Oncopeptides — Interim / Quarterly Report 2017

Nov 15, 2017

Interim Report July - September 2017

SUMMARY OF Q3

July 1 st – September 30th 2017

• Net sales amounted to 0.0 (0.0) MSEK
• Loss for the period was 51.6 (loss: 24.7) MSEK
• Loss per share, before and after dilution, was 1.30 (loss: 1.06) SEK
• On September 30th cash and cash equivalents amounted to 443.0 (5.6) MSEK

Significant events after the period July 1 st to September 30th 2017

• On November 1st, we announced that we will present results from two clinical studies at the American Society of Hematology (ASH) annual meeting in Atlanta, USA: Final data from the phase II study called O-12-M1 and interim data from the ongoing phase II study called HORIZON. Both studies target latestage patients with Relapsed Refractory Multiple Myeloma (RRMM).

FINANCIAL OVERVIEW OF THE GROUP (SEK thousand):

Financial overview of the group (SEK thousand)

	2017	2016	2017	2016	2016
	Jul - Sep	Jul - Sep	Jan - Sep	Jan - Sep	Jan - Dec
Net sales	0	-	-	-	-
Operating loss	-51,573	-24,667	-180,916	-63,394	-114,482
Loss before tax	-51,573	-24,667	-180,916	-63,394	-114,446
Loss for the period	-51,573	-24,667	-180,916	-63,394	-114,446
Earnings per share before and after dilution (SEK)	-1.30	-1.06	-4.78	-2.78	-4.88
Cash flow from operating activities	-86,158	-27,243	-225,818	-59,912	-104,262
Cash and cash equivalents at the end of the period	442,964	5,647	442,964	5,647	40,251
Research & development costs/operating expenses %	94%	82%	80%	86%	78%

FINANCIAL CALENDAR

Full Year Report 2017	February 22nd 2018
Annual General Meeting	May 17th 2018
Interim Report Q1 2018	May 17th 2018
Interim Report Q2 2018	July 13th 2018

CEO STATEMENT

Dear Shareholders,

The multiple myeloma field is rapidly changing. This summer the competitive landscape has changed significantly in favour of Ygalo® although regrettably this change is a set-back for patients with myeloma. The American regulatory authority, the FDA, has put all check-point inhibitors (immuno-oncological compounds) under development on clinical hold in myeloma due to lack of beneficial clinical activity. In total, 14 clinical studies in phase II and phase III were put on hold. Check-point inhibitors were considered by many to be one of the major new drug classes to help myeloma patients.

At the American Society Hematology (ASH) meeting in December 2017 we expect to see updated data from several candidate drugs in the clinical phase of development within myeloma. The two most important ones relative to Ygalo® are the cell based CAR-T therapy bb2121 and an antibody drug conjugate called GSK2857916. Both candidates target cells that express the protein BCMA. Regarding CAR-T, we assume that we will continue to see good results in heavily pre-selected patients with respect to BCMA-expression. If data proves good enough for approval, this would lead to an interesting niche therapy for some myeloma patients. GSK2857916 from GSK also looks promising as a potential antibody competitor to daratumumab for treatment of patients with myeloma.

Presentations at ASH in Atlanta, December 9-12

At this meeting we will present the final data – that will feature in the clinical study report - from our phase II study O-12-M1 in late-stage relapsed refractory multiple myeloma patients. Please note that the data that we made public a few weeks ago from the abstracts are still interim, due to submission timelines for ASH. In the abstract, the median overall survival (OS) of 20.7 months and the median progression-free survival (PFS) of 5.1 months are improvements compared with our

previously reported figures of 18.2 months and 4.3 months respectively. The improvement in reported PFS for Ygalo® is relevant since PFS is the primary end-point in our clinical phase III study OCEAN. The better the inherent PFS is for Ygalo®, the lower the outcome-risk is in OCEAN. We are looking forward to ASH when the final data will be presented. The data from O-12-M1 provides us with an increased degree of comfort regarding a positive clinical outcome in our pivotal study OCEAN.

The second data-set to be presented is interim data from our phase II study HORIZON in which we study patients that are very advanced in their disease. They have been treated with both immunomodulatory drugs (IMiDs) and proteasome inhibitors (PIs), become refractory or nonresponsive to these treatments, and after that have also become refractory to later stage treatment with pomalidomide and/or daratumumab. The overall response rate (ORR) of 30% in this patient population, with a high unmet medical need, is encouraging and we look forward to presenting the updated data at ASH.

OCEAN and HORIZON on track, while minor delay in ANCHOR

Patient recruitment has continued to be on track in HORIZON throughout the third quarter. The early recruitment in OCEAN is also in line with plans. The preparations for dosing the first patient in the ANCHOR trial in Q4 of 2017 are slightly behind plan due to longer than anticipated contracting lead times. First-patient-in is now expected in early Q1 2018.

