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p. 1
Reinventing
existing medications
2022
Annual report
Contents
This Annual Report 2022 includes the management report in
accordance with article 12 of the Royal Decree of 14 November 2007
relating to the obligations of issuers of ﬁnancial instruments admitted
on a regulated market. All information required to be included in such
management report pursuant to articles 3:6 and 3:32 of the Belgian
Code of Companies and Associations is reported throughout all
difference sections of this Annual Report.
p.50
p.12
Business
Overview
Auditor’s
Report
2030
Environmental,
Social and
Governance
Roadmap
Consolidated
Financial
Statements
Corporate
Governance
p.124
p.80
Hyloris
_ Annual Report 2021
p. 3
Proﬁle
4
Highlights
6
Key ﬁgures
8
Letter to Shareholders
10
Business overview
12
Our strategy
16
2030 Environmental, Social and
Governance Roadmap
40
The Hyloris share
48
Corporate Governance
50
Consolidated Financial Statements
80
Auditor’s report
124
Glossary & other infos
136
p.40
Hyloris
_
Annual Report 2022
p. 4
p. 5
Hyloris is a specialty
biopharma company
committed to bringing innovative treatments
that offer added value to underserved patient
populations.
We apply our knowhow and technological innovations to
existing pharmaceuticals to unlock their hidden potential and
address important unmet medical needs. We have built a
broad proprietary pipeline of complex value-added products
with potential to offer signiﬁcant advantages over currently
available alternatives.
Today, we have two, early stage partnered products,
Sotalol IV for the treatment of atrial ﬁbrillation, and
Maxigesic
®
IV, a novel, dual mode- of-action non-opioid
analgesic for the treatment of post-operative pain.
Our development strategy of reformulating and repurposing
approved pharmaceuticals primarily utilises the 505(b)(2)
regulatory pathway in the U.S. and similar pathways in other
countries, which is speciﬁcally designed for pharmaceutical
agents for which the safety often times has already been
established.
This focused strategy can dramatically reduce the clinical
burden required to bring a product to market, and signiﬁcantly
shortens the development timelines while also reducing costs
and risks.
Hyloris employs 37 people
(15 women and 22 men) of 11 nationalities.
Proﬁle
Specialty biopharma
Adding value and innovation to existing drug assets for core unmet medical needs
Broad pipeline
With 14 innovative product-candidates, 2 marketed products and 3 high barrier
generics
In Europe (Belgium) and US
Founded in 2012 in the heart of Europe
Strong network and knowhow
KOL & partners network, in-house research facility with a new and improved R&D lab
under construction
Listed
Hyloris is listed on the Euronext Brussels Stock Exchange (HYL:BB)
Market cap end of January 2023: Average volume weighted market cap in April 2023
+/- €370 million
Environmental,
Social and Governance Roadmap & Objectives
Hyloris is committed to develop, manufacture, and deliver therapies to address
major clinical unmet needs across a wide range of therapeutic areas. It also
considers the impact of our operations on the planet we share. We are committed
to considering every aspect of the consequences of our actions not only in ethical
business operations but also in our relationships with a broad community of
stakeholders including:
• Patients • Physicians • Payors • Governments
• Investors • Employees • Suppliers • Partners
Hyloris strives to operate in a socially responsible manner combining good business
ethics, a key focus on the wellbeing of employees, and a relationship with the
environment, whilst working to deliver safe, novel products to patients.
In this annual report, Hyloris presents an assessment of ESG standards Hyloris
aims to uphold, and signals speciﬁc areas where it aims to measurably improve
in the future. By incorporating ESG factors into our decision-making process, we
can enhance our reputation, reduce risks, increase efﬁciency, foster innovation and
create long-term value for our shareholders. We will continue to engage with our
stakeholders and report on our progress as we strive to make a positive difference
in the world.
Hyloris
_
Annual Report 2022
p. 6
p. 7
11
nationalities
The number of different
nationalities within the Hyloris
team nearly doubled since
2021, from 6 to 11.
During 2022
and early 2023
Breathing health care
at a new life sciences hub
In 2022, Hyloris moved into its new ofﬁces on the outskirts of Liège. An old
coal mine site is now home to the CHC hospital and, right next door, a new Life
Sciences Hub called Légiapark. The new location is expected to beneﬁt employee
well-being greatly, and will soon incorporate our new and expanded R&D lab
facilities as well.
Légiapark is dedicated to hosting businesses
that operate in the life sciences sector. The
site is located no more than ten minutes
from the city centre of Liège, the heart of
Wallonia’s biotech ecosystem. The Liège
airport and the main highway E40 leading
from Brussels and beyond deep into
Germany, add extra accessibility.
The complex has been developed and
managed by Noshaq group, the leading
funding partner for SME’s in the region of
Liège, founded in 1985, which also supported
Hyloris in different stages of its development,
including the IPO and the 2022 capital raise.
The move brings us right across the road
from CHC MontLégia and its thousands
of patients. This aligns with our corporate
ambition to become a leader in value-added
medicines. Taken overall, the CHC group
employs no less than 1.000 doctors always
looking to bring their patients the best
possible care.
In 2023, Hyloris will inaugurate its improved
R&D lab facility, which will allow the
company to perform drug formulation and
analytical activities for an ever growing
pipeline, further streamlining processes and
more effectively deploying internal resources.
The choice for Légiapark was also a choice
for sustainability. Solar panels will supply
the complex with two thirds of its energy
needs at full capacity. Read more about
Légiapark’s sustainability features in our
ESG (environmental, social and governance)
roadmap further in this annual report.
In 2022 and early 2023, the Hyloris team nearly doubled in headcount, from 21 at
the start of last year, to 37 currently. Talented professionals from around the globe
have joined us, boosting the number of different nationalities from 6 to 11.
Increased experience within our
expanded team will enable Hyloris
to accelerate efforts into expanding
our product portfolio and bringing
more product candidates across the
ﬁnish line so they can serve patients,
physicians and payors.
The Hyloris team is better equipped
and more conﬁdent than ever before
in our capabilities to assess new
opportunities, ﬁnd the best partners,
speed up crucial R&D steps in our
own lab and navigate the regulatory
landscape in countries all over the
world.
At the same time, we are convinced
that we must remain a lean and
mean biopharmaceutical company
and be able to offer a diversiﬁed
portfolio that partially reduces
development risk. We reiterate
our ambition to be nimble in the
execution of our strategy, and
to keep overhead and costs low,
compared to global standards in the
pharmaceutical industry.
Highlights
In an effort to reinforce bonds
between our colleagues working
together across country lines,
monthly company updates
happen virtually to keep the
team engaged and informed.
The colleagues based in Europe
meet each other frequently at our
new Liège headquarters, and are
offered overnight stays at a hotel
in the heart of Liège to bridge
multiple working days at the
ofﬁce.
Hyloris
_
Annual Report 2022
p. 8
p. 9
key
ﬁgures
2022
14
2
€43
€0
product candidates
repurposed or
reformulated 3 high
barrier generics and
2 commercialised
products
million revenues,
with increasing
contributions from
royalties
million in cash &
cash equivalents
no ﬁnancial debt
Financial highlights
€3
commercial products
Sotalol IV
for the treatment
of atrial ﬁbrillation
commercialised in the US
Maxigesic
®
IV
for the treatment of postoperative
pain commercial in 20+ countries
(including imminent launches)
with potential regulatory
approval in the US before
end of 2023
Year ended 31 December
(in € thousand)
2022
2021
Variance
Revenues
2.951
3.096
-4,7%
Cost of sales
(94)
(107)
Research and development expenses
(10,151)
(5,056)
100,8%
General and administration expenses
(3,517)
(2,900)
21,3%
Shares’ issuance related expenses
-
-
Earnings/losses from Associates and joint ventures
(130)
(191)
-31,9%
Other operating result
303
(5,381)
Operating result
(10,638)
(10,541)
0,9%
Net ﬁnancial result
(127)
(741)
-82,9%
Income Taxes
(4)
(297)
-98,7%
Result for the period
(10,770)
(11,579)
-7,0%
Net operating cash ﬂow
(13,154)
(11,250)
16,9%
Cash and cash equivalents
43,457
50,012
-13,1%
Hyloris
_
Annual Report 2022
p. 10
p. 11
2022 was also the year in
which royalty income from our
2 commercialised products –
Maxigesic
®
IV a potent but non-
opioid post-operative pain killer and
Sotalol IV for the treatment of atrial
fibrillation – increased significantly.
This trend is set to continue in the
years to come.
Another big commercial step
forward can be expected later this
year, with the potential registration
of Maxigesic
®
IV for the US market.
In July 2022, regulatory authorities
in the US requested additional data
relating to the primary packaging
of Maxigesic
®
IV. The regulator
did not raise any questions about
the data generated during the
clinical development program. Our
full response, which addresses all
of the regulator’s questions was
filed on April 17
th
2023. We expect
the submitted data to satisfy the
FDA’s requirements with approval
before the end of the year, with
first sales following shortly after.
As of this writing, Maxigesic
®
IV is
commercialised in over 20 countries
and approved in 40 countries, with
multiple launches lined up in the
months ahead.
A notable clinical success in 2022
was the positive phase 1/2 trial
data for Tranexamic Acid Oral
Mouth Rinse – which aims to
reduce oral bleeding during dental
procedures. We are anticipating
that a phase 3 trial can start in
2023. Additionally, pivotal studies
for HY-029 and Dofetilide IV are
also in preparation.
Several of the other product
candidates in our pipeline are
clearing hurdles on their way to
patients in need, with potential
launches in the coming years.
Phase 2 clinical trials for Alenura™
(Acute pain in Insterstitial Cystitis
/ Bladder Pain Syndrome) are in
preparation, with at least 6 million
patients in the US
suffering from
acute pain flares disrupting their
daily lives.
Top line results for the phase 2
dose-finding study of Miconazole-
Domiphen Bromide (targeting
recurring Vulvovaginal Candidiasis,
a chronic infection) will help define
the next clinical study. One in two
women live through an episode of
VVC sooner or later. 20% of them
develop severe or recurrent VVC
where reinfection happens at least
4 times a year.
Our strategy is championed by
a team that almost doubled its
headcount since 2021. 37 bright
minds of 11 different nationalities
apply their tremendous expertise to
move our product candidates and
the company forward. We have an
impressive team, and I’m proud to
work with all of them.
During the second half of last year,
our Belgian team moved into our
new offices at Légiapark, a new
biotech hub right next to the CHC
hospital in Liège. A few months from
now, we will inaugurate our new
R&D lab in that same location.
Stock market indices painted a
disappointing picture of financial
market conditions in 2022. The
global biotech sector showed double
digit declines across the board, and
the Hyloris share was not spared.
Still, our share price remained
comfortably above the IPO price of
€ 10,75.
Meanwhile, sell side analysts remain
unified in their positive opinion of our
strategy and hence the valuation
of the Company. Since our yearly
update, two additional investment
banks have published buy ratings
for our stock. As we report on our
progress, we have also noticed
increased interest from international
investors, as we interacted with
many of them throughout the
year. Combined with the trust we
have received from you, our loyal
shareholders, the progress we are
making, our confidence in the future
is strengthened.
As we are increasingly aware of
the impact of our actions enclosed
in this annual report you will find an
initial assessment and target action
plan covering all three areas of ESG:
environment, social and governance.
With our sights set on the year
ahead, we would like to thank you
for your continued support. We
are thrilled about what’s coming in
2023 and look forward to providing
you with updates on our progress.
Sincerely
,
Stijn Van Rompay
Stijn Van Rompay
CEO Hyloris
Letter to
Shareholders
Our pipeline continues to
be guided by a methodical,
unmet medical needs-driven
assessment
covering
approximately
200
opportunities
in 2022.
Dear Shareholders,
After stringing together a series of
successes in 2022, Hyloris has started
2023 on the right foot. Expansion and
progress of our product pipeline has
once again proven our business model
is as successful as it is unique. The
development and delivery of added
value reformulated medicines is at the
heart of our mission. I’m particularly
pleased with the addition of HY-083
to our pipeline, which aims to relieve
symptoms for patients suffering
from idiopathic rhinitis. With the
more recent in-licensing of HY-088,
targeting phosphate deficiency in the
blood, we are on the right track to
reach our goal of 30 portfolio assets
before 2025.
In the relentless search for the
best product candidates our team
evaluated around 200 potential
product candidates in 2022 whereby
our selection criteria lean towards
repurposing of existing molecules,
rather than only reformulation.
Repurposed molecules, while requiring
higher R&D investments, have a
higher potential to change therapy
outcomes for patients and in general
offer enhanced value creation for
all our stakeholders. For both our
reformulated and repurposed assets,
the strict goal remains to bring them to
market within 7 years at an average
cost of less than € 7 million.
We believe the Company is
sufficiently capitalised to execute the
development of the current pipeline.
A € 15 million equity raise in March
2022 solidified our cash position
which was supplemented shortly after
by the exercise of warrants resulting in
an extra € 2,8 million of net proceeds.
Hyloris
_
Annual Report 2022
p. 12
p. 13
Business
overview
Miconazole-Domiphen Bromide:
Hyloris will co-develop a
topical synergistic combination
treatment for Recurrent
Vulvovaginal Candidiasis (rVVC),
a condition that affects nearly
10
%
of women during their
lifetime
2
mio
cases of lung cancer
per year
Plecoid
TM
agents:
small cell lung
cancer accounts for
approximately 13-15% of
Strong financial position
Solid ﬁnancials in an exceptionally difﬁcult
context for ﬁnancial markets and the
healthcare sector, underpin the continued
success of Hyloris. The Company had a
cash position of €43 million and was free
of ﬁnancial debt on December 31
st
2022.
Revenues were close to €3 million, thanks to a
signiﬁcantly higher contribution from royalties
from the 2 commercialised products and
revenue related to out-licensing.
In March of 2022 Hyloris raised €15 million in gross
proceeds from new and existing, local and international
investors, through an equity offering by means of a
private placement via an accelerated bookbuild offering
of 967,742 new shares (being approximately 3.7% of the
Company’s outstanding shares (pre-transaction) at an
issue price of EUR 15.50 per share, representing a tight
discount of 1.6% to the 30-day VWAP (volume-weighted
average price).
Assuming continued strategic out-licensing, commercial
success for Maxigesic
®
IV and Sotalol IV, additional non-
dilutive funding and milestone payments, the Company
believes it is sufﬁciently capitalised to execute the full
development of the current pipeline assets (14 product
candidates, 3 high barrier generics and 2 commercial
products).
Hyloris
_
Annual Report 2022
p. 14
p. 15
6
mio
people in the US.
Alenura
TM
, the
product candidate
treats acute pain
in interstitial
cystitis/bladder
pain syndrome
(IC/BPS), a
condition that
affects at least
Increased roll out of
commercial products :
Maxigesic
®
IV, a novel,
unique combination
for the treatment of
post-operative pain is
currently licensed to
partners covering
over 100 countries
across the globe.
Commercial success
Commercial progress of the Company was demonstrated by
increased royalty contributions from 2 commercialised products.
1
DelveInsight Market Research Report (2020).
Sotalol IV is a patented intravenous
(IV) solution for the treatment of atrial
ﬁbrillation, which is marketed by our
partner AltaThera in the US. The
new indication of Sotalol IV allows to
signiﬁcantly reduce the length of hospital
stay and potentially signiﬁcantly reduce
the overall cost of care, while improving
patient outcomes and safety.
Maxigesic
®
IV, a new patented
treatment that meets the urgent need
for non-opioid pain treatments in the
post-operative hospital environment, to
avoid side effects and risk of addiction
associated with opioids. Its dual mode
of action is a unique combination of
paracetamol and ibuprofen for infusion.
Maxigesic
®
IV is developed with our
partner AFT Pharmaceuticals.
The non-opioid analgesic space and the
market for post-operative pain is growing
rapidly and is forecasted to reach $1.7
billion in 2028 in the U.S., up from $745
million in 2019.
1
A Complete Response Letter from
the United States Food and Drug
Administration (FDA) was received,
stating that it was unable to complete
its review, requesting additional
information relating to potential
leachable and extractable compounds
expected to be present in the drug
product based on the drug product
packaging. Importantly, the agency
did not report any issues related to
the data generated during the clinical
development programme. Hyloris
and its partner submitted a formal
response to the Complete Response
Letter on 17 april 2023, and believe
to have addressed all questions
and recommendations. This implies
potential New Drug Application (NDA)
approval by the end of 2023.
Submissions were made in 15
countries in Asia, Africa and
Latin America, including large
pharmaceutical markets such as
Canada and Mexico.
Marketing authorizations have
been granted in several countries
including Italy, Norway, Indonesia, The
Netherlands, Finland, Singapore and
Hong Kong.
Launches occurred in 7 countries:
Denmark, Sweden, Finland, Norway,
The Netherlands and Singapore.
Near-term launches are expected in
several additional countries, bringing
the total number of countries where
Maxigesic
®
IV will be available up to
more than 20.
4 U.S. patents were granted to Hyloris,
ranging in expiry between 2035 and
2039.
Growing pipeline
Promising new product-candidates were announced in 2022 and early 2023,
both serving patient populations with few effective treatment options today.
HY-083
was announced in
November 2022. This novel,
proprietary formulation will
be administered intranasally
to treat idiopathic rhinitis.
Idiopathic rhinitis is a medical
disorder characterised by a
nasal symptoms that resemble
nasal allergies and hay fever
(allergic rhinitis) but are not
related to a known cause like
allergens or infectious triggers.
