BerGenBio

213800TYYFXKYF3V2A23-2022-12-31-en.xhtml 213800TYYFXKYF3V2A23 2022-01-01 2022-12-31 213800TYYFXKYF3V2A23 2021-01-01 2021-12-31 213800TYYFXKYF3V2A23 2022-12-31 213800TYYFXKYF3V2A23 2021-12-31 213800TYYFXKYF3V2A23 2020-12-31 213800TYYFXKYF3V2A23 2021-12-31 ifrs-full:IssuedCapitalMember 213800TYYFXKYF3V2A23 2022-01-01 2022-12-31 ifrs-full:IssuedCapitalMember 213800TYYFXKYF3V2A23 2022-12-31 ifrs-full:IssuedCapitalMember 213800TYYFXKYF3V2A23 2020-12-31 ifrs-full:IssuedCapitalMember 213800TYYFXKYF3V2A23 2021-01-01 2021-12-31 ifrs-full:IssuedCapitalMember 213800TYYFXKYF3V2A23 2021-12-31 ifrs-full:SharePremiumMember 213800TYYFXKYF3V2A23 2022-01-01 2022-12-31 ifrs-full:SharePremiumMember 213800TYYFXKYF3V2A23 2022-12-31 ifrs-full:SharePremiumMember 213800TYYFXKYF3V2A23 2020-12-31 ifrs-full:SharePremiumMember 213800TYYFXKYF3V2A23 2021-01-01 2021-12-31 ifrs-full:SharePremiumMember 213800TYYFXKYF3V2A23 2021-12-31 ifrs-full:AdditionalPaidinCapitalMember 213800TYYFXKYF3V2A23 2022-01-01 2022-12-31 ifrs-full:AdditionalPaidinCapitalMember 213800TYYFXKYF3V2A23 2022-12-31 ifrs-full:AdditionalPaidinCapitalMember 213800TYYFXKYF3V2A23 2020-12-31 ifrs-full:AdditionalPaidinCapitalMember 213800TYYFXKYF3V2A23 2021-01-01 2021-12-31 ifrs-full:AdditionalPaidinCapitalMember iso4217:NOK iso4217:NOK xbrli:shares Annual Report & Accounts 2022 Developing breakthrough AXL therapeutics to improve patients’ lives New data announced in treatment of 2L NSCLC patients substantiate role of bemcentinib • BGBC008 (2L NSCLC) study of bemcentinib in combination with immune checkpoint inhibition • BGBIL005 (2L+ NSCLC) investigator led trial of bemcentinib in combination with chemotherapy Initiated Ph1b/2a study in 1L STK11m NSCLC patients Studies completed in 2022 with ﬁnal data expected in 2023 • BGBC003 (Relapsed/Refractory AML) bemcentinib + chemotherapy • BGBC149-102 (Serous Ovarian Cancer) tilvestamab ACCORD2 study of bemcentinib in hospitalized COVID-19 meets primary, key secondary endpoints First patient treated in Ph2b hospitalized COVID-19 study Signiﬁcant ﬁnancial commitment obtained from major investor Highlights 2022 BerGenBio (OSE:BGBIO) is a clinical stage biopharmaceutical company developing selective AXL inhibitors to treat aggressive diseases including cancer and severe respiratory infections STRATEGIC REPORT 04–22 CORPORATE GOVERNANCE 23-49 FINANCIAL STATEMENTS 50-81 01 Annual Report & Accounts 2022 OVERVIEW 01–03 “I am conﬁdent that our strategy, drive and expertise have us on track to deliver value to patients and shareholders for years to come.” Chair’s Statement Dear Shareholders It was a little over a year ago when I was presented with the opportunity to serve as the Chair of the Board of BerGenBio. It became immediately clear to me that we had a tremendous opportunity to change the lives of patients around the world suffering from life-threatening diseases. I am very proud to be able to say today that through the hard work and resolute focus of our employees, management team and board we have moved demonstrably closer to achieving that goal. BerGenBio has been at the forefront of understanding and harnessing the receptor tyrosine kinase AXL. Mounting evidence published by third parties continues to validate our ﬁndings that AXL plays a signiﬁcant role in exacerbating severe diseases. Activation of AXL not only enhances disease entry and replication, but also dampens the immune response, leading to aggressive illnesses with little to halt their attack. BerGenBio’s lead compound, bemcentinib, a potent, potentially ﬁrst-in-class selective AXL inhibitor, may hold the key to turning off this incendiary process. Preclinical and human data evaluating bemcentinib across a number of indications in over 600 patients has provided us with evidence of a compelling safety proﬁle, encouraging efﬁcacy and an unrivaled expertise in AXL’s role and bemcentinib’s ability to inhibit it, particularly in the lungs. The plethora of data points we accumulated, along with volumes of research conducted by world-renowned experts, guided us in honing our strategy this past year, when we announced in May of 2022 our plans to concentrate our efforts on First-Line (1L) Non-Small Cell Lung Cancer (NSCLC) patients harboring STK11 mutations (STK11m) and hospitalized COVID-19 patients. As we enter 2023, we have already begun to see this new emphasis bear fruit. NSCLC patients harboring STK11m comprise approximately 20% of non-squamous NSCLC cases, do not currently have a targeted therapy and face one of the worst prognoses. NSCLC patients with STK11m do, however, predominantly express increased levels of AXL activation resulting in the development of drug resistance, immune invasion and metastasis. The results of the topline data, announced in February 2023, from our BCBG008 trial evaluating bemcentinib in 2L+ NSCLC showed an impressive overall survival beneﬁt, especially in patients with higher levels of AXL activation. We are optimistic that our Ph1a/2b study assessing bemcentinib in 1L STK11m NSCLC, which was initiated in October of 2022, may provide the aid to these patients that they so desperately need. 2022 was a pivotal year for BerGenBio. Data from years of toil came into focus and we were able to deﬁne needy patient populations where AXL inhibition may lead to extraordinary results. I am proud of our team for traversing a difﬁcult capital markets environment for biopharmaceutical companies and concentrating on the task at hand: progressing bemcentinib into two new, promising clinical trials. I am conﬁdent that our strategy, drive and expertise have us on track to deliver value to patients and shareholders for years to come. Anders Tullgren Chair of the Board of Directors 02 Annual Report & Accounts 2022 OVERVIEW 01-03 STRATEGIC REPORT 04-22 CORPORATE GOVERNANCE 23-49 FINANCIAL STATEMENTS 50-81 OVERVIEW 01-03 Dear Shareholders I joined BerGenBio as Chief Executive Ofﬁcer in September 2021 and directly set out on a mission with our team to analyze the substantial, promising early evidence that the Company had generated over the years and use it to identify speciﬁc severe diseases where selective AXL inhibition could potentially transform the treatment of these indications. As I announced during our strategy update in May of last year, we were successful in detecting two large, underserved patient populations where bemcentinib may have the greatest impact. Today, we now have scientiﬁc evidence validating the relevance of AXL as a target and bemcentinib’s selective inhibition capabilities. The activation of the receptor tyrosine kinase AXL due to oxidative stress, inﬂammation, hypoxia and drug treatment is a major driver of disease progression and severity. In Non-Small Cell Lung Cancer (NSCLC), AXL activation leads to an immune suppressed tumor, which allows for cancer cell survival, escape and the development of drug resistance. The inhibition of AXL by bemcentinib aims to reverse this immunosuppressive tumor microenvironment, reducing the immune evasion and drug resistance, while reactivating the innate immune response. Our recently announced topline data demonstrates that bemcentinib may enhance the effects of checkpoint inhibitors and chemotherapy in NSCLC. In February 2023, we announced positive topline data from BGBC008, a Ph2 trial evaluating bemcentinib in combination with pembrolizumab in 2L+ NSCLC patients. The study revealed a very encouraging and clinically meaningful overall survival beneﬁt and evidence of disease control across all cohorts, regardless of prior therapy or PD-L1 status. The data was particularly impressive in patients with an AXL tumor proportion score (TPS) > 5, comprising approximately 50% of the evaluable Chief Executive’s Statement patients, demonstrating a statistically and clinically signiﬁcant improvement in median overall survival compared to patients with AXL TPS < 5. These results strongly support the strategy we embarked on in May to target First-Line (1L) NSCLC patients harboring STK11 mutations. AXL is expressed in approximately 80% of 1L NSCLC STK11m patients, causing a highly immunosuppressed and toxic tumor microenvironment. Due to this activity, patients currently have a lower response rate, shorter overall and progression free survival with the current standard of care, and do not have a targeted therapy available. This large subgroup makes up approximately 20% (~30,000 patients in the US and ﬁve largest EU countries) of non-squamous NSCLC cases, making it one of the largest “non- actionable” mutations. The inhibition of AXL, anti-tumor effects and modulation of the tumor microenvironment by bemcentinib shown in the BGBC008 trial makes it an extremely attractive candidate to treat STK11m NSCLC patients and enter a potentially multi-billion dollar market. Over the past year, we transitioned from establishing a clear strategy for the Company to executing that plan. Thanks to the wisdom and dedication of our team, we now have two ongoing clinical trials evaluating bemcentinib in two highly pertinent indications for AXL inhibition: a Ph1b/2a in 1L STK11m NSCLC and a Ph2b in hospitalized COVID-19 patients. In 2022, BerGenBio separated itself once again as the leader in the development of AXL-targeted therapies. We are motivated to continue this momentum and look forward to sharing further results with you in 2023. Martin Olin Chief Executive Ofﬁcer STRATEGIC REPORT 04-22 CORPORATE GOVERNANCE 23-49 FINANCIAL STATEMENTS 50-81 OVERVIEW 01–03 03 Annual Report & Accounts 2022 Strategic Report Contents 05 BerGenBio’s Leading Position in AXL Targeted Therapeutics 06 AXL – a Promising Target to Treat Life-Threatening Diseases 08 Our Product Candidates 09 Our Development Focus 10 NSCLC: Potential to Treat a Large Patient Population with Poor Prognosis 13 Severe Respiratory Infections - COVID-19 and Beyond: Setting the Stage for Indication Expansion 15 Environmental, Social and Governance 04 Annual Report & Accounts 2022 BerGenBio is the only company solely focused on exploiting the potential of selective AXL inhibition for therapeutic purposes, providing it with a unique competitive position in the biopharmaceutical industry. BerGenBio has built the world’s-leading understanding of the tyrosine kinase target AXL. Since its inception, BerGenBio has explored and validated the signiﬁcant role that AXL plays as a driver of cancers, severe respiratory infections and ﬁbrotic diseases. BerGenBio has been successful in advancing its highly selective AXL tyrosine kinase inhibitors which appear to confer improved safety, while retaining potent efﬁcacy when compared to less selective tyrosine kinase inhibitors (known as mixed tyrosine kinase inhibitors). Our approach of highly selective and potent AXL inhibition has allowed us to establish a unique position in the clinical development of AXL inhibitors, with few direct competitors. BerGenBio has studied its product candidates across several clinical trials to inform its development plans, in both company- sponsored trials and in partnership with some of the leading academic centers in the US and Europe in Investigator Led Trials (ILTs). Data from these trials have been analyzed to identify the diseases for which selective AXL intervention has the most promise to treat patients with high unmet medical needs and for which there is competitive “white space”. The unique characteristics of our highly selective AXL inhibitors have also been employed in preclinical studies by a large BERGENBIO’S UNIQUE POSITION AND APPROACH IN THE BIOTECHNOLOGY FIELD WORLD-LEADING EXPERTISE ON SELECTIVE AXL INHIBITORS AND THEIR THERAPEUTIC APPLICATIONS “ We have successfully translated our world-leading research on AXL’s biological role into two proprietary, ﬁrst-in-class clinical development candidates: the highly selective, oral AXL inhibitor bemcentinib, and the novel, anti-AXL monoclonal antibody tilvestamab. We believe our clinical development candidates are well-positioned to become potential treatment modalities for aggressive diseases with high unmet medical needs.” Our unique position number of academic groups validating the role of AXL in serious diseases. These rich datasets have resulted in the Company focusing its future activities in NSCLC and severe respiratory infections (SRIs). While preclinical and clinical evidence also supports the important role of AXL in ﬁbrotic diseases, such as Non-alcoholic Steatohepatitis (NASH) and Idiopathic Pulmonary Fibrosis (IPF), the Company believes it would be most efﬁcient to explore this opportunity in partnership with a company specializing in ﬁbrotic diseases. BerGenBio intends to continue to develop its lead compound bemcentinib itself and through strategic partnerships and retains all strategic options for the future commercialization of its products. As a core part of its business model, BerGenBio continues to advance its research to identify which patients within these focus areas may beneﬁt most from treatment with our product candidates. The availability of a clinically relevant biomarker has been shown to be an important success factor in the clinical development of oncology agents, providing insights into patient selection and conﬁrmation of mechanism(s) of action. The availability of prognostic biomarkers may also facilitate registration and reimbursement of our novel drugs. BerGenBio is employing a development strategy that includes extensive biomarker discovery activities and potential development of a companion diagnostic in parallel. CORPORATE GOVERNANCE 23-49 FINANCIAL STATEMENTS 50-81 STRATEGIC REPORT 04–22 OVERVIEW 01–03 05 Annual Report & Accounts 2022 AXL AXL expression and activation is known to be a predictor of poor outcome in many diseases AXL – A PROMISING TARGET TO TREAT LIFE-THREATENING DISEASES THE TYROSINE KINASE TARGET AXL IS KNOWN TO PLAY AN IMPORTANT ROLE IN BOTH THE INNATE AND ADAPTIVE IMMUNE SYSTEMS AXL is a tyrosine kinase target that mediates aggressive disease. Under normal healthy physiological conditions, there is very low activation of AXL. However, in aggressive diseases, such as cancer and severe respiratory infections, AXL signaling is activated in response to hypoxia, inﬂammation, cellular stress and drug treatment. The activation of AXL occurs when it binds to its ligand GAS6, resulting in overexpression and intracellular signaling. Extensive scientiﬁc literature, preclinical data and clinical point to the potential application of selective AXL inhibitors in three major diseases categories as shown to the right. BerGenBio is focusing its development activities in the areas of cancer and severe respiratory infections; while any activities to advanced ﬁbrotic indications would be conducted in collaboration with a partner. CORPORATE GOVERNANCE 23-49 FINANCIAL STATEMENTS 50-81 STRATEGIC REPORT 04–22 OVERVIEW 01–03 06 Annual Report & Accounts 2022 Key Roles of AXL in Cancer When cancerous tumors develop, they employ the inherent characteristics of AXL to protect themselves, allowing them to survive and metastasize. In cancer, AXL is overexpressed/activated on two major cell types: cancer cells and immune suppressive cells. Each plays a key role in allowing tumor survival and expansion by protecting the tumor from changes in the tumor microenvironment due to the aberrant cancer cells and/or drug treatment (shown on the left below) and by suppressing the patient’s natural immune response to the “foreign” cancer cells (shown on the right below). BerGenBio believes that selective and potent inhibition of AXL in cancer patients holds the potential to reverse these deleterious effects. Role of AXL Key Roles of AXL in Severe Respiratory Infections AXL plays a key role in facilitating viral entry, replication and suppression of immune responses. The Company believes bemcentinib reduces viral entry, promotes innate immunity against the infection and facilitates the repair of damaged epithelium. This combination of mechanisms makes AXL a particularly attractive target to treat several severe respiratory infections. OVERVIEW 01–03 CORPORATE GOVERNANCE 23-49 FINANCIAL STATEMENTS 50-81 STRATEGIC REPORT 04-22 Annual Report & Accounts 2022 07 Tilvestamab (BGB149) • Anti-AXL fully humanized monoclonal antibody • Highly selective to human AXL • Well tolerated Bemcentinib (BGB324) • Orally bioavailable small molecule TKI • Highly selective for AXL • Potent • Once-a-day administration • Favorable safety proﬁle • Combines with other cancer drugs Extracellular Bemcentinib (BGB324) • Oral, once-a-day small molecule tyrosine kinase inhibitor • Highly potent, selective for AXL • Broadly studied in over 600 patients • Favorable safety proﬁle and indications of efﬁcacy across several trials Our lead molecule, bemcentinib, is in Ph2 clinical testing in patients with NSCLC and hospitalized COVID-19 in preparation for potential subsequent pivotal trials. During 2022 and early 2023 promising efﬁcacy data from three completed clinical studies, two in NSCLC and one in hospitalized COVID-19 patients provided strong clinical rationale for the continued development of bemcentinib in these indications. In addition, bemcentinib has been studied by the Company in hematological cancers (AML, MDS); however, due to the rapidly changing therapeutic landscape in these indications, including but not limited to the introduction of new therapies, the Company believes further development is not warranted. As of the end of 2022, bemcentinib had been studied in over 600 patients, demonstrating its safety as a monotherapy and in combination with a variety of standard of care treatments, including chemotherapy, immune checkpoint inhibition, steroids and the anti-viral remdesivir.. This large safety database positions us well to advance the development of bemcentinib towards the market. Bemcentinb was licensed from Rigel, Inc. and we hold exclusive rights to develop and commercialize the product world-wide. Our product candidates BGB and Partner AXL Inhibitors Tilvestamab – AXL Selective Monoclonal Antibody in Ph1B • Selective anti-AXL fully humanized monoclonal antibody (mAb) • Preclinical and clinical data support mechanisms of action • Well tolerated in PhIa and PhIb trials In 2022, the Company successfully completed dosing of tilvestamab in a Ph1b trial designed to substantiate its immune activation properties and to evaluate ﬁbrotic biomarker identiﬁcation. In line with its strategic focus, BerGenBio is seeking a partner or licensee to advance this program into future clinical trials. In addition to our two proprietary programs, an AXL antibody developed by BerGenBio has been licensed to ADC Therapeutics for use in an antibody-drug conjugate format. ADC Therapeutics advanced its program called ADCT-601 into a PhIb trial during 2022. CORPORATE GOVERNANCE 23-49 FINANCIAL STATEMENTS 50-81 STRATEGIC REPORT 04–22 OVERVIEW 01–03 08 Annual Report & Accounts 2022 Our development focus BerGenBio is executing on a focused development path for its lead compound bemcentinib and is working in partnership to exploit other applications AXL inhibition through commercial and academic partnerships BerGenBio Clinical Pipeline Candidate Targeted Indication Preclinical Phase I Phase II Registrational Oncology Bemcentinib 1L STK11m NSCLC Bemcentinib 2L NSCLC Bemcentinib R/R AML Mipasetamab uzoptirine Solid Tumors Fully out-licensed mAb Tilvestamab Ovarian Cancer Viral Bemcentinib Hospitalized COVID-19 Additionally, bemcentinib is being studied in Investigator Led Trials in glioblastoma, 2L lung cancer, melanoma, pancreatic cancer and mesothelioma. FINANCIAL STATEMENTS 50-81 CORPORATE GOVERNANCE 25–55 STRATEGIC REPORT 04–22 OVERVIEW 01–03 09 Annual Report & Accounts 2022 18% Other 20% STK11 11% KRAS G12C 18% Other KRA s 3% ERBB2 3% MET 19% EGFR 3% ALK 5% BRAF The Opportunity Lung cancer is the world’s second most common cancer and despite recent advancements in treatment options, it remains the leading cause of cancer-related mortality exceeding 1.7 million deaths worldwide in 2020. NSCLC is the most common type of lung cancer representing approximately 85% of patients. NSCLC is generally diagnosed late and patients are frequently diagnosed with metastatic disease, limiting potential treatment options. NSCLC is a severe disease with a 5-year survival for newly diagnosed patients of just 25% (Source: SEER). The activation of AXL is a recognized negative prognostic factor and has been shown to be an important resistance mechanism in NSCLC. Current treatment of NSCLC is biomarker driven and NSCLC patients are routinely screened for the presence of driver mutations to determine the optimal treatment approach. Mutations that can be speciﬁcally addressed with targeted therapies today include EGFR and ALK mutations. Today these targeted therapies generate sales in the billions of US dollars. STK11 mutations (STK11m) occur in up to 20% of 1L NSCLC patients (~31,000 patients in the US and EU5) and extensive data suggest that current standard of care treatment with immune checkpoint inhibitors and chemotherapy result in a poor prognosis when compared to patients with a wild-type STK11 gene. No targeted therapies exist for this large population. The chart to the right illustrates the high frequency of STK11 mutations in NSCLC. In late 2021, BerGenBio received a US FDA Fast Track designation for bemcentinib in NSCLC patients harboring a STK11 mutation supporting the recognition of need for this patient population. Commonnely reported NSCLC Mutations Indication Highlight – 1L STK11m NSCLC Unique opportunity to establish a large, new biomarker driven NSCLC market 31,000 patients in US, EU Legend Currently Actionable 1L NSCLC Mutation Mutations without Targeted Therapies Sources:Oncogenic driver mutations in non-small cell lung cancer: Past, present and future, World J Clin Oncol. 2021 Apr 24; 12(4): 217–237 ; Prognostic Impact of KRAS Mutation Subtypes in Metastatic Lung Adenocarcinoma, J.Thor.Onc. 2015; 10(3):431-437; Global Data 2020 US, UK, IT, FR, GE, SP ** Source: Global Data estimate in US, UK, Fr, Gr, Sp, It OVERVIEW 01–03 CORPORATE GOVERNANCE 25–55 FINANCIAL STATEMENTS 56–85 STRATEGIC REPORT 04–22 Annual Report & Accounts 2022 10 Indication Highlight – 1L STK11m NSCLC continued Unique Role of AXL in 1L STK11m NSCLC Patients AXL plays a key role in a variety of cancers to ensure tumor survival and promote metastasis. Our research in 2L NSCLC patients indicates that approximately 50% of patients express AXL in their tumors or in the tumor microenvironment. Conversely, the Company’s data indicate that AXL is almost universally expressed in 1L STK11m patients. STK11m appear to create a uniquely adverse tumor microenvironment (TME) which decreases the efﬁcacy of immune checkpoint inhibition and chemotherapy. There are no speciﬁc targeted therapies available to treat these patients today. Patients with STK11m have the following hallmarks, all of which we believe result in the expression/activation of AXL: • High oxidative stress and elevated levels of Reactive Oxygen Species (ROS) • High levels of epithelial to mesenchymal transition (EMT) driving tumor drug resistance, immune evasion and metastasis • Enhanced replication stress tolerance and resistance to DNA damage and apoptosis • No/low PDL1 expression and a highly immune suppressed TME Through the use of bemcentinib, we hypothesize that its potent inhibition of AXL will provide improved response to immune checkpoint inhibition and delay/decrease of chemotherapy resistance in this highly immuno-suppressed patient phenotype. OVERVIEW 01–03 CORPORATE GOVERNANCE 23-49 FINANCIAL STATEMENTS 50-81 STRATEGIC REPORT 04–22 Annual Report & Accounts 2022 11 Indication Highlight – 1L STK11m NSCLC continued BGB’s Clinical Strategy in NSCLC In 2022, the company completed a Ph2 trial (BGBC008) of bemcentinib in combination with the immune checkpoint inhibitor pembrolizumab (KEYTRUDA ® ) in 2L NSCLC patients. Post the Annual reporting period, the Company announced on February 16, 2023, positive topline data from this study as shown below. The company believes that this data represent clinically meaningful outcome when compared to what is achievable with existing therapies. In addition, a Ph1b Investigator Sponsored Trial (BGBIL005) has been completed studying bemcentinib in combination with the chemotherapy docetaxel. Again bemcentinib provided signiﬁcantly improved median overall survival in comparison with historical survival achieved with docetaxel treatment alone in this patient population. While both studies resulted in encouraging signs of efﬁcacy with acceptable tolerability, BerGenBio has decided to prioritize 1L NSCLC STK11m as its next step in clinical development of bemcentinib. due to the expected high level of AXL activation and unmet medical needs in this indication. Additionally, the data from the BGBC008 and BGBIL005 studies warrants further development of bemcentinib in 2L NSCLC. The Company initiated a Ph1b/2a study in 2022 to study the safety and efﬁcacy of bemcentinib in combination with an anti-PD1 antibody and chemotherapy. The company believes that bemcentinib’s unique mechanism of action works synergistically with immunotherapies (such as anti-PD1/PDL1 mAbs) to increase a cancer’s ability to be recognized and targeted by the immune system, while reducing its immunosuppressive effects. In late 2021, the US FDA awarded a Fast Track designation for the use of bemcentinib in 1L STK11m NSCLC patients. BCBIL005 Bemcentinib + Docetaxel ORR 35% PFS, mos 3.1 mOS, mos 12.3 OVERVIEW 01–03 CORPORATE GOVERNANCE 23-49 FINANCIAL STATEMENTS 50-81 STRATEGIC REPORT 04–22 Annual Report & Accounts 2022 12 Severe respiratory infections: COVID-19 and beyond The Opportunity 2022 continued to see the evolution of the COVID-19 pandemic with the emergence of new variants and the relaxation of protections to avoid infection spread. Governments around the world continue to emphasize the need for vaccination and new therapeutics against severe respiratory illnesses. The last year has shown that in spite of vaccination efforts, a large cohort of individuals remain vulnerable to morbidity and mortality, particularly in those with pre-existing conditions and those who are immuno- compromised. In spite of the overwhelmingly large number of product candidates studied in COVID-19 patients, the majority appear to have failed in clinical trials and very few products have received Emergency Use Authorizations or full approvals in the US and EU. Thus, there remains a high unmet need for effective therapeutics for patients hospitalized with COVID-19. The Company believes the mechanisms of action of bemcentinib in treating COVID-19 patients are directly applicable to other severe respiratory diseases including Respiratory Syncytial Virus (RSV) and inﬂuenza, both of which result in signiﬁcant morbidity and mortality and are poorly treated once the infections become established in the lung. The illustration to the right describes the three distinct mechanisms of action that AXL plays in promoting severe respiratory infections: Indication Highlight – Severe Respiratory Illnesses The COVID-19 pandemic provides a ﬁrst step to validate bemcentinib in severe respiratory infections OVERVIEW 01–03 CORPORATE GOVERNANCE 23-49 FINANCIAL STATEMENTS 50-81 STRATEGIC REPORT 04–22 Annual Report & Accounts 2022 13 Indication Highlight – Severe Respiratory Illnesses continued Unique Role of AXL in Hospitalized COVID-19 Patients Independent scientiﬁc evidence published in 2021 and 2022 by academic groups indicate that AXL plays a unique role in the promotion of SARS-CoV-2 infection. In addition to external validation, the Company’s two completed hospitalized COVID-19 studies demonstrate clinical response and biomarker improvement consistent with reduced inﬂammatory response. Clinical Strategy in COVID/Severe Respiratory Infections Two completed studies of bemcentinib in combination with standard of care therapies (BGBC019 and BGBIL020) in hospitalized COVID-19 patients indicate improvement in in key endpoints relating to delayed progression of respiratory disease. These studies, which form the basis of our continued development strategy, demonstrated improvements in mortality, days of hospitalization and delay of progression. Based on these data, bemcentinib has been accepted into the EU funded EU-SolidAct Ph2b trial in hospitalized COVID-19 patients. The EU SolidAct trial – European DisCoVeRy for Solidarity: An Adaptive Pandemic and Emerging Infection Platform Trial – is part of EU-RESPONSE, a pan-European research project involved with the rapid and coordinated investigation of medications to treat COVID-19. Under the trial, bemcentinib will be studied in up to 500 hospitalized COVID-19 patients. In support of the trial, BerGenBio is providing bemcentinib drug supplies and incremental funding of costs related to the bemcentinib sub-protocol. Patient treatment with bemcentinib under the EU-SolidAct protocol was initiated in H2 2022. In early 2023, the Company announced that it was monitoring changes in the COVID-19 pandemic that may affect trial execution. An update on the study will be provided later in H1 2023. OVERVIEW 01–03 CORPORATE GOVERNANCE 23-49 FINANCIAL STATEMENTS 50-81 STRATEGIC REPORT 04–22 Annual Report & Accounts 2022 14 Environment, Social and Governance (ESG) is a key focus area for BerGenBio, and the following pages contain a summary of the key policies, initiatives and impacts related to ESG Introduction For us to reach our ESG-related ambitions, we consider good governance to be of the utmost importance. Over the last two years we have taken signiﬁcant steps and have raised ESG even higher on our agenda in 2022. We use the term ESG to describe our commitments as a responsible corporate citizen, and we fully support the United Nations’ Sustainable Development Goals (SDGs) and Agenda 2030. While we have gathered