Xbrane Biopharma

Interim / Quarterly Report • Aug 21, 2020

Interim report January – June 2020

Despite the prevailing Coronapandemic, Xbrane succeeded in establishing a partnership with Bausch + Lomb for Xlucane for the US and Canada during the quarter and raise SEK 146 M in a directed issue involving a number of new institutional investors.

Financial summary second quarter 2020

• » Revenue amounted to SEK 0 M (0).
• » The gross margin amounted to 0 percent (0).
• » Other operating income amounted to SEK 5.3 M (1.8).
• » EBITDA was SEK -51.6 M (-45.1*).
• » R&D expenses amounted to SEK 45.1 M (-40.8*) representing 77 percent (85*) of total operating expenses.
• » The loss for the period was SEK 53.4 M (-47.4*).
• » Earnings per share was SEK -3.11 (-5.63*).
• » Cash and cash equivalents at the end of the period amounted to SEK 232.5 M (171.4) which excludes the milestone payment from Bausch + Lomb received after the balance sheet date.

Financial summary of first six months 2020

• » Revenue amounted to SEK 0 M (0).
• » The gross margin was 0 percent (0).
• » Other operating income totaled SEK 10.2 M (3.0).
• » EBITDA was SEK -101.5 M (-79.0*).
• » R&D expenses amounted to SEK 92.6 M (-70.0*), representing 81 percent (83*) of total operating expenses.
• » The loss for the period was SEK 105.2 M (-83.3*).
• » Earnings per share was SEK -6.12 (-9.90*).

Significant events during the second quarter 2020

» The ongoing Coronapandemic has entailed rapid changes to Xbrane's business activities to comply with local government health guidelines. This has resulted in canceled trips, a switch to digital meetings and the majority of employees not working in the lab have been working from home. The Xplore study has been kept open for recruitment but had a significantly reduced recruitment rate during March-May although this recovered in May. The work on Xplore follows the guidelines of local authorities as well as those of the European Medicines Agency ("EMA") and the US Food and Drug Administration ("FDA"). The safety of patients and clinical staff has been our highest priority. The uncertainty surrounding the development of the pandemic makes it difficult to predict the recruitment rate for the remainder of the study. We estimate that the last patient will be recruited by the end of the third quarter or the beginning of the fourth quarter 2020, depending on the impact of the Coronapandemic in the coming months. Given this timetable, we estimate that we will be able to apply as planned for and obtain market approval for Xlucane before Lucentis® loses its patent protection in the EU in July 2022.

• » In May, Xbrane and STADA formed a partnership with Bausch + Lomb for the commercialization of Xlucane in the US and Canada. Revenue for the first of potential several milestone payments is accrued over two years. The gross profits from future sales will be shared between Bausch + Lomb, Xbrane and STADA. Xbrane and STADA will share all income from Bausch + Lomb from the commercialization of Xlucane in the US and Canada equally.
• » The company carried out a targeted issue of SEK 146 M in May to new investors such as TIN Fonder, Swedbank Robur Ny Teknik and certain existing owners.
• » In May, the company signed an agreement to establish an expanded development lab in the Life Science cluster at Campus Solna. Occupancy is expected to take place in the first quarter of 2021.

Significant events after the end of the quarter

» The company announced that Susanna Helgesen will resign as CFO during the year.

This report is a translation of the Swedish version. When in doubt the Swedish version shall prevail.

*This period has been recalculated due to restatement, see Appendix 1 for the effects.

Science for high quality biosimilars

This information is information that Xbrane Biopharma is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the CEO, for publication on 08-21-2020, 08:00 CEST.

Financial summary for the Group

Amounts in SEK thousand	2020 Q2	2019 Q2	2020 Q1-2	2019 Q1-2	2019 Full year
Revenue	-	-	-	-	-
Research and development (R&D)	-45,099	-40,804*	-92,642	-69,964*	-137,665*
R&D expenses as a percentage of operating expenses	77%	85%*	81%	83%*	88%*
Operating loss	-53,197	-46,949*	-104,825	-82,518*	-186,572*
EBITDA	-51,573	-45,102*	-101,547	-78,974*	-162,439*
Loss for the period	-53,397	-47,361*	-105,231	-83,311*	-187,989*
Cash and cash equivalents	232,506	171,410	232,506	171,410	164,197
Equity/assets ratio	44%	61%*	44%	61%*	47%*
Number of shares at end of period before dilution	19,280,707	12,694,871	19,280,707	12,694,871	15,415,199
Number of shares at end of period after dilution	19,280,707	12,694,871	19,280,707	12,694,871	15,415,199
Average number of shares before dilution	17,195,806	8,413,054	17,195,806	8,413,054	11,190,591
Average number of shares after dilution	17,195,806	8,413,054	17,195,806	8,413,054	11,190,591
Earnings per share before dilution (SEK)	-3.11	-5.63*	-6.12	-9.90*	-16.80*
Earnings per share after dilution (SEK)	-3.11	-5.63*	-6.12	-9.90*	-16.80*

*This period has been recalculated due to restatement, see Appendix 1 for the effects.

About Xbrane

Xbrane Biopharma AB develops biological drugs based on a platform technology that provides significantly lower production costs compared to competing systems. Xbrane's leading product Xlucane, a Lucentis® biosimilar candidate, addresses the EUR 10.4b ophthalmic VEGFa inhibitor market. Xlucane is in phase III and marketing authorization

is expected mid-2022. Xbrane has additionally four biosimilars in its pipeline targeting EUR 8.7b in originator sales. Xbrane's head office is in Solna, just outside Stockholm. Xbrane is listed on Nasdaq Stockholm under the ticker XBRANE. For more information, visit www.xbrane.com.

Martin Åmark, CEO.

CEO letter

Dear shareholders

Despite the all-pervasive global Coronapandemic, the second quarter of 2020 was both eventful and important for us in a positive sense. We established a partnership with Bausch + Lomb for the sale and marketing of Xlucane in the US and Canada, carried out a directed issue of SEK 146 M to new investors such as TIN fonder and Swedbank Robur Ny Teknik and certain existing owners, and signed an agreement for establishing an expanded development lab in the Life Science cluster at Campus Solna in greater Stockholm.

Impact of the Coronapandemic on Xbrane's operations

Since the Coronapandemic broke out at the start of the year, Xbrane's highest priority has been the safety of our employees, partners and patients participating in the Xplore study. We have continuously followed, and continue to follow, local health guidelines from the authorities in the places where we operate. During the first quarter of 2020, we were quick to change our working methods to provide a safe working environment for our employees while minimizing operational disruptions and this was maintained during the second quarter. In addition to trips being canceled and meetings taking place digitally, the majority of employees who are not working in the lab have been working from home since mid-March. For those employees who need access to the lab, we have offered a safe means of travel and scheduled work to comply with guidelines on social

distancing. Absence due to illness has been relatively low. Together, we have found effective ways of working and an even stronger cohesion that allows us to be sustainable in this situation and we continue to make our staff, partners and patients' health and safety as our first priority. In addition, the Coronapandemic has affected the ongoing Xplore study by significantly reducing the recruitment rate in March - May 2020. We have seen a recovery since May and final recruitment is expected to continue to be possible in the third quarter or the beginning of the fourth quarter 2020, depending on the impact of the Coronapandemic in the coming months. Xbrane is closely following developments in the countries where the study is taking place and measures are being taken to minimize the impact on the study and the timetable for obtaining market approval.

Partnership with Bausch + Lomb in the US and Canada

In May 2020, Xbrane and STADA started a partnership with Bausch + Lomb for the sales and marketing of Xlucane in the US and Canada. We are very pleased and proud to have entered into this partnership, which has great strategic value for Xbrane. Bausch + Lomb is one of the leading companies in the field of eye products and ophthalmic medicines in North America. The company has an established sales force with good relations with around 2,500 eye clinics who currently purchase and prescribe Lucentis® and are therefore expected to become future purchasers of Xlucane. Bausch + Lomb is also a strong and well-known brand in ophthalmic medicine and has

good relationships with private and public insurers and payers. I am convinced that Bausch + Lomb will be able to establish a strong market position for Xlucane in the US and Canada and realize the commercial potential we see in the product.

Target of generating revenue of at least EUR 100 M annually three years after the launch of Xlucane

In April 2019, Xbrane announced a target for Xlucane to reach annual net sales of EUR 350 M three years after launch, thus generating EUR 100 M in annual net revenue for Xbrane. The strength of a partner like Bausch + Lomb means that we are now seeing greater sales potential than we previously expected in the US and Canada. We are very confident in our ability to reach our target of annual net revenue of at least EUR 100 M three years after launch, despite the profit sharing with another partner. The market for VEGFa inhibitors had sales of more than EUR 10 billion in 2019 and has grown by over 10 percent per year in recent years. However, during the second quarter of 2020 we saw a 12 percent decline in the market compared with the second quarter of 2019. This decline is thought to be driven by the Coronapandemic and we expect a recovery as the pandemic declines worldwide.

Xlucane on its way to market approval before Lucentis® loses patent protection in the EU in July 2022

Since April 2019, the registration-based phase III trial called Xplore has been underway with the aim of demonstrating the equivalence between Xlucane and the original drug Lucentis®. The recruitment rate was significantly reduced in connection with the outbreak of the Coronapandemic, but has increased since May in connection with a reduction in infection and reduced restrictions in the countries where the study is being carried out. By mid-August 2020, around 490 patients had been recruited to Xplore, ie around 85 percent of the planned 580 patients. We estimate that the last patient will be recruited by the end of the third quarter or the beginning of the fourth quarter 2020, depending on the impact of the Coronapandemic in the coming months. Given this timetable, we estimate that we will be able to apply as planned for and obtain market approval for Xlucane before Lucentis® loses its patent protection in the EU in July 2022.

