Unlocking the potential of innovative medicines

ANNUAL REPORT 2020 PCI Biotech Holding ASA

1. Introduction
2. a. About PCI Biotech
3. b. Our technology
4. c. Three distinct business areas
5. d. Key figures
1. Board of Directors report
1. Responsibility statement from the Board of Directors and CEO

PCI Biotech Holding ASA, Ullernchausséen 64, 0379 Oslo, Norway, Company no: 991036393 MVA Phone: + 47 67 11 54 00, www.pcibiotech.com

Unlocking the potential of innovative medicines

1. Annual statement on corporate governance policy and corporate social responsibility policy
1. Financial statements
1. Auditors report
1. Other information

INTRODUCTION

ABOUT PCI BIOTECH

PCI Biotech Holding ASA ("PCI Biotech" or "the Group" or "the Company") is a cancer focused biopharmaceutical company headquartered in Norway and listed on the Oslo Stock Exchange. The Company is developing therapeutic products based on its proprietary photochemical internalisation (PCI) technology, which originates from world leading research at the Norwegian Radium Hospital. PCI Biotech's lead product candidate is the photosensitiser fimaporfin (Amphinex®) and the Company has an extensive collaboration with Norwegian and international hospitals and companies.

OUR TECHNOLOGY

The PCI technology can enhance the effect of anticancer drugs by targeted, light-directed drug delivery into cancer cells, and can also be used as a platform that may both potentiate the effect of vaccines and enable macromolecules to reach intracellular targets. PCI Biotech applies the technology to three distinct anticancer paradigms: fimaCHEM (enhancement of chemotherapeutics for localised treatment of cancer), fimaVACC (T-cell induction technology for therapeutic vaccination), and fimaNAC (nucleic acid therapeutics delivery).

Chemotherapies and several novel classes of drugs (e.g. certain immunotherapeutics) need access to the inside of their human target cells, such as tumour cells or immune cells, in order to be effective. Unfortunately, many of these substances are by nature encapsulated in so-called endosomes as they enter the target cell. Once inside the cell, most of the active compound may hence be trapped in the endosomes and therefore unable to exert its therapeutic effect. Pharmaceutical companies struggle to find effective methods to release drugs that are entrapped in this way and are actively searching for technologies that provide adequate drug release inside the target cells, in order to achieve the full therapeutic and commercial potential of their products.

The PCI technology platform consists of two elements: a proprietary small molecule photosensitiser (named fimaporfin) and a light source. The primary aim of PCI is to introduce drug molecules or macromolecules into the cytosol of the target cells. It is this drug or macromolecule that gives the biological effect in a PCI treatment, and the intended biological effect may range from cell killing (fimaCHEM), through modification of gene expression (fimaNAC) to enhanced antigen presentation (fimaVACC). Needless to say, in the two latter approaches the aim is not to kill the target cells, but PCI is employed to give the cells new properties by modifying the intracellular trafficking of drugs/antigens.

For different applications, fimaporfin will be formulated differently and used at different doses e.g. intravenous injection in localised cancer treatment versus minute amounts administered into the skin in the vaccination setting. The light source may also be different for different applications. Red laser light is used in localised cancer treatment to achieve good tissue penetration, while a blue LED light may be used in vaccination, as deep light penetration may not be needed to reach antigen presenting cells (APC's) at the site of vaccination. fimaCHEM and fimaVACC are consequently very different products, although the same basic mechanism of targeted endosomal release is applied.

THREE DISTINCT BUSINESS AREAS

Recent advancements in cancer therapy, not least owing to the development of new classes of drugs, such as immunotherapeutics, imply a potential to significantly improve the prognosis for millions of patients. The potential of fimaporfin to improve the efficacy of anti-cancer agents has been convincingly shown in well-established preclinical models as well as in clinical trials, with the first clinical results being published in the renowned medical journal the Lancet Oncology. This was followed by a Phase Ib study in bile duct cancer patients that delivered encouraging early signs of tumour response and survival. Based on these positive findings, PCI Biotech is now developing three parallel programmes.

INOPERABLE BILE DUCT CANCER AND fimaCHEM

The fimaCHEM programme aims to fulfil unmet medical needs by providing localised targeted enhancement of approved chemotherapies for the benefit of the many patients currently left without effective treatment options. Based on findings from a successful Phase I study in bile duct cancer patients, a single pivotal clinical trial, named the RELEASE study, has been initiated in inoperable extrahepatic bile duct cancer, a rare, but fatal disease with no cure. The RELEASE study design is based on the outcome of meetings with the two leading regulatory authorities, the European Medicine Agency (EMA) and the U.S. Food and Drug Administration (FDA). The RELEASE study will provide the opportunity to generate robust comparative data of importance for market acceptance and has the potential of accelerated/conditional marketing approval as a first line treatment given the rare disease status and high unmet medical need for bile duct cancer patients.

Bile duct cancer (cholangiocarcinoma) affects the cell lining of the bile duct and represents a patient population with a high unmet medical need. It is a rare disease with an incidence rate of 1-2 per 100,000 in the western world, indicating a total patient population of close to 15,000 per year. The incidence rates are increasing worldwide. Overall survival at 5 years is dismal at less than 10%. Resection is today the only potential cure but only possible in 10-35% of the patients. Most patients die of local effects of the tumour and the cancer shows remarkable resistance to chemotherapy. Gemcitabine + cisplatin is the most effective chemotherapy combination and has become a standard treatment for bile duct cancer patients in most regions. Gemcitabine's anti-cancer effect is significantly enhanced by the fimaCHEM technology in preclinical studies.

The potential first line fimaCHEM treatment regimen consists of an intravenous injection of fimaporfin, followed four days later by an intravenous infusion of gemcitabine and a laser light application in the bile duct easily administered through endoscopic methods used routinely in these patients. The patients then follow the standard background treatment with up to 8 chemotherapy cycles of gemcitabine + cisplatin. The fimaCHEM treatment may be repeated during the background chemotherapy treatment cycles. Local tumour response in the bile duct is important to maintain biliary drainage and loco-regional control may therefore be more important for patient long term survival than would be the case for many other cancers. The fimaCHEM treatment boosts the chemotherapy effect locally in the bile duct, thereby directly targeting this area.

Bile duct cancer is an orphan indication with a range of development and market incentives. PCI Biotech has obtained orphan drug designation (ODD) for fimaporfin in this disease in both EU and the US, meaning that regulatory authorities may expedite a market approval process, and that a market exclusivity period can be secured under the orphan drug legislations in both regions. ODD is a significant regulatory milestone and it recognises the therapeutic benefits fimaCHEM seek to bring to the bile duct cancer patients in need of better local treatments.

The immediate target for PCI Biotech is inoperable patients with advanced or metastatic extrahepatic disease without bone or brain metastases. Across Europe and USA approximately 3,000 patients annually are assumed to be eligible for fimaCHEM treatment. Asia is a potential upside from a business perspective. Applying a projection of inoperable patients based on the estimated inoperable portion from the Western world and taking into account that not all parts of the population in China will have access to the treatment, it can be estimated potentially more than 4,000 patients annually in the commercial interesting part of the Asian market, considered to be South-Korea, Japan, China, Taiwan and Hong Kong. The price potential is normally attractive for orphan drugs of this rarity.

There is a potential for obtaining a significant majority share of the identified eligible market due to the anticipated benefits, such as no competing marketable treatment alternatives, limited development pipeline, greater efficacy due to local chemotherapy boosts and fimaCHEM being an add-on to the current standard of care with easy light access through established standard procedures.

IMMUNOTHERAPY AND fimaVACC

Immunotherapy utilises the body's own immune system to fight cancer, which is a radically different approach to treating cancer than chemotherapy. The armamentarium of cancer immunotherapies includes many different therapeutic approaches including antibody-based treatments, cell-based therapies, and therapeutic vaccines. The pharmaceutical industry has long recognised the potential of therapeutic cancer vaccination and the objective of a therapeutic vaccine is to treat an established disease using the body's natural defences. Whereas in a traditional anti-infectious vaccine, the main component of the vaccine is the infectious agent antigen, in the case of a cancer vaccine the main component can be a peptide or protein found on the surface of tumour cells. By vaccinating with such tumour-specific antigens, the body's natural defences can be trained to recognise and destroy cancer cells.

Peptide and protein based vaccines are a subgroup of therapeutic cancer vaccines. There is a broad consensus that therapeutic peptide and protein based cancer vaccines have so far not been able to elicit sufficiently strong immune responses. A fundamental challenge for most existing therapeutic vaccine approaches is to produce a strong and relevant cellular immune response (T-cell activation). A potent induction of Cytotoxic T-cells is considered paramount for successful therapeutic vaccination. This is a main need in the market, which could be addressed by using the fimaVACC technology. In addition to the use in therapeutic vaccination for cancer, fimaVACC also has the potential to be used for both therapeutic and prophylactic vaccination for several infectious diseases.

fimaVACC is an endosomal escape technology that may realise the true benefit of innovative therapeutic vaccines by modifying the intracellular machinery of immune cells in such a way that antigens are more efficiently processed and induce antigen specific cytotoxic T-cells. The innovative and well characterised mode of action of fimaVACC can be applied to a wide range of cancer vaccine technologies and provide PCI Biotech with a strategic opportunity to enter the field of cancer immunotherapy at a time where the understanding of cancer biology and the potential of modulating the immune response to fight cancer is growing at a rapid pace.

In terms of type of vaccination, fimaVACC is also a versatile technology that can be used in multiple settings including, intradermal, intranodal, and intratumoural administration. Preclinical research has shown that it could also be developed in conjunction with ex vivo vaccination. Another promising way forward in the development of therapeutic vaccines is to combine vaccination with other cancer immunotherapy modalities such as checkpoint inhibitors (CPIs). There is a strong scientific rationale for combining CPIs with the fimaVACC technology: fimaVACC increases the number of T-cells induced by cancer vaccines while the CPIs prevent the tumour from evading the immune response.

In addition to T-cell enhancement, the fimaVACC features also include antibody enhancement, suggesting that the technology has a clear potential to contribute to the development of new prophylactic vaccines for infectious diseases lacking effective vaccines. Prominent examples are malaria and tuberculosis, but there are also many other potential target diseases for fimaVACC based prophylactic vaccination.

Significant efforts are being invested by the global health community to research and develop potential treatments against COVID-19. Most vaccine companies are currently focused on reaching or progressing clinical development of their own established technologies and may not be open for the inclusion of new technologies in the short term. PCI Biotech is nevertheless closely monitoring and exploring potential fimaVACC compatible opportunities, as the immune response characteristics of the PCI technology may fit well with the medical needs.

Vaccine technologies commonly utilise adjuvants to enhance immune responses, but the consensus is that each one of the adjuvants available today has shortcomings, like variation in efficacy and toxicity issues. fimaVACC is expected to increase vaccines' efficacy and generate the immune response faster, and to be user-friendly since illumination of the target area is considered to be a minor inconvenience. fimaVACC has the potential to increase patient safety if it can reduce the antigen payload and adjuvant volume per treatment and reduce the number of treatments needed. Increased efficacy for a broad range of peptide and protein based vaccines and patient safety are fimaVACC's key competitive differentiators.

The proprietary fimaVACC technology was successfully translated into humans through a Phase I study in healthy volunteers after having demonstrated strong preclinical efficacy. The immune results in man provide Proof-of-Concept and clinical support of fimaVACC's potential to enhance overall T-cell responses, by demonstrating improvement of the immunogenicity of vaccines in healthy volunteers. It is anticipated that a significant number of the cancer vaccines in development could use fimaVACC to boost their activation of T-cells and increase their efficacy. There are competing peptide vaccine enhancing technology platforms; for example adjuvants, liposomes and nanoparticles. For some of these technologies fimaVACC has shown synergistic effects in the preclinical setting.

NUCLEIC ACID THERAPEUTICS AND THE fimaNACDELIVERY TECHNOLOGY

PCI Biotech's nucleic acid therapeutics program (fimaNAC) aims at improving the efficacy of novel nucleic acid based therapies. The fimaNAC technology addresses a main hurdle in the development of nucleic acid based therapies: Sufficient release of therapeutics inside the targeted cells. The therapeutic molecules are, due to their size and charge, notoriously difficult to deliver in large payloads inside cells. Nucleic acids are in most cells taken up by endocytosis, but are then trapped in endosomes, constituting a barrier severely limiting the achievable therapeutic effect. Thus, nucleic acids are very good candidates for enhancement by an endosomal release technology like fimaNAC, and preclinical experiments have shown that fimaNAC can give a substantial improvement in the effect of very important classes of nucleic acids such as oligonucleotides and mRNA. Nucleic acid therapeutics are widely acknowledged to have a large potential as therapeutic agents, and numerous clinical trials with nucleic acid therapeutics are underway. The commercial exploitation of most such drugs has been hampered by the lack of technologies for efficient delivery of the therapeutic molecules to their molecular targets inside cells. PCI Biotech's fimaNAC drug delivery technology has the potential to address this issue, as demonstrated in numerous preclinical models.

Nucleic acids have emerged as very promising therapeutic candidates for a wide range of diseases and are now considered the third major drug class, in addition to antibodies and small molecules. Recent progress has been rapid and broad, with more than eight nucleic acid based drugs on the market and more than one hundred in clinical trials.

fimaNAC is well positioned to capture a significant part of the nucleic acid therapeutics delivery market as demonstrated by the partnering activities of PCI Biotech in this field. The main fimaNAC strategy is to collaborate with biotech or pharmaceutical companies and develop long-term relationship with companies having early stage innovative nucleic acid based technology.

The fimaNAC programme, aiming at improving the efficacy of novel nucleic acid based therapies, is a preclinical stage collaborative programme where partners are exploring synergies between their proprietary nucleic acid technologies and the fimaNAC technology, with potential for further deepening of the partnerships. PCI Biotech see great potential for further development of our intracellular delivery technology, not least within the emerging field of mRNA.

KEY FIGURES

(In NOK 1,000)	2020	2019
Other income	7 368	9 392
Operating expenses	89 488	98 195
Operating results	-82 121	-88 804
Comprehensive income	-72 239	-88 746
Cash & cash equivalents	187 967	261 103
Total liabilities	19 879	27 204
Cash flow from operating activities	-77 391	-81 695

BOARD OF DIRECTORS REPORT

2020 IN REVIEW – EXPANDING AND OPTIMISING THE RELEASE STUDY

The Covid-19 pandemic has affected all aspects of business and life, and accentuated the importance of being adaptive and agile in response to changes. For PCI Biotech, with a global pivotal study open in many of the countries most affected by the pandemic, the greatest impact has been on clinical study progress in the fimaCHEM programme. The main focus during the year has therefore been on mitigating the effects of the pandemic by both optimising and expanding the pivotal RELEASE study, with the aim to minimise the delays inflicted by the pandemic. The early period of the pandemic was used to analyse eligibility failure logs and review investigator feedback on study design and procedures. The study protocol was thereafter amended, and an optimised protocol implemented during the autumn 2020. The expansion to include new countries and sites have run in parallel and the RELEASE study now spans across 47 sites. The expansion to Asia has shown initial good screening and enrolment. The study communication has also been strengthened, both by the establishment of several online tools, interaction with patient organisations and publication of case reports. We expect to see the full effect of these efforts when the Covid-19 vaccination starts to reduce the effect of the pandemic on the healthcare systems.

The Board of Director's would like to commend the PCI Biotech organisation for their relentless efforts during 2020 to both mitigate the effects of the pandemic and optimise the RELEASE study protocol and procedures for optimal study performance and progress. The outstanding organisational efforts now bears fruit, with indication of increased screening activity and patient recruitment.

The foundation of the fimaVACC programme has been reinforced by the granting of two key patents in the US, providing protection for the combination with two important classes of immunomodulators commonly used in the development of vaccines. The publication of the Phase I results in a high-impact immunology journal was another important fimaVACC milestone. The focus is now on utilising the Phase I results in partnering efforts and planning for clinical proof-of-concept in a disease setting.

The fimaNAC collaboration with AstraZeneca ended in 2020, but it has produced important data for the further development of this platform. The results, which were recently presented at a conference on RNA therapeutics, suggest that the fimaNAC technology provides an appealing intracellular delivery solution for certain applications within this class of therapeutics. The rapid development progress of

mRNA-based vaccines against Covid-19 has generated a lot of attention to the potential of this class of drugs and we will now focus our efforts towards the most attractive opportunities.

On the corporate side, the medical and business development areas of the organisation have been further strengthened by the appointment of Dr. Amir Snapir as CMO and Mr. Ludovic Robin as CBO. The organisation will continue to be reinforced as we are pursuing multiple potential business opportunities.

HIGHLIGHTS

fimaCHEM – Implemented several initiatives to recoup long-term recruitment projections for the RELEASE study. Delays in patient recruitment were experienced in 2020 due to the Covid-19 pandemic. The first Asian patient was enrolled in South Korea in October and besides going into Asia the most important initiatives are the protocol amendment made to expand the eligible patient population, and the addition of new clinical sites. We are seeing indications of increased screening and enrolment after implementation of the amended protocol and the opening of Asian sites, although we do not expect to see the full effect of these initiatives until the Covid-19 situation improves.

fimaVACC – Successful Phase I vaccination proof of concept study published in the high impact immunology journal, Frontiers in Immunology. The results demonstrate enhanced immune responses to peptide- and protein-based vaccines in healthy volunteers.

fimaNAC - Encouraging mRNA data. In October PCI Biotech was informed that AstraZeneca elected not to enter into a definitive agreement for the fimaNAC technology. Encouraging preclinical results have been achieved with fimaNAC in this collaboration and the decision not to enter into a definitive agreement was primarily based on a strategic evaluation by AstraZeneca of their current development priorities. The collaborative interactions and results have provided valuable data and knowhow to be utilised for further development of the fimaNAC technology.

BUSINESS, LOCATION AND HUMAN RESOURCES

PCI Biotech Holding ASA is a cancer focused biopharmaceutical company headquartered in Norway and listed on the Oslo Stock Exchange, with the ticker PCIB. The company is developing therapeutic products based on its proprietary photochemical internalisation (PCI) technology, with the lead candidate fimaporfin.

The PCI Biotech group (The Group) comprises PCI Biotech Holding ASA, the wholly owned Norwegian subsidiary PCI Biotech AS. PCI Biotech is located at Ullernchausséen 64, Oslo, Norway. A former dormant Icelandic branch, PCI Biotech Utibu, was dissolved in 2019.

The Board of Directors –The Board of Directors consist of Hans Peter Bøhn (Chairman), Hilde Furberg, Christina Herder, Lars Viksmoen and Andrew Hughes, who were all elected for a one year term at the annual general meeting in May 2020.

Employees - All operations of the Group are managed by PCI Biotech AS and the Group had 15 employees as of 31 December 2020 (2019: 12 employees). The parent company has no employees. The Group mainly uses external service providers for manufacturing, research and development and regulatory work.

The management team consists of Per Walday, Chief Executive Officer, Ronny Skuggedal, Chief Financial Officer, Anders Høgset, Chief Scientific Officer, Kristin Eivindvik, Chief Development Officer, Amir Snapir, Chief Medical Officer and Ludovic Robin, Chief Business Development.

The working environment is considered good. No accidents or injuries were reported in 2020 or 2019. Absence due to illness was 629 days, approximately 19.18% in 2020 (2019: 148 days, approximately 7.36%). The majority of the absence in 2020 was related to long term sick leaves and employees

facing responsibilities for home-based school or closed kinder gardens for their children during the pandemic.