An estimated 7% of the world
population is affected by
idiopathic rhinitis, representing
an estimated 19 million people
in the U.S. alone. 13% of them
have moderate to severe
idiopathic rhinitis, leading
them to actively seek out
specialist care. Hyloris seeks to
offer a new, unique, safe and
approved targeted therapy
treatment option.
HY-088
was announced in
January 2023. The Company
in-licensed the technology to
develop an oral liquid targeting
hypophosphatemia, a mineral
deﬁciency in the blood. In
severe forms, this condition
can be life threatening.
The condition can result in
muscle and bone weakness,
respiratory or heart failure,
seizures or coma amongst
others. It is estimated
hypophosphatemia affects
around 5% of hospitalised
patients, and a subpopulation
needs direct treatment during
and/or after their hospital stay.
Post-closing event
A formal response to the FDA’s Complete Response Letter regarding
Maxigesic
®
IV received in 2022, was ﬁled in 17 April 2023. All questions were
addressed implying a potential market approval before the end of 2023.
p. 16
p. 17
Hyloris
We focus
on value-added
medicines, pharma’s sweet spot
COMMITTED TO ADDRESSING
UNDERSERVED NEEDS THROUGH
INNOVATION
Our core focus and mission is to address
underserved medical needs and bring
added value to the healthcare system
through reformulations and repurposing,
with the goal to change therapy outcomes
and improve the lives of patients around the
globe.
We have built
a broad proprietary
portfolio of value-added reformulated
and repurposed product candidates
by
applying our knowhow and technological
innovations to existing pharmaceuticals.
Since our inception, we have significantly
strengthened our capabilities and skills,
and expanded our focus from high barrier
generics towards complex, reformulated
and repurposed patented products, thereby
further moving up the value chain.
Our development strategy primarily
utilises the 505(b)(2) regulatory pathway
in the U.S.
and similar pathways in other
countries, which are specifically designed for
pharmaceutical agents for which the safety
and efficacy have already been established.
This focused strategy can dramatically
reduce the clinical burden required to bring a
product to market, and significantly
shortens
the development timelines while also
reducing costs and risks.
To achieve our goal we are in continuous
dialogue with healthcare professionals,
patient groups, payors and partners as
well as leveraging our extensive sourcing
network and R&D capabilities.
Our
strategy
and strengths
Our core focus
and
mission
is to address
underserved
medical needs
and bring added
value to the
healthcare system
Unique features
• patent protected,
• reformulations,
• repurposing,
• novel routes of administration,
• novel combinations,
• extended indications
Value-added 505(b)(2) compounds
Key benefits to patients,
physicians and payors
• Improved therapy outcomes,
• better patient experience,
• greater convenience,
• more effective,
• acceptable safety/tolerability profile
• improved compliance
New
chemical
entities
Off-patent
ethical
compounds
and generics
Our ambition is to become a
leading 505(b)(2) company
Hyloris aims to become a market leader
in the number of value-added products
in development eligible for the 505(b)(2)
regulatory track.
Acquisition and
in-licensing
of product candidates
based on:
• Clear scientific and medical
rationale based on physicians’ input
• Approved, well-known molecules
• Clear regulatory pathway
• Landscape review & patent
protection
• Addressable market need
Continuously growing
diversified product
portfolio
characterised by:
• Fast market adoption
• Maximised ROI
• Addressing clear unmet needs
• Large potential
7-7 technical
feasibility
criteria strategy
development in ≤ 7 years
for ≤ $7 million cost
on average
Development cost
Time
Hyloris
_
Annual Report 2022
p. 18
p. 19
2
commercialised
products - via
partners in the U.S.
and RoW
14
505(b)(2)
differentiating product
candidates in the pipeline and
growing exponentially across
various stages of development
and indications
Acquisitions
and in-licensing
Scouting for strategic ﬁts
on an opportunistic basis.
Real-world
data and
surveys
Polling KOLs and payors
to ﬁnd solvable problems
and assess appetite
for potential solutions
needs.
Desk research
Conducting extensive
market studies and com-
paring utilisation patterns
and labels for ex-U.S.
pharmaceuticals.
Obtaining
FDA approval
for currently
unapproved
applications
Uncovering usage
opportunities for indications
that are not included in the
current package insert.
Repurposing and
reformulating
approved
pharmaceuticals
to develop
innovative drug
assets for core
unmet medical needs
30
key assets
before 2025
Network
In-depth discussions
with physicians and
partners to uncover
underserved needs.
3
high barrier generics
Hyloris
_
Annual Report 2022
p. 20
p. 21
we do not target substantial
upfront milestone payments
from our commercial partners as
we prioritise more product sales
related income.
The advantages of the
505(b)(2) regulatory
pathway
The 505(b)(2) regulatory pathway
significantly lowers development
risks and costs compared to the
traditional 505(b)(1) regulatory
pathway. It is intended for
molecules that have previously
been approved by the FDA or that
have a long history of clinical use.
The potential advantages offered
by products eligible for the 505(b)
(2) pathway compared to the
505(b)(1) pathway include:
•
Lower formulation risk:
developing new formulations
of drugs that are extensively
described and documented (both
clinically and chemically) reduces
potential formulation issues.
•
Lower clinical and regulatory
risk:
reformulating approved
and marketed pharmaceutical
agents will usually have higher
probability of clinical success
and regulatory approval as
clinical development can usually
be reduced to fewer bridging
studies to the reference listed
pharmaceutical drug (RLD).
•
Shorter development timelines:
on average 5 years compared to
8 to 15 years for new chemical
entities (NCE) that are developed
using the 505(b)(1) pathway.
•
Much lower costs:
we expect
to spend on average less
than €7 million for the entire
development through to
submission for approval.
•
Lower commercial risk:
as
505(b)(2) products reference
well-established drugs,
there is already a high user
awareness amongst physicians
and payors. We will leverage
that user awareness with our
products’ value dossiers clearly
demonstrating the added value
and unmet need that is being
addressed.
•
Competitive advantage and
protection:
although the chemical
entity of 505(b)(2) product
candidates cannot be patented,
we file other types of patents
(such as formulation patents,
process patents related to the
manufacturing or method of use
patents) to protect our products
from generic competition.
More notably, there are currently
around 6,000 hospitals and 33,000
cardiologists in the U.S., with more
than 70% of cardiologists employed
by hospitals. We will commercially
target sub-segments for the
promotion of our products such as an
estimated 3,200 electrophysiologists
in the U.S. (with the exception of
Sotalol IV, which is partnered with
AltaThera and HY-075 which has
potential in the larger retail market).
We intend to remain flexible
and assess the optimal
commercialisation strategy on a
case-by-case basis to maximise
the return on investment, including
potential commercial opportunities
outside the U.S. For our existing
commercial products, Sotalol IV and
Maxigesic
®
IV, we have agreements
with strategic partners for the
marketing, sale and distribution, i.e.
AltaThera and AFT Pharmaceuticals
respectively. The commercial partner
for Maxigesic
®
IV in the U.S. is Hikma
Pharmaceuticals, a leading supplier
of injectable hospital products in
the U.S,
•
Generate diversified revenue
streams with the current
commercial portfolio setting the
foundation for long-term growth.
We expect that sales from the
current commercial products
Maxigesic
®
IV and Sotalol IV will be
the primary drivers of short-term
revenue growth until additional
products are launched.
For the majority of our product
candidates which we expect to
license out (with the exception
of Sotalol IV, Maxigesic
®
IV and
Miconazole-Domiphen Bromide),
we expect to retain a large
minority or small majority of
the net product margin (i.e., the
gross profit after deduction of
distribution and manufacturing
related expenses, insurance,
transport etc.) realised by our
commercial partners. In general,
The key elements of our strategy
•
Build a portfolio of patented, complex,
proprietary value-added products
that
address underserved medical needs by
primarily utilising the capital and time
efficient 505(b)(2) regulatory pathway in
the U.S. (and similar pathways in other
countries).
Our mission is to pursue value creation
through our product development activities
with focus on products that are eligible
for the 505(b)(2) in the U.S. and similar
regulatory pathways in other countries.
By utilising this pathway, we can accelerate
development and lower the clinical and
regulatory risk, as compared to products
developed under the traditional 505(b)
(1) regulatory pathway (i.e. New Chemical
Entities, NCEs).
Our 505(b)(2) product development
candidates are sourced and selected through
multiple channels and are validated based
on scientific and medical input from our large
network of physicians and KOLs. All our
candidates must be able to get protection
through patents and trade secrets, and
they must have the ability to address unmet
medical needs and have large commercial
potential.
Furthermore, all our product candidates must
meet our predetermined strategic selection
criteria, including a total development
cost of less than € 7 million on average, a
development timeline expected to be less
than 5 years with an additional maximum 2
years for registration, a solid expected return
on investment and technically feasible to
develop.
•
Build a diversified and growing product
pipeline across various stages of
development.
Our ambition is to grow the pipeline with
products in various stages of development
and commercialisation with the goal to have
30 key assets before 2025 and to become the
market leader in number of 505(b)(2) products
in the pipeline the next coming years.
•
Build a strong intellectual property
portfolio and knowhow.
For all our 505(b)(2) product candidates, we
have a long-term strategy to register and
protect our intellectual property to maximise
our products’ commercial lifespan. Our patent
portfolio (as owner, co-owner and/or licensee)
provides a wide range of protection, including
dosages and formulations, medical indications,
methods for preparing a composition and
improved methods of production.
•
Flexible go-to-market strategy with the
goal to build our own lean commercial
organisation in the U.S.
As the majority of prescribers of our cardio-
vascular products in the U.S. are employed
by hospitals, we believe we will be able to
commercialise our cardiovascular portfolio in a
cost- efficient manner with our own small sales
force in U.S.
Our goal
is to have
30
key assets
before 2025
Our 505(b)(2)
product development
candidates are
sourced and selected
through multiple
channels and are
validated based
on scientific and
medical input from
our large network
of physicians and
KOLs.
Hyloris
_
Annual Report 2022
p. 22
p. 23
Intended to be commercialised by Hyloris in the U.S.
Intended to be commercialised with partner
Formulation and
feasibility
Clinical
Development
Regulatory
Filing
Target Market
Up to 7 years
Launched in U.S./partnered with AltaThera
Licensed in >100 countries /partnered with AFT Pharmaceuticals
Up to 7 years
* Our high barrier generic products, TXA RTU, HY-038, HY-016 and Fusidic Acid Cream have not been included in the above overview.
Product
Route of Administration
Indication
CARDIOVASCULAR (CV) PORTFOLIO
Sotalol IV
IV
Atrial
ﬁb
rillation
Aspirin IV U.S.
IV
Acute coronary syndrome
Dofetilide IV
IV
Atrial
ﬁb
rillation
Metolazone IV
IV
Congestive heart failure
HY-075
Oral Liquid
Coronary heart disease
Milrinone
Extended Release Capsule
Advanced heart failure (LVAD)
HY-074
IV
Acute coronary syndrome
Atomoxetine
Oral Liquid
ADHD
HY-029
Oral Liquid
Viral infection
HY-083
Nasal administration
Idiopathic Rhinitis
HY-088
Oral Liquid
Hypophosphatemia
Maxigesic
®
IV
IV
Post-operative pain
Tranexamic Acid OR
Oral Liquid
Speci
ﬁc
dental indication
Alenura™
PFS
IC / PBS
Miconazole-DB
Topical
Severe and rVVC
Plecoid™ Agent
IV
AML/SCLC
OTHER VALUE-ADDED PORTFOLIO
Aspirin IV U.S.
is formerly known as HY-073;
RTU:
ready to use;
LVAD:
battery-operated, mechanical surgically implanted pump,
which helps the left ventricle of the heart pump blood;
TXA:
tranexamic acid;
ADHD:
attention deficit hyperactivity disorder;
Miconazole-DB:
miconazole-domiphen bromide;
rVVC:
recurring Vulvovaginal Candidiasis;
AML:
Acute Myeloid Leukemia;
SCLC:
Small cell Lung Cancer
OUR PORTFOLIO
BUILDING A BROAD, PROPRIETARY INNOVATIVE PRODUCT PORTFOLIO
We are a specialty biopharma company
committed to bringing innovative treatments
that offer added value to underserved
patient populations, physicians, hospitals
and payors.
We apply our knowhow and technological
innovations to existing pharmaceuticals
and have built a broad proprietary product
pipeline that has the potential to offer
significant advantages over currently
available alternatives.
Two products, Sotalol IV and Maxigesic
®
IV
are currently being commercialised
by our partners AltaThera and AFT
Pharmaceuticals, respectively.
Outside of our core strategic focus, we also
have a few high barrier generic products in
development and registration phase.
Hyloris
_
Annual Report 2022
p. 24
p. 25
Product
Route of Administration
IP
Indication
Potential Added Value
CARDIOVASCULAR PORTFOLIO
Sotalol IV
’34-’38; granted & pending
AF
Shorter hospital stay; lower overall healthcare cost; facilitate antiarrhythmic therapy
for patients unable to swallow tablets
Aspirin IV U.S.
‘38; granted & pending
Coronary heart disease
Faster onset of action; lower overall healthcare cost; facilitate antiarrhythmic therapy
for patients unable to swallow tablets
Milrinone
Orphan indication
Advanced heart failure (LVAD)
Allow long term use of Milrinone to improve quality of life ; improved drug absorption
and concomitant treatment possible
Dofetilide IV
‘39; granted & pending
AF
Shorter hospital stay; lower overall healthcare cost; facilitate antiarrhythmic therapy
for patients unable to swallow tablets
Metolazone IV
‘38; granted & pending
Congestive heart failure
Fast onset of action (essential in critical care) ; improved drug absorption and
concomitant treatment possible
HY-074
Conﬁdential
Coronary heart disease
Fast onset of action (essential in critical care) with low drug-drug interaction risk;
therapy possible in patients who are nauseous or unconscious
HY-075
Conﬁdential
Coronary heart disease
Possibility for drug titration, ease of administration and indicated dosage control
OTHER VALUE-ADDED PORTFOLIO
Maxigesic
®
IV
‘30-’39; granted & pending
Pain
Highly effective non-opioid; dual MOA; greater pain relief
HY-004
‘39; granted & pending
ND
Address acute issues or possible procedural related complications in dental ofﬁces
Miconazole-DB
‘38; granted & pending
sVVC/rVVC
Dual MOA; addressing population for whom there is no cure available
Plecoid
TM
IP; pending
AML/SCLC
A chelator for adjunct therapy to chemotherapy for patients suffering from acute
myeloid leukaemia (AML) and small cell lung cancer (SCLC)
Alenura
TM
IP; ‘25-’38; granted & pending
IC/PBS
Ready-To-Use solution via a pre-ﬁlled syringe for intra-vesicular administration
targeting acute pain ﬂar
Atomoxetine
’36-‘43
; granted & pending
ADHD
Possibility for drug titration, ease of administration and indicated dosage control;
improved compliance and convenience
HY-029
Conﬁdential
Viral infections
Ease of administration and dosage control; improved compliance and clinical beneﬁt
HY-083
Conﬁdential
Idiopathic Rhinitis
Restoring normal function of the nasal mucosa, hereby suppressing chronic nasal
obstruction, rhinorrhea (a runny nose) and/or sneezing salvos.
HY-088
Conﬁdential
Hypophosphatemia
In many countries, no approved oral treatment exists
ND = non-disclosed
Beneﬁts to patients, physicians and
payors
Adding value is at the core of everything we do.
Below we present the unique features and benefits of
our candidate and commercial products as presented in
our pipeline chart:
Hyloris
_
Annual Report 2022
p. 26
p. 27
Current standard of care and
limitations
Treatments for AF may include
lifestyle changes, medications and
other interventions (e.g. surgery)
to try to alter the heart’s electrical
system. To reduce the risk of
blood clot formation, patients also
receive blood thinners, including
anticoagulants such as warfarin
or heparin, antiplatelet drugs such
as aspirin, and fibrinolytics such as
tissue plasminogen activator.
Most hospitalised patients with
AF receive an antiarrhythmic drug,
with the oral potassium channel
blockers being the principal rhythm
control drugs in the U.S. (including
amiodarone, dronedarone, Sotalol
and Dofetilide).
In 2021, about 810 million tablets
and capsules of rhythm control
drugs were sold in the U.S. with
amiodarone and Sotalol leading
the space with 26% and 23%
market share, respectively
5
.
Oral Sotalol and oral Dofetilide
each are widely used in different
patient subgroups. Both carry FDA
black box warnings due to their
drug induced proarrhythmic (i.e.
irregular heartbeats that can lead
to cardiac arrest) risk in patients
who are initiating or re-initiating on
oral Dofetilide or oral Sotalol.
As a result, AF patients from both
subgroups who initiate treatment
with oral Sotalol or oral Dofetilide,
must be continuously monitored in
a hospital setting for at least three
days or until steady state drug
levels (i.e. a constant level of the
drug in the blood) are achieved.
5
IQVIA
Our solution: Sotalol IV: an
innovative, patented method
of an IV formulation of
Sotalol, the 2nd most widely
used antiarrhythmic drug in
the U.S.
To address the required hospital
stay needed to monitor the
patient’s heart rhythm during
oral Sotalol initiation treatment,
an IV formulation was developed
seeking to reduce the required
hospital stay associated with oral
Sotalol loading. A safe, effective,
and patented method of using
Sotalol IV has been developed
to replace the current standard
loading/drug initiation regimen.
