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Design & Layout Kontrapunkt Photographers Tuala Hjarn , 3FX, Inc. Forward Looking Statement 159 Genmab A/S Kalvebod Brygge 43 1560 Copenhagen V Denmark T. +45 70 20 27 28 Genmab US, Inc. 902 Carnegie Center Suite 301 Princeton, NJ 08540 USA T. +1 609 430 2481 Genmab B.V. & Genmab K.K. Level 21 Shiodome Shibarikyu Building 1-2-3 Kaigan, Minato-ku Tokyo 105-0022 Japan T. +81 3 5403 6330 Genmab Holding B.V.
Daratumumab is in clinical development by Janssen for the treatment of additional multiple myeloma indications, other blood cancers and amyloidosis. A SubQ formulation of ofatumumab is in development by Novartis for the treatment of RMS. Genmab also has a broad clinical and pre-clinical product pipeline. Genmab's technology base consists of validated and proprietary next generation antibody technologies the DuoBody platform for generation of bispecific antibodies, the HexaBody platform, which creates effector function enhanced antibodies, the HexElect platform, which combines two co-dependently acting HexaBody molecules to introduce selectivity while maximizing therapeutic potency and the DuoHexaBody platform, which enhances the potential potency of bispecific antibodies through hexamerization.
Tecentriq is a trademark of Genentech, Inc. TEPEZZA is a trademark of Horizon Therapeutics plc About Genmab A/S Genmab is a publicly traded, international biotechnology company specializing in the creation and development of differentiated antibody therapeutics for the treatment of cancer. Founded in 1999, the company is the creator of three approved antibodies: DARZALEX (daratumumab, under agreement with Janssen Biotech, Inc.) for the treatment of certain multiple myeloma indications in territories including the U.S., Europe and Japan, Arzerra (ofatumumab, under agreement with Novartis AG), for the treatment of certain chronic lymphocytic leukemia indications in the U.S., Japan and certain other territories and TEPEZZA (teprotumumab, under agreement with Roche granting sublicense to Horizon Therapeutics plc) for the treatment of thyroid eye disease in the U.S.
DARZALEX is a trademark of Janssen Pharmaceutica NV. OmniAb is a trademark of Open Monoclonal Technology, Inc. UltiMAb is a trademark of Medarex, Inc. Opdivo is a trademark of Bristol-Myers Squibb Company. Velcade and NINLARO are trademarks of Millennium Pharmaceuticals. Revlimid and Pomalyst are trademarks of Celgene Corporation. Venclexta is a trademark of AbbVie, Inc.
Genmab A/S and/or its subsidiaries own the following trademarks: Genmab ; the Y-shaped Genmab logo ; Genmab in combination with the Y-shaped Genmab logo ; HuMax ; DuoBody ; DuoBody in combination with the DuoBody logo ; HexaBody ; HexaBody in combination with the HexaBody logo ; DuoHexaBody ; HexElect ; and UniBody . Arzerra is a trademark of Novartis AG or its affiliates.
For a further discussion of these risks, please refer to the section Risk Management in this annual report and the risk factors included in Genmab's final prospectus for our U.S. public offering and listing and other filings with the U.S. Securities and Exchange Commission (SEC). Genmab does not undertake any obligation to update or revise forward looking statements in this annual report nor to confirm such statements to reflect subsequent events or circumstances after the date made or in relation to actual results, unless required by law.
The important factors that could cause our actual results or performance to differ materially include, among others, risks associated with product discovery and development, uncertainties related to the outcome and conduct of clinical trials including unforeseen safety issues, uncertainties related to product manufacturing, the lack of market acceptance of our products, our inability to manage growth, the competitive environment in relation to our business area and markets, our inability to attract and retain suitably qualified personnel, the unenforceability or lack of protection of our patents and proprietary rights, our relationships with affiliated entities, changes and developments in technology which may render our products obsolete, and other factors.
Cytotoxic Toxic to living cells. Glossary 158 Forward Looking Statement This annual report contains forward looking statements. The words believe , expect , anticipate , intend and plan and similar expressions identify forward looking statements. Actual results or performance may differ materially from any future results or performance expressed or implied by such statements.
Immunomodulatory agent A type of drug used to treat certain types of cancers, such as multiple myeloma. Examples include lenalido-mide and pomalidomide. Refractory Resistant to treatment. Priority Review FDA designation used for drugs that, if approved, would be significant im-provements in the safety or effectiveness of the treat-Relapsed Recurrence of disease symptoms after a period of improvement.
Biologics License Hexamerization The ordered clustering of six antibodies. Application (BLA) A submission to apply for marketing approval from the U.S. FDA, which contains specific information on the manufacturing processes, chemistry, pharmacology, clinical pharmacology and the medical effects of a biologic product. Complement dependent cytotoxicity (CDC) An antibody effector function that eliminates target cells.
Subcutaneous (SubQ) Applied under the skin. Apoptosis A form of programmed cell death. Pre-clinical Term used to refer to drugs that are at the stage of being investigated in the laboratory or in animals to determine the safety and efficacy of the drug before it is tested in humans. Real-Time Oncology Review (RTOR) Pilot Program Allows the U.S. FDA to review data prior to the completed formal submission of a sBLA.
Clinical Term used to refer to drugs that are at the stage of being investigated in humans to determine the safety and efficacy of the drug before it can be submitted for approval by regulatory authorities. Monotherapy Treatment of a medical condi-tion by use of a single drug. U.S. Food and Drug Administration (FDA) U.S. regulatory agency responsible for ensuring the safety, efficacy and security of human and veterinary drugs, biological products and medical devices.
Monoclonal antibodies derived from such single cell will be identical. Proteasome inhibitor (PI) A type of drug used to treat certain types of cancer, such as multiple myeloma. Exam-ples include bortezomib and carfilzomib. European Medicines Antigen Immunogen. A target molecule that is specifically bound by an antibody. Agency (EMA) European regulatory agency that facilitates development and access to medicines, evaluates applications for marketing authorization and monitors the safety of medicines.
(PFS) The length of time a patient lives without his/her disease worsening. Antibody-drug conjugate (ADC) Antibody with potent cyto-toxic agents (toxins) coupled to it. BREEAM (Building Research Establishment Environmen-tal Assessment Method) A sustainability assessment method for infrastructure and buildings. Monoclonal Derived from a single cell.