PCI Biotech's goal is to be a workplace with gender equality and where discrimination is not accepted. As of date of this report the Group has 40% female representation in the board of directors and 20% in the executive management team. 8 out of 15 employees as of year-end 2020 were women (2019: 7 out of 12). Working time and remuneration of the Group employees are not related to gender.

OPERATIONS

Operational overview

PCI Biotech is a biopharmaceutical company focusing on development and commercialisation of novel therapies for the treatment of cancer through its innovative photochemical internalisation (PCI) technology platform, which induces triggered endosomal release that is used to unlock the true potential of a wide array of therapeutic modalities. PCI is applied to three distinct anticancer paradigms with the advantage of shared technological solutions in multiple business opportunities with different risk profiles: fimaCHEM (enhancement of chemotherapeutics for localised treatment of cancer), fimaVACC (T-cell induction technology for therapeutic vaccination), and fimaNAC (nucleic acid therapeutics delivery).

fimaCHEM– pivotal RELEASE study for inoperable bile duct cancer

The fimaCHEM programme for local enhancement of cancer treatments is the most advanced of PCI Biotech's development programmes. The main focus is now to bring the lead candidate to the market through successful completion of the pivotal RELEASE trial for treatment of inoperable bile duct cancer. RELEASE is a single randomised pivotal study with registration intent, building on encouraging results from the Phase I study. RELEASE will evaluate PCI Biotech's Amphinex® (the intravenous formulation of fimaporfin) in combination with the standard of care chemotherapy with gemcitabine and cisplatin in a randomised trial with 186 patients. The first European patient was enrolled in May 2019, while the first Asian patient was enrolled in October 2020. Bile duct cancer is a rare disease with high unmet medical need and the combination of Amphinex and chemotherapy will be evaluated as a first line treatment, with orphan drug designation granted in both EU and the US.

RELEASE progress and new initiatives for increased patient enrolment

The RELEASE study has enthused investigators, which is very important for clinical studies in rare patient groups such as cholangiocarcinoma. The study is however impacted by the COVID-19 pandemic, which has significantly affected patient recruitment and study recruitment projections.

Scale-up and optimisation activities for the RELEASE study have been performed during 2020, with site contract negotiations, regulatory approvals and site activations, following the protocol harmonisation and optimisation. Most of the study optimisation work has now been implemented and the focus going forward will be on regular trial management, including performance evaluation and potential replacement of sites.

Several initiatives have been implemented to recoup long-term recruitment projections, with the intention to accelerate patient inclusion under the constraints on clinical trials inflicted by the COVID-19 pandemic. Besides expanding the RELEASE trial into Asia, the most important initiative is the modification of patient eligibility criteria, made to expand the eligible patient population and thereby increase the enrolment rate. The company has scrutinised the study screening log, consulted investigators and external KOL's, and assessed feasible modifications that causes a limited increase of the overall study risk. These modifications have been included in an amendment to the study protocol and full approvals for the amended protocol were achieved in all countries during 2020. Other recruitment initiatives include patient and clinician study awareness, including online recruitment activities; and expansion of the trial from the planned 40 to more than 50 sites. Ukraine has been added to the country mix in Europe, replacing UK where we faced approval delays and trial

competition. By end-January 2021, 47 sites across 14 countries had opened for recruitment. All open sites are screening for patients under the amended protocol with broadened inclusion criteria.

The consequences of the pandemic and the new recruitment initiatives for the RELEASE study cannot yet be fully established, but early indications after implementation of the amended protocol are encouraging with increased screening and enrolment. The opening of sites in Asia has also shown promise as the first patient was enrolled in South Korea in October, less than three months after opening of the first Asian site. The situation has been difficult in the US, but the new amendment has now been implemented at all sites. First patient enrolled in the US is expected 1H 2021.

The anticipated timeline for interim read is retained as a range from second half 2022 to first half of 2023. The current cash position may therefore not be sufficient to reach interim read of the RELEASE study and the company will closely monitor progress in relation to timelines and costs in the coming months, as the COVID-19 pandemic is still affecting most countries.

Expansion of RELEASE to Asia

The expansion of RELEASE to Asia has been done to enhance patient recruitment and provide access to hospitals and key opinion leaders in this region with higher prevalence of bile duct cancer. The expansion may also open up a potential upside from the business perspective. The trial is open in South-Korea and Taiwan. Other commercially interesting countries in Asia are considered to be Japan, Hong Kong and China. The Asian market is known to be fragmented and PCI Biotech do not foresee to commercialise fimaCHEM for bile duct cancer in Asia without a partner.

The target population for fimaCHEM is inoperable patients, and applying a projection based on the estimated inoperable portion from the Western world (approx. 75% ) and taking into account that not all parts of the population in China will have access to the treatment, it may potentially be more than 4,000 patients annually in the commercially interesting part of the Asian market. This preliminary figure is based on publicly available epidemiological information.

Conference and online activities

PCI Biotech sponsored the US based Cholangiocarcinoma Foundation (CCF) Annual Conference in April 2020, and a poster of the RELEASE study was provided to both caregivers and patients at this online meeting. A webinar presenting the RELEASE trial, the fimaCHEM technology and the results achieved from Phase I was co-hosted with the CCF in October. CCF is a patient organisation with a strong position in the US bile duct cancer community, and the aim of this webinar was to reach out to and make potential US patients and caregivers aware of the RELEASE study. In addition, specific online recruitment efforts are implemented targeting Germany, France, Spain and US.

The design of the pivotal RELEASE study is based on regulatory interactions

The RELEASE study design has been based on the outcome of meetings with the two leading regulatory authorities, the European Medicines Agency (EMA) and the U.S. Food and Drug Administration (FDA).

Regular communication milestones for the RELEASE study

The planned communication milestones for the pivotal RELEASE study will be quarterly updates on the number of countries and clinical sites open for recruitment, as well as updates on expected timelines for major milestones. Other milestones and updates will be communicated as appropriate, including outcome of the IDMC reviews, as well as further details regarding timing and plan for interim analysis.

Phase I results paved the way for the pivotal RELEASE trial with registration intent

The RELEASE study builds on the favourable safety results and encouraging early signs of efficacy in the Phase I study, with more than 80% of the patients being progression-free at 6 months.

The fimaCHEM treatment boosts the chemotherapy effect locally in the bile duct. Local tumour response in the bile duct is important to maintain biliary drainage, and the primary tumour response may therefore be more important for survival outcome than would be the case for many other cancers.

Overview best overall response – patients with measurable disease in all cohorts (n=15) (Cohort I, II & Extension: data from local read, Cohort III & IV: data from centralised read)

Tumour response translates into encouraging survival data

All patients have been followed-up for survival post-study and the finally confirmed median overall survival (mOS) for the full study ended on 16.1 months at final censoring, with two patients still being alive.

The group in the dose escalation study that received the RELEASE study dose (n=6, cohort IV) had a mOS of 22.8 months and half of these patients exceeded 30 months survival. The mOS in the extension group (n=7), where patients received up to two fimaCHEM treatments of the RELEASE dose was 16.6 months, with one patient still alive at final censoring. Five of the seven extension patients received two fimaCHEM treatments.

Although these are small patient groups with considerable heterogeneity, positive signs of objective tumour response seem to translate into encouraging survival data.

Publication of a case report series

In November 2020 a case report series from the Phase I study was published in Endoscopy International Open. The article provides detailed descriptions of treatment effects in three select patients at the dose chosen for the RELEASE study. The title of the publication is "Photochemical Internalisation and gemcitabine combined with first-line chemotherapy in perihilar cholangiocarcinoma – observations in three patients".

Endoscopy International Open (EIO) is an open access journal in the field of gastrointestinal endoscopy. It covers all aspects of endoscopic diagnosis, therapeutic procedures and technical developments. EIO offers a fast and independent quality process with free, broad and easy access for everybody, and all articles submitted to EIO undergo rigorous blind scientific peer review.

European patent for treatment of bile duct cancer granted

In November 2020, the European Patent Office (EPO) informed the company that a new European patent has been granted. The European patent covers the intended use of fimaCHEM in combination with gemcitabine for the treatment of cholangiocarcinoma (bile duct cancer). The patent secure protection until 2037, which is several years beyond the potential market exclusivity offered by the orphan designation in Europe. The patent approvals are still pending in US and key Asian markets.

fimaVACC- Vaccination program

The fimaVACC programme aims to enhance the cellular immune responses that are important for the therapeutic effect of vaccines, and the fimaVACC technology has proven excellent preclinical efficacy with protein- and peptide-based vaccines. The technology has shown particularly strong CD8 T-cell immune responses, which are important for therapeutic vaccination, as well as enhanced helper (CD4) T-cell and antibody responses.

Successful clinical proof-of-concept in healthy volunteers

PCI Biotech successfully translated the vaccination technology into humans through a Phase I study in healthy volunteers that was completed in May 2019. The immune results provided Proof-of-Concept and clinical support of fimaVACC 's potential to enhance overall T-cell responses, by demonstrating improvement of the immunogenicity of vaccines in healthy volunteers.

The Phase I results showed a substantial increase in number of T-cell responders to HPV peptides already after two vaccinations, and a clear enhancement in the T-cell responses compared to the control group with a state-of-art vaccine adjuvant. The important CD8 responses were more robust with fimaVACC and also exhibited increased functionality compared to control.

fimaVACC provides highly desired features for therapautic vaccination technologies:

✓ Increased number of responders
✓ Enhanced T-cell responses
✓ Improved T-cell functionality

More than 90 subjects were included, and tolerability of intradermal treatment with fimaVACC is established across a wide range of doses.

As a next development step, PCI Biotech is actively exploring potential further clinical proof-of-concept studies for the technology in relevant diseases.

Proof-of-concept study results presented and published

The overall study results were presented at the ESMO Immuno-Oncology Congress in December 2019 and the full study results were published early January 2021 in Frontiers in Immunology, a high impact immunology journal. The study was performed in collaboration with international experts, including staff at the Department of Medical Oncology at Leiden University Medical Centre (LUMC) under the leadership of Professor Sjoerd van der Burg.

Research collaboration with DCprime to explore novel cancer vaccination concepts

A new research collaboration was established in September 2020 with DCprime to explore novel cancer vaccination concepts. DCprime is a clinical stage cancer immunotherapy company developing vaccines and located in The Netherlands. All shares of DCprime were recently acquired by Immunicum AB, a Swedish listed company. The partnership is governed by a research collaboration agreement, under which the collaborators will perform an extensive evaluation of technology compatibility and synergy based on preclinical studies. The collaboration pursues the development of novel cancer vaccination concepts based on tumour-independent antigens (TIAs). The companies will evaluate results achieved from this research collaboration and then explore the potential for further development and partnership. Both the fimaVACC and fimaNAC technologies will be utilised in the collaboration.

New US patents granted

In January 2020, a US patent was granted providing a broad coverage for the combination of various cytokines with the fimaVACC technology. In March 2020, a further US patent was granted providing a broad coverage for the combination of the fimaVACC technology with a new important class of adjuvants, called toll like receptor agonists. These US patents secure protection until 2035, while patent applications are still pending in Europe and key Asian markets, with the except of the toll like receptor combination patent which is granted in Japan. These patents are important for PCI Biotech's development strategy, as they supplement the company's ability to potentially generate an internal future vaccine pipeline, in addition to bringing value for the fimaVACC technology in partnering efforts.

Potential COVID-19 opportunities

Significant efforts are being invested by the global health community to research and develop potential treatments against COVID-19. Most vaccine companies are currently focused on reaching or progressing clinical development of their own established technologies and may not be open for the inclusion of new technologies in the short term. PCI Biotech is nevertheless closely monitoring and exploring potential fimaVACC compatible opportunities, as the immune response characteristics of the PCI technology may fit well with the medical needs.

Research and development supported by a grant

The fimaVACC programme is supported by a government grant from the Research Council of Norway (BIA-programme) of up to NOK 13.8 million distributed over the course of four years, 2017-2021.

fimaNAC- delivery of nucleic acid therapeutics

The fimaNAC programme provides a targeted intracellular delivery technology for nucleic acid therapeutics. It is a preclinical stage collaborative programme, with four research collaborations established.

The collaboration partners include DCprime, eTheRNA immunotherapies, IMV and Aposense. In all these collaborations, partners are exploring synergies between their proprietary nucleic acid technologies and the fimaNAC technology, with potential for further deepening of the partnerships. Previous collaborative interactions and results with other key players have provided valuable data and knowhow for PCI Biotech to be utilised for the further development of fimaNAC.

A preclinical research collaboration with AstraZeneca was established in 2015 and the experimental phase of the collaboration ended in 2019. This was followed by an evaluation period until end of 2020 for AstraZeneca to determine whether to move the collaboration into a definitive agreement. In October 2020, PCI Biotech was informed that AstraZeneca elected not to enter into a definitive agreement for the fimaNAC technology. Encouraging preclinical results have been achieved with the fimaNAC platform in this collaboration and the decision not to enter into a definitive agreement was primarily based on a strategic evaluation by AstraZeneca of their current development priorities.

In February 2021 the encouraging data from this collaboration was included in a presentation at the 12th Annual RNA Therapeutics Virtual Conference, a UK based online event. The conference was set to explore the latest developments in RNA delivery agents and RNA-based therapeutics with the latest case studies on advanced mRNA technologies, oligonucleotide delivery, therapeutic applications and future trends and innovations. PCI Biotech's presentation focused on the delivery of RNA molecules, including the most recent data on the use of the fimaNAC delivery technology in the exciting field of RNA based therapies.

The collaboration with AstraZeneca has provided PCI Biotech with valuable scientific knowhow from working with a big biopharma company over the last 5 years and the company will utilise this important knowhow, together with the generated preclinical results, for the further development of the fimaNAC

asset. PCI Biotech see great potential for further development of our intracellular delivery technology, not least within the emerging field of mRNA.

In August 2020 PCI Biotech provided the Israeli company Aposense with the fimaNAC technology for synergy testing with their molecular nano-motors. In September 2020 PCI Biotech entered into a research collaboration with DCprime, a clinical stage cancer immunotherapy company developing vaccines and located in The Netherlands. All shares of DCprime were recently acquired by Immunicum AB, a Swedish listed company. This collaboration is a combined fimaVACC and fimaNAC project; please see under 'fimaVACC' for more information about the collaboration.

All collaborations were during 2020 reviewed for progress and value to PCI Biotech, and prioritised accordingly. Three of the collaborations (Phio Pharmaceuticals, Bavarian Nordic and BioNTech) were closed as a result of these evaluations.

Corporate

Management changes

In March 2020, PCI Biotech announced the appointment of Dr Amir Snapir, MD, PhD as Chief Medical Officer (CMO), commencing May 2020. Dr Snapir serve as a member of PCI Biotech's executive management team. He leads the execution of all clinical development programmes. Dr Snapir brings extensive experience in global clinical development of novel therapeutics, from early clinical translation to marketing authorisation, combined with extensive international regulatory experience. Dr Snapir also brings years of experience in business collaborations, alliances and product co-developments. Since 2007 Dr Snapir has held various positions at Orion Pharma, Espoo, Finland, spanning from leader of clinical pharmacogenomics to clinical development leader in Oncology. In his most recent role, Dr Snapir held the position as Director, Rare Disease Development. Dr Snapir has a PhD from the University of Turku, Finland and an MD from the University of Tel Aviv, Israel. Dr. Snapir is the author of numerous scientific publications.

From July 2019, the previous CMO Dr. Olivecrona operated via a consultancy agreement, and from May 2020 he holds no formal positions in the company.

In April 2020, PCI Biotech announced the appointment of Mr Ludovic Robin, PharmD, MBA, as Chief Business Officer (CBO), commencing May 2020. Mr Robin serves as a member of PCI Biotech's executive management team and leads all business and commercial development activities. Over the last twenty-five years, Ludovic has held numerous international managerial positions providing leadership in the pharmaceutical industry in the areas of international research and development, business development, as well as marketing and sales. In particular, he has participated in the launch of more than fifteen original orphan drugs or specialty pharmaceuticals. Mr Robin joined Shire in 2004 serving as Marketing Manager, Business Unit Director, Marketing Director and Commercial Operations Head of France/Benelux. In 2016 he joined Advicenne, a French biotech listed on Euronext as CBO, deputy CEO, responsible for commercial strategy of the drug candidates under development/registration in EU and US. Mr Robin holds a Doctorate of Pharmacy (PharmD) from Lyon I University, a Master's in Industrial Pharmacy from Lyon Institute of Industrial Pharmacy, and an MBA from HEC Paris.

Business development

PCI Biotech's strategy is to create value by effectively progressing development of the three distinct business areas towards commercialisation. The commercialisation of products is intended primarily through agreements with external partners. PCI Biotech believes that the PCI technology has the potential to play a role in the realisation of several new therapeutic modalities, including cancer immunotherapy and mRNA therapeutics.

The Company's lead programme, fimaCHEM for bile duct cancer, is developed towards the market through the pivotal clinical RELEASE trial with the potential of accelerated / conditional marketing

approval as a first-line treatment given the rare disease status and unmet medical need in this condition.

The fimaVACC programme is a clinical stage programme, with a successful clinical translation through a Phase I study in healthy volunteers. These results were accepted for publications in the high-impact immunology journal Frontiers in Immunology in 2020. PCI Biotech pursues two development strategies in parallel for fimaVACC, utilising the Phase I results both in direct partnering efforts and planning for clinical Proof-of-Concept in a disease setting.

The fimaNAC programme will continue to follow a collaborative approach, pursuing out-licensing opportunities based on established preclinical data and entering into early collaborations with the aim to transform the collaborations into commercial agreements. Recent vaccination successes has created a lot of attention to this class of drugs, and we will now centre our efforts on the most attractive opportunities.

FINANCIAL REVIEW

Profit and loss

(All amounts in brackets are comparative figures for 2019 unless otherwise specifically stated)

The Group did not record revenues in 2020 nor 2019. Grants received from various public sources such as the Research Council of Norway and "SkatteFUNN" were recorded as other operating income amounting to NOK 7.4 million (NOK 9.4 million). The parent company did not record any revenue for 2020 or 2019.

The fimaVACC programme received in 2017 a grant of up to NOK 13.8 million from the Research Council of Norway (BIA-programme). The grant is distributed over the course of four years, 2017- 2021, and for 2020 a total of NOK 2.6 million (NOK 3.6 million) has been recorded as other income. Total grant recorded by end of 2020 were NOK 12.0 million.

Expenditure on research activities is recognised as an expense in the period in which it was incurred. The Group had no development expenditure qualifying for recognition as an asset under IAS 38 in 2020 and as for previous years all research expenses are charged through the profit and loss statement. Total operating expenses were NOK 89.5 million in 2020 (NOK 98.2 million) and expenses are mainly driven by the research and development (R&D) activities. In 2019 the initiation of the RELEASE study increased expenses compared to previous years, and the reduction in R&D costs for 2020 is mainly due to start-up costs for the RELEASE trail in 2019. R&D expenses amounted to NOK 75.6 million in 2020 (NOK 83.3 million). Other operating (general and administrative) expenses were NOK 13.9 million (NOK 14.9 million). The change in general and administration costs is mainly driven by non-cash accounting elements for the groups share option programme. Operating result in 2020 ended at NOK -82.1 million (NOK -88.8 million) for the Group. Operating result for the parent company were NOK -4.7 million in 2020 (NOK -4.6 million).

