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The term refers to glycated haemoglobin, which develops when haemoglobin joins with glucose in the blood, becoming glycated' IgA: Immunoglobulin A (an anti-body.) Also referred to as IgA1 IgA Nephropathy (IgAN): a rare autoimmune kidney inflammatory disease, within the glomerulone-phritis class Ileum: the distal end of the small intestine, also called the bowel arm, is 2 4 meters long and connects to the colon 106 Calliditas Therapeutics | Annual Report 2022 Immunoglobulin: antibodies (proteins) used by the body's immune system to detect and identify foreign substances that can cause damage Incidence: number of new patients per year in a disease Immunosuppressive agents: a class of drugs that suppress, or reduce, the strength of the body's immune system Immunotherapy: Immunotherapy is the treatment of disease by acti-vating or suppressing the immune system Investigator-Led Study: Inves-tigator led studies are clinical studies initiated and managed by a non-pharmaceutical company researchers, like individual inves-tigators, institutions, collaborative study groups or cooperative groups IPF: Idiopathic pulmonary fibrosis (IPF) is a condition in which the lungs become scarred and breathing becomes increasingly difficult, the causes of which are unclear KDIGO: Kidney Disease: Improving Global Outcomes, a non-profit organization that develops global guidelines for treatment in kidney disease Monomeric: a monomeric mole-cule is one that is a single unit and can be bonded to other identical molecules to form a polymer NADPH Oxidase: NADPH oxidase (nicotinamide adenine dinucleotide phosphate oxidase,) also known as NOX enzymes, are membrane-bound enzyme complexes, which catalyse the production of reactive oxygen species Nephrologist: a physician special-ized in kidney disease Off-label prescription: prescription of an approved drug outside the approved indication On-label: prescription of an approved drug within the approved indication Open-label: An open-label trial is one in which information about which treatment is being admin-istered is not withheld from trial participants and researchers Orphan disease: a rare disease that falls within the criteria of orphan drug law Oxidative Stress: Oxidative stress is when there is an imbalance between the production and the accumulation of reactive oxygen species (ROS) in cells and tissues and the body' ability to detoxify these reactive products PBC: Primary biliary cholangitis, a rare autoimmune fatty liver disease Peyer's patches: lymph tissue of the ileum, the distal part of the small intestine, part of the body's immune system Prevalence: number of people in a population having a disease Proteinuria: a condition charac-terized by the presence of greater than normal amounts of protein in the urine; a measure of leakage in the kidney's filtration function Proof of Concept Trial: Proof of Concept Principle studies are an early stage of clinical drug develop-ment when a compound has shown potential in animal models and early safety testing, and often is the step between a Phase 1 and a dose ranging Phase 2 study RAS: Renin-angiotensin system, which regulates blood pressure and fluid in the body; a RAS blocker lowers blood pressure; RAS blockade is when a patient is on drugs that block RAS, which can be ACEIs and/or ARBs Randomised: A randomised trial is one in which participants are randomly assigned to 2 or more groups Reactive Oxygen Species: Reactive oxygen species are highly reactive chemical molecules formed through the electron acceptability of O Redox Homeostasis: Redox homeostasis is attained by the regulation of the formation and removal of reactive oxygen species (ROS) from the body system RRT: renal replacement therapy; a treatment for terminal kidney failure where the function of the diseased kidney is replaced by dial-ysis or kidney transplantation Transient Elastography: Transient elastography (FibroScan) is an ultra-sound exam that uses pulse-echo ultrasound acquisitions to measure liver stiffness in kilopascals (kPa,) which allows for a noninvasive assessment of liver stiffness UPCR: Urine protein creatinine ratio, a measure of leakage in the kidney's filtration function Calliditas Therapeutics | Annual Report 2022 107 Calliditas Therapeutics AB Kungsbron 1, D5, SE-111 22 Stockholm, Sweden Phone: +46 (0)8 411 3005 Mail: info@calliditas.com Web: www.calliditas.com
Antibodies such as IgA have sugar chains attached to them. These sugar chains contain, among other things, galactose Glomerulus: An anatomical struc-ture of the kidney. Blood vessel bundles where the blood is filtered to urine Glomerulonephritis: an inflamma-tion of the glomeruli, the kidney's filtration function HbA1c: HbA1c is a term commonly used in relation to diabetes and is a measure of average blood sugar levels.
A measure of the kidney's ability to filter and purify the blood. When a kidney disease worsens, eGFR decreases EMA: European Medicines Agency ESRD: end-stage renal disease Enteric: relating to or occurring in the small intestine. The enteric coating on Nefecon refers to the fact that it is designed to dissolve in the ileum, which is in the distal part of the small intestine FDA: US Food and Drug Adminis-tration Galactose: a type of sugar that is similar to glucose.
It is used to calculate eGFR. High creatinine corresponds to low eGFR Dimeric: Also known as polymeric', a dimeric molecule is composed of two identical simpler molecules (monomers) DKD: Diabetic kidney disease (DKD,) also called diabetic nephro-pathy, is kidney disease that is due to Type 1 or Type 2 diabetes Double blind: A double-blind study is one in which neither the participants nor the experimenters know who is receiving a particular treatment eGFR: estimated glomerular filtra-tion rate.
Corticosteroids are used systemi-cally for the treatment of inflamma-tory and immunological diseases, including IgA nephropathy, autoim-mune hepatitis and primary biliary cholangitis Creatinine: a chemical substance made by muscles. Measured in the blood circulation and produced in a relatively even amount. Eliminated through the kidneys. Too high a concentration in the blood is a measure of impaired kidney func-tion.