Marketing Authorization Epitope The specific surface portion of an antigen to which an antibody binds. Upon binding of the antibody to the epitope an immune response is elicited. Application (MAA) A submission to apply for marketing approval for a drug from the EMA. Progression Free Survival Transgenic mouse A mouse carrying a trans-gene from a foreign species, typically a human, which transgene has been intro-duced into the replicating cells of the mouse, so the transgene is passed on to future generations/offspring of the transgenic mouse.
Bispecific antibody An antibody in which the two binding regions are not identical, with each region directed against two differ-ent antigens or against two different sites on the same antigen. Dual-listed company A company whose shares are traded on two stock markets. Initial Public Offering (IPO) An initial public offering of a company's stock Target A molecule of potential interest against which an antibody is raised/created.
Rasmus Friis J rgensen State Authorised Public Accountant mne 28705 Allan Knudsen State Authorised Public Accountant mne 29465 - Independent Auditor's Report 157 Glossary ment, diagnosis, or preven-tion of serious conditions when compared to standard applications. American Depository Shares (ADSs) A U.S. dollar-denomi-nated equity share of a foreign-based company available for purchase on an American stock exchange.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by Management. - Hellerup, 19 February 2020 PricewaterhouseCoopers Statsautoriseret Revisionspartnerselskab CVR no 33 77 12 31 - - We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, mis-representations, or the override of internal control. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group's and the Parent Company's internal control.
We also: From the matters communicated with those charged with gov-ernance, we determine those matters that were of most signi-ficance in the audit of the Financial Statements of the current period and are therefore the key audit matters. We describe these matters in our auditor's report unless law or regulation precludes public disclosure about the matter or when, in ex-tremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse con-sequences of doing so would reasonably be expected to out-weigh the public interest benefits of such communication. - Identify and assess the risks of material misstatement of the Financial Statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion.
Misstatements can arise from fraud or error and are consid-ered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these Financial Statements. As part of an audit in accordance with ISAs and the additional requirements applicable in Denmark, we exercise profession-al judgment and maintain professional skepticism through-out the audit.
We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion. We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
Evaluate the overall presentation, structure and content of the Financial Statements, including the disclosures, and whether the Financial Statements represent the underlying transactions and events in a manner that achieves fair presentation. Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the Consoli-dated Financial Statements.
If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the Financial Statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Group or the Parent Company to cease to continue as a going concern.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs and the additional requirements applicable in Denmark will always detect a material misstatement when it exists. - Conclude on the appropriateness of Management's use of the going concern basis of accounting and based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group's and the Parent Compa-ny's ability to continue as a going concern.
We focused on this area because timing of revenue recognition in the income statement has inherent complexities and requiresWe tested a sample of transactions of revenue recognized for significant judgment and estimation by management. accurate calculation and appropriately recognition based on agreements, recognition principles and Managements estimates Reference is made to note 2.1.and judgments.
Revenue is recognized when a performance obligation is satisfied Our audit procedures in regard of revenue recognition included i.e. when Genmab's customer obtains control of promisedtesting of relevant internal controls. goods or services, in an amount that reflects the consideration that Genmab expects to receive in exchange for those goods orWe read relevant agreements to assess whether the revenue services.recognition was consistent with the accounting standard IFRS 15, Revenue from Contracts with Customers, and had been applied oration agreements including simultaneous transactions and multiple performance obligations such as upfront payments,We considered the reasonableness of the judgments made by milestone payments, royalties and reimbursement of costs.Management in determining the relevant assumptions utilized in calculating recognized revenue.
In connection with our audit of the Financial Statements, our responsibility is to read Management's Review and, in doing so, consider whether Management's Review is Based on the work we have performed, in our view Manage-ment's Review is in accordance with the Consolidated Independent Auditor's Report 156 Key audit matterHow our audit addressed the key audit matter Revenue recognition on research and development and collaboration agreementsWe discussed revenue recognition principles with Management.
Statement on Management's Review Management is responsible for Management's Review. Our opinion on the Financial Statements does not cover Management's Review, and we do not express any form of assurance conclusion thereon. Moreover, we considered whether Management's Review includes the disclosures required by the Danish Financial Statements Act. Auditor's responsibilities for the audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the Financial Statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion.
Revenue recognition involve accounting for license and collab-consistently. In preparing the Financial Statements, Management is responsible for assessing the Group's and the Parent Com-pany's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless Management either intends to liquidate the Group or the Parent Company or to cease operations, or has no realistic alternative but to do so. materially inconsistent with the Financial Statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated.
We did not identify any material misstatement in Management's Review. Management's responsibilities for the Financial Statements Management is responsible for the preparation of consoli-dated financial statements and parent company financial statements that give a true and fair view in accordance with International Financial Reporting Standards as adopted by the EU and further requirements in the Danish Financial Statements Act, and for such internal control as Management determines is necessary to enable the preparation of financial statements that are free from material misstate-ment, whether due to fraud or error.
Collectively referred to as the Financial Statements. To the best of our knowledge and belief, prohibited non-audit services referred to in Article 5(1) of Regulation (EU) No 537/2014 were not provided. Independent Auditor's Report 155 Financial Statements and the Parent Company Financial Statements and has been prepared in accordance with the requirements of the Danish Financial Statements Act.
We have also fulfilled our other ethical responsibilities in accordance with the IESBA Code. What we have audited The Consolidated Financial Statements and Parent Company Financial Statements of Genmab A/S for the financial year 1 January to 31 December 2019 comprise income statement and statements of comprehensive income, balance sheets, statements of cash flows, statements of changes in equity and notes, including summary of significant accounting policies for the Group as well as for the Parent Company.
Our opinion is consistent with our Auditor's Long-form Report to the Audit and Finance Committee and the Board of Directors. Independence We are independent of the Group in accordance with the International Ethics Standards Board for Accountants' Code of Ethics for Professional Accountants (IESBA Code) and the additional requirements applicable in Denmark.