Sotalol IV is administered by an
infusion pump over one hour at
a constant infusion rate and has
a rapid onset of action enabling
the transition from acute IV
administration to chronic oral
therapy. This new procedure of
starting with Sotalol IV and then
transitioning to oral Sotalol, can
reduce hospital stay from 3 days
to a 1-day hospital outpatient
procedure, thereby potentially
significantly decreasing overall
cost of care, while potentially
improving patient outcomes and
safety. Moreover, a fast onset
of action is crucial in acute care
settings as is the case for patients
admitted to the hospital with
suspected AF.
Around half of patients currently
eligible for oral Sotalol or oral
Dofetilide within their respective
patient populations, could be
switched to intravenous modes
of administration when these
treatments become available.
Achievements
Prior to March 2020, Sotalol IV
was only approved by the FDA
for use in patients who are unable
to take oral Sotalol, representing
a very limited market and was
mainly used by paediatric cardiac
specialists. In March 2020, the
FDA approved the expanded
label of Sotalol IV to using Sotalol
IV in adult AF patients until near
steady-state exposure to Sotalol
is achieved prior to initiating or
increasing oral Sotalol dosing,
thereby significantly expanding its
market potential.
Sotalol IV is being commercialised
in the U.S. by Hyloris’ commercial
partner, AltaThera. Revenues from
Sotalol IV under the new expanded
label, and priced at above $2,000
per vial, are expected to grow
substantially over the next coming
years.
Our commercial portfolio
1
Centres for Disease Control and Prevention
2
Leila et al, 2011, Stroke Prevention in Nonvalvular Atrial Fibrillation
3
Dipak Kotecha and Jonathan P. Piccini, Eur Heart J. 2015
4
Kim et al, 2011, AHA Journal
1. Sotalol IV for the treatment
of atrial ﬁbrillation
Atrial ﬁbrilla tion (AF):
a life-threatening
cardiovascular disease
Atrial fibrillation is a quivering or irregular
heartbeat (arrhythmia) that can lead to
blood clots, stroke, heart failure and other
heart-related complications.
Normally, the heart contracts and relaxes
to a regular beat. In atrial fibrillation, the
upper chambers of the heart (the atria)
beat irregularly (quiver) instead of beating
effectively to move blood into the ventricles.
Most embolic strokes are due to blood clots
that are formed due to AF. They can break
off, enter the bloodstream, lodge in an
artery leading to the brain, block the blood
flow and result in stroke.
Source: Mayo Cli nic
U.S. prevalence expected to
increase
to 12 million
by 2030 in the US
1
454,000
AF-related hospitalisations
per year in the U.S. with majority receiving
an anti-arrthymtic drug.
AF contributes to about
158,000
deaths
each year in the U.S.
If left untreated, majority of AF patients
will die
within
5 years
following onset of symptoms.
AF is associated
with a
five-fold increase in the risk of a stroke
2
and a
three-fold increase in the risk of heart failure
3
Annual U.S. hospitalisation costs associated
with AF amount to
$6 billion
per
year and the total U.S. healthcare costs
related to AF are approximately
$26
billion
per year
4
Hyloris
_
Annual Report 2022
p. 28
p. 29
Our potential solution:
Maxigesic
®
IV: an innovative,
patented, IV formulation of
Paracetamol plus Ibuprofen
to combat the opioid crisis
Injectable formulations of
analgesics are typically used
when patients are unable to take
oral medications, when faster
onset of analgesia is required,
or when it is more convenient to
administer drugs in the injectable
form. Hospitalised patients may be
unable to take oral medications for
a variety of reasons including post-
anesthesia sedation, other forms
of sedation, nausea, vomiting,
gastrointestinal limitations, or
other conditions.
Maxigesic
®
IV is a novel and
unique combination of 1000mg
paracetamol with 300mg
ibuprofen solution for infusion for
use post-operatively in a hospital
setting.
There is an urgent need for safer
and more effective non-opioid pain
treatments in the post-operative
hospital setting, and thanks to
its unique, dual mode-of-action,
Maxigesic
®
IV has the potential to
become a valuable pain treatment
option without the side effects and
risk of addiction associated with
opioids.
Results from a randomised,
double-blind, placebo-controlled
Phase 3 trial in 276 patients
following bunion surgery
demonstrated that Maxigesic
®
IV was well-tolerated and had a
faster onset of action and offered
higher pain relief compared to
ibuprofen IV or paracetamol IV
alone in the same doses. Moreover,
the superior analgesic effect of
Maxigesic
®
IV was supported by
a range of secondary endpoints,
including reduced opioid
consumption compared to the
paracetamol IV and ibuprofen IV
treatment groups (P<0.005)
10
.
10 Daniels et al, 2019, Clinical Therapeutics
11 Maxigesic
®
IV Phase 3 exposure study. Study ID No AFT-MXIV-11. NCT04005755. Submitted for publication
An additional exposure study has
demonstrated Maxigesic
®
IV’s
efficacy and safety in an expanded
population group over a longer
treatment period
11
.
Recent achievements
In 2022 and early 2023,
Maxigesic
®
IV was launched in
7 countries including Denmark,
Sweden, Finland, Norway and
The Netherlands. In the near
term, additional launches are
expected in several countries,
bringing the total number of
countries where Maxigesic
®
IV will
be available up to more than 20.
Meanwhile, out-licensing deals for
several additional countries were
signed, paving the way for future
commercial expansion.
A Complete Response Letter
relating to our New Drug
Application was received from
the United States Food and Drug
Administration (FDA) in July 2022.
The CRL stated the regulator was
unable to complete its review,
requesting additional information
relating to potential leachable
and extractable compounds
expected to be present in the drug
product based on the drug product
packaging. Importantly, the agency
did not report any issues related
to the data generated during the
clinical development programme.
Importantly, the FDA did not
report any issues related to the
data generated during the clinical
development programme.
2. Maxigesic
®
IV for the treatment of
post-operative pain
$442M peak sales potential in U.S.,
Japan and EU5
6
Post-operative pain and the opioid crisis
Pain is a distressing sensory and emotional
feeling which normally occurs due to tissue
damage or illness. It is one of the most
widespread conditions in the world affecting
patient health and quality-of-life.
The duration of pain varies from short term,
known as acute pain, to long term referred to
as chronic pain. In the hospital setting, acute
pain is generally classified as post-operative
or non-operative. Post-operative pain is a
response to tissue damage during surgery
that stimulates peripheral nerves, which
signal the brain to produce a sensory and
emotional response.
6
DelveInsight market study (EU5: France, Germany, Italy, Spain, UK) (includes Maxigesic
®
in oral form)
7
Coley K et al. J Clin Anesth. 2002
8
Wonuk Koh et al, Korean J Anesthesiol. 2015
9
IQVIA and DelveInsight Market Research
Although acute pain is predictable after
operations, the management of post-
operative pain is a difficult challenge for
anaesthesiologists.
In 2019, 50,6 million surgical procedures
were performed in the U.S. Pain remains
the leading cause of unanticipated hospital
readmission following surgery
7
with > 80%
of surgical patients having moderate pain
and 31-37% of patients experiencing severe
or extreme pain.
8
The management of pain typically
involves treatment using a particular set
of drugs and is one of the most frequently
dealt with issues by physicians with limited
improvements over the last two decades.
Drugs that are used to treat pain can be
categorised in two groups: anaesthetics and
analgesics:
Anaesthetics
There are two major categories of
anaesthetics:
(1) general anaesthetics and
(2) local anaesthetics.
General anaesthetics are drugs that
produce loss of sensation associated
with loss of consciousness. Local
anaesthetics, in contrast, result in a
small region of anaesthesia particularly
at the region of the tissue wherein the
anaesthetic is injected into.
50.6
million
surgical
procedures
In 2019, 50.6
million surgical
procedures were
performed
in the U.S.
>80%
moderate
pain
31-37%
severe or
extreme pain
8
Pain remains the
leading cause
of unanticipated
hospital
readmission
following surgery
7
Analgesics
Analgesics are classified in two groups:
(1) opioids and
(2) non-opioids.
Opioids are substances that act on opioid
receptors to produce a morphine-like effect and
are frequently referred to as narcotics. They can
be critical for post-surgical pain management
because of their powerful effect. But the misuse
of, and addiction to, opioids is a serious public
health issue with over 100,000 deaths per year
in the U.S. due to opioid-involved overdoses.
The Centers for Disease Control and Prevention
estimate that the total economic burden of
prescription opioid misuse alone in the United
States is $78.5 billion a year, including the
costs of healthcare, lost productivity, addiction
treatment, and criminal justice involvement.
Paracetamol and ibuprofen are considered
non-opioid analgesics and do not bind to
opioid receptors Globally, approximately 1.2
billion vials are sold per year in the non-opioid
analgesic space with > 260 million vials of IV
paracetamol, representing a market of >$700
million in 2020. The market for post-operative
pain is growing rapidly and is forecasted to
reach $2.6 billion by 2028 (up from $1.1 billion
in 2019)
9
80
Placebo
60
E
E
.�
40
C
.
�
20
1
Oh
6h
12h
18h
24h
30h
36h
42h
48h
* Acetaminophen = paracetamol
Mean Estimates & 95% Confidence lntervals
-
-
-
Maxigesic
®
-
-
lbuprofen
-
-
-
Acetaminophen
*
A formal response to the
FDA’s Complete Response
Letter, was ﬁled on
17 April 2023. All questions
were addressed implying
a
potential market approval
before the end of 2023.
Hyloris
_
Annual Report 2022
p. 30
p. 31
Product
Indication
Unmet Needs
Our Potential Solution
Dofetilide IV
Atrial ﬁbrillation, a life-
threatening cardiac condition
expected to affect >12 million
people in the U.S. by 2030.
On average, the duration
of hospital stay required
for Dofetilide oral dosing
is even longer than that of
patients on oral Sotalol.
We have adopted a development
strategy for Dofetilide IV aimed
at reducing hospitalizations
days and hospital related costs.
Dofetilide, which is currently only
available as an oral capsule, may
be introduced ﬁrst as Dofetilide
IV as an initial loading dose with
subsequent oral Dofetilide dosing
to reduce the time to reach steady
state and hospital discharge.
An IV formulation of Dofetilide can
cause side effects similar to those
of the tablet but due to the close
monitoring during the shortened
loading period and the possibility
to stop the treatment, the loading
related risk is different.
Metolazone IV
Congestive heart failure (CHF)
is the most rapidly growing
cardiovascular condition
globally and the leading cause
of hospitalisations, with 30%
readmission rate.
~870,000 new cases par year in
the U.S. and 8 million people in
the U.S. expected to suffer from
CHF by 2030.
12
By 2030, the total cost of heart
failure is forecasted to reach
$69.8 billion.
13
CHF is progressive and
there is currently no cure
available. Diuretics and
lifestyle changes can
reduce symptoms, but
patients become resistant to
diuretics over time, resulting
in insufﬁcient symptom
relief, higher risk of in-
hospital worsening of heart
failure, increased mortality
after discharge and 3-fold
increase in readmission
rates.
14
To address this, patients
can be administered a
combination of a loop
diuretic with a thiazine-like
diuretic such as metolazone
tablets. But tablet
formulations have highly
variable bioavailability
and erratic absorption,
particularly in patients with
severe gastrointestinal
oedema.
We are developing an intravenous
formulation of metolazone for
the U.S.
The potential beneﬁts of
Metolazone IV include accelerating
onset of action, allowing
simultaneous administrations
with furosemide, and improving
drug absorption for patients with
concomitant gastrointestinal
oedema. The intravenous
formulation will also allow drug
administration in patients who are
too ill to receive oral medications
or who are unconscious.
12 Benjamin et al, Circulation, 2019
13 AHA association
14 Ellison et al, NEJM 2017
Our cardiovascular product
pipeline targeting multi-
billion-dollar end-markets
At the date of this annual report, our
cardiovascular product pipeline includes six
505(b)(2) reformulated product candidates
in various stages of development, and we
anticipate that all these products will be in
clinical development, or beyond, by
early
2024.
As the majority of prescribers of our
cardiovascular products in the U.S. are
employed by hospitals, we believe we will
be able to commercialise our cardiovascular
portfolio in a cost- efficient manner with our
own small sales force in U.S.
Hyloris
_
Annual Report 2022
p. 32
p. 33
Product
Indication
Unmet Needs
Our Potential Solution
Milrinone SR
Heart failure (HF) is a severe and
chronic condition in which the
heart muscle is unable to pump
enough blood to meet the body’s
need for blood and oxygen.
The condition results in a very poor
quality of life, that leaves patients
breathless even at rest and
leads to co-morbidities including
ischemia, arrhythmias, and chronic
renal failure.
HF usually develops because
the heart has been damaged
by a heart attack, or because
of other conditions such as
cardiomyopathy, a disease of the
heart muscle.
It is the most rapidly growing
cardiovascular disorder in the U.S.
with 870,000 new cases every
year.
HF is the most common cause
of hospitalisation in people aged
over 65 years of age, with about 1
million hospitalisations in the U.S.
per year, and 20% readmissions
following discharge.
The average life expectancy is
less than 5 years for 50% of all
patients and 90% of patients with
advanced HF die within 1 year
following diagnosis.
Current standard of care
depends on disease severity
and treatment of advanced
HF is predominantly
palliative and includes the
use of positive inotropes
(such as Milrinone IV),
digoxin and opioids, as well
as LVADs in some cases,
which are used either
longer-term or as a bridge
to heart transplantation.
In 2020, there were about
20,000 patients with
an LVAD implant in the
U.S. and 30% of these
patients developed right
heart failure. Over the
next coming years, the
LVAD patient population
is expected to grow at an
average annual growth rate
of 6% in the U.S.
Hyloris is developing a novel,
patented, extended-release
Milrinone formulation for twice a
day convenient oral dosing, which
provides a steady and predictable
exposure of Milrinone. Hyloris will
initially pursue a new, longer term
use indication in patients with left
ventricular assist devices (LVAD)
who have developed right heart
failure. Orphan drug status has
been granted by the FDA in this
indication and formulation patent
claims have been issued in the U.S.,
Japan, and China, and are pending
in Europe.
Several smaller trials, have shown
that extended-release Milrinone
was well tolerated, with no effect
on heart rate or blood pressure
and was associated with improved
functional activity as deﬁned by
NYHA Classiﬁcation. The Milrinone
treatment was also associated
with signiﬁcant improvements
in both quality of life (Minnesota
Living with Heart Failure Score)
and functional capacity (6-minute
walk distance) with a trend
towards improved renal function.
Product
Indication
Unmet Needs
Our Potential Solution
Aspirin IV
HY-074 and
HY-075
Coronary Heart Disease (CHD) is
a serious condition usually caused
by atherosclerosis, i.e. plaque (fatty
deposits) build-up in the arteries,
which may partially or totally
block blood ﬂow through large- or
medium-sized arteries in the heart,
brain, pelvis, legs, arms, or kidneys.
Plaque itself can pose a risk.
A piece of plaque can break off
and be carried by the bloodstream
until it gets stuck. And plaque that
narrows an artery may lead to a
blood clot (thrombus) that sticks
to the blood vessel’s inner wall,
which in return can provoke acute
coronary syndrome (ACS).
In either case, the artery can be
blocked, cutting off blood ﬂow.
CHD can result in (i) a stable
angina: episodic chest pain
occurring on exertion and
lasting two to ﬁve minutes, (ii)
unstable angina: severe chest
pain occurring at rest and lasting
more than ten minutes, (iii) acute
myocardial infarction: heart attack
accompanied by a sensation of
tightness, pressure or squeezing
and (iv) sudden cardiac death:
sudden death caused by loss of
heart function.
The risk of coronary heart disease
increases with family history of
coronary heart disease before
the age of 50, older age, smoking
tobacco, high blood pressure,
high cholesterol, diabetes, lack of
exercise and obesity.
CHD is the leading cause of death
in the U.S. with >370,000 deaths
every year.
15
About 18.2 million
adults in the U.S., aged >20 years
old, had a CHD in 2017
16
and
the estimated annual incidence
of heart attacks in the U.S.
amounted to 605,000 new attacks
and 200,000 recurrent attacks
between 2005 and 2014.
17
When ACS occurs, fast
diagnosis and treatment
is crucial and potentially
lifesaving. The sooner
treatment begins, the better
the chances of survival.
18
If the blood ﬂow is not
restored quickly, the
damage to the heart
muscle can be permanent
or the patient may die.
Half of all deaths due to a
heart attack occur in the
ﬁrst three to four hours
after symptoms begin.
Despite the need for fast
onset of action drugs is the
majority of current standard
of care treatments only
available in oral form,
resulting on a signiﬁcant
delay in treatment onset.
Existing IV formulations
are only used during
percutaneous coronary
intervention and require
continuous infusion due to
their short drug half-life.
Furthermore, the optimal
switching strategy from
the IV to an oral therapy
with another mode-of-
action is a concern due
to drug-drug interactions
and lack of guideline
recommendations.
Aspirin IV is an intravenous
formulation of Aspirin, which
offers a faster onset of action and
a more predictable response (and
thereby potentially signiﬁcantly
reduce the risk of death), more
convenient administration (more
notably in patients who are
nauseated or unconscious), and
dosage control. As Aspirin is
currently available in oral form,
it should allow for an optimal
switching strategy from the IV to
the oral form.
