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INDEX TO UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
| Page | ||||
| Unaudited Condensed Consolidated Interim Statements of Profit or Loss and Other Comprehensive Income for the Three and Nine Months Ended September 30, 2015 and 2014 | 2 | |||
| Unaudited Condensed Consolidated Interim Statements of Financial Position as of September 30, 2015 and December 31, 2014 | 3 | |||
| Unaudited Condensed Consolidated Interim Statements of Changes in Equity at September 30, 2015 and 2014 | 4 | |||
| Unaudited Condensed Consolidated Interim Cash Flow Statements for the Nine Months Ended September 30, 2015 and 2014 | 5 | |||
| Notes to the Unaudited Condensed Consolidated Interim Financial Statements | 6 |
Unaudited Condensed Consolidated Interim Statements of Profit or Loss
and Other Comprehensive Income for the Three and Nine Months Ended September 30
| Three Months Ended September 30 | Nine Months Ended September 30 | |||||||||||||||||||
| Consolidated | ||||||||||||||||||||
| Notes | 2015 | 2014 | 2015 | 2014 | ||||||||||||||||
| (EUR 000) | (EUR 000) | |||||||||||||||||||
| Revenue | 4 | 2,117 | 3,250 | 6,141 | 11,157 | |||||||||||||||
| Research and development costs | (8,038 | ) | (3,932 | ) | (28,013 | ) | (12,177 | ) | ||||||||||||
| General and administrative expenses | (1,396 | ) | (1,556 | ) | (5,945 | ) | (3,908 | ) | ||||||||||||
| Operating profit / (loss) | (7,317 | ) | (2,238 | ) | (27,817 | ) | (4,928 | ) | ||||||||||||
| Finance income | 126 | 344 | 9,266 | 493 | ||||||||||||||||
| Finance expenses | (279 | ) | (37 | ) | (2,774 | ) | (102 | ) | ||||||||||||
| Profit / (loss) before tax | (7,470 | ) | (1,931 | ) | (21,325 | ) | (4,537 | ) | ||||||||||||
| Tax on profit / (loss) for the period | 160 | (49 | ) | 398 | (83 | ) | ||||||||||||||
| Net profit / (loss) for the period | (7,310 | ) | (1,980 | ) | (20,927 | ) | (4,620 | ) | ||||||||||||
| Other comprehensive income | ||||||||||||||||||||
| Items that may be reclassified subsequently to profit or loss: | ||||||||||||||||||||
| Exchange differences on translating foreign operations | 5 | 5 | (13 | ) | 3 | |||||||||||||||
| Other comprehensive income / (loss) for the period, net of tax | 5 | 5 | (13 | ) | 3 | |||||||||||||||
| Total comprehensive income / (loss) for the period, net of tax | (7,305 | ) | (1,975 | ) | (20,940 | ) | (4,617 | ) | ||||||||||||
| Profit / (loss) for the period attributable to owners of the Company | (7,310 | ) | (1,980 | ) | (20,927 | ) | (4,620 | ) | ||||||||||||
| Total comprehensive income / (loss) for the period attributable to owners of the Company | (7,305 | ) | (1,975 | ) | (20,940 | ) | (4,617 | ) | ||||||||||||
| EUR | EUR | EUR | EUR | |||||||||||||||||
| Basic earnings per share | (0.30 | ) | (0.18 | ) | (0.90 | ) | (0.43 | ) | ||||||||||||
| Diluted earnings per share | (0.30 | ) | (0.18 | ) | (0.90 | ) | (0.43 | ) | ||||||||||||
| Number of shares used for calculation (basic) | 24,536,580 | 10,801,948 | 23,307,976 | 10,801,948 | ||||||||||||||||
| Number of shares used for calculation (diluted) | 24,536,580 | 10,801,948 | 23,307,976 | 10,801,948 |
Unaudited Condensed Consolidated Interim Statements of Financial Position
| Notes | September 30, 2015 | December 31, 2014 | ||||||||||
| (EUR 000) | ||||||||||||
| Assets | ||||||||||||
| Non-current assets | ||||||||||||
| Intangible assets | 3,495 | 3,495 | ||||||||||
| Property, plant and equipment | 2,145 | 1,874 | ||||||||||
| Deposits | 265 | 140 | ||||||||||
| 5,905 | 5,509 | |||||||||||
| Current assets | ||||||||||||
| Trade receivables | 737 | 1,292 | ||||||||||
| Other receivables | 1,480 | 210 | ||||||||||
| Prepayments | 3,386 | 620 | ||||||||||
| Income taxes receivable | 1,508 | 873 | ||||||||||
| Cash and cash equivalents | 128,247 | 50,167 | ||||||||||
| 135,358 | 53,162 | |||||||||||
| Total assets | 141,263 | 58,671 | ||||||||||
| Equity and liabilities | ||||||||||||
| Equity | ||||||||||||
| Share capital | 7 | 3,374 | 2,272 | |||||||||
| Other reserves | 5,069 | 3,979 | ||||||||||
| Retained earnings | 123,273 | 39,559 | ||||||||||
| Total equity | 131,716 | 45,810 | ||||||||||
| Current liabilities | ||||||||||||