Key audit matters Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the Fi-nancial Statements for 2019. These matters were addressed in the context of our audit of the Financial Statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
Basis for opinion We conducted our audit in accordance with International Standards on Auditing (ISAs) and the additional require-ments applicable in Denmark. Our responsibilities under those standards and requirements are further described in the Auditor's responsibilities for the audit of the Financial Statements section of our report. We believe that the audit evidence we have obtained is suf-ficient and appropriate to provide a basis for our opinion.
We have been reappointed annually by shareholder resolution for a total period of uninterrupted engagement of 19 years including the financial year 2019. Our opinion In our opinion, the Consolidated Financial Statements and the Parent Company Financial Statements give a true and fair view of the Group's and the Parent Company's financial po-sition at 31 December 2019 and of the results of the Group's and the Parent Company's operations and cash flows for the financial year 1 January to 31 December 2019 in accordance with International Financial Reporting Standards as adopted by the EU and further requirements in the Danish Financial Statements Act.
Connelly (Deputy Chairman) Rolf Hoffmann Pernille Erenbjerg David A. Eatwell (Executive Vice President & CFO) Paolo Paoletti Anders Gersel Pedersen Mijke Zachariasse (Employee elected) Daniel J. Bruno (Employee elected) Judith Klimovsky (Executive Vice President & CDO) Peter Storm Kristensen (Employee elected) Directors' and Management's Statement on the Annual Report 154 Independent Auditor's Report To the shareholders of Genmab A/S Appointment Following the listing of the shares of Genmab A/S on Nasdaq Copenhagen, we were first appointed auditors of Genmab A/S on 22 March 2001.
The Annual Report has been prepared in accordance with International Financial Reporting Standards as adopted by the EU and further requirements in the Danish Financial Statements Act. We recommend that the Annual Report be adopted at the Annual General Meeting. In our opinion, Management's Review includes a true and fair account of the development in the operations and financial circumstances of the Group and the Parent Company, of the Copenhagen, February 19, 2020 Executive Management Board of Directors Jan van de Winkel (President & CEO) Mats Pettersson (Chairman) Deirdre P.
In our opinion, the Consolidated Financial Statements and the Parent Company Financial Statements give a true and fair view of the financial position at 31 December 2019 of the Group and the Parent Company and of the results of the Group and Parent Company operations and cash flows for 2019. results for the year and of the financial position of the Group and the Parent Company as well as a description of the most significant risks and elements of uncertainty facing the Group and the Parent Company.
Please refer to note 5.6 in the consolidated financial statements for additional information regarding fees to auditors of the group. Financial Statements for the Parent Company 153 Directors' and Management's Statement on the Annual Report The Board of Directors and Executive Management have today considered and adopted the Annual Report of Genmab A/S for the financial year 1 January to 31 December 2019.
Other services than statutory audit of the financial statements comprise services relating to Genmab's IPO on the Nasdaq U.S., tax and VAT compliance, agreed-upon procedures, opinions relating to grants, educational training and accounting advice. Total changes in working capital (1,340) (668) Please refer to note 5.7 in the consolidated financial statements for additional information regarding adjustments to the cash flow statement of the group.
As of December 31, 2019, these contingent In addition to the above obligations, we enter into a variety of agreements and financial commitments in the normal course of business. The terms generally allow us the option to Financial Statements for the Parent Company 152 17 18 Fees to Auditors Appointed at the Annual General Meeting Adjustments to Cash Flow Statement (DKK million) Note (DKK million) 2019 2018 2019 2018 Adjustments for non cash transactions: Depreciation, amortization and impairment Share-based compensation expenses PricewaterhouseCoopers Audit services Audit-related services Tax and VAT services Other services 1.7 2.3 0.5 2.4 0.8 0.1 0.4 0.1 5, 6 3 99 147 55 91 Total adjustments for non cash transactions 246 146 Changes in working capital: Receivables Other payables Total 6.9 1.4 (1,640) 300 (762) 94 Fees for other services than statutory audit of the financial statements provided by Price-waterhouseCoopers Statsautoriseret Revisionspartnerselskab amounted to DKK 5.2 million (DKK 0.6 million in 2018).
In the parent company, the contractual obligations amounted to DKK 438 million (2018: DKK 787 million). Please refer to note 5.4 in the consolidated financial state-ments for additional information regarding commitments of the group. We also have certain contingent commitments under our li-cense and collaboration agreements that may become due for future payments.
It is not possible to predict the maximum potential amount of future payments under these agreements due to the conditional nature of our obligations and the unique facts and circumstances involved in each particular agreement. Guarantees and Collaterals There were no bank guarantees as of December 31, 2019 or 2018. Other Purchase Obligations The parent company has entered into a number of agreements primarily related to research and development activities carried out by Genmab.
These milestone payments generally become due and payable only upon the achievement of certain development, clinical, regulatory or commercial milestones. The events triggering such payments or obligations have not yet occurred. cancel, reschedule and adjust our requirements based on our business needs prior to the delivery of goods or performance of services.
Cost per December 31 1,008 560 Value adjustments January 1 Profit/(loss) in subsidiaries, net of tax Exchange rate adjustment (206) (155) 6 (98) (118) 10 Please refer to note 5.2 to the consolidated financial state-ments for additional information regarding transactions with related parties of the group. Value adjustments per December 31 (355) (206) Investments in subsidiaries per December 31 653 354 Financial Statements for the Parent Company 151 16 Commitments commitments amounted to approximately DKK 6,322 million (USD 947 million) in potential future development, regulatory and commercial milestone payments to third parties under license and collaboration agreements for our pre-clinical and clinical-stage development programs as compared to DKK 4,871 million (USD 747 million) as of December 31, 2018.
Genmab Holding B.V. Genmab US, Inc. Genmab K.K. Utrecht, the Netherlands Utrecht, the Netherlands New Jersey, USA Tokyo, Japan 100% 100% 100% 100% 100% 100% 100% 26 (937) 9 15 (546) 1 Balances with subsidiaries: Current receivables Current payables 42 (305) 40 (180) (DKK million) 2019 2018 Cost per January 1 Additions 560 448 560 Genmab A/S has placed at each subsidiary's disposal a cred-it facility (denominated in local currency) that the subsidi-ary may use to draw from in order to secure the necessary funding of its activities.