HY-074 is an intravenous
formulation of current standard
of care treatments to offer faster
onset of action (and thereby
potentially signiﬁcantly reduce the
risk of death), more convenient
administration (more notably in
patients who are nauseated or
unconscious), and dosage control.
It is currently available in oral form,
which should allow for an optimal
switching strategy from the IV to
the oral form.
HY-075 is a novel liquid
formulation of a commonly
used drug for the treatment of
speciﬁc cardiovascular diseases
requiring frequent dosage
changes and adjustments. This
novel formulation is expected
to signiﬁcantly improve drug
administration, ease of use,
and dosage control, potentially
resulting in potential better
compliance and patient outcomes.
15 American Heart Association, Heart Disease & Stroke Statistics (2016)
16 Centers for Disease Control and Prevention
17 American Heart Association, Heart Disease & Stroke Statistics (2019)
18 The Complete Encyclopaedia of Medicine & Health, Johannes Schade
Hyloris
_
Annual Report 2022
p. 34
p. 35
HY-088, an oral liquid targeting phosphate deﬁciency in the blood
Indication
Current treatments and their limitations
Hypophosphatemia is a deﬁciency of the vital mineral phosphate in the
blood. While mild hypophosphatemia is common and many patients are
asymptomatic, severe hypophosphatemia can be life-threatening and requires
medical treatment. The condition can result in different health challenges,
including muscle and bone weakness, respiratory or heart failure, seizures
or coma. Deﬁciency of this vital mineral is always linked to an underlying
condition, such as diabetes, anorexia, use of diuretics or alcohol abuse.
Currently, physicians mostly rely on
compounded drugs which have, by deﬁnition,
not been submitted for regulatory scrutiny
regarding safety, efﬁcacy, and quality.
Our potential solution: Treatment protocols for patients deﬁcient in phosphate are well-established and have
proven useful in other situations of bone mineral imbalance. Oral administration is the preferred way of treating
hypophosphatemia, although in most countries no approved drugs exist. Currently, physicians mostly rely on
compounded drugs which have, by deﬁnition, not been submitted for regulatory scrutiny regarding safety, efﬁcacy, and
quality.
Hyloris will seek advice and approval from regulators by making use of the rich body of clinical data that has emerged from
established clinical practice. With a primary on safety of the product, Hyloris intends to conduct a streamlined development
programme to achieve market access in Europe, targeting regulatory approval in European countries as from 2026.
Miconazole-Domiphen Bromide, a novel women’s health repurposed product
candidate for the treatment of severe and rVVC
19 IQVIA
20
J Tits., J et al., Antimicrob. Agents Chemother (2020); K. De Cremer et al., Antimicrobial agents and chemotherapy (2015
)
Indication
Current treatments and their limitations
Severe and recurrent vulvovaginal candidiasis (VVC) is a
chronic and debilitating vaginal infection commonly caused by
the yeast
Candida albicans.
As many as 1 in every 2 women will have an acute VVC
infection during their life and 20% of these patients develop
chronic, severe and recurrent VVC.
The annual economic burden due to severe and recurrent VVC
is estimated at $14.4 billion and women with severe and rVVC
may suffer from pain, depression, shame and loss of control.
VVC treatments include topical and systemic anti-fungal
treatments with about 175 million drug products sold
annually.
19
However, these are not effective and have severe side
effects when used chronically to treat severe and recurrent
VVC. With limited innovation over the past decades, there
is a high unmet need for effective and safe treatment
options for severe and recurrent VVC.
Our potential solution: Miconazole-Domiphen Bromide, a novel, dual-mode-of-action locally administered
emulsion
We have a partnership with Purna Female Healthcare to develop a novel, dual-mode-of-action combination treatment
for severe and recurrent VVC based on the current standard antimycotic treatment, Miconazole (MCZ), to which we add
Domiphen Bromide (DB), a well-known anti-septic that is currently used in cough medications. Top line results for a phase 2
dose-ﬁnding study are expected by the summer of 2023.
Dual
Fungicidal
Activity
LOCAL TOPICAL FORMULATION
WELL-KNOWN
ANTIMYCOTIC
MICONAZOLE
(MCZ)
Prevents growth of
fungus
RE-
PURPOSED
MOLECULE
DOMIPHEN BRO-
MIDE (DB)
Potentiator for
fungicidal activity
Domiphen-bromide: anti-septic;
-
tor through drug screening of large
drug repurposing library
Results from animal studies de
ate that MC
Z, when comb
he potentiator DB, can co
and recurrence of mucosal bioﬁlm-related vaginal Candida infections20. MCZ and DB work synergistically where DB
increases the permeability of the plas
ane and th
ane o
f Cand
fungicidal, thereby effectively destroying fungal activity and preventing further fungal growth.
Other value-added products in the pipeline addressing global healthcare challenges
At the date of this annual report, nine repurposed
and reformulated products outside our cardiovascular
portfolio are in formulation, manufacturing, clinical
development or registration phase. As these products
represent global opportunities or address a large pool
of prescribers in the U.S., we will seek commercial
partners and distributors for the commercialisation of
these assets.
For competitive reasons, the indications of some
of these candidate products have not yet been
disclosed and we therefore focus this report on those
reformulated and repurposed assets for which the
indication has already been publicly announced.
HY-083, a proprietary formulation for the treatment of idiopathic rhinitis
Indication
Current treatments and their limitations
Idiopathic rhinitis is a medical disorder characterised by a
collection of nasal symptoms that resemble nasal allergies
and hay fever (allergic rhinitis) but are not caused by a
known cause like allergens or infectious triggers. Idiopathic
rhinitis features an overexpression of TRPV1 in the nasal
mucosa giving rise to nasal obstruction, rhinorrhoea
(colloquially: a runny nose), and/or sneezing.
Current treatment options for idiopathic rhinitis are not
consistently successful. This leads to unnecessary and often
ineffective surgery for severe cases, such as nasal septal
corrections and/or inferior turbinate reductions.
Available
treatments
Mild to moderate
Conservative treatments
Saline nasules
Severe
Turbinate reduction
surgery
Anti histamines
Nasal cortocoids
Decongestants (oral/
intranasal)
FIRST LINE CARE
General practitioner
Pharmacy
SPECIALIST
CARE
Rhinologist
Our potential solution: a proprietary formulation of a molecule with a well-known mechanism of action
Hyloris’ treatment approach is to activate and depolarise TRPV1 receptors leading to restoration of a normal function of the
nasal mucosa.
~ 35%
Allergic
rhinitis
Other causes
Gustatory,
drug-induced,
...
25-50%
50-70%
13%
Infectious
rhinitis
Inflammatory
rhinitis
of the population is suffering
from
Chronic Rhinitis
Non-allergic
Rhinitis
Idiopathic rhinitis
7% of the
population
Seeks specialist
treatment
Inconsistent results
Patient population and addressable market
Addressable market
~
19
million
patients in the US
~
25.8
million
patients in Europe
Hyloris
_
Annual Report 2022
p. 36
p. 37
Fungal Growth
NO treatment
Current treatment
fungal growth
NEW combo treatment
fungal growth
The synergistic mode-of-action of topical MCZ-DB has the potential to be more effective against azole-resistant infections,
addressing the high unmet needs in complicated and recurrent VVC.
21
The Phase 2 dose-ﬁnding study of MCZ-DB has started in 2021.
Atomoxetine, a novel oral liquid formulation of atomoxetine tablets
for the treatment of Attention Deﬁcit Hyperactivity Disorder (ADHD)
21 Manuscript for scientific paper submitted
22 Sharma and Couture, Ann Pharmacother. 2014
23 https://www.helpguide.org/articles/add-adhd/medication-for-attention-deficit-disorder-adhd.htm
24
"The Top 300 of 2019". clincalc.com. Archived from the original on 21 November 2018. Retrieved 22 December 2018
25 IQVIA
26
Van Riet-Nales DA et al. Oral medicines for children in the European paediatric investigation plans. PLoS One 2014; 9(6): e98348.
27 IQVIA
Indication
Current treatments and their limitations
ADHD is a chronic mental childhood-onset disorder
characterised by developmentally inappropriate and
impaired inattention, motor hyperactivity, and impulsivity,
with difﬁculties often continuing into adulthood.
Children and adolescents suffering from ADHD experience
challenging key formative years. Because of impulsive
behavior and slower rates of processing information, they
perform poorly on standardised tests, score lower grades
and are more likely to drop out of school. In addition, ADHD
often presents itself with one or more comorbidities such as
oppositional deﬁant disorder, major depressive disorder, and
anxiety disorders, thus bestowing additional challenges on
these individuals.
ADHD is among the most common neurobehavioral
problems affecting children between the age of 6 and 17.
Its prevalence in the U.S. ranges from 2% to 18% in this
age group. About 60% to 80% of the symptoms of ADHD
persist into adulthood. Thus, ADHD is not just a childhood
disorder that resolves spontaneously after adolescence. It is
estimated that about 4.0% to 4.5% of adults in the U.S. have
ADHD.
22
Stimulants are the most widely used medications for ADHD.
In most cases, non-stimulant medications are considered
when stimulants did not work or have caused intolerable
side effects.
23
Strattera
®
, also known by its generic name atomoxetine, is
a non-stimulant medication approved by the FDA for ADHD
treatment and is currently sold under its brand name as well
as under generic names sold by several companies.
In 2019, atomoxetine had more than 2 million prescriptions
24
in the U.S. and the number of atomoxetine capsules sold over
the past few years has grown from 88.5 million in 2016 to
124.1 million in 2021.
25
Despite its common use, administration of atomoxetine to
paediatric patients can be challenging. The drug requires
titration from 0.5 mg/kg increasing to 1.2 mg/kg and it is
not always commercially available in appropriate dosage
formulations and strengths. Furthermore, the capsule is large
(16 mm) and can best be avoided in children under the age
of 11 years to prevent inadvertent inhalation or choking.
26
Our potential solution
We are developing an oral solution of atomoxetine for the U.S. market where it is currently not available, which is expected
to provide signiﬁcant clinical beneﬁts to paediatric, adult and elderly patients by:
•
Facilitating the use of atomoxetine in patients who do not tolerate or are able to swallow tablets
•
Improving compliance and convenience during the therapy
•
Facilitating the dose adjustment when the initial dosing is based on body weight, requiring the precise titration of the drug.
Most markets where the liquid formulation has been introduced have seen a signiﬁcant increase in the market share of the
oral liquid, showing that there is a need for this novel formulation of oral forms of current standard of care treatments.
27
Following feedback from the FDA, an innovative taste masking strategy was deployed targeting a preferred taste for young
patients. A pivotal study is expected to start later in 2023.
P
lecoid
TM
Agent, a novel oral formulation of a chelator for adjunct therapy to
chemotherapy for patients suffering from acute myeloid leukaemia (AML) and small
cell lung cancer (SCLC)
Indication
Current treatments and their limitations
AML
is a type of heterogenous haematological malignancy
that originates from immature white blood cells (blasts)
in the bone marrow, which may be derived from either a
hematopoietic stem cell or a lineage-speciﬁc progenitor cell.
AML generally spreads quickly to the bloodstream and can
then spread to other parts of the body including lymph
nodes, spleen, central nervous system, and testicles.
AML is an orphan disease and is the most common type of
acute leukaemia in adults and is primarily a disease of the
adulthood; the median age of newly diagnosed AML patients
is around 67 years. Additionally, AML is more common in
males.
AML can arise de novo or secondarily either due to the
progression of other diseases or due to treatment with
cytotoxic agents.
Datamonitor Healthcare estimates that in 2018, there were
158,400 incident cases of AML worldwide and expects that
the number will increase to 169,000 by 2027.
For AML, the 1-year survival rate is approx. 50% and 5-year
survival below 30%.
SCLC
is an aggressive malignancy accounting for 15% of
diagnosed lung cancers.
Rapid deterioration of symptoms and an early development
of metastasis results in 95% mortality in ﬁve years after
diagnosis. Almost all cases are associated with tobacco
smoking. Other factors can be arsenic in drinking water, air
pollution, etc.,
It is an potential orphan indication with a signiﬁcant lack of
progress in treatment options in the last three decades.
In eight major markets, Japan had the highest diagnosed
incidence of SCLC in 2019 for men (24.76 cases per 100,000
population) and the US had the lowest diagnosed incidents
in 2019 (13.18 cases per 100,000 population).
Some cancers have shown to be resistant to therapy and
many AML patients have signiﬁcantly elevated levels of toxic
metals in their bone marrow and blood, resulting in the poor
overall survival.
While the current cancer treatments aim to treat the tumour,
none of the existing cancer therapies aim to deal with the
elevated levels of toxic metals believed to be an important
contributor to the therapy resistance.
Our potential solution
The Plecoid
TM
Agent is intended for adjunctive treatment to chemotherapy. Plecoid
TM
is an innovative, clinical-stage product
candidate that contains a chelating agent with different characteristics and aims to detoxify the cancer promoting cellular
micro-environment and improve the effectiveness of chemotherapy in patients in in turn improve the overall survival rates.
In 2022, the deﬁnition of the preferred formulation has progressed signiﬁcantly in anticipation of clinical trials.
Hyloris
_
Annual Report 2022
p. 38
p. 39
Alenura
TM
, a novel combination of heparin and alkalinised lidocaine administered as
an instillation to patients suffering from interstitial cystitis/bladder pain syndrome
(IC/BPS)
Indication
Current treatments and their limitations
Interstitial Cystitis (IC) is a condition resulting in recurring
discomfort and pain in the bladder and the surrounding
pelvic region. IC varies in symptoms and severity and
is hence often termed Bladder Pain Syndrome (BPS) as
pain is the main complaint from patients. The disease is
characterised by pelvic pain, urinary urgency, increased
urinary frequency, discomfort and pelvic pressure.
The cause for the disease is believed to be an anatomical
defect in the internal protective bladder lining (the GAG
mucous layer), which exposes the nerve ends to toxic
components and high levels of potassium of the urine.
IC/BPS is more prevalent in women, although men
can experience symptoms as well, and although
underdiagnosed, it is estimated at least 6 million people in
the U.S. suffer from the condition.
In the milder end of the disease severity, the acute pain
ﬂares are rare and infrequent, but as frequency increases,
these ﬂares drive the patients to seek treatment.
Today, there is no standardised treatment protocol and
current treatments have clear limitations:
•
Oral Elmiron (Pentosan) is the only FDA approved oral
treatment, which is both very both expensive, has limited
efﬁcacy and takes a 3-6 months for full effect.
•
In addition, oral tricyclic antidepressants, antihistamines,
anti-spasmodic drugs, anticholinergic drugs, or opioids are
used.
•
RIMSO-50 is an FDA approved instillation, which initially
is dosed twice a week and less after desired relief is
achieved. The product is odorous through breath and skin
up to 72 hours after dosing and is toxic.
•
In addition, compounded cocktails of lidocaine, heparin,
steroids, sodium bicarbonate, etc. are used.
•
More aggressive approaches include Botox and
neuromodulation.
Our potential solution
Alenura
TM
is a unique, Ready-To-Use solution for instillation for intra-vesicular administration and is a combination of
alkalised lidocaine and heparin that have a unique collaborative effect on the GAG layer and epithelial cell layer as:
•
Lidocaine penetrates the epithelial cell layer, provides immediate pain relief, and downregulates the afferent signal.
•
Heparin augments the GAG layer and prevents further irritation of the urothelium.
•
Multiple clinical trials are expected to start throughout 2023, including a four-arm Phase 2, prospective, randomised,
double-blind, placebo-controlled, multi-center, single-dose, pharmacodynamic study comparing Alenura
TM
to its
2 individual components (alkalinised lidocaine and heparin) as well as placebo.
High Barrier Generics Portfolio
Outside our core strategic focus,
we have three high barrier
generic products in late-stage
development:
•
HY-016, a generic of an off-
patent branded reference
product sold in the U.S. without
generic competition, has been
filed with the FDA in the U.S.
•
Fusidic acid cream, a generic of
an off-patent reference product
currently sold in Canada without
generic competition, is in clinical
development.
•
Tranexamic acid RTU, a ready
to use Tranexamic acid solution
for infusion. The product will be
filed as a value-added product
outside the US, and has already
been partnered in Canada,
Australia and New Zealand.
HY-016 is partnered with Padagis.
For Fusidic acid cream, we intend
to seek a commercial partner
closer to approval of the product.
In addition, we do not intend to
actively pursue new opportunities
in the generic space as our core
focus is on primarily utilising the
505(b)(2) regulatory pathway
and the development of novel,
patented, value-added products.
This strategy was demonstrated
by our divestment of the generic
asset HY-038 in early 2023.
OUTLOOK 2023
MULTIPLE VALUE INFLECTION MILESTONES AHEAD
During 2023, evaluation of new
opportunities by
our Business
Development
team will continue,
with an end goal of reaching
30 total pipeline assets and
marketed products before 2025:
Regarding clinical achievements,
we anticipate delivering on
the several key value inflection
milestones, including:
•
Alenura™
, start of multiple
Phase II clinical trials (details
mentioned above).
•
Atomoxetine oral solution
, start
pivotal study.
•
Dofetilide IV
, open pivotal study.
•
Tranexamic Oral Mouth Rinse,
previously known as HY-004
:
start of preparations for the
pivotal study to support the
submission of a marketing
application.
•
HY-029 oral liquid
(product
not disclosed): start of a pivotal
study to support the submission
of a marketing application.
•
Miconazole-Domiphen
Bromide
: anticipated topline
results of a Phase 2 dose-finding
study.