Directed issue strengthens Xbrane's financial position

In May 2020, we carried out a directed issue of around SEK 146 M. We are pleased to welcome new shareholders such as TIN fonder and Swedbank Robur Ny Teknik and we are grateful for the support of existing shareholders such as STADA, Swedbank Robur Medica and the Serendipity Group. The interest in Xbrane has been huge, which I believe is a result of us now rapidly approaching the launch of our leading biosimilar candidate Xlucane together with strong partners such as STADA and Bausch + Lomb.

New premises on Campus Solna

To take the next step in our ambition of becoming a leading global biosimilar developer and expand our biosimilar portfolio, we have signed an agreement with Akademiska Hus to expand our operations to a larger premises with better technical facilities at Campus Solna. Xbrane will move its headquarters and establish a development lab with much greater capacity and we expect to be able to begin the development of additional biosimilars of top-selling biological drugs with patent expirations during this decade, in the second quarter of 2021. At the same time, the development continues rapidly of our current pre-clinical biosimilars, mainly Xcimzane (Cimzia® biosimilar) and Xdivane (Opdivo® biosimilar).

Important milestones in the next 12 months

Xbrane has many important milestones to deliver in the next 12 months, which are totalized below:

• To complete patient recruitment for Xplore and communicate interim data from interim analysis carried out after the last patient has completed six months of treatment.
• To apply for market approval for Xlucane in Europe and the US.
• To license the rights for the sale and marketing of Xlucane in Latin America, Japan and China.

We also have the ambition of establishing further partnerships, primarily for Xcimzane and Xdivane, and to continue to strengthen our platform technology and IP protection.

We continue to actively meet with investors. During the second quarter, we presented Xbrane at ABG Life Science days and Redeye Growth Day, from where video recordings are available on our website. We will present the company at the Pareto Healthcare Conference on September 3 and the LSX Nordic Congress on September 1-4.

Finally, I would like to extend my thank s to my employees who have made it possible for Xbrane to take these important steps in our development. We all feel great enthusiasm for Xbrane's journey to becoming a leading global biosimilar developer and, with our unique patented production platform, to be able to develop cost-effective biosimilars for the benefit of the world's patients.

Martin Åmark, CEO

Product portfolio

Product	Biosimilar to	Primary indication	Sales originator drug, 2019 (SEK billion)*	Patent expire date for originator drug	Phase of development
Xlucane	Ranibizumab (Lucentis®)	Wet age-related macular degeneration, diabetic related macular edema, and retinal vein occlusion.	371,2	2022 (Europe) 2020 (US)	Phase III
Xcimzane	Certolizumab pegol (Cimzia®)	Rheumatoid arthritis, axial spondylarthrosis, psoriatic arthritis, psoriasis and Crohn disease.	183	2024 (US) 2025** (Europe)	Pre-clinical phase
Xdivane	Nivolumab (Opdivo®)	Melanoma, lung cancer, renal cell carcinoma, head- and neck cancer, bladder and urinary tract cancer.	684	2026-2031 Depending on country	Pre-clinical phase
Xoncane	Pegaspargase (Oncaspar®)	Acute lymphocytic leukemia.	25	Expired	Pre-clinical phase
Spherotide	Triptorelin (Decapeptyl®)	Prostate cancer, breast cancer, endometriosis, and myoma	46	Expired	Pre-clinical phase

Sources:

1) Novartis Year-end report 2019 2) Roche Year-end report 2019 3) UCB Year-end report 2019

4) BMS Year-end report 2019

5) EvaluatePharma 2018

6) IQVIA 2018

* If sales figures for the full year 2019 are not available, sales figures for 2018 have been used. ** Includes six months patent extension due to pediatric indication.

Xlucane

Xlucane is a biosimilar to ranibizumab (original drug Lucentis®), a so-called VEGFa-inhibitor, and it is used to treat a number of serious eye diseases: wet age-related macular degeneration (AMD), diabetic macular edema (DME), diabetic retinopathy (DR), as well as retinal vein occlusion (RVO). The market for VEGFa-inhibitors for ophthalmic use had sales of more than EUR 10 billion1,2,3 in 2019, and has grown by more than 10 percent in the past few years1,2. During the second quarter of 2020, however, we saw a 12 percent decline in the market compared with the second quarter of 2019. This decline is judged to be driven by the Coronapandemic and we expect a recovery as the pandemic worldwide declines.

A pivotal phase III study, Xplore, is being conducted to demonstrate equivalence compared to Lucentis®. The study is progressing with no safety concerns raised. By mid-August 2020, 490 of the planned 580 patients had been recruited to the Xplore study. Xbrane will, as per agreement with EMA and FDA, submit Marketing Authorization application ("MAA")/Biologics License Application ("BLA") for Xlucane in Europe and United States, on the basis of six months treatment data from Xplore. We estimate that the last patient will be recruited by the end of the third quarter or the beginning of the fourth quarter 2020, depending on the impact of the corona pandemic in the coming months. Given this timetable, we estimate that we will be able to apply as planned for and obtain market approval for Xlucane before Lucentis® loses its patent protection in the EU in July 2022.

Xbrane has a co-development agreement with STADA for the development, sale and marketing of Xlucane, which means that STADA and Xbrane are sharing the development costs and future profits for Xlucane equally. In May 2020, the commercialization rights for the US and Canada were licensed to Bausch + Lomb, for more information see pages 3 and 10.

Xcimzane

Xcimzane is a biosimilar to certolizumab pegol (original drug Cimzia®), a TNF inhibitor used in the treatment of rheumatoid arthritis and Crohn's disease in particular. The market for TNF inhibitors had a turnover of approximately SEK 240 billion in 20184 and Cimzia® sold for SEK 18 billion5 in 20196 . Cimzia® patent protection is expected to expire in 2024 in the US and 2025 in Europe.

Xcimzane is now undergoing pre-clinical development with a focus on developing a cost-efficient production process and demonstrating biochemical similarity to the original drug. When this step is completed, upscaling along with a production partner will follow, after which the product can be taken into clinical trials.

Xdivane

Xdivane is a biosimilar to nivolumab (original drug Opdivo®), a PD1 inhibitor for the treatment of various cancers with a turnover of approximately SEK 68 billion in 20196 . Opdivo® patent protection is expected to expire during 2026-2031, depending on the country.

Xdivane is undergoing pre-clinical development with a focus on developing a cost-efficient production process and demonstrating biochemical similarity to the original drug. When this step is completed, upscaling with a production partner will follow, after which the product can be taken into clinical trials.

Xoncane

Xoncane is a biosimilar to pegaspargase (original drug Oncaspar®), used in treatment for Acute Lymphatic Leukemia. In 2018, Oncaspar® sold for about SEK 2 billion7 . Xoncane is now undergoing pre-clinical development.

Spherotide

Spherotide is a long-acting formulation with the active substance triptorelin, which is mainly used for the treatment of prostate cancer, breast cancer, endometriosis and myoma. Triptorelin had annual sales of SEK 4 billion8 in 2018, and despite the fact that the patents expired several years ago, there are still no generics within long-acting formulations.

The product candidate is in the pre-clinical phase where the next step is to initiate a registration-based phase III study in endometriosis patients as a basis for market approval in Europe and China.

In January 2020, Finchimica S.p.A., parent company of contract manufacturer International Chemical Industry S.p.A. (ICI), was declared bankrupt by the Milan court. Primm Pharma is closely following the process and is taking appropriate measures to protect its interests in future production of Spherotide.

During the year, Xbrane started dialogues with two stakeholders who showed interest in acquiring the subsidiary Primm Pharma, which develops Spherotide.

Sources:

• 1) Novartis Year-end report 2019
• 2) Roche Year-end report 2019

5) UCB Year-end report 2019 6) BMS Year-end report 2019

7) Evaluate Pharma

8) IQVIA

³⁾ Regeneron Year-end report 2019

⁴⁾ Research and markets Global Tumor Necrosis Factor (TNF) Inhibitors Market 2018-2026: A \$181.13 Billion Market Opportunity by 2026

Shareholders

As per June 30, 2020, Xbrane had approximately 4,000 shareholders distributed over 19,280,707 shares. The ten largest shareholders by the end of this report's period are shown in the table below1 .

Name	Number of shares	Ownership, %
Serendipity Group	2,819,967	14.6%
Swedbank Robur Fonder	1,888,362	9.8%
STADA Arzneimittel AG	1,570,989	8.1%
Bengt Göran Westman	1,442,681	7.5%
TIN Fonder	1,050,000	5.4%
Avanza Pension	755,917	3.9%
Futur Pension	668,270	3.5%
Nordnet Pensionsförsäkring	382,258	2.0%
Paolo Sarmientos	296,939	1.5%
Swedbank Försäkring	304,903	1.6%
Ten largest shareholders in total	11,180,286	58.0%
Other Swedish shareholders	6,065,792	31.5%
Other foreign shareholders	2,034,629	10.6%
Total outstanding shares	19,280,707	100.0%

Source:

1) Modular Finance. Based on a complete list of shareholders including directly registered and nominee registered shareholders.