Please refer to note 5.1 in the consolidated financial statements for additional information regarding the remuneration of the Board of Directors and Executive Management. Financial Statements for the Parent Company 150 15 Investments in Subsidiaries Genmab A/S (parent company) holds investments either directly or indirectly in the following subsidiaries: (DKK million) 2019 2018 Ownership and Votes 2019 Ownership and Votes 2018 Name Domicile Transactions with subsidiaries: Income statement: Service fee income Service fee costs Financial income Genmab B.V.
Eatwell Judith Klimovsky 0.7 0.4 0.4 1.3 0.2 1.5 0.8 1.0 3.5 1.2 1.6 Total 1.5 1.5 3.3 6.3 2018 (DKK million) Jan van de Winkel David A. Eatwell Judith Klimovsky 0.7 0.4 0.4 1.1 1.3 0.8 0.6 3.1 1.2 1.0 Total 1.5 1.1 2.7 5.3 Remuneration of the Board of Directors for the parent is the same as disclosed in note 5.1 in the consolidation financial statements.
Genmab B.V. owns the HexaBody technology and the parent company performs certain research and development activities related to the HexaBody technology on behalf of Genmab B.V. All intercom-pany transactions have been eliminated in the consolidated financial statements of the Genmab group. The remuneration of each of the Executive Management is described below: Defined Contribution Plans Annual Cash Bonus Share-based Compensation Expenses Other Benefits 2019 Base Salary Total (DKK million) Jan van de Winkel David A.
(DKK million) 2019 2018 Wages and salaries Share-based compensation expenses 10 8 9 8 Total 18 17 Transactions with subsidiaries Genmab B.V., Genmab Holding B.V., Genmab US, Inc. and Genmab K.K. are 100% (directly or indirectly) owned subsid-iaries of Genmab A/S and are included in the consolidated financial statements. They perform certain research & de-velopment, general & administrative, and management ac-tivities on behalf of the parent company.
Please refer to note 4.5 in the consolidated financial statements for additional information regarding financial income and expenses of the group. Financial Statements for the Parent Company 149 13 14 Remuneration of the Board of Directors and Executive Management Related Party Disclosures The total remuneration of the Board of Directors and Executive Management is as follows: Genmab A/S' related parties are: - - the company's subsidiaries the company's Board of Directors, Executive Manage-ment, and close members of the family of these persons.
Depreciation charge of right-of-use assets Properties 11 Total depreciation charge of right-of-use assets 11 Interest expense 1 Financial Statements for the Parent Company 148 9 11 Receivables Marketable Securities Please refer to note 4.4 to the consolidated financial statements for additional information on marketable securities of the group. (DKK million) 2019 2018 Receivables related to collaboration agreements Receivables from subsidiaries Interest receivables Other receivables P repayments 2,849 42 34 11 46 1,266 40 18 7 3 12 Financial Income and Expenses Total 2,982 1,334 Non-current receivables Current receivables 6 2,976 4 1,330 (DKK million) 2019 2018 Total 2,982 1,334 Financial income: Interest and other financial income Interest from subsidiaries Realized and unrealized gains on marketable securities (fair value through the income statement), net Realized and unrealized gains on fair value hedges, net Realized and unrealized exchange rate gains, net Please refer to note 3.5 in the consolidated financial statements for additional information regarding receivables of the group. 120 9 63 1 9 100 2 177 10 Other Payables Total financial income 238 243 Financial expenses: Interest and other financial expenses Realized and unrealized losses on marketable securities (fair value through the income statement), net 1 (DKK million) 2019 2018 11 Liabilities related to collaboration agreements Staff cost liabilities Other liabilities Payable to subsidiaries Accounts payable 8 20 487 305 33 6 14 152 180 38 Total financial expenses 1 11 Net financial items 237 232 Interest and other financial income on financial assets measured at amortized cost Total at December 31 853 390 22 8 Non-current other payables Current other payables 1 852 2 388 Interest and other financial expenses on financial liabilities measured at amortized cost Total at December 31 853 390 Please refer to note 3.7 in the consolidated financial statements for additional information regarding other payables of the group.
Total lease liabilities 35 There were no additions to the right-of-use assets in 2019. Amounts recognized in the statement of comprehensive income The statement of comprehensive income shows the following amounts relating to leases: 8 Other investments December 31, 2019 December 31, 2018 (DKK million) Please refer to note 3.4 to the consolidated financial statements for additional information on other investments of the group.
Future minimum payments under our leases as of December 31, 2019 and December 31, 2018, are as follows: Amounts recognized in the balance sheet The balance sheet shows the following amounts relating to leases: December 31, 2019 December 31, 2018 December 31, 2019 December 31, 2018 (DKK million) (DKK million) Right-of-use assets Properties Payment due Less than 1 year 1 to 3 years More than 3 years, but less than 5 years More than 5 years 34 12 24 11 25 11 Total right-of-use assets 34 Lease liabilities Current Non-current 12 23 Total 36 47 Please refer to note 3.3 in the consolidated financial statements for additional information regarding leases of the group.
Financial Statements for the Parent Company 147 7 Leases The parent company has entered into lease agreements with respect to office space and office equipment. The leases are non-cancelable for various periods up to 2022. Interest expense is included in net financial items and expenses relating to short-term leases are included in operating expenses in the statement of comprehensive income.
Financial Statements for the Parent Company 146 6 Leasehold Improvements Equipment, Furniture and Fixtures Total Property, Plant and Equipment (DKK million) Property, Plant and Equipment 2019 Cost at January 1 Additions for the year Disposals for the year 4 20 5 (2) 24 5 (2) Cost at December 31 4 23 27 Accumulated depreciation and impairment at January 1 Depreciation for the year Disposals for the year (1) (12) (4) 2 (13) (4) 2 Accumulated depreciation and impairment at December 31 (1) (14) (15) Carrying amount at December 31 3 9 12 2018 Cost at January 1 Additions for the year Disposals for the year 2 2 17 4 (1) 19 6 (1) Cost at December 31 4 20 24 Accumulated depreciation and impairment at January 1 Depreciation for the year Disposals for the year (1) (11) (2) 1 (11) (3) 1 Accumulated depreciation and impairment at December 31 (1) (12) (13) Carrying amount at December 31 3 8 11 (DKK million) 2019 2018 Depreciation, amortization, and impairments are included in the income statement as follows: Research and development expenses General and administrative expenses 3 1 2 1 Total 4 3 Please refer to note 3.2 in the consolidated financial statements for additional information regarding property, plant and equip-ment of the group.
