Alligator Bioscience AB (publ) Q3 Interim report January-September 2019 A revolution for life.

Alligator regaining rights to ADC-1013 from Janssen.

Financial information

July-September 2019

Net sales, SEK 4.3 million (0.2)
Total operating costs SEK -62.9 million (-40.6)
Operating result, SEK -58.5 million (-39.9)
Earnings per share before and after dilution, SEK -0.79 (-0.56)
Cash flow for the period, SEK -46.8 million (-39.7)
Cash, cash equivalents, incl securities, SEK 302.4 million (478.4)

January-September 2019

Net sales, SEK 4.4 million (1.4)
Total operating costs SEK -160.2 million (-125.5)
Operating result, SEK -155.2 million (-123.0)
Earnings per share before and after dilution, SEK -2.11 (-1.67)
Cash flow for the period, SEK -126.0 million (-70.0)

"We are now regaining the exclusive, global rights to develop and commercialize ADC-1013 and at the same time receive enough ADC-1013 substance to, with or without a new partner, bring ADC-1013 into Phase II clinical trials next year. In total, we now have three projects in clinical development, and soon another one where the first patient in Phase I will be dosed. "

CEO Per Norlén

This information is such information as Alligator Bioscience AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication at 8:00 a.m. CEST on October 24, 2019. For contact details, see page 14.

Significant events July-September

Alligator regains the global rights for the CD40 antibody ADC-1013 (mitazalimab) from Janssen.
Alligator continued its work on the clinical development plan for mitazalimab with the goal of starting a Phase II study in 2020.
Antibody agreement was signed with Biotheus Inc. of China, which obtained Chinese rights to an antibody from the antibody library ALLIGATOR-GOLD.

Events after the end of the period

ATOR-1015: The Phase I clinical trial is progressing well with seven dose levels evaluated for initial safety. Currently, doses of 100 mg, about 1.5 mg/kg, are given every two weeks.
ALG.APV-527: Along with co-development partner Aptevo, discussions are initiated with additional partners for the upcoming clinical development of ALG.APV-527 and, therefore, the submission of the application for permission to start clinical trial is delayed. For Alligator, this ensures that resources are available in order to bring the clinical portfolio forward with full force.

Comments from the CEO.

ADC-1013, which has undergone Phase I clinical trials for the treatment of metastatic cancer, is Alligator's most advanced drug candidate. It was licensed to Janssen in 2015. We now regain the exclusive, global rights to develop and commercialize ADC-1013 and at the same time receive enough ADC-1013 substance to, with or without a new partner, bring ADC-1013 into clinical Phase II studies next year.

Regaining the Phase II ready drug candidate ADC-1013

The clinical results for ADC-1013 are very satisfying and were presented by Janssen during ASCO's (American Society of Clinical Oncology) annual meeting in early June this year. They demonstrated that ADC-1013 is safe and tolerated at clinically relevant doses. The results also gave indications of clinical activity as one renal cell cancer patient showed partial response (PR) and 10 patients remained stable in their cancer disease (SD) for at least 6 months. This raise the question why Janssen decided not to proceed when the results in the project were so good. The answer is that it was a commercial strategy decision. ADC-1013 is a candidate that will be developed as a combination therapy and Janssen did not have products that showed the right synergy with ADC-1013 in their own development portfolio.

Thus, as of October 28, 2019, we will have regained a fantastic asset. Since the out-licensing in 2015, ADC-1013 has been further developed under Janssen's management and is now a drug candidate ready and equipped for clinical Phase II with a comprehensive, robust and validated data package in terms of both safety data and efficacy. In addition to Janssen funding of development program for ADC-1013 the past years, Alligator has received payments of a total of USD 46 million since 2015. We will also receive considerable values in terms of high-quality study drug material that can be used in further clinical trials with ADC-1013.

We are now running the development of ADC-1013 with the goal of being able to offer patients a new treatment alternative. That also means that we are initiating discussions with potential new partners to ensure the continued development of ADC-1013. Our plan is to initiate Phase II combination studies with ADC-1013 next year, with or without a new partner. Based on this, we see good possibilities for ADC-1013 to be available on the market as an approved combination therapy as early as 2026.

The Phase I study with ATOR-1015 is progressing well

For the Alligator drug candidate ATOR-1015, a Phase I clinical trial is ongoing. ATOR-1015 is based on immunostimulation with CTLA-4, which has shown impressive clinical efficacy against several cancers. Our ambition is that ATOR-1015 will be more effective than the approved CTLA-4 drug Yervoy, but without the severe side effects affecting many of the patients today. ATOR-1015 has the potential to achieve this by seeking out the tumor region and more selectively activate the immune system there.

The Phase I study, a dose escalation study in patients with metastatic cancer, had its first patient dosed in March 2019. Recruitment to the study is progressing well with seven dose levels evaluated for initial safety at the hospitals in Lund, Stockholm and Uppsala. The doses currently under evaluation are at levels that have the potential to be therapeutic. ATOR-1015 is being developed for the treatment of solid tumors and the Phase I study will comprise up to 53 patients, with the primary endpoint to evaluate safety and tolerability. The results of the study are planned to be presented in the second half of 2020.

Four projects in clinical development within short

On June 18, 2019, we filed a clinical trial authorization (CTA) application to start a clinical study of the ATOR-1017 antibody. The planned Phase I study is a dose finding study in patients with metastatic cancer. The study, which will be conducted at three different clinics across Sweden, will initiate patient recruitment in November. At the same time, patient dosing has been initiated for AC101, which is being developed by Henlius in China and where Alligator has a share in future revenue. With this we have four projects in clinical development.

Focus on the clinical portfolio

In addition to our clinical projects, there are two additional preclinical drug candidates in our portfolio; the tumor-directed and immunomodulatory antibody ALG.APV-527 and the tumor-localizing antibody ATOR-1144.

Together with the co-development partner Aptevo discussions are initiated with additional partners for the upcoming clinical development of ALG.APV-527 and, therefore, the submission of the application for permission to start a Phase I clinical trial is postponed. For ATOR-1144, preclinical studies are being conducted with the aim of strengthening the preclinical data package, while other activities are kept at a minimum level. All in all, this ensures that resources are available to focus maximally on the clinical project portfolio.

Regional antibody agreement

In August, an agreement was signed with Biotheus Inc. ("Biotheus"), a privately owned Chinese company. Biotheus obtained Chinese rights to an antibody from the antibody library ALLIGATOR-GOLD, with the intention of creating up to three new bispecific molecules. The license agreement includes an initial payment of USD 1 million; USD 0.5 million at signing and another USD 0.5 million after scientific evaluation, and has a total value of up to USD 142 million. The agreement with Biotheus validates our antibody library as well as our excellence in generating high-quality antibodies in the TNFR family, and can be seen as a first step in our ambition to establish a presence in the fast-growing life science market in China.

Updated strategy shows the way forward

The decision to postpone the application to start clinical trial with ALG.APV-527 and to limit the activities with ATOR-1144, can be seen in light of the fact that we have regained the rights for ADC-1013 and we are now ensuring that ADC-1013 has all the resources needed to effectively prepare for and initiate Phase II clinical trials.

Within the framework of the 2020 budget, we will focus on running the clinical portfolio with full force. Next to ADC-1013, ATOR-1015 is a project we are investing heavily in and next year, we will present the final results of the initial clinical study. In addition, ATOR-1017 initiates clinical trials, which equip the clinical portfolio with yet another weapon in the fight against cancer.

With the updated strategy as a guide and significant development milestones ahead of us, we confidently look forward to the remainder of 2019 and the beginning of the coming year when we will have four clinical projects in our portfolio.

Per Norlén, CEO, Alligator Bioscience

Performance measures, Group.

Net sales, SEK million

Operating costs, rolling 12 months, SEK million

Cash flow, rolling 12 months, SEK million

Cash and cash equivalents, including securities, SEK million

	2019	2018	2019	2018	2018
Note	Jul-Sep	Jul-Sep	Jan-Sep	Jan-Sep	Jan-Dec

Result (TSEK)
Net sales 5	4,288	197	4,358	1,364	26,959
Operating profit/loss	-58,467	-39,918	-155,212	-123,020	-153,080
Profit/loss for the period	-56,633	-39,635	-150,348	-119,454	-150,043
R&D costs	-52,025	-30,945	-125,888	-95,418	-139,493
R&D costs as a percentage of operating costs excl. impairments	83%	76%	79%	76%	77%

Capital (TSEK)
Cash and cash equivalents at end of period	239,281	404,688	239,281	404,688	362,878
Cash, cash equivalents and bonds at end of period	302,370	478,355	302,370	478,355	436,391
Cash flow from operating activities	-55,269	-39,111	-129,395	-62,945	-104,115
Cash flow for the period	-46,805	-39,691	-125,973	-69,990	-111,770
Equity at the end of the period	318,210	498,779	318,210	498,779	468,310
Equity ratio at the end of the period, %	86%	95%	86%	95%	92%

Info per share (SEK)
Earnings per share before dilution	-0.79	-0.56	-2.11	-1.67	-2.10
Earnings per share after dilution*	-0.79	-0.56	-2.11	-1.67	-2.10
Equity per share before dilution	4.46	6.99	4.46	6.99	6.56
Equity per share after dilution*	4.46	6.99	4.46	6.99	6.56

Personnel
Number of employees at end of period	56	53	56	53	55
Average number of employees	56	51	56	49	51
Average number of employees employed within R&D	48	43	48	42	44

For definitions and calculations, see the sections later in this report.

*Effect from dilution is not considered when result is negative and options where call rate is higher than closing rate is not considered.

Operations.

Alligator Bioscience AB is a public Swedish biotech company specialized in the development of novel immuno-oncology drugs for tumor-directed immunotherapy, with the aim of providing more effective treatment with fewer side effects. The strategy is to develop drug candidates that selectively stimulate the immune system in the tumor region, rather than the whole body. In this area, Alligator is strongly differentiated and there is currently a major unmet medical need for novel and improved therapies.