Net financial results for the Group were NOK 9.9 million in 2020 (NOK 0.1 million). The net positive result in 2020 was mainly driven by positive effects of NOK 8.5 million from cash deposits placed in EUR at year-end, as a hedge of the foreign currency risk for the RELEASE study. The corresponding effect for 2019 was NOK 1.6 million negative. The parent company's financial income for 2020 consists mainly of interest on loans to the subsidiary PCI Biotech AS and the same kind of net positive accounting effect of cash deposits placed in EUR at year-end, as for the Group. Financial expenses consist of negative interest on cash deposits in EUR and an interest expense on right to use assets (IFRS 16 Leases).

The Board of Directors proposes that the comprehensive income of NOK 6.4 million for the parent company in 2020 is transferred to retained earnings.

Balance sheet

During 2019 PCI Biotech acquired the first lots of lasers to be used in the pivotal RELEASE study, and these types of acquisitions have continued into 2020 in line with the progress of opening clinical sites

for the RELEASE trial. PCI Biotech adopted IFRS 16 Leases for the first time in 2019, applying the modified retrospective method and the identified leases are disclosed as right to use assets in the balance sheet. Short term receivables per end of 2020 was NOK 13.2 million (NOK 14.6 million) and mainly consist of advance payments in connection with the RELEASE trial and recognised not received public grants.

Other long-term liabilities relate to potential future social security liabilities in connection with the company's share option program, and the liability fluctuates with the share price and number of outstanding 'in-the-money' share options per year-end. Social security liabilities for share options that are vested, or that may vest during 2021, are disclosed as short-term liabilities. Current liabilities were generally higher per the end of 2019 compared to the end of 2020, mainly due to the initiation of RELEASE in 2019 and decreased public duties liabilities related to the share option scheme for 2020.

Total equity for the Group were NOK 189.2 million per year-end 2020 (NOK 254.8 million). Total equity of the parent company amounts to NOK 686.5 million in 2020 (NOK 673.5 million) reflecting this year's result and share based payments elements charged through equity for the Group's share option scheme.

Equity in the wholly owned subsidiary PCI Biotech AS was NOK 102.7 million at the end of 2020 (NOK 105.1 million). The equity in PCI Biotech AS were increased in 2020 by NOK 70 million, through a capital increase from the parent company PCI Biotech Holding ASA.

Total assets of the Group at the end of 2020 were NOK 209.1 million (NOK 282.0 million) and the decrease from last year is mainly due to net loss from operational activities. Total assets in the parent company amounted to NOK 687.7 million per year-end 2020 (NOK 674.6 million).

PCI Biotech does not recognise deferred tax assets in the balance sheet, due to uncertainty as to when the company will accrue a payable tax liability. Unrecognised deferred tax assets at the end of 2020 were NOK 125.3 million (NOK 109.7 million).

Cash flow

Net cash flow from operating activities amounted to NOK -77.4 million in 2020 (NOK -81.7 million) for the Group and for the parent company to NOK -2.0 million for 2020 (NOK 0.9 million). Net change in cash and cash equivalents for the Group was NOK -73.1 million in 2020 (NOK -88.2 million). Net change in cash and cash equivalents for the parent company were NOK -54.3 million in 2020 (NOK - 69.6 million).

Investment activities during the year include NOK 3.9 million (NOK 5.4 million) in acquisition cost of devices (lasers) to be used in the RELEASE trial. Financing activities are impacted by proceeds in relation to share options being executed by employees.

The Group held cash and cash equivalents of NOK 188.0 million at the end of 2020, compared to NOK 261.1 million per end of 2019, reflecting net negative cash flow of NOK 81.7 million in 2020 (NOK 86.6 million) and NOK 8.5 million net positive (NOK 1.6 net negative) exchange rate effect on bank deposits in foreign currency. Cash flow from operations is mainly dependent on R&D activities. The Group employs a prudent cash management strategy for its cash and cash equivalents and assets are held as bank deposits or invested in low risk short-term money market instruments. All cash and cash equivalents were held as bank deposits at the end of the year.

The Parent's cash and cash equivalents at the end of 2020 amounted to NOK 68.5 million (NOK 122.8 million).

Share capital - capital increases following share option exercises

Participants in PCI Biotech's share option program exercised on 2 September 2020 a total number of 60,500 share options, out of these 26,000 share options were exercised at a strike price of NOK 7.84 and 34,500 share options were exercised at a strike price of NOK 3.26. All of the exercised share options were about to expire unless exercised.

Following the exercise of share options, the Board of Directors of PCI Biotech Holding ASA, pursuant to an authorisation granted by the Company's Annual General Meeting on 27 May 2020, decided to increase the Company's share capital with NOK 181,500 by issuing 60,500 new shares, each share of par value NOK 3.00. The transaction was registered in the Norwegian Register of Business Enterprises on 8 September 2020, and the capital increase has thus been completed.

The capital increase resulted in gross proceeds of NOK 0.3 million and the Company's new share capital is NOK 111,979,170 divided by 37,326,390 shares, each with a nominal value of NOK 3.00 and each giving one vote at the Company's general meeting.

RISK AND RISK MANAGEMENT

Implications of the COVID-19 pandemic

COVID-19's impact on the general biotech industry risks may in broad terms be summarised as the conduct and progress of clinical development, disruption of the supply chain, exchange rate fluctuations, access to resources through the capital market and other health economic aspects. PCI Biotech is closely monitoring potential implications on its short- and long-term operations during the course of the COVID-19 pandemic. PCI Biotech's overriding priority has been the safety of its staff and patients participating in the clinical trial and its collaborators. Other key priorities include identification and implementation of potential mitigating actions for the delays in progress of the fimaCHEM RELEASE study in collaboration with our contract research organisation, as well as identification and removal of unnecessary recruitment hurdles in the study protocol. Screening of patients was severely affected in 2020 and the situation is still challenging. Initial indications of increased screening and enrolment under the amended protocol despite the continued impact of the pandemic is encouraging, but the full effect of the initiatives is not expected until the Covid-19 vaccination starts to reduce the effect of the pandemic on the healthcare systems. The Company has not experienced any major shortage in supplies of investigational products and devices for the trial in 2020. For the fimaVACC and fimaNAC programmes the main implications have been transient downturn in business development activities.

PCI Biotech has per date of this report not a complete picture of consequences regarding timelines and costs for the RELEASE study. Given the uncertainty surrounding long-term consequences of the unprecedented situation with the COVID-19 pandemic, the anticipated timeline for the planned interim analysis remains in the range from 2H 2022 to 1H 2023, and the current cash-position may therefore not be sufficient to reach interim read of the RELEASE trial. The company will continue to closely monitor progress in relation to timelines and costs in the coming months.

The pandemic has no material implications for balance sheet items per year-end 2020.

Operational Risk and Risk Management

There are great risks in the business of developing medical drugs, both related to regulatory affairs and market risk. The development may fail at any stage of the process, due to safety considerations or lack of clinical results. Changes in clinical development or patient management, or any other matters affecting patients ability or willingness to participate in clinical trials may impede the recruitment of patients in the Company's studies. It is not possible to predict with certainty whether and when PCI Biotech will be able to submit applications to regulatory authorities in the relevant markets. Moreover, one cannot be sure that PCI Biotech will receive the marketing authorisations to commercialise the products. Regulatory approval and specific regulatory designations may be denied, suspended or limited. Poor clinical performance of PCI Biotech's potential products on the market and new technologies and innovative or generic products that are not yet launched may also limit the competitive edge of PCI Biotech's products and impact pricing and/or reimbursement. PCI Biotech's business strategy is to commercialise its technology partly through collaborative agreements and the Company cannot give any assurance that such agreements will be obtained on acceptable terms. There is no certainty that PCI Biotech or its licensees will achieve commercial success. The success,

competitive position and future revenues will depend in part on PCI Biotech's ability to protect intellectual property and know-how. Patent applications filed by others could also limit PCI Biotech's freedom to operate. Changes in the healthcare market and/or the market access environment could further preclude PCI Biotech from charging a premium price or obtaining coverage and/or reimbursement for the Company's products. The Company is highly dependent upon having a highly qualified senior management and scientific team. The loss of key employee might impede the achievement of the scientific development and commercialisation objectives. PCI Biotech cannot be certain that it will be able to enter into satisfactory agreements with third-party suppliers or manufacturers.

In parallel with the clinical development of PCI Biotech's lead programme, fimaCHEM for inoperable extrahepatic bile duct cancer, the company has been building its knowledge base to enable the design of its commercialisation strategy for fimaCHEM. Market research has guided management to understand the competitive environment, what potential future customers perceive as the areas of unmet needs and potential market access and reimbursement pathways.

PCI Biotech's lead programme, fimaCHEM, could become a commercially successful therapeutic option, for inoperable extrahepatic bile duct cancer, provided certain prerequisites are met: (a) scientific engagement of the thought leaders in key institutions ahead of commercial launch, (b) welldesigned clinical plan, (c) robust market access and reimbursement programme, (d) optimised referral pathway; and (e) streamlined distribution via centralised logistics service to customers. PCI Biotech is committed to leverage these insights to develop strategies that offer the best chance of commercial success for fimaCHEM.

PCI Biotech performed in 2018 a market opportunity assessment for the fimaVACC technology platform, guiding management to understand the opportunity space based on the key attributes fimaVACC may offer for peptide and protein based vaccines.

To handle the inherent risks in the industry, and to comply with national and international regulations, PCI Biotech has implemented a process to identify, analyse and manage the key risks for the Group, including the character of the relevant insurance policies.

The Group does not pollute the external environment.

Financial Risk and Risk Management

The Group's activities are exposed to certain financial risks including currency risk, interest rate risk and liquidity risk. The risk is of such character that the Group has chosen to put in place measures to mitigate the potential currency risk of the financial markets and a prudent strategy regarding interest rate risk.

PCI Biotech's most important future sources of financing is revenue related to any licensing and collaboration agreements, government grants and equity issues. The equity capital market is used as a source of liquidity when appropriate and conditions within this market are competitive. PCI Biotech has no external debt with financial covenants or any long-term debt.

Currency risk - The Group's expenses and revenues are incurred in multiple currencies. The Group is therefore exposed to fluctuations in exchange rates. The risks are assessed on a regular basis. PCI Biotech is currently not using any financial hedging instruments, but in October 2018 parts of the net NOK proceeds from a rights issue with gross proceeds of NOK 360 million were converted into EUR as a hedge of the foreign exchange rate risk for the fimaCHEM programme.

Interest rate risk - PCI Biotech has no interest-bearing debt and interest risks are mainly related to the Group's holdings of cash and cash equivalents. The Group employs a prudent cash management strategy for its cash and cash equivalents, and assets are placed as bank deposits or invested in low risk short-term money market instruments. Per year-end 2020 all cash and cash-equivalents are placed as bank deposits.

Liquidity Risk - One of the main objectives of PCI Biotech's financial policy is to ensure that the Group has sufficient short- and long-term financial flexibility to achieve strategic and operational objectives. PCI Biotech's goal is to at least have sufficient cash to cover the expected capital need for the next 12

months, as well as a strategic reserve. The Group closely monitors cash flows based on short- and long-term forecasts. Cash burn rate depends mainly on the level of activity in the clinical and preclinical programmes. The programmes do not involve substantial long-term commitments for the Group, allowing flexibility for adjusting operational activities.

GOING CONCERN

In accordance with § 3-3a of the Norwegian Accounting Act (NAA) it is confirmed that the conditions for assuming that the Group will continue as a going concern are present and that the financial statements have been prepared on the basis of this assumption. The Board of Directors refers to the document on corporate governance in the annual report relating to corporate governance (NAA § 3- 3b) and corporate social responsibility (NAA § 3-3c).

SUBSEQUENT EVENTS

PCI Biotech is not aware of any other subsequent events since year-end 2020 which is of material significance to the financial statements as of 31 December 2020.

OUTLOOK

PCI Biotech's proprietary PCI technology enables intracellular delivery, which provides the possibility to unlock the true potential of certain classes of innovative medicines. Supported also by external collaboration partners' opinion, the PCI technology has the opportunity to play a significant role in the realisation of several new therapeutic modalities, including immunotherapy (fimaVACC) and nucleic acid therapeutics (fimaNAC).

Although the company's focus is divided over the three programmes, most resources are currently spent on progressing the lead project of fimaCHEM, which is clinical development of fimaporfin with gemcitabine for the treatment of inoperable extrahepatic bile duct cancer; a rare disease with high unmet medical need. Based on the encouraging early signs of efficacy in Phase I, the company worked with regulators in Europe and the U.S. receiving important guidance for the design of a pivotal phase study.

The company is fully committed to advance the fimaCHEM programme with the ambition of helping patients currently left without effective treatment options to achieve a good quality of life. The ongoing COVID-19 pandemic has affected the progress of the pivotal study and the company is currently focusing on effective execution of the study, with the aim to recoup as much as possible of the delays.

In parallel, the two other programmes, fimaVACC and fimaNAC, are proceeding in accordance with the established development strategy. The Phase I study in healthy volunteers provided affirmative results on translation of the fimaVACC technology into humans and key data to support the programme's further development. The fimaNAC programme continues to follow a collaborative approach, by pursuing out-licensing opportunities in the most attractive areas for the technology.

In short, the main priorities of PCI Biotech at this time are to:

Effectively drive the fimaCHEM development programme in inoperable extrahepatic bile duct cancer towards the market
Implement the strategy for the next phase of development for fimaVACC
Manage alliance and partnering activities across all commercially interesting areas for the PCI platform

Oslo, 20 April 2021 Board of Directors and Chief Executive Officer, PCI Biotech Holding ASA

Hans Peter Bøhn Hilde Furberg Chairman Director

Christina Herder Andrew Hughes

Director Director

Director CEO

Lars Viksmoen Per Walday

PCI Biotech Holding ASA, Ullernchausséen 64, 0379 Oslo, Norway, Company no: 991036393 VAT Phone: + 47 67 11 54 00, www.pcibiotech.com

RESPONSIBILITY STATEMENT FROM THE BOARD OF DIRECTORS AND CEO 2020

We confirm that the financial statements for the period 1 January to 31 December 2020, to the best of our knowledge, have been prepared in accordance with IFRS and that the accounts give a true and fair view of the assets, liabilities, financial position and results of operations, and that the information in the report includes a fair review of the development, performance and position of the Company and the Group, together with a description of the principal risks and uncertainties PCI Biotech faces.

Oslo, 20 April 2021 Board of Directors and Chief Executive Officer, PCI Biotech Holding ASA

Chairman Director

Director Director

Lars Viksmoen Per Walday Director CEO

Hans Peter Bøhn Hilde Furberg

Christina Herder Andrew Hughes

ANNUAL STATEMENT ON CORPORATE GOVERNANCE POLICY AND CORPORATE SOCIAL RESPONSIBILITY POLICY

PCI Biotech Holding ASA emphasises good corporate governance

The Norwegian Code of Practice for corporate governance is a guideline for listed companies to help regulate the division of roles between shareholders, the board of directors and executive management more comprehensively than is required by legislation.

PCI Biotech Holding ASA ("PCI Biotech" or "The Company") bases its policy for corporate governance on the Norwegian Code of Practice of 17 October 2018. Adherence to the code of practice is implemented on the basis of a "comply or explain principle".

The Board of Directors and management has resolved as a main principle to follow the recommendations of the Norwegian Corporate Governance Code ("the Code") to the extent not considered unreasonable due to the company size and stage of development. Explanations of nonconformance to the Code are provided if not fully implemented. PCI Biotech's compliance with the Code is described in this report and section numbers refer to the Code's chapters.

1. Implementation and reporting on corporate governance

PCI Biotech acknowledges the division of roles between shareholders, the Board of Directors and the executive management team. PCI Biotech has implemented a sound corporate governance policy. Guidelines on corporate governance and statement of compliance with the Code is presented in the Company's annual report and website. The Company ensures that the policy is adopted by holding regular Board of Directors' meetings which the executive management team attends to present strategic, operational and financial matters.

Corporate values are established with the purpose to establish a healthy corporate culture and preserve the Company's integrity by helping employees to comply with standards of good business conduct. Furthermore, the values are intended to be a tool for self-assessment and for further development of the Company's identity. The corporate values are important foundations for PCI Biotech's corporate governance. Ethical guidelines are also established and these guidelines are based on the corporate values.

PCI Biotech adhere to the code of practice for corporate governance. The company has to date five deviations from the code and reasons for the deviations and solutions selected are further explained under section 2.1, 6 and 9.

2. Business

The objective and purpose for PCI Biotech's business are clearly defined and described in the articles of association. "The Company's business activities shall include cancer treatment and drug delivery based on the PCI technology and other related activities, including participation in other companies with similar activities through equity, loan or by issue of guarantees." The Company's articles of association are available at the Company's website and the Company's objectives and strategy are available in the annual report.

PCI Biotech has defined three distinct development programmes with clear objectives, strategies and risk profiles for the company's business activities to enable PCI Biotech to create long term value for its shareholders. The Board of Directors perform annual evaluations of the objectives, strategies and risk profiles.

The company has implemented guidelines for how to integrate stakeholder considerations into its value creation, through corporate social responsibility and ethical guidelines.

2.1 Corporate social responsibility (CSR)

PCI Biotech is a Norwegian based company focusing on research and development within the field of cancer treatment. The PCI Biotech Group consists of 15 employees and the core competencies are possessed by these employees, while the group's other resources in research and development are mainly purchased from public and private research institutions and service providers across Europe and USA.

As of today, the Group has no sales or supply of services and a limited complexity in operations. The Group has established guidelines, policies, procedures and standards in accordance with internal control policies for comparable businesses of similar size, complexity and industry to fight corruption. This means that the group requires its directors and employees to demonstrate high ethical standards in business and interpersonal relationships. Other principles followed are prevention through awareness-raising, limitation of opportunities, high detection risk of and zero tolerance for corruption.

The Group has established its own quality control system in line with authorities' requirements within the activities that the Group operates, both in terms of production and storage of pharmaceutical products and medical devices, and in connection with preclinical and clinical studies. The quality control procedures are based on the relevant activities in relation to the different phases of operation and the development of procedures are thus a continuous and systematic process. The Group is concerned that staff have appropriate training and experience in their business areas and staff are regularly updated within their business fields.

The Group is concerned with animal welfare, human rights, labour rights, social issues and sustainable development. The Group's management conducts regular performance reviews and internal evaluations and the Group adapts according to Norwegian law within the area. The Group's subcontractors are mainly public and private European and US research institutions and service providers. Preclinical and clinical research is subject to strict government regulation of animal welfare, human rights and social conditions in all the countries where the research and development work is carried out, including South Korea and Taiwan where the RELEASE trial recently opened sites at selected hospitals. The Group therefore considers that animal welfare, human rights, labour rights and social issues are well taken care of, both internally and among its subcontractors. Regarding sustainable development, please see section 2.2.

The Group has not identified any material issues based on the corporate social responsibility procedures (CSR) performed in 2020. The implementation of further detailed specific objectives, strategies or action plans related to CSR, beyond the ones described above, has not yet been prioritised, but will be developed along with the continuous development of PCI Biotech's operations.

Non-conformance with the recommendation: The Group's operations are of such character that it does not significantly affect the environment and the Group therefore believes it is not appropriate to establish specific guidelines, policies, procedures and standards in this area, but environmental issues are included in the ethical guidelines and please also see the separate reporting regarding sustainable development in section 2.2.