the central ESG-related information in this section of the report, we also refer to other parts of the report where the issues in question are explained and presented in more detail. Governance related topics are presented ﬁrst before we turn to the social and environmental aspects on the following pages. In addition, we have included a table of key ESG-related indicators, combined with an index referring to the most relevant ESG-related information at the end of the annual report. ESG at BerGenBio We started the journey to strengthen our sustainability management in 2020, and since then these efforts have been continued and broadened, as we show in this report. Our prioritization of ESG is also reﬂected in our strategy and our values. Cancer remains one of the most pressing healthcare challenges, accounting for the second most common cause of death globally. Our vision is to improve and save lives and thereby generate a positive impact for patients, society and shareholders through our work in discovering and developing novel medicines to treat aggressive diseases, including advanced, treatment-resistant cancers. ESG is therefore important to us, as it is the foundation of our activities and directly linked to our long-term success. The CEO has the overall responsibility for ESG at BerGenBio and our ESG commitment is overseen by the Board of Directors. Our governance structure is elaborated upon in the Corporate Governance report of the annual report. In the ﬁrst phase of developing BerGenBio’s sustainability strategy, we identiﬁed a set of ESG topics related to our activities and our value chain that are material for us and our stakeholders. We have identiﬁed a set of ESG topics related to our activities and our value chain that is material for us and our stakeholders. Next, we will proceed to develop our ESG ambitions and KPIs and we will integrate these with our strategy and governance, including setting strategic ESG targets and incorporating additional metrics. We have now established a foundation which will grow with us to ensure our sustainable value-creation as our Company further develops. Progress and status on actions and initiatives mentioned in our 2021 report: • Our updated Code of Conduct was implemented in March 2023. • In 2022 we completed implementation of a supplier self-assessment questionnaire based on the pharmaceutical sector standard (Pharmaceutical Supply Chain Initiative, PSCI) in our supplier management system. This questionnaire is being used as part of the selection process for new vendors as well as mapping of existing vendors. • A whistleblower policy with independent third-party reporting channel was implemented in 2022. This provides a conﬁdential and transparent way for staff to communicate any behavior that may involve wrongdoing, give rise to illegal activity, or contravene BerGenBio’s governance standards, and cases can more easily be escalated to the right attention level within the Company. • Action has been taken to comply with the Norwegian Transparency Act. The Sustainable Development Goals We are committed to building our business in line with international best practice on Environmental, Social and Governance, in particular Agenda 2030 and the Sustainable Development Goals, as formulated by the United Nations and launched in 2015. Our vision is to develop innovative drugs for aggressive diseases, and a key focus goal for BerGenBio is consequently to innovate (SDG 9) to enable SDG 3 – healthy lives and promote wellbeing for all at all ages. While this is our end goal, we are working systematically at contributing to this goal by our efforts to enable goals 8, 12 and 17. We believe that our positive contribution to Agenda 2030 and the SDGs will be largest if we manage to be a role model for responsible production (SDG 12) – an actor working in partnerships with others (SDG 12 and SDG 17) in order to promote innovation (SDG 9), economic growth and decent work (SDG 8). Environmental, Social and Governance Key goals for BerGenBio OVERVIEW 01–03 CORPORATE GOVERNANCE 23-49 FINANCIAL STATEMENTS 50-81 Annual Report & Accounts 2022 15 STRATEGIC REPORT 04–22 SDG 9 and 3 Innovation, research and development are at the center of our business. Our dedicated team and collaborators focus on gaining a thorough understanding of cellular mechanisms, therapy resistance, disease-speciﬁc attributes and clinical evidence through rigorous research with state-of-the-art technologies. Our approach to innovation and results are elaborated under the Innovation and economic performance heading of this ESG report as well as in the strategic report. As a biopharmaceutical company aiming to provide drugs for some of our society’s greatest health issues, our foundation is built on delivering innovation for improved health and well-being in line with SDG 3. The future impact of our drug candidates is potentially great, and we make efforts to also ensure that our drugs will be available for all, and we adhere to international agreements. The safety and wellbeing of our patients is imperative for our drug candidates to deliver on BerGenBio’s vision and will become even more important when we get to a commercialization phase of our Company’s drug development. We embed drug-safety considerations throughout the drug development lifecycle. Our research from pre-clinical studies is evaluated and discussed with experts and regulators prior to proceeding to the clinical trial phase. Clinical trials are essential to ascertain the efﬁcacy, safety and effectiveness of drug candidates and it is crucial that they are conducted in accordance with our high standards and regulatory requirements. We examine the potential outcome of our trials to ensure patients are subjected to testing only when suitable. The primary consideration of all our clinical trials is to ensure the safety and effectiveness of our medicines. We conduct detailed studies on the safety proﬁles of our drug candidates throughout the trial and testing phase. Adverse effects and risks linked to drug candidates are recorded and reported to regulatory authorities (aligned with regulations) on a periodic basis. It is also of paramount importance to us to ensure the personal information of our patients and no claims of any data breaches were received in 2022. SDG 8, 12 and 17 While BerGenBio is a clinical trial stage company with moderate drug manufacturing activity, we have still chosen to focus on SDG 12 and our role in supporting responsible production and consumption. Key efforts in this regard relate to our emphasis on promoting sustainability in our supply chain through our dialog and contracts with our partners and suppliers. You can read more about our efforts related to responsible sourcing under the Responsible Sourcing heading of this ESG report, and we have also initiated additional actions related to the Norwegian Transparency Act that was implemented in 2022. The new requirements related to performing due diligence, and working on fundamental human rights and decent working conditions is in line with our efforts to be a responsible actor, focusing on a responsible supply chain. Environmental, Social and Governance continued Through our work we are also contributing to SDG 8 – decent work and economic growth, SDG 9 – industry, innovation and infrastructure, and SDG 17 – partnerships for the goals. Decent work relates to the aforementioned efforts to secure human rights and decent working conditions. BerGenBio contributes economically to society through our investments in research and development, and our sound economic performance sets the foundation for our future contribution, as we further develop our Company towards production and commercialization. Our performance is disclosed in our ﬁnancial statements. BerGenBio intends to develop its drug candidates itself and through strategic partnerships in multiple indications, and retains all strategic options for the future commercialization of its products. While the research and development strategy is designed in-house, the Company leverages its network of external contract research organizations (CROs) to execute its development strategy. BerGenBio also collaborates with academic institutions to extend research in areas of interest for the Company. This approach allows BerGenBio to react quickly and nimbly to industry changes. OVERVIEW 01–03 CORPORATE GOVERNANCE 23-49 FINANCIAL STATEMENTS 50-81 Annual Report & Accounts 2022 16 STRATEGIC REPORT 04–22 Material topics To ensure that our commitment towards sustainability results in activities that positively impact our key sustainability targets, we have performed a materiality analysis. This analysis involved mapping our value chain, as well as reviewing industry standards, organizations, and peers. More importantly, it has led us to engage with key stakeholders and consulted ESG experts, to gain insight into which topics are most important to them, as well as their expectations of us. These key stakeholders include: our patients and their families, our employees, investors, regulators, suppliers, and other business partners such as research organizations and academic institutions. This resulted in a mapping of the ESG topics that are deemed as important for our long-term sustained value creation. The matrix to the right provides an overview of these topics, arranged according to the signiﬁcance of their ESG impacts, and the topics’ inﬂuence on stakeholder assessments and decisions. The topics in the top right corner are those which are of most strategic importance to BerGenBio and these are given detailed descriptions in this report. A reference index of the reporting is provided on page 78 for ease of location. Communicate decisions and monitor development Monitor and communicate Protection of human and labor rights Inﬂuence on stakeholder assessments & decisions Signiﬁcance of environmental, social & governance impacts Legend Environment Social Governance Clinical trial conduct Patient health and safety Economic Innovation Business ethics performance Occupational health and safety Climate and Environmental management Wellbeing of employees Board governance Talent attraction and retention Responsible sourcing Strategic, active communication, clear governance and follow-up Active governance and communication Environmental, Social and Governance continued OVERVIEW 01–03 CORPORATE GOVERNANCE 23-49 FINANCIAL STATEMENTS 50-81 Annual Report & Accounts 2022 17 STRATEGIC REPORT 04–22 Governance Business ethics To ensure that patients, research and development partners, employees, shareholders and other stakeholders feel conﬁdent about our commitment to operate in accordance with responsible, ethical and sound corporate and business principles, the Comapny has established a set of ethical guidelines that are presented in its Code of Conduct policy. The newly implemented Code of Conduct, replacing the CSR policy, has been strengthened by including additional topics such as conﬂicts of interest, marketing practices and fair competition, data privacy and integrity, supplier conduct and a patient ﬁrst approach. The Code of Conduct reﬂects our commitment to sustainability and the guidelines provide a framework for what the Company considers responsible conduct, and deﬁnes the individual responsibilities of all employees and Board members through a combination of broad principles and speciﬁc requirements. The Code of Conduct has been distributed to all employees, managers and Board members and is available on the Company’s website. BerGenBio takes a zero-tolerance stance towards corruption, money laundering and insider trading. All employees are encouraged to report any breaches of the Company’s regulation. No incidents were reported in 2022. Board governance For BerGenBio it is important that the Board reﬂects the diversity of their Company’s stakeholders to be more aware of their needs. This will enable the Board to assist the Company in making robust strategic decisions, in addition to controlling risks and ensuring legal compliance. Furthermore, this enables us to be well-positioned to deliver long-term value for shareholders and stakeholders. Our Board consists of ﬁve non-executive members of which two are women. All of the members are independent. The members of the Board reﬂect different nationalities and a breadth of competencies, including health, medicine, pharmacy, research, ﬁnance and ESG. Further information is provided in Section 8: Board of Directors and Independence, which can be found in the Corporate Governance report. Clinical trials BerGenBio ensures strict conformity with international, regional and local regulatory requirements in all our sponsored studies. All our clinical studies comply with the principles elucidated in the Declaration of Helsinki, the International Council for Harmonization of Technical Requirements for Pharmaceuticals for Human Use, including Good Clinical Practice guidelines E6 (R2) and International Ethical Guidelines for Health-related Research Involving Humans. In 2022, we had no critical inspection ﬁndings from any of our regulators and no monetary claims were received. We make periodic disclosures of clinical trial data in line with EFPIA-PhRMA Principles for Responsible Clinical Trial Data Sharing. We share information on the outcomes of our clinical trial studies here and through EUDRaCT, ClinicalTrials.gov and other registries in accordance with international legislation. We also support academia by sharing clinical data upon request pursuant to relevant regulations and protocols. Patient health and safety As discussed in relation to SDG 3, the safety and wellbeing of our patients is imperative for our drug candidates to deliver on BerGenBio’s vision and will become even more important when we get to the production and commercialization phase of our Company development. We embed drug-safety considerations throughout the drug development lifecycle. Our research from the pre-clinical studies are evaluated and discussed with experts and regulators, prior to proceeding to the clinical trial phase. We examine the potential outcome of our trials to ensure patients are subjected to testing only when suitable. The primary consideration of all our clinical trials is to ensure the safety and effectiveness of our medicines. We conduct detailed studies on the safety proﬁles of our drug candidates throughout the trial and testing phase. Adverse effects and risks linked to drug candidates are recorded and reported to regulatory authorities (aligned with regulations) on a periodic basis. It is also of paramount importance to us to ensure the personal information of our patients, and no claims of any breaches were received in 2022. Environmental, Social and Governance continued OVERVIEW 01–03 CORPORATE GOVERNANCE 23-49 FINANCIAL STATEMENTS 50-81 Annual Report & Accounts 2022 18 STRATEGIC REPORT 04–22 Responsible sourcing We rely on third parties for clinical studies (Contract Research Organizations), supply of medicinal products, ofﬁce supplies and housekeeping services. We currently have 11 key suppliers. We consider engaging with the right vendors and suppliers as critical, and therefore seek to only partner with third parties who share our values of business ethics, social and environmental consciousness. We strengthened our responsible supply-chain management by developing a s supplier self-assessment questionnaire. The questionnaire is based on a recognized pharmaceutical sector standard (Pharmaceutical Supply Chain Initiative, PSCI) and has been implemented into our existing supplier management system. In 2022 we started to establish routines for meeting the new Transparency Act, which entails routines for due diligence with a focus on risks of human rights violations in our value chain. This is also discussed in the next section. Our Chief Operating Ofﬁcer is responsible for procurement and supply chain management-linked activities, oversees effective implementation of management systems and our vendor selection and management process to evaluate vendors on ESG criteria. Under the process we conduct an analysis to determine our critical suppliers based on risks and opportunities linked with each vendor. Going forward, we will administer the self-assessment questionnaire to existing prioritized vendors and to potential new vendors, as part of the vendor selection process. The vendor self-assessment process will enable us to appraise our partners based on their adherence to regulatory norms as well as social and environmental standards. It will also provide insights into our vendors’ practices in terms of ethics, labor management, environmental conservation and employee health and safety management. The outcome of the self-assessment exercise will guide us in engaging with them to strengthen their performance on identiﬁed improvement areas. Protection of human and labor rights We are committed to the protection of human and labor rights in all our operational endeavors. We recognize the universal and fundamental nature of human rights, and align all our operations with the Universal convention on Human Rights and conventions of the International Labor Organization (ILO). Our commitment to human rights protection has been emphasized in our new Code of Conduct that have been implemented in March 2023. Whilst having robust systems to ensure the protection of human rights within our operational bounds, we also expect all our suppliers and value-chain partners to strictly comply with relevant norms on human rights protection. We have zero tolerance to child labor, forced labor, discrimination of any form and direct or indirect violation of human rights. We have established grievance redressal mechanisms to ensure timely resolutions of any breaches in this regard. We are not aware of any cases of discrimination or any other human rights breaches in our operations during 2022. Innovation and economic performance BerGenBio´s goal is to have a positive impact on the lives of patients with aggressive diseases, including immune-evasive, drug-resistant and metastatic cancers. Through cutting-edge technologies, partnerships and scientiﬁc expertise we seek to transform the lives of such patients. Over the years, our organization has gained a deep insight into AXL biology to bring value for patients by tailoring transformative drugs targeting AXL signaling pathways. BerGenBio have made substantial research & development (R&D) investments to strengthen our pipeline and identify new therapeutic opportunities. Our greatest R&D assets are our scientists and collaborators, and the scientiﬁc know-how they represent. For 2022, we have one peer-reviewed publication and 12 presentations that stand as testament to our organizational knowledge-base. Over the years, we have strategically expanded our capabilities and our sphere of impact by engaging in partnerships with industry leaders. This has made it possible for us to accelerate our innovation-linked pursuits. We have partnered with leading academic institutions, pharmaceutical companies and clinical research organizations for advancement of our R&D efforts. Environmental, Social and Governance continued OVERVIEW 01–03 CORPORATE GOVERNANCE 23-49 FINANCIAL STATEMENTS 50-81 Annual Report & Accounts 2022 19 STRATEGIC REPORT 04–22 Social Our approach to social sustainability is reﬂected in BerGenBio’s relationships with people, communities, and society. Hence, activities that improve social conditions are important for us. By discovering and developing novel medicines to treat aggressive diseases, including advanced, treatment-resistant cancers, we aim to improve and save lives, which creates value for patients, society, and shareholders. Therefore, sustainability is a foundation of our activities and directly linked to our long- term success. We also seek to maintain and improve the social conditions at both BerGenBio and in our partnering companies. Following the results of our materiality analysis, we especially focus on activities that affects the topics: diversity and inclusion, pay equality and wage level, talent attraction and retention, skills for the future, wellbeing of employees, and occupational safety. Diversity and inclusion We value and encourage the development of a diverse and inclusive work environment. BerGenBio promotes an open and strong corporate culture with a healthy, safe and fair work environment that enables free exchange of ideas and fosters collaboration. We are committed to being an equal- opportunity employer and to fair treatment for each of our employees throughout their tenure with BerGenBio. We strictly prohibit discrimination of any form based on gender, age, race, ethnic background and sexual orientation, among other diversity metrics. BerGenBio recruits from environments where the number of women and men is relatively equally represented. At year-end, we employed 29 people, of which 62% are women. Three out of seven executives in the management team are women while two out of the ﬁve members of our Board of Directors are women. Our team represents 12 nationalities, and their different backgrounds enhance our ability to innovate and strengthen our work environment. Our team of highly-educated employees includes 14 colleagues with PhDs. We make provisions to cater to the diverse needs and aspirations of our employees. We also support each of our employees with their individual challenges depending on their personal circumstances. Pay equality and wage level BerGenBio’s Remuneration Policy aims to support both the purpose and sustainability of the Company, as well as the delivery of our strategic priorities. With remuneration components aligned with the interests of shareholders and other stakeholders, BerGenBio wants to attract, motivate, and retain members of the Board of Directors and the Executive Management Team. The Remuneration Policy also intends to reward members of the Executive Management Team in line with corporate and individual performance. Our current remuneration policies are based on the following principles: market competitiveness, “pay for performance”, transparency, business alignment and consistency, and shareholder alignment. In order to ensure the policy’s market competitiveness, it is benchmarked with an appropriate peer group of companies. This is a key component in the process of reviewing our Remuneration Policy. The current Remuneration Policy was approved by the Annual General Meeting 19 March 2021 and is available at the Company’s website under the Corporate Governance section. The policy was not materially changed in 2021 but updated to reﬂect the new formal requirements effective from 1 October 2021. Environmental, Social and Governance continued OVERVIEW 01–03 CORPORATE GOVERNANCE 23-49 FINANCIAL STATEMENTS 50-81 Annual Report & Accounts 2022 20 STRATEGIC REPORT 04–22 Talent araction and retention Our employees are at the core of BerGenBio’s growth story. We aim to engender an organizational culture which appeals to employees with varied talent and experience. Enabling the all- round development and growth of our employees plays a vital role in attracting and retaining promising talent. Our hiring process focuses on creating a diverse employee pool in terms of culture, educational background and skillsets, among other considerations. In 2022 we welcomed 6 new colleagues to our team (including 1 intern), of which 83.5% were women. Currently we have two PhD students employed. All employees receive regular performance and development evaluation. Skills for the future Growing our employees and ensuring they are developing themselves, and providing the right skills to support BerGenBio is an important part of the annual development process for employees. All employees have development discussions with their line managers as part of the annual review cycle to support the development and growth of each team member. During the year our employees have attended conferences (whether in person or online) and are encouraged to discuss their continued development with their line manager and to request any appropriate training which may assist in the advancement of their skills which can be applied in their role. We provide various training and development programs for our employees in the areas of Good Clinical Practice (GCP) and Good Manufacturing Practice (GMP), as well as a mandatory basic course in the General Data Protection Regulation (GDPR). We also encourage our employees to enroll in external accredited learning programs with relevant professional bodies such as The Organization for Professionals in Regulatory Affairs (TOPRA) and The Institute of Clinical Research (ICR). In order to support the career growth of our employees, we engage with them through periodic performance appraisals to help them reﬂect on their progress and set professional goals. The appraisal process also helps in aligning an employee’s career aspirations with BerGenBio’s goals. We also provide long term incentives through our stock option program to support long-term association of employees with BerGenBio. Wellbeing of employees Employee wellbeing is important to boost workplace satisfaction and productivity levels. To ensure the wellbeing of our employees, we consider it important to focus on job satisfaction, ﬁnancial security, a healthy work environment and overall engagement in organizational activities. When the global pandemic during 2020 and 2021 required continued changes in working arrangements with working from home and sustained focus on wellbeing of employees, we introduced a hybrid working model in 2022 and involved employee representatives in wellbeing and social activites for the entire team. We periodically capture our workforce’s sentiment and feedback through employee engagement surveys. An employee engagement survey was conducted in 2021, and the feedback that we receive from our employees helped us to update our policies and design interventions to enhance employee engagement and satisfaction. We provide competitive compensation for all our employees which is commensurate with their level of experience, qualiﬁcation and expertise. We had a sick-leave of 2.3% in 2022 compared to 1.4% in 2021. All employees can take advantage of our ﬂexible hours and we have shower facilities to enable our employees to exercise comfortably around their working day. Occupational health and safety We encourage our employees to embrace a proactive approach to managing their health. We focus holistically on the physical, emotional and mental wellbeing of our employees and provide them assistance to cope with identiﬁed ailments. All staff have access to private medical care and we have employee assistance programs which offer support with health (physical and mental) and on general topics such as advice and recommendation with ﬁnances. In response to the global pandemic we continually assessed risks to ensure a safe return to work and continued our workstation assessments to ensure our employees have safe work spaces and the right equipment to work virtually as and when required. We believe that safe working conditions are a fundamental right of each employee. We ensure alignment of our occupational safety management systems with globally recognized standards and guidelines. Our laboratory safety management systems conform to the requirements of ISO 15190:2003 and OSHA 3404 laboratory safety guidelines. A systematic protocol is in place to record and investigate any untoward incidents. In 2022, no occupational safety-linked incident occurred at any of our facilities. Environmental, Social and Governance continued OVERVIEW 01–03 CORPORATE GOVERNANCE 23-49 FINANCIAL STATEMENTS 50-81 Annual Report & Accounts 2022 21 STRATEGIC REPORT 04–22 Environmental BerGenBio has a relatively low environmental impact at the current stage of the Company. Nevertheless, we take our impact seriously and have taken measures to start measuring our impact in order to properly manage environmental risks as we grow. Greenhouse gas emissions (GHG) We recognize the importance of corporate engagement in environmental conservation and climate action. Our approach to carbon management currently focuses on tracking our energy consumption and corresponding emissions. As we are currently not engaged in any commercial supply manufacturing activities, our direct environmental footprint stems primarily from the resources consumed in our ofﬁce spaces. In addition, we also account for the footprint arising out of our indirect business activities such as employee travels. We are conscious of the impact of waste that we generate, speciﬁcally bio-hazardous waste and managing this risk is is an important aspect of our chain management. Currently we do not measure the environmental footprint of these activities conducted by third parties. We are also cognizant of the impact of pharmaceuticals in the environment and are developing systems to manage this risk. Furthermore, we consider it imperative to have stringent systems and initiatives in place to address our future needs in terms of safe and responsible waste management. In 2021 we started mapping our GHG-emissions to develop baselines for setting emission targets. We consider this a ﬁrst but crucial step for understanding our carbon footprint and for identifying appropriate actions for reducing this footprint. Our emissions are reported according to the Greenhouse Gas Protocol’s standard for carbon accounting, which categorizes emissions in three categories called Scopes. Scope 1 represents direct emissions, Scope 2 covers indirect emissions from purchased energy, and Scope 3 includes indirect emissions from upstream and downstream activities. Our total emissions in 2022 was 54,63 tons CO 2 e (2021: 17,54 tons CO 2 e). The results of our initial mapping of direct and indirect emissions conﬁrm that business travel is where we have our largest impact, representing 90% (2021: 66%) of our total emissions. Travel activities have been heavily reduced during the COVID-19 pandemic. In order to secure the development of our projects, some level of travel is required externally and between our Norway and UK ofﬁces. We will, in general continue to conduct digital meetings when possible, to limit travel. 