, its manufacture or use does not infringe a valid claim of the paten t in question. Alternativ ely , if we were to challenge the validity of any issued U.S. patent in court, we would need to overcome a statutory presumption of validity that attaches to every U.S. patent. This means that in order to prevail, we would need to present clear and convincing evidence as to the invalidity of the patent’ s claims. There is no assur ance that a court would find in our fa vor on questions of infringement or validity . In the event that a patent is successfully asserted against us such that the patent is found to be valid and enfor ceable and infringed by our product, unless we obtain a license to such a paten t, which may not be av ailable on commercially reasonable terms or at all, we could be prevent ed from continu - ing to develop or commercialize our product. Similarly , the targets for certain of our products and product candidat es have also been the subject of research by other companies, which have filed patent applications or hav e patents on aspects of the targets or their uses. There can be no assurance any such paten ts will not be asserted against us or that we will not need to seek licenses from such third parties. W e may not be able to secure such licenses on accept - able terms, if at all, and any such litigation would be costly and time-consuming. It is also possible that we are unawar e to relev ant patents or applicaons. For ex ample, certain U .S. applicaons led aer November 29, 2000 that will not be led outside the U.S. ma y remain conden al unl paten ts issue. In general, paten t applicaons in the U.S. and elsewhere are published approxima tely 18 months aer the earliest ling from which priority is claimed, with such earliest ling date being commonly referr ed to as the priority date. Theref ore, patent applicaons cov ering our products, product candidat es or plaorm t echnology could have been led by others without our knowledge. Furthermore, we operat e in a highly compeve eld, and given our limited resour ces, it is unreasonable to monitor all patent applicaons purporng to gain br oad cover age in the areas in which we are acve. Addionally , pending patent applicaons which hav e been published can, subject to certain limitaons, be later amended in a manner that could cover our pla orm technologies, our products or the use of our products. Third-party intellectual pr operty right holders, including our competor s, may acvely bring infringement claims agains t us. The granng of orphan drug st atus in respect of any of our product candidates does not guarante e our freedom to opera te and is separat e from our risk of possible infringement of third pares’ intelle ctual property rights. W e may not be able to successfully sele or otherwise resolve such infringement claims. If we are unable to successfully sele future claims on terms acceptable to us, we may be required to engage or connue costly , unpredictable and me-consuming liga on and may be prevent ed from or experience subs tanal delays in mark eng our products. If we f ail in any such dispute, in addion to being for ced to pay damages, w e or our licensees may be tempor arily or per - manently prohibit ed from commercializing an y of our products and product candidat es that are held to be infringing. W e might, if possible, also be for ced to redesign products and pr oduct candidates so that w e no longer infringe the third-party intellectual pr operty rights. We ma y be required t o seek a license to any such technology that w e are found to infring e, which license may not be a vailable on commercially r easonable terms, or at all. Even if w e or our licensors or collabora on partners obt ain a license, it may be non-ex clusive (for ex ample, the POTELLIGENT® pla orm), thereby giving our compet ors access to the same technologies licensed t o us or our licensors or collaboraon partner s. In addion, we could be found lia - ble for monet ary damages, including treble damages and aorne ys’ fees, if we ar e found to ha ve willfully infringed a patent. Any of these events, even if we were to ulmat ely prev ail, could require us to divert substanal nancial and manage - ment resource s that we would otherwise be able to devote to our business. In addion, if the breadth or streng th of protecon pro vided by our or our licensors’ or collabor aon partners’ patents and patent applicaons is threa tened, it could dissuade companies from collabora ng with us to license, develop or commercializ e current or future products and product candidates. Furthermore, because of the substan al amount of discovery requir ed in connecon with intellectual property liga on, there is a risk that some of our condenal informa - on could be compromised by disclosure during this type of ligaon. 2.6.4 Our ability to compete may be adversel y aected if we are unsucc essful in defending against any claims by c ompetitors or others that we are infringing upon their intellectual property rights. The various marke ts in which we operate or plan to operat e are subject to frequent and ext ensive ligaon regar ding paten ts and other intellectual property rights. In addion, companies producing therapeucs to treat and potenally cure cancer hav e employed int ellectual property lig aon as a means to gain an advantage over their compet ors. As a result, we may be requir ed to def end against claims of intellectual property infringement that may be asserted agains t us and, if the outcome of any such liga on is adverse to us, it may a ect our ability to compete e ecvely . Our involvemen t in ligaon, and in, e.g., any interf erence, derivaon, reex aminaon, inter partes review , opposion or post -grant proceedings or other intellectual property pr oceedings inside and outside of the European Union or the U.S. may divert management me from f ocusing on business operaons, could cause us to spend signicant amounts of mon - ey and may have no guaran tee of success. Poten al intellectual property ligaon could also, amongst other things, for ce us to stop selling, incorporang, manufacturing or using certain of our products, to obt ain a license to sell or use certain technology from a third party asserng its intellectual pr operty rights, to redesign certain products or processes that use any allegedly infringing or misappropriat ed technology or pay damages, including the possibility of treble damages in a paten t case if a court nds us to have willfully infringed certain int ellectual property rights, which may result in signicant cost and/or dela y to us. Moreover , certain licenses may not be available on reasonable terms, or at all, or may be non-ex - clusive thereby giving our competor s access to the same technologies licensed to us and redesigning certain products or processes could be technically inf easible. 126 | Risk F actors Related to argenx’s Intellectual Property Risk F actors Related to argenx’s Intellectual Property | 127 P ART II 2.6.5 Intellectual pr operty litigation could cause us to spend substantial resources and distr act our personnel from their normal responsibilities. Ev en if resolved in our fav or , liga on or other legal proceedings relang to int ellectual property claims may cause us to incur signicant expenses and could distract our technical and management personnel fr om their normal responsibilies. In addion, there could be public announcements of the results of hearings, moons or other interim pr oceedings or developments and if securies analysts or invest ors perceive these results to be negave, this may neg avely impact us. Such ligaon or proceedings could subst anally increase our opera ng losses and reduce our resources av ailable for development acvies. W e may not have sucient nancial or other resour ces to adequately conduct such ligaon or proceedings. Some of our competors may be able to sustain the costs of such ligaon or proceedings more e ecvely than we can because of their subst anally greater nancial resources. Uncertain es resulng from the iniaon and connuaon of paten t liga on or other proceedings could have a material adver se eect on our ability to compet e in the marke tplace. Many of our consultants and employees, including our senior management, were previously employed at other biotech - nology or pharmaceucal companies, including our competor s or potenal compet ors. Some of these consultants and employees ex ecuted propriet ary rights, non-disclosure and non-compeon agreements in connecon with such previ - ous employment. Although we try to ensure that our consultants and employees do not use the proprietary informa on or know-how of others in their work for us, we may be subject to claims that we or these consultants and employees have used or disclosed condenal informa on or intellectual property , including trade secrets or other proprietary in - forma on, of any such consultant’ s or employee’ s former employer , or have br eached their non-compeon agreement. Liga on may be necessary to defend agains t these claims. If we fail in prosecung or defending any such claims, in addion to paying monetary damages, we may lose valuable intellectual property rights or personnel or sustain damages. Such intellectual pr operty rights could be awarded to a third party , and we could be required to obtain a license from such third party to commercialize our technology or products. Such a license may not be available on commer cially reasonable terms or at all. Even if we successfully prosecute or def end agains t such claims, ligaon could result in substan al costs and distr act management. 2.6.6 We may not be successful in obtaining or maintaining necessary rights to our products and product candidates through acquisitions and in-licenses. Because our progr ams may requir e the use of proprietary rights held by thir d pares, the growth of our business will lik ely depend in part on our ability to acquire, in-license, maint ain or use these proprietary rights. W e may be unable t o acquire or in-license any composions, me thods of use, processes, or other third-party intellectual pr operty rights from third pares that we idenfy as necessary f or our product candidates. The licensing and acquision of thir d-party intellectual proper - ty rights is a compev e area, and a number of more est ablished companies may pursue s trategies to license or acquir e third-party int ellectual property rights that we ma y consider aracv e. These established companies ma y have a compe - ve advan tage over us due to their siz e, cash resour ces and greater clinical dev elopment and commercializa on capabilies. For e xample, we somemes collabor ate with U.S. and non-U .S. academic instuons to accelera te our preclinical resear ch or development under wrien agreements with these instuons. T ypically , these instuons provide us with an opon to negoate a license to any of the instuon’ s rights in technology resulng from the collaboraon. R egardless of such opon, we may be unable to negoate a license within the specied meframe or under terms that are acceptable to us. If we are unable to do so, the instuon may o er the intellectual pr operty rights to other pares, potenally blocking our ability to pursue our applicable product candidate or progr am. In addion, companies that perceive us to be a competor ma y be unwilling to assign or license rights to us. We also may be unable to license or acquire third-party int ellectual property rights on terms that would allow us to make an appropriat e return on our inves tment. If we are unable to successfully obtain a license to third-party intellectual property rights necessary for the development of a product candidate or progr am, we may ha ve to abandon development of that product candidat e or progr am and our business and nancial condion could suer . 2.6.7 If we fail to compl y with our obligations under the agreements pursuant to which w e license intellectual property rights from third parties, or otherwise experience disruptions to our business relationships with our licensors, we could lose the rights to intellectual pr operty that are important to our business. W e are a party to license agreements under which we are granted rights to intellectual property that are important to our business and we expect that we may need to enter into additional license agreements in the future. Existing license agreements impose, and we expect that future license agreements will impose, various development obliga - tions, payment of roy alties and fees based on achieving certain milestones, as well as other obliga tions. If we fail to comply with our obligations under these agreements, the licensor may have the right to terminate the license. The termination of any license agreements or failure to adequately preserve such license agreements could prev ent us from commercializing products or product candidates covered by the licensed intellectual property . Several of our existing license agreements are sub-licenses from third parties which are not the original licensor of the intellectual property at issue. Under these agreements, we must rely on our licensor to comply with its obligations under the primary license agreements under which such third party obtained rights in the applicable intellectual property , where we may have no relationship with the original licensor of such rights. If the licensors fail to comply with their obliga - tions under these upstream license agreements, the original third-party licensor may have the right to terminate the original license, which may terminate the sublicense. If this were to occur , we would no longer hav e rights to the ap - plicable intellectual property and, in the case of a sublicense, if we were not able to secure our own direct license with the owner of the relev ant rights, which it may not be able to do at a reasonable cost or on reasonable terms, it may adver sely aff ect our ability to continue to develop and commercialize the products and product candidates incorpor at - ing the relev ant intellectual property . Disputes may arise reg arding intellectual property subject to a licensing agreemen t, including: • the scope of rights grant ed under the license agreement and other interpr etaon-rela ted issues; • the extent to which our technology and processes infringe on intellectual pr operty of the licensor that is not subject to the licensing agreement; • the sublicensing of patent and other rights under any collaboraon rela onships we might enter into in the future; • our diligence obliga ons under the license agreement and what acvies sasfy those diligence obligaons; • the ownership of invenons and know-how resulng fr om the joint creaon or use of intellectual property by our licensors and us and our partners; and • the priority of invenon of paten ted technology . If disputes over in tellectual property that we ha ve licensed preven t or impair our ability to maintain our curren t licensing arrang ements on acceptable terms, we ma y be unable to successfully develop and commer cialize the a ected products and product candida tes. 2.6.8 If our trademarks and trade names are not adequately protected, then we may not be able to build name recognition in our markets of interest and our business may be adversel y aected. Our register ed or unregistered trademark s or trade names may be challenged, infringed, circumv ented or declared generic or determined to be infringing on other marks. We may not be able to protect our rights to these trademarks and trade names, which we need to build name recognition by potential partners or customer s in our mark ets of in - teres t. Over the long term, if we are unable to establish name recognition based on our trademarks and trade names, then we may not be able to compet e eff ectively and our business may be adversely aff ected. If other entities use trademark s similar to ours in differen t jurisdictions, or have senior rights to ours, it could interf ere with our use of our current trademarks throughout the world. 128 | Risk F actors Related to argenx’s Intellectual Property Risk F actors Related to argenx’s Intellectual Property | 129 P ART II 2.6.9 If we do not obtain protection under the Hatch-Waxman Amendments and sim- ilar non-U .S. legislation for extending the term of patents covering each of our products and product candidates, our business may be materiall y harmed. Pa tents have a limit ed duraon. In the U.S., if all main tenance fees ar e mely paid, the natural expir aon of a patent is g en - erally 20 y ears from its earliest U .S. non-provisional ling date. V arious extensions ma y be available, but the lif e of a patent, and the protecon it a ords, is limited. E ven if paten ts covering our products and product c andidates, their manufactur e, or use are obt ained, once the patent lif e has expired, we ma y be open to compeon from compe ve medicaons, including biosimilar medicaons. Given the amoun t of me required for the de velopment, tesng and r egulatory review of new pr od - uct candidates, pa tents prot ecng such candidates might expir e befor e or shortly aer such candidates ar e commercialized. As a result, our owned and licensed pat ent porolio may not pr ovide us with sucient rights to e xclude others fr om com - mercializing pr oducts similar or idencal to ours. Depending upon the ming, duraon and condions of FD A markeng appr oval of our product candida tes, one or more of our U.S. pat ents may be eligible f or limited patent term e xtension under the Drug Price Compeon and Pa tent T erm Rest o - ra on Act of 1984 (the Hatch-W axman Act ) and similar legislaon in the European Union. The Hat ch-Waxman Act permits a paten t term extension of up to ve y ears for a pa tent covering an appr oved product as compensa on for e ecve patent term lost during pr oduct development and the FDA r egulatory review pr ocess. The patent term e xtension cannot extend the remaining term of a pa tent beyond a tot al of 14 years fr om the date of product appro val, and only one patent applica - ble to an appro ved drug may be extended. Ho wever , we may not r eceive an extension if we f ail to apply within applicable deadlines, fail to apply prior t o expiraon of r elevant pat ents or otherwise fail to sas f y applicable requir ements. Moreover , the length of the e xtension could be less than we request. If w e are unable to obtain pat ent term extension or the t erm of any such e xtension is less than we request, the period during which we c an enforce our pa tent rights for tha t product will be shortened and our compet ors may obt ain approval to mark et compeng pr oducts sooner than we expect. As a result, our rev enue from applicable products could be r educed, possibly materially . 2.6. 10 We enjoy only limited geographical pr otection with respect to certain patents and may face diculties in c ertain jurisdictions, which may diminish the value of intellectual property rights in those jurisdictions. W e oen le our rst pat ent applicaon (i.e., priority ling) at the UK Intellectual Pr operty Oce, the European Pat ent Oce or the USPT O. Internaonal applicaons under the Pa tent Cooperaon T reaty ( PCT ) are usually led within twelve months aer the priority ling. Based on the PCT ling, naonal and regional pat ent applicaons may be led in addi - onal jurisdicons where we believe our products and product candidates may be mark eted. We ha ve so far not led for paten t prot econ in all naonal and regional jurisdicons where such protecon ma y be available. In addion, we may decide to abandon naonal and regional pat ent applicaons before gr ant. Finally , the grant proceeding of each naonal/ regional paten t is an independent proceeding which may lead to situaons in which applicaons might in some jurisdic - ons be refused by the relevant pat ent oces, while grant ed by others. It is also quite common that depending on the country , the scope of paten t prot econ may vary f or the same products or product candidate or technology . Competor s may use our and our licensors’ or collabor aon partners’ technologies in jurisdicons where we hav e not obtained paten t prot econ to develop their own products and, further , may export otherwise infringing products to territories where we and our licensors or collabora on partners hav e patent protecon, but enf orcement is not as strong as that in the U.S. and the European Union. These products may compete with our products and product candidates, and our and our licensors’ or collabora on partners’ pat ents or other intellectual property rights ma y not be eecve or sucient to prev ent them from compeng. The laws of some jurisdicons do not protect intellectual property rights to the same extent as the laws in the U.S. and the European Union, and companies have encounter ed signicant dicules in protecng and def ending such rights in such jurisdicons. If we or our licensors encounter dicules in protecng, or are otherwise precluded from eecv ely protecng, the intellectual property rights importan t for our business in such jurisdicons, the value of these rights may be diminished and we may f ace addional compeon from others in those jurisdicons. Some countries have c ompulsor y licensing laws under which a patent owner may be compelled to gran t licenses to thir d par - es. In addion, some countries limit the enforceability of patents against gov ernment agencies or government c ontractor s. In these countrie s, the patent owner may ha ve limited r emedies, which could ma terially diminish the v alue of such pat ent. If we or an y of our licensors is forced to gran t a license to third pares with r espect to an y patents r elevant t o our business, our c om - peve posion may be impair ed and our business, r esults of opera ons and nancial condion may be adver sely a ected. Proceedings to enf orce our and our licensors’ or collaboraon partner s’ paten t rights in for eign jurisdicons could result in substanal cos ts and divert our and our licensors’ or collabor aon partners’ eorts and aenon fr om other aspects of our business, could put our and our licensors’ or collaboraon partners’ pat ents at risk of being invalidat ed or interpr eted narrowly and our and our licensors’ or collabor aon partners’ patent applicaons at risk of not issuing and could prov oke third pares to assert claims against us or our licensors or collabora on partners. We or our licensors or collaboraon partners may not prev ail in any lawsuits that we or our licensors or collabora on partners iniat e and the damages or other remedies awarded, if any , may not be commercially meaningful. 2.6.11 Intellectual pr operty rights do not necessaril y addr ess all potential threats to our c ompetitive advantage and changes in patent laws or patent jurisprudence could diminish the value of patents in general, thereb y impairing our ability to protect our products. The America Invents Act ( AIA ) has been enacted in the U.S., resulng in signicant changes to the U.S. paten t sy stem. An important change introduced by the AIA is that, as of March 16, 2013, the U.S. tr ansioned to a “rst -to-le” s ystem for deciding which party should be grant ed a paten t when two or more patent applicaons are led by dier ent pares claiming the same inv enon. A third party that les a patent applicaon in the USPTO aer that dat e but befor e us could theref ore be awarded a patent co vering an inven on of ours even if we had made the inv enon before it was made by the third party . This will require us to be cognizant going forwar d of the me from invenon to ling of a patent applica - on, but circumstances could prev ent us from promptly ling patent applicaons on our invenons. Among some of the other changes introduced by the AIA are changes that limit where a patent ee may le a patent in - fringement suit and providing opportunies for third pares to challenge any issued patent in the USPTO . This applies to all of our U.S. pat ents, even those issued bef ore March 16, 2013. Because of a lower evidenary standard in USPT O pro - ceedings compared to the evidenary standar d in U.S. feder al courts necessary to inv alidate a patent claim, a third party could potenally pro vide evidence in a USPTO proceeding sucient f or the USPT O to hold a claim invalid even though the same evidence would be insucient to invalidate the claim if rst presen ted in a district court acon. Accordingly , a third party may aempt to use the USPTO pr ocedures to invalidat e our patent claims that would not have been inv alidated if rs t challenged by the third party as a def endant in a district court acon. The AIA and its implementaon could increase the uncertaines and costs surrounding the prosecuon of our patent applicaons and the enfor cement or def ense of our issued patents. Addionally , the U.S. Supreme Court has ruled on sever al patent cases in recent year s, either narrowing the scope of pat - ent protecon a vailable in certain circumstances or weak ening the rights of patent owner s in certain situaons. In addion to increasing uncertainty with reg ard to our ability to obtain pat ents in the future, this combinaon of events has created uncertainty with respect to the value of patents, once obtained. Depending on decisions by the U.S. Congress, the feder al courts and the USPTO , the laws and regulaons governing pat ents could change in unpredict able wa ys that could weaken our ability to obtain new patents or to enfor ce our exisng pat ents and paten ts that we might obtain in the future. Any inability of us to protect our compeve advant age with reg ard to any of our products and product candidates may prev ent us from successfully monezing such products and product candidate and this could materially adver sely a ect our business, prospects, nancial condion and results of operaons. 130 | Risk F actors Related to argenx’s Intellectual Property Risk F actors Related to argenx’s Intellectual Property | 131 P ART II 2.6. 12 Obtaining and maintaining our patent protection depends on compliance with various pr ocedural, document submission, fee payment and other r equirements imposed by g overnmental patent ag encies, and our patent pr otection could be reduced or eliminated for non-c ompliance with these requirements. Periodic maint enance and annuity fees on any issued patent are due to be paid to the USPT O, the European Pat ent Oce and foreign pat ent agencies in sever al stages over the lifeme of the patent. The USPT O, the European Pat ent Oce and various for eign governmental pat ent agencies require compliance with a number of procedural, document ary , fee pay - ment and other similar provisions during the patent applica on process. While an inadvertent lapse can in many cases be cured by payment of a late f ee or by other means in accordance with the applicable rules, there are situaons in which noncompliance can result in abandonment or lapse of the patent or paten t applicaon, resulng in paral or complete loss of patent rights in the relevant jurisdicon. Non-compliance events that could result in abandonment or lapse of a paten t or patent applica on include failure to respond to ocial acons within prescribed me limits, non-paymen t of fees and failur e to properly legalize and submit formal documents. If we or our licensors or collabor aon partners fail to maintain the paten ts and patent applica ons covering our products and product candidat es, our competor s might be able to enter the marke t, which would have an adverse e ect on our business. 2.6. 13 Our trade secrets may be misappr opriated or disclosed, and confidentiality agreements with employ ees, consultants, advisors and potential collaborators may not adequatel y pr event disclosure of trade secrets and protect other proprietary inf ormation. In addion to patent protecon, we also rely on trade secre t prot econ for our propriet ary inf ormaon that is not amenable to, or that we do not consider appropriate for , patent protecon, including, for ex ample, certain aspects of our llama immunizaon and anbody anity matura on approaches. Howev er , tr ade secrets are dicult to prot ect, and we have limited con trol over the protecon of trade secrets used by our licensors, collabora tors and suppliers. T o protect this type of informaon agains t disclosure or appropriaon by compet ors, our usual pracce is to requir e our employees, consult ants, advisors and potenal collabor ator s to enter int o condenality agr eements. Moreover , we put in place appropriate procedur es to idenfy condenal mat erial and restrict access to documenta on. Howev er , current or former employees, consult ants, advisers and potenal collaborat ors may unintenonally or willfully disclose our condenal inf ormaon to competors. W e have enter ed into, and may in the future enter into addional, collabora ons with our competors, and condenality agr eements may not pro vide an adequate remedy in the event of unauthorized disclosure of condenal inf ormaon. In addion, the need to share trade secrets and other condenal informa on increases the risk that such trade secrets become known to our competors, are inadvert ently incorporat ed into the technology of others, or are disclosed or used in violaon of these agreements. Enfor cing a claim that a third party obtained illegally and is using trade secre ts is expensive, me consuming and the outcome is unpredictable, and the enfor ceability of condenality agree ments may vary from jurisdicon to jurisdicon. Moreov er , if any of our trade secrets were to be lawfully obtained or independently developed by a competor or other third party , we would have no right to prevent them from using that technology or informaon to compet e with us. 2. 7 Risk F actors Related to argenx’ s Org anization and Operations 2. 7 . 1 Our future growth and ability to compete depends on retaining our ke y personnel and recruiting additional qualified personnel. Our success depends upon the connued contribuons of our key management, scienc and technical per sonnel, many of whom have been instrumental f or us and have substan al experience with our therapies and relat ed technologies. These ke y management individuals include the members of our Board of Director s and senior management team. The loss of k ey managers and senior sciensts could delay our research and development acvies. In addion, our abili - ty to compete in the highly compeve biotechnology and pharmaceucal industries depends upon our ability to aract and retain highly qualied management, scienc and medical personnel. Many other biotechnology and pharmaceucal companies and academic instuons that we compete agains t for qualied personnel ha ve greater nancial and other re - sources, di erent risk proles and a longer history in the industry than we do. Theref ore, we might not be able to aract or retain these k ey persons on condions that are economically acceptable. Furthermore, we will need to recruit new managers and qualied scienc, commercial, regulatory and nancial person - nel to develop our business if we expand into elds that will require addional skills. Our inability to ar act and ret ain these ke y persons could prev ent us from achieving our objecves and implemenng our business str ategy , which could have a material adver se eect on our business and prospects. 2. 7 .2 We expect to e xpand our development, regulatory and sales and marketing capabilities, and as a r esult, we may encounter diculties in managing our gr owth, which could disrupt our operations. W e have grown signicantly in number of employees and scope of opera ons over the recent year s and expect to experience signicant gr owth in the number of our employees and the scope of our operaons also in the near future, parcularly in the areas of drug research, drug development, regula tory aairs and sales and markeng. T o manage our ancipated future gr owth, we must connue to implement and improv e our managerial, operaonal and nancial sys tems, expand our facilies and connue to recruit and train addional qualied personnel. Due to our limited nancial resour ces and the limited experience of our management team in managing a company with such ancipated growth, we may not be able to eecvely manage the expansion of our operaons or recruit and train addional qualied personnel. For ex ample, we are currently outsourcing certain development areas which we cannot cover our selves due to limited personnel capacies, f or ex ample to Zai Lab in relaon to proof -of-concept trials in two kidney indicaons, LN and MN or to IQVIA in relaon to proof -of-concept trials in primary SjS and COVID-19-mediat ed POTS. As a result of our limited nancial, manufacturing and management recour ses, we may forgo or delay pur suit of opportunies with potenal prod - uct candidates that late r prov e to hav e great er market potenal. Our resour ce allocaon decisions may cause us to fail to capitaliz e on viable commercial products or prot able mark et opportunies. Further , we may relinquish rights to such product candidat es through collabor aons, licensing or roy alty arrangements in circumst ances where it would hav e been more advant ageous for us to retain sole development and commercializ aon rights. 132 | Risk F actors Related to argenx’s Intellectual Property P ART II Risk F actors Related to argenx’s Org anization and Operations | 133 The expansion of our operaons may lead to signicant costs and may divert our management and business develop - ment resource s and may dilute our corpora te culture, which in turn may mak e it more dicult to aract and retain em - ployees. Any inability to manage growth could dela y the ex ecuon of our stra tegic objecves or disrupt our operaons, which in turn could materially harm our business and prospects. 2. 7 .3 Public health issues or o ther catastrophic events c ould disrupt the suppl y, delivery or demand of products, which c ould negativel y aect our operations and perf ormance. Public health crises such as pandemics or similar outbreaks could adver sely impact our business. T o date, the outbreak of COVID-19 has already resulted in extended shutdowns of certain businesses in many countries all over the world. The spread of COVID-19 has impacted the global economy and may impact our operaons, including the poten al interrup - on of our clinical trial acvies and our supply chain, and the operaons of our k ey business partners. Global health concerns, such as the recen t developments ar ound COVID-19, could also result in social, economic, and labor instability in the countries in which we or the third pares with whom we engage oper ate. We ha ve also tak en temporary precau - onary and severely restricv e measures intended to help minimiz e the risk of COVID-19 to our employees, including tempor arily requiring our employees to work r emotely , suspending non-essenal trav el worldwide for our employees and discour aging employee a endance at industry events and in-person work -relat ed meengs. These measures could nega - vely a ect our business. COVID-19 has also caused volality in the global nancial markets and threat ened a slowdown in the global econom y , which may negavely a ect our ability to raise addional capital on ar acve terms or at all. W e cannot presently predict the scope and severity of any potenal business shutdowns or disrupons, but if we or any of the third pares with whom we engage, including the suppliers, contr act manufacturer s, clinical trial sites, regulator s and other third pares with whom we conduct business, were to experience shutdowns or other business disrupons, our ability to conduct our business in the manner and on the melines presen tly planned could be materially and negavely impacted. It is also possible that global health concerns such as this one could disproporona tely impact the clinical sites in which we conduct any of our clinical trials, which could have a material adverse e ect on our business and our results of operaon and nancial condion. In addion, a cat astrophic event that r esults in the destrucon or disrupon of our data center s or our crical business or informa on technology sy stems would severely a ect our ability to conduct normal business operaons and, as a result, our operang results would be adver sely a ected. 2. 7 .4 Global economic uncertainty and w eakening product demand caused by politi- cal instability , changes in trade agreements and conflicts, such as the c onflict between Russia and Ukraine, could adv ersely aect our business and financial performance. Economic uncertain ty in various global marke ts caused by polical instability may r esult in weak ened demand for our products and diculty in forecas ng our nancial results. Global conicts, including the conict between Russia and Ukraine, as well as economic sancons implemented by the U.S., the European Union and other countries against Russia in response thereto , may neg avely impact markets, increase energy and transport aon costs and cause weaker macro-economic condions. P olical developments impacng government spending and internaonal trade ma y also nega vely impact mark ets and cause weak er macro-economic condions. While at the date of this Universal R egistraon Document the conict between Russia and Ukraine and the corr esponding sancons imposed on Russia, did not directly impact our operaons, we cannot predict the eect the conict ma y hav e on the European and global economic and thereby , indirectly or directly aect our opera ons. The conict between Russia and Ukraine increased recruitment costs f or our ADDRESS trial of SC ef gargimod for PF and PV and is expected to cause delays in our ADDRESS trial. In addion, the sancons imposed by many countries, ongoing developments and uncertainty r elated to the conict between Russia and Ukraine could adver sely aect us in other wa ys. 134 | Risk F actors Related to argenx’s Org anization and Operations For ex ample, it could lead to increasing manufacturing costs f or our products by causing disrupons in the supply chain, including as a result of transport aon restricons, increased costs of raw mat erials, producon costs as well as having an adverse e ect on the availability of materials. The conict between Russia and Ukraine may also result in declines in the global equity and debt capital mark ets, liming our ability to access such mark ets to obtain nancing to conduct our opera ons and growth. 2. 7 .5 We have obtained significant funding from agencies of the go vernment of the Flemish region of Belgium and have benefited from certain r esearch and development incentiv es, which may be re-evaluated if our shareholder base changes significantl y. The tax authorities may challenge our eligibility for or our calculation of such incentives. Pursuant to the gener al terms of each grant, certain Flemish agencies are entled to re-ev aluate the subsidies granted to us in case of a fundamental change in our shareholding base, which is not dened in the gener al terms, but we believe would involv e a change of control of us. Any such reevalua on could nega vely impact the funding that we receive or have r eceived from the Flemish agencies. The research and developmen t incentives from which we have benefited as a company active in research and devel - opment in Belgium can be offset against Belgian corporat e income tax due. The excess portion may be refunded at the end of a five-year fiscal period for the Belgian research and development incentive. The resear ch and development incentives are both calculated based on the amount of eligible research and developmen t expenditure. The Belgian tax authorities may audit each research and development progr am in respect of which a tax credit has been claimed and assess whether it qualifies for the tax credit regime. The tax authorities may challenge our eligibility for , or our calculation of , certain tax reductions or deductions in respect of our research and development activities and, should such a claim of the Belgian tax administra tion be successful, we may be liable for additional corpor ate income tax, and penalties and inter est relat ed theret o, which could have a significant impact on our results of operations and future cash flows. Furthermore, if the Belgian government decide to eliminate, or reduce the scope or the rate of , the re - search and development incentive benefit, either of which it could decide to do at any time, our results of opera tions could be adver sely aff ected. 2. 7 .6 Exchange rate fluctuations or abandonment of the euro currency may materiall y aect our results of operations and financial c ondition. Due to the internaonal scope of our operaons and the signicant posion of cash we need to have av ailable to conn - ue our business acvies, our assets, earnings and cash ows are inuenced by movements in ex change rates of sever al currencies. Our net sales and costs will be aect ed by uctuaons in the rate of ex change parcularly between the U.S. dollar , our new funconal currency as per January 1, 2021, and the euro , Swiss francs, Japanese Y en and Brish pounds, which are our main nancing and potenal rev enue currencies beyond the U.S. dollar . The majority of our operang expenses are paid in USD, but we also receive payments and we regularly acquire services, consumables and materials in euros, Swiss francs and Brish pounds. As a result, our business may be aected by uctuaons in for eign ex change rat es between the U.S. dollar and other currencies, which may also hav e a signicant impact on our report ed results of opera - ons and cash ows from period to period. Currently , we do not have any ex change rate hedging arr angements in place. P ART II Risk F actors Related to argenx’s Org anization and Operations | 135 136 | Risk F actors Related to argenx’s Org anization and Operations 2. 7 .7 Changing expectations f or inflation and deflation and corresponding fluctua- tions in interest rates could decr ease demand for our products and negativel y aect our performance, as well as increase certain operating costs, such as employee c ompensation. Demand for our products and our operang costs may be nega vely impacted by adverse condions in the U.S., the Eu - ropean Union and global economies. A number of factor s may contribut e to a decline in economic condions, including , but not limited to, rising government debt levels, scal and central bank policy shis, the withdrawal of governmen t interven ons into the nancial marke ts, changing consumer spending paerns, and changing expect aons for inaon and deaon which may impact interes t ra tes. For example, at its January 2022 the Feder al Open Mark et Commiee Meeng, the United States Feder al Reserve Bank indicat ed it expects to raise benchmark inter est rate s in 2022, paral - ly in response to increasing inaon and a strong labor market. Increased int erest rat es may decr ease demand for our products, even as inaon places pressure on consumer spending, borrowing and saving habits as consumer s evalua te their prospects for future income gro wth and employment opportunies in the current economic en vironment, and as borrow ers face uncertainty about the impact of rising prices on their ability to repay a loan. A change in demand for our products and any step s we may tak e to migat e such change could impact our over all growth. Furthermore, inaonary and other economic pressure could negav ely a ect our business, nancial condion, results of oper aons, cash ows and future prospects. Addionally , an inaonary environment, combined with the ght labor mark et, could make it mor e costly f or us to aract or retain employ ees. In order to meet the compensaon expect aons of our prospecv e and current employ ees due to inaonary fact ors, we may be requir ed to increase our operang cos ts or risk losing skilled work ers to competor s. 2. 7 .8 We ar e exposed to unanticipated changes in tax laws and r egulations, adjustments to our tax pro visions, exposure to additional tax liabilities, or forfeiture of our tax assets. The determinaon of our provision for income tax es and other ta x liabilies requires signicant judgment, including the adopon of certain accounng policies and our determinaon of whether our deferr ed tax assets are, and will remain, tax e ecve. W e cannot guaran tee that our interpr etaon or structure will not be quesoned by the relev ant tax au - thories, or that the relev ant tax laws and regulaons, or the interpret aon thereof , including through tax rulings, by the relev ant tax authories, will not be subject to change. Any adverse outcome of such a review may lead to adjustments in the amounts recorded in our nancial stat ements and could have a materially adver se eect on our operang results and nancial condion. W e are subject to laws and regulaons on tax levies and other charges or contribuons in dieren t countries, including trans fer pricing and ta x regulaons f or the compensaon of personnel and third pares. Dealings between current and former group companies as well as addional companies that may form part of our group in the future are subject to trans fer pricing regulaons, which may be subject to change and could aect us. Compliance with these laws and regula - ons will be more challenging as we expand our internaonal opera ons, including in connecon with potenal approv - als of our products and product candidat es in Europe, the U.S. and elsewhere. Our effectiv e tax ra tes could be adver sely aff ected by changes in tax laws, treaties and regulations, both interna tion - ally and domestically , or the interpreta tion thereof by the relevan t tax authorities, including changes to the patent income deduction, possible changes to the corporat e income tax base, wage withholding tax incentive for qualified re - search and development personnel in Belgium and other tax incentives and the implementa tion of new tax incentives such as the innovation deduction. For example, whether the tax authorities in Belgium will agree with argenx BV’ s qualifications and proposed application of patent box tax advant ages will have a significant tax ation impact on argenx BV . An increase of the effective ta x rat es could have an adver se eff ect on our business, financial position, results of opera tions and cash flows. In addion, we may not be able to use, or changes in tax regula ons may a ect the use of , certain unrecogniz ed tax assets or credits that we have built over the years. For inst ance, as of December 31, 2021, we had USD 815.3 million of consolidat ed tax loss carry forwar ds. In gener al, some of these tax losses carry forw ards may be forfeit ed in whole, or in part, as a result of various transacons, or their ulizaon ma y be restrict ed by sta tutory law in the relevant jurisdicon. Any corpor ate reorg anizaon by us or any transacon relang to our shareholding structur e may result in paral or com - plete forf eiture of tax loss carry forwar ds. For inst ance, under Belgian law , argenx BV may lose its tax loss carry forwards and other tax incen ves in case of a change of contr ol, through an acquision or otherwise, not meeng legimate nancial or economic needs as well as in case of a tax neutr al reor ganizaon, such as a merger or a demerger , involving argen x BV . The tax burden would increase if prots, if any , could not be oset agains t tax loss carry forw ards. P ART II Risk F actors Related to argenx’s Org anization and Operations | 137 3 P ART III Non-financial R eporting R equir ements Cont ents 3.1 Disclosur es pursuan t to the EU Non-Financial Reporng Dir ecve 142 3.2 EU En vironmen tal T ax onomy 147 140 | Non-financial R eporting Requirements 3 Non- financial Reporting Requir ements The European Direcv e 2014/95/EU dated October 22, 2014 ( NFRD ) imposes on public-int erest enes which are lar ge undertakings with more than 500 emplo yees, the obligaon to publish non- nancial informaon including inf ormaon on envir onmental, social and governance ma ers ( ESG ), diversity , respect f or human rights and on an-corrupon and bribery maer s. The NFRD has been fully implemented in The Netherlands by the Act implemenng the Dir ecve 2014/95/EU dated Sept ember 28, 2016, the Decree disclosure of diver sity policy dated December 31, 2016 and the Decree on disclosur e of non-nancial inf ormaon dated March 14, 2017. In the nancial y ear 2021 we have f or the rst me cr ossed the 500 employee thr eshold and have become subject to r eporng requirements under NFRD . In addion, as a public interes t enty , we became subject to the EU T axonom y Climate Deleg ated Act (EU) 2021/2139 (the Climate Delega ted Act) reporng requir ements. In this chapter 3, we make all disclosures required f or our compliance with NFRD and the Climate Delegat ed Act, and ancillary legislaon and guidelines applicable to us. In addion to the non-nancial disclosures made in this Universal Registr aon Document, we plan to publish a separat e and dedicated report on ESG annually , starng in 2022, which will give more conte xt as well as addional, volunt ary disclosures on ESG and related subjects. P ART III Non-financial R eporting Requirements | 141 The outcome of those policies All employees ha ve accepted and are tr ained (and retrained annually) on our Code of Conduct, and accepng, and comming to, the c ontents thereof is e xpected of all newcomers t o argenx. At the da te of this Universal Regis traon Document, f or the nancial year ended December 31, 2021, we hav e not idened any material br eaches of our Code of Conduct in relaon to social or employee maer s. Principle risks Our employees and rele vant third pares may eng age in misconduct or other improper acvies, including non-compliance with regulat ory standards and requir ements, which could have a mat erial adverse e ect on our business. Our future gro wth and ability to compete depends in part on our ability to ret ain key per sonnel and recruit addional qualied personnel. How these risks are managed In order to main tain oversight ov er compliance with the our Code of Conduct and other company policies including in relaon to pot enal violaons in the area of employee and social ma ers, and to increase compliance and ensure our colleagues know wher e to go with quesons on the Code of Conduct and its applicaon, we ha ve established the arg enx COMP ASS Helpline, where our employ ees can raise any concerns they ma y have reg arding potenal violaons of arg enx ’ policy condenally or anon ymously (to the exten t allowed by law). W e have in 2021 revised our e xisng Whistleblower Policy in to our new Speak-up P olicy compliant with DIRECTIVE (EU) 2019/1937 OF THE EUROPEAN P ARLIAMENT AND OF THE COUNCIL of 23 October 2019 on the protecon of per sons who report breaches of Union law (EU Whistleblow er Direcve), which policies (jointly our Speak-up P olicy) enables and encourages our employees t o speak up and report any suspected violaon of our Code of Conduct, and to prot ect them from retalia on. We hav e set-up a specic helpline reachable through di erent channels including by phone, also anon ymously , to report suspected poten al violaons. Also to miga te the risks of non-compliance with our Code of Conduct in relaon to emplo yee and social maer s, we require all new employ ees to conrm their acceptance and adherence t o the Code of Conduct and we train e xisng and new employees annually on our Code of Conduct and our Speak -up Policy . W e oer compeve r emuneraon packag es and share based incenves in the form of an E quity Incenve Plan in which all employees are o ered the opportunity to parcipat e. We perf orm periodic benchmark analyses with an external service pr ovider to ensure the compeveness of the c ompensaon oered t o our k ey personnel in comparison to other (peer group) c ompanies. We pay close a enon to creang an envir onment that supports the further development of the talen ts of our key people, including through our personal developmen t plan program. 142 | Disclosures pursuant to the EU Non-Financial Reporting Dir ective P ART III Disclosures pursuant to the EU Non-Financial Reporting Dir ective | 143 3. 1 Disclosures pursuant to the EU Non-Financial R eporting Directive A brief descripon of the undertaking’ s business model A descripon of the policies pursued, including due diligence processes At ar genx, we are on a journey t ogether to achieve the unthink able. We are all w orking hard to build an integr ated, immunology company impr oving the lives of paents. As we con nue to scale up the business to achieve this vision, it is crical tha t we do so with integrity and passion. When each of us acts with honesty and integrity , we gain the trus t of our colleagues, paents and communies. W e are dedicated to f ostering a workplace wher e all people feel free to shar e their thoughts and ideas. And we insist on building and maint aining a safe and secure work en vironment, where no one is subject to unnecessary risk. W e commit to developing our people based on their streng ths, to the benet of the broader team. W e comply with internaonal labor st andards as well as applicable labor and employment laws, wherever w e operate. This includes pr ohibing child labor and forced labor , upholding the right to freedom of associaon, and eliminang discrimina on at work. When selecng our business associates, we strive t o work with third pares who share our commitmen t to respecng and improving human rights, and we do not conduct business with an y individual or company that parcipates in f orced, bonded or indentured labor or in voluntary prison labor , the exploitaon of children (including child labor), harsh or inhumane trea tment or threat of any such tr eatment or any f orm of modern slavery or human tracking. W e believe open communicaon is crical t o guaranteeing a posive work en vironment and our ulmate success. W e underst and that to make a di erence we need to f oster a culture of openness, where colleagues ar e encouraged to shar e their thoughts and ideas because diversity of thought leads to and empower s innovaon. W e acvely listen to our colleagues and mak e sure all voices ar e heard. Our Code of Business Conduct and Ethics ( Code of Conduct ) reects our c ore values: a wa y of working that celebr ates innovaon, c o-creaon, ex cellence, humility , and empowerment. Our Code of Conduct translat es the core values int o a set of clear standards to help guide our conduct as w e navig ate the complexies of the highly regula ted and compeve global mark etplace in which we operat e as we work to become an independent, fully in tegrated, and global immunology compan y . Our commitment to the Code of Conduct is an enabler t o our core business of innovaon and our culture of collabor aon. We ar e all dedicated to and responsible f or its success. Each of us contributes to our reput aon by living our core values ev ery day and making the best choices for ar genx and the many people we serve. All emplo yees are trained annually on our Code of Conduct, and accepng, and comming to , the contents thereof is e xpected of all newcomer s to argenx. Our Code of Conduct sets out core principles f or the way we commit t o important employee and social maer s, including our commitment to maintaining the highest scien c and ethical standards in our research and de velopment acvies and complying with all internaonally accept ed standards that apply to our clinical trials, including the ICH Guidelines f or Good Clinical Pracce and the ethical principles arculated in the Declar aon of Helsinki, as well as applicable local laws and r egulaons. W e monitor compliance with these standards thr ough a number of policies which we regularly train relev ant employees on. W e operate a per sonal development progr am in which we encourage all employ ees to parcipate. W e operat e short-term and long t erm incenve plans to encourag e aracon and ret enon of qualied personnel. W e take a s tance against all f orms of discriminaon and commit to promong diver sity , equity and inclusion as set out in our Code of Conduct and in our diversity , equity and inclusion policy . We encourag e respect of the individual, their integrity and their dignity , by ensuring that the working envir onment and relaons between colleagues ar e free of discriminaon and harassment, whe ther based on race, r eligion, color , polical con vicons, sex, language, pregnancy , ethnic or naonal origin, civil sta te, social status, sex ual orientaon, handicap, age or otherwise. W e will protect an y colleague who in good faith believ es they are vicms of harassment or discrimina on. This includes acons that can reasonably be consider ed oensive, inmida ng or discriminatory , including sexual har assment, power har assment and bullying , whether ph ysical, verbal or visual. W e encourage colleagues to speak up against an y incident that could be viewed as har assment or discriminaon and to support those aect ed. Once informed, we will tak e all measures requir ed to stop any such beha vior and to deal appropriat ely with the person or persons inv olved. The maer will be treat ed with discreon and diligence. W e strictly prohibit ret aliaon or retribuon agains t anyone who in good faith r eports a concern about harassmen t, discriminaon, or other issues, or cooperat es with an invesga on into alleged harassmen t and discriminaon, even if the inial concern is ulmately det ermined to be unfounded, as is further set out in our Speak -up policy which was re vised in 2021 to be compliant with the new EU Whistleblower dir ecve. Non-nancial k ey performance indica tors At the da te of this Universal Regis traon Document, f or the nancial year ended December 31, 2021, we have not iden ed any material breaches of our Code of Conduct in r elaon to social or employee maer s. Our voluntary employ ee turnover rat e for the nancial year 2021 is 4.28% and our inv oluntary employee turnover r ate for the nancial year 2021 w as 1.03%, both numbers we believe to be belo w industry aver ages. Social and employee ma ers Subtopic Disclosure A brief descripon of the undertaking’ s business model argen x is dedicated to c onducng its business in a saf e and environment ally sustainable manner as part of our commitment t o not only improve the lives of paents we hope to serve, but also to posiv ely impact our colleagues, business partner s, and surrounding communies as well. In an eort t o do this we: • comply with en vironmental law s and regulaons that ar e related t o our specic work and responsibilies. • encour age colleagues to respect the environment and na tural resour ces available to us by taking sustainability s teps lik e liming energy use, reducing w aste, and recy cling. • have awareness and tr aining programs t o teach our employees how to deal with dier ent waste sys tems. W e are commied t o expanding and developing our sus tainability iniaves in the future. Given the pr esent stat e of scienc knowledge, it is not possible to examine the complex inter acons in a living org anism solely by the use of modeling or performing experiments in cell cultures and ssue samples. Resear ch using living animals remains essenal in the discovery , development and producon of new medicines. W e cannot replace all animal experiments in the f oreseeable future, but w e connuously review the welfare and use of animals and develop procedur es that reduce or r eplace animal experiments. If we eng age in research using live animals, we f ollow all applicable laws and r egulaons, and argenx policies including our Animal W elfare Policy . Environmen tal maers Subtopic Disclosure P ART III The outcome of those policies Non-nancial k ey performance indica tors Principle risks How these risks are managed At the da te of this Universal Regis traon Document, f or the nancial year ended December 31, 2021, we hav e not idened any material br eaches of our Code of Conduct in relaon to envir onmental maer s, and we have not idened an y material breaches of our Animal W elfare P olicy . At the da te of this Universal Regis traon Document, f or the nancial year ended December 31, 2021, we hav e not idened any material br eaches of our Code of Conduct in relaon to envir onmental maer s, and we have not idened an y material breaches of our Animal W elfare P olicy . W e have assessed our acvies to dat e and did not idenfy specic risks of material envir onmental violaons and as such we hav e not idened environment al risks as principal risks for ar genx. Our primary research and dev elopment acvies tak e place in our facilies in Zwijnaarde, Belgium. F or these acvies we requir e, and have obtained, the necessary envir onmental and biohazar d permits from the responsible g overnments, required by us f or the manner in which we use said facilies. W e may become exposed to liability and subs tanal expenses in connecon with en vironmental compliance or remediaon acvies. Our personnel could br each the animal welfare commitmen ts set out in our Code of Conduct or our Animal W elfare Policy . W e comply with environment al laws and regulaons that ar e related to our specic work and responsibilies and o er trainings to our employees depending on their ar ea of work. In addion, we have a dedic ated safety advisor and f acility manager supervising compliance with environmen tal law on our premises. W e train all personnel inv olved in research acvies with live animals, on our Animal W elfare P olicy . In order to main tain oversight ov er compliance with the our Code of Conduct and other company policies including in relaon to pot enal violaons in the area of envir onmental maer s, and to increase compliance and ensur e our colleagues know where to go with quesons on the Code of Conduct and its applicaon, we ha ve established the arg enx COMP ASS Helpline, where our employ ees can raise an y concerns they may ha ve regar ding potenal violaons of argenx’ policy condenally or anonymously (to the e xtent allowed by law), including in r elaon to violaons of our Code of Conduct on envir onmental maers or in r elaon to violaons of our Animal W elfare P olicy . Our Speak -up Policy enables and encourag es our employees to speak up and report any suspect ed violaon of our Code of Conduct, and to prot ect them from retalia on. We hav e set-up a specic helpline reachable through di erent channels including by phone, also anonymously , to report suspected potenal viola ons. Also to migate the risk s of non-compliance with our Code of Conduct in relaon to en vironmental ma ers, we requir e all new employees to conrm their accept ance and adherence to the Code of Conduct and we tr ain exisng and new employ ees annually on our Code of Conduct and our Speak -up Policy . A descripon of the policies pursued, including due diligence processes W e do not have an envir onmental policy . W e conduct our acvies within the environment al regulat or y frame work set out by those jurisdicons in which we operat e in and have obtained all required en vironmental licenses and permits. With the goal of mig ang the risk of failure t o obtain any r equired environment al permits or licenses, or of losing granted permits or licenses we ma y need to opera te our business, we regularly ev aluate the requirements of such en vironmental permits and licenses to ensure con nued compliance. W e commit to treang resear ch animals in a humane and responsible manner , in accordance with Code of Conduct and our Animal W elfare Policy . Our Animal Welf are Policy r equires us to perform due diligence on third party collabor ators who eng age in research acvies on our behalf , by reviewing their external cerc aon on this topic (such as Associaon for Assessment and Accr editaon of Laborat ory Animal Care Int ernaonal, or AAALAC, cercaon) or if they ha ve not (yet) been cered, by performing our own c onrmatory due diligence through re views and/or interviews or wri en quesons and answers t o gain comf ort that the standards applied are a t the same level as our internal st andards on this topic. A brief descripon of the undertaking’ s business model At ar genx, we are on a journey t ogether to achieve the unthink able. We are all w orking hard to build an integr ated, immunology company and r each paents. As we connue t o scale up the business to achieve this vision, it is crical that w e do so with integrity and passion. When each of us acts with honesty and integrity , we gain the trus t of our colleagues, paents and communies. Relev ant maers with respect t o human rights Subtopic Disclosure A descripon of the policies pursued, including due diligence processes W e commit to compliance with internaonal labor s tandards as well as applicable labor and employment laws, wher ever we opera te. This includes prohibing child labor and for ced labor , upholding the right to freedom of associa on, and eliminang discriminaon at work. When selecng our business associates, we s trive to work with third pares who shar e our commitment to