•
Maxigesic
®
IV
: A formal
response to the FDA’s Complete
Response Letter regarding
Maxigesic
®
IV received in 2022,
was filed on April 17
th
2023.
All questions were addressed
implying a potential market
approval before the end of 2023.
Further approval and launch of
the product happened in 2022,
and is expected to continue in
2023.
Commercially, Hyloris’ partner AFT
Pharmaceuticals will continue the
rollout of Maxigesic
®
IV (with the
aim to make it available in more
than 100 countries - from twenty
today) and AltaThera will continue
expanding sales of Sotalol IV to
more hospitals, with sales from
these products expected to be
the primary drivers of short-term
revenue for the Company.
With cash and cash equivalents
of €43 million at year-end , the
Company is well-capitalised to
advance all current pipeline assets
as planned and execute on its
ambitious growth strategy with
30 key assets in our portfolio
before 2025.
Hyloris
_
Annual Report 2022
p. 40
p. 41
Introduction
The core of our business is unlocking the hidden
potential of existing medicines and tackling unmet
medical needs through drug repurposing. As an
organization we need to act responsibly. Releasing
our potential requires embedding sustainability into
business practices, processes, product development,
operations and strategy.
In publishing this initial report, we want to allow for an
assessment of our organization’s performance on various
sustainability and ethical issues. We believe transparency
is linked to better outcomes for stakeholders as it will
support informed decision-making.
In this global overview, we consider:
•
our potential to contribute positively to the planet we share;
•
the human potential and well-being of our colleagues;
•
the potential of science to solve some of the greatest health challenges
in the world.
We are committed to bringing all of these aspects together, not only in ethical
business operations but also in our relationships with a broad community of
stakeholders including patients, physicians, payors, governments, investors,
employees and suppliers.
In 2022, we shouldered an exercise to identify the practices, initiatives, strategies, and
gaps in our approach to Environmental, Social and Governance (ESG) challenges in an
effort to more effectively and authentically communicate our positive impact on society.
This report is a result of those efforts.
2030
Environmental,
Social and
Governance
Roadmap
Stijn Van Rompay,
CEO of Hyloris
“Our company desires to create
value for our stakeholders
by developing innovative
and affordable medicines
that address unmet medical
needs, while minimizing our
environmental impact, ensuring
ethical conduct and promoting
social responsibility. In this
ﬁrst report we lay out
where we stand at
present, and where we
want to improve in
the future, to make
an increasingly
positive impact
on the world
around us.”
Hyloris
_
Annual Report 2022
p. 42
p. 43
Hyloris ESG Imperatives
Once we identiﬁed the UN Agenda for Sustainable Development goals and targets that were
authentic to our mission, we organised our commitments under three imperatives.
Imperative I
Imperative II
Imperative III
Commitment to
the Good Health and
Well-Being of Society
Commitment to
Environmental
Sustainability
Commitment to
Responsible
Leadership
Imperative I –
Commitment to the Good Health and Well-Being of Society
A. Access to safe, effective,
quality and affordable
essential (Target 3.8)
We currently have a portfolio
of 14 value-added medicines
(of which 2 are commercialised)
addressing underserved
medical needs in areas including
cardiovascular diseases, the
largest therapeutic area globally.
Hyloris aims to develop 30 or
more products, targeting a global
presence for most of them.
One of our first commercial
products, Sotalol IV for the
treatment of atrial fibrillation, can
significantly reduce the length of
hospital stay and hereby reduce
the overall cost of care, while
improving patient outcomes and
safety. Sotalol IV is currently
marketed in the US, where
overnight hospital stays typically
cost thousands of dollars.
Hyloris currently has a portfolio of
3 high barrier generic medicines
in development. Once approved,
these offer identical, effective,
safe and significantly cheaper
alternatives to patients and the
health care community.
Our development strategy of
reformulating and repurposing
approved pharmaceuticals, whose
safety has often already been
established, can dramatically
reduce the time and cost it takes
to get our medicines approved. A
lower development cost can result
in lower costs to patients and
health care systems overall
B. Part of the solution to the
Opioid Crisis (Target 3.5)
The UN Agenda for Sustainable
Development emphasizes a health-
oriented approach to the global
scourge of drug abuse. According
to the World Health Organization
(WHO), drug abuse has killed
more than 500,000 people with 70
percent of those deaths attributable
to opioids. Further, the WHO
found that “the number of opioid
overdoses has increased in recent
years in several countries, in part
due to the increased use of opioids
in the management of chronic pain
and increasing use of highly potent
opioids appearing on the illicit drug
market.”
(Source: https://www.who.int/news-room/
fact-sheets/detail/opioid-overdose).
Developing non-addictive
alternatives to opioids for
pain management is a public
health imperative. Our product
Maxigesic
®
IV is a novel, dual mode
of action non-opioid analgesic for
the treatment of post-operative
pain. As of this writing, it is
marketed in over 20 countries is
and Hyloris is working diligently
on market approval for the US,
where over 100,000 deaths are
reported annually due to opioid-
involved overdoses. We are proud
to be a part of the solution to this
public health crisis and expect that
Maxigesic
®
IV will be available in
the vast majority of all countries,
including most developing nations.
C. A portfolio focused on the
leading cause of death.
(Target 3.4)
Cardiovascular Diseases (CVDs)
are the leading cause of death
globally. According to WHO, an
estimated 17.9 million people died
from CVDs, in 2019, representing
32% of all global deaths. Of these
deaths, 85 percent were due to
heart attack and stroke. At Hyloris,
over a third of our current portfolio
(7 product candidates) is devoted
to addressing cardiovascular
disorders.
Good health
and Well Being
•
By 2030, reduce by one third premature
mortality from non-communicable
diseases through prevention and
treatment and promote mental health and
well-being (Target 3.4);
•
Strengthen the prevention and treatment
of substance abuse, including narcotic
drug abuse and harmful use of alcohol
(Target 3.5);
•
Achieve universal health coverage,
including financial risk protection, access
to quality essential health-care services
and access to safe, effective, quality and
affordable essential medicines for all.
(Target 3.8);
•
Support the research and development
of medicines for the communicable and
non-communicable diseases that primarily
affect developing countries. (Target 3.8B).
Gender
Equality
•
Ensure women’s full and effective
participation and equal opportunities for
leadership at all levels of decision-making
in political, economic and public life
(Target 5.5).
Decent Work and
Economic Growth
•
Protect labour rights and promote safe
and secure working environments for all
workers, including migrant workers, in
particular women migrants, and those in
precarious employment. (Target 8.8).
Selected Goals and Targets
The United Nations Agenda for Sustainable Development provided the framework for identifying our
contributions and for mapping our progress against them. Adopted in 2015 by all United Nations member
states, the UN Agenda for Sustainable Development offers 17 goals for global development to be achieved
by 2030. These broad goals are further defined by a total of 167 targets, which in turn are measured by
232 indicators of progress. Our first step in assessing Hyloris’ contributions to these goals was determining
which of them were authentic to our core mission and against which we could measure progress.
In all, we mapped our business against four UN SD goals and six corresponding targets.
Hyloris
_
Annual Report 2022
p. 44
p. 45
Imperative II -
Commitment to Sustainable Consumption
and Environmental Protection
At Hyloris we have taken specific and proactive initiatives to do our part to address the
planetary crises of biodiversity loss, pollution and climate change.
A. Headquarters and Lab Relocation
In 2022, we made a sustainable choice by
moving our headquarters to the LégiaPark
site in Liege. The complex is a BREEAM-
accredited facility with a performance rating
of “Excellent”. BREEAM (Building Research
Establishment Environmental Assessment
Method) is the leading international standard
for rating green buildings. It validates this
office space as an enjoyable and comfortable
workplace with respect for the environment.
Solar panels on the roof of the LégiaPark
Complex are estimated to cover two thirds
(67%) of the energy consumption of the site,
at full capacity. Thermal engineering for heat
retention, natural light, passive ventilation,
rain water recuperation for reduced water
consumption and parking capacity for electric
vehicles are other key features. In addition,
in 2023, we will move our R&D laboratory
facility to the complex to further leverage its
environmental benefits.
B. Raising the bar for our suppliers
In choosing suitable partners for its drug
development & manufacturing, the Company
requires certain disclosures in the selection
procedure. Hyloris reviews amongst others
product quality, supplier capabilities,
consistency, and supplier risk but also ESG
metrics and policies. Sustainability is expected
to become increasingly important, with a
strong focus on responsible consumption and
production.
C. Leading the push for electric vehicles
Ahead of deadlines incorporated in Belgian
law, Hyloris is turning its small fleet of cars
green: company cars are chosen by a list of
leasing offers pre-approved by Hyloris. From
this shortlist, nearly all combustible engine
vehicles have been phased out and several
types of PHEVs (Plug-in-Hybrid Electric
Vehicle) or BEVs (Battery Electric Vehicle)
have been added in recent months. In other
words: the choice for a car “with a plug” is
strongly encouraged.
Imperative III -
Commitment to Responsible Leadership
A. A Virtual, Flexible Workplace
Working with dozens of suppliers
and partners while relying on an
international group of colleagues
often based in their native countries,
Hyloris sets the example for hybrid
working. Virtual meetings are the
standard. Over 90% of all recurring
(weekly or bi-weekly) meetings were
held virtually in 2022.
Colleagues can choose to work at
the Liège headquarters 2 to 5 days
a week, if it fits their schedule. To
further cut down on commuting time,
travelling colleagues are offered
the option to stay overnight in a
company-paid hotel to bridge two
in-office workdays.
B. Key Values, Accountability and
Leadership Culture
Four key values support the
achievement of Hyloris’ mission, and
will be part of the yearly evaluation
procedures as of 2023:
›
Passion and Drive;
›
Entrepreneurship;
›
Professional Excellence;
›
Integrity and Accountability.
Colleagues in leadership position
also have their performance review
centered around empowerment and
coaching. To ensure these values
and culture are integrated into every
aspect of our operations and after
growing its workforce significantly in a
short period, Hyloris hired a dedicated
human resources director in 2022 who
brings decades of experience in “soft
HR” into the company, and reports to
the executive leadership team with full
accountability for employee well-being.
C. Respect for Global Expertise
At Hyloris we abide by the guiding
principle to “look for expertise where it
is available” Thus, we have recruited
colleagues of 11 different nationalities
to help fulfill our mission. They are
working across three continents
(Europe, US and Asia).
Hyloris is proud of the diverse
background of its team members, and
expects the number of nationalities
to grow naturally as the company
progresses towards its objectives.
D. Dedication to Workplace Safety
(SDG Goal 8.8)
Hyloris is dedicated to upholding
the highest standard of workplace
safety for our employees. Our newly
hired human resources manager
has recently obtained the necessary
certifications and is outlining a
5-year plan focusing on safety as
well as the psychological well-being
of our employees.
Peter Mertens,
HR Director
“Employee well-being is not
just a nice-to-have, it’s a must-
have for any organization that
wants to succeed. We value
every team member and want
to demonstrate our commitment
to a healthy, safe and supportive
work environment in every way.
Our ﬂexible, location-independent
way of working is a testament
to that. In the future, we want
to offer extra beneﬁts to help
everyone working at Hyloris
cope with stress, balance work
and private life, and achieve
professional and personal goals.”
27
%
of people die from
heart attack and
stroke.
Hyloris has
7 product
candidates
adressing
cardiovascular
disorders
Hyloris
_
Annual Report 2022
p. 46
p. 47
E. Checks & Balances in place at the highest
level
As a quoted company, the Company
adheres to all requirements in the Belgian
Company Code. As of this annual report, the
board consists of 8 members of which 4 are
independent directors. The Remuneration
Committee consists solely of non-executive
directors and is formed in majority by
independent directors.
F. Pursuit of Gender Equality (SDG Goal 5)
Hyloris remains committed to further
diversifying its leadership, and in particular its
board representation. The Company’s Board
currently counts one female Director. Special
efforts are being made to attract additional
female Board Members to bring additional
experience at the highest decision making level
and improve gender diversity.
Hyloris employs 37 people, 15 women and 22
men. While the Company recruited nearly half
of the current team in 2022, the gender balance
remained stable around 40% (women) to 60%
(men). This overall balance is also representative
of all the positions in the company, with the
exception of the Executive Committee (which
does not yet have any women members).
In the future, the goal remains to keep a
similar
gender balance and pay special attention to
bring extra diversity into the team.
G. Ethical Business Practices
Hyloris maintains high ethical standards in
all its business practices and relationships
with customers, suppliers and its internal
workforce. The following ethical guidelines are
a cornerstone of day-to-day operations of the
company, and apply to all employees:
1). Personal conduct;
2). Conflict of Interests;
3). Confidential Information
4). Influence;
5). Competition.
Hyloris has also drawn up a set of rules -
“
Dealing Code
” - regarding ‘market abuses’
such as insider dealing, unlawful disclosure of
inside information and market manipulation,
and transactions in financial instruments
by persons discharging managerial
responsibilities and persons closely associated
with them.
H. Less Animal Testing
In utilizing the 505(b)(2) development
pathway in the US and similar pathways
in other countries, the need for additional
early stage R&D is reduced compared to
New Chemical Entities following the 505(b)
(1) regulatory pathway. Hyloris will continue
to implement alternatives to animal testing
where possible.
Conclusion
As a business of some 40 colleagues,
we are cognizant of the limits of our
contributions to as ambitious an
undertaking as the UN’s Agenda for
Sustainable Development. Yet, we
also are inspired by its call to action
“to end poverty, protect the planet
and improve the lives and prospects
of everyone, everywhere.” In
particular, the UN Secretary General
called for three levels of action to
complete this sustainable agenda
– global, local and people, defining
“people” as inclusive of the private
sector.
We believe our core mission of
addressing unmet medical needs
through reinventing existing
medications goes to the heart of
improving “the lives and prospects of
everyone, everywhere.” Further, our
first three ESG imperatives will guide
us in our efforts to make measurable
progress in unlocking the potential
of our products, our people and our
planet.
Key Performance Indicators
The Company will keep its attention
on sustainability on its way to
achieving the main commercial
goals. Points of attention in the
medium term will be:
increased gender diversity at
the board level: by 2026,
at least
one third of the members of our
board must be of another gender
than the other members;
increased focus on sustainability
factors in
the selection procedure
for suppliers;
maintaining or improving a
diverse workforce with different
nationalities
(currently 11 on
a workforce of 37) and cultural
backgrounds as the Company
hires more team members;
maintaining or improving
gender equality
across all levels
of the team (currently 40% of the
team is female).
Hyloris gender diversity
41
%
59
%
Men
Woman
Hyloris
_
Annual Report 2022
p. 48
p. 49
Breakdown of Share Capital
Major shareholders (status December 31, 2022)
Other holders
44,33 %
Pieter Van Rompay
3,27 %
Nick Reunbrouck
5,75 %
Scorpiaux BV
6,17 %
Thomas Jacobsen
(Founder & CBDO)
13,06 %
Stijn Van Rompay
(Founder & CEO)
27,42 %
Share capital (excluding share premium)
€140,001.16
Total number of outstanding voting rights (= denominator)
28,000,374
Total number of securities carrying voting rights not yet issued
634,625
Analyst Coverage
Bank
Analyst
Rating
KBC Securities
Jeroen Van den Bossche
Buy
Kempen
Suzanne van Voorthuizen
Buy
Berenberg
Beatrice Allen
Buy
Degroof Petercam
David Seynnaeve
Buy
Kepler Cheuvreux
Arsene Guekam
Buy
Hyloris is followed by the analysts listed above. Please note that any opinions, estimates or forecasts regarding
Hyloris’ performance made by these analysts are theirs alone and do not represent opinions, forecasts or
predictions of Hyloris or its management.
The Hyloris
share
Hyloris Pharmaceuticals SA
(ticker: HYL:BB) is listed on Euronext Brussels
since 29 June 2020.
Data and graph can be found at
https://live.euronext.com/en/product/equities/
BE0974363955-XBRU
The Hyloris share
Performance versus sector indices
since IPO on 29 June 2020.
-40,00%
-20,00%
0,00%
20,00%
40,00%
60,00%
80,00%
100,00%
29/06/20
29/08/20
29/10/20
29/12/20
28/02/21
30/04/21
30/06/21
31/08/21
31/10/21
31/12/21
28/02/22
30/04/22
30/06/22
31/08/22
31/10/22
31/12/22
28/02/23
Performance since IPO (€ 10,75)
Hyloris
_
Annual Report 2022
p. 50
p. 51
Corporate
Governance
The Company’s Executive
Committee is an advisory
committee to the Board of
Directors.
INTRODUCTION
...............................................................................................................................................
52
COMPLIANCE WITH THE CORPORATE GOVERNANCE CODE
................................
53
BOARD OF DIRECTORS
.............................................................................................................................
54
EXECUTIVE COMMITTEE
...........................................................................................................................
60
REMUNERATION REPORT
.......................................................................................................................
62
MARKET ABUSE REGULATIONS
........................................................................................................
73
CONFLICTS OF INTEREST AND RELATED PARTIES
.........................................................
73
SHARE CAPITAL, SHARES AND SHAREHOLDERS
.........................................................
75
The Board has established
two Board Committees:
the Audit Committee and the
Remuneration and Nomination
Committee.
Hyloris
_
Annual Report 2022
p. 52
p. 53
COMPLIANCE WITH THE CORPORATE
GOVERNANCE CODE
The Company will apply the ten
corporate governance principles
outlined in the Corporate
Governance Code 2020. The
Board of Directors is of the
opinion that certain deviations
from the provisions of the
Corporate Governance Code
2020 were justified, in view of
our activities, our size and the
specific circumstances in which we
operate.