2022 2021 Source tCO 2 e Share of emissions tCO 2 e Share of emissions Scope 2 Total electricity and heat 5,64 10% 5,89 34% Scope 3 Total ﬂights 49,00 90% 11,65 66% Total 54,63 100% 17,54 100% BerGenBio does not own or lease any vehicles and no other fossil fuels or greenhouse gases are consumed in our direct business activities, hence no Scope 1 emission sources are reported. Within our ofﬁces in Norway and the UK, use of electricity and district heating represent 10% (34%) of our total emissions. The scope 3 numbers recorded in 2021 were signiﬁcant affected by travel restriction caused by the pandemic and therefore represent an historic low. We acknowledge that a large part of the emissions within our business are found in Scope 3. In 2023, we take further steps to identify the most relevant sources to develop our carbon account. A ﬁrst step in this work will be to initiate conversations with our suppliers in order to collect data on our indirect emissions generated by our impact on activities represented by our partners’ operations. Environmental, Social and Governance continued ESG actions for 2023 In 2023 we will seek to improve our sustainability performance and enhance our ESG reputation with stakeholders by continuing our work to: 1) integrate ESG into our business strategy, 2) implement a waste minimization plan to identify opportunities to reduce waste from our operations that will take into account where in our value chain we generate waste, types of waste and how waste is handled, and 3) complete the work to align our business with the Norwegian Transparency Act and report as required. OVERVIEW 01–03 CORPORATE GOVERNANCE 23-49 FINANCIAL STATEMENTS 50-81 Annual Report & Accounts 2022 22 STRATEGIC REPORT 04–22 Governance Report Contents 24 Board of Directors 25 Management Team 26 Remuneration Report 36 Corporate Governance Report 43 Board of Directors’ Report 23 Annual Report & Accounts 2022 OVERVIEW 01–03 STRATEGIC REPORT 04–22 FINANCIAL STATEMENTS 50-81 CORPORATE GOVERNANCE 23-49 Board of Directors ANDERS TULLGREN Independent Chair Anders Tullgren has over 35 years of global experience in both large pharmaceutical and small/mid-size biotech environments, with senior leadership roles in the United States, Germany, France, the United Kingdom and the Nordic region. He spent over 20 years at Bristol Myers Squibb, most recently as President Intercontinental Region. Anders has in his career worked with several oncology products and was leading the successful launch of BMS immunooncology portfolio in the intercontinental region. Mr Tullgren is an experienced Non-Executive Director with several international Board and Chair positions. He holds an MSc in Pharmaceutical Studies from Uppsala University (Sweden) and a Diploma in Marketing & Business Administration from MIS (Sweden). SVEINUNG HOLE Non-Executive Director Sveinung Hole holds a number of Board positions amongst others at Sarsia investment funds, ICON Capital VII, Scale Leap Capital and Prophylix Pharma AS. He also headed the Health & Care21 Strategy Council appointed by the Norwegian Minister of Health (2019–2021). Formerly he was the CEO of Trond Mohn Foundation and Stiftelsen Kristian Gerhard Jebsen, CEO of Sarsia Seed AS, Board Member of Norwegian Venture Capital Association and Bergen Hospital Trust (Helse Bergen). Hole has also held various top management positions in the Nordic and US. Hole holds a Master of International Management from BI Norwegian Business School. DR DEBRA BARKER Independent Non-Executive Director Debra Barker is a seasoned clinical development executive with experience from Novartis, Roche, Smithkline Beecham and Knoll and served until recently as the Chief Medical and Development Ofﬁcer at Polyphor Ltd. Dr Barker has a Diploma in Pharmaceutical Medicine and received a MSc in immunology from King’s College in London and a medical degree from Queens College, Cambridge. DR SALLY BENNETT Independent Non-Executive Director Dr Sally Bennett has a career spanning medicine, equity & capital markets and investment management. She brings 25 years industry experience in senior roles across the ﬁnancial sector within the life science and biopharmaceutical space. She currently serves as a Senior Advisor to Catalio Capital Management, having spent 15 years as a senior member of the investment team at HealthCor. Prior to HealthCor she spent a decade in senior analyst roles at ING Financial Markets and latterly Piper Jaffray. She currently serves on the Board of several other publicly listed and private biotech companies. She is a member of the Institute of Directors (IoD) and has been awarded the CertIoD qualiﬁcation. Dr Bennett received a BSc in Anatomical Sciences and a Medical Degree, awarded with Honours, both from the University ofManchester. DR FRANÇOIS THOMAS Independent Non-Executive Director Francois Thomas has more than 25 years of experience in the life sciences sector and is currently a Operating Partner in Quadrille Capital. He was previously Venture Partner at Soﬁmac, responsible for management of the Inserm Transfert Initiative portfolio. Prior to this he was the CEO of Cytheris, a private biotech company, and has held management positions at Ipsen (VP Clinical Development), Genset (VP Licensing and Pharmacogenomics), led the healthcare corporate ﬁnance at Bryan Garnier and was a Venture Partner at Atlas Ventures. He has been on the Board of Directors of more than 20 biotech companies in the EU and North America, and has been involved in the development of multiple HemOnc drugs during his professional career. Dr Thomas is a French-certiﬁed medical oncologist, a former assistant professor at the Gustave Roussy Institute, and received an MSc in cancer biology and an MBA in management from Paris University and MIT (Boston), respectively. Mr. Tullgren joined the Board of Directors on 6 January 2022 as Chairman. He is a Swedish citizen and resides in Portugal. He attended 16 Board meetings in 2022. Mr. Hole joined the Board of Directors on 1 September 2010 and served as Chairman from 13 March 2019 to 6 January 2022. He is a Norwegian citizen and resides in Norway. He attended 17 Board meetings in 2022. Dr Barker joined the Board of Directors on 13 March 2019. She is a UK citizen and resides in Switzerland. She attended 15 Board meetings in 2022. Dr Bennett joined the Board of Directors on 9 December 2020. She is a UK citizen and resides in the UK. She attended 17 Board meetings in 2022. Mr Thomas joined the Board of Directors on 9 December 2020. He is a French citizen and resides in France. He attended 17 Board meetings in 2022. 24 OVERVIEW 01–03 STRATEGIC REPORT 04–22 FINANCIAL STATEMENTS 50-81 CORPORATE GOVERNANCE 23-49 GAYLE MILLS Chief Business Ocer Gayle Mills joined BerGenBio as Chief Business Ofﬁcer in 2021. Ms Mills has held a variety of positions at senior levels in both major pharmaceutical and biotechnology ﬁrms. Her most recent position was as Chief Business Ofﬁcer at Symphogen A/S, where she executed major collaborators with Merck KGaA and Baxalta. Prior to Symphogen she was in senior business development positions at Abgenix, Inc., Roche Bioscience and Syntex USA. In addition to leading the execution and management of signiﬁcant partnerships with several major pharmaceutical ﬁrms, she has been actively involved in the negotiation and execution of the acquisitions of Symphogen A/S, ROXRO Pharma and Abgenix, Inc. Management Team MARTIN OLIN Chief Executive Ocer Martin Olin joined BerGenBio as Chief Executive Ofﬁcer in 2021. Mr Olin has more than 20 years of experience as an executive in the pharmaceutical and biotechnology industries. He previously served as CEO of Symphogen, a biotechnology company focused on the development of protein drugs based on recombinant monoclonal antibody mixtures, acquired by Servier in 2020. Before joining Symphogen in 2012, Mr. Olin was a senior partner with SLS Invest, a Scandinavian-based healthcare-focused private equity fund. During his career he has held managerial positions in Novo Nordisk including Finance Director, EMEA. Prior to joining BerGenBio he served as Managing Partner of Nordic Eye, a Copenhagen-based Venture Capital Firm. NIGEL Mc CRACKEN MSC, PHD Chief Scientiﬁc Ocer Dr Nigel McCracken joined BerGenBio as Chief Scientiﬁc Ofﬁcer in 2021. He has more than 25 years of experience across Pharma, Biotech and CRO companies, most recently as the Chief Operating Ofﬁcer, concurrently holding the position as Senior VP Discovery and Early Development, at NuCana plc. Prior to this he was an Executive Board Member and Vice President of Translational Medicine at Debiopharm International. Dr McCracken has worked in senior roles in the US and Europe, covering both preclinical and clinical development within a number of therapeutic areas such as cardiovascular, respiratory, rare disease, oncology, anti-infectives, metabolic disease, neuroscience, hamatology and GI with both small and large molecules. He has broad experience recognizing and evaluating high-quality science and also has a deep business and regulatory understanding and has spent the last eight years working primarily in oncology with a focus on developing drug candidates in the area of targeted therapy and targeted delivery. Dr McCracken has a BSc in Biochemistry and Pharmacology as well as a PhD in Biochemical Toxicology and an MSc in Clinical Pharmacology. RUNE SKEIE Chief Financial Ocer Rune Skeie joined BerGenBio as Chief Financial Ofﬁcer in 2018. He has over 20 years of ﬁnancial management, corporate development, corporate governance and advisory experience with public and private companies across multiple industry sectors. The majority of his career was spent at EY (formerly Ernst & Young), where he held the role of Executive Director, before joining REMA Franchise Norge AS, the multinational supermarket business. Mr Skeie has been awarded as Registered Accountant and a State Authorized Public Accountant. CRISTINA OLIVA Chief Medical Ocer Cristina Oliva, MD, joined BerGenBio as Chief Medical Ofﬁcer in 2022. Cristina brings over 20 years of senior clinical development experience across large pharmaceutical, biotechnology and Clinical Research Organizations (CROs). Most recently Cristina was Vice President, Oncology and Head of Oncology Centre of Excellence at IQVIA Ltd, where shesupported customers with their oncology development plans and established and led the IQVIA Oncology Global Scientiﬁc Advisory Board. Prior to her role at IQVIA, Cristina held senior positions leading oncology development programs for Nordic Nanovector, Takeda Pharmaceuticals, GlaxoSmithKline and Eli Lilly. Cristina is a Board- certiﬁed oncologist and has global experience in drug development in oncology and onco-haematology compounds. JAMES BARNES PHD Chief Operating Ocer Dr James Barnes joined BerGenBio in 2019 and is now Chief Operating Ofﬁcer. He has 15 years’ experience across a wide range of business functions and therapeutic areas, including oncology. His early and late stage development experience, recently focused on innovative breakthrough products for rare diseases, has been gained from both pharmaceutical and consultancy roles. He has a Cellular & Molecular Biology PhD from the University of Bristol in the ﬁeld of colorectal cancer and held a Postdoctoral Research position in Human Embryonic Stem Cells at the University of Shefﬁeld. 25 OVERVIEW 01–03 STRATEGIC REPORT 04–22 FINANCIAL STATEMENTS 50-81 CORPORATE GOVERNANCE 23-49 Remuneration Report The Board of Directors has cautiously applied its remuneration practices, while retaining the ability to develop the business, recruit and retain key personnel to pursue our strategic goals. 1. Chairman’s leer With this report, we are providing greater insight and transparency into the remuneration outcomes for 2022 and our Executive remuneration practices. In 2021 and 2022, the Remuneration Committee engaged external assistance to ensure our policies are compliant and that their application serves our business needs. Our remuneration policy has not materially changed but is updated and reﬂecting the formal requirements, such as the Shareholder Rights Directive (SRD II), as they materialize. I joined as Chair of the Board of Directors and Remuneration Committee in January 2022 replacing Sveinung Hole who remains as Board member, member of the Remuneration Committee and the Audit Committee. Our core focus is inhibition of AXL, which is known to play a central role in the mediation of aggressive diseases. Our strategic priorities are diseases in which the scientiﬁc rationale, pre-clinical and clinical data confers a clear rationale for advancing our two highly selective AXL inhibitors, bemcentinib and tilvestamab, towards potential treatment modalities addressing unmet medical needs. In May 2022 the Company announced a focused strategy where the following activities and indications will be prioritized: • 1 line NSCLC STK11m (Ph1b/2a) • Severe respiratory infections including COVID-19 (Ph2) This also included a rightsizing of the organization. The Board of Directors has cautiously applied its remuneration practices, while retaining the ability to develop the business, recruit and retain key personnel to pursue our strategic goals. This statement regarding remuneration of the management of BerGenBio ASA has been adopted by the Board of Directors of BerGenBio ASA pursuant to section 6–16a of the Norwegian Public Limited Companies Act. Anders Tullgren Chairman of the Remuneration Committee 28 April 2023 26 Annual Report & Accounts 2022 OVERVIEW 01–03 STRATEGIC REPORT 04–22 FINANCIAL STATEMENTS 50-81 CORPORATE GOVERNANCE 23-49 2. Introduction 2.1 Remuneration policy and objectives The remuneration principles for the Board and Executive Management are governed by our Remuneration Policy, which has been adopted at the Annual General Meeting held on 19 March 2021. The Remuneration Policy is available in the Corporate Governance section at www.bergenbio.com. The objective of the remuneration principles for the Board and Executive Management are to; • Support the purpose and sustainability of BerGenBio; • Align the remuneration components with the interests of our stakeholders; • Support delivery of BerGenBio’s strategic priorities; • Attract, motivate and retain members of the Board of Directors and the Executive Management Team of the appropriate calibre, given the size and complexity of the business; and • Reward members of the Executive Management Team in line with corporate and individual performance. This Remuneration Report discloses all the Group’s remuneration of members of the Board of Directors of BerGenBio ASA (“the Company”), inclusive of remuneration received from the subsidiary BerGenBio Limited, and of the Executive Management of BerGenBio in 2022. The disclosures are primarily derived from the audited ﬁnancial statements, which are available at www.bergenbio.com in the Investor/Financial report section. The Remuneration Report has been compiled in accordance with section 6–16a of the Norwegian Public Limited Companies Act and to align with the amended Shareholder Rights Directive. 2.2 Nomination and Remuneration Commiees The Board has established both a Nomination Committee and a Remuneration Committee to assist the Board with all matters related to establishing, implementing, and executing the principles set out in the Remuneration Policy. The Nomination Committee of BerGenBio ASA consist of three members: Hans Peter Bøhn (Chairman), Ann-Tove Kongsnes and Shantrez Miller Gillebo. The Nomination Committee shall recommend candidates for the election of member and Chairman to the Board of Directors; and remuneration for the Board of Directors. The Nomination Committee issues a report to the Annual General Meeting on the work of the Nomination Committee and the recommendation of remuneration of the Board of Directors and Committees. The objective is to act as a preparatory and advisory body in relation to the Company’s remuneration of Executive Management. The Remuneration Committee shall review the remuneration and beneﬁts strategy, review the performance and prepare matters relating to other material employment issues in respect of the Executive Management, including STI and LTI principles. In 2022, the Remuneration Committee held six meetings and consisted of three members: Andes Tullgren (Chairman), Sveinung Hole and Debra Barker. The Remuneration Committee reviews the approach to remuneration based on the following principles: Principles Summary Market competitive remuneration BerGenBio offers market-competitive remuneration opportunities to attract, retain, and motivate the talent needed to achieve BerGenBio’s vision, business strategy and other Company objectives. BerGenBio shall balance the need to provide competitive levels of reward against a desire to be cost effective when determining reasonable and responsible reward outcomes. Pay for performance A proportion of the remuneration package, the short-term incentive program, is performance based to link remuneration outcomes with the achievement of key ﬁnancial and non-ﬁnancial targets that are aligned with BerGenBio’s strategy. Each element of remuneration is weighted to ensure continuous and further positive development of BerGenBio. Transparency Remuneration programs are designed and communicated in a manner that reinforces the link between vision, business objectives and culture. Business alignment and consistency Remuneration decisions are made to ensure local practices are aligned and consistent with BerGenBio´s principles and policies. The remuneration practices will remain ﬂexible enough to evolve as BerGenBio’s business priorities change. Shareholder and strategic alignment The remuneration programs will align the interests of all employees in driving value creation for shareholders. BerGenBio’s strategy is focused on developing novel medicines for aggressive diseases. To sustain BerGenBio’s position as a world leader in this ﬁeld, BerGenBio’s strategy hinges upon actionable strategic priorities. Each of these strategic priorities consists of several themes where BerGenBio has deﬁned speciﬁc ﬁnancial and non-ﬁnancial goals and related actions to execute over time. Remuneration Report CONTINUED 27 Annual Report & Accounts 2022 OVERVIEW 01–03 STRATEGIC REPORT 04–22 FINANCIAL STATEMENTS 50-81 CORPORATE GOVERNANCE 23-49 OVERVIEW 01–03 3. Overall Company ﬁnancial performance in 2022 In 2022 BerGenBio sharpened its strategy to focus on NSCLC STK11m and severe respiratory infections including COVID-19 for its lead compound bemcentinib. In addition the Company has continued and completed clinical trials of bemcentinib in 2L NSCLC and AML, and tilvestamab in Ovarian cancer. BerGenBio’s EBIT in 2022 was a loss of NOK 306 million against a loss of NOK 314 million in 2021. Revenue stood at NOK 0.4 million (2021: NOK 0.8 million). Revenue in 2022 and 2021 is refund of patent-cost from a license agreement with ADCT. 4. Remuneration of the Board of Directors The Nomination Committee, as deﬁned in the Corporate Governance section of BerGenBio’s website, reviews Board fees at least annually. Fees are evaluated relative to Nordic and UK companies of comparable size and complexity to BerGenBio. The work of the Board of Directors and committees are covered in section 8 and 9 in the Corporate Governance Report in the Annual Report. The Nomination Committee prepares recommendations for remuneration of the Board of Directors. The recommendations are put before shareholders for approval before they come into effect. The Board of Directors’ remuneration is approved by the shareholders as a separate item on the agenda at the Annual General Meeting. The Chairman and each member of the Board of Directors receives a ﬁxed annual fee. The Chairman or Board members who participate in the Audit Committee, Remuneration Committee or Clinical Committee receive separate compensation for this. As relevant, Board members not domiciled in Norway are also entitled to compensation for travelling time within business hours to and from Board meetings. Additional fees or beneﬁts may be provided to reﬂect, for example, accommodation, ofﬁce, transport and other business-related expenses incurred while carrying out their role. Board members are not eligible to participate in any incentive arrangements operated by BerGenBio. The remuneration of Board members is not linked to the Company’s performance and does not contain option elements. 4.1 Remuneration of individual members of the Board of Directors in 2022 Table 4.1 Remuneration of individual members of the Board of Directors in 2022 in ‘1,000 NOK Committee fees Name Position 2022 Base Board fee Audit Committee Remuneration Committee Clinical Committee Other beneﬁts 1) Total fees Anders Tullgren 2) Chair of the board, Chair of Remuneration Committee and member of Audit Committee 650 27 45 393 1,115 Sveinung Hole 3) Non-executive member of the Board of Directors, member of Remuneration Committee and member of Audit Committee 294 27 24 345 Stener Kvinnsland 4) Non-executive member of the Board of Directors and member of the Clinical Committee to 6 January 2022 21 3 24 Debra Barker Non-executive member of the Board of Directors, member of Remuneration Committee and member of Clinical Committee 272 24 32 21 353 Sally Bennett 5) Non-executive member of the Board of Directors, Chair of the Audit Committee and member of the Clinical Committee 272 51 2 32 21 378 Francois Thomas 6) Non-executive member of the Board of Directors, Chair of Clinical committee and member of the Audit Committee 272 2 62 13 349 Total remuneration 1,781 107 95 129 452 2,564 1) Other beneﬁts include compensation for traveling hours related to board meetings and one-off bonus for the new Chair of the Board representing the after tax value of 25,000 shares in BerGenBio. 2) Anders Tullgren was elected to the Chair of the Board 6 January 2022 and as Chair of Remuneration Committee and member of the Board of Directors from the same time. 3) Sveinung Hole has as of 6 January 2022 changed his position to non-executive member of the Board of Directors, member of the Remuneration Committee and member of Audit Committee. 4) Stener Kvinnsland has as of 6 January 2022 resigned his position as member of the Board of Directors and member of the Clinical Committee. 5) Sally Bennett has as of 6 January 2022 resigned as a member of the Remuneration Committee and joined as member of the Clinical Committee. 6) Francois Thomas has as of 6 January 2022 resigned as a member of the Audit Committee. Remuneration Report CONTINUED 28 Annual Report & Accounts 2022 OVERVIEW 01–03 STRATEGIC REPORT 04–22 FINANCIAL STATEMENTS 50-81 CORPORATE GOVERNANCE 23-49 4.2 Board of Directors shareholdings The table illustrates shares purchased and sold by Board members in 2022. Table 4.2 Board of Directors shareholdings Name Shares at 1 January 2022 Additions during the year Sold during the year Shares at 31 December 2022 Anders Tullgren 1) 25,000 25,000 50,000 Sveinung Hole 107, 394 107, 394 Stener Kvinnsland 2) 104,444 N/A 2) Debra Barker Sally Bennett Francois Thomas 1) Anders Tullgren was elected as Chairman of the Board of Directors as of 6 January 2022. At time of election, he held 25,000 shares in BerGenBio and an additional 25,000 shares was purchased in 2022 as part of his one-time bonus on his appointment as Chairman of the Board. 2) Stener Kvinnsland resigned from the position as Non-executive director of the Board 6 January 2022 and shareholding after his resignation is not included. The remuneration arrangements for the BerGenBio Executive Management comprise the following elements: Remuneration Description Base salary Enables BerGenBio to attract, engage and retain talent needed to drive long-term value creation. It is an annual market- consistent remuneration that is ﬁxed based on skills, performance, experience, scope of work and responsibility, taking into consideration the rate of pay rise for executives and other employees. Short-term incentive (STI) Enables BerGenBio to incentivize delivery of its short-term objectives and ensure a clear link with value creation. Performance measures and targets are normally set annually by the Board of Directors. The Board sets the individual objectives of the CEO and the overall objectives for the executive team. The Committee, in discussion with the CEO, reviews the level of performance achieved and the amount of STI earned by the members of the Executive Management. The Board of Directors determines pay-outs based on performance against the targets and to ensure that the outcome is fair in the context of overall performance of BerGenBio and the individual. Awards are normally paid out in cash. The target award for CEO is 50%, with a maximum award in any ﬁnancial year up to 75% of base salary. For other executives the target award is 30%, with a maximum award in any ﬁnancial year up to 45% of base salary. Long-term incentive (LTI) program Enables BerGenBio to incentivize and reward long-term value creation and align with shareholders’ interest. Award of share options is not dependent on achieving speciﬁc targets; however, their values are linked to BerGenBio’s share price and its development. Share options vest over three years from time of grant and expire eight years after grant. Other beneﬁts Enables BerGenBio to provide market competitive and cost-effective beneﬁts. Beneﬁts may include, but are not limited to healthcare, life and accident insurance on customary terms, house allowance. Speciﬁc beneﬁt provision may be subject to minor change from time to time. Additional beneﬁts may be provided on recruitment or to support relocation. Pension Encourages planning for retirement and long-term saving. BerGenBio ASA has a deﬁned contribution pension plan according to the mandatory requirements in the Norwegian Law. BerGenBio Limited has a deﬁned contribution pension plan according to the requirements in the UK. Company-paid pension contributions are set considering the wider workforce rate and market practice in the country in which the executive resides. Terms and conditions for indemnity for the members of the Board of Directors BerGenBio has a Directors and Ofﬁcers’ liability insurance and indemniﬁcation for the members of the Board of Directors. It is the policy of BerGenBio to indemnify Directors and Ofﬁcer’s against claims for damages of up to NOK 100 million. In 2022, no claims were reported and BerGenBio did not indemnify its Directors and Ofﬁcers against claims for damages. 5.1 Executive Management remuneration benchmark Executive Management remuneration is evaluated annually against relevant benchmarks of Nordic general industry companies and European biotech companies, similar to BerGenBio in size, complexity, and market capitalization. After the 2020 update, the BerGenBio Comparator Peer Group consists of 19 companies from the Nordic countries (13) and the UK (6) with number of employees, revenue, R&D expense and market capitalization spanning from well below to well above the relevant metrics for BerGenBio. The peer group is used for a benchmarking of the Executive Management Team to assess the market positioning of the remuneration packages. Remuneration Report CONTINUED Total 236,838 25,000 157,394 5. Remuneration of the Executive Management Remuneration for the CEO is proposed by the Remuneration Committee and subsequently approved by the Board of Directors annually, in line with the policy. Remuneration for other members of the Executive Management is proposed by the CEO to the Remuneration Committee for their approval in line with the policy. 29 Annual Report & Accounts 2022 OVERVIEW 01–03 STRATEGIC REPORT 04–22 FINANCIAL STATEMENTS 50-81 CORPORATE GOVERNANCE 23-49 5.2 Remuneration of individual members of the Executive Management in 2022 Table 5.2.1 Remuneration of individual members of the Executive Management in 2022 Table 5.2.1 and 5.2.2 is presented individual in the currency the remuneration is nominated in. in ‘1,000 NOK Fixed remuneration Variable remuneration Name Joined/ Departed Currency Year Base salary Pension Severance pay Other beneﬁts 1) Total ﬁxed remuneration % out of total remuneration Short-term incentive One-off bonus 2) Total granted fair value of share options Total variable remuneration % out of total remuneration Total Martin Olin 3) (CEO) Joined 8 Sep 2021 GBP 2022 414 63 42 519 56% 178 229 407 44% 926 GBP 2021 124 20 143 43% 60 127 186 57% 330 Rune Skeie 4) (CFO) NOK 2022 1,876 192 19 2,086 73% 472 286 758 27% 2,844 NOK 2021 1,896 180 14 2,090 64% 394 787 1,181 36% 3,271 Nigel McCracken (CSO) Joined 1 Mar 2021 GBP 2022 227 23 249 68% 51 66 117 32% 367 GBP 2021 183 18 202 86% 33 33 14% 235 James Barnes (COO) GBP 2022 198 20 218 74% 51 27 78 26% 296 GBP 2021 178 18 196 63% 35 79 113 37% 309 Cristina Oliva (CMO) Joined 25 April 2022 GBP 2022 189 19 207 69% 47 48 95 31% 303 GBP 2021 0 Other Executives 5) NOK 2022 458 94 588 1,140 100% 0 0% 1,140 NOK 2021 7, 2 39 531 5,145 434 13,350 68% 1,479 4,948 6,427 32% 19,776 1) Other beneﬁts include housing allowance, insurances, expenses to mobile, internet, newspapers, and other business-related expenses. 2) Martin Olin received a sign-on bonus of NOK 1.500k (GBP 127k) in 2021. 3) Martin Olin has been remunerated as CEO from 8 September 2021. 4) Rune Skeie has been interim CEO in the period 22 August to 8 September 2021. Compensation included in base salary in 2021. 