2.2 Sustainable development

PCI Biotech has not used any specific reporting standards or guidelines for sustainability reporting other than the Code and this section for sustainable development is considered as an integrated part of the CSR reporting. In general PCI Biotech's strategy and operations are focused on human welfare through its vision of 'unlocking the potential of innovative medicines'. PCI Biotech focus its development on anti-cancer product- and technology candidates. All international anti-cancer development is strictly regulated regarding animal welfare and high focus on safety and wellbeing for patients participating in clinical trials. PCI Biotech have internal routines securing that the Group and service providers comply with all relevant standard in these regards. The Group's operations are of such character that they do not significantly affect the environment beyond normal course of business for a small biotech company. Travelling and the needs for shipment of devices and materials for preclinical and clinical trials are identified as the activities with most environmental impact. To keep the environmental impact to a minimum, devices that are no longer used are returned in bulks to the

PCI Biotech Holding ASA, Ullernchausséen 64, 0379 Oslo, Norway, Company no: 991036393 VAT Phone: + 47 67 11 54 00, www.pcibiotech.com

producer for recycling. Other shipments are optimised in collaboration with our service providers and collaborators to reduce number of shipments. External meetings are evaluated for use of virtual meeting tools when appropriate, to limit travels to what is considered necessary from an operational perspective.

2.3 Ethical guidelines

The ethical guidelines encompass the following elements; core values, compliance with laws and regulations, working environment, interaction with different stakeholders, intragroup transactions, employees loyalty, conflicts of interest, confidentiality, environment, accounting, financial reporting, trading of Company shares, other employee activities and compliance with the ethical guidelines.

3. Equity and dividends

PCI Biotech's equity as of 31 December 2020 was NOK 189 million. The capital structure is regularly assessed in light of the Company's objectives, strategy and risk profile. The equity level is assessed as satisfactory per year-end 2020.

To date the Company has not distributed any dividends and this dividend policy will apply as long as PCI Biotech is in a research and development phase. The Board of Directors has no mandate to approve the distribution of dividend.

The Board of Directors has been authorised by the Company's General Assembly in May 2020 to increase the share capital by share issue of up to 2,790,000 shares in connection with the Company's employee incentive program and to issue shares in connection with private placements by an amount up to 10% of the share capital of the Company. The authorisations are valid to the next ordinary general assembly. Other than the above the Board of Directors has no general authorisation to issue shares.

4. Equal treatment of shareholders and transactions with close associates

PCI Biotech has only one class of shares and all shares have equal rights. Each share carries one vote.

The Board of Directors and management are committed to treat all shareholders equally. The Company had no transactions in own shares during 2020.

In the event of the Board of Directors resolving to issue new shares and waive the pre-emptive rights of existing shareholders, the Board of Directors intends to comply with the recommendation of the Norwegian Code of Practice for Corporate Governance that the justification for such waiver is noted in the Stock Exchange announcement relating to such a share issue.

Please refer to Note 23 Related party transactions to the financial statements for 2020 where information regarding related party transactions are disclosed.

The Group had no regular business transactions with related parties in 2020. In 2019 the Group had regular business transactions with the Norwegian Radium Hospital Research Foundation, which owned 3.44% of PCI Biotech at year end 2019. The transactions were related to an extensive cooperation with the Norwegian Radium Hospital mainly regarding pre-clinical activities. The cooperation was regulated through signed agreements and it is the Board of Director's and management's opinion that the contracts were based on "arm's length" principles. These arrangements are from 1 January 2020 transferred to Inven2 AS being PCI Biotech's counterpart in these matters from that date.

All material transactions between the Group and shareholders, directors, management or close associates of such parties are valuated independently by a third party. No such transactions exist for 2020. Directors and members of the executive management are obliged to notify the Board of Director's of any direct or indirect material interest in any transaction entered into by the Group.

5. Shares and tradability

The shares in PCI Biotech are freely tradable with no form of restriction. No restrictions regarding voting, ownership or tradability are placed on the shares in the Company's articles of association.

6. General Meetings

The Board of Director's facilitate that as many shareholders as possible may exercise their rights by participating at the General Meeting and that the General Meeting is an effective forum for both the views of shareholders and the Board of Director's.

The Chairman, the Chief Executive Officer (CEO) and the Chief Financial Officer (CFO) are present at the Annual General Meeting, along with representatives from the Nomination Committee and the group auditor.

Shareholders who are unable to participate themselves may vote by proxy and a person can also be appointed to vote for the shareholders as a proxy. The Board of Directors may decide that shareholders may submit their votes in writing, including by use of electronic communication, in a period prior to the general meeting.

Notice of the meeting and relevant documents, including the proposal of the nomination committee, are made available on the company website three weeks in advance of the meeting. Notice of the meeting is sent to all shareholders individually, or to their depository banks, three weeks in advance of the meeting. The meeting notice include information regarding shareholders' rights, guidelines for registering and voting at the meeting. The company provides information on the procedure for representation at the meeting through proxy, nominations of a person to vote on behalf of the shareholders and to the extent possible prepare a form which allows separate voting instructions for each matter, hereunder for individual candidates for appointment to the Group's governing bodies. The deadline for notice of attendance is set as close to the meeting as practically possible and in accordance with the provisions in the Articles of Association.

Non-conformance with the recommendation: PCI Biotech is a small company and has encouraged directors to attend the General Meeting. The entire Board has not usually attended the General Meeting as, thus far, the items on the agenda of the General Meeting have not required all directors to attend. The Chair of the Board is present, and other Board members participate on an ad hoc basis. From the Group's perspective, this is considered to be sufficient. The recommendation to implement routines to ensure an independent chairing of the meeting has not been applied, both for cost and convenience reasons based on the size of the company. From the Group's perspective, this is considered to be sufficient.

7. Nomination Committee

The requirement for a Nomination Committee and its guidelines follows from article 6 of the articles of association. The Nomination Committee's duties are to propose candidates for election to the Board of Directors and to propose remuneration. The Nomination Committee is required to justify its recommendations and encouraged to interact with shareholders, the Board of Directors and the Chief Executive Officer (CEO) in its work. The Nomination Committee's members, including the chairperson, are elected by the General Meeting for two years at a time, unless otherwise resolved by the General Meeting and the General Meeting may adopt instructions for the Nomination Committee. The Nomination Committee shall consist of minimum two members who shall be shareholders or representatives for the shareholders. The remuneration to the members of the Nomination Committee is determined by the General Meeting.

The Nomination Committee ensures that shareholders' views are taken into account when qualified members are nominated to the governing bodies of PCI Biotech. Shareholders are encouraged to submit proposals to the Nomination Committee for candidates for election to the board of directors. Such proposals must be in writing and justified and be submitted minimum 2 months before the general meeting if they are to be considered by the nomination committee.

None of the Committee's members represents PCI Biotech's management or Board and they are all considered to be independent of daily management and the Board. The Nomination Committee is considered to have a composition that reflects the common interests of the community of shareholders.

The nomination committee currently consists of the following three members: Jónas Einarsson (chairperson), Erik Must and Trond Johansen. The current members have been elected by the general meeting with a term until the Company's ordinary general meeting in 2021. The Nomination Committee's contact details are available at PCI Biotech's website.

8. Board of Directors, composition and independence

The Board of Directors is composed to ensure that the Board of Directors can operate independently, attend the common interest for all shareholders and the Company's need for expertise, capacity and diversity. The shareholders elect between three and seven members to the Board of Directors, including the Chair and they are elected for one-year terms by the General Meeting. The Board of Directors is presented on the company website. All board members are considered to be independent from the Company's day-to-day management, main shareholders and material business connections. All board members are encouraged to be shareholders and their shareholdings are disclosed in the Annual Report.

9. Work of the Board of Directors

It is the responsibility of the Board of Directors to ensure that the Company has a well functioning internal control environment in accordance with the regulations that apply to its activities and to supervise daily management and activities of the company in general. In addition, the Board of Directors is responsible for appointment of Chief Executive Officer (CEO) and convening and preparing for general meetings. The Board of Directors has implemented instructions for the Board and the executive management, with focus on allocation of internal responsibilities and duties. The objectives, responsibilities and functions of the Board of Directors and the CEO are in compliance with rules and standards applicable for the company.

The Board of Directors should ensure that members of the Board and executive personnel make the company aware of any material interests that they may have in items to be considered by the Board of Directors. The Board of Directors' consideration of material matters in which the Chairman of the Board is, or has been, personally involved, shall be chaired by another member of the Board.

The Board of Directors adopts an annual plan for its work, which includes objectives, strategy and implementation. The CEO is responsible for keeping the Board of Directors informed about the company's activities, position and financial and operational developments. The Board of Directors evaluates its performance and expertise annually and the evaluation is made available to the Nomination Committee. The Company has not established a separate Audit Committee in accordance with the exemption in the Norwegian Public Limited Liability Companies Act. The Company has not established a separate Remuneration Committee. The Board of Directors in its entirety serves as an Audit and Remuneration Committee.

The Board conducted nine meetings in 2020. Board members had the following attendance at these meetings:

Hans Peter Bøhn, 9/9 Lars Viksmoen, 9/9 Hilde Furberg, 9/9 Andrew Hughes 9/9 Christina Herder 8/9

Non-conformance with the recommendation: PCI Biotech has not established separate Audit and Remuneration Committees. The Board of Directors believes that this is most appropriate given the Company's current size and complexity. The Board of Directors will, depending on the Company's performance, consider appointing a separate Audit and Remuneration Committee.

10. Risk management and internal control

It is the responsibility of the Board of Directors to ensure that the Company has sound internal controls and systems for risk management that are appropriate in relation to the extent and nature of the Company's activities. Significant risks include strategic risks, market risks, financial risks, liquidity risks and operational risks including risks related to development of products. The internal control systems also include company values, code of ethics and corporate social responsibility, which are all integrated into the Company's value creating activities. The Company's significant risk areas and internal control systems are assessed on an on-going basis and at least once a year by the Board of Directors.

Please also refer to The Board of Directors report, for a description of relevant risk factors.

11. Remuneration of the Board of Directors

The General Meeting determines the remuneration to the Board of Directors based on a proposal from the Nomination Committee. Remuneration reflects the Board of Directors responsibility, expertise, time commitment and the business complexity. The remuneration is not linked to the Company's performance, and no share options are granted to Directors. Detailed information on the remuneration of the Board of Directors can be found in the Annual Report.

Board members or companies to which they are connected should not undertake separate assignments for the Group in addition to the Board appointment. If they nevertheless do, the whole Board is to be informed. Fees for such assignments are to be approved by the Board. If remuneration has been paid above the normal Board fee, this is to be specified in the annual report.

12. Remuneration of the executive management

The Board has established guidelines on the determination of salaries and other remuneration of executive management in accordance with § 6–16a of the Norwegian Public Companies Act. The remuneration guidelines shall be communicated to and approved by the Annual General Meeting. The remuneration guidelines seek to contribute to the alignment of interests between the shareholders and executive management and sets out the main principles in determining the salary and other remuneration for the executive management. Performance-related remuneration is linked to long term value creation for shareholders and is based on quantifiable factors that can be influenced by the executive management. It is established a limit for the performance related remuneration. A share option scheme is part of the remuneration policy and the scheme is approved by the general meeting.

13. Information and communication

The Company presents its financial statements in accordance with IFRS, and procedures have been established to ensure compliance with IFRS interim and annual reporting requirements. The Company's management, the Chief Executive Officer (CEO) and Chief Financial Officer (CFO) are responsible for preparing the financial statements, and financial reports are approved by the Board of Directors prior to publication. PCI Biotech reports in accordance with the rules in the Norwegian Securities Trading Act, as well as with the requirements specified by the Oslo Stock Exchange for companies with listed shares.

The Group's report on corporate social responsibility is integrated in the annual report. The Board has set an IR policy for PCI Biotech's reporting of financial and other information. The Board has approved guidelines and procedures relating to the handling of insider information and trading in the company's shares.

The Company's guidelines for reporting of financial and other information is based on transparency and takes into account the requirement for equal treatment of all participants in the securities market. The Company is committed to report financial results and other relevant information on an accurate and timely basis. The Company publishes a financial calendar on an annual basis, including dates for release of interim and annual reports and dates for general meetings. PCI Biotech considers it important to inform shareholders about the Group's development and economic and financial status. Management members are available for discussions with shareholders, other than through general meetings, in order to develop a balanced understanding of such shareholders' situation and focus,

PCI Biotech Holding ASA, Ullernchausséen 64, 0379 Oslo, Norway, Company no: 991036393 VAT Phone: + 47 67 11 54 00, www.pcibiotech.com

subject however to the provisions in legislation and regulations. The Chair of the Board ensures that shareholders' viewpoints are communicated to the whole Board.

14. Take-overs

The Board of Directors endorses the principles concerning equal treatment of all shareholders. In the event of a take-over bid, it is obliged to act in accordance with the requirements of Norwegian law and in accordance with the applicable principles for good corporate governance.

The Board of Directors will not hinder or obstruct takeover bids for PCI Biotech's activities or shares. The Board will ensure that shareholders are given sufficient information and time to form an opinion on an offer. If a takeover offer is received, the Board will issue a statement making a recommendation as to whether shareholders should or should not accept the offer.

A transaction that in fact is a business disposal shall be approved by a General Meeting.

15. Auditor

Ernst & Young AS (EY) is the appointed auditor of PCI Biotech.

The auditor shall annually in writing confirm to the Board of Directors that he/she satisfies established requirements for independence and objectivity. The auditor participates at least one Board of Directors meeting per year, where he/she present auditors plan for the audit, the assessment of the Company's internal control and participate during the approval of the annual accounts. The auditor has a minimum of one meeting per year with the Board of Directors without the presence of the Executive Management. The Board of Directors has established separate guidelines for use of non-audit services. Fees paid to the external auditor for audit and non-audit services are reported in the Company's Annual Report, which are, in turn, approved by the annual general meeting. The auditor is requested to participate at the annual general meeting for consideration of the annual financial statement.

PCI Biotech Holding ASA – financial statement

STATEMENT OF COMPREHENSIVE INCOME For the year ended 31 December 2020

(1.1 - 31.12)

Parent					Group
2020	2019	(figures in NOK 1.000)		2020	2019
			Note
		Other income	5,6	7 368	9 392
-	-	Total income		7 368	9 392
		Research and development	7,8	75 571	83 312
4 664	4 582	General and administrative	7,8,9,10,14	13 917	14 883
4 664	4 582	Total operating expenses	23,24	89 488	98 195
-4 664	-4 582	Operating results		-82 121	-88 804
11 400	6 750	Financial income	11	10 796	2 737
307	1 989	Financial expenses	11,24	915	2 680
11 092	4 761	Net financial results		9 881	58
6 429	179	Profit/Loss before income tax		-72 239	-88 746
-	-	Income tax	12	-	-
6 429	179	Net profit/loss for the year		-72 239	-88 746
		Other comprehensive income, net of tax
-	-	Items that will not be reclassified to income statement		-	-
-	-	Items that subsequently may be reclassified to income statement		-	-
6 429	179	Total comprehensive income for the year		-72 239	-88 746
		Loss per share basic and diluted (figures in NOK)	13	1.94	2.38

PCI Biotech Holding ASA

BALANCE SHEET for the year ended 31 December 2020

Parent				Group
2020	2019	ASSETS		2020	2019
		(figures in NOK 1.000)	Note
		Non-current assets
		Property, plant and equipment	14	7 388	5 072
		Right to use assets	24	605	1 211
600 070	523 731	Shares in subsidiary	15	-	-
600 070	523 731	Total non-current assets		7 994	6 283
		Current assets
19 021	28 011	Receivables from group companies	18	-	-
86	69	Other short-term receivables	18	13 162	14 646
19 107	28 080	Total receivables	17	13 162	14 646
68 474	122 794	Cash and cash equivalents	16,17,19	187 967	261 103
87 581	150 874	Total current assets		201 129	275 749
687 651	674 604	Total assets		209 123	282 032

PCI Biotech Holding ASA BALANCE SHEET for the year ended 31 December 2020

Parent				Group
2020	2019	EQUITY AND LIABILITIES (figures in NOK 1.000) Equity	Note	2020	2019
111 979 361 148 18 687	111 797 361 013 12 348	Share capital Share premium Other paid-in capital	20	111 979 450 464 -	111 797 450 329 -
194 732	188 303	Retained earnings		-373 199	-307 297
686 546	673 462	Total equity	8	189 244	254 828
		Liabilities
		Non-current liabilities
		Other long-term liabilities	16	32	2 037
		Long-term lease liabilities	24	-	539
-	-	Total non-current liabilities		32	2 576
		Current liabilities
60	150	Trade account payables		5 191	8 601
-	-	Current lease liabilities	24	673	657
129	119	Public duties payables		2 107	4 684
915	872	Other current liabilities	22	11 877	10 685
1 104	1 141	Total current liabilities	16,21	19 847	24 628
1 104	1 141	Total liabilities	17	19 879	27 204
687 651	674 604	Total equity and liabilities		209 123	282 032

Oslo, 20 April 2021 Board of Directors and Chief Executive Officer, PCI Biotech Holding ASA

Hans Peter Bøhn Christina Herder Hilde Furberg Chairman Director Director

Andrew Hughes Lars Viksmoen Per Walday Director Director CEO

PCI Biotech Holding ASA - GROUP CONSOLIDATED STATEMENT OF CHANGES IN EQUITY for the year ended 31 December 2020

(attributable to the equity holders of the parent)

(figures in NOK 1.000)	Note	Share capital	Share premium	Other paid-in capital	Retained earnings	Total equity
Equity at 1 January 2019	20	111 494	449 448	0	-220 987	339 954
Loss for the period		-	-	-	-88 746	-88 746
Other comprehensive income, net of tax		-	-	-	-	-
Total comprehensive income for the period		-	-	-	-88 746	-88 746
Capital increase		303	880	-	-	1 183
Capital increase expenses		-	-	-	-	0
Share based payments		-	-	2 436	-	2 436
Allocation		-	-	-2 436	2 436	0
Equity at 31 December 2019	20	111 797	450 329	0	-307 297	254 828
Loss for the period		-	-	-	-72 239	-72 239
Other comprehensive income,
net of tax		-	-	-	-	-
Total comprehensive income
for the period		-	-	-	-72 239	-72 239
Capital increase		182	135		-	316
Capital increase expenses		0	0		-	0
Share based payments				6 339	-	6 339
Allocation		-	-	-6 339	6 339	0
Equity at 31 December 2020	20	111 979	450 464	0	-373 199	189 244

PCI Biotech Holding ASA - PARENT CONSOLIDATED STATEMENT OF CHANGES IN EQUITY for the year ended 31 December 2020

(figures in NOK 1.000)	Note	Share capital	Share premium	Other paid-in capital	Retained earnings	Total equity
Equity at 1 January 2019	20	111 494	360 133	9 912	188 124	669 663
Profit for the period		-	-	-	179	179
Other comprehensive income, net of tax		-	-	-	-	-
Total comprehensive income for
the period		-	-	-	179	179
Capital increase		303	880	-	-	1 183
Capital increase expenses		-	-	-	-	-
Share based payments in subsidiary		-	-	2 436	-	2 436
Equity at 31 December 2019	20	111 797	361 013	12 348	188 303	673 462
Profit for the period		-	-	-	6 429	6 429
Other comprehensive income, net of
tax		-	-	-	-	-
Total comprehensive income for
the period		-	-	-	6 429	6 429
Capital increase		182	135	-	-	316
Capital increase expenses		-	-	-	-	-
Share based payments in subsidiary		-	-	6 339	-	6 339
Equity at 31 December 2020	20	111 979	361 148	18 687	194 732	686 546

PCI Biotech Holding ASA CASH FLOW STATEMENT for the year ended 31 December 2020

Parent		(figures in NOK 1,000)		Group
2020	2019		Note	2020	2019
6 429	179	Profit/Loss before income tax		-72 239	-88 746
-	-	Depreciation and amortisation	7,14	2 208	955
-	-	Leasing interest cost	24	75	37
-	-	Share-based payments	8	6 339	2 436
-8 411		1 529 Currency gain (-) / loss (+) not related to operations	19	-8 526	1 649
-17		184 Changes in accounts receivables		1 484	-6 934
-90		-1 046 Changes in account payables		-3 410	6 713
52		93 Changes in other net operating assets and liabilities		-3 322	2 194
-2 037	938	Cash flow from operating activities		-77 391	-81 695
-65 194		-73 925 Disbursement intragroup interest-bearing loan		-	-
4 184		3 753 Proceeds intragroup interest-bearing loan		-	-
-	-	Investment in subsidiary	15	-	-
-	-	Acquisition of non-current assets	14	-3 919	-5 405
-61 010	-70 171	Net cash flow from investing activities		-3 919	-5 405
-	-	Payment principal portion of lease liability	24	-668	-657
316		1 183 Proceeds from issue of new equity	8,20	316	1 183
-	-	Expenses in relation to issues of new equity	20	-	-
317		1 183 Net cash flow from financing activities		-352	526
-62 730	-68 050	Net changes in cash and cash equivalents Exchange rate effect on bank deposits in foreign		-81 662	-86 574
8 411	-1 529	currency	19	8 526	-1 649
122 794	192 373	Cash and cash equivalents at 1 January		261 103	349 326
68 474		122 794 Cash and cash equivalents at 31 December	19	187 967	261 103

PCI BIOTECH HOLDING ASA – ACCOUNTING PRINCIPLES 2020

1. Corporate information

The annual accounts for 2020 for PCI Biotech Holding ASA (the Company) and the consolidated financial statement (the Group or PCI Biotech) was approved for publication by the Board of Directors on 20 th April 2021.