In addition, we now also expect the average time on treatment to be twice as long based on the encouraging data from our phase II study O-12-M1. This will result in longer treatment duration in the phase II portion of ANCHOR and as a consequence last patient out from this study is now estimated in Q1 2020 instead of summer of 2019.

Manufacturing preparing for commercial scale production

In the third quarter of 2017, we initiated the process of getting a second manufacturing site up and running for Ygalo® to prepare for the planned launch of the product.

Updating the strategic plan

We are currently preparing launch plans for Ygalo® both in the US as well as the EU. In addition, we are preparing programs to broaden the use of Ygalo® in indications outside of late-stage RRMM. We plan to present highlights from the expanded strategy in the first half of 2018.

Other Matters

We would also like to welcome Bengt Gustavsson as Head of Medical Relations for Oncopeptides AB. Bengt has previously held the position of Nordic Medical Director at Celgene.

Finally, in Q3 2017 we also donated funds to Dana-Farber Cancer Institute (Harvard) for the establishment of 'Oncopeptides AB Early Phase Research Fund'.

Stockholm, November 15th, 2017

Jakob Lindberg CEO, Oncopeptides AB (publ)

YGALO® AND MULTIPLE MYELOMA OVERVIEW

About Ygalo®

Ygalo® is a next generation alkylator treatment that targets cancer cells through a mechanism called peptidase potentiation. While traditional alkylators target the bone marrow (which causes side effects) and cancer cells (which treats the disease) equally well, Ygalo® targets the cancer cells 50x better than the bone-marrow cells compared to traditional alkylators. This is expected to result in a better treatment of the cancer without corresponding increase in side effects.

Currently, Ygalo® is being studied in three clinical trials for the treatment of a rare hematological cancer - multiple myeloma. The current studies are O-12-M1, HORIZON and OCEAN. The study ANCHOR will be initiated in the beginning of 2018 to further investigate Ygalo® in multiple myeloma in combination with other drugs. See later sections for details around the four clinical studies.

About multiple myeloma

Multiple myeloma is a hematological cancer of the B-cells (antibody producing cells) with no cure. Currently, the median overall survival is roughly 5 years and improving.*

Today, roughly 170,000 patients live with multiple myeloma in the EU and the US while 57,000 patients are newly diagnosed and 26,000 patients die from

the disease annually.* The underlying increase in the number of multiple myeloma patients is just over 1% per year with the aging population being the main driver of growth. However, the increase in late-stage multiple myeloma patients that Ygalo® is focused on is more than 10% per year, due to improvements in earlier lines of therapy (i.e. more patients than ever before survive the first years with the disease – that remains incurable - and become late-stage multi-refractory patients with a significant medical need for further treatment options).

Treating multiple myeloma

Multiple myeloma is mainly treated through five different treatment modalities (see next page). Due to the high mutation frequency of myeloma cells, patients have several active cancers (cancer clones) at the same time with different protein expression patterns. Because of this heterogeneity of the disease in each patient, broad spectrum agents are the backbone in multiple myeloma treatment. In the case of the new targeted agents, they will almost exclusively be used in combination with broad spectrum agents to ensure that all the patient's cancer cells get appropriately treated. Immunooncological compounds have so far had limited success in the treatment of multiple myeloma.

* Source: National Cancer Institute (seer.cancer.gov), Global Data 2015 (www.globaldata.com) and American Cancer Society (www.cancer.org).

INTERIM REPORT JUL - SEP 2017

MODALITY	PHARMACEUTICAL DRUGS	COMBINED MYELOMA SALES 2016	% OF PATIENTS TREATED IN 2016 (US)
Broad Spectrum Agents
Alkylating agents	Bendamustine, cyclophosphamide and melphalan
IMiDs	Lenalidomide, pomalidomide and thalidomide	>10bn USD	93.9%
Proteasome inhibitors	Bortezomib, carfilzomib and ixazomib
Steroids	Dexamethasone and prednisone
Targeted Agents
Anti-CD38	Daratumumab
Anti-SLAMF7	Elotuzumab	>0.7bn USD	9.2%

Patient segments in multiple myeloma

In the table below, the main patient segments in multiple myeloma are detailed. The main segments are 'Newly Diagnosed', 'Relapsed and Relapsed Refractory', 'Late-Stage Relapsed Refractory' and 'Quad- and Penta-Refractory' patients. An outline of what successful clinical results look like in the different patient segments can be seen in the table below. As shown, treatment results deteriorate quickly once a patient starts to become refractory. This is consequently the patient population with the largest medical need and is the focus in the clinical development of Ygalo®. As mentioned previously, this is also the fastest growing patient segment due to recent advances in the treatment of the disease in earlier lines of therapy. In the table on the next page, the patient groups that the studies HORIZON and OCEAN target are shown by the study logotypes.