5) Other Executives are: (2022) Alison Messom. (2021) Richard Godfrey, Alison Messom, Hani Gabra, Gro Gausdal and Endre Kjarland. Remuneration Report CONTINUED 30 Annual Report & Accounts 2022 OVERVIEW 01–03 STRATEGIC REPORT 04–22 FINANCIAL STATEMENTS 50-81 CORPORATE GOVERNANCE 23-49 Table 5.2.2 Remuneration of individual members of the Executive Management engaged as contractors in ‘1,000 Remuneration Name Joined/ Resigned Year Invoiced fee Gayle Mills 1) (CBO) Joined 8 Oct 2021 2022 346 (USD) 2021 63 (USD) Gwyn Thomas 2) (Interim Head of Clinical Development) Left 30 April 2022 2022 99 (GBP) Joined 28 Jun 2021 2021 111 (GBP) Debbie Molyneux 2) (CPO) 2022 227 (GBP) 2021 203 (GBP) 1) Gayle Mills has joined the Executive Management from 8 October 2021. Gayle Mills is contracted through a consultancy agreement with a ﬁxed monthly fee and eligible for an incentive fee on partnering deals. 2) Debbie Molyneux is and Gwyn Thomas was contracted through individual consultancy agreements. 5.3 Short-term incentive of the Executive Management in 2022 BerGenBio Executive Management participate in a short-term incentive scheme in line with the Remuneration Policy. Target STI level for CEO is 50% of base salary and 30% of base salary for all other Executives. Individual STI is dependent on performance and achievement of goals. Goals for 2022 consisted of speciﬁc development goals of bemcentinib and organization development. Overall achievement of corporate goals for 2022 ended on 75% with an average individual performance achievement between 100% and 113%. Short-term incentive for Executive Management for 2022 amounted in total NOK 4.3 million. Category Measures Overall achievements 2022 Financials • Secure additional capital to fund activities beyond 2022 Development of bemcentinib • Initiate clinical studies in COVID-19 Ph2b, NSCLC STK11m Ph1b/2a and Human ADME. • Conduct formulation and manufacturing activities to support further development. Organization development • Organization design to support strategy. • Financial strategy. • Pursue relevant partnership and licence opportunities. • Corporate compliance and inspection readiness. Total 75% Remuneration Report CONTINUED 5.4 Long-term incentive (LTI) programme To promote and achieve long-term goals and strategies for BerGenBio, as well as sustainability, and thereby contribute to BerGenBio´s development and growth, incentive remuneration in the form of share option is offered to the Executive Management and the wider team. Share options normally vest over three years by one third per annum. The maximum award in respect of a ﬁnancial year is 100% of annual base salary for the CEO and 50% for all other executives calculated according to the Black-Scholes model. Options are awarded at an exercise price identical to the fair value of the shares at the time of the initial grant, which is to be determined when the initial grant is made. In addition to the exercise price, the participant shall pay to the Company an amount that covers any payroll tax payable as a result of exercising the options. Individual share option awards are determined by considering the overall performance, potential, competitiveness of the employment terms, position responsibility, need for retention, and the overall long-term organization need. Exercise is not subject to performance measures, but the value of the options will be measured based on development in share price. Vested share options can be exercised partly or fully at four speciﬁed points per year in connection with the release of ﬁnancial results. In addition, the Board of Directors may allow exercise at other suitable times during the year. 31 Annual Report & Accounts 2022 OVERVIEW 01–03 STRATEGIC REPORT 04–22 FINANCIAL STATEMENTS 50-81 CORPORATE GOVERNANCE 23-49 Remuneration Report CONTINUED Table 5.4 Long-term incentive (LTI) program Name Program Grant date Earliest vesting date Exercise price No. of share options Beginning of the year No. of share options granted No. of share options cancelled No. of share options exercised No. of share options end of the year Fair value of share options at grant (1’000 NOK) 3) Martin Olin (CEO) 1) 2022 23.11.2022 08.09.2022 7.59 0 950,000 950,000 2,714 Rune Skeie (CFO) 2022 23.11.2022 23.11.2023 7.59 100,000 100,000 286 2021 06.05.2021 06.05.2022 28.55 54,340 54,340 787 2020 08.04.2020 08.04.2021 15.00 146,667 146,667 1,100 2019 17.04.2019 17.04.2020 25.00 52,000 52,000 650 2018 31.10.2018 31.10.2019 28.50 20,000 20,000 285 2018 22.05.2018 22.05.2019 46.70 24,090 24,090 563 James Barnes (COO) 2022 23.11.2022 23.11.2023 7.59 110,000 110,000 314 2021 06.05.2021 06.05.2022 28.55 64,122 64,122 929 2020 08.04.2020 08.04.2021 15.00 178,000 178,000 1,335 2019 17.04.2019 17.04.2020 25.00 59,40 0 59,400 743 Nigel McCracken (CSO) 2) 2022 23.11.2022 01.03.2022 7.59 0 275,000 275,000 786 Cristina Oliva (CMO) 2022 23.11.2022 25.04.2023 7.59 0 200,000 200,000 571 Other executives 3) 2022 2021 06.05.2021 06.05.2022 28.55 61,068 (61,268) 885 2020 08.04.2020 08.04.2021 15.00 383,778 (316,001) (67,777) 146,667 5,470 2019 17.04.2019 17.04.2020 25.00 157, 867 (157, 8 67 ) 52,000 2,960 2018 31.10.2018 31.10.2019 28.50 33,333 (33,333) 20,000 713 2018 22.05.2018 22.05.2019 46.70 122,484 (122,484) 24,090 2,860 2016 19.12.2016 19.12.2017 24.00 100,000 (100,000) 2015 22.05.2015 22.05.2016 16.01 137,5 0 0 (137,5 0 0 ) 1) Fair value of total share options at grant date is based on Black Scholes fair value calculation (from 2021 program). 2) 2022 grant includes initial grant from 2021. 3) Other Executives are Richard Godfrey, Alison Messom and Hani Gabra. 32 Annual Report & Accounts 2022 OVERVIEW 01–03 STRATEGIC REPORT 04–22 FINANCIAL STATEMENTS 50-81 CORPORATE GOVERNANCE 23-49 Remuneration Report CONTINUED 5.5 Executive Management Shareholdings Shares purchased and sold by Executive members in 2022. Table 5.5 Executive Management shareholdings Name Shares at 1 January 2022 Additions during the year Sold during the year Reclassiﬁcation Shares at 31 December 2022 Martin Olin (CEO) 0 37,10 0 37,10 0 Total shares 0 37,10 0 37,10 0 6. Terms of termination and termination beneﬁts BerGenBio does not apply a standard notice policy. The normal notice period for the Executive Management Team is three months by the executive or the Company. The CEO has a notice period of six months by the CEO and six months by the Company. If the CEO’s employment is terminated without cause by the Company, the CEO is entitled to receive a severance payment equal to 12 months remuneration excluding short term incentive. If the CEO’s contract is terminated within 18 months of a change of control (or change of ownership), the CEO will be compensated with 18 months’ remuneration. Severance payments for executives will normally be made up of salary, beneﬁts, pension contributions and short term incentive (where eligible) and would reﬂect the notice period of the contract. The Board of Directors reserves the right to make any other payments in connection with a member of the Executive Management stepping down/ceasing employment where the payments are made in good faith in discharge of an existing legal obligation (or by way of damages for breach of such an obligation) or by way of settlement of any claim arising in connection with the individual stepping down/ceasing employment. Any termination payments, including payment during the notice period, may not exceed a total value of the equivalent to 12 months’ remuneration. This maximum severance amount includes all components of remuneration, both ﬁxed and variable elements. 7. Comparison of remuneration and ﬁnancial performance ﬁgures BerGenBio will build up ﬁve years of comparative ﬁgures for the annual change in remuneration, in Company performance, and in average remuneration based on full-time equivalents (“FTEs”) of employees other than Executive Management members. 2021 was the ﬁrst year of reporting and BerGenBio has chosen to only include relevant comparative ﬁgures from 2020. Table 7.1 Comparison of total remuneration and ﬁnancial performance ﬁgures Executive Management total remuneration include base salary, pension, other remuneration, short- term incentive and total calculated fair value of granted options. Table 7.1 is presented in NOK. NOK/ GBP average exchange rates used for conversion are: 2022: 11.85, 2021: 11.83 and 2020: 12.05. In ‘1,000 NOK 2022 Change, % 2021 Change, % 2020 Executive Management – remuneration Martin Olin 1) 10,974 181.5% 3,898 0 Rune Skeie 2,844 -13.0% 3,271 2.5% 3,190 Nigel McCracken 2) 4,343 56.5% 2,775 0 James Barnes 3,502 -4.1% 3,653 -10.3% 4,071 Cristina Oliva 3) 3,586 0 0 Other employed executives 4) 1,140 -94.2% 17, 776 -22.4% 25,475 Board of Directors – remuneration Anders Tullgren 5) 1,115 0 0 Sveinung Hole 345 -31.9 506 7.7% 470 Sally Bennet 6) 378 20.2 315 1,201.6% 24 Debra Barker 353 10.3 320 26.4% 253 François Thomas 7) 349 -4.7 366 1,251.5% 27 Stener Kvinnsland, to 6 January 2022 24 -91.6 285 22.8% 232 The calculation of average ﬁxed and variable remuneration is very sensitive to the relatively low number of FTEs involved and is further impacted due to a signiﬁcant change of FTEs during 2022 as part of the announced focused strategy in May 2022 compared to 2021 and 2020. Average increase of ﬁxed remuneration from 2021 to 2022 was 4% on Group level. 1) Martin Olin joined as CEO from 8 September 2021. 2) Nigel McCracken joined as CSO from 1 March 2021. 3) Cristina Oliva joined as CMO 25 April 2022. 4) Other executives includes 2022: Alison Messom. 2021 and 2020: Richard Godfrey, James B. Lorens, Alison Messom, Hani Gabra, Gro Gausdal and Endre Kjærland. 5) Anders Tullgren joined as Chairman of the Board of Directors from 6 January 2022. 6) Sally Bennett joined as member of Board of Directors from 9 December 2020. 7) Francois Thomas joined as member of Board of Directors from 9 December 2020. 33 Annual Report & Accounts 2022 OVERVIEW 01–03 STRATEGIC REPORT 04–22 FINANCIAL STATEMENTS 50-81 CORPORATE GOVERNANCE 23-49 Remuneration Report CONTINUED Anders Tullgren Chairman Sveinung Hole Non-Executive Director Dr. François Thomas Non-Executive Director Dr. Sally Bennett Non-Executive Director Dr. Debra Barker Non-Executive Director 2022 Change, % 2021 Change, % 2020 Financial performance ﬁgures Employees – average remuneration based on FTE: Number of FTE’s (excl. Executive Management) – Group 31.3 -15.8% 37.2 47.1% 25.3 Average total remuneration for Group employees (1’000 NOK) 1) 10) 1,258 -8.3% 1,371 25.9% 1,089 Average ﬁxed remuneration for Group employees (1’000 NOK) 2) 1,074 10.5% 972 12.9% 861 Average variable remuneration for Group employees (1’000 NOK) 3) 184 -53.9% 399 75.2% 228 Number of FTE’s (excl. Executive Management) – Parent 12.0 -2.9% 12.4 15.9% 10.7 Average total remuneration for parent company employees (1’000 NOK) 8) 10) 1,094 -4.2% 1,142 40.2% 815 Average ﬁxed remuneration for parent company employees (1’000 NOK) 9) 956 23.5% 774 8.1% 716 Average variable remuneration for parent company employees (1’000 NOK) 10) 138 -62.4% 368 271.6% 99 Group ﬁnancial results: Revenue of BerGenBio (´1.000 NOK) 389 - 49.7% 774 28.8% 601 Research & Development (R&D) costs (´1.000 NOK) 252,600] -0.4% 253,700 22.6% 206,857 1) Average total remuneration for Group employees and Parent Company employees is calculated as total remuneration (salary, pension and short-term incentive for all employees (excluding Executive Management) including fair value of granted options divided by total FTEs (excluding Executive Management). 2) Average ﬁxed remuneration for Group employees and Parent Company employees is calculated as ﬁxed remuneration (salary and pension for all employees (excluding Executive Management) excluding short-term incentive and fair value of granted options divided by total FTEs (excluding Executive Management). 3) Variable remuneration include introduction of STI and LTI scheme for additional employees from 2021. 8. Compliance with the remuneration policy The remuneration of members of the Board of Directors and Executive Management for 2022 is consistent with the scope of the Remuneration Policy. There has been no deviation or derogation from the framework provided by the Remuneration Policy. 9. Statement by the Board of Directors The Board of Directors has today considered and approved the Remuneration Report of BerGenBio for the ﬁnancial year 1 January to 31 December 2022. The Remuneration Report is presented in accordance with section 6–16a of the Norwegian Public Limited Companies Act. In our opinion, the Remuneration Report is in accordance with the Company’s Remuneration Policy, which has been adopted at the Company’s Annual General Meeting, and is free of material misstatement, whether due to fraud or error. We recommend the Remuneration Report for advisory vote at the Company’s Annual General Meeting. Bergen, 28 April 2023 Board of Directors 34 Annual Report & Accounts 2022 OVERVIEW 01–03 STRATEGIC REPORT 04–22 FINANCIAL STATEMENTS 50-81 CORPORATE GOVERNANCE 23-49 Remuneration Report CONTINUED Statsautoriserte revisorer Ernst & Young AS Thormøhlens gate 53 D, 5006 Bergen Postboks 6163, 5892 Bergen Foretaksregisteret: NO 976 389 387 MVA Tlf: +47 24 00 24 00 www.ey.no Medlemmer av Den norske Revisorforening A member firm of Ernst & Young Global Limited INDEPENDENT AUDITOR’S ASSURANCE REPORT ON REMUNERATION REPORT To the General Meeting of BerGenBio ASA Opinion We have performed an assurance engagement to obtain reasonable assurance that BerGenBio ASA’s report on salary and other remuneration to directors (the remuneration report) for the financial year ended 31 December 2021 has been prepared in accordance with section 6-16 b of the Norwegian Public Limited Liability Companies Act and the accompanying regulation. In our opinion, the remuneration report has been prepared, in all material respects, in accordance with section 6-16 b of the Norwegian Public Limited Liability Companies Act and the accompanying regulation. Board of directors’ responsibilities The board of directors is responsible for the preparation of the remuneration report and that it contains the information required in section 6-16 b of the Norwegian Public Limited Liability Companies Act and the accompanying regulation and for such internal control as the board of directors determines is necessary for the preparation of a remuneration report that is free from material misstatements, whether due to fraud or error. Our independence and quality control We are independent of the company in accordance with the requirements of the relevant laws and regulations in Norway and the International Ethics Standards Board for Accountants’ International Code of Ethics for Professional Accountants (including International Independence Standards) (IESBA Code), and we have fulfilled our other ethical responsibilities in accordance with these requirements. Our firm applies International Standard on Quality Control 1 (ISQC 1) and accordingly maintains a comprehensive system of quality control including documented policies and procedures regarding compliance with ethical requirements, professional standards and applicable legal and regulatory requirements. Auditor’s responsibilities Our responsibility is to express an opinion on whether the remuneration report contains the information required in section 6-16 b of the Norwegian Public Limited Liability Companies Act and the accompanying regulation and that the information in the remuneration report is free from material misstatements. We conducted our work in accordance with the International Standard for Assurance Engagements (ISAE) 3000 – “Assurance engagements other than audits or reviews of historical financial information”. We obtained an understanding of the remuneration policy approved by the general meeting. Our procedures included obtaining an understanding of the internal control relevant to the preparation of the remuneration report in order to design procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company’s internal control. Further we performed procedures to ensure completeness and accuracy of the information provided in the remuneration report, including whether it contains the information required by the law and accompanying regulation. We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Statsautoriserte revisorer Ernst & Young AS Thormøhlens gate 53 D, 5006 Bergen Postboks 6163, 5892 Bergen Foretaksregisteret: NO 976 389 387 MVA Tlf: +47 24 00 24 00 www.ey.no Medlemmer av Den norske Revisorforening A member firm of Ernst & Young Global Limited INDEPENDENT AUDITOR’S ASSURANCE REPORT ON REMUNERATION REPORT To the General Meeting of BerGenBio ASA Opinion We have performed an assurance engagement to obtain reasonable assurance that BerGenBio ASA’s report on salary and other remuneration to directors (the remuneration report) for the financial year ended 31 December 2021 has been prepared in accordance with section 6-16 b of the Norwegian Public Limited Liability Companies Act and the accompanying regulation. In our opinion, the remuneration report has been prepared, in all material respects, in accordance with section 6-16 b of the Norwegian Public Limited Liability Companies Act and the accompanying regulation. Board of directors’ responsibilities The board of directors is responsible for the preparation of the remuneration report and that it contains the information required in section 6-16 b of the Norwegian Public Limited Liability Companies Act and the accompanying regulation and for such internal control as the board of directors determines is necessary for the preparation of a remuneration report that is free from material misstatements, whether due to fraud or error. Our independence and quality control We are independent of the company in accordance with the requirements of the relevant laws and regulations in Norway and the International Ethics Standards Board for Accountants’ International Code of Ethics for Professional Accountants (including International Independence Standards) (IESBA Code), and we have fulfilled our other ethical responsibilities in accordance with these requirements. Our firm applies International Standard on Quality Control 1 (ISQC 1) and accordingly maintains a comprehensive system of quality control including documented policies and procedures regarding compliance with ethical requirements, professional standards and applicable legal and regulatory requirements. Auditor’s responsibilities Our responsibility is to express an opinion on whether the remuneration report contains the information required in section 6-16 b of the Norwegian Public Limited Liability Companies Act and the accompanying regulation and that the information in the remuneration report is free from material misstatements. We conducted our work in accordance with the International Standard for Assurance Engagements (ISAE) 3000 – “Assurance engagements other than audits or reviews of historical financial information”. We obtained an understanding of the remuneration policy approved by the general meeting. Our procedures included obtaining an understanding of the internal control relevant to the preparation of the remuneration report in order to design procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company’s internal control. Further we performed procedures to ensure completeness and accuracy of the information provided in the remuneration report, including whether it contains the information required by the law and accompanying regulation. We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. 2 Independent auditor’s assurance report on remuneration report - BerGenBio ASA 2021 A member firm of Ernst & Young Global Limited Bergen, 7 April 2022 ERNST & YOUNG AS Truls Nesslin State Authorised Public Accountant (Norway) 35 Annual Report & Accounts 2022 OVERVIEW 01–03 STRATEGIC REPORT 04–22 FINANCIAL STATEMENTS 50-81 CORPORATE GOVERNANCE 23-49 Annual Report & Accounts 2022 35 CONTENT TO BE REPLACED Corporate Governance Report 1. Corporate Governance in BerGenBio BerGenBio considers good corporate governance to be a prerequisite for value creation and trustworthiness, and for access to capital. In order to secure strong and sustainable corporate governance, it is important that BerGenBio ensures good and healthy business practices, reliable nancial reporting and an environment of compliance with legislation and regulations. BerGenBio is incorporated and registered in Norway and is subject to Norwegian law. The Company’s shares are listed on Oslo Stock Exchange (Oslo Børs) under the ticker BGBIO, and thus subject to the requirement to prepare an annual statement of its principles and practices for corporate governance. The Company endorses the Norwegian Code of Practice for Corporate Governance, issued by the Norwegian Corporate Governance Board (the “Code”). Compliance with the Code is based on the “comply or explain” principle, which means that the Company must either comply with the individual items in the Code or explain why they have chosen an alternative solution. Implementation and reporting of corporate governance BerGenBio has governance documents setting out principles for how business should be conducted. References to more specic policies are included in this corporate governance report where relevant. The BerGenBio governance regime is approved by the Board of Directors in the Company. BerGenBio believes good corporate governance involves openness and trustful cooperation between the Company and all its stakeholders. By practicing good corporate governance, the Company’s Board of Directors and management will contribute to achieving the Company’s objectives of openness, independence, equal treatment, and control and management. The following sections provide a discussion of the Company’s corporate governance in relation to each section of the Code. According to the Company’s own evaluation, the Company deviates from the Code on the following points: • Formulation of Company takeover policy (section 14) • Formulation of guidelines for use of the auditor for services other than auditing (section 15). Values and ethical policies The Company’s main values and ethical principles form the basis for the Code of Conduct. The Code of Conduct is distributed to all employees, management and Board members, and published on the Company’s website. The Company’s Code of Conduct rules set forth the basic principles for business practices and personal behavior for BerGenBio and apply to all employees, as well as persons/ entities related to the Company, including hired consultants acting on behalf of the Group. They comprise the Company’s main principles on issues such as human and labor rights, health and safety, business ethics, legal compliance, insider trading, whistleblowing and other relevant issues related to the Company’s operations. Material breaches of the ethical guidelines may result in termination of employment/engagements. 2. Business BerGenBio is a clinical-stage biopharmaceutical Company focused on developing novel medicines for aggressive diseases, including advanced, treatment-resistant cancers. The Company’s operations comply with the business objective set forth in its articles of associations section 3: “The company’s objective is to undertake research and development in biotechnology with a focus on new pharmaceutical therapeutics”. The Company has developed clear goals and strategies which are further described in the Annual Report for 2022. 3. Equity and Dividends Capital adequacy BerGenBio’s total equity as of 31 December 2022 was NOK 88.5 million, corresponding to an equity ratio of 53.1%. The Company cash position as of 31 December 2022 was NOK 150.8 million. In addition, the Company secured a shareholder loan facility of up to NOK 100 million from Meteva AS in October 2022. The facility is available from Q2 2023 and up to the earlier of 31 March 2024 and completion of an equity issue. In April 2023 the Company announced an equity funding, a partly guaranteed and underwritten right issue, with a minimum proceed of NOK 175 million. The equity issue is subject to AGM approval and publication of an approved prospectus. The cash position in combination with expected proceeds from the equity funding will fund the planned activities to end of Q2 2024 on a going concern basis. The Board of Directors considers this to be an adequate level, relative to the risk and scope of operations based on the Company’s internal estimated capital requirements. 36 Annual Report & Accounts 2022 OVERVIEW 01–03 STRATEGIC REPORT 04–22 FINANCIAL STATEMENTS 50-81 CORPORATE GOVERNANCE 23-49 Corporate Governance Report CONTINUED Dividend policy BerGenBio has not developed any dividend policy. The Company is focusing on the development of novel pharmaceutical products and does not anticipate paying any cash dividend until sustainable proﬁtability is achieved. The Company has not previously distributed any dividends to its shareholders. Authorizations to the Board of Directors At the Company’s Annual General Meeting, on 28 April 2022, the Board of Directors was granted the following authorization: • Authorization to increase the Company’s share capital by up to NOK 886,605 in connection with its existing share option scheme. The authorization is effective until the earlier of the AGM in 2022 and 30 June 2023. • Authorization to increase the Company share capital by up to NOK 1,773,210 by subscription of new shares, which constitute approximately 20% of the Company´s outstanding shares. The purpose of the authorization is to permit the issue of new shares to strengthen the Company equity and to increase the liquidity and/or to broaden the Company’s shareholder base. The authorization is effective until the earliest of the AGM in 2022 and 30 June 2023. For supplementary information on the authorizations, reference is made to the minutes of the Annual General Meeting held on 28 April 2022, available from the Company’s website. 4. Equal treatment of shareholders and transactions with close associates BerGenBio has only one class of shares. Each share in the Company carries one vote, and all shares carry equal rights, including the right to participate in General Meetings. All shareholders shall be treated on an equal basis, unless there is just cause for treating them differently. Share issues without preferential rights for existing shareholders In the event of a share capital increase through the issue of new shares, a decision to waive the existing shareholders’ preferential rights to subscribe for shares shall be justiﬁed. Where the Board of Directors resolves to issue shares, and waive the preferential rights of existing shareholders pursuant to an authorization granted to the Board of Directors by the general meeting, the justiﬁcation will be publicly disclosed in a stock exchange announcement issued in connection with the shares issuance. There were no such transactions in 2022. Transactions in treasury shares Any transactions in treasury shares shall be carried out through Oslo Stock Exchange, and in any case to prevailing stock exchange prices. In the event that there is limited liquidity in the Company’s shares, the Company will consider other ways to cater for equal treatment of shareholders. There were no such transactions in 2022. Approval of agreements with shareholders and close associates For transactions that are considered to be not immaterial between the Company and its closely related parties, the Board of Directors will arrange for an independent third-party valuation. Members of the Board of Directors and executive personnel are required to notify the Board of Directors when such members have any signiﬁcant, direct or indirect, interest in a transaction carried out by the Company. There were no such transactions in 2022. In October 2022 the Company secured a shareholder loan facility agreement with Meteva AS, holding 27% of the shares in the Company. The contribution from the Company are comittment fee of 1.5% on any undrawn amount and interest of 6% of any drawn amount. The maximum contribution from the Company, consisting of commitment fee and interest, are below the threshold in the Norwegian Public Limited Liability Companies Act section 3-10 which require approval by the General Meeting. The Company also consider the terms in the loan agreement to be favorable compared to alternative similar ﬁnancing solutions. 5. Freely Negotiable Shares The shares of the Company are freely negotiable, and the Company’s articles of association do not place any restrictions on the negotiability of shares. 37 Annual Report & Accounts 2022 OVERVIEW 01–03 STRATEGIC REPORT 04–22 FINANCIAL STATEMENTS 50-81 CORPORATE GOVERNANCE 23-49 Annual Report & Accounts 2022 6. General Meetings The General Meeting is open to all shareholders, and BerGenBio encourages all shareholders to participate and exercise their rights in connection with the Company’s General Meetings. The right to participate and vote at the general meeting can only be exercised for shares registered in the shareholders’ register by the ﬁfth business day prior to the day of the General Meeting. Notice of a General Meeting and any supporting documents, including the recommendation by the Nomination Committee and other information on the resolutions to be considered, shall be made available on the Company’s website no later than 21 days prior to the date of the General Meeting. In accordance with the Company’s articles of association, documents that are to be considered by the General Meeting are not required to be sent to the shareholders if they have been made available on the Company’s website. The deadline for registration will be set as close to the meeting as possible, and all the necessary registration information will be described in the notice. Shareholders unable to attend may vote by proxy. Whenever possible, the Company will prepare a proxy form that will allow separate votes for the items that are to be considered in the General Meeting. The agenda for the Annual General Meeting is stipulated by the articles of association, and the main topics to be considered include the approval of the annual accounts and the Directors’ report, including distribution of dividend, and remuneration of leading personnel. If the Board Chairman is the chair for the General Meeting and there is disagreement on individual items for which the Board Chairman belongs to one of the factions, or is not regarded as being impartial for other reasons, another chairperson will be appointed to ensure impartiality regarding the items to be considered. The Board Chairman and the CEO will be present at General Meetings, together with representatives of the Board. Representatives of the Nomination Committee, the Remuneration Committee and the Audit Committee, as well as the auditor, should be present at General Meetings where matters of relevance for such committees/persons are on the agenda. Minutes from the General Meetings will be published in accordance with the stock exchange regulations and made available on the Company’s website. In 2022, BerGenBio held its Annual General Meeting on 28 April 2022. 