(DKK million) 2019 2018 Net result before tax 2,885 1,636 Computed 22% (2018: 22%) 635 360 Tax effect of: Recognition of previously unrecognized tax losses and deductible temporary differences Non-deductible expenses/non-taxable income and other permanent differences, net All other (240) 72 12 44 Total tax effect 84 (196) Total tax for the period in the income statement 719 164 Total tax for the period in shareholders' equity (24) (89) Financial Statements for the Parent Company 145 5 Licenses, Rights, and Patents Total Intangible Assets (DKK million) Intangible Assets 2019 Cost per January 1 Additions for the year Disposals for the year Exchange rate adjustment 745 75 745 75 Cost at December 31 820 820 Accumulated amortization and impairment per January 1 Amortization for the year Impairment for the year Disposals for the year Exchange rate adjustment (302) (95) (302) (95) Accumulated amortization and impairment per December 31 (397) (397) Carrying amount at December 31 423 423 2018 Cost per January 1 Additions for the year Disposals for the year Exchange rate adjustment 347 398 347 398 Cost at December 31 745 745 Accumulated amortization and impairment per January 1 Amortization for the year Impairment for the year Disposals for the year Exchange rate adjustment (250) (52) (250) (52) Accumulated amortization and impairment per December 31 (302) (302) Carrying amount at December 31 443 443 2019 2018 Depreciation, amortization, and impairments are included in the income statement as follows: (DKK million) Research and development expenses General and administrative expenses 95 52 Total 95 52 Please refer to note 3.1 in the consolidated financial statements for additional information regarding intangible assets of the group.
Number of FTE at year end: 154 113 Please refer to note 2.3 in the consolidated financial statements for additional information regarding staff costs of the group. Financial Statements for the Parent Company 144 4 Corporate and Deferred Tax Taxation Balance Sheet Significant components of the deferred tax asset are as follows: (DKK million) Taxation Income Statement & Shareholders' Equity 2019 2018 (DKK million) 2019 2018 Tax deductible losses Share-Based Instruments Capitalized R&D Costs Other temporary differences 64 1 261 67 4 8 Current tax on result Adjustment to deferred tax Adjustment to valuation allowance 444 275 161 255 (252) 65 340 Valuation allowance Total tax for the period in the income statement 719 164 Total deferred tax assets 65 340 A reconciliation of Genmab's effective tax rate relative to the Danish statutory tax rate is as follows: Please refer to note 2.4 in the consolidated financial statements for additional information regarding corporate and deferred tax of the group.
The parent company's share of profit or loss is recognized in the parent company's profit or loss. The parent company's share of other comprehensive income arising from the investment is recognized in other comprehensive income of the parent company. The impact of the adoption of IFRS 16 on the financial state-ments as of January 1, 2019 is shown in the table and further described below: January 1, 2019 (DKK million) Operating lease commitments disclosed as at December 31, 2018 Discounted using the parents's incremental borrowing rate of 3.0% Share-based Compensation Expenses In the financial statements for the parent company, expenses and exercise proceeds related to employees in the subsidiar-ies are allocated to the relevant subsidiary where the em-ployee has entered an employment contract. 47 (2) Lease liability recognized at January 1, 2019 45 Financial Statements for the Parent Company 143 2 3 Revenue Staff Costs (DKK million) (DKK million) 2019 2018 2019 2018 Wages and salaries Share-based compensation Defined contribution plans Other social security costs 140 34 11 13 105 23 7 1 Revenue: Royalties Milestone payments License fees Reimbursement income 3,155 1,869 368 1,741 687 348 265 Total 198 136 Total 5,392 3,041 Staff costs are included in the income statement as follows: Revenue split by collaboration partner: Janssen (DARZALEX/daratumumab & DuoBody) Novartis (Arzerra/ofatumumab) Other collaboration partners Research and development expenses General and administrative expenses 148 50 98 38 4,983 23 386 2,390 338 313 Total 198 136 Total 5,392 3,041 Average number of FTE 136 96 Please refer to note 2.1 in the consolidated financial statements for additional information regarding revenue of the group.
The weighted average lessee's incremental borrowing rate applied to the lease liabilities on January 1, 2019 was 3.0%. Supplementary Accounting Policies for the Parent Company Investments in Subsidiaries The equity method is used for measuring the investments in subsidiaries. Under the equity method, the investment in a subsidiary is recognized on initial recognition at cost, and the carrying amount is increased or decreased to recognize the parent company's share of the profit or loss of the investment after the date of acquisition.
Please refer to note 1.3 in the consolidated financial state-ments for a description of management's judgments and estimates under IFRS. On adoption of IFRS 16, the parent company recognized lease liabilities in relation to leases that had previously been classified as operating leases' under the principles of IAS 17 Leases. These liabilities were measured at the present value of the remaining lease payments, discounted using the lessee's incremental borrowing rate as of January 1, 2019.
Please refer to note 1.2 in the consolidated financial state-ments for a description of new accounting policies and disclosures of the group. Except for the implementation of IFRS 16, the accounting policies are unchanged from the prior year. The parent company accounting policies are the same as those applied for the Group, with the additions mentioned below.
Net result decreased by DKK 1 million as a result of adopting IFRS 16 in 2019. Cash flows from operating activities increased by DKK 13 million and cash flows from financing activities decreased by DKK 12 million as a result of adopting IFRS 16 in 2019. Please refer to note 1.1 in the consolidated financial state-ments for a description of the accounting policies of the group.
Financial Statements for the Parent Company 142 1 Accounting Policies The financial statements of the parent company have been prepared in accordance with the International Financial Reporting Standards (IFRS) as adopted by the European Union (EU) and further disclosure requirements in the Danish Financial Statements Act. The ROU assets established at January 1, 2019 on the balance sheet was DKK 45 million.