The preclinical development process is mainly carried out in Alligator's laboratory by the company's own personnel. All of the expertise required for running successful projects is represented. To make the process as competitive and time-efficient as possible, some of this work is also carried out in collaboration with other biotech companies, contract laboratories and leading international immuno-oncology research institutions.

The clinical studies are carried out in collaboration with leading specialist physicians and CROs with expertise in clinical development.

Several patented technologies

The development of novel drug candidates is based on Alligator's patented technology platforms FIND® (protein optimization technology) and ALLIGATOR-GOLD® (antibody library). These platforms enable efficient generation of novel drug candidates with high potential. In addition, the company has two unique bispecific antibody formats for the development of novel dual-action antibodies. The latest, RUBY™, allows Alligator to easily generate bispecific molecules from any two antibodies, with excellent stability and manufacturability properties. The format abolishes the need for further optimization and enables Alligator to move drug candidates faster from preclinical to the clinical phase. Together, these technologies provide Alligator with a strong base for the development of bispecific, tumordirected drug candidates.

Competitive project portfolio

Alligator's project portfolio includes the clinical and preclinical drug candidates ADC-1013/mitazalimab, ATOR-1015, ATOR-1017, ALG.APV-527 and ATOR-1144, plus a number of early-stage research projects. All drug candidates are developed for tumor-directed immunotherapy, are directed against immunostimulatory receptors and can provide long-lasting protection against cancer. Future cancer treatments will probably involve several different drugs in combination. However, although the combination therapies used to date have boosted the clinical effect, they have also led to a higher risk of developing severe immune-related adverse events. Alligator's concept of tumor-directed immunotherapy provides an opportunity to solve this and develop new cancer therapies with higher efficacy without increasing the risk of severe side effects.

Alligator's business model

Alligator's organization

Alligator's research organization is divided into three units: Discovery, Preclinical and Clinical. The Discovery Unit is responsible for early-stage research projects through to the identification of a drug candidate. This normally includes the development and evaluation of treatment concepts, the evaluation of potential drug candidates and early-stage efficacy testing. The Preclinical Unit is responsible for manufacturing clinical study materials and for compiling a clinical data package sufficient for clinical study applications. The Clinical Unit assumes responsibility when the drug candidate enters a Phase I clinical study and for the subsequent clinical development until successful out-licensing.

Business model that creates value across the development chain

The company's business model is based on proprietary drug development – from early-phase research and preclinical development to Phase II clinical studies, when the treatment is validated in patients. The plan is to subsequently out-license the drug candidate to a licensee for further development and market launch. This business model enables the company to generate revenue even before the drug reaches the market, such as revenue when agreements are signed and milestone payments during the development process.

Drug development at Alligator – the different phases

DISCOVERY	PRECLINICAL	CLINICAL PHASE I	CLINICAL PHASE II	CLINICAL PHASE III
In the Discovery phase, Alligator creates mono and bispecific antibodies using its technology platforms ALLIGATOR-GOLD, FIND and two bispecific fusion formats. The development and evaluation of treatment concepts, evaluation of various potential drug candidates and early-stage efficacy testing. The antibodies are optimized to achieve the set objectives in terms of function, binding affinity and stability, after which a drug candidate is selected for further development.	In the Preclinical phase, final optimization takes place and the safety and efficacy of the drug candidate is assessed together with its clinical potential. These studies are conducted both internally at Alligator and together with external partners. Alongside of these preclinical activities, research activities continue to increase understanding of the candidate's biolog ical function. This phase also includes activities for the production of materials for upcoming clinical studies.	The first human studies are conducted in smaller cohorts, normally 20–80 patients with metastatic cancer. The aim of these studies is mainly to show that the com pound is safe. Studies are also carried out to see how the drug is absorbed, distributed and metabolized.	The endpoint of Phase II studies is to show that the substance has the intended medical efficacy and to determine optimal dosage. Normally, 100-300 patients are tested. By the end of Phase II, the drug's efficacy, probable dosage and side-effects profile should have been determined.	The drug is tested on a larger cohort of patients in Phase III, usually between 1,000 and 3,000 patients. The endpoint of Phase III studies is to demonstrate that the new compound is at least as good or better than previously approved treatments. When the Phase III program is complete, a statement can be issued about the drug's properties and common side effects and the documentation required to register the drug has been compiled.

ADC-1013/mitazalimab. Drug candidate ready for Phase II clinical study.

ADC-1013, now with the generic name of mitazalimab, is an antibody that binds to CD40 receptors and has been developed for the treatment of various types of metastatic cancer. Activation of the dendritic cell's CD40 receptor strengthens the expression of the immune system's antigens and hence the ability to selectively attack the cancer cells. The drug candidate was out-licensed to Janssen Biotech, Inc (Janssen) in 2015-2019 (October). Janssen conducted an extensive Phase I clinical study that showed promising safety and tolerability, and initial signs of clinical efficacy. To date, mitazalimab has generated revenue of almost SEK 400 million for Alligator. The next stage of development will be a Phase II combination study, which is scheduled to commence in late 2020. ADC-1013 MoA Activation Tumor Killing Mode of action

Dendritic cell

■ Events during the third quarter

On July 31, 2019, the company announced that it regains the exclusive, global rights to develop and commercialize the CD40 antibody mitazalimab from Janssen. The licensing agreement between Alligator and Janssen that was signed in 2015 was terminated due to a strategic decision by Janssen to prioritize other projects. In addition to Janssen running and funding the development programs over the past few years, Alligator also received an upfront payment of USD 35 million when the agreement was signed in 2015, and an additional USD 11 million throughout the term of the agreement.

During the period, intensive efforts took place to transfer the project from Janssen to Alligator. The transfer includes a substantial amount of clinical material which will cover the upcoming Phase II program. The agreement will officially be terminated on October 28, 2019. Alligator is now working on the continued clinical development plan for mitazalimab, which includes a Phase II combination study with a PD-1 inhibitor and an additional component. The Phase II study is expected to commence in late 2020. Tumor Cell

Project status: Phase I clinical study completed, planning for Phase II

To date, the clinical program has comprised two Phase I studies. The first study was conducted by Alligator with a focus on intratumoral administration. The results showed that clinically relevant doses of mitazalimab are well-tolerated. Promising safety and tolerability data from a second Phase I clinical study with mitazalimab in cancer patients was presented at the American Society of Clinical Oncology (ASCO) Annual Meeting in Chicago on May 31-June 4, 2019. The study showed that the adverse effects were mostly mild and transient. The study comprised a total of 95 patients. Doses of up to 1200 μg/kg i.v. with no premedication, and up to 2000 μg/kg with premedication proved safe and tolerable. The results also gave signs of clinical activity. Partial response was observed in one renal cancer patient, while 10 patients showed disease stability for at least six months.

Updated 2019 objectives

Completion of patient study in Phase I clinical study. ✓ Initiate technology transfer from Janssen to Alligator.

Mechanism of action

T cell

Mitazalimab is an agonistic – or stimulatory – antibody that targets CD40, a receptor in the dendritic cells of the immune system, which are the cells that detect enemies such as cancer cells. Mitazalimab's activation of CD40 enables dendritic cells to stimulate the immune response's weapons more effectively – in this case, T cells – allowing the immune system to selectively attack the cancer. Mitazalimab has been optimized using Alligator's unique FIND technology, with the aim of improving binding affinity. This makes it possible to achieve efficacy with very low doses. In preclinical experimental models, mitazalimab has been shown to induce a potent tumor-directed immune response and provide long-lasting tumor immunity. In addition, preclinical data have demonstrated how mitazalimab can be used against multiple types of cancer.

ATOR-1015. Tumor-localizing bispecific CTLA-4 antibody with dual immunostimulatory function.

Tumor Killing

T cell

ATOR-1015 is a bispecific antibody that targets the CTLA-4 and OX40 molecules, developed as targeted therapy for metastatic cancer. One component of the antibody blocks CTLA-4, and clinical efficacy is well-validated. The other component binds to OX40, which localizes the antibody to the tumor region, and has the potential to increase efficacy and improve safety. The drug should primarily be administered in combination with PD-1 inhibitors. The ATOR-1015 antibody has been assembled and optimized using Alligator's unique ALLIGATOR-GOLD and FIND technologies and a bispecific fusion format. ATOR-1015 MoA (CTLA-4 x 0X40) Mode of action ATOR-1015 MoA (CTLA-4 x 0X40) Mode of action ATOR-1015 MoA (CTLA-4 x 0X40) Mode of action

Treg Depletion

■ Events during the third quarter

The ongoing Phase I study commenced in March 2019 with an accelerated titration phase using a single patient per dose level. This phase was then followed by the standard 3+3-design, where a cohort of at least three patients per dose level are treated before escalating to a higher dose.

■ Events after the end of the period

The Phase I clinical trial is progressing well and doses of 100 mg, about 1.5 mg/kg given every two weeks, are currently evaluated. Current dosing has reached a level that is likely to produce both benefits and side effects.

Project status: Clinical Phase I

The ongoing dose escalation study in patients with metastatic cancer is planned to comprise up to 53 patients. The principal investigator is Dr Jeffrey Yachnin from the Department of Oncology at Karolinska University Hospital in Stockholm. The primary endpoint of the study is to investigate the safety and tolerability of ATOR-1015 and to determine the recommended dose for subsequent Phase II studies. For further information, please refer to:

https://www.clinicaltrials.gov/ct2/show/NCT03782467?term=1015&rank=1

2019 objectives

Continued Phase I clinical study with preliminary read-out of results in the second-half of 2020.

Mechanism of action

ATOR-1015 binds to two different immunomodulatory receptors – the CTLA-4 inhibitory receptor, and an OX40 costimulatory receptor. In preclinical studies, the bispecificity has been shown to cause a significant increase in the immunostimulatory effect and is expected be achieved mainly in environments where both of the target molecules are expressed at high levels, such as in a tumor. This means that ATOR-1015 may have potent immunostimulatory effects in the tumor environment, but not in the rest of the body, with the goal of reducing the side effects while maintaining efficacy. ATOR-1015 is primarily designed for combination therapies and the preclinical results presented include data indicating an additive anti-tumor effect in combination therapy with a PD-1 pathway-blocking antibody.