All people have some degree of autoimmunity, but when it gets too high it becomes harmful Budesonide: a potent glucocor-ticoid with rapid elimination that fits very well with local treatment where you want to minimize systemic side effects CAF: A cancer-associated fibroblast (CAF) is a key cell type within the tumor microenvironment. CAFs promote tumor growth via a variety of mechanisms, including initiating the remodelling of the extracellular matrix or secreting cytokines Corticosteroids: a class of steroid hormones and synthetic analogues.
A rise in ALP levels indicates impaired bile flow in the liver Angiotensin Receptor Blockers (ARBs): ARBs work by blocking the AT1 receptors that the hormone angiotensin II acts on, thereby limiting its action and lowering blood pressure Autoimmune disease: Disease that is manifested because of the immune system's harmful attack with autoantibodies on the body's own tissue.
Angiotensin II is activated by a molecule called Angiotensin Converting Enzyme (ACE,) which is blocked by ACE inhibitors Adaptive Design: An adaptive design trial is one in which the design allows for modifications to the trial and/or statistical proce-dures of the trial after its initiation without undermining its validity and integrity ALP: Alkaline phosphatase (ALP) is an enzyme which is used as a marker in PBC.
Reich Department Division Director of Nephrology, University of Toronto; Senior Scientist, Toronto General Hospital Research Institute; Nephrologist, University Health Network, Toronto, Ontario, Canada H rnan Trimarchi Professor of Medicine, Universidad Cat lica Argentina; Head, Nephrology Service, Hospital Brit nico; Head, Kidney transplant unit, Hospital Brit nico, Buenos Aires, Argentina Hong Zhang Professor of Medicine and Doctoral supervisor, Nephrology Division, Peking University First Hospital, Peking University Institute of Nephrology, Beijing, China Jonathan Barratt Professor, Department of Infection, Immunity and Inflam-mation, University of Leicester; Honorary Consultant Nephrologist in the John Walls Renal Unit, Leicester General Hospital, Leicester, UK J rgen Floege Professor, head of the Department of Renal and Hyper-tensive Diseases, Rheumatological and Immunological Diseases (Medicine II) at the Aachen University Hospital; Director of the Department of Nephrology and Clinical Immunology at the University of Aachen, Aachen, Germany Richard Lafayette Professor of Medicine (Nephrology), the Stanford University Medical Center; Director, the Stanford Glomerular Disease Center, Stanford, California, US Vladimir Tesar Professor, Head of the Department of Nephrology, 1st Faculty of Medicine, Charles University, Prague, Czech Republic 104 Calliditas Therapeutics | Annual Report 2022 Financial Calendar Interim Report for the period January 1 March 31, 2023 May 16, 2023 Annual General Meeting 2023 May 30, 2023 Interim Report for the period January 1 June 30, 2023 August 17, 2023 Interim Report for the period January 1 September 30, 2023 November 16, 2023 Year-End Report for the period January 1 December 31, 2023 February 22, 2024 Calliditas Therapeutics | Annual Report 2022 105 Glossary ACE inhibitors (ACEIs): Angiotensin Converting Enzyme inhibitors (ACEis) are a type of blood pressure medication that work by limiting the effects of the hormone angio-tensin II, which has a constricting effect on blood vessels and stim-ulates salt and water retention in the body and thus increases blood pressure.
Holding in the Company: Sandra Frithiof holds 75,000 options1. Calliditas Therapeutics | Annual Report 2022 103 Scientific Steering Committee Some of the most prominent IgA nephropathy specialists in the world serve as external advisors and members of the Company's advisory board. Brad H. Rovin Professor, Director of the Division of Nephrology and Vice Chairman of Medicine for Research at the Ohio State University Wexner Medical Center, Columbus, Ohio, US Heather N.
Head of HR since 2020. Education: Bachelor's Degree in Human Resource Management from rebro University, Sweden. Experience: Sandra Frithiof has more than 23 years of HR experience in different industries. Before joining Calliditas Sandra worked as Head of HR and COO at Ramberg Advokater. Previous HR positions also include Karolinska University Hospital, UTC, CGI and Manpower Group.
Prior to joining Calliditas, Mr. Schur was a Partner in the Life Sciences practice group at Goodwin Procter LLP, and before that a partner and co-managing partner of the Paris Office of Dechert LLP. Holding in the Company: Jonathan Schur holds 165,000 options1. 102 Calliditas Therapeutics | Annual Report 2022 1 Holding in ESOP 2020, ESOP 2021 and/or ESOP 2022 Sandra Frithiof Head of Human Resources Born 1975.
Holding in the Company: Richard Philipson holds 185,000 options1. Jonathan Schur Group General Councel Born 1953. Group General Counsel since 2020. Education: Bachelor's Degree in 1975 from Harvard University, J.D from Harvard Law School. Experience: Jonathan Schur has over 40 years of experience as a lawyer, is a member of the New York Bar, and a former member of the Paris Bar.
Before Trizell, he worked for Takeda as an Executive Medical Director and spent 16 years at GlaxoSmithKline, where he held a number of senior positions, including Disease Area Head and Acting Chief Medical Officer for the Rare Diseases Unit. Before joining the industry, Richard worked as a physician in several clinical positions with various patient popu-lations, including patients with IgA nephropathy.