The agreement also includes three additional options for Genmab to obtain commercial licenses to CureVac's mRNA technology at pre-defined terms, exercisable within a five-Financial Statements / Other Disclosures 137 Table of Contents Financial Statements for the Parent Company Primary Statements Notes Statements of Comprehensive Income .......................... 139 Balance Sheets............................................................. 140 Accounting Policies ................................................ 143 1 2 3 4 5 6 7 8 9 10 11 12 13 Revenue ................................................................. 144 Statements of Cash Flows ............................................. 141 Statements of Changes in Equity................................... 142 Staff Costs.............................................................. 144 Corporate and Deferred Tax .................................... 145 Intangible Assets.................................................... 146 Property, Plant and Equipment ............................... 147 Leases.................................................................... 148 Other Investments.................................................. 148 Receivables............................................................ 149 Other Payables....................................................... 149 Marketable Securities............................................. 149 Financial Income and Expenses .............................. 149 Remuneration of the Board of Directors and Executive Management.................................... 150 Related Party Disclosures ....................................... 150 Investments in Subsidiaries ................................... 151 Commitments......................................................... 152 Fees to Auditors Appointed at 14 15 16 17 the Annual General Meeting ................................... 153 Adjustments to Cash Flow Statement...................... 153 18 Financial Statements for the Parent Company / Table of Contents 138 Financial Statements for the Parent Income Statement (DKK million) Note 2019 2018 2 Revenue 5,392 3,041 Research and development expenses General and administrative expenses 3, 5, 6 3, 6 (2,235) (354) (1,298) (220) CSotamtepmaennyts of Comprehensive Income Operating expenses (2,589) (1,518) Oper ating result 2,803 1,523 Profit / (Loss) in subsidiaries, net of tax Financial income Financial expenses 15 12 12 (155) 238 (1) (119) 243 (11) Net result before tax 2,885 1,636 4 (719) (164) Corporate tax Net result 2,166 1,472 Statement of Comprehensive Income Net result 2,166 1,472 Other comprehensive income: Amounts which will be re-classified to the income statement: Adjustment of foreign currency fluctuations on subsidiaries 6 10 Total comprehensive income 2,172 1,482 Financial Statements for the Parent Company 139 Primary Assets December 31, 2019 December 31, 2018 (DKK million) Note SBtaalatenmceents Sheets Intangible assets Property, plant and equipment Right-of-use assets Investments in subsidiaries Receivables Deferred tax assets Other investments 5 6 7 15 9 4 8 423 12 34 653 6 65 149 443 11 - 354 4 340 - Total non-current assets 1,342 1,152 Receivables Marketable securities Cash and cash equivalents 9 11 2,976 7,419 3,274 1,330 5,573 478 Total current assets 13,669 7,381 Total assets 15,011 8,533 Shareholders' Equity and Liabilities December 31, 2019 December 31, 2018 (DKK million) Note Share capital Share premium Other reserves Retained Earnings 65 11,755 98 2,130 61 8,059 92 (198) Total shareholders' equity 14,048 8,014 Provisions Lease liabilities Other payables 2 23 1 1 - 2 7 10 Total non-current liabilities 26 3 Corporate tax payable Payable to subsidiaries Lease liabilities Other payables 4 10 7 10 73 305 12 547 128 180 - 208 Total current liabilities 937 516 Total liabilities 963 519 Total shareholders' equity and liabilities 15,011 8,533 Financial Statements for the Parent Company 140 Primary Statements of Cash Flows Statements of Cash Flows (DKK million) Note 2019 2018 Cash flows from operating activities: Net result before tax Reversal of financial items, net Reversal of profit/(loss) in subsidiaries, net of tax Adjustment for non-cash transactions Change in working capital 2,885 (237) 155 246 (1,340) 1,636 (232) 119 146 (668) 12 18 18 Cash generated by operating activities before financial items Interest received Interest elements of lease payments Interest paid Corporate taxes (paid)/received 1,709 111 (1) (13) (476) 1,001 44 46 7 Net cash generated by operating activities 1,330 1,091 Cash flows from investing activities: Investment in intangible assets Investment in tangible assets Transactions with subsidiaries Marketable securities bought Marketable securities sold 5 6 (23) (5) (329) (5,812) 3,940 (398) (6) (69) (3,521) 2,221 11 Net cash used in investing activities (2,229) (1,773) Cash flows from financing activities: Warrants exercised Shares issued for cash Costs related to issuance of shares Principal elements of lease payments Purchase of treasury shares Payment of withholding taxes on behalf of employees on net settled RSUs 65 3,873 (238) (12) (9) 75 (146) 7 Net cash from financing activities 3,679 (71) 2,780 478 16 (753) 1,220 11 Changes in cash and cash equivalents Cash and cash equivalents at the beginning of the period Exchange rate adjustments Cash and cash equivalents at the end of the period 3,274 478 Cash and cash equivalents include: Bank deposits and petty cash Short-term marketable securities 2,606 668 478 Cash and cash equivalents at the end of the period 3,274 478 Financial Statements for the Parent Company 141 Primary Statements of Changes in Equity Share Capital Share Premium Translation Reserves Retained Earnings Shareholders' Equity (DKK million) Statements Balance at December 31, 2017 61 7,984 82 (1,855) 6,272 Change in accounting policy: Adoption of IFRS 15 151 151 of in Changes Equity Adjusted total equity at January 1, 2018 61 7,984 82 (1,704) 6,423 Net result Other comprehensive income 10 1,472 1,472 10 Total comprehensive income Exercise of warrants Purchase of treasury shares Share-based compensation expenses Tax on items recognized directly in equity 75 10 1,472 (146) 91 89 1,482 75 (146) 91 89 Balance at December 31, 2018 61 8,059 92 (198) 8,014 Net result Other comprehensive income 6 2,166 2,166 6 Total comprehensive income 6 2,166 2,172 Exercise of warrants Shares issued for cash Expenses related to capital increases Share-based compensation expenses Net settlement of RSUs Tax on items recognized directly in equity 1 3 64 3,870 (238) 147 (9) 24 65 3,873 (238) 147 (9) 24 Balance at December 31, 2019 65 11,755 98 2,130 14,048 Distribution of the year's result The Board of Directors proposes that the parent company's 2019 net income of DKK 2,166 million (2018: net income of DKK 1,472million) be carried forward to next year by transfer to retained earnings.