Macrophage

Treg

Tumor Killing

T cell

ATOR-1017. Stimulation of both T and NK cells induces potent killing of tumor cells.

Macrophage

ATOR-1017 is a monoclonal antibody that activates the costimulatory function of 4-1BB on T and NK cells in the tumor region and has been developed for the treatment of metastatic cancer. 4-1BB has the capacity to stimulate the immune cell populations required for tumor control. ATOR-1017 MoA (4-1BB) ATOR-1017 MoA (4-1BB) ATOR-1017 MoA (4-1BB)

■ Events during the third quarter

Mode of action

Clinical Trial Authorization (CTA) was granted for a Phase I clinical study with ATOR-1017, and dosing preparations for the first patient are ongoing. The study will comprise up to 50 patients and is a dose-ranging study in patients with metastatic cancer. The study will be conducted in three different clinics in Sweden. The primary endpoint of the study is to investigate the safety and tolerability of ATOR-1017, and to determine the recommended dose for subsequent Phase II studies. ATOR-1017 is a FcgR (Fc gamma Receptor) crosslinking dependent 4-1BB agonist activating effector T cells ATOR-1017 is a FcgR (Fc gamma Receptor) crosslinking dependent 4-1BB agonist activating effector T cells ATOR-1017 is a FcgR (Fc gamma Receptor) crosslinking dependent 4-1BB agonist activating effector T cells Tumor Killing

Project status: Preclinical development

Preclinical data presented for the drug candidate ATOR-1017 shows that ATOR-1017 triggers potent anti-tumor effects in an experimental model of colorectal cancer (MC38). It has also been shown that ATOR-1017 has a dose-dependent inhibitory effect on tumor growth and improves survival.

Large volumes of preclinical data have been presented showing that ATOR-1017 stimulates both natural killer (NK) and T cells, both of which contribute to an effective immune-mediated killing of tumor cells. NK cells are immune cells that specifically target tumor cells trying to evade the immune system's response. NK cells also strengthen cell-death signaling from the immune system's tumor-specific T cells. Stimulatory antibodies against 4-1BB therefore strengthen the ability of both NK and T cells to attack tumor cells. Tumor Cell T cell Tumor Killing Tumor Cell T cell Tumor Killing Tumor Cell T cell

These preclinical data further support positioning of the 4-1BB antibody ATOR-1017 as best-in-class with the potential to minimize side effects while also triggering powerful immune responses.

2019 objectives

✓ Submission of Clinical Trial Authorization (CTA) application. Start of Phase I clinical study later this year.

Mechanism of action 4-1BB and FcgR co-expressing cells within the 4-1BB and FcgR co-expressing cells within the 4-1BB and FcgR co-expressing cells within the

ATOR-1017 is distinct from other 4-1BB antibodies, partly because of its unique binding profile, but also because its immunostimulatory function is dependent on crosslinking to Fc-gamma receptors in immune cells. This localizes the immunostimulation to the tumor region where both 4-1BB and Fc gamma receptors are expressed at high levels – totally in line with the treatment strategy for Alligator's drug candidates. The objective is to achieve an effective tumordirected immune response with minimum side effects.

ALG.APV-527. A tumor-binding and immunomodulatory antibody in the same molecule.

ALG.APV-527 is a bispecific antibody that targets the 4-1BB and 5T4 molecules, designed for the treatment of metastatic cancer. The antibody has two functions: to stimulate antitumor-specific T cells via the costimulatory receptor 4-1BB, and to bind to the 5T4 protein on the surface of tumor cells and thereby localize the immunostimulation to the tumor. ALG.APV-527 (4-1BB x 5T4) Mode of action ALG.APV-527 (4-1BB x 5T4) Mode of action ALG.APV-527 (4-1BB x 5T4) Mode of action

■ Events during the third quarter ALG.APV-527 active in 5T4+ tumor ALG.APV-527 active in 5T4+ tumor ALG.APV-527 active in 5T4+ tumor

The previous objective was to submit a CTA application for a Phase I clinical study together with Aptevo before the end of the year. Following a review of the entire project portfolio, Alligator and Aptevo have made a joint decision to postpone submission of a CTA (Clinical Trial Authorization), previously planned before year-end. For Alligator, this will ensure that resources are available for driving its clinical portfolio forward. The companies are initiating discussions with potential partners for the upcoming clinical development of ALG.APV-527. Binding to 4-1BB and 5T4 Clustering of 4-1BB T cell activation Tumor killing T cell Binding to 4-1BB and 5T4 Clustering of 4-1BB T cell activation Tumor killing T cell Binding to 4-1BB and 5T4 Clustering of 4-1BB T cell activation Tumor killing T cell

Project status: Preclinical development

Preclinical data for ALG.APV-527 has been presented at several scientific conferences. Data shows that ALG.APV-527 has the potential to selectively stimulate and strengthen the T cell response in the tumor without stimulating the immune system in the rest of the body. Data shows that ALG.APV-527 is localized to 5T4 positive tumors and selectively stimulates and enhances the tumor-directed immune responses of the T cells and NK cells. Additionally, data shows that the 5T4 antigen is expressed by a wide range of tumor types. The findings support its overall potential to evoke an effective tumor-targeting immune response with fewer adverse events.

Co-development with Aptevo

In July 2017, Aptevo Therapeutics and Alligator Bioscience signed an agreement regarding the co-development of ALG. APV-527. The antibody is based on Alligator's original bispecific drug candidate ATOR-1016. Under the agreement, the companies will equally own and finance the development of the drug candidate through the Phase II clinical study. Tumor Cell Tumor Cell Tumor Cell

The original molecules involved in the tumor-binding function and immunomodulatory function of ALG.APV-527 were developed using Alligator's patented antibody library, ALLIGATOR-GOLD. The bispecific molecule was then further developed and improved jointly with Aptevo, using their technology platform ADAPTIR™. A drug candidate was created by combining a tumor-binding function with an immunomodulatory function in the same molecule, that can selectively target the tumor and stimulate the antitumor-specific immune cells that are found there.

Updated 2019 objectives

Following a review of the entire project portfolio, Alligator have decided to postpone the CTA application. Also, the companies are initiating discussions with potential partners for the upcoming clinical development of ALG.APV-527.

Mechanism of action

Tumor Killing

4-1BB has the ability to stimulate the immune cells (antitumor-specific T cells) involved in tumor control, making 4-1BB a particularly compelling target for cancer immunotherapy. The tumor-binding function of ALG.APV-527 targets the 5T4 tumor-associated antigen. 5T4 is a protein expressed on multiple tumor types as well as certain types of aggressive tumor cells (tumor-initiating cells), but at low levels or not at all in normal tissue, making 5T4 a compelling target molecule for cancer therapy.

ATOR-1144. Tumor-localizing bispecific CTLA-4 x GITR antibody with broadened capacity to activate the immune system.

The ATOR-1144 drug candidate is a tumor-localizing bispecific CTLA-4 x GITR antibody with the potential to stimulate both the innate and adaptive (acquired) immune systems, also with a direct anti-tumor effect. The innate immune system is the body's first line of defense against pathogens. The acquired immune system does not react the first time the body is attacked. However, it remembers the pathogen and is ready to respond if it ever attacks again.

■ Events after the end of the period

Promising preclinical data was presented in October at the European Antibody Congress in Basel. The results demonstrate a potent anti-tumor effect in disease models of cancer. The results also show that treatment with ATOR-1144 can induce an immunological memory.

In order to reduce costs and resources for the coming year, the number of activities carried out for ATOR-1144 will be limited and only then to strengthen the preclinical data package.

Project status: Preclinical phase

ATOR-1144 entered the preclinical development phase shortly before the end of 2018. In April 2019, preclinical data presented at the AACR Annual Meeting (American Association for Cancer Research) showed that ATOR-1144 has several different methods of attack: activating effector T cells (immunostimulatory), killing regulatory T cells (immunosuppressive) and tumor cells, and activating NK cells, which can kill more tumor cells. Furthermore, GITR is also expressed on other cells involved in direct tumor cell killing.

ATOR-1144 consists of two binding components. One component is a GITR-specific antibody isolated from ALLIGATOR-

GOLD; the other is a CTLA-4-specific binder developed through FIND-optimization of CD86, a natural ligand for CTLA-4.

2019 objectives

✓ Ongoing preclinical studies will continue throughout the year, including experimental studies to demonstrate anti-tumor effects.

Mechanism of action

Other projects.

Alligator's early-stage research projects include several projects with components created using ALLIGATOR-GOLD and FIND, and then assembled using Alligator's bispecific format.

■ Events during the third quarter Technology agreement with Biotheus

In August 2019, an agreement was concluded with Biotheus Inc. ("Biotheus"), a privately owned Chinese company based in Zhuhai, Guangdong Province, China. Biotheus obtained the Chinese rights (China, Hong Kong, Taiwan and Macao) to an antibody from the ALLIGATOR-GOLD antibody library, with the aim of creating up to three new bispecific molecules. The agreement also contains an option to expand the license to include global rights.

The license agreement includes an upfront payment of USD 1 million, USD 0.5 million when the agreement is signed and an additional USD 0.5 million after six months of scientific and technical evaluation. The agreement gives Alligator the right to total upfront, milestone and option payments of up to USD 142 million. Upfront and milestone payments linked to the achievement of various development targets total approximately USD 52 million. If the global license option is exercised, Alligator is entitled to USD 90 million, as well as royalties on future sales and a proportion of any sub-licensing revenues.

AC101 agreement with AbClon

In July 2019, the first patient was dosed with AC101 (named HLX22 by Henlius) in a Phase I study. The objective of the study is to study safety, tolerability and pharmacokinetics in patients with tumors with HER2 overexpression (breast cancer biomarker).