Financial overview

The Group's results for April – June 2020

During the second quarter, no sales were made, and thus no cost of goods sold were incurred (SEK 0.0 M and SEK 0.0 M in the same period last year for net sales and cost of goods sold).

Other operating income amounted to SEK 5.3 M (1.8). Part of the revenue relates to income from the licensing of the American and Canadian rights for Xlucane to Bausch + Lomb and is accrued over two years. The remaining amount relates to gains on currency derivatives, exchange rate gains on receivables and liabilities of an operating nature and license income from non-core operations.

No sales costs arose during the first quarter (SEK -0.2 M regarding personnel costs in the subsidiary in the comparison period). Administrative expenses amounted to SEK -9.7 M (-7.8) and the increase is explained by a growing organization.

Research and development costs amounted to SEK -45.1 M (-40.8*), of which SEK -43.8 M (-38.2*) pertains to biosimilars and then primarily Xlucane and SEK -1.3 M (-2.6) pertain to the long-acting injectable drug Spherotide. Most of the R&D costs relate to the ongoing Xplore study for Xlucane, the parallel regulatory work and the establishment of a production chain. Costs for the pre-clinical portfolio of biosimilars account for SEK -1.4 M (-0.4).

Other operating expenses amounted to SEK -3.6 M (-0) and relate primarily to exchange rate losses on receivables and liabilities of an operating nature as well as realized and unrealized losses on currency price hedges.

The operating loss was SEK 53.2 M (-46.9*). Net financial items amounted to SEK -0.2 M (-0.4) and primarily relate to financial expenses regarding leasing agreements.

The loss before tax was SEK 53.4 M (-47.4*). During the quarter, no taxable profit arose and thus no tax expense (SEK 0.0 M in the same period last year).

The loss after tax for the period was SEK 53.4 M (-47.4*).

The Group's cash flow for April - June 2020

The cash flow from operating activities amounted to SEK 15.8 M (-17.8). Changes in operating receivables and operating liabilities amounted to SEK 14.0 M (10.2) and SEK 48.5 M (20.8*), respectively. Changes in working capital can vary greatly between quarters, primarily as a result of advance payments from STADA regarding the development work for Xlucane and costs for the clinical study.

The cash flow from investment activities consisted of smaller investments in tangible fixed assets that rounded amounted to SEK 0.0 M (-0.4).

The cash flow from financing activities amounted to SEK 135.3 M (142.2), of which SEK 146.4 M relates to issue proceeds, SEK -10.3 M (-18.2) relates to transaction costs and repayment of a lease liability of SEK -0.8 M (-0.9).

The Group's earnings for the period January - June 2020

During the first six months, no sales took place and thus no cost for goods sold arose (SEK 0.0 M and SEK 0.0 M, respectively, in the same period last year for net sales and cost of goods sold)

Other operating income amounted to SEK 10.2 M (3.0). Part of the revenue relates to income from the licensing of the American and Canadian rights for Xlucane to Bausch + Lomb and is accrued over two years. The remaining amount relates to gains on currency derivatives, exchange rate gains on receivables and liabilities of an operating nature and license income from non-core operations.

No sales costs arose during the first six months (SEK -0.4 M regarding personnel costs in the subsidiary in the comparative period). Administrative expenses amounted to SEK -16.8 M (-11.1) and the increase is explained by a growing organization.

Research and development costs amounted to SEK -92.6 M (-70.0*), of which SEK -89.2 M (-64.0*) relates to biosimilars and primarily Xlucane and SEK -3.4 M (-6.0) relates to the long-term injectable drug Spherotide. Most of the R&D costs relate to the ongoing Xplore study for Xlucane, the parallel regulatory work and the establishment of a production chain. Costs for the pre-clinical portfolio of biosimilars amounted to SEK -3.7 M (-0.4).

Other operating expenses amounted to SEK -5.6 M (-4.1) and consist primarily of exchange rate losses on receivables and liabilities of an operating nature.

The Group's operating loss was SEK -104.8 M (-82.5*). Net financial items amounted to SEK -0.4 M (-0.8) and refer in their entirety to financial expenses which consist of interest expenses and leasing agreements.

The loss before tax was SEK 105.2 M (-83.8*). During the first six months, no taxable profit arose and thus no tax expense, which was not the case during the comparative period.

The loss after tax for the first six months amounted to SEK 105.2 M (-83.3).

*This period has been recalculated due to restatement, see Appendix 1 for the effects.

The Group's cash flow January - June 2020

The cash flow from operating activities was SEK -67.4 M (-71.0). The change in operating receivables and operating liabilities was SEK -35.2 M (-29.8) and SEK 68.7 M (42.2*), respectively. The change in operating receivables and operating liabilities can vary greatly between the periods, primarily as a result of re-invoicing to STADA regarding the development work for Xlucane and costs for the clinical study.

The cash flow from investing activities amounted to SEK -0.1 M (-0.8) and consisted of investments in tangible fixed assets.

The cash flow from financing activities amounted to SEK 134.5 M (141.8), of which SEK 146.4 M relates to the issue proceeds, SEK -10.3 M (-18.2) relates to transaction costs and repayment of loans that rounded up was SEK 0.0 M (-0.1) and repayment of leasing liabilities amounting to SEK -1.6 M (-1.2).

The Group's financial position and going concern

On the balance sheet date, cash and cash equivalents amounted to SEK 232.5 M (171.4), excluding milestone payments from Bausch + Lomb received after the balance sheet date.

Besides the additional revenues that partnerships and transactions may bring in the near future, Xbrane is expected to need additional capital to finance the next 12 months of operations. In addition, it is estimated that further financing of the business will be needed until 2022, when the company is expected to generate sales revenue from Xlucane. The company continues to evaluate various financing alternatives together with its financial advisor and dialogues with investors.

Goodwill

Goodwill amounted to SEK 61.0 M (61.5) on the balance sheet date and the fall of SEK 0.5 M compared with the previous year is due to exchange rate changes.

Tangible fixed assets

Tangible fixed assets amounted to SEK 9.2 M (21.5) on the balance sheet date and the decrease from the previous year is partly explained by current assets of SEK 7.7 M not being presented separately and partly by depreciation and impairment of production equipment in the subsidiary.

Right of use assets

Right of use assets amounted to SEK 7.6 M (-). The increase from the previous year is because current assets of SEK 7.7 M were not presented separately but under tangible fixed assets.

Inventories

When sales of Spherotide were put on hold, inventories were written down and thus amounted to SEK 0.0 M (4.5).

Accounts receivable

Accounts receivable amounted to SEK 21.2 M (1.2) and refer in full to milestone payments from Bausch + Lomb for the licensing agreement for Xlucane. The receivable was settled in its entirety after the balance sheet date.

Prepaid expenses and accrued income

Prepaid expenses and accrued income amounted to SEK 86.6 M (79.3), of which SEK 38.7 M (50.8) relates to the purchase and packaging costs of reference drugs for the ongoing Phase III study that will be used on an ongoing basis. SEK 34.3 M (22.0) refers to the advance payment to CRO (Contract Research Organization) conducting the clinical study and the remaining SEK 13.6 M (6.5) refers to other prepaid expenses and accrued income.

Changes in equity

Equity amounted to SEK 4.3 M (2.8) on the balance sheet date. Other capital contributions amounted to SEK 584.4 M (371.4) and during the first six months was impacted by SEK 135.2 M from the new share issue after transaction costs and reserved share-related remuneration to employees of SEK 1.0 M (0.7). Total equity amounted to SEK 191.3 M (279.1*).

The equity ratio was 44 percent (61*).

Long-term and short-term interest-bearing liabilities

Long-term and short-term interest-bearing liabilities On the balance sheet date, there were no long-term interest-bearing liabilities (SEK 0 M in the comparative period) and no short-term interest-bearing liabilities (SEK 0.1 M in the comparative period).

Leasing liabilities

Long- and short-term interest-bearing leasing liabilities amounted to SEK 4.9 M (3.7) and SEK 2.9 M (2.4), respectively. The increase from the previous year is explained by newly signed leasing contracts relating to lab equipment.

Accounts payable

Accounts payable amounted to SEK 36.2 M (36.5).

Accrued expenses and prepaid income

Accrued expenses and prepaid income amounted to SEK 191.9 M (123.8) and primarily relate to advance payments from STADA for Xlucane of SEK 130.6 M (86.3*).

*This period has been recalculated due to restatement, see Appendix 1 for the effects.

Impact of the joint development agreement with STADA on the results and balance sheet

Since the joint development agreement with STADA for Xlucane was concluded in July 2018, Xbrane's net costs for the research and development attributable to the development of Xlucane have been reported in the results, i.e. 50 percent of the total cost of the project. With regard to the balance sheet, assets and liabilities attributable to the development of Xlucane are reported in their entirety, i.e. 100 percent and then STADA's share of these, i.e. 50 per- cent, is reported as the receivable or liability arising be- tween Xbrane and STADA. This applies to both the Group and parent company. On the closing date, Xbrane had a longterm non-interest-bearing liability to STADA amounting to SEK 4.2 M (4.2) relating to STADA's share of the long-term advance payment to CRO. In addition, accrued expenses and prepaid income from STADA amounted to SEK 130.6 M (86.3*).

Parent company

The core business of Xbrane, which is the development of biosimilars, is run by the parent company. As the parent company constitutes the major part of the Group, a statement in text format of the parent company's earnings, financial position and cash flow would provide no further information than described in the report. Hence, this is only presented in reporting format on pages 17-19.