respecng and improving human rights, and w e do not conduct business with any individual or company that parcipates in f orced, bonded or indentured labor or inv oluntary prison labor , the exploitaon of children (including child labor), harsh or inhumane tr eatment or threat of an y such treatment or any form of modern sla very or human tracking. Our Code of Conduct includes our commitment to r especng the human rights of all people and ensure f airness in the workspace. All our personnel is trained annually on our Code of Conduct including its provisions on respecng human righ ts. Accepng, and comming to, the cont ents of the afor emenoned Code of Conduct is expected of all newc omers to argen x. The outcome of those policies Principle risks How these risks are managed For the nancial year ending December 31, 2021, ther e have been no alleged breaches of our Code of Conduct on the topics of human rights or alleged f orced labor or child labor . W e have assessed our acvies to dat e and did not idenfy specic risks of violaons of human rights in relaon to our business acvies and as such w e have not idened the risk of violaons of human rights as principal risk for ar genx. In order to main tain oversight ov er compliance with the our Code of Conduct and other company policies including in relaon to pot enal violaons in the area of human rights, and to incr ease compliance and ensure our colleagues know wher e to go with quesons on the Code of Conduct and its applicaon, we ha ve established the arg enx COMP ASS Helpline, where our employ ees can raise any concerns they ma y have reg arding potenal violaons of arg enx ’ policy condenally or anon ymously (to the ext ent allowed by law), including in relaon t o violaons of our Code of Conduct on human rights rela ted topics. Our Speak -up Policy enables and encourag es our employees to speak up and report any suspect ed violaon of our Code of Conduct, and to prot ect them from retalia on. We hav e set-up a specic helpline reachable through di erent channels including by phone, also anonymously , to report suspected potenal viola ons. Also to migate the risk s of non-compliance with our Code of Conduct in relaon to human righ ts issues, we require all new employ ees to conrm their acceptance and adherence to the Code of Conduct and we tr ain exisng and new employ ees annually on our Code of Conduct and our Speak -up Policy . Non-nancial k ey performance indica tors For the nancial year ending 31 December 2021, ther e have been no alleged breaches of our Code of Conduct on the topics of human rights or alleged f orced labor or child labor . A brief descripon of the undertaking’ s business model A descripon of the policies pursued, including due diligence processes W e work with healthcare prof essionals for the benet of all. The spirit of co-cr eaon is one of our core v alues. T o provide be er , more e ecve products f or paents, we regularly eng age healthcare prof essionals to provide various services in support of our business. The services provided by healthcare pr ofessionals include clinical inves gaons, advisory services, and speaking engagemen ts at argen x events. At ar genx, we promot e our products ethically and honestly , and only for the uses for which they ha ve been approved. W e believe that healthc are prof essionals and paents have the right t o decide the most appropria te treatment opons a vailable based on truthful, accurat e, and balanced product informa on that is supported by scienc evidence and is consist ent with approved pr oduct labeling. W e only use promoonal material and other product inf ormaon that hav e been approved through our internal r eview process. When acng in a promoonal capacity , colleagues and agents of arg enx are required t o always give a balanced pr esentaon of our products, including r elevant saf ety informaon. Whenever arg enx hires a healthcare pr ofessional as a consultant, advisor , invesga tor , speaker , or in any other capacity , we requir e the following requiremen ts are met: • There must be a documented legimat e business need for the services on the part of argenx. Business relaonships mus t not be created as a disguised means to induce or re ward healthcare prof essionals to prescribe, purchase, or rec ommend argenx products. • The selecon of healthcare prof essionals must be based on their qualicaons, experse, capabilies, experience and other appr opriate criteria directly r elated to the idened need. • A wrien contract mus t be executed prior t o the commencement of the services that accurat ely describes the nature of the services and the basis f or remuneraon. • All compensaon to healthcare pr ofessionals must reect f air market v alue for the services provided. • Meengs or events org anized or sponsored by arg enx involving healthcare pr ofessionals’ services must be held at appr opriate venues that are c onducive to the purpose of the meeng or event. Maer s with respect to an-corrupon and bribery Subtopic Disclosure 144 | Disclosures pursuant to the EU Non-Financial Reporting Dir ective Disclosures pursuant to the EU Non-Financial Reporting Dir ective | 145 The outcome of those policies Principle risks Non-nancial k ey performance indica tors How these risks are managed At the da te of this Universal Regis traon Document, f or the nancial year ended December 31, 2021, we hav e not idened any breaches of our Code of Conduct in rela on to an-corrupon or an- bribery maer s. W e may be subject to healthcare la ws, regulaon and enfor cement. Our failure t o comply with these laws could harm our r esults of operaons and nancial condions. Because man y of our healthcare prof essional are also our customers, ther e is the risk that paents and others migh t perceive potenal conicts of int erest, even when none exis t. Failure to c omply with applicable healthcare laws and regulaons ma y lead to enforcemen t including civil and administrave penales, nes or criminal prosecuon and ma y cause us to incur signicant costs and harm t o our business and reputaon. At the da te of this Universal Regis traon Document, f or the nancial year ended December 31, 2021, we hav e not idened any breaches of our Code of Conduct in rela on to an-corrupon or an- bribery maer s. T o avoid even the sugges on of a conict of interes t, we conduct all interacons with healthc are prof essionals with the utmost integrity , scrupulously adhering to government and industry body regulaons, as well as en forcing our own strict in ternal guidelines. We ha ve designed and implemented a targ eted compliance progr am consisng of a body of codes, policies and procedures, which w e acvely and regularly tr ain all relevant per sonnel on. We ha ve recruited a dedicat ed legal and compliance team to support and monit or compliance with relevant rules and r egulaons. Furthermore, all employees are tr ained annually on our Code of Conduct, including its provisions on an-bribery and an-corrupon. Accepng, and comming to , the contents ther eof is expected of all newcomer s to argen x. In order to main tain oversight ov er compliance with the our Code of Conduct and other company policies including in relaon to pot enal violaons in the area of an-bribery and an-corrupon, and to increase c ompliance and ensure our colleagues know where to go with ques ons on the Code of Conduct and its applicaon, we ha ve established the arg enx COMP ASS Helpline, where our employ ees can raise an y concerns they may ha ve regar ding potenal violaons of argenx’ policy condenally or anonymously (to the e xtent allowed by law), including in r elaon to violaons of our Code of Conduct on human rights relat ed topics. Our Speak -up Policy enables and encourag es our employees to speak up and report any suspect ed violaon of our Code of Conduct, and to prot ect them from retalia on. We hav e set-up a specic helpline reachable through di erent channels including by phone, also anonymously , to report suspected potenal viola ons. Also to migate the risk s of non-compliance with our Code of Conduct in relaon t o an-bribery and an-corrupon, we require all ne w employees to conrm their accept ance and adherence to the Code of Conduct and we tr ain exisng and new employ ees annually on our Code of Conduct and our Speak -up Policy . A descripon of the policies pursued, including due diligence processes W e value diversity among our colleagues as an in tegral component in building a sust ainable growth plaorm. W e believe that a div erse workfor ce enhances our overall perf ormance and success. We tak e pride in creang and sustaining a cultur e and environment wher e each of us can excel. W e bring together people with div erse backgrounds experiences and funconal e xperse. By doing so, we broaden the scope of ideas and cr eavity essenal to developing and delivering innov ave therapies t o paents. Acknowledging and beneng fr om dieren t perspecves promotes div ersity of thought and empowers inno vaon. It also contributes t o our commitment to improve liv es of paents, wheref ore we need teams with a health y mix of contrasng per specves and backgrounds that re ect the diverse communies we serve. W e recognize that our people ar e our greatest s trength. Fos tering an inclusive work envir onment where everyone f eels safe and encour aged to contribut e leads to beer work outcomes and supports high levels of employ ee commitment and retenon. W e aspire to be a c onsciously global company . Our success is built on, and dependent on true collabor aon in cross-funconal and oen cross-r egional teams in which open communica on is encouraged and saf eguarded. Every one has a voice and is encourag ed to contribute to the bene t of our common goals, irrespecve of race, e thnicity , age, gender or cultural backgr ound. Good ideas as well as real concerns are t aken seriously , regardless of who brings them forwar d. Diversity t argets The outcome of those policies, results of the Diversity , Equity and Inclusion Policy How our diversity , equity and inclusion policy is being implemented. W e aim to foster an inclusiv e work environment in support of our s trategic plan and priories. W e connue to r aise the bar in this regar d, and to commit to measures and goals designed to support our maturing compan y culture. We aim t o have an equal gender balance in our Board of Dir ectors and in our company leader ship (including funconal leaders and project leaders). As at December 31, 2021, our Board of Dir ectors consist ed of 8 directors, including 1 ex ecuve director and 7 non-ex ecuve directors. The full boar d contained 6 male direct ors (including 1 execuv e director) and 2 female dir ectors (non-ex ecuve), translang in to a 75% male / 25% female balance for our full board of direct ors and a 71.4% male / 28.6% female balance f or our non-execuve dir ectors. As at December 31, 2021, our compan y leadership team consist ed of 23 persons of whom 14 male (60%) and 9 female (40%) per sons. For the purpose of this stat ement we dened the leadership team as consisng of our C-lev el people as well as the leaders of our largest funcons and pr ojects. Each of these posions is characteriz ed by high-impact across the org anizaon, leading a global and cross- funconal team and having a global r each. As at December 31, 2021, 58% of the members of our w orkforce who disclosed their gender identy , were f emale, and 42% male. Our diversity , equity and inclusion policy is implemented in the wa y we recruit, develop and pr omote our employees. W e value our fair , inclusive recruitment process, which is s tandardized acr oss the org anizaon and focuses on pre-iden ed ‘what counts’ fact ors. The process involv es a diverse group of colleagues from acr oss the organiza on, who are provided with training t o recognize an y exisng biases. Recruitment decisions ar e based on a group evaluaon of a vailable candidates, ensuring dier ent perspecves. Our onboarding pr ogram is designed to promot e inclusion by building a strong social f abric across teams, funcons and geogr aphic locaons. Furthermore, all employees ar e encourag ed to parcipate in a personal dev elopment program aimed at building on their individuals streng ths to benet the broader team. W e oer opportunies f or promoon, training and car eer development solely based on job-r elated, appropriate crit eria such as skills, competencies, experience, aptude and enthusiasm and giving account t o each individual’ s experience, ambions and capabilies. W e will connue to implement our diver sity , equity and inclusion policy by seeking new way s to improve and support div ersity , equity and inclusion in our company and w e expect to report on specic iniaves tak en in this reg ard, in the ESG reports expect t o publish annually , starng in 2022. Insight into our div ersity , equity and inclusion policy and pracces Subtopic Disclosure All arrangemen ts (or reimbursement of e xpenses) for trav el, lodging, and meals that are provided to healthcare pr ofessionals relang t o their performance of services must be consisten t with Company policies. W e ensure that that we a void even the percepon of impr oper inuence by refraining fr om oering gis or other items of value. 3.2 EU Environmental T axonomy W e have ex amined all tax onomy-eligible ec onomic acvies listed in the EU T axonom y Climate Delega ted Act (EU) 2021/2139 (the Climate Deleg ated Act ) based on our acvies as a biopharmaceucal gr oup. The Climate Delegat ed Act focuses on those ec onomic acvies and sectors that hav e the greates t potenal to achieve the objecve of clima te change migaon or clima te change adapon or climate chang e adapon. The sectors cov ered include energy , selected manufac - turing acvies, transport and buildings. Companies are required to idenfy if their acvies are eligible under the EU T ax onomy Regulaon (EU) 2020/852. Our main acvity is NACE 72.11 – Research and experiment al developmen t on biotechnology . Aer a thorough revie w involv - ing all relevant divisions and funcons, we concluded that our core economic acvies are not cover ed by the Climate Delega ted Act and consequently are tax onomy -non-eligible. Our assessment of taxonom y-eligibility is focused on economic acvies, dened as the provision of goods or services on a market, thus (potenally) gener ang revenues. In this context, we, as a commercial-s tage biopharmaceucal group, dene the research and development and mark eng of pharmaceucal products as the core of our business acvies. W e dene acvies such as the manufacturing or the transport of our pharmaceucal products to our clients as under - lying acvies necessary to conduct our core business acvies. Therefor e, they are not report ed as tax onomy-eligible acvies and not included in our turnover key perf ormance indicat ors ( KPI ) as they are not generang e xternal turnover on a standalone basis. We will connue to monitor any futur e reporng obliga ons and their impact. The KPIs under the Climate Delega ted Act include the turnover KPI, the capital expenditure (Capex) KPI and the operang expenditur e (Opex) KPI. For the reporng period 2021, the KPIs have to be disclosed in relaon to tax onomy-eligible eco - nomic acvies and tax onomy -non-eligible economic acvies (Art. 10 (2) of the Art. 8 Delega ted Act). As our economic acvies as a biopharmaceucal group are not cover ed by the Climate Delega ted Act, the share of tax onomy -eligible economic acvies in our total turnov er is 0% and – consequently – the related Capex and Opex are also 0%. Accordingly , the share of tax onomy non-eligible economic acvies is 100% for all three KPIs. 146 | Disclosures pursuant to the EU Non-Financial Reporting Dir ective EU Environmental T axonomy | 147 4 P ART IV Cont ents 4.1 Dut ch Corporat e Governance Code, “Comply or Explain” 150 4.2 Manag ement Structure 151 4.3 R eport of the Non-Ex ecuve Director s 169 4.4 R emunera on Report of the R emuneraon and 174 Nominaon Commiee 4.5 Risk Appe te & Contr ol 202 Corporate Go vernanc e 150 | Dutch Corporate Governance Code, “Compl y or Explain ” Management Structure | 151 4 Corporate Gov ernance 4. 1 Dutch Corporate Governanc e Code, “Compl y or Explain” As a Dutch company , we are subject to the Dutch Corpora te Governance Code. A copy of the Dutch Corporate Gov er - nance Code can be found on www .mccg.nl. The Dutch Corporat e Governance Code is based on the noon that a com - pany is a long-term alliance between the various stak eholders of the compan y . Stakeholde rs are groups and individuals who, directly or indirectly , inuence – or are inuenced by – the aainment of argenx’ s objecves: employees, share - holders and other lenders, suppliers, customer s and other stak eholders. Our Board of Director s has responsibility for weighing up these interests, gener ally with a view to ensuring the connuity of the company and its subsidiaries, as the company seeks to cr eate long-term value. If stak eholders are to coopera te within and with the company , they need to be condent that their interes ts are duly tak en into considera on. Good entrepr eneurship and eecve supervision are essenal condions for st akeholder condence in management and supervision. This includes integrity and transparency of the acons of , and accountability f or the supervision by , the Board of Directors. The Dutch Corporate Governance Code is based on a “ comply or explain” principle. Accordingly , companies are re - quired to state the extent to which they comply with the principles and best practice provisions of the Dutch Cor - pora te Governance Code in their annual report and, where it does not comply with them, why and to what extent it deviates from them. W e acknowledge the importance of good corporate gov ernance and we fully endorse the underlying principles of the Dutch Corpora te Governance Code, which is reected in a policy that complies with the best pracce provisions as sta ted in the Dutch Corporate Gov ernance Code (the Board By -Laws ). The Board By-Law s are av ailable on our website (www .argen x.com). However , we do not comply with or deviate fr om the best pracce provisions in the areas set out below , for the reasons explained in this secon. These deviaons all relat e to our remuneraon pr acces, which are in line with our remuner aon policy as approved by our General Meeng in 2021. • We do not comply with best pracce provisions 3.1.2 under vi of the Dutch Corpora te Governance Code, which states that shares should be held for at least ve years aer they are awarded. In accordance with our remuner aon policy , pursuant to our Equity Incenve Plan, restricted stock units vest in four equal tranches, which means that one fourth of the res tricted stock units gran ted are seled at each anniversary of the date of granng, and no lock -up period applies to any shares acquired at such selement. Our Equity Incenve Plan was cra ed rec ognizing that equity incenves are an important factor in the key jurisdicons in which we operat e for ar acng and retaining qualied sta . Hence, we deviate from best pracce provision 3.1.2 under vi to allow for a compeve Equity Incenve Plan. At the same me, we believe our curren t Equity Incenve Plan promotes long term value creaon. For instance, opons cannot be exer cised by our directors in the rst three years aer the date of granng and the four -year vesng period of the res tricted stock units ensures that a restricted stock unit package gran ted cannot be fully seled within four year s aer the grant date. In addion, under our previous opon plans, although opons could be exer cised within the rst three year s aer the date of grant of those opons in accordance with the then applicable vesng scheme, unl the date of this Universal Regis traon Document, none of the directors hav e done so. The Equity Incenve Plan is regularly reviewed by the Board of Director s and the remuneraon and nominaon commiee in parcular , based on external benchmarking done by an independent third party . The main purpose of such review and benchmark is to test if the Equity Incenve Plan, including the type, size and condions of gran ts thereunder , is suciently compe - ve and as such can support our ability to ar act and retain talent. In 2021, our Board of Directors has amended our Equity Incenve Plan in line with our updated remuner aon policy , adding specically the granng of restricted stock units to the equity incenve scheme and including the af oremenoned vesng schemes. We currently do not expect to implement trading restricons for our director s that would bring us in full compliance with the Dutch Corpora te Governance in this respect. On this topic, considering the importance of compeve remuner aon for our ability to ar act and retain highly qualied persons, alignment with the refer ence group is priorized over compliance with this best pracce provision 3.1.2. W e currently do not envision to change our pracce in this respect. • We do not comply with best pracce provision 3.2.3. of the Dutch Corporat e Governance Code, which requir es that the severance paymen t in the even t of dismissal should not exceed one year ’ s base compensaon. Our remunera on policy provides that a sever ance payment equal to 18 months base compensaon may become pay able by argenx to our Chief Execuve Ocer . The severance component of the remuner aon package is, like all other components, benchmark ed agains t and aligned with the severance components as idened within the ref erence group. On this topic, considering the importance of compeve remuner aon for our ability to aract and retain highly qualied persons, alignment with the ref erence group is priorized over compliance with this best pracce provision 3.2.3. We currently do not envision to change our pracce in this respect. • We do not comply with best pracce provision 3.3.2. of the Dutch Corporat e Governance Code, which requir es that non-ex ecuve directors will not be gran ted any shares or rights to shares as remuner aon. We note that the ‘best pracces’ and usages regar ding gran ng equity incenves to non-execuv e director s vary signicantly between the k ey jurisdicons in which we operat e. For ex ample, we conduct a signicant part of our opera ons in Belgium and the Belgian Corporate Governance Code requires that non-ex ecuve director s receive part of their remuner aon in the form of shares, but not stock opons. Our benchmarking conrms that oering equity incenves to non-execuv e director s in the form of opons and/or shares is on the other hand widely accepted market pracce in the U.S. We believe it is in the interest of our stak eholders that we are equipped to recruit the talent on our Board of Director s proporonat e to our internaonal ambions. For this reason, we aligned our remuner aon pracces with those prev alent in the key mark ets in which we need to compete for talen t. Considering specically our signicant acvies in the U.S. and the specialized knowledge and experience needed on our Board of Directors to maximiz e our chanc - es of success in this region, we need to align our remuneraon pracces f or non-ex ecuve directors with the U.S. companies in our ref erence group, meaning we oer share opons and/or res tricted share units to our non-execuve director s. We believe this is conscious and well-considered deviaon from the Dutch Corporate Governance Code is required to serve our long-term global goals and ambions. On this topic, considering the importance of compeve remuner aon for our ability to aract and retain highly qualied persons, alignment with the re ference group is pri - orized over compliance with this best pracce pro vision 3.3.2. We currently do not envision to change our pracce in this respect. W e currently do not envision to change our pracce in this respect. W e are considered as a for eign private issuer in the U.S. As a result, in accordance with the lisng requirements of Nas - daq, we may rely on home country governance requiremen ts and certain ex empons thereunder rather than relying on the corpora te governance requirements of Nasdaq. In accordance with Dutch law and generally accepted business prac - ces in the Netherlands, our Arcles of Associaon do not provide quorum requirements gener ally applicable to general meengs of shareholders. T o this extent, our pracce varies fr om the requiremen t of Nasdaq Lisng Rule 5620(c), which require s an issuer to provide in its bylaws f or a gener ally applicable quorum, and that such quorum may not be less than one-third of the outstanding vong stock. Although we must provide shareholder s with an agenda and other relev ant documents for the General Meeng, Dutch law does not have a regulatory regime for the solicitaon of pro xies, and the solicitaon of pro xies is not a generally accepted business pracce in the Netherlands; thus, our pracce will vary from the requiremen t of Nasdaq Lisng Rule 5620(b). 4.2 Management Structur e 4.2. 1 General W e have a one-er board structur e consisng of ex ecuve and non-ex ecuve directors, and a senior management team responsible for the day -to-day oper aons. We hav e opted f or this structure to allow for a division of responsibilies between our Board of Director s and our senior management team, keeping our Board of Director s at a manageable size whilst being able to involve some or all members of our senior management team in discussions of the Board of Director s if and when necessary . P ART IV In pracce, all members of our senior management team are r egularly inv olved in the discussions of our Board of Direc - tors and its commiees, in order to provide inf ormaon and context to the various issues the board needs to decide on. In addion to being presen t to meengs from me to me, regular contact (face to f ace or via electronic means) is kept between the members of the Board of Directors and its commiees and the members of the senior management team as well as other senior leaders in the organiz aon. Set out below is a summary of certain pro visions of Dutch corpora te law as at the date of this Universal Regis traon Document, as well as a summary of relevant inf ormaon concerning our Board of Director s and certain pro visions of the Arcles of Associaon and Board By -Laws (terms of ref erence) concerning our Board of Director s. This summary does not purport to give a complet e overview and should be read in conjuncon with, and is qualied in its enrety by ref erence to the relevan t provisions of Dutch law as in force on the date of this Universal Regis traon Doc - ument and the Arcles of Associaon and Board By-Law s. The Arcles of Associaon are available in the governing Dutch language and an unocial English translaon ther eof , and the Board By-la ws are available in English, on our website. 4.2.2 Statement of the Board of Dir ectors Responsibilies for the Financial Statemen ts and Management Report In accordance with Arcle 5:25c(2)(c) of the DFSA, the Board of Directors hereby ceres that, to the best of our knowl - edge, the consolidated nancial sta tements of argenx SE as of December 31, 2021, prepared in accordance with Interna - onal Financial Reporng Standards (IFRS) as adopted by the European Union, and with the legal r equirements applicable in the Netherlands, give a true and fair view of the assets, liabilies, nancial posion and prot or loss of the company and the undertakings included in the consolidaon tak en as a whole, and that the management report includes a fair review of the development and performance of the business and the posion of argenx and the undertakings included in the consolidaon tak en as a whole, together with a descripon of the principal risks and uncertain es that they face. Responsibility for this Universal Regis traon Document The Board of Directors declar es that the informaon con tained in the Universal R egistraon Document, including the consolidat ed nancial stat ements of arg enx SE as of December 31, 2021 and the management report, is, to the best of its knowledge, in accordance with the facts and contains no omission likely to aect its import. The Board of Directors is responsible for the inf ormaon given in this Universal R egistraon Document. In Control St atement Our Board of Directors is responsible f or the oversigh t of our risk management acvies and has delegat ed to the audit and compliance commiee the responsibility to assist our Board of Directors in this task. While our Board of Director s over sees our risk management, our senior management is responsible f or day -to-day risk management processes. Our Board of Director s expects our senior management to consider risk and risk management in each business decision, to proacvely dev elop and monitor risk management stra tegies and processes f or day -to-day acvies and to eecv ely implement risk management str ategies adopted by the Board of Direct ors. We believe this division of responsibilies is the most eecv e approach f or addressing the risks we face. See secon 4.5 “Risk Appete & Control” f or further informaon on our risk appete and control. 4.2.3 Board of Directors Responsibilies Under Dutch law (Secon 2:129 paragr aph 1 of the DCC), our Board of Director s is collecvely r esponsible for our general aair s. Our Board of Directors, our e xecuve direct or as well as our non-ex ecuve director s, dene our strat egy (as further set out in secon 1.2 “Strategy and objecves”). Our str ategy is regularly discussed and monitored a t our board meengs. Pursuant to our Arcles of Associaon, our Board of Direct ors will divide its dues among its members, with our day- to-da y management entrus ted to the ex ecuve director(s). The non-ex ecuve directors ar e task ed with super vising the management of argen x and providing the ex ecuve director(s) with advice. In addion, both the execuve dir ector(s) and the non-ex ecuve directors must perf orm such dues as are assigned to them pursuant to the Arcles of Associaon. The division of tasks within our Board of Director s is determined (and amended, if necessary) by our Board of Directors. Our ex ecuve director(s) may not be allocated the tasks of: (i) serving as chairperson of our Board of Directors; (ii) determin - ing the remuneraon of an ex ecuve director; or (iii) nominang directors for appointmen t. Each direct or has a duty to properly perform the dues assigned to him or her and to act in our corpora te interest. As a principle under Dutch law , the corpor ate interes t ext ends to the interes ts of all corpora te stak eholders, such as share - holders, credit ors, employees and other stak eholders. Composion, Appointment and Dismissal The Arcles of Associaon provide tha t our board of director s (the Board of Directors ) will c onsist of our ex ecuve direc - tor(s) and non-ex ecuve direct ors. The number of ex ecuve director s must at all mes be less than the number of non-ex - ecuve direct ors. The number of director s, as well as the number of ex ecuve director s and non-execuve dir ectors, is determined by our Boar d of Directors, pr ovided that the Board of Direct ors must consist of a t least three members. Our director s are appointed by the shareholders a t the General Meeng f or a period of four y ears. In accordance with best pracce principle 2.2.1 of the Dutch Corpora te Governance Code, ex ecuve directors ma y be re-appointed for periods of not more than four ye ars at a me. In accordance with best pracce principle 2.2.2 of the Dutch Corpora te Governance Code, non-ex ecuve director s are appointed for a period of four year s and may subsequently be re-appoint ed for anoth - er four -year period. The non-ex ecuve director ma y subsequently be reappointed again f or a period of two year s, which appointment ma y be extended by a t most two years. In the event of a reappoin tment aer an eight -year period, reasons will be given in the report of the Board of Director s. The Board of Direct ors is required to mak e one or more proposals for each seat on our Board of Direct ors to be lled. A resoluon to nominate a direct or by our Board of Direct ors (with support from the remuner aon and nominaon commiee) may be adopted by a simple majority of the votes cas t. A nominaon for appoin tment of an ex ecuve director mus t st ate the candidate’ s age and the posions he or she holds, or has held, insofar as these are relev ant for the performance of the dues of an ex ecuve director . The nominaon must sta te the reasons for the nominaon of the relev ant person. A nominaon for appointment of a non-ex ecuve direct or must st ate the candidate’ s age, his or her profession, the number of shares he or she holds and the employment posions he or she holds, or has held, insofar as these are r elevant for the perf ormance of the dues of a non-execuv e director . Furthermore, the names of the legal enes of which he or she is already a supervisor y board member or a non-ex ecuve member of the board shall be indicated; if those include legal enes which belong to the same group, a re ference to that group will be sucient. The nominaon must st ate the reasons for the nominaon of the relev ant person. Our director s are appointe d as either an ex ecuve director or as a non-execuv e director by the shareholder s at the Gen - eral Meeng. Our Board of Director s designates one ex ecuve director as Chief Execuv e Ocer . In addion, the Board of Director s may gr ant other tles to ex ecuve directors. Our Board of Director s designates a non-execuve dir ector as chairperson of the Board of Directors and a non-ex ecuve director as vice chairperson of the Board of Director s. The legal relaonship betw een an ex ecuve member of the Board of Directors and argen x will not be considered as an employ - ment agreement. Employment agr eements between an ex ecuve director and a group company (other than argenx SE) are permied. In the absence of an employment agreement, member s of a Board of Directors gener ally do not enjoy the same protecon as employees under Dutch labor law . As a foreign priva te issuer , under the lisng requirements and rules of Nasdaq, we are not required to ha ve indepen - dent director s on our Board of Directors, ex cept that our audit and compliance commiee is required to consist fully of independent director s, subject to certain phase-in schedules. However , our Board of Directors has determined that, taking into accoun t any applicable commiee independence st andards, all of our non-ex ecuve directors, including the members of our audit and compliance commiee, are “independent dir ectors” under Rule 10A-3 of the Exchange Act and the applicable rules of the Nasdaq Stock Market and of the Dutch Corporate Gov ernance Code. In making such deter - minaon, our Board of Directors consider ed the relaonships that each non-ex ecuve director has with us and all other facts and circumst ances our Board of Director s deemed relev ant in determining the director’ s independence, including the number of ordinary shares benecially owned by the director and his or her aliated enes (if any). The Dutch Corpor ate Governance Code requir es that the composion of the non-ex ecuve director s is such that the 152 | Management Structure Management Structure | 153 P ART IV members ar e able to operat e independently and crically vis-à-vis one another , the ex ecuve director s, and any parcular inter ests involved. A t the date of this Univer sal Registr aon Document, all non-ex ecuve director s meet the independence criteria con tained in the Dutch Corporat e Governance Code. Theref ore, in the opinion of the non-ex ecuve director s, the composion of our non-ex ecuve director s complies with the independence requiremen ts of best pracce pro visions 2.1.7 to 2.1.9 of the Dutch Corpor ate Governance Code. Our Boar d of Directors has consequen tly also determined that all mem - bers of our commi ees are independent under the applicable rules of the Dutch Corpor ate Governance Code. As of the date of this Universal R egistraon Document (or in any period befor e), none of the members of our Board of Director s and senior management has or has had a family relaonship with any other member of our Board of Director s or senior management. Director s may be suspended or removed by the shareholders at the General Meeng at an y me, with or without cause, by means of a resoluon passed by a simple majority of the votes cast. Under Dutch law (Secon 2:134 paragr aph 1 of the DCC), execuv e direct ors may also be suspended by the board of directors. A suspension of an ex ecuve director by the board of directors ma y be disconnued by the shareholders at an y me at the general meeng. Diversity W e value diversity as a way of recognizing and valuing the dierences between individuals to come to the most ecient and eecv e wa y to achieve our str ategic objecves. For our Board of Directors, this means that when making recom - mendaons to the general meeng for the (re- )appointment of direct ors, the board will aim for a diverse composion in terms of such fact ors as gender and age, in accordance with our diversity policy as may be in force from me to me. Under Dutch law reporng rules, argenx will be required to address diver sity of our Board of Directors in its annual report or in the report of the Board of Directors (bestuur sver slag): (i) composion of the Board of Direct ors by gender; (ii) objec - ves of the diversity policy; (iii) descripon of how the diversity policy is being implemented and the results thereof and (iv) if there is no diversity policy , this should be explained. On January 1, 2022, new legislaon entered int o for ce, requiring “large Dutch companies” to set an ‘appropria te and ambious’ targe t for their management board, supervisory board and senior execuv es (the laer as determined by the company). If a company has adopted a one-er board structure, the appropriat e and ambious targe t applies to both the ex ecuve and non-execuv e director s. The legislaon is based on a “ comply or explain” principle. Accordingly , we will be require d to disclose in our report of the Board of Directors whether or not we are in compliance with the self-imposed targ et. In addion, within ten months of the end of the nancial year , we will need to report to the Sociaal-Economische Raad (SER) whether or not we have complied with the self-imposed tar get. Board Diver sity Matrix (as of the date of this Universal r egistraon Document) Our policy is that we will balance our Boar d of Directors in t erms of gender , age, background and naonality as much as r ea - sonably possible while sll ha ving our board composed of the best possible candidat es overall. It has been and will r emain our priority to hav e the best available specialis ts on our Board of Director s, irrespecve of age, backgr ound, naonality and gender , who mak e a balanced panel of directors able t o advise and guide argenx to further gr owth and success for all its st akeholders. This means we requir e a number of speciales and character tr aits to be present. Considering the af oremenoned and the specialist natur e of our business, we will acvely seek to further impro ve diversity on our boar d if and when proposing new appointments to our Boar d of Director s, whilst acknowledging that age, gender and na onality are important, but not the only fact ors relevan t for the ulmate decision t o select a board member . W e have set our selves the targ et to over me achieve an equal gender balance in our Board of Dir ectors, and we will r eport on our progress annually in our ESG r eport. Meengs and decision-making Our Board By-La ws, that describe, inter alia, the procedure f or holding meengs of the Board of Direct ors, for the deci - sion-making by the Board of Director s and the Board of Director s’ opera ng procedures. In accordance with our Arcles of Associaon, our Board of Directors will meet at least once every three months to dis - cuss the state of a airs within the company and the expected dev elopments. Under the Board By-Law s, the members of our Board of Directors must endeav or , insofar as is possible, to ensure that resoluons are adopted unanimously . Where unanimity cannot be achieved and Dutch law , the Arcles of Associaon or the Board By-La ws do not prescribe a larger majority , all resoluons of our Board of Directors must be adopted by a sim - ple majority of the votes cast in a meeng at which at least a majority of the members of our Board of Director s then in oce are present or represen ted. The Arcles of Associaon and the Board By -Laws provide that in case of a e of votes, the chairperson does not have a casng vote and as such the proposal will be rejected in case of a e. Under the Board By-Law s, some specic maers requir e approval of the majority of the non-ex ecuve directors. These maer s are set out in Schedule 1 of our Board By-La ws. Our Board By -Laws are available on our website. In ex ceponal cases, if the urgent necessity and the interests of argen x requir e this, resoluons of our Board of Directors may also be adopted by unanimous wrien approval of all directors in oce. A director may issue a proxy f or a specic board meeng to another director in wring. The ex ecuve director(s) are required to be ask ed their vision on their own remuner aon in accor dance with best prac - ce provision 3.2.2 but may not parcipate in the adopon of resoluons (including any deliberaons in respect of such resoluons) relang to their remuner aon. Commiees In accordance with the Dutch Corporate Gov ernance Code, our non-execuv e direct ors can set up specializ ed commiees to analyz e specic issues and advise the non-ex ecuve directors on those issues. The commiees are advisory bodies only , and the decision-making remains within the collegial responsibility of the Board of Director s. The non-ex ecuve directors det ermine the terms of ref erence of each commiee with respect to the org anizaon, procedures, policies and acvies of the commiee. Our non-ex ecuve directors hav e established and appointed: • an audit and compliance commiee; and • a remuneraon and nominaon commiee. The composion and funcon of all these commiees complies with all applicable requirements of Euronext Brussels, the Dutch Corpora te Governance code, the Exchange Act, the exchange on which the ordinary shares and the ADS are listed and SEC rules and regula ons. Only non-ex ecuve directors qualify for membership of these commiees. The audit and compliance commiee and the remuner aon and nominaon commiee ma y not be chaired by the chairperson of the Board of Director s or by a former ex ecuve director of argenx. 154 | Management Structure Management Structure | 155 P ART IV Country of Principal Execuv e Oces The Netherlands Foreign Priv ate Issuer Ye s Disclosure Prohibit ed by Dutch Law No T otal Number of Director s 7 Gender: Number of Director s Female 1 Male 6 Non-Binary 0 Did Not Disclose Gender 0 Demographic Backgr ound Categories Number of Director s in Each Demographic Categ ory Underrepresen ted individual in home country jurisdicon 1 LGTBQ+ 0 Did not disclose demographic backgr ound 6 * We had two female member s of our Board of Directors as of December 31, 2021. However , on March 3, 2022, Yvonne Greenstr eet stepped down from our Board of Directors due to me constr aints following her appointment as Chief Execuve Ocer of Alnylam. As a result, we have one female member of our Board of Directors as of the date of this Universal Registr aon Document. In addion to the af oremenoned legally requir ed subcommiees, our Board of Director s may also opt to incorpor ate informal commi ees consisng of non-ex ecuve director s and other internal and external persons in argen x, in order to facilit ate discussions and act as a sounding board on specic projects, as well as on a more permanent basis. Our Board of Director s has incorpora ted a resear ch and development commi ee and a commercial commiee. Audit and Compliance Commiee Our audit and compliance commiee consis ts of four members: W erner Lanthaler (chairperson), Pet er K. M. V erhaeghe, Anthony A. Rosenber g and James M. Daly . Our Board of Director s has est ablished that W erner Lanthaler qualies as an “audit commi ee nancial expert” as dened under the Exchange Act and arcle 39 paragr aph 1 of Direcve 2014/56/ EU of the European P arliament and of the Council of 16 April 2014 amending Direcve 2006/43/EC on sta tutory audits of annual accounts and consolidated accounts and that the composion of the audit and compliance commiee meets the require ments under the Dutch Decree on Establishing Audit Commiees. Our audit and compliance commiee assists our Board of Director s in over seeing the accuracy and integrity of our ac - counng and nancial reporng processes and audits and review s of our consolidated nancial sta tements, the imple - menta on and eecv eness of an internal contr ol sy stem and our compliance with legal and regulat or y requiremen ts, the independent auditors’ qualicaons and independence and the performance of the independent auditor s. Our audit and compliance commiee is governed by a charter that complies with Nasdaq lisng rules and the Dutch Cor - pora te Governance Code. Our audit and compliance commiee is responsible for , among other things, establishing meth - ods and procedures for supervising, and where necessary requiring improv ements of , our nancial reporng, compliance and organiz aon for the purpose of making appropriat e recommenda ons to our Board of Director s in that regar d. Our audit and compliance commiee meets as oen as is required for its proper funconing, but at least four mes a year . Our audit and compliance commiee meets at least once a year with our independent auditor . Our audit and compliance commiee r eports regularly to our Board of Director s on the exer cise of its funcons. It in - forms our Board of Director s about all areas in which acon or improvement is necessary in its opinion and produces rec - ommendaons concerning the necessary steps that need to be tak en. The audit review and the reporng on that review cover us and our subsidiaries as a whole. The members of the audit and compliance commiee are entled to receive all informa on which they need for the performance of their funcon, from our Board of Director s and employees. E very member of the audit and compliance commiee shall exer cise this right in consultaon with the chairperson of the audit and compliance commiee. Remuner aon and Nominaon Commiee W e have established a remuner aon and nominaon commiee, which serves as both the remuner aon commiee and selecon and appointment commi ee as prescribed by the Dutch Corporate Gov ernance Code. Our remunera on and nominaon commiee consists of four members: J. Donald deBethizy (chairper son), Pet er K. M. V erhaeghe, Werner Lanthaler and Yv onne Greens treet. Our remunera on and nominaon commiee is responsible for , among other things: • regularly reviewing the remuner aon policy in light of all relev ant circumstances and benchmarks, and recommending to the non-ex ecuve directors the remuner aon of the individual ex ecuve directors; • advising our Board of Director s in respect of the remuneraon f or the non-ex ecuve director s; • preparing the remuneraon report to be included in our annual report; • drawing up selecon criteria and appointment procedures for direct ors and making proposals f or appointment and re-appointmen t of the directors; • periodically assessing the size and composion of our Board of Directors and making a proposal for a composion prole of the non-ex ecuve directors; • periodically assessing the funconing of individual direct ors and reporng on this to the non-execuv e direct ors; and • supervising the policy of the execuv e director s on the selecon criteria and appointment procedures for senior manage - ment. The remunera on and nominaon commiee consists of at least three members. The remuner aon and nominaon commiee meets as oen as is required for its proper funconing, but at least once per year to evaluat e its funconing. Informal subcommiees Research and Development Commiee The research and development commi ee consists of members of our Board of Director s and other persons, which composion may vary from me to me. Currently , the research and development commiee consis ts of three members: David L. Lacey (chairperson), J. Donald deBethizy and Pamela Klein. J. Donald deBethizy and P amela Klein are members of our Board of Directors. David L. Lacey resigned from our Board of Director s per May 11, 2021, but connues to serve as an advisor on the Research and Development Commiee. Ad-hoc parcipants to the commiee meengs furthermore include a variety of employees and/or external advisors, depending on the needs of the commiee and the topics under discussion. The research and development commi ee is responsible for , among other things: • monitoring and overseeing our research and development goals, str ategies and measures; • serving as a sounding board to our r esearch and development managemen t, general managemen t and board of director s; • perf orming strategic r eviews of our k ey research and development progr ams; • reporng to our Board of Directors on the outcome of the strate gic review s; • reviewing our scienc publicaon and communicaons plan; • evaluang and challenging the eecveness and compeveness of our research and development endea vors; • reviewing and discussing emer ging scienc trends and acvies crical to the success of our r esearch and development; • reviewing our clinical and preclinical product pipeline; and • engaging in aracng, retaining and developing our senior research and development per sonnel. All members of the research and development commiee shall have adequat e industrial, academic and/or praccal expe - rience with the resear ch and development of biopharmaceucals. One purpose of our research and developmen t commiee is to engag e in discussion with our research and developmen t personnel, and the commiee’ s responsibilies to carry out this purpose include, among others: monitoring the research and development acvies, performing str ategic review s of the key resear ch and development pr ograms; and reviewing the scienc publicaon plan. Our research and development commi ee meets as oen as is required for its proper funconing, but typically meets at least once prior to each meeng of our board of directors, and reports regularly to our Board of Director s on the outcome of the stra tegic reviews. The chairperson of our research and development commiee reports to our Board of Director s on the research and development commi ee’ s discussions and str ategic advice aer each meeng on all mat - ter s within its dues and responsibilies. Commercial commiee The commercial commiee consis ts of members of our Board of Directors and other persons, which composion may vary from me to me. As of the date of this Universal Regis traon Document, the commercial commi ee consists of two permanent members: James M. Daly (chairperson) and A .A. Rosenberg. The commercial commiee is responsible for , among other things: • serving as a sounding board to our branded and unbranded str ategic mark eng plans, size and scope of our franchises, pre and post launch market access plan of acon; • reviewing and discussing global commer cial and polical trends aecng our industry and development; and • r eporng to our Board of Directors on the outcome of the stra tegic reviews. The non-ex ecuve directors shall appoint and dismiss the members of the commercial commiee. All members of the commercial commi ee shall have adequat e industrial, academic and/or pr accal experience with the commercializ aon of (bio)pharmaceucals. Our commercial commiee meets as oen as is required for its proper funconing and reports regularly to our Board of Director s on the outcome of its strat egic reviews. Management Structure | 157 156 | Management Structur e P ART IV P ART IV 158 | Management Structure Management Structure | 159 Peter K. M. V erhaeghe Pet er V erhaeghe has served as a member and chairperson of the board of arGEN-X B. V . since October 2008 and as non-ex ecuve director on our Boar d of Director s since July 2014. Mr . V erhaeghe is the managing partner of VVGB Advocat en-Avoca ts, a corporate nance la w and tax law rm, a posion he has held since July 1999. He is currently lead c ounsel to a number of Belgian, Dutch, French, U .S. and Swiss life sciences companies. Mr . V erhaeghe served as the president of the boar d of directors of Merisan t France SAS, as a mem- ber of the management boar d of Merisant Company 2 sàrl and as a member of the board of direct ors of CzechP ak Manufacturing s.r .o. He previously also served as director of Innog enecs (Belgium), Tibotec-Virco NV , Biocars SA, and as the chairman of the board of direct ors of PharmaNeuroBoost NV and as liquidator in char ge of KBC Private E quity Fund Biotech NV from April 2009 to December 2012. Mr . V erhaeghe serves on the board of director s of Par - cipaemaatschappij Vlaander en (PMV) NV since May 2018, as chairman of the board of Hare s SA (Luxembourg) since Mar ch 2011, and as member of the board of direct ors of miDiagnoscs since April 2020. Mr . V erhaeghe also serves as the chairman of the LP & advisory commiee of Bioqube F actory Fund I NV . Mr . V erhaeghe holds a degree in law (J.D .) from the University of Leuven and an LLM degree fr om Harvard Law School. Dr . Werner Lanthaler Dr . W erner Lanthaler has served as a member of our Board of Directors since July 2014. Dr . Lanthaler is the chief ex ecuve ocer of Evot ec SE, a global drug discovery and development organiz aon, a posion he has held since March 2009. He also serves on the supervisory Board of AC Immune SA (Switzerland). Dr . Lanthaler previously served on the supervisory boards of Biox ell SpA and Pant ec Biosoluons AG. Dr . Lanthaler holds a degree in psy chology , a Ph. D . in business administraon fr om Vienna University of Economics and Business and a Mast er ’ s degree in public administr aon from Harvar d University . Dr . J. Donald deBethizy Dr . J. Donald deBethizy has served as a member of our Board of Dir ectors since May 2015. Dr . deBethizy has 30 year s of experience in resear ch and development and nancial, business and opera ng management and board work in the biotechnology and consumer products indus try . He is the president of White City Consulng ApS and Innovent LLC , board and CEO coaching consult ancies. Previously , Dr . deBethizy served as presiden t and chief ex ecuve ocer of Santaris Pharma A/S unl October 2014, when the company w as sold to R oche. From August 2000 to June 2012, Dr . deBethizy was co-f ounder and chief execuv e ocer of T argacep t, Inc., a U.S. biotech - nology company lis ted on Nasdaq. He currently serves on the supervisory 4.2.4 Non-Executive Directors Our Board of Direct ors as at 31 December 2021 comprised the f ollowing seven non-ex ecuve director s: boards of Albumedix A/S, Lophora ApS Newron Pharmaceuc als SpA , Noxx - on Pharma NV and AG, Rigont ec GmbH and Proterris, Inc. From Ma y 2013 to November 2014, he served as ex ecuve chairman of Contera Pharma ApS, and from July 2015 to No vember 2017, he served as chairman of Rigotec GmbH. He previously served on the boar ds of Asceneuron SA, Serende x Pharmaceucals A/S, Enbiox Inc., T argacept Inc., LigoCyte Pharmaceucals Inc and Biosource Inc. Dr . deBethizy has held adjunct appointments a t Wak e Fores t University Babcock School of Manag ement, Wak e Fores t University School of Medicine and Duk e University . Dr . deBethizy holds a B. Sc. in biolo - gy from the Univer sity of Maryland, and an M. Sc. and a Ph. D. in to xicology from Ut ah State Univer sity . He has been a Diplomate of the American Boar d of T oxicology . Dr . Pamela Klein Dr . Pamela Klein has served as a member of our Board of Dir ectors since April 2016. Dr . Klein is a principal and founder of PMK BioResear ch, which of - fer s strat egic consulng in oncology drug development to corpor ate boards, management teams and the inv estment community , a posion she has held since 2008. She currently serves as a member of se veral board of dir ector ’ s including F-Star Therapeucs, Jiy a Acquision Corps, I-Mab and Pa tr y’ s; as well as various scienc advisor boards. Pr eviously , Dr . Klein spent seven year s at the Naonal Cancer Instut e as Resear ch Director of the NCI-Navy Breast Cen ter , aer which she joined Genentech and was VP , Development unl 2001. She served as Chief Medical Ocer for Intellikine which was acquired by T ak eda. She was pre viously Vice President, Dev elopment for Ge - nentech. Dr . Klein holds a Bachelor ’ s degree in biology from California Stat e Univer sity and an M.D. from Stritch School of Medicine, Lo yola University Chicago and is trained in int ernal medicine and medical oncology . Msc. A. A. Rosenberg Msc. A. A. Rosenberg has served as a member of our Boar d of Directors since April 2017. He currently serves as CEO of TR Advisor y Services GmbH, his own consultancy rm advising on business development, licensing and merger s and acquisions. Previously Mr . Rosenber g held the posions of Managing Director at MPM Capital, a venture capit al rm (2015 unl 2020). Head of M&A and Licensing of Novars Internaonal (2013 to 2015) and Head of Business Developmen t and Licensing at Novars Pharma (2005 to 2012). Mr . Rosenberg curr ently ser ves on the boards of directors of SiO2 Material Science, Oculis SA (chairman) and Cullinan Oncology (chairman), and previously served on the boards of director s at Radius Health Inc., T ri - NetX, Inc., iOmx Therapeucs AG, and Clinical Ink. Msc. A.A. Rosenberg has a B.Sc. (Hons) from the Univer sity of Leicester and a M.Sc. Physiology from the Univer sity of London. James M. Daly James M. Daly has served as a member of our Board of Dir ectors since May 2018. He joined Glax oSmithKline in 1985 where he held various posions, including Sr . Vice President – Respir atory Division with full responsibility f or sales, marke ng and medical aair s. He moved to Amgen in 2002 where he was Sr . Vice President for the North America Commercial Opera ons 2011. In 2012 he joined Incyte, a publicly traded company focused on oncology and inammaon, where he was chief commercial ocer unl June 2015. Mr . Daly currently serves as a director of Acadia Pharmaceucals Inc., Halozyme Ther apeucs, Inc., Bellicum Pharmaceucals, Inc. and Madrigal Pharmaceucals, all Nasdaq-listed companies. Mr . Daly holds a Bachelor in Science and a Master in Business Administra on from the University at Bualo , State University of New Y ork. Yvonne Gr eenstreet Dr . Greenstreet has served as a member of our Boar d of Directors since May 2021. She was appointed Chief Execuv e Ocer of Alnylam Pharma - ceucals e ecve January 1, 2022 and was serving as President and Chief Opera ng Ocer at Alnylam Pharmaceucals bef ore. Dr . Greenstreet has more than 25 years of experience in the Biopharmaceucal industry , driving str ategy and innovaon, bringing transf ormave medicines to paents and building successful businesses in the U.S., Europe and globally . Dr . Greenstr eet serves on the board of directors of Pacir a Pharmaceucals, American Funds, the Scienc Advisory Commiee of the Bill and Melinda Gates Founda on and is a member of the Discovery Council of Harvard Medical School. Between 2011 and 2013, Dr . Greenstr eet was Senior Vice President and Head of Medicines Development at Pzer serving on the ex ecuve team leading a rapidly gr owing $16 billion division. Prior to Pzer , she was at GlaxoSmithKline plc f or 18 years, where she was Senior Vice President and Chief of Strat egy for R esearch and Development. Dr . Greenstr eet had previously been in various posions of increasing responsibility at GSK, including Senior Vice President f or Medicines Devel - opment and Chief Medical Ocer for Europe. Dr . Greenstr eet is trained as a physician and earned her medical degree from Leeds University in the United Kingdom and her MBA degree from INSEAD , France. On March 3, 2022, Dr . Greenstreet st epped down from her posion as member of our Board of Director s due to me constr aints following her appointment as Chief Execuv e Ocer at Alnylam. The following table sets forth certain inf ormaon with respect to the curren t non-ex ecuve members of our Board of Director s, including their ages, as at December 31, 2021. The address for our non-ex ecuve directors is our regist ered oce, Willemstr aat 5, 4811 AH, Breda, the Netherlands. Pet er K.M. V erhaeghe, Werner Lanthaler and James M. Daly are expected to be nominated for re-appoin tment at the General Meeng to be held in 2022. The following table sets forth the companies and partnerships of which the current non-ex ecuve members of our Board of Director s hav e been a member of the administra ve, management or super visory bodies or partner at any me in the previous ve year s, indicang whether or not the individual is sll a member of the administr ave, management or su - pervisory bodies or partner , as of the date of this Universal R egistra on Document, other than argenx or our subsidiaries: 12 Name Age Gender Poson Naonality Date of Inial Appointment Date of last (re-) Appointment T erm Expiraon Pet er K. M. V erhaeghe 63 M Non-Execuve Dir ector (chairperson) Belgium October 15, 2008 May 8, 2018 2022 W erner Lanthaler 53 M Non-Execuv e Director (vice-chairperson) Austria July 9, 2014 Ma y 8, 2018 2022 J. Donald deBethizy 71 M Non-Execuve Dir ector U.S. Ma y 13, 2015 Ma y 7, 2019 2023 Pamela Klein 60 F Non-Execuve Dir ector U.S. April 28, 2016 May 12, 2020 2024 Anthony A. Rosenber g 68 M Non-Execuve Dir ector UK April 26, 2017 May 11, 2021 2025 James M. Daly 60 M Non-Execuve Direct or U.S. May 8, 2018 May 8, 2018 2022 Y vonne Greenstr eet (1) 59 F Non-execuve dir ector UK May 11, 2021 Ma y 11, 2021 2025 160 | Management Structure P ART IV Management Structure | 161 (1) On March 3, 2022, Yvonne Greenstr eet stepped down from her posion as member of our Board of Director s. NAME CURRENT PA S T Pet er K. M. Verhaeghe VVGB Advocaten – A vocats PharmaNeuroBoost NV Hares SA Biocars SA Parcipaemaa tschappij Vlaanderen (PMV) NV Fujirebio Europe NV (f ormerly Innogenecs NV) miDiagnoscs NV Tibotec-Virc o NV Bioqube Fact ory Fund I NV Merisan t France SAS Merisant Company 2 sàrl CzechP ak Manufacturing s. r . o. Bever Z werfsport BV W erner Lanthaler Ev otec SE Biox ell SpA AC Immune SA Pant ec Biosoluons AG J. Donald deBethizy White City Consulng ApS Rigontec GmbH Albumedix A/S Noxx on Pharma NV and AG Newron Pharmaceucals SpA Proeris Inc. Lophora ApS Saniona AB Albumin Holdings ApS Innovent LL C Pamela Klein PMK BioResear ch Olema Oncology Patry s Limited I-Mab Biopharma F-Star Ther apeucs, Inc. Jiya Acquision Corp. Anthony A. R osenberg Cullinan Oncology Inc. Radius Health, Inc. Oculis SA T riNetX, Inc. SiO2 Material Science Clinical Ink, Inc. TR Advisory Services GmbH iOmx Ther apeucs AG MPM Capital James M. Daly Ac adia Pharmaceucals Inc. Chimerix, Inc. Halozyme Ther apeucs, Inc. Bellicum Pharmaceucals, Inc. Madrigal Pharmaceucals Y vonne Greenstreet (1) Alnylam Pharmaceucals, Inc. – Pacir a Pharmaceucals, Inc. American Fund Tim V an Hauwermeiren Tim V an Hauwermeiren c o-founded our Company in 2008 and has serv ed as our Chief Execuve Ocer since July 2008. He has served as a member of our Board of Directors since July 2014. Mr . V an Hauwermeiren has more than 20 years of general managemen t and business development experi - ence across the life sciences and consumer goods sectors. Mr . V an Hauw - ermeiren holds a B. Sc. and M. Sc. in bioengineering from Ghent University (Belgium) and an ex ecuve MBA from The Vlerick School of Management. Tim V an Hauwermeiren serves on the board of director s of iT eos Pharma - ceucals and Aelin Therapeucs where he is chairman. Keith W oods Keith W oods has ser ved as our Chief Operang Ocer since April 2018. Mr . W oods has over 30 year s of experience in the biopharmaceucal industry . He most recently served as senior vice president of North American opera - ons for Alexion Pharmaceucals Inc., where he managed a team of sever al hundred people in the U.S. and Canada and was responsible for more than $1 billion in annual sales. Within Alexion, he previously served as vice president and managing director of Alexion UK, overseeing all aspects of Alexion’ s UK business, vice president of U.S. operaons and ex ecuve director of sales, leading the launch of Soliris in atypical hemolyc uremic syndr ome. Prior to joining Alexion, he held various posions of increasing responsibility within Roche, Amgen and Eisai over a span of 20 years. Keith W oods holds a B.S. in markeng from Florida Stat e Univer sity . Karl Gubitz Karl Gubitz has served as Chief Financial Ocer since June 2021. Mr . Gubitz work ed at Pzer for nearly 20 years, most recently as vice president of nance within the global oncology business. During his tenure at Pz er , he successfully negoated the commer cializaon model