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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 / (Loss) for the Three Months Ended March 31, 2016 and 2015 | 2 | |||
| Unaudited Condensed Consolidated Interim Statements of Financial Position as of March 31, 2016 and December 31, 2015 | 3 | |||
| Unaudited Condensed Consolidated Interim Statements of Changes in Equity at March 31, 2016 and 2015 | 4 | |||
| Unaudited Condensed Consolidated Interim Cash Flow Statements for the Three Months Ended March 31, 2016 and 2015 | 5 | |||
| Notes to the Unaudited Condensed Consolidated Interim Financial Statements | 6 |
Unaudited Condensed Consolidated Interim Statements of Profit or Loss
and Other Comprehensive Income / (Loss) for the Three Months Ended March 31
| Consolidated | ||||||||||
| Notes | 2016 | 2015 | ||||||||
| (EUR 000) | ||||||||||
| Revenue | 4 | 1,258 | 2,081 | |||||||
| Research and development costs | (16,242 | ) | (7,334 | ) | ||||||
| General and administrative expenses | (2,908 | ) | (2,405 | ) | ||||||
| Operating profit / (loss) | (17,892 | ) | (7,658 | ) | ||||||
| Finance income | 20 | 9,135 | ||||||||
| Finance expenses | (2,764 | ) | (9 | ) | ||||||
| Profit / (loss) before tax | (20,636 | ) | 1,468 | |||||||
| Tax on profit / (loss) for the period | 118 | (46 | ) | |||||||
| Net profit / (loss) for the period | (20,518 | ) | 1,422 | |||||||
| Other comprehensive income / (loss) | ||||||||||
| Items that may be reclassified subsequently to profit or loss: | ||||||||||
| Exchange differences on translating foreign operations | 21 | (18 | ) | |||||||
| Other comprehensive income / (loss) for the period, net of tax | 21 | (18 | ) | |||||||
| Total comprehensive income / (loss) for the period, net of tax | (20,497 | ) | 1,404 | |||||||
| Profit / (loss) for the period attributable to owners of the Company | (20,518 | ) | 1,422 | |||||||
| Total comprehensive income / (loss) for the period attributable to owners of the Company | (20,497 | ) | 1,404 | |||||||
| EUR | EUR | |||||||||
| Basic earnings / (loss) per share | (0.82 | ) | 0.07 | |||||||
| Diluted earnings / (loss) per share | (0.82 | ) | 0.06 | |||||||
| Number of shares used for calculation (basic) | 25,128,242 | 21,382,447 | ||||||||
| Number of shares used for calculation (diluted) (1) | 25,128,242 | 24,382,271 |
Unaudited Condensed Consolidated Interim Statements of Financial Position
| Notes | March 31, 2016 | December 31, 2015 | ||||||||
| (EUR 000) | ||||||||||
| Assets | ||||||||||
| Non-current assets | ||||||||||
| Intangible assets | 3,495 | 3,495 | ||||||||
| Property, plant and equipment | 2,331 | 2,355 | ||||||||
| Deposits | 297 | 270 | ||||||||
| 6,123 | 6,120 | |||||||||
| Current assets | ||||||||||
| Trade receivables | 888 | 1,064 | ||||||||
| Other receivables | 690 | 338 | ||||||||
| Prepayments | 2,132 | 3,819 | ||||||||
| Income taxes receivable | 981 | 784 | ||||||||
| Cash and cash equivalents | 101,865 | 119,649 | ||||||||
| 106,556 | 125,654 | |||||||||
| Total assets | 112,679 | 131,774 | ||||||||
| Equity and liabilities | ||||||||||
| Equity | ||||||||||
| Share capital | 7 | 3,374 | 3,374 | |||||||
| Other reserves | 7,779 | 5,678 | ||||||||
| Retained earnings | 90,759 | 111,277 | ||||||||
| Total equity | 101,912 | 120,329 | ||||||||
| Current liabilities | ||||||||||
| Trade payables and other payables | 8,337 | 8,373 | ||||||||
| Deferred income | 2,327 | 3,072 | ||||||||
| Income taxes payable | 103 | |||||||||
| 10,767 | 11,445 | |||||||||
| Total liabilities | 10,767 | 11,445 | ||||||||
| Total equity and liabilities | 112,679 | 131,774 |