Risks and uncertainties

Risks and uncertainties are described in the 2019 Annual Report on pages 27-29. This is available on the company's website. With regard to risks related to the ongoing Coronapandemic, these are described in the annual report and at the time of publishing this interim report, these have not changed.

The 2019 Annual Report describes the risk that Xbrane and its partner STADA not succeeding in reaching agreements with a third-party distributors for major markets, for example the US and LATAM. After the end of the reporting period, this risk has been altered by the fact that Xbrane and STADA have signed an agreement with Bausch + Lomb to obtain the rights to distribute Xlucane in the US and Canada. The agreement is described in more detail on pages 3 and 4.

Apart from the change described above, no new factors or changed assumptions have arisen that could have a material impact on the previously compiled risk and uncertainty assessment.

Share information

Xbrane's share capital at the end of the period amounted to SEK 4.3 M (2.8), divided into 19,280,707 shares (6,329,239). The quota value of all shares is SEK 0.224 and all shares have an equal right to a share in the company's assets and earnings. Xbrane's shares have been listed on Nasdaq Stockholm since September 23, 2019 and the number of shareholders in Xbrane on the balance sheet date amounted to around 4,000. The share's closing price on the balance sheet date was SEK 70.6 (38), resulting in a market capitalization of SEK 1,361 M (485).

Organization and employees

Xbrane is headquartered in Solna, outside Stockholm, Sweden, where the company also has a laboratory for the research and development of biosimilars. Xbrane has one wholly-owned subsidiary, Primm Pharma, located in Milan, Italy. On the balance sheet date, the company had 42 (36) employees.

Annual General Meeting (AGM)

The AGM for 2020 was held on May 14, 2020.

Auditor's review

This report has not been subject to a review by the company's auditor

Events after the end of the quarter

The company announced that Susanna Helgesen will resign as CFO during the year.

*This period has been recalculated due to restatement, see Appendix 1 for the effects.

Consolidated income statement

Amounts in SEK thousand	Notes	2020 Q2	2019 Q2*	2020 Q1-2	2019 Q1-2*	2019 Full year*
	2,3	-	-	-	-	-
Revenues
Cost of goods sold		-	-	-	-	-18,271
Gross profit		-	-	-	-	-18,271
Other income	2,3	5,283	1,794	10,185	2,995	6,355
Selling and distribution expenses		,-,	-150	,-,	-382	-454
Administrative expenses		-9,742	-7,790	-16,777	-11,117	-26,415
Research and development expenses		-45,099	-40,804	-92,642	-69,964	-137,665
Other expenses		-3,640	-	-5,592	-4,051	-10,122
Operating profit/loss	2	-53,197	-46,949	-104,825	-82,518	-186,572
Financial income		-	0	-	51	51
Financial costs		-200	-412	-406	-844	-1,468
Net financial costs	2	-200	-412	-406	-793	-1,417
Profit/loss before tax		-53,397	-47,361	-105,231	-83,311	-187,989
Income tax expense		-	-	-	-	-
Profit/loss for the period		-53,397	-47,361	-105,231	-83,311	-187,989
Profit/loss attributable to:
- Owners of the Company		-53,397	-47,361	-105,231	-83,311	-187,989
- Non-controlling interests		-	-	-	-	-
Total comprehensive income for the period		-53,397	-47,361	-105,231	-83,311	-187,989
Earnings per share
- Basic earnings per share (SEK)		-3.11	-5.63	-6.12	-9.90	-16.80
- Diluted earnings per share (SEK)		-3.11	-5.63	-6.12	-9.90	-16.80
Number of outstanding shares at the end of the reporting period
- Before dilution		19,280,707	12,694,871	19,280,707	12,694,871	15,415,199
- After dilution		19,280,707	12,694,871	19,280,707	12,694,871	15,415,199
Average number of outstanding shares
- Before dilution		17,195,806	8,413,054	17,195,806	8,413,054	11,190,591
- After dilution		17,195,806	8,413,054	17,195,806	8,413,054	11,190,591

Consolidated income statement and other comprehensive income

Amounts in SEK thousand	2020 Q2	2019 Q2*	2020 Q1-2	2019 Q1-2*	2019 Full year*
Total comprehensive income for the period	-53,397	-47,361	-105,231	-83,311	-187,989
Other comprehensive income
Items that have been transferred and can be transferred to profit/loss for the period to profit/loss for the period
Reclassification of foreign currency translation differences	-3,742	1,144	78	2,433	1,171
Comprehensive income for the period	-3,742	1,144	78	2,433	1,171
Total comprehensive profit/loss attributable to:
- Owners of the Company	-57,139	-46,217	-105,153	-80,878	-186,818
- Non-controlling interests	-	-	-	-	-
Total comprehensive income for the period	-57,139	-46,217	-105,153	-80,878	-186,818

Consolidated statement of financial position

Amounts in SEK thousand	06-30-2020	06-30-2019*	12-31-2019*
ASSETS
Goodwill	61,033	61,485	60,760
Intangible assets	4,669	5,522	5,053
Property, plant and equipment	9,235	21,502	7,004
Right of use	7,600	-	9,204
Trade and other receivables	9,019	9,081	8,982
Non-current assets	91,556	97,591	91,003
Inventories	-	9,955	-
Trade and other receivables	21,210	1,218	-
Other receivables	5,692	95,765	5,889
Prepaid expenses and accrued income	86,559	79,251	77,850
Cash and cash equivalents	232,506	171,410	164,197
Current assets	345,968	357,598	247,937
TOTAL ASSETS TOTAL ASSETS	437,524	455,189	338,940
EQUITY
Share capital	4,322	2,847	3,456
Non-registered equity	-	91 131	-
Share premium	584,369	371,348	448,089
Reserves	6,797	7,981	6,719
Retained earnings	-404,142	-194,232	-298,912
Equity attributable to owners of the Company	191,347	279,075	159,352
Non-controlling interests	-	-	-
Total equity	191 347	279 075	159 352
LIABILITIES
Leasing	4,918	3,660	6,281
Non-current non-interest-bearing liabilities	4,192	4,223	4,173
Provisions	4,931	4,436	4,547
Non-current liabilities	14,042	12,320	15,001
Current interest-bearing liabilities	-	85	12
Trade and other payables	36,167	36,467	21,097
Current tax liabilities	-	127	-
Other current liabilities	1,107	942	2,903
Leasing	2,947	2,385	3,144
Deferred income/revenue	191,915	123,788	137,431
Current liabilities	232,136	163,794	164,587
TOTAL LIABILITIES	246,178	176,114	179,588
TOTAL EQUITY AND LIABILITIES	437,524	455,189	338,940

Consolidated cash flow statement

Amounts in SEK thousand	2020 Q2	2019 Q2*	2020 Q1-2	2019 Q1-2*	2019 Full year*
Cash flow from operating activities
Profit/loss before tax	-53,397	-47,361	-105,231	-83,311	-187,989
Adjustments for items not included in cash flow	6,738	-475	4,267	4,179	24,718
Paid income taxes	-	-	-	-	-
Total	-46,659	-47,836	-100,964	-79,132	-163,271
Increase (-)/Decrease (+) of inventories	-	-936	-	-4,221	-
Increase (-)/Decrease (+) of trade and other receivables	14,020	10,199	-35,207	-29,766	-28,286
Increase (-)/Decrease (+) of trade and other payables	48,486	20,805	68,740	42,151	42,968
Cash flow from current operations	15,847	-17,768	-67,431	-70,968	-148,589
Cash flow from investing activities
Acquisition of property, plant and equipment	-34	-451	-76	-808	-1,187
Cash flow from investing activities	-34	-451	76	-808	-1,187
Cash flow from financing activities
Proceeds from exercise of share options	3	-	3	-	-
New share issue	146,444	161,326	146,444	161,326	252,457
Transaction expense	-10,337	-18,206	-10,337	-18,231	-33,430
Amortization of loan	-	-35	-12	-70	-140
Amortization of lease liability	-766	-909	-1,564	-1,191	-2,846
Cash flow from financing activities	135,344	142,176	134,534	141,834	216,041
Cash flow for the period	151,157	123,957	67,027	70,058	66,265
Cash and cash equivalents at beginning of period	84,471	44,317	164,197	100,972	100,972
Exchange rate differences in cash and cash equivalents	-3,120	3,136	1,282	380	-3,039
Cash and cash equivalents at end of period	232,506	171,410	232,506	171,410	164,197

Consolidated statement of changes in equity

Amounts in SEK thousand	Share capital	Share premium	Translation reserve	Retained earnings	Total	Total equity
Balance at January 1, 2020	3,456	448,089	6,719	-273,941	184,323	184,323
Recalculation*	-	-	-	-24,970	-24,970	-24,970
Balance at January 1, 2020 after recalculation	3,456	448,089	6,719	-298,911	159,353	159,353
Total comprehensive income for the period
Profit/loss for the period	-	-	-	-105,231	-105,231	-105,231
Other comprehensive income for the period	-	-	78	-	78	78
Total comprehensive income for the period	-	-	78	-105,231	-105,153	-105,153
Transactions with group shareholder
New share issue	867	135,243	-	-	136,110	136,110
- New share issue	867	145,580	-	-	146,447	146,447
- Transaction expenses	-	-10,337	-	-	-10,337	-10,337
Share savings program	-	1,037	-	-	1,037	1,037
Total contributions from and distributions to shareholders	867	136,280	-	-	137,147	137,147
Balance at June 30, 2020	4,322	584,369	6,797	-404,142	191,347	191,347

*This period has been recalculated, see Appendix 1 for the effects.