PCI Biotech Holding ASA is a public listed company domiciled in Norway. The business of the Group is associated with research and development of pharmaceutical products and related technical equipment. The Company is listed on the Oslo Børs and the registered office address is Ullernchausséen, N-0379 Oslo.

2. Significant accounting policies

2.1 Basis of preparation

The Group and the Company's annual accounts are prepared in accordance with International Financial Reporting Standards (IFRS) as specified by the International Accounting Standards Board and implemented by the EU as per 31 December 2020.

The annual accounts for the Group and the Company have been prepared on the basis of historical cost. The financial income statement is presented by function of expense.

NOK (Norwegian kroner) is the functional currency for all companies within the Group. In the absence of any statement to the contrary, all financial information is reported in whole thousands. As a result of rounding adjustments, the figures in the financial statements may not add up to the totals. The Group's consolidated financial statements are presented in NOK, which is also the parent company's functional currency.

2.2 Basis of consolidation

The consolidated accounts include the overall financial results and overall financial position when the parent company PCI Biotech Holding ASA and the fully owned subsidiary PCI Biotech AS. The dormant Icelandic branch PCI Biotech Utibu were dissolved in 2019. The subsidiary is fully consolidated. The consolidated financial statements are prepared using uniform accounting policies for similar transactions and events under similar circumstances. Intercompany transactions and balances, including internal profits and unrealised gains and losses, are eliminated. All intra-group assets and liabilities, equity, income, expenses and cash flows relating to transactions between members of the Group are eliminated in full on consolidation.

2.3 Summary of significant accounting policies

a) Current versus non-current classification

The Group presents assets and liabilities in statement of financial position based on current/noncurrent classification. An asset is current when it is:

Expected to be realised or intended to sold or consumed in normal operating cycle
Held primarily for the purpose of trading
Expected to be realised within twelve months after the reporting period

• Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period

All other assets are classified as non-current.

A liability is current when:

It is expected to be settled in normal operating cycle
It is held primarily for the purpose of trading
It is due to be settled within twelve months after the reporting period

• There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period

The Group classifies all other liabilities as non-current. Deferred tax assets and liabilities are classified as non-current assets and liabilities.

b) Government grants

Government grants are presented as other income, see Note 5 for further information. Government grants are recognised where there is reasonable assurance that the grant will be received and all attached conditions will be complied with. When the grant relates to an expense item, it is recognised as income on a systematic basis over the periods that the related costs, for which it is intended to compensate, are expensed. When the grant relates to an asset, it is recognised as income in equal amounts over the expected useful life of the related asset.

c) Taxes

Current income tax

Current income tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date in the countries where the Group operates and generates taxable income.

Current income tax relating to items recognised directly in equity is recognised in equity and not in the statement of profit or loss. Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate.

Deferred tax

Deferred tax is provided using the liability method on temporary differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes at the reporting date. Deferred tax liabilities are recognised for all taxable temporary differences.

Deferred tax assets are recognised for all deductible temporary differences, the carry forward of unused tax credits and any unused tax losses. Deferred tax assets are recognised to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry forward of unused tax credits and unused tax losses can be utilised.

The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised. Unrecognised deferred tax assets are re-assessed at each reporting date and are recognised to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date.

Deferred tax relating to items recognised outside profit or loss is recognised outside profit or loss. Deferred tax items are recognised in correlation to the underlying transaction either in OCI or directly

in equity. Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority.

d) Foreign currencies

Transactions in foreign currencies are initially recorded by the Group's entities at their respective functional currency spot rates at the date the transaction first qualifies for recognition. Monetary assets and liabilities denominated in foreign currencies are translated at the functional currency spot rates of exchange at the reporting date. Differences arising on settlement or translation of monetary items are recognised in profit or loss.

e) Cash dividend distribution to equity holders of the parent

The Company recognises a liability to make cash distributions to equity holders of the parent when the distribution is authorised and the distribution is no longer at the discretion of the Company. As per the corporate laws in Norway, a distribution is authorised when it is approved by the shareholders. A corresponding amount is recognised directly in equity.

f) Property, plant and equipment

Tangible fixed assets are recognised at cost less deductions for accumulated depreciation and writedowns. Tangible fixed assets are depreciated over the expected useful life of the assets taking any residual value into consideration. Costs accrued for major replacements and upgrades of tangible fixed assets are added to cost if it is probable that the costs will generate future economic benefits for the Group and if the costs can be reliably measured. Ordinary maintenance is expensed as incurred.

Tangible fixed assets are depreciated on a straight-line basis over the estimated useful life of the asset as follows:

Production and test equipment 3-5 years
Furniture and equipment 3–5 years

g) Leases

The Group assesses at contract inception whether a contract is, or contains, a lease. That is, if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. The Group applies a single recognition and measurement approach for all leases, except for short-term leases and leases of low-value assets. The Group recognises lease liabilities to make lease payments and right-of-use assets representing the right to use the underlying assets.

The Group recognises right-of-use assets at the commencement date of the lease (i.e., the date the underlying asset is available for use). Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any remeasurement of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities recognised, initial direct costs incurred, and lease payments made at or before the commencement date less any lease incentives received.

Right-of-use assets are depreciated on a straight-line basis over the shorter of the lease term and the estimated useful lives of the assets. If ownership of the leased asset transfers to the Group at the end of the lease term or the cost reflects the exercise of a purchase option, depreciation is calculated using the estimated useful life of the asset. The right-of-use assets are also subject to impairment.

At the commencement date of the lease, the Group recognises lease liabilities measured at the present value of lease payments to be made over the lease term. The lease payments include fixed payments (including in-substance fixed payments) less any lease incentives receivable, variable lease payments that depend on an index or a rate, and amounts expected to be paid under residual value guarantees. The lease payments also include the exercise price of a purchase option reasonably certain to be exercised by the Group and payments of penalties for terminating the lease, if the lease

term reflects the Group exercising the option to terminate. Variable lease payments that do not depend on an index or a rate are recognised as expenses (unless they are incurred to produce inventories) in the period in which the event or condition that triggers the payment occurs.

In calculating the present value of lease payments, the Group uses its incremental borrowing rate at the lease commencement date because the interest rate implicit in the lease is not readily determinable. After the commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments made. In addition, the carrying amount of lease liabilities is remeasured if there is a modification, a change in the lease term, a change in the lease payments (e.g., changes to future payments resulting from a change in an index or rate used to determine such lease payments) or a change in the assessment of an option to purchase the underlying asset.

The Group applies the short-term lease recognition exemption to its short-term leases of machinery and equipment (i.e., those leases that have a lease term of 12 months or less from the commencement date and do not contain a purchase option). It also applies the lease of low-value assets recognition exemption to leases of office equipment that are considered to be low value. Lease payments on short-term leases and leases of low-value assets are recognised as expense on a straight-line basis over the lease term.

h) Intangible assets - Research and development costs

Research costs are expensed as incurred. Internal development costs related to development of products are recognised in the income statement in the year incurred unless it meets the asset recognition criteria of IAS 38 "Intangible Assets". Development expenditures on an individual project are recognised as an intangible asset when the Group can demonstrate:

The technical feasibility of completing the intangible asset so that the asset will be available for use or sale
Its intention to complete and its ability and intention to use or sell the asset
How the asset will generate future economic benefits
The availability of resources to complete the asset
The ability to measure reliably the expenditure during development

Following initial recognition of the development expenditure as an asset, the asset is carried at cost less any accumulated amortisation and accumulated impairment losses. Amortisation of the asset begins when development is complete and the asset is available for use. It is amortised over the period of expected future benefit. Amortisation is recorded in cost of sales. During the period of development, the asset is tested for impairment annually. The Group has currently no development expenditure that qualifies for recognition as an asset under IAS 38.

i) Impairment of non-financial assets

The Group assesses, at each reporting date, whether there is an indication that an asset may be impaired. If any indication exists, or when annual impairment testing for an asset is required, the Group estimates the asset's recoverable amount. An asset's recoverable amount is the higher of an asset's fair value less costs of disposal and its value in use. When the carrying amount of an asset exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. Right-of-use assets are also subject to impairment.

j) Financial instruments

Financial assets

Financial assets are classified, at initial recognition, as subsequently measured at amortised cost, fair value through other comprehensive income (OCI), and fair value through profit or loss.

The classification of financial assets at initial recognition depends on the financial asset's contractual cash flow characteristics and the Group's business model for managing them. The Group initially measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss, transaction costs. In order for a financial asset to be classified and measured at amortised cost or fair value through OCI, it needs to give rise to cash flows that are 'solely payments of principal and interest (SPPI)' on the principal amount outstanding.

Subsequent measurement

For purposes of subsequent measurement, financial assets are classified in four categories:

• Financial assets at amortised cost (debt instruments)

• Financial assets at fair value through OCI with recycling of cumulative gains and losses (debt instruments)

• Financial assets designated at fair value through OCI with no recycling of cumulative gains and losses upon derecognition (equity instruments)

• Financial assets at fair value through profit or loss

Financial assets at amortised cost

This category is the most relevant to the Group. The Group measures financial assets at amortised cost if both of the following conditions are met:

• The financial asset is held within a business model with the objective to hold financial assets in order to collect contractual cash flows and

• The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding

Financial assets at amortised cost are subsequently measured using the effective interest (EIR) method and are subject to impairment. Gains and losses are recognised in profit or loss when the asset is derecognised, modified or impaired.

The Group does not have financial assets at fair value through profit and loss.

Derecognition

A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is primarily derecognised (i.e., removed from the Group's consolidated statement of financial position) when:

• The rights to receive cash flows from the asset have expired

• The Group has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a 'passthrough' arrangement; and either (a) the Group has transferred substantially all the risks and rewards of the asset, or (b) the Group has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset

Impairment of financial assets

Further disclosures relating to impairment of financial assets are also provided in the following notes:

• Note 16 Financial risk

Note 18 Receivables by year end
Note 19 Cash and cash equivalents

The Group recognises an allowance for expected credit losses (ECLs) for all debt instruments not held at fair value through profit or loss. ECLs are based on the difference between the contractual cash flows due in accordance with the contract and all the cash flows that the Group expects to receive, discounted at an approximation of the original effective interest rate. The expected cash flows will include cash flows from the sale of collateral held or other credit enhancements that are integral to the contractual terms.

For trade receivables and contract assets, the Group applies a simplified approach in calculating ECLs. Therefore, the Group does not track changes in credit risk, but instead recognises a loss

allowance based on lifetime ECLs at each reporting date, meaning that a loss allowance is made for losses expected over the remaining life of the exposure.

For debt instruments at fair value through OCI, the Group applies the low credit risk simplification. At every reporting date, the Group evaluates whether the debt instrument is considered to have low credit risk using all reasonable and supportable information that is available without undue cost or effort. In making that evaluation, the Group reassesses the internal credit rating of the debt instrument. In addition, the Group considers that there has been a significant increase in credit risk when contractual payments are more than 30 days past due.

The Group considers a financial asset in default when contractual payments are 90 days past due. However, in certain cases, the Group may also consider a financial asset to be in default when internal or external information indicates that the Group is unlikely to receive the outstanding contractual amounts in full before taking into account any credit enhancements held by the Group. A financial asset is written off when there is no reasonable expectation of recovering the contractual cash flows.

Financial liabilities

Initial recognition and measurement

Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss, loans and borrowings, payables, or as derivatives designated as hedging instruments in an effective hedge, as appropriate. All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs. The Group's financial liabilities include trade and other payables. The Group does not have financial liabilities at fair value through profit and loss.

Derecognition

A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires.

k) Cash and short-term deposits

Cash and short-term deposits in the statement of financial position comprise cash at banks and shortterm deposits with a maturity of three months or less, which are subject to an insignificant risk of changes in value.

l) Provisions

Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.

m) Pensions and other post-employment benefits

PCI Biotech AS has an agreement with a life assurance company concerning contribution-based pensions for employees. Contributions, ranging from 7% to 21% of the employee's ordinary salary up to 12 times the basic amount (G) of the Norwegian National Insurance scheme, are paid into the employee's contribution account with the life assurance company. The Company's payment of contributions is expensed in the period it is accrued. Any prepayments made to the contribution fund are recognised in the balance sheet.

n) Share-based payments

Employees (including executive management) of the Group receive remuneration in the form of sharebased payments, whereby employees render services as consideration for equity instruments (equitysettled transactions).

Equity-settled transactions

The cost of equity-settled transactions is determined by the fair value at the date when the grant is made using the Black-Scholes valuation model. That cost is recognised, together with a corresponding increase in other capital reserves in equity, over the period in which the service conditions are fulfilled in employee benefits expense. The cumulative expense recognised for equity-settled transactions at each reporting date until the vesting date reflects the extent to which the vesting period has expired and the Group's best estimate of the number of equity instruments that will ultimately vest. The statement of profit or loss expense or credit for a period represents the movement in cumulative expense recognised as at the beginning and end of that period and is recognised in employee benefits expense. See Note 8 Salary expenses and other remuneration for further information.

No expense is recognised for awards that do not ultimately vest, except for equity-settled transactions for which vesting are conditional upon a market or non-vesting condition. These are treated as vesting irrespective of whether or not the market or non-vesting condition is satisfied, provided that all other performance and/or service conditions are satisfied. When the terms of an equity-settled award are modified, the minimum expense recognised is the expense had the terms not been modified, if the original terms of the award are met. An additional expense is recognised for any modification that increases the total fair value of the share-based payment transaction, or is otherwise beneficial to the employee as measured at the date of modification. The dilutive effect of outstanding options is reflected as additional share dilution in the computation of diluted earnings per share, further details are given in Note 13 Earnings per share.

o) License costs

Agreements with external parties concerning access to technology in the form of license agreements and agreements that allow the use of patented technology are expensed when they occur according to the agreement and are disclosed as "Research and development expenses" in the income statement.

p) Segment reporting

Segments are reported similarly as the internal reporting to the Group's senior decision makers. Senior decision makers are defined as the Group's management group. The Group has only one segment and see Note 6 for further information.

q) Cash-flow statement

The statement of cash flows distinguishes between cash flows from operating, investing and financing activities and the statement has been prepared in accordance with the indirect method. For the purpose of the consolidated statement of cash flows, cash and cash equivalents consist of cash at banks and short-term deposits with a maturity of three months or less. Cash and cash equivalents denominated in foreign currencies are translated at the functional currency spot rates of exchange at the reporting date. Differences arising from translation of these monetary items are not considered to be related to operations and are presented as part of net changes in cash and cash equivalents. Interest paid and interest received are included under cash flow from operating activities. Cash flows from share issues are recognised as cash flows from financing activities.

r) Events after the balance sheet date

New information regarding the Group's financial position on the balance sheet date has been taken into account in the annual accounts. Events after the balance sheet date that do not affect the Group's financial position on the balance sheet date, but which will affect the Group's financial position in the future, are reported if they are significant.

s) Contingent liabilities and assets

Contingent liabilities are defined as:

Possible liabilities as a result of earlier events where their existence depends on future events;
Liabilities that is not included because it is not probable that they will lead to an outflow of resources from the Group;
Liabilities that cannot be measured with sufficient reliability.

Contingent liabilities are not included in the annual accounts. Notes on significant contingent liabilities are provided, with the exception of contingent liabilities with little probability of occurring. Contingent assets are not included in the annual accounts, but are reported in cases in which there is a certain likelihood of their resulting in a benefit to the Group.

Accounting policies only relevant for the Parent:

t) Investment in subsidiaries

Shares and investments intended for long-term ownership are reported in the Company's statement of financial position as non-current assets and valued at cost. The Company determines at each reporting date whether there is any objective indication that the investment in the subsidiary is impaired. If this is the case, the amount of impairment is calculated as the difference between the recoverable amount of the subsidiary and its carrying value and recognizes the amount in the statement of profit and loss. Any realised and unrealised losses and any write downs relating to these investments will be included in the Company's statement of comprehensive income as financial items.

2.4 Changes in accounting policies and disclosures

New and amended standards and interpretations

The Group applied for the first-time certain standards and amendments, which are effective for annual periods beginning on or after 1 January 2020, but they do not have an impact in the consolidated financial statements of the Group. The Group has not early adopted any other standard, interpretation or amendment that has been issued but is not yet effective.

The following standards and amendments are applied for the first time in the 2020 consolidated accounts,

* Amendments to IFRS 3: Definition of a Business
* Amendments to IFRS 7, IFRS 9 and IAS 39 Interest Rate Benchmark Reform
* Amendments to IAS 1 and IAS 8 Definition of Material
* Conceptual Framework for Financial Reporting issued on 29 March 2018 (revised)

These amendments had no impact on the consolidated financial statements of the Group for 2020.

3. Significant accounting judgments, estimates and assumptions

The preparation of the Group's consolidated financial statements requires management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.

Other disclosures relating to the Group's exposure to risks and uncertainties includes:

• Financial risk management and policies Note 16 Financial risk.

Judgments

In the process of applying the Group's accounting policies, management has made the following judgments, which have the most significant effect on the amounts recognised in the consolidated financial statements:

The fair value of employee options is calculated according to the Black-Scholes method. This method involves the use of estimates and discretionary judgment, as described in more detail in Note 8. The allocation of options to employees of subsidiary is made directly from the parent company and the financial presentation is correspondingly reported in the subsidiary.
The Group has not recognised a deferred tax asset related to carry forward losses, as described in more detail in Note 12 Tax.
Regarding development of pharmaceuticals and medical equipment the Group cannot render probable future earnings large enough to justify recognising development costs in the balance sheet before marketing approval has been obtained, in accordance with IAS 38 Intangible assets. Own development costs are therefore recognised as an expense as incurred until national market approval for the product and indication has been obtained. Any further development of the product after marketing approval has been obtained and market launch completed will be recognised in the balance sheet to the extent that this involves significant changes to the product, which is considered likely to generate future financial benefits.
Regarding IFRS 16 and leasing costs, the Group cannot readily determine the interest rate implicit in the lease, therefore, it uses its incremental borrowing rate (IBR) to measure lease liabilities. The IBR is the rate of interest that the Group would have to pay to borrow over a similar term, and with a similar security, the funds necessary to obtain an asset of a similar value to the right-of-use asset in a similar economic environment. The IBR therefore reflects what the Group 'would have to pay', which requires estimation when no observable rates are available.