Through its subsidiary Atlas Therapeutics AB, Alligator holds a participating interest in the clinical project Biosynergy (AC101/ HLX22), run by the Korean company AbClon. Alligator incurs no overheads for this project but is entitled to a share of any future returns. During previous financial years, Alligator received two milestone payments totaling SEK 2.1 million in conjunction with a regional out-licensing of one of these products, the HER2 antibody AC101.

In autumn 2018, a third party, Shanghai Henlius Biotech, Inc. ("Henlius"), chose to expand the scope of the AC101 agreement from a regional to a global agreement. The exercising of this option triggered a payment of USD 10 million (approximately SEK 90 million) from Henlius to AbClon Inc. ("AbClon"). Alligator holds an ownership interest in this project through its subsidiary Atlas Therapeutics AB that entitles Alligator to 35 percent of AbClon's revenue from the agreement with Henlius. Alligator received a payment of approximately SEK 25 million in March 2019.

Alligator's mission is to change this.

There is a huge unmet need for new, effective treatments.

One in five men and one in six women worldwide will at some stage of their lives develop cancer. Every year, about 18 million people are diagnosed with cancer and approximately 10 million people die of cancer (Globocan 2018), which means there is a major unmet need for advanced cancer care. One reason why cancer cases are constantly increasing is our increasing lifespan. Another is that diagnostics have improved. This means that more cancer cases are detected, more often in an early stage, which improves the chances of successful treatment.

Targeted attack on the cancer tumor

The immune system is the body's protection against attacks by pathogenic micro-organisms (such as viruses and bacteria) and by cancer cells. Growing tumors often contain large numbers of immune cells with an innate ability to attack the cancer cells. However, the cancer often develops its own protection against the immune system, by producing immunosuppressive agents, for example. Immunotherapy strengthens the body's ability to fight cancer effectively, which blocks or weakens the tumor's defense. The immune cells that destroy the cancer cells can then survive in the body and protect against metastases that may develop after the treatment. This "vaccination effect" is unique to immunotherapy. Through the use of biomolecular engineering and the company's patented technology platforms, Alligator's drug candidates are designed to selectively stimulate the immune system in the area surrounding the tumor rather than the whole body – which is not only expected to have a better effect, but also fewer side effects.

Growing importance of immunotherapies

Immuno-oncology is one of the fastest growing areas of drug research. The global market for cancer immunotherapies is expected to grow to nearly USD 107 billion in 2023. As an example, sales of Merck's drug Keytruda® (PD-1 inhibitor) alone have already exceeded USD 11 billion in 2019 (USD 7.1 billion in 2018). Source: Cowen Therapeutics Outlook March 2019.

Immunotherapy has revolutionized cancer therapy in recent years and is showing positive effects in a large proportion of patients and over a longer period of time compared with previous treatments. Future cancer treatments will probably involve several different drugs in combination. However, although the combination therapies used to date have boosted the clinical effect, they have also led to a higher risk of developing severe immune-related adverse events. Alligator's concept of tumordirected immunotherapy provides an opportunity to solve this and develop new cancer therapies with higher efficacy without increasing the risk of severe side effects.

The Alligator share.

Changes during the quarter

During the quarter, Norron funds and Öresund Investment, who where among the ten largest shareholders at the beginning of the quarter, have divested all their shares while Catella funds have reduced their shareholding (-855,000 shares) and is no longer among the ten largest shareholders. On the list with the ten largest shareholders, these have been replaced by Gladiator fund (+1,203,000 shares), Avanza Pension (+821,301 shares) and Stena AB (unchanged). During the quarter, the number of shareholders has increased from approximately 5,800 to 7,100.

Number of shares and stock option program

The total number of outstanding shares in the company at the end of the quarter was 71,388,615 (71,388,615).

At the AGM held in 2016, a resolution was passed regarding two incentive programs: an employee option program and a warrant program.

Under the employee option program, 900,000 employee stock options were allotted free of charge to participants. The employee options have been vested in installments until May 1, 2019. Of the allotted employee options, 846,664 have been vested and 53,336 have lapsed since the individuals to whom they were allotted have since left the company. To secure delivery under the employee option program, and to cover ancillary costs, primarily social security contributions, a total of 1,182,780 warrants were issued to a subsidiary of which 900,000 were allotted to employees free of charge and 282,780 were issued to cover ancillary costs. As a consequence of the warrants having lapsed, a total of maximum 1,112,686 warrants can be exercised in the program.

A total of 1,000,000 subscription options were issued under the program, of which a total of 857,000 warrants had been transferred to the participants in the program at market value at the end of the quarter. Further transfers will not take place and, as a consequence, a maximum of 857,000 warrants can be exercised in the program.

Each warrant in the two programs entitles the holder to acquire one new share at an exercise price of SEK 75. The warrants can be exercised in the from March 1, 2020 until May 31, 2020.

At the 2018 AGM, it was decided to set up another employee option program whereby 2,275,000 employee options were allotted free of charge to participants. The employee options will be vested in installments until May 1, 2021. Vesting is subject to the participant remaining in the company's employment and not having resigned on a given qualifying date. Of the allotted employee options, 568,750 have been vested, 1,665,000 may still be vested and 41,250 have lapsed since the individual to whom they were allotted has since left the company. To secure delivery under the employee stock option program, and to cover ancillary costs, primarily social security contributions, a total of 2,989,805 warrants were issued to a subsidiary of which 2,275,000 were allotted to employees free of charge and 714,805 were issued to cover ancillary costs. As a consequence of the warrants having lapsed, a total of maximum 2,935,594 warrants can be exercised in the program.

Each warrant in the program entitles the holder to acquire one new share at an exercise price of SEK 75. The warrants are expected to be available to exercise one month after the publication of the first quarter reports for 2021 and 2022.

Upon full exercise of all warrants issued in respect of the share subscription incentive programs, a total of 4,905,280 shares will be issued, thereby increasing the number of shares to a maximum of 76,293,895, corresponding a to dilution by 6.4%.

The Alligator share in brief (September 30, 2019)

Listed on: Nasdaq Stockholm Mid Cap
Number of shares: 71,388,615
Average turnover per day: Approximately 312,000 (preceding quarter approximately 60,000)
Number of shareholders: Approximately 7,100 (preceding quarter approximately 5,800)
Market capitalization: SEK 837 million (preceding quarter SEK 1,781 million)
Ticker: ATORX
ISIN: SE0000767188

Largest Shareholders, Sep 30, 2019	Number	%
Banque Internationale à Luxembourg SA	13,309,605	18.6
Johnson & Johnson Innovation	5,762,523	8.1
Sunstone Life Science Ventures Fund	5,758,485	8.1
Lars Spånberg	3,213,858	4.5
Gladiator fund	2,203,085	3.1
4AP fund	2,202,183	3.1
Avanza Pension	2,078,289	2.9
Öhman funds	1,968,859	2.8
Mikael Lönn	1,422,183	2.0
Stena AB	1,401,339	2.0
Remaining share holders	32,068,206	44.9

Banque Internationale à Luxembourg SA (BIL) is a group of mainly Swedish investors with their shares managed by BIL.

The company's owner structure is updated monthly on the company's website: www.alligatorbioscience.com.

Source: Shareholder data is based on a report from Euroclear and Monitor (Modular Finance) as of September 30, 2019, where certain foreign accounts have been identified by the company.

Other information.

Review

This report has been reviewed by the company's auditor.

Employees

The number of employees in the Group at the end of the quarter was 56 (55). Of these, 14 (14) were men and 42 (41) were women.

Of the total number of employees, 48 (47) were employed within Research and Development.

Future report dates

Alligator intends to publish its financial reports according to the following:

- Year-end report 2019 February 12, 2020, 8:00 am

Annual Report 2019 March 2020
Q1 Interim report April 23, 2020, 8:00 am
Q2 Interim report July 13, 2020, 1:00 pm • Q3 Interim report October 22, 2020, 8:00 am

The license agreement with Janssen

On July 31, it was announced that the company had regained exclusive, global rights to develop and commercialize the CD40 antibody ADC-1013 (JNJ-64457107) from Janssen Biotech, Inc. The agreement was terminated due to a strategic decision by Janssen to prioritize other projects. The original license agreement with Janssen comprised possible milestone payments of up to about USD 695 million. The successful commercialization of ADC-1013 would also have triggered incremental royalties on global net sales for Alligator. In addition to Janssen being responsible for and running the project in recent years, Alligator received an initial payment of USD 35 million when the agreement was signed in 2015, and then another USD 11 million during the time of the agreement.

Alligator has no legal or financial obligations to Janssen. The agreement was officially terminated on October 28, and all rights have been transferred to the company. The short-term financing is not impacted by regaining the rights due to the company's previous announcement that it does not expect to receive any milestone payments from this project during 2019.

Prospective information

As the company's project portfolio is expected to advance to more cost-intensive phases, Alligator's management has concluded that costs for 2019 are expected to increase within the range of approximately 10-20% compared with 2018.

The company out-licensed the ADC-1013 project to Janssen Biotech, Inc. and receives milestone payments as the various milestones in the project are achieved. The company does not expect to receive any milestone payments from this project in 2019.

Even if management believes the expectations in this forward-looking information are justified, no guarantees can be given that they will be correct. Accordingly, the actual outcome may differ significantly from the assumptions stated in this forward-looking information depending on, among other factors, changes in the economy or market, changes in legal or regulatory demands, other political decisions and changes in exchange rates.

Risks and uncertainties

During the course of its business operations, the Group is exposed to various financial risks, such as market risk (comprising foreign exchange risk, interest-rate risk and price risk), credit risk and liquidity risk. The aim of the Group's overall risk management is to achieve minimal adverse effects in terms of earnings and financial position. The Group's business risks, risk management and financial risks are described in detail in the Annual Report for 2018. As Alligator regains the global rights to ADC-1013 from Janssen, the risk in the company's long-term financing increases. Alligator will mitigate the risk by reviewing priorities in the company's project portfolio and further focus on out-licensing any of the company's projects. Otherwise, no significant events occurred during the year that impacted or changed these descriptions of the Group's risks and risk management.