When evaluating clinical data in multiple myeloma several standard measures are used:

• Progression Free Survival (PFS) measures for how long the cancer is not growing from the start of the treatment (when the

cancer begins growing again the patient has relapsed in his/her disease)

• Overall Survival (OS) measures for how long the patient survives from the start of the treatment
• Overall Response Rate (ORR) measures the number of patients (%) that have lost 50% or more of the tumor mass from the start of the treatment
• Clinical Benefit Rate (CBR) measures the number of patients (%) that have lost 25% or more of the tumor mass from the start of the treatment. CBR is only used in latestage multiple myeloma patients where such a result is also seen as success, at the stage where the disease has become very difficult to treat
• Duration of Response (DOR) measures for how long the cancer does not progress in a patient that responded to the treatment (i.e., for how long the cancer does not grow in those patients that got rid of at least 50% of the tumor mass as measured from the time point that the patient was a responder to the treatment)

PATIENT SEGMENT	MEDIAN PFS	MEDIAN OS	ORR	MEDIAN DOR
Newly Diagnosed	20-30 months	4-6 years	70-100%	20-30 months
Relapsed and Relapsed Refractory	15-30 months	2-4 years	60-90%	15-30 months
Late-Stage Relapsed Refractory	3-4 months	$1-1.5$ years	20-30%	7-8 months
Quad- and Penta-Refractory	2-3 months	$\sim$ 9 months	$\sim$ 20%	$~5$ months

INTERIM REPORT JUL - SEP 2017

ORR	MEDIAN PFS	MEDIAN DOR
		87% 26.3 months 28.6 months 67% 17.6 months 21.2 months

REATMENT	ORR	CBR	MEDIAN PFS	MEDIAN DOR	MEDIAN OS
ielinexor + dexamethasone	21%	32%		2.1 months 5.0 months	9.3 months
lote: Selinexor is not market approved.

Clinical data in different multiple myeloma patient segments

In the graphics above, more details around the patient segments and recent clinical data are shown. The graphics also include a rough visual outline of the relative sizes of the different patient segments in multiple myeloma over time from diagnosis.

The first graphic shows the two main patient segments: 'Newly Diagnosed' patients and 'Relapsed and Relapsed Refractory' patients. Almost all clinical trials that are in 'Relapsed and Relapsed Refractory' patients are in patients that have relatively recently undergone initial therapy as newly diagnosed patients. This is reflected in the clinical data seen to the right of the graph. There are a very large number of trials in 'Relapsed and Relapsed Refractory' patients so only a representative sample of clinical trials are shown, for reference.

The second graphic shows the sub-population of patients that match the strict definition that FDA and EMA use in their label texts for 'Late-Stage Relapsed and Refractory patients'¹ . As shown in the second graphic most patients become 'Late-Stage Relapsed and Refractory patients' at some point in time but for some patients it happens very early during their disease and for others late in their disease. There are a limited number of trials in this patient population and to the right of the second graph those reference trials are shown. Treatment results deteriorate quickly in this 'Late-Stage Relapsed and Refractory' patient population compared to the earlier stage patients shown above. Consequently, these are patients with a significant unmet medical need. In our study OCEAN, Ygalo® is compared head-to-head with the current standard of care in this patient population, pomalidomide.

The last graphic shows the sub-population of patients that have received treatment as a 'Late-Stage Relapsed and Refractory patient' and subsequently have also become refractory to that treatment. These patients are referred to as 'Quadand Penta-Refractory Patients'. This is the study population for HORIZON. To the right of this graph, the only - to our knowledge – large trial in this patient population is shown for reference. Our study HORIZON will be assessed in comparison with these data.

1) 2+ prior lines of therapy, prior exposure to both IMiDs and proteasome inhibitors and disease progression while on therapy or within 60 days of last dose.

Clinical Development Plan

We are currently running two clinical trials and planning to run a third, to fully characterize Ygalo® in multi-refractory late-stage multiple myeloma patients: these are respectively OCEAN, HORIZON and ANCHOR. Recently, we ran a clinical phase I and II trial in 'Late-Stage Relapsed Refractory' patients where the clinical study report will be filed during the fourth quarter of 2017: O-12-M1.

OCEAN

OCEAN is a phase III clinical trial and a head-tohead comparison between Ygalo® + dexamethasone and the current standard of care in 'Late-Stage Relapsed Refractory' multiple myeloma patients: pomalidomide + dexamethasone. The trial is a multicenter, pivotal study and is being run in Europe, USA and Israel. The first patient was reported dosed on June 14th 2017. Top-line results are expected summer 2019.