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, 2015 | 3,374 | (85 | ) | 5,763 | 111,277 | 120,329 | ||||||||||||||
| Loss for the period | (20,518 | ) | (20,518 | ) | ||||||||||||||||
| Other comprehensive income / (loss), net of tax | 21 | 21 | ||||||||||||||||||
| Total comprehensive income / (loss) | 21 | (20,518 | ) | (20,497 | ) | |||||||||||||||
| Share-based payment (Note 6) | 2,080 | 2,080 | ||||||||||||||||||
| Equity at March 31, 2016 | 3,374 | (64 | ) | 7,843 | 90,759 | 101,912 |
| 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 | ||||||||||||||
| Profit for the period | 1,422 | 1,422 | ||||||||||||||||||
| Other comprehensive income / (loss), net of tax | (18 | ) | (18 | ) | ||||||||||||||||
| Total comprehensive income / (loss) | (18 | ) | 1,422 | 1,404 | ||||||||||||||||
| Share-based payment (Note 6) | 556 | 556 | ||||||||||||||||||
| Capital increase | 929 | 108,887 | 109,816 | |||||||||||||||||
| Cost of capital increase | (8,396 | ) | (8,396 | ) | ||||||||||||||||
| Equity at March 31, 2015 | 3,201 | (89 | ) | 4,606 | 141,473 | 149,190 |
Unaudited Condensed Consolidated Interim Cash Flow Statements for the
Three Months Ended March 31
| Consolidated | ||||||||||
| Notes | 2016 | 2015 | ||||||||
| (EUR 000) | ||||||||||
| Operating activities | ||||||||||
| Net profit / (loss) for the period | (20,518 | ) | 1,422 | |||||||
| Reversal of finance income | (20 | ) | (9,135 | ) | ||||||
| Reversal of finance expenses | 2,764 | 9 | ||||||||
| Reversal of tax charge | (118 | ) | 46 | |||||||
| Adjustments for: | ||||||||||
| Share-based payment | 2,080 | 556 | ||||||||
| Depreciation and amortization | 162 | 123 | ||||||||
| Changes in working capital: | ||||||||||
| Deposits | (27 | ) | (10 | ) | ||||||
| Trade receivables | 175 | 441 | ||||||||
| Other receivables | (351 | ) | (34 | ) | ||||||
| Prepayments | 1,686 | 248 | ||||||||
| Trade payables and other payables | (15 | ) | 464 | |||||||
| Deferred income | (744 | ) | (1,248 | ) | ||||||
| Cash flows generated from / (used in) operations | (14,926 | ) | (7,118 | ) | ||||||
| Finance income received | 20 | 51 | ||||||||
| Finance expenses paid | (2 | ) | (9 | ) | ||||||
| Income taxes received / (paid) | 24 | (59 | ) | |||||||
| Cash flows from / (used in) operating activities | (14,884 | ) | (7,135 | ) | ||||||
| Investing activities | ||||||||||
| Acquisition of property, plant and equipment | (138 | ) | (86 | ) | ||||||
| Cash flows used in investing activities | (138 | ) | (86 | ) | ||||||
| Financing activities | ||||||||||
| Capital increase | 109,816 | |||||||||
| Cost of capital increase | (8,396 | ) | ||||||||
| Cash flows from / (used in) financing activities | 101,420 | |||||||||
| Increase / (decrease) in cash and cash equivalents | (15,022 | ) | 94,199 | |||||||
| Cash and cash equivalents at January 1 | 119,649 | 50,167 | ||||||||
| Effect of exchange rate changes on balances held in foreign currencies | (2,762 | ) | 9,084 | |||||||
| Cash and cash equivalents at March 31 | 101,865 | 153,450 |
Notes to the Unaudited Condensed Consolidated Interim Financial Statements
Note 1 General Information
Pharma A/S, together with its subsidiaries, is a clinical stage biopharmaceutical company applying its TransCon technology to develop a pipeline of therapeutics with best-in-class profiles to address significant unmet medical needs. Ascendis Pharma
A/S was incorporated in 2006 and 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
The address of the Company s registered office is Tuborg Boulevard 5, DK-2900, Hellerup, Denmark.