Parent Company

Net sales, earnings trend, financial position and liquidity

Both Group management functions and all operating activities are carried out in the Parent Company.

For additional details, refer to the information provided for the Group since the subsidiaries do not conduct their own operations.

Notes to the reader

Figures in brackets refer to the outcome for the corresponding period in the preceding year for figures related to the income statement and cash flow. For figures related to the financial position and personnel, figures in brackets refer to December 31, 2018. Unless otherwise stated, all amounts stated are rounded correctly, which may mean that some totals do not tally exactly.

Registered trademarks

FIND® and ALLIGATOR-GOLD® are Alligator Bioscience AB proprietary trademarks which are registered in Sweden and other countries.

For further information, please contact:

Per Norlén, CEO [email protected] +46 46-540 82 00

Per-Olof Schrewelius, CFO [email protected] +46 46-540 82 03

Cecilia Hofvander, Director IR & Communications [email protected] + 46 46-540 82 06

Alligator Bioscience AB (publ) 556597-8201

Medicon Village, Scheelevägen 2, 223 81 Lund, Sweden. Phone +46 46 540 82 00. www.alligatorbioscience.com

Financial statements

Unless otherwise stated, this Interim Report refers to the Group. Due to the nature of the business, there can be large fluctuations in revenue which are not seasonal or regular but are mainly linked to when milestones generating a payment are reached in out-licensed research projects.

Like revenue, expenses can also fluctuate between periods. Among other factors, this fluctuation in expenses is influenced by the current phase of the various projects since certain phases generate higher costs. Figures in brackets refer to the outcome for the corresponding period in the preceding year for figures related to the income statement and cash flow. For figures related to the financial position and personnel, figures in brackets refer to December 31, 2018.

Unless stated otherwise, all amounts are in SEK thousand (TSEK). All amounts stated are rounded, which may mean that some totals do not tally exactly.

Consolidated Income Statement

Net sales. Sales for the quarter and year pertain primarily to the license agreement with Biotheus Inc. In the same periods prior year, sales pertained primarily to payments for development work related to the agreement for ADC-1013/ mitazalimab.

Other operating income. Other operating income for the year comprises exchange gains in the company's operations. In the same period prior year, revenue comprised exchange gains in the company's operations.

Operating expenses. The company has expanded its operations compared with the same period prior year and its ongoing projects have progressed. The overall cost level is within the previously communicated cost increase interval of 10-20 percent compared to last year. As the clinical study for ATOR-1015 progresses and the production of materials in certain projects begins, costs are expected to increase relative to the same period prior year. Employee benefit expenses have increased as a result of additional people being employed, mainly within R&D.

Total financial items. Pertains to returns on liquidity and financial assets as well as unrealized exchange gains and losses as a result of significant liquidity positions in USD, EUR and GBP.

		2019	2018	2019	2018	2018
All amounts TSEK unless specified	Note	Jul-Sep	Jul-Sep	Jan-Sep	Jan-Sep	Jan-Dec
Net sales	5	4,288	197	4,358	1,364	26,959
Other operating income	5	134	520	610	1,145	1,555
Total operating income		4,422	716	4,969	2,509	28,514

Operating costs
Other external costs		-46,115	-27,564	-104,072	-81,850	-121,162
Personnel costs		-13,149	-11,092	-45,340	-37,630	-52,144
Depreciation of tangible assets and intangible assets		-2,890	-1,523	-8,681	-4,398	-5,902
Other operatings expenses		-735	-454	-2,087	-1,650	-2,387
Total operating costs		-62,888	-40,634	-160,180	-125,529	-181,594
Operating profit/loss		-58,467	-39,918	-155,212	-123,020	-153,080

Result from other securities and receivables		314	279	941	868	1,160
Other interest income and similar income statement items		1,636	1,313	4,276	7,582	7,465
Interest expense and similar income statement items		-116	-1,308	-354	-4,885	-5,587
Net financial items		1,834	283	4,864	3,566	3,037

Profit/loss before tax		-56,633	-39,635	-150,348	-119,454	-150,043
Tax on profit for the period		0	0	0	0	0
Profit for the period attributable to Parent Company
shareholders		-56,633	-39,635	-150,348	-119,454	-150,043

Earnings per share before dilution, SEK		-0.79	-0.56	-2.11	-1.67	-2.10
Earnings per share after dilution, SEK		-0.79	-0.56	-2.11	-1.67	-2.10

Consolidated Statement of Comprehensive Income

All amounts TSEK Note	2019 Jul-Sep	2018 Jul-Sep	2019 Jan-Sep	2018 Jan-Sep	2018 Jan-Dec
Profit/loss for the period	-56,633	-39,635	-150,348	-119,454	-150,043
Other comprehensive income	0	0	0	0	0
Comprehensive income for the period	-56,633	-39,635	-150,348	-119,454	-150,043

Consolidated Statement of Financial Position

Prepayments and accrued income. The increase pertains to prepaid manufacturing costs for drug substance. At the end of the period, prepayments and accrued income amounted to SEK 8,527 thousand (4,521).

Cash and cash equivalents. Consolidated cash and cash equivalents, which consist of bank balances and short-term, highly liquid investments, totaled SEK 239,281 thousand (362,878). Bank balances amounted to SEK 86,602 thousand (112,024). A portion of the Group's liquidity is invested in short-term interest funds funds, which is recognized as cash and cash equivalents. This investment can easily be converted to cash and is subject to an immaterial risk of changes in value. The investment totals a nominal amount of SEK 150,908 thousand (250,439) and the value at the end of the period was SEK 152,679 thousand (250,854).

Cash, cash equivalents and other short-term investments, including financial assets. The Group invests a portion of its liquidity in corporate bonds, which are deemed to be easily convertible to cash. The value of these bonds amounts to SEK 63,089 thousand (73,513), of which SEK 10,012 (20,254) is classified as short-term since one of the bonds mature within 12 months. The Group plans to use its liquidity for operating activities. A portion of the Group's liquidity is invested in USD, EUR and GBP foreign currency accounts. In accordance with the Group's Financial Policy, inflows of foreign currencies exceeding the expected requirements for the coming 18 months are to be converted to SEK at the time of payment. Besides this, no further hedging has taken place.

Equity. Equity at the end of the period amounted to SEK 318,210 thousand (468,310), corresponding to an equity ratio of 86% (92).

Equity per share before and after dilution. At the end of the period, equity per outstanding share amounted to SEK 4.46 (6.56), before and after dilution. Since the subscription price for issued options has not been reached, these are not taken into account (not "in-the-money").

Right of use assets, lease liabilities and loans. At the end of the period, right of use assets amounted to SEK 19 554 thousand (0) and lease liabilities amounted to SEK 18 200 thousand (0). Both right of use assets and lease liabilities pertain primarly to leases for offices and laboratories. No loans had been raised as of 30 September 2019 and no loans have been raised since that date. The Group has no loans or loan commitments.

Accrued expenses and deferred income. The increase pertains to accrued expenses for manufacturing of drug substance and accrued costs for clinical activities. At the end of the period, accrued expenses and deferred income amounted to SEK 28,627 thousand (20,580).

All amounts in TSEK Note 2019-09-30 2018-09-30 2018-12-31

ASSETS
Fixed assets
Intangible assets
Participations in development projects	3	17,949	17,949	17,949
Patents		318	870	702
Softwares		496	491	464
Tangible assets
Improvements in leased premises		1,977	2,586	2,434
Right of use assets	2	19,554	0	0
Equipment, machinery and computers		13,155	16,351	15,804
Financial assets
Other investments held as fixed assets	6	53,077	63,477	53,259
Total fixed assets		106,527	101,723	90,612

Current assets
Current receivables
Accounts receivable	6	4,934	197	25,328
Other receivables	6	2,463	4,083	4,564
Prepayments and accrued income		8,527	4,583	4,521
Other short-term financial assets	6	10,012	10,189	20,254
Cash and cash equivalents	6	239,281	404,688	362,878
Total current assets		265,217	423,740	417,545
TOTAL ASSETS		371,743	525,463	508,156

EQUITY AND LIABILITIES
Equity
Share capital		28,555	28,555	28,555
Other capital contributions		662,614	662,614	662,614
Retained earnings and profit/loss for the period		-372,960	-192,390	-222,860
Equity attributable to Parent Company shareholders		318,210	498,779	468,310
Non-current provisions and liabilities
Lease Liabilities	2, 6	12,525	0	0
Total non-current provisions and liabilities		12,525	0	0

Current liabilities
Accounts payable	6	5,787	13,276	17,702
Other liabilities		920	786	1,564
Lease Liabilities	2, 6	5,675	0	0
Accrued expenses and deferred income	6	28,627	12,622	20,580
Total current liabilities		41,009	26,684	39,847

TOTAL EQUITY AND LIABILITIES 371,743 525,463 508,156

Consolidated Statement of Changes in Equity

Consolidated Statement of Cash Flows All amounts in TSEK

Investments. Investments for the third quarter amounted to SEK 116 thousand (590). These investments comprised software totaling SEK 116 thousand (541). During the quarter, investments in laboratory equipment totaling SEK 0 thousand (49).

Investments during the first nine months of 2019 was made in software SEK 116 thousand and laboratory equipment SEK 816 thousand (5,940). During the period, investments in leased premises amounted to SEK 0 thousand (573).

Cash flow for the period. Cash flow for the third quarter totaled SEK -46,805 thousand (-39,691). During the quarter, a corporate bond of SEK 10 000 thousand matured, previously reported as Other short-term financial assets.

Cash flow for the first nine months of 2019 amounted to SEK -125,973 (-69,990). During the first quarter, a payment was received as a result of Shanghai Henlius Biotech, Inc. exercising an option to acquire the global licensing rights to the Biosynergy project, which was recognized as revenue in the fourth quarter of 2018.