for tanezumab with Eli Lilly in all non-U.S. mark ets as well as the Myovant co-c ommercializaon agreement f or Orgo vyx™. Within Pzer , Mr . Gubitz held country , regional, and global posions, and consist ently delivered top-line growth. He managed teams of over 250 col - leagues in nancial leadership r oles within the global internal medicine and global innovav e products businesses. Prior to joining P z er in 2003, Mr . Gubitz held various management roles at Pricewat erhouseCoopers. He holds an M.B.A. from Henley Management College in the United King - dom, Bachelor ’ s degree in compung from the Univer sity of South Africa, and Bachelor of commer ce from the University of Pret oria. 4.2.5 Senior Management Our senior management t eam acts as our execuve manag ement. Of these persons, only our Chief Ex ecuve Ocer , Mr . Tim V an Hauwermeiren, is part of our Boar d of Directors as e xecuve dir ector . Our senior management t eam comprised of the following per sons as at December 31, 2021 and as at the date of this URD: P ART IV 162 | Management Structure Management Structure | 163 (1) On March 3, 2022, Yvonne Greenstr eet stepped down from her posion as member of our Board of Director s. Prof . Hans de Haard Prof . Hans de Haard is a co-f ounder of argenx and has served as our Chie f Scienc Ocer since July 2008. Prof . de Haard has been acve in the an - body engineering eld since 1989. He also serves as a Professor of immu - nology at University of Franche Comté (France). Prof . de Haard holds an M. Sc. in biochemistry from the Higher Prof essional Educaon for Labor atory T echnicians (Oss, the Netherlands) and a M. Sc. in chemistry from the Ins - tute of T echnology (Roerdam, the Netherlands) and a Ph. D. in molecular immunology from Maastricht Univer sity . Dirk Beeusaert Dirk Beeusaert has served as General Counsel of argenx since 2017. He has 20 years of experience in corpora te governance and as general counsel of a listed company . Mr . Beeusaert worked in various roles fr om February 1996 to July 2016 for Gim v NV , a European private equity company lis ted on Eurone xt Brussels, including chief legal ocer from January 2001 to 2006, and general counsel from 2006 to July 2016, where he was co-responsible for oper aons and corpor ate governance. He currently serves on the boards of Cubigo NV and The Fourth Law NV . Dirk holds a Bachelor of Law , Master of Law from Ghent University and an MBA in scal studies and accounng research, ta x and accounng from Vlerick Leuven-Gent Management School. Mr . Beeusaert has rered per December 31, 2021 and has since been suc - ceeded by Malini Moorthy as from February 14, 2022. Malini Moorthy Malini Moorthy joined argenx as General Counsel in 2022. She has over 25 years of legal experience with ext ensive experience in the biophar - maceucal and medical device sectors, including as senior vice president & chief deputy general counsel, legal, compliance & government a airs at Medtronic, vice president & associate gener al counsel, head of global liga on & inves gaons at Bayer Corpor aon, vice presiden t & assistant gener al counsel, head of civil liga on at Pzer Inc. Malini Moorthy began her career as a law rm associate, r st with McCarthy T étrault and Genest Murra y Desbrisay Lamek in T oront o, Canada and then Salans (now Dentons) in New Y ork City . She holds a Bachelor of Arts in polical science and eco - nomics from the University of North Carolina at Chapel Hill and a Bachelor of Laws from the Faculty of Law at Queen’ s University in Canada. P ART IV Wim Parys Wim Parys joined argen x as Chief Medical Ocer in 2019. He has over 25 year s of experience leading successful clinical progr ams in biopharma, including the development and regulatory submission of seven now-ap - prov ed drugs. Prior to argenx, he was the R&D head of the newly established Global Pub - lic Health group at Janssen (Johnson & Johnson) responsible for a porolio including programs in HIV (developing rs t long-acng therapy), TB, dengue fe ver and malaria. Befor e this, Mr . Pary s was the head of development of the infecous disease therapeuc area of Janssen and Tibotec where he de - veloped and launched innovave drugs for HIV (Prezis ta™, Intelence™ and Edur ant™), Hepas C (Incivo™, Olysio™/Sovriad™), and TB ((Sirturo™). He started his career within the Johnson & Johnson org anizaon at the Janssen Research Founda on in Belgium where he led the R&D team developing galan tamine (Reminyl™/Raz adyne™) for Alzheimer ’ s disease. He obtained his medical degree from the Katholiek e Universit eit in Leuven, Bel - gium and worked in privat e pracce for nine years prior to joining industry . Mr . Pary s will rere with e ect from March 31, 2022 and will be succeeded by Luc T ruyen as of April 1, 2022. Luc T ruyen Luc T ruyen joined argenx at the end of September 2021. Prior to this, Dr . T ruyen was with Johnson & Johnson for over 20 years holding various leadership posions, primarily within neuroscience. In his most recent posion prior to joining arg enx, Dr . T ruyen was global head of development and external a airs – neuroscience for neuroscience managing stra tegy and delivery of the early and late porolio of assets for mood disorder s and schizophr enia, and neurodegener ave and neuroinammat ory disorder s. Besides Dr . T ruyen’ s strong track recor d in clinical development r esulng in several global innova ve drug appro vals, his broad-based e xperience also includes leading global clinical development oper aons for the whole Johnson & Johnson pharmaceucal group as well as serving as head of R&D and chief medical ocer of Janssen Alzheimer Immunotherapy , an internal spin-out from Johnson & Johnson. Dr . T ruyen holds an M.D. and Ph.D. in Neurology from the Univer sity of Antwerp. Luc T ruyen will succeed Wim P ar ys with e ect as of April 1, 2022 as a mem - ber of our senior management team. 164 | Management Structure Management Structure | 165 Arjen Lemmen Arjen Lemmen joined argen x in 2016 and ser ves as Vice Pr esident of Cor - pora te Development & Str ategy at arg enx since 2019. He has successfully ex ecuted several tr ansacons including a number of progr ams within the Immunology Innovaon Progr am and the str ategic collaboraon with Jans - sen for cusatuzumab. Prior to joining argenx, Mr . Lemmen served as a corpor ate nance special - ist at K empen & Co focusing on M&A, equity capital mark ets and str ategic advisory transacons in the European life sciences industry . He holds a B.Sc. in Life Science & T echnology from the Univer sity of Groningen and a Mast er of Engineering Management from Duk e Univer sity . Andria Wilk Andria Wilk joined arg enx as Global Head of Quality in 2020. Ms. Wilk has more than 20 years of experience in quality assurance (QA) within the pharmaceucal industry . Most recen tly , Ms. Wilk served as senior director , head of medical, regulatory & clinical QA (MRC QA) at Lundbeck, where she managed the global MRC QA group based in the EU, U .S. and Asia. In this role, she was responsible for the global audit programs and QA support for all clinical trial and post-mark eng acvies and related computeriz ed sys tems. Prior to Lundbeck, she held various QA posions of increasing responsibility within AstraZ eneca, T akeda Global Research and Develop - ment (TGRD) and Ast ellas Pharmaceucals. Ms. Wilk holds a joint B.Sc. in Pharmacology and Biochemistry and is a member of Resear ch Quality Associaon (MRQA). The following table sets forth certain inf ormaon with respect to the members of our senior management, including their ages, as at December 31, 2021 and as at the date of this URD: The address f or our senior management is Industriepark -Zwijnaarde 7, 9052 Z wijnaarde (Ghent), Belgium. The following t able sets forth the companies and partner ships of which the current members of our senior managemen t have been a member of the adminis trave, manag ement or supervisory bodies or partner at any me in the previous v e year s, indicang whether or not the individual is sll a member of the administr ave, management or supervisory bodies or partner , as of the date of this Univer sal Registr aon Document, other than argen x or our subsidiaries: Name Age Poson Naonality Date of r st employment/ engagement Tim V an Hauwermeiren 49 Chief Ex ecuve Ocer and Execuv e Director Belgium July 15, 2008 (1) Keith W oods 54 Chief Operang Ocer U.S. April 5, 2018 Karl Gubitz 52 Chief Financial Ocer German y June 1, 2021 Prof . Hans de Haard 62 Chief Scien c Ocer The Netherlands July 1, 2008 Dirk Beeusaert (2) 57 General Counsel Belgium April 1, 2017 Malini Moorthy (2) 52 General Counsel Canada F ebruary 14, 2022 Wim Parys (3) 62 Chief Medical Ocer Belgium July 1, 2019 Arjen Lemmen 37 Vice-President Corpor ate Development & Str ategy The Netherlands May 1, 2016 Andria Wilk 49 Global Head of Quality UK January 13, 2020 (1) Tim V an Hauwermeiren has been a member of our Board of Dir ectors since July 9, 2014. (2) DirkBeeusaerthasrer edperDecember31,2021andhassincebeensucceededbyMaliniMoorthyasfromFebruary14,2022. (3) WimPary swillrerewitheectfr omMarch31,2022andwillbesucceededbyLucT ruyenasofApril1,2022. (1) Mr . Beeusaert has rered per December 31, 2021 and has since been succeeded by Malini Moorthy as from February 14, 2022. (2) Mr . Parys will rere with eect from March 31, 2022 and will be succeeded by Luc T ruyen as of April 1, 2022. P ART IV Management Structure | 167 166 | Management Structure Name Current Past Tim V an Hauwermeiren Iteos NV – Aelin Therapeucs Keith W oods – Karl Gubitz – Prof . Hans de Haard – – Dirk Beeusaert (1) Cubigo NV Gimv NV (and gr oup companies of Gimv NV) The Fourth Law NV TINC NV Pragma Capit al SAS Grandeco NV DG Infra+ NV Finimmo NV CapMan plc Malini Moorthy (1) – – Wim Parys (2) – – Arjen Lemmen – – Andria Wilk – Lundbeck A/S 4.2.6 Confirmation of No Past Oenses As of the date of this Univer sal Registr aon Document and ex cept as set out below , none of the members of our Boar d of Director s and senior management team f or at least the previous v e years: • has been convict ed of any fr audulent oenses; • has been a senior manager or a member of the administr ave, management or supervisory bodies of any company at the me of or preceding any bankruptcy , receiver ship, liquidaon or of such company being put into administra on; • has been subject to any ocial public incriminaon and/or sancon by any st atutory or regulatory authority (including any designat ed prof essional body); or • has ever been disqualied by a court from acng as a member of the administr ave, management or supervisor y bod - ies of any company or from acng in the management or conduct of aair s of any compan y . 4.2. 7 Liability of Board and Senior Manag ement Members Under Dutch law (Secon 2:138 of the DCC), member s of our Board of Director s may be liable to us for damag es in the event of impr oper or negligent performance of their dues. The y may be jointly and sever ally liable for damages to us and third pares f or infringement of the Arcles of Associaon or certain pr ovisions of the Dutch Civil Code ( DCC ). In certain circumst ances, they may also incur addional specic civil and criminal liabilies. The liability of members of our Board of Dir ectors and senior managemen t team is covered b y a directors’ and ocer s’ liability insurance policy . This policy contains cus tomary limitaons and ex clusions, such as willful misconduct or intenonal recklessness ( opz et of bewuste roek eloosheid ). In addion, according t o arcle 15 of our Arcles of Associaon, we will in - demnify our director s against liabilies, claims, judgements, nes and penales in r elaon to acts or omissions in or relat ed to his or her capacity as dir ector . 4.2.8 Conflict-of -Interest T ransactions Director s will immediately report an y (potenal) direct or indirect per sonal interes t in a maer which is conicng with the inter ests of the company and the business connect ed with it to the chairperson of our Board of Dir ectors and to the other director s and will provide all relev ant informa on, including informaon concerning their spouse, regis tered partner or other partner , fos ter child and relaves by blood or marriag e up to the second degree as dened under Dutch la w (Secon 1:3 paragr aph 1 of the DCC). The non-ex ecuve directors will decide, without the direct or concerned being present, whether there is a conict of inter est. A conict of inter est in rela on to a director in any even t exis ts if we intend to enter int o a transacon with a legal enty (i) in which such director per sonally has a material nancial interes t, (ii) which has an ex ecuve director or a member of the management board who is related under family law to such director or (iii) in which such director has an ex ecuve or non-ex ecuve posion. A director will not parcipate in any discussions and decision making if he has a conict of interes t in the maer being discussed. If for this reason no resoluon can be tak en by our Board of Director s as a whole, the shareholders at a General Meeng will resolve on the maer . All transacons in which there are conicts of interes t with director s will be agreed on terms that are customary in the sector concerned. Decisions to enter int o transacons in which there are conicts of interes t with director s that are of material signicance to us or to the relevant director requir e the approv al of the non-ex ecuve directors. All transacons between us and legal or natural per sons who hold at least one tenth of our shares will be agreed on terms that are customary in the sector in which we and our combined businesses are acve. The non-execuv e direct ors are required to approv e such transacons that are of a material signicance to us or to such persons. P ART IV 168 | Management Structure Dutch law s pulates that material tr ansacons with related pares tha t are (a) not entered in to in the ordinary course of business of argen x or (b) that are not concluded on normal mark et terms, require appr oval of the board of dir ectors. The Board of Direct ors has established an in ternal procedure to periodic ally assess whether transacons are concluded in the ordinary cour se of business and on normal market terms. Dir ectors that ar e involved in the r elated party transacon ar e prohibited fr om parcipang in the deliberaons and v ong on the maer . Such material transacons must be made public by argen x at the me the transacon is ent ered into. T ransacons with relat ed pares are considered mat erial if (i) informa - on on the transacon qualies as inside inf ormaon under the Mark et Abuse Regulaon ((EU) No. 596/2014) (the Mark et Abuse Regulaon or MAR ) and (ii) such tr ansacon is entered in to with one or more holders of shares in ar genx repr esent - ing at least 10% of issued shar e capital, or a member of our Board of Direct ors. T ransacons tha t are in itself non-material, but which are ent ered into with the same rela ted party during the same nancial year , are jointly c onsidered material. There are no arr angements or under standings in place with major shareholders, cus tomers, suppliers or other s pursuant to which any member of our Boar d of Directors or senior managemen t team has been appointed. There ar e no conicts of in - teres ts between argen x and any administra ve, management and supervisory bodies and senior management, nor are ther e any pot enal conicts of inter ests of the members of our Board of Dir ectors and senior management betw een any dues to argen x and their private int erests and or other dues. 4.2.9 Code of Business Conduct and Ethics W e adopted a Code of Business Conduct and Ethics ( Code of Conduct ), that is applicable t o all of our employees and director s. The Code of Conduct is available on our websit e at www .argenx.c om. The audit and compliance commiee of our Board of Direct ors is responsible f or overseeing the Code of Conduct and is requir ed to approve an y waivers of the Code of Conduct for employ ees and directors. W e expect tha t any amendments to the Code of Conduct, and an y waivers of its requiremen ts, will be disclosed on our website. 4.3 Report of the Non-Executiv e Directors 4.3. 1 Meetings Our Board of Directors had eight formal meengs in the course of 2021. The meengs were held in the months March (twice), April, May , July , October , November and December , most of which were held (parally) via videoconf erencing due to restricons relat ed to the COVID-19 pandemic. The commiees of the Board of Directors also conv ened regularly (see also paragraphs 4.3.5 “Report Audit and Compliance Commiee” to 4.3.8 “Report Commercial Commi ee” below for the separa te reports of the commiees). All Board of Director meengs and almost all commiee meengs were also aended by Mr . Tim V an Hauwermeir en, as ex ecuve director . In addion, sever al members of the senior management team were invit ed to discuss specic items included on the Board of Director and commiee meengs’ agendas. 4.3.2 Attendance Record Board o f Director Meetings In 2021, eight Board of Directors meengs were held. The meeng aendance ra te for our directors is set out in the table on the next page. Report of the Non-Executive Directors | 169 170 | Report of the Non-Executive Directors Report of the Non-Executive Directors | 171 Name Number of meengs aended in 2021 since appointment A endance % Pet er K. M. Verhaeghe (chairper son) 8/8 100% W erner Lanthaler 7/8 87.5% J. Donald deBethizy 8/8 100% Pamela Klein 8/8 100% Anthony A. R osenberg 8/8 100% James M. Daly 8/8 100% Y vonne Greenstreet (1) 5/5 100% David L. Lacey (1) 3/3 100% Name Number of meengs aended in 2021 since appointment A endance % Pet er K. M. Verhaeghe 4/4 100% W erner Lanthaler 4/4 100% J. Donald deBethizy 4/4 100% Pamela Klein 4/4 100% Anthony A. R osenberg 4/4 100% James M. Daly 4/4 100% Y vonne Greenstreet (1) 2/2 100% David L. Lacey (1) 2/2 100% In 2021, four Boar d of Directors meengs with solely the non-e xecuve dir ectors being presen t were held as closed sessions at the beginning or the end of other meengs. These f our meengs were a ended by all non-execuv e directors appoint ed at such me. 4.3.3 Activities The agenda for the Board of Directors included long-term value crea on as well as the manner in which the senior management team implements arg enx ’ s stra tegy , argen x ’ s culture to ensure proper monitoring by the non-ex ecuve director s, the argen x ’ nancial posion as well as the results of its subsidiaries, acquisions, large investmen t proposals, the yearly budget, director changes and the internal risk management and control s ystem. In 2021, specic aen on was given to the sta tutory and governance topics such as the appointment of Ms. Y vonne Greenstr eet as non-ex ecuve director as well as the re-appointment of Mr . Anthony R osenberg, the impact of COVID-19 and related mig ang measures, business updates, review and approval of for ecasts, the corporat e dashboard and product porolios, business & corpora te development, review and approv al of consolidat ed nancial stat ements, update resear ch & developments, updates to the remuner aon policy , commiee reports, nancing of argenx, board r otaon and succession process and plan, and the approval of the proposed agenda, explanat ory notes and convoc aon noce for the (extraor dinary) gener al meengs. (1) Yv onne Greenstr eet succeeded David L. Lacey as a non-execuve dir ector aer he resigned from our Board of Director s per May 11, 2021. Unl his resignaon, David L. Lacey aended as a non-execuv e director two out of the two Board of Directors meengs with solely the non-ex ecuve directors being present held so far that year . (1) Yv onne Greenstr eet replaced David L. Lacey as a non-ex ecuve director aer he resigned from our Board of Directors per May 11, 2021. Unl his resignaon, Da vid L. Lacey aended as a non-ex ecuve director three out of the three Boar d of Directors meengs held so f ar that year . P ART IV 4.3.4 Board Evaluation The Board of Directors ev aluates its funconing and the funconing of its commiees and of each individual director annually . The evaluaon pr ocess is performed with the help of an external prof essional board evaluaon consultan t (in 2021 this was performed by NASDAQ). The evaluaon includes preparing specic quesonnaires focusing on the relevan t skills and competences most relev ant for argenx, and the most material board topics and challenges facing argen x. The wrien quesonnaire is then follow ed up by one-to-one interviews with each of the members of the Board of Directors, follow ed by a debrief to the enre Board of Directors both in wring (in form of a report) and in the form of a live discus - sion of the evalua on report aimed at dislling specic learnings and conclusions. Based on the self -evaluaon performed, the non-ex ecuve director s concluded that the Board of Directors and its com - miees had properly discharged their responsibilies during 2021. 4.3.5 Report Audit and Compliance Committee The audit and compliance commiee re ports regularly to our Board of Director s on the exer cise of its funcons. It informs our Board of Director s about all areas in which acon or improvemen t is necessary in its opinion and produces recommenda ons concerning the necessary steps that need to be taken. The audit review and the reporng on that review cov er argenx and its subsidiaries as a whole. In 2021, the main points of discussion at the meengs were the k ey ndings and risk areas of the 2021 gap analysis on compliance, the ke y ndings of the 2021 gap analysis on ESG, the 2020 consolidated nancial statemen ts and press release, Deloie’ s and PwC ’ s 2020 audit reports, the interim consolida ted nancial sta tements and press releases, Deloie’ s 2021 audit plan, the interim nancial st atements, review of quarterly for ecasts, updates on internal contr ol acvies, updates on corpora te audit acvies, and updates on cash, cash equivalents and nancial assets. In 2021, six audit and compliance commiee meengs were held. The meeng aendance rat e for our director s is set out in the table below . 4.3.6 Report Remuneration and Nomination Committee The remunera on and nominaon commiee assists the Board of Director s by , amongst other maer s, regularly review - ing argenx’ s remuner aon policy , preparing remunera on proposals and periodically assessing the size and composion of the Board of Directors, as well as preparing the policy of the senior management team on the selecon criteria and appointment procedur es for senior management. During their delibera ons in 2021, the main topics of discussion were the dras of the new remuneraon policy and the new equity incenve plan, the achievements of senior management’ s 2021 targe ts and pay -out of variable pay , the proposed 2021 equity incenve gr ants and the proposal to move to a single annual equity grant moment for recurring equity gran ts. Name Number of meengs aended in 2021 since appointment A endance % Pet er K. M. Verhaeghe 6/6 100% W erner Lanthaler (chairperson) 6/6 100% Anthony A. R osenberg 6/6 100% James M. Daly (1) 3/3 100% (1) James M. Daly joined the audit and compliance commiee in May 2021. PV Patient | 173 PV Patient David “ Pemphigus vulgaris has changed the way I live my life. I’m al ways watching for new blisters and lesions and questioning anytime I f eel something strange. ’ ’ In 2021, two formal remunera on and nominaon commiee meengs were held. The meeng aendance ra te for our director s is set out in the table below . 4.3. 7 Report Research and Development Committee The research and development commi ee funcons as a sounding board to arg enx ’ s research and development man - agement, gener al management and the Board of Director s, and monitors the resear ch and development goals, str ategies and measures of argenx. In 2021, the commiee held three formal meengs, in which it focused mainly on the vision and str ategy on science at argen x. The meeng aendance rat e for our directors is set out in the table below . 4.3.8 Report Commercial Committee The commercial commiee funcons as a sounding board on branded and unbranded str ategic mark eng plans for the Board of Director s. In 2021, the commiee held one formal meeng, in which it focused mainly on argenx’ s readiness in the U.S., Japan and EMEA in light of the envisaged launch of efg argimod. The meeng aendance rat e for our directors is set out in the table below . 172 | Report of the Non-Executive Directors Name Number of meengs aended in 2021 since appointment A endance % Pet er K. M. Verhaeghe 2/2 100% W erner Lanthaler 2/2 100% J. Donald deBethizy (chairper son) 2/2 100% Y vonne Greenstreet 1/1 100% Name Number of meengs aended in 2021 since appointment A endance % J. Donald deBethizy 3/3 100% Pamela Klein 3/3 100% David L. Lacey (chairper son) (1) 3/3 100% Name Number of meengs aended in 2021 since appointment A endance % Anthony A. R osenberg 1/1 100% James M. Daly (chairperson) 1/1 100% (1) David L. Lacey resigned from our Board of Directors per May 11, 2021. 4.4.2 Remuneration of our Senior Management for 2021 and the Previous Y ears The remunera on of our senior management (including our ex ecuve director , Mr . Tim V an Hauwermeiren) consists of the following x ed and variable components: • xed base compensaon; • short-term v ariable compensaon; • long-term variable compensaon, in the form of stock opons and restricted stock units; • severance arr angements; and • pension and fringe benets. Fixed base compensaon The base compensaon of our senior management is determined on the basis of a benchmarking analysis completed by an independent consulng rm. The x ed cash compensaon levels ar e set at or around the 50th percenle of U.S. and EU companies in our ref erence group f or U.S. and EU based execuv es. The nal determinaon of an execuv e direct or ’ s xed pa y is made considering this benchmark, the individual’ s skills, experience and performance, the remuneraon pracces and condions across the wider organiz aon and our inter acons with k ey stak eholders to secure broad public support for our remunera on pr acces. Short-t erm variable compensaon The objecve of our short-t erm annual incenve c ompensaon is to ensure that our senior management team is incenv - ized to achiev e performance targ ets in the shorter term. V ariable cash incenves are gran ted for achieving predet ermined specic performance tar gets. At the st art of each nancial year , the Board of Director s will determine our key priories and will set specic, challenging performance targ ets in line with these priories. The Board of Director s will determine the relav e weight of each tar get and the metrics used for measuring their achievement. Our senior management team is eligible for an annual short-t erm variable incenve of their annual base compensaon. The targ et percentage f or this 174 | Remuneration Report of the Remuneration and Nomination Committee Remuneration Report of the Remuneration and Nomination Committee | 175 4. 4 Remuneration Report o f the Remuneration and Nomination Committee 4.4. 1 Remuneration Policy 2021 and Changes to the Policy argen x ’ s remunera on policy 2021 is available at argenx’ s website via hps://www .argenx.com/ sites/def ault/les/me - dia-documents/ar genx_remuner aon_policy_nal_approved_11_Ma y_2021.pdf and is incorpora ted by refer ence into this URD. The remuner aon policy was adopted by the General Meeng on May 11, 2021. The aim is to achieve tot al remuner aon packages that are ar acve and in line with the mark et. argenx periodically review s the posioning of the total remuner aon of the senior management members compar ed to a ref erence group of peer companies acve within the industries wherein arg enx operates. Our remuner aon policy and total compensaon is posioned on the mark et median or slightly above the market median for x ed compensaon, benets and short term variable, with a strong emphasis on variable compensaon. The long term variable is posioned between the 50th and the 75th percenle. In order to realiz e the group’ s ambions in this challenging envir onment, the organiza on needs to perform str ongly and focus on the implementaon of a sustainable str ategy . T alented manager s are indispensable in terms of achieving this goal. The remunera on policy aims to link this str ategy and the Company’ s objecves to the performance and remunera - on of management. In this wa y , the Group creates a globally consisten t framew ork for the development, remunera on and empowerment of its people. The Group consider s commitment, rec ognion and leadership as important founda ons for employ ee engag ement. This enables the Group to aract, re tain and movat e the best talents to achiev e both short- term and long-term objecves. This is all within the context of a globally consistent remuner aon policy that rewards the contribuon tow ards and the achievement of compan y objecves and the generaon of shareholder value. The ref erence group for our 2021 cash and equity remuner aon benchmarking consist ed of US and Europe based compa - nies, taking into account our global ambions as well as the primary mark ets for talent in which we compete. The compa - nies in our re ference group wer e selected based on a combinaon of characteriscs which included their industry , years since inial public o er , number of employees, revenues, R&D expense, tot al level of cash & cash-equivalents, 30-day aver age marke t cap and 1-year and 3-year tot al return on stock. For 2021, the companies in our refer ence group were: US companies EU companies ACADIA Pharmaceucals Abcam Acceleron Pharma ADC Therapeucs Agios Pharmaceucals ALK-Abelló Alnylam Pharmaceucals Ascendis Pharma Amicus Therapeucs BioNT ech Biohaven Pharmaceuc al Cosmo Pharmaceucals bluebird bio CRISPR Therapeucs Blueprint Medicines Ev otec BridgeBio Pharma Galapagos CRISPR Therapeucs Genmab Denali Therapeucs Idorsia Fa te Therapeucs Mithra Pharmaceucals FibroGen MorphoSys Global Blood Therapeucs Sw edish Orphan Biovitrum Intellia Ther apeucs uniQure Mira Ther apeucs Zealand Pharma Reat a Pharmaceucals Sage Therapeucs Sarepta Ther apeucs Xencor P ART IV purpose was set to 40% of the annual base compensaon of a member of the senior management team, e xcept for our ex ecuve director and our chief oper ang ocer . The target v ariable cash incenve for our ex ecuve director shall be 60% of the xed cash compensa on if 100% of targ ets are achieved and 50% for our chief opera ng ocer . In case of signicant over achievement, the Board of Director s may decide to awar d higher variable pa y to fairly reect the individual’ s value contribuon to ar genx, but the variable pay will not ex ceed 120% of the xed cash c ompensaon. Financial performance targ ets relate to building the business and typically mak e up 60% of the over all variable cash incenve tar gets and are aimed at signicantly pr ogressing our product candida tes towards mark et approval and ul - mately to the gener aon of sales and revenues to further enhance shareholder value and enable and support our further resear ch and development acvies. For further informaon on our nancial performance targ ets, see in this secon below und “ V ariable compensaon determinaon – CEO” . Non-nancial targ ets relate to building the organiz aon and typically mak e up 40% of overall targ ets and are aimed at building and developing our organiza on into a sust ainable, commercial st age, fully integrat ed global biopharmaceucal company in line with our identy and our core values. Long-term incenve aw ards Our Board of Directors int ends to incenviz e our senior management team by issuing stock opons and/or restrict ed stock units from me to me to be able to ar act and ret ain well-qualied senior management in connecon with the Equity Incenve Plan, as set out below . T ypically , stock opons and restricted st ock units are gran ted annually in ac - cordance with our equity incenve grant alloca on scheme which is regularly reviewed by our Board of Directors and parcularly our remuneraon and nominaon commiee. Sever ance arr angements W e have entered int o management con tracts and employment agreements with our senior management team, each of which provides for certain minimum noce periods if their service or employment with us is terminat ed in certain circumst ances as described below in secon 6.11.2 “Relat ed Party T ransacons” . Pension and fringe benets Our senior management team parcipates in a dened contribuon pension scheme opera ted by a third-party pension insurance org anizaon. Our senior management team is entled to customary fringe benets, such as a company car and a hospitaliza on plan. Perf ormance of scenario analyses In determining the remunera on packag e of each individual member of the senior management team, scenario analyses are performed annually and tak en into account in seng the level of the base remuneraon to be paid as well as the variable remuner aon and the corresponding tar gets. Relaons betw een the remunera on of ex ecuves in comparison to other company personnel The total compan y expense for the non-equity remuner aon paid to our Chief Execuv e Ocer (and only execuve di - rector) f or the year ended December 31, 2021, equaled USD 1,238,772, repr esenng 787% of the total company expense for the non-equity median compensaon paid to our employees. This percent age was calculated on the basis of the last compensaon paymen t period of the year ended December 31, 2021, over which the median non-equity remuneraon of all argenx employees rela ve to their full me percentag e was tak en into account and set o against the non-equity remuner aon of our ex ecuve director for the same period. We calculat e the afor emenoned percentag e on the last compensaon paymen t of the relevan t period, because due to our r apid growth we deem it relevan t to also include our lates t hires in the comparison. Please see below an overview of the annual change of compensaon, of the performance of argenx and of the median remuner aon on a full-me equivalent basis (annualized for employ ees who joined or le argenx during the year) of argen x ’ s employees, other than the ex ecuve director , over the ve most recent nancial year s: 176 | Remuneration Report of the Remuneration and Nomination Committee Remuneration Report of the Remuneration and Nomination Committee | 177 Financial year ended December 31, 2017 2018 2019 2020 2021 Stock opons gr anted to our CEO 80,000 80,000 80,000 50,000 25,000 Median stock opons gr anted to our employees 2,500 2,500 2,800 2,900 981 Rao employee/CE O 3.13% 3.13% 3.50% 5.80% 3.9% Aver age number of stock opons grant ed to non-execuv e directors 15,000 12,143 10,000 10,000 2,869 Median stock opons gr anted to our employees 2,500 2,500 2,800 2,900 981 Rao non-ex ecuve director s/employee 16.67% 20.59% 28.00% 29.00% 34.20% The decrease in the remuneraon r ao between our k ey senior management and other employees between 2020 and 2021 is caused by the decreased median salary paid to our employees, also as a result of our expansion in the U.S. and Japan. The comparison of non-equity compensaon above is made between the compensaon paid to our single ex ecuve director , and the median compensaon paid to our employees. W e have opted to compar e non-equity salaries in this comparison, because whereas the number of opons gran ted is link ed to the over all siz e of remunera on packag es gran ted, the value of equity components depends on the evolve ment of our share price, volality and the risk-fr ee ra te, which is unknown at gr anng and as such the forw ard looking valuaon methods for opons normally do not provide an accura te economic value. Due to the global spread of our employees over mulple connents, we deem it relevan t to also include the above com - parison separat ely to our U.S. employees, EU employees and Japan employees. Due to the overall higher compensaon level in our business segment in the U.S. and Japan compared to the EU, there is a signicant di erence in the pay r ao when the CEO’ s compensaon is compared to the median compensaon of all our employees (the majority of which are EU persons), as set out above, or compared to employ ees in the U.S. and Japan. The following inf ormaon is provided for ref erence purposes: For the share based payments the raos ar e as follows: Financial year ended December 31, (In USD thousands, unless otherwise indicated) 2017 2018 2019 2020 2021 Non-equity remuner aon of our CEO 648,108 926,577 952,995 1,094,367 1,238,772 Non-equity median salary paid to our employees 108,417 110,196 121,603 163,062 157,349 Rao employee/CE O 16% 12% 13% 15% 13% Aver age compensaon paid to non-ex ecuve director s 60,249 59,891 60,372 57,925 54,484 Number of employees at end of y ear 73 105 188 336 650 Share price at end of y ear Euronext EUR 52.52 85.20 143.60 242.00 315.30 Share price at end of y ear Euronext USD 62.99 97.55 161.32 296.96 357.11 P ART IV Rao of non-equity compensaon of the a verage employ ee compared to the CEO f or the nancial year ended December 31, 2021 All employees 13% European employ ees 8% US employees 17% Japan employees 9% P ART IV Remuneration Report of the Remuneration and Nomination Committee | 179 178 | Remuneration Report of the R emuneration and Nomination Committee The total employment costs (e xcluding any stock opons) paid by us in the nancial year 2021 was split between regions as follows: As a result of linking long term targe ts, designed to increase argen x ’ s performance in the present as well as the future, the variable compensaon of our senior management team intends to align the interests of the senior management team to that of the (other) st akeholders of arg enx. The Board of Director s believes that a remuner aon package com - prised of a x ed compensaon a variable compensaon link ed to individual targets as well as opons linked to a vesng scheme is most suitable to achieve this goal. Remuner aon and Benets of the CEO The following table sets forth inf ormaon regar ding compensaon paid by us for Tim V an Hauwermeiren during the year ended December 31, 2021. V ariable compensaon determinaon – CEO The mix between xed and variable remuner aon components for our execuv e director for at least the last three year s is set out below . For 2021, the variable pay targ ets for our senior management included targ ets relang to the following topics (in addion to a number of non-disclosed targ ets) 1. Building the business: a. Resear ch progr ess: Nominated new indicaons for specied product candidates; b. Commercial development: Est ablished launch ke y performance indica tors; c. Regulat ory approv als: Obtained regulatory approv al key performance indica tors relang to VYVGAR T in the U.S. and Japan; d. Cash management and nancing: Raised a minimum amount of capital to support the business objecves; e. Supply chain capabilies: Built out our global supply chain in prepar aon of the commercial launch and clinical development objecves of VYVGART . 2. Building the organiz aon: a. T eam development: Accomplished the recruitment objecves for commer cial posions as well as the recruitmen t and onboarding of a number of ke y senior leadership roles; b. Legal / compliance development: Put in place a number of policies, processes, resour ces and training to prepar e the company f or its commercial lif e; c. Company culture f ocus: Deliver ed on our goals inclusive of imbedding and reinfor cing our cultural v alues and leading by example. Compensaon in USD Financial year ended December 31, Fixed base c ompensaon 651,986 Long-term variable c ompensaon, in the form of stock opons (1) 3,895,370 Long-term variable c ompensaon, in the form of restrict ed stock units 2,084,509 Employer social security con tribuon stock opons (2) – Non-equity incenve plan compensa on 586,787 Pension con tribuons 26,894 Social security costs 3,456 Other (3) 14,827 T otal 7,263,828 (1) Amount shown represents the expenses with respect to the stock opon awards gr anted in 2021 to Mr . V an Hauwermeiren measured using the Black Scholes formula. For a descripon of the assumpons used in valuing these awards, see note 14 “Share-based payments” to our consolidated nancial stat ements in chapter 7 “Consolidated Financial Stat ements – audited as of and for the years ended December 31, 2021, 2020 and 2019” . These amounts do not reect the actual economic value realized by Mr . Van Hauwermeir en. (2) argenx incur s employer social security costs with respect to the opon awards grant ed to the members of our senior management. The amount of employer social security costs depends on the actual economic value realiz ed and theref ore varies based on the price of our ordinary shares. At each reporng date, arg enx makes a calculaon of the exposure. (3) Consists of USD 14,626 aributable to the lease of a company car and USD 201 in employer -paid medical insurance premiums. Non-cash Non-cash 86% Non-cash 88% Fi xe d 62% Fi xe d 65% Fi xe d 65% V ariable 38% Va riable 35% Va riable 35% Cash 12% Cash 14% Cash 2021 2020 2019 V ariable pay 8% Other benets 1% T otal cash/ non-cash T otal cash fixed/ variable T otal Base salary 9% Base salary 9% Base salary 8% Long term variable compensaon 81% 83% Equity incenves 85% Equity incenves 87% V ariable pay 5% V ariable pay 4% Other benets 1% Other benets 1% 17% T otal remuner aon paid in the nancial year ended December 31, 2021 (in USD millions) EU 47.9 U.S. 64.8 Japan 7.9 Remuneration Report of the Remuneration and Nomination Committee | 181 180 | Remuneration Report of the R emuneration and Nomination Committee All of the tar gets for 2021 were achieved, with overperf ormance of up to 200% gr anted for some targets, parcularly where the targ ets wer e over achieved in absolute terms, or where the tar gets were achieved despite signicant unf ore - seen obstacles, including relang to CO VID-19. Our CEO’ s variable pay tar gets related to: Building the business (60%): • If acceler ated approval, deliver on number of new paent starts, if December approval, resear ch progress targ et (40%) • Commer cial developmen t and launch preparedness tar gets (20%) Building the organiz aon (40%): • T eam development (20%) • Compan y culture (20%) Our Board of Directors r esolved that each of the variable pay targ ets of our CEO had been met in 2021, and that an over - performance warr anted 150% pay -out of the variable pay , considering among other things the successful overcoming of signicant challenges coming out of the COVID-19 pandemic in this pre-launch year and taking into account the success in recruing and onboarding key funcons in the senior management team. The rao between x ed and variable paymen ts to our CEO for the nancial year ended December 31, 2021 equals USD 651,986/USD 586,787 or 52.6%/47.4%. Remuner aon of Other Members of the Senior Management The following table sets forth inf ormaon regar ding aggreg ate compensaon paid by us for the members of our ex ecuve management (ex cluding our CEO Tim V an Hauwermeiren) during the year ended December 31, 2021. We note that these numbers also include compensaon paid to persons who have been part of our ex ecuve management for part of 2021 (being Karl Gubitz). Compensaon in USD Financial year ended December 31, Fixed base c ompensaon 2,812,668 Long-term variable c ompensaon, in the form of stock opons (1) 11,165,679 Long-term variable c ompensaon, in the form of restrict ed stock units 5,940,183 Employer social security con tribuon stock opons (2) 4,171,822 Non-equity incenve plan compensa on 1,433,378 T erminaon benets 381,522 Pension con tribuons 123,002 Social security costs 785,489 Other (3) 258,950 T otal 27,072,693 (1) Amount shown represents the expenses with respect to the stock opon awards gr anted in 2021 to Mr . Keith W oods, Mr . Karl Gubitz, Prof . Hans de Haard, Mr . Wim Parys, Mr . Arjen Lemmen and Miss Andria Wilk measured using the Black Scholes formula. For a descripon of the assumpons used in the valuing these awards, see note 14 “Share-based payments” to our consolidated nancial statemen ts in chapter 7 “Consolidated Financial Statemen ts – audited as of and for the years ended December 31, 2021, 2020 and 2019” . These amounts do not reect the actual economic value realiz ed by these members of our senior management. (2) argenx incur s employer social security costs with respect to the opon awards grant ed to the members of our senior management. The amount of employer social security costs depends on the actual economic value realiz ed and theref ore varies based on the price of our ordinary shares. At each reporng date, arg enx makes a calculaon of the exposure. (3) Consists of USD 78,181 aributable to the leases of company car s, USD 136,893 in car , housing and other allowances and USD 43,876 in employer-paid medical insurance premiums. Opon Awards for Our Senior Management The following table sets forth inf ormaon regar ding opon awar ds gran ted to our senior management during the year ended December 31, 2021: The following table sets forth inf ormaon regar ding res tricted stock units granted to our senior management during the year ended December 31, 2021: Following our annual remunera on and benchmarking exer cise the base amount of equity for the CEO was adjusted downwar d (from the approv ed remuner aon policy 2021) to 32,000 stock opons and 7,200 restricted stock units. The Remuner aon and Nominaon Commiee discussed a recommendaon of 130% of this base amount based on perfor - mance (being 41,600 stock opons and 9.360 restricted s tock units). Howev er , following consult aon of the CEO in line with best pracce principle 3.2.2. of the Dutch Corpora te Governance Code, at the request of the CEO , the Board of Di - rector s agreed to grant only 25,000 stock opons and 5,700 restrict ed stock units to the CEO and to recommend placing the dier ence (being 16,600 stock opons and 3,660 restrict ed stock units) at the disposion of the CEO f or distribuon to k ey individuals in the April 1, 2022 equity grant. Name Stock opons Expiraon dat e Exer cise price (IN USD) Tim V an Hauwermeiren (1) 25,000 December 24, 2031 350.20 Eric Castaldi (2) – – – Keith W oods 16,000 December 24, 2031 350.20 Karl Gubitz (2) 24,000 July 1, 2031 288.93 Hans de Haard (1) 16,000 December 24, 2031 350.20 Dirk Beeusaert (3) – – – Wim Parys (4) – – – Arjen Lemmen (1) 16,000 December 24, 2031 350.20 Andria Wilk (1) 4,446 December 24, 2031 350.20 P ART IV (1) On December 24, 2021, the Company has granted opons f or which each beneciary has a 60 day period to choose between a contractual term of ve or ten years. (2) Eric Castaldi resigned from his posion as chief nancial ocer on our senior management in June 2021 and was succeeded by Karl Gubitz. (3) Mr . Beeusaert has rered per December 31, 2021 and, theref ore, was not granted any equity incenves in 2021. (4) Mr . Parys will rer e with eect from Mar ch 30, 2022 and, therefore, w as not granted an y equity incenves in 2021. Name Restrict ed stock units Expiry date Tim V an Hauwermeiren 5.700 December 24, 2031 Eric Castaldi (1) – – Keith W oods 3.600 December 24, 2031 Karl Gubitz (1) 5.400 July 1, 2025 Hans de Haard 3.600 December 24, 2031 Dirk Beeusaert (2) – – Wim Parys (3) – – Arjen Lemmen 3.600 December 24, 2031 Andria Wilk 988 24/12/2031 (1) Eric Castaldi resigned from his posion as chief nancial ocer on our senior management in June 2021 and was succeeded by Karl Gubitz. (2) Mr . Beeusaert has rered per December 31, 2021 and, theref ore, was not granted any equity incenves in 2021. (3) Mr . Parys will rer e with eect from Mar ch 30, 2022 and, therefore, w as not granted an y equity incenves in 2021. Remuneration Report of the Remuneration and Nomination Committee | 183 Name T otal stock opons held on January , 1, 2021 Stock opons grant ed in 2021 Stock opons forf eited in 2021 Stock opons ex ercised in 2021 T otal stock opons held on December 31, 2021 Exer cise price (in USD) Stock opons vest ed through 2020 Stock opons vest ed through 2021 Stock opons to vest in 2022 Stock opons to vest in 2023 Stock opons to vest in 2024 Tim V an Hauwermeiren 290,000 25,000 – – 315,000 23.98 80,000 97.77 53,333 26,667 153.75 26,667 26,666 26,667 280.43 16,667 16,666 16,667 350.20 8,333 8,334 8,333 T otal 290,000 25,000 – – 315,000 160,000 70,000 51,666 25,001 8,333 Eric Castaldi (1) 171,400 – – (46,400) 125,000 23.98 25,000 97.77 50,000 153.75 50,000 T otal 171,400 – – (46,400) 125,000 125,000 – – – – Keith W oods 155,000 16,000 – (30,000) 141,000 97.77 8,333 16,667 153.75 16,667 16,666 16,667 280.43 16,667 16,666 16,667 350.20 5,333 5,334 5,333 T otal 155,000 16,000 – (30,000) 141,000 25,000 50,000 38,666 22,001 5,333 Karl Gubitz (1) – 24,000 – – 24,000 288.93 11,333 8,000 4,667 T otal – 24,000 – – 24,000 – – 11,333 8,000 4,667 Hans de Haard 545,975 16,000 – – 561,975 2.76 144,822 8.12 109,000 10.72 28,200 12.99 28,200 16.01 28,200 20.85 14,353 23.98 43,200 97.77 33,333 16,667 153.75 16,666 16,668 16,666 280.43 16,667 16,666 16,667 350.20 5,333 5,334 5,333 T otal 545,975 16,000 – – 561,975 445,974 50,002 38,665 22,001 5,333 182 | Remuneration Report of the Remuneration and Nomination Committee The table below shows the stock opons held at Januar y 1, 2021 and the stock opons grant ed to our senior manage - ment which have vest ed during the year ended December 31, 2021, as well as the stock opons scheduled to vest in the years ending December 31, 2022, December 31, 2023 and December 31, 2024 (in number of stock opons), and the respecve e xercise price of such stock opons: P ART IV (1) Eric Castaldi resigned from his posion as chief nancial ocer on our senior management in June 2021 and was succeeded by Karl Gubitz. Remuneration Report of the Remuneration and Nomination Committee | 185 184 | Remuneration Report of the R emuneration and Nomination Committee Name T otal stock opons held on January , 1, 2021 Stock opons grant ed in 2021 Stock opons forf eited in 2021 Stock opons ex ercised in 2021 T otal stock opons held on December 31, 2021 Exer cise price (in USD) Stock opons ves ted through 2020 Stock opons ves ted through 2021 Stock opons to vest in 2022 Stock opons to vest in 2023 Stock opons to vest in 2024 Dirk Beeusaert (2) 204,682 – – (54,682) 150,000 91.54 23,500 4,700 97.77 14,533 7,267 128.53 30,757 19,243 222.16 12,756 37,244 T otal 204,682 – – (54,682) 150,000 81,546 68,454 – – – Wim Parys 225,000 – – – 225,000 97.77 83,333 41,667 153.75 16,667 16,666 16,667 280.43 16,667 16,666 16,667 T otal 225,000 – – – 225,000 100,000 75,000 33,333 16,667 – Arjen Lemmen 136,211 16,000 – (6,430) 145,781 20.85 4,306 23.98 6,328 91.54 2,361 834 97.77 8,452 7,500 153.75 24,963 12,519 12,518 280.43 16,667 16,666 16,667 350.20 5,333 5,334 5,333 T otal 136,211 16,000 – (6,430) 145,781 46,410 37,520 34,517 22,001 5,333 Andria Wilk 19,300 4,446 23,746 153.75 4,693 2,353 2,354 280.43 4,575 2,663 2,662 350.20 1,482 1,482 1,482 T otal 19,300 4,446 23,746 4,693 6,928 6,499 4,144 1,482 P ART IV (1) Eric Castaldi resigned from his posion as chief nancial ocer on our senior management in June 2021 and was succeeded by Karl Gubitz. (2) Dirk Beeusaert rered eecv e December 31, 2021 and was succeeded by Malini Moorthy e ecve February 14, 2022. 186 | Remuneration Report of the Remuneration and Nomination Committee Remuneration Report of the Remuneration and Nomination Committee | 187 Name T otal restrict ed stock units held on January , 1, 2021 Restrict ed stock units grant ed in 2021 Restrict ed stock units forf eited in 2021 Restrict ed stock units ex ercised in 2021 T otal restrict ed stock units held on December 31, 2021 Restrict ed stock units vested through 2021 Restrict ed stock units to vest in 2022 Restrict ed stock units to vest in 2023 Restrict ed stock units to vest in 2024 Restrict ed stock units to vest in 2025 Tim V an Hauwermeiren – 5,700 – – 5,700 – 1,425 1,425 1,425 1,425 T otal – 5,700 – – 5,700 – 1,425 1,425 1,425 1,425 Eric Castaldi (1) – – – – – – – – – – T otal – – – – – – – – – – Keith W oods – 3,600 – – 3,600 – 900 900 900 900 T otal – 3,600 – – 3,600 – 900 900 900 900 Karl Gubitz (1) – 5,400 – – 5,400 – 1,350 1,350 1,350 1,350 T otal – 5,400 – – 5,400 – 1,350 1,350 1,350 1,350 Hans de Haard – 3,600 – – 3,600 – 900 900 900 900 T otal – 3,600 – – 3,600 – 900 900 900 900 Dirk Beeusaert – – – – – – – – – – T otal – – – – – – – – – – Wim Parys – – – – – – – – – – T otal – – – – – – – – – – Arjen Lemmen – 3,600 – – 3,600 – 900 900 900 900 T otal – 3,600 – – 3,600 – 900 900 900 900 Andria Wilk – 988 – – 988 – 247 247 247 T otal – 988 – – 988 – 247 247 247 P ART IV The table below shows the restricted stock units held at January 1, 2021 and the restricted stock units gran ted to our senior management which have vest ed during the year ended December 31, 2021, as well as the restrict ed stock units scheduled to vest in the years ending December 31, 2022, December 31, 2023, December 31, 2024 and December 31, 2025 (in number of restrict ed stock units): (1) Eric Castaldi resigned from his posion as chief nancial ocer on our senior management in June 2021 and was succeeded by Karl Gubitz. (2) Dirk Beeusaert rered eecv e December 31, 2021 and was succeeded by Malini Moorthy e ecve February 14, 2022. Remuneration Report of the Remuneration and Nomination Committee | 189 Name Number of Stock opons Exer cise price (in USD) Tim V an Hauwermeiren – – Eric Castaldi (1) 28,200 16.01 18,200 23.98 Keith W oods 5,000 23.98 25,000 97.77 Karl Gubitz (1) – – Hans de Haard – – Dirk Beeusaert (2) 39,682 20.85 15,000 23.98 Wim Parys – – Arjen Lemmen 3,215 12.99 Arjen Lemmen 3,215 16.01 Andria Wilk – – T otal 137,512 (1) On December 24, 2021, argen x grant ed opons for which the beneciary has a 60 day period to choose between a contractual term of ve or ten years. (2) Eric Castaldi resigned from his posion as chief nancial ocer on our senior management in June 2021 and was succeeded by Karl Gubitz. (3) Dirk Beeusaert rered e ecve December 31, 2021 and was succeeded by Malini Moorthy eecve February 14, 2022. (4) In accordance with the equity plan, restrict ed stock units, once vested, will be seled against the issuance of ordinary shares in argenx SE. Such shares have no expiry date and may be held by the parcipant without limitaon. (1) Eric Castaldi resigned from his posion as chief nancial ocer on our senior management in June 2021 and was succeeded by Karl Gubitz. (2) Dirk Beeusaert rered eecv e December 31, 2021 and was succeeded by Malini Moorthy e ecve February 14, 2022. 188 | Remuneration Report of the Remuneration and Nomination Committee Name Number of Stock opons Remaining term on December 31, 2021 (rounded up) Number of restrict ed stock units (4) Tim V an Hauwermeiren (1) 80,000 6 years 5,700 80,000 7 years 80,000 8 years 50,000 9 years 25,000 5 years / 10 y ears (1) Eric Castaldi (2) 17,360 2 years 18,120 3 years 25,000 6 years 32,640 7 years 31,880 8 years Keith W oods 25,000 7 years 3,600 50,000 8 years 50,000 9 years 16,000 10 years Karl Gubitz (2) 24,000 10 years 5,400 Hans De Haard (1) 108,996 0.5 year s 3,600 35,826 3 years 109,000 3 years 28,200 4 years 28,200 4.5 year s 28,200 5 years 14,353 5.5 year s 43,200 6 years 50,000 7 years 50,000 8 years 50,000 9 years 16,000 5 years / 10 y ears (1) Dirk Beeusaert (3) 28,200 1.5 year s – 21,800 2 year s 50,000 2.5 year s 50,000 3.5 year s Name Number of Stock opons Remaining term on December 31, 2021 (rounded up) Number of restrict ed stock units Wim Parys 125,000 2 years – 50,000 4 years 50,000 8 years Arjen Lemmen (1) 2,500 1.5 year s 3,600 50,000 3 year s 4,306 5.5 year s 6,328 6 year s 695 6.5 year s 15,952 7 year s 50,000 9 year s 16,000 5 years / 10 y ears (1) Andria Wilk (1) 9,400 3 year s 988 9,900 4 year s 4,446 5 years / 10 y ears (1) The table below shows the remaining term of the stock opons and restrict ed stock units held by our senior management during the year ended December 31, 2021. The table below shows the stock opons exer cised by our senior management during the year ended December 31, 2021 and the exer cise price of those stock opons. Per ex ercised opon, one share was issued. P ART IV Remuneration Report of the Remuneration and Nomination Committee | 191 Relev ant Body Posion Fees denominat ed in USD Fees denominat ed in EUR Board of Direct ors Chairperson 76,878 65,000 Member 41,396 35,000 Audit & Complance commiee/R&D Chairperson 17,741 15,000 Member 8,871 7,500 Remuner aon & Nominaon commiee/ Commercial commi ee Chairperson 11,827 10,000 Member 5,913 5,000 190 | Remuneration Report of the Remuneration and Nomination Committee 4.4.3 Remuneration of Non-Executive Directors The remunera on of the individual members of the Board of Director s i s determined by the Board of Directors, at the recommenda on of the remunera on and nominaon commiee, within the limits of the remuneraon policy adopted by the shareholders at the General Meeng. The descripon below reects the remuneraon policy approv ed by our General Meeng held on May 11, 2021. Pursuant to the remuner aon policy , the remunera on of the non-execuv e direct ors consists of the following xed and variable components: • a xed fee • if applicable, a fee f or chairing the audit and compliance commiee, the resear ch and development commiee or , the remunera on and nominaon commiee or the commercial commiee; • a xed fee for boar d commiee member ship; and • a long-term variable incenve in the form of stock opons and restrict ed stock units. Fixed f ee The Board of Directors has set the annual base remuner aon, the annual remuner aon for members of the audit and compliance commiee, the research and developmen t commiee, the remuner aon and nominaon commiee and the commercial commi ee and, in each case, the addional remunera on for the respecve chairperson as follows: Long-term incenve plan The Board of Directors int ends to incenviz e the non-ex ecuve director s by issuing stock opons and/or restrict ed stock units from me to me to be able to aract and ret ain well-qualied non-ex ecuve director s in connecon with the Equi - ty Incenve Plan. The Board of Directors gran ts stock opons and restrict ed stock units to the non-ex ecuve director s on the recommendaon of the remunera on and nominaon commiee. Such stock opon and restricted s tock unit gran ts are based on an equity incenve gr ant allocaon scheme established by the Board of Director s pursuant to the Opon Plan. The condions of our Equity Incenve Plan apply to our non-execuv e director s, as set forth in secon 4.4.4 “Long- T erm Incenves Gran ted to Key Per sons – Equity Incenve Plan” . Success payment In ex ceponal circums tances, the Board of Director s may decide to reward a non-ex ecuve director with a success payment r elang to the occurrence of specic events achieved through the ex ceponal eorts of that person (such as a pla orm licensing or product licensing deal brok ered by that non-ex ecuve director). T o date, no such success paymen ts have been made or promised by us to our non-ex ecuve director s. Pursuant to the remuner aon policy , in case of a dismissal, non-ex ecuve directors will not be entled to a sever ance payment. The following table sets forth the inf ormaon regarding the compensaon earned by our non-exe cuve directors during the year ended December 31, 2021: (1) These amounts do not reect the actual economic value realiz ed by the non-ex ecuve director . Amount shown repr esents the expenses with respect to the stock opon awards gr anted in 2021 to the non-ex ecuve directors measured using the Black Scholes formula. For a descripon of the assumpons used in valuing these awards, see note 14 “Share-based payments” to our consolidated nancial stat ements in chapter 7 “Consolidated Financial Statemen ts – audited as of and for the years ended December 31, 2021, 2020 and 2019” . (2) These amounts do not reect the actual economic value realiz ed by the non-ex ecuve director . Amount shown repr esents the expenses with respect to the restricted st ock unit awards gr anted in 2021 to the non-ex ecuve directors measured using the Black Scholes formula. For a descripon of the assumpons used in valuing these awards, see note 14 “Share-based payments” to our consolidated nancial stat ements in chapter 7 “Consolidated Financial Statements – audited as of and for the years ended December 31, 2021, 2020 and 2019” . (3) David L. Lacey resigned from our Board of Directors per May 11, 2021 and was succeeded by Yvonne Greenstr eet. On March 3, 2022, Yvonne Gr eenstreet stepped down from her posion as member of our Board of Directors. Name (in USD) Fees earned or paid in cash Stock opon awar ds (1) Restrict ed stock units awards (2) T otal Pet er Verhaeghe 91,662 392,743 210,120 694,526 David L. Lacey (3) 19,712 392,743 210,120 622,576 W erner Lanthaler 65,051 392,743 210,120 667,914 J. Donald deBethizy 62,094 392,743 210,120 664,957 Pamela Klein 50,266 392,743 210,120 653,130 A. A. Rosenberg 56,180 392,743 210,120 659,044 James M. Daly 59,137 392,743 210,120 662,000 Y vonne Greenstreet (3) 30,459 514,154 260,034 804,647 P ART IV P ART VII How He F ound W ays to Balanc e Mental and Physical Health with MG Daniel Growing up, Daniel was alway s inv olved in sports and tness, and he eventually established a car eer in the eld. When he was diagnosed with my asthenia gravis (MG), his world was turned upside down. 192 | Patient Story Patient Story | 193 P ART VI How did you react when y ou received your myasthenia gravis diagnosis? I didn’t really know much about MG, so I didn’t really know what to think. The only thing I knew about MG was informa on I gained through m y then-girlfriend. Her dad has MG. Ironically , she had menoned MG when she was taking me to appointments. He was the only person I knew living with MG, and he seemed to be living a pre y normal life. What has changed about your life sinc e your myasthenia gravis diagnosis, and what has stayed the same? For the most part, my life is sll prey normal. Some things sta yed the same, lik e I’m working full me and working out ve or six mes a week, although I had to slowly build back up to using heavier weights. I have to be careful about not pushing myself too hard, and I work ed with my doctor to gure out what ex ercises were right for me. I know not everyone with MG can do as much as I hav e been able to do. But some things certainly did change. I had to start cut - ng back on social oungs. My friends noced, but when I explained it to them, they were understanding. And I need more sleep than I did before. For me, it’ s really been about nding the right balance of what I want to do and what I need to do to tak e care of my body . What challenges did you face while continuing to work ? Did you have to set new expectations or modify your workload or schedule? I’m very lucky to have the job that I do because I was able to modify my schedule. I work ed with my manager when my sympt oms were r eally bad. I would go in when I could. My manager and cowork ers knew that I would do all that I could, so they were underst an - ding when I needed to come in late or miss a day . When I had a my asthenia gravis–r elated surgery , I took some me o to rec over and nd my new balance. When I was ready to come back, my posion was waing for me. Patient Story P ART IV Paid c ontributor to MG United. 194 | Remuneration Report of the Remuneration and Nomination Committee Remuneration Report of the Remuneration and Nomination Committee | 195 Name T otal stock opons held on January , 1, 2021 Stock opons grant ed in 2021 Stock opons ex ercised in 2021 T otal stock opons held on December 31, 2021 Exer cise price (in USD) Stock opons ves ted through 2020 Stock opons ves ted through 2021 Stock opons to vest in 2022 Stock opons to vest in 2023 Stock opons to vest in 2024 Pet er Verhaeghe 58,595 2,700 – 61,295 2.76 11,626 4.47 1,969 8.12 5,000 12.89 10,000 97.77 6,667 3,333 153.75 3,333 3,334 3,333 280.43 3,333 3,334 3,333 350.20 2,700 T otal 58,595 2,700 – 61,295 38,595 10,000 6,667 3,333 2,700 David L. Lacey (1) 67,800 2,700 (5,000) 65,500 8.12 7,800 12.89 10,000 23.98 15,000 97.77 6,667 3,333 153.75 3,333 3,334 3,333 280.43 3,333 3,334 3,333 350.20 2,700 T otal 67,800 2,700 (5,000) 65,500 42,800 10,000 6,667 3,333 2,700 W erner Lanthaler 30,000 2,700 (4,420) 28,280 97.77 6,667 3,333 153.75 2,247 3,333 280.43 3,333 3,334 3,333 350.20 2,700 T otal 30,000 2,700 (4,420) 28,280 8,914 9,999 3,334 3,333 2,700 J. Donald deBethizy 47,500 2,700 (7,500) 42,700 12.89 10,000 97.77 6,667 3,333 153.75 3,333 3,334 3,333 280.43 3,333 3,334 3,333 350.20 2,700 T otal 47,500 2,700 (7,500) 42,700 20,000 10,000 6,667 3,333 2,700 The table below shows the stock opons held at Januar y 1, 2021 and the stock opons grant ed to the non-ex ecuve director s which hav e vest ed during the year ended December 31, 2021, as well as the stock opons scheduled to vest in the years ending December 31, 2022, December 31, 2023 and December 31, 2024 (in number of stock opons), and the respecve e xercise price of such stock opons: P ART IV Remuneration Report of the Remuneration and Nomination Committee | 197 196 | Remuneration Report of the R emuneration and Nomination Committee Name T otal stock opons held on January , 1, 2021 Stock opons grant ed in 2021 Stock opons ex ercised in 2021 T otal stock opons held on December 31, 2021 Exer cise price (in USD) Stock opons ves ted through 2020 Stock opons ves ted through 2021 Stock opons to vest in 2022 Stock opons to vest in 2023 Stock opons to vest in 2024 Pamela Klein 50,000 2,700 (7,500) 45,200 12.96 2,500 12.89 10,000 97.77 6,667 3,333 153.75 3,333 3,334 3,333 280.43 3,333 3,334 3,333 350.20 2,700 T otal 50,000 2,700 (7,500) 45,200 22,500 10,000 6,667 3,333 2,700 A. A. Rosenberg 45,000 2,700 (1,160) 46,540 16.00 15,000 97.77 6,667 3,333 153.75 2,173 3,334 3,333 280.43 3,333 3,334 3,333 350.20 2,700 T otal 45,000 2,700 (1,160) 46,540 23,840 10,000 6,667 3,333 2,700 James M. Daly 35,000 2,700 – 37,700 90.97 2,500 2,500 97.77 6,667 3,333 153.75 3,333 3,334 3,333 280.43 3,333 3,334 3,333 350.20 2,700 T otal 35,000 2,700 – 37,700 12,500 12,500 6,667 3,333 2,700 Y vonne Greenstreet (1) – 4,050 – 4,050 288.93 1350 1350 1350 T otal – 4,050 – 4,050 – – 1,350 1,350 1,350 P ART IV (1) David L. Lacey resigned from our Board of Directors per May 11, 2021 and was succeeded by Yvonne Greenstr eet. On March 3, 2022, Yvonne Greenstr eet stepped down from her posion as member of our Board of Directors. 