The OCEAN clinical trial protocol has undergone Special Protocol Assessment with the FDA and has been discussed and agreed in detail with European authorities.

The primary read-out in OCEAN is a comparison between Ygalo® and pomalidomide regarding PFS. This comparison can simplistically result in three different outcomes i.e. that Ygalo® is superior, noninferior or inferior to pomalidomide. As seen in the graphic to the right, the non-inferior outcome can in turn be broken down in different scenarios with stronger or weaker data to support marketing efforts of Ygalo®. OCEAN has been powered to show superiority of Ygalo® over pomalidomide based on historical data for the two compounds (see figure on page 6 – 'Late-Stage Relapsed Refractory'). A superiority outcome is expected to result in

approval both in the US and the EU. A noninferiority result is expected to result in approval in the EU and a discussion with the FDA in the US regarding the totality of data from all clinical studies in RRMM. In a non-inferiority scenario, HORIZON data in pomalidomide refractory latestage RRMM patients will be a key point for the case to receive approval also in the US.

HORIZON

HORIZON is a phase II clinical trial where Ygalo® + dexamethasone is being studied in multiple myeloma patients that are refractory to pomalidomide and/or daratumumab (i.e. 'Quadand Penta-refractory' patients). The trial is being conducted in Italy, Spain and the USA. The first patient was reported dosed on January 19th 2017. Interim data will be presented at ASH in December 2017.

ANCHOR

ANCHOR is a phase I/II combination study where Ygalo® + dexamethasone is used in combination with bortezomib or daratumumab. First patient is expected to be dosed early 2018, and last patient out from the study is estimated in Q1 2020.

O-12-M1

O-12-M1 was a phase I and II clinical trial in 'Late-Stage Relapsed Refractory' multiple myeloma patients. In O-12-M1 we established the dose and dose modification schedule for Ygalo® as well as the activity of Ygalo® in 'Late-Stage Relapsed Refractory' multiple myeloma patients.

Final O-12-M1 data will be presented at ASH in December 2017.

ADDITIONAL OPPORTUNITIES

The Company is also exploring the possibility to use Ygalo® in conjunction with stem-cell transplantation in multiple myeloma, for the treatment of non-Hodgkin's lymphoma as well as for the treatment of amyloidosis.

FINANCIAL OVERVIEW

Revenue

Net sales amounted to 0.0 (0.0) MSEK during the quarter and 0.0 (0.0) MSEK for the period January to September.

Operating expenses

Operating expenses for the third quarter amounted to 51.6 (24.7) MSEK and to 180.9 (63.4) MSEK for the period January to September. This relates primarily to research and development costs.

Research and development costs

During the quarter, research and development costs increased to 48.2 (20.3) MSEK and to 145.0 (54.5) MSEK for the first nine months. During the third quarter, the clinical studies HORIZON and OCEAN continued, which essentially explains the increase in research and development costs.

Marketing and distribution costs

Marketing and distribution costs for the third quarter amounted to 2.3 (0.0) MSEK and to 9.1 (0.0) MSEK for the first nine months. These costs are attributable to the development of a commercialization strategy for Ygalo®.

Administration costs

During the quarter, administration costs amounted to 1.0 (4.3) MSEK and to 26.8 (8.9) MSEK for the period January to September.

Costs for share-based incentive program

The cost for the company's share-based incentive program is included in operating expenses and affected the result for the third quarter positively by 3.9 (-3.3) MSEK and for the period January to September by -22.9 (-4.0) MSEK.

The 3.9 MSEK for the period consists of a disbursement of provisions for social security contributions of 4.8 MSEK and IFRS 2 classified costs of -0.9 MSEK.

The costs for social security contributions may vary quarterly due to the change in the underlying share price for the current quarter. Related provisions are reported as long- and short-term liabilities.

Earnings

Loss for the period was -51.6 (-24.7) MSEK and -180.9 (-63.4) MSEK for the period January to September 2017. This corresponds to earnings per share, before and after dilution of -1.30 (-1.06) SEK for the period and -4.78 (-2.78) SEK for the first nine months.

Tax

No tax costs were reported for the quarter (-). The group has accumulated tax losses, as determined in the last tax assessment (year 2015), of 180.3 MSEK. The group's tax losses have not been valued and have not been recognized as a deferred tax asset. These tax losses will be valued only when the group has established a level of earnings that management believes is likely to lead to tax costs.

Cash flow, investment and financial position

Cash flow from operating activities for the third quarter amounted to -86.2 (-27.2) MSEK and to -225.8 (-59.9) MSEK for the first nine months of 2017. This is mainly due to costs related to the expansion of the clinical program. As of September 30th 2017, the recorded prepaid study related expenses amounted to approximately 80 MSEK.