The Company intends to comply
with the corporate governance
provisions set forth in the
Corporate Governance Code 2020,
except in relation to the following:
•
Provision 2.19
: the powers of
the members of the Executive
Management other than the
CEO are determined by the
CEO rather than by the Board
of Directors as the members
of the Executive Management
perform their functions under the
leadership of the CEO, to whom
the day-to-day management
and additional well-defined
powers were delegated by the
Board of Directors.
•
Provision 4.14
: no independent
internal audit function has been
established. This deviation is
explained by the size of the
Company. The Audit Committee
will regularly assess the need for
the creation of an independent
internal audit function.
•
Provision 7.6
: except for the
Chairman who holds ESOP
warrants (allocated prior to
the IPO), the Non-Executive
members of the Board of
Directors do not receive part
of their remuneration in the
form of shares. This deviation
is explained by the fact that
the interests of the non-
executive members of the
Board of Directors are currently
considered to be sufficiently
oriented to the creation of long-
term value for the Company.
•
Provision 7.9
: for the same
reasons as mentioned with
respect to provision 7.6; no
minimum threshold of shares to
be held by the members of the
Executive Committee has yet
been set.
•
Provision 7.12:
the Board
believes it is not opportune
to take a decision to claim
back or withhold payment
of the variable part of the
remuneration of the members
of the Executive Management
mainly because the variable
part of the remuneration is
based on performance during
the preceding performance
period. No advances on variable
remuneration related to future
performance are paid by the
Company.
What constitutes good corporate
governance will evolve with the
changing circumstances of the
company and with the standards
of corporate governance globally
and must be tailored to meet
those changing circumstances.
The Board of Directors intends to
update the Corporate Governance
Charter as required to reflect
changes to the Company’s
corporate governance.
INTRODUCTION
Hyloris’ Corporate Governance Charter is in
line with the 2020 Belgian Code on Corporate
Governance (the Corporate Governance Code
2020), which the Company needs to apply, in
accordance with a ‘comply or explain’ approach,
pursuant to Article 3:6, §2, 1° CCA and the
Royal Decree of May 12, 2019 specifying the
corporate governance code to be complied with
by listed companies.
The Corporate Governance Charter describes
the main aspects of the corporate governance
of the Company, including its governance
structure, the terms of reference of the Board
of Directors and its committees and other
important topics. The Corporate Governance
Charter must be read together with the
Company’s Articles of Association, which have
been amended by the Extraordinary General
Shareholders’ Meeting of July 31, 2020. The
Corporate Governance Charter and Articles of
Association can be consulted on the website of
Hyloris at: https://hyloris.com/our-governance
Hyloris
_
Annual Report 2022
p. 54
p. 55
BOARD
OF DIRECTORS
1
Acting through SVR Management BV
2
Acting through Jacobsen Management BV
3
Acting through Van Rompay Management BV
4
Acting through Noshaq Partners SCRL
5
Acting through Pienter Jan BV
Composition of
the Board of Directors
The Board of Directors consists of eight
members, two of whom are Executive
Directors (as member of the Executive
Committee) and six of whom are Non-
Executive Directors, including four
Independent Directors.
The Company’s Board currently counts one
female Director. Special efforts are made to
attract female Board Members in accordance
with Article 3:6 § 2, 6° of the Belgian
Companies Code (and with the law of 28 July
2011) to assure that the appropriate quorum
and gender diversity will be reached by 2026
(i.e. the sixth year after Initial Public Offering).
The table below gives an overview of
the members of the Company’s Board of
Directors and their terms as of the date of
this annual report:
Name
Age
Position
Start
of term
End
of term
Mr. Stefan Yee
61
Non-Executive Director
Chairman of the Board of
Directors
2020
2024
Mr. Stijn Van Rompay
1
47
Executive Director
2020
2024
Mr. Thomas Jacobsen
2
48
Executive Director
2020
2024
Mr. Leon Van Rompay
3
73
Non-Executive Director
2020
2024
Mr. Marc Foidart
4
47
Independent Director
2020
2024
Mrs. Carolyn Myers
64
Independent Director
2020
2024
Mr. James Gale
74
Independent Director
2020
2024
Mr. Chris Buyse
5
59
Independent Director
2021
2025
Stefan Yee
Stefan Yee has
more than 30 years
of experience in
audit, corporate
law, mergers and
acquisitions, corporate finance,
investment banking and private
equity with companies as KPMG,
Linklaters, the Flemish investment
bank Lessius, the Belgian
Corporation for International
Investment (SBI/BMI), Beluga
(Euronext Brussels) and as the
founder and CEO of the PE Group,
a Belgian privately held private
equity firm. Stefan is, and has been
an investor and/or board member
of several listed and private
companies such as, amongst
others, Beluga, Encare group
(Mensura), AXI, The Reference,
Alro Holdings, Loomans Group,
United Brands, Capco, Faseas
International (Spacewell), HD
Partners (Dekabo group), AED
Rent, UnifiedPost Group, NRG New
Generation, Axiles Bionics,
including several healthcare
companies Docpharma (listed on
Euronext Brussels until its
acquisition in 2005 by Matrix
Laboratories for €218M), Uteron
Pharma and Imcyse). Stefan holds
Masters Degrees in Law and
Business Management from the
Universities of Brussels (VUB and
ULB Solvay Business School) and
the University of Chicago (as a
BAEF Fellow).
Stijn Van Rompay
Stijn Van Rompay
has over 20 years
of experience in
leadership positions
in the
pharmaceutical industry and is the
co-founder and CEO of the
Company. Stijn also co-founded,
and was CEO of, Alter Pharma, a
pharmaceutical company focused
on the development of complex
generics and pharmacy-related
products. He was also co-CEO of
Uteron Pharma, a company
focused on innovative female
healthcare products, which was
sold to Watson for up to $305M in
2013. Prior to these positions, Stijn
was CFO and afterwards CEO of
Docpharma (listed on Euronext
Brussels until its acquisition in
2005 by Matrix Laboratories for
€218M) a generics and medical
device company. He also holds
several Non-Executive Director
positions in the biotech sector and
acts as an advisor to venture
capital investors. Stijn holds a
Master in Applied Economics from
the University of Antwerp.
Thomas Jacobsen
Thomas Jacobsen
has over 20 years
of experience in the
pharmaceutical
industry, with
expertise in operational
management, business
development, licensing, and
research and development. He
co-founded Alter Pharma and prior
to this, he worked with
Docpharma, where he focused on
out-licensing of Docpharma’s
products. Thomas started his
career in the Scandinavian-based
generics company Alternova,
where he was responsible for
licensing, product registration and
launches. Thomas holds a Master’s
Degree in Pharmacy from the
University of Copenhagen and a
Business Degree from
Copenhagen Business School.
Leon Van Rompay
Leon Van Rompay
has more than 40
years of experience
in the
pharmaceutical
industry. During his professional
career he held several positions
including country & area manager
(covering major territories) and
Board member of the Zambon
Group. He was founder and CEO of
Docpharma and served on
different Boards including Ecodis
and Uteron Pharmaceuticals. He
was a founding member of BIGE/
IBES (Belgian Institute for Health
and Economics), the B.G.A.
(Belgian Generic Association),
BAPIE (Belgian Association of
Parallel Import and Export) and
was an executive committee
member and Board member of the
Belgian Pharmaceutical Industry
Association. He also was a
member of the pharmaceutical
deontological commission and
responsible for this commission in
the industry association executive
committee. He is the former CEO of
the Belgian women’s health
company, Mithra, an Euronext
listed company.
Marc Foidart
Marc Foidart is
co- founder and
Executive Chairman
of Eyed Pharma SA,
a start-up company developing
innovative controlled release
micro-implants in ophthalmology
and is also co-founder of EKLO
ASBL. Marc is also investment
manager of Epimede SA, a €50
million Belgian private high-tech
growth fund. He has more than 15
years of experience in strategic
consulting and investment at all
stages of development of small
and medium high tech-high
growth life sciences enterprises.
He played a key role in several
financing rounds at critical
development stages of various
Belgian biotech companies
including, Mithra Pharmaceuticals
SA, Imcyse SA, Uteron Pharma SA,
PDC Line Pharma SA, Diagenode
SA. As an entrepreneur, Marc is
co-founder and past CEO of
Arlenda SA, a spin-off company of
the University of Liège providing
expert statistical solutions to the
pharmaceutical, chemical and
environmental industries. Marc is
associate professor at the
University of Liege since 2011 and
obtained a Master in Business
Engineering from the University of
Liège (1998).
Hyloris
_
Annual Report 2022
p. 56
p. 57
Activity Report
In 2022, in addition to discussing
the financial reporting and the
operational development of the
Company, the Board of Directors
devoted a great deal of attention
to product development and
business development, considering
further expansion of the
Company’s growth and strategy.
The Executive and Non-Executive
members of the Board of Directors
convened eleven times in 2022.
All Directors attended all Board
Meetings, except for:
•
Mr. Leon Van Rompay and Mr.
Yee, who were excused once.
•
Mr. Foidart, who was excused
twice.
In 2022 the Board of Directors did
not convene for specific decision-
making as prescribed by article
7:97 of the Belgian Company Code
with respect to a decision relating
to a related party as defined
by EC Directive 1606/2002, nor
with respect to any decisions on
conflicts of interest.
6
Acting through Noshaq Partners SCRL competence in accounting and auditing.
7
Acting through Pienter Jan BV
Committees of
the Board of Directors
The Board has established two
Board Committees: the Audit
Committee and the Remuneration
and Nomination Committee.
Currently, no Scientific Committee
has been formally established
within the Company.
The strategic focus is to consult
Key Opinion Leaders and
specialists in the field to cover the
wide range of therapeutic areas
in which the Company is active
today. Please find more of our
reasoning below under “Scientific
Committee”.
Audit Committee
The Audit Committee comprises
the following members:
›
Mr. Marc Foidart
6
,
Independent Director,
Chairperson of the Audit
committee
›
Mr. Stefan Yee
,
Non-Executive Director
›
Mr. James Gale
,
Independent Director
›
Mr. Chris Buyse
7
,
Independent Director
According to the Board of Directors,
the members of the Audit Committee
satisfy this requirement, as evidenced
by the different senior management
and director mandates that they have
held in the past and currently hold
(see also Board of Directors, p. 55 for
more information on their curriculum
vitae). Both James Gale, Chris Buyse
and Stefan Yee have been identified
as having the necessary competence
in accounting and auditing.
According to the Board of Directors,
the members of the Audit Committee
satisfy this requirement, as
evidenced by the different senior
management and director mandates
that they have held in the past and
currently hold (see also Board of
Directors, p. 55 for more information
on their curriculum vitae). Both James
Gale, Chris Buyse and Stefan Yee
have been identified as having the
necessary competence in accounting
and auditing.
In accordance with Article 7:99, §4
CCA, the Audit Committee, without
prejudice to the legal duties of the
Board of Directors, has at least the
following tasks:
•
inform the Board of Directors of
the result of the legal audit of
the annual accounts and of the
consolidated annual accounts
and explain how the legal audit
of the annual accounts and of the
consolidated annual accounts
contributed to the integrity of the
financial reporting and what role
the Audit Committee has played
in this process;
•
monitor the financial
reporting process and make
recommendations or proposals
to guarantee the integrity of the
process;
•
monitor the effectiveness of the
Company’s internal control and
risk management systems and
monitor the internal audit and its
effectiveness;
•
monitor the statutory audit of
the annual accounts and the
consolidated annual accounts,
including follow-up of the
questions and recommendations
formulated by the statutory
auditor;
•
assess and monitor the
independence of the statutory
auditor, in particular as to
whether the provision of
additional services to the
Company is appropriate. In
particular, the Audit Committee
analyses, together with the
Carolyn Myers
Dr. Carolyn Myers is an
accomplished senior
executive with extensive
experience creating, growing,
and leading health care
businesses. She is currently CEO of FendX
Technologies Inc. (CSE:FNDX), a
nanotechnology company developing
products using a unique pathogen repelling
technology to reduce pathogen spread and
infection. Carolyn is also a Principal of
Bioensemble Ltd, a business strategy
consulting firm that provides a
comprehensive range of drug development,
commercial and business development
services to small and mid-size pharma.
Carolyn currently serves as a board member
of Mayne Pharma (ASX:MYX), EyeD Pharma
SA and FendX Technologies (CSE:FNDX).
Prior roles at Allergan (acquired by AbbVie)
include Vice President of International
Business Development and Alliance
Management and Vice President of CNS
marketing. Prior to Allergan, she held
leadership positions at Mylan (now Viatris
Pharmaceuticals) including President of Dey
Laboratories and President of Mylan
Technologies. Carolyn earned a PhD in
Genetics from the University of British
Columbia and an MBA from Rutgers
University.
James Gale
James (Jim) Gale is the
founding partner of Signet
Healthcare Partners. Jim has
over 30 years of healthcare
investing and finance
experience. Jim is Managing Director of
Signet Healthcare Fund and is currently the
Chairman of the Board of Bionpharma Inc, is
lead director of Knight Therapeutics Inc.
(TSX: GUD) and also serves on the Board of
Directors of Ascendia Pharmaceuticals, Chr.
Olesen Synthesis A/S, Juno Pharmaceutical
Corp., Pharmaceutics International (Pii), Lee’s
Pharmaceutical Holdings (HKX:0950HK),
Pharma Nobis LLC and RK Pharma. Prior
portfolio company boards include Arbor
Pharmaceuticals, Amarin Corporation,
eResearch Technologies Inc., and Valera
Pharmaceuticals. Prior to founding Signet,
Jim was head of principal investment
activities and head of investment banking for
Gruntal & Co., LLC. While at Gruntal, he
made several investments including Andrx
Corporation, Royce Laboratories (merged
with Watson Pharmaceuticals), Lifecell
Corporation, Neurocrine Biosciences, and
BML Pharmaceuticals (acquired by Endo
Pharmaceuticals).
Chris Buyse
Chris Buyse is Managing
Partner of the Belgian
company Fund+ NV which he
co-founded in 2015. Fund+ is
an open-end fund that
invests in innovative life sciences companies
primarily active in therapeutics, as well as
companies developing diagnostics and
medical devices.
He has more than 30 years of experience
in international company finance and in
running and establishing best financial
practice. He was previously CFO of
ThromboGenics NV (currently Oxurion),
CropDesign and Keyware Technologies and
he held several financial positions at Suez
Lyonnaise des Eaux and Unilever. He is
currently serving as an independent Board
Member of a few companies, mostly active in
life sciences such as Inventiva Pharma and
EyeD Pharma.
Hyloris
_
Annual Report 2022
p. 58
p. 59
The role of the Remuneration and
Nomination Committee consists of
making recommendations to the
Board of Directors regarding the
appointment and remuneration
of Directors and members of the
Executive Committee and, and has
the following tasks:
Pursuant to its function as
Remuneration Committee:
•
make recommendations to
the Board of Directors on the
remuneration policy and other
remuneration proposals that the
Board of Directors must submit
to the General Shareholders’
Meeting;
•
make recommendations to the
Board of Directors in line with the
remuneration policy approved
by the General Shareholders’
Meeting on the individual
remuneration of the Directors
and members of the Executive
Committee, including variable
remuneration and long-term
performance bonuses, whether
or not linked to shares, in the
form of stock options (warrants)
or other financial instruments,
and severance pay, and, where
applicable, the resulting proposals
that the Board of Directors
must submit to the General
Shareholders’ Meeting;
•
prepare the remuneration report,
in line with the remuneration
policy approved by the General
Shareholders’ Meeting, that the
Board of Directors must include
in its corporate governance
statement, which in turn forms
a part of the Company’s annual
report; and
•
explain the remuneration report at
the Annual General Shareholders’
Meeting.
Pursuant to its function as
Nomination Committee:
•
make recommendations to the
Board of Directors with regard
to the appointment of Board
members and members of
Executive Committee;
•
prepare plans for the orderly
succession of Board members;
•
lead the re-appointment process of
Board members;
•
ensure that sufficient and regular
attention is paid to the succession
of members of Executive
Committee; and
•
ensure that appropriate talent
development programmes and
programmes to promote diversity
in leadership are in place.
The Remuneration and Nomination
Committee shall meet whenever it
deems it necessary for the proper
performance of its duties and at
least twice a year. The Remuneration
and Nomination Committee shall
regularly report to the Board of
Directors on the performance of its
duties.
At the end of each Board member’s
term, the Remuneration and
Nomination Committee shall
evaluate the relevant Board
member’s presence at the
meetings of the Board of Directors
or Committee meetings, their
commitment and their constructive
involvement in discussions and
decision-making and shall also
assess whether the contribution
of each Board member is adapted
to changing circumstances. The
Board of Directors shall act on
the results of the performance
evaluation, and shall, where
appropriate, propose new Board
members for appointment, propose
not to re-appoint existing Board
members or take any measure
deemed appropriate for the effective
operation of the Board of Directors.
The Remuneration Committee
convened three times in 2022.
Scientiﬁc Committee
A Scientific Committee has not
yet been formally created by
the Company. As the Company
is progressing with its different
product candidates within a wide
range of therapeutic areas and
health care technologies, the
current strategy entails consulting
experts and Key Opinion Leaders
in their respective domains.