198 | Remuneration Report of the Remuneration and Nomination Committee Remuneration R eport of the Remuneration and Nomination Committee | 199 Name T otal restrict ed stock units held on January , 1, 2021 Restrict ed stock units grant ed in 2021 Restrict ed stock units forf eited in 2021 Restrict ed stock units ex ercised in 2021 T otal restrict ed stock units held on December 31, 2021 Restrict ed stock units vested through 2021 Restrict ed stock units to vest in 2022 Restrict ed stock units to vest in 2023 Restrict ed stock units to vest in 2024 Restrict ed stock units to vest in 2025 Pet er Verhaeghe – 600 – – 600 – 150 150 150 150 T otal – 600 – – 600 – 150 150 150 150 David L. Lacey (1) – 600 – – 600 – 150 150 150 150 T otal – 600 – – 600 – 150 150 150 150 W erner Lanthaler – 600 – – 600 – 150 150 150 150 T otal – 600 – – 600 – 150 150 150 150 J. Donald deBethizy – 600 – – 600 – 150 150 150 150 T otal – 600 – – 600 – 150 150 150 150 Pamela Klein – 600 – – 600 – 150 150 150 150 T otal – 600 – – 600 – 150 150 150 150 A. A. Rosenberg – 600 – – 600 – 150 150 150 150 T otal – 600 – – 600 – 150 150 150 150 James M. Daly – 600 – – 600 – 150 150 150 150 T otal – 600 – – 600 – 150 150 150 150 Y vonne Greenstreet (1) – 900 – – 900 – 225 225 225 225 T otal – 900 – – 900 – 225 225 225 225 P ART IV The table below shows the restricted stock units held at January 1, 2021 and the restricted stock units gran ted to the non-ex ecuve director s which have ves ted during the year ended December 31, 2021, as well as the restrict ed stock units scheduled to vest in the years ending December 31, 2022, December 31, 2023, December 31, 2024 and December 31, 2025 (in number of restrict ed stock units): (1) David L. Lacey resigned from our Board of Directors per May 11, 2021 and was succeeded by Yvonne Greenstr eet. On March 3, 2022, Yvonne Greenstr eet stepped down from her posion as member of our Board of Directors. 200 | Remuneration Report of the Remuneration and Nomination Committee Name Number of Stock opons Remaining term on December 31, 2021 (rounded up) Number of restrict ed stock units (2) Pet er Verhaeghe 8,741 0.5 years 600 4,854 3 year s 5,000 3 year s 10,000 4.5 years 10,000 7 year s 10,000 8 year s 10,000 9 year s 2,700 10 years David L. Lacey (1) 7,800 3 year s 600 10,000 4.5 year s 15,000 6 years 10,000 7 years 10,000 8 years 10,000 9 years 2,700 10 years W erner Lanthaler 10,000 2 years 600 5,580 8 year s 10,000 9 year s 2,700 10 years J. Donald deBethizy 10,000 4.5 years 600 10,000 7 year s 10,000 8 year s 10,000 9 year s 2,700 10 years Pamela Klein 2,500 3.5 years 600 10,000 4.5 years 10,000 7 year s 10,000 8 year s 10,000 9 year s 2,700 10 years A. A. Rosenberg 15,000 5 years 600 10,000 7 year s 8,840 8 year s 10,000 9 year s 2,700 10 years Name Number of Stock opons Remaining term on December 31, 2021 (rounded up) Number of restrict ed stock units James M. Daly 5,000 6.5 years 600 10,000 7 year s 10,000 8 year s 10,000 9 year s 2,700 10 years Y vonne Greenstreet 4,050 10 years 900 The table below shows the remaining term of the stock opons and restrict ed stock units held by the non-execuv e director s during the year ended December 31, 2021. Remuneration Report of the Remuneration and Nomination Committee | 201 Name Number of Stock opons Exer cise price (in USD) Pet er Verhaeghe – – David L. Lacey (1) 5,000 8.12 W erner Lanthaler 4,420 153.75 J. Donald deBethizy 7,500 12.96 Pamela Klein 7,500 12.96 A. A. Rosenberg 1,160 153.75 James M. Daly – – Y vonne Greenstreet (1) – – T otal 25,580 The table below shows the stock opons exer cised by our non-ex ecuve director s during the year ended December 31, 2021 and the ex ercise price of those stock opons. P er ex ercised opon, one share was issued. 4.4.4 Long- T erm Incentives Granted to Key Persons – Equity Inc entive Plan Our current equity incenve plan providing for the gran ng of a mix of stock opons and restrict ed stock units was approv ed by our Board of Directors on March 15, 2021 and subsequently amended on December 15, 2021 (the Equity Incenve Plan ). The aim of the Equity Incenve Plan is to encourage our senior management, direct ors, all other k ey employees, and k ey outside consultan ts and advisors to acquire an economic and benecial ownership interes t in the growth and performance of argen x, to increase their incenve to contribut e to our value and to aract and ret ain individ - uals who are key to arg enx. In connecon with the Equity Incenve Plan, our Board of Director s has also established an equity incenve alloca on scheme. The equity incenv e allocaon scheme cont ains (i) the date on which stock opons and r estricted st ock units are gran ted each year , which shall be the same date each year and (ii) the number of s tock opons and res tricted stock units granted t o each person or t o each group of per sons, which shall be based on objecve criteria only . Starng Januar y 1, 2023, the r egular annual gran t of equity incenves to exisng employees will be once a year in July f or all parcipants of the Equity Incenve Plan. Our Board of Directors, in each case subject to the approval of the majority of the non-ex ecuve directors, may gr ant stock opons and restrict ed stock units to our senior management, director s, all other key employ ees, or k ey outside P ART IV (1) David L. Lacey resigned from our Board of Directors per May 11, 2021 and was succeeded by Yvonne Greenstr eet. On March 3, 2022, Yv onne Greenstreet stepped down from her posion as member of our Board of Directors. (2) In accordance with the equity plan, restrict ed stock units, once vested, will be seled against the issuance of ordinary shares in argenx SE. Such shares have no expiry date and may be held by the parcipant without limitaon (1) David L. Lacey resigned from our Board of Directors per May 11, 2021 and was succeeded by Yvonne Greenstr eet. On March 3, 2022, Yv onne Greenstreet stepped down from her posion as member of our Board of Directors. 202 | Risk Appetite & Control Risk Appetite & Control | 203 IN THIS SECTION WE WILL MAKE THE REQUIRED DISCL OSURES REGARDING OUR RISK APPETITE AND MITIGA TING ACTIONS. THE RISK MITIGA TION ACTIONS AND RISK MANAGEMENT DESCRIBED IN THIS SECTION HAVE BEEN FULL Y T AKEN INTO ACCOUNT B Y US WHEN PREP ARING THE DE - SCRIPTION OF THE MAIN RISKS AND UNCERT AINTIES WE F ACE, AS SET OUT IN SECTION 2 ” RISK FA C T O R S ” . ANY MITIGA TING LANGUAGE USED IN THIS SECTION DOES NOT HA VE ANY IMP ACT ON THE RISKS AND UNCERT AINTIES WE F ACE OR THEIR POTENTIAL ADVER SE EFFECTS AS THEY ARE DESCRIBED IN SECTION 2 “ RISK F ACTOR S ”. SECTION 2 “ RISK F ACT ORS ” DESCRIBE S THE MAIN RISKS AND UNCERT AINTIES WE F ACE ALREAD Y FULL Y HA VING T AKEN INT O ACCOUNT OUR RISK MANAGEMENT AND THE RISK MITIGA TING AC - TIONS DESCRIBED HEREIN. 4.5. 1 Introduction This Universal Regis traon Document, in applicaon of arcle 9 sub 12 of the Prospectus Regula on contains (whether in the body of the document or in the documents incorpor ated by ref erence) the inf ormaon required for us to be dis - closed in our annual nancial reporng and as such also serves as our annual report for the nancial year 2021. Under Dutch law , we are required to include in our annual report a general descripon of our willingness to migate the risks and uncertaines we face (also called our ‘risk appete’), and to give a descripon of the migang acons we have tak en with reg ard to our most relevant risks. RISK F ACTOR MEASURES T AKEN TO C ONTROL THESE RISKS W e have incurred signican t losses since our incepon and expect to incur losses for the f oreseeable future. W e may never achie ve or maintain pr otability . All but one of our product candidates ar e either in preclinical, early -stage clinical or clinical de velopment or mark et approval has been reques ted for them, but has not (yet) been gr anted, and only VYVGART™ f or the treatment of gMG has obtained regula tory approval in the U .S. and in Japan. Our trials may f ail and even if they succeed we may be unable t o commercializ e any or all of our product candida tes due to a lack of , or delay in, r egulatory approval or f or other reasons. W e have adopted a business model and str ategic porolio management appr oach to spread risks over wholly -owned progr ams as well as partnered progr ams, and to manage risks within our own propriet ary product candidates pipeline. W e connue to cr eate novel, di erenated pr oduct candidates from our propriet ar y technology pla orms which regularly feed our product candidat e pipeline. W e will face signicant challenges in successfully commercializing our pr oducts. W e plan to focus on the development and c ommercializaon of the product candidat es that we believe hav e a clear clinical and regulat or y approv al pathway and tha t we believe we can commer cialize successfully , when and if approved. Our commercializ aon strat egy for any pr oduct candidates that are appro ved will focus on k ey academic centers, specialis t physicians and adv ocacy groups, as well as on providing pa ents with support progr ams and maximizing product access and reimbursemen t. We plan to partner pr oduct candidates that we believe ha ve promising ulity in disease areas or paen t populaons that are be er served by the resources of lar ger biopharmaceucal companies. Nearly all aspects of our acvies are subject to subs tanal regulaon. No assur ance can be given that any of our pr oduct candidates will fulll r egulatory compliance. Failur e to comply with such regulaons could r esult in delays, suspension, refusals and withdraw al of approvals, as well as nes. W e are establishing a robus t quality management sys tem to ensure compliance with curr ent good laboratory pr acces, current good manuf acturing pracces and current g ood clinical pracces. W e endeavor t o stay abreas t of changes to legislaon and to ensure compliance. W e hav e strengthened our team by establishing an in-house quality assur ance department to ensure compliance. Experts at the EMA and FD A, as well as its consultants and CR Os. We striv e to develop good working relaonships with r egulators to ensur e alignment on the selected clinical development and r egulatory pathwa ys to ensure opmal regulat or y eciencies are achie ved. Furthermore, we seek to maintain a deep pr oduct candidate pipeline to allow us to potenally a void being too dependent on the success of a single asset. Nearly all aspects of our acvies are subject to subs tanal regulaon. No assur ance can be given that any of our pr oduct candidates will full r egulatory compliance. Failur e to comply with such regulaons could r esult in delays, suspension, refusals and withdraw al of approvals, as well as nes. W e have established a r obust quality management sy stem to ensure compliance with curr ent GLP , cGMP and current GCP . We endeavor t o stay abreas t of changes to legislaon and to ensure compliance. W e have str engthened our team by establishing an in-house quality assurance team t o ensure compliance. W e strive to develop good w orking relaonships with regulat ors to ensure alignment on the selected clinical dev elopment and regulatory pathwa ys to ensure opmal r egulatory eciencies are achieved. Furthermore, we seek t o maintain a deep product candidat e pipeline to allow us to poten ally avoid being too dependent on the success of a single asset. P ART IV consultan ts or advisors and in accordance with the equity incenve allocaon scheme. Our Board of Director s may also gran t stock opons and restrict ed stock units at its discreon outside of the equity incenve alloca on scheme, but only in a period when no inside informaon (as specied in our insider trading policy) is available. Per sons to whom equity incenves are gr anted cannot refuse to accept such equity incenves. The aggregat e number of shares that may be available f or the issuance of stock opons and res tricted stock units is based between the 50 th and the 75 th percenle of our ref erence group. Stock opons gr anted pursuant t o the Equity Incenve Plan shall ves t with respect to one third of the shares upon the r st anniversary of the da te of grant, with the r emaining two thirds vesng in tw enty-f our equal monthly instalments with the stock opon fully v esng upon the third anniver sar y of the date of gr ant, subject, in each case, to the oponee’ s connued sta tus. Stock opons are ex ercisable when ves ted, and in any case not a er the stock opon e xpiraon dat e included in each individual stock opon gr ant, which is (at the elecon of the oponee) either ve y ears or ten year s from the date of gr ant. Each stock opon shall be grant ed with an exer cise price equal to the fair marke t value upon the date of grant and shall have a term equal to ve or ten years from the date of gr ant. Oponees may pre fer to elect the ve year period as this may limit their personal tax obliga ons in respect of the opon in respect to the jurisdicon where opons are tax ed at gran t, compared to a ten year opon. Res tricted stock units gran ted under the Equity Incenve Plan shall v est over a period of four y ears with repect to one f ourth of the shares upon each anniver sary of the date of gran t. At the me of vesng, the holder of such res tricted stock unit receives ar genx shares f or free in the number equal to the number of res tricted stock units ves ted minus a certain number of shares requir ed to cover employ ee tax es payable by ar genx on behalf of the holder of restricted s tock units, if applicable. In the case of a (i) sale, merg er , consolidaon, tender oer or similar acquision of shar es or other transacon or series of relat ed transacons as a result of which a change in con trol occurs, (ii) sale or other disposion of all or subst anally all of argen x ’ s assets or (iii) dissoluon and/or liquidaon of ar genx, then 100% of any un vested equity incenv es shall vest. Our Board of Directors, upon approv al of a majority of the non-ex ecuve director s, may amend or terminate the Equity Incenve Plan or may amend the terms of this Equity Incenve Plan, also for any outst anding stock opons or restrict ed stock units, provided that we will compensat e any a ected oponee for any direct nega ve impact of such amendment. 4.5 Risk Appetite & Contr ol As a Dutch comefor e reading this secon, please carefully review the f ollowing cauonary sta tement: 204 | Risk Appetite & Control RISK F ACTOR MEASURES T AKEN TO C ONTROL THESE RISKS W e rely , and expect to c onnue to rely , on third pares, including independent clinical inv esgator s and CROs, to conduct our preclinical studies and clinic al trials. If these third pares do not successfully carry out their contr actual dues or meet expected deadlines, we may not be able t o obtain regulatory appr oval for or commercializ e our product candidates and our business c ould be substan ally harmed. W e endeavor to meet our con tractual obligaons and an y relevant milestone achiev ements under our collaboraon con tracts. W e endeavor t o maintain a rich pipeline of possible collaboraon partners as well as a g ood relaonship with exisng and poten al future collabor aon partners in order to limit r eliance on a limited number of collabora on partners. Furthermore, third-party contr actor selecon and management is subject to our quality management s ystem. Customary c ontractual agreements ar e put in place in an eort t o protect us from under -performance. W e are typically spreading oper aonal risks over various service provider s. Project management belongs to our cor e internal competences. W e rely on patents and other int ellectual property rights to protect our pr oduct candidates and pla orm technologies. Failur e to enforce or pr otect these rights adequately c ould harm our ability to compet e and impair our business. W e le and prosecute paten t applicaons to protect our product candidat es and technologies. We ar e doing this in close collabora on with leading expert rms in the eld of intellectual property pr otecon. In order to pr otect trade secr ets, we maintain strict conden ality standards and agreemen ts with collaborang pares. W e regularly monitor third-party int ellectual property rights within our relev ant elds and jurisdicons to avoid violang any thir d-party rights and secures licenses to such third-party rights on a need-to basis. Our future gro wth and ability to compete depends on ret aining our k ey personnel and recruing addional qualied personnel. W e oer compe ve remunera on packages and share based incenves in the form of the Equity Incenve Plan. We perf orm periodicalperiodic benchmark analy ses with an ext ernal service provider t o ensure the c ompeveness of the compensa on oer ed to our k ey personnel in comparison to other (peer group) companies. W e pay close aenon t o creang an en vironment that supports the further de velopment of the t alents of our k ey people. 4.5.2 General Description of Our Risk Appetite Our risk appete serves as a guideline for us in deciding which measures we may tak e in migang some of the risks and uncertaines we f ace. Our risk appete is aligned with our strat egy and priories. The business we opera te in is inherent - ly high-risk. In gener al, we are willing, and in our view required, to tak e signicant risks to be able to operate successfully in our line of business. Some of the risks and uncertaines we face are enr ely outside of our contr ol whereas others may be inuenced or migated. 4.5.3 Controlling Actions T aken by Us with Regard to Our Most Relev ant Risks and Uncertainties As required by Clause 2:391 sub 1 of the Dutch Civil Code in conjuncon with Guideline 400.1.110c on Annual Reporng, the following is a descripon of the main risks and uncertaines we face (being the rst risk of each cat egory of risk fac - tors set out in secon 2 “Risk Fact ors”) and a descripon of the measures we took to control them. A descripon of the expected impact upon materializ aon of these risks is included for each risk in secon 2 “Risk Fact ors” . 4.5.4 Material Impact of Risk Materialization in 2021 idened any material impact on argen x as a result of materializaon of previously idened risks and uncertaines. As set out in secon 2.2.2 “Business interrupons r esulng from the COVID-19 pandemic could c ause a disrupon of the development of our pr oducts and product candidates and adv ersely impact our business. ” , we are monitoring the impact of the COVID-19 pandemic on our oper aons. W e conduct our clinical trials globally , including in areas impacted b y COVID-19 in North America, Europe and Japan. The c onnued spread of COVID-19 has and could c onnue to adversely impact our business and operaons, including our or our thir d party partners’ discovery acvies, pr eclinical studies and clinical trials. 4.5.5 Financial Risks and Controls In running our business, we seek to implement a sustainable policy regarding int ernal contr ol and risk management. Our Board of Director s has delegat ed an acve role to its audit and compliance commiee in the design, implementaon and monitoring of an internal risk management and control sy stem to manage the signicant risks to which we are exposed. Our nancial reporng is structured within a ght frame work of budgeng, reporng and forec asng. A disncon is made between reports for int ernal and external use. External reporng at group level consis ts of an annual report (in the form of this Universal Regis traon Document), including nancial statements audited by the independent auditor , as well semi-annual reporng and quarterly updates, containing summariz ed nancial informa on. The external reports ar e based on the internal nancial reporng. Internal nancial reporng consists of extensiv e consolidated monthly reports in which current developments are com - pared to the monthly (cumulave) budgets and previous for ecasts. In addion, each quarter we reiter ate or update our for ecast for the annual results, including the cash ow posion at the end of the nancial year . The quarterly budgets are part of the annual group budget, which is prepared every year by our senior management and approved by our Board of Director s. Our specialized nance and administraon department ar e primarily responsible for evalua ng the dra internal and external reporng, bef ore these are nally approv ed by our Board of Director s. Our Board of Dire ctors discusses the nancial results of the gr oup at all formal board mee ngs, which meengs are minuted. argen x ’ s internal contr ols over nancial reporng are a subset of internal contr ols and include those policies and proce - dures that: • pertain to the maintenance of records that, in reasonable detail, accura tely and fairly r eect the transacons and dis - posions of the assets of argenx; • provide reasonable assurance that tr ansacons are rec orded as necessary to permit preparaon of nancial sta te - ments in accordance with IFRS as issued by the Internaonal Accoun ng Standar ds Board and as adopted by the EU, and that receipts and expenditures of argen x are being made only by authorized per sons; and • provide reasonable assurance reg arding preven on or mely detecon of unauthorized acquision, use or disposion of argenx’ s assets that could have a material e ect on the nancial statemen ts. Since argenx has securies regist ered with the U.S. Securies and Exchange Commission ( S EC ) and is a large accelera ted ler within the meaning of Rule 12b-2 of the U.S. Securies Exchange Act of 1934, arg enx needs to assess the eecve - ness of the internal con trols over nancial reporng and provide a report on the results of this assessment. Our Board of Director s review ed its internal contr ols over nancial reporng based on criteria established in the Internal Control – Integr ated Framew ork (2013) issued by the Commiee of Sponsoring Organiz aons of the T readw ay Commission ( COSO ) and engaged an external advisor to help assess the e ecveness of those contr ols. 4.5.6 Recent or Current De velopments in our System of Risk Management In 2021, we have further increased our aenon to pro-acve risk management by making the evaluaon of argen x ’ s core risks and uncertaines a standing discussion topic at our Board of Director s. P ART IV Risk Appetite & Control | 205 5 PA RT V General description of the Company and it’ s Shar e Capital Cont ents 5.1 Leg al Inf ormaon on the Company 208 5.2 Shar e Capital 209 5.3 Shar e Classes and Principal Shar eholders 216 5.4 Gener al meeng of Shareholder s and V ong Rights 217 5.5 An -T ak eover Pr ovisions 218 5.6 Amendments of Arcles of Associaon 218 5.7 Oblig aons of Shar eholders and Member s of the 219 Managing Board t o Disclose Holdings 5.8 Short P osions 220 5.9 Mark et Abuse Regime 220 5.10 T ranspar ency Direcve 221 5.11 Dutch Financial R eporng Super vision Act 221 5.12 Dividends and Other Distribuons 221 5.13 Financial Calendar 2022 222 5 General description of the Company and its Shar e Capital 5. 1 Legal Inf ormation on the Company 5. 1. 1 General W e were incorporat ed on April 25, 2008 in the Netherlands and under Dutch law . Our commercial name is ‘ar genx ’ and since April 26, 2017, our corporat e name is ‘ar genx SE’ . We are a Dutch European public company ( Societas E uropaea o r SE ) register ed with the trade regis ter of the Dutch Chamber of Commerce under number 24435214. Our corporate seat is in Roer dam, the Netherlands, and our registered oce is at Willemstraa t 5, 4811 AH, Breda, the Netherlands. Our tele - phone number is +31 (0) 10 70 38 441. Our websit e address is hp://www .argenx.com. Inf ormaon on the website does not form part of this Univer sal Regis traon Document and has not been scrunized or approv ed by the AFM, unless that informa on is incorpora ted by refer ence into this Universal Registr aon Document (see also 9 “Informa on incorpor ated by ref erence”). Our European legal enty idener number ( LEI ) is 7245009C5FZE6G9ODQ71. Our ordinary shares are listed on Eurone xt Brussels under ISIN Code NL0010832176 under the symbol “ ARGX” . The ADSs are list ed on Nasdaq, under the symbol “ ARGX” . 5. 1.2 Statutory / Corporate Objects Pursuant to Arcle 3 of our Arcles of Associaon, our corporat e objects are: (a) to exploit, including all acvies relang to resear ch, development, pr oducon, mark eng and commer cial exploit aon; biological, chemical or other products, processes and technologies in the life sciences sector in general, and more specically in the diagnosc, pharmaceucal, medical, cosmec, chemical and agricultural sector; (b) to design and develop instruments which may be used in medical diagnosis and aliated areas; (c) the worldwide distribuon of , sale of and rendering services rela ng to our products and subsidiaries directly to customers as well as through third pares; (d) to incorporat e, to parcipate in any way what - soever , to manage, to supervise, to operate and to promot e enterprises, businesses and companies; (e) to render advice and services to businesses and companies with which we form a group and to third pares; (f) to nance businesses and companies; (g) to borrow , to lend and to raise funds, including the issue of bonds, promissory notes or other securies or evidence of indebtedness as well as to enter into agr eements in connecon with the aforemen oned; (h) to render guaran tees, to bind us and to pledge our assets for oblig aons of the companies and enterprises with which we form a group and on behalf of third pares; (i) to obtain, alienate, manage and exploit regist ered property and items of prop - erty in general; ( j) to trade in currencies, securies and items of property in gener al; (k) to develop and trade in patents, trademark s, licenses, know-how and other industrial property rights; and (l) to perform any and all acvies of industrial, nancial or commercial nature, as well as everything pertaining the foregoing, relang there to or conducve there to, all in the widest sense of the word. 5.2 Shar e Capital 5.2. 1 Authorized and Issued Shar e Capital Under Dutch Law (Secon 2:67 of the DCC), a compan y ’ s authorized share capital sets out the maximum amount and number of shares that it may issue without amending its arcles of associaon. Our Arcles of Associaon provide f or an authorized share capit al in the amount of €9 million divided into 90 million shares, each with a nominal value of €0.10. All issued and outst anding shares hav e been fully paid up and the shares are held in dematerializ ed form. As of March 1, 2022 our issued and paid up share capital amounted to €5,190,530.8, repr esented by 51,905,308 ordinary shares with a nominal value of €0.10, each represenng an idencal fr acon of our share capital. As of March 1, 2022, neither we nor any of our subsidiaries held any of our own shares. 5.2.2 Stock Options and Restricted Stock Units In addion to the shares already outst anding , we hav e gran ted stock opons which upon ex ercise will lead to an increase in the number of our outstanding shares. A total of 5,619,113 stock opons (wher e each stock opon entles the holder to subscribe for one new or dinar y share) wer e outstanding and grant ed as of December 31, 2021. Upon exer cise of these 5,619,113 stock opons, a tot al amount of $923.4 million in stock opon ex ercise price would become pay able to argenx by the oponees, increasing the argen x ’ s share capital and share pr emium by the same amount. A total of 5,373,997 st ock opons (where each stock opon entles the holder to subscribe f or one new ordinary share) were outst anding and gran t - ed as of March 1, 2022. Upon exer cise of these 5,373,997 stock opons, a tot al amount of $910.4 million in opon ex ercise price would become pay able to argenx by the oponees, increasing ar genx ’ s share capit al by the same amount. Further , we have gran ted restricted stock units which upon ex ercise will lead to an increase in the number of our out - standing shares. A tot al of 212,253 restricted st ock units (where the holder receives restricted st ock units receives the equal number of new ordinary shares, minus a certain number of shares requir ed to cov er certain costs, if applicable) were outst anding and gran ted as of December 31, 2021. A total of 212,253 restricted st ock units (where the holder receives r estricted stock units receives the equal number of new ordinary shares, minus a certain number of shares require d to cover certain cos ts, if applicable) were outst anding and grant ed as of March 1, 2022. Apart from the stock opons and restricted st ock units grant ed under the argenx Equity Incenv e Plan, we do not currently ha ve other stock opons, res tricted stock units, opons to purchase securies, con verble securies or other rights to subscribe for or purchase securies outstanding. For stock opon inf ormaon through December 31, 2021, see note 14 “Share-based payments” in our consolidated nancial sta tements in secon 7 “Consolidated Financial Stat e - ments – audited as of and for the years ended December 31, 2021, 2020 and 2019” . 5.2.3 History of Share Capital New shares creat ed during 2019 As a result of the ex ercise of opons under the Equity Incenve Plan, 419,317 new shares were creat ed in 2019. On January 18, 2019, Johnson & Johnson Innovaon JJDC, Inc. purchased 1,766,899 of our ordinary shares at a price of €100.02 per share, totaling €176.7 million, as part of a broader license and collabora on arrang ement further described in 1.4.7 “Our Strategic P artnership with Janssen for cusatuz umab” . The shareholding of Johnson & Johnson Innovaon at the me of the issuance represent ed appro ximately 4.68% of our outstanding shar es. On November 7, 2019, we oered 4,000,000 of our ordinary shares through a global oering which consist ed of (i) a pub - lic oering of 2,010,057 ADSs in the U.S. and certain other countries outside the EEA at a price of $121.00 per ADS, be - for e underwring discounts and commissions and oering expenses; and (ii) a concurren t private placement of 2,589,943 208 | Legal Information on the Company Share Capital | 209 PA RT V of ordinary shares in the EEA at an oering price of €109.18 per share, before underwring discounts and commissions and oering expenses. On November 8, 2019, the under writer s of the oering ex ercised their over -allotment opon to purchase 600,000 addional ADSs in full. As a result, we receiv ed $556.3 million of gross proceeds from this oering, decreased by $25.7 million of underwriter discounts and commissions, and oering expenses, of which $25.5 million has been deducted from equity . The total net cash proceeds from the oering amount ed to $530.6 million. As a result of these developments, ar genx ’ s share capital incr eased from 35,975,312 shares as of January 1, 2019 to 42,761,528 shares as of December 31, 2019. New shares creat ed during 2020 As a result of the ex ercise of opons under the Equity Incenve Plan, 602,461 new shares were creat ed in 2020. On May 28, 2020, we oered 3,658,515 of our ordinary shares through a global oering which consist ed of (i) a public oering of 2,584,138 ADSs in the U.S. and certain other countries outside the EEA at a price of $205.00 per ADS, befor e underwring discounts and commissions and o ering expenses; and (ii) a concurrent privat e placement of 1,074,377 ordinary shares in the EEA at an oering price of €186.52 per share, befor e underwring discounts and commissions and oering e xpenses. On May 29, 2020, the under writer s of the oering ex ercised their over-allotmen t opon to purchase 548,777 addional ADSs in full. As a result, we receiv ed $872.3 million of gross proceeds from this oering, decreased by $52.7 million of underwriter discounts and commissions, and oering expenses, of which $52.7 million has been deduct - ed from equity . The total net cash proceeds from the oering amount ed to $813.3 million. As a result of these developments, ar genx ’ s share capital incr eased from 42,761,528 shares as of January 1, 2020 to 47,571,283 shares as of December 31, 2020. New shares creat ed during 2021 As a result of the ex ercise of opons under the Equity Incenve Plan, 503,282 new shares were creat ed in 2021. On February 2, 2021, we o ered 3,125,000 of our ordinary shares through a global oering which consisted of (i) a public oering of 1,608,000 ADSs in the U.S. and certain other countries outside the EEA at a price of $320.00 per ADS, befor e underwring discounts and commissions and o ering expenses; and (ii) a concurrent privat e placement of 1,517,000 ordinary shares in the EEA at an oering price of €265.69 per share, befor e underwring discounts and commissions and oering expenses. On February 4, 2021, the underwriter s of the oering ex ercised their over-allotmen t opon to purchase 468,750 addional ADSs in full. As a result, we receiv ed $1,146.7 million of gross proceeds from this oering, decreased by $56.0 million of underwriter discounts and commissions, and oering expenses, of which $56.0 million has been deducted from equity . The total net cash proceeds from the oering amount ed to $1,090.1 million. 5.2.4 American Depository Shares In connecon with our IPO on Nasdaq, the Bank of New Y ork Mellon, as depositary , register ed and delivered American Depositary Shares, also ref erred to as ADSs. Each ADS repr esents one share (or a right to receive one share) deposited with ING Bank N. V ., as custodian for the depositary in the Netherlands. Each ADS also represents an y other securies, cash or other property which may be held by the depositary . The depositary ’ s oce at which the ADSs are administer ed is located at 101 Barcla y Street, New Y ork, New Y ork 10286. The Bank of New Y ork Mellon’ s principal execuv e oce is locat ed at 225 Liberty Street, New Y ork, New Y ork 10286. An ADS holder will not be treated as one of our shareholders and does not have shareholder rights. Dutch law governs shareholder rights. The depositary will be the holder of the shares underlying the ADSs. A regis tered holder of ADSs has ADS holder rights. A deposit agreement among us, the depositary , ADS holders and all other persons indirectly or benecially holding ADSs sets out ADS holder rights as well as the rights and obligaons of the depositary . New Y ork law governs the deposit agreement and the ADSs. The depositary has agreed to pay or distribute to ADS holders the cash dividends or other distribuons it or the custodian receives on shares or other deposited securies, upon paymen t or deducon of its fees and expenses. ADS holders will receive these distribuons in proporon to the number of shares their ADSs represen t. An ADS holder may surr ender his ADSs at the depositary’ s oce. Upon payment of its fees and expenses and of any tax es or charges, such as stamp tax es or stock transf er taxes or f ees, the depositary will deliver the shares and any other deposited securies underlying the ADSs to the ADS holder or a person the ADS holder designates at the oce of the custodian. Or , at an ADS holder ’ s request, risk and expense, the depositary will deliver the deposited securies at its oce, if f easible. The depositary may charge the ADS holder a f ee and its expenses for instrucng the custodian reg arding delivery of deposited securies. ADS holders may instruct the depositary how to vote the number of deposited shares their ADSs 210 | Share Capital Share Capital | 211 PA RT V Number of shares outst anding on December 31, 2019 42,761,528 Number of shares outst anding on December 31, 2020 47,571,283 Exer cise of opons in January 2021 108,785 Exer cise of opons in February 2021 21,184 Global oering on Nasdaq and Eur onext on February 2, 2021 3,125,000 Over -allotment opon ex ercised by underwriters on February 4, 2021 468,750 Exer cise of opons in March 2021 16,398 Exer cise of opons in April 2021 2,244 Exer cise of opons in May 2021 19,152 Exer cise of opons in June 2021 65,867 Exer cise of opons in July 2021 41,069 Exer cise of opons in August 2021 56,394 Exer cise of opons in September 2021 18,895 Exer cise of opons in October 2021 1,029 Exer cise of opons in November 2021 13,581 Exer cise of opons in December 2021 138,684 Number of shares outst anding on December 31, 2021 51,668,315 Exer cise of opons in January 2022 236,593 Exer cise of opons in February 2022 400 Number of shares outst anding on March 1, 2022 51,905,308 The following t able shows the developments in our share c apital for the nancial year s 2021 and 2022 up to March 1, 2022: repre sent. If we request the depositary to solicit the ADS holders’ vong instrucons (and we are not required to do so), the depositary will nofy them of a General Meeng and send or make vong materials a vailable to them. Those mate - rials will describe the maer s to be voted on and explain how ADS holders may instruct the depositary how to vote. For instrucons to be valid, they must reach the depositary by a date set by the depositary . The depositary will try , as far as pracc al, subject to Dutch law and the pro visions of our Arcles of Associaon or similar documents, to vote or to have its agents vote the shares or other deposited securies as instructed by ADS holders. If we do not request the deposi - tary to solicit the ADS holders’ vong instrucons, an ADS holder can sll send vong instrucons, and, in that case, the depositary may try to vote as he instructs, but it is not required to do so. In any even t, the depositary will not exer cise any discreon in vong deposited securies and it will only vote or aempt to vot e as instructed or as described in the following sent ence. If we ask ed the depositary to solicit an ADS holder ’ s instrucons at least 45 days befor e the meeng date but the depositary does not receiv e vong instrucons from an ADS holder by the specied date, it will consider such ADS holder to hav e authorized and direct ed it to give a discreonary proxy to a person designat ed by us to vote the number of deposited securies repr esented by its ADSs. The depositary will give a discreonary pro xy in those circum - stances to vot e on all quesons to be voted upon unless we nofy the depositary that: • we do not wish to receive a discreonary pro xy; • ther e is substan al shareholder opposion to the parcular queson; or • the parcular queson would have an adver se impact on our shareholders. W e are required to nofy the depositary if one of the condions specied above exists. In order to give an ADS holder a reasonable opportunity to instruct the depositary as to the ex ercise of vong rights relang to our shares, if we request the depositary to act, we agree to give the depositary noce of any meeng and details concerning the maers to be voted upon at least 30 days in advance of the meeng date. 5.2.5 Issue of Shares The Arcles of Associaon provide that shares ma y be issued or rights to subscribe f or our shares ma y be gran ted pur - su¬ant to a resoluon of the shareholder s at the General Meeng, or alternavely , by our Board of Directors if so designat - ed by the shareholders at the Gener al Meeng. A resoluon of the shareholders at the General Meeng to issue shar es, to gran t rights to subscribe for shares or to designat e our Board of Direct ors as the corporat e body authorized t o do so can only tak e place at the proposal of our Board of Directors with the consent of the majority of the non-ex ecuve director s. Shares may be issued or rights to subscribe f or shares may be grant ed by resoluon of our Board of Directors, if and inso - far as our Board of Direct ors is designated to do so by the shareholders at the Gener al Meeng. Designaon by resoluon of the shareholders at the Gener al Meeng cannot be withdrawn unless determined otherwise at the me of designaon. The scope and duraon of our Board of Direct ors’ authority to issue shares or grant righ ts to subscribe f or shares (such as granng s tock opons or issuing con verble bonds) is determined by a resoluon of the shareholders at the General Meeng and relat es, at the most, to all unissued shares in argenx’ s authorized capital a t the relev ant me. The duraon of this authority may not ex ceed a period of ve year s. Designaon of our Board of Direct ors as the body authorized to issue shares or gran t rights to subscribe for shares may be e xtended by a resoluon of the shareholders at the General Meeng for a period not ex ceeding ve years in each case. The number of shares that may be issued is determined at the me of designaon. No shareholder s’ resoluon or Board of Directors’ r esoluon is requir ed to issue shares pursuant to the ex er - cise of a previously gran ted right to subscribe for shares. A resoluon of our Board of Direct ors to issue shares and to gran t rights to subscribe f or shares can only be tak en with the consent of the majority of the non-execuve dir ectors. On May 11, 2021, the shareholder s at the General Meeng designated our Board of Director s as the corpora te body competen t to issue addional shares and grant rights to subscribe for shares up to a maximum of 10% of the outstanding capital at the date of the general meeng, and to limit or ex clude pre-empve rights of shareholders for such shares with the prior consent of the majority of the non-execuve dir ectors for a period of 18 months. 5.2.6 Pre-Emption Rights Dutch law (Secon 2:96a of the DCC) and the Arcles of Associaon give shareholders pre-empv e rights to subscribe on a pro rat a basis for an y issue of new shares or , upon a grant of rights, to subscribe for shares. Holders of shares hav e no pre-empv e rights upon (1) the issue of shares against a payment in kind (being a contribuon other than in cash); (2) the issue of shares to our employees or the employees of a member of our group; and (3) the issue of shares to persons ex ercising a previously grant ed right to subscribe for shares. A shareholder may ex ercise pre-empve rights during a period of at least two weeks from the date of the announcement of the issue of shares. Pursuant to the Arcles of Associaon, the shareholders at the General Meeng may res trict or ex clude the pre-empv e rights of shareholders. A resoluon of the shareholders at the General Meeng to res trict or ex - clude the pre-empve rights or to designate our Board of Directors as our corpora te body authorized to do so, ma y only be adopted on the proposal of our Board of Director s with the consent of the majority of the non-execuv e director s. A resoluon of the shareholders at the General Meeng to ex clude or restrict pre-empv e rights, or to authorize our Board of Director s to ex clude or res trict pre-empv e rights, requir es a majority of at least two-thirds of the votes cas t, if less than 50% of our issued and outstanding share capit al is present or represen ted at the General Meeng. With respect to an issuance of shares pursuan t to a resoluon of our Board of Direct ors, the pre-empve rights of shareholder s may be restrict ed or ex cluded by resoluon of our Board of Directors if and insofar as our Board of Directors is designated to do so by the shareholder s at the General Meeng. A resoluon of our Board of Direct ors to restrict or ex clude pre-empve rights can only be tak en with the consent of the majority of the non-ex ecuve directors. The designaon of our Board of Director s as the body competent to res trict or ex clude the pre-empve rights ma y be extended by a resoluon of the shareholders at the General Meeng for a period not exceeding ve year s in each case. Designaon by resoluon of the shareholders at the General Meeng cannot be withdrawn unless determined otherwise at the me of designaon. See also 5.2.5 “Issue of Shares” with respect to the current right of the Board of Director s to limit or exclude pre-empv e rights. 5.2. 7 Acquisition of Shares in argenx’s Capital W e may not subscribe for our own shares on issue. We may acquire fully paid-up shares at any time for no consider - atio n or , if: • our shareholders’ equity less the paymen t requir ed to mak e the acquision, does not fall below the sum of called-up and paid-in share capital and any statut ory reserves; • we and our subsidiaries would thereaer not hold shares or hold a pledge over shares with an aggregat e nominal value ex ceeding 50% of our issued share capital; and • our Board of Director s has been authorized theret o by the shareholders at the General Meeng. As part of the authorizaon, the shareholder s at the General Meeng must specify the number of shares that may be repur chased, the manner in which the shares may be acquired and the price rang e within which the shares may be acquired. An authorizaon by the shareholders at the General Meeng to our Board of Director s for the repurchase of shares can be grant ed for a maximum period of 18 months. No authorizaon of the shareholder s at the General Meeng is required if ordinary shares are acquired by us with the intenon of transf erring such ordinary shares to our employees under the Equity Incenve Plan. A resoluon of our Board of Director s to repur chase shares can only be tak en with the consent of the majority of the non-ex ecuve directors. Shares held by us in our own share capital do not carry a right to any distribuon. Furthermore, no vong rights may be ex ercised for any of the shares held by us or our subsidiaries unless such shares a are subject to the right of usufruct PA RT V 212 | Share Capital Shar e Capital | 213 P ART VII This is the story of Lisa Ann fr om Boston, New Y ork Lisa Ann Lisa Ann was working as an owner of a small photograph y rm in Sarat oga Springs, New Y ork when she had her rst autoimmune a ack. 214 | Patient Story Patient Story | 215 P ART VI Since geng sick, Lisa Ann has spent a lot of me with other people diagnosed with pemphigus vulgaris. In these conver saons, she also hears about the emoonal stress f or car egivers, which Lisa has not had to consider in her disease journey . Lisa Ann discusses her experience in tackling the disease without a regular caregiver: “I didn‘t have a caregiv er , so I didn‘t have to worry about somebody else‘s emoonal connecon. I didn‘t have so - mebody forcing me to get out of bed and go to work. If I didn‘t wan t to put clothes on because my whole back was raw , and a lot of my front was ra w , that was ne. I kind of see it as an advant age that I lived alone, that I was able to not pull anybody into this drama. ” Live today , not in the future. Finally having the pemphigus vulgaris diagnosis has led to some big changes in Lisa Ann’ s life, including a new perspecve on how she wants to live her life aer many year s of leng her symptoms and disease drive her de - cisions. Here is what she had to say on her ‘ carpe diem’ atude: “Y ou know , there‘s a di erence between living your life the way you wan t to live it and living in fear all the me. I choose to live my life, which includes geng on the motorcy cle and going and feeling that wind in my face and feeling the sun on my body . I choose to live this way because I could have died in my bedroom with half of my skin. I could have died on my bathroom oor but I didn‘t. I choose to live today , not in the future. “ Patient Story or to a pledge in fa vor of a person other than us or its subsidiaries and the vong rights wer e vest ed in the pledgee or usufructuary befor e us or its subsidiaries acquired such shares. Neither we nor our subsidiaries may ex ercise vong rights in respect of shares for which we or our subsidiaries have a right of usufruct or a pledge. 5.2.8 R eduction of Share Capital The shareholders at the General Meeng may , upon a proposal of our Board of Director s with the consent of the ma - jority of the non-ex ecuve director s, resolve to reduce the issued share capit al by cancelling shares or by amending the Arcles of Associaon to reduce the nominal value of the shares. Only shares held by us or shares for which we hold the depositary receipts may be cancelled. A resoluon of the shareholders at the General Meeng to reduce the number of shares must designate the shares to which the resoluon applies and must lay down rules for the implementa on of the resoluon. A resoluon to reduce the issued share capital requires a majority of at least two-thirds of the votes cast, if less than 50% of our issued and outstanding shar e capital is present or repr esented at the General Meeng. 5.3 Shar e Classes and Principal Shareholders As at March 1, 2022 the issued share capital of argenx SE amounts to €5,190,530.8 and is represented by 51,905,308 ordinary shares. There are only ordinary shares, and there are no special rights aached to any of the ordinary shares, nor special shareholder rights, including vong rights, for any of our shareholder s. Any subs tanal holding and gross short posions in issuing instuons and shares with special controlling rights hav e to be noed. An issuing instuon is a public limited company (naamloz e vennootschap) incorporat ed under Dutch law whose (depositary receipts f or) shares are admied to trading on a regula ted market in the Netherlands or in another member sta te of the European Union or an EEA Sta te, or a legal enty incorpora ted under the law of a st ate that is not an EU mem - ber sta te and whose (depositary receipts f or) shares are admied to tr ading on a regulat ed market in the Netherlands. As soon as the substan al holding or short posion equals or exceeds 3% of the issued capital, the holder should report this. Subsequently , it should nofy the AFM again when his substanal holding or short posion consequently reaches, ex ceeds or falls below a threshold. This can be caused by the acquision or disposal of shares by the shareholder or be - cause the issued capital of the issuing instuon is increased or decreased. Pursuant to chapter 5.3 of the DFSA, relevant thresholds are: 3%, 5%, 10%, 15%, 20%, 25%, 30%, 40%, 50%, 60%, 75% and 95%. Pursuant to a dra Dutch legislav e proposal published for consult aon on May 23, 2019 (the consultaon period of which ended on July 4, 2021), a thresh - old of 2% may be added to this list, however , it is not yet clear if and when this change will enter into e ect. The duty to nofy applies to legal enes as well as natural persons. As of the date of this Universal R egistraon Document, the following major shareholdings fall under the mandatory noce provisions of chapter 5.3 of the DFSA on the basis of informaon provided by the shareholders and/ or the public regist er of all nocaons made available pursuan t to the DFSA at the AFM’ s website up to the date of this Universal Regis traon Document (see also secon 5.2 “Gener al Descripon of Share Capital” on page 207 and further). No share - holdings above 3% were reported to the Company directly . The total number of stock opons and restricted stock units outstanding as of March 1, 2022 amounts to 5,586,250. At the date of this Universal R egistraon Document, we are not directly or indirectly owned or controlled by any share - holder , whether individually or acng in concert. We are not awar e of any arrang ement that may , at a subsequent date, result in a change of control of our company . At the date of this Universal R egistraon Document, as far as we are awar e, there are no direct or indirect relaonships between us and any of our signicant shareholders. 5. 4 General meeting of Shar eholders and V oting Rights The Arcles of Associaon provide that he annual general meeng must be held on the second T uesday of the month May . Other general meengs will be held whenever our Board of Director s deems such to be necessary . Shareholder s repre senng alone or in ag greg ate at least one-tenth of our issued and outstanding shar e capital ma y , pursuant to the Dutch Civil Code, request that a general meeng be convened. Within three months of it becoming apparent to our Board of Director s that our equity has decreased to an amount equal to or lower than one-half of the paid-in and called- up capital, a general meeng would be held to discuss any requisite measures. W e will give noce of each gener al meeng by publicaon on our website and furthermore, to the extent requir ed, in another manner in accor dance with the applicable stock ex change regulaons. The noce con vening any general meeng must include, among other items, an agenda indicang the place and date of the meeng, the items for discussion and vong, the proceedings for registr aon including the regis traon date, as well as any proposals for the agenda. Pursuant to Dutch law , shareholders holding at least 3% of our issued and outstanding share capit al hav e a right to request our Board of Director s to include items on the agenda of the general meeng. Our Board of Director s must agree to these requests, pr ovided that (i) the request was made in wring and movat ed, and (ii) the request was received by the Chair of our Board of Directors at least sixty days prior to the date of the general meeng. Our Board of Directors must give noce of a general meeng, by at least such number of days prior to the day of the meeng as required by Dutch law , which is currently forty -two days. Each shareholder (as well as other persons with vong rights or meeng rights) may aend the general meeng, to address the general meeng and, in so far as they have such right, to exer cise vong rights pro ra ta to its shareholding, PA RT V 216 | Share Classes and Principal Shareholders General meeting of Shareholders and V oting Rights | 217 Name of Benecial Owner Number of shares Capital inter est (percent age) Number of vong rights V ong rights (percent age) T . Rowe Price Gr oup, Inc. (1) 4,998,028 (2) 11.68 4,927,064 (3) 11.51 FMR LLC (1) 5,025,092 (4) 9.80 5,025,092 (4) 9.80 Arsan Inves tments GP LLC (1) 2,575,257 (5) 5.02 2,575,257 (5) 5.02 Feder ated Equity Management Compan y of Penns ylvania (1) 1,895,001 (6) 4.97 1,895,001 (6) 4.97 Johnson & Johnson Innovaon – JJDC, Inc. (1) 1,766,899 4.66 1,766,899 4.66 The V anguard Group (1) 1,978,464 4.16 0 0 BlackRock, Inc. (1) 2,397,921 (8) 4.64 2,774,397 (8) 5.37 Baillie Gior d & Co. (1) 0 0 2,966,216 6.24 W ellington Management Gr oup LLP (1) 0 0 2,276,361 (9) 4.81 (1) Based on the number of shares reported in, and at the me of , the most recent transpar ency nocaon led with the AFM. (2) Consisng of 1,571 ordinary shares and 4,996,457 ADSs. There is a more recent SEC ling which sets out a number of 5,603,556 shares. (3) Consisng of vong rights on 1,571 ordinary shares and 4,925,493 ADSs. (4) There is a more recent SEC ling which sets out a number of 4,876,317 shares. (5) Consisng of 105,864 ordinary shares and 2,469,393, according to the AFM ling, depository receipts and the respecve number of vong rights. There is a more recent SEC ling which sets out a number of 3,180,665 shares. (6) Consisng of 1,522,200 ordinary shares and 372,801 ADSs and the respecve number of vong rights. (7) Consisng of 1,718,968 ordinary shares and 678,953, according to the AFM ling, depository receipts. (8) Consisng of vong rights on 2,050,038 ordinary shares and 724,359, according to the AFM ling, depository receipts (9) Consisng of vong rights on 1,545,652 ordinary shares, 729,479 ADSs and 1,230 equity swaps. either in person or by proxy . Shareholders may ex ercise these rights, if they are the holders of shares on the regis - tra on date which is currently the 28th day befor e the day of the meeng, and they or their pro xy have noed our Board of Directors of their intenon to aend the meeng in wring at the address and by the date specied in the noce of the meeng. Each shareholder ma y cast one vote f or each ordinary share held. Members of our Board of Directors ma y aend a gener al meeng in which they have an advisory role. The vong rights aached to shares ar e suspended as long as such shares are held by us. Resoluons of the general meeng are tak en by an absolute majority , excep t where Dutch law or our Arcles of Associa - on provide for a qualied majority or unanimity . One general meeng was held in 2021. The annual general meeng was held on May 11, 2021. In this meeng decisions were tak en on the adopon of the new remuneraon policy , the approval of the 2020 remuneraon report, the adopon of the 2020 annual accounts, the allocaon of losses in the nancial year 2020, the release of the members of our Board of Director s from liability for their respecve dues carried out in the nancial year 2020, the appointment of Yvonne Greenstr eet as non-ex ecuve director to our Board of Director s, the reappointment of Anthon y Rosenber g as non-ex ec - uve director to our Board of Director s, the authoriza on of our Board of Directors to issue shares and grant rights to subscribe for shares in our share capital up to a maximum of 10% of the outstanding capital at the date of the general meeng for a period of 18 months from the general meeng and to limit or exclude st atutory pre-empve rights, and the appointment of Deloie Account ants B. V . as external auditor of argenx f or the 2021 nancial year . 5.5 Anti- T ak eover Pr ovisions V arious protecv e measures are possible and permissible within the boundaries set by Dutch law and Dutch case law . W e have not implemented specic measures with the aim of deterring tak eover aempts. However , we have adopted sever al provisions that may have the e ect of making a takeov er of argen x more dicult or less aracve, including require ments that certain maers, including an amendment of our Arcles of Associaon, may only be brough t to our shareholder s for a vote upon a proposal by our Board of Directors. No tak eover bid has been insg ated by third pares in respect of our equity during the previous nancial year and the curren t nancial year . 5.6 Amendments of Articles of Association The shareholder s at the General Meeng ma y resolve to amend the Arcles of Associaon, a t the proposal of our board of director s, with the consent of the majority of the non-ex ecuve director s. A resoluon by the shareholder s at the General Meeng to amend the Arcles of Associaon r equires a simple majority of the votes cas t in a meeng in which at least half of our issued and outstanding capit al is present or repr esented, or at least tw o-thirds of the votes cas t, if less than half of our issued and outstanding capit al is present or repr esented at that meeng. Changing the rights of any of the shar eholders will require the Arcles of Associa on to be amended. 5. 7 Obligations of Shar eholders and Members of the Managing Boar d to Disclose Holdings Shareholder s may be subject to nocaon obliga ons under the DFSA. Pursuant to chapter 5.3 of the DFSA, any per - son who, directly or indirectly , acquires or disposes of an actual or potenal capital int erest and/or vong rights must immediately give wrien noce to the AFM of such acquision or disposal by means of a standar d form if , as a result of such acquision or disposal, the percentag e of capital inter est and/or vong rights held by such person reaches, ex ceeds or falls below the following thresholds: 3%, 5%, 10%, 15%, 20%, 25%, 30%, 40%, 50%, 60%, 75% and 95%. Pursuant to a dra Dut ch legislave proposal published f or consulta on on May 23, 2019 (the consultaon period of which ended on July 4, 2021), a threshold of 2% may be added to this list, however , it is not yet clear if and when this change will enter into e ect. In addion, any person whose capital int erest or vong rights reaches, exceeds or falls below a threshold due to a change in our outstanding share capit al, or in votes that can be cast on the shares as noed to the AFM by us, should nofy the AFM no later than the f ourth trading da y aer the AFM has published our nocaon of the change in its outstanding share capital. Each person holding an interes t in our share capital or vong rights of 3% or more at the me of admission of our shares to trading must immediat ely nofy the AFM. Furthermore, every holder of 3% or more of our share capital or vong rights whose interes t at 31 December at midnight diers fr om a previous nocaon to the AFM must nofy the AFM within four weeks. For the purpose of calculang the percen tage of capital interes t or vong rights, the following inter ests must be taken into account: (i) shares and/or vong rights dir ectly held (or acquired or disposed of) by any per son, (ii) shares and/or vong rights held (or acquired or disposed of) by such person’ s subsidiaries or by a third party for such person’ s account or by a third party with whom such person has concluded an oral or wrien vong agreement, (iii) vong rights acquired pursuant to an agreemen t providing f or a temporary tr ansfer of vong rights in consideraon f or a payment, and (iv) shares and/or vong rights which such person, or any contr olled enty or third party ref erred to above, may acquire pursuant to an y opon or other right to acquire shares and/or the aached vong rights. Special rules apply to the aribuon of shares and/or vong rights that are part of the property of a partnership or other form of joint ownership. A holder of a pledge or right of usufruct in respect of shares can also be subject to nocaon obligaons, if such person has, or can acquire, the right to vote on the shares. The acquision of (condional) vong rights by a pledgee or benecial owner may also trigger nocaon obligaons as if the pledgee or benecial owner were the legal holder of the shares and/or vong rights. W e are required to nofy the AFM promptly of any change of 1% or more in our issued and outst anding share capital or vong rights since the previous nocaon. The AFM must be noed of other changes in our issued and out - standing share capit al or vong rights within eight days aer the end of the quarter in which the change occurred. The AFM will publish all our nocaons of our issued and outstanding share capital and vong rights in a public register . If a person’ s capital int erest and/or vong rights reach, ex ceed or fall below the above-menoned thresholds as a result of a change in our issued and outstanding share capital or vong rights, such person is required to mak e a nocaon not later than on the fourth trading day a er the AFM has published our nocaon as described above. Furthermore, each member of our Board of Director s and certain other persons who, inter alia, have (co-)managerial responsibilities, as well as certain persons closely associated with any such members or other persons, must immedi - ately give written notice to the AFM by means of a standar d form of any change in his or her holding of our shares and voting rights. 218 | Anti- T akeover Provisions Oblig ations of Shareholders and Members of the Managing Board to Disclose Holdings | 219 PA RT V 220 | Short Positions T ransparency Directive | 221 PA RT V 5.8 Short P ositions Each person holding a net short posion amounng to 0.2% or more of the issued share capital of a Dutch listed compa - ny must report it to the AFM. Each subsequent increase of this posion by 0.1% above 0.2% will also have to be report ed. Each net short posion equal to 0.5% of the issued share capital of a Dutch-list ed compan y and any subsequent increase of that posion by 0.1% will be made public via the AFM short selling register . T o calculate whether a natural person or legal person has a net short posion, their short posions and long posions must be set o . A short transacon in a share can only be contracted if a reasonable case can be made that the shares sold can actually be deliver ed, which require s conrmaon of a third party that the shares have been located. There is also an obligaon to nofy the AFM of gross short posions. The nocaon thresholds are the same as apply in respect of the nocaon of actual or potenal capital int erests in the capital and/or vong rights, as described above. The AFM keeps a public register of all nocaons made pursuant to these disclosure obliga ons and publishes any no - caon receiv ed. In 2021, no short posion was declared to the AFM. 5.9 Mark et Abuse Regime The Marke t Abuse Regulaon (Regula on EU nr . 