Cash flow from investment activities was -0.2 (0.0) MSEK for the quarter and -1.5 (0.0) MSEK for the first nine months. This investment referred to equipment that will be used in the manufacture of Ygalo®. This is recorded as a tangible non-current asset in the balance sheet.

Cash flow from financing activities amounted to 0.0 (17.0) MSEK for the quarter and to 636.8 (63.3) MSEK for the first nine months, when the company raised 695.0 MSEK before issue costs of 58.2 MSEK in connection with the IPO in February 2017.

Cash flow for the quarter was -86.4 (-10.3) MSEK and 409.5 (3.4) MSEK for the first nine months. As of September 30th 2017, cash and cash equivalents amounted to 443.0 (5.6) MSEK and equity to 477.0 (-2.7) MSEK.

Share-based incentive programs

The purpose of share-based incentive programs is to promote the company's long-term interests by motivating and rewarding the company's senior management, founders, and other co-workers in line with the interest of the shareholders. Oncopeptides has currently five active programs that include part of the management team, certain board members, founders and employees.

In 2013, two option programs were implemented. "Founder Option Program" and "Employee option program 2012/2019" and in 2016 a program "Employee option program 2016/2023" was implemented. For more information about these programs see note 4.18 on pages 27-28 in the Swedish Annual Report 2016 or pages 73-74 in the company's prospectus dated February 7th 2017.

In accordance with a decision by the Shareholder's General Meeting in May 2017, two incentive programs; "Co-worker LTIP 2017" and "Board LTIP 2017" were introduced. For more information about these programs see previous interim report.

Full utilization of issued options and share awards per September 30th 2017, corresponding to 2,495,200 shares, will result in a dilution for shareholders of 5.90 percent. Full utilization of mandated options, corresponding to 4,459,888 shares (i.e. including non-allocated employee options and hedge for social security contributions), will result in a dilution for shareholders of 10.0 percent.

Number of shares allocated employee stock options may entitle to:
- Employee option program 2012/2019	1,354,500
- Founder option program	102,600
- Employee option program 2016/2023	276,300
- Co-worker LTIP 2017	727,000
Total number of shares allocated employee stock options may entitle to:	2,460,400
Number of allocated share awards in program "Board LTIP 2017"	34,800
Total number of shares allocated employee stock options and share awards may entitle to:	2,495,200
Total number of shares non-allocated employee stock options may entitle to:	891,939

OTHER INFORMATION

Co-workers

As of September 30th 2017, the number of coworkers amounted to 25 (21).

Parent company

Since the operations of the parent company are consistent with those of the group in all material respects, the comments for the group are also largely relevant for the parent company.

Other

As of January 1st 2017, Oncopeptides reports the operating expenses in the income statement classified by function. The historical comparative data has thus been reclassified on the basis of function.

Oncopeptides' shares

Oncopeptides was listed on Nasdaq OMX Stockholm Mid Cap segment February 22nd 2017. In total 15,108,340 new shares were issued. In connection with the listing, the company issued

2,655,781 new shares as a result of the conversion of the company's bridge loans.

In conjunction with the listing all existing preference shares, 18,766,800, were converted to ordinary shares.

As of September 30th 2017, the number of registered shares and votes in Oncopeptides amounted to 39,806,021.

Nomination Committee

During October, the Nomination Committee was appointed in respect of AGM 2018 in Oncopeptides.

Events after the end of the report period

On November 1 st, we published data from two scientific abstracts that had been accepted for publication at ASH in December 9-12 in Atlanta, US.

Review

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

The Board and the CEO confirm that the interim report provides a true and fair overview of the group's and the parent company's operations, position and earnings and describes the material risks and uncertainty factors faced by the parent company and the companies within the group.

Stockholm, November 15th 2017

Oncopeptides AB Board of Directors

For further information, please contact:

Jakob Lindberg, CEO for Oncopeptides AB E-mail: jakob.lindberg@oncopeptides.se Tel: +46 8 615 20 40

Rein Piir, Head of Investor Relations for Oncopeptides AB E-mail: rein.piir@oncopeptides.se Tel: +46 70 853 72 92

This information is information that Oncopeptides AB is obliged to make public pursuant to the EU Market Abuse Regulation and the Swedish Securities Markets Act. The information was submitted for publication, through the persons above, 08.00 am CET on November 15th 2017.