If and when the Scientific
Committee is created, it shall
consist of not less than three
members (who may, but do not
have to, be member of the Board
of Directors), or more members
as determined by the Board of
Directors at any time. The Scientific
Committee will elect a chairperson
amongst its members.
Members of the Executive
Management and the Board of
Directors can be invited to attend
meetings of the Scientific Committee.
The role of the Scientific
Committee shall be to assist
the Board of Directors with the
following matters:
•
providing strategic guidance for
programme development;
•
providing a neutral view on the
progress of technology and
science;
•
providing external validation
of intellectual property or new
technologies;
•
providing ad hoc advice on
scientific matters at the request
of the Board.
If and when created, the Scientific
Committee shall meet whenever it
deems it necessary for the proper
performance of its duties and at
least twice a year. The Scientific
Committee shall regularly report
to the Board of Directors on the
performance of its duties.
statutory auditor, the threats to the
statutory auditor’s independence and the
security measures taken to mitigate these
threats when the total amount of fees
exceed the criteria set out in Article 4, §3 of
Regulation (EU) no. 537/2014; and
•
make reasoned recommendations to
the Board of Directors regarding the
appointment of the statutory auditor of the
Company in accordance with Article 16, §2
of Regulation (EU) No 537/2014.
The Audit Committee meets whenever
it deems it necessary for the proper
performance of its duties and at least four
times a year. The Audit Committee regularly
reports to the Board of Directors on the
performance of its duties, and in any event
when the Board of Directors prepares the
annual accounts, the consolidated annual
accounts and the condensed financial
statements intended for publication.
The members of the Audit Committee have
full access to the Executive Committee
and to any other employee to whom they
may require access to carry out their
responsibilities. The statutory auditor of the
Company has direct and unrestricted access
to the chairperson of the Audit Committee.
The Audit Committee convened 3 times in
2022.
8
Acting through Noshaq Partners SCRL
competence in accounting and auditing.
Remuneration and Nomination
Committee
The Remuneration and Nomination
committee consist of the following members:
›
Mr. Stefan Yee
,
Chairperson of the Renumeration and
Nomination Committee
›
Mrs. Carolyn Myers
,
Independent Director
›
Mr. Marc Foidart
8
,
Independent Director
According to Article 7:100, §2 CCA of the
Belgian law, all members of the Remuneration
Committee must be Non-Executive Directors,
and most of its members must be independent
directors. The chair- person of the Board of
Directors or another Non- Executive Director is
the Chair of the Remuneration and Nomination
Committee.
The members of the Remuneration Committee
must have the necessary expertise in terms
of remuneration policy, which is evidenced by
the experience and previous roles of its current
members (see also Board of Directors, p. 55
for more information on their curriculum vitae).
The CEO may participate in the meetings of
the Remuneration Committee in an advisory
capacity every time the remuneration of
another member of the Executive Committee is
discussed.
Hyloris
_
Annual Report 2022
p. 60
p. 61
Jean-Luc Vandebroek
Jean-Luc
Vandebroek is a
seasoned executive
who joined the
Company in 2021
from his role as CFO of Bone
Therapeutics, a publicly traded
biotech company based in
Gosselies, Belgium. Prior to that, he
was CFO and CIO at Alcopa and
Fluxys, and before that, he held
various senior financial positions at
Delhaize Group. Jean-Luc is an
experienced Executive Board
member and has a track record of
developing and implementing
financing strategies and
transactions and has a large,
global network of investors and
financial institutions. Jean-Luc
holds a Master in Business
Administration from the Louvain
Management School. He is Board
member of BioSenic.
Dietmar Aichhorn
Dietmar Aichhorn
has more than 20
years of experience
in the
pharmaceutical
industry leading teams in a broad
range of functions, including,
development, regulatory, clinical
development, product launch and
logistics of small molecules,
biologics and Advanced Therapy
Medicinal Products. Before joining
Hyloris in October 2020, Dietmar
worked in clinical development at
Polpharma Biologics and Vira
Therapeutics, Innovacell
Biotechnology as Head of
Development. Dietmar’s
experience also includes Strategic
Planning, M&A and post-merger
integration at Mylan and Novartis.
Dietmar holds a degree in
chemistry and a degree in
economy from Vienna University of
Economy and is a lecturer at the
Medical University of Innsbruck
and the Austrian Medical
Association.
Koenraad Van der Elst
Koenraad Van der
Elst has almost 40
of experience as
in-house and
external legal and
general counsel of various listed
companies and was also involved
in numerous capital market and
M&A transactions worldwide.
Before joining Hyloris in 2020,
Koenraad served as General
Counsel at Metris (currently Nikon
Metrology) and acted as Secretary
General & General Counsel of
Punch International and Punch
Graphix plc, a company listed on
the London Stock Exchange (AIM)
and was President of the
Supervisory Board (“Raad van
Commissarissen”) of Punch
Technix, a company listed on
Euronext Amsterdam. Between
1995 and 2002, Koenraad was
Director Legal Documentation at
the Investment Banking
Department (corporate finance
and capital markets) of Generale
Bank/Fortis Bank. Koenraad was
also an assistant Professor in
Financial Law at the University of
Brussels (VUB). Koenraad holds a
Master of laws from the University
of Brussels (VUB) and holds an
MBA from EHSAL Brussels.
EXECUTIVE COMMITTEE
9
Acting through SVR Management BV.
10
Acting through Jacobsen Management BV.
11 Acting through Finsys Management BV.
12 Acting through Herault BV.
The Board of Directors has established
an “Executive Committee” and appointed
the members of the Executive Committee
in consultation with the CEO, based
on the recommendations made by the
Remuneration and Nomination Committee.
The Company’s Executive Committee is
an advisory committee to the Board of
Directors and does not constitute a “conseil
de direction” / “directieraad” per the definition
of Article 7:104 CCA. The Board of Directors
considers the need for a balanced Executive
team.
On 31 December 2022, the Executive
Committee consisted of the following
members:
›
Mr. Stijn Van Rompay
9
,
Chief Executive Officer
›
Mr. Thomas Jacobsen
10
,
Chief Business Development Officer
›
M
r. Jean-Luc Vandebroek
11
,
Chief Financial Officer
›
Mr. Dietmar Aichhorn
,
Chief Operating Officer
›
Mr. Koenraad Van der Elst
12
,
Chief Legal Officer
The Executive Committee meets every week.
It has also met on an informal basis through
conference and video calls every time it was
required for its proper functioning.
Stijn Van Rompay
Stijn Van Rompay has over
20 years of experience in
leadership positions in the
pharmaceutical industry,and
is the co-founder and CEO of
the Company. Stijn co-founded, and was
CEO of, Alter Pharma, a pharmaceutical
company focused on the development of
complex generics and pharmacy-related
products. He was also co-CEO of Uteron
Pharma, a company focused on innovative
female healthcare products, which was sold
to Watson for $305M in 2013. Prior to these
positions, Stijn was CFO and afterwards
CEO of Docpharma (listed on Euronext
Brussels until its acquisition in 2005 by
Matrix Laboratories for €218M) a generics
and medical device company. He also holds
several Non-Executive Director positions in
the biotech sector and acts as an advisor to
venture capital investors. Stijn holds a
Master in Applied Economics from the
University of Antwerp.
Thomas Jacobsen
Thomas Jacobsen has over
20 years of experience in the
pharmaceutical industry, with
expertise in operational
management, business
development, licensing, and research and
development. He co-founded Alter Pharma
and prior to this, he worked with Docpharma,
where he focused on out-licensing of
Docpharma’s products. Thomas started his
career in the Scandinavian-based generics
company Alternova, where he was
responsible for licensing, product registration
and launches. Thomas holds a Master’s
Degree in Pharmacy from the University of
Copenhagen and a Business Degree from
Copenhagen Business School.
Hyloris
_
Annual Report 2022
p. 62
p. 63
Hyloris does not grant shares to
Non-Executive Directors11
13
. It
considers that its general policy
and modus operandi already meet
the objective of recommendation
7.6 of the Code 2020, which is to
promote long-term value creation.
The Non-Executive Director
mandate can be revoked at any
time (at nutum) without the Non-
Executive Director being entitled to
any indemnity payment.
Remuneration Policy for
Executive Committee
members Introduction
Hyloris wants to offer market-
competitive compensation to be
able to recruit, retain and motivate
expert and qualified professionals,
while considering the scope of
their responsibilities.
The remuneration scheme that
applies to the Chief Executive
Officer (CEO) and other Executive
Committee members is designed
to balance short-term operational
performance with the long-term
objective of creating sustainable
value, while considering the
interests of all stakeholders.
The remuneration scheme for
Executive Committee members
consists of short-term and long-
term remuneration elements. The
short-term remuneration elements
have a fixed part (please see
Fixed remuneration) (i.e., a base
annual remuneration in cash) and
a variable part (please see Variable
remuneration) (cash bonus). As
for the long-term remuneration
elements, the Executive Committee
members can receive Stock options
(please see Stock options, p. 66).
Variable remuneration can be
granted if the criteria set out in
variable remuneration are met.
13
Only the Chair of the Board, Stefan Yee, holds 100,000 warrants, which were granted prior the date of the IPO – the Company does not
consider these warrants to be variable compensation.
Fixed remuneration
The fixed annual remuneration
consists of a fee paid in cash.
The amount of this fee is
determined by the Board, upon
the recommendation by the
Remuneration Committee. The
fee is paid in monthly instalments.
Some Executive Committee
members receive compensation for
costs they incurred in performance
of their duties. Executive
Committee members do not
receive any fringe benefits. Hyloris
will conduct external salary-
benchmarking exercises regularly
to ensure that the remuneration of
Executive Directors is in line with
market practices and is sufficiently
fair, reasonable to attract, retain
and motivate individuals with the
most appropriate profile.
Variable remuneration
The Articles of Association of a
company can deviate from Article
7:91 of the BCCA, which is what
Hyloris has done. Article 7:91 of
the BCCA reads: “Unless otherwise
provided for in the articles of
association or expressly approved
by the shareholders’ meeting, at
least one-quarter of the variable
remuneration of an executive
director in a public-listed company
must be based on predetermined
and objectively measurable
performance criteria over a
period of at least two years, and
another quarter must be based
on predetermined and objectively
measurable criteria over a period
of at least three years.” Article
7:91 also states that the above
principles do not apply if the
variable part of the remuneration
does not exceed 25% of the total
yearly remuneration. Therefore, the
rules on variable remuneration laid
down in Article 7:91 of the BCCA
do not apply.
The principles that apply to
granting any variable remuneration
are the following:
Granting is driven by the
individual’s merits and based on
the performance-rating system
at Hyloris, being the achievement
of Hyloris’ corporate targets
(Corporate Targets) as they are
cascaded down as much as
possible by translating them and/
or reflected into their individual
targets (Personal Targets), hence
aligning these Personal Targets
with the Hyloris corporate targets
and the overall Hyloris’ strategy.
Corporate Targets include factors
related to progress in Hyloris’
research activities, corporate
development and budgetary
requirements. The Corporate
Targets focus on company
growth and value creation for all
shareholders. This results in the
Personal Targets being aligned
optimally to the Corporate Targets
of Hyloris, the Shareholders and
other stakeholders.
The goal setting and variable
remuneration for all members of
the Executive Committee (except
for the CEO) is based on the
following principles:
•
40% of their goals will be based
on the Corporate Targets, as
these Corporate Targets will
also be cascaded down as much
as possible into the Personal
Targets;
•
60% of their goals will be based
on Personal Targets, which will
be in line with and/or reflect the
Corporate Targets and which
will also include objectives
with respect to leadership
competencies.
For the CEO, the goal setting and
variable remuneration is construed
along the following principles:
REMUNERATION REPORT
Remuneration Policy
Introduction
The remuneration policy of Hyloris
Pharmaceuticals SA (Remuneration Policy)
has been established in accordance
with the Belgian Code of Companies
and Associations (BCCA), and with the
recommendations of the Belgian Corporate
Governance Code (Code 2020). This
Remuneration Policy applies retroactively as
from 1 January 2021 and was approved by
the annual Shareholders’ Meeting held on 8
June 2021.
The Remuneration Policy applies to all Non-
Executive Directors, Executive Directors of
Hyloris and other members of the Executive
Committee. The Executive Directors are part
of the Executive Committee. At the time of
Board approval, Hyloris does not have other
persons who hold management positions
according to the definition of this term in
Article 7:89/1§2,1°of the BCCA.
Executive Committee
The Remuneration Committee meeting of
11 April, 2023
has performed the appraisal
of the Board of Directors and of the members
of the Executive Committee and has also
approved the bonuses of the members
the Executive Committee, in line with the
principles as outlined in the Remuneration
Policy.
Objective of the Hyloris’
Remuneration Policy
Hyloris wants to be a competitive market
player by benchmarking against appropriate
peer groups and by incentivising and
rewarding performance at the highest
level possible. The objective of the Hyloris
Remuneration Policy is to attract, motivate
and retain diverse, qualified and expert
individuals whom Hyloris needs to achieve
its corporate, strategic and operational
objectives. The Remuneration Policy also
aims to ensure consistency between the
remuneration of executives and that of all
staff members, while soundly and efficiently
managing risks and controlling wage-related
costs for Hyloris.
The Remuneration Committee evaluates the
overall remuneration packages of Executive
Directors, Non-Executive Directors, and
Hyloris’ employees. The Remuneration
Committee consults and engages the Board
on this subject matter. The Remuneration
Committee takes into consideration all the
information on its workforce remuneration,
its knowledge and research data about the
relevant job market to ensure that all Hyloris
employees are remunerated in a market-
conform and sufficient manner to motivate
and retain its employees.
The Remuneration Policy is reviewed
regularly so that its contents are aligned with
market practice.
Remuneration Policy for
Non-Executive Directors
Remuneration of Non-Executive Directors
will be benchmarked regularly with peers
to ensure that the remuneration scheme is
sufficiently fair, reasonable, and competitive
to attract, retain and motivate the Non-
Executive Directors.
Remuneration is linked to the amount of time
the individual is expected to commit to the
Board and its various committees such as
the Remuneration Committee and the Audit
Committee. The Board submits this proposal
for approval to the shareholders at the
annual Shareholders’ Meeting.
The Remuneration Committee and the
Board share the view that all Non-Executive
Directors - also the independent directors
- within the meaning of Article 7:87 of the
BCCA - should be compensated equally as
set out hereafter.
The Non-Executive Directors are paid a
fixed remuneration per year plus a fixed
remuneration per year as a member of a
Board committee (such as the Remuneration
Committee and the Audit Committee).
The Non-Executive Directors do not receive
any fringe benefits and do not receive any
variable remuneration i.e., performance-
related pay such as bonuses.
Hyloris
_
Annual Report 2022
p. 64
p. 65
Mr. Thomas Jacobsen (CBDO)
The current services agreement
with Mr. Thomas Jacobsen has
been entered into between Mr.
Thomas Jacobsen’s Belgian
incorporated management
company Jacobsen Management
BV and the Company effective
as from 1 November 2019, for
an indefinite period. It can be
terminated by the Company upon
six months’ notice or payment of
a compensation equivalent to the
fixed remuneration of a three-
month period. It can be terminated
by Jacobsen Management BV upon
three months’ notice or payment of
a compensation equivalent to the
fixed remuneration of such three-
month period. The agreement
also provides for reasons for
immediate termination because of
breach of either party (e.g., serious
contractual breach, bankruptcy,
in- solvency, non-performance of
the consultancy services for 25
consecutive days, etc.).
In the event of termination of
the services agreement, the
agreement provides for a non-
compete period of 18 months after
termination, against a payment
of 100% of the fixed fee over
that 18 months’ period. However,
Jacobsen Management BV will
not be entitled to this payment
if it terminates the services
agreement at its own initiative
or if the Company terminates the
services agreement for breach of
contract imputable to Jacobsen
Management BV.
Mr. Jean-Luc Vandebroek (CFO)
The current services agreement
with Mr. Jean-Luc Vandebroek
has been entered into between
Mr. Vandebroek’s Belgian
incorporated management
company Finsys Management
BV and the Company effective
as from 23 September 2021, for
an indefinite period. It can be
terminated by the Company upon
three months’ notice or payment
of a compensation equivalent to
the fixed remuneration of a three-
month period. It can be terminated
by Finsys Management BV upon
three months’ notice or payment of
a compensation equivalent to the
fixed remuneration of such three-
month period. The agreement
also provides for reasons for
immediate termination because of
breach of either party (e.g., serious
contractual breach, bankruptcy,
in- solvency, non-performance
of the consultancy services for
25 consecutive days, etc.).
In the event of termination of
the services agreement, the
agreement provides for a non-
compete period of 12 months after
termination against a payment
of 50% of the fixed fee over such
12 months’ period. However,
Finsys Management BV will
not be entitled to this payment
if it terminates the services
agreement at its own initiative
or if the Company terminates the
services agreement for breach
of contract imputable to Finsys
Management BV.
Mr. Dietmar Aichhorn (COO)
The current services agreement
with Mr. Dietmar Aichhorn has
been entered into as from 1
October 2020, for an indefinite
period. During the first 3 years, it
can be terminated by the Company
and Mr. Aichhorn upon three
months’ notice or payment of a
compensation equivalent to the
fixed remuneration of a three-
month period. After 3 years, it can
be terminated by the Company
and Mr. Aichhorn upon six months’
notice period or payment of a
compensation equivalent to the
fixed remuneration of such six-
month period. The agreement also
provides for reasons for immediate
termination because of a breach
by either party (e.g. serious
contractual breach, bankruptcy,
insolvency, non-performance
of the consultancy services for
25 consecutive days, etc.).