7. Nomination Commiee The Nomination Committee of BerGenBio consists of three members, elected pursuant to section 9 of the Company’s Articles of Association. The Nomination Committee is responsible for recommending candidates for the election of members and Chairman of the Board of Directors, candidates for the election of members and Chairman of the Nomination Committee, and remuneration of the Board of Directors, Board subcommittees and the Nomination Committee. The objectives, responsibilities and functions of the Committee are further described in the “Instructions for the Nomination Committee”, which were adopted by the General Meeting at the AGM in 2017. The instructions are available from the Company’s website. The current Nomination Committee consists of: • Hans Peter Bøhn (Chair) – elected at the Annual General Meeting 22 March 2017 • Ann-Tove Kongsnes – elected at the Annual General Meeting 19 June 2014 • Shantrez Miller Gillebo – elected at the Extraordinary General Meeting 9 December 2020 All members are elected with a term until the Annual General Meeting in 2023. All members are considered independent of the Company’s Board of Directors and Executive Management. All shareholders are entitled to nominate candidates to the Board, and contact information for proposing candidates can be found on the Company’s website. Corporate Governance Report CONTINUED 38 Annual Report & Accounts 2022 OVERVIEW 01–03 STRATEGIC REPORT 04–22 FINANCIAL STATEMENTS 50-81 CORPORATE GOVERNANCE 23-49 Annual Report & Accounts 2022 8. Board of Directors; Composition and Independence Pursuant to the articles of association section 5, the Company’s Board of Directors shall consist of three to seven members. As of 31 December 2022, the Board of Directors consisted of ﬁve members, of which two are women: • Anders Tullgren (Chair) – elected at the Extraordinary General Meeting (EGM) 6 January 2022 and re-elected at the AGM in 2022 up to the AGM in 2024 • Sveinung Hole – elected at the Annual General Meeting (AGM) in 2010 and re-elected annually, last time at the AGM on 28 April 2022 up to the AGM in 2024 • Debra Barker – elected at the Annual General Meeting on 13 March 2019 and re-elected up to the Annual General Meeting in 2023 • Sally Bennett – elected at the Extraordinary General Meeting on 9 December 2020 and re-elected up to the Annual General Meeting in 2023 • Francois Thomas – elected at the Extraordinary General Meeting on 9 December 2020 and re-elected up to the Annual General Meeting in 2023 In an Extraordinary General Meeting 6 January 2022, Anders Tullgren was elected as Chairman of the Board, Sveinung Hole was reconﬁrmed as Board member and Stener Kvinnsland resigned from the Board. He has continued in a senior advisory position. The composition of the Board of Directors is in compliance with the independence requirements of the Norwegian Code of Practice for Corporate Governance, (the “Corporate Governance Code”), meaning that (i) the majority of the shareholder-elected Board Members are independent of the Company’s Executive Management and material business contacts, (ii) at least two of the shareholder-elected Board Members are independent of the Company’s main shareholders (shareholders holding more than 10% of the shares in the Company), and (iii) no members of the Company’s Management serve on the Board of Directors. Furthermore, pursuant to the Norwegian Public Limited Companies Act, if the Board of Directors of a Norwegian Public Limited Liability Company consists of four to ﬁve members, then each gender shall be represented by at least two members. All board members are independent of the Company’s signiﬁcant business relations and large shareholders (shareholders holding more than 10% of the shares in the Company) and of the Management. Board members are not part of the share option program in the Company but are encouraged to own shares in BerGenBio. The following shares are held by the Board as of 31 December 2022: Name Position Considered independent Served since Term expires Board meeting attendance 2022 Shares Anders Tullgren Chair Yes 06.01.2022 AGM 2024 16 50,000 Sveinung Hole Board member Yes 01.09.2010 AGM 2024 17 107, 394 1) Debra Barker Board member Yes 13.03.2019 AGM 2023 15 0 Sally Bennett Board member Yes 09.12.2020 AGM 2023 17 0 Francois Thomas Board member Yes 09.12.2020 AGM 2023 17 0 1) Sveinung Hole holds 104,444 shares in the Company through Svev AS, a wholly-owned company of Sveinung Hole, and 2,950 shares directly. Corporate Governance Report CONTINUED 39 Annual Report & Accounts 2022 OVERVIEW 01–03 STRATEGIC REPORT 04–22 FINANCIAL STATEMENTS 50-81 CORPORATE GOVERNANCE 23-49 Annual Report & Accounts 2022 9. The work of the Board of Directors The Board of Directors is responsible for the management of the Company, including the appointment of the Chief Executive Ofﬁcer (CEO), convening and preparing for General Meetings and supervising the daily management and the activities of the Company in general. The Board of Directors has implemented instructions for the Board and the Executive Management, with focus on allocation of internal responsibilities and duties. The objectives, responsibilities and functions of the Board of Directors and the CEO are in compliance with rules and standards applicable to the Company and are described in the Company’s “Instructions for the Board of Directors” and “Instructions for the CEO”. The Board of Directors will produce an annual schedule for its work, with particular focus on objectives, strategy and implementation. The CEO is responsible for keeping the Board of Directors informed and provides regular reports to the Board of Directors about the Company’s activities, position and ﬁnancial and operational developments. During 2022, the Board of Directors held 17 meetings. The Board of Directors’ consideration of material matters in which the Chairman of the Board is, or has been, personally involved, shall be chaired by another member of the Board. The Board of Directors shall annually evaluate its performance and expertise in the previous year. The evaluation is made available to the Nomination Committee. Audit Commiee The Board of Directors established an Audit Committee on 28 February 2017, which is a sub committee of the Board of Directors. Its main duties are to assess the Company’s ﬁnancial reporting and internal control, monitor statutory audit and report outcome of the audit to the Board of Directors. The Audit Committee also supports the Board in the administration and exercise of its responsibility for supervision in accordance with applicable rules and legislations. From 2021 pre-approval of non-audit services delivered by the independent auditor is required from the Audit Committee. The Company’s Audit Committee is governed by the Norwegian Public Limited Liability Companies Act and a separate instruction adopted by the Board of Directors. The Audit Committee has held ﬁve meetings in 2022, and met with the Auditor, EY, separately without the Executive Management present. The members of the Audit Committee are elected by and amongst the members of the Board of Directors for a term of up to two years. The current members of the Audit Committee are: • Sally Bennett (Chair) • Sveinung Hole • Anders Tullgren, from 6 January 2022 Francois Thomas served as Audit Committee member up to 6 January 2022. Clinical Commiee The Board of Directors established a Clinical Committee in December 2020 as a preparatory and advisory committee for the Board of Directors, to address questions relating to clinical development and trials. The members of the Clinical Committee are elected by and amongst the members of the Board of Directors. The current members of the Clinical Committee are; • Francois Thomas (Chair) • Debra Barker • Sally Bennett (from 6 January 2022) Stener Kvinnsland served as Clinical Committee member up to 6 January 2022. Corporate Governance Report CONTINUED Remuneration Commiee The Board of Directors has established a Remuneration Committee as a preparatory and advisory committee for the Board of Directors, to address questions relating to remuneration of the Company’s Executive Management. The duties are described in the Company’s “Instructions for the Remuneration Committee”. The main duties include the responsibility to review the remuneration and beneﬁts strategy of the members of the Executive Management; review the performance of the Executive Management vs. the adopted objectives and recruitment policies, career planning and management development plans; and prepare matters related to other material employment issues in respect of the Executive Management. The Remuneration Committee meets as often as deemed necessary. In 2022 the committee held six meetings. The members of the Remuneration Committee are elected by and amongst the members of the Board of Directors for a term of up to two years and shall be independent of the Company’s Executive Management. The current members of the Remuneration Committee are: • Anders Tullgren (Chair), from 6 January 2022 • Sveinung Hole, Chair up to 6 January 2022 • Debra Barker Sally Bennett served as Remuneration Committee member up to 6 January 2022. 40 Annual Report & Accounts 2022 OVERVIEW 01–03 STRATEGIC REPORT 04–22 FINANCIAL STATEMENTS 50-81 CORPORATE GOVERNANCE 23-49 Annual Report & Accounts 2022 10. Risk Management and Internal Control The Board of Directors of BerGenBio are responsible for ensuring that the Company has sound and appropriate risk management and internal control systems in accordance with the regulations that apply to its business activities. The Company has implemented a comprehensive set of relevant corporate manuals and procedures, which provide detailed descriptions of procedures covering all aspects of managing its operations, including the development of clinical data and ﬁnancial performance. The procedures and manuals are continuously revised to reﬂect best practice derived from experience or adopted through regulations. The Board of Directors receives reports from the management on developments and results related to strategy, ﬁnance, KPIs, risk management, clinical studies, challenges and plans for the coming periods. In addition, quarterly and annual reports are prepared in accordance with the listing requirements and recommendations of Oslo Børs, and they are reviewed by the Audit Committee prior to the Board’s approval and subsequent publication. BerGenBio prepares its ﬁnancial accounts in accordance with the international accounting standard IFRS, which aims to provide a true and fair overview of the Company’s assets, ﬁnancial obligations, ﬁnancial position and operating proﬁt. For information on the Company’s ﬁnancial risk and risk management, reference is made to the Board of Directors’ report and Note 20 in the 2022 annual report. 11. Remuneration of the Board of Directors The remuneration of the Board of Directors is determined by the shareholders at the Annual General Meeting of the Company based on the proposal from the Nomination Committee. Guidelines are set out in the Remuneration policy approved by the AGM 19 March 2021. The level of the remuneration is based on remuneration of Board members for comparable companies and reﬂects the Board of Directors’responsibility, expertise, the complexity of the Company, as well as time spent and the level of activity in both the Board of Directors and any Board Committees. The remuneration of Board members is not linked to the Company’s performance and does not contain option elements. Board members who participate in the Audit Committee, Remuneration Committee or Clinical Committee receive separate compensation for this. Detailed information on the remuneration of the Board of Directors can be found in the Remuneration Report for 2022. Members of the Board of Directors, or companies with which they are associated, should not engage in speciﬁc assignments for the Company in addition to their appointment as members of the Board, but if they do, this shall be fully disclosed to the Board of Directors. The remuneration for such additional duties will be approved by the Board of Directors and speciﬁcally identiﬁed in the annual report. Corporate Governance Report CONTINUED 12. Remuneration of Executive Management Team The Remuneration Policy sets out the main principles for remuneration of BerGenBio’s Executive Management Team, and was approved by the AGM on 19 March 2021. The overall objectives of the Remuneration Policy are to: • Support the purpose and sustainability of the Company • Align the remuneration components with the interests of shareholders and other stakeholders relevant to the above • Support delivery of BerGenBio’s strategic priorities • Attract, motivate, and retain members of the Board of Directors and the Executive Management Team of the appropriate caliber given the size and complexity of the business; and • Reward members of the Executive Management Team in line with corporate and individual performance Detailed information on the remuneration of the Executive Management Team can be found in the Remuneration Report for 2022. 41 Annual Report & Accounts 2022 OVERVIEW 01–03 STRATEGIC REPORT 04–22 FINANCIAL STATEMENTS 50-81 CORPORATE GOVERNANCE 23-49 Annual Report & Accounts 2022 13. Information and Communications BerGenBio complies with Oslo Børs’ Code of Practice for IR. The Board of Directors has adopted an investor relations (IR) policy, to clarify roles and responsibilities related to ﬁnancial reporting, regulate contact with shareholders and the investor market and ensure that the principles of openness and equal treatment of market participants are followed. The IR policy is available from the Company’s website. In addition, the Board has adopted separate instructions for ﬁnancial reporting and the handling of inside information in line with the EU’s Market Abuse Regulation and the Norwegian Securities Trading Act. The Company will each year publish a ﬁnancial calendar, providing an overview of the dates for major events such as its Annual General Meeting and publication of interim ﬁnancial reports and annual report. Interim reports are published on a quarterly basis, in line with Oslo Børs’ recommendations. The Company will give open presentations in connection with its interim ﬁnancial reporting. All ﬁnancial and other IR information is provided in English. All information is distributed to the Company’s shareholders by postings on the Company’s website at the same time as it is sent to Oslo Børs through its information system www.newsweb.no. Corporate Governance Report CONTINUED 14. Take-Overs There are no defense mechanisms against take-over bids in the Company’s articles of association, nor have other measures been implemented to speciﬁcally hinder acquisitions of shares in the Company. In the event of a take-over process, the Board of Directors and the Executive Management will ensure that the Company’s shareholders are treated equally and that the Company’s activities are not unnecessarily interrupted. The Board of Directors has a special responsibility in ensuring that the shareholders have sufﬁcient information and time to assess the offer. In addition to complying with relevant legislation and regulations, the Board of Directors will seek to comply with the recommendations in the Code, including a valuation from an independent third party. On this basis, the Board of Directors will make a recommendation as to whether the shareholders should accept the bid. The Board of Directors has not established any other written guidelines for procedures to be followed in the event of a take-over bid, as such situations normally are characterized by speciﬁc and one-off situations which makes guidelines challenging to prepare. 15. Auditor The Company’s auditor is EY and is regarded as independent in relation to BerGenBio ASA. The Audit Committee and Board of Directors receives an annual conﬁrmation from the auditor that the requirements regarding independence and objectivity have been satisﬁed. The auditor prepares an annual plan for carrying out the auditing work, which is made known to the Audit Committee. The Audit Committee have annual meetings with the auditor to discuss the annual accounts, accounting principles, assessment of any important accounting estimates and matters of importance on which there has been disagreement between the auditor and the Company’s Executive Management. At least once per year, the auditor will present to the Audit Committee a review of the Company’s internal control procedures, including identiﬁcation of weaknesses and proposals for improvement. These meetings will also be held with an opportunity for a review with the auditor, without the Company’s day-to-day management being present. No separate guidelines have been prepared for use of the auditor for services other than auditing, but from 2021 pre- approval is required from the Audit Committee for non-audit services. The Board of Directors will disclose the remuneration paid to the auditor, to the shareholders, at the Annual General Meeting, including a break-down of the fee paid for audit work and fees paid for other speciﬁc assignments, if any. The Audit Committee has reviewed the work of the auditor and recommend to the General Meeting to retain EY as the Company’s auditor. The auditor will participate at the Annual General Meeting. 42 Annual Report & Accounts 2022 OVERVIEW 01–03 STRATEGIC REPORT 04–22 FINANCIAL STATEMENTS 50-81 CORPORATE GOVERNANCE 23-49 Annual Report & Accounts 2022 Board of Directors’ Report Strategy BerGenBio ASA (“the Company”) and its subsidiary (together “the Group”) is a biopharmaceutical Company developing novel medicines for patients with severe unmet medical needs, with a focus on cancer and severe respiratory infections. The Company is a world-leader in understanding the potential applications of AXL inhibition in mediating aggressive diseases. The Company has two key clinical assets targeting the receptor tyrosine kinase AXL. The Company’s lead asset bemcentinib is currently in development in a Ph1b/2a study in 1L NSCLC and in an Investigator Led Ph2b trial in hospitalized COVID-19 patients. In NSCLC, the Company is investigating bemcentinib as a potential combination treatment for STK11 mutated advanced/ metastatic NSCLC and received FDA Fast Track designation in November 2021. In early 2023, the Company announced positive topline Ph2 data (BGBC008) studying bemcentinib in combination with the immune checkpoint pembrolizumab in 2L NSCLC. Further encouraging data from the Investigator Led Ph1b study (BGBIL005) of bemcentinib in combination with the chemotherapy docetaxel was also reported. The Company believes both data sets provide encouraging clinical and scientiﬁc rationale which substantiate our near-term strategy of conduct of 1L STK11m NSCLC Ph1b/2a (BGB016) study of bemcentinib in combination with imune checkpoint inhibition and doublet chemotherapy. In severe respiratory infections, our initial focus has been the study of bemcentinib in hospitalized, COVID-19 patients. In April 2022, BerGenBio announced that the ACCORD2 Ph2 trial in hospitalized COVID-19 patients met its primary efﬁcacy endpoint. As a part of a comprehensive strategy to develop bemcentinib in multiple severe respiratory infections, bemcentinib has been entered into the Ph2B EU-SolidAct trial, a pan-European research project and will share updates as they emerge. In addition, a broad set of investigator-initiated trials are exploring the wider potential of bemcentinib in disease indications with strong scientiﬁc rationale, Key Opinion Leaders (KOL) support, and high unmet medical need with a view to developing future pipeline opportunities. The Company has also announced that as a part of its focused strategy, it will be seeking a partner to advance development of tilvestamab (formerly BGB149), a ﬁrst-in-class anti-AXL antibody. BerGenBio’s focused near-term strategy includes the following key initiatives: • Aggressively pursue the NSCLC opportunity for patients harboring STK11 mutations through initiation of a global, open label Ph1b/2a trial • Pursue the potential within severe respiratory infections, initially through the EU-SolidAct sponsored platform to conduct a conﬁrmatory randomized placebo-controlled trial • Explore the potential to out-license tilvestamab • Secure additional pipeline opportunities for the Company’s AXL inhibitors in oncology and respiratory diseases Operational review During 2022 the Company maintained its clinical research focus with its lead drug candidate bemcentinib, a novel, once-a-day, orally-administered, highly-selective inhibitor of AXL. Data generated through clinical trials so far have been encouraging and the Company is committed to continuing the progression of bemcentinib, alone or in partnership, into late-stage clinical trials and through to regulatory approval where data warrants. The FDA has granted Fast Track Designation for bemcentinib for the treatment of bemcentinib in combination with an anti- PD-(L)1 agent as a treatment for patients with STK11 mutated advanced/metastatic NSCLC. The Company’s focus going forward is on the clinical development of bemcentinib within NSCLC and acute respiratory diseases. Clinical Trial Progress: NSCLC In October 2022, the Company announced it had initiated a Ph1b/2a clinical trial of bemcentinib in combination with standard of care therapy in 1L STK11m NSCLC patients. In 2022, BerGenBio completed its Ph2 clinical trial (BGBC008) assessing bemcentinib in combination with pembrolizumab in 2L patients with NSCLC, announcing positive topline data in early 2023. Clinical Trial Progress: COVID-19 In response to the global pandemic that emerged in early 2020, BerGenBio began to explore bemcentinib as a potential COVID-19 treatment, based on the Company’s understanding of its reported potent anti-viral activity in preclinical models against several enveloped viruses, including Ebola and Zika. Building on positive data generated in two Ph2 studies of hospitalized COVID-19 patients bemcentinib was accepted into the EU sponsored EU-SolidAct Ph2b adaptive, multi- center trial. In February 2023, the Company announced that the EUSolidAct and BerGenBio are monitoring the evolution of the COVID-19 pandemic and will provide additional updates in H1 2023. 43 Annual Report & Accounts 2022 OVERVIEW 01–03 STRATEGIC REPORT 04–22 FINANCIAL STATEMENTS 50-81 CORPORATE GOVERNANCE 23-49 Annual Report & Accounts 2022 Board of Directors’ Report CONTINUED Progress: tilvestamab (BGB149) Tilvestamab (BGB149) is the ﬁrst functional blocking anti-AXL monoclonal antibody to enter clinical development and is BerGenBio’s second clinical stage drug development program targeting AXL. The mechanism of action of tilvestamab differs from that of bemcentinib by blocking the binding AXL’s ligand Gas6, preventing receptor activation and resulting in receptor internalization. Based on preclinical data generated by the Company and by academic groups, the Company believes tilvestamab has potential to treat ﬁbrotic diseases and certain gynecological cancers. As a result of BerGenBio’s focused development strategy, the Company has initiated out-licensing activities for this attractive product candidate. Tilvestamab has been studied in two PhI studies, in healthy volunteers and more recent in an international PhI ﬁrst-in-patient trial investigating tilvestamab (BGB149) to study safety, tolerability and determine a recommended Ph2 dose (RP2D) for use in subsequent clinical trials. Both studies show excellent tolerability of tilvestamab positioning the program to enter into more advanced clinical trials by a partner. Progress: Companion Diagnostics Program The availability of a predictive biomarker test signiﬁcantly enhances the chance of regulatory success and later reimbursement, in general, and particularly for high-value oncology drugs. The development of a Companion Diagnostics test is a strategic priority for the Company. In certain indications, such as STK11m NSCLC, the availability of a clinically validated Companion Diagnostic assay will be critical to market adoption. Extensive activities have been conducted to evaluate the most predictive biomarkers for bemcentinib development with encouraging results. Other progress The Company sponsored trial (BGBC003) of bemcentinib in AML and MDS has been completed in 2022 and data is expected for release in H1 2023. The Company supports its own clinical development program with a broad portfolio of investigator sponsored clinical trials of high scientiﬁc value, commercial interest and KOL endorsement. This is considered a cost-effective strategy to explore opportunities for potential future label extension for bemcentinib. Similarly, pre-clinical academic collaborations exploring AXL’s role in driving serious diseases continue to be an important part of BerGenBio’s strategy to expand the understanding of AXL biology and potential clinical applications of our selective AXL inhibitors. 