Significant accounting judgments, estimates and assumptions only relevant for the Parent

• PCI Biotech Holding ASA has in its separate financial statement performed an assessment of the carrying amount of the subsidiary PCI Biotech AS, see Note 11 Financial income and Note 15 Shares in subsidiaries for further information.

4. Standards issued, but not yet effective

The new and amended standards and interpretations that are issued, but not yet effective, up to the date of issuance of the Group's financial statements are disclosed below. The Group intends to adopt these new and amended standards and interpretations, if applicable, when they become effective.

Amendments to IAS 1: Classification of Liabilities as Current or Non-current. The Group is currently assessing the impact the amendments will have on current practice.

The following other standard are currently not applicable to the Group:

*IFRS 17 Insurance contracts.

*Property, Plant and Equipment: Proceeds before Intended Use – Amendments to IAS 16.

*Onerous Contracts – Costs of Fulfilling a Contract – Amendments to IAS 37.

*IFRS 1 First-time Adoption of International Financial Reporting Standards – Subsidiary as a first-time Adopter.

*IFRS 9 Financial Instruments – Fees in the '10 per cent' test for derecognition of financial liabilities. *IAS 41 Agriculture – Taxation in fair value measurements

PCI BIOTECH HOLDING ASA - NOTES FINANCIAL STATEMENT 2020

5 OTHER INCOME

OTHER INCOME

(figures in NOK 1,000)	Group
	2020	2019
SkatteFUNN	4 750	5 777
Grants from the Research Council of Norway	2 573	3 615
Other	45	0
Total other income	7 368	9 392

Government grants are recognised at the value of the contributions at the transaction date. Grants are not recognised until it is probable that the conditions attached to the contribution will be achieved. The grant is recognised in the statement of profit and loss in the same period as the related costs, and are disclosed as other income. R&D projects have been approved for SkatteFUNN for the period 2020 through 2022. The Group is awarded a grant from The Research Council of Norway (user-driven research-based innovation programme (BIA)) of up to NOK 13.8 million in total for the period June 2017 through June 2021 and per end of 2020 a total of NOK 12.0 million are recorded. Grant receivables as of year-end are disclosed in Note 18 Receivables.

6 OPERATING SEGMENTS

The Group has only one operating segment, which is research and development, and had no revenues for the reporting periods. Norwegian government grants that are received in the reporting periods are disclosed as other income, see Note 5 Other income.

7 STATEMENT OF COMPREHENSIVE INCOME ACCORDING TO CLASSIFICATION AND R&D EXPENSES BY CATEGORY

Operating costs according to classification.

(figures in NOK 1,000)			Group		Parent
	Note	2020	2019	2020	2019
Salary expenses	8	23 416	24 669	1 450	1 378
R&D exclusive salary and other operating expenses		55 389	64 341	0	0
Depreciation and amortisation	14,24	2 208	955	0	0
Other operating expenses		8 475	8 229	3 214	3 204
Total operating expenses		89 488	98 195	4 664	4 582

Of the total salary expenses NOK 15 379 relates to R&D activities (2019: NOK 16 021).

Specification of other operating expenses

	2020	2019	2020	2019
Travel expenses	170	964	38	53
Patent, legal and other fees	4 879	4 075	2 159	2 257
Other expenses	3 426	3 190	1 017	894
Total other operating expenses	8 475	8 229	3 214	3 204

R&D expenses by category:

	2020	2019
Clinical studies	57 761	62 971
Pre-clinical studies	6 607	6 198
CMC and equipment	6 637	10 716
Patents	4 566	3 427
Other expenses	0	0
Total R&D expenses	75 571	83 312

The Group has no development expenditure that qualifies for recognition of an asset under IAS 38 and intangible assets and all research expenditures are charged through the income statement, in line with previous years. A new batch of the product under development (fimaporfin) was produced in 2019 and an estimated cost value of fimaporfin in stock per year end is NOK 3.8 million (2019: NOK 4.3 million).

PCI Biotech has per date of this report not a complete picture of the long-term consequences of the COVID-19 pandemic regarding timelines and costs for clinical studies (the RELEASE trial). In 2020 the pandemic resulted in lower than expected patient recruitment into the RELEASE trial.

8 SALARY EXPENSES AND OTHER REMUNERATION

(figures in NOK 1,000)		Group		Parent
		2020	2019	2020	2019
Wages and Board of Directors remuneration		17 277	13 796	1 278	1 198
Social security contributions		2 801	2 257	172	181
Share-based payments, incl social security		1 291	7 199	0	0
Pension costs	9	1 627	1 224	0	0
Other expenses		419	194	0	0
Total salary expenses		23 416	24 669	1 450	1 378
No. of full-time equivalent positions		14.2	10.8	0.0	0.0

Share option programme for employees

Employees (including senior management) of the Group receive remuneration in the form of sharebased payments, whereby employees render services as consideration for equity instruments (equitysettled transactions). The employees are employed in the subsidiary, PCI Biotech AS, and the sharebased payment is thus accounted for as a P&L effect in the Group accounts and an investment in subsidiary in the parent company accounts. The general vesting term in the employee share option scheme is three years, with one third vested each year. The share options expire five years from grant date. All share options will lapse immediately upon the event that the employee's employment with the company are terminated. Each share option gives the right to subscribe for or acquire one share upon PCI Biotech Holding ASA's choice. The strike price is set at market terms and no premium for the share options are paid. The Black-Scholes method is used for fair value assessment of the share options at grant date. Further details about the share option program can be found in the Group remuneration policy.

Valuation method for fair value assessment of share options granted

The Black-Scholes method is used for fair value assessment of the share options at grant date. Volatility is calculated based on PCI Biotech's own stock market price. The exercise price is set at market terms, equal to the average volume weighted share price last five days of trade prior to grant date (5 days VWAP), and no premium for the share options are paid. The risk free interest rate is based on Norwegian 3-5 years government bond yield. Each option program is calculated separately with actual exercise price and lifetime for the program. The table below shows the input values used in the fair value assessment model at grant date.

Fair value for share options granted in 2020 were NOK 20.7 million (2019: NOK 6.8 million). The fair value estimated at grant date is amortised over the vesting period of three years.

Share options granted in 2020 and 2019	October 2020	June 2019
Number of share options	540 000	320 000
Dividend	0	0
Historical volatility (%)	107 %	110 %
Risk free interest rate (%)	0.37 %	1.21 %
Expected lifetime (years)	5	5

Authorisation from the annual general meeting

The general meeting held 27 May 2020 authorised the Board of Directors to grant the employees with a total of 2,790,000 share options and the authorisation applies for one year. 1,245,500 share options of the current authorisation have been granted by the Board of Directors at year-end 2020, including the 60,500 share options exercised in September 2020. The Board of Directors have not been granted any share options. See note 23 Related party transactions for further information.

Share option transactions during the year

Participants in the Company's share option program exercised on 2 September 2020 a total number of 60,500 share options, out of these 26,000 share options were exercised at a strike price of NOK 7.84 and 34,500 share options were exercised at a strike price of NOK 3.26. All of the exercised share options were about to expire unless exercised.

Out of the total number of exercised share options, 54,500 share options are exercised by the following primary insiders:

Primary insider Per Walday (CEO) has on 2 September 2020 exercised a total number of 9,000 share options at a strike price of NOK 3.26. The share options were granted to Walday in November 2015 and now about to expire unless exercised. Subsequent to the exercise he has sold 4,600 shares in the market at an average price of NOK 45.6 per share in order to finance the cash and tax impact of the transaction.

Primary insider Ronny Skuggedal (CFO) has on 2 September 2020 exercised a total number of 20,000 share options at a strike price of NOK 7.84 and a total number of 6,000 share options at a strike price of NOK 3.26. The share options were granted to Skuggedal in April 2015 and November 2015 and now about to expire unless exercised. Subsequent to the exercise he has sold 14,000 shares in the market at an average price of NOK 45.6 per share in order to finance the cash and tax impact of the transaction.

Primary insider Kristin Eivindvik (PD) has on 2 September 2020 exercised a total number of 6,000 share options at a strike price of NOK 7.84 and a total number of 7,500 share options at a strike price of NOK 3.26. The share options were granted to Eivindvik in April 2015 and November 2015 and now about to expire unless exercised. Subsequent to the exercise she has sold 7,100 shares in the market at an average price of NOK 45.6 per share in order to finance the cash and tax impact of the transaction.

Primary insider Anders Høgset (CSO) has on 2 September 2020, as a participant in the Company's share option program, exercised a total number of 6,000 share options at a strike price of NOK 3.26. The share options were granted to Høgset in November 2015 and now about to expire unless exercised. Subsequent to the exercise he has sold 4,500 shares in the market at an average price of NOK 45.6 per share.

In accordance with the authorisation granted by the Annual General Meeting 27 May 2020, the Board of Directors of PCI Biotech Holding ASA awarded a total of 540,000 share options to key employees on 6th October 2020. Each share option gives the right to subscribe for or acquire one share per option (after PCI Biotech Holding ASA's choice), at a strike price of NOK 50.36, equal to the volume weighted average share price (VWAP) for the last 5 days of trade prior to the grant date.

The share options vest over approximately three years and can be exercised with 1/3 of the options after approximately one year, further 1/3 after approximately two years and the last third after approximately three years. To ensure long term ownership by executive management, shares shall be held for at least three years after exercise, except shares to be sold immediately to cover transaction costs and tax under a so called cash less exercise.

The Black-Scholes method is used for fair value assessment of the share options at grant date and the fair value is assessed to NOK 20.7 million which will be charged to the profit and loss statement over the vesting period for the share options. The share options are subject to other customary terms and conditions for employee incentive programs and the share options are lapsing in Q3 2025.

Of the 540,000 share options, 400,000 share options were allotted to the following primary insiders: 90,000 share options were allotted to Amir Snapir, CMO. 90,000 share options were allotted to Ludovic Robin, CBO. 70,000 share options were allotted to Per Walday, CEO. 50,000 share options were allotted to Anders Høgset, CSO. 50,000 share options were allotted to Ronny Skuggedal, CFO. 50,000 share options were allotted to Lucy Wabakken, CDO (acting).

Share option transactions during 2019

Participants in the Company's share option program exercised on 20 February 2019 a total number of 61,000 share options. Out of these share options 30,000 were exercised at a strike price of NOK 19.24, 15,000 share options were exercised at a strike price of NOK 7.84, 11,000 share options were exercised at a strike price of NOK 3.26 and 5,000 share options were exercised at a strike price of NOK 21.48.

Out of the total number of exercised share options, 5,000 share options at a strike price of NOK 21.48 and 6,000 share options at a strike price of NOK 3.26 were exercised by the primary insider Gaël L'Hévéder (CBDO at that time), who sold 5,300 shares in the market at an average price of NOK 25.75 per share in order to finance the cash and tax impact of the share option exercise.

Out of the total number of exercised share options, 30,000 share options at a strike price of NOK 19.24 were exercised by the primary insider Hans Olivecrona (CMO at that time), who has sold 30,000 shares in the market at an average price of NOK 25.75 per share.

The Board of Directors awarded in June 2019 a total of 320,000 share options under the employee share option program. Each share option gives the right to subscribe for or acquire one share per option (after PCI Biotech Holding ASA's choice), at a strike price of NOK 25.78, equal to the volume weighted average share price (VWAP) for the last 5 days of trade prior to the grant date. The share options can be exercised with 1/3 of the options after one year, further 1/3 after two years and the last third after three years. To ensure long term ownership by executive management, shares shall be held for at least three years after exercise, except shares to be sold immediately to cover transaction costs and tax under a so called cash less exercise. The share options are subject to other customary terms and conditions for employee incentive programs and the share options are lapsing in Q3 2024.

The Black-Scholes method is used for fair value assessment of the share options at grant date and the fair value is assessed to NOK 6.8 million which will be charged to the profit and loss statement over

the vesting period for the share options. During 2019 a total number of 70,000 non-vested share options were terminated due to cease of employment. Expenses for these share options charged through profit and loss in previous periods have been reversed in 2019, with a net positive effect of NOK 1.0 million.

In September 2019 participants of the company's share option program for employees exercised a total number of 40,000 share options. All share options were exercised by the primary insider Ronny Skuggedal (CFO), at a strike price of NOK 8.63. Mr Skuggedal sold at the same time 25,300 shares in the market at an average price of NOK 27.08 per share in order to finance the cash and tax impact of the share option exercise.

P&L and balance sheet effects of the share option programme

The net P&L accounting effect for share-based payments and corresponding social security liability following future share option exercises were a net cost of NOK 1.3 million (2019: NOK 7.2 million). The potential social security liability for future exercises are calculated based upon share options that are in-the-money per reporting date and recognised as a short- or long-term liability in the balance sheet depending on vesting date of the underlying share options.

For the parent company, PCI Biotech Holding ASA, a net amount of NOK 6.3 million for share based payments (2019: NOK 2.4 million) is recognised as an investment in subsidiary.

Share options outstanding at the end of the period have the following expiry date and exercise prices:

Expiry date	Exercise price in NOK per share	Number of share options
		2020	2019
2020 - Q3	7.84	-	26 000
2020 - Q3	3.26	-	34 500
2022 - Q3	21.48	325 000	325 000
2024 - Q3	25.78	320 000	320 000
2025 - Q3	50.36	540 000	-
Sum		1 185 000	705 500

		2020		2019
	Number	Average exercise price in NOK per share	Number	Average exercise price in NOK per share
Outstanding at the beginning of the year	705 500	17.70	556 500	17.70
Granted during the year	540 000	50.36	320 000	25.78
Lapsed during the year	0	-	0	7.12
Exercised during the year	60 500	5.23	101 000	11.72
Expired during the year	0	-	70 000	25.14
Outstanding at year end	1 185 000	35.80	705 500	22.04
Exercisable options at year end	431 667	22.54	277 167	17.93

Options granted to employees, average exercise price and transactions during the year is listed below:

Exercise price and average remaining lifetime for outstanding options per year-end:

Number of options 2020 / 2019	Exercise price in NOK per share	Average remaining lifetime (years)
		2020	2019
0 / 26 000	7.84	-	0.7
0 / 34 500	3.26	-	0.7
325 000 / 325 000	21.48	1.7	2.7
320 000 / 320 000	25.78	3.7	4.7
540 000 / 0	50.36	4.7	-

9 PENSION EXPENSES

(figures in NOK 1,000)	Group
	2020	2019
Total pension cost from contribution schemes	1 627	1 224

The contribution pension scheme is in compliance with Norwegian public requirements and a total of fourteen employees are included in the scheme at year-end 2020 (2019: twelve employees), in addition to one employee in a Finnish pension scheme.

10 AUDITORS FEE

AUDITOR FEES	Group		Parent
(figures in NOK 1,000)	2020	2019	2020	2019
Statutory audit	198	203	135	139
Other assurance services	60	43	17	16
Total	259	246	152	155

11 FINANCIAL INCOME AND EXPENSES

(figures in NOK 1,000)	Group			Parent
	2020	2019	2020	2019
Interest income	1 849	2 398	84	16
Interest income group company	-	0	2 905	6 734
Other financial income	8 947	339	8 411	0
Total financial income	10 796	2 737	11 400	6 750

Interest expense	322	469	307	461
Interest expense leasing	75	37	0	0
Other financial expense	518	2 174	0	1 528
Total financial expense	915	2 680	307	1 989

For 2020 NOK 8.4 million in other financial income (2019: NOK 1.5 million other financial expense) in Parent and NOK 8.5 million (2019: NOK 1.6 million other financial expense) in Group are related to accounting effects of cash deposits in Euro per year-end, resulting from converting these Euro cash positions into NOK as functional currency for the annual accounts.

12 TAX

(figures in NOK 1,000)	Group			Parent
	2020	2019	2020	2019
Comprehensive income before tax	-72 239	-88 746	6 429	179
Expected nominal rate of tax (2020: 22% / 2019: 22%)	-15 893	-19 524	1 414	39
Permanent differences charged through P&L	343	-737	2	0
Deferred tax asset not recognised in the balance sheet	15 549	20 261	-1 416	-39
Total tax expense for the year	0	0	0	0

Specification of basis for deferred tax asset / liability

Tax effect of temporary differences:	Group			Parent
	2020	2019	2020	2019
Fixed assets	184	423	0	0
Receivables	0	0	0	0
Carry forward loss	-125 484	-110 134	-9 914	-11 292
Total tax asset (22% for 2019 / 22% for 2018)	-125 300	-109 712	-9 914	-11 292
Deferred tax asset not recognised	125 300	109 712	9 914	11 292
Deferred tax asset recognised in the balance sheet	0	0	0	0

The Group and Parent have no history of taxable profits and due to uncertainty of future utilisation, deferred tax assets have not been recognised in the balance sheets. Deferred tax asset not recognised in the balance sheet amounts to NOK 125.3 million (2019: NOK 109.7 million) at group level. The carry forward loss has no time limit according to current tax legislations.

13 EARNINGS PER SHARE

Earnings per share for the Group (diluted earnings per share) are calculated on the basis of the financial result after tax for the year (financial result after tax for the year adjusted for dilutive effects) divided by a weighted average number of shares outstanding for the year (weighted average number of outstanding shares for the year adjusted for dilutive effects). Dilution effect is weighted number of outstanding share options which are in-the-money during the year. Accretive effects are not taken into consideration. Earnings per share is not affected by the dilution effect if negative results in the period.

Earnings per share Weighted average number of shares (in '000)	2020 37 285	2019 27 797
Net loss for the year	-72 239	-88 746
Earnings per share (NOK per share)	-1.94	-2.38

An estimated dilution effect of 645 thousand shares at year-end 2020 (2019: 556 thousand) for outstanding share options which are in-the-money is not taken into account due to net negative result for the year.

14 FIXED AND INTANGIBLE ASSETS

(figures in NOK 1,000)	Group
	Office
	Device (laser)	equipment	Total
Acquisition cost per 31 December 2018	0	337	337
Additions in 2019	5 349	55	5 405
Disposals and scrapping during 2019	0	0	0
Acquisition cost per 31 December 2019	5 349	392	5 742
Additions in 2020	3 919	0	3 919
Disposals and scrapping during 2020	0	0	0
Acquisition cost per 31 December 2020	9 268	392	9 661
Accumulated depreciation per 31 December 2018	0	320	320
Ordinary depreciation 2019	339	10	349
Disposals in 2019	0	0	0
Accumulated depreciation per 31 December 2019	339	330	669
Ordinary depreciation 2020	1 589	13	1 603
Disposals in 2020	0	0	0
Accumulated depreciation per 31 December 2020	1 928	343	2 272
Book value per 31 December 2019	5 010	62	5 072
Book value per 31 December 2020	7 340	48	7 388

The laser device is for the fimaCHEM programme. The COVID-19 pandemic has not impacted the valuation of fixed assets per year-end 2020.