| Trade payables and other payables | 5,387 | 4,956 | ||||||||||
| Deferred income | 4,160 | 7,905 | ||||||||||
| 9,547 | 12,861 | |||||||||||
| Total liabilities | 9,547 | 12,861 | ||||||||||
| Total equity and liabilities | 141,263 | 58,671 |
Unaudited Condensed Consolidated Interim Statements of Changes in Equity
| Share Capital | Foreign Currency Translation Reserve | Share- based Payment Reserve | Retained Earnings | Total | ||||||||||||||||
| (EUR 000) | ||||||||||||||||||||
| Equity at December 31, 2014 | 2,272 | (71 | ) | 4,050 | 39,559 | 45,810 | ||||||||||||||
| Loss for the period | (20,927 | ) | (20,927 | ) | ||||||||||||||||
| Other comprehensive income / (loss), net of tax | (13 | ) | (13 | ) | ||||||||||||||||
| Total comprehensive income / (loss) | (13 | ) | (20,927 | ) | (20,940 | ) | ||||||||||||||
| Share-based payment (Note 6) | 1,104 | 1,104 | ||||||||||||||||||
| Capital increase | 1,102 | 113,036 | 114,138 | |||||||||||||||||
| Cost of capital increase | (8,396 | ) | (8,396 | ) | ||||||||||||||||
| Equity at September 30, 2015 | 3,374 | (84 | ) | 5,154 | 123,273 | 131,716 | ||||||||||||||
| Share Capital | Foreign Currency Translation Reserve | Share- based Payment Reserve | Retained Earnings | Total | ||||||||||||||||
| (EUR 000) | ||||||||||||||||||||
| Equity at December 31, 2013 | 1,448 | (57 | ) | 2,776 | 2,134 | 6,301 | ||||||||||||||
| Loss for the period | (4,620 | ) | (4,620 | ) | ||||||||||||||||
| Other comprehensive income / (loss), net of tax | 3 | 3 | ||||||||||||||||||
| Total comprehensive income / (loss) | 3 | (4,620 | ) | (4,617 | ) | |||||||||||||||
| Share-based payment (Note 6) | 815 | 815 | ||||||||||||||||||
| Equity at September 30, 2014 | 1,448 | (54 | ) | 3,591 | (2,486 | ) | 2,499 |
Unaudited Condensed Consolidated Interim Cash Flow Statements for the
Nine Months Ended September 30
| Consolidated | ||||||||||
| Notes | 2015 | 2014 | ||||||||
| (EUR 000) | ||||||||||
| Operating activities | ||||||||||
| Net profit / (loss) for the period | (20,927 | ) | (4,620 | ) | ||||||
| Reversal of finance income | (9,266 | ) | (493 | ) | ||||||
| Reversal of finance expenses | 2,774 | 102 | ||||||||
| Reversal of tax charge | (398 | ) | 83 | |||||||
| Adjustments for: | ||||||||||
| Share-based payment | 1,104 | 815 | ||||||||
| Depreciation and amortization | 405 | 369 | ||||||||
| Changes in working capital: | ||||||||||
| Deposits | (125 | ) | (108 | ) | ||||||
| Trade receivables | 555 | 537 | ||||||||
| Other receivables | (1,270 | ) | (254 | ) | ||||||
| Prepayments | (2,766 | ) | (307 | ) | ||||||
| Trade payables and other payables | 418 | 726 | ||||||||
| Deferred income | (3,744 | ) | (7,773 | ) | ||||||
| Cash flows from / (used in) operations | (33,240 | ) | (10,923 | ) | ||||||
| Finance income received | 66 | 493 | ||||||||
| Finance expenses paid | (68 | ) | (102 | ) | ||||||
| Income taxes paid | (238 | ) | (219 | ) | ||||||
| Cash flows from / (used in) operating activities | (33,480 | ) | (10,751 | ) | ||||||
| Investing activities | ||||||||||
| Acquisition of property, plant and equipment | (676 | ) | (366 | ) | ||||||
| Cash flows from / (used) in investing activities | (676 | ) | (366 | ) | ||||||
| Financing activities | ||||||||||
| Capital increase, net of expenses | 105,742 | |||||||||
| Prepaid IPO-costs | (404 | ) | ||||||||
| Cash flows from / (used in) financing activities | 105,742 | (404 | ) | |||||||
| Increase / (decrease) in cash and cash equivalents | 71,586 | (11,521 | ) | |||||||
| Cash and cash equivalents at January 1 | 50,167 | 19,430 | ||||||||
| Effect of exchange rate changes on balances held in foreign currencies | 6,494 | |||||||||
| Cash and cash equivalents at September 30 | 128,247 | 7,909 |
Notes to the Unaudited Condensed Consolidated Interim Financial Statements
Note 1 General Information
Pharma A/S, together with its subsidiaries, is a biopharmaceutical company applying its TransCon technology to develop a pipeline of therapeutics with best-in-class profiles addressing unmet medical needs. Ascendis Pharma is headquartered in
Hellerup, Denmark. Unless the context otherwise requires, references to the Company, we, us and our refer to Ascendis Pharma A/S and its subsidiaries.