Auditor's report

Oncopeptides AB (publ) corp. reg. no. 556596-6438

Introduction

We have reviewed the condensed interim financial information (interim report) of Oncopeptides AB (publ) as of 30 September 2017 and the nine-month period then ended. The board of directors and the CEO are responsible for the preparation and presentation of the interim financial information 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 Report 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, ISA, 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 respects, in accordance with IAS 34 and the Swedish Annual Accounts Act, regarding the Group, and with the Swedish Annual Accounts Act, regarding the Parent Company.

Stockholm, November 15th 2017 PricewaterhouseCoopers AB

Magnus Lagerberg Authorized Public Accountant

FINANCIAL INFORMATION

Condensed consolidated statement of comprehensive income

Condensed consolidated statement of comprehensive income (SEK thousand)

	2017	2016	2017	2016	2016
	Jul - Sep	Jul - Sep	Jan - Sep	Jan - Sep	Jan - Dec
Net sales	-	-	-	-	-
Gross profit	-	-	-	-	-
Operating expenses
Research and development costs	-48,225	-20,318	-145,010	-54,521	-89,725
Marketing and distribution costs	-2,322	-	-9,127	-	-630
Administrative expenses	-1,026	-4,349	-26,779	-8,873	-24,128
Total operating expenses	-51,573	-24,667	-180,916	-63,394	-114,482
Operating loss	-51,573	-24,667	-180,916	-63,394	-114,482
Net financial items	0	0	0	0	36
Loss before tax	-51,573	-24,667	-180,916	-63,394	-114,446
Tax	-	-	-	-	-
Loss for the period	-51,573	-24,667	-180,916	-63,394	-114,446
Earnings per share before and after dilution (SEK)	-1.30	-1.06	-4.78	-2.78	-4.88

Condensed consolidated statement of comprehensive income (SEK thousand)

	2017	2016	2017	2016	2016
	Jul - Sep	Jul - Sep	Jan - Sep	Jan - Sep	Jan - Dec
Loss for the period	-51,573	-24,667	-180,916	-63,394	-114,446
Other comprehensive income
Translation differences on currency hedges	-5,710	-	-6,758	-	-
Total other comprehensive income, net of tax	-5,710	-	-6,758	-	-
Total comprehensive loss for the period1)	-57,283	-24,667	-187,674	-63,394	-114,446

1) Total comprehensive loss for the period is in total attributable to parent company shareholders

Condensed consolidated balance sheet

Condensed consolidated balance sheet (SEK thousand)

	Sep 30th 2017	Sep 30th 2016	Dec 31st 2016
Assets
Non-current assets
Tangible non-current assets	2,406	32	1,100
Financial non-current assets	263	263	263
Total non-current assets	2,669	295	1,363
Current assets
Other current receivables	1,794	1,216	2,963
Prepaid expenses and accrued income	80,168	9,336	11,056
Cash and cash equivalents	442,964	5,647	40,251
Total current assets	524,926	16,199	54,270
Total assets	527,595	16,494	55,633
Equity and liabilities
Equity
Share capital	4,423	2,046	2,449
Additional paid-in capital	955,099	239,061	318,738
Retained earnings (including net profit/loss for the period)	-482,524	-243,799	-294,850
Total equity1)	476,997	-2,692	26,337
Long term liabilities Provision for social security contributions, share based incentive program	750	-	-
Total long term liabilities	750	-	-
Current liabilities
Trade payables Provision for social security contributions, share based incentive	8,857	13,385	8,731
program	30,800	3,963	10,200
Other current liabilities	452	1,087	715
Accrued expenses and deferred income	9,738	751	9,651
Total current liabilities	49,848	19,186	29,296
Total liabilities	50,597	19,186	29,296
Total equity and liabilities	527,595	16,494	55,633

1) Equity is in total attributable to parent company shareholders

Condensed consolidated statement of changes in equity

Consolidated statement of changes in equity (SEK thousand)

	Share capital	Additional paid-in capital	Retained earnings including net profit/loss for the period	Total equity
Opening balance January 1st 2016	2,046	175,759	-180,405	-2,600
Net loss for the period			-63,394	-63,394
Transactions with shareholders
Mandatorily convertible bridge loans raised		63,302		63,302
Closing balance September 30th 2016	2,046	239,061	-243,799	-2,692
Opening balance January 1st 2016	2,046	175,759	-180,405	-2,600
Net loss for the period			-114,446	-114,446
Transactions with shareholders
Mandatorily convertible bridge loans raised		143,302		143,302
Value of participants in the incentive programs service		81		81
Conversion of bridge loans	403	-403		0
Closing balance December 31st 2016	2,449	318,738	-294,850	26,337
Opening balance January 1st 2017	2,449	318,738	-294,850	26,337
Net loss for the period			-187,674	-187,674
Transactions with shareholders
Issue of new shares	1 ,679	693,305		694,984
Underwriting expenses		-58,223		-58,223
Conversion of bridge loans	295	-295		0
Value of participants in the incentive programs service		1,574		1,574
Closing balance September 30th 2017	4,423	955,099	-482,524	476,997