He has exten-sive experience in rare diseases, having brought several products from early development to the market. Prior to joining Calliditas, Richard worked as CMO with the UK-based biotech company Trizell where he led the Adstiladrin phase 3 clinical program and Biologics License Application in non-muscle invasive bladder cancer, submitted to the FDA in September 2019.
Chief Medical Officer since 2020. Education: BSc in Biomedical Sciences at London University and MB MS, Middlesex Hospital Medical School. Member of the Royal College of Physicians and Fellow of the Faculty of Pharmaceutical Medicine. Experience: Dr. Richard Philipson is a physician with 24 years of experience in the pharmaceutical industry from both large pharmaceutical companies and smaller biotechs.
Andrew began his career in the pharmaceutical industry at Purdue Pharma and held several sales and marketing positions, including responsible for the company's brands and led a multifunctional team for a multi-billion pain medication franchise. Holding in the Company: Andrew Udell holds 26,000 share in the Company and 235,000 options1. Calliditas Therapeutics | Annual Report 2022 101 Management team Richard Philipson Chief Medical Officer Born 1964.
Andrew Udell President, North America Born 1970. Head of North America Commercial since 2019. Education: BSc from Lehigh University. MBA from the University of Connecticut. Experience: Andrew Udell has more than 20 years of commer-cial experience in the pharmaceutical industry. Before joining Calliditas, Andrew worked as Vice President of North America Commercial at NeuroDerm.
Experience: Frank Bringstrup has over 17 years of experience in the pharmaceutical industry within regulatory affairs and health authority interactions. Prior to joining Calliditas, he worked in various positions at Novo Nordisk A/S. He started his professional career first as a clinic doctor and then Frederiksborg County Medical Advisor. Holding in the Company: Frank Bringstrup holds 8,000 share in the Company and 95,000 options1.
VP Regulatory Affairs since 2019. Education: Medical education from the University of Copen-hagen. He has a diploma in Managing Medical Product Innovation (MMPI) from the Copenhagen School of Economics, a diploma in business administration from Warwick University, and a post graduate specialist course in public health science from the National Board of Health, Denmark.
Previously, he was CFO and COO at Birdstep Technology/Techstep ASA, listed on the Oslo Stock Exchange, where he, among other things, was in charge of the acquisition and reversed listing of Teki Solu-tions. Previous CFO positions also include Phone Family, Teligent Telecom and Wayfinder Systems. Holdings in the Company: Fredrik Johansson holds 42,750 shares in the Company and 205,000 options1. 100 Calliditas Therapeutics | Annual Report 2022 1 Holding in ESOP 2020, ESOP 2021 and/or ESOP 2022 Frank Bringstrup Vice President Regulatory Affairs Born 1959.
Fredrik Johansson Chief Financial Officer Born 1977. CFO since 2017. Education: Studies in Business Law at J nk ping Interna-tional Business School. Studies in Business and American law, Economics and Finance at Georgia State University, University of South Carolina and Lund University. Experience: Fredrik Johansson has extensive experience in exec-utive positions, primarily within telecom and software.
Prior to this, Ren e Aguiar-Lucander was the European Group Head and Managing Director at a global investment bank and has more than 12 years' experience in corporate finance. Prior to her career in investment banking, she was the Head of European Sales and Marketing in a company focused on the sale of software for financial services. Holdings in the Company: Ren e Aguiar-Lucander holds 643,000 shares in the Company and 591,000 options1.
MBA from INSEAD. Experience: Before joining Calliditas, Ren e Aguiar-Lucander was a Partner and COO of Omega Fund Management, an international venture capital company focused on investments within the life science sector. Before that, she served as a Partner in the venture capital group 3i Group plc in London, where she managed the publicly quoted assets and was co-head of the global healthcare and technology portfolio.
Holdings in the Company: Elisabeth Bj rk holds 5,356 share awards in LTIP 2022. Independent in relation to the Company and its management and in relation to major shareholders. Calliditas Therapeutics | Annual Report 2022 99 Management team Renee Aguiar-Lucander Chief Executive Officer Born 1962. CEO since 2017. Education: BA in Finance from Stockholm School of Economics.
Throughout her career at AstraZeneca, she has gained broad drug development experience covering clinical development phase I-IV, large outcomes programs, major global filings and health authority interactions (FDA, EMA, Japan) and commercial strategy/implementation. Other current assignments: Board member in Rocket Pharmaceuticals, Pharvaris NV, Chalmers University of Technology, Chalmers Ventures.
Board member since 2022. Education: MD degree, Karolinska Insti-tute, Stockholm and Associate Professor, Medicine, Uppsala University Board Committees: Member of the Remu-neration Committee. Experience: Elisabeth Bj rk is an endo-crinologist by training and an asso-ciate professor of medicine at Uppsala University, Sweden. Elisabeth Bj rk is the Senior Vice President, Head of Late-stage Development, Cardiovascular, Renal and Metabolism (CVRM), BioPharma-ceuticals R&D at AstraZeneca leading the global development of medicines within this area.
Other current assignments: CFO of Phatom Pharmaceuticals, Inc. Holdings in the Company: Molly Henderson holds 100 shares in the Company, 4,327 share awards in board LTIP 2020, 4,086 share awards in LTIP 2021 and 5,356 share awards in LTIP 2022. Independent in relation to the Company and its management and in relation to major shareholders. Elisabeth Bj rk Non-executive Director Born 1961.