44 Annual Report & Accounts 2022 OVERVIEW 01–03 STRATEGIC REPORT 04–22 FINANCIAL STATEMENTS 50-81 CORPORATE GOVERNANCE 23-49 Annual Report & Accounts 2022 Risks and uncertainties The Group operates in a highly competitive industry sector with many large players and may be subject to rapid and substantial technological change. The long-term impact of the COVID-19 pandemic remains unclear. Our ability to conduct clinical trials at the expected pace is a risk factor in the evolving pandemic. BerGenBio is currently in a development phase involving activities that entail exposure to various risks. BerGenBio’s lead product candidate bemcentinib is currently in Ph2 clinical trials. This is regarded as an early stage of development and the clinical studies may not prove to be successful. Timelines for completion of clinical studies are to some extent dependent on external factors outside the control of the Group, including resource capacity at clinical trial sites, competition for patients, etc. The nancial success of BerGenBio and/or its commercial partners requires obtaining marketing authorization and achieving an acceptable reimbursement price for its drugs. There can be no guarantee that the drugs will obtain the selling prices or reimbursement rates foreseen. BerGenBio has a liability insurance which covers Directors and Ofcers in the Company and subsidiaries. The insurance is limited to NOK 100,000,000 per claim and in total during the insurance period. Financial risks Interest rate risk The Group holds cash and cash equivalents and does not have any borrowings. The Group’s interest rate risk is therefore in the rate of return of its cash on hand. Bank deposits are exposed to market uctuations in interest rates, which affect the nancial income and the return on cash. Exchange rate risk The value of non-Norwegian currency denominated costs will be affected by changes in currency exchange rates or exchange control regulations. The Group undertakes various transactions in foreign currencies and is consequently exposed to uctuations in exchange rates. The exposure arises largely from the clinical trials and research expenses. The Group is mainly exposed to uctuations in pounds sterling (GBP), euro (EUR), and US dollar (USD). The Group are holding part of the bank deposit in GBP, EUR and USD depending on the need for such foreign exchange. The foreign currency exposure is also mostly linked to trade payables with short payment terms. The Group might consider changing its current risk management of foreign exchange rate if it deems it appropriate. Credit risk Credit risk is the risk of a counterparty’s default in a nancial asset, liability or customer contract, giving a nancial loss. TheGroup’s receivables are generally limited to receivables from public authorities by way of government grants. The creditrisk generated from nancial assets in the Group is limited since it is cash deposits. The Group places its cash inbank deposits in recognized nancial institutions to limit itscredit riskexposure. The Group has not suffered any loss on receivables during 2022 and the Group considers its credit risk as low. Funding and liquidity risk Liquidity is monitored by Group management. The Group works continuously to ensure nancial exibility in the short and long term to achieve its strategic and operational objectives. Funding of ongoing operations is and will be for some time depending on external sources, mainly equity contributions. Signicant changes to nancial market conditions, may affect the climate for investor investments and consequently the Company ability to secure adequate funding to pursue its strategy. In April 2023 the Company announced an equity funding, a partly guaranteed and underwritten right issue, with a minimum proceed of NOK 175 million. The equity issue is subject to AGM approval and publication of an approved prospectus. The cash position in combination with expected proceeds from the equity funding will fund the planned activities to end of Q2 2024 on a going concern basis. Board of Directors’ Report CONTINUED 45 Annual Report & Accounts 2022 OVERVIEW 01–03 STRATEGIC REPORT 04–22 FINANCIAL STATEMENTS 50-81 CORPORATE GOVERNANCE 23-49 Annual Report & Accounts 2022 Non-ﬁnancial risks Technology risk The Group’s lead product candidate, bemcentinib (BGB324), is currently in Ph2 clinical trials. This is regarded as an early stage of development and the Group’s clinical studies may not prove to be successful. Competitive technology The Group operates in a highly competitive industry sector with many large players and is subject to rapid and substantial technological change. The Group is currently in a development phase involving activities that entail exposure to various risks. The Group’s lead product candidate bemcentinib is currently in Ph2 clinical trials. This is regarded as an early stage of development and the clinical studies may not prove to be successful. Timelines for completion of clinical studies are to some extent dependent on external factors outside the control of the Group, including resource capacity at clinical trial sites, competition for patients, etc. Patent and Intellectual Property IP risks The success of the Company will highly depend on the Company’s ability to obtain and maintain patent protection for its products, methods, processes and other technologies, to preserve trade secrets, to prevent third parties from infringing proprietary rights of the Company and to operate without infringing the proprietary rights of third parties. To date, the Company holds certain exclusive patent rights in major markets. The patent rights are limited in time. The Company cannot predict the range of protection any patents will afford against competitors and competing technologies, including whether third parties will ﬁnd ways to invalidate the patents, obtain patents claiming aspects similar to those covered by the Company’s patents and patent applications, and whether the Company may be subject to litigation proceedings. Regulatory and commercial risks The ﬁnancial success of the Group requires obtaining marketing authorization and achieving an acceptable reimbursement price for its drugs. There can be no guarantee that the Group’s drugs will obtain the selling prices or reimbursement rates foreseen by the Group. The Group will need approvals from the FDA to market its products in the US, and from the European Medicines Agency (EMA) to market its products in Europe, as well as equivalent regulatory authorities in other worldwide jurisdictions to commercialize in those regions. The Group’s future earnings are likely to be largely dependent on the timely marketing authorization of bemcentinib for various indications. COVID-19 The long-term impact of the COVID-19 crisis remains unclear although no greater for BerGenBio than any other business in the sector. Our ability to conduct clinical trials at the expected pace is a risk factor in the evolving pandemic. Financial review (Figures in brackets = same period 2021 unless stated otherwise) Accounting policies The ﬁnancial statements of BerGenBio Group have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the EU on 31 December 2022. Figures are for the Group and for the Parent Company BerGenBio ASA labelled ASA on the next page. Board of Directors’ Report CONTINUED 46 Annual Report & Accounts 2022 OVERVIEW 01–03 STRATEGIC REPORT 04–22 FINANCIAL STATEMENTS 50-81 CORPORATE GOVERNANCE 23-49 Annual Report & Accounts 2022 Financial results Operating revenues Revenue for the full year 2022 amounted to NOK 0.4 million (NOK 0.8 million) for the Group and NOK 0.9 million (NOK 1.2 million) for ASA. Revenue in 2022 and 2021 is refund of patent costs from an out-licensed agreement with ADCT. Operating expenses Total operating expenses for 2022 for the Group amounted to NOK 306.0 million (NOK 315.2 million), and NOK 306.2 million (NOK 317.4 million) for ASA. Employee expenses were NOK 68.7 million (NOK 74.0 million) for the Group and NOK 22.4 million (NOK 32.3 million) for ASA. Payroll expenses decreased for the full year compared to 2022. This was mainly due to reduction in headcount in 2022, as part of organizational restructuring and focused strategy announced in May 2022, and cost related to CEO change in 2021 including severance payment to departing CEO. For the full-year 2022, other operating costs for the Group amounted to NOK 236.5 million (NOK 239.9 million), and NOK 282.9 million (NOK 283.8 million) for ASA. The decreased costs year on year reﬂects a combination of increased drug manufacturing activities in preparation for execution of new clinical trials and decreasing levels of clinical trials and translational activities. The change in other operating expenses are impacted by the fact that company had a signiﬁcant number of patients recruited on clinical trials in 2021 where some of these studies have completed recruitment and in 2022 have been in a data read-out phase. The Group has recognized government grants amounting to NOK 10.4 million (NOK 13.3 million) for the full-year 2022. Government grants are recognized as cost reduction in the proﬁt and loss. Payroll expenses have been reduced by NOK 5.1 million (NOK 6.4 million) and operating expenses by NOK 5.3 million (NOK 6.9 million) as a result of these government grants. ASA has recognized government grants for a total of NOK 6.6 million (NOK 8.6 million) for the full year 2022. Payroll expenses have been reduced by NOK 1.3 million (NOK 1.7 million) and operating expenses by NOK 5.3 million (NOK 6.9 million) as a result of these government grants. The operating loss for the Group in 2022 was NOK 305.6 million (NOK 314.5 million) and NOK 305.2 million (NOK 316.2 million) for ASA, reﬂecting reduced headcount, CEO change in 2021 and decreased clinical trial activities. Net ﬁnancial gain for the Group was NOK 3.5 million (gain NOK 5.1 million) and NOK 3.9 million (NOK 5.5 million) for ASA for the full-year 2022. Losses after tax for the Group were NOK 302.1 million (NOK 309.4 million) and NOK 301.4 million (NOK 310.7 million) for ASA for the full year 2022. Financial position Total assets as of 31 December 2022 for the Group decreased to NOK 166.7 million (NOK 450.2 million at year-end 2021) for the Group and to NOK 156.2 million (NOK 441.0 million at year-end 2021) for ASA, mainly due to the operational loss in the period. Total liabilities were NOK 78.2 million (NOK 65.8 million at year-end 2021) for the Group and NOK 67.0 million (NOK 57.1 million at year-end 2021) for ASA. Total equity as of 31 December 2022 was NOK 88.5 million (NOK 384.4 million at year-end 2021) for the Group and NOK 89.2 million (NOK 383.9 million at year-end 2021) for ASA, corresponding to an equity ratio of 53.1% (85.4%) for the Group and 57.1% (87.1%) for ASA. Cash ﬂow Net cash ﬂow from operating activities was negative by NOK 288.2 million (NOK 303.3 million) for the Group and negative by NOK 292 million (NOK 311.4 million) for ASA for the full-year 2022, mainly driven by the level of activity related to the clinical trials the Group is conducting, as well as milestone payments related to progress made. Net cash ﬂow received from investing activities during the full-year 2022 was NOK 3.2 million (NOK 3.1 million) for the Group and NOK 3.2 million (NOK 3.1 million) for ASA. Net cash ﬂow from ﬁnancing activities was NOK 2.9 million (NOK 16.0 million) for the Group and NOK 2.9 million (NOK 16.0 million) for ASA for the full-year 2022, representing the proceeds from share issue from the share option program. Cash and cash equivalents decreased to NOK 150.8 million (NOK 436.6 million) for the Group and NOK 138.3 million (NOK 428.1 million) for ASA. Board of Directors’ Report CONTINUED 47 Annual Report & Accounts 2022 OVERVIEW 01–03 STRATEGIC REPORT 04–22 FINANCIAL STATEMENTS 50-81 CORPORATE GOVERNANCE 23-49 Annual Report & Accounts 2022 Research and development While the research and development strategy is designed in-house in BerGenBio, the Group leverages its network of external contract research organizations (CROs) in order to execute its development strategy. BerGenBio also collaborates with academic institutions to extend the research in areas of interest of the Group. The Group has employed experienced personnel that are capable of directing work that is performed by the CROs. This approach to product development allows the Group to quickly change research directions and efforts when needed and to quickly bring in new technologies and expertise when necessary. Uncertainties related to the regulatory approval process and results from ongoing clinical trials generally indicate that the criteria for capitalization of R&D costs are not met until market authorization is obtained from relevant regulatory authorities. The Group has currently no development expenditure that qualiﬁes for recognition as an asset under IAS 38. Going concern The Board stated that the annual accounts represent a true and fair view of the Group’s ﬁnancial position at the turn of the year. According to the Norwegian Accounting Act section 3-3 (a), the Board of Directors conﬁrmed that the ﬁnancial statements have been prepared under the assumption of going concern. Environmental, social and governance (ESG) In order to have a real impact, we worked to strengthen our sustainability management. The aim was to identify ESG topics in BerGenBio’s value chain that are material for us and our stakeholders. Our key stakeholders include our patients and their families, our employees, investors, regulators, suppliers and other business partners, such as research organizations and academic institutions. The work involved mapping of our value chain and a review of industry standards, other organizations and peers. The topics which are of most strategic importance to us are; innovation, clinical trial conduct, business ethics, economic performance and patient health and safety. In connection with the materiality analysis, we also analyzed the United Nation’s Sustainability Development Goals (SDGs) to identify those we have the largest impact upon. We directly contribute to SDG 3 – health and wellbeing. In addition, we also contribute to SDG 8 – decent work and economic growth for our employees and society, SDG 9 – industry, innovation and infrastructure – through our research and development and ﬁnally, SDG 17 – partnerships for the goals – through our extensive cooperation with research organizations and academic institutions. Given the current stage of development of BerGenBio, we do not have signiﬁcant negative impact on the goals, but this may change when we move into production and will be reassessed. All topics are addressed in the ESG section of this annual report and we refer to the World Economic Forum disclosure reference index in the appendix, for ease of location, along with an overview of performance data. The reporting in this section addresses BerGenBio’s requirements under section 3-3 a and c of the Norwegian Accounting Act. The ESG analysis provided a basis for determining BerGenBio’s ambitions and KPIs and alignment with our strategy. We also determined metrics to monitor our performance for our material ESG topics. Moreover, we strengthened our management structures by revising our Corporate Social Responsibility policy and augmenting it to our new Code of Conduct in addition to strengthening our responsible supply chain management. Share information As of 31 December 2022, there were 88,660,532 ordinary shares outstanding, up from 88,455,255 shares at year end 2021. The Company has one class of shares, and all shares carry equal voting rights. The Company had more than 11,000 shareholders as of 31 December 2022. The results for BerGenBio ASA for 2022 show a loss of tNOK 301,375. The Board proposes that the loss should be covered by share premium. Board of Directors’ Report CONTINUED 48 Annual Report & Accounts 2022 OVERVIEW 01–03 STRATEGIC REPORT 04–22 FINANCIAL STATEMENTS 50-81 CORPORATE GOVERNANCE 23-49 Annual Report & Accounts 2022 Outlook BerGenBio’s broad clinical development program with bemcentinib, pipeline of AXL inhibitors and nancial position together, provide a strong foundation to create and deliver signicant value for its shareholders. The Board considers that the results emerging from on-going development programs provide support for AXL inhibition as an attractive approach for cancer therapy and respiratory diseases. Further clinical data will be reported at future medical congresses and as appropriate by the Company. We continue to develop our organization with skilled and experienced personal to support our strategies. The cash position in combination with expected proceeds from the equity funding will fund the planned activities to end of Q2 2024 on a going concern basis. In retaining global rights to bemcentinib, BerGenBio maintains complete strategic exibility for its future development and commercialization. It is anticipated that the high novelty of bemcentinib plus its promising therapeutic prole, particularly in combination with existing therapies, could make it and future pipeline candidates attractive targets for partnering. A go-to market strategy may also be considered in selected indications in discrete territories, where greater value for shareholders could be created. The Board believes the potential of our two rst-in-class AXL inhibitors are relevant therapeutic modalities in several aggressive diseases. However the recent and ongoing geopolitical situation and associated impacts on nancial market conditions requires a highly focused development strategy. The Board of Directors, BerGenBio ASA Bergen, 28 April 2023 Conﬁrmation from the Board of Directors and CEO We conrm that, to the best of our knowledge, the nancial statements for the period from 1 January to 31 December 2022 have been prepared in accordance with IFRS as adopted by EU and the Norwegian Accounting Act and give a true and fair view of the Group and the Company’s consolidated assets, liabilities, nancial position and results of operations, and that the Report of the Board of Directors provides a true and fair view of the development and performance of the business and the position of the Group and the Company together with a description of the key risks and uncertainty factors that the Company is facing. The Board of Directors, BerGenBio ASA Bergen, 28 April 2023 Anders Tullgren Chairman Anders Tullgren Chairman Dr. Sally Bennett Non-Executive Director Dr. Sally Bennett Non-Executive Director Sveinung Hole Non-Executive Director Sveinung Hole Non-Executive Director Dr. François Thomas Non-Executive Director Dr. François Thomas Non-Executive Director Dr. Debra Barker Non-Executive Director Dr. Debra Barker Non-Executive Director Martin Olin CEO Martin Olin CEO Board of Directors’ Report CONTINUED 49 Annual Report & Accounts 2022 OVERVIEW 01–03 STRATEGIC REPORT 04–22 FINANCIAL STATEMENTS 50-81 CORPORATE GOVERNANCE 23-49 Annual Report & Accounts 2022 Income Statement and Other Comprehensive Income 1 January – 31 December (NOK 1000) Parent 2021 Parent 2022 Note Group 2022 Group 2021 1,232 980 Revenue 4 389 774 28,206 19,895 Payroll and other related employee cost 5, 7, 10 66,143 69,929 4,116) 2,546 Employee share option cost 5, 6 2,546 4,116 1,312 883 Depreciation 8 883 1,312 283,786 282,887 Other operating expenses 7, 9, 13, 22 236,451 239,880 317,421 306,211 Total operating expenses 306,024 315,237 (316,189) (305,231) Operating proﬁt (loss) (305,635) (314,464) 14,934 14,926 Finance income 11 15,027 15,993 9,403 11,071 Finance expense 9,11 11,514 10,894 5,531 3,856 Financial items, net 3,513 5,100 (310,657) (301,375) Proﬁt (loss) before tax ( 302,122) (309,364) 0 0 Income tax expense 12 0 0 (310,657) (301,375) Proﬁt (loss) after tax (302,122 ) (309,364) Other comprehensive income (loss) Items which may be reclassiﬁed over proﬁt and loss 0 0 Exchange differences on translation of foreign operations (484) (112) (310,657) (301,375) Total comprehensive income for the year (302,606) (309,476) Earnings per share: (3.53) (3.40) – Basic and diluted per share 14 (3.41) (3.52) OVERVIEW 01-03 STRATEGIC REPORT 04-22 CORPORATE GOVERNANCE 23-49 FINANCIAL STATEMENTS 50-81 50 Annual Report & Accounts 2022 Statement of Financial Position 31 December (NOK 1000) Parent 2021 Parent 2022 Note Group 2022 Group 2021 ASSETS Non-current assets 1,191 43 Property, plant and equipment and right-of-use assets 8 43 1,191 1,191 43 Total non-current assets 43 1,191 Current assets 11,711 17,905 Other current assets 7, 15, 22 15,860 12,398 428,093 138,288 Cash and cash equivalents 16, 20 150,803 436,646 439,804 156,192 Total current assets 166,663 449,045 440,995 156,235 TOTAL ASSETS 166,706 450,236 EQUITY AND LIABILITIES Equity Paid in capital 8,846 8,866 Share capital 17 8,866 8,846 334,679 36,495 Share premium 17 35,780 335,195 40,386 43,852 Other paid in capital 6, 17 43,852 40,386 383,910 89,213 Total paid in capital 88,498 384,426 383,910 89,213 Total equity 88,498 384,426 Non-current liabilities 942 275 Long term debt 9, 20, 24 275 942 942 275 Total non-current liabilities 275 942 Current liabilities 25,455 27,156 Accounts payable 29,634 26,726 29,719 39,591 Other current liabilities 9, 18, 22 48,299 37,172 969 0 Provisions 19 0 969 56,143 66,747 Total current liabilities 77,933 64,868 57,085 67,022 Total liabilities 78,208 65,810 440,995 156,235 TOTAL EQUITY AND LIABILITIES 166,706 450,236 The Board of Directors, BerGenBio ASA Bergen, 28 April 2023 Anders Tullgren Chairman Dr. Sally Bennett Non-Executive Director Sveinung Hole Non-Executive Director Dr. François Thomas Non-Executive Director Dr. Debra Barker Non-Executive Director Martin Olin Chief Executive Ofﬁcer OVERVIEW 01-03 STRATEGIC REPORT 04-22 CORPORATE GOVERNANCE 23-49 FINANCIAL STATEMENTS 50-81 51 Annual Report & Accounts 2022 Group 2022 Note Share capital Share premium Other paid in capital Total equity Balance at 1 January 2022 8,846 335,195 40,386 384,426 Proﬁt (loss) after tax (302,122) (302,122) Other comprehensive income (loss) for the year, net of income tax (484) (484) Total comprehensive income (loss) for the year 0 (302,606) 0 (302,606) Recognition of share-based payments 5, 6 3,466 3,466 Issue of ordinary shares 17 21 3,198 3,218 Share issue costs 17 (7) (7) Transactions with owners 21 3,191 3,466 6,678 Balance at 31 December 2022 8,866 35,780 43,852 88,498 Group 2021 Note Share capital Share premium Other paid in capital Total equity Balance at 1 January 2021 8,726 628,231 33,272 670,229 Proﬁt (loss) after tax (309,364) (309,364) Other comprehensive income (loss) for the year, net of income tax (112) (112) Total comprehensive income (loss) for the year 0 (309,476) 0 (309,476) Recognition of share-based payments 5, 6 7,113 7,113 Issue of ordinary shares 17 120 16,510 16,629 Share issue costs 17 (70) (70) Transactions with owners 120 16,440 7,113 23,673 Balance at 31 December 2021 8,846 335,195 40,386 384,426 Statement of Changes in Equity (NOK 1000) OVERVIEW 01-03 STRATEGIC REPORT 04-22 CORPORATE GOVERNANCE 23-49 FINANCIAL STATEMENTS 50-81 52 Annual Report & Accounts 2022 Parent 2022 Note Share capital Share premium Other paid in capital Total equity Balance at 1 January 2022 8,846 334,679 40,386 383,910 Proﬁt (loss) for the year (301,375) (301,375) Other comprehensive income (loss) for the year, net of income tax 0 0 Total comprehensive income (loss) for the year 0 (301,375) 0 (301,375) Recognition of share-based payments 5, 6 3,466 3,466 Issue of ordinary shares 17 21 3,198 3,218 Share issue costs 17 (7) (7) Transactions with owners 21 3,191 3,466 6,678 Balance at 31 December 2022 8,866 36,495 43,852 89,213 Parent 2021 Note Share capital Share premium Other paid in capital Total equity Balance at 1 January 2021 8,726 628,896 33,273 670,894 Proﬁt (loss) for the year (310,657) (310,657) Other comprehensive income (loss) for the year, net of income tax 0 0 Total comprehensive income (loss) for the year 0 (310,657) 0 (310,657) Recognition of share-based payments 5, 6 7,113 7,113 Issue of ordinary shares 17 120 16,510 16,629 Share issue costs 17 (70) (70) Transactions with owners 120 16,440 7,113 23,673 Balance at 31 December 2021 8,846 334,679 40,386 383,910 Statement of Changes in Equity continued (NOK 1000) OVERVIEW 01-03 STRATEGIC REPORT 04-22 CORPORATE GOVERNANCE 23-49 FINANCIAL STATEMENTS 50-81 53 Annual Report & Accounts 2022 Statement of Cash Flows 1 January – 31 December (NOK 1000) Parent 2021 Parent 2022 Note Group 2022 Group 2021 Cash ﬂow from operating activities (310,657) (301,375) Proﬁt (loss) before tax (302,122) (309,364) Adjustments for: 1,312 883 Depreciation of property, plant and equipment 8 883 1,312 7,113 3,466 Share-based payment expense 5 3,466 7,113 (5,039) (969) Movement in provisions 10, 19 (969) (5,039) 779 3,835 Currency -gains/+loss not related to operating activities 3,280 667 (3,130) (2,857) Net interest received (2,949) (3,130) Working capital adjustments: (1,726) (6,194) Decrease in trade and other receivables and prepayments (3,462) 1,830 (67) 11,180 Increase in trade and other payables 13,641 3,270 (311,415) (292,029) Net cash ﬂow from operating activities (288,231) (303,340) Cash ﬂows from investing activities 3,130 2,857 Interest received 2,949 3,130 299 Sale/(Purchase) of property, plant and equipment 8 299 3,130 3,155 Net cash ﬂow used in investing activities 3,248 3,130 Cash ﬂows from ﬁnancing activities 16,629 3,218 Proceeds from issue of share capital 17 3,218 16,629 (70) (7) Share issue cost (7) (70) (565) (307) Cash payments for the principal portion of the lease liability 9 (307) (565) 15,995 2,904 Net cash ﬂow from ﬁnancing activities 2,904 15,995 (779) (3,835) Effects of exchange rate changes on cash and cash equivalents (3,764) (779) (292,290) (285,970) Net increase/(decrease) in cash and cash equivalents (282,080) (284,216) 721,161 428,093 Cash and cash equivalents at beginning of period 16 436,646 721,641 428,093 138,288 Cash and cash equivalents at end of period 16 150,803 436,646 OVERVIEW 01-03 STRATEGIC REPORT 04-22 CORPORATE GOVERNANCE 23-49 FINANCIAL STATEMENTS 50-81 54 Annual Report & Accounts 2022 Notes to the Financial Statements Note 1 – Corporate information BerGenBio ASA (“the Company” or "Parent") as the Parent Company and its subsidiary (together “the Group”) is a clinical-stage biopharmaceutical company developing innovative drugs for aggressive diseases, including drug resistant and metastatic cancers and respiratory disease. BerGenBio’s lead product, bemcentinib (BGB324), is a selective, potent and orally bio-available small molecule AXL inhibitor and is curently being developed in STK11 mutated NSCLC and severe respiratory infections including COVID-19. It is the most advanced selective AXL inhibitor in clinical development. BerGenBio ASA is a public limited liability company incorporated and domiciled in Norway. The address of the registered ofﬁce is Møllendalsbakken 9, 5009 Bergen, Norway. BerGenBio retains strategic ﬂexibility for the further development and commercialisation of its product candidates: it is anticipated that the high novelty of bemcentinib plus its promising therapeutic proﬁle could make it (and later other pipeline candidates) attractive targets for strategic partnering; a “Go-to market” strategy will also be considered in select indications in discrete territories. The consolidated ﬁnancial statements and the ﬁnancial statement for the Company cover the year ending 31 December 2022 and were approved for issue by the Board of Directors on 28 April 2023. Note 2 – Basis for preparation and signiﬁcant accounting policies The principal accounting policies applied in the preparation of these ﬁnancial statements are set out below. These policies have consistently been applied in all periods presented. Amounts are in Norwegian kroner (NOK) and all values are presented in 1,000 NOK, except when otherwise indicated. The presenting currency of the Group and the Company is NOK. Basis for preparation The consolidated ﬁnancial statements for the Group and the Company have been prepared in accordance with IFRS as adopted by the EU. The consolidated ﬁnancial statements and the Company ﬁnancial statements have been prepared on a historical cost basis, except money market fund which is recognized at fair value through proﬁt and loss. Basis for consolidation The consolidated ﬁnancial statements comprise of the ﬁnancial statements of the Company and its subsidiary as at 31 December 2022. The subsidiary is BerGenBio Limited, located in Oxford in the United Kingdom and is 100% owned and controlled by the Parent Company BerGenBio ASA. BerGenBio Limited was incorporated 10 January 2017 with a share capital of NOK 1,044. Going concern The Group works continuously to ensure ﬁnancial ﬂexibility in the short and long term to achieve its strategic and operational objectives. Capital markets are used as a source of liquidity when this is appropriate and when conditions in these markets are acceptable. In 2020 funding of total NOK 740 million was raised, and thus the Board of Directors has reasonable expectation that the Group will maintain adequate resources to continue in operational existence for the foreseeable future. In October 2022 the Company secured a shareholder loan facility of up to NOK 100 million from Meteva AS. The loan is available from Q2 2023 and up to the earlier of 31 March 2024 and completion of an equity issue. In April 2023 the Company announced an equity funding, a partly guaranteed and underwritten right issue, with a minimum proceed of NOK 175 million. The equity issue is subject to AGM approval and publication of an approved prospectus. The cash position in combination with expected proceeds from the equity funding will fund the planned activities to end of Q2 2024 on a going concern basis. The ﬁnancial statements are prepared under the going concern assumption. Summary of signiﬁcant accounting policies The new and amended standards and interpretations from IFRS that were adopted by the EU with effect from 2022 did not have any signiﬁcant impact on the reporting for 2021 and 2022. The Group has not early adopted any standard, interpretation or amendment that has been issued but is not yet effective. Revenue recognition Revenue from contracts with customers is recognized when control of the goods or services are transferred to the customer at an amount that reﬂects the consideration to which the Group and the Company expects to be entitled in exchange for those goods or services. The Group and the Company has generally concluded that it is the principal in its revenue arrangements, because it typically controls the goods or services before transferring them to the customer. The Group’s and the Company’s products are still in the research and development phase, and have limited revenue from sales of products yet. OVERVIEW 01–03 STRATEGIC REPORT 04-22 CORPORATE GOVERNANCE 23-49 FINANCIAL STATEMENTS 50-81 55 Annual Report & Accounts 2022 Notes to the Financial Statements continued Note 2 – Basis for preparation and signiﬁcant accounting policies continued The Group (the Company) has entered into an out licence agreement where development, regulatory and sales-based milestones trigger revenue payment to the Group (the Company). Revenue from out licence agreements are recognized in the period when the milestone events occured. Government grants Government grants are recognized when there is reasonable assurance that the grant will be received and all attached conditions will be complied with. The grant is recognized in the income statement in the same period as the related costs, and presented net. Government grants are recognized at the value of the contribution at the transaction date. Government grants are normally related to either reimbursements of employee costs and classiﬁed as a reduction of payroll and related expenses, or related to other operating activities and thus classiﬁed as a reduction of other operating expenses. Research and development costs Research costs are expensed as incurred. Internal development costs related to the Group’s development of products are recognized in the income statement in the year incurred unless it meets the asset recognition criteria of IAS 38 “Intangible Assets”. An internally generated asset arising from the development phase of an R&D project is recognized as an intangible asset if the Group can demonstrate: • Its ability to use or sell the intangible assets • The technical feasibility of completing the intangible asset so that the asset will be available for use or sale • Its intention to complete and its ability and intention to use or sell the asset • How the asset will generate future economic beneﬁts • The availability of adequate technical, ﬁnancial and other resources to complete the development and use of sell the asset • The ability to measure reliably the expenditure during development Uncertainties related to the regulatory approval process and results from on-going clinical trials, generally indicate that the criteria are not met until the time when marketing authorisation is obtained from relevant regulatory authorities. The Group has currently no development expenditure that qualiﬁes for recognition under IAS 38. Property, plant and equipment Property, plant and equipment are stated at cost, net of accumulated depreciation and accumulated impairment losses, if any. Acquisition cost includes expenditures that are directly attributable to the acquisition of the individual item. Property, plant and equipment are depreciated on a straight-line basis over the expected useful life of the asset. If signiﬁcant individual parts of the assets have different useful lives, they are recognized and depreciated separately. Depreciation commences when the assets are ready for their intended use. An item of property, plant and equipment and any signiﬁcant part initially recognized is derecognized upon disposal or when no future economic beneﬁts are expected from its use or disposal. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the income statement when the asset is derecognized. The residual values, useful lives and methods of depreciation of the property, plant and equipment are reviewed at each ﬁnancial year and adjusted prospectively, if appropriate. Investment in subsidiaries Subsidiaries are consolidated in the Group Financial Statement. In the Company Financial Statement subsidiaries are measured at cost. Signiﬁcant accounting policies Identifying a lease At the inception of a contract, The Group assesses whether the contract is, or contains, a lease. A contract is, or contains, a lease, if the contract conveys the right to control the use of an identiﬁed asset for a period of time in exchange for consideration. The Group (the Company) as a lessee Separating components in the lease contract For contracts that constitute, or contain a lease, the Group (the Company) separates lease components if it beneﬁts from the use of each underlying asset either on its own or together with other resources that are readily available, and the underlying asset is neither highly dependent on, nor highly interrelated with, the other underlying assets in the contract. The Group (the Company) then accounts for each lease component within the contract as a lease separately from non-lease components of the contract. Recognition of leases and exemptions At the lease commencement date, the Group (the Company) recognizes a lease liability and corresponding right-of-use asset for all lease agreements in which it is the lessee, except for the following exemptions applied: • Short-term leases (deﬁned as 12 months or less) • Low value assets For these leases, the Group (the Company) recognizes the lease payments as other operating expenses in the statement of proﬁt or loss when they incurred. OVERVIEW 01–03 STRATEGIC REPORT 04-22 CORPORATE GOVERNANCE 23-49 FINANCIAL STATEMENTS 50-81 56 Annual Report & Accounts 2022 Note 2 – Basis for preparation and signiﬁcant accounting policies continued Lease liabilities The lease liability is recognized at the commencement date of the lease. The Group (the Company) measures the lease liability at the present value of the lease payments for the right to use the underlying asset during the lease term that are not paid at the commencement date. The lease term represents the non-cancellable period of the lease, together with periods covered by an option either to extend or to terminate the lease when the Group (the Company) is reasonably certain to exercise this option. The lease payments included in the measurement comprise of ﬁxed lease payments (including in-substance ﬁxed payments), less any lease incentives receivable. The lease liability is subsequently measured by increasing the carrying amount to reﬂect interest on the lease liability, reducing the carrying amount to reﬂect the lease payments made and remeasuring the carrying amount to reﬂect any reassessment or lease modiﬁcations. The Group (the Company) does not include variable lease payments in the lease liability. Instead, the Group (the Company) recognises these variable lease expenses in proﬁt or loss when they occur. Right-of-use assets The Group measures the right-of use asset at cost, less any accumulated depreciation and impairment losses, adjusted for any remeasurement of lease liabilities. The cost of the right-of-use asset comprise: • The amount of the initial measurement of the lease liability recognized • Any lease payments made at or before the commencement date, less any incentives received • Any initial direct costs incurred by the Group. The Group (the Company) applies the depreciation requirements in IAS 16 Property, Plant and Equipment in depreciating the right-of-use asset, except that the right-of- use asset is depreciated from the commencement date to the earlier of the lease term and the remaining useful life of the right-of-use asset. The Group (the Company) applies IAS 36 Impairment of Assets to determine whether the right-of-use asset is impaired and to account for any impairment loss identiﬁed. Financial assets Initial recognition and measurement Financial assets are classiﬁed, at initial recognition, as subsequently measured at amortised cost, fair value through other comprehensive income (OCI), and fair value through proﬁt or loss. Financial assets are recognized initially at fair value plus, in the case of ﬁnancial assets not recorded at fair value through proﬁt or loss, transaction costs that are attributable to the acquisition of the ﬁnancial asset. Financial assets are derecognized when the rights to receive cash ﬂows from the assets have expired or the Group has transferred its rights to receive cash ﬂows from the assets. Financial assets at amortised cost This category is the most relevant to the Group. The Group measures ﬁnancial assets at amortised cost if both of the following conditions are met: • The ﬁnancial asset is held within a business model with the objective to hold ﬁnancial assets in order to collect contractual cash ﬂows; and • The contractual terms of the ﬁnancial asset give rise on speciﬁed dates to cash ﬂows that are solely payments of principal and interest on the principal amount outstanding. Financial assets at amortized cost are subsequently measured using the effective interest (EIR) method and are subject to impairment. Gains and losses are recognized in proﬁt or loss when the asset is derecognized, modiﬁed or impaired Financial assets at fair value through proﬁt or loss Financial assets at fair value through proﬁt or loss are carried in the statement of ﬁnancial position at fair value with net changes in fair value recognized in the statement of proﬁt or loss. The Group ﬁnancial assets at fair value through proﬁt or loss include money markets fund. Financial liabilities Initial recognition and measurement Financial liabilities are classiﬁed, at initial recognition, as ﬁnancial liabilities at fair value through proﬁt or loss. All ﬁnancial liabilities are recognized initially at fair value. The Group’s ﬁnancial liabilities include trade and other payables, and loans and borrowings. The Group does not have ﬁnancial liabilities at fair value through proﬁt and loss. Subsequent measurement For purposes of subsequent measurement, ﬁnancial liabilities are classiﬁed in two categories: - Financial liabilities at fair value through proﬁt and loss - Financial liabilities at amortized cost (loans and borrowings). Derecognition A ﬁnancial liability is derecognized when the obligation under the liability is discharged or cancelled or expires. OVERVIEW 01–03 STRATEGIC REPORT 04-22 CORPORATE GOVERNANCE 23-49 FINANCIAL STATEMENTS 50-81 Notes to the Financial Statements continued 57 Annual Report & Accounts 2022 Note 2 – Basis for preparation and signiﬁcant accounting policies continued Share-based payments The Group operates an equity-settled, share-based compensation plan, under which the Group receives services from employees and members of the Board as consideration for share-based payments (options). The cost of equity-settled transactions is determined by the fair value at the date when the grant is made using an. appropriate valuation model That cost is recognized, together with a corresponding increase in other paid in capital in equity, over the period in which the performance and/or service conditions are fulﬁlled in employee beneﬁts expense. The cumulative expense recognized for equity-settled transactions at each reporting date until the vesting date reﬂects the extent to which the vesting period has expired and the Group’s best estimate of the number of equity instruments that will ultimately vest. The statement of proﬁt or loss expense or credit for a period represents the movement in cumulative expense recognized at the beginning and end of that period and is recognized in employee beneﬁts expense. The fair value of the options granted is measured using the Black-Scholes model. Measurement inputs include share price on the measurement date, exercise price of the instrument, expected volatility, weighted average expected life of the instruments, expected dividends and the risk-free interest rate. When the options are exercised, the Group will issue new shares. The proceeds received net of any directly attributable transaction costs are recognized as share capital (nominal value) and share premium reserve. Taxes Current income tax Current income tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date in the country where the Group operates and generates taxable income. Deferred tax Deferred tax is provided using the liability method on temporary differences between the tax bases of assets and liabilities and their carrying amounts for ﬁnancial reporting purposes at the reporting date. Deferred tax liabilities are recognized for all taxable temporary differences, except: When the deferred tax liability arises from the initial recognition of goodwill or an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting proﬁt nor taxable proﬁt or loss. Deferred tax assets are recognized for all deductible temporary differences, the carry forward of unused tax credits and any unused tax losses. Deferred tax assets are recognized to the extent that it is probable that taxable proﬁt will be available against which the deductible temporary differences, and the carry forward of unused tax credits and unused tax losses can be utilized. The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufﬁcient taxable proﬁt will be available to allow all or part of the deferred tax asset to be utilized. Unrecognized deferred tax assets are re-assessed at each reporting date and are recognized to the extent that it has become probable that future taxable proﬁts will allow the deferred tax asset to be recovered. Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date. Deferred tax relating to items recognized outside proﬁt or loss is recognized outside proﬁt or loss. Deferred tax items are recognized in correlation to the underlying transaction either in OCI or directly in equity. Foreign currencies The Group’s ﬁnancial statements are presented in NOK, which is also the parent’s functional currency. For each entity within the Group, the Group has determined the functional currency based on the primary economic environment of which the entity operates. Items included in the ﬁnancial statements are measured using that functional currency based on the primary economic environment of which the entity operates. Items included in the ﬁnancial statements are measured using that functional currency. The functional currency for the Group’s entities are GBP and NOK. On consolidation, the assets and liabilities of foreign operations are translated into Norwegian Kroner at the rate of exchange prevailing at the reporting date and their statements of proﬁt or loss are translated at exchange rates prevailing at the dates of the transactions. The exchange differences arising on translation for consolidation are recognized in OCI. For consolidation purpose the following exchange rates have been used: 31.12.2022 31.12.2021 NOK/GBP 11,85 11,89 Proﬁt and loss from BerGenBio Limted has been converted to NOK on a transaction by transaction exchange rate. OVERVIEW 01–03 STRATEGIC REPORT 04-22 CORPORATE GOVERNANCE 23-49 FINANCIAL STATEMENTS 50-81 Notes to the Financial Statements continued 58 Annual Report & Accounts 2022 Notes to the Financial Statements continued Transactions and balances Transactions in foreign currencies are recorded at their respective functional currency spot rates at the date the transaction ﬁrst qualiﬁes for recognition. Monetary assets and liabilities denominated in foreign currencies are translated at the functional currency spot rates of exchange at the reporting date. Differences arising on settlement or translation of monetary items are recognized in proﬁt or loss as ﬁnancial items. Cash and short-term deposits Cash and short-term deposits in the statement of ﬁnancial position comprise cash at banks and on hand and short-term deposits with a maturity of three months or less, which are subject to an insigniﬁcant risk of changes in value. See note 3. For the purpose of the statement of cash ﬂows, cash and cash equivalents consist of cash and short-term deposits, as deﬁned above. The indirect method is used to prepare the statement of cash ﬂow. Provisions Provisions are recognized when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that an outﬂow of resources embodying economic beneﬁts will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. The expense relating to a provision is presented in the Income Statement and other Comprehensive Income net of any reimbursement. If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reﬂects, when appropriate, the risks speciﬁc to the liability. When discounting is used, the increase in the provision due to the passage of time is recognized as a ﬁnance cost. Pensions and other post-employment beneﬁts The Group have a deﬁned contribution pension scheme for all employees. Under the deﬁned contribution scheme, the Group does not commit itself to paying speciﬁc future pension beneﬁts, but makes annual contributions to the employees’ pension savings. The Group’s payment to the deﬁned contribution scheme amounts to 7% of salary up to 12G and 18.1% of salary between 7.1G and 12G for Norwegian employees and 7-10% for UK employees (G is Norwegian National Insurance basic amount). Further details about pensions, and the closing of the deﬁned beneﬁt scheme, are given in Note 10. New and amended standards and interpretations The standards and interpretations that are issued, but not yet effective, up to the date of issuance of the Group’s ﬁnancial statements are disclosed in the following section. Note that only the ones that are expected to have material impact on the Group’s ﬁnancial position, performance, and/ or disclosures are discussed. The Group intends to adopt these standards, if applicable, when they become effective. Changes in accounting policies and disclosures The accounting policies adopted are consistent with those of the previous ﬁnancial year, except for the amendments to IFRS which have been implemented by the Group during the current ﬁnancial year. No additional new standard have been applicable for the Group’s 2022 ﬁnancial statements. Other standards Other standards, interpretations and amendments that are issued, but not yet effective are either not applicable for the Group or is not expected to have a material impact of the ﬁnancial statements. Note 3 – Signiﬁcant accounting judgements, estimates and assumptions The preparation of the Group’s ﬁnancial statements requires management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods. Estimates and assumptions Preparation of the accounts in accordance with IFRS requires the use of judgement, estimates and assumptions that have consequences for recognition in the balance sheet of assets and liabilities and recorded revenues and expenses. The use of estimates and assumptions is based on the best discretionary judgement of the Group’s management. Share-based payments The Group initially measures the cost of equity-settled transactions with employees using the Black-Scholes model to determine the fair value of the liability incurred. Estimating fair value for share-based payment transactions requires determination of the most appropriate valuation model, which is dependent on the terms and conditions of the grant. This estimate also requires determination of the most appropriate inputs to the valuation model including the expected life of the share option, volatility and dividend yield and making assumptions about them. The assumptions and models used for estimating fair value for share-based payment transactions are disclosed in Note 6. 59 Note 2 – Basis for preparation and signiﬁcant accounting policies continued OVERVIEW 01–03 STRATEGIC REPORT 04-22 CORPORATE GOVERNANCE 23-49 FINANCIAL STATEMENTS 50-81 Annual Report & Accounts 2022 Notes to the Financial Statements continued Note 3 – Signiﬁcant accounting judgements, estimates and assumptions continued Money market fund Money market fund is classiﬁed as cash and cash equivalent. The criteria for classifying this as cash equivalent are that these funds are short term, highly liquid, readily convertible into known amounts of cash and subject to insigniﬁcant risk of change in value. The evaluation of these criteria require use of judgement. The purpose of the fund is to meet short term commitments, and hence the company have access to use the funds with only a few days notice. The funds invested in is well-known and have invested in shares exchanged in an active marked, and hence the funds are considered highly liquid. Even though it is not possible to know the exact amount of cash the funds can be converted to, the funds of which the money are invested in are low risk and low proﬁt, and hence it is possible to predict the most likely outcome as it is expected to be insigniﬁcant changes in value of these funds. Note 4 Segments and revenue For management purposes the Group is organized as one business unit and the internal reporting is structured in accordance with this. The Group has entered into an out-licence agreement where development, regulatory and sales-based milestones are due upon the occurrence of certain speciﬁc events. In 2022 or 2021, there has not been any clinical milestone payment from this out-licence agreement and the revenue represent refund of patent costs. Note 5 Payroll and related expenses Parent 2021 Parent 2022 Group 2022 Group 2021 23,407 15,115 Salaries 49,768 58,910 3,423 2,706 Social security tax 7, 86 4 7,728 1,496 1,322 Pension expense 4,095 4,343 1,118 1,728 Bonus 8,748 4,466 421 374 Other remnueration 790 855 (1,657) (1,349) Government grants (5,122) (6,373) 28,206 19,895 Total payroll and other employee related cost 66,143 69,929 7,113 3,466 Share option expense employees 3,466 7,113 (2,997) (920) Accrued social security tax on share options (920) (2,997) 4,116 2,546 Total employee share option cost 2,546 4 ,116 32,323 22,441 Total employee beneﬁt cost 68,689 74,045 16 13 Average number of full time equivalent employees 36 44 For remuneration to Executive Management and Board of Directors, please see Remuneration Report in the Governance section of the Annual Report. Key Executive Managment personel and Board of Directors compensation (in 1,000 NOK): Group 2022 Group 2021 Short-term employee beneﬁts 21,936 21,985 Post-employment beneﬁt 1,757 1,371 Other long-term beneﬁts 0 0 Termination beneﬁts 588 5,145 Share-base payment (period cost) 815 2,288 Total 25,096 30,789 OVERVIEW 01–03 STRATEGIC REPORT 04-22 CORPORATE GOVERNANCE 23-49 FINANCIAL STATEMENTS 50-81 60 Annual Report & Accounts 2022 Notes to the Financial Statements continued Note 6 Employee share option program The Group has a share option scheme for employees. Each option gives the right to acquire one share in BerGenBio on exercise. The Group has a share option program to ensure focus and align the Group’s long term performance with shareholder values and interest. Most of the employees in the Group take part in the option program. The program also serves to retain and attract senior management. The exercise price for options granted is set at the market price of the shares at the time of grant of the options. In general, for options granted after 2012, the options expire eight years after the date of grant. Options vest annually in equal tranches over a three-year period following the date of grant. Total options For the twelve months ended 31 December 2022 2021 Number of options Weighted average exercise price Number of options Weighted average exercise price Balance at 1 January 3,560,897 22.96 4,209,232 18.45 Granted during the period 2,114,230 7. 59 1,379,871 28.55 Exercised during the period 1) (205,277) 15.68 (1,195,272) 13.91 Forfeited and cancelled (1,250,005) 24.61 (832,934) 22.43 Balance at 31 December 4,219,845 15.13 3,560,897 22.96 1) Average share price at date of exercise was NOK 17.71 for 2022 (NOK 26.55 for 2021). 2) 114.230 options were granted in the twelve months period ended 31 December 2022 and 1.379.871 options were granted in the twelve months period ended 31 December 2021. In the Annual General Meeting on the 22 March 2017 it was resolved a split of the shares so that 1 share with a nominal value of NOK 10 was split into 100 shares with a nominal value of NOK 0.10. The overview above takes into account the share split. The average weighted expected remaining lifetime of options is 3.0 years at year end. The exercise price is calculated as the weighted average exercise price of the forfeited , cancelled and exercised options. Vested options 2022 2021 Options vested at 1 January 1,541,168 1, 8 87, 201 Exercised and forfeited in the period (1,003,946) (1,195,272) Vested in the period 1,077, 8 4 4 849,239 Options vested at 31 December 1,615,066 1,541,168 Total outstanding number of options 4,219,845 3,560,897 OVERVIEW 01–03 STRATEGIC REPORT 04-22 CORPORATE GOVERNANCE 23-49 FINANCIAL STATEMENTS 50-81 61 Annual Report & Accounts 2022 Notes to the Financial Statements continued Note 6 Employee share option program continued The options are valued using the Black & Scholes model. The risk-free interest rates are based on rates from Norges Bank and Oslo Stock Exchange on the grant date (bonds and certiﬁcates) equal to the expected term of the option being valued. Where there is no exact match between the term of the interest rates and the term of the options, interpolation is used to estimate a comparable term. The vesting period is the period during which the conditions to obtain the right to exercise must be satisﬁed. The Group has estimated an expected vesting date and this date is used as basis for the expected lifetime. The Group expects the options to be exercised earlier than the expiry date. For options granted earlier than 2014, the mean of the expected vesting date and expiry date has been used to calculate expected lifetime due to the lack of exercise pattern history for the Group and experience from other companies in combination with the relatively long lifetime of these options (up to eight years). For valuation purposes 55,81 % expected future volatility has been applied .To ﬁnd the expected volatility, we use the Company’s annualized standard deviation of the continuously compounded rates of return on the historic share price for the term equal to the life of the option. For 2022 the value of the share options expensed through the proﬁt or loss amounts to NOK 3.5 million (for the same period in 2021: NOK 7.1 million). In addition, a change in provision for social security contributions on share options of NOK -0.9 million (for the same period in 2021: NOK -3.0 million). The provision for social security contribution is calculated on the difference between the share price and exercise price on exercisable option as at the end of the period. Outstanding Instruments Overview Strike price Outstanding Instruments Vested Instruments Number of instruments Weighted Average remaining contractual life Weighted Average Strike Price Vested instruments 31.12.2022 Weighted Average Strike Price 7.59 2,114,230 7.38 7. 59 245,000 7.59 15.00 859,726 5.27 15.00 580,118 15.00 16.01 77, 5 0 0 0.67 16.01 77, 50 0 16.01 24.00 60,000 1.00 24.00 60,000 24.00 25.00 227,225 4.30 25.00 227,225 25.00 28.50 90,000 3.83 28.50 90,000 28.50 28.55 715,746 6.35 28.55 259,805 28.55 46.70 75,418 3.40 46.70 75,418 46.70 4,219,845 1,615,066 OVERVIEW 01–03 STRATEGIC REPORT 04-22 CORPORATE GOVERNANCE 23-49 FINANCIAL STATEMENTS 50-81 62 Annual Report & Accounts 2022 Notes to the Financial Statements continued Note 7 Government grants Government grants have been recognized in the proﬁt or loss as a reduction of related expense with the following amounts: Parent 2021 Parent 2022 Group 2022 Group 2021 1,657 1,349 Payroll and related expenses 5,122 6,373 6,914 5,298 Other operating expenses 5,298 6,914 8,571 6,648 Total 10,420 13,287 Grants receivable as at 31 December are detailed as follows: Parent 2021 Parent 2022 Group 2022 Group 2021 755 172 Grants from Research Council, BIA 172 755 519 496 Grants from Research Council, PhD 496 519 4,750 4,750 Grants from SkatteFunn 4,750 4,750 0 0 Grants R&D UK 7,958 4,224 6,024 5,418 Total 13,375 10,248 BIA grants from the Research Council The Company currently has one grants from the Research Council, programs for user-managed innovation arena (BIA) in 2022. The BIA grant ("AXL as a therapeutic target in ﬁbrosis; biology and biomarkers") has been awarded from 2019 and amount up to NOK 10.7 million. The Group has recognized NOK 0.3 million in 2022 (2021: NOK 2.3 million) classiﬁed partly as reduction of payroll and related expenses and partly as a cost reduction of other operating expenses. PhD grants from the Research Council BerGenBio has been awarded two grants supporting industrial PhD's in 2020. The fellowship covers 50 % of the established current rates for doctoral research fellowships and an operating grant to cover up to 50 % of additional costs related to costly laboratory testing connected with the research fellow's doctoral work. The Group has recognized NOK 1.6 million in 2022 (2021: NOK 1.6 million) classiﬁed partly as reduction of payroll and related expenses and partly as a cost reduction of other operating expenses. SkatteFunn R&D projects have been approved for SkatteFunn (a Norwegian government R&D tax incentive program designed to stimulate R&D in Norwegian trade and industry) for the period from 2021 until the end of 2024. The Group has recognized NOK 4.8 million in 2022 (2021: NOK 4.8 million) classiﬁed partly as reduction of payroll and related expenses and partly as a cost reduction of other operating expenses. Innovation Norway BerGenBio has been awarded a NOK 24 million (USD 2.85m) grant from Innovation Norway to support the clinical development of BGB324 in combination with Merck & Co.’s KEYTRUDA ® (pembrolizumab) in patients with advanced lung cancer. OVERVIEW 01–03 STRATEGIC REPORT 04-22 CORPORATE GOVERNANCE 23-49 FINANCIAL STATEMENTS 50-81 63 Annual Report & Accounts 2022 Notes to the Financial Statements continued Note 7 Government grants continued The grant from Innovation Norway is an Industrial Development Award (IFU). The IFU program is directed to Norwegian companies developing new products or services in collaboration with foreign companies. BerGenBio has by end of 2020 recognized and received the total grant of NOK 24 million. The grant may be withdrawn under certain circumstances. R&D tax grants UK BerGenBio Limited, a 100% subsidary of BerGenBio ASA, has been granted R&D tax grants in UK from 2017. R&D grants are approved retrospect by application. The Group has in 2022 recognized NOK 3.7 million (2021: NOK 4.2 million) classiﬁed as reduction of payroll and related expenses for the year 2022. Note 8 Property, plant and equipment Year ended 31 December 2022 Parent/Group Furnitures Equipment/ﬁttings Right to use property Total Cost at 1 January 2022 137 1,632 3,366 5,135 Additions in the year 0 0 0 0 Disposals in the year 0 (42) (223) (265) Cost at 31 December 2022 137 1,590 3,14 3 4,870 Accumulated depreciation at 1 January 2022 (66) (1,537) (2,340) (3,944) Depreciation in the year (27) (53) (803) (883) Accumulated depreciation at 31 December 2022 (94) (1,590) (3,14 3) (4,827) Net carrying amount at 31 December 2022 43 0 0 43 Estimated useful life 5 years 5 years 2/5 years Depreciation method Straight-line Straight-line Over right of use time Year ended 31 December 2021 Parent/Group Furnitures Equipment/ﬁttings Right to use property Total Cost at 1 January 2021 137 1,632 3,195 4,964 Additions in the year 0 0 171 171 Disposals in the year 0 0 0 0 Cost at 31 December 2021 137 1,632 3,366 5,135 Accumulated depreciation at 1 January 2021 (39) (1,414) (1,178) (2,632) Depreciation in the year (27) (123) (1,162) (1,312) Accumulated depreciation at 31 December 2021 (66) (1,537) (2,340) (3,944) Net carrying amount at 31 December 2021 70 96 1,026 1,191 Estimated useful life 5 years 5 years 2/5 years Depreciation method Straight-line Straight-line Over right of use time OVERVIEW 01–03 STRATEGIC REPORT 04-22 CORPORATE GOVERNANCE 23-49 FINANCIAL STATEMENTS 50-81 64 Annual Report & Accounts 2022 Notes to the Financial Statements continued Note 8 Property, plant and equipment continued Research & Development Expenses for research and development for the ﬁnancial year 2022 for the Group was gross NOK 263.0 million (net NOK 252.6 million reduced of grants NOK 10.4 million) of which gross NOK 212.5 million (net NOK 207.5 million) was classiﬁed as other operating expenses and gross NOK 50.5 million (net NOK 45.4 million) was classiﬁed as payroll. Expenses for research and development for the ﬁnancial year 2021 for the Group was gross NOK 266.9 million (net NOK 253.7 million reduced of grants NOK 13.3 million) of which gross NOK 213.3 million (net NOK 206.4 million) was classiﬁed as other operating expenses and gross NOK 53.6 million (net NOK 47.3 million) was classiﬁed as payroll. Note 9 Leases The Group (the Company) as a leesee The Company rent premises in Bergen, Norway, for ofﬁce purposes. The laboratory rental was discontinued in November 2022, and ofﬁce rental agreement is currently being negotiated for a 12 