Condensed consolidated statement of cash flows

Condensed consolidated statement of cash flow (SEK thousand)

	2017	2016	2017	2016	2016
	Jul - Sep	Jul - Sep	Jan - Sep	Jan - Sep	Jan - Dec
Operating loss	-51,573	-24,667	-180,916	-63,394	-114,482
Adjustment for non-cash-items1)	-3,816	3,345	23,090	3,974	10,304
Interest received	0	0	0	0	1
Interest paid	0	0	0	0	0
Cash flow from operating activities before change in working capital	-55,390	-21,322	-157,826	-59,420	-104,177
					0
Cash flow from changes in working capital	-30,769	-5,921	-67,992	-492	-85
Cash flow from operating activities	-86,158	-27,243	-225,818	-59,912	-104,262
Cash flow from investing activities	-237	-36	-1,472	-36	-1,117
Cash flow from financing activities	0	17,007	636,761	63,302	143,302
Cash flow for the period	-86,395	-10,272	409,471	3,354	37,923
Cash and cash equivalents at beginning of period	535,069	15,919	40,251	2,293	2,293
Change in cash and cash equivalents Foreign exchange difference in cash and cash	-86,395	-10,272	409,471	3,354	37,923
equivalents	-5,710	0	-6,758	0	35
Cash and cash equivalents at the end of period	442,964	5,647	442,964	5,647	40,251

1) Pertains mainly to costs of share based incentive program including social security contributions

Condensed parent company statement of comprehensive income

Condensed parent company statement of comprehensive income (SEK thousand)

	2017	2016	2017	2016	2016
	Jul - Sep	Jul - Sep	Jan - Sep	Jan - Sep	Jan - Dec
Net sales	-	-	-	-	-
Gross profit	-	-	-	-	-
Operating expenses
Research and development costs	-48,225	-20,318	-145,010	-54,521	-89,725
Marketing and distribution costs	-2,322	-	-9,127	-	-630
Administrative expenses	-1,026	-4,349	-26,779	-8,873	-24,128
Total operating expenses	-51,573	-24,667	-180,916	-63,394	-114,482
Operating loss	-51,573	-24,667	-180,916	-63,394	-114,482
Net financial items	0	0	0	0	36
Loss before tax	-51,573	-24,667	-180,916	-63,394	-114,446
Tax	-	-	-	-	-
Loss for the period	-51,573	-24,667	-180,916	-63,394	-114,446

Condensed parent company statement of comprehensive income (SEK thousand)

	2017	2016	2017	2016	2016
	Apr - Jun	Apr - Jun	Jan - Jun	Jan - Jun	Jan - Dec
Loss for the period	-51,573	-24,667	-180,916	-63,394	-114,446
Other comprehensive income
Translation differences on currency hedges	-5,710	-	-6,758	-	-
Total other comprehensive income, net of tax	-5,710	-	-6,758	-	-
Total comprehensive loss for the period	-57,283	-24,667	-187,674	-63,394	-114,446

Condensed parent company balance sheet

Parent company balance sheet (SEK thousand)

Assets
Non-current assets
Tangible non-current assets 2,406 32	1,100
Financial non-current assets 313 313	313
Total non-current assets 2,719 345	1,413
Current assets
Other current receivables 1,794 1,216	2,963
Prepaid expenses and accrued income 80,168 9,336	11,056
Cash and cash equivalents 442,914 5,597	40,201
Total current assets 524,876 16,149	54,220
Total assets 527,595 16,494	55,633
Equity and liabilities
Restricted equity
Share capital 4,423 2,046	2,449
Statutory reserve 10,209 10,209	10,209
Non-restricted equity
Share premium account 912,125 196,087	275,764
Retained earnings (including net profit/loss for the period) -449,759 -211,034	-262,085
Total equity 476,997 -2,692	26,337
Long term liabilities
Provision for social security contributions, share based incentive
750 - program	-
Total long term liabilities 750 -	-
Current liabilities
Trade payables 8,857 13,385	8,731
Provision for social security contributions, share based incentive 30,800 3,963	10,200
program
Other current liabilities 452 1,087	715
Accrued expenses and deferred income 9,738 751	9,651
Total current liabilities 49,848 19,186	29,296
Total liabilities 50,597 19,186	29,296
Total equity and liabilities 527,595 16,494	55,633

KEY PERFORMANCE MEASURES

The company presents in this report certain key performance measures, including one measure that is not defined under IFRS, namely expenses relating to research and development / operating expenses %. The company believes that this ratio is an important complement because it allows for a better evaluation of the company's economic trends. This financial performance measure 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 measure as the company has defined it should not be compared with other performance measures with similar names used by other companies. This is because the above-mentioned performance measure is not always defined in the same manner, and other companies may calculate the differently to Oncopeptides.