She was previously the CFO of Urogen and Executive Vice President of Advaxis, Inc, the CFO of Iovance Biothera-peutics, Inc. (formerly Lion Biotechnologies, Inc.) and before that the Chief Business and Financial Officer and Senior Vice Pres-ident of VirtualScopics, Inc. Molly has also advised start-up companies in Switzerland, and was a Manager in the audit division of PricewaterhouseCoopers LLP.
Molly Henderson Non-executive Director Born 1970. Board member since 2020. Education: M.B.A. and B.S. degree from the State University of New York at Buffalo. Board Committees: Member of the Audit Committee. Experience: Molly Henderson has served as the CFO of several listed life science companies for over 17 years. Currently, she is the CFO of Phathom Pharmaceu-tical, Inc.
Other current assignments: Board member in CTI BioPharma, TriSalus Life Sciences, Kura Oncology, Soligenix and Celularity. Holdings in the Company: Diane Parks holds 8,449 shares in the Company, 4,327 share awards in board LTIP 2020, 4,086 share awards in LTIP 2021 and 5,356 share awards in LTIP 2022. Indepen-dent in relation to the Company and its management and in relation to major shareholders.
Board member since 2019. Education: Master's degree from Kansas State University and an MBA from Georgia State University. Board Committees: Member of the Remu-neration Committee. Experience: Diane Parks is a senior executive with deep sales and marketing experience from the US, where she has held positions such as Head of US Commercial for Kite Pharma, VP of Sales for Amgen and Head of Global Marketing at Pharmacyclics.
Other current assignments: Henrik is also a Board member in Midsona AB. Holdings in the Company: Henrik Sten-qvist holds 10,000 shares in the Company and 5,356 share awards in LTIP 2022. Independent in relation to the Company and its management and in relation to major shareholders. 98 Calliditas Therapeutics | Annual Report 2022 Diane Parks Non-executive Director Born 1952.
Education: Master of Science in Business Administration and Economics, University of Link ping. Board Committees: Chairman of the Audit Committee. Experience: Henrik Stenqvist has served as CFO of several listed life science companies and currently, he is the CFO of SOBI. Previous positions include CFO at Recipharm, CFO at Meda, Regional Finance Director at AstraZeneca, Finance Director at Astra Export & Trading and Board member of MedCap AB.
Holdings in the Company: Elmar Schnee holds 33,236 shares in the Company, 14,063 share awards in LTIP 2020, 10,624 share awards in LTIP 2021 and 13,926 share awards in LTIP 2022. Indepen-dent in relation to the Company and its management and in relation to major shareholders. Henrik Stenqvist Non-executive Director Born 1967. Board member since 2022.
He has also served as General Partner and member of the Exec-utive Board of Merck KGaA and has held previously several senior global manage-ment positions with UCB and Sanofi. Other current assignments: Chairman of the board of directors of ProCom Rx SA, Moleac Pte Lts and Noorik Biopharma-ceuticals AG as well as a member of the board of directors of Kuste Biopharma, Mindmaze SA and Damian Pharma AG.
Independent in rela-tion to the Company and its management and in relation to major shareholders. Elmar Schnee Chairman Born 1959. Board member since 2019. Education: Master's degree in marketing and management from SIB. Board Committees: Chairman of the Remuneration Committee. Experience: Elmar Schnee was previ-ously CEO of Merck Serono and was instrumental in the acquisition of Serono by Merck KGaA.
In addition to working for Genzyme/Sanofi Genzyme, Hilde has since 2005 worked as non-executive director and Board member of Probi, Pronova, Clavis, Bergenbio and Algeta. Other current assignments: Hilde is currently an industrial advisor to Investinor and Board member of PCI Biotech, OncoZenge, Herantis Pharma, Sedana Medical and Bio-Me. Holdings in the Company: Hilde Furberg holds 53,199 shares in the Company, 4,327 share awards in board LTIP 2020, 4,086 share awards in LTIP 2021 and 5,356 share awards in LTIP 2022.
She has extensive experience of leadership from her 35 years in sales, marketing, strategy and management in Pharma/Biotech. Her experience is in various fields of rare diseases, which she gained working in small companies and large global corporations. Hilde has worked in companies such as Genzyme and Baxter, she was most recently SVP and General Manger/European Head of Rare Diseases at Sanofi Genzyme.
Calliditas Therapeutics | Annual Report 2022 97 Board of Directors Hilde Furberg Non-executive Director Born 1958. Board member since 2014. Education: Master of Science in Engi-neering from Oslo University, Norway. Board Committees: Member of the Audit Committee. Experience: Hilde Furberg is an indepen-dent consultant and professional Board member.
We believe that the examination has provided us with sufficient basis for our opinions. Opinions A corporate governance statement has been prepared. Disclosures in accordance with chapter 6 section 6 the second paragraph points 2-6 the Annual Accounts Act and chapter 7 section 31 the second paragraph the same law are consistent with the annual accounts and the consolidated accounts and are in accordance with the Annual Accounts Act.
The scope of the audit Our examination has been conducted in accordance with FAR's standard RevR 16 The auditor's examination of the corporate governance statement. This means that our examination of the corporate governance statement is different and substantially less in scope than an audit conducted in accordance with International Standards on Auditing and generally accepted auditing stan-dards in Sweden.
Auditor's report on the corporate governance statement To the general meeting of the shareholders of Calliditas Therapeutics AB (Publ), corporate identity number 556659-9766 Stockholm, April 26, 2023 Ernst & Young AB Anna Svanberg Authorized Public Accountant Engagement and responsibility It is the Board of Directors who is responsible for the corporate governance statement for the year 2022 on pages 92-97 and that it has been prepared in accordance with the Annual Accounts Act.