The compa-nies will collaborate on research to identify an initial product candidate and CureVac will contribute a portion of the overall costs for the development of this product candidate, up to the time of an investigational New Drug Application. Genmab would thereafter be fully responsible for the development and commercialization of the potential product, in exchange for undisclosed milestones and tiered royalties to CureVac.
Two product candidates are currently in development in connection with this agree-ment, DuoBody-PD-L1x4-1BB and DuoBody-CD40x4-1BB. We submitted CTAs for these products in 2019 and dosed the first patient in a Phase I/II study for DuoBody-PD-L1x4-1BB in May 2019 and dosed the first patient in a Phase I/II for DuoBody-CD40x4-1BB in September 2019. Under the terms of the agreement Genmab will provide CureVac with a USD 10 million upfront payment.
If BioNTech and us jointly select any product candidates for clinical development, development costs and product ownership will be shared equally going forward. If one of the companies does not wish to move a product candidate forward, the other company is entitled to continue developing the product on predetermined licensing terms. The agreement also includes provisions which will allow the parties to opt out of joint development at key points.
The strategic partnership will focus on the research and develop-ment of differentiated mRNA-based antibody products by combining CureVac's mRNA technology and know-how with Genmab's proprietary antibody technologies and expertise. Collaboration with BioNTech (DuoBody-PD-L1x4-1BB and DuoBody-CD40x4-1BB) In May 2015, we entered an agreement with BioNTech to jointly research, develop and commercialize bispecific antibody products using our DuoBody technology platform and antibodies.
Under the terms of the agreement, Genmab paid Immatics an upfront fee of USD 54 million and Immatics is eligible to receive up to USD 550 million in development, regulatory and commercial milestone payments for each product, as well as tiered royalties on net sales. Collaboration with CureVac During December 2019, Genmab entered into a research collaboration and license agreement with CureVac AG.
Collaboration with Immatics In July 2018, Genmab entered into a research collaboration and exclusive license agreement with Immatics Biotechnolo-gies GmbH (Immatics) to discover and develop next-generation bispecific immunotherapies to target multiple cancer indica-tions. Genmab received an exclusive license to three propri-etary targets from Immatics, with an option to license up to two additional targets at predetermined economics.
This includes payments under our asset purchase agreement with IDD Biotech in connection with our development of HexaBody-DR5/DR5, our ADC license agreement with Seattle Genetics in connection with our enapotamab vedotin antibody and our research, collabo-ration and exclusive license agreement with Immatics to discover and develop next-generation bispecific immuno-therapies to target multiple cancer indications.
CureVac would retain an option to participate in de-velopment and/or commercialization of one of the potential additional programs under pre-defined terms and conditions. Further, Genmab made a EUR 20 million equity investment in CureVac. Refer to note 3.4 for additional information regarding Genmab's equity investment in CureVac. In-Licensed Technology While not material in 2018 or in 2019, in the future, our results and financial condition could be affected by mile-stone payments and royalties related to technology we have licensed or acquired.
If Genmab exercises any of these options, it would fund all research and would develop and commercial-ize any resulting product candidates with CureVac eligible to receive between USD 275 million and USD 368 million in de-velopment, regulatory and commercial milestone payments for each product, dependent on the specific product concept. In addition, CureVac is eligible to receive tiered royalties in the range from mid-single digits up to low double digits per product.
In addition, we record all development expenses incurred by us in connection with this collaboration as research and development expenses, while reimbursements received from Seattle Genetics related to such development expenses are recorded in revenue as reimbursement income. Our cost sharing arrangement with BioNTech is similar to the one with Seattle Genetics described above with respect to tisotumab vedotin. year period.
Such reimbursements may not be immediate or may be offset by other costs incurred or profits received by one or both partners. As a result, we may incur costs for which we are not ultimately responsible, and this may affect our working capital, liquidity and availability of resources for other projects. On the other hand, we may also be responsible for reimbursing Seattle Genetics in respect of the portion of its spending in furtherance of the collaboration for which we are responsible.
All costs and profits for tisotumab vedotin will be shared on a 50:50 basis. Our cost-sharing arrangement with Seattle Genetics in respect of the co-development and co-commercialization of Financial Statements / Other Disclosures 136 5.8 Collaborations and Technology Licenses Continued tisotumab vedotin is such that, from time to time, one partner may be required to bear certain costs in furtherance of the collaboration for which it would be entitled to seek reim-bursement of 50% of the costs from the other partner.
(1,658) 440 (768) 134 Total changes in working capital (1,218) (634) Collaboration with Seattle Genetics (Tisotumab vedotin) In October 2011, we entered into a license and collaboration agreement with Seattle Genetics. In August 2017, Seattle Genetics exercised an option it was granted pursuant to this agreement to co-develop and co-commercialize tisotumab vedotin with us.
Pursuant to the terms of the agreement, Janssen's obligation to pay royalties under this agreement will expire on a country-by-country basis on the later of the date that is 13 years after the first sale of daratumumab in such country or upon the expiration of the last-to-expire relevant product patent (as defined in the agreement) covering daratumumab in such country.
We receive tiered royalty payments between 12% and 20% based on Janssen's annual net product sales. The royalties payable by Janssen are limited in time and subject to reduction on a country-by-country basis for customary reduction events, including upon patent expiration or invalidation in the relevant country and upon the first commercial sale of a biosimilar product in the relevant country (for as long as the biosimilar product remains for sale in that country).
Changes in working capital: Receivables Other payables Collaboration with Janssen (Daratumumab/DARZALEX) In August 2012, we entered into a global license, develop-ment, and commercialization agreement with Janssen for daratumumab (marketed as DARZALEX for the treatment of MM). Under this agreement, Janssen is fully responsible for developing and commercializing daratumumab and all costs associated therewith.
Under the agreement with Novartis, we are entitled to royalties of 20% of worldwide net sales of ofatumumab for the treatment of cancer and 10% of worldwide net sales for non-cancer treatments, as well as certain potential regulatory and sales milestones, of which only certain sales milestones remain. Novartis is fully responsible for all costs associated with developing and commercializing ofatumumab.