months extention, but this is not formalized. In addition, the Group rent ofﬁce premises in UK. The rental agreement can be terminated by either party with a one month notice period. The rental agreements in UK are considered a short term lease and recognized directly in proﬁt or loss. From 1 January 2023 the rental arrangement for ofﬁce in Norway currently also is consider to be a short term lease. Right-of-use assets The Group (the Company) leased ofﬁces up until November 2022, when lab lease was discontinued and ofﬁce lease ended and currently being negotiated for extenion. The Group's (the Company's) right-of-use assets are categorised and presented in Note 8. OVERVIEW 01–03 STRATEGIC REPORT 04-22 CORPORATE GOVERNANCE 23-49 FINANCIAL STATEMENTS 50-81 65 Annual Report & Accounts 2022 Notes to the Financial Statements continued Note 9 Leases continued Lease liabilities Summary of the lease liabilities Group 2022 Group 2021 Total lease liabilities at 1 January 1,623 2,016 New lease liabilities recognized in the year (1,169) 171 Cash payments for the principal portion of the lease liability (454) (564) Cash payments for the interest portion of the lease liability (66) (116) Interest expense on lease liabilities 66 116 Currency exchange differences 0 0 Total lease liabilities at 31 December 0 1,623 Current lease liabilities (note 18) 0 681 Non-current lease liabilities 0 942 Total cash outﬂows for leases 454 564 The leases do not contain any restrictions on the Group’s dividend policy or ﬁnancing. The Group does not have signiﬁcant residual value guarantees related to its leases to disclose. Undiscounted lease liabilities and maturity of cash outﬂows 2022 2021 Less than 1 year 325 328 1-5 years 0 1,054 Total undiscounted lease liabilities at 31 December 325 1,382 Summary of other lease expenses recognized in proﬁt or loss 2022 2021 Variable lease payments expensed in the period 0 0 Operating expenses in the period related to short-term leases 2,550 1,799 Operating expenses in the period related to low value assets 85 26 Total lease expenses included in other operating expenses 2,635 1,825 The Groups cash outﬂow for leases amonuted in total to NOK 3,607 in 2022 (NOK 2,789 in 2021). Practical expedients applied The Group has a lease agreement for ofﬁces in Oxford. The lease agreement is short term and is renewed at one months basis. The Groups had two lease agreements in Norway. The ﬁrst was terminated effective as of 30 November 2022 and the second expired 31 December 2022. The Group is in negotiation of extention for a 12 months period but this have currently not been formalized. The Group also leases printers with contract terms of ﬁve years. The Group has elected to apply the practical expedient of low value assets for some of these leases and does not recognise lease liabilities or right-of-use assets. The leases are instead expensed when they incur. The Group has also applied the practical expedient to not recognise lease liabilities and right-of-use assets for short-term leases, presented in the table above. OVERVIEW 01–03 STRATEGIC REPORT 04-22 CORPORATE GOVERNANCE 23-49 FINANCIAL STATEMENTS 50-81 66 Annual Report & Accounts 2022 Notes to the Financial Statements continued Note 9 Leases continued Extension options The Group has no extention options for lease arrangements as of 31 December 2022. Note 10 Pensions BerGenBio ASA is required to have an occupational pension scheme in accordance with the Norwegian law on required occupational pension (“lov om obligatorisk tjenestepensjon”). The Company has a contribution pension scheme which complies with the Act on Mandatory company pensions. Both BerGenBio ASA and BerGenBio Limited have deﬁned contribution pension schemes, but the contribution is different. For BerGenBio ASA and Norwegian employees the contribution amounts to 7% of salary up to 12G and 18.1% of salary between 7.1G and 12G (G is Norwegian National Insurance basic amount). For BerGenBio Limited and UK employees the contribution is between 7-15% of base salary. Note 11 Financial income and expense Parent 2021 Parent 2022 Group 2022 Group 2021 Financial income 0 10 Interest income on tax repaid 10 0 3,130 2,847 Interest income on bank deposits 2,939 3,130 11,804 12,070 Other ﬁnance income 12,078 12,864 14,934 14,926 Total ﬁnancial income 15,027 15,993 Parent 2021 Parent 2022 Group 2022 Group 2021 Financial expense 7 309 Other interest expense 321 53 9,396 10,762 Other ﬁnance expense 11,193 10,841 9,403 11,071 Total ﬁnancial expense 11,514 10,894 5,531 3,856 Net ﬁnancial income 3,513 5,100 OVERVIEW 01–03 STRATEGIC REPORT 04-22 CORPORATE GOVERNANCE 23-49 FINANCIAL STATEMENTS 50-81 67 Annual Report & Accounts 2022 Notes to the Financial Statements continued Note 12 Income tax Parent 2021 Parent 2022 Group 2022 Group 2021 (310,657) (301,375) Proﬁt before tax (3 02,122) (309,364) (68,345) (66,302) Income taxes calculated at 22% (66,467) (68,060) 0 (16) Adjustment in respect of current income tax of previous years (16) 0 1,565 765 Non deductible expenses 765 1,565 (1,054) (1,045) Non-taxable income (1,045) (1,951) 67, 8 3 4 66,598 Change in deferred tax asset not recognized 66,763 68,445 0 0 Tax expense 0 0 0 0 Income tax expense reported in income statement 0 0 Deferred tax and deferred tax assets Parent 2021 Parent 2022 Group 2022 Group 2021 Deferred tax assets (22% of temporary differences) (332,706) (399,430) Tax losses carried forward (399,495) (332,706) (58) (14) Property, plant and equipment (58) (58) (213) 0 Other 0 (213) 332,976 399,444 Deferred tax asset not recognized 399,553 332,976 0 0 Deferred tax assets – gross 0 0 The Company has a tax loss of NOK 303.2 million in 2022, and in total a tax loss carried forward as of 31 December 2022 on NOK 1 815.6 million. There are no timing restrictions on carrying forward the tax loss, and it can be carried forward indeﬁnitely. The deferred tax asset has not been recognized in the statement of ﬁnancial position, as the Company does not consider that taxable income in the short-term will sufﬁciently support the use of a deferred tax asset. Note 13 Other operating expenses Parent 2021 Parent 2022 Group 2022 Group 2021 191,316 189,508 Program expenses, clinical trials and research 194,063 193,076 649 685 Ofﬁce rent and expenses 3,331 2,447 68,387 71,666 Consultants R&D projects 8,340 12,744 7,491 8,101 Patent and licence expenses 8,101 7, 491 22,857 18,225 Other operating expenses 27,915 31,035 (6,914) (5,298) Government grants (5,298) (6,914) 283,786 282,887 Total 236,451 239,880 OVERVIEW 01–03 STRATEGIC REPORT 04-22 CORPORATE GOVERNANCE 23-49 FINANCIAL STATEMENTS 50-81 68 Annual Report & Accounts 2022 Notes to the Financial Statements continued Note 13 Other operating expenses continued Speciﬁcation auditor's fee Parent 2021 Parent 2022 Group 2022 Group 2021 238 313 Statutory audit 313 400 20 173 Other assurance services 173 20 0 0 Other non-assurance services 0 71 12 20 Tax consultant services 20 71 270 506 Total 506 563 Amounts are excluding VAT Note 14 Earnings per share Parent 2021 Parent 2022 Group 2022 Group 2021 (310,657) (301,375) Proﬁt after tax (302,122) (309,364) 87,956,563 88,636,493 Weighted average number of outstanding shares during the year 88,636,493 87,956,563 (3.53) (3.40) Earnings (loss) per share – basic and diluted (NOK) (3.41) (3.52) Share options issued have a potential dilutive effect on earnings per share. No dilutive effect has been recognized as potential ordinary shares only shall be treated as dilutive if their conversion to ordinary shares would decrease earnings per share or increase loss per share from continuing operations. As the Group is currently loss-making an increase in the average number of shares would have anti-dilutive effects. Note 15 Other current assets Parent 2021 Parent 2022 Group 2022 Group 2021 6,024 5,418 Government grants 13,375 10,248 676 290 Refundable VAT 290 676 637 1,183 Prepaid expenses 1,804 701 774 389 Other receivables 390 774 3,601 10,625 Receivables Intercompany 0 0 11,711 17,905 Total 15,860 12,398 r OVERVIEW 01–03 STRATEGIC REPORT 04-22 CORPORATE GOVERNANCE 23-49 FINANCIAL STATEMENTS 50-81 69 Annual Report & Accounts 2022 Notes to the Financial Statements continued Note 16 Cash and cash equivalents Parent 2021 Parent 2022 Group 2022 Group 2021 756 733 Employee withholding tax 733 756 121,243 80,188 Short-term bank deposits 92,704 129,796 306,094 57, 367 Money market fonds 57, 3 67 306,094 428,093 138,288 Total 150,803 436,646 Of the total balance in cash and cash equivalents, NOK 0.7 million (2021: NOK 0.8 million) relates to restricted funds for employee withholding taxes. The Group’s short-term bank deposits are on variable rate terms. Money market funds are classiﬁed as Cash and cash equivalents as this is short term placement held for the purpose of meeting short-term cash commitments. Risk is low and the fund is highly liquid. Note 17 Share capital and shareholder information The Group has one class of shares and all shares carry equal voting rights. As of 31 December Number of authorized shares Nominal value (NOK) Book value (NOK) Ordinary shares 2022 88,660,532 0.10 8,866,053.20 Ordinary shares 2021 88,455,255 0.10 8,845,525.50 Changes in the outstanding number of shares 2022 2021 Ordinary shares at 1 January 88,455,255 87, 259,9 8 3 Issue of ordinary shares 205,277 1,195,272 Ordinary shares at 31 December 88,660,532 88,455,255 OVERVIEW 01–03 STRATEGIC REPORT 04-22 CORPORATE GOVERNANCE 23-49 FINANCIAL STATEMENTS 50-81 70 Annual Report & Accounts 2022 Notes to the Financial Statements continued Note 17 Share capital and shareholder information continued Ownership structure as of 31.12.2022 Shareholder Number of shares Percentage share of total shares METEVA AS 24,139,650 27.2 % INVESTINOR DIREKTE AS 7, 270,78 0 8.2% FJARDE AP-FONDEN 4,487,493 5.1% SARSIA SEED AS 2,117,9 0 0 2.4% J.P. MORGAN SE NOMINEE I 1,726,731 1.9% BERA AS 1,712,426 1.9% VERDIPAPIRFONDET NORDEA AVKASTNING 1,510,174 1.7% SARSIA DEVELOPMENT AS 1,175,000 1.3% VERDIPAPIRFONDET NORDEA NORGE PLUS 901,260 1.0% VERDIPAPIRFONDET NORDEA KAPITAL 881,920 1.0% VERDIPAPIRFONDET NORDEA NORGE VERD 864,688 1.0% MARIT MOHN 850,000 1.0% MARSTIA INVEST AS 850,000 1.0% VERDIPAPIRFONDET KLP AKSJENORGE IN 574,309 0.6% NORDA ASA 519,614 0.6% LOUISE MOHN 509,676 0.6% J.P. MORGAN SE NOMINEE II 422,541 0.5% HØSE AS 383,111 0.4% MP PENSJON PK 372,783 0.4% NORDNET LIVSFORSIKRING AS 371,168 0.4% Top 20 shareholders 51,641,224 58.2% Total other shareholders 37,019, 3 0 8 41.8% Total number of shares 88,660,532 100.0% The Board of Directors has been granted a mandate from the Annual General Mmeeting held on 28 April 2022 to increase the share capital with up to NOK 883,605 by subscription of new shares. The power of attorney was granted for the purpose of issuance of new shares in accordance with the Company's share incentive program and is valid until the earlier of the Annual General Meeting in 2023 and 30 June 2023. See note 6 for more information about the share incentive program and number of option granted. The Board of Directors has been granted a mandate from the Annual General Meeting held on 28 April 2022 to increase the share capital with up to NOK 1,773,210 by subscription of new shares. The proxy is valid until the earlier of the Annual General Meeting in 2023 and 30 June 2023. OVERVIEW 01–03 STRATEGIC REPORT 04-22 CORPORATE GOVERNANCE 23-49 FINANCIAL STATEMENTS 50-81 71 Annual Report & Accounts 2022 Notes to the Financial Statements continued Note 17 Share capital and shareholder information continued Ownership structure as of 31.12.2021 Shareholder Number of shares Percentage share of total shares METEVA AS 23,798,564 26.9% INVESTINOR DIREKTE AS 7, 270,780 8.2% FJARDE AP-FONDEN 4,487,493 5.1% SARSIA SEED AS 2,117,9 0 0 2.4% BERA AS 1,712,426 1.9% VERDIPAPIRFONDET NORDEA AVKASTNING 1,510,174 1.7% VERDIPAPIRFONDET NORDEA KAPITAL 1,504,740 1.7% VERDIPAPIRFONDET KLP AKSJENORGE 1,440,000 1.6% SARSIA DEVELOPMENT AS 1,175,000 1.3% J.P. MORGAN BANK LUXEMBOURG S.A. NOMINEE I 1,088,228 1.2% VERDIPAPIRFONDET NORDEA NORGE PLUS 909,260 1.0% VERDIPAPIRFONDET NORDEA NORGE VERD 864,688 1.0% MARIT MOHN 850,000 1.0% MARSTIA INVEST AS 850,000 1.0% NORDNET LIVSFORSIKRING AS 660,469 0.7% LOUISE MOHN 509,676 0.6% J.P. MORGAN BANK LUXEMBOURG S.A. NOMINEE II 430,541 0.5% KEVIN ZAIM 374,000 0.4% NORDNET BANK AB NOMINEE III 359,581 0.4% RO INVEST AS 350,000 0.4% Top 20 shareholders 52,263,520 59.1% Total other shareholders 36,191,735 40.9% Total number of shares 88,455,255 100.0% For shares in the Company held by the Executive Management and Board of Directors, please see Remuneration Report in the Governance section of the Annual Report. OVERVIEW 01–03 STRATEGIC REPORT 04-22 CORPORATE GOVERNANCE 23-49 FINANCIAL STATEMENTS 50-81 72 Annual Report & Accounts 2022 Notes to the Financial Statements continued Note 18 Other current liabilities Parent 2021 Parent 2022 Group 2022 Group 2021 1,351 1,281 Unpaid duties and charges 1,623 1,643 1,556 1,215 Unpaid vacation pay 1,215 1,556 681 0 Current lease liabilities 0 681 26,131 37, 0 96 Other accrued costs 45,461 33,292 29,719 39,591 Total 48,299 37,172 Note 19 Provisions Social security contributions on share options Total Balance at 1 January 2022 969 969 Additional provisions recognized (969) (969) Balance at 31 December 2022 0 0 Current 0.00 0.00 Non-current 0.00 0.00 The provision for social security contributions on share options is calculated based on the number of options outstanding at the reporting date that are expected to be exercised. The provision is based on the difference between market price and strike price. The market price of the shares at the reporting date is the best estimate of market price at the date of exercise. Note 20 Financial instruments and risk management objectives and policies The Group’s activities are exposed to certain ﬁnancial risks including foreign exchange risk, credit risk and liquidity risk. The risk is however of such character that the Group has chosen not to put in place any measures to mitigate the potential unpredictability of the ﬁnancial markets. The Group has NOK 150.8 million in cash and cash equivalents at year end. The main purpose of this is to ﬁnance the Group's activities and ongoing clinical trials. The Group has various assets and liabilities such as receivables and trade payables, which originate directly from its operations. All ﬁnancial assets and liabilities are carried at amortized cost except for money market fund which is at fair value. All ﬁnancial assets and liabilities are short-term in nature and their carrying value approximates fair value. The cash and cash equivalent and account payable is in ﬁnancial instruments measured at amorotized cost. The Group does currently not use ﬁnancial derivatives. Foreign currency risk The value of non-Norwegian currency denominated revenues and costs will be affected by changes in currency exchange rates or exchange control regulations. The Group undertakes various transactions in foreign currencies and is consequently exposed to ﬂuctuations in exchange rates. The exposure arises largely from research expenses. The Group is mainly exposed to ﬂuctuations in euro (EUR), pounds sterling (GBP) and US dollar (USD). The Group has chosen not to hedge its operational performance as the Group’s cash ﬂow is denominated in several currencies that changes depending on where clinical trials are run. The foreign currency exposure is also mostly linked to trade payables with short payment terms. The Group might consider changing its current risk management of foreign exchange rate if it deems it necessary. OVERVIEW 01–03 STRATEGIC REPORT 04-22 CORPORATE GOVERNANCE 23-49 FINANCIAL STATEMENTS 50-81 73 Annual Report & Accounts 2022 Notes to the Financial Statements continued Note 20 Financial instruments and risk management objectives and policies continued Interest rate risk The Group holds NOK 150.8 million in cash and cash equivalents. The Group’s interest rate risk is therefore in the rate of return of its cash on hand. Bank deposits are exposed to market uctuations in interest rates, which affects the nancial income and the return on cash. The Group had NOK 2.9 million in interest income in 2022 (NOK 3.1 million 2021). The shareholder loan facility secured from Meteva AS in October 2022 have a facility fee of 1.5% of any un-drawn amonut. Facility fee for 2022 is expensed with NOK 0.3 million in 2022. Credit risk Credit risk is the risk of a counterparty’s default in a nancial asset, liability or customer contract, giving a nancial loss. The Group’s receivables are generally limited to receivables from public authorities by way of government grants. The credit risk generated from nancial assets in the Group is limited since it is cash deposits. The Company only places its cash in bank deposits and limited risk money market fund in recognized nancial institutions to limit its credit risk exposure. The Group has not suffered any loss on receivables during 2022 and the Group considers its credit risk as low. Liquidity risk Liquidity is monitored by Group management. Management considers the Group’s liquidity situation to be satisfactory. The Group raised total NOK 740 million in equity funding during 2020. The cash position of the Group at year end 2022 was NOK 150.8 million, compared to NOK 436.6 million at year end 2021. In addition, the Group secured a shareholder loan facility of up to NOK 100 million from Meteva AS in October 2022. The facility is undrawn at end of 2022 and available from Q2 2023 and up to the earlier of 31 March 2024 and completion of an equity issue. In April 2023 the Company announced an equity funding, a partly guaranteed and underwritten right issue, with a minimum proceed of NOK 175 million. The equity issue is subject to AGM approval and publication of an approved prospectus. The cash position in combination with expected proceeds from the equity funding will fund the planned activities to end of Q2 2024 on a going concern basis. Capital management The Board of Directors’ goal is to maintain a strong capital base in order to preserve the condence of investors, creditors and to develop business activities. Change in liabilities arising from nancing activities: Current lease liabilities (Note 9) Non-current lease liabilities (Note 9) 1 January 2022 681 942 Cash ows (454) 0 New leases (1,169) 0 Other 942 (942) 31 December 2022 0 0 1 January 2021 650 1,366 Cash ows (564) 0 New leases 171 0 Other 424 (424) 31 December 2021 681 942 Other includes the effect of reclassication of non-current lease liabilities to current. The Group classies interest paid as cash ow from operation activities. OVERVIEW 01–03 STRATEGIC REPORT 04-22 CORPORATE GOVERNANCE 23-49 FINANCIAL STATEMENTS 50-81 74 Annual Report & Accounts 2022 Notes to the Financial Statements continued Note 21 Subsidiary The Group’s subsidiary at 31 December 2022 are set out below. The share capital consist solely of ordinary shares that are held directly by the Group, and the proportion of ownership interests held equals the voting rights held by the Group. Name of entity BerGenBio Limited Place of business Oxford, U.K. Ownership interest held by the Group 100% Principal activities Management of clinical studies Note 22 Intercompany BerGenBio ASA have entered into two intercompany management agreement with BerGenBio Limited. R&D services are delivered from BerGenBio Limited to BerGenBio ASA and management services are delivered from BerGenBio ASA to BerGenBio Limited. Parent 2022 Parent 2021 Purchase from BerGenBio Limited (included in other operation expenses) 65,618 63,612 Receivables BerGenBio Limited (included in other current assets) 10,625 3,601 Note 23 Subsequent events In April 2023 the Company announced an equity funding, a partly guaranteed and underwritten right issue, with a minimum proceed of NOK 175 million. The equity issue is subject to AGM approval and publication of an approved prospectus. The cash position in combination with expected proceeds from the equity funding will fund the planned activities to end of Q2 2024 on a going concern basis. Note 24 Shareholder loan The Company secured a shareholder loan facility 24 October 2022 of up to NOK 100 million from Meteva AS, a 27.2% shareholder in the Company. The facility is not drawn as of 31 December 2022 but is available and can be drawn from Q2 2023 and up to the earlier of 31 March 2024 and completion of an equity issue. The loan will be terminated by completion of an equity issue. Meteva AS has in the facility agreement committed to participate in an equity funding, and the intention for the company is to complete a funding in 2023. Any drawn amount under the facility agreement will be converted to equity as part of any equity issue. Loans drawn under the facility will carry interest at a rate of 6% p.a. on any drawn amount and a commitment fee of 1.5% p.a. on any undrawn part of the loan facility. Commitment fee for 24 October – 31 December 2022 has been accrued and included in ﬁnancial costs in 2022 by NOK 0.3 million. The loans will not be amortizing and shall be repaid including interest and commitment fee on 31 December 2024. Accrued commitment fee as of 31 December 2022 is classiﬁed as long term debt. OVERVIEW 01–03 STRATEGIC REPORT 04-22 CORPORATE GOVERNANCE 23-49 FINANCIAL STATEMENTS 50-81 75 Annual Report & Accounts 2022 Independent Auditors Report [Content TBC] OVERVIEW 01–03 STRATEGIC REPORT 04-22 CORPORATE GOVERNANCE 23-49 FINANCIAL STATEMENTS 50-81 76 Annual Report & Accounts 2022 Independent Auditors Report continued [Content TBC] OVERVIEW 01–03 STRATEGIC REPORT 04-22 CORPORATE GOVERNANCE 23-49 FINANCIAL STATEMENTS 50-81 77 Annual Report & Accounts 2022 WEF index and data summary Theme Disclosure reference Metric 2020 2021 2022 Report reference WEF Metric: Governance Governing Purpose The British Academy and Colin Mayer, GRI (102-26), EPIC and others Setting purpose Qualitative Qualitative Qualitative Quality of Governing Body GRI (102-22), GRI (405-1a), IR (4B) Total number of Board members (#) 5 5 5 Pages 18, 24 Board diversity (men/women) (%) 60/40 60/40 60/40 Pages 18, 24 Number of non-executive Board members (#) 5 5 5 Pages 18, 24 Number of independent Board members (#) 3 3 5 Page 18 Stakeholder Engagement GRI (102-21), GRI (102-43), GRI (102-47) Impact of material issues on stakeholders Qualitative Qualitative Qualitative Ethical Behaviour GRI (205-2), GRI (205-3) Percentage of employees receiving Code of conduct training (%) 0 0 0 Page 18 Conﬁrmed incidents of corruption (#) 0 0 0 Page 18 GRI (102-17) Protected ethics advice and reporting mechanism Qualitative Qualitative Qualitative Risk and Opportunity Oversight EPIC, GRI (102-15), World Economic Forum Integrated Corporate Governance, IR (4D) Integrating risk and opportunity into business processes Qualitative Qualitative Qualitative Responsible Sourcing Own indicator, adapted from GRI (408-1.b), GRI (409-1) Number of material suppliers who undertook supplier ESG selfassessment (#) 0 0 0 Page 19 WEF Metric: Planet Climate Change GRI 305:1-3; TCFD; GHG Protocol Scope 2 total (tCO 2 e) – 5.89 5,64 Page 22 Scope 3 total (tCO 2 e) - 11.65 49,00 Page 22 Solid Waste Natural Capital Protocol (2016); ISO 14008: Monetary valuation of environmental impacts and related environmental aspects (2019); Value Balancing Alliance Impact of solid waste disposal Qualitative Qualitative Qualitative WEF Metric: People Dignity and Equality GRI (102-8) Total number of employees (#) 42 46 29 Page 20 GRI (405-1.b) Employee diversity (Men/women) (%) 41/59 37/63 38/62 Page 20 BerGenBio indicator Number of interns/postgraduate students/ PhD students employed (#) 2 2 3 Page 20 Adapted, to include other indicators of diversity, from GRI 401-1 (a & b) Employees regularly receiving performance and development evaluation (%) 100 100 100 Page 21 BerGenBio indicator Personnel with PhD (#) 16 19 14 Pages 20, 21 GRI (408-1.b), GRI (409-1) Conﬁrmed incidents of discrimination (#) 0 0 0 Pages 19, 21 Risk of incidents of child, forced or compulsory labour Qualitative Qualitative Qualitative 78 Annual Report & Accounts 2022 OVERVIEW 01–03 STRATEGIC REPORT 04–22 CORPORATE GOVERNANCE 23-49 FINANCIAL STATEMENTS 50-81 OVERVIEW 01–03 WEF index and data summary continued Theme Disclosure reference Metric 2020 2021 2022 Report reference WEF Metric: People Health and Well-being GRI (403-9.a & .b) Number of injuries 0 0 0 Page 21 Injury rate 0 0 0 Page 21 Norwegian Accounting Act Sick-leave (%) 2 1.4 2.3 Page 21 BerGenBio indicator Employee survey response rate (%) and engagement score (%) 84/84 75/80 N/A Page 21 Patient Safety GRI (418-1) Total number of substantiated complaints received with regard to patient personal data breach 0 0 0 Page 18 Output of patient/clinical trial participant assistance program 1 1 1 Page 18 WEF Metric: Prosperity Employment and Wealth creation Adapted, to include other indicators of diversity, from GRI 401-1 (a & b) New hires (#) 14 16 6 Page 21 New hires diversity (men/women) (%) 21.5/78.5 41/59 16.5/83.5 Page 21 Turnover rate (%) 10 23 59 GRI 201-1 and 201-4 Revenues (NOK Million) 0.6 0.8 0.4 Page 50 Operating costs (NOK Million) 261.7 315.2 306.0 Page 50 Employee wages and beneﬁts (NOK Million) 60.18 74.0 68.7 Pages 50, 60 Payments to governments (other than tax) (NOK Million) 0 0 0 Financial assistance from governments (NOK Million) 21.4 13.3 10.4 Page 63 As referenced in IAS 7 and US GAAP ASC 230 Share buybacks plus divided payments (NOK Million) 0 0 0 Community and Social Vitality Adapted from GRI 201-1 Total taxes paid (NOK Million) 5.8 7.7 7.9 Page 60 Innovation of Better Products and Services US GAAP ASC 730 Total R&D spend (#) 222.5 268.5 263.0 Page 65 Pharma Indicator, Industry best practice Number of patents granted (#) 10 18 8 Page 46 Pharma Indicator, Industry best practice Number of peer-reviewed publications BerGenBio has contributed to (#) 2 4 1 Page 19 Pharma Indicator, Industry best practice Number of international presentations (#) 9 15 12 Page 19 Clinical Trial Conduct SASB (HC-BP-210a.1.) Number of clinical trials registered and initiated during the year (#) 1 1 2 Pages 12, 43 Adapted from SASB (HC-BP-210a.1.) Total number of discontinued clinical trials due to non-compliance (#) 0 0 0 Page 18 Adapted from SASB (HC-BP-210a.2.) Critical inspection ﬁndings (#) 0 0 0 Page 18 Adapted from SASB (HC-BP-210a.3.) Total amount of monetary losses as a result of legal proceedings associated with clinical trials (NOK million) 0 0 0 Page 18 79 Annual Report & Accounts 2022 OVERVIEW 01–03 STRATEGIC REPORT 04–22 FINANCIAL STATEMENTS 50-81 CORPORATE GOVERNANCE 23-49 1L First line cancer treatment 2L Second line cancer treatment ACCORD Accelerating COVID-19 Research & Development ADC Antibody-drug conjugate ADCT ADC Therapeutics SA ADME Study of absorption, distribution, metabolism, and excretion ALK Anaplastic lymphoma kinase AML Acute Myeloid Leukemia AXL AXL tyrosine kinase receptor BGB BerGenBio BGBIO BerGenBio ticker symbol on Oslo Stock Exchange CEO Chief Executive Ofﬁcer COVID-19 Infectious diseased caused by SARS-CoV-2 virus CROs Contract research organizations CSR Corporate social responsibility CTL Cytotoxic T lymphocytes DCs Dendritic cells DNA Deoxyribonucleid acid EGFR Epidermal growth factor receptor EMT Endothelial-mesenchymal transition ESG Environmental, Social and Governance EU European Union EU5 UK, France, Germany, Italy & Spain EY Ernst and Young AS FDA Food and Drug Administration FTEs Full time equivalents GAS6 Growth arrest-speciﬁc 6 (AXL ligand) GBP British pound sterling GCP Good Clinical Practice GHG Greenhouse Gas GMP Good Manufacturing Practice IFN1 Type 1 interferons IFU Industrial Development Award (Norwegian) IFRS International Financial Reporting Standards ISO International Organization for Standardization ILT Investigator Led Trials KPI Key Performance Indicator LDAC Low-dose AraC LTI Long term incentives mAb Monoclonal antibody MDS Myelodysplastic syndrome MHC-1 Major histocompatibility complex class I mOS Median overall survival MSD Merck & Co., Inc., d.b.a. Merck Sharp & Dohme outside the United States and Canada Glossary NK cells Natural killer cells NOK Norwegian Kroner NSCLC Non-Small Cell Lung Cancer OCI Other Comprehensive Income OSE Oslo Stock Exchange PD-1 Programmed death 1 PD-L1 Programmed death-ligand 1 PFS Progression free survival PhD Doctor of philosophy PSCI Pharmaceutical Supply Chain Initiative R&D Research & development ROS Reactive oxygen stress SARS-CoV-2 Severe acute respiratory syndrome coronavirus 2 SDG Sustainable Development Goals SEER US National Cancer Institute Cancer Program SRI Severe respiratory infection STI Short term incentives STK11 Serine/threonine kinase gene STK11m Mutation(s) in the STK11 gene TKI Tyrosine Kinase Inhibitor UK United Kingdom US United States USD United States dollars 80 Annual Report & Accounts 2022 OVERVIEW 01–03 STRATEGIC REPORT 04–22 FINANCIAL STATEMENTS 50-81 CORPORATE GOVERNANCE 23-49 BerGenBio ASA Møllendalsbakken 9, 5009 Bergen, Norway P.O. Box 2324, Møllendal, 5867 Bergen, Norway Telephone: +47 55 96 11 59 E-mail: [email protected] Investor Relations Contact E-mail: [email protected] Martin Olin CEO Rune Skeie CFO International Media Relations Graham Morell Head of IR E-mail: [email protected] Analyst Coverage H.C. Wainwright & Co Joseph Pantginis Telephone: +1 646 975 6968 E-mail: [email protected] Carnegie Arvid Necander Telephone: +46 8 5886 8846 E-mail: [email protected] Ulrik Traner Telephone: +46 8 5886 8589 E-mail: [email protected] DNB Markets Patrik Ling Telephone: +46 8 473 48 43 E-mail: [email protected] Geir Hiller Holom Telephone:+47 977 66 583 E-mail: [email protected] Contact Us 81 Annual Report & Accounts 2022 OVERVIEW 01–03 STRATEGIC REPORT 04–22 FINANCIAL STATEMENTS 50-81 CORPORATE GOVERNANCE 23-49

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