15 SHARES IN SUBSIDIARIES – only relevant for the Parent company

Company	Year of acquisition	Share capital of company	Equity participation and share of voting rights	Carrying amount (NOK thousand)	Equity (NOK thousand)	Financial result (NOK thousand)
PCI Biotech AS, Oslo -	2008
Norway
Figures for 2020		5 495 420	100 %	600 070	102 748	-78 668
Figures for 2019		5 172 160	100 %	523 731	105 077	-88 925

In 2020 the share capital of PCI Biotech AS was increased by NOK 323 260, with a share premium of NOK 69 676 740, totalling to NOK 70 000 000. The share capital was increased by a contribution in kind of intercompany balances of NOK 70 million by PCI Biotech Holding ASA.

In 2019 the share capital of PCI Biotech AS was increased by NOK 323 260, with a share premium of NOK 134 676 740, totalling to NOK 135 000 000. The share capital was increased by a contribution in kind of intercompany balances of NOK 135 million by PCI Biotech Holding ASA.

The carrying amount is assessed at the lowest of historic cost value and the observable market value of PCI Biotech at Oslo Stock Exchange. Per year end 2020 the carrying amount is at historic cost.

16 FINANCIAL RISK

This note describes the Group's various financial risks and the management of these. In addition, numerical tables for risk associated with financial risks are also presented.

(I) Organisation of financial risk management

PCI Biotech has an international business operation and is exposed to currency risk, interest risk, liquidity risk and credit risk. The Group has not utilised any derivatives or other financial instruments to reduce these risks during the accounting period. The responsibility for managing financial risk is at group level. The risk associated with centralised activities such as financing, interest rate and currency management is managed at group level. In addition, the group manages the risks associated with the business processes. The financial risk management is monitored by the Board of Directors.

Centralised risk management

PCI Biotech has a centralised risk management policy. The most important tasks within risk management are to ensure the Group's financial freedom to act both in a short- and long term perspective, and to monitor and manage financial risk in cooperation with the individual units in the group. A hedging-oriented view forms the basis for risk management of the finance department's positions so that all transactions with financial instruments have a counter item in an underlying commercial hedging requirement. Any permits required for borrowing and entering into derivative framework agreements are given on an annual basis by the Board of Directors.

Financial risk

This section describes the most important risk factors within each business area and the management of these. In this context, financial risk is understood as risk associated with financial instruments. These can either be hedging instruments for underlying risk or be considered themselves as a source of risk. Market risk is not hedged with financial instruments.

Research and development activities

PCI Biotech carries out research and development for new innovative medical products based on the company's patented technology. The currency risk in research and development is limited to the purchase of services, primarily related to clinical and pre-clinical studies. Foreign currency risk associated with purchase of goods and services are foremost related to transactions in EUR and GBP. Foreign currency exposure associated with research and development is not normally hedged, but at year-end 2020 the Group has placed cash deposits in EURO to hedge the foreign currency risk for the RELEASE study.

(II) Classes of financial risk

Interest rate risk

PCI Biotech does not have any interest-bearing debt, and the group's interest rate risk is primarily associated with the Group's cash positions and cash equivalents. This risk is managed at group level. The main strategy is to diversify the risk and invest in cash deposits with fixed or spot interest rates or money market funds with low risk, high liquidity and short duration. All funds are placed as cash deposits per year-end 2020.

Liquidity risk

One of the most important objectives of PCI Biotech's finance policy is to ensure that the Group has financial freedom to act in the short and long-term in order to attain strategic and operational goals. PCI Biotech shall have sufficient funds to cover expected capital requirements during the forthcoming 12 month period in addition to a strategic reserve. Cash flow in research and development depends mainly on the activity level of the clinical programmes and the activity levels are adjustable without substantial long term commitments. The finance department monitors the cash flows in a short- and long term perspective. PCI Biotech's most important source of finance are future royalty and milestone payments associated with licence agreements, government grants and the capital market. The capital market is used as a source of liquidity when this is appropriate and the conditions in these markets are competitive. The finance department continually evaluate other sources of financing. PCI Biotech does not have any debt agreements with key business ratio requirements (covenants).

PCI Biotech has per date of this report not a complete picture of consequences of the COVID-19 pandemic regarding timelines and costs for the RELEASE study. Given the uncertainty surrounding long-term consequences of the unprecedented situation with the COVID-19 pandemic, the anticipated timeline for the planned interim analysis is in a range up to 1H 2023, and the current cash-position may therefore not be sufficient to reach interim read of the RELEASE trial. PCI Biotech will continue to closely monitor progress in relation to timelines and costs in the coming months.

Credit risk

PCI Biotech has no sales or receivable balances based on sales for 2020 and 2019 and faces therefore no credit risk. PCI Biotech has no need for monitoring of receivable balances based on sales and no bad debt provision has been recognised during 2020 or 2019. The majority of the Group's financial assets are cash and cash equivalents and these funds are placed in cash deposits in different banks with satisfactory credit ratings. The credit risk for these funds is assessed to be low and no impairment test are performed for 2020 or 2019.

The following table shows an overview of the maturity structure of the group's financial obligations, based on non-discounted contractual payments.

Group (figures in NOK 1,000)	Remaining period
	Less than 1 month	1-3 months	3-12 months	1-5 years	Total
31.12.2020
Other long-term liabilities	0	0	0	32	32
Long term-lease liabilities	0	0	0	0	0
Trade accounts payables	5 191	0	0	0	5 191
Current lease liabilities	168	168	336		673
Public duties payables	950	165	992	0	2 107
Other current liabilities	175	4 516	7 186	0	11 877
31.12.2019
Other long-term liabilities	0	0	0	2 037	2 037
Long term lease liabilities	0	0	0	539	539
Trade accounts payables	8 601	0	0	0	8 601
Current lease liabilities	164	164	329		657
Public duties payables	915	0	3 770	0	4 684
Other current liabilities	85	3 986	6 615	0	10 685

Other long-term liabilities relates to estimated social securities for potential future share option exercises in the Group's remuneration incentive program.

Parent (figures in NOK 1,000)	Remaining period
	Less than 1 month	1-3 months	3-12 months	1-5 years	Total
31.12.2020
Trade accounts payables	60	0	0	0	60
Public duties payables	0	0	129	0	129
Other current liabilities	0	0	915	0	915
31.12.2019
Trade accounts payables	150	0	0	0	150
Public duties payables	0	0	119	0	119
Other current liabilities	25	0	847	0	872

Foreign currency risk

As NOK is the Group's functional currency, PCI Biotech is exposed to foreign currency risk associated with the Group's foreign net exchange rate exposure. The Group's expenses accrue in various currencies, primarily EUR, GBP, USD, SEK and NOK. PCI Biotech is therefore exposed to fluctuations in foreign exchange rates. The Group evaluates whether measures should be taken to reduce the foreign currency risk through hedging for significant transactions and projects.

The following table details the Group's and Parent company's sensitivity to potential changes in the foreign currency exchange rate, with all other factors constant. The calculation assumes an equal change in exchange rates against all relevant foreign currencies. The estimated effect on operating result is due to changes in value of monetary items in the balance sheet per year end.

	Changes in exchange rates	Effect on operating result
		Parent	Group
2020	+/- 10 %	+/- 6 790	+/- 6 432
2019	+/- 10 %	+/- 12 516	+/- 11 144

17 CLASSIFICATION OF FINANCIAL ASSETS AND LIABILITIES

(Figures in NOK 1,000)		Group
31.12.2020		Financial
		instruments
	Financial instruments at	at fair value through
	amortised cost	OCI	Total
Assets
Other current receivables	13 162	0	13 162
Cash and cash equivalents	0	187 967	187 967
TOTAL FINANCIAL ASSETS	13 162	187 967	201 129

Liabilities - other financial liabilities
Other long-term liabilities	32	0	32
Long term lease liabilities	0	0	0
Trade accounts payables	5 191	0	5 191
Current lease liabilities	673	0	673
Public duties payables	2 107	0	2 107
Other current liabilities	11 877	0	11 877
TOTAL FINANCIAL LIABILITIES	19 879	0	19 879


(Figures in NOK 1,000)		Group
31.12.2019		Financial
	Financial	instruments at fair value
	instruments at	through
	amortised cost	OCI	Total
Assets
Other current receivables	14 646	0	14 646
Cash and cash equivalents	0	261 103	261 103
TOTAL FINANCIAL ASSETS	14 646	261 103	275 749

Liabilities - other financial liabilities
Other long-term liabilities	2 037	0	2 037
Long term lease liabilities	539	0	539
Trade accounts payables	8 601	0	8 601
Current lease liabilities	657	0	657
Public duties payables	4 684	0	4 684
Other current liabilities	10 685	0	10 685

Parent

Parent

31.12.2020

		Financial
		instruments
	Financial	at fair value
	instruments at	through
	amortised cost	OCI	Total
Assets
Receivables from group company	19 021	0	19 021
Other current receivables	86	0	86
Cash and cash equivalents	0	68 474	68 474
TOTAL FINANCIAL ASSETS	19 107	68 474	87 581

Liabilities
Trade accounts payables	60	0	60
Public duties payables	129	0	129
Other current liabilities	915	0	915
TOTAL FINANCIAL LIABILITIES	1 104	0	1 104

31.12.2019

		Financial
		instruments
	Financial	at fair value
	instruments at	through
	amortised cost	OCI	Total
Assets
Receivables from group company	28 011	0	28 011
Other current receivables	69	0	69
Cash and cash equivalents	0	122 794	122 794
TOTAL FINANCIAL ASSETS	28 080	122 794	150 874

Liabilities
Trade accounts payables	150	0	150
Public duties payables	119	0	119
Other current liabilities	872	0	872
TOTAL FINANCIAL LIABILITIES	1 141	0	1 141

18 RECEIVABLES

Receivables are measured by the amortised cost method, but due to the assets being short term receivables the non-discounted contractual payments are disclosed. No credit losses allowance are recognised at year end 2020 or 2019.

Other current receivables - specification

(Figures in NOK 1,000)	Group		Parent
	31.12.2020	31.12.2019	31.12.2020	31.12.2019
Recognised not received government grants	5 373	6 725	0	0
Prepaid payables	7 176	7 634	54	36
VAT receivables	613	288	32	33
Total other receivables	13 162	14 646	86	69

The parent company has supported its wholly owned subsidiary, PCI Biotech AS, with loans and capital increases during the year. The capital increase during 2020 was NOK 70 million (2019: NOK 135 million) and per year end the loan balance is NOK 19.0 million (2019: NOK 28.0 million).

19 CASH AND CASH EQUIVALENTS

(Figures in NOK 1,000)	Group		Parent
	31.12.2020	31.12.2019	31.12.2020	31.12.2019
Cash and cash equivalents, restricted (1)	799	1 127	0	0
Cash and cash equivalents, non-restricted	187 168	259 976	68 474	122 794
Sum	187 967	261 103	68 474	122 794

(1) Restricted cash and cash equivalents are security for the employees' withholding tax and a bank deposit of NOK 50 thousand.

The carrying amount of cash and cash equivalents is approximately equal to fair value since these instruments have a short term to maturity. The cash and cash equivalents are placed in cash deposits in NOK and EUR in different banks with satisfactory credit ratings. The credit risk for these funds is assessed to be low and no impairment test are performed for 2020 or 2019.

Conversion effects for bank deposits in foreign currency (Euro) versus NOK as functional currency for the Group accounts was NOK 8.5 million (2019: NOK -1.6 million) and for the parent accounts NOK 8.4 million in 2020 (2019: NOK -1.5 million).

20 SHARE CAPITAL

	No. of shares	Nominal value per share in NOK	Share capital in NOK
Share capital as per 31.12.2018	37 164 890	3,00	111 494 670
Share issues in 2019	101 000	3,00	303 000
Share capital as per 31.12.2019	37 265 890	3,00	111 797 670
Share issues in 2020	60 500	3,00	181 500
Share capital as per 31.12.2020	37 326 390	3,00	111 979 170

All shares have equal voting rights and otherwise have equal rights in the company and one share represents one voting right.

Ordinary shares are classified as equity and only one class of shares exists. Expenses that are directly attributable to the issue of ordinary shares are disclosed as reduction of equity.

The annual general meeting in May 2020 authorised the board of directors to execute share capital increases by issuing up to 2,790,000 shares with a nominal value of NOK 3.00 in connection with the company's employee share option program. The authorisation is valid for one year. In addition the board of directors were authorised to execute share capital increases with up to NOK 12,016,700 in connection with private placements. The authorisation shall not be used to increase share capital by an amount in excess of 10% of the share capital, based on the share capital per date of the authorisation and potential share capital increases in relation to the employee share option program. The authorisation may be used for general corporate purposes and is valid for one year.

Share issues in 2020

In September 2020 participants in the Company's share option program exercised a total number of 60,500 share options. Following the exercise of share options, the Company's Board of Directors, pursuant to an authorisation granted by the Company's Annual General Meeting on 27 May 2020, decided to increase the Company's share capital with NOK 181,500 by issuing 60,500 new shares, each share of par value NOK 3.00. The transaction was registered in the Norwegian Register of Business Enterprises on 8 September 2020, and the capital increase has thus been completed. The capital increase resulted in net proceeds of NOK 0.3 million.

Subsequent to the transaction the Company's new share capital is NOK 111,979,170 divided by 37,326,390 shares, each with a nominal value of NOK 3.00 and each giving one vote at the Company's general meeting.

Share issues in 2019

In February 2019 participants of the Company's share option program for employees exercised a total number of 61,000 share options. Following the exercise of share options the Company's board of directors, pursuant to an authorisation granted by the Company's Annual General Meeting on 29 May 2018, decided to increase the Company's share capital with NOK 183,000 by issuing 61,000 new shares, each share with a nominal value of NOK 3.00 and each share giving one vote at the Company's general meeting. The transaction was completed 25 February 2019. The capital increase resulted in net proceeds of NOK 0.8 million.

In September 2019 participants of the company's share option program for employees exercised a total number of 40,000 share options. Following the exercise of share options the company's board of directors, pursuant to an authorisation granted by the company's annual general meeting on 29 May 2019, decided to increase the company's share capital with NOK 120,000 by issuing 40,000 new shares, each share with a nominal value of NOK 3.00 and each share giving one vote at the company's general meeting. The transaction was completed 9 September 2019. The capital increase resulted in net proceeds of NOK 0.3 million.

Subsequent to the two transactions in 2019 the company's share capital is NOK 111,797,670 divided into 37,265,890 shares, each share with a nominal value of NOK 3.00 and each share giving one vote at the Company's general meeting.

Ownership structure per 31 December 2020:

Name	No. of shares	Ownership
FONDSAVANSE AS	3 760 443	10.07 %
MYRLID AS	2 720 000	7.29 %
MP PENSJON PK	1 836 729	4.92 %
RADIUMHOSPITALETS FORSKNINGSSTIFT.	1 281 415	3.43 %
NORDNET LIVSFORSIKRING AS	722 253	1.93 %
ODD R. GRESSLIEN	720 792	1.93 %
NORDNET BANK AB	714 617	1.91 %
JANDERSEN KAPITAL AS	510 000	1.37 %
ALEXANDER BERG-LARSEN	481 650	1.29 %
VERDIPAPIRFONDET KLP AKSJENORGE IN	354 374	0.95 %
Total 10 largest shareholders	13 102 273	35.10 %
Others	24 224 117	64.90 %
Total	37 326 390	100.00 %

Shares owned, directly or indirectly, by members of the board and executive management, and their personally related parties per 31.12.2020 and per 31.12.2019:

	Number of shares
Name	Position	31.12.2020	31.12.2019
Hans Peter Bøhn	Chairman	123 662	123 662
Lars Viksmoen	Board member	12 966	12 966
Christina Herder	Board member	10 000	10 000
Hilde Furberg (Borkenholm AS)*	Board member	4 000	4 000
Andrew Hughes	Board member	-	-
Per Walday	CEO	72 700	68 300
Anders Høgset	CSO	64 800	63 300
Ronny Skuggedal	CFO	55 000	43 000
Kristin Eivindvik	CDO	25 200	18 800
Lucy Wabakken, and related parties	CDO (acting)	10 008	NA
Ludovic Robin**	CBO	-	NA
Amir Snapir**	CMO	-	NA
Total		378 336	344 028

* Hilde Furberg's shares are owned via Borkenholm AS, which is a related party to Hilde Furberg.

** Ludovic Robin and Amir Snapir joined the Company in May 2020, and holdings from that date are reported.

21 FINANCING STRUCTURE

The Group had no external interest-bearing debt as of 31.12.2020 or 31.12.2019.

22 OTHER CURRENT LIABILITIES BY YEAR END

(Figures in NOK 1,000)	Group		Parent
	31.12.2020	31.12.2019	31.12.2020	31.12.2019
Accruals for incurred external R&D expenses Accruals for employee bonus, holiday payments,	6 440	7 201	0	0
board remuneration etc.	5 437	3 459	915	847
Other accruals	0	25	0	25
Total other current liabilities	11 877	10 685	915	872

Other current liabilities are measured by the amortised cost method, but due to the liabilities being short term liabilities the non-discounted contractual payments are disclosed.

23 RELATED PARTIES TRANSACTIONS

Figures for remuneration are expensed amounts in the financial year. All board remunerations are accounted for in the parent company.

(Figures in NOK 1,000)	Board remuneration	Salary	Bonus	Other benefits	Pension benefits	Total
Senior executives 2020
Per Walday, CEO*	0	2 031	317	400	154	2 902
Ronny Skuggedal, CFO*	0	1 434	258	1 027	153	2 873
Anders Høgset, CSO*	0	1 124	106	273	131	1 633
Kristin Eivindvik, PD*	0	1 017	54	558	130	1 759
Lucy Wabakken, CDO (acting)	0	1 094	92	19	127	1 331
Ludovic Robin, CBO**	0	1 110	0	65	0	1 175
Amir Snapir, CMO**	0	1 271	0	44	183	1 497
Total senior executives remuneration	0	9 080	827	2 386	878	13 171

* "Other benefits" include salary benefits in relation to exercise of share options during 2020.

** Ludovic Robin and Amir Snapir joined the Company in May 2020.

	Board			Other	Pension
(Figures in NOK 1,000)	remuneration	Salary	Bonus	benefits	benefits	Total
Senior executives 2019
Per Walday, CEO	0	1 812	346	18	132	2 307
Ronny Skuggedal, CFO*	0	1 290	182	751	132	2 355
Anders Høgset, CSO	0	1 092	143	18	111	1 364
Gaël L'Hévéder, CBDO**	0	553	0	198	28	779
Kristin Eivindvik, PD	0	1 090	82	13	113	1 298
Hans Olivecrona, CMO***	0	681	100	273	65	1 119
Total senior executives remuneration	0	6 518	853	1 271	580	9 222

* "Other benefits" include salary benefits in relation to exercise of share options during 2019.

** "Other benefits" include salary benefits in relation to exercise of share options during 2019 and Gaël. L'Hévéder resigned from his position by end of March 2019.

*** "Other benefits" include salary benefits in relation to exercise of share options during 2019 and Hans Olivecrona transitioned from an employee to an external consultant from 1 July 2019. Mr. Olivecrona received SEK 233 thousand in consultancy fee's for 2019.