The address of the Company s registered office is Tuborg Boulevard 12, DK-2900 Hellerup.
On February 2, 2015, the Company completed its initial public offering ( IPO ), which resulted in the listing of American
Depositary Shares ( ADSs ) representing the Company s ordinary shares, under the symbol ASND in the United States on The NASDAQ Global Select Market.
The Company s Board of Directors approved these unaudited condensed consolidated interim financial statements on November 11, 2015.
Note 2 Summary of Significant Accounting Policies
Basis of Preparation
condensed consolidated interim financial statements of the Company are prepared in accordance with International Accounting Standard 34, Interim Financial Statements . Certain information and disclosures normally included in the
consolidated financial statements prepared in accordance with International Financial Reporting Standards ( IFRS ) have been condensed or omitted. Accordingly, these condensed consolidated interim financial statements should be read in
conjunction with the Company s annual consolidated financial statements for the year ended December 31, 2014 and accompanying notes, which have been prepared in accordance with IFRS as issued by the International Accounting Standards
The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates and
requires management to exercise its judgment in the process of applying the Company s accounting policies. The areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the condensed
consolidated interim financial statements are disclosed in Note 3.
Changes in Accounting Policies
The accounting policies applied when preparing these condensed consolidated interim financial statements have been applied consistently to all
the periods presented, unless otherwise stated and are consistent with those of the Company s most recent annual consolidated financial statements. A description of our accounting policies is provided in the Accounting Policies section of the
audited consolidated financial statements as of and for the year ended December 31, 2014.
Retrospective Effect of Bonus Share Issuance
All share and per share data in the condensed consolidated interim financial statements give retrospective effect to a bonus
issuance of shares in the ratio of 3:1 of the Company s authorized, issued and outstanding ordinary and preference shares, which was effective on January 13, 2015, with the corresponding impacts on both share capital and retained earnings
also retrospectively recognized. Retrospective effect has also been given with respect to the share and per share data for the Company s warrants.
Note 3 Critical Accounting Judgments and Key Sources of Estimation Uncertainty
In the application of our accounting policies, we are required to make judgments, estimates and assumptions about the carrying amounts of
assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions
Notes to the Unaudited Condensed Consolidated Interim Financial Statements
are based on historical experience and other factors that are considered to be relevant. In some instances, we could have reasonably used different accounting estimates, and in other instances
changes in the accounting estimates are reasonably likely to occur from period to period. Accordingly, actual results could differ significantly from the estimates we have made. To the extent that there are material differences between these
estimates and actual results, our future financial statement presentation, financial conditions, results of operations and cash flows will be affected.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in
which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.
Critical judgments made in the process of applying our accounting policies and that have the most significant effect on the amounts recognized
in our unaudited condensed consolidated financial statements relate to revenue recognition, share-based payment, internally generated intangible assets, and joint arrangements / collaboration agreements.
The key sources of estimation uncertainty that have a significant risk of causing a material adjustment to the carrying amount of assets and
liabilities within the next financial year relate to impairment of goodwill and to useful lives of property, plant and equipment and finite-lived intangible assets. There have been no changes to the applied useful lives of property, plant and
equipment or finite-lived intangible assets, or in the application of other significant accounting estimates, and no impairment losses have been recognized during the first nine months of 2015 or 2014.
The unaudited condensed consolidated interim financial statements do not include all disclosures for critical accounting estimates and
judgments that are required in the annual consolidated financial statements, and should be read in conjunction with the Company s annual consolidated financial statements for the year ended December 31, 2014.
| Consolidated | ||||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
| 2015 | 2014 | 2015 | 2014 | |||||||||||||
| (EUR 000) | (EUR 000) | |||||||||||||||
| Revenue from the rendering of services | 869 | 1,242 | 2,397 | 4,496 | ||||||||||||
| License income | 1,248 | 2,008 | 3,744 | 6,661 | ||||||||||||
| Total revenue | 2,117 | 3,250 | 6,141 | 11,157 | ||||||||||||
| Revenue from external customers (geographical) | ||||||||||||||||
| USA | 1,807 | 2,076 | 5,537 | 9,051 | ||||||||||||
| Germany | 135 | 1,174 | 428 | 2,106 | ||||||||||||
| Switzerland | 175 | 175 | ||||||||||||||
| Total revenue | 2,117 | 3,250 | 6,141 | 11,157 |
Note 5 Segment Information
We are managed and operated as one business unit. No separate business areas or separate business units have been identified in relation to
product candidates or geographical markets. Accordingly, we do not disclose information on business segments or geographical markets, except for the geographical information on revenue included in Note 4.