596/2014, MAR ) and relat ed Commission Implemenng Regulaons and Delega ted Regulaons, provide for specic rules that intend to prev ent market abuse, such as the prohibions on insider trading, divulging inside informaon and pping, and mark et manipulaon (the European Union Mark et Abuse Rules ). W e are subject to the European Union Marke t Abuse Rules and non-compliance with these rules may lead to criminal nes, administra ve nes, imprisonment or other sancons. The European Union Marke t Abuse Rules on mark et manipulaon may res trict our ability to buy back its shares. In certain cir - cumstances, our inves tors can also be subject to the European Union Mark et Abuse Rules. Pursuant t o Arcle 19 MAR (“Manag - ers’ transacons”), members of our Board of Directors and any senior e xecuve who has regular access to inside inf ormaon re - lang dir ectly or indirectly t o us and has the power to t ake manag erial decisions aecng the future dev elopments and business prospects of us, (persons dischar ging managerial responsibilies, PDMRs ), must nofy the AFM of every transacon conducted on their own account rela ng to our shar es or debt instrumen ts or to deriv aves or other nancial instruments link ed theret o. In addion, certain persons closely associa ted with our PDMRs must also nofy the AFM of every transacon c onducted on their own account r elang to our shares or debt instrumen ts or to derivaves or other nancial ins truments linked ther eto. MAR determines the f ollowing categories of per sons: (i) the spouse or any partner considered by na onal law as equivalent to the spouse, (ii) dependent childr en, (iii) other relaves who hav e shared the same household for at leas t one year at the relev ant transacon dat e and (iv) a legal person, trust or partner ship, the managerial responsibilies of which are dis - charged by a per son discharging managerial responsibilies or by a per son ref erred to in point (i), (ii) or (iii), which is directly or indirectly con trolled by such a person, which is set up f or the benet of such a person, or the economic int erests of which are subs tanally equivalent t o those of such a person. These nocaons must be made no lat er than on the third business day f ollowing the transacon date and b y means of a standard f orm. The nocaon may be postponed un l the moment that the value of the tr ansacons performed f or the PDMR that person’ s own account, or transacons carried out b y the persons closely associat ed with that person, reaches or e xceeds an amount of €5,000 in the calendar y ear in queson. The AFM keeps a public register of all nocaons under arcle 19 MAR. Third pares can request to be noed auto - macally by e-mail of changes to the public regist er . Pursuant MAR, we will maintain a list of its insiders. In addion, to further ensure compliance with MAR, we have adopted an internal policy relang to the possession of and transacons by members of our PDMRs and employees in our shares or in nancial instruments of which the value is (co)det ermined by the value of our shares. Our Insider T rading P olicy has been published on our website on hps://www .argenx.com/ inves tors/ governance/rules-codes-compliance. 5. 10 T ransparency Dir ective W e are a European public company with limited liability ( Societas E uropaea or SE ) incorpora ted and existing under the laws of the Netherlands. The Netherlands is our European Union home member sta te ( lidstaat van herkoms t ) for the purposes of Directive 2004/109/EC (as amended by Directive 2013/50/EU), or the T ransparency Directive, as a consequence of which we are subject to the DFSA in respect of certain ongoing transpar ency and disclosure obliga - tions. In addition, as long as our shares are listed on Euronext Brussels and the ADSs on Nasdaq, we are required to disclose any regulated informa tion which has been disclosed pursuant to the DFSA as well in accordance with the Bel - gian Act of May 2, 2007, the Belgian Ro yal Decree of November 14, 2007 and Nasdaq listing rules. We must publish our annual accounts within four months after the end of each financial year and our half- yearly figures within two months after the end of the first six months of each financial year . Within five calendar day s after adoption of our annual accounts, we must file our adopted annual accounts with the AFM. Pursuant to the DFSA, we will be requir ed, among other things, to mak e public without delay any change in the rights att aching to our shares or any rights to subscribe our shares. 5. 11 Dutch Financial Reporting Supervision Act The Dutch Financial Reporting Supervision Act ( Wet t oezicht financiële verslaggeving ) (the D FSA ) applies to finan - cial year s starting from 1 Januar y 2006. On the basis of the DFSA, the AFM supervises the application of financial reporting standards by , among others, companies whose corpora te seat is in the Netherlands and whose securities are listed on a Dutch Regula ted Mark et or foreign stock exchang e. Pursuant to the DFSA, the AFM has an inde - pendent right to (i) request an explanation from us reg arding its application of the applicable financial reporting standar ds and (ii) recommend to us the making available of further explana tions. If we do not comply with such a request or recommenda tion, the AFM may request that the Enterprise Chamber order us to (i) make available fur - ther explana tions as recommended by the AFM, (ii) provide an explana tion of the way we have applied the applica - ble financial reporting standar ds to its financial reports or (iii) prepare our financial reports in accor dance with the Enterprise Chamber ’ s instructions. This Universal Regis traon Document also concerns the annual nancial reporng within the meaning of 5:25c(2) DFSA. 5. 12 Dividends and Other Distributions W e have not paid or declared any cash dividends on our ordinary shares, and we do not ancipate paying an y cash dividends in the for eseeable future. All of our outstanding shares hav e the same dividend rights. We intend to re tain all av ailable funds and any future earnings to fund the development and expansion of our business. Ev en if future opera ons lead to signicant levels of distributable prots, we curr ently intend that any earnings will be re¬in vested in our business and that cash dividends will not be paid unl we have an established revenue s tream to support connuing cash dividends. In addion, paymen t of any future dividends to shareholders would be subject to shareholder approv al at our General Meeng, upon proposal of our Board of Direct ors, which proposal would be subject to the approval of the majority of the non-ex ecuve director s aer taking int o account various f actors including our busi - ness prospects, cash requiremen ts, nancial performance and new product development. 222 | Financial Calendar 2022 Under Dutch law , a Dutch European public company with limited liability (Societas Europaea or SE) may only pay dividends if the shareholders’ equity (eigen vermogen) ex ceeds the sum of the paid-up and called-up share capital plus the reserves requir ed to be maintained by Dutch law or our Arcles of Associaon. Subject to such restricons, any future det ermina - on to pay dividends would be at the discreon of the shareholder s at our General Meeng. Our Arcles of Associaon, as incorpor ated into this URD by re ference (see secon 9 “Informaon incorpor ated by ref er - ence”) contain the pro vision on the distribuon of prots in its arcle 20 (Prots, distribuons and losses). 5. 13 Financial Calendar 2022 March 3, 2022 full year and f ourth quarter 2021 nancial results May 5, 2022 rst quarter 2022 nancial results May 10, 2022 annual general meeng July 28, 2022 half year and second quarter 2022 nancial results October 27, 2022 third quarter 2022 nancial results 6 P ART VI Operating and Financial R eview Cont ents 6.1 Ov er view 226 6.2 Basis of P resent aon 227 6.3 Capit aliza on and Indebtedness 233 6.4 Cric al Accounng P olicies and Signicant Judg ements 234 and Esma tes 6.5 R esults of Opera on 235 6.6 Liquidity and Capit al Resour ces 241 6.7 O -Balance Sheet Arr angements 243 6.8 Con tractual Oblig aons 243 6.9 Financial St atemen ts 244 6.10 Informa on Reg arding the Independent Audit or 244 6.11 Material Contr acts and R elated P arty T ransacons 244 6.12 Employees 246 6.13 Legal and Arbitr aon Pr oceedings 247 6.14 Insur ance 247 6 Operating and Financial r eview 6. 1 Overview Since our inception in 2008, we hav e focused most of our financial resources and efforts towar ds developing our SIMPLE Antibody ™ Platform and antibody engineering technologies, identifying potential product candidates, establishing process, development and manufacturing capabilities for our product candidates and advancing multiple discovery progr ams into the clinic. W e are advancing a deep pipeline of both clinical- and preclinical-st age product candidat es for the trea tment of neuromuscular , hematology , dermatology and nephrology indications within our growing commercial franchises. Lever aging our technology suite and clinical expertise, we have advanced sever al candidat es into late-st age clinical development and we currently hav e multiple programs in the discovery stage. Through December 31, 2021, we have raised an aggregat e gross proceeds of $3,514.4 million, including: i. an aggregat e of $65.3 million (€46.0 million) from the private placement of equity securies in 2008, 2009 and 2011; ii. $56.9 million (€41.8 million) from our inial public oering on the Euronext Brussels in 2014; iii. $50.9 million (€46.0 million) from the private placement of equity securies, primarily to U.S. based instuonal inves tors, in 2016; iv . $114.7 million from our inial U.S. public o ering on the Nasdaq Global Select Market in May 2017; v. $265.5 million from our second U.S public oering on the Nasdaq Global Select Market in December 2017; vi. $300.6 million from our third U.S public oering on the Nasdaq Global Select Mark et in September 2018; vii. $200.9 million (€176.7 million) from the privat e placement of equity securies as part of the closing of the global collabor aon and license agreement with Janssen in Januar y 2019; viii. $556.3 million (€502.2 million) from a global oering in November 2019; ix. $590.5 million from our U.S. public oering on the Nasdaq Global Select Market and $222.8 million (€200.4 million) from a concurrent priv ate placement in May 2020; and x. $1,090.1 million from from our U.S. public oering on the Nasdaq Global Select Marke t in January 2021. In addion, as of December 31, 2021, we hav e received upfr ont payments, milestone pa yments and resear ch and devel - opment service fees from our collabora tors totaling $578.9 million. As of December 31, 2021, we had cash, cash equiva - lents and current nancial assets of $2,336.7 million. Our balance sheet shows our total assets accumulat e to $2,850.3 million for the year ended December 31, 2021, com - pared to $2,279.4 million for the year ended December 31, 2020 and $1,610.2 million for the year ended December 31, 2019. The main reason f or the material change in balance sheet total are the various equity nancing rounds (described in secon 5.2.3 “History of Share Capital”), complet ed over the period covered by the nancial stat ements incorporat ed herein by ref erence (see secon 9 “Inf ormaon incorporated by re ference”). Since our incepon, we have incurred signicant opera ng losses. On December 17, 2021, the FDA approved ef gargi - mod, which is mark eted as VYVGART™ (ef gargimod alfa-f cab), for the treatment of gMG in adult paents who are AChR anbody posive. On January 20, 2022, the Japan PMDA appr oved VYVGART™ (ef gargimod alfa) for the treatment of adult paents with gMG who do not have sucient response to ster oids or non-ster oidal IST s. These are the only approv ed products we curren tly hav e and we have not gener ated any revenue fr om product sales unl the end of the nancial year ended December 31, 2021. Our ability to generat e revenue sufficient to achieve profitability will depend significantly upon the successful com - mercializ ation of our approv ed product and developmen t and eventual commercialization of one or more of our prod - uct candidates. For the year s ended December 31, 2021 and 2020, we incurred total comprehensiv e losses of $450.6 million and $446.2 million, respectively . As of December 31, 2021, we had accumulated losses of $1,400.2 million. W e expect our expenses to increase subs tanally in connecon with our further transion to an integra ted immunology company , including the further build-out of global commercial infrastructur e and drug product inven tory in light of the global launch of VYVGART™ f or the treatmen t of gMG, the advancement of our clinical-st age pipeline, including ongoing registr aonal trials across four indicaons of ef gargimod, and connued investmen t in our IIP . In addion, we expect to connue to incur signicant costs associat ed with operang as a public company in the U.S. W e ancipat e that our expenses will increase substan ally if and as we: Resear ch and Development acvies: • execut e the Phase 3 clinical trials of ef gargimod in ITP , CIDP , PF and in PV ; • ex ecute the Phase 2/3 clinical trials of e fg argimod in BP and m yosis and launch Phase 2/3 clinical trials in other indicaons; • connue the research and development of our other clinical- and preclinical-s tage product candidates and discov er y stag e progr ams; and • seek regulatory approv als for an y product candidat es that successfully complete clinical trials. Pre-commer cial and commercial acvies • further build-out our sales, markeng and distribuon infras tructure and scale-up manufacturing capabilies to commercializ e VYVGART™ for which we obtained the regulatory appro val from FDA and the PMDA and any pr oduct candidat e for which we may obtain appr oval; and • expand our global reach enabling us to commercializ e any pr oduct candidat es for which we may obt ain regulat ory approv al. Other acvies • seek to enhance our technology plaorm and discover and develop addional product candidat es; • maintain, expand and protect our intellectual property por olio, including ligaon costs associate d with defending agains t alleged paten t infringement claims; • add clinical, scienc, operaonal, nancial and management informaon sy stems and personnel, including personnel to support our product development and potenal future commercializ aon eorts; and • experience any delays or encount er any issues, including failed studies, ambiguous trial results, safe ty issues or other regulat ory challenges. W e expect that the costs of developmen t and commercializ aon might also signicantly increase due to current and future collabor aons with resear ch and development partner s as well as commercial partners. 6.2 Basis o f Presentation 6.2. 1 Foreign currency transactions Funconal and presentaon currency Items included in the consolidat ed nancial sta tements of each of our enes are valued using the currency of their eco - nomic environmen t in which the enty operates. As of January 1, 2021, and for all periods therea er , the consolidated nancial stat ements are presented in USD ($), which is the Company ’ s present aon currency . Change in funconal and present aon currency as of January 1, 2021 As of January 1, 2021, the Company changed its functional and presentation currency from EUR to USD. The change in functional currency was made to reflect that USD has become the predominant currency for the Company , represen ting a significant part of the Company’ s cash flows and financing. The change has been implemented with prospective eff ect. 226 | Overview P ART VI Basis of Pr esentation | 227 The change in presentaon currency , e ecve January 1, 2021, from EUR to USD is retr oacvely applied to compar ave gures according to IAS 8 and IAS 21, as if USD had alwa ys been the presenta on currency of the consolidated nancial sta tements. The change was made to beer re ects the economic footprint of the Company’ s business going forw ard. The Company believes that the presenta on currency change will give inv estors and other stak eholders a clearer under - standing of the Company’ s performance over me. 6.2.2 Re venue from Collaborations and lic ense agreements Rev enues to date have consisted principally of milestones, license fees, non-refundable upfront f ees and resear ch and development service fees in connection with collabor ation and license agreements. The Company recogniz es revenue when the customer obtains contr ol of promised goods or services, in an amount that reects the consider aon that the Company expects to r eceive in ex change for those goods and ser vices. In order to determine rev enue rec ognion for agreemen ts that the Company determines to be in the scope of IFRS 15, the following ve steps ar e performed: 1. Idenfy the contr acts In its current collabora on and license agreements, the Company is mainly licensing its intellectual property and/or providing resear ch and development pr oducts and services, which might include a cost sharing mechanism and/or in the future, selling its products to collabora ve partner enes. Rev enue is genera ted through these arrangements via up - front pa yments, milestone payments based on clinical and regulatory criteria, research and developmen t service fees and future sales-based milestones and sales-based royales. In some cases, the collaboraon and license agreements also include an equity subscripon component. If this is the case, the Company analyses if the criteria to combine contracts, as set out by IFRS 15, are met. 2. Idenfy performance obligaons Depending on the type of the agreement, there can be one or more disnct performance oblig aons under IFRS 15. This is based on an assessment of whether the promises in an agreement are capable of being disnct and are disnct from the other promises to transf er goods and/or services in the context of the contr act. For our material ongoing collabor aon and license agreement (i.e., the Zai Lab Agreemen t, as described in secon 1.4.2 “Our Stra tegic Partnership with Zai Lab for ef gargimod”), the Company has assessed that there is more than one disnct performance oblig aon, being the transf er of a license and supply of clinical and commercial product. This is because the Company consider s the performance oblig aons is disnct in the conte xt of the contract as the li - cense has stand-alone value without the Company being further inv olved in the research and development collabor aon and that there is no interdependence between the license and the clinical and commercial supply to be provided. For other material collabor aon and license agreements, the Company has assessed that there is one single performance obligaon in our collabora on and license agreements, being the transf er of a license combined with performance of resear ch and development services. 3. Determine the transacon price Our material ongoing collabora on and license agreements include non-refundable upfr ont payments or license fees; milestone pa yments, the receipt of which is dependent upon the achievement of certain clinical, regulat ory or commer - cial milestones; roy ales on sales and research and development service fees. • Non-refundable upfron t paymen ts or license fees If the license to the Company’ s intellectual property is determined to be disnct from the other performance obliga - ons idened in the arrang ement, the Company r ecognizes revenue fr om non-refundable upfron t f ees allocat ed to this license at the point in me the license is trans ferred to the customer and the customer has the right to use the license. For all our material ongoing collabora on and license agreements, the Company considers the performance oblig aons relat ed to the transf er of the license as disnct from the other promises to transf er goods and/or services. The Company ulizes judgemen t to assess the nature of the performance obligaon to determine whether the performance oblig aon is sased over me or at a point in me. If over me, rev enue is then recogniz ed based on a paern that best reects the transf er of contr ol of the service to the customer . • Milest one payments other than sales based milestones A milestone paymen t, being a variable consideraon, is only included in the transacon price to the extent it is highly probable that a signicant rev ersal in the amount of cumulave rev enue recognion will not occur when the uncertainty associated with the variable considera on is subsequently resolved. The Company esma tes the amount to be included in the transacon price upon achievemen t of the milestone event. The transacon price is then allocated to each perfor - mance obligaon on a stand-alone selling price basis, for which the Company rec ognizes revenue as or when the perfor - mance obligaons under the contract ar e sased. A t the end of each reporng period, the Company re-ev aluates the probability of achievement of such milestones and any relat ed constr aint, and, if necessar y , adjusts the esmat e of the over all tr ansacon price. Any such adjustments are recor ded on a cumulave cat ch-up basis, which would aect rev enue and earnings in the period of adjustment. • R esearch and development service f ees Our material ongoing collabora on and license agreements may include reimbur sement or cost sharing for r esearch and development services. R&D services are perf ormed and sased over me given that the customer simultaneously re - ceives and consumes the benets provided by us. Such costs reimbur sements received are recogniz ed in revenues when costs are incurred and agreed by the pares. • Sales based milestone paymen ts and roy ales Our material ongoing collabora on and license agreements include sales based royales, including commercial milestone payments based on the level of sales, and the license has been deemed to be de predominant item to which the roy ales and commercial milestone pa yments relate. Rela ted revenue is recogniz ed as the subsequent underlying sales occur . 4. Allocate the transacon price In principle, an enty shall allocate the transacon price to each performance obliga on idened in the contract on a relav e st and-alone selling price basis. As our ongoing collaboraon and license agreement (i.e., the Zai Lab Agreement, as described in secon 1.4.2 “Our Strate gic Partner ship with Zai Lab for ef gargimod”) contains more than one perfor - mance obligaon, the Company assesses to allocate the transacon price to all performance obliga on idened. 5. Recognize re venue Rev enue is recogniz ed when the customer obtains con trol of the goods and/or services as provided in the collabor aon and license agreements. The control can be transf erred over me or at a point in me – which results in the recognion of revenue over me or at a point in me. As our ongoing collaboraon and license agreements (i.e., the Zai Lab Agreement, as described in secon 1.4.2 “Our Stra - tegic Partner ship with Zai Lab for ef gargimod”) contains more than one performance obliga on, the Company rec og - nized re venue at point in me for trans fer of license and the Company recogniz es revenue over me for supply of clinical and commercial products as customer simultaneously re ceive the benets provided by the Company’ s performance, sased over me. Other ongoing collaboraon and license agreements only cont ain one single performance obligaon which is, as the customer simultaneously receiv e the benets provided by the Company’ s performance, sased over me, the Company recogniz es revenue over me. The recognion of re venue over me is based on a paern that best r eects the sasfacon of the rela ted performance obliga on, applying the input method. The input method esmat es the sasf acon of the performance obliga on as the percent age of total collabor aon costs that ar e completed each period compared to the t otal esmated c ollaboraon costs. 228 | Basis of Pr esentation Basis of Pr esentation | 229 P ART VI Resear ch and development service fees are rec ognized as revenue when costs are incurred and agreed by the pares as the Company is acng as a principal in the scope of its stak e of the research and development acvies of its ongoing collabor aon and license agreements. 6.2.3 Other Operating Income As a company that carries extensiv e resear ch and development acvies, we benet from various gr ants, research and development incenv es and payr oll tax r ebates from certain government al agencies. These gran ts and research and development incenv es gener ally aim to partly reimburse appro ved expenditures incurred in our research and develop - ment e orts. The primary grants, research and developmen t incenves and payr oll tax rebates are as follo ws: • Government Gran ts W e have received sever al grants from agencies of the Flemish government to support various research progr ams fo - cused on technological innovaon in Flanders. These grants r equire us to maintain a presence in the Flemish region for a number of year s and inves t according to pre agreed budgets. • Research and Development Incenv es Companies in Belgium can benet from ta x savings on amounts spent on research and development by applying a one me or periodic tax deducon on research and development expenditur es for the acquision or development of paten ts. This tax credit is a reducon of the corpor ate income tax es for Belgian statutory purposes and is transf errable to the next four accounng periods. These tax credits are paid to us in cash aer ve years to the exten t they have not been oset agains t corpor ate tax es due. • Payr oll T ax Reba tes W e also benet from certain reba tes on payr oll withholding tax es for scienc personnel. The government gr ants and research and development incenv es gener ally aim to partly reimburse appro ved expenditures incurred in our resear ch and development e orts and are credited to the income st atement, under other operang income, when the relev ant expenditure has been incurred and there is reasonable assur ance that the grant or resear ch and development incenve is receiv able. • Changes in fair value on non-current nancial assets In March 2019, the Company entered into a license agreement with AgomAb for the use of HGF-mimec SIMPLE Anbodies™, developed under the Company’ s IIP . In ex change for granng this license, the Company received a prot share in AgomAb. In March 2021, AgomAb secured $74.0 million in Series B nancing by issuing 286,705 Preferr ed B Shares. argen x used the post -money valuaon of Series B nancing round and the number of outstanding shares in determining the fair value of the prot -sharing instrument, which results in a change in fair value of non-current nancial assets of $11.2 million recor ded through prot or loss. The fair value of non-current nancial assets is updated at the end of each reporng period. 6.2.4 Research and Dev elopment Expenses Resear ch and development expenses consis t principally of: • personnel expense relat ed to compensaon of resear ch and development st a and relat ed expenses, including sala - ries, benets and share-based compensaon expenses; • external research and developmen t expenses rela ted to (i) chemistry , manufacturing and control cos ts for our product candidat es, both for preclinical and clinical tesng, all of which is conducted by specialized con tract manufacturer s, (ii) fees and other costs paid to contr act resear ch org anizaons in connecon with preclinical tesng and the performance of clinical trials for our product candidates and (iii) costs associated with regulatory submissions and approvals, quality assurance and pharmacovigilance; • materials and consumables expenses; • depreciaon and amorzaon of tangible and intangible xed assets used to develop our product candidat es; and • other expenses consisng of (i) costs associat ed with obtaining and maintaining paten ts and other intellectual property and (ii) other costs such as tra vel expenses related to resear ch and development acvies. The following table shows our resear ch and development expenses f or the past three nancial years: W e incur various external e xpenses under our collaboraon and license agreements f or material and services consumed in the discovery and development of our partnered product candidates. Under our agreement with AbbVie, our own resear ch and development expenses wer e not reimbur sed. Under our agreement with Janssen, we assumed certain development oblig aons, and wer e jointly responsible with Janssen for all research, developmen t and regulatory cos ts relang to the product. Under our agreement with Zai, we are responsible for certain cos ts relang to future clinical trials involving ef gargimod conduct ed parally by Zai. Our research and development e xpenses may vary subst anally from period to period based on the ming of our re - search and development acvies, including the ming of the iniaon of clinical trials, producon of product batches and enrolment of paents in clinical trials. Research and development expenses ar e expect ed to increase as we advance the clinical development of ef gargimod and ARGX-117 and further advance the research and development of our other early stage pipeline candidat es. The successful development of our product candidates is highly uncertain. At this me, we cannot reasonably esmat e the nature, ming and esmated cos ts of the eorts that will be necessary to complet e the development of , or the period, if any , in which material net cash inow s may commence from, an y of our product candidat es. This is due to numerous risks and uncertaines associat ed with developing drugs, as fully described in chapter 2 “Risk Factor s” , and including the uncertainty of: • the scope, rate of progress and expense of our research and development acvies; • the successful enrollment in, and compleon of clinical trials; • the ability to mark et, commercialize and achieve mark et acceptance for ef gargimod (ex cept for the U.S. and Japan), or any other product candidate that we ma y develop in the future, if approved; • establishing and maintaining a connued acceptable saf ety prole for our product candidates; • the terms, ming and receipt of regulatory appro vals from applicable regulatory authories; • the successful compleon of preclinical studie s necessary to support IND applicaons in the United States or similar applicaons in other countries; • the expense of ling, prosecung, defending and enfor cing patent claims and other intellectual property rights; and our current and future collaborat ors connuing their collaboraons with us. P ART VI 230 | Basis of Pr esentation Basis of Pr esentation | 231 Financial year ended December 31, (In USD thousands) 2021 2020 2019 Resear ch and development expenses 580,520 370,885 220,771 6.2.5 Selling, General and Administrative Expenses Selling, general and administra ve expenses consist primarily of (i) personnel expenses rela ng to salaries and related costs f or personnel, including share-based compensaon, of our employees in ex ecuve, nance, business development, mark eng, commercial and support funcons, (ii) professional f ees for business developmen t, mark eng, IT , audit, commercial, leg al services and investor rela ons costs, (iii) board expenses consisng of directors’ f ees, travel e xpenses and share-based compensaon for non-e xecuve board members, (iv) costs associat ed with prepar aon of commercial launch of VYVGART™ for the treatment of gMG in the U.S. and promoonal acvies (v) costs associated with the prepa - ra on of the commercial launch in Japan and EMEA and connued investmen t in supply chain, (vi) allocat ed facilies costs and (vii) other selling , general and administr ave expenses, including leasing costs, oce expenses, trav el costs. W e expect our gener al and administr ave expenses to increase as we connue to support our growth and opera te as a public company in the U.S. Such costs include increases in our nance and legal personnel, addional external legal and audit fees, and expenses and costs associated with compliance with the regulaons governing public companies. W e ex - pect our selling and mark eng expenses to increase signican tly due to mark eng and promoonal acvies with respect to the commercial launch of VYVGART™ in the U.S. and Japan. 6.2.6 Financial Income ( Expense ) Financial income mainly reects interes t earned on our cash and cash equivalents and curren t nancial assets and net gains on our cash and cash equivalents and current nancial assets held at fair value through prot or loss. Financial expense corre sponds mainly to net losses on cash and cash equivalents and current nancial assets held at fair value through prot or loss and other nancial expenses. 6.2. 7 Exchang e Gains (Losses ) Our ex change gains (losses) relate to (i) our transacons denominated in foreign currencies, mainly in Euro, Swiss francs, Brish pounds and Japanese yens which genera te exchange g ains or losses and (ii) the translaon at the reporng date of assets and liabilies denominated in foreign currencies into USD , which is our funconal and present aon currency since January 1, 2021 and theref ore the presentaon currency thr oughout this Universal Regis traon Document. For more informa on on currency ex change uctuaons on our business, please see 2.7.5 “Exchang e ra te uctuaons or abandon - ment of the euro currency may materially a ect our results of operaons and nancial condion. ” . We hav e no derivav e nancial instruments to hedge inter est rate and for eign currency risk. 6.2.8 Income T ax Expense W e have a history of losses. W e expect to connue incurring losses as we connue to inv est in our clinical and pre-clin - ical development pr ograms and our discovery pla orm, and as we incur costs for the commercial launch of VYVGART™, following the recent r egulatory approval by the FDA and the PMDA. Consequently , we do not have any def erred tax asset reg arding unused tax losses on our consolidated st atements of nancial posion. W e are incurring current income ta x expense on the prot gener ated in various subsidiaries in view of the transf er price agreements set up between argen x BV and these subsidiaries. 6.3 Capitalization and Indebtedness The table below sets forth our capitaliza on as of December 31, 2021 on an actual basis: The table below sets forth our indebtedness as of December 31, 2021 on an actual basis: P ART VI 232 | Basis of Pr esentation Capitalization and Indebtedness | 233 (1) Leg al reserves are the amount of translaon di erences. (In USD thousands) As at December 31, 2021 (audited) T otal current debt (including curr ent poron of non-current debt) 0 Guarant eed 0 Secured 0 Unguarant eed / unsecured 0 T otal non-current debt (e xcluding current poron of non-curr ent debt) 0 Guarant eed 0 Secured 0 Unguarant eed / unsecured 0 Shareholder equity 2,534,224 Share capit al 6,233 Share premium 3,462,775 Legal r eser ve(s)(1) 131,684 Ret ained earnings (1,400,197) Other reserves 333,729 T otal 2,534,224 (In USD thousands) As at December 31, 2021 (audited) A. Cash 242,494 B. Cash equivalents (1) 1,092,182 C. Other current nancial assets (2) 1,002,052 D. Liquidity (A)+(B)+(C) 2,336,728 E. Current nancial debt (including debt instruments, but e xcluding current poron of non-curr ent nancial debt) 0 F . Current poron of non-current nancial debt (3) 3,509 G. Current nancial indebt edness (E + F) 3,509 H. Net current nancial indeb tedness (G - D) (2,333,219) I. Non-current nancial debt (e xcluding current poron and deb t instruments) (3) 7,956 J. Debt instrumen ts 0 K. Non-current tr ade and other payables 0 L. Non-current nancial indebt edness (I)+(J)+(K) 7,956 M. T otal nancial indebtedness (H)+(L) (2,325,263) (1) See note 12 “Cash and cash equivalents” to our consolidated nancial stat ements in secon 7 “Consolidated Financial Statements – audited as of and for the years ended December 31, 2021, 2020 and 2019” . (2) See note 11 “Financial assets – current” to our consolidated nancial stat ements in secon 7 “Consolidated Financial Statements – audited as of and for the years ended December 31, 2021, 2020 and 2019” . (3) Please note that nancial debt balances as presented in the table above do not include any indirect or conngen t indebtedness. For more inf ormaon on the Company’s indirect and conng ent indebtedness, please see note 29 “Commitments” to our consolidated nancial statemen ts in secon 7 “Consolidated Financial Statemen ts – audited as of and for the years ended December 31, 2021, 2020 and 2019” . As of December 31, 2021, current nancial debt (as disclosed in item E. in the table above) included current liabilies re - lated to short -term leases in the amount of $3.5 million and non-current nancial debt (as disclosed in item I. in the table above) included non-current liabilies relat ed to long-term leases in the amount of $8.0 million. More inf ormaon is included in our consolidat ed nancial sta tements and related notes included in secon 7 “Consoli - dated Financial Stat ements – audited as of and for the years ended December 31, 2021, 2020 and 2019” . 6. 4 Critical Acc ounting Policies and Significant Judgments and Estimates In the applicaon of the Company’ s accounng policies, which are described above, the Company is requir ed to mak e judgments, esmat es and assumpons about the carrying amounts of assets and liabilies that are not readily apparent from other sources. The esmates and associated assumpons are based on historical experience and other factor s that are considered to be relev ant. Actual results may dier from these esmat es. The esmates and underlying assumpons are reviewed on an ongoing basis. Revisions to accounng esmat es are recogniz ed in the period in which the esmate is revised if the revision a ects only that period or in the period of the revision and future periods if the revision aects both current and future periods. 6.4. 1 Critical estimates in appl ying accounting policies The following areas are areas wher e k ey assumpons concerning the future, and other key sources of esmaon uncer - tainty at the end of the reporng period, hav e a signicant risk of causing a material adjustmen t to the carrying amounts of assets and liabilies within the next nancial year . Resear ch and development cost accruals The Company recogniz es costs of $163.7 million, as specied in note 15 “ T rade and other payables” to the consolidated nancial stat ements, incurred for clinical trial acvies and manufacturing of drug products, as research and develop - ment expenses based on an evaluaon of its vendors’ progress tow ard compleon of specic tasks. Timing of paymen t may di er signicantly fr om the period in which the costs are recogniz ed as expense, resulng in clinical trial accruals recogniz ed within “ T rade and other payables” in the consolidated sta tements of nancial posion. Quancaon of the research pr ogress and the transla on of the progress to these accruals requires esmat es, because the progress is not directly observable. In esmang the vendors’ progr ess tow ard compleon of specic tasks, the Company there fore uses non-nancial data such as paent enrollment, clinical site acva ons and vendor informa on of actual costs incurred. This data is obtained through reports from or discussions with Company personnel and outside service providers as to the progress or sta te of compleon of trials, or the compleon of services. Costs are expensed over the service period the services are provided. Costs for services provided that have not yet been paid are recogniz ed as accrued expenses. 6.5 Results of Operation Below is the comparison of the consolidated st atements of prot or loss for the nancial year s ended December 31, 2021, 2020 and 2019. 6.5. 1 Revenue 234 | Critical Acc ounting Policies and Significant Judgements and Estimates Results of Operation | 235 P ART VI Financial year ended December 31, % change (2021 compared to 2020) (In USD thousands) 2021 2020 2019 Zai Lab 151,903 — — 100 Janssen 292,279 33,759 22,386 766 AbbVie 121 565 855 (79) Agomab — — 1,684 Other — 38 50 (100) Upfront pa yments 444,303 34,362 24,975 1,193 Zai Lab 25,634 — — 100 Janssen 22,865 2,641 1,738 766 AbbVie 102 762 30,077 (87) Other 1,214 19 25 6,289 Milestone pa yments 49,815 3,422 31,840 1,356 Janssen 2,028 3,175 21,236 (36) Other 298 284 411 5 Research and de velopment service fees 2,326 3,459 21,647 (33) Zai Lab 833 — — 100 Other revenues 833 — — 100 T otal revenue 497,277 41,243 78,462 1,106 Financial year ended December 31, % change (2021 compared to 2020) (In USD thousands, unless otherwise indicated) 2021 2020 2019 Rev enue 497,277 41,243 78,462 1,106 Other operang inc ome 42,141 23,668 15,563 78 T otal operang inc ome 539,418 64,911 94,025 731 Resear ch and development expenses (580,520) (370,885) (220,771) 57 Selling, general and administr ave expenses (307,644) (171,643) (72,146) 79 T otal operang e xpenses (888,164) (542,528) (292,917) 64 Operang loss (348,746) (477,617) (198,892) (27) Financial income /(expenses) (944) (1,501) 15,983 (37) Exchange g ains (losses) (50,053) (126,234) 6,990 (60) Loss befor e taxes (399,743) (605,352) (175,919) (34) Income tax e xpense (8,522) (3,103) (5,289) 175 Loss for the year (408,265) (608,455) (181,208) (33) W eighted aver age number of shares outstanding 51,075,827 45,410,442 38,619,121 12 Basic and diluted loss per share (in USD) (7.99) (13.40) (4.69) (40) Kim “ Some days I think my current treatments contr ol my disease, and just when I feel like things are smoo th sailing, my symptoms come rushing back. ’ ’ MG Patient | 237 MG Patient 236 | MG Patient 238 | Results of Operation Results of Operation | 239 P ART VI Our revenue increased by $456.1 million to $497.3 million for the year ended December 31, 2021, compar ed to $41.2 million for the year ended December 31, 2020, a result of the recognion of the transacon price as a consequence of the terminaon of the collaboraon agreemen t with Janssen and the closing of the str ategic collabora on f or ef gargi - mod with Zai Lab. The increase in revenue recognion fr om upfr ont payments is primarily driven by the recognion of the upfront paymen t received fr om Zai Lab upon strat egic collabor aon for efg argimod and the recognion of the upfront pa yment received under the collaboraon agreemen t with Janssen upon terminaon of the agreement. The increase in revenue recognion fr om milestone pa yments is mainly due to the recognion of $25.0 million from Zai Lab upon regulatory approv al of ef gargimod by FDA in the U.S. and the recognion of $22.9 million as a result of the terminaon of the collabora on agreement with Janssen. The decrease in revenue recognion fr om resear ch and development service fees of $1.1 million is primarily driven by the decrease due to the terminaon of the collabor aon agreement with Janssen. 6.5.2 Other Operating Income Other operang income increased by $18.4 million to $42.1 million for the year ended December 31, 2021, compared to $23.7 million for the year ended December 31, 2020. The increase is primarily driven by • the increase in resear ch and development incenv es, as a result of the increased resear ch and development cos ts incurred; • the increase in payr oll tax rebates, as a direct result of the increase in the employment of highly qualied resear ch and development personnel, eligible for specic payr oll tax rebates; and • the increase in fair value on our prot share in AgomAb Therapeucs NV . For more inf ormaon regarding gov ernmental policies that could aect our operaons, see 1.9 “Regulaon” . 6.5.3 Research and Development Expenses Our research and development e xpenses totaled $580.5 million and $370.9 million for the year s ended December 31, 2021 and 2020, respecv ely . The increase of $209.6 million compared to 2020 primarily results fr om an increase in external resear ch and developmen t expenses and personnel expenses, primarily relat ed to the ef gargimod progr am in various indicaons and other clinical and preclinical progr ams. Furthermore, the personnel expenses increased due to a planned increase in headcount. The increase of $74.4 million in personnel expense for the year ended December 31, 2021 corresponded primarily to (i) an increase of $49.2 million for share-based compensa on expenses rela ted to the gran t of stock opons to our research and development employees, and (ii) increased costs associated with addional research and developmen t personnel. W e employed on averag e 349.7 full me equivalen ts in our research and development funcons in the year ended De - cember 31, 2021, compar ed to 213.0 in the year ended December 31, 2020. Our external resear ch and development expenses f or the year ended December 31, 2021 totaled $382.9 million, com - pared to $259.9 million for the year ended December 31, 2020. The increase reects higher clinical trial costs and man - ufacturing expenses r elated to the development of our product candida te porolio. The table below provides addional detail on our external resear ch and development expenses by progr am: External research and developmen t expenses f or our lead product candidate ef gargimod totaled $311.0 million for the year ended December 31, 2021, compared to $182.5 million for the year ended December 31, 2020. This increase of $128.5 million corresponds primarily to increased manufacturing and clinical development acvies in relaon to: • the execuon of two Phase 3 clinical trials in MG; • the execuon of the bridging study for ENHANZE® efg argimod in MG; • the execuon of two Phase 2 clinical trials and iniaon of the Phase 3 clinical trial in CIDP; • the execuon of two Phase 3 clinical trials in ITP; • the execuon of the Phase 2 clinical trial and iniaon of the Phase 3 clinical trial in PV and PF; • the execuon of Phase 2 clinical trial in BP; and • the execuon of Phase 1 clinical trial in Myosis. External research and developmen t expenses f or cusatuzumab tot aled $24.6 million for the year ended on December 31, 2021 compared to $48.8 million for the year ended December 31, 2020. This decrease of $24.2 million is the result of the terminaon of the collabora on agreement with Janssen. External research and developmen t expenses on other programs incr eased by $18.6 million to $47.2 million for the year ended December 31, 2021, compared to $28.6 million for the year ended December 31, 2020. The increase is primarily due to increased research and development e xpenses in relaon to the advancement of our ARGX -117 program, a com - plement -targeng anbody ag ainst C2. Financial year ended December 31, % change (2021 compared to 2020) (In USD thousands) 2021 2020 2019 Grants 4,398 1,365 2,563 222 Resear ch and development incenves 13,970 10,257 5,373 36 Pa yroll tax reba tes 12,621 9,095 6,413 39 Change in fair v alue on non-current nancial assets 11,152 2,951 1,214 278 T otal 42,141 23,668 15,563 78 Financial year ended December 31, % change (2021 compared to 2020) (In USD thousands) 2021 2020 2019 ef gargimod 311,038 182,511 94,024 70 cusatuzumab 24,630 48,796 43,139 (50) Other progr ams 47,234 28,636 15,726 65 T otal 382,902 259,943 152,889 47 Financial year ended December 31, % change (2021 compared to 2020) (In USD thousands) 2021 2020 2019 Per sonnel expenses 160,464 86,036 51,172 87 External resear ch and development expenses 382,902 259,943 152,889 47 Materials and consumables 2,735 3,562 2,267 (23) Depreciaon and amorz aon 3,742 2,835 1,840 32 Other expenses 30,677 18,509 12,603 66 T otal 580,520 370,885 220,771 57 P ART VII 240 | Patient Story Liquidity and Capital Resources | 241 P ART VI 6.5.4 Selling, General and Administrative Expenses Our selling, gener al and administr ave expenses totaled $307.6 million and $171.6 million for the years ended Decem - ber 31, 2021 and 2020, respecvely . The increase in our selling, gener al and administra ve expenses for the year ended December 31, 2021 was principally due to an increase of personnel expense and professional f ees, resulng from: • increased costs of the share-based payment compensaon plans relat ed to the grant of stock opons to our selling, gener al and administra ve employees; • increased costs associated with addional employees recruited to str engthen our selling , general and administr ave acvies, in preparaon of the commercial launch of VYVGART™ in the U.S.; • increased prof essional fees, primarily in prepar aon of the commercial launch of VYVGART™ in the U.S.; and • Promoonal and markeng cos t associated with the commercial launch of VYVGART™, following the approv al by FDA in the U.S. W e employed on averag e 264.4 full me equivalen ts in our selling, gener al and administra ve funcons in the year end - ed December 31, 2021, compared to 119.5 in the year ended December 31, 2020. 6.5.5 Financial Income ( Expense ) For the year ended December 31, 2021, nancial expense amounted to $0.9 million compared to $1.5 million f or the year ended December 31, 2020. The decrease of $0.6 million in 2021 related primarily to higher nancial expenses incurred in 2020 as a result of a decrease in net asset value on current nancial assets following the impact of the COVID-19 outbreak on the nancial markets, partly oset by the interes t receiv ed on our cash and cash equivalents and curren t nancial assets. 6.5.6 Exchange Gains ( Losses ) Exchang e losses totaled $50.1 million for the year ended December 31, 2021, compared to ex change losses of $126.2 million for the year ended December 31, 2020. The decrease was mainly aributable to unrealiz ed exchange r ate losses on the cash, cash equivalents and current nancial assets posion in Euro during the nancial year ended December 31, 2021 as compared to unrealiz ed exchange r ate losses on the cash, cash equivalents and curren t nancial assets posion in USD during the nancial year ended December 31, 2020. 6.6 Liquidity and Capital Resour ces 6.6. 1 Sources of Funds Since our incepon in 2008, we have inv ested most of our resources in developing our product candidates, building our intellectual property por olio, developing our supply chain, conducng business planning, r aising capital and providing gener al and administra ve support for these oper aons. We currently ha ve only one approved pr oduct but have not gener ated any signicant rev enue from product sales. T o date, we hav e funded our operaons through public and privat e placements of equity securies, upfr ont, milestone and expense reimbursement pa yments received from our collabo - ra tors, funding from government al bodies and interes t income from the inves tment of our cash, cash equivalents and nancial assets. Through December 31, 2021, we have r aised gross proceeds of $3,514.4 million from privat e and public oerings of equity securies and received $578.9 million in revenue fr om our collabora tors. Our cash ows may uctuate and are dicult to for ecast and will depend on many factor s. On December 31, 2021, we had cash, cash equivalents and current nancial assets of $2,336.7 million, compared to $1,996.5 million on December 31, 2020. W e have no ongoing material nancing commitments, such as lines of credit or guarantees, that are expect ed to a ect our liquidity over the next ve years, other than leases and our commitments to Lonza which are detailed in note 29 “Commitments” to our consolidated nancial sta tements in secon 7 “Consolidated Financial Statemen ts – audited as of and for the years ended December 31, 2021, 2020 and 2019” . For more inf ormaon as to the risks associated with our future funding needs, see the secon of this annual report tled 2.1 “Risk Factor s Rela ted to argenx’ s Financial Posion and Need for Addional Capital” . For more inf ormaon as to our nancial instruments, please see note 26 “Financial management” to our consolidated nancial stat ements in secon 7 “Consolidated Financial Statements – audited as of and for the years ended December 31, 2021, 2020 and 2019” . 6.6.2 Cash Flows The table below summarizes our cash ows for the years ended December 31, 2021, 2020 and 2019. Net Cash Used in Opera ng Acvies Net cash oulow from our operang acvies increased by $208.3 million to a net oulow of $606.8 million for the year ended December 31, 2021, compared to a net oulow of $398.5 million for the year ended December 31, 2020. The net cash oulow from opera ng acvies for the year ended December 31, 2021 resulted primarily from (i) the research and development expenses incurred in relaon to the manufacturing and clinical developmen t acvies of efg argimod Financial year ended December 31, V ariance 2021 compared to 2020 (In USD thousands) 2021 2020 2019 Cash and cash equivalents a t beginning of the period 1,216,803 372,162 321,791 844,641 Net cash ows (used in)/ fr om operang acvies (606,812) (398,463) 151,630 (208,349) Net cash ows (used in)/ fr om invesng acvies (347,070) 344,692 (833,267) (691,762) Net cash ows (used in)/ fr om nancing acvies 1,121,342 833,003 733,726 288,339 E ect of ex change rat e dierences on c ash and cash equivalents (49,587) 65,409 (1,717) (114,996) Cash and cash equivalen ts at end of the period 1,334,676 1,216,803 372,162 117,873 Financial year ended December 31, % change (2021 compared to 2020) (In USD thousands) 2021 2020 2019 Per sonnel expenses 164,646 108,507 44,774 52 Prof essional fees 102,674 48,681 18,181 111 Supervisory board 12,958 4,838 3,127 168 Other expenses 27,366 9,617 6,064 185 T otal 307,644 171,643 72,146 79 240 | Results of Operation 242 | Patient Story 242 | Liquidity and Capital Resources P ART VII O -Balance Sheet Arrangements | 243 P ART VI and the advancement of other clinical, preclinical and discovery-s tage product candidate, (ii) the personnel expenses and consulng expenses incurred in prepara on of the commercial launch of efg argimod in the U.S. and Japan, and (iii) the manufacturing of inventory ahead of the commercial launch of efg argimod in the U.S. The net cash oulow of $398.5 million for the year ended December 31, 2020 was primarily inuenced by (i) the resear ch and development expenses incurred in relaon to the manufacturing and clinical development acvies of ef gargimod, cusatuzumab and the advancement of other preclinical and discovery-s tage product candidat e, (ii) the personnel expenses and consulng expenses incurred in prepar aon of the potenal commer cial launch of efg argimod in the U.S., and (iii) the manufactur - ing of pre-launch invent or y ahead of the potenal commer cial launch of efg argimod in the U.S. Net Cash Used in / from Inves ng Acvies Inves ng acvies for the year ended December 31, 2021, consist primarily of the divestment of current nancial assets and the purchase of intangible assets. Cash ow from inv esng acvies represented a net oulow of $347.1 million for the year ended December 31, 2021, compared to a net inow of $344.7 million for the year ended December 31, 2020. The net oulow for the year ended December 31, 2021 related primarily to (i) the net inv estment of $228.2 million in current nancial assets, including money market funds and term deposit accounts, compared to a net divestment of $341.9 million for the year ended December 31, 2020 and (ii) the cash oulow of $98.0 million during 2021 in relaon to the purchase of a PRV from Bayer Healthcar e Pharmaceucals. Net Cash Provided by Financing Acvies Financing acvies primarily consist of net proceeds from our priva te placements and public oerings of our securies and ex ercise of stock opons. The net cash inow from nancing acvies was $1,121.3 million for the year ended De - cember 31, 2021, compar ed to a net cash inow of $833.0 million for the year ended December 31, 2020. The net cash inow for the year ended December 31, 2021 was aributed to (i) $1,091.7 million net cash proceeds from our global oering in February 2021, compared to $812.6 million net cash proceeds from our global oering and concurrent privat e placement in May 2020 and (ii) $33.4 million proceeds received from the ex ercise of stock opons in 2021, compar ed to $22.9 million for the year ended 2020. Opera ng and Capital Expenditure Requiremen ts W e have never achieved prot ability and, as of December 31, 2021, we had accumulated losses of $1,400.2 million. W e expect to connue to incur signicant operang losses for the for eseeable future as we connue our research and development e orts, incur higher costs f or commercializ aon of efg argimod in the U.S. and Japan, and seek to obtain regulat ory approv al and commercializ aon of our product candidat es in Europe. On the basis of current assumpons, we expect that our exisng cash and cash equivalents and current nancial assets will enable us to fund our operang expenses and capital expe nditure requirements through at least the next twelve months. Because of the numerous risks and uncertaines associated with the development and commercializa on of ef gargimod and our other product candidat es and discovery st age programs and because the extent to which we may enter int o collabor aons with third pares for the development of these product candidates is unknown, we are unable to esmat e the amounts of increased capital outlays and opera ng expenses associat ed with compleng the research and development of our product candidates. Our future capital r equirements for ef gargimod and our other product candidat es and discovery stag e progr ams will depend on many factor s, including: • the progr ess, ming and compleon of preclinical tesng and clinical trials for our current or an y future product candidates; • the number of potenal new product candidat es we idenfy and decide to develop; • the me and costs in volved in obtaining regulat ory approv al for our product candidat es and any dela ys we may encoun - ter as a result of evolving regula tory requirements or adver se results with respect to any of our product candidat es; • selling and mark eng acvies undertak en in connecon with the commercializa on of VYVGART™ or potenal com - mercializ aon of any of our current or any future product candida tes, if approv ed, and costs inv olved in the creaon of an eecv e sales and markeng or ganizaon; • manufacturing acvies undertak en ahead of the commer cializaon of VYVGART™ or potenal commercializ aon of any of our current or any future product candidate s, if approved, and costs in volved in the creaon of an eecv e supply chain; • the costs involved in growing our org anizaon to the size needed to allow for the research, developmen t and potenal commercializ aon of our current or any future pr oduct candidat es; • the costs involved in ling patent applicaons and maint aining and enfor cing paten ts or def ending agains t claims or infringements r aised by third pares; • the maintenance of our exisng collabor aon agreements and entry into new collabora on agreements; • the amount of rev enues, if any , we may derive either directly or in the form of roy alty paymen ts from future sales of our product candidates, if approv ed; • developments relat ed to COVID-19 and its impact on the costs and ming associated with the conduct of our clinical trials, preclinical progr ams, manufacturing acvies and other related acvies; and • developments relat ed to the global economic uncertaines and polical instability resulng from the conict between Russia and the Ukraine. For more inf ormaon as to the risks associated with our future funding needs, see the secon of this annual report tled 2.1 “Risk Factor s Rela ted to argenx’ s Financial Posion and Need for Addional Capital” . 6.6.3 W orking Capital Statement In accordance with item 3.1 of Annex 11 of the commission delegated regula on (EU) 2019/980 we make the following sta tement: In our opinion, the working capital of the Company is sucient for the Company’ s presen t requir ements, at least for a period of twelve months from the date of this Universal Registr aon Document. 6. 7 O -Balance Sheet Arrangements W e did not have during the periods presented, and we do not curren tly hav e, any o balance sheet arrangements, as de - ned in the applicable rules and regulaons, such as relaonships with unconsolidated enes or nancial partnerships, which are oen ref erred to as structured nance or special purpose enes, established f or the purpose of facilit ang nancing transacons that are not required to be reect ed on our balance sheets. 6.8 Contractual Obligations Below an overview is given of our material contr actual obligaons at December 31, 2021: W e signed lease agreements f or laboratory and oce space in Zwijnaar de, Belgium, oces in Breda, Netherlands, Boston, U.S., and T okyo, Japan, as disclosed in note 6 “Pr operty , Plant and Equipmen t ” in the consolidated nancial sta tements in secon 7 “Consolidated Financial Sta tements – audited as of and f or the years ended December 31, 2021, 2020 and 2019” . In January 2021, we hav e enter ed into a binding lease agreement relat ed to the envisioned reloca on of our Zwijnaarde Pa yments due by period (In USD thousands) T otal Less than 1 year 1 to 3 years 3 to 5 years More than 5 years Lease liabilies 12,004 3,509 6,331 2,164 — Lease commitments not commenced 19,155 — — 1,437 17,718 244 | Patient Story 244 | Financial Statements P ART VII Material Contracts and Related P arty T ransactions | 245 P ART VI facility to a newly built oce in Zwijnaar de, with an annual base rent of $1.9 million, which would be opera onal in the second quarter of 2025, and with an inial term of 10.5 years. Included in the binding lease commitment is a rent free period of 6 months follo wing the compleon of the building. The total future cash oulows rela ted to this lease are rep - resent ed above as “Lease commitments not commenced” . In addion, our lease liabilies include a lease plan for company car s with maturity dates up to four year s. For a discussion of contr actual obligaons, please see not e 29 “Commitments” in our consolidated nancial st atements in secon 7 “Consolidated Financial Sta tements – audited as of and f or the years ended December 31, 2021, 2020 and 2019” . 6.9 Financial Statements The (consolidated) audited nancial sta tements of the Company f or the nancial years ending on December 31, 2020 and 2019 are incorporat ed into this Univer sal Regis traon Document by ref erence. Please see secon 9 “Informaon incorpor ated by ref erence” . 6. 10 Information Regar ding the Independent Auditor The audited consolidated nancial sta tements as of and for the nancial years ended December 31, 2021 and 2020 and 2019 have been audited by our independent auditor , Deloie Accountants B. V . (Deloie), who rendered an unqualied audit report on these nancial sta tements. The partner of Deloie who signed the auditor s’ reports is a member of the Netherlands Instute of Chartered Accoun tants ( Koninklijk e Nederlandse Beroepsorganisae van Account ants ). The oce of Deloie is located at Wilhelminakade 1, 3072 AP Roerdam, the Netherlands. 6. 11 Material Contracts and Related Party T ransactions 6. 11. 1 Material Contracts Our material contr acts are described in chapter 1.4 “Collaboraon Agreemen ts” , 1.5 “License Agreements” and 1.6 “Distribuon Agreements” . 6. 