On February 2, 2015, the Company completed an initial public offering, or 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 May 19, 2016.
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 Reporting . 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, 2015 and accompanying notes, which have been prepared in accordance with IFRS as issued by the International Accounting Standards
Board, and as adopted by the European Union.
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, 2015.
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.
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 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.
Notes to the Unaudited Condensed Consolidated Interim Financial Statements
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, recognition of accruals for manufacturing and clinical trial activities, 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 three
months of 2016 or 2015.
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, 2015.
| Consolidated | ||||||||
| Three Months Ended March 31, | ||||||||
| 2016 | 2015 | |||||||
| (EUR 000) | ||||||||
| Revenue from the rendering of services | 513 | 833 | ||||||
| License income | 745 | 1,248 | ||||||
| Total revenue | 1,258 | 2,081 | ||||||
| Revenue from external customers (geographical) | ||||||||
| USA | 1,258 | 1,893 | ||||||
| Germany | 188 | |||||||
| Total revenue | 1,258 | 2,081 |
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.
Note 6 Warrants and Share-based Payment
Pharma A/S has established warrant programs, equity-settled share-based payment transactions, as an incentive for all of our employees, members of the Company s Board of Directors and select external consultants.
Warrants are granted by the Board of Directors in accordance with authorizations given to it by the shareholders of Ascendis Pharma A/S and
each warrant granted is exercisable for one ordinary share of Ascendis Pharma A/S. As of March 31, 2016, 4,220,812 warrants had been granted, of which 19,580 warrants have been cancelled, 1,292,462 warrants have been exercised, 2,168 warrants have
expired without being exercised, and 115,743 warrants have been forfeited. As of March 31, 2016, the Board of Directors was
Notes to the Unaudited Condensed Consolidated Interim Financial Statements
authorized to grant up to 3,798,592 additional warrants to our employees, board members and select consultants without pre-emptive subscription rights for the shareholders of Ascendis Pharma A/S.
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 the Board of Directors. The exercise
prices of our outstanding warrants are approximately 6.48, 8.00, 15.68 and 16.33 per warrant depending on the grant dates of such warrants. Depending on the warrant program under which our warrants have been issued, vested
warrants may either be exercised in two or four annual exercise periods. Other than with respect to exercise periods, the terms of the programs under which outstanding warrants have been issued are similar.
table specifies the warrant activity during the three months ended March 31, 2016:
| Total Warrants | Weighted Average Exercise Price EUR | |||||||
| Outstanding at December 31, 2015 | 2,615,903 | 10.69 | ||||||
| Granted during the period | 178,500 | 16.33 | ||||||
| Exercised during the period | ||||||||
| Forfeited during the period | (3,544 | ) | 10.83 | |||||
| Expired during the period | ||||||||
| Outstanding at March 31, 2016 | 2,790,859 | 11.05 | ||||||
| Vested at the balance sheet date | 1,000,735 | 8.23 |
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 March 31, | ||||||||
| 2016 | 2015 | |||||||
| (EUR 000) | ||||||||
| Research and development costs | 1,007 | 191 | ||||||
| General and administrative expenses | 1,073 | 365 | ||||||
| Total warrant compensation costs | 2,080 | 556 |
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 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.
Notes to the Unaudited Condensed Consolidated Interim Financial Statements
On 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.
Note 8 Subsequent Events
have occurred after the balance sheet date that would have a significant impact on the results or financial position of the Company.