Internal Audit The Board of Directors has assessed the need for an internal audit function and decided that such a function is not justified in Calliditas, taking into account the scope of operations and that the Board's monitoring of internal control is considered sufficient to ensure that internal control is effective. The Board of Directors reassess the requirement when changes take place that may give rise to a reassessment and at least once per year.
The Board of Directors has also adopted an information policy governing the company's disclosure of informa-tion. The company did also in 2021 initiate an imple-mentation of an internal control structure according to the Sarbanes-Oxely Act to meet the requirements for companies listed in the USA. In addition to the abovementioned internal control, there is also internal, business-specific control of data as regards research and development, as well as quality control including systematic surveillance and evaluation of the compa-ny's development and manufacturing operations.
The CEO also reports on these matters at each ordinary Board meeting. The compa-ny's compliance with relevant policy's and guidelines are assessed annually. The results from these assess-ments are compiled by the CFO in the company and then reported to the Board of Directors and the Audit Committee annually. Information and communication The company has information and communication channels to promote the accuracy of the financial reporting and to facilitate reporting and feedback from operations to the Board of Directors and senior management, for example by making corporate gover-nance documents such as internal policies, guidelines and instructions regarding the financial reporting available and known to the employees concerned.
In agreements with essential subcontractors, the company has secured the right to audit each respective subcontractors' fulfill-ment of relevant services, including quality aspects. Monitoring Compliance with, and effectiveness of, the internal controls are constantly monitored. The CEO ensures that the Board of Directors continuously receives reports on the development of the company's activ-ities, including the development of the company's results and financial position, as well as information on important events, such as research results and important contracts.
The Board of Directors is responsible for the internal control and monitoring of the company's management. This is done through both internal and external control activities, and through examination and monitoring of the company's guidelines related to risk management. The effectiveness of the control activities are assessed annually and the 96 Calliditas Therapeutics | Annual Report 2022 CORPORATE GOVERNANCE REPORT results from these assessments are reported to the Board of Directors and the Audit Committee.
Calliditas' management shall annually perform a risk assessment of strategic, operational and financial risks and present the assessment to the Audit Committee and the Board of Directors. The CEO is responsible for the presentation. The management's risk assessment shall be reviewed on an annual basis by the CFO. Control activities Control activities limit the identified risks and ensure accurate and reliable financial reporting.
The responsibility for the internal, business-specific control in the daily opera-tions lies with the CEO. Risk assessment Risk assessment includes identifying risks that may arise if the basic requirements for the financial reporting of the company are not met. Calliditas' management team has, in a specific risk register, iden-tified and evaluated the risks that arise in the compa-ny's operations, and has assessed how these risks can be managed.
The responsi-bility for the ongoing work of the internal control over financial reporting has been delegated to the compa-ny's CEO. The CEO regularly reports to the Board of Directors in accordance with the established instruc-tions for the CEO and the instructions for financial reporting. The Board of Directors also receives reports from the company's auditor.
Furthermore, the Board of Directors has established an Audit Committee whose main task is to monitor the company's financial position, to monitor the effectiveness of the company's internal control, internal audit and risk management, to be informed about the audit of the annual report and consolidated financial statements, and to review and monitor the auditor's impartiality and independence.
These documents primarily comprise the rules of procedure for the Board of Directors, instruc-tions for the CEO, rules of procedure for the Audit Committee and instructions for financial reporting. The Board of Directors has also adopted a delegation of signatory authority and a treasury policy. The company also has a financial manual which contains principles, guidelines and process descriptions for accounting and financial reporting.
The internal control primarily consists of the following five components. Control environment The Board of Directors has the overall responsibility for the internal control in relation to financial reporting. In order to create and maintain a functioning control environment, the Board of Directors has adopted a number of policies and guidelines governing financial reporting.
The overall purpose of the internal control is to ensure that the company's operating strategies and targets are monitored and that the owners' investments are protected, to a reasonable degree. Furthermore, the internal control shall ensure that the external finan-cial reporting, with reasonable certainty, is reliable and prepared in accordance with generally accepted accounting practice, that applicable laws and regulations are followed, and that the requirements imposed on listed companies are complied with.
The Board of Directors shall, among other tasks, ensure that Calliditas has sufficient internal control and formalized routines to ensure that established principles for financial reporting and internal control are adhered to and that there are effective systems to monitor and control the company's operations and the risks associated with the company and its operations.
Internal Control and Risk Management The Board of Director's responsibility for the internal control is governed by the Swedish Companies Act, the Swedish Annual Reports Act which requires that infor-mation about the main features of Calliditas' system for internal control and risk management related to financial reporting each year must be included in the corpo-rate governance report and the Code.
Calliditas' management consists of seven individuals and includes, in addition to the CEO, the Chief Finan-cial Officer, Chief Medical Officer, Vice President Regu-latory Affairs, President North America, Head of Human Resources and Group General Counsel. For information about current executive management at Calliditas, when these assumed their positions, and date of birth, education, experience, shareholding in the company and current and previous assignments, refer to pages 100-103 and the company's website, www.calliditas.se.
The Rules of Procedure for Decision-making for the Board and instructions for the CEO present which issues that the company's Board of Directors are to consider and decide and which are the respon-sibility of the CEO. The CEO is also responsible for preparing reports and required documentation for decision-making prior to board meetings and is the reporting person on the material at board meetings.