11.2 R elated Party T ransactions Since December 31, 2021, being the end of the last nancial period for which audited nancial stat ements have been published, we have not enter ed into an y transacons with any rela ted pares which are – as a single transacon or in their enrety – material to us. In addion, in the period covered by the nancial stat ements incorporated her ein by ref erence, there has not been, nor is there currently proposed, an y material tr ansacon or series of similar material tr ansacons to which we were or are a party in which any of the members of our Board of Director s or senior management, holders of more than 10% of any class of our vong securies, or any member of the immediate f amily of any of the foregoing per sons, had or will have a direct or indirect material int erest, other than the compensaon and shareholding arrangemen ts we describe in para - graph 5.3 “Share Classes and Principal Shareholders” , and the transacons we describe below . From me to me, in the ordinary cour se of our business, we may con tract for services from companies in which certain of the members of our senior management or director s may serve as director or advisor . The costs of these ser vices is negoated on an at arm’ s length basis and none of these arrangements ar e material to us. Agreements with Our Senior Manag ement W e have entered int o a management agreement with Tim V an Hauwermeiren as our Chief Execuve Ocer . The Chief Execuv e Ocer is our sole ex ecuve director . The key terms of his agreement are as follows: W e may terminat e Mr . V an Hauwermeiren’ s ser vices upon 18 months’ notice, or paymen t of 18 months’ pro-rat ed base compensation in lieu of notice. Mr . V an Hauwermeiren would be entitled to the same paymen t in lieu of notice in the event he terminates his ser vices with us in circumst ances in which it cannot reasonably be expect ed for him to continue providing services to us (and after our failure to remedy such conditions after being pro vided at least 14 day s’ notice). Mr . V an Hauwermeiren would also be entitled to payment in lieu of notice in the event he terminat ed his ser vices with us in certain cases of our failure to comply with obligations under applicable law or his agreement (and after our failure to remedy such non-compliance, if non-deliberate, after being provided at least 14 days’ notice). In these cases, there will be a full acceleration of the vesting of any outstanding stock options held by Mr . V an Hauwer - meiren. There will be no notice period or payment in lieu of notice in certain cases of Mr . V an Hauwermeiren’ s failure to comply with obligations under applicable law or his agreement. Mr . V an Hauwermeiren may be dismissed immedi - ately as an ex ecutive director . Karl Gubitz, our Chief Financial Ocer , has an employment contr act with our subsidiary , argen x US Inc., for an indenite term. His employment c ontract ma y be terminated at an y me by us, subject to a noce period and a sever ance payment of at least tw elve months. Keith W oods, our Chief Oper ang Ocer , has an employment contr act with our subsidiary , argen x US Inc., for an indenite term. His employment c ontract ma y be terminated at an y me by us, subject to a noce period and a sever ance payment of at least tw elve months. Wim Parys, our Chie f Medical Ocer , has an employment contr act with our subsidiary argenx BV , for an indenite t erm. His employment con tract may be t erminated at any me b y us, subject to a noce period and a severance pa yment of at least twelve mon ths. Hans de Haard, our Chief Scien c Ocer , has an employment contract with our sub sidiar y , argenx B V , for an inde nite term. His employment c ontract ma y be terminated at an y me by us, subject to a noce period and a sever ance payment of at least tw elve months. Tim V an Hauermeiren Fixed base c ompensaon $651,986 Short-t erm variable compensaon A targ et of 60% of the xed base compensaon based on pr eviously determined bonus tar gets established by the non-e xecuve direct ors Pension con tribuons (1) $26,894 Duraon Indenite (1) Amounts shown represent pension contribuons paid during the year -ended December 31, 2021. 246 | Patient Story 246 | Employees P ART VII Legal and Arbitration Proceedings | 247 P ART VI Arjen Lemmen, our VP Corpora te Development & Str ategy , has an employment contr act with our subsidiary , argen x BV , for an indenite t erm. His employment contract ma y be terminated a t any me by us, subject to a noce period and a sever - ance paymen t of at least twelve months. Dirk Beeusaert, our General Counsel un l December 31, 2021, had an employment contr act with our subsidiary , argenx B V , for an inde nite term. This agreement w as terminated with mutual agreemen t with eect from December 31, 2021. Andria Wilk, our Global Head of Quality , has an employment contr act with our subsidiary , argenx B V , for an indenite term. Her employment con tract may be t erminated at any me b y us, subject to a noce period and a severance pa yment of at least twelv e months. Malini Moorthy , our General Counsel, joined ar genx in 2022 and has an employment contr act with our subsidiary , arg enx US Inc., for an inde nite term. Her employment con tract may be termina ted at any me by us, subject t o a noce period and a sever ance payment of at leas t twelve months. Luc T ruyen, our Head of R esearch and Development Manag ement Operaons and, fr om April 1, 2022 on, our Chief Medical Ocer , has an employment con tract with our subsidiary , argenx BV , for an indenite term. His emplo yment contract ma y be terminat ed at any me by us, subject to a noce period and a sev erance paymen t of at least twelve months. Indemnicaon Agreemen ts In connecon with our inial U.S. public o ering, we entered in to indemnicaon agreements with each of our non-e x - ecuve direct ors and each member of our senior management. W e have en tered into such agr eements with each new non-ex ecuve director or member of our senior manag ement when they have joined us since our inial U .S. public oering. Insofar as indemnica on for liabilies arising under the Securies Act may be permied t o non-execuv e directors, ocer s or persons con trolling us pursuant t o the foregoing pr ovisions, we have been inf ormed that in the opinion of the SEC such indemnicaon is ag ainst public policy as expressed in the Securies Act and is there fore unenf orceable. 6. 12 Employees As of December 31, 2021, we had 650 employees (ex cluding consultants) A t each date shown below , we had the following number of employees, brok en out by department and geograph y . Collecve barg aining agreemen ts ( CBAs ) can be entered int o in Belgium at the naonal, industry , or company levels. These CBAs are binding on both employer s and employees. W e have no trade union represent aon or CBAs at the company lev el, but we are subject to the naonal and industry level CBAs that relat e to the chemical industry . The CBAs currently applicable to us relat e to employment condions such as wages, working me, job security , innovaon and supplementary pensions. W e hav e not had, and do not ancipate having, disputes on any of these subjects. CBAs may , howev er , change the employment condions of our employees in the future and hence adversely aect our employment relaonship s. 6. 13 Legal and Arbitration Pr oceedings From me to me we may become involv ed in legal, governmen tal or arbitra on proceedings or be subject to claims arising in the ordinary cour se of our business. Regardless of the outcome, liga on can hav e an adverse impact on us be - cause of defense and selement cos ts, diver sion of management resour ces and other factor s. During the previous twelve months, there hav e not been any legal, governmen tal or arbitra on proceedings (including any such proceedings which are pending or threatened of which we are aware) which may hav e, or have had in the recent past signicant e ects on argen x and/or the Group’ s nancial posion or protability . 6. 14 Insurance W e maintain an insurance porolio that is common and appropriate for our business. Our main insurances are com - mercial gener al liability insurances, including products liability insurance, direct or and ocer liability insurance and our marime insurance covering the risk of loss of product during transit and stor age. As at December 31, As at March 1 (In USD thousands) 2021 2020 2019 2022 Funcon Resear ch and development 289 193 118 307 Selling, general and administr ave 361 143 70 377 Geograph y Zwijnaar de, Belgium 296 213 145 308 Boston, U .S. 276 108 40 284 T okyo, Japan 57 13 3 63 Breda, the Netherlands – – – – Geneva, Switz erland 9 2 – 10 Issy Les Moulineaux, Fr ance 3 – – 6 Munich, Germany 9 – – 13 T oronto , Canada – – – – T otal 650 336 188 684 7 P ART VII Consolidated Financial Statements CONSOLIDA TED FINANCIAL ST A TEMENTS – AUDITED AS OF AND FOR THE YEARS ENDED DECEMBER 31, 2021, 2020 AND 2019 Cont ents 7.1 Consolida ted Sta tements of Financial P osion 248 7.2 Consolida ted Sta tements of Pr ot or Loss 250 7.3 Consolida ted Sta tements of Comprehensiv e Income and Loss 251 7.4 Consolida ted Sta tements of Cash Flows 252 7.5 Consolida ted Sta tements of Changes in E quity 253 7.6 Not es to the Consolidated Financial St atemen ts 254 P ART VII 250 | Consolidated Statements of Financial Position Consolidated Statements of Financial Position | 251 Consolidated Statements of Financial Position Assets (In USD thousands $) Note As of December 31, 2021 As of December 31, 2020 () As of December 31, 2019 () Current assets Cash and cash equivalents 12 1,334,676 1,216,803 372,162 Resear ch and development incenve receiv ables — current — 463 293 Financial assets — current 11 1,002,052 779,649 1,128,499 Prepaid expenses 58,946 27,913 10,136 T rade and other r eceivables 10 38,221 6,978 31,585 Inven tories 9 109,076 25,195 — T otal current assets 2,542,971 2,057,001 1,542,675 Non-current assets Other non-current assets 7 54,876 7,816 3,624 Resear ch and development incenve receiv ables — non-current 32,707 20,626 9,624 Def erred tax asset 8 32,191 15,038 — Property , plant and equipment 6 15,844 11,582 9,175 Intangible assets 5 171,684 167,344 45,117 T otal non-current assets 307,303 222,406 67,540 T otal assets 2,850,274 2,279,407 1,610,215 * The Company has adopted a change in its presentaon curr ency from EUR to USD at January 1, 2021, as described in note 3.4.4. Accordingly , the December 31, 2020 and December 31, 2019 comparave st atements of nancial posion and related notes ha ve been re-pr esented retrospecvely based on the accounng policies as outlined in note 3.4.4. The accompanying notes form an inte gral part of these consolidated nancial sta tements. Consolidated Statements of Financial Position Equity and Liabilies (In thousands of $) Note As of December 31, 2021 As of December 31, 2020 () As of December 31, 2019 () Equity 13 Equity aribut able to owners of the parent Share capital 6,233 5,744 5,209 Share premium 3,462,775 2,339,033 1,505,641 T ranslaon dierences 131,684 134,732 (27,541) Accumulated losses (1,400,197) (991,932) (383,477) Other reserves 333,729 186,474 80,577 T otal equity 2,534,224 1,674,051 1,180,409 Non-current liabilies Provisions f or employee benets 417 156 72 Lease liabilies — non-current 22 7,956 6,181 5,101 Def erred tax liabilies 8 6,438 1,487 — Def erred revenue — non-curren t 16 — 269,039 244,937 T otal non-current liabilies 14,811 276,863 250,110 Current liabilies Lease liabilies — current 22 3,509 3,476 2,218 T rade and other pa yables 15 293,415 275,192 95,827 T ax liabilies 4,315 3,497 386 Def erred revenue — curren t 16 — 46,328 81,265 T otal current liabilies 301,239 328,493 179,696 T otal liabilies 316,050 605,356 429,806 T otal Equity and Liabilies 2,850,274 2,279,407 1,610,215 * The Company has adopted a change in its presentaon curr ency from EUR to USD at January 1, 2021, as described in note 3.4.4. Accordingly , the December 31, 2020 and December 31, 2019 comparave st atements of nancial posion and related notes ha ve been re-presen ted retrospecvely based on the accounng policies as outlined in note 3.4.4. The accompanying notes form an integr al part of these consolidated nancial sta tements. 252 | Consolidated Statements of Pr ofit or Loss Consolidated Statements of Compr ehensive Income and Loss | 253 Consolidated Statements of Pr ofit or Loss Consolidated Statements of Compr ehensive Inc ome/Loss (In USD thousands $ ex cept for shares and EPS) Note Y ear Ended December 31, 2021 Y ear Ended December 31, 2020 () Y ear Ended December 31, 2019 () Rev enue 16 497,277 41,243 78,462 Other operang inc ome 17, 7 42,141 23,668 15,563 T otal operang inc ome 539,418 64,911 94,025 Resear ch and development expenses 19 (580,520) (370,885) (220,771) Selling, general and administr ave expenses 20 (307,644) (171,643) (72,146) T otal operang e xpenses (888,164) (542,528) (292,917) Operang loss (348,746) (477,617) (198,892) Financial income/(expense) 23 (944) (1,501) 15,983 Exchange g ains/(losses) 23 (50,053) (126,234) 6,990 Loss befor e taxes (399,743) (605,352) (175,919) Income tax e xpense 24 (8,522) (3,103) (5,289) Loss for the year (408,265) (608,455) (181,208) Loss for the year a ributable to: Owners of the paren t (408,265) (608,455) (181,208) W eighted aver age number of shares outstanding 51,075,827 45,410,442 38,619,121 Basic and diluted loss per share (in $) 25 (7.99) (13.40) (4.69) (In USD thousands $ ex cept for shares) Note Y ear Ended December 31, 2021 Y ear Ended December 31, 2020 () Y ear Ended December 31, 2019 () Loss for the year (408,265) (608,455) (181,208) Items that ma y be reclassied subsequently to prot or loss, net of t ax Currency tr anslaon dierences, arisen fr om translang f oreign acvies (3,048) — — T ranslaon e ect — 162,273 (8,587) Items that will not be r eclassied subsequently to prot or loss, net of t ax Fair v alue gain/(loss) on inves tments in equity instruments designated as at FVT OCI 7 (39,290) — — Other comprehensive loss, ne t of income tax (42,338) 162,273 (8,587) T otal comprehensive loss a ributable to: Owners of the paren t (450,603) (446,182) (189,795) * The Company has adopted a change in its presentaon curr ency from EUR to USD at January 1, 2021, as described in note 3.4.4. Accordingly , the December 31, 2020 and December 31, 2019 comparave st atements of prot and loss and relat ed notes have been re-pr esented retrospecvely based on the accounng policies as outlined in note 3.4.4. The accompanying notes form an inte gral part of these consolidated nancial sta tements. * The Company has adopted a change in its presentaon curr ency from EUR to USD at January 1, 2021, as described in note 3.4.4. Accordingly , the December 31, 2020 and December 31, 2019 comparave st atements of comprehensive income and loss and related notes have been re-presen ted retr ospecvely based on the accounng policies as outlined in note 3.4.4. The accompanying notes form an integr al part of these consolidated nancial sta tements. P ART VII Consolidated Statements of Cash Flows 254 | Consolidated Statements of Cash Flows Consolidated Statements of Chang es in Equity | 255 Cash ow (used in) / from oper ang acvies (In thousands of $) NOTE Y ear Ended December 31, 2021 Y ear Ended December 31, 2020 () Y ear Ended December 31, 2029 () Operang loss (348,746) (477,617) (198,892) Adjustments f or non-cash items Amorzaon of in tangible assets 5 776 246 43 Depreciaon of pr operty , plant and equipment 6 5,091 3,671 2,382 Provisions f or employee benets 260 76 64 Expense recogniz ed in respect of share-based paymen ts 14 179,366 96,932 44,236 Fair v alue gains on non-current nancial assets a t fair value through pr ot or loss (11,152) (2,951) (1,214) Non-cash rev enue 7 (75,000) — — (249,405) (379,643) (153,381) Movements in curr ent assets/liabilies (Increase)/decrease in tr ade and other receivables 10 (31,632) 21,961 (25,709) (Increase)/decrease in in ventories 9 (83,880) (23,852) — (Increase)/decrease in other curr ent assets (30,990) (16,189) (5,788) Increase/(decrease) in tr ade and other payables 15 134,892 50,537 53,729 Increase/(decrease) in de ferred re venue – current 16 (46,327) (40,441) 69,526 Movements in non-curr ent assets/liabilies (Increase)/decrease in other non-curr ent assets (13,975) (10,299) (6,224) Increase/(decrease) in de ferred re venue – non-current 16 (269,039) 2,655 224,492 Cash ows (used in)/from oper ang acvies (590,356) (395,272) 156,645 Inter est paid (684) (401) (139) Income tax es paid (15,772) (2,791) (4,876) Net cash ow (used in) / from oper ang acvies (606,812) (398,463) 151,630 Purchase of int angible assets 5 (117,811) (4,071) (44,939) Purchase of property , plant and equipment 6 (3,623) (1,068) (1,796) (Increase)/decrease in nancial assets – curr ent 11 (228,239) 341,869 (792,655) Inter est received 2,603 7,962 6,122 Net cash ow (used in) / from in vesng acvies (347,070) 344,692 (833,267) Principal elements of lease paymen ts 22 (3,855) (2,550) (1,515) Proceeds fr om issue of new shares 13 1,091,326 813,186 755,641 Issue costs paid 13 (528) (613) (25,747) Exchange g ain from currency con version on proceeds fr om issue of new shares 966 68 — Proceeds fr om exercise of s tock opons 13 33,433 22,912 5,345 Net cash ow (used in) / from nancing acvies 1,121,342 833,003 733,726 Net increase (decrease) in c ash & cash equivalents 167,460 779,232 52,088 Cash and cash equivalen ts at the beginning of the period 1,216,803 372,162 321,791 Exchange g ains/(losses) on cash & cash equivalents (49,587) 65,409 (1,717) Cash and cash equivalen ts at the end of the period 1,334,676 1,216,803 372,162 Consolidated Statements of Changes in Equity Aribut able to owners of the parent () (In thousands of $) Share capital Share premium Accumulated losses T ranslaon dier ences Other reserves T otal equity aributable to owners of the parent T otal equity Balance at January 1, 2019 4,451 796,894 (202,270) (18,954) 36,341 616,462 616,462 Loss for the y ear (181,208) (181,208) (181,208) Other comprehensiv e income / (loss) (8,587) (8,587) (8,587) T otal comprehensive loss of the period (181,208) (8,587) (189,795) (189,795) Share-based paymen t 44,236 44,236 44,236 Issue of share capit al 710 756,472 757,182 757,182 T ransacon cos ts for equity issue (25,476) (25,476) (25,476) Accounng trea tment of the share subscripon agreement (27,635) (27,635) (27,635) Exer cise of stock opons 48 5,386 5,434 5,434 Balance year ended December 31, 2019 5,209 1,505,641 (383,477) (27,541) 80,577 1,180,409 1,180,409 Loss for the y ear (608,455) (608,455) (608,455) Other comprehensiv e income / (loss) 162,273 162,273 162,273 T otal comprehensive loss of the period (608,455) 162,273 (446,182) (446,182) Income tax bene t from ex cess tax deducons relat ed to share-based pa yments 8,965 8,965 8,965 Share-based paymen t 96,932 96,932 96,932 Issue of new shares 468 812,718 813,186 813,186 T ransacon cos ts for equity issue (613) (613) (613) Exer cise of stock opons 67 21,287 21,354 21,354 Balance year ended December 31, 2020 5,744 2,339,033 (991,932) 134,732 186,474 1,674,051 1,674,051 Loss for the y ear (408,265) (408,265) (408,265) Other comprehensiv e income / (loss) (3,048) (39,290) (42,338) (42,338) T otal comprehensive loss of the period (408,265) (3,048) (39,290) (450,603) (450,603) Income tax bene t from ex cess tax deducons relat ed to share-based pa yments 7,179 7,179 7,179 Share-based paymen t 179,366 179,366 179,366 Issue of new shares 430 1,090,896 1,091,326 1,091,326 T ransacon cos ts for equity issue (528) (528) (528) Exer cise of stock opons 59 33,374 33,433 33,433 Balance year ended December 31, 2021 6,233 3,462,775 (1,400,197) 131,684 333,729 2,534,224 2,534,224 * The Company has adopted a change in its presentaon curr ency from EUR to USD at January 1, 2021, as described in note 3.4.4. Accordingly , the December 31, 2020 and December 31, 2019 comparave st atements of prot and loss and relat ed notes have been re-pr esented retrospecvely based on the accounng policies as outlined in note 3.4.4. The accompanying notes form an inte gral part of these consolidated nancial sta tements. * The Company has adopted a change in its presentaon curr ency from EUR to USD at January 1, 2021, as described in note 3.4.4. Accordingly , the December 31, 2020 and December 31, 2019 comparave st atements of prot and loss and relat ed notes have been re-pr esented retrospecvely based on the accounng policies as outlined in note 3.4.4. Please ref er to note 13 for more inf ormaon on the share capital and movemen t in number of shares. See also note 14 for more inf ormaon on the share-based paymen ts. The accompanying notes form an integr al part of these consolidated nancial sta tements. P ART VII 256 | Notes to the Consolidated Financial Statements Notes to the Consolidated Financial Statements | 257 Notes to the Consolidated Financial Statements 1 General information about the c ompany argen x SE is a Dutch European public company with limit ed liability incorporat ed under the laws of the Netherlands. The company (C OC 24435214) has its ocial seat in Roer dam, the Netherlands, and its register ed oce is at Willemstraa t 5, 4811 AH, Breda, the Netherlands. An ov erview of the company and its subsidiaries (the Company) ar e described in note 31. argen x SE is a publicly traded compan y with ordinary shares listed on Eurone xt Brussels under the symbol “ ARGX” since July 2014 and with American Depositary Shares listed on Nasdaq under the symbol “ ARGX” since May 2017. 2 Impacts of C OVID- 19 on Our Business The current unpr ecedented challenges as a result of the C OVID-19 outbreak hav e impacted how we opera te. We ha ve been taking, and connue to t ake, the necessary st eps in terms of saf ety , risk migaon, and nancial measur es to best manage through these challenging mes. W e have curr ently experienced limited impact on our nancial perf ormance and nancial posion, although we connue t o face addional risks and challenges associat ed with the impact of the outbreak. 3 Significant Acc ounting Policies The signicant Company’ s accounng policies are summarized below . 3. 1 Statement of complianc e and basis of preparation The consolidated nancial sta tements are prepared in accordance with the Internaonal Financial Reporng Standar ds (IFRS), issued by the Internaonal Accounng Standar ds Board (IASB) and the interpret aons issued by the IASB’ s Inter - naonal Financial Reporng Interpr etaon Commiee. The consolidated nancial stat ements provide a general overview of the Company ’ s acvies and the results achieved. They present fairly the enty ’ s nancial posion, its nancial perfor - mance and cash ows, on a going concern basis. The signicant accounng policies applied in the prepar aon of the above consolidat ed nancial stat ements are set out below . All amounts are present ed in thousands of dollar , unless otherwise indicat ed, rounded to the neares t $ ‘000. The consolidated nancial sta tements have been approved f or issue by the Company’ s Board of Director s (the “Board”) on March 18, 2022. 3.2 Adoption of New and R evised Standards New standards and int erpretaons applicable for the annual period beginning on January 1, 2021 New standar ds and interpr etaons for the annual period beginning on January 1, 2021 did not hav e any mat erial impact on our consolidated nancial stat ements. New standards and int erpretaons issued, but not yet applicable for the annual period beginning on January 1, 2021 W e have not early adopted an y other standard, in terpreta on, or amendment that has been issued but is not yet e ecve. Of the standar ds that are not yet e ecve, we e xpect no standard t o have a material impact on our nancial s tatements in the period of inial applicaon. 3.3 Basis of Consolidation The consolidated nancial sta tements include the nancial stat ements of the Company and enes contr olled by the Company (its subsidiaries). Control is achieved when the Company; • has power over the inv estee; • is exposed, or has rights, to variable returns from its inv olvement with the inv estee; and • has the ability to use its power to a ect its returns. The Company reassesses whether or not it contr ols an inves tee if facts and circumstances indicat e that there are changes to one or more of the three elements of control lis ted above. The results of the subsidiaries are included in the consolidated sta tements of prot or loss and consolidated st atements of other comprehensive income from the e ecve date of acquision up to the date when control ceases to exist. When necessary , adjustments are made to the nancial st atements of subsidiaries to bring their accounng policies into line with those used by other members of the Group. All inter -company transacons and unrealiz ed gains on transacons between group companies ar e eliminated. Unr ealised losses are also eliminated unless the transacon provides evidence of an impairment of the transf erred asset. 3.4 Foreign Curr ency T ransactions 3.4. 1 Functional and Presentation Currency Items included in the consolidat ed nancial sta tements of each of our enes are valued using the currency of their economic envir onment in which the enty operates. As of January 1, 2021, the consolidated nancial stat ements are present ed in USD ($), which is the Company ’ s present aon currency . 3.4.2 T ransactions and Balances T ransacons in foreign currencies are transla ted at the exchange r ate ruling at the date of the transacon. Monetary assets and liabilies denominated in foreign currencies are tr anslated at the exchange r ate ruling at the reporng dat e. Foreign e xchange dier ences arising on translaon are r ecognized in the consolidated sta tements of prot or loss and the consolidated st atements of other comprehensive income. Non monetary assets and liabilies denominated in for eign currencies are tr anslated at the foreign ex change rate ruling at the date of the transacon. 3.4.3 Financial Statements of F oreign Entities For for eign enes using a dier ent funconal currency than USD: • assets and liabilies for each balance sheet presented are tr anslated at the closing ra te at the date of the balance sheet. • income and expenses f or each stat ement presenng pr ot or loss and statemen ts of statemen ts of other comprehensive income are tr anslated at a verage e xchange r ates (unless this av erage is not a reasonable appr oximaon of the cumulav e e ect of the rates pr evailing on the transacon da tes, in which case income and expenses ar e translated a t the rate on the dates of the tr ansacons). • all resulng exchange di erences are recognised in the stat ements other comprehensiv e income. 3.4.4 Change in functional and pr esentation currency as of January 1, 2021 As of January 1, 2021, the Company changed its funconal and presenta on currency from EUR to USD. The change in funconal currency was made to reect that USD has become the predominant curr ency in the Company , represenng a signicant part of the Company ’ s cash ows and nancing. The change has been implemented with prospecve e ect. The change in presentaon currency , e ecve January 1, 2021, from EUR to USD is retr oacvely applied on compara ve gures according to IAS 8 and IAS 21, as if USD had alwa ys been the presenta on currency of the consolidated nancial sta tements. The change was made to beer re ect the economic footprint of the Company’ s business going forw ard. The P ART VII 258 | Notes to the Consolidated Financial Statements Notes to the Consolidated Financial Statements | 259 Company believes that the present aon currency change will give investor s and other stak eholders a clearer unders tand - ing of the Company’ s performance over me. Comparison gures in the consolidated stat ements of nancial posion, the consolidated sta tements of prot or loss and the consolidated st atements of other comprehensive income, the consolidated st atements of changes in equity , consol - idated st atements of cash ows, and all disclosures hav e been re-presen ted, unless other wise sta ted, using the proce - dures outlined below: • Assets and liabilies are transla ted into USD at the closing rat es applicable at the end of each reporng period. • Income and expenses are translated a t ex change rates at the dat es of the respecve transacon or av erage ra tes where these are a suitable proxy . • Dierences resulng fr om the re-presen taon have been present ed as translaon di erence, a component within shareholder s’ equity . • Share capital, share premium, and other reserves are translat ed at hi st oric ra tes prevailing at the date of transacon. 3.5 Intangible Assets 3.5. 1 Internall y Generated Intangible Assets Expenditure on research acvies is recogniz ed as an expense in the period in which it is incurred. An internally gener ated intangible asset arising from development (or from the development phase of an internal proj - ect) is recognized if , and only if , all of the following ha ve been demonstr ated: • the technical feasibility of compleng the intangible asset so that it will be available f or use or sale; • the intenon to complete the intangible asset and use or sell it; • the ability to use or sell the intangible asset; • how the intangible asset will gener ate probable future economic benets; • the availability of adequate technical, nancial and other resources to complete the development and to use or sell the intangible asset; and • the ability to measure reliably the expenditure aribut able to the intangible asset during its development. The amount inially recognized f or internally gener ated intangible assets is the sum of the expenditure incurr ed from the date when the intangible asset rst meets the recognion criteria list ed above. Where no internally gener ated intangible asset can be recogniz ed, development e xpenditures are recogniz ed in the consolidated sta tements of prot or loss and the consolidated st atements of other comprehensive income in the period in which they are incurred. Due to uncertaines inherent to the development and regis traon with the relevant healthcar e authories of its prod - ucts, the Company esmates that the condions for capit alizaon are not met unl the regula tory procedur es required by such healthcare authories have been nalized. 3.5.2 Acquired In-Process R&D, Softw are and Databases and Other intangible assets Intangible assets with nit e useful lives that are acquir ed separately r elated to in-process r esearch and development pr oj - ects, soware and da tabases and other intangible assets ar e carried at cost less accumulat ed amorzaon and accumulated impairment losses. Int angible assets with indenite useful lives are c arried at cost less accumulat ed impairment losses. Pa yments for acquired in-process resear ch and development pr ojects obtained through in-licensing arrang ements are capitaliz ed as intangible assets pr ovided that they are separa tely idenable, controlled by the Company and expected to provide future economic benets. As the probability criterion in IAS 38 is alway s consider ed to be sased for separ ate - ly acquired research and development assets and the amount of the paymen ts is determinable, upfr ont and milestone payments to thir d pares for pharmaceucal products or compounds for which regulat ory mark eng approval has not yet been obtained are rec ognized as intangible assets. Other intangible assets includes the Priority Revie w V oucher (“PRV ”) acquired in 2020 which the Company can use to obtain the priority review by the FDA for one of its future regula tory submissions or may sell or transf er to a third party . The PRV is measured at cost and reviewed f or impairment when events or circumst ances indicate that the carrying value may not be recover able. At the me the Company commits using the PRV to accelerat e the review of a drug applicaon, the intangible asset will be amorzed and derecognized upon ling of the related Biologic License Applicaon. 3.5.3. Amortization of Intangible Assets Intangible assets, which comprises of acquired in-process research and developmen t, sowar e and databases and other intangible assets, are amorz ed on a straight -line basis over the esmated useful life as from the me they are available for use, or when the underlying drug candidate is approved, gener ally on the following basis: • Acquired In-Process R&D – the longer of the patent protecon lif e and the useful life of the combined product • Soware and Databases – 3 – 5 years The esmated useful lif e and amorzaon method are re viewed at the end of each reporng period, with the eect of any changes in esmat e being accounted f or on a prospecve basis. 3.5.4 Derecognition of Intangible Assets An intangible asset is derecogniz ed either on disposal or when no future economic benets are expected from its use. Gains or losses arising from derecognion of an intangible asset, measured as the dierence betw een the net disposal proceeds, if any , and the carrying amount of the asset, are recognized in the consolidated st atements of prot or loss and the consolidated st atements of other comprehensive income when the asset is derecogniz ed. 3.6 Property , plant and equipment Items of pr operty , plant and equipmen t held for use in the producon or supply of goods or ser vices, or f or administra ve purposes, are s tated in the statemen t of nancial posion at their cos t, less accumulated depr eciaon and impairment losses. Depreciation is recognize d as from acquisition date onwards (unless asset is not ready for use) so as to write off the cost or valuation of assets (other than freehold land and properties under construction) less their residual values over their useful lives, using the straigh t line method. The estimated useful lives, residual values and depreciation method are reviewed at the end of each reporting period, with the eff ect of any changes in estimate accounted for on a pro - spective basis. Unless revised due to specic changes in the esmated useful lif e, annual depreciaon r ates are as follows: • Oce and lab equipment: 3–5 years • IT equipment: 3 year s An item of property , plant and equipment is derecognized upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on the disposal or retirement of an item of property , plant and equipment is determined as the diff erence between the sales proceeds, if any , and the carrying amount of the asset and is recogniz ed in the consolidat ed sta tements of profit or loss and the consolidated stat ements of other comprehensiv e income. 3. 7 Inventories Inven tories are carried at cost or net realisable value, whichever is lowest. Cost is determined using the rst -in, rs t-out method. Cost comprises of costs of purchase, costs of conver sion and other costs incurred in bringing the inventories to their present locaon and condion. If the expected sales price less compleon cos ts to ex ecute sales (net realizable value) is lower than the carrying amount, a write-down is recognised for the amount by which the carrying amount ex ceeds its net realisable value. P ART VII 260 | Notes to the Consolidated Financial Statements Notes to the Consolidated Financial Statements | 261 Included in inventory are pr oducts which could, besides commercial acvies, be used in preclinical and clinical progr ams as well as in non-reimbur sed pre-approval access progr am. These products are charg ed to research & development ex - penses or selling , general and administr ave expenses, respecvely , when dedicated to this channel. W e capitalize inv entory costs associated with products prior to the regulatory approv al of these products, or for inven - tory produced in producon facilies not yet approv ed, when it is highly probable that the pre-appr oval invent ories will be saleable. The determina on to capitaliz e is based on the parcular facts and circums tances relang to the expected regulat ory approv al of the product or producon facility being considered. The assessment of whether or not the product is considered highly probable to be saleable is made on a quarterly basis and includes, but is not limited to, how far a parcular product or facility has progressed along the approval pr ocess, any known saf ety or ecacy concern, poten al labelling restricons and other impediments. Previously capit alized costs relat ed to pre-launch inv entories could be required to be wrien down upon a change in such judgement or due to a denial or delay of approv al by regulat or y bodies, a delay in commercializaon or other potenal fact ors, which will be recorded to r esearch and developmen t expenses. 3.8 Leases The Company assesses whether a contract is or contains a lease, at incepon of the contr act. The Company recognises a right -of-use asset and a corresponding lease liability with respect to all lease arrangements in which it is the lessee, ex cept for short-t erm leases (dened as leases with a lease term of 12 months or less) and leases of low value assets. For these leases, the Company r ecognises the lease payments as an operang expense on a straigh t-line basis over the term of the lease unless another syst emac basis is more repr esentave of the me paern in which economic benets from the leased assets are consumed. The lease liability is initially measured at the presen t value of the lease paymen ts that are not paid at the commence - ment date, discounted by using the rate implicit in the lease. If this rat e cannot be readily determined, the lessee uses its increment al borrowing rat e. The lease liability is subsequently measured by increasing the carrying amount to reflect interes t on the lease liability (using the eff ective inter est method) and by reducing the carrying amount to reflect the lease payments made. The lease liability is presented as a separat e line in the consolidat ed sta tements of financial position. The right -of-use assets comprise the inial measurement of the corresponding lease liability , lease payments made at or befor e the commencement day , less any lease incenves received and any inial direct costs. They are subsequently measured at cost less accumulated deprecia on and impairment losses. Right -of-use assets are depreciated ov er the shorter period of lease term and useful life of the underlying asset. If a lease transf ers ownership of the underlying asset or the cost of the right -of-use asset reects that the Company e xpects to ex ercise a purchase opon, the related right -of- use asset is depreciated over the useful life of the underlying asset. The right -of-use assets are present ed in the consoli - dated st atements of nancial posion under the capon “Property , plant and equipment” . 3.9 Impairment of Assets 3.9. 1 Financial Assets The impairment loss of a nancial asset measured at amorsed cost is calculated based on the expected loss model. For trade r eceivables, in the absence of a signicant nancing component, the allowance is measured at an amount equal to life me expect ed credit losses. Those are the expected credit losses that result from possible default even ts over the expected lif e of those trade receiv ables. 3.9.2 Property , Plant and Equipment and Intangible Assets At the end of each reporng period, the Company revie ws the carrying amounts of its tangible and intangible assets to determine whether there is any indicaon that those assets have su ered an impairment loss. If any such indicaon exists, the rec overable amount of the asset is esmat ed in order to determine the exten t of the impairment loss, if any . Where it is not possible to esmat e the recov erable amount of an individual asset, the Company esmates the recov er - able amount of the cash gener ang unit to which the asset belongs. Intangible assets with indenite useful lives and intangible assets not yet av ailable for use are tes ted for impairment at least annually , and whenever there is an indicaon that the asset may be impaired. If the recover able amount of an asset or cash generang unit is esmated to be less than its carrying amount, the carry - ing amount of the asset or cash genera ng unit is reduced to its recover able amount. An impairment loss is recognized immediately in the stat ement of prot or loss and the statement of other comprehensiv e income. Where an impairment loss subsequently rever ses, the carrying amount of the asset is increased to the revised esmate of its recover able amount, but so that the increased carrying amount does not ex ceed the carrying amount that would have been determined had no impairment loss been recognized f or the asset or cash generang unit in prior years. A rev ersal of an impairment loss is recognized immediat ely in prot or loss. 3. 10 Financial Instruments Financial assets and nancial liabilies are recogniz ed in the consolidated st atements of nancial posion when the Com - pany becomes party to the contractual pr ovisions of the instrument. The Company does not use currency deriva ves to hedge planned future cash ows, nor does it mak e use of forward f oreign exchang e contr acts. Addionally , the Company does not have nancial debt at December 31, 2021. 3. 10. 1 Financial Assets Financial assets are inially recognized either at fair v alue or at transacon price. All recognized nancial assets are subsequently measured at either amorzed cos t or fair value under IFRS 9 on the basis of both the Company’ s model for managing the nancial assets and the contractual cash ow charact eriscs of the nancial asset. • A nancial asset that (i) is held within a business model whose objecve is to collect the contr actual cash ows and (ii) has contractual cash ows that are solely paymen ts of principal and interest on the principal amount outstanding is measured at amorzed cost (net of any write down for impairment), unless the asset is designated at fair value through prot or loss (FVTPL) under the fair value opon. • A nancial asset that (i) is held within a business model whose objecve is achieved both by collecng contr actual cash ows and selling nancial assets and (ii) has contractual term that give rise on specied dates to cash ows that are solely payments of principal and interest on the principal outstanding, is measured at fair value through other compre - hensive income (FVTOCI), unless the asset is designated at FVTPL under the fair value opon. • All other nancial assets are measured at FVTPL. A nancial asset is classied as current when the cash ows expected to ow fr om the instrument mature within one year . The Company derecogniz ed a nancial asset when the contractual rights to the cash ows from the asset expire, or the Company tr ansfers the right to receiv e the contr actual cash ows on the nancial asset in a transacon in which substan - ally all the risks and rewar ds of ownership of the nancial asset are transf erred. The Company classies non-derivave nancial assets into the following ca tegories; • nancial asset at fair v alue through prot or loss or OCI (non-current nancial assets, current nancial assets and cash equivalents) • nancial assets at amorz ed cost (receiv ables and cash and cash equivalents) Financial assets at fair value through prot or loss or OCI Financial assets are designated at fair value thr ough prot or loss if the Company manages such inv estments and makes purchases and sales decisions based on their fair value in accordance with the Company ’ s inves tment strat egy . Aribut - able transacon costs are rec ognised in the consolidated st atements of prot or loss and the consolidated st atements of other comprehensive income as incurred. Financial assets at fair value through prot or loss are measured at fair v alue, P ART VII 262 | Notes to the Consolidated Financial Statements Notes to the Consolidated Financial Statements | 263 and changes therein, which tak e into account an y dividend income, are recogniz ed in the consolidated st atements of prot or loss and the consolidat ed sta tements of other comprehensive income. 3.10.1.1 Non-current nancial assets at fair value through prot or loss or OCI The Company holds investmen ts in non-current nancial assets, which based on IFRS 9, are designated as nancial assets at fair value thr ough prot or loss or nancial assets at fair value thr ough OCI. The fair value of listed inves tments is based upon the closing price of such securies at each reporng date. If there is no acve mark et for an equity instru - ment, the Company establishes the fair value by using valuaon techniques. Based on IFRS 9, the Company irrev ocably elected to designate specic investmen ts as a nancial asset at fair value through OCI as the parcipaon is not held for trading purposes nor conngent consider aon recognised by an acquirer in a business combinaon. 3.10.1.2 Current nancial assets at fair value through prot or loss Current nancial assets include nancial assets measured at fair value through prot or loss and comprise of money mar - k et funds and term accounts that have an inial maturity equal or less than 12 months, but ex ceeding 3 months. 3.10.1.3 Cash equivalents measured at fair value through prot or loss Cash equivalents measured at fair v alue through prot or loss may comprise of term accounts that hav e an inial ma - turity of equal or less than 3 months and money market funds that are readily con verble to cash and are subject to insignicant risk of changes in value. These nancial assets are used by the Company in the management of the short- term commitments. Financial Assets at Amorzed Cost 3.10.1.4 Receivables T rade and other receiv ables are designated as nancial assets measured at amorzed cost. They are inially measured either at fair value or at transacon price, in the absence of a signicant nancing component. All receivables are subsequently measur ed at amorzed cos t, which generally corr esponds to nominal value less expect - ed credit loss provision. Receiv ables mainly comprise trade and other receivables and current and non-current resear ch and development incen - ve receiv ables. These research and development incenv e receiv ables relate to refunds resulng fr om resear ch and development incenv es on research and developmen t expenses in Belgium and are credited to the consolidated st ate - ments of prot or loss and the consolidated st atements of other comprehensive income under the line “Other oper ang income” when the relevant expenditur e has been incurred and there is a reasonable assur ance that the research and development incenv es are receiv able. 3.10.1.5 Cash Cash are nancial assets measured at amorzed cost and comprise of cash balances and savings accounts. 3.10.1.6 Cash equivalents measured at amorzed costs Cash equivalents measured at amorz ed cost comprise of term accounts that hav e an inial maturity of less than 3 months that are subject to an insignicant risk of changes in values. The nancial assets are used by the Company in the management of short -term commitments. Cash and cash equivalents ex clude res tricted cash, which is presented in the consolidated st atements of nancial posion under the line “Other non-curren t assets” . 3.10.1.7 Current nancial assets measured at amorzed costs Current nancial assets include nancial assets measured at amorzed costs and comprise of term accounts that have an inial maturity equal or less than 12 months, but ex ceeding 3 months. 3. 10.2 Financial Liabilities Financial liabilies are inially measured at their transacon price. Subsequent to inial recognion, nancial liabilies are measured at amorz ed cost. Financial liabilies mainly comprise of trade and other liabilies. T rade and other liabilies are comprised of liabilies that are due less than one year from the balance sheet date and are in general not inter est bearing and seled on an ongoing basis during the nancial year . They also include accrued expense rela ted to the Company’ s research and development cos ts. 3. 11 Shareholder’s equity An equity instrument is any contract that evidences a residual inter est in the assets of an enty aer deducng all of its liabilies. Equity instruments issued by the Company are recogniz ed at the proceeds receiv ed, net of direct issue costs. The Company has never distributed any dividends to its shareholders. As of December 31, 2021, no prots were a vailable for distribuon. 3. 12 Short term employ ee benefits Short term employee benets include payables and accruals for salaries and bonuses to be paid to the employees of the Company . They are recogniz ed as expenses for the period in which employees perf orm the corresponding services. 3. 13 Share based payments Equity seled share based payments to employ ees and others providing similar services are measured at the fair value of the equity instruments at the acceptance date. The fair value determined at the acceptance date of the equity seled share based payments is expensed on a str aight line basis over the vesng period, based on the Company ’ s esmat e of equity instruments that will eventually vest, with a corresponding increase in equity . At the end of each reporng period, the Company revises its esmat e of the number of equity instruments expected to ves t. The impact of the revision of the original esmates, if any , is recogniz ed in the consolidat ed sta tements of prot or loss and the consolidated sta tements of other compr ehensive income such that the cumulave expense r eects the revised esma te, with a corresponding adjustment to the equity seled share based payment r eser ve. 3. 14 Deferred revenue Current and non-current def erred rev enue relat es to cash receiv ed from collabor aon & license agreements prior to compleon of the earnings process. These paymen ts are rec ognized as revenue over the esmat ed dura on of the Com - pany’ s involvemen t in the research and development progr ams provided for under the terms of the agreements. 3. 15 Income taxes Income tax in the consolidated st atements of prot or loss and the consolidated st atements of other comprehensive income represen ts the total of the current tax and def erred tax. P ART VII 264 | Notes to the Consolidated Financial Statements Notes to the Consolidated Financial Statements | 265 The curren t tax is based on tax able profit for the year . T axable profit diff ers from profit as reported in the stat e - ment of profit and loss and stat ement of other comprehensiv e income as it excludes items of income or expense that are tax able or deductible in other years and items that are never taxable or deductible. The Company ’ s liabil - ity for current tax is calculated using tax rates that have been enacted or substan tively enacted by the end of the reporting period. Def erred tax is recogniz ed on temporary di erences between the carrying amounts of assets and liabilies in the consoli - dated nancial sta tements and the corresponding t ax basis used in the comput aon of tax able prot. Deferred ta x assets are recogniz ed to the extent that it is probable that future taxable pr ots will be available agains t which those deducble tempor ary dier ences can be ulized. The carrying amount of deferr ed tax assets is review ed at the end of each report - ing period and reduced to the exten t that it is no longer probable that sucient ta xable prots will be available to allow all or part of the asset to be rec overed. Def erred tax assets and liabilies are oset if there is a legally enfor ceable right to oset curren t tax liabilies and assets, and they relate to income tax es levied by the same tax authority on the same tax able enty , or on dierent ta xable enes which intend either to sele current tax liabilies and assets on a net basis, or to realize the assets and sele the liabilies simultaneously . Def erred tax assets and liabilies are measured at the tax r ates that are expected to apply in the period in which the liability is seled or the asset realized, based on tax ra tes (and tax laws) that have been enacted or substanally enacted by the end of the reporng period. 3. 16 Rev enue and other operating income recognition 3. 16. 1 Collaborations and license agreements Rev enues to date ha ve consisted principally of milestones, license fees, non-refundable upfr ont fees and research and development service fees in connecon with collabora on and license agreements. The Company recogniz es revenue when the customer obtains contr ol of promised goods or services, in an amount that reects the consider aon that the Company expects to r eceive in ex change for those goods and ser vices. In order to determine rev enue rec ognion for agreemen ts that the Company determines to be in the scope of IFRS 15, following ve steps ar e performed: 1. Idenfy the contracts In its current collabora on and license agreements, the Company is mainly licensing its intellectual property and/or pr o - viding research and development pr oducts/services, which might include a cost sharing mechanism and/or in the future, selling its products to collaborav e partner enes. Rev enue is genera ted through these arrangements via upfron t pay - ments, milestone pa yments based on clinical and regulatory criteria, research and developmen t service fees and future sales based milestones and sales based roy ales. In some cases, the collaboraon and license agreements also include an equity subscripon component. If this is the case, the Company analyses if the criteria to combine contr acts, as set out by IFRS 15, are met. 2. Idenfy performance obligaons Depending on the type of the agreement, there can be one or more disnct performance oblig aons under IFRS 15. This is based on an assessment of whether the promises in an agreement are capable of being disnct and are disnct from the other promises to transf er goods and/or services in the context of the contr act. For our material ongoing collabor aon and license agreement (i.e. the Zai Lab Agreemen t), the Company has assessed that there is more than one disnct performance obligaon, being the transf er of a license and supply of clinical and commercial pr oduct. This is because the Company considers the performance obligations is distinct in the conte xt of the contr act as the license has stand-alone value without the Company being further involved in the research and development col - labora tion and that there is no interdependence between the license and the clinical and commercial supply to be provided. For other material collabor aon and license agreements, the Company has assessed that there is one single performance obligaon in our collabora on and license agreements, being the transf er of a license combined with performance of resear ch and development services. 3. Determine the transacon price Our material ongoing collabora on and license agreements include non-refundable upfr ont payments or license fees; milestone pa yments, the receipt of which is dependent upon the achievement of certain clinical, regulat ory or commer - cial milestones; roy ales on sales and research and development service fees. 3.1 Non-refundable upfr ont payments or license fees If the license to the Company’ s intellectual pr operty is determined to be disnct fr om the other performance obliga ons idened in the arr angement, the Company rec ognizes rev enue from non-refundable upfr ont fees alloca ted to this license at the point in me the license is tr ansferr ed to the customer and the customer has the righ t to use the license. For all our mat erial ongoing collaboraon and license agr eements, the Company consider s the performance obligaons relat ed to the transf er of the license as disnct from the other pr omises to transf er goods and/or services. The Company ulizes judg ement to assess the nature of the perf ormance obligaon to det ermine whether the performance obliga on is sased ov er me or at a point in me. If over me, re venue is then recogniz ed based on a paern that best r eects the trans fer of contr ol of the ser vice to the cust omer . 3.2 Milestone pa yments other than sales based milestones A milestone paymen t, being a variable consideraon, is only included in the transacon price to the extent it is highly probable that a signicant rev ersal in the amount of cumulave rev enue recognion will not occur when the uncertainty associated with the variable considera on is subsequently resolved. The Company esma tes the amount to be included in the transacon price upon achievemen t of the milestone event. The transacon price is then allocated to each perfor - mance obligaon on a stand-alone selling price basis, for which the Company rec ognizes revenue as or when the perfor - mance obligaons under the contract ar e sased. A t the end of each reporng period, the Company re-ev aluates the probability of achievement of such milestones and any relat ed constr aint, and, if necessar y , adjusts the esmat e of the over all tr ansacon price. Any such adjustments are recor ded on a cumulave cat ch-up basis, which would aect rev enue and earnings in the period of adjustment. 3.3 Resear ch and development service fees Our material ongoing collabora on and license agreements may include reimbur sement or cost sharing for r esearch and development services. R&D services are perf ormed and sased over me given that the customer simultaneously re - ceives and consumes the benets provided by us. Such costs reimbur sements received are recogniz ed in revenues when costs are incurred and agreed by the pares. 3.4 Sales based milestone paymen ts and royales Our material ongoing collabor aon and license agreements include sales based royales, including commer cial milestone paymen ts based on the level of sales, and the license has been deemed to be the predominant item t o which the roy ales and commercial milest one payments relat e. Related re venue is recognized as the subsequent underlying sales occur . 4. Allocate the transacon price In principle, an enty shall allocate the transacon price to each performance obliga on idened in the contract on a relave st and-alone selling price basis. As our ongoing collabora on and license agreement (i.e. the Zai Lab Agree - ment) cont ains more than one performance obligaon, the Company assess to allocat e the transacon price to all performance oblig aons idened. 5. Recognize r evenue Rev enue is recogniz ed when the customer obtains con trol of the goods and/or services as provided in the collabor aon and license agreements. The control can be transf erred over me or at a point in me – which results in the recognion of revenue over me or at a point in me. As our ongoing collaboraon and license agreement (i.e. the Zai Lab Agreement) con tains more than one performance P ART VII 266 | Notes to the Consolidated Financial Statements Notes to the Consolidated Financial Statements | 267 obligaon, the Company recogniz ed revenue at point in me for transf er of license and the Company recogniz es rev enue over me for supply of clinical and commercial products as customer simultaneously receive the benets provided by the Company’ s performance, sased over me. Other ongoing collaboraon and license agreements only cont ain one single performance obligaon which is, as the customer simultaneously receiv e the benets provided by the Company’ s performance, sased over me. As such, the Company rec ognizes revenue over me. The recognion of r evenue over me is based on a pa ern that best reects the sas facon of the relat ed performance obligaon, applying the input me thod. The input method esmates the sasf acon of the performance oblig aon as the percent age of total collabor aon costs that ar e completed each period compar ed to the total esmat ed collaboraon c osts. Resear ch and development service fees are rec ognized as revenue when costs are incurred and agreed by the pares as the Company is acng as a principal in the scope of its stak e of the research and development acvies of its ongoing collabor aon and license agreements. 3. 16.2 Grants, research and dev elopment incentives, payroll tax rebates and changes in fair value on non-current financial assets Because it carries out extensive research and development activities, the Company benefits from various grants, resear ch and developmen t incentives and payroll tax rebates from certain government al agencies. These gran ts, resear ch and developmen t incentives and payroll tax rebates gener ally aim to partly reimburse approved expenditur es incurred in research and development eff orts of the Company and are credited to the consolidated stat ements of prof - it or loss and the consolidat ed sta tements of other comprehensive income, under the line “Other operating income” , when the relev ant expenditur e has been incurred and there is reasonable assurance that the grants or research and development incentives are receivable. F air value gains resulting from the change in the fair value of non-current financial assets are credited to the consolidat ed sta tements of profit or loss and the consolidated stat ements of other comprehensiv e income, under the line “Other operating income” . 3. 17 Segment reporting Segment results include revenue and expenses directly aribut able to a segment and the relevant poron of revenue and expenses that can be allocated on a reasonable basis to a segment. Segment assets and liabilies comprise those operat - ing assets and liabilies that are directly aribut able to the segment or can be allocat ed to the segment on a reasonable basis. Segment assets and liabilies do not include income tax items. The Company manages its acvies and opera tes as one business unit which is reected in its org anizaonal structure and internal reporng. The Company does not disnguish in its internal reporng di erent segments, neither business nor geographic al segments. The chief operang decision mak er is the Board of Directors. 