Key performance measures

	2017	2016	2017	2016	2016
	Jul - Sep	Jul - Sep	Jan - Sep	Jan - Sep	Jan - Dec
Total registered shares at the beginning of period	39,806,021	20,460	22,041,900	20,460	20,460
Total registered shares at the end of period	39,806,021	20,460	39,806,021	20,460	22,041,900
Number of shares that granted employee options and share awards may entitle to	2,495,200	1,866,600	2,495,200	1,866,600	1,733,400
Share capital at the end of period, SEK thousand	4,423	2,046	4,423	2,046	2,449
Equity at the end of period, SEK thousand	476,997	-2,692	476,997	-2,692	26,337
Earnings per share before and after dilution, SEK1)	-1.30	-1.06	-4.78	-2.78	-4.88
Operating expenses, SEK thousand	-51,573	-24,667	-180,916	-63,394	-114,482
Research and development costs, SEK thousand	-48,225	-20,318	-145,010	-54,521	-89,725
Research & development costs/operating expenses %2)	94%	82%	80%	86%	78%

1) Earnings per share before dilution are calculated by dividing earnings attributable to shareholders of the parent company by a weighted average number of outstanding shares during the period. Adjustments have been made to the calculation of earnings per share, since preference shares have existed during part of the previous periods. There is no dilution effect for the employee stock option program, as earnings for the periods have been negative.

2) Defined by dividing the research and development costs with total operating expenses. The key performance measure helps the users of the financial statements to get a quick opinion on the proportion of the company's expenses that are attributable to the company's core business.

NOTES

Note 1 General information

This report covers the Swedish parent company Oncopeptides AB (publ), Swedish corporate identity no. 556596-6438 and its subsidiary Oncopeptides Incentive AB, Swedish corporate identity no. 556931-5491. All the group's business operations are conducted in the parent company.

The parent company is a Swedish public limited company registered in and with its registered office in Stockholm. The head office is located at Västra Trädgårdsgatan 15, 111 53 Stockholm.

The interim report for the third quarter 2017 was approved for publication on November 15th 2017, in accordance with the board decision of November 14th 2017.

Note 2 Accounting policies

Oncopeptides applies International Financial Reporting standards (IFRS) as adopted by the European Union. Relevant accounting and valuation principles could be found on pages 13-18 of the Swedish Annual Report 2016 and on pages 109-112 in the company's prospectus dated February 7th 2017.

The interim report for the group has been prepared in accordance with IAS 34 Interim Financial Reporting. The parent company applies the Swedish Financial Reporting Board recommendation RFR2 Accounting for legal entities. None of the new or amended standards and interpretations that became effective January 1st 2017, have had a significant impact on the company's financial reporting.

As of January 1st 2017, Oncopeptides reports the operating expenses in the income statement classified by function. The historical comparative data has thus been reclassified on the basis of function.

Oncopeptides applies ESMA:s (European Securities and Markets Authority) guidelines on alternative performance measures.

Note 3 Risks and uncertainties in the group and the parent company

Operational risks

Research and drug development up to approved registration is subject to considerable risk and is a capital-intensive process. The majority of all initiated projects will never reach market registration due to the technological risk such as the risk for insufficiency efficacy, intolerable side effects or manufacturing problems. If competing pharmaceuticals capture market share or reach the market faster, or if competing research projects achieve better product profile, the future value of the product portfolio may be lower than expected. The operations may also be impacted negatively by regulatory decisions, such as approvals and price changes.

Financial risk management

Oncopeptides' financial policy governing the management of financial risks has been designed by the board of directors and represents the framework of guidelines and rules in the form of risk mandated and limits for financial activities. The company is primarily affected by foreign exchange risk since the development costs for Ygalo® are mainly paid in USD and EUR.

In accordance with the company's policy for financial risk, the company exchanges cash into USD and EUR in line with entered agreements for the period up to mid-2019 in order to manage currency exposure.

For more information about the group and parent company's financial risk management see note 3 on pages 17-18 in the Swedish Annual Report 2016 or page 112 in the company's prospectus dated February 7th 2017.

Note 4 Estimates and judgements

This report includes forward looking statement. Actual outcomes may deviate from what has been stated. Internal factors such as successful management of research projects, and intellectual property rights may affect future results. There are also external conditions, e.g. the economic climate, political changes and competing research projects that may affect Oncopeptides results.

Note 5 Related-party transactions

No transactions with related parties occurred during the third quarter (0.3 MSEK)