The Board of Directors continu-ously assesses the work of the CEO by monitoring the performance of the operations compared with estab-lished targets and makes a formal assessment each year. CEO and Management Team The role of the CEO is subordinate to the Board of Directors, and his or her primary task is to attend to the company's daily management and operations in the company.
Evaluation of the Board and CEO Every year, the Board Chairman initiates an evaluation of the Board's work. The evaluation aims to gain an opinion of the views of Board members on how the work of the Board is progressing and what measures can be implemented to enhance the efficiency of the Board. The aim is also to gain an opinion of the type of issues the Board believes should be offered more space and areas where further expertise may be Calliditas Therapeutics | Annual Report 2022 95 needed on the Board.
Share and share price related incentive programs shall, if resolved on, be decided by the AGM. Pension shall, where possible, be premium based. For the CEO and other members of executive management, the premium may, in situations where premium-based pension is applicable, amount to a maximum of 30 percent of the fixed salary. Notwithstanding the above, the Board of Directors is entitled to offer other solutions which, in terms of cost, are equivalent to the above.
The fixed remuneration shall be reviewed annually. The executive management may be offered cash bonuses. Variable remuneration paid in cash may not exceed 60% of the annual fixed remuneration. Variable remunerations shall be connected to predetermined and measurable criteria, designed with the aim of promoting the company's long-term value creation.
The remuneration to the executive management may consist of fixed remuneration, variable remuneration, share and share price related incentive programs, pension and other benefits. If local conditions justify variations in the remuneration principles, such varia-tions may occur. The fixed remuneration shall reflect the individual's responsibility and experience level.
Remuneration of the CEO and Executive Management 2022 Calliditas shall offer remuneration in accordance with market practice to enable the recruitment and reten-tion of qualified executive management. Remunerations within Calliditas shall be based on principles of perfor-mance, competitiveness and fairness. The executive management refer to the CEO and other members of the executive management, as well as board members.
The Remuneration Committee shall prepare matters concerning remuneration prin-ciples, remuneration and other employment terms for the CEO and the executive management. The Committee held four meetings in 2022. At these meetings, the Committee discussed the current compensation system in the company, including a proposal for remuneration of the CEO and senior executives and the direction and terms of the incentive program that was approved for implementation by the Annual General Meeting on May 19, 2022.
The Committee held seven meetings in 2022. The company's auditors took part in four of the meetings, where discussions included the auditors' planning of the audit, their observations and examination of the company and the company's financial statements and internal control over financial reporting. Remuneration Committee Calliditas has a Remuneration Committee consisting of three members: Elmar Schnee (Chairman), Elisabeth Bj rk and Diane Parks.
Board Committees Audit Committee Calliditas has an Audit Committee consisting of three members: Henrik Stenqvist (Chairman), Molly Henderson and Hilde Furberg. The Audit Committee shall, without it affecting the responsibilities and tasks of the Board of Directors, monitor the company's finan-cial reporting, monitor the efficiency of the company's internal controls, internal auditing and risk manage-ment, keep informed of the auditing of the annual report and the consolidated accounts, review and monitor the impartiality and independence of the audi-tors and pay close attention to whether the auditors are providing other services besides audit services for the company, and assist in the preparation of proposals for the AGM's decision on election of auditors.
In addition to the above-proposed remuneration for ordi-nary board work, it is proposed that board members residing in the United States shall receive an additional amount of SEK 140,000 and that board members residing in Europe, but outside the Nordics, shall receive an additional amount of SEK 50,000. For more information regarding remuneration of Board members, refer to Note 9 Employees and Personnel Costs.
Calliditas' CEO participates in Board meetings, as does the company's CFO and General Counsel, who is secretary at the meetings. Other employees from Calliditas have reported on particular issues at the meetings. Board Remuneration The directors' fees shall be paid with SEK 900,000 to the chairman of the Board of Directors and SEK 350,000 to each one of the other members who are not employed in the Group, SEK 200,000 to the chairman of the audit committee and SEK 100,000 to the other members of the audit committee who are not employed in the Group as well as SEK 50,000 to the chairman of the remuneration committee and SEK 25,000 to the other members of the remuneration committee who are not employed in the Group.
Board Independence The company satisfies the requirements of the Code as most of the Board members elected by the AGM are independent of the company and management, and that at least two of these are independent in relation to major shareholders. The table below presents the independence of members at the date on which this report was published. Board members' independence, attendance and remuneration in 2022 Independent in relation to Attendance Name Position Board member since The company and management Major shareholders Board meetings Audit Committee meetings Remuneration Committee meetings Total remuneration, SEK in thousand Elmar Schnee Board Chairman 2019 Yes Yes 12/12 - 4/4 1,622 Lennart Hansson (until May 2022) Board Member 2009 Yes Yes 4/4 2/2 2/2 233 Hilde Furberg Board Member 2014 Yes Yes 12/12 7/7 - 651 Diane Parks Board Member 2019 Yes Yes 11/12 - 4/4 729 Molly Henderson Board Member 2020 Yes Yes 12/12 5/7 - 817 Henrik Stenqvist (from May 2022) Board Member 2022 Yes Yes 4/8 2/5 - 349 Elisabeth Bj rk (from May 2022) Board Member 2022 Yes Yes 7/8 - 2/2 261 94 Calliditas Therapeutics | Annual Report 2022 CORPORATE GOVERNANCE REPORT Work of the Board in 2022 During 2022, the Board of Directors held a total of 12 meetings, of which 6 were ordinary and 6 were extraor-dinary meetings.