	Share	None -registered	Share	Translation	Retained		Total
Amounts in SEK thousand	capital	shares	premium	reserve	earnings	Total	equity
Balance at January 1, 2019	1,419	-	184,007	5,548	-107,903	83,070	83,070
Recalculation*	-	-	-	-	-3,019	-3,019	-3,019
Balance at January 1, 2019 after recalculation	1,419	-	184,007	5,548	-110,922	80,051	80,051
Total comprehensive income for the period
Profit/loss for the period	-	-	-	-	-83,311	-83,311	-83,311
Other comprehensive income for the period	-	-	-	2,433		2,433	2,433
Total comprehensive income for the period	-	-	-	2,433	-83,311	-80,878	-80,878
Transactions with the group's owner
New share issue	1,427	91,131	186,668	-	-	279,226	279,226
- Non-registered shares	-	610	-	-	-	610	610
- Unregistered rights issue	-	90,,521	-	-	-	90,521	90,521
- New share issue	1,427		204,899			206,326	206,326
- Transaction expenses	-	-	-18,231	-	-	-18,231	-18,231
Share savings program	-	-	674	-	-	674	674
Total contributions from and distributions to
shareholders	1,427	91,131	187,342	-	-	279,901	279,901
Balance at June 30, 2019	2,847	91,131	371,348	7,981	-194,232	279,074	279,074

Consolidated statement of changes in equity, cont.

Amounts in SEK thousand	Share capital	Share premium	Translation reserve	Retained earnings	Total	Total equity
Balance at January 1, 2019	1,419	184,007	5,548	-107,903	83,070	83,070
Recalculation*	-	-	-	-3,019	-3,019	-3,019
Balance at January 1, 2019 after recalculation	1,419	184,007	5,548	-110,922	80,051	80,051
Total comprehensive income for the period
Profit/loss for the period	-	-	-	-187,989	-187,989	-187,989
Other comprehensive income for the period	-	-	1,171	-	1,171	1,171
Total comprehensive income for the period	-	-	1,171	-187,989	-186,818	-186,818
Transactions with the group's owner
New share issue	2,037	261,990	-	-	264,027	264,027
- New share issue	2,037	295,420	-	-	297,457	297,457
- Transaction expenses	-	-33,430	-	-	-33,430	-33,430
Share savings program	-	2,092	-	-	2,092	2,092
Total contributions from and distributions to shareholders	2,037	264,082	-	-	266,119	266,119
Balance at December 31, 2019	3,456	448,089	6,719	-298,911	159,352	159,352

Income statement, Parent company

Amounts in SEK thousand	2020 Q2	2019 Q2*	2020 Q1-2	2019 Q1-2*	2019 Full year*
Revenues	-	-	-	-	-
Cost of goods sold	-	-	-	-	-
Gross profit		-		-	-
Other income	4,707	1,360	9,591	2,199	4,416
Administrative expenses	-8,444	-6,493	-14,213	-8,688	-21,595
Research and development expenses	-43,639	-38,234	-89,443	-63,953	-126,509
Other expenses	-3,588	-	-5,487	-4,025	-10,090
Operating profit/loss	-50,964	-43,367	-99,552	-74,467	-153,777
Financial items
Financial income	-	-	11	-	4
Financial expenses	-79	-356	-149	-770	-995
Net finance costs	-79	-356	-138	-770	-990
Profit/loss before tax	-51,043	-43,723	-99,690	-75,237	-154,767
Income tax expense	-	-	-	-
Total comprehensive income for the period	-51,043	-43,723	-99,690	-75,237	-154,767

*This period has been recalculated, see Appendix 1 for the effects.

Parent company statement of comprehensive income

Amounts in SEK thousand	2020 Q2	2019 Q2*	2020 Q1-2	2019 Q1-2*	2019 Full year*
Profit/loss for the period	-51,043	-43,723	-99,690	-75,237	-154,767
Other comprehensive income	-	-	-	-	-
Total comprehensive income for the period	-51,043	-43,723	-99,690	-75,237	-154,767

Balance Sheet, Parent company

Amounts in SEK thousand	06-30-2020	06-31-2019*	12-31-2019*
ASSETS
Non-current assets Property, plant and equipment	6,206	4,454	3,697
Financial non-current assets
Shares in group companies	108,838	100,783	102,319
Other non-current receivables	9,019	9,081	8,982
Total financial non-current assets	117,857	109,864	111,301
Total non-current assets	124,063	114,318	114,998
Current assets
Current receivables	-	-	-
Trade and other receivables	21,210	107	-
Receivables in group companies		91,131	-
Other receivables	3,864	1,194	2,962
Prepaid expenses and accrued income	86,507	79,215	77,752
Total current receivables	111,580	171,647	80,714
Cash and bank	230,745	167,429	163,601
Current assets	342,325	339,076	244,315
TOTAL ASSETS	466,388	453,394	359,313
EQUITY AND LIABILITIES
Equity
Restricted equity
Share capital	4,322	2,847	3,456
Unregistered shares	-	91,131	-
Unrestricted equity
Share premium	585,055	372,034	448,775
Retained earnings	-252,474	-97,707	-97,707
Profit/loss for the period	-99,690	-75,237	-154,767
Total equity	237,214	293,068	199,757
Non-current liabilities
Non-current interest-bearing liabilities			-
Non-current non-interest-bearing liabilities	4,192	4,223	4,173
Non-current liabilities	4,192	4,223	4,173
Current liabilities
Liabilities to subsidiaries	264	-	-
Trade and other payables	35,928	35,808	20,377
Other current liabilities	984	824	2,708
Deferred income/revenue	187,805	119,472	132,298
Current liabilities	224,982	156,104	155,383
TOTAL LIABILITIES	229,174	160,328	159,556
TOTAL EQUITY AND LIABILITIES	466,388	453,394	359,314

Cash flow statement, Parent company

Amounts in SEK thousand	2020 Q2	2019 Q2*	2020 Q1-2	2019 Q1-2*	2019 Full year*
Cash flows from operating activities
Earnings before income and tax	-51,043	-43,724	-99,690	-75,237	-154,767
Adjustments for items not included in cash flow	3,653	-2,003	-176	2,101	6,706
Paid income taxes	-	-	-	-	-
Total	-47,390	-45,727	-99,866	-73,136	-148,061
Increase (-)/Decrease (+) of trade and other receivables	38,893	9,870	-11,389	-45,924	-46,015
Increase (-)/Decrease (+) of trade and other payables	25,833	20,321	47,591	46,218	46,462
Cash flow from current operations	17,336	-15,536	-63,664	-72,842	-147,614
Cash flow from investing activities
Investments in subsidiaries	-3,201	-	-6,519	-	-1,536
Acquisition of property, plant and equipment	-34	-297	-76	-370	-565
Cash flow from investing activities	-3,235	-297	-6,595	-370	-2,101
Cash flow from financing activities
Exercised share options by employees	3	-	3	-	-
New share issue	146,444	161,326	146,444	161,326	252,457
Transaction expense	-10,337	-18,206	-10,337	-18,231	-33,430
Amortization of loan	-	-	-	-	-3,042
Cash flow from financing activities	136,110	143,120	136,110	140,053	215,985
Cash flow for the period	150,211	127,288	65,851	66,840	66,270
Cash and cash equivalents at beginning of period	83,701	36,887	163,601	100,380	100,380
Exchange rate differences in cash and cash equivalents	-3,166	3,255	1,294	209	-3,049
Cash and cash equivalents at end of period	230,745	167,429	230,746	167,429	163,601

Notes

Note 1 Accounting principles

This interim report has been prepared in accordance with IAS 34, Interim Financial Reporting, as well as applicable regulations from the annual accounts act. The interim report for the Parent company has been prepared according to the Annual accounts act, chapter 9, Interim Report. For the Group and the Parent

company the same accounting principles and calculation bases as the previous annual report have been used. Information according to IAS 34.16A is presented, except for within the financial reports and the associated notes, in other parts or the interim report as well.

Note 2 Segment reporting

Report of revenue, operating profit/loss and profit/loss before tax per segment

Amounts in SEK thousand	2020 Q2	2019 Q2*	2020 Q1-2	2019 Q1-2*	2019 Full year*
Revenues per segment
Biosimilars	1,697	-	1,697	-	-
Long-acting injectable drugs	-	505	-	857	-
Unallocated revenue	3,586	1,289	8,489	2,138	6,355
Total	5,283	1,794	10,185	2,995	6,355
Operating profit or loss per segment
Biosimilars	-42,059	-38,234	-87,542	-63,953	-125,675
Long-acting injectable drugs	-1,343	-2,151	-3,403	-5,235	-30,261
Unallocated revenue	-9,795	-6,564	-13,880	-13,330	-30,637
Operating profit/loss	-53,197	-46,949	-104,825	-82,518	-186,572
Net finance costs
Biosimilars	-106	-	-220	-	-354
Long-acting injectable drugs	-27	-77	-59	-77	-71
Unallocated revenue	-68	-335	-127	-716	-993
Total	-201	-412	-406	-793	-1,417
Profit/loss before tax	-53,397	-47,361	-105,231	-83,311	-187,989
Depreciation, amortization and write downs
Biosimilars	1,074	799	2,144	1,479	3,624
Long-acting injectable drugs	443	928	913	1,839	20,068**
Unallocated revenue	107	120	220	225	441
Total	1,624	1,847	3,278	3,544	24,134

*This period has been recalculated, see Appendix 1 for the effects.