	Board remuneration	Salary	Bonus	Other benefits	Pension benefits	Total
Board of Directors 2020
Hans Peter Bøhn, Chairman	345	0	0	0	0	345
Hilde Furberg	210	0	0	0	0	210
Christina Herder	210	0	0	0	0	210
Lars Viksmoen	210	0	0	0	0	210
Andrew Hughes	210	0	0	0	0	210
Total remuneration	1 185	0	0	0	0	1 185

(Figures in NOK 1,000)	Board remuneration	Salary	Bonus	Other benefits	Pension benefits	Total
Board of Directors 2019
Hans Peter Bøhn, Chairman	330	0	0	0	0	330
Hilde Furberg*	0	0	0	0	0	0
Hilde H. Steineger**	200	0	0	0	0	200
Christina Herder	200	0	0	0	0	200
Lars Viksmoen	200	0	0	0	0	200
Andrew Hughes	200	0	0	0	0	200
Total remuneration	1 130	0	0	0	0	1 130

*Hilde Furberg joined the Board of Directors in May 2019

**Hilde H. Steineger ended her term in May 2019

PCI Biotech's policy as regards the determination of salary and other remuneration to senior executives is to have market based remuneration and provide other benefits that are competitive in employment for senior executives. It is important to attract the required expertise and experience to create value and contribute to the mutual interests between owners and senior executives. The performance-based remuneration shall be linked to value creation for shareholders or long-term performance of the Group.

The main principles for remuneration of the Group's senior executives are as follows: - Salaries are reviewed annually

Bonuses are calculated on the basis of goals for the Group established by the Board of Directors and achievement of personal goals. The Group's Chief Executive Officer (CEO) has a bonus agreement for up to 30% of annual salary, other senior executives have bonus agreements of up to 10 - 25% of annual salary.
Senior executives, and other key employees, participate in the Group's share option incentive scheme
Senior executives participate in the Group's general pension scheme

Bonuses for senior executives are determined on the basis of the Group's financial results and development, and achievement of personal goals.

The senior executives participate in the Group's pension plan that is a defined contribution plan which entails payment of 7% to 21% of the employee's annual salary up to 12 times the basic National Insurance amount (G). The pension scheme also covers in the event of disability.

The CEO is entitled to six months' notice and has an agreement of additional 6 months' salary on certain terms. There are no agreements beyond the statutory requirements for other senior executives.

Senior executives have not received any remuneration or financial benefits from other companies in the Group other than those disclosed above. It is not given additional remuneration for special services outside the normal functions of a senior executive.

Professor Andrew Hughes is in addition to being a member of the Board of Director's, a member of PCI Biotech's Scientific Advisory Committee and available for the Company for agreed consultancy services through his wholly owned company Helpyou2 Ltd. For these additional services Helpyou2 Ltd. received no fees for 2020 (2019: NOK 35 thousand).

There are no loans or pledges to senior executives, board of directors, employees or other persons in elected corporate bodies.

Senior executive's shareholdings in PCI Biotech Holding ASA are disclosed in note 20 Share capital. Allocation, exercise and holdings of share options in the Company for senior executives are presented in the table below:

Overview share options, Senior executives	Total holdings 31.12.2019	Allocated	Lapsed	Exercised	Expired	Total holdings 31.12.2020	Average exercise price in NOK

Per Walday, CEO	164 000	70 000	0	9 000	0	225 000	31.61
Ronny Skuggedal, CFO	116 000	50 000	0	26 000	0	140 000	33.02
Anders Høgset, CSO	106 000	50 000	0	6 000	0	150 000	32.25
Kristin Eivindvik, PD	73 500	10 000	0	13 500	0	70 000	28.06
Lucy Wabakken, CDO (acting)	70 000	50 000	0	0	0	120 000	34.59
Ludovic Robin, CBO*	NA	90 000	0	0	0	90 000	50.36
Amir Snapir, CMO*	NA	90 000	0	0	0	90 000	50.36
Sum	529 500	410 000	0	54 500	0	885 000

* Ludovic Robin and Amir Snapir joined the Company in May 2020 and holdings from that date are disclosed

Related parties:

The Norwegian Radium Hospital Research Foundation:

PCI Biotech has a long-standing research relationship with the Norwegian Radium Hospital Research Foundation (RF), which is affiliated to the Norwegian Radium Hospital (NRH), now named Oslo Universitetssykehus HF (OUS). Some of PCI Biotech's main patents were filed by the NRH and later transferred to PCI Biotech. Under the terms of research agreements with RF from 2002 and 2007 and later amendments, the PCI Biotech supports the RF with research and development funding, and gets rights of use and an option on certain conditions to acquire the new technologies developed by the RF.

PCI Biotech has a right of first refusal to purchase from the RF, completely or in part, any new technology within the field of Photochemical Internalisation. If PCI Biotech is not interested in purchasing such technology at the terms offered, RF can offer the technology to a third party. An offer to a third party cannot be at terms inferior to those offered to PCI Biotech, and PCI Biotech has the right to perform an independent assessment of any agreement entered into between RF and a third party, to ensure that RF has offered no more favourable terms to the third party than those previously rejected by PCI Biotech. If the terms are found more favourable, PCI Biotech may request that the agreement between RF and the third party is to be cancelled. RF has from the listing of PCI Biotech in 2008 been, and still is, one of PCI Biotech's major investors.

From 1 January 2020 the above agreements are transferred from RF to Inven2 AS, and Inven2 AS is thus PCI Biotech's counterpart in the above described agreements from that date. Inven2 AS is not a

related party to PCI Biotech. PCI Biotech have not purchased any services from the related party, RF, in 2020 and there are no open balances between the parties per 31.12.2020. In 2019 PCI Biotech has for delivery of R&D services, related to the above described agreements, paid NOK 2.1 million on commercial terms to RF. As of 31.12.2019 PCI Biotech had account payables of NOK 0.5 million to RF.

PCI Biotech AS:

The parent company, PCI Biotech Holding ASA, has no employees. The Group operations are managed through the wholly owned subsidiary PCI Biotech AS that has a management service agreement with the parent company, including services like management, offices, finance and investor relation functions for the Group. All transactions are performed at market terms.

The parent company has been charged for operations according to the service agreement of NOK 1.9 million in 2020 (2019: NOK 2.0 million). The parent company has charged PCI Biotech AS interest expenses for intercompany loans of NOK 2.9 million during 2020 (2019: NOK 6.7 million). Net current receivables from PCI Biotech AS at year-end 2020 were NOK 19.0 million (2019: NOK 28.0 million). In 2020 an intercompany loan to PCI Biotech AS of NOK 70 million was utilised as contribution in kind from PCI Biotech Holding ASA for a capital increase in PCI Biotech AS.

24 RIGHT TO USE ASSETS AND LEASE LIABILITIES

PCI Biotech has entered into a lease agreement with Oslo Cancer Cluster Incubator, Ullernchausséen 64 Oslo, Norway. The lease originally runs to 31 December 2018, but PCI Biotech exercised an option for three more years and the lease now runs to 31 December 2021 with an option for additional three more years. The lease agreement is subject to annual adjustment according to changes in the consumer price index. Amounts of minimum lease payment for non-cancellable operating leases is NOK 0.7 million (non-discounted contractual payments) per year end 2020 for the year 2021.

In 2019 PCI Biotech recognised NOK 1.8 million in right of use assets and a corresponding lease liability which were disclosed in the balance sheet as long- and short-term liabilities depending on maturity of the corresponding lease payments. The initial recognised amount is based upon contractual minimum lease payments for 2019-2021 and discounted by the incremental borrowing rate at the date of initial application. The relevant non-cancellable operating lease commitment per 1 January 2019 was NOK 2.0 million for 2019-2021, not including an extension option due to not reasonable certainty about option exercise. The discounted value of the operating lease commitment applying an incremental borrowing rate of 6% was NOK 1.8 million. Payments for the principal portion of the lease liabilities are not charged to profit and loss and will only have cash flow effects.

Right to use asset - office lease
Initial recognition 01.01.2019	1 815
Acquisition costs 31.12.2019	1 815
Acquisitions FY 2020	0
Acquisition costs 31.12.2020	1 815
Depreciation FY 2019	604
Accumulated depreciation and impairment as of 31.12.2019	604
Depreciation FY 2020	606
Accumulated depreciation and impairment as of 31.12.2020	1 210
Total right to use assets – office lease as of 31.12.2019	1 211
Total right to use assets – office lease as of 31.12.2020	605
Lower of remaining lease term or economic life - 2019	2.0 years
Lower of remaining lease term or economic life - 2020	1.0 years
Depreciation method	Linear
Lease liabilities - office
Initial recognition 01.01.2019	1 815
Payments principal portion of the lease liability FY 2019	-657
Payments principal portion of the lease liability FY 2020	-668
Interest expenses on the lease liability FY 2019	38
Interest expenses on the lease liability FY 2020	144
Total lease liabilities for office as of 31.12.2019	1 196
Total lease liabilities for office as of 31.12.2020	673
Whereof:
Short term lease liabilities < 1 year 2019 / 2020	657 / 673
Long term lease liabilities > 1 year 2019 / 2020	539 / 0

The Group applies the short-term lease recognition exemption for leases related to office equipment, parking facilities at the office and a flat in Oslo available for disposition for foreign employees. Lease payments for this category of leases are consequently charged directly through profit and loss.

Income statement effects leasing	2020	2019
Depreciation of right to use asset	-606	-604
Operating expenses for short-term leases	-170	-66
Effect on Operating results net of tax	-777	-670
Interest expenses on the lease liabilities	-144	-38
Effect on Net financial result net of tax	-921	-708
Comprehensive income effect net of tax	-921	-708

The Group had total cash outflows related to leases of NOK 0.8 million in 2020 (2019: NOK 0.7 million). Minimum payments for non-cancellable payments for all leases are NOK 0.9 million per yearend 2020 (2019: NOK 1.4 million).

25 SUBSEQUENT EVENTS

PCI Biotech is not aware of any other subsequent events since year-end 2020 which is of material significance to the financial statements as of 31 December 2020.

Statsautoriserte revisorer Ernst & Young AS

Dronning Eufemias gate 6, NO-0191 Oslo Postboks 1156 Sentrum, NO-0107 Oslo

Foretaksregisteret: NO 976 389 387 MVA Tlf: +47 24 00 24 00 Fax: www.ey.no Medlemmer av Den norske revisorforening

INDEPENDENT AUDITOR'S REPORT

To the Annual Shareholders' Meeting of PCI Biotech Holding ASA

Report on the audit of the financial statements

Opinion

We have audited the financial statements of PCI Biotech Holding ASA, which comprise the financial statements for the parent company and the Group. The financial statements for the parent company and the Group comprise the balance sheets as at 31 December 2020, the statements of other comprehensive, the statements of cash flows and changes in equity for the year then ended and notes to the financial statements, including a summary of significant accounting policies.

In our opinion, the financial statements have been prepared in accordance with laws and regulations and present fairly, in all material respects, the financial position of the Company and the Group as at 31 December 2020 and their financial performance and cash flows for the year then ended in accordance with International Financial Reporting Standards as adopted by the EU.

Basis for opinion

We conducted our audit in accordance with laws, regulations, and auditing standards and practices generally accepted in Norway, including International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the Company and the Group in accordance with the ethical requirements that are relevant to our audit of the financial statements in Norway, and we have fulfilled our ethical responsibilities as required by law and regulations. We have also complied with our other ethical obligations in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key audit matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements for 2020. We have determined that there are no key audit matters to communicate in our report.

Other information

Other information consists of the information included in the Company's annual report other than the financial statements and our auditor's report thereon. The Board of Directors and Chief Executive Officer (management) are responsible for the other information. Our opinion on the financial statements does not cover the other information, and we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information, and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Responsibilities of management for the financial statements

Management is responsible for the preparation and fair presentation of the financial statements in accordance with International Financial Reporting Standards as adopted by the EU, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, management is responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting, unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Auditor's responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

As part of an audit in accordance with law, regulations and generally accepted auditing principles in Norway, including ISAs, we exercise professional judgment and maintain professional scepticism throughout the audit. We also

► identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control;
► obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control;
► evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management;
► conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Company to cease to continue as a going concern;
► evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation;
► obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

Report on other legal and regulatory requirements

Opinion on the Board of Directors' report and on the statements on corporate governance and corporate social responsibility

Based on our audit of the financial statements as described above, it is our opinion that the information presented in the Board of Directors' report and in the statements on corporate governance and corporate social responsibility concerning the financial statements, the going concern assumption, and proposal for the allocation of the result is consistent with the financial statements and complies with the law and regulations.

Opinion on registration and documentation

Based on our audit of the financial statements as described above, and control procedures we have considered necessary in accordance with the International Standard on Assurance Engagements (ISAE) 3000, Assurance Engagements Other than Audits or Reviews of Historical Financial Information, it is our opinion that management has fulfilled its duty to ensure that the Company's accounting information is properly recorded and documented as required by law and bookkeeping standards and practices accepted in Norway.

Oslo, 20 April 2021 ERNST & YOUNG AS

The auditor's report is signed electronically

Tommy Romskaug State Authorised Public Accountant (Norway)

OTHER INFORMATION

DEFINITIONS AND GLOSSARY

Amphinex:	Trade name of the clinical intravenous formulation of fimaporfin
APC:	Antigen Presenting Cell
BIA:	User-driven research-based innovation program by the Research Council of Norway
CCA:	Cholangiocarcinoma – Bile duct cancer
CPI:	Checkpoint Inhibitor
CRC:	Cohort Review Committee
CSR:	Corporate Social Responsibility
FDA:	US Food and Drug Administration
Fimaporfin:	Generic name of the photosensitiser active ingredient TPCS2a
fimaCHEM:	PCI Biotech's development program for enhancement of generic chemotherapies
fimaNAC:	PCI Biotech's development program for delivery of nucleic acids
fimaVACC:	PCI Biotech's development program for a vaccination technology
HPV:	Human papillomavirus
IDMC:	Independent Data Monitoring Committee
IFRS:	International Financial Report Standards
IND	Investigational New Drug
In vitro:	Studies performed with cells or biological molecules studied outside their normal
	biological context; for example proteins are examined in solution, or cells in
	artificial culture medium.
In vivo:	Studies in which the effects of various biological entities are tested on whole, living organisms usually animals.
KLH	Keyhole limpet hemocyanin
NAA:	Norwegian Accounting Act
ODD:	Orphan Drug Designation
ORR:	Overall Response Rate
OS:	Overall Survival
PCI:	Photochemical internalisation
PCIB:	PCI Biotech's ticker at Oslo Børs
PFS:	Progression Free Survival
RELEASE:	Name of PCI Biotech's pivotal study for inoperable extrahepatic bile duct cancer
R&D:	Research and Development
SAC:	Scientific Advisory Committee
SoC:	Standard of Care

FINANCIAL CALENDAR

First quarter 2021 report 7 May 2021 Ordinary general meeting 2021 28 May 2021 Second quarter 2021 report 25 August 2021 Third quarter 2021 report 17 November 2021

INVESTOR CONTACT

Contact person: Ronny Skuggedal, email: [email protected] mob: +47 9400 5757

Web: www.pcibiotech.com

FORWARD LOOKING STATEMENTS

This Report contains certain forward-looking statements relating to the business, financial performance and results of the Company and/or the industry in which it operates. Forward-looking statements concern future circumstances and results and other statements that are not historical facts, and are sometimes identified by the words "believes", expects", "predicts", "intends", "projects", "plans", "estimates", "aims", "foresees", "anticipates", "targets", and similar expressions. The forwardlooking statements contained in this Report, including assumptions, opinions and views of the Company or cited from third party sources, are solely opinions and forecasts which are subject to risks, uncertainties and other factors that may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements that are expressed or implied by statements and information in the Report, including, among others, risks or uncertainties associated with the Company's business, segments, development, growth management, financing, market acceptance and relations with customers, and, more generally, general economic and business conditions, changes in domestic and foreign laws and regulations, taxes, changes in competition and pricing environments, and fluctuations in currency exchange rates and interest rates. None of the Company or any of its subsidiaries or any such person's directors, employees or advisors provide any assurance that the assumptions underlying forward-looking statements expressed in this Report are free from errors nor does any of them accept any responsibility for the future accuracy of such forward-looking statements.

PCI BIOTECH HOLDING ASA

Unlocking the potential of innovative medicines

Ullernchausséen 64 N-0379 Oslo Norway

Phone: +47 67 11 54 00 email: [email protected] web: www.pcibiotech.com

PCI BIOTECH AS, subsidiary

PCI Biotech Holding ASA, Ullernchausséen 64, 0379 Oslo, Norway, Company no: 991036393 VAT Phone: + 47 67 11 54 00, www.pcibiotech.com

Ullernchausséen 64 N-0379 Oslo Norway

AI assistant

PCI Biotech Holding — Annual Report 2020

3709_rns_2021-05-07_af60e371-0544-42d5-a61c-b630a5e4de35.pdf

Unlocking the potential of innovative medicines

CONTENTS

INTRODUCTION

ABOUT PCI BIOTECH

OUR TECHNOLOGY

THREE DISTINCT BUSINESS AREAS

INOPERABLE BILE DUCT CANCER AND fimaCHEM

IMMUNOTHERAPY AND fimaVACC

NUCLEIC ACID THERAPEUTICS AND THE fimaNACDELIVERY TECHNOLOGY

KEY FIGURES

BOARD OF DIRECTORS REPORT

2020 IN REVIEW – EXPANDING AND OPTIMISING THE RELEASE STUDY

HIGHLIGHTS

BUSINESS, LOCATION AND HUMAN RESOURCES

OPERATIONS

Operational overview

fimaCHEM– pivotal RELEASE study for inoperable bile duct cancer

RELEASE progress and new initiatives for increased patient enrolment

Expansion of RELEASE to Asia

Conference and online activities

The design of the pivotal RELEASE study is based on regulatory interactions

Regular communication milestones for the RELEASE study

Phase I results paved the way for the pivotal RELEASE trial with registration intent

Tumour response translates into encouraging survival data

Publication of a case report series

European patent for treatment of bile duct cancer granted

fimaVACC- Vaccination program

Successful clinical proof-of-concept in healthy volunteers

Proof-of-concept study results presented and published

Research collaboration with DCprime to explore novel cancer vaccination concepts

New US patents granted

Potential COVID-19 opportunities

Research and development supported by a grant

fimaNAC- delivery of nucleic acid therapeutics

Corporate

Management changes

Business development

FINANCIAL REVIEW

Profit and loss

(All amounts in brackets are comparative figures for 2019 unless otherwise specifically stated)

Balance sheet

Cash flow

Share capital - capital increases following share option exercises

RISK AND RISK MANAGEMENT

Implications of the COVID-19 pandemic

Operational Risk and Risk Management

Financial Risk and Risk Management

GOING CONCERN

SUBSEQUENT EVENTS

OUTLOOK

RESPONSIBILITY STATEMENT FROM THE BOARD OF DIRECTORS AND CEO 2020

ANNUAL STATEMENT ON CORPORATE GOVERNANCE POLICY AND CORPORATE SOCIAL RESPONSIBILITY POLICY

PCI Biotech Holding ASA emphasises good corporate governance

1. Implementation and reporting on corporate governance

2. Business

2.1 Corporate social responsibility (CSR)

2.2 Sustainable development

2.3 Ethical guidelines

3. Equity and dividends

4. Equal treatment of shareholders and transactions with close associates

5. Shares and tradability

6. General Meetings

7. Nomination Committee

8. Board of Directors, composition and independence

9. Work of the Board of Directors

10. Risk management and internal control

11. Remuneration of the Board of Directors

12. Remuneration of the executive management

13. Information and communication

14. Take-overs

15. Auditor

PCI Biotech Holding ASA – financial statement

STATEMENT OF COMPREHENSIVE INCOME For the year ended 31 December 2020

PCI Biotech Holding ASA

BALANCE SHEET for the year ended 31 December 2020

PCI Biotech Holding ASA BALANCE SHEET for the year ended 31 December 2020

PCI Biotech Holding ASA - GROUP CONSOLIDATED STATEMENT OF CHANGES IN EQUITY for the year ended 31 December 2020

PCI Biotech Holding Annual Report 2020