In addition to these meetings, additional Board meetings can be convened to handle issues which cannot be postponed until the next ordi-nary board meeting. In addition to the Board meetings, the Chairman of the Board of Directors and the CEO continuously discuss the management of the company. Currently, the company's Board of Directors consists of six ordinary members elected by the AGM.
Among other things, the rules of procedure govern the practice of the Board of Directors, functions and the division of work between Board members and the CEO. At the inaugural board meeting, the Board of Directors also adopts instructions for the CEO, including instructions for financial reporting. The Board of Directors meets according to an annual predetermined schedule.
According to the Code, the Chairman of the Board of Directors is to be elected by the AGM and have a special responsibility for leading the work of the Board of Directors and for ensuring that the work of the Board of Directors is efficiently organized. The Board of Directors applies written rules of proce-dure, which are revised annually and adopted by the inaugural board meeting every year.
The Board of Directors is also responsible for ensuring that annual reports and interim reports are prepared in a timely manner. Moreover, the Board of Directors appoints the CEO. Members of the Board of Directors are normally appointed by the AGM for the period until the end of the next AGM. According to Calliditas' Articles of Asso-ciation, the members of the Board of Directors elected by the AGM shall be not less than three and not more than ten members with no deputy members of the Board of Directors.
For information about remuneration of the auditor, refer to Note 6 Auditors' Fee. Board of Directors The Board of Directors is the second highest deci-sion-making body of the company after the AGM. According to the Swedish Companies Act, the Board of Directors is responsible for the organization of Callid-itas and the management of the company's affairs, which means that the Board of Directors is responsible for, among other things, setting targets and strategies, securing routines and systems for evaluation of set targets, continuously assessing the financial condition and profits as well as evaluating the operating manage-ment.
The Auditor-in-Charge is Anna Svan-berg. The auditor examines the Parent Company's and the Group's accounts and administration on behalf of the AGM. The external audit of the Parent Company's and the Group's accounts and the Board's and CEO's administration is conducted using generally accepted auditing standards in Sweden. The company entrusted the auditor to review one interim reports in 2022, which satisfies the requirements of the Code.
Shareholders may submit proposals to the Nomination Committee in accor-dance with what has been published on the company's website, www.calliditas.se, prior to the AGM. Auditor In accordance with the Articles of Association, Callid-itas must appoint a registered firm of accountants as external auditor. The 2022 AGM elected the registered firm of accountants Ernst & Young AB as auditor, up to Calliditas Therapeutics | Annual Report 2022 93 the 2023 AGM.
Changes to the composition of the Nomination Committee shall be announced immediately. The term of the office for the Nomination Committee ends when the next Nomination Committee has been appointed. The Nomination Committee shall carry out its duties as set out in the Code. The Nomination Committee will be constituted and will meet in advance of the 2023 AGM and its proposals will be presented in the convening notice of the AGM and on Calliditas' website.
Should a member resign from the Nomination Committee before his or her work is completed, the shareholder who has appointed such member shall appoint a new member, unless that shareholder is no longer one of the three largest shareholders, in which case the largest shareholder in turn shall appoint the substitute member. A shareholder who has appointed a representative to the Nomination Committee shall have the right to discharge such repre-sentative and appoint a new representative.
Unless there are specific reasons otherwise, the already estab-lished composition of the Nomination Committee shall, however, remain unchanged in case such change in the ownership is only marginal or occurs during the three-month period prior to the AGM. Where a shareholder has become one of the three largest shareholders due to a material change in the ownership at a point in time falling later than three months before the AGM, such a shareholder shall however in any event have the right to take part of the work of the Nomination Committee and participate at its meetings.
Should a shareholder having appointed a repre-sentative to the Nomination Committee no longer be among the three largest shareholders at a point in time falling three months before the AGM at the latest, the representative appointed by such shareholder shall resign and the shareholder who is then among the three largest shareholders shall have the right to appoint one representative to the Nomination Committee.
Should any of the three largest shareholders renounce its right to appoint one representative to the Nomina-tion Committee, such right shall transfer to the share-holder who then in turn, after these three, is the largest shareholder in Calliditas. The Board of Directors shall convene the Nomination Committee. The member representing the largest shareholder shall be appointed Chairman of the Nomination Committee, unless the Nomination Committee unanimously appoints someone else.
At the Extraordinary General Meeting held on September 14, 2017, it was resolved that the Nomi-nation Committee shall be composed of the Chairman of the Board of Directors together with one represen-tative of each of the three largest shareholders, based on ownership in Calliditas as of the end of the third quarter of the fiscal year. The Nomination Committee for 2023 consists of: - Patrik Sobocki, appointed by Stiftelsen Industrifonden - Jan S rlvik, appointed by Fj rde AP-fonden - Karl Tobieson, appointed by Linc AB - Elmar Schnee, Chairman of the Board.
The Nomination Committee shall, pursuant to the Code, consist of at least three members of which a majority shall be independent in relation to Calliditas and the Group Management. In addition, at least one member of the Nomination Committee shall be independent in relation to the largest shareholder in terms of voting rights or group of shareholders who cooperate in terms of the company's management.
Shareholders who wish to have a matter brought before the AGM must submit a written request to the Board of Directors. Such request must normally be received by the Board of Directors no later than seven weeks prior to the Meeting. Nomination Committee Companies applying the Code shall have a Nomination Committee. According to the Code, the AGM shall appoint the members of the Nomination Committee or resolve on procedures for appointing the members.