** Whereof SEK 16,808 thousand relates to write down of inventory and production facilities for Spherotide.

Note 3 Distribution of Income

Amounts in SEK thousand	Q2 2020
Income per region	Biosimilars	Long-acting injectable drugs	Unallocated/ administration	Group
Middle East	-	-	-	-
Asia	-	-	-	-
Europe	-	-	3,541	3,541
United States	1,697	-	45	1,742
Total	1,697	-	3,587	5,284
Income per category
Pharmaceuticals	-	-	-	-
Milestone payments from partners	1,697	-	-	1,697
Services and other	-	-	3,586	3,586
Total	1,697	-	3,586	5,283

Amounts in SEK thousand
Income per region	Biosimilars	Long-acting injectable drugs	Unallocated/ administration	Group
Middle East	-	-	-	-
Asia	-	-	-	-
Europe	-	505	1,289	1,794
United States	-	-	-	-
Total	-	505	1,289	1,794
Income per category
Pharmaceuticals	-	-	-	-
Milestone payments from partners	-	-	-	-
Services and other	-	505	1,2891	1,794
Total	-	505	1,289	1,794

Note 3 Distribution of Income

Amounts in SEK thousand	Q1-2 2020
Income per region	Biosimilars	Long-acting injectable drugs	Unallocated/ administration	Group
Middle East	-	-	-	-
Asia	-	-	-	-
Europe	-	-	8,389	8,389
United States	1,697	-	99	1,796
Total	1,697	-	8,489	10,185
Income per category
Pharmaceuticals	-	-	-	-
Milestone payments from partners	1,697	-	-	1,697
Services and other	-	-	8,489	8,489
Total	1,697	-	8,489	10,185

Amounts in SEK thousand
Income per region	Biosimilars	Long-acting injectable drugs	Unallocated/ administration	Group
Middle East	-	302	-	302
Asia	-	-	-	-
Europe	-	555	2,092	2,647
United States	-	-	46	46
Total	-	857	2,138	2,995
Income per category
Pharmaceuticals	-	302	-	302
Milestone payments from partners	-	-	-	-
Services and other	-	555	2,138	2,639
Total	-	857	2,138	2,995

Amounts in SEK thousand		Full year 2019
Income per region	Biosimilars	Long-acting injectable drugs	Unallocated/ administration	Group
Middle East	-	-	-	-
Asia	-	-	-39	-39
Europe	-	-	6,132	6,132
United States	-	-	262	262
Total	-	-	6,355	6,355
Income per category
Pharmaceuticals	-	-	-	-
Milestone payments from partners	-	-	-	-
Services and other	-	-	6,355	6,355
Total	-	-	6,355	6,355

Note 4 Transactions with related parties

Since 2019, STADA Arnzeimittel AG has been a shareholder in Xbrane (see the list of owners on page 7). Transactions with STADA relate to shared costs for the collaboration agreement with Xlucane.

During the second quarter a targeted issue was carried out and related parties participated on market conditions. The following related transaction was carried out: Serendipity Group participated in the issue and signed for 563,991 shares. Stada Arnzeimittel AG also participated in the issue and signed for 314,197 shares.

Note 5 Financial instruments

The below table shows the different valuation levels of the financial assets and liabilities that are reported at fair value in the consolidated balance sheet. For a description of how fair value has been calculated, see Note 26 in the 2019 Annual Report. All entries assessed at fair value are defined as being Level 2. The

fair value of financial assets and liabilities to acquisition value or accrued acquisition value is estimated to correspond to book values in all material aspects.

Group Amounts in SEK thousand	06-30-2020 Level 2	06-30-2019 Level 2	12-31-2019 Level 2
Financial assetss
Other current receivables fordringar	-	-	24
Whereof currency deriatives	-	-	24
Total financial assets	-	-	24
Financial liabilities
Other current payables	-	-	1,729
Whereof currency deriatives	-	-	1,729
Total financial liabilities	-	-	1,729

Certification

The Board of Directors and the CEO hereby certify that this Interim report provides a true and fair view of the Parent Company and the Group's operations, position and results and describes significant risks and uncertainties faced by the Company and the companies that are part of the Group.

Stockholm, 21 August 2020

Anders Tullgren Chairman of the Board

Peter Edman Board member

Karin Wingstrand Board member

Ivan Cohen-Tanugi Board member

Eva Nilsagård Board member

Mats Thorén Board member

Giorgio Chirivì Board member Martin Åmark CEO

Alternative performance measures

The Company presents certain financial measures in the interim report that are not defined in accordance with IFRS. The Company believes that these measures provide valuable supplementary information to investors and the Company's management as they enable evaluation of the Company's performance. Since not all companies calculate financial measurements in the same way, these are not al-

ways comparable to measurements used by other companies. These financial measures should therefore not be seen as replacement for measures that are defined in accordance with IFRS. The tables below show measurements that are not defined in accordance with IFRS.

Gross margin

Gross margin is calculated as gross result divided by revenues. Gross result is calculated as revenues minus cost of goods sold.

Amounts in SEK thousand	2020 Q2	2019 Q2*	2020 Q1-2	2019 Q1-2*	2019 Full year*
Gross profit	-	-	-	-	-18,271
Divided by revenues	-	-	-	-	-
Gross margin	-	-	-	-	N/A

EBITDA

Shows the business's earning ability from current operations without regard to capital structure and tax situation and is intended to facilitate comparisons with other companies in the same industry.

Amounts in SEK thousand	2020 Q2	2019 Q2*	2020 Q1-2	2019 Q1-2*	2019 Full year*
Operating profit or loss	-53,197	-46,949	-104,825	-82,518	-186,572
Depreciation, amortization and write downs	-1,624	-1,847	-3,278	-3,544	-24,134
EBITDA	-51,573	-45,102	-101,547	-78,974	-162,439

*This period has been recalculated, see Appendix 1 for the effects.

Research and development expenses as a percentage of operating expenses

The company's direct costs for research and development relate to personnel, materials and external services costs. Research an development expenses as a percentage of operating expenses show the proportion of operating expenses relating to research and development. This is calculated by dividing research and development expenses by total operating expenses excluding depreciation and amortization. Total operating expenses comprise of selling and distribution expenses, administrative expenses, research and development expenses and other operating expenses.

Amounts in SEK thousand	2020 Q2	2019 Q2*	2020 Q1-2	2019 Q1-2*	2019 Full year*
Research and development expenses minus depreciation and amortization	-43,809	-39,948	-90,031	-68,374	-133,154
Divided by total operating expenses minus depreciation and amortization	-56,856	-46,896	-111,732	-81,970	-150,523
Research and development expens-es as a percentage of operating expenses	77%	85%	81%	83%	88%

*This period has been recalculated, see Appendix 1 for the effects.

Equity ratio

Equity ratio is the proportion of assets funded by equity to show the company's long-term ability to pay, i.e. equity through total assets.

Amounts in SEK thousand	06-30-2020	06-31-2019*	12-31-2109*
Total equity	191,347	279,075	159,352
Divided by total assets	437,524	455,189	338,940
Equity ratio	44%	61%	47%

For further information Martin Åmark, CEO/IR martin.amark@xbrane.com

Susanna Helgesen, CFO susanna.helgesen@xbrane.com

• 46 76-309 37 77 www.xbrane.com

Financial calendar

Interim report January-September 2020 November 13, 2020 Year-end report 2020 February 26, 2021 Annual report 2020 April 8, 2021

Appendix 1 Adjustment Retroactive adjustment of revenue recognition of STADA's share of research and development costs

In 2018, Xbrane signed a cooperation agreement with STADA for Xlucane where both parties share costs equally for the development of Xlucane. Prior to the registration-based phase III study Xplore, the original drug Lucentis® was purchased for use in the study and for research and development purposes. The costs for Lucentis® will be charged to the results as the stock is used up. The recognition of STADA's share of the inventory has been done too early, which has resulted in lower research and development expenses, due to the recognition of STADA's share, and advance payments from STADA, which are reported under accrued costs and prepaid income, have also been deducted too early. The correction is an adjustment of when in time the revenues are to be recognized. All advances from STADA are estimated to be recognized as revenues within twelve months.

In connection with the interim report for January-June 2020, a correction has been made for this, which runs from the third quarter of 2018 to the first quarter of 2020. The correction leads to an increase in research and development expenses for the last seven quarters, a reduction in equity and an increase in accrued income and prepaid expenses.

Advance payments from STADA will be recognized as revenue against research and development expenses for the remainder of the Xplore study and thus the advance will not be refunded to STADA.

The reports listed below are shown in following order to demonstrate the quantifiable effects:

• The consolidated income statement and report on comprehensive income for Q1 2020, Q 1-4 2019 and full year 2019.
• The consolidated balance sheet on the balance sheet date for March 31, 2020, December 31, 2019, September 30, 2019, June 30, 2019, and March 31, 2019.
• The parent company's income statement for Q1 2020, Q 1-4 2019 and full year 2019.
• The parent company's balance sheet on the balance sheet date for March 31, 2020, December 31, 2019, September 30, 2019, June 30, 2019, and March 31, 2019.