Notes to the Unaudited Condensed Consolidated Interim Financial Statements
Note 6 Warrants and Share-based Payment
established warrant programs, or equity-settled share-based payment transactions, as an incentive for all of our employees, members of our Board of Directors and select external consultants.
Warrants are granted by our Board of Directors in accordance with authorizations given to it by our shareholders. As of September 30,
2015, our Board of Directors has been authorized to grant up to 8,019,404 warrants to our employees, board members and select consultants without pre-emptive subscription rights for our shareholders. As of September 30, 2015, 3,019,404 warrants
had been granted, of which 1,292,462 warrants have been exercised, 19,580 warrants have been cancelled, 2,168 warrants have expired, and 108,399 warrants have been forfeited and will not vest. As of September 30, 2015, 5,000,000 warrants remain
available for future grant to employees, board members and select consultants without pre-emptive subscription rights for our shareholders. Each warrant carries the right to subscribe for one ordinary share of a nominal value of DKK 1. The exercise
price is fixed at the fair market value of our ordinary shares at the time of grant as determined by our Board of Directors. The exercise prices for outstanding warrants under our warrant programs are approximately 6.48 and 8.00
depending on the grant dates. Vested warrants may generally be exercised in two annual exercise periods, although warrants granted in November 2014 are exercisable in four annual exercise periods.
table specifies the warrant activity during the first nine months of 2015:
| Total Warrants | Weighted Average Exercise Price EUR | |||||||
| Outstanding at December 31, 2014 | 2,999,824 | 5.70 | ||||||
| Granted during the year | ||||||||
| Exercised during the year | (1,292,462 | ) | 3.34 | |||||
| Forfeited during the year | (108,399 | ) | 7.65 | |||||
| Expired during the year | (2,168 | ) | 3.06 | |||||
| Outstanding at September 30, 2015 | 1,596,795 | 7.48 | ||||||
| Vested at the balance sheet date | 766,285 | 7.77 |
Warrant Compensation Costs
Warrant compensation costs are determined with basis in the grant date fair value of the warrants granted and recognized in the statement of
profit or loss over the vesting period of the warrants granted.
| Consolidated | ||||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
| 2015 | 2014 | 2015 | 2014 | |||||||||||||
| (EUR 000) | (EUR 000) | |||||||||||||||
| Research and development costs | 120 | 31 | 458 | 192 | ||||||||||||
| General and administrative expenses | (9 | ) | 274 | 646 | 627 | |||||||||||
| Total warrant compensation costs | 111 | 305 | 1,104 | 819 |
Notes to the Unaudited Condensed Consolidated Interim Financial Statements
Note 7 Share Capital
The share capital of Ascendis Pharma A/S consists of 25,128,242 shares at a nominal value of DKK 1. Following the Company s IPO, all
share classes were converted into ordinary shares in the ratio of 1:1.
On January 13, 2015, as preparation for the IPO, the
Company s shareholders approved an issuance of bonus shares in the ratio of 3:1 of the Company s authorized, issued and outstanding ordinary and preference shares, thereby increasing the number of shares from 4,233,945 shares to 16,935,780
shares. All share and per share data in this report, including those relating to the warrants, give retrospective effect to the bonus issuance of shares.
On February 2, 2015, the Company closed its IPO of 6,900,000 American Depositary Shares, or ADSs , on The NASDAQ Global Select
Market under the symbol ASND . Each ADS represents one ordinary share. The 6,900,000 ADSs include the exercise in full by the underwriters of their option to purchase additional ADSs. As part of the IPO, the Company s share capital
was increased from 16,935,780 shares to 23,835,780 shares and all classes of preference shares converted into ordinary shares.
May 21, May 29, June 4, and June 9, 2015, an aggregate of 361,046 warrants were exercised, increasing the Company s share capital from 23,835,780 shares to 24,196,826 shares.
On August 27, August 28, September 3, and September 8, 2015, an aggregate of 931,416 warrants were exercised,
increasing the Company s share capital from 24,196,826 shares to 25,128,242 shares.
In total, 1,245,476 of the 1,292,462 warrants
exercised during 2015 had expiration dates in September 2015.
Note 8 Subsequent Events
No events have occurred after the balance sheet date that would have a significant impact on the results or financial position of the Company.