Below is an overview of some of our collaborations that have had a significant impact or that we expect may in the near term have a significant impact on our financial results. (DKK million) Note 2019 2018 Adjustments for non cash transactions: Depreciation, amortization and impairment Share-based compen-sation expenses Other 3.1, 3.2 139 88 2.3, 4.6 147 5 91 Total adjustments for non cash transactions 291 179 Collaboration with Novartis (Ofatumumab) Ofatumumab is commercialized by Novartis under a co-development and collaboration agreement with us, which it acquired from GSK in 2015.
Our Collaborations We enter into collaborations with biotechnology and pharmaceutical companies to advance the development and commercialization of our product candidates and to supple-ment our internal pipeline. We seek collaborations that will allow us to retain significant future participation in product sales through either profit-sharing or royalties paid on net sales.
In the fourth quarter of 2019, we moved from the 18% royalty tier (applica-ble to net sales exceeding USD 2.0 billion in a calendar year) to the royalty tier of 20% on the portion of net 2019 sales exceeding USD 3.0 billion. The total amount of potential milestone payments under the contract is approximately USD 1,015 million, and to date, we have recorded approximately USD 835 million in milestone payments from Janssen and could be entitled to receive up to USD 180 million in further payments if certain additional milestones are met.
Financial Statements / Other Disclosures 135 5.7 Adjustments to Cash Flow Statement 5.7 5.8 We are also eligible to receive certain additional payments in connection with development, regulatory and sales milestones. Adjustments to Cash Flow Statement Collaborations and Technology Licenses Sales of DARZALEX have grown since it received its first marketing approval in the United States in 2015.
Collaboration, Development and License Agreements We have entered into collaboration, development and license agreements with external parties, which may be subject to renegotiation in case of a change of control event in Genmab A/S. However, any changes in the agreements are not expect-ed to have significant influence on our financial position. Please refer to note 4.6 for additional information regarding change of control clauses related to share-based instruments granted to the Executive Management and employees.
Total 7.1 1.7 Fees for other services than statutory audit of the financial statements provided by PricewaterhouseCoopers Statsauto-riseret Revisionspartnerselskab amounted to DKK 5.2 million (DKK 0.6 million in 2018). Other services than statutory audit of the financial statements comprise services relating to Genmab's IPO on the Nasdaq in the U.S., tax and VAT com-pliance, agreed-upon procedures, opinions relating to grants, educational training and accounting advice.
In case of the change of control event and the termination of all 22 service agreements the total impact on our financial position is estimated to approximately DKK 75 million as of December 31, 2019 (2018: DKK 81 million). (DKK million) 2019 2018 PricewaterhouseCoopers Audit services Audit-related services Tax and VAT services Other services 1.1 0.1 0.4 0.1 1.9 2.3 0.5 2.4 Change of Control In the event of a change of control, change of control clauses are included in some of our collaboration, development and license agreements as well as in service agreements for certain employees.
If Genmab as a result of a change of control terminates the service agreement without cause, or changes the working conditions to the detriment of the employee, the employee shall be enti-tled to terminate the employment relationship without further cause with one month's notice in which case Genmab shall pay the employee a compensation equal to one-half, one or two times the employee's existing annual salary (including benefits).
As such, there will be no further proceedings in the case. Contingent assets and liabilities are not to be recognized in the financial statements, but are disclosed in the notes. 5.6 Fees to Auditors Appointed at the Annual General Meeting In addition, Genmab has entered into service agreements with 22 (2018: 26) current employees according to which Genmab may become obliged to compensate the employees in connection with a change of control of Genmab.
On January 25, 2019, the District Court ruled on summary judgment that the three MorphoSys patents were invalid for lack of enablement. MorphoSys had the opportunity to appeal the District Court's decision. On January 31, 2019, MorphoSys dismissed its infringement claims against us and Janssen, and we and Janssen, in turn, dismissed our inequitable conduct claims against MorphoSys.
District Court of Delaware against Genmab and Janssen Biotech, Inc. for patent infringement based on activities relating to the manufacture, use and sale of DARZALEX in the United States, which was subsequently amended to include two additional MorphoSys patents. In addition, a further claim by Janssen and us that the three MorphoSys patents were unenforceable due to inequitable conduct by MorphoSys was included in the case.
Accounting Policies Contingent Assets And Liabilities Contingent assets and liabilities are assets and liabilities that arose from past events but whose existence will only be confirmed by the occurrence or non-occurrence of future events that are beyond Genmab's control. Legal Matter MorphoSys Patent Infringement Complaint In April 2016, MorphoSys filed a complaint at the U.S.
In the event of termination by Genmab (unless for cause) or by a mem-ber of Executive Management as a result of a change of control of Genmab, Genmab is obliged to pay a member of Executive Management a compensation equal to his existing total salary (including benefits) for up to two years in addition to the notice period. In case of a change of control event and the termination of service agreements of the Executive Management, the total im-pact on our financial position is estimated to approximately DKK 106 million as of December 31, 2019 (2018: DKK 98 million).
Management and Employees The service agreements with each member of the Executive Management may be terminated by Genmab with no less than 12 months' notice and by the member of the Executive Management with no less than six months' notice. In the event of a change of control of Genmab, the termination notice due to the member of the Executive Management is extended to 24 months.
Upon termi-nation, the DKK 50 million (2018: DKK 50 million) threshold amount is no longer applicable and the value of the derivative liability, if any, could be due to the counterparty upon request. Service Agreements with Executive Subsequent Events No events have occurred subsequent to the balance sheet date that could significantly affect the financial statements as of December 31, 2019.
Ownership Ownership and Votes 2019 and Votes 2018 Name Domicile Genmab B.V. Genmab Holding B.V. Genmab US, Inc. Genmab K.K. Utrecht, the Netherlands Utrecht, the Netherlands New Jersey, USA Tokyo, Japan 100% 100% 100% 100% 100% 100% 100% Financial Statements / Other Disclosures 134 5.5 Contingent Assets, Contingent Liabilities and Subsequent Events Continued In addition, the agreement requires Genmab to maintain a cash position of DKK 258.5 million at all times or the counter-party has the right to terminate the agreement.