Group - January-March 2020

Consolidated income statement

Amounts in SEK thousand	After correction Q1 2020	Correction	Before correction Q1 2020
Research and development expenses	-47,543	-2,947	-44,597
Operating profit/loss	-51,628	-2,947	-48,681
Profit/loss before tax	-51,833	-2,947	-48,887
Total comprehensive income for the period	-51,833	-2,947	-48,887
Earnings per share
- Basic earnings per share (SEK)	-3.36	-0.19	-3.17
- Diluted earnings per share (SEK)	-3.36	-0.19	-3.17

Consolidated income statement and other comprehensive income

Amounts in SEK thousand	After correction Q1 2020	Correction	Before correction Q1 2020
Total comprehensive income for the period	-51,833	-2,947	-48,887
Other comprehensive income	3,820	-	3,820
Total comprehensive income for the period	-48,013	-2,947	-45,067

Consolidated statement of financial position

Amounts in SEK thousand	After correction 03-31-2020	Correction	Before correction 03-31-2020
TOTAL ASSETS	311,354	-	311,354
Retained earnings	-350,744	-27,917	-322,827
Equity attributable to owners of the Company	111,582	-27,917	139,499
Deferred income/revenue	136,641	27,917	108,724
Current liabilities	184,675	27,917	156,758
Total liabilities	199,773	27,917	171,856
TOTAL EQUITY AND LIABILITIES	311,354	-	311,354

In the Group's cash flow for Q1 2020, profit before tax has decreased by SEK 2,947 thousand and changes in operating liabilities have increased by the corresponding amount. The total cash flow has thus not been affected.

Group - January-December 2019

Consolidated income statement

Amounts in SEK thousand	After correction 2019	Correction	Before correction 2019
Research and development expenses	-137,665	-21,952	-115,713
Operating profit/loss	-186,572	-21,952	-164,620
Profit/loss before tax	-187,989	-21,952	-166,037
Total comprehensive income for the period	-187,989	-21,952	-166,037
Earnings per share
- Basic earnings per share (SEK)	-16,80	-1,96	-14,84
- Diluted earnings per share (SEK)	-16,80	-1,96	-14,84

Consolidated income statement and other comprehensive income

Amounts in SEK thousand	After correction 2019	Correction	Before correction 2019
Total comprehensive income for the period	-187,989	-21,952	-166,037
Other comprehensive income	1,171	-	1,171
Total comprehensive income for the period	-186,818	-21,952	-164,866

Consolidated statement of financial position

Amounts in SEK thousand	After correction 12-31-2019	Correction	Before correction 12-31-2019
TOTAL ASSETS	338,940	-	338,940
Retained earnings	-298,912	-24,971	-273,941
Equity attributable to owners of the Company	159,352	-24,971	184,323
Deferred income/revenue	137,431	24,971	112,460
Current liabilities	164,587	24,971	139,616
Total liabilities	179,588	24,971	154,617
TOTAL EQUITY AND LIABILITIES	338,940	-	338,940

In the Group's cash flow for the full year 2019, profit before tax has decreased by SEK 21,952 thousand and changes in operating liabilities have increased by the corresponding amount. The total cash flow has thus not been affected.

Group - October-December 2019

Consolidated income statement

Amounts in SEK thousand	After correction Q4 2019	Correction	Before correction Q4 2019
Research and development expenses	-36,347	-10,749	-25,598
Operating profit/loss	-66,322	-10,749	-55,573
Profit/loss before tax	-66,675	-10,749	-55,926
Total comprehensive income for the period	-66,675	-10,749	-55,926
Earnings per share
- Basic earnings per share (SEK)	-5.96	-0.96	-5.00
- Diluted earnings per share (SEK)	-5.96	-0.96	-5.00

Consolidated income statement and other comprehensive income

Amounts in SEK thousand	After correction Q4 2019	Correction	Before correction Q4 2019
Total comprehensive income for the period	-66,675	-10,749	-55,926
Other comprehensive income	-2,790		-2,790
Total comprehensive income for the period	-69,465	-10,749	-58,716

In the Group's cash flow for Q4 2019, profit before tax has decreased by SEK 10,749 thousand and changes in operating liabilities have increased by the corresponding amount. The total cash flow has thus not been affected.

Group - January-September 2019

Consolidated income statement

Amounts in SEK thousand	After correction Q1-3 2019	Correction	Before correction Q1-3 2019
Research and development expenses	-101,318	-11,203	-90,115
Operating profit/loss	-120,249	-11,203	-109,046
Profit/loss before tax	-121,314	-11,203	-110,111
Total comprehensive income for the period	-121,314	-11,203	-110,111
Earnings per share
- Basic earnings per share (SEK)	-12.42	-1.15	-11.27
- Diluted earnings per share (SEK)	-12.42	-1.15	-11.27

Consolidated income statement and other comprehensive income

Amounts in SEK thousand	After correction Q1-3 2019	Correction	Before correction Q1-3 2019
Total comprehensive income for the period	-121,314	-11,203	-110,111
Other comprehensive income	3,815	-	3,815
Total comprehensive income for the period	-117,499	-11,203	-106,296

Consolidated statement of financial position

Amounts in SEK thousand	After correction 09-30-2019	Correction	Before correction 09-30-2019
TOTAL ASSETS	406,410	-	406,410
Retained earnings	-232,235	-14,221	-218,014
Equity attributable to owners of the Company	227,499	-14,221	241,720
Deferred income/revenue	139,617	14,221	125,396
Current liabilities	162,804	14,221	148,583
Total liabilities	178,911	14,221	164,690
TOTAL EQUITY AND LIABILITIES	406,410	-	406,410

In the Group's cash flow for Q1-3 2019, profit before tax has decreased by SEK 11,203 thousand and changes in operating liabilities have increased by the corresponding amount. The total cash flow has thus not been affected.

Group - July-September 2019

Consolidated income statement

Amounts in SEK thousand	After correction Q3 2019	Correction	Before correction Q3 2019
Research and development expenses	-31,354	-5,604	-25,750
Operating profit/loss	-37,731	-5,604	-32,127
Profit/loss before tax	-38,002	-5,604	-32,398
Total comprehensive income for the period	-38,002	-5,604	-32,398
Earnings per share
- Basic earnings per share (SEK)	-2.63	-0.39	-2.24
- Diluted earnings per share (SEK)	-2.63	-0.39	-2.24

Consolidated income statement and other comprehensive income

Amounts in SEK thousand	After correction Q3 2019	Correction	Before correction Q3 2019
Total comprehensive income for the period	-38,002	-5,604	-32,398
Other comprehensive income	1,382	-	1,382
Total comprehensive income for the period	-36,620	-5,604	-31,016

In the Group's cash flow for Q3 2019, profit before tax has decreased by SEK 5,604 thousand and changes in operating liabilities have increased by the corresponding amount. The total cash flow has thus not been affected.

Group - January-June 2019

Consolidated income statement

Amounts in SEK thousand	After correction Q1-2 2019	Correction	Before correction Q1-2 2019
Research and development expenses	-69,964	-5,599	-64,365
Operating profit/loss	-82,518	-5,599	-76,919
Profit/loss before tax	-83,311	-5,599	-77,712
Total comprehensive income for the period	-83,311	-5,599	-77,712
Earnings per share
- Basic earnings per share (SEK)	-9.90	-0.67	-9.24
- Diluted earnings per share (SEK)	-9.90	-0.67	-9.24

Consolidated income statement and other comprehensive income

Amounts in SEK thousand	After correction Q1-2 2019	Correction	Before correction Q1-2 2019
Total comprehensive income for the period	-83,311	-5,599	-77,712
Other comprehensive income	2,433	-	2,433
Total comprehensive income for the period	-80,878	-5,599	-75,279

Consolidated statement of financial position

Amounts in SEK thousand	After correction 06-30-2019	Correction	Before correction 06-30-2019
TOTAL ASSETS	455,189	-	455,189
Retained earnings	-194,232	-8,617	-185,615
Equity attributable to owners of the Company	279,075	-8,617	287,692
Deferred income/revenue	123,788	8,617	115,171
Current liabilities	163,794	8,617	155,177
Total liabilities	176,114	8,617	167,497
TOTAL EQUITY AND LIABILITIES	455,189	-	455,189

In the Group's cash flow for Q1-2 2019, profit before tax has decreased by SEK 5,599 thousand and changes in operating liabilities have increased by the corresponding amount. The total cash flow has thus not been affected.

Group - April-June 2019

Consolidated income statement

Amounts in SEK thousand	After correction Q2 2019	Correction	Before correction Q2 2019
Research and development expenses	-40,804	-2,962	-37,842
Operating profit/loss	-46,949	-2,962	-43,987
Profit/loss before tax	-47,361	-2,962	-44,399
Total comprehensive income for the period	-47,361	-2,962	-44,399
Earnings per share
- Basic earnings per share (SEK)	-5.63	-0.35	-5.28
- Diluted earnings per share (SEK)	-5.63	-0.35	-5.28

Consolidated income statement and other comprehensive income

Amounts in SEK thousand	After correction Q2 2019	Correction	Before correction Q2 2019
Total comprehensive income for the period	-47,361	-2,962	-44,399
Other comprehensive income	1,144	-	1,144
Total comprehensive income for the period	-46,217	-2,962	-43,255

In the Group's cash flow for Q2 2019, profit before tax has decreased by SEK 1,502 thousand and changes in operating liabilities have increased by the corresponding amount. The total cash flow has thus not been affected.