All amounts in TSEK	2019 Jul-Sep	2018 Jul-Sep	2019 Jan-Sep	2018 Jan-Sep	2018 Jan-Dec
Opening balance	374,789	538,295	468,310	617,956	617,956
New capital issue	0	0	0	0	0
Effect of share-based payments	53	119	247	278	397
Profit/loss for the period	-56,633	-39,635	-150,348	-119,454	-150,043
Other comprehensive income in the period	0	0	0	0	0
Closing balance	318,210	498,779	318,210	498,779	468,310

	2019	2018	2019	2018	2018
	Jul-Sep	Jul-Sep	Jan-Sep	Jan-Sep	Jan-Dec
Operating activities
Operating profit/loss	-58,467	-39,918	-155,212	-123,020	-153,080
Adjustments for items not generating cash flow
Depreciation and impairments	2,890	1,523	8,681	4,398	5,902
Effect from warrant program	53	119	247	278	397
Other items, no impact on cash flow	463	199	1,825	848	32
Interest received	453	431	1,409	1,415	1,886
Interest paid	-102	0	-321	0	0
Tax paid	0	0	0	0	0
Cash flow from operating activities before changes in working
capital	-54,710	-37,645	-143,371	-116,081	-144,863

Changes in working capital
Change in operating receivables	-9,154	-1,294	18,489	51,529	25,979
Change in operating liabilities	8,595	-172	-4,513	1,607	14,769
Cash flow from operating activities	-55,269	-39,111	-129,395	-62,945	-104,115

Investing activities
Acquisition of intangible assets	-116	-541	-116	-541	-541
Acquisition of tangible assets	0	-49	-816	-6,514	-7,124
Divestment of property, plant and equipment	0	10	0	10	10
Divestment of securities	10,000	0	10,000	0	0
Cash flow from investing activities	9,885	-580	9,069	-7,045	-7,655

Financing activities
Amortization of leasing liabilities	-1,421	0	-5,646	0	0
Cash flow from financing activities	-1,421	0	-5,646	0	0

Cash flow for the period	-46,805	-39,691	-125,973	-69,990	-111,770

Cash and cash equivalents at beginning of period	284,950	444,575	362,878	472,919	472,919
Exchange rate differences in cash and cash equivalents	1,136	-196	2,376	1,759	1,728
Cash and cash equivalents at end of period	239,281	404,688	239,281	404,688	362,878

* Inclusive other short-term liquid asset investments in interest funds of SEK 153 millions, easily converted into cash and subject to an insignificant risk of value changes. Bonds of SEK 63 millions, easily converted into cash, are not included in cash and cash equivalents.

Parent Company Income Statement

		2019	2018	2019	2018	2018
All amounts in TSEK	Note	Jul-Sep	Jul-Sep	Jan-Sep	Jan-Sep	Jan-Dec
Net sales		4,288	197	4,358	1,364	1,751
Other operating income		134	520	289	1,145	1,555
Total operating income		4,422	716	4,647	2,509	3,307
Operating costs
Other external costs		-47,616	-27,564	-108,534	-81,848	-121,159
Personnel costs		-13,149	-11,092	-45,340	-37,630	-52,144
Depreciation and impairment of tangible assets and
intangible assets		-1,446	-1,523	-4,389	-4,398	-5,902
Other operatings expenses		-735	-454	-2,087	-1,650	-2,121
Total operating costs		-62,946	-40,634	-160,350	-125,526	-181,325
Operating profit/loss		-58,525	-39,918	-155,703	-123,017	-178,019

Results from financial items
Result from other securities and receivables		314	279	941	868	1,160
Other interest income and similar income statement items		435	1,113	2,093	6,734	7,871
Interest expense and similar income statement items		-1	-1,308	-20	-4,885	-5,587
Net financial items		748	83	3,014	2,718	3,444
Profit/loss after financial items		-57,777	-39,835	-152,689	-120,299	-174,575

Appropriations
Group contribution received		0	0	0	0	14,677
Total appropriations		0	0	0	0	14,677
Result before tax		-57,777	-39,835	-152,689	-120,299	-159,898

Tax on profit for the year		0	0	0	0	0
Profit/loss for the period		-57,777	-39,835	-152,689	-120,299	-159,898

Parent Company Statement of Comprehensive Income

	2019	2018	2019	2018	2018
All amounts in TSEK Note	Jul-Sep	Jul-Sep	Jan-Sep	Jan-Sep	Jan-Dec
Profit/loss for the period	-57,777	-39,835	-152,689	-120,299	-159,898
Other comprehensive income	0	0	0	0	0
Profit/loss for the year	-57,777	-39,835	-152,689	-120,299	-159,898

Parent Company Balance Sheet

All amounts in TSEK Note	2019-09-30	2018-09-30	2018-12-31
ASSETS
Fixed assets
Intangible assets
Patents	318	870	702
Software	496	491	464
Total intangible assets	814	1,361	1,166
Tangible assets
Improvements in leased premises	1,977	2,586	2,434
Equipment, machinery and computers	13,155	16,351	15,804
Total tangible assets	15,133	18,937	18,238
Financial assets
Participations in Group companies	20,294 3	20,294	20,294
Other investments held as fixed assets	53,077	63,477	53,259
Total financial assets	73,371	83,771	73,553
Total fixed assets	89,318	104,068	92,957

Current assets
Current receivables
Accounts receivables	4,934	197	387
Receivables from Group companies	0	0	14,677
Other receivables	2,463	4,083	4,563
Prepayments and accrued income	10,022	4,583	4,521
Total current receivables	17,419	8,862	24,148
Other short-term investments	160,920	285,189	270,693
Cash and bank deposits	72,541	125,349	109,353
Total current assets	250,880	419,400	404,195
TOTAL ASSETS	340,198	523,469	497,152

EQUITY AND LIABILITIES
Equity Restricted equity
Share capital	28,555	28,555	28,555
Total restricted equity	28,555	28,555	28,555
Non-restricted equity
Share premium reserve	662,741	662,741	662,741

Retained earnings	-233,744	-74,213	-74,094
Profit/loss for the period	-152,689	-120,299	-159,898
Total non-restricted equity	276,309	468,229	428,750
Total equity	304,864	496,785	457,305
Current liabilities
Accounts payable	5,787	13,276	17,702
Other liabilities	920	786	1,564
Accrued expenses and deferred income	28,627	12,622	20,580
Total current liabilities	35,334	26,684	39,847
TOTAL EQUITY AND LIABILITIES	340,198	523,469	497,152

Notes.

Note 1 General information

This Interim report covers the Swedish Parent Company Alligator Bioscience AB (publ), corporate registration number 556597-8201, and its subsidiaries Atlas Therapeutics AB, corporate registration number 556815-2424, and A Bioscience Incentive AB, corporate registration number 559056- 3663. All the Group's business operations are carried out in the Parent Company.

The Parent Company is a Swedish public limited liability company registered and domiciled in the Municipality of Lund. The head office is located at Medicon Village, SE-223 81 Lund.

Note 2 Accounting policies

This Interim report for the Group has been prepared in accordance with IAS 34 Interim Financial Reporting and applicable regulations in the Swedish Annual Accounts Act (ÅRL). The Interim report for the Parent Company has been prepared in accordance with the Swedish Annual Accounts Act (ÅRL) and the Swedish Financial Reporting Board's recommendation RFR 2 Accounting for Legal Entities.

The accounting policies and calculation methods used in this report are the same as those described in the Annual Report for 2018 with the following exceptions.

IFRS 16 Leases

The new standard that entered into force on January 1, 2019, IFRS 16 Leases, has been implemented during the financial year and had no material impact on the Group's or the Parent Company's financial statements for the period. This standard replaces IAS 17 Leases. The transition to IFRS 16 has been recognized in accordance with the modified retrospective approach, meaning that the transition has been recognized as an adjustment of the opening balance at the transition date. Comparative figures and previous years have not be restated. For more information on the impact on the consolidated financial statements at the transition date, refer to Note 2 Accounting policies and Note 10 Leasing in the Annual Report for 2018.

The Group determines whether a contract is, or contains, a lease at the start of the contract. The Group recognizes a right-of-use assets and a corresponding lease liability for all leases in which the Group is the lessee, with the exception of leases where the underlying asset is of a low value. For leases that fulfill the criteria for the exemption rules, the Group recognizes lease payments as an operating expense on a straight-line basis over the lease term, provided no other systematic method for allocating the lease payment provides a fairer presentation taking into account how the economic benefits from the underlying asset are consumed by the lessee.

The lease liability is initially measured at the present value of the future lease payments that have not been paid as of the start date for the lease, discounted by the implicit interest rate or, if this cannot easily be determined, by the incremental borrowing rate. The incremental borrowing rate is the interest rate that a lessee would need to pay for financing through loans in a corresponding period, and with corresponding collateral, for the right of use for an asset in a similar economic environment.

The following lease payments are included in the measurement of lease liabilities:

fixed fees (including essentially fixed fees) less any benefits in connection with signing the lease that are to be received,
variable lease payments that are dependent on an index or price, initially measured using an index or price on the start date,
amounts expected to be paid by the lessee according to residual value guarantees,
the exercise price for an option, if the lessee is reasonably certain that such an option will be exercised, and
penalty charges paid upon termination of the lease, if the lease term reflects the fact that the lessee will exercise an option to terminate the lease.

Lease liabilities are presented on a separate line in the statement of financial position.

Lease liabilities are recognized in the subsequent period by increasing the liability to reflect the effect of interest and reducing the liability to reflect the effect of lease payments made.

Lease liabilities are remeasured with a corresponding adjustment of the right-of-use asset according to the rules of the standard. No such adjustments have been made during the current period.

The right-of-use asset is initially recognized at the value of the lease liability, plus lease payments made on or prior to the start date for the lease and initial direct expenses. The right-of-use asset is recognized in the subsequent period at cost loss depreciation and impairment.