4. Critical Accounting Judgements and Key Sourc es of Estimation Uncertainty In the applicaon of the Company’ s accounng policies, which are described above, the Company is requir ed to mak e judgments, esmat es and assumpons about the carrying amounts of assets and liabilies that are not readily apparent from other sources. The esmates and associated assumpons are based on historical experience and other factor s that are considered to be relev ant. Actual results may dier from these esmat es. The esmates and underlying assumpons are reviewed on an ongoing basis. Revisions to accounng esmat es are recogniz ed in the period in which the esmate is revised if the revision a ects only that period or in the period of the revision and future periods if the revision aects both current and future periods. The following areas are areas wher e k ey assumpons concerning the future, and other key sources of esmaon uncer - tainty at the end of the reporng period, hav e a signicant risk of causing a material adjustmen t to the carrying amounts of assets and liabilies within the next nancial year . Critical estimates in appl ying accounting policies Resear ch and development cost accruals The Company recogniz es costs of $163.7 million, as specied in note 15 to the nancial statements, incurr ed for clinical trial acvies and manufacturing of drug products, as research and development e xpenses based on an evaluaon of its vendors’ progr ess toward compleon of specic tasks. Timing of payment may di er signicantly from the period in which the costs are recogniz ed as expense, resulng in clinical trial accruals recognized within “ T rade and other pay - ables” in the consolidat ed st atements of nancial posion. Quancaon of the research pr ogress and the transla on of the progress to these accruals requires esmat es, because the progress is not directly observable. In esmang the vendors’ progr ess tow ard compleon of specic tasks, the Company there fore uses non-nancial data such as paent enrollment, clinical site acva ons and vendor informa on of actual costs incurred. This data is obtained through reports from or discussions with Company personnel and outside service providers as to the progress or sta te of compleon of trials, or the compleon of services. Costs are expensed over the service period the services are provided. Costs for services provided that have not yet been paid are recogniz ed as accrued expenses. P ART VII 268 | Notes to the Consolidated Financial Statements Notes to the Consolidated Financial Statements | 269 5 Intangible assets The Company performed an annual impairment review on the intangible assets not yet available f or use. This review did not result in the recognion of an impairment charge. As of December 31, 2021, there are no commitments to acquire addional intangible assets, ex cept as set forth in note 29. No intangible assets are pledged as security for liabilies nor are there any int angible assets whose tle is restricted. (In thousands of $) Acquired In-Process R&D Soware & databases Other Intangibles T otal Cost On January 1, 2019 — 182 — 182 Addions 45,000 293 — 45,293 T ranslaon di erences (198) (2) — (200) On December 31, 2019 44,802 473 — 45,275 Addions 16,182 2,814 98,000 116,996 T ranslaon di erences 4,196 256 1,058 5,510 On December 31, 2020 65,180 3,543 99,058 167,781 Addions 5,000 — — 5,000 Disposals — (190) — (190) On December 31, 2021 70,180 3,353 99,058 172,591 Amorzaon and impairmen t On January 1, 2019 — (118) — (118) Amorzaon — (43) — (43) T ranslaon di erences — 4 — 4 On December 31, 2019 — (158) — (158) Amorzaon — (246) — (246) T ranslaon di erences — (33) — (33) On December 31, 2020 — (437) — (437) Amorzaon — (470) — (470) On December 31, 2021 — (907) — (907) Carrying Amount On December 31, 2019 44,802 315 — 45,117 On December 31, 2020 65,180 3,106 99,058 167,344 On December 31, 2021 70,180 2,446 99,058 171,684 6 Property , Plant and Equipment (In thousands of $) IT , oce and lab equipment Right -of-use assets Buildings Right -of-use assets V ehicles Leasehold improve - ments Lease equipment 1 T otal Cost On January 1, 2019 3,105 — — — 290 3,395 Adopon of IFRS 16 — 2,677 517 — — 3,194 Addions 856 5,097 588 905 32 7,478 T ranslaon di erences (55) (33) (7) 3 (5) (97) On December 31, 2019 3,906 7,741 1,098 908 317 13,970 Addions 733 3,335 1,074 432 — 5,574 Disposals (110) — — — — (110) T ranslaon di erences 360 645 101 84 29 1,219 On December 31, 2020 4,889 11,721 2,273 1,424 346 20,653 Addions 3,163 4,923 802 543 — 9,430 Disposals (217) — — — — (217) Currency tr anslaon adjustment 104 (182) — 14 — (64) On December 31, 2021 7,938 16,462 3,075 1,981 346 29,802 Depreciaon and impairment On January 1, 2019 (2,439) — — — (13) (2,452) Depreciaon (515) (1,472) (261) (103) (31) (2,382) T ranslaon di erences 45 (5) (1) — — 39 On December 31, 2019 (2,909) (1,477) (262) (103) (44) (4,795) Depreciaon (535) (2,262) (441) (401) (32) (3,671) Disposals 103 — — — — 103 T ranslaon di erences (301) (305) (57) (39) (6) (708) On December 31, 2020 (3,642) (4,044) (760) (543) (82) (9,071) Depreciaon (1,118) (2,714) (651) (539) (34) (5,055) Disposals 158 — — — — 158 Currency tr anslaon adjustment 37 (15) — (11) — 10 On December 31, 2021 (4,565) (6,774) (1,411) (1,093) (116) (13,958) Carrying Amount On December 31, 2019 997 6,264 836 805 273 9,175 On December 31, 2020 1,247 7,677 1,513 881 264 11,582 On December 31, 2021 3,373 9,688 1,664 888 230 15,844 1. The Company has elected not to reassess whether a contract is, or cont ains, a lease at the date of inial applicaon. Ins tead, for contracts ent ered into befor e the transion date, the Company relied on its assessment made applying IAS 17 and IFRIC 4 Determining whether an Arrangement cont ains a Lease. There are no commitments to acquire property , plant and equipment. Furthermore, no items of property , plant and equipment are pledged. See note 22 for informa on for leases where the Company is a lessee. P ART VII 270 | Notes to the Consolidated Financial Statements Notes to the Consolidated Financial Statements | 271 7 Other Non-Current Assets Other non-current assets c onsisted of non-current r estricted cash and nancial assets held at f air value through pr ot or loss or through OCI. Non-current r estricted cash on December 31, 2021 was mainly c omposed of deposit guarantees paid under the lease agr ee - ments f or the laboratory and oces of the Company . Non-current nancial assets held a t fair value thr ough prot or loss is comprised of the prot share in Ag omAb Therapeucs NV . In March 2019, the Company ent ered into a license agreemen t with AgomAb Therapeucs NV for the use of HGF-mi - mec SIMPLE Anbodies™, dev eloped under the Company ’ s Immunology Innova ve Program. In e xchange f or granng this license, the Company r eceived a prot share in AgomAb Ther apeucs NV . In March 2021, AgomAb Ther apeucs NV secured $74 million in Series B nancing by issuing 286,705 of Pref erred B Shares. The Company used the post -money valua on of Series B nancing round and the number of outstanding shares in de ter - mining the fair v alue of the prot-sharing ins trument, which results in a change in f air value of non-current nancial assets of $11.2 million recor ded through prot or loss. Fair v alue changes on non-current nancial assets with f air value through pr ot or loss are recogniz ed in the consolidated sta tements of prot or loss in line “Other oper ang income” . As part of the license agreement f or the development and commer cializaon f or efg argimod in Greater China (see note 16 for further inf ormaon), the Company obt ained, amongst others, 568,182 newly issued Zai Lab shar es calculated at a price of $132 per share. The f air value of the equity instrument at r eporng date is determined by r efer ence to the closing price of such securies at each reporng da te (classied as level 1 in the fair v alue hierarch y), resulng in a change in fair v alue. The Company made the irr evocable elecon to rec ognize subsequent changes in f air value through OCI in line “F air value gain/(loss) on in vestments in equity instruments designa ted as at FVT OCI” . The table below illustr ates these non-curren t nancials assets at fair value thr ough prot or loss or OCI as of December 31, 2021, 2020 and 2019. (In thousands of $) At December 31, 2021 At December 31, 2020 At December 31, 2019 Restrict ed Cash - non-current 1,707 1,509 708 Non-current nancial assets held a t fair value through pr ot or loss 17,459 6,307 2,916 Non-current nancial assets held a t fair value through OCI 35,710 — — T otal other non-current assets 54,876 7,816 3,624 (In thousands of $) At December 31, 2021 At December 31, 2020 At December 31, 2019 Cost at January 1 1,659 1,659 — Addions of the year 75,000 — 1,659 Cost at December 31 76,659 1,659 1,659 Fair v alue adjustments at January 1 4,648 1,257 — Fair v alue adjustment of the year through pr ot or loss 11,152 2,951 1,214 Fair v alue adjustment of the year through OCI (39,290) — — T ranslaon di erence — 440 43 Fair v alue adjustment at December 31 (23,490) 4,648 1,257 Net book value a t December 31 53,169 6,307 2,916 8 Deferr ed T axes The amount of def erred tax asse ts and liability by type of temporary dier ence can be detailed as f ollows: The change in net def erred ta xes recor ded in the consolidated st atements of nancial posion can be det ailed as follows: At December 31, 2021 (In thousands of $) Assets Liabilies N et Deferr ed tax assets / (liabilies) Accruals and allowances 2,858 — 2,858 Income tax bene t from ex cess tax deducons related to share-based pa yments 26,026 — 26,026 Prot in inv entory 3,305 — 3,305 Property , plant and equipment 532 (740) (208) Intangible assets — (2,714) (2,714) Non-current x ed assets — (3,725) (3,725) Other 210 — 210 Neng by ta xable enty (740) 740 — Net def erred tax assets / (liabilies) 32,191 (6,438) 25,753 At December 31, 2020 (In thousands of $) Assets Liabilies N et Deferr ed tax assets / (liabilies) Accruals and allowances 2,147 — 2,147 Income tax bene t from ex cess tax deducons related t o share-based paymen ts 13,362 — 13,362 Prot in inv entory — — — Property , plant and equipment — (167) (167) Intangible assets — (1,792) (1,792) Non-current x ed assets — — — Other — — Neng by ta xable enty (471) 471 — Net def erred tax assets / (liabilies) 15,038 (1,487) 13,551 (IN THOUSANDS OF $) Def erred tax assets Def erred tax liabilies Balance at January 1, 2021 15,038 (1,487) Recogniz ed in prot or loss 11,385 (5,082) Recogniz ed in equity 5,494 — E ects of change in for eign exchange r ate 274 131 Balance at December 31, 2021 32,191 (6,438) (IN THOUSANDS OF $) Def erred tax assets Def erred tax liabilies Balance at January 1, 2020 — — Recogniz ed in prot or loss 8,351 (1,384) Recogniz ed in equity 6,225 — E ects of change in for eign exchange r ate 462 (103) Balance at December 31, 2020 15,038 (1,487) P ART VII 272 | Notes to the Consolidated Financial Statements Notes to the Consolidated Financial Statements | 273 10 T rade and Other R eceivables The trade and other r eceivables are composed of r eceivables which are detailed below: 11 Financial Assets — Curr ent These current nancial assets r elate to term acc ounts with an inial maturity longer than 3 months but less than 12 months and money mark et funds that do not qualify as cash equivalents. 12 Cash and Cash Equivalents The carrying amounts of tr ade and other receivables appro ximate their respecv e fair values. On December 31, 2021, we did not have an y provision f or expected credit losses. Please also ref er to note 26 f or more informa on on the nancial risk management. On December 31, 2021, the current nancial asse ts included €60.7 million held in EUR, which could generate a f oreign cur - rency e xchange gain or loss in our nancial r esults in accordance with the uctuaons of the USD/EUR ex change ra te as the Company’ s funconal currency is USD . Please also ref er to note 26 f or more informa on on the nancial risk management. (In thousands of $) At December 31, 2021 At December 31, 2020 At December 31, 2019 T rade r eceivable 28,058 287 25,367 Inter est receivable 1,325 993 2,338 Other receivable 8,838 5,698 3,880 T otal trade and other receiv ables 38,221 6,978 31,585 (In thousands of $) At December 31, 2021 At December 31, 2020 At December 31, 2019 Money mark et funds 73,052 130,290 804,099 T erm accounts 929,000 649,359 324,400 T otal current nancial assets 1,002,052 779,649 1,128,499 (In thousands of $) At December 31, 2021 At December 31, 2020 At December 31, 2019 Money mark et funds 997,092 858,291 — T erm accounts 95,090 61,356 255,631 Cash and bank balances 242,494 297,156 116,531 T otal cash and cash equivalen ts 1,334,676 1,216,803 372,162 13 Shar e Capital and Share Pr emium On December 31, 2021, the Company’ s share capit al was represent ed by 51,668,315 shares. All shares wer e issued, fully paid up and of the same class. The table below summariz es our capital increases, as a result of o erings and the ex ercise of stock opons under the Compan y ’ s Employee St ock Opon Plan. Roll f orward of number of shares outs tanding: Cash and cash equivalen ts may comprise of cash and bank balances, saving acc ounts, term accounts with an original matu - rity not ex ceeding 3 months and money mark et funds that are readily con verble to cash and ar e subject to an insignicant risk of changes in value. Cash posions are inv ested with pref erred nancial partner s, which are mostly considered t o be high quality nancial ins - tuons with sound credit r angs to reduce credit risk. On December 31, 2021, the cash and cash equiv alents included €462.0 million held in EUR, which could generat e a foreign currency e xchange gain or loss in our nancial r esults in accordance with the uctuaons of the USD/EUR ex change ra te as the Company’ s funconal currency is USD . Please also ref er to note 26 f or more informa on on the nancial risk management. Number of shares outst anding on January 1, 2019 35,975,312 Exer cise of stock opons 419,317 Share subscripon fr om Johnson & Johnson Innovaon Inc. 1,766,899 Global public oering on Eur onext and Nasdaq on November 7, 2019 4,000,000 Over -allotment opon ex ercised by underwriters on November 8, 2019 600,000 Number of shares outst anding on December 31, 2019 42,761,528 Exer cise of stock opons 602,463 Global public oering in Eur onext and Nasdaq on May 28, 2020 3,658,515 Over -allotment opon ex ercised by underwriters on Ma y 29, 2020 548,777 Number of shares outst anding on December 31, 2020 47,571,283 Exer cise of stock opons 503,282 Global public oering in Eur onext and Nasdaq on February 2, 2021 3,125,000 Over -allotment opon ex ercised by underwriters on February 4, 2021 468,750 Number of shares outst anding on December 31, 2021 51,668,315 P ART VII 9 Inventories On December 31, 2021, inv entories amounted to $109.1 million r elated to ef gargimod. Of the tot al inventory , $48.8 million relat es to invent ory which is currently awaing f acility approval. As of December 31, 2021, no in ventory write-downs wer e recor ded. Included in inven tory are products which could, besides commer cial acvies, be used for in-house preclinical and clinic al progr ams, non-reimbursed pre-appr oval progr ams and clinical progr ams carried out by Zai Lab. (In thousands of $) At December 31, 2021 At December 31, 2020 At December 31, 2019 Raw materials and c onsumables 70,134 18,608 — Inven tories in process 37,705 6,587 — Finished goods 1,237 — — T otal invent ories 109,076 25,195 — 274 | Notes to the Consolidated Financial Statements Notes to the Consolidated Financial Statements | 275 On February 2, 2021, arg enx SE oer ed 3,125,000 of its ordinary shares through a global o ering which consisted of 1,608,000 ADSs in the U.S. at a price of $320.0 per ADS, before underwring discounts and commissions and oering ex - penses; and 1,517,000 ordinary shares in the European Economic Area at a price of €265.69 per share, bef ore underwrit - ing discounts and commissions and oering expenses. On February 4, 2021, the underwriters of the oering ex ercised their over -allotment opon to purchase 468,750 addional ADSs in full. As a result, argenx SE received $1,146.7 million in gross proceeds from this oering, decreased by $56.6 million of underwriter discounts and commissions, and oering expenses, of which $56.0 million has been deducted from equity . The total net cash proceeds from the oering amount - ed to $1,090.1 million. On May 11, 2021 at the annual general meeng, the shareholders of the Company approv ed the authorizaon to the Board to issue a maximum of 10% of the then-outstanding share capital for a period of 18 months. On December 31, 2021, an amount of €410,857.7, repr esented by 4,108,577 shares, sll remained available under the authorized capit al. 14 Share-based Payments Stock Opon Plans The Company has a s tock opons scheme for the employees of the Compan y and its subsidiaries. In accordance with the terms of the plan, as appro ved by shareholders, employ ees may be gran ted stock opons to pur chase ordinary shares at an ex ercise price as menoned below per or dinar y share. The stock opons ar e granted t o employees, consultants or dir ectors of the Compan y and its subsidiaries. The stock opons have been gr anted free of char ge. Each employ ee’ s stock opon con verts into one ordinary shar e of the Company upon ex - ercise. The st ock opons carry neither rights to dividends nor vong rights. St ock opons may be ex ercised at an y me from the date of v esng to the date of their e xpiry . As of January 1, 2021, the Company decided to change the ves ng period of its sign-on stock opons fr om 4 years to 3 y ears to mak e the vesng consis tent for all the opons gr anted. The stock opons gr anted (regular and sign-on) v est, in principle, as follows: • 1/3rd of the total st ock opons granted will v est on the rst anniver sary of the granng of the st ock opons, and • 1/36th of the total grant on the r st day of each month f ollowing the rst anniv ersary of the date of gr ant of the stock opons. Upon leave of the emplo yee, consultant or dir ector , stock opons must be e xercised be fore the lat er of (i) 90 days aer the last working da y at argenx, or (ii) Mar ch 31 of the 4th year following the da te of grant of those st ock opons, and in any case no later than the e xpiraon dat e of the opon. In order to pr enance the tax es that are paid upon the gran t of stock opons, Belgian employees ha ve the ability , in ex change for the ta xes due upon the gran t of the stock opons, to tr ansfer the economic bene ts related to part of those stock opons t o a third party . As of December 31, 2021, the economic benets of 190,560 s tock opons, for which acceler - ated v esng applies, were tr ansferred t o a third party . No other condions are a ached to the stock opons. The following shar e-based payment arr angements were in e xistence during the current and prior y ears and which are ex er - cisable at the end of each period presen ted: Expiry date Exer cise price per stock opons (in $) () Outstanding stock opons on December 31, 2021 Outstanding stock opons on December 31, 2020 Outstanding stock opons on December 31, 2019 2020 4.47 — — 7,210 2022 2.76 125,339 — — 2023 2.76 — 165,693 211,769 2024 2.76 94,088 100,086 102,696 2024 4.47 6,113 6,238 6,238 2024 8.12 276,500 294,167 335,067 2025 12.96 4,500 21,500 39,000 2025 11.71 — 950 3,000 2025 10.73 105,857 114,232 185,832 2026 12.89 41,000 45,000 45,000 2026 12.99 102,840 127,252 219,791 2026 16.00 117,581 176,426 258,746 2027 20.85 53,143 102,479 108,613 2027 23.98 361,350 460,701 565,798 2023 91.54 85,080 85,077 94,100 2028 91.54 39,515 49,532 73,100 2023 97.77 321,473 325,661 366,260 2028 97.77 350,631 381,317 402,714 2024 128.54 111,174 111,174 111,690 2029 128.54 146,765 163,410 299,560 2024 153.75 203,658 195,452 204,430 2029 153.75 611,122 692,914 717,455 2025 135.38 16,712 19,000 — 2030 135.38 102,558 123,700 — 2025 222.16 129,711 131,770 — 2030 222.16 282,475 325,150 — 2025 226.77 32,100 32,100 — 2030 226.77 136,601 175,200 — 2030 280.43 692,214 728,517 — 2025 280.43 203,214 211,045 — 2026 265.48 24,366 — — 2026 288.93 61,505 — — 2026 293.91 48,138 — — 2031 265.48 42,282 — — 2031 288.93 207,464 — — 2031 293.91 92,456 — — 2026/2031 (2) 350.20 389,588 — — 5,619,113 5,365,743 4,358,069 (1) Amounts have been converted to USD at the closing rate as of December 31, 2021. (2) As of December 2021, the Company granted opons f or which the beneciaries had a 60-day period to choose between a c ontractual term of ve or ten years P ART VII 276 | Notes to the Consolidated Financial Statements Notes to the Consolidated Financial Statements | 277 The weight ed averag e share price at the date of e xercise of op ons exer cised during the year ended December 31, 2021 was $305.9, compared t o $254.54 during the year ended December 31, 2020 and $124.69 during the year ended December 31, 2019. The weight ed averag e remaining contr actual life of the stock opons outs tanding amounted to 6.3 y ears on December 31, 2021 compared t o 7.08 years on December 31, 2020 and 7.27 year s on December 31, 2019. The table below shows the weight ed averag e remaining contr actual life for each r ange of ex ercise price: The fair mark et value of the s tock opons has been determined based on the Black and Scholes model using the following unobservable assumpons: • The expected volality , determined on the basis of the implied vola lity of the share price over the expect ed life of the opon. • The expected opon lif e, calculated as the esmat ed duraon unl e xercise, t aking into account the specic f eatures of the plans. Below is an overview of the par ameters used in rela on to the determinaon of the f air value of the grants during 2021: Exer cise price (in $) Outstanding on December 31, 2021 W eighted aver age remaining contr actual life (in years) 2.76 - 4.47 225,540 1.50 8.12 - 10.73 382,357 3.24 11.71 - 16.00 265,921 4.64 20.85 - 23.98 414,493 5.90 91.54 - 97.77 796,699 4.35 128.54 - 153.75 1,191,989 6.50 222.16 - 280.43 1,542,963 7.56 288.93 - 350.20 799,151 9.10 Stock opons gr anted in April 2021 July 2021 October 2021 December 2021 (1) Number of opons gran ted 67,833 280,339 144,824 389,588 Aver age Fair v alue of opons (in $) () 98.96 - 154.88 131.65 - 159.13 101.53 - 131.80 145.35 - 149.09 Share price (in $) () 248.9 - 283.67 300.78 - 340.95 286.52 - 304.5 351.73 Exer cise price (in $) () 275.33 303.16 301.02 349.92 Expected volality 54.24 - 60.08 % 45.58 - 47.96 % 46.01 - 48.46 % 43.57 - 43.58 % Aver age Expected opon lif e (in years) 4 - 6.50 4 - 6.50 4 - 6.50 6.15 - 6.50 (1) Risk -free inter est rate (0.41) - (0.08) % (0.41) - (0.17) (0.18) - (0.05) % 0.03 - 0.05 % Expected dividends — — — — Stock opons gr anted in April 2020 Juny 2020 October 2020 December 2020 Number of opons gran ted 142,700 550,090 196,500 908,362 Aver age Fair v alue of opons (in $) () 76.46 - 148.03 83.46 - 129.64 91.10 - 156.68 101.23 - 229.20 Share price (in $) () 155.23 - 252.29 224.80 - 281.25 256.46 - 293.52 273.15 - 383.10 Exer cise price (in $) () 146.68 240.70 245.69 303,83 Expected volality 44.44 - 64.77 % 43.46 - 52.19 % 44.17 - 52.71 % 46.80 - 59.94 % Aver age Expected opon lif e (in years) 4 - 6.68 4 - 6.68 4 - 6.68 4 - 6.68 Risk -free inter est rate (0.32) - (0.18) % (0.43) - (0.28) % (0.51) - (0.34) % (0.51) - (0.28) % Expected dividends — — — — 2021 2020 2019 Number of stock opons W eighted aver age ex ercise price () Number of stock opons W eighted aver age ex ercise price () Number of stock opons W eighted aver age ex ercise price () Outstanding a t January 1 5,365,743 142.87 4,358,069 78.23 3,536,651 37.54 Grant ed 882,584 314.99 1,797,652 266.71 1,365,172 144.38 Exer cised (503,282) 64.72 (602,463) 38.86 (419,317) 12.75 Forf eited (125,932) 234.98 (187,515) 170.98 (124,437) 99.89 Outstanding a t December 31 5,619,113 164.33 5,365,743 142.87 4,358,069 71.62 Exer cisable at December 31 3,613,371 106.53 2,833,680 65.24 2,203,476 25.38 * amounts have been convert ed to USD at the closing rate of the respecve period. Below is an overview of the par ameters used in rela on to the determinaon of the f air value of grants during 2020: Below is an overview of the par ameter used in relaon to the de terminaon of the fair v alue of grants during 2019: The total shar e-based payment e xpense recognized in the c onsolidated stat ements of comprehensive inc ome totaled $179.4 million for the y ear ended December 31, 2021, compared to $96.9 million f or the year ended December 31, 2020 and $44.2 million for the y ear ended December 31, 2019. Stock opons gr anted in June 2019 November 2019 December 2019 Number of opons gran ted 423,487 19,800 921,885 Aver age Fair v alue of opons (in $) () 71.28 64.81 46.51 - 74.58 Share price (in $) () 138.40 142.00 146.15-169.30 Exer cise price (in $) () 127.49 127.49 152.50 Expected volality 45.25 % 44.14 % 43.80 - 44.11 % Aver age expected opon lif e (in years) 8.59 6.50 4 - 6.5 Risk -free inter est rate 0.07 % (0.05) % (0.57) - (0.24) % Expected dividends — — — P ART VII (1) In December 2021, the Company gran ted a total of 389,588 stock opons. The beneciary can choose between a contractual term of ve or ten years. The expected opon life r anges between 6.15 and 6.50 years. This esmate will be reassessed once the acceptance period of 60 day s has passed and the beneciaries will have made a choice between a contractual term of ve or ten years. The total fair value of the grant would r ange from $45.0 million (100% of the stock opons with a contr actual term of ve years) to $57.1 million (100% of the stock opons with a contr actual term of ten years ). () amounts have been convert ed to USD at the applicable rate prev ailing at the gran t date. () amounts have been convert ed to USD at the closing rate of the respecve period. () amounts have been convert ed to USD at the closing rate of the respecve period. 15 T rade and Other Pay ables (In thousands of $) At December 31, 2021 At December 31, 2020 At December 31, 2019 T rade pa yables 208,850 206,325 65,639 Short-t erm employee benets 83,737 68,867 30,188 Other 828 — — T otal trade and other pa yables 293,415 275,192 95,827 278 | Notes to the Consolidated Financial Statements Notes to the Consolidated Financial Statements | 279 The table below summariz es the changes in deferr ed revenue – curr ent and deferr ed revenue – non-curren t for the year ended December 31, 2021, 2020 and 2019. For the year s ended December 31, 2021, 2020 and 2019, the majority of the revenue w as generat ed under the agreements with Zai Lab, Janssen and AbbVie, each as described below . T rade payables c orrespond primarily to clinical and manufacturing acvies and include accrued e xpenses related t o these acvies. As of December 31, 2021 and December 31, 2020, the trade pa yables include accruals amounng to $163.7 million and $64.5 million, respecvely , relat ed to accruals from clinical manuf acturing organiz aons for the manufacturing of drug pr od - ucts and from clinical r esearch org anisaons. Short -term employee benets include pa yables and accruals for salaries and bonuses to be paid to the emplo yees of the Company . 16 Revenue The following t able summarizes details of r evenues for the y ear ended December 31, 2021, 2020 and 2019 by collaboraon agreement and b y category of rev enue: upfront pa yments, milestone paymen ts and research and developmen t service fees. (In thousands of $) Y ear Ended December 31, 2021 Y ear Ended December 31, 2020 Y ear Ended December 31, 2019 Zai Lab 151,903 — — Janssen 292,279 33,759 22,386 AbbVie 121 565 855 Agomab — — 1,684 Other — 38 50 Upfront pa yments 444,303 34,362 24,975 Zai Lab 25,634 — — Janssen 22,865 2,641 1,738 AbbVie 102 762 30,077 Other 1,214 19 25 Milestone pa yments 49,815 3,422 31,840 Janssen 2,028 3,175 21,236 Other 298 284 411 Research and de velopment service fees 2,326 3,459 21,647 Zai Lab 833 — — Other revenues 833 — — T otal revenue 497,277 41,243 78,462 (In thousands of $) Janssen AbbVie Other T otal On January 1, 2019 — 2,342 133 2,475 Received Upfron t 328,327 — — 328,327 Milestone 25,000 30,000 — 55,000 Rev enue recognion Upfron t (22,386) (855) (50) (23,291) Milestone (1,738) (30,077) (25) (31,840) T ranslaon di erence (4,575) 107 (2) (4,470) On December 31, 2019 324,629 1,517 56 326,202 Received Milestone — — — — Rev enue recognion Upfron t (33,759) (565) (38) (34,362) Milestone (2,641) (762) (19) (3,422) T ranslaon di erence 26,915 33 1 26,949 On December 31, 2020 315,144 223 — 315,367 Received Upfron t — — — — Milestone Rev enue recognion Upfron t (292,279) (121) — (292,400) Milestone (22,865) (102) — (22,967) On December 31, 2021 — — — — Below are summaries of the k ey collabor aons. Zai Lab On January 6, 2021, argenx and Zai Lab announced the License agreement f or the development and commercializ aon of ef gargimod in Greater China, gran ng Zai Lab the exclusive rights to dev elop and commercializ e efg argimod in Great er China. Under the terms of the agreement, the Company receiv ed $175 million in collaboraon paymen ts, comprised of a $75 million upfront pa yment in the form of 568,182 newly issued Zai Lab shares calculated at a price of $132 per share, $75 million as guaranteed non-credit able, non-refundable payment, receiv ed in the rst quarter of 2021, and an addional $25 million milestone payment upon regulat ory approv al of ef gargimod by FDA in the U.S. The Company is also eligible to receive er ed roy ales (mid-teen to low twenes on a percent age basis) based on annual net sales of efg argimod in Great er China. With reg ard to this collabor aon with Zai Lab: • The Company concluded there are tw o performance obliga ons under IFRS 15, being the transf er of a license and the at arms-length supply of clinical and commer cial product. The Company c oncluded that these performance obliga ons are disnct in the cont ext of the contr act. P ART VII 280 | Notes to the Consolidated Financial Statements Notes to the Consolidated Financial Statements | 281 • The Company concluded that the Subscripon Shar es granted by Zai Lab, as included in the Shar e Issuance Agreement, enter ed into on January 6, 2021, was obtained bec ause of the exisng obligaons under the t erms of the Collaboraon and License Agreement, and is ther efore t o be considered to be part of the over all considera on received. • The transacon price of these two agreemen ts is currently composed of a x ed part, that being an upfront pa yment of $75 million in the form of newly issued Zai Lab shar es, and a $75 million guaranteed, non-cr editable, non-refundable paymen t and $25 million milestone upon approval of e fgargimod in the U .S. and the consideraon r eceived in return f or the supply of clinical and commer cial product. Milestone pa yments are only included in the transacon price t o the extent it is highly probable that a signic ant rever sal in the amount of cumulave rev enue recognion will not occur when the uncertainty associa ted with the conngent c onsideraon is subsequently r esolved. We es mate the amount to be includ - ed in the transacon price upon achiev ement of the milestone even t or the supply of clinical and commercial product. Sales-based milestones and sales-based r oyales are a part of the Compan y ’ s arrangemen ts but are not yet included in its rev enue. • The xed part of the transacon price, as w ell as the $25 million milestone upon approval of e fg argimod in the U.S. has been allocated t o the transf er of a license performance obliga on. • The Company concludes that the license as of the e ecve date of the con tract has standalone v alue. As such, the Com - pany concluded tha t the promise in granng the license t o Zai is to provide a right t o use the enty ’ s intellectual pr operty as it exists a t the point in me at which the license is grant ed and therefor e, revenue accrued has been r ecognised at a point in me. This conclusion was r eached, taking into accoun t following aspects: • there ar e no material restricons included in the c ontract which would pre vent Zai Lab to direct the use of , and obtain substan ally all of the remaining benets, within Great er China and considering the sales-based royales which be - come due to the Compan y upon successful commercializa on. • the curren t phase of efg argimod, successfully completed the Phase III trials. • Under the collaboraon agreemen t, the Company provides clinical and c ommercial supply to Zai Lab. Company c on - cludes to rec ognize such sales as revenue giv en that the Company acts as principal in the tr ansacon as the risk related to inven tory is born by the Company unl the in ventory is trans ferred to Z ai. The revenue rela ted to clinical and commercial supply is recor ded under line item “Other rev enues” within the revenue footnot e. AbbVie In April 2016, the Company ent ered into a collabor aon agreement with AbbVie S.À.R.L. (AbbVie) to develop and c ommer - cialize AR GX-115 (ABB V-151). Under the t erms of the collaboraon agr eement, the Company was r esponsible for conducng and funding all ARGX 115 (ABBV -151) research and developmen t acvies up to compleon of IND enabling studies. The Company gr anted AbbVie an ex clusive opon, for a specied period f ollowing compleon of IND enabling studies, to obtain a worldwide, e xclusive license to the AR GX 115 (ABBV -151) progr am to develop and commercializ e products. The Company r eceived an upfront, non-r efundable, non-creditable pa yment of $40 million from AbbVie for the e xclusive opon to license ARGX 115 (ABB V-151). The Compan y achieved two preclinic al milestones, each of which triggered a $10.0 million paymen t. In August 2018, AbbVie ex ercised its opon and has assumed certain de velopment obligaons, being solely r esponsible for all resear ch, development and regulat ory costs relang to AR GX-115 based pr oducts. In March 2019, the Company achiev ed the rs t development milestone upon iniaon of a r st -in-human clinical trial, trig gering a $30.0 million pa yment. Subject to the connuing pr ogress of ARGX -115 (ABBV -151) by AbbVie, the Company is eligible t o receive developmen t, regulatory and commercial miles tone payments in aggreg ate amounts of up to $110 million, $190 million and $325 million, r espec - vely , as well as ered r oyales on sales at percen tages ranging fr om the mid single digits to the lower teens, subject to customary r educons. The Company has the right, on a pr oduct by product basis to co pr omote ARGX 115 (ABBV -151) based products in the European E conomic Area and Switzerland and t o combine the product with the Company’ s own future immuno oncology progr ams. The co promoon e ort would be governed by a co pr omoon agreement negoat ed in good faith by the pares. AbbVie will fund further GARP relat ed research by the Compan y for an inial period of two year s. AbbVie will have the right to license addional therapeuc pr ograms emerging fr om this research, f or which the Company could receiv e associated milestone and r oyalty paymen ts. With reg ard to its collabor aon with AbbVie, the Company concluded as follo ws: • There is one single perf ormance obliga on under IFRS 15, that being the trans fer of a license combined with perfor - mance of research and developmen t acvies. The Company concluded tha t the license is not disnct in the context of the contr act. • The transacon price of these two agreemen ts is currently composed of a x ed part, that being an upfront license f ee, and a variable part, being milest one payments and cost r eimbursements of resear ch and development acvies deliv - ered. Milest one payments are only included in the tr ansacon price to the extent it is highly pr obable that a signicant rev ersal in the amount of cumulave r evenue recognion will not occur when the uncertain ty associate with the variable consider aon is subsequently resolved. W e esmat e the amount to be included in the transacon price upon achiev e - ment of the milest one event. Sales-based milestones and sales-based r oyales are a part of the Compan y ’ s arrangemen ts but are not ye t included in its revenues. • The transacon price has been allocated t o the single performance obligaon and r evenues have been r ecognized ov er the esmat ed ser vice period based on a paern tha t reects the trans fer of the license and progr ess to complete sas fac - on of the resear ch and development acvies. This is because we consider ed that there is a trans formaonal rela on - ship between the license and the resear ch and development acvies to be deliv ered. • The Company has chosen an input model to measure the sas facon of the single performance oblig aon that considers percent age of costs incurred f or these progr ams that are completed each period (per centage of compleon me thod). • Cost reimbursements r eceived are rec ognized in rev enues when costs are incurred and agr eed by the pares, as the Com - pany is acng as a principal in the scope of its s take of the r esearch and development acvies of its ongoing c ollabora - on and license agreements. Janssen On June 4, 2021, the Company r eceived a terminaon nocaon fr om Cilag GmbH Internaonal, an alia te of Janssen, which results in the termina on of the Collaboraon Agreement t o jointly develop and commer cialize cusatuzumab. As a result, the Compan y regains the worldwide rights t o its an-CD70 anbody cusatuzumab. Under the terms of the agreemen t, Janssen commied to an upfr ont payment of $500 million consis ng of a license paymen t of $300 million and a $200 million equity investment in the Compan y by subscribing to 1,766,899 new shares at a price of €100.02 per share, including an issuance premium. In December 2019, the Compan y achieved the rs t development milestone, triggering a $25.0 million pa yment. With reg ard to this collabor aon with Janssen, the Company concluded as follo ws: • There was one single performance oblig aon under IFRS 15, that being the tr ansfer of a license combined with perf or - mance of resear ch and development acvies. The Company concluded tha t the license is not disnct in the context of the contr act. • The Company concluded that the share pr emium that Janssen paid above the closing price on the day of en tering into the inves tment agreement (being December 2, 2018) w as paid because of the exisng obliga ons to deliver development services under the terms of the collabor aon agreement and was ther efore c onsidered to be part of the over all consider - aon receiv ed. • The transacon price of these two agreemen ts composed of a xed part, that being an upfr ont license fee, and a v ariable part, being milestone pa yments and cost reimbur sements of resear ch and development acvies delivered. • The transacon price was allocat ed to the single performance obliga on and revenue was pr eviously recogniz ed over the esmat ed ser vice period based on a paern tha t reects the trans fer of the license and progr ess to complete sas facon of the resear ch and development acvies. Following the termina on, the Company concluded that it has subs tanally sased the perf ormance obligaon, and as a consequence, rec orded $315.1 million for the 12 months ending December 31, 2021. P ART VII 17 Other Operating Inc ome (In thousands of $) Y ear Ended December 31, 2021 Y ear Ended December 31, 2020 Y ear Ended December 31, 2019 Grants 4,398 1,365 2,563 Resear ch and development incenves 13,970 10,257 5,373 Pa yroll tax reba tes 12,621 9,095 6,413 Change in fair v alue on non-current nancial assets 11,152 2,951 1,214 T otal other operang inc ome 42,141 23,668 15,563 17 . 1 Grants The grant income is relat ed to gran ts receiv ed from the Flanders Innova on and Entrepr eneurship Agency . No condions relat ed to the above governmen t gran ts wer e unfullled, nor were there any mat erial conng encies relat ed thereon at the date of the approval of these consolidated nancial sta tements. 17 .2 Research and development incentiv es The Company has accounted for a ta x receiv able of $14.0 million in the year ended December 31, 2021, compared to $10.3 and $5.4 million in the year ended December 31, 2020 and December 31, 2019, respecv ely , following a research and development tax incenv e scheme in Belgium according to which the incenve will be refunded aer a ve year period, if not oset ag ainst the curren t tax pa yable over the period. 17 .3 Payroll tax rebates The Company accounted f or $12.6 million payroll ta x rebates in the year ended December 31, 2021, compared to $9.1 and $6.4 million in the year ended December 31, 2020 and December 31, 2019, respecvely , as a reducon in withhold - ing income tax es for its highly qualied personnel employed in its research and development department. 282 | Notes to the Consolidated Financial Statements Notes to the Consolidated Financial Statements | 283 18 Segment Reporting The Company oper ates from the Netherlands, Belgium, the Unit ed States of America, Japan, S witzerland, Germany and France. R evenues are gener ated by e xternal customers with their main r egistered oce geogr aphically locat ed as shown in the table below . 19 Research and De velopment Expenses 20 Selling, General and Administrativ e Expenses The non-current assets of the Compan y , with the excepon of the def erred ta x assets, are geographic ally located as shown in the table below: Rev enue from external cust omers (In thousands of $) Y ear Ended December 31, 2021 Y ear Ended December 31, 2020 Y ear Ended December 31, 2019 () Denmark 1,389 342 488 Belgium — — 1,684 United Sta tes 317,396 40,901 76,290 China 178,370 — — Other 123 — — T otal 497,277 41,243 78,462 Non-current assets (In thousands of $) At December 31, 2021 At December 31, 2020 At December 31, 2019 () Netherlands — 1 1 Belgium 268,733 200,125 63,785 United Sta tes 3,138 4,751 3,435 Japan 3,232 2,491 319 Switzerland 8 — — T otal 275,111 207,368 67,540 (In thousands of $) Y ear Ended December 31, 2021 Y ear Ended December 31, 2020 Y ear Ended December 31, 2019 Per sonnel expenses 160,464 86,036 51,172 External resear ch and development expenses 382,902 259,943 152,889 Materials and consumables 2,735 3,562 2,267 Depreciaon and amorz aon 3,742 2,835 1,840 Other expenses 30,677 18,509 12,603 T otal research and dev elopment expenses 580,520 370,885 220,771 (In thousands of $) Y ear Ended December 31, 2021 Y ear Ended December 31, 2020 Y ear Ended December 31, 2019 Per sonnel expenses 164,646 108,507 44,774 Prof essional fees 102,674 48,681 18,181 Supervisory board 12,958 4,838 3,127 Other Expenses 27,366 9,617 6,064 T otal Selling, general and administr ave expenses 307,644 171,643 72,146 P ART VII * In prior periods this has been present ed based on the geographical loc aon of the contr acng enty . * In prior periods this has been present ed based on the geographical loc aon of the contr acng enty . 21 Personnel Expenses The personnel e xpenses menoned in note 19 and 20 above are as f ollows: 22 Leases The sta tement of nancial posion shows the follo wing amounts relang to leases: The post employment bene ts relate to the pension plans the Compan y has in place for its employees. The aver age number of full me equivalents (FTE) employ ees by department is present ed below: Addions to the right -of-use assets amoun ted to $5.7 million for the y ear ended December 31, 2021. (In thousands of $) Y ear Ended December 31, 2021 Y ear Ended December 31, 2020 Y ear Ended December 31, 2019 Short-t erm employee benets—Salaries 135,676 75,437 36,747 Short-t erm employee benets—Social Security 12,785 9,087 3,996 Post -employment benets 2,864 1,242 837 T erminaon benets 818 1,005 722 Share-based paymen t 167,965 92,558 41,612 Employer social security con tribuons stock opons 5,002 15,214 12,032 T otal personnel expenses 325,110 194,543 95,946 Aver age Number of FTE Y ear Ended December 31, 2021 Y ear Ended December 31, 2020 Y ear Ended ecember 31, 2019 Resear ch and development 349.7 213.0 121.6 Selling, general and administr ave 264.4 119.5 56.3 614.1 332.5 177.9 (In thousands of $) Y ear Ended December 31, 2021 Y ear Ended December 31, 2020 Y ear Ended December 31, 2019 Right -of-use assets Buildings 9,688 7,677 6,264 V ehicles 1,664 1,513 836 Equipment 230 264 273 11,583 9,454 7,373 Lease liabilies Current 3,509 3,476 2,218 Non-current 7,956 6,181 5,101 11,465 9,657 7,319 284 | Notes to the Consolidated Financial Statements Notes to the Consolidated Financial Statements | 285 The table below shows a ma turity analysis of the lease liabilies as on December 31, 2021: The consolidated s tatements of pr ot or loss and the consolidated st atements of other compr ehensive income shows the following amoun ts relang to leases: The total c ash oulow for leases in 2021 and 2020 was $4.5 million and $3.0 million respecvely . The Company did not ent er into any lease agr eement with variable lease paymen ts or residual value guaran tees. The Company has leases that include e xtension opons. These opons provide e xibility in managing the leased assets and align with the Company’ s business needs. The Company ex ercises judgemen t in deciding whether it is reasonably certain that the extension opons will be e xercised. (In thousands of $) Y ear Ended December 31, 2021 Y ear Ended December 31, 2020 Y ear Ended December 31, 2019 Depreciaon char ges Buildings 2,714 2,262 1,472 V ehicles 651 441 261 Equipment 34 32 31 3,399 2,735 1,764 Inter est expense (included in nance cost) 412 201 117 Expense relang t o short-term leases 212 264 137 Expense relang t o leases of low-value assets tha t are not shown above as short -term leases 7 6 6 (In thousands of $) Less than 1 year 1-3 year s 3-5 years More than 5 years T otal contr actual cash ows Carrying amount Lease liabilies 3,509 6,331 2,164 — 12,004 11,465 23 Financial R esult and Exchange Gains/( losses ) (In thousands of $) Y ear Ended December 31, 2021 Y ear Ended December 31, 2020 Y ear Ended December 31, 2019 Inter est income 3,489 5,119 8,805 Net gain on curr ent nancial assets held at fair v alue through pr ot or loss and cash equivalents 144 1,340 7,317 Financial income 3,633 6,459 16,122 Net loss on current nancial assets held a t fair value through pr ot or loss and cash equivalents (3,482) (7,559) — Other nancial expense (1,096) (401) (139) Financial expense (4,578) (7,960) (139) Realiz ed exchange g ains/(losses) 15 (443) (385) Unrealiz ed exchange g ains/(losses) (50,068) (125,791) 7,375 Exchang e gains/(losses) (50,053) (126,234) 6,990 P ART VII The ex change losses of $50.1 million for the year ended December 31, 2021 w ere primarily aributable to unr ealized ex change rat e losses on our cash and cash equivalents and curr ent nancial assets posion in EUR due to the unfa vorable uctuaon of the EUR ex change ra te over the period. The tax r ate used f or the 2021, 2020 and 2019 reconciliaons above is the c orporate income t ax rat e of 25% payable by corpor ate enes in the Netherlands. The unrecogniz ed deferr ed tax asset on unused ta x losses amounts to $203.8 million on December 31, 2021, compared to $174.2 million on December 31, 2020. Def erred tax ha ve been measured using the e ecve rat e that will apply in Belgium and the Netherlands (25%). The Company has unused t ax losses carried forwar d for an amount of $815.3 million on Decem - ber 31, 2021, compared t o $696.7 million on December 31, 2020. This, combined with other temporary di erences, resulted in a net def erred tax asset posion. Due t o the uncertainty surrounding the Compan y ’ s ability to realiz e taxable pr ots in the future, the Compan y did not recognize an y deferr ed tax assets, with the ex cepon of those further detailed in note 8. As a company acv e in research and developmen t in Belgium, we expect to benet fr om the innovaon income deducon, or IID, in Belgium. The innov aon income deducon regime allow s net prots aributable to r evenue from among oth - ers pat ented products t o be taxed a t a lower eecv e tax ra te than other revenues. A t the end of 2021 and 2020, we had $161.5 million and $52.1 million of carry- forward IID in Belgium. Income ta xes were dir ectly recogniz ed in the income statemen t can be detailed as f ollows: 2 4 Income T ax Expense The income ta x expense for the year c an be reconciled to the accounng loss as f ollows: (In thousands of $) Y ear Ended December 31, 2021 Y ear Ended December 31, 2020 Y ear Ended December 31, 2019 Loss befor e taxes 399,743 605,352 175,919 Income tax c alculated at 25% 99,936 151,338 43,980 E ect of expenses and gains tha t are not deducble in determining ta xable results (34,366) (12,813) (8,625) E ect of stock issue expenses tha t are not deducble in determining ta xable results 14,119 14,139 6,363 E ect of concessions 13,413 7,900 635 E ect of tax losses carried f orward not recogniz ed (44,232) (116,711) (12,952) E ect of dier ent tax ra tes in jurisdicons in which the company opera tes (2,084) (195) (58) Def erred tax asset other than loss carryf or war ds not recognized (50,389) (45,601) (30,336) Withholding tax paid (5,076) — — (Underprovided)/ overprovided in prior year s 398 (1,014) (4,310) Other (241) (146) 15 Income tax e xpense recognized in the consolidat ed stat ements of prot or loss (8,522) (3,103) (5,289) (In thousands of $) Y ear Ended December 31, 2021 Y ear Ended December 31, 2020 Y ear Ended December 31, 2019 Current y ear 15,224 7,847 5,289 Income tax prior y ears (398) 1,732 — Current ta x expense 14,826 9,579 5,289 Originang and rev ersal of temporary di erences (6,304) (6,476) — Deferr ed tax expense / (income) (6,304) (6,476) — T otal tax e xpense 8,522 3,103 5,289 286 | Notes to the Consolidated Financial Statements Notes to the Consolidated Financial Statements | 287 25 Loss per Share 26 Financial Risk Management The nancial risks are manag ed centrally . The Company coordina tes the access to naonal and interna onal nancial mark ets and considers and manages con nuously the nancial risks concerning the Company’ s acvies. These relate t o the nancial mark ets risk, credit risk, liquidity risk and currency risk. There ar e no other important risks, such as int erest ra te risk on borrowings, as the Company has no nancial debt. The Compan y does not buy or trade nancial instruments f or speculave purposes. Categories of nancial asse ts and liabilies: (In thousands of $) Y ear Ended December 31, 2021 Y ear Ended December 31, 2020 Y ear Ended December 31, 2019 Loss of the year (408,265) (608,455) (181,208) W eighted aver age number of shares outstanding 51,075,827 45,410,442 38,619,121 Basic and diluted loss per share (in $) (7.99) (13.40) (4.69) Earnings/losses per or dinar y share ar e calculated by dividing the loss f or the period by the weighted av erage number of ordinary shares during the y ear . As the Company r eported a net loss in 2021, 2020 and 2019, stock opons ha ve an an diluve e ect rather than a diluve e ect. As such, there is no dier ence between basic and diluted earnings/losses per ordinary share. Measurement categ ory Carr ying amount (In thousands of $) At December 31, 2021 At December 31, 2020 () At December 31, 2019 () Financial assets — non-current FVTPL 17,459 6,307 2,916 Financial assets — non-current FVTOCI 35,710 — — Resear ch and development incenve receiv ables — non-current Amorsed cost 32,707 20,626 9,624 Restrict ed cash — non-current Amorsed cos t 1,707 1,509 708 T rade and other r eceivables Amorsed c ost 38,221 6,978 31,585 Financial assets—current FVTPL 73,052 130,290 804,099 Financial assets—current Amorsed c ost 929,000 649,359 324,400 Resear ch and development incenve receiv ables — current Amorsed cost — 463 293 Cash and bank balances Amorsed cost 242,494 297,156 116,531 Cash equivalents FVTPL 997,092 858,291 — Cash equivalents Amorsed cost 95,090 61,356 255,631 T rade and other pa yables Amorsed cost 293,415 275,192 95,827 * The historical consolidated nancial inf ormaon for 2020 and 2019 presented in this disclosure note has been adjusted t o present the breakdown of curren t nancial assets that are measured at FVTPL and amorzed c ost. P ART VII * The historical consolidated nancial inf ormaon for 2020 and 2019 presented in this disclosure note has been adjusted t o present the breakdown of current nancial assets that are measured a t FVTPL and amorzed cos t. Financial assets held at f air value through prot or loss or OCI Financial assets held at f air value through prot or loss or OCI c onsisted of equity instruments of list ed and non-listed com - panies and money mark et funds. The Company has no r estricons on the sale of these equity instruments and the assets are not pledg ed under any of its liabilies. These instruments ar e classied as nancial assets held at fair value thr ough prot or loss or OCI which qualify for: • Level 1 fair value measur ement with respect to curr ent nancial assets and cash equivalents based upon the closing price (net asset value) of such securies a t each reporng date. • Level 3 fair value measur ement with respect to non-curr ent nancial assets. The mark et price of these nancial instruments might f ace uctuaons and might be aect ed by a variety of fact ors, such as the global economic situaon. Curren t nancial assets and cash equivalents include collecv e investment funds nomi - nated in € and $ of which the underlying in vestments include bonds and other interna onal debt securies. Based on the weight ed averag e maturity of the underlying instruments, amongst other s, these investmen ts are either classied as current nancial assets or cash equivalen ts. The maximum exposur e to credit risk is the carrying amount at r eporng date. The Company carried the f ollowing assets at f air value on December 31, 2021, 2020 and 2019 respecvely: At December 31, 2021 (In thousands of $) Level 1 Level 2 Lev el 3 Non-current nancial assets 35,710 — 17,459 Current nancial assets 73,052 — — Cash Equivalen ts 997,092 — — Assets carried at f air value 1,105,854 — 17,459 At December 31, 2020 () (In thousands of $) Level 1 Level 2 Le vel 3 Non-current nancial assets — — 6,307 Current nancial assets 130,290 — — Cash Equivalen ts 858,291 — — Assets carried at f air value 988,581 — 6,307 At December 31, 2019 () (In thousands of $) Level 1 Level 2 Lev el 3 Non-current nancial assets — — 2,916 Current nancial assets 804,099 — — Assets carried at f air value 804,099 — 2,916 288 | Notes to the Consolidated Financial Statements Notes to the Consolidated Financial Statements | 289 During the disclosed calendar year , no transf ers occurred between the applic able categories. Non-current nancial asse ts – Level 3 In March 2019, the Compan y entered int o a license agreement with AgomAb Ther apeucs NV for the use of HGF-mimet - ic SIMPLE Anbodies™, developed under the Compan y ’ s Immunology Innovav e Program. In e xchange f or granng this license, the Company r eceived a prot share in AgomAb Ther apeucs NV . In March 2021, AgomAb Ther apeucs NV secured $74 million in Series B nancing by issuing 286,705 of Pref erred B Shares. The Company used the post -money valua on of Series B nancing round and the number of outstanding shares in de ter - mining the fair v alue of the prot-sharing ins trument, which results in a change in f air value of non-current nancial assets of $11.2 million recor ded through prot or loss. Since AgomAb Ther apeucs NV is a private compan y , the valua on of the prot shar e is based on level 3 assumpons. Non-current nancial asse ts – Level 1 As part of the license agreement f or the development and commer cializaon f or efg argimod in Greater China (see note 16 for further inf ormaon), the Company obt ained, amongst others, 568,182 newly issued Zai Lab shar es calculated at a price of $132 per share. The f air value of the equity instrument at period-end is det ermined by ref erence to the closing price of such securies at each reporng da te (classied as level 1 in the fair v alue hierarch y), resulng in a change in fair v alue. The Company made the irr evocable elecon to rec ognize subsequent changes in f air value through OCI. Capital risk The Compan y manages its capit al to ensure that it will be able to connue as a going c oncern. The capital s tructure of the Com - pany consists of equity a ributed to the holders of equity ins truments of the Compan y , such as capital, r eser ves and accumu - lated losses as menoned in the consolidated s tatements of changes in equity . The Compan y makes the necessary adjustments in the ligh t of changes in the economic circumst ances, risks associat ed to the di erent asse ts and the project ed cash needs of the curren t and projecte d research acvies. On December 31, 2021, c ash and cash equiv alents amounted t o $1,334.7 million and tot al capital amoun ted to $3,469 million. The current c ash situaon and the ancipated cash generaon are the most important parameter s in assessing the c apital structure. The Company’ s objecve is t o maintain the capital structur e at a le vel to be able to nance its acvie s for at least twelve months. Cash income fr om exisng and new partnership s is tak en into account and, if needed and possible, the Company can issue new shares or enter int o nancing agreements. Credit risk Credit risk re fers t o the risk that a counterparty will def ault on its contractual oblig aons resulng in nancial loss to the Company . The Company has adopted a policy of only dealing with cr editworthy count erpares and obtaining sucient col - later al, where appropriat e, as a means of migang the risk of nancial loss from de faults. Concentra ons in credit risk are determined based on an analysis of c ounterpares and their importance on the over all outstanding contr actual obligaons at year -end. The Company has a limited number of c ollaboraon and license partners and ther efore has a signic ant concentra on of credit risk. Howe ver , it has policies in place to ensure that credit e xposure is k ept to a minimum and signicant concentr a - ons of credit exposur e are only gran ted for short periods of me to high cr edit quality collaboraon partners. The Company applied the IFR S 9 simplied approach to measuring expected cr edit losses which uses a lifeme expect ed loss allowance f or all receivables. T o measure the e xpected credit losses, receiv ables have been grouped based on cr edit risk charact eriscs and the days past due. The pr ovision for expect ed credit losses was not signicant giv en that there hav e been no credit losses over the las t three year s and the high quality nature of our customer s. Cash and cash equivalen ts and current nancial assets are in vested with sever al highly reputable banks and nancial ins - tuons. The Company holds its cash and c ash equivalents mainly with dier ent banks which are independently r ated with a minimum ra ng of ‘ A-’ . The Company also holds short term inv estment funds in the form of money mark et funds with a recommended in vestment horiz on of 6 months or shorter but with a low historic al volality . These money mark et funds are * The historical consolidated nancial inf ormaon for 2020 presented in this disclosure not e has been adjusted to corr ect for the amounts of current nancial assets that are measured at f air value. * The historical consolidated nancial inf ormaon for 2019 presented in this disclosure not e has been adjusted to corr ect for the amounts of current nancial assets that are measured at f air value. P ART VII highly liquid inves tments, can be readily con verble into a known amount of c ash. Since they are a baske t of funds there is no individual credit risk inv olved. The company has adopt ed a policy whereby money mark et funds must have an a verage ra ng of “BBB-“ or higher . Liquidity risk The Company manages liquidity risk b y maintaining adequate reserv es, by connuously monitoring for ecast and actual cash ows, and by mat ching the maturity proles of nancial assets and liabilies. The Company’ s main sources of cash inow s are obtained through c apital increases and collabor aon agreements. This cash is inves ted in savings accounts, t erm accounts and short term inv estment funds in the form of mone y market funds. These money mark et funds represent the majority of the Compan y ’ s av ailable sources of liquidity however since all of these ar e immediately tr adable and converble in cash the y have a limited impact on the liquidity risk. Inter est rat e risk The only variable int erest -bearing nancial instruments are cash and c ash equivalents and current nancial in vestments. Changes in inter est ra tes may cause v ariaons in interest inc ome and expense resulng from short -term int erest -bearing assts. Managemen t does not expect the short-t erm interest r ates to decr ease signicantly in the immediate f oreseeable future, which limits the int erest exposur e on our cash and cash equivalents and curren t nancial assets. For the year ended December 31, 2021, if applic able interest r ates would incr ease/decrease by 25 basis points, this would have a posiv e/negave impact of $0.9 million (compar ed to $1.7 million for the year ended December 31, 2020 and $2.2 million for the y ear ended December 31, 2019). Foreign e xchange risk The Company undert akes tr ansacons denominated in foreign curr encies; consequently , exposures to e xchange r ate uctu - aons arise. The Company is mainly e xposed to the Euro , Japanese yen, Brish pound and Swiss franc. T o limit this risk, the Company a empts to align incoming and outgoing cash ow s in currencies other than USD. The net exposur e to exchang e dierences of the monet ary assets (being cash, cash equivalents and curr ent nancial assets) of the Company at the end of the r eporng period are as follow s: On December 31, 2021, if the EUR/USD ex change rat e would have incr eased/decreased by 10%, this would hav e had a neg - ave/posiv e impact of $53.81million, compared to $63.91 million and $52.6 million on December 31, 2020 and December 31, 2019, respecvely . On December 31, 2021, if the ex change rat e for other currencies w ould have increased/decreased b y 10%, this would hav e had no signicant impact. (In thousands of $) At December 31, 2021 At December 31, 2020 At December 31, 2019 EUR 591,887 703,016 578,483 JPY 6,316 264 856 GBP 1,237 48 4 CHF 727 2 1 27 Related Party T ransactions 27 . 1 Relationship and T ransactions with Subsidiaries See note 31 for an overview of the consolida ted companies of the group, which ar e all wholly-o wned subsidiaries of arg enx SE. Balances and transacons between the Company and its subsidiaries, which are relat ed pares of the Company , hav e been eliminated on consolidaon and are not disclosed in this note. 290 | Notes to the Consolidated Financial Statements Notes to the Consolidated Financial Statements | 291 27 .2 Relationship and T ransactions with K ey Personnel The Company’ s key management per sonnel consists of the members of the management team and the members of the board of director s. Remuner aon of key management personnel On December 31, 2021, the senior management consisted of 8 members: Chief Execuv e Ocer , Chief Operang Ocer , Chief Financial Ocer , Chief Scienc Ocer , General Counsel, Chief Medical Ocer , Vice President Corporat e Develop - ment and Strat egy and Global Head of Quality Assurance. They provide their services on a full-me basis. On December 31, 2021, the board of directors consis ted of 8 members: Pe ter Verhaeghe, Don deBethizy , Pamela M. Klein, W erner Lanthaler , A.A. Rosenber g, James M. Daly , Yv onne Greens treet and Tim V an Hauwermeiren. Only the Chief Execuve Ocer is a member of both the senior management team and the board of directors. The Chief Execuv e Ocer does not receive any remuner aon for his board membership, as this is part of his tot al remuner aon package in his capacity as member of the senior management team. The remunera on packag e of the members of key managemen t personnel comprises: (In thousands of $, ex cept for the number of stock opons & R SUs) Y ear Ended December 31, 2021 Y ear Ended December 31, 2020 Y ear Ended December 31, 2019 Remuner aon of key manag ement personnel Short-t erm benets for senior management members as a group Gross salary 3,465 3,246 2,829 V ariable pay 2,020 1,510 1,091 Employer social security 789 753 910 Other short term benets 274 156 137 T erminaon Benets 382 385 526 Pos t-employment benets for senior managemen t members as a group 150 161 161 Cost of st ock opons granted in the year for senior management members as a group 15,060 42,824 24,457 Cost of restrict ed stock units granted in the year for senior managemen t members as a group 8,025 — — Employer social security cost relat ed to stock opons 4,172 11,206 10,255 T otal benets for k ey management personnel 34,337 60,241 40,366 Numbers of stock opons gran ted in the year Senior Management as a gr oup 101,446 334,900 405,000 Numbers of restricted s tock units granted in the year Senior Management as a gr oup 22,888 — — Remuner aon of non-execuv e directors Board fees and other short -term benets for non-ex ecuve directors 435 405 423 Cost of st ock opons granted in the year for non-ex ecuve directors 3,263 9,576 4,847 Cost of restrict ed stock units granted in the year for non-e xecuve directors 1,731 — — T otal benets for non-e xecuve board members 5,429 9,981 5,270 Numbers of stock opons gran ted in the year Non-ex ecuve director s 22,950 70,000 70,000 Numbers of restricted s tock units granted in the year Non-ex ecuve director s 5,100 — — P ART VII 28 Contingencies The Company is curr ently not facing any outs tanding claims or ligaons that ma y have a signican t adverse impact on the Company’ s consolidated nancial posion. 29 Commitments At balance shee t date, there wer e no commitments signed for the acquision of pr operty , plant and equipment. In January 2021, the Company en tered into a binding lease commitmen t related to the en visioned relocaon to a ne wly built oce in Zwijnaar de, Belgium. Included in the binding lease commitment is a rent free period f or 6 months following the c ompleon of the building. The total futur e cash oulows relat ed to this lease are as follow s: In February 2019, and as amended in September 2020, the Compan y entered in to a global collaboraon and license agr ee - ment with Haloz yme Therapeucs, Inc. Under the terms of the agreemen t, the Company will pay $12.5 million per tar get for future tar get nominaons and potenal futur e payments of up to $160.0 million per select ed target subject to achie vement of specied development, r egulatory and sales-based milestones and up to $40.0 million subject t o the achievement of addional, specied sales-based milestones. This amount r epresents the maximum amount tha t would be paid if all mile - stones w ould be achieved but excludes v ariable royalty pa yments based on unit sales. In 2019, the Company e xercised the opon to nominat e an addional target (triggering a $10.0 million developmen t milestone paymen t) and iniated a Phase 1 clinical trial using Halozyme’ s propriet ary ENHANZE® drug delivery technology (triggering a $5.0 million development milestone pa yment). In 2020, the Company iniat ed a Phase 3 clinical trial using Halozyme’ s proprietary ENHANZE® drug delivery technology (triggering a $15.0 million developmen t milestone paymen t). In 2021, the Company iniated a Phase 1 clinical trial using Halozyme’ s propriet ary ENHANZE® drug delivery technology (triggering a $5.0 million development milestone pa yment). The Company’ s manufacturing commitmen ts with Lonza, its drug substance manuf acturing contract or , relate to the ongoing ex ecuon of the biologic license applicaon (BLA) services for ef gargimod and its manuf acturing acvies related to the potenal futur e commercialisaon. In December 2018, the Compan y signed its rst commercial supply agr eement with Lonza r elated to the reserva on of commercial drug subst ance supply capacity for ef gargimod. In the aggreg ate, the Com - pany has outs tanding commitments for e fgargimod under the r st commercial supply agr eement of $312.4 million. (In thousands of $) Less than 1 year 1-3 year s 3-5 years More than 5 years T otal contr actual cash ows Lease commitments not commenced — — 1,437 17,718 19,155 292 | Notes to the Consolidated Financial Statements Notes to the Consolidated Financial Statements | 293 31 Ov erview of Consolidation Scope The parent c ompany argenx SE is domiciled in the Ne therlands. The Company , argenx SE, has two subsidiaries, ar genx BV and argen x IIP BV , based in Belgium. argenx BV has v e subsidiary , argen x US, Inc., based in the United States of America, argen x Japan KK, based in Japan, argenx Switz erland SA, based in Switzerland, ar genx France SAS based in Fr ance and argenx Germany GmbH based in German y . Details of the Compan y ’ s consolidated enes a t the end of the reporng period are as follow s: 30 Audit f ees The following audit ors’ fees w ere expensed in the income st atement: Name Registr aon number Country Parcipaon Main acvity argen x SE COC 24435214 The Netherlands 100.00 % Holding company argen x BV 0818292196 Belgium 100.00 % Biotechnical research on drugs and pharma processes argen x IIP BV 0751809485 Belgium 100.00 % Biotechnical research on drugs and pharma processes argen x US, Inc. 36-4880497 USA 100.00 % Pharmaceucals and pharmacy supplies merchant wholesalers argen x Switzerland, SA CH-660.3.799.020-7 Switzerland 100.00 % Pharmaceucals and pharmacy supplies merchant wholesalers argen x Japan KK 0104-01-145183 Japan 100.00 % Pharmaceucals and pharmacy supplies merchant wholesalers argen x France SAS 90065093800013 France 100.00 % Pharmaceucals and pharmacy supplies merchant wholesalers argen x Germany GmbH HRB 268437 Germany 100.00 % Pharmaceucals and pharmacy supplies merchant wholesalers (In thousands of $) Y ear Ended December 31, 2021 Y ear Ended December 31, 2020 Y ear Ended December 31, 2019 Audit Fees (1) 1,183 923 817 Audit-r elated Fees 267 188 178 T ax Fees (2) 79 — — All other Fees — — — T otal 1,529 1,111 995 (1) Audit services performed by Deloie Accountants B. V . as the external auditor ref erred to in Secon 1 of the Dutch Accounng Firms Oversight Act (Wta) as well as by the Deloie network. (2) T ax and other services performed by the Deloie network. Other No loans, quasi-loans or other guarante es were given by the Company or any of its subsidiaries to members of the board of director s or the execuv e team. We have not enter ed into transacons with our key management per sonnel, other than as described above with respect to remuner aon arrangements rela ng to the ex ercise of their mandat es as mem - bers of the ex ecuve team and the board of director s. P ART VII 32 Events After the Balance Sheet Date No events have occurred after the Balance Sheet date that could have a material impact on the consolidated financial sta tements. 