Group - January-March 2019

Consolidated income statement

Amounts in SEK thousand	After correction Q1 2019	Correction	Before correction Q1 2019
Research and development expenses	-29,160	-2,637	-26,523
Operating profit/loss	-35,569	-2,637	-32,932
Profit/loss before tax	-35,950	-2,637	-33,313
Total comprehensive income for the period	-35,950	-2,637	-33,313
Earnings per share
- Basic earnings per share (SEK)	-5.68	-0.42	-5.26
- Diluted earnings per share (SEK)	-5.68	-0.42	-5.26

Consolidated income statement and other comprehensive income

Amounts in SEK thousand	After correction Q1 2019	Correction	Before correction Q1 2019
Total comprehensive income for the period	-35,950	-2,637	-33,313
Other comprehensive income	1,289	-	1,289
Total comprehensive income for the period	-34,661	-2,637	-32,024

Consolidated statement of financial position

Amounts in SEK thousand	After correction 03-31-2019	Correction	Before correction 03-31-2019
TOTAL ASSETS	294,165	-	294,165
Retained earnings	-146,871	-5,655	-141,216
Equity attributable to owners of the Company	95,463	-5,655	101,118
Deferred income/revenue	103,219	5,655	97,564
Current liabilities	142,597	5,655	136,942
Total liabilities	198,702	5,655	193,047
TOTAL EQUITY AND LIABILITIES	294,165	-	294,165

In the Group's cash flow for Q1 2019, profit before tax has decreased by SEK 2,637 thousand and changes in operating liabilities have increased by the corresponding amount. The total cash flow has thus not been affected.

Parent company - January-March 2020

Income statement, parent company

Amounts in SEK thousand	After correction Q1 2020	Correction	Before correction Q1 2020
Research and development expenses	-45,804	-2,947	-42,857
Operating profit/loss	-48,588	-2,947	-45,641
Profit/loss before tax	-48,647	-2,947	-45,700
Total comprehensive income for the period	-48,647	-2,947	-45,700

The Parent Company has no transactions in other comprehensive income, which is why the profit for the year corresponds to the profit for the year above.

Balance sheet, Parent company

Amounts in SEK thousand	After correction 03-31-2020	Correction	Before correction 03-31-2020
TOTAL ASSETS	332,570	-	332,570
Retained earnings	-252,474	-24,971	-227,503
Profit/loss for the period	-48,647	-2,947	-45,700
Total equity	151,353	-27,917	179,270
Deferred income/revenue	132,449	27,917	104,532
Current liabilities	176,784	27,917	148,867
TOTAL LIABILITIES	181,217	27,917	153,300
TOTAL EQUITY AND LIABILITIES	332,570	-	332,570

In the parent company's cash flow for Q1 2020, profit before tax has decreased by SEK 2,947 thousand and changes in operating liabilities have increased by the corresponding amount. The total cash flow has thus not been affected.

Parent company - January-December 2019

Income statement, parent company

Amounts in SEK thousand	After correction 2019	Correction	Before correction 2019
Research and development expenses	-126,509	-21,952	-104,557
Operating profit/loss	-153,777	-21,952	-131,825
Profit/loss before tax	-154,767	-21,952	-132,815
Total comprehensive income for the period	-154,767	-21,952	-132,815

The Parent Company has no transactions in other comprehensive income, which is why the profit for the year corresponds to the profit for the year above.

Balance sheet, Parent company

Amounts in SEK thousand	After correction 12-31-2019	Correction	Before correction 12-31-2019
TOTAL ASSETS	359,313	-	359,313
Retained earnings	-97,707	-3,019	-94,688
Profit/loss for the period	-154,767	-21,952	-132,815
Total equity	199,757	-24,971	224,728
Deferred income/revenue	132,298	24,971	107,327
Current liabilities	155,383	24,971	130,412
TOTAL LIABILITIES	159,556	24,971	134,585
TOTAL EQUITY AND LIABILITIES	359,313	-	359,313

In the parent company's cash flow for full year 2019, profit before tax has decreased by SEK 21,952 thousand and changes in operating liabilities have increased by the corresponding amount. The total cash flow has thus not been affected.

Parent company - October-December 2019

Income statement, parent company

Amounts in SEK thousand	After correction Q4 2019	Correction	Before correction Q4 2019
Research and development expenses	-34,653	-10,749	-23,904
Operating profit/loss	-45,642	-10,749	-34,893
Profit/loss before tax	-45,752	-10,749	-35,003
Total comprehensive income for the period	-45,752	-10,749	-35,003

The Parent Company has no transactions in other comprehensive income, which is why the profit for the year corresponds to the profit for the year above.

In the Parent company's cash flow for Q4 2019, profit before tax has decreased by SEK 10,749 thousand and changes in operating liabilities have increased by the corresponding amount. The total cash flow has thus not been affected.

Parent company - January-September 2019

Income statement, parent company

Amounts in SEK thousand	After correction Q1 -3 2019	Correction	Before correction Q1-3 2019
Research and development expenses	-91,856	-11,203	-80,653
Operating profit/loss	-108,135	-11,203	-96,932
Profit/loss before tax	-109,015	-11,203	-97,812
Total comprehensive income for the period	-109,015	-11,203	-97,812

The Parent Company has no transactions in other comprehensive income, which is why the profit for the year corresponds to the profit for the year above.

Balance sheet, Parent company

Amounts in SEK thousand	After correction 09-30-2019	Correction	Before correction 09-30-2019
TOTAL ASSETS	402,192	-	402,192
Retained earnings	-97,707	-3,019	-94,688
Profit/loss for the period	-109,015	-11,203	-97,812
Total equity	244,336	-14,221	258,557
Deferred income/revenue	135,395	14,221	121,174
Current liabilities	153,565	14,221	139,344
TOTAL LIABILITIES	157,856	14,221	143,635
TOTAL EQUITY AND LIABILITIES	402,192	-	402,192

In the parent company's cash flow for Q1-3 2019, profit before tax has decreased by SEK 11,203 thousand and changes in operating liabilities have increased by the corresponding amount. The total cash flow has thus not been affected.

Parent company - July-December 2019

Income statement, parent company

	After correction		Before correction
Amounts in SEK thousand	Q3 2019	Correction	Q3 2019
Research and development expenses	-27,903	-5,604	-22,299
Operating profit/loss	-33,668	-5,604	-28,064
Profit/loss before tax	-33,778	-5,604	-28,174
Total comprehensive income for the period	-33,778	-5,604	-28,174

The Parent Company has no transactions in other comprehensive income, which is why the profit for the year corresponds to the profit for the year above.

In the Parent company's cash flow for Q3 2019, profit before tax has decreased by SEK 5,604 thousand and changes in operating liabilities have increased by the corresponding amount. The total cash flow has thus not been affected.

Parent company - January-June 2019

Income statement, parent company

Amounts in SEK thousand	After correction Q1-2 2019	Correction	Before correction Q1-2 2019
Research and development expenses	-63,953	-5,599	-58,354
Operating profit/loss	-74,467	-5,599	-68,868
Profit/loss before tax	-75,237	-5,599	-69,638
Total comprehensive income for the period	-75,237	-5,599	-69,638

The Parent Company has no transactions in other comprehensive income, which is why the profit for the year corresponds to the profit for the year above.

Balance sheet, Parent company

Amounts in SEK thousand	After correction 06-30-2019	Correction	Before correction 06-30-2019
TOTAL ASSETS	453,394	-	453,394
Retained earnings	-97,707	-3,019	-94,688
Profit/loss for the period	-75,237	-5,599	-69,638
Total equity	293,069	-8,617	301,686
Deferred income/revenue	119,471	8,617	110,854
Current liabilities	156,103	8,617	147,486
TOTAL LIABILITIES	160,326	8,617	151,709
TOTAL EQUITY AND LIABILITIES	453,394	-	453,394

In the Parent company's cash flow for Q1-2 2019, profit before tax has decreased by SEK 5,599 thousand and changes in operating liabilities have increased by the corresponding amount. The total cash flow has thus not been affected.

Parent company - April-June 2019

Income statement, parent company

Amounts in SEK thousand	After correction Q2 2019	Correction	Before correction Q2 2019
Research and development expenses	-38,234	-2,962	-35,272
Operating profit/loss	-43,367	-2,962	-40,405
Profit/loss before tax	-43,724	-2,962	-40,762
Total comprehensive income for the period	-43,724	-2,962	-40,762

In the Parent company's cash flow for Q2 2019, profit before tax has decreased by SEK 2,962 thousand and changes in operating liabilities have increased by the corresponding amount. The total cash flow has thus not been affected.

Parent company - January-March 2019

Income statement, parent company

Amounts in SEK thousand	After correction Q1 2019	Correction	Before correction Q1 2019
Research and development expenses	-25,719	-2,637	-23,082
Operating profit/loss	-31,107	-2,637	-28,470
Profit/loss before tax	-31,521	-2,637	-28,884
Total comprehensive income for the period	-31,521	-2,637	-28,884

The Parent Company has no transactions in other comprehensive income, which is why the profit for the year corresponds to the profit for the year above.

Balance sheet, Parent company

Amounts in SEK thousand	After correction 03-31-2019	Correction	Before correction 03-31-2019
TOTAL ASSETS	291,620	-	291,620
Retained earnings	-97,707	-3,019	-94,688
Profit/loss for the period	-31,521	-2,637	-28,884
Total equity	106,957	-5,655	112,612
Deferred income/revenue	99,962	5,655	94,307
Current liabilities	135,545	5,655	129,890
TOTAL LIABILITIES	184,663	5,655	179,008
TOTAL EQUITY AND LIABILITIES	291,620	-	291,620

In the Parent company's cash flow for Q1 2019, profit before tax has decreased by SEK 2,637 thousand and changes in operating liabilities have increased by the corresponding amount. The total cash flow has thus not been affected.