If the Group undertakes an obligation to dismantle a leased asset, to restore land or to restore and renovate an asset to a condition agreed on in the lease, a provision for such obligations is recognized in accordance with IAS 37. Such provisions are included in the cost of the right-of-use asset, provided they are not linked to the production of inventory.

Right-of-use assets depreciated over their estimated useful life or, if it is shorter, over the agreed lease term. If a lease entails a transfer of ownership right at the end of the lease term, or if the cost includes a probable exercise of a call option, the right-of-use asset is depreciated over its useful life. Depreciation commences on the start date for the lease.

Right-of-use assets are presented on a separate line in the statement of financial position.

The group applies the principles of IAS 36 for impairment of right-of-use assets and recognizes this item in accordance with the accounting policy for tangible assets according to IAS 16.

Variable lease payments that are not dependent on an index or price are not included in the measurement of lease liabilities and right-of-use assets. Such lease payments are recognized as a cost under operating profit in the period in which they arise.

IFRS 16 contains practical exemption rules that entail that the lessee does not need to separate service components from the applicable lease payment by class of asset. The Group has chosen not to apply this exemption rule.

Note 3 Effects of changed estimates and judgments

Significant estimates and judgments are described in Note 3 of the Annual Report for 2018. There have been no changes to the company's estimates and judgments since the Annual Report for 2018 was prepared.

Note 4 Segment reporting

The company conducts only one business activity, namely research and development in the field of immunotherapy, and the chief operating decision-maker is thus only responsible for regularly making decisions on and allocating resources to one entity. Accordingly, the company comprises only one operating segment, which corresponds to the Group as a whole, and no separate segment reporting is provided.

Note 5 Consolidated income

A breakdown of the Group's revenue regarding license revenue is as follows:

	2019	2018	2019	2018	2018
All amounts in TSEK	Jul-Sep	Jul-Sep	Jan-Sep	Jan-Sep	Jan-Dec
Licensing income	4,288	0	4,288	0	25,207
Reimbursement for development work	0	197	70	1,364	1,751
Milestone revenue	0	0	0	0	0
Royalty	0	0	0	0	0
Total	4,288	197	4,358	1,364	26,959

A breakdown of the Group's revenue per project is as follows:

	2019	2018	2019	2018	2018
All amounts in TSEK	Jul-Sep	Jul-Sep	Jan-Sep	Jan-Sep	Jan-Dec
ADC-1013/mitazalimab	0	197	70	1,332	1,720
Biosynergy	0	0	0	0	25,207
Biotheus	4,288	0	4,288	0	0
Other	0	0	0	32	32
Total	4,288	197	4,358	1,364	26,959

Alligator receives revenues in USD from out-licensed projects.

A breakdown of the Group's other operating income is as follows:

	2019	2018	2019	2018	2018
All amounts in TSEK	Jul-Sep	Jul-Sep	Jan-Sep	Jan-Sep	Jan-Dec
Swedish government grants received	0	0	0	0	68
Operational exchange rate gains	134	520	610	1,145	1,488
Other	0	0	1	0	0
Total	134	520	610	1,145	1,555

Note 6 Financial instruments

Cash and cash equivalents at September 30, 2019 consisted of bank balances amounting to SEK 86,602 thousand (112 024) and investments in fixed income funds totaling SEK 152,679 thousand (250 854). Other investments held as fixed assets and other short-term investments pertain to investments in corporate bonds. The accounting policies are described in Note 2 in the annual report for 2018. For other financial assets and liabilities, the reported value as below is considered a reasonable approximation of fair value.

All amounts in TSEK	2019-09-30	2018-09-30	2018-12-31

Financial assets valued at fair value through profit and loss
Liquid assets - Interest funds	152,679	276,669	250,854

Financial assets valued at amortized cost
Other investments held as fixed assets	53,077	63,477	53,259
Other short term investments	10,012	10,189	20,254
Accounts receivable	4,934	197	25,328
Other receivables	880	872	843
Liquid assets - Bank accounts	86,602	128,019	112,024
Total financial assets	308,184	479,423	462,562

Financial liabilities valued at amortized cost
Long term lease liabilities	12,525	0	0
Accounts payable	5,787	13,276	17,702
Short term lease liabilities	5,675	0	0
Accrued expenses	23,506	8,558	15,827
Total financial liabilities	47,493	21,834	33,529

Note 7 Related party transactions

Alligator has a consulting agreement with Carl Borrebaeck through the company Ocean Capital AB pertaining to expert assistance with the evaluation of early-phase research projects and new antibodies. Carl Borrebaeck also plays an important role in building and developing contacts with leading researchers and prominent organizations within cancer immunotherapy. Pricing has been determined on market conditions. These related party transactions corresponded to an expense of SEK 180 thousand (180) for the third quarter and SEK 540 thousand (540) for the year to date.

Calculation of performance measures.

Alligator presents certain financial performance measures in this report, including measures that are not defined under IFRS. The company believes that these performance measures are an important complement because they allow for a better evaluation of the company's economic trends. These financial performance measures should not be viewed in isolation or be considered to replace the performance indicators that have been prepared in accordance with IFRS. In addition, such performance measures as Alligator has defined them should not be compared with other performance measures with similar names used by other companies. This is because the above-mentioned performance measures are not always defined in the same manner, and other companies may calculate them differently to Alligator.

The table below shows the calculation of key figures, for the mandatory earnings per share according to IFRS and also for performance measures that are not defined under IFRS or where the calculation is not shown in another table in this report.

The company's business operation is to conduct research and development which is why "R&D costs/Operating costs excluding impairment in %" is an essential indicator as a measure of efficiency, and how much of the company's costs relate to R&D.

As mentioned earlier in this report, the company does not have a steady flow of revenue, with revenue generated irregularly in connection with the signing of license agreements and achievement of milestones. Therefore, the company monitors performance indicators such as equity ratio and equity per share in order to assess the company's solvency and financial stability. These are monitored along with the cash position and the various measures of cash flows shown in the consolidated statement of cash flow.

For definitions, see the section "Financial definitions" on page 26.

	2019	2018	2019	2018	2018
All amounts TSEK unless specified	Jul-Sep	Jul-Sep	Jan-Sep	Jan-Sep	Jan-Dec
Profit/loss for the period	-56,633	-39,635	-150,348	-119,454	-150,043
Average number of shares before dilution	71,388,615	71,388,615	71,388,615	71,388,615	71,388,615
Earnings per share before dilution, SEK	-0.79	-0.56	-2.11	-1.67	-2.10
Average number of shares after dilution	71,388,615	71,388,615	71,388,615	71,388,615	71,388,615
Earnings per share after dilution, SEK	-0.79	-0.56	-2.11	-1.67	-2.10

Operating costs	-62,888	-40,634	-160,180	-125,529	-181,594
Impairment of tangible assets and intangible assets	0	0	0	0	0
Operating costs excluding impairments	-62,888	-40,634	-160,180	-125,529	-181,594
Administrative expenses	-7,974	-8,166	-25,611	-25,712	-36,199
Depreciation	-2,890	-1,523	-8,681	-4,398	-5,902
Research and development costs	-52,025	-30,945	-125,888	-95,418	-139,493
R&D costs / Operating costs excluding impairments %	83%	76%	79%	76%	77%

Equity	318,210	498,779	318,210	498,779	468,310
Average number of shares before dilution	71,388,615	71,388,615	71,388,615	71,388,615	71,388,615
Equity per share before dilution, SEK	4.46	6.99	4.46	6.99	6.56
Average number of shares after dilution	71,388,615	71,388,615	71,388,615	71,388,615	71,388,615
Equity per share after dilution, SEK	4.46	6.99	4.46	6.99	6.56

Equity	318,210	498,779	318,210	498,779	468,310
Total assets	371,743	525,463	371,743	525,463	508,156
Equity ratio, %	86%	95%	86%	95%	92%

Other investments held as fixed assets (publicly traded
corporate bonds)	53,077	63,477	53,077	63,477	53,259
Other short-term financial assets (publicly traded corporate
bonds)	10,012	10,189	10,012	10,189	20,254
Cash and cash equivalents	239,281	404,688	239,281	404,688	362,878
Cash and cash equivalents at end of period	302,370	478,355	302,370	478,355	436,391

The declaration of the Board of Directors and the CEO.

The Board and the CEO declare that this Interim report provides a true and fair overview of the company and the Group's operations, positions and earnings and describes the material risks and uncertainty factors faced by the Parent company and the companies within the Group.

Lund, October 24, 2019

Peter Benson Carl Borrebaeck Chairman Member of the Board

Ulrika Danielsson Graham Dixon Member of the Board Member of the Board

Kirsten Drejer Anders Ekblom Member of the Board Member of the Board

Kenth Petersson Jonas Sjögren

Member of the Board Member of the Board

Laura von Schantz Per Norlén Employee representative CEO

Laura von Schantz Per Norlén

Alligator Bioscience AB | Interim report January-September 2019 – 24 – Declaration of the Board of Directors and the CEO

THIS IS A TRANSLATION FROM THE SWEDISH ORIGINAL

Review report

Alligator Bioscience AB (publ), corporate identity number 556597-8201 To the Board of Directors of Alligator Bioscience AB (publ)

Introduction

We have reviewed the condensed interim report for Alligator Bioscience AB (publ) as at September 30, 2019 and for the nine months period then ended. The Board of Directors and the Managing Director are responsible for the preparation and presentation of this interim report in accordance with IAS 34 and the Swedish Annual Accounts Act. Our responsibility is to express a conclusion on this interim report based on our review.

Scope of review

We conducted our review in accordance with the International Standard on Review Engagements, ISRE 2410 Review of Interim Financial Statements Performed by the Independent Auditor of the Entity. A review consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing and other generally accepted auditing standards in Sweden. The procedures performed in a review do not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the interim report is not prepared, in all material aspects, in accordance with IAS 34 and the Swedish Annual Accounts Act regarding the Group, and in accordance with the Swedish Annual Accounts Act regarding the Parent Company.

Lund, October 24, 2019

Ernst & Young AB

Johan Thuresson

Authorized Public Accountant

Financial definitions.