The minutes from the AGM will be made available at www.calliditas.se. Participation at the Annual General Meeting Information on participation at the Annual General Meeting will be provided in the notice of the Annual General Meeting. The notice will be distributed no later than four weeks in advance of the Annual General Meeting and will be available at www.calliditas.se.
Notice of the AGM shall be published in the Swedish Official Gazette and on the company's website, within such time as set forth in the Swedish Companies Act (2005:551). It shall be announced in Svenska Dagbladet that a notice has been issued. 92 Calliditas Therapeutics | Annual Report 2022 Annual General Meeting 2023 Calliditas' 2023 AGM will be held on Thursday, May 30, 2023, 10:00 at Klara, Klarabergsviadukten 90, Stock-holm, Sweden.
Shareholders may attend the shareholders' meetings in person or by proxy and may be accom-panied by a maximum of two assistants. Typically, it is possible for a shareholder to register for the AGM in several different ways as indicated in the notice of the meeting. A shareholder may vote for all company shares owned or represented by the shareholder.
In view of company's financial position and negative earnings, the Board of Directors does not intend to propose any dividend before the company generates long-term sustainable profits and positive cash flow. Dividends shall, as far as a dividend is proposed, be balanced with regard to the business risk. Annual General Meeting Right to participate in the Annual General Meeting Shareholders who wish to participate in the Annual General Meeting (AGM) must be included in the share-holders' register maintained by Euroclear Sweden on the day falling six banking days prior to the meeting, and notify the company of their participation no later than on the date stipulated in the notice convening the meeting.
Dividend Policy The company has so far not paid out any dividend. Any future dividend and the size thereof, will be determined based on long-term growth, earnings trends and capital requirements of Calliditas. It is the view of the Board of Directors that Calliditas should prioritize progression of the development program, and until the future reve-nues substantially exceeds the cost of the development programs, financial resources should mainly be used to finance Calliditas' development programs.
At the end of 2022, Calliditas had 18,585 (19,879) shareholders and the ten largest share-holders owned 48.3 (59.1) % of all outstanding shares, excluding shares held by Calliditas. As of December 31, 2022, BVF Partners LP, Linc AB and Stiftelsen Indus-trifonden were the single largest shareholders in the company, excluding shares held by Calliditas, with 10.5%, 10.0% and 6.4%, respectively, of the votes and capital.
Examples of Important Rules and Regulations Important internal rules and regulations - Articles of Association - Rules of procedure of the Board of Directors and Committees - Directives for the CEO - Policy documents Important external rules and regulations - Swedish Companies Act - Swedish and international accounting legislation - Nasdaq Stockholm's Rule Book for Issuers - Nasdaq U.S Rule Book for Issuers - Swedish Code of Corporate Governance - Sarbanes-Oxley Act Shareholders Calliditas' shares were admitted to trading on Nasdaq Stockholm, Mid Cap, in June 2018 and on Nasdag Global Select, in June 5, 2020.
However, the company has not deviated from any of the rules established in the Code during the year. The company is classified as a Foreign Private Issuer (FPI) in accordance with the regulations estab-lished by the US Securities and Exchange Commission (SEC) and therefore follows market practice in the domestic market, ie Swedish corporate governance.
The company also applies the Swedish Code of Corporate Governance (the Code ). The Code applies to all Swedish compa-nies whose shares are listed on a regulated market in Sweden. The company need not comply with all of the rules of the Code as the Code itself offers an opportu-nity to deviate from the rules, on the condition that any such deviation, and the chosen alternative solution, is described and the reasons explained in the Corporate Governance Report (according to the comply or explain principle).
This report pertains to the financial year of 2022 and has been examined by the company's auditors. Background Corporate governance refers to the systems through which shareholders, directly or indirectly, control the company. Good corporate governance is an essential part of efforts to generate value for Calliditas' share-holders. Corporate governance in Calliditas is based on Swedish law, Nasdaq Stockholm's Rule Book for Issuers and internal rules and regulations.
Calliditas Therapeutics | Annual Report 2022 91 Corporate Governance Report Introduction Calliditas Therapeutics AB (publ), Calliditas is a Swedish public limited liability company with its regis-tered office in Stockholm. The company's share was listed on June 29, 2018 on Nasdaq Stockholm and on June 5, 2020 on Nasdaq Global Select US and is traded under the ticker CALTX and CALT, respectively.
Furthermore, the procedures also include an assess-ment of whether the consolidated statement of finan-cial performance, financial position, changes in equity, cash flow and disclosures in the Esef report have been marked with iXBRL in accordance with what follows from the Esef regulation. Ernst & Young AB, Hamngatan 26, 111 47 Stockholm, was appointed auditor of Calliditas Therapeutics AB by the general meeting of the shareholders on May 19, 2022 and has been the company's auditor since April 15, 2004.
The exam-ination also includes an evaluation of the appropriateness and reasonableness of assumptions made by the Board of Directors and the Managing Director. The procedures mainly include a validation that the Esef report has been prepared in a valid XHTML format and a reconciliation of the Esef report with the audited annual accounts and consolidated accounts.
In carrying out this risk assessment, and in order to design audit procedures that are appropriate in the circumstances, the auditor considers those elements of internal control that are relevant to the preparation of the Esef report by the Board of Directors and the Managing Director, but not for the purpose of expressing an opinion on the effectiveness of those internal controls.