294 | Notes to the Consolidated Financial Statements 8 P ART VIII Company Financial Statements Cont ents 8.1 Signatures of Ex ecuve and Non-ex ecuve Direct ors 298 8.2 Company Balance Sheet on December 31, 2021 argenx SE 300 8.3 Company P rot or Loss Accoun t for the Y ear ended 301 December 31, 2021 arg enx SE 8.4 Notes to the Compan y Financial Sta tements of arg enx SE 302 8.5 Other inf ormaon 307 8.6 Independent Auditor ’ s Report 308 FOR ARGENX SE - FOR THE YEAR ENDED DECEMBER 31, 2021 P ART VIII Signatur es of Ex ecutive and Non-Ex ecutive Dir ectors In accordance with arcle 2:101 of the Dutch Civil Code, the annual accounts were signed by all execuv e and non-ex ecu - ve director s on March 18, 2022. Company Financial Statements for arg enx SE For argen x SE For the year ended December 31, 2021 298 | Signatures of Executive and Non-Executive Dir ectors Company Financial Statements for argenx SE | 299 P ART VIII Company Balanc e Sheet on December 31, 2021 ar genx SE Company Pr ofit or Loss Acc ount for the Y ear Ended December 31, 2021 ar genx SE 300 | Company Balanc e Sheet on December 31, 2021 argenx SE Company Pr ofit or Loss Account for the Y ear Ended December 31, 2021 argenx SE | 301 (In thousands of $) NOTE Y ear ended December 31, 2021 Y ear ended December 31, 2020 () Inter company Rechar ges — — T otal operang inc ome — — G&A Expenses (21,944) (12,738) T otal operang e xpenses (21,944) (12,738) Operang r esult (21,944) (12,738) Financial income and expense 8 (5,231) (1,626) Share in result of subsidiaries 9 (381,493) (589,668) Result bef ore taxa on (408,668) (604,032) T axaon on result of or dinary acvies 404 (101) Result a er taxaon (408,265) (604,134) Assets (In thousands of $) NOTE At December 31, 2021 At December 31, 2020 () Non-current Assets Financial Fixed Assets 2 Inves tments in Group Companies 2,412,741 1,536,080 Other nancial assets 1 1 T otal Financial Fixed assets 2,412,742 1,536,081 T otal Non-Current Assets 2,412,742 1,536,081 Current assets Receiv ables 3 1,993 6,155 Financial assets — current 4 4,985 5,430 Cash in banks 5 142,853 117,995 T otal Current Assets 149,831 129,579 T otal Assets 2,562,573 1,665,661 Equity and liabilies (In thousands of $) NOTE At December 31, 2021 At December 31, 2020 (*) Equity 6 Share Capital 6,233 5,744 Share Premium 3,462,775 2,339,033 Accumulated losses (1,400,196) (991,931) Reserve f or Share-Based payments 356,875 177,509 T ranslaon r eserves 134,041 134,041 T otal Equity 2,559,728 1,664,396 Current liabilies 7 Accounts P ayable 70 0 Inter company pay ables 1,232 655 T axes pa yable 95 0 Accrued expenses 620 610 Other pay ables 827 0 T otal Liabilies 2,845 1,265 T otal Equity & Liabilies 2,562,573 1,665,661 * The Company has adopted a change in its presentaon currency from EUR to USD at January 1, 2021, as described in note 1.3. Accordingly , the December 31, 2020 comparave st atements and related notes have been re-pr esented retrospecvely based on the accounng policies as outlined in note 1.3. * The Company has adopted a change in its presentaon currency from EUR to USD at January 1, 2021, as described in note 1.3. Accordingly , the December 31, 2020 comparave st atements and related notes have been re-pr esented retrospecvely based on the accounng policies as outlined in note 1.3. P ART VIII Notes to The Company Financial Statements of argenx SE 1 Acc ounting Information and Policies 1. 1 Basis of Preparation The company nancial sta tements of argenx SE (hereaer: the company) ha ve been prepar ed in accordance with Part 9, Book 2 of the Dutch Civil Code. In accordance with arcle 362 sub8, Book 2 of the Dutch Civil Code, the company ’ s nancial stat ements are prepared based on the accounng principles of recognion, measuremen t and determinaon of prot, as applied in the consolidat ed IFRS nancial sta tements. 1.2 Summary o f Significant Ac counting Policies In case no other policies are menoned, ref er to the accounng policies as described in the summary of signicant accounng policies in the consolida ted IFRS nancial sta tements. For an appropria te interpre taon, the company nancial sta tements of argenx SE should be read in conjuncon with the consolidated IFRS nancial stat ements. Parcipa ng inter ests in group companies Parcipa ng inter ests in group companies are valued using the equity method, applying the IFRS accounng policies endorsed by the European Union. Following the adopon of IFRS 9 by the group, and our interpr etaon of the Dutch Accounng Standar d 100.107A, the company shall, upon idencaon of a credit loss on an intercompan y loan and/ or receivable, eliminat e the carrying amount of the inter company loan and/or receivable f or the value of the idened credit loss. Result of parcipang interes ts The share in the result of parcipang inter ests consists of the share of the Company in the result of these parcipang inter ests. In so far as gains or losses on transacons involving the transf er of assets and liabilies between the Company and its parcipang interests or between parcipang int erests themselves can be considered unrealize d, they have not been recogniz ed. All amounts are presented in thousands of USD, unless stat ed other wise. The balance sheet and income stat ement ref erences have been included. These ref er to the notes. 1.3 Change in Functional and Presentation Currency as of January 1, 2021 As of January 1, 2021, the Company changed its funconal and presenta on currency from EUR to USD. The change in funconal currency was made to reect that USD has become the predominant curr ency in the Company , represenng a signicant part of the Company ’ s cash ows and nancing. The change has been implemented with prospecve e ect. The change in presentaon currency , e ecve January 1, 2021, from EUR to USD is retr oacvely applied on compara ve gures according to IAS 8 and IAS 21, as if USD had alwa ys been the presenta on currency of the consolidated nancial sta tements. The change was made to beer re ects the economic footprint of the Company’ s business going forw ard. The Company believes that the presenta on currency change will give inv estors and other stak eholders a clearer under - standing of the Company’ s performance over me. Comparison gures in the balance Sheet, prot or loss, and all disclosures hav e been re-presen ted, unless otherwise sta ted, using the procedures outlined below: • Assets and liabilies are transla ted into USD at the closing rat es applicable at the end of each reporng period. • Income and expenses are translated at e xchange rat es at the dates of the respecve transacon or av erage ra tes where these are a suitable proxy . • Dierences resulng fr om the re-presen taon have been present ed as translaon di erence, a component within shareholder s’ equity . • Share capital, share premium, and other reserves are translat ed at hi st oric ra tes prevailing at the date of transacon. 2. Financial Fixed Assets The Company has two Belgian subsidiaries, argenx BV and argenx IIP BV , which carry out the research and development acvies of the Group. Arg enx IIP BV was incorpor ated through a paral demerger of argenx BV in 2020. Argenx BV has ve subsidiaries, argenx US Inc. (United Stat es), argen x Japan KK (Japan), argenx Switz erland SA (Switz erland), argen x Germany GmbH and argenx Fr ance SAS. The nancial xed assets consist of the 100% parcipaons in argen x BV and, argen x IIP BV , both register ed at Industriepark 7, Zwijnaarde, Belgium. The movement in nancial xed assets is as follows: 302 | Notes to The Company Financial Statements of argenx SE Notes to The Company Financial Statements of argenx SE | 303 (In thousands of $) At December 31, 2021 At December 31, 2020 Inves tments in Group Companies Opening Balance 1,535,060 1,113,192 Share of loss of inv estments (437,968) (589,668) Share-based paymen t expenses of inves tments 167,965 91,049 T ranslaon r eserves — (37,064) Capital increase ar genx BV 1,146,687 896,195 Paral demer ger argenx BV — (10,623) Incorpora on argenx IIP BV — 10,623 Capital increase ar genx IIP BV — 61,355 Closing balance 2,411,743 1,535,060 Receiv able/(payable) on Group companies 999 1,020 Inves tments in Group companies 2,412,741 1,536,080 Other nancial assets Opening Balance 1 1 Balance as at year -end 1 1 T otal nancial xed assets 2,412,742 1,536,081 P ART VIII 5 Cash and Cash Equivalents 6 Equity (In thousands of $) At December 31, 2021 At December 31, 2020 T erm deposits 47,365 68,846 Current bank accoun ts 95,488 49,149 T otal Cash in banks 142,853 117,995 For the details on Share Based Paymen ts we re fer to note 14 of the consolidated IFR S nancial stat ements. The company holds no legal reserves as part of the equity . 7 Current Liabilities 8 Financial Resul t and Exchange Gains/( Losses ) (In thousands of $) At December 31, 2021 At December 31, 2020 Accounts pa yable 70 — Inter company pay ables 1,232 655 T axes pa yable 95 — Accrued expenses 620 610 Other pay ables 827 — T otal Current Liabilies 2,845 1,265 (In thousands of $) Y ear ended December 31, 2021 Y ear ended December 31, 2020 Inter est income on bank deposits — 142 Net gains on in vestments at FVTPL — — Fees collect ed from ADS holders 484 402 Inter est on I/C current account — — Financial income 484 544 Net losses on inves tments at FVTPL (364) (538) Inter est expense (116) (86) Other nancial expenses (44) (27) Financial expenses (524) (652) Exchang e gains/(losses) (5,191) (1,519) Financial income and expense (5,231) (1,626) All current liabilies fall due in less than one year . The fair value of the current liabilies approxima tes the nominal value, due to their short-term char acter . 304 | Notes to The Company Financial Statements of argenx SE Notes to The Company Financial Statements of argenx SE | 305 3 Receiv ables Receiv ables fall due in less than one year . The fair v alue of the receivables appro ximates the nominal value, due to their short -term character . 4 Financial Assets (In thousands of $) At December 31, 2021 At December 31, 2020 Money mark et funds 4,985 5,430 T erm account — — T otal Financial asssets 4,985 5,430 (In thousands of $) At December 31, 2021 At December 31, 2020 Inter est receivable — — Other receivables 949 505 Prepaid expenses 1,044 5,650 T otal Receivables 1,993 6,155 (In thousands of $) Share Capital Share Premium Ret ained Earnings Other Reserves T ranslaon Reserves T otal Equity Equity per 1 January 2021 in EUR 4,757 2,058,122 (861,491) 154,977 — 1,356,365 Equity per 1 january 2021 at closing r ate USD/EUR 31 December 2021 5,837 2,525,522 (1,057,136) 190,173 — 1,664,396 Correcon f or historical ra te (93) (186,488) 65,204 (12,664) 134,041 — Equity per 1 January 2021 in USD 5,744 2,339,033 (991,931) 177,509 134,041 1,664,396 Result of the year — — (408,265) — — (408,265) SPB result — — — 179,366 — 179,366 Capital increase e xercised s tock opons 59 32,906 — — — 32,965 Capital increase nancing 2021 430 1,090,836 — — — 1,091,266 Equity per 31 December 2021 in USD 6,233 3,462,775 (1,400,196) 356,875 134,041 2,559,728 P ART VIII Other Inf ormation Pro vision in the Articles of Association Governing the Appropriation of Results 1. The compan y shall have a policy on reserves and dividends which shall be determined and may be amended by the board of director s. The adopon and thereaer each material change of the policy on reserves and dividends shall be discussed at the general meeng under a separate agenda item. 2. From the prots, shown in the annual accounts, as adopted, the board of director s shall determine which part shall be reserved. Any prots remaining ther eaer shall be at the disposal of the general meeng. The board of director s shall make a proposal f or that purpose. A proposal to pay a dividend shall be dealt with as a separat e agenda item at the general meeng. 3. Distribuon of dividends on the shares shall be made in proporon to the nominal value of each share. 4. Distribuons may be made only insofar as the company’ s equity ex ceeds the amount of the paid in and called up part of the issued capital, increased by the reserves which must be kept by virtue of the law . 5. If a loss was suered during any one year , the board of directors ma y resolv e to oset such loss by wring it o agains t a reserve which the company is not required to keep by virtue of the law . 6. The distribuon of prots shall be made aer the adopon of the annual accounts, from which it appears that the same is permied. 7. The board of director s may , subject to due observance of the policy of the compan y on reserves and dividends, resolve to mak e an interim distribuon, provided the requirement of paragr aph 4 of this arcle has been complied with, as shown by interim accoun ts. Such interim accounts shall show the nancial posion of the company not earli - er than on the rst da y of the third month befor e the month in which the resoluon to mak e the interim distribuon is announced. Such interim accoun ts shall be signed by all members of the board of directors. If the signature of one or more of them is missing, this shall be stat ed and reasons for this omission shall be given. The interim accounts shall be deposited in the oces of the trade r egister within eight days aer the day on which the resoluon to mak e the interim distribuon has been announced. 8. At the proposal of the board of director s, the gener al meeng may resolv e to mak e a distribuon on shares wholly or partly not in cash but in shares. 9. The board of director s may , subject to due observance of the policy of the compan y on reserves and dividends, re - solve that distribuons to holders of shares shall be made out of one or more reserves. 10. A claim of a shareholder for payment of a distribuon shall be barred a er ve year s hav e elapsed. 306 | Notes to The Company Financial Statements of argenx SE Other Information | 307 9 Share in Result of Subsidiaries As of December 31, 2021, the Company had two Belgian subsidiaries, argen x BV and argenx IIP BV , which jointly carry out the research and development acvies of the Group. 10 Other Disclosures CONTINGENT LIABILITIES The conngent liabilies of the Company consist of a rental agreemen t for oce space at DocW ork Breda for an amount of KEUR 6 per annum. The lease can be terminated annually . RELA TED-P ARTY TRANSACTIONS All legal enes that can be controlled, jointly contr olled or signicantly inuenced are consider ed as a related party . Also, enes which can contr ol the company are consider ed a relat ed party . In addion, director s, other ke y manage - ment of argenx SE and close relaves are reg arded as related pares. Other than the inter company cross-char ges, there were no relat ed party transacons. REMUNERA TION See note 27 of the notes to the consolidated IFRS nancial sta tements. INFORMA TION RELA TING T O EMPLO YEES During the year 2021, the Company had an aver age of 0.2 FTE (2020: 0.2 FTE). AUDIT OR’S FEES See note 30 of the notes to the consolidated IFRS nancial sta tements. PROPOSAL FOR APPROPRIA TION OF THE RESUL T The Company reported a net loss of $408.3 million for the year ended on December 31, 2021. The Board of Direct ors pro - poses to carry forward the net loss of the year 2021 to the accumulated losses. Ancipang the approval of the nancial sta tements by the shareholders at the annual general meeng of shareholders, this proposal has already been reected in the 2021 nancial sta tements. EVENTS AFTER THE BALANCE SHEET DA TE For the events aer balance sheet date, we re fer to note 32 of the consolidat ed IFRS nancial sta tements. Breda, March 18, 2022 The Director Tim V an Hauwermeiren, CEO (In thousands of $) Y ear ended December 31, 2021 Y ear ended December 31, 2020 argen x BV (421,774) (572,033) argen x IIP BV (16,195) (17,635) (437,968) (589,668) P ART VIII 308 | Independent Auditor’ s Report Independent Auditor’ s Report | 309 Materiality Based on our professional judg ement we determined the materiality f or the nancial sta tements as a whole at USD 29,500,000. The materiality is based on 3.5% of operang expenses. W e have also tak en into accoun t misstatements and/ or possible misstat ements that in our opinion are material for the users of the nancial st atements for qualit ave reasons. W e agreed with the Board of Direct ors that misst atements in ex cess of USD 1,475,000, which are idened during the audit, would be report ed to them, as well as smaller missta tements that in our view must be r eported on qualitave gr ounds. Scope of the group audit argen x SE is at the head of a group of enes. The nancial informaon of this group is included in the consolidat ed nancial stat ements of argen x SE. Because we are ulmately responsible f or the opinion, we are also responsible for direcng, supervising and performing the group audit. In this respect we hav e determined the nature and ext ent of the audit procedures to be carried out for group enes. The audit procedures on all group enes hav e been performed by the group engagemen t team. By performing these procedur esat group enes, together with addional procedures at group level, we hav e been able to obtain sucient and appropriat e audit evidence about the group’ s nancial informaon to provide an opinion about the consolidat ed nancial stat ements. Audit approach fraud risks In accordance with the Dutch Standards on Auding, we are responsible f or obtaining reasonable assur ance that the nancial stat ements taken as a whole are free from material misst atements, whether due to fraud or error . Inherent to our responsibilies f or the audit of the nancial stat ements, there is an unavoidable risk that material missta tements go undetected, even though the audit is planned and performed in accordance with Dutch law . The risk of undetected mat erial missta tements due to fraud is even higher , as fraud ma y involv e collusion, forgery , intenonal omissions, misrepresent aons, or the override of internal contr ol. Also, we are not responsible for the prevenon and detecon of fraud and non-compliance with all laws and regulaons. Our audit procedur es di er from a for ensic or legal inves gaon, which oen have a more in-depth charact er . W e idened and assessed the risks of material misst atements of the nancial statements due to fr aud. During our audit we obtained an underst anding of the enty and its envir onment and the components of the syst em of internal contr ol, including the risk assessment process and management’ s process for responding to the risks of fraud and monitoring the sys tem of internal control and how the Board of Directors ex ercises over sight, as well as the outcomes. In obtaining our unders tanding we performed inquiries with management (Chief Ex ecuve Ocer , Chief Opera ng Ocer , Chief Financial Ocer), those charged with governance and others within the company . W e evaluated the design and relevant aspects of the syst em of internal contr ol and in parcular the fraud risk assessment, as well as among others the code of conduct and whistle blower procedures. W e evaluat ed the design and the implementaon and tes ted the opera ng e ecve - ness of internal controls designed to miga te fraud risks. As part of our process of idenfying fraud risks, we evaluated fraud risk fact ors with respect to nancial reporng fr aud, misappropria on of assets and briber y and corrupon in close co-oper aon with our forensic specialists. W e evaluat ed whether these factor s indicate that a risk of material misst ate - ment due to fraud is present. Following these procedur es, and the presumed risks under the prev ailing audit standar ds, we considered fraud risks relat - ed to management override of controls, including evalua ng whether there was evidence of bias by the Ex ecuve Board, the ex ecuve leadership team and other members of management, which may repr esent a risk of material missta tement due to fraud. Our audit procedures to respond to these fraud risks include, among others, an evaluaon of relev ant inter - nal controls and supplementary subst anve audit procedures, including detailed tesng of journal entries, evaluang the accounng esmat es for bias and review of the supporng documentaon in relaon to post -closing adjustments. Data analycs, including selecon of journal entries based on risk -based char acteriscs, form part of our audit approach to address the idened fraud risks. Addionally , we perf ormed further procedures including, among others, the following: Independent Auditor’ s Report T o the shareholders of . Report on the Audit of the Financial S tatements for the y ear ended December 31, 2021 included in the Annual R eport Our opinion W e have audited the accompanying nancial stat ements for the year ended December 31, 2021 of argen x SE, based in Breda, the Netherlands. The nancial sta tements comprise the consolidated nancial statemen ts and the company nancial stat ements. In our opinion: • The accompanying consolidated nancial sta tements give a true and fair view of the nancial posion of argenx SE as at December 31, 2021, and of its result and its cash ows for the year ended December 31, 2021 in accordance with Interna onal Financial Reporng Standards as adopted by the European Union (EU-IFRS) and with Part 9 of Book 2 of the Dutch Civil Code. • The accompanying company nancial sta tements give a true and fair view of the nancial posion of argenx SE as at December 31, 2021, and of its result for the year ended December 31, 2021 in accor dance with Part 9 of Book 2 of the Dutch Civil Code. The consolidated nancial sta tements comprise: 1. The consolidat ed sta tements of nancial posion at December 31, 2021. 2. The following st atements for the year ended December 31, 2021: the consolidated st atements of prot or loss, the consolidated st atements of comprehensive income and loss, the consolidated sta tements of cash ows and the consolidat ed sta tements of changes in equity . 3. The notes comprising a summary of the signicant accounng policies and other explanatory informa on. The company nancial sta tements comprise: 1. The compan y balance sheet as at December 31, 2021. 2. The compan y prot or loss account for the year ended December 31, 2021. 3. The notes comprising a summary of the accounng policies and other explana tory informaon. Basis for our opinion W e conducted our audit in accordance with Dutch law , including the Dutch Standar ds on Auding. Our responsibilies under those standards are further described in the “Our responsibilies f or the audit of the nancial stat ements” secon of our report. W e are independent of argen x SE in accordance with the EU Regula on on specic requirements reg arding sta tutory audit of public-inter est enes, the W et toezicht accoun tantsorg anisaes (Wta, Audit rms supervision act), the V erordening inzak e de onaank elijkheid van accountan ts bij assurance-opdracht en (ViO, Code of Ethics f or Professional Acc ountants, a regulaon with r espect to independence) and other relevan t independence regulaons in the Netherlands. Furthermore, we hav e complied with the V erordening gedr ags- en beroepsreg els accountants (V GBA, Dutch Code of Ethics). W e believe the audit evidence we have obtained is sucient and appropriat e to provide a basis for our opinion. P ART VIII 310 | Independent Auditor’ s Report Independent Auditor’ s Report | 311 • We incorpor ated elements of unpredictability in our audit. We also considered the outcome of our other audit proce - dures and evaluat ed whether any ndings were indica ve of fraud or non-compliance. • We ev aluated whether the selecon and applicaon of accounng policies, parcularly those relat ed to subjecve measurements, ma y be indicave of fraudulen t nancial reporng. • We ev aluated whether the judgments and decisions made by management in making the accounng esmates includ - ed in the nancial sta tements indicate a possible bias that may represent a risk of material misstat ement due to fraud. Management insights, esmat es and assumpons that might have a major impact on the nancial stat ements are disclosed in Note 4 of the nancial statemen ts. Our procedures to address fr aud risks did not result in a Ke y Audit Maer . Audit approach compliance with laws and regulaons W e assessed the laws and regulaons relev ant to the Company thr ough discussion with the legal counsel, re ading minutes and reports of internal audit. We inv olved our forensic specialists in this evaluaon. As a result of our risk assessment procedures, and while realizing that the eects from non-compliance could consid - erably vary , we considered the following laws and regula ons: adherence to (corpor ate) tax law and nancial reporng regulaons, the requir ements under the Internaonal Financial Reporng Standar ds as adopted by the European Union (EU-IFRS) and Part 9 of Book 2 of the Dutch Civil Code with a direct eect on the nancial statemen ts as an integra ted part of our audit procedures, to the ext ent material for the related nancial sta tements. W e obtained sucient appropri - ate audit evidence reg arding provisions of those laws and regulaons gener ally recognized to ha ve a direct e ect on the nancial stat ements. Apart from these, the company is subject to other laws and regulaons where the consequences of non-compliance could have a material e ect on amounts and/or disclosures in the nancial stat ements, for instance, through imposing nes or ligaon. Given the nature of the company’ s business and the complexity of law or regulaons, there is a risk of non-compliance with the requirements of such laws and regulaons. In addion, we considered major laws and regula - ons applicable to listed companies. Our procedures ar e more limited with respect to these laws and regulaons tha t do not have a direct e ect on the de - terminaon of the amounts and disclosures in the nancial sta tements. Compliance with these laws and regulaons may be fundamental to the oper ang aspects of the business, to arg enx ’ s ability to connue its business, or to avoid ma terial penales (e.g., with laws and regulaons as SEC regulaons, Dut ch Stock e xchange regulaons, FD A regulaons and EMA regulaons to the e xtent material f or the nancial sta tements of the company) and theref ore non-compliance with such laws and regula ons may ha ve a material e ect on the nancial sta tements. Our responsibility is limited to undertaking specied audit procedures to help idenfy non-compliance with those laws and r egulaons that may have a mat erial eect on the nancial stat ements. Our procedures are limited to (i) inquiry of management, the Board of Direct ors and others within the company as to whether the compan y is in compliance with such laws and regulaons and (ii) inspecng corre - spondence, if any , with the relevant licensing or regula tory authories to help idenfy non-compliance with those laws and regulaons that ma y have a material e ect on the nancial st atements. Natur ally , we remained alert to indicaons of (suspected) non-compliance throughout the audit. Finally , we obtained wrien represen taons that all known instances of (suspected) fraud or non-compliance with laws and regulaons ha ve been disclosed to us. Audit approach going concern Our responsibilies, as well as the responsibilies of the management and the Board of Director s, related to going concern under the prevailing standar ds are outlined in the “Descripon of responsibilies reg arding the nancial state - ments” secon below . In fullling our responsibilies, we performed pr ocedures including evalua ng management ’ s assessment of the company’ s ability to connue as a going concern and considering the impact of nancial, opera onal, and other condions. Based on these procedures, we did not idenfy any reportable ndings related to the enty’ s abili - ty to connue as a going concern. Our key audit ma ers Key audit maer s are those maers that, in our professional judgemen t, were of most signicance in our audit of the nancial stat ements. We hav e communica ted the k ey audit maer s to the Board of Director s. The ke y audit maer s are not a comprehensive reecon of all maer s discussed. These maers wer e addressed in the conte xt of our audit of the nancial stat ements as a whole and in forming our opinion thereon, and we do not provide a separa te opinion on these maers. T rade and Other Payables – Research and development c ost accruals — Refer to Note 15 to the financial statements Descripon Our response The company r ecognizes costs of USD 163.7 million, as specied in Note 15 to the nancial st atements, incurred f or clinical trial acvies as research and de velopment expenses based on evaluaon of its v endors’ progress t oward compleon of specic tasks. P ayment ming may di er signicantly from the period in which the costs ar e recognized as e xpense, resulng in research and development c ost accruals recognized within T rade and Other Pa yables in the Statemen t of Financial Posion. Determinaon of the r esearch progress and the tr anslaon of the progress t o the research and development c ost accruals requires judgment, because such pr ogress is not directly observable. In esmang the vendor s’ progress tow ard compleon of specic tasks, the compan y theref ore uses data such as paent enrollment, clinic al site acvaons and vendor inf ormaon of actual costs incurred. This da ta is obtained through r eports from or discussions with compan y personnel and outside service provider s as to the progress or st ate of compleon of trials, or the compleon of services. Costs are e xpensed over the service period the services are provided. Cos ts for services provided that have not y et been paid are recogniz ed as accruals. W e idened the research and developmen t cost accruals as a crical audit maer due t o the number of ongoing clinical trial acvies and the subjecvity involv ed in esmang research and development c ost accruals and as auding the research and development c ost accruals involves judgemen t in evaluang the progress of the r esearch and development acvies r elave to the costs incurr ed. Our audit procedures r elated to the resear ch and development cost accruals included the f ollowing , among others: • We tes ted controls ov er the appropriateness of the rec ording of the research and de velopment accruals reecng the progress of the clinic al trials, including the quarterly review meengs between the nance department and clinic al research personnel. • We read select ed research and collabor aon agreements, as well as amendments there to, to ev aluate whether the progress of the clinical trials reects all r elevant contr actual elements. • We consider ed publicly available informa on (such as press releases and inv estor present aons) and board of director s’ materials r egarding the sta tus of clinical trial acvies and evaluat ed this informaon to the judgemen ts applied in recor ding the accruals. • For a selecon of contracts, w e compared the amount of accruals at the end of the prior period to curren t year acvity and evaluat ed the accuracy of the company’ s esmaon methodology • We perf ormed conrmaon procedures with v endors related to the progr ess of signicant projects to tes t the research and development c ost input calculaons. • We made selecons of specic amounts r ecognized as resear ch and development e xpense as well as those recognized as accrued expenses and perf ormed the following procedures: - Evaluat ed management ’ s esmate of the v endor ’ s progress based on inquiries with company clinical oper aons personnel. - Reconciled any a vailable related s tatement of work, pur chase order , or other supporng documentaon t o management ’ s esmat e (such as communicaons between the compan y and vendors). OBSERV A TIONS The scope and nature of the audit pr ocedures we performed was sucient and appr opriate to address the risks of ma terial missta tement related t o the research and development c ost accruals. P ART VIII 312 | Independent Auditor’ s Report Independent Auditor’ s Report | 313 Report on the other information included in the Annual Report In addion to the nancial sta tements and our auditor ’ s report thereon, the annual report contains other inf ormaon that consists of: • The Business secon. • The Corpora te Governance secon, including the Remuner aon Report. • Other Inf ormaon as requir ed by Part 9 of Book 2 of the Dutch Civil Code. Based on the follo wing procedur es performed, we conclude that the other informaon: • Is consist ent with the nancial stat ements and does not contain material misst atements. • Cont ains the informa on as required by P art 9 of Book 2 of the Dutch Civil Code. W e have read the other informaon. Based on our knowledge and unders tanding obtained through our audit of the nancial stat ements or otherwise, we have consider ed whether the other informaon cont ains material misst atements. By performing these procedur es, we comply with the requirements of Part 9 of Book 2 of the Dutch Civil Code and the Dutch Standar d 720. The scope of the procedures perf ormed is substan ally less than the scope of those performed in our audit of the nancial stat ements. Management is responsible for the prepar aon of the other informaon, including the Management’ s Board’ s Report in accordance with Part 9 of Book 2 of the Dutch Civil Code, and the other informaon as required by P art 9 of Book 2 of the Dutch Civil Code. Report on the other legal and regulatory requirements Engagemen t W e were engaged by the Board of Directors as auditor of argenx SE on May 13, 2015, as of the audit for the year 2015 and have oper ated as statutory auditor ever since that nancial year . No prohibited non-audit services W e have not provided prohibited non-audit services as re ferred to in Arcle 5(1) of the EU Regulaon on specic require - ments reg arding statutory audit of public-interes t enes. European Single Electronic Reporng Format (ESEF) In the Commission Delega ted Regulaon (EU) 2019/815 of 17 December 2018 supplemenng Direcve 2004/109/EC of the European Parliamen t and of the Council with regar d to regula tory technical st andards on the specicaon of a single electronic reporng f ormat is regulat ed that the Annual Report of the company has to be prepared in a single electronic reporng forma t (“ESEF”). The requiremen ts to be met are set out in the afor emenoned delegated regula on (these require ments are hereinaer ref erred to as: the RTS on ESEF). In our opinion, the Annual Report made up in XHTML format, including the partly tagged Consolidated Financial State - ments as included in the reporng package by the Company , has been prepar ed in all material respects in accordance with the RTS on ESEF . Management is responsible for preparing the Annual Report including the nancial statements in accor dance with the RTS on ESEF , whereby managemen t combines the various components in a reporng package. Our responsibility is to ob - tain reasonable assurance f or our conclusion whether the Annual Report in this reporng packag e, is in accordance with the requiremen ts. W e have tak en into consider aon what is stated in Alert 43. Our procedures included: Revenue – Determination of appropriate accounting of the license and c ollaboration agreement — Refer to Note 16 to the financial statements Descripon Our response The company r ecognized rev enue of USD 178.4 million related to a license and collabor aon agreement with Zai Lab Limited. Under the terms of the agreemen t, the company received USD 175 million in collabora on payments, consisng of an upfr ont payment and miles tone payment. The upfr ont payment of USD 150 million is comprised of a USD 75 million upfron t cash payment and a USD 75 million pa yment in the form of newly issued Zai Lab shares. The compan y has received an addional milestone pa yment of USD 25 million upon obtaining regulatory approv al of efgargimod b y the FDA in the US. In addion, the company is eligible t o receive ered ro yales based on annual net sales of ef gargimod in Great er China. The company’ s license and collabora on agreement has been determined as repr esenng two disnct perf ormance obligaons, being the transf er of the license over ef gargimod and the at arms-length supply of clinical and commer cial product to Zai Lab Limited. The upfr ont payment and milestone pa yment are allocated t o the performance obligaon r elated to the trans fer of the license, whereas sales-based ro yales and revenue gener ated from supplying Zai Lab Limited with drug pr oduct are allocated t o the performance oblig aon related to the supply of pr oduct. The company c oncluded that the license has standalone value as of the e ecve date of the contr act. Therefor e, the revenue relat ed to the transf er of the license has been recognized at a point in me upon fulllment of the perf ormance obligaon, being the granng of the license t o Zai Lab Limited. The milestone payment w as considered constr ained upon the eecve dat e of the contr act and was recogniz ed at the point in me of obtaining the FDA appro val of efg argimod. Revenue fr om royales and supply of drug product to Zai Lab Limit ed will be recognized upon fulllment of the performance oblig aon related t o the supply of drug product. Given the comple xity involved in determining the appr opriate accounng trea tment in line with IFRS and the fact that it is the rst me tha t the efg argimod license is considered to have standalone v alue for the company , we idened the inial accounng trea tment of the license and collaboraon agr eement with Zai Lab Limited as a crical audit ma er . Our audit procedures f or the accounng of the collabor aon and license agreement included the f ollowing, among others: • We tes ted the controls ov er the appropriateness of the accounng of the license and collabor aon agreement, including the review by manag ement of the appropriate accounng trea tment. • We read the license and c ollaboraon agreement and ev aluated whether management’ s accounng posion considered all relev ant facts and terms included in the agreemen t. • We further ev aluated management’ s accounng posion paper and evaluat ed management ’ s conclusions to determine whether they had appropriat ely considered and applied the guidance and interpr etaon within IFRS 15. • We hav e consulted with our nancial reporng experts on the accounng trea tment of the license and collaboraon agreement. OBSERV A TIONS The scope and nature of the audit pr ocedures we performed was sucient and appr opriate to address the risks of ma terial missta tement related t o the accounng of the license and collabora on agreement. 314 | Independent Auditor’ s Report P ART VIII Independent Auditor’ s Report | 315 • Obtaining an underst anding of the enty ’ s nancial reporng process, including the pr eparaon of the reporng pack age; • Obtaining the reporng package and performing validaons to det ermine whether the reporng containing the Inline XBRL instance document and the XBRL extension tax onomy les have been prepared in accordance with the technical specicaons; and • Examining the informaon rela ted to the Consolidated Financial Stat ements in the reporng packag e to determine whether all required tagging has been applied and whether they are in accordance with the RTS on ESEF . Description of r esponsibilities regarding the Financial Statements Responsibilies of management and the Board of Directors for the nancial statemen ts Management is responsible for the prepar aon and fair presentaon of the nancial stat ements in accordance with EU-IFRS and Part 9 of Book 2 of the Dutch Civil Code. Furthermore, management is responsible for such internal con trol as management determines is necessary to enable the prepar aon of the nancial statemen ts that are free fr om material missta tement, whether due to fraud or error . As part of the prepar aon of the nancial statemen ts, management is responsible f or assessing the company’ s ability to connue as a going concern. Based on the nancial reporng framework s menoned, management should prepare the nancial statemen ts using the going concern basis of accounng unless management either intends to liquidate the company or to cease operaons, or has no realisc alternav e but to do so. Management should disclose events and circumst ances that may cas t signicant doubt on the company’ s ability to connue as a going concern in the nancial stat ements. The Board of Directors is responsible f or over seeing the company’ s nancial reporng process. Our responsibilies for the audit of the nancial statemen ts Our objecve is to plan and perform the audit assignment in a manner that allows us to obtain sucient and appropriate audit evidence for our opinion. Our audit has been performed with a high, but not absolute, level of assurance, which means we may not detect all material error s and fr aud during our audit. Missta tements can arise from fraud or error and are considered material if , individually or in the aggrega te, they could reasonably be expected to inuence the economic decisions of users tak en on the basis of these nancial statemen ts. The materiality a ects the nature, ming and extent of our audit procedures and the evaluaon of the eect of idened missta tements on our opinion. W e have ex ercised professional judgemen t and have maint ained prof essional skepcism throughout the audit, in ac - cordance with Dutch Standar ds on Auding, ethical requirements and independence requirements. Our audit included among others: • Idenfying and assessing the risks of material misstat ement of the nancial statemen ts, whether due to fraud or error , designing and performing audit procedures responsive to those risks, and obtaining audit evidence that is sucient and appropriate to pr ovide a basis for our opinion. The risk of not detecng a material misstatemen t resulng fr om fraud is higher than for one resulng from error , as fraud may inv olve collusion, forgery , intenonal omissions, misrep - resent aons, or the override of internal contr ol. • Obtaining an understanding of internal con trol relevant to the audit in order to design audit procedur es that are appropriat e in the circumstances, but not for the purpose of expressing an opinion on the eecveness of the company’ s internal contr ol. • Evalua ng the appropriat eness of accounng policies used and the reasonableness of accounng esmat es and related disclosures made by management. • Concluding on the appropriateness of management’ s use of the going concern basis of accounng, and based on the audit evidence obtained, whether a material uncertainty exists r elated to events or condions that may cast signicant doubt on the company ’ s ability to connue as a going concern. If we conclude that a material uncertainty e xists, we are requir ed to dra w aen on in our auditor ’ s report to the related disclosures in the nancial statemen ts or , if such disclosures are inadequate , to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor ’ s report. However , future events or condions may cause the company to cease to connue as a going concern. • E valuang the overall pr esentaon, structure and cont ent of the nancial statemen ts, including the disclosures. • Evalua ng whether the nancial statemen ts repr esent the underlying transacons and events in a manner that achieves fair pr esentaon. W e communicate with the Board of Directors reg arding, among other maer s, the planned scope and ming of the audit and signicant audit ndings, including any signicant ndings in internal contr ol that we idened during our audit. In this respect we also submit an addional report to the audit commiee in accordance with Arcle 11 of the EU Regulaon on specic requiremen ts reg arding statut ory audit of public-interest enes. The inf ormaon included in this addional report is consistent with our audit opinion in this auditor ’ s report. W e provide the Board of Director s with a sta tement that we have complied with relevan t ethical requir ements regar ding independence, and communicate with them all relaonships and other maers that may reasonably be thought to bear on our independence, and where applicable, relat ed saf eguards. From the maer s communica ted with the Board of Director s, we determine the k ey audit maer s: those maer s that were of most signicance in the audit of the nancial statemen ts. W e describe these maer s in our auditor ’ s report unless law or regulaon precludes public disclosure about the maer or when, in extremely rar e circums tances, not communicang the maer is in the public interest. Ro erdam, March 21, 2022 Deloie Account ants B. V . Inial for idencaon purposes: P .J. Seegers 314 | Independent Auditor’ s Report 9 P ART IX Inf ormation Inc orporated by R ef er enc e 9 Inf ormation Incorporated by R efer ence 318 | Information Incorporated by Reference Information Incorporated by Reference | 319 P ART IX Our consolidated nancial sta tements as of and for the nancial years ended December 31, 2021, 2020 and 2019 (in - cluding the independent auditor ’ s reports thereupon) have been incorpora ted by refer ence in this Universal Regis traon Document. W e have incorpora ted certain documents into this Universal Registr aon Document by ref erence. The parts of the documents incorporat ed herein by ref erence to which no specic ref erence has been made are either not relevan t for inv estors or are cov ered elsewhere in this Univer sal Regis traon Document. The following table cont ains a cross-r eference list to the relev ant pages of our consolidate d nancial stat ements for the nancial year ended December 31, 2021, which are incorporat ed by ref erence in this Universal Registr aon Document: The following table cont ains a cross-r eference list to the relev ant pages of the nancial stat ements of arge nx SE for the nancial year ended December 31, 2021, which are incorporat ed by ref erence in this Universal Registr aon Document: The following table cont ains a cross-r eference list to the relev ant pages of our annual report 2020 on which can be found our consolidat ed nancial stat ements for the nancial year ended December 31, 2020, which are incorpor ated by ref erence in this Registra on Document: Consolidated st atement of nancial posion p. 250 Consolidated st atement of prot or loss and other c omprehensive income p. 252 Consolidated st atement of cash ows p. 254 Consolidated st atement of changes in equity p. 255 Notes to the consolida ted nancial statemen ts for the year 2021 p. 256 Consolidated st atement of nancial posion p. 250 Consolidated st atement of prot or loss and other c omprehensive income p. 252 Consolidated st atement of cash ows p. 254 Consolidated st atement of changes in equity p. 255 Notes to the consolida ted nancial statemen ts for the year 2020 p. 256 Company balance sheet on December 31, 2021 p. 300 Company pr ot or loss account for the year ended December 31, 2021 p. 301 Notes to the nancial st atements p. 302 Independent auditor’ s report on the nancial statemen ts p. 308 The full text of the Arcles of Associaon and an unocial English translaon thereof are incorpor ated by ref erence in this Registr aon Document. Any informa on not listed in the tables above but included in the document The full text of the Arcles of Associaon and an unocial English transla on thereof are incorpor ated by ref erence in this Universal Regis traon Document. Any inf ormaon not list ed in the tables above but included in the document incorporat ed by ref erence is given for infor - maon purpose only . The documents incorpora ted by re ference are av ailable on our website (www .argenx.com), at the following locaons: The following table cont ains a cross-r eference list to the relev ant pages of our annual report 2019 on which can be found our consolidat ed nancial stat ements for the nancial year ended December 31, 2019, which are incorpor ated by ref erence in this Registra on Document: Annual report 2019 hps://www .argenx.com/sit es/default/les/media-documents/ argenx_Annual_Report_2019.pdf Annual report 2020 hps://www .argenx.com/sit es/default/les/report/ argenx_report_2020_Mar ch_30_2021.pdf Annual report 2021 hps://www .argenx.com/sit es/default/les/report/ argenx_report_2021_Mar ch_21_2022.pdf Arcles of associaon hps://www .argen x.com/sites/def ault/les/media-documents/argen x_SE_Arcles_of_Associaon_ Consolidated_V ersion-NL.pdf hps://www .argenx.com/sit es/default/les/media-documents/ar genx_SE_Arcles_of_Associaon_ Consolidated_T ranslaon-ENG.pdf Remuner aon Policy hps://www .argenx.com/sit es/default/les/media-documents/ar genx_remuner aon_policy_nal_ approved_11_Ma y_2021.pdf Consolidated st atement of nancial posion p. 250 Consolidated st atement of prot or loss and other c omprehensive income p. 252 Consolidated st atement of cash ows p. 254 Consolidated st atement of changes in equity p. 255 Notes to the consolida ted nancial statemen ts for the year 2020 p. 256 PA RT X Glossary 10 Cont ents Cross R ef erence T able f or Annual Reporng R equirements 322 Glossary 324 PA RT X 322 | Cross Ref erence T able for Annual Reporting Requir ements Cross Ref erence T able for Annual Reporting Requir ements | 323 Cr oss Ref er ence T able f or Annual Reporting Requir ements The following list of cross ref erences idenes where each item required f or us to disclose in our yearly nancial report can be found in this Registr aon Document. Management Conrmaons With due regard to bes t pracce principle 1.4.3 of the Dutch Corporate Governance Code, we conrm that: (i) This Univeral Regis traon Document provides sucient insights int o any f ailings in the eecveness of the internal risk management and contr ol sy stems, as is further substan ated in chapter 2 “Risk F actors” , and secon 4.5 “Risk Appete & Control”; (ii) The risk- and contr ol systems described herein, parcularly in paragr aph 4.5.5 “Financial Risks and Controls” provide reasonable assur ance that the nancial reporng does not cont ain any material inaccuracies; (iii) We conrm that we e xpect that our exisng cash and cash equivalents and current nancial assets will enable us to fund our operang expenses and capital expenditur e requir ements through at least the next twelve months. On the basis of the current sta te of a airs, it is jused that the nancial reporng is prepared on a going concern basis; and (iv) This report, parcularly chapter 2 “Risk F actors” sta tes those material risks and uncertaines that are r elevant to the expectaon of our connuity for the period of twelve months aer the prepara on of this Universal Regis tra - on Document. The aforemen oned sta tement does not in any wa y limit the relevance or applicability of the Risk Fact ors set out in this Universal Re gistraon Document to the afor emenoned period of twelve months. /Signed on behalf of argenx SE/ SOURCE OF REQUIREMENT T opic Locaon Arcle 2:391 DCC, RJ 400, RJ 405 Report on the compan y ’ s acvies 1 Shareholder Leer Present aon of the Group Corporat e structure 5 General Descripon of the Compan y and its Share Capital Board of direct ors report 4 Corporate Go vernance Primary risks and uncertaines 2 Risk Factors Risk appete & con trol 4.5 Risk Appete & Control Analysis of nancial condion and results 6 Operang and Financial Re view Informa on on research and development acvies 1.3 1.4 1.5 Our Products and Pr oduct Candidates Collaboraon Agr eements License Agreements – Gener al Forwar d looking paragraph Outlook 2022 Compensaon sta tements and remuner aon report 4.4 Remunera on Report of the Remunera on and Nominaon Commiee RJ 430 Key gures, r aos etc. 6 Operang and Financial Re view Arcle 2:392 DCC/RJ 410 Auditors opinion 8 A ached to the 2021 Financial Report included herein Arcles of associaon on the distribuon of prots 5.12 Arcles of Associaon on Prots, distribuons and losses List of subsidiaries 1.1.1 Group Structure Decree on cont ents of board report ( besluit inhoud bestuursverslag ) Arcle 2:391 sub 5 DCC Corporat e governance code comply - or-e xplain 4.1 Dutch Corporat e Governance Code, “Comply or Explain” Main elements of nancial management & con trol syst ems in connecon with the compan y ’ s nancial reporng 4.5.5 Financial Risks and Controls Funconing of the general mee ng 5.4 General Meeng of Shareholder s and Vong Rights Composion and funconing of the board of direct ors and its commiees 4.2.3 4.2.4 Board of Direct ors Non-Execuv e Directors Arcle 10 Decree T akeover Dir ecve ( besluit overnamerichtlijn ), Arcle 2:391 sub 5 DCC Capital structur e 5 General Descripon of the Company and its Share Capital Principal shareholders 5.3 Share Classes and Principal Shareholders Parcular shar eholder rights and limitaons ther eof 5.4 General meengs of Shar eholders and V ong Rights Procedure f or appointment of board members 4.2 Management Structure Procedure f or amending the arcles of associaon 5.6 Amendment of Arcles of Associaon Authority of the board of direct ors to issue or acquire shares 5.2.5 5.2.7 Issue of Shares Acquision of Shares in arg enx ’ s Capital Material arr angements, to which the company is a party , in relaon to a public oer 5.5 An-T akeover Pr ovisions RJ = Guidelines on Annual Reporng ( Richtlijnen voor de Jaar verslaggeving ) 324 | Glossary Glossary | 325 AbbVie AbbVie S.Á.R.L. ABSIS autoimmune bullous skin disorder intensity sc ore ACA the Paen t Protecon and Aor dable Care Act, as amended by the Health Care and Educaon R econciliaon Act of 2010 AChR an-acetylcholine recept or ADCC anbody dependen t cell-mediated cytotoxicity ADR American Depositary R eceipt ADS American Depositary Share AFM the Dut ch Authority for the Financial Mark ets ( Schng Autoriteit Financiële Markten ) AIA America Invents Act AgomAb AgomAb Therapeucs NV AKS the U.S. feder al An-Kickback Statute ALS amyotr ophic lateral scler osis AML acute my eloid leukemia argen x or the Company argenx SE Arcles of Associaon our current arcles of associaon ASyS an-synthet ase syndrome ASP aver age sales price Autoanbodies self -directed anbodies B-cell B lymphocyte producing a specic anbody BioW a BioWa, Inc Bird R ock Bio Bird Rock Bio , Inc. BLA biologics license applicaon Board By -Laws the rules adopted by our Boar d of Directors that describe the pr ocedure for holding meengs of the Board of Dir ectors, for the decision-making by the Board of Directors and the Board of Direct ors’ operang pr ocedures Board of Direct ors consisng of our ex ecuve director(s) and our non-ex ecuve director s. BP bullous pemphigoid BPCIA the U.S. Biologics Price Compeon and Innovaon Act Broteio Brot eio Pharma B. V . C2 component 2 CBA a collecve bargaining agr eement cGMP current good manuf acturing pracces CH Switzerland CHMP Commiee for Medicinal Pr oducts for Human Use Chugai Chugai Pharmaceucal Co., L td. CIDP chronic inammatory dem yelinang polyneuropath y Cilag Cilag GmbH Internaonal, one of the Janssen Pharmaceuc al Companies of Johnson & Johnson CMOs contr act manufacturing organiz aons CMMI Center f or Medicare and Medicaid Innova on CMS Centers f or Medicare & Medicaid Code of Conduct our Code of Business Conduct and Ethics CR Complete r emission CRO contract resear ch organiza on C TA clinical trial authorizaon applica on CTC L cutaneous T -cell lymphoma DCC Dut ch Civil Code Deloie Deloie Acc ountants B. V . DFSA Dutch Financial Supervision Act (W et op het nancieel toezicht) DM dermatom yosis DRC Dat a Review Commiee DSMB Data Safe ty Monitoring Board Dutch Corpor ate Governance Code the Dutch Corpor ate Governance Code dated December 8, 2016, which is in f orce as of the nancial year st arng on or aer January 1, 2017 EEA European Ec onomic Area Elektro Elektro, Inc. EMA European Medicines Authority EMEA Eur ope, Middle East and Africa ENHANZE® ENHANZE® technology Enterprise Chamber the Dutch Enterprise Chamber of the Ams terdam Court of Appeal (Ondernemingskamer van het Ger echtshof te Amsterdam) Euronext Brussels the regulat ed market oper ated by Euronext Brussels S A/NV , a regulated mark et within the meaning of Direcve 2014/65/EU of the Eur opean Parliament and of the Council of May 15 , 2014 on mark ets in nancial instruments amending Council Direcves 2004/39/EC , Direcve 85/611/EEC, 93/6/EEC and Dir ecve 2000/12/EC of the European P arliament and of the Council and repealing Council Direcve 93/22/EE C (MiFID II) Exchange Act the U.S. Securies Ex change Act of 1934, as amended FairJourne y FairJourne y LDA Fc an body region interacng with cell surf ace Fc receptor s FcRn neonatal Fc r eceptor FDA U.S. Food and Drug Administr aon FDCA the U.S. Feder al Food, Drug, and Cosmec Act GARP gly coprotein A repe ons predominant GCC Gulf Cooperaon Council, c omprising Saudi Arabia, Kuwait, the United Ar ab Emirates, Qatar , Bahrain and Oman GCP Good Clinic al Pracce GDPR Regulaon (EU) 2016/679 of the Eur opean Parliament and of the Council of April 27, 2016 on the protecon of na tural persons with reg ard to the processing of per sonal data and on the free movemen t of such data General Meeng any gener al meeng of shareholders of ar genx SE (i. e. any annual gener al meeng and any extr aordinary general meeng) Genor Biopharma Genor Biopharma Co. Ltd Genpharm Genpharm Services FZ-LLC GLP Good Labora tory Pracce gMG generaliz ed myas thenia gravis PA RT X Glossary The following explana ons are intended to assist the gener al reader to understand certain terms used in this Universal Regis traon Document. The denions set out below apply throughout this Universal Regis traon Document, unless the conte xt requir es otherwise. GPCR G-protein coupled recept ors Group argenx SE tog ether with its subsidiaries GSK GlaxoSmithKline plc Halozyme Halozyme Inc. Hatch-W axman Act the U.S. Drug Price Compeon and P atent T erm Rest oraon Act of 1984 HGF hepatocyte growth f actor HIP AA the U.S. f ederal Health Insurance P ortability and Accountability Act of 1996 HITECH the Health Inf ormaon T echnology for E conomic and Clinical Health Act of 2009 H TA a health technology assessment I-RODS Inammatory Rasch-built Overall Disability Scale IFRS Internaonal Financial R eporng Standards, as issued by the Interna onal Accounng Standards Boar d, and as adopted by the European Union IgA Immunoglobulin A IgD Immunoglobulin D IgG Immunoglobulin G IgM Immunoglobulin M IIP Immunology Innova on Program IL-22 in terleukin-22 IL-22R interleukin-22 r eceptor IMM irrever sible morbidity or mortality IMNM immune-mediated necrozing m yopathy INCA T Inammat ory Neuropathy Cause and T reatment IND invesg aonal new drug IQVIA IQ VIA L TD IRB instuonal review boar d I S Ts immunosuppr essive therapies ITP immune thrombocytopenic purpura ITP immune thrombocytopenia IV intra venous IVIg intra venous IgG Janssen Janssen Pharmaceuc als, Inc. JJDC Johnson & Johnson Innovaon – JJDC, Inc. J-MAA Japanese Mark et Authorizaon Applica on JOBS Act the U.S. Jumpstart Our Business St artups Act of 2012 LEO Pharma Pharma LEO Pharma A/S LN lupus nephris Lonza Lonza Sales AG LUMC Leiden Univer sity Medical Center MAA mark eng authorizaon applicaon MAD mulple ascending dose MAR Regulaon (EU) No 596/2014 of the Eur opean Parliament and of the Council of April 2014 on mark et abuse (market abuse regula on) and repealing Direcve 2003/6/EC Eur opean Parliament and of the Council and Commission Dir ecves 2003/124/EC, 2003/EC and 2004/72/EC, and the rules and regula ons promulgated pur suant thereto MDS my elodysplasc syndromes Medison Medison Pharma Ltd. Member Stat e a member state of the EE A MET mesench ymal-epithelial transion fact or MFN Most F avored Naon MG m yasthenia gra vis MHRA Medicines and Healthcare products R egulatory Agency Minister Minister of Health, Labour and W elfare MMN mulfocal motor neuropa thy MN membranous nephropath y MuSK muscle-specic kinase MSE minimal sympt om expression myosis idiopathic inammatory myopa thies Nasdaq the Nasdaq Global Select Market NHI Naonal Health Insurance NHSA Naonal Healthcar e Security Administraon NK natural killer Novo Novo Nordisk A/S NRDL Naonal Reimbursable Drug Lis t OIG the Oce of Inspector General OOPD the U .S. Oce of Orphan Products Development Equity Incenv e Plan the equity incenve plan as adopted b y our Board of Directors on December 18, 2014 which was approv ed by the General Meeng on May 13, 2015 and amended b y the General Meeng on April 28, 2016 and November 25, 2019 and the Boar d of Directors on December 18, 2019, November 5, 2020 and on December 15, 2021 PA A pre-approv al access program PCT Paten t Cooperaon T reaty PD pharmacodynamic PDAI pemphigus disease area index PDUF A Prescripon Drug User Fee Act PF pemphigus foliaceous Pharmaceucal and Medical Device Act the Act on Securing Quality , E cacy and Safety of Pharmaceucals and Medic al Devices PHSA the U.S. Public Health Service Act PIP paediatric inv esgaon plan PK pharmac okinec PMDA Pharmaceucals and Medical Devices Agency (Japan) POT S postur al orthostac tach ycardia s yndrome Prospectus R egulaon Regulaon (Eu) 2017/1129 Of The Eur opean Parliament And Of The Council of 14 June on the prospectus to be published when securies ar e oered to the public or admied tr ading on a regulat ed market, and repealing Dir ecve 2003/71/EC PREA P ediatric Research Equity Act of 2003, as amended PRV Priority Review V oucher PV pemphigus vulgaris P VA S pemphigus vulgaris acvity scor e QMG quantave my asthenia gra vis RDL R eimburse Drug List Registr aon Document this universal registr aon document REMS risk evaluaon and mig aon stra tegy PA RT X 326 | Glossary Glossary | 327 328 | Glossary Roche F . Homan-La Roche AG RSUs Restricted s tock units SAD single ascending dose SC subcutaneous SE regulaon European Council Regula on (EC) No 2157/2001 of October 8, 2001 on the Statut e for a European compan y (Societas Europaea or SE) SEC the U. S Securies and Exchange Commission Secon 404 Secon 404 of the Sarbanes-Oxley Act of 2002 Securies Shares or American Depositary Receipts t o Shares in the share capital of arg enx SE Securies Act the U.S. Securies Act of 1933, as amended Shire Shire AG, no w known as Shire Internaonal GmbH SjS Sjögren’ s syndrome SLE s ystemic lupus erythematosus SMA spinal muscular a trophy Sopartec Sopart ec S.A . SRD II Direcve 2017/828 of the Eur opean Parliament and of the Council of May 17, as r egards the encourag ement of long-term shareholder engag ement Stat en Stat en Biotechnology B. V . TEAE treatment emer gent adverse ev ents T akeover La w the Belgian law dated April 1, 2007 on public tak eover bids T akeover R oyal Decree the Belgian Royal Decree of April 27, 2007 on public t akeover bids T -cell T lymphocyte pr otecng the body from inf econ TCL T -cell lymphoma TGF-β transforming gr owth factor beta T ranspar ency Direcve Direcve 2004/109/E C of the European Parliament and of the Council of December 15, 2004 on the harmonizaon of tr ansparency requiremen ts in relaon to informa on about issuers whose securies are admied t o trading on a regulated mark et and amending Direcve 2001/34/EC and the rules and regula ons promulgated pur suant thereto , as amended by various direcv es including 2013/50/EU T regs T -cell populaon modulang the immune sy stem U.S. the United Stat es of America UCL Université Catholique de Louv ain UK the United Kingdom UoT the Univer sity of T ex as System USPT O the Unit ed States Pa tent and T rademark Oce VIB VIB v zw V -regions anbody variable r egions we, us or our argen x SE together with its wholly owned subsidiaries argenx IIP B V , argen x BV , arg enx US Inc, argen x Japan K.K., and argenx Switz erland SA, argenx France S AS and argenx Germany GmbH and, as applicable, its former wholly owned sub sidiaries Zai Lab Zai Lab Limited
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