Average number of employees

Average number of employees at the beginning and end of the period.

Average number of employees within R&D

Average number of employees within the Company's R&D departments at the beginning and end of the period.

Average number of shares before and after dilution

Average number of outstanding shares during the period. The number of shares after dilution also takes account of outstanding options where the company's share price on the reporting date is at least equal to the conversion price of the option.

Cash and Cash equivalents including securities

Cash and cash equivalents consists of bank balances, interest funds and publicly traded corporate bonds.

Cash flow for the period

Net change in cash and cash equivalents excluding the impact of unrealized foreign exchange gains and losses.

Cash flow from operating activities

Cash flow before investing and financing activities.

Earnings per share before and after dilution

Earnings divided by the weighted average number of shares during the period before and after dilution respectively. If the result is negative, the number of shares before dilution is also used for the calculation after dilution.

Equity per share after dilution

Equity divided by the total number of shares at the end of the period and any outstanding options where the company's share price on the reporting date is at least equal to the conversion price of the option.

Equity per share before delution

Equity divided by the number of shares at the end of the period.

Equity ratio

Equity as a percentage of Total assets.

Operating costs excluding impairments

Other external costs, personnel costs and depreciation (excluding impairments of tangible and intangible assets).

Operating profit/loss

Profit/loss before financial items and taxes.

R&D costs

The Company's direct costs for research and development. Refers to costs for personnel, materials and external services.

R&D costs as a percentage of operating costs excluding impairments

R&D costs as a percentage of operating costs excluding impairments.

Total assets

Total of the Company's assets.

Glossary.

Agonist

A compound which binds to a receptor and stimulates its activity.

Antigen

Substance which triggers a reaction in the immune system, such as a bacteria or virus.

Antibody

Proteins used by the body's immune defenses to detect and identify xenobiotic material.

Bispecific antibodies

Antibody-based products which bind to two different targets and thus have dual functions.

Cancer

A disease in which cells divide in an uncontrolled manner and invade neighboring tissue. Cancer can also spread (metastasize) to other parts of the body through the blood and the lymphatic system.

Checkpoint inhibitor

An antibody with the ability to break the immune system's tolerance to something dangerous, for example a cancer tumor. Immune-inhibiting signals can be blocked through binding to a specific receptor such as CTLA-4 or PD-1.

Clinical study

The examination of healthy volunteers or patients to study the safety and efficacy of a potential drug or treatment method.

CRO (Clinical Research Organization)

Company specialized in performing contract research and clinical studies on behalf of other pharma or biotech companies.

CTA (Clinical Trial Authorization)

Application to start clinical trials in humans which is submitted to a regulatory authority.

CTLA-4 (Cytotoxic T-lymphocyte-Associated protein-4)

An immune-inhibiting molecule expressed in and on the surface of T cells, primarily regulatory T cells.

Dendritic cell

A type of cell which detects xenobiotic substances. A key role of dendritic cells is their ability to stimulate T cells in the immune system.

Discovery

This research phase usually encompasses the development and evaluation of treatment concepts, the evaluation of potential drug candidates, and early efficacy studies.

Drug candidate

A specific compound usually designated before or during the preclinical phase. The drug candidate is the compound that is then studied in humans in clinical studies.

EMA

The European Medicines Agency.

Experimental model

A model of a disease or other injury to resemble a similar condition in humans.

FDA

The US Food and Drug Administration.

GMP (Good Manufacturing Practice)

Quality assurance methodology designed to ensure that products are manufactured in a standardized manner, such that quality requirements are satisfied.

Immuno-oncology

Field of oncology in which cancer is treated by activating the immune system.

INN (International Nonproprietary Name)

Generic name on a drug substance. The INN is selected by the World Health Organization (WHO) since 1953.

Lead

A potential drug candidate which binds to the actual target molecule/s.

Ligand

Binds to a receptor. Could be a drug, hormone or a transmitter substance.

Lymphocyte

A type of white blood cells.

Macrophages

A type of white blood cell of the immune system that engulfs and digests cellular debris and foreign materia such as bacteria.

Milestone payment

Financial consideration received in the course of a project/program when a specified objective is reached.

Mitazalimab

Generic name (INN) for ADC-1013.

Monospecific antibodies

Antibody-based product which bind only to one target, such as a receptor.

NK cells

NK cells (Natural Killer) are lymphocytes with the ability to activate several different cells in the immune system, such as macrophages.

Oncology

Term for the field of medicine concerned with the diagnosis, prevention and treatment of tumor diseases.

Patent

Exclusive rights to a discovery or invention.

PD-1 (Programmed Death-1)

Immune-inhibiting receptor on the surface of certain cells, for example tumor cells.

PD-L1 (Programmed Death-Ligand-1)

The ligand that binds to PD-1, helping the cancer evade the body's immune defense.

Phase I, II and III

The various stages of studies on the efficacy of a pharmaceutical in humans. See also "clinical study." Phase I examines the safety on healthy human subjects, Phase II examines efficacy in patients with the relevant disease and Phase III is a large-scale study that verifies previously achieved results. In the development of new pharmaceuticals, different doses are trialed and safety is evaluated in patients with relevant disease. Phase II is often divided into Phase IIa and Phase IIb. In Phase IIa, which is open, different doses of the pharmaceutical are tested without comparison against placebo and focusing on safety and the pharmaceutical's metabolism in the body. Phase IIb is 'blind', and tests the efficacy of selected dose(es) against placebo.

Pharmacokinetics

The study of the turnover of substances in the body, for example how the amount of the substance is changed by absorption, distribution, metabolism and excretion.

Pharmacology

The study of how substances interact with living organisms to bring about a functional change.

Preclinical

The stage of drug development before the drug candidate is tested in humans. It includes the final optimization of the drug candidate, the production of materials for future clinical studies and the compilation of a data package for an application to start clinical studies.

Proof of concept studies

Studies carried out to provide support for dosages and administration paths in subsequent clinical studies.

R&D

Research & Development

Receptor

A receptor on a cell which picks up chemical signals.

Sponsor

The person, company, institution or organization responsible for initiating, organizing or financing a clinical study.

T cell

A type of white blood cell which is important to the specific immune defense.

Tumor-associated antigen (TAA)

A protein expressed to a much higher degree on the surface of tumor cells than healthy cells.

Tumor cell

A cell that divides relentlessly.

Tumor necrotic factor receptor superfamily (TNFR-SF)

A group of immune-modulating target proteins related to the tumor necrosis factor protein. The name 'tumor necrosis factor' was derived from the fact that the first function detected for the protein was its ability to kill some types of tumor cells, though it was later discovered to have an immune-regulatory function.

2001 2019 Important milestones in Alligator's history. 2001 2019

ALLIGATOR GOLD® Antikroppsbiblioteket färdigställs

Aptevo Therapeutics Co-development agreement for ALG.APV-527. ADC-1013 global rights regained from Janssen. Phase II ready clinical project.

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Alligator Bioscience

3138_10-q_2019-10-24_4cd783e2-fdb3-4778-92c5-75a816be8f89.pdf

Alligator Bioscience AB (publ) Q3 Interim report January-September 2019 A revolution for life.

Alligator regaining rights to ADC-1013 from Janssen.

Financial information

January-September 2019

CEO Per Norlén

Significant events July-September

Events after the end of the period

Comments from the CEO.

Regaining the Phase II ready drug candidate ADC-1013

The Phase I study with ATOR-1015 is progressing well

Four projects in clinical development within short

Focus on the clinical portfolio

Regional antibody agreement

Updated strategy shows the way forward

Performance measures, Group.

Operating costs, rolling 12 months, SEK million

Cash flow, rolling 12 months, SEK million

Cash and cash equivalents, including securities, SEK million

Operations.

Several patented technologies

Competitive project portfolio

Alligator's business model

Alligator's organization

Business model that creates value across the development chain

Drug development at Alligator – the different phases

ADC-1013/mitazalimab. Drug candidate ready for Phase II clinical study.

■ Events during the third quarter

Project status: Phase I clinical study completed, planning for Phase II

Updated 2019 objectives

Mechanism of action

ATOR-1015. Tumor-localizing bispecific CTLA-4 antibody with dual immunostimulatory function.

■ Events during the third quarter

■ Events after the end of the period

Project status: Clinical Phase I

https://www.clinicaltrials.gov/ct2/show/NCT03782467?term=1015&rank=1

2019 objectives

Mechanism of action

ATOR-1017. Stimulation of both T and NK cells induces potent killing of tumor cells.

■ Events during the third quarter

Project status: Preclinical development

2019 objectives

Mechanism of action 4-1BB and FcgR co-expressing cells within the 4-1BB and FcgR co-expressing cells within the 4-1BB and FcgR co-expressing cells within the

ALG.APV-527. A tumor-binding and immunomodulatory antibody in the same molecule.

■ Events during the third quarter ALG.APV-527 active in 5T4+ tumor ALG.APV-527 active in 5T4+ tumor ALG.APV-527 active in 5T4+ tumor

Project status: Preclinical development

Co-development with Aptevo

Updated 2019 objectives

Mechanism of action

ATOR-1144. Tumor-localizing bispecific CTLA-4 x GITR antibody with broadened capacity to activate the immune system.

■ Events after the end of the period

Project status: Preclinical phase

2019 objectives

Mechanism of action

Other projects.

■ Events during the third quarter Technology agreement with Biotheus

AC101 agreement with AbClon

There is a huge unmet need for new, effective treatments.

Targeted attack on the cancer tumor

Growing importance of immunotherapies

The Alligator share.

Changes during the quarter

Number of shares and stock option program

The Alligator share in brief (September 30, 2019)

Other information.

Review

Employees

Future report dates

- Year-end report 2019 February 12, 2020, 8:00 am

The license agreement with Janssen

Prospective information

Risks and uncertainties

Parent Company

Net sales, earnings trend, financial position and liquidity

Notes to the reader

Registered trademarks

For further information, please contact:

Alligator Bioscience AB (publ) 556597-8201