In the event of termination of
the services agreement, the
agreement provides for a non-
compete period of 12 months after
termination against a payment
of 50% of the fixed fee over such
12 months’ period. However, the
Company is entitled to waive
this non-compete payment if the
services agreement is terminated
at the initiative of Mr. Aichhorn.
The non-compete payment will not
be due if the Company terminates
the services agreement for breach
of contract imputable to Mr.
Aichhorn.
Mr. Koenraad Van der Elst (CLO)
The current services agreement
with Mr. Koenraad Van der Elst
has been entered into between
Mr. Koenraad Van der Elst’s
Belgian incorporated management
company Herault BV and the
Company effective as from 1
January 2020, for an indefinite
period. It can be terminated
by the Company upon six
months’ notice or payment of a
compensation equivalent to the
fixed remuneration of a three-
month period. It can be terminated
by Herault BV upon three months’
notice period or payment of a
compensation equivalent to the
fixed remuneration of such three-
month period. The agreement also
provides for reasons for immediate
termination because of a breach
by either party (e.g. serious
contractual breach, bankruptcy,
insolvency, non-performance of
the consultancy services for 25
consecutive days, etc.).
In the event of termination of
the services agreement, the
agreement provides for a non-
compete period of 12 months after
termination against a payment
of 50% of the fixed fee over such
12 months’ period. However,
Herault BV will not be entitled
to this payment if it terminates
the services agreement at its
own initiative or if the Company
terminates the services agreement
for breach of contract imputable to
Herault BV.
•
75% of his goals will be based on the
Corporate Targets;
•
25% of his goals will be based on the
average of the Personal Targets and
performance of the other members of
the Executive Committee and which will
also include objectives with respect to
leadership competencies.
The Targets are set annually. The Board sets
the Corporate Targets. The Personal Targets
of the Executive Committee (other than the
CEO) members are set by the CEO.
The total target variable remuneration
amount for an Executive Committee
member (i.e., the sum of the first and second
components described above) represents
maximum 25% of the total fixed annual
remuneration of an Executive Committee
member.
The variable remuneration is based on a
weighted average of the achievement rate
of the Personal Targets and the Corporate
Targets.
The extent to which the Corporate Targets
have been achieved at the end of the year, is
evaluated by the Remuneration Committee.
The extent to which the Executive
Committee members (other than the CEO)
have achieved their Personal Targets is
evaluated by the CEO at the end of the year.
The evaluation is subject to deliberation by
the Remuneration Committee and finally
decided by the Board.
Variable remuneration, if any, is paid only
after approval by the Board of Directors
upon proposal of the Remuneration
Committee.
Contract term and severance payment
All Executive Committee members provide
their services under a Belgian-law-governed
management agreement with Hyloris.
The terms, notice periods and severance
payments are described hereunder.
Mr. Stijn Van Rompay (CEO)
The current services agreement with Mr. Stijn
Van Rompay has been entered into between
Mr. Stijn Van Rompay’s Belgian incorporated
management company SVR Management
BV and the Company effective as from
1 September 2019, for an indefinite period.
It can be terminated by both the Company
upon six months’ notice or payment of
a compensation equivalent to the fixed
remuneration of a three-month period. It
can be terminated by SVR Management
BV upon three months’ notice or payment
of a compensation equivalent to the fixed
remuneration of such three-month period.
The agreement also provides for reasons for
immediate termination because of a breach
by either party (e.g., serious contractual
breach, bankruptcy, in- solvency, non-
performance of the consultancy services for
25 consecutive days, etc.).
In the event of termination of the services
agreement, the agreement provides for
a non-compete period (subject to certain
exceptions) of 18 months after termination,
against a payment of 100% of the fixed
fee over such 18 months’ period. However,
SVR Management BV will not be entitled
to this payment if it terminates the services
agreement at its own initiative or if the
Company terminates the services agreement
for breach of contract imputable to SVR
Management BV.
Stijn Van Rompay
(CEO) and Thomas
Jacobsen (CBDO)
Hyloris
_
Annual Report 2022
p. 66
p. 67
Minimum Shareholding
Considering the shareholders
structure and the remuneration
package of the members of the
Executive Committee, Hyloris
already meets the objective of
recommendation 7.9 of the Code
2020, which is to promote long-
term value creation.
Clawback
No claw-back rights have
been provided to the benefit
of the Company in respect of
variable remuneration granted
to the members of the Executive
Committee.
Pension Scheme
Hyloris does not have a
complementary pension scheme
for any Non-Executive Director or
any Executive Committee member.
Decision-making and
Conflict of Interest
The Remuneration Committee
is composed exclusively of Non-
Executive Directors, and most of
its members are also independent
directors within the meaning of
Article 7:87 of the Belgian Code
of Companies and Associations.
This composition helps to avoid
conflicts of interest regarding
the structure design, adjustment
and implementation of the
Remuneration Policy towards
Executive Committee members.
The CEO and Executive Committee
members are not invited to
participate in the Remuneration
Committee’s deliberations of their
own individual compensation.
Regarding the remuneration
of Non-Executive Directors, all
decisions are approved by the
Shareholders’ Meeting.
Deviations from the
Remuneration Policy
In exceptional circumstances,
the Board may decide to deviate
from any rule contained in this
Remuneration Policy if it is required
for the long-term interests and
sustainability of Hyloris. Any such
deviation must be discussed within
the Remuneration Committee,
which will provide a substantiated
recommendation to the Board. Any
deviation from this Remuneration
Policy will be described and
explained in any Hyloris
remuneration report.
Changes to the
Remuneration Policy
Hyloris does not expect any
material changes to this
Remuneration Policy to be made in
the next two years but will review
the Remuneration Policy regularly
in order to reflect market conditions
and optimise and - as the case
may be - improve the objective of
the Remuneration Policy to attract,
motivate and retain diverse,
qualified and expert individuals.
Stock Options and Other
Share- Convertible Securities
The members of the Executive Committee
can be granted Stock Options or other
instruments that allow the holder to acquire
shares through schemes that need to be
pre-approved by the annual Shareholder’s
Meeting.
Hyloris has put in place the following
warrant schemes (which are called
inschrijvingsrechten/ droits de souscription
under the BCCA) of which the details (i.e.,
conditions for the granting, term, vesting
period, exercise) are set out in the below
table. The conditions for the granting of
these warrants and the vesting period
help to align the interests of the Executive
Committee members with the long-term
interests of Hyloris, its shareholders and
other stakeholders.
ESOP Scheme 2019
ESOP Scheme 2020
ESOP Scheme 2022
Conditions
for
Granting
Employees, Directors or
consultants of Hyloris
Pharmaceuticals and/or its
subsidiaries
Employees, directors or
consultants of Hyloris
Pharmaceuticals and/or its
subsidiaries
Employees, directors or
consultants of Hyloris
Pharmaceuticals and/or its
subsidiaries
Term
5 years
10 years
7 years
Vesting
Period
The 2019 plan is subject to
services conditions so that
it will vest gradually over
the subsequent four years
(25% after 1 year, and 1/48
for every additional month).
The 2020 plan is subject to
services conditions so that
it will vest gradually over
the subsequent four years
(25% after 1 year, and 1/48
for every additional month).
The 2022 plan is subject to
services conditions so that
it will vest gradually over
the subsequent four years
(25% after 1 year, and 1/48
for every additional month).
Exercise
Warrants which are
deﬁnitively acquired
(“vested”) may be exercised
from the ﬁrst (1) of January
of the fourth (4
th
) calendar
year following that of
the Date of the Offer and
this, only during the ﬁrst
fortnight. (the ﬁrst ﬁfteen
(15) days) of each quarter.
The ﬁrst fortnight (the ﬁrst
ﬁfteen (15) days) of the
last quarter of the validity
period of the Stock Option
Warrants constitutes the
last possible exercise
period. Each ﬁscal
period will end on the
last business day of the
relevant ﬁscal period.
Warrants which are
deﬁnitively acquired
(“vested”) may be exercised
from the ﬁrst (1) of January
of the fourth (4
th
) calendar
year following that of
the Date of the Offer and
this, only during the ﬁrst
fortnight. (the ﬁrst ﬁfteen
(15) days) of each quarter.
The ﬁrst fortnight (the ﬁrst
ﬁfteen (15) days) of the
last quarter of the validity
period of the Stock Option
Warrants constitutes the
last possible exercise
period. Each ﬁscal
period will end on the
last business day of the
relevant ﬁscal period.
Warrants which are
deﬁnitively acquired
(“vested”) may be exercised
from the ﬁrst (1) of January
of the fourth (4
th
) calendar
year following that of
the Date of the Offer and
this, only during the ﬁrst
fortnight. (the ﬁrst ﬁfteen
(15) days) of each quarter.
The ﬁrst fortnight (the ﬁrst
ﬁfteen (15) days) of the
last quarter of the validity
period of the Stock Option
Warrants constitutes the
last possible exercise
period. Each ﬁscal
period will end on the
last business day of the
relevant ﬁscal period.
Article 7:91, first paragraph of the BCCA
states that a director—within three years
from the date of the grant—may not
definitively acquire shares by way of
remuneration or exercise share options
or any other right to acquire shares. The
company’s articles of association may
deviate from this rule. Article 3 of the Articles
of Association of Hyloris explicitly allows
the Board to deviate from this rule when
proposing the variable remuneration scheme.
Hyloris
_
Annual Report 2022
p. 68
p. 69
The 2022 ratio between the
highest remuneration of the
members of the Executive
Committee and the lowest
remuneration (in full-time
equivalent) of Hyloris’ employees
amounted to 5-to-1. Share options
(warrants) are excluded from the
calculations.
Shares and Share
Options - Warrants
Appraisals
Board of Directors and
Committees of the Board
of Directors
The Board is responsible for a
periodic assessment of its own
effectiveness to ensure continuous
improvement in the governance of
the Company.
The contribution of each director
is evaluated periodically. The
Chairman of the Board and the
performance of his role within the
Board are also carefully evaluated.
Furthermore, the Board will assess
the operation of the Committees
at least every two to three years.
For this assessment, the results
of the individual evaluation of
the Directors are taken into
consideration.
The Non-Executive Directors
regularly (and preferably once
a year) assess their interaction
with the Executive Directors and
the Executive Committee and
reflect on how to streamline the
interactions between both the
Non-Executive Directors and
Executive.
The Board may request the
Remuneration Committee, where
appropriate and if necessary, in
consultation with external experts,
to submit a report commenting on
the strengths and weaknesses to
the Board and make proposals to
appoint new Directors or to not
re-elect Directors. A Director who
did not attend 50% of the Board
meetings will not be considered for
re-election at the occasion of the
renewal of the mandate.
The evaluation of the operation of
the Board of Directors in terms of
its scope, composition, operation,
and that of its Committees, as
well as of its interaction with
the Executive Committee, took
place on April 11, 2023 under
the leadership of the Chairman
of the Board of Directors. This
evaluation resulted in a positive
assessment and also indicating a
few recommendations to improve
the performance of the Board
of Directors, of the Executive
Committee and of its interaction
between the Board of Directors
and the Executive Committee.
Executive Committee
The CEO and the Remuneration
Committee formally assess
the operation as well as the
performance of the Executive
Committee annually. The
evaluation of the Executive
Committee occurs in the context
of determining the variable
remuneration of the Executive
Committee members.
In accordance with the relevant
Corporate Governance principles,
the Remuneration Committee has
assessed the performance and
contributions of the CEO and the
other members of the Executive
Committee on April 11 2023.
The Remuneration Committee
determined that the Corporate
Targets for 2022, had not always
been fully achieved, especially
for business development. Not
meeting these objectives however
has not had a material impact on
the operations of the company.
The variable remuneration
for 2022 has considered the
contributions of the members of
the Executive Committee made to
these achievements.
Remuneration
Remuneration of Non-Executive
Directors
The remuneration package for the Non-
Executive Directors was revised and
approved by the Shareholders’ Meeting of
the Company held on June 14, 2021 and
consists of a fixed annual fee of €12,500 for
the Non-Executive Directors and €5,000 for
the members of the various Committees.
14 Acting through Van Rompay Management BV.
15 Acting through Noshaq Partners SCRL.
16
Calculated as % of all outstanding warrants: 634,625 accepted warrants as of December 31, 2022. 80.000 accepted
warrants early 2023 - the remainder has lapsed.
Any changes to these fees will be submitted
to the Shareholders’ Meeting for approval.
The Executive Directors will not receive any
specific remuneration in consideration for
their membership in the Board of Directors.
For the remuneration of the Independent
Directors the total remuneration amounted
to € 110,000. The table below provides
an overview of the remuneration per Non-
Executive Director.
Name
Remuneration
Mr. Stefan Yee
22,500
Mr. Leon Van Rompay
14
12,500
Mr. Marc Foidart
15
22,500
Mrs Carolyn Myers
17,500
Mr. James Gale
17,500
Mr. Chris Buyse
17,500
TOTAL
110,000
The table below provides an overview of
significant positions of warrants held directly
or indirectly by the Non-Executive Members
of the Board of Directors at December 31,
2022.
Warrants
16
Name
Number
%
Mr. Stefan Yee
100,000
15.76%
Mr. Leon Van Rompay
14
0
0%
Mr. Marc Foidart
15
0
0%
Mrs. Carolyn Myers
0
0%
Mr. James Gale
0
0%
Mr. Chris Buyse
0
0%
TOTAL
100,000
15.76%
The Non-Executive Members of the Board of Directors do not hold any shares of the Company.
Remuneration of Executive Directors and Members of the Executive
Committee
In 2022, the following remuneration and
compensation was paid or accrued to the
CEO (i.e., Mr. Stijn Van Rompay) and the other
members of the Executive Committee of Hyloris:
In €
CEO
Other members of the
Executive Comittee
16
Annual base salary
185,738
805,050
Annual variable salary
22,323.14
77,997.42
Supplementary pension plan (deﬁned contribution)
n.a.
n.a.
Car lease / transport allowance
n.a.
n.a.
Medical plan
n.a.
n.a.
Hyloris
_
Annual Report 2022
p. 70
p. 71
its business plan or result in
significant delays in doing so.
Hyloris is currently developing
its internal sales and marketing
functions in order to execute its
commercial strategy with respect
to its IV Cardiovascular Portfolio in
the U. S. and to secure suitable sales
and marketing partners for its other
products. If Hyloris is unable to do so,
it may not successfully commercialise
any of its product candidates.
Hyloris’ business is dependent on
the continuous generation of new
ideas and the development of new
product candidates to stay ahead
of the competition. Hyloris relies
and expects to continue to rely in
large part on the knowhow of its
development partners with respect
to the current portfolio. Hyloris
expects to be less reliable from
external partners in the future for the
development and expansion of its
portfolio.
The occurrence of a pandemic,
epidemic, other health crisis or geo-
political imbalance, including the
COVID-19 pandemic, could have a
negative impact on Hyloris’ product
development activities, including its
access to APIs, the conduct of its
clinical trials and its ability to source
required funding, which could delay
or prevent it from executing its
strategy as planned.
The geopolitical situation in Eastern
Europe intensified on 24 February
2022, with Russia’s invasion of
Ukraine. The war between the
two countries continues to evolve
as military activity proceeds and
additional sanctions are imposed.
Although the Russia-Ukraine war is
not expected to cause disruption in
the Hyloris’ operations. If an external
partner experience disruptions to
their business due to the military
conflict, this could delay or prevent
it from executing its strategy as
planned.
Certain of Hyloris’ Directors and
members of Hyloris’ Executive
Committee hold directorships
or shareholdings in other
pharmaceutical companies, which
could create potential conflicts of
interest.
Hyloris may be unable to successfully
manage its growth.
Hyloris is dependent on third parties
to supply APIs and manufacture its
products, and commercialisation
of Hyloris’ product candidates
could be delayed, halted, or made
less profitable if those third parties
fail to obtain and maintain the
required approvals from the FDA
or comparable foreign regulatory
authorities, or otherwise fail to
provide Hyloris with sufficient
quantities of its products.
Any termination or suspension of,
or delays in the commencement
or completion of, any necessary
clinical trials in respect to any of
Hyloris’ product candidates, including
because of Hyloris’ reliance on third
parties to conduct such clinical trials,
could result in increased costs to
Hyloris, delay or limit its ability to
generate revenue and adversely
affect Hyloris’ commercial prospects.
Intellectual property rights are
difficult and expensive to obtain,
maintain and protect and Hyloris
may not be able to fully ensure the
protection of its rights, which may
adversely impact Hyloris’ financial
performance and prospects. And,
third parties may claim an ownership
interest in Hyloris’ intellectual
property.
Financial Risks
Hyloris has a limited operating
history and has not yet generated
any substantial revenues. Hyloris
has incurred operating losses,
negative operating cash flows
and an accumulated loss since
inception and Hyloris may not be
able to achieve or subsequently
maintain profitability. Hyloris
is executing its strategy in
accordance with its business
model, the viability of which has
not been demonstrated.
An inflation spike in the year 2022
reminded investors of the risk of
rising interest rates, which made
drug development more expensive.
For Hyloris, the impact of increased
costs in a rising rate environment
could partially be offset by a
positive effect resulting from
the Company’s significant cash
position which should generate
additional deposit income. The
company was free of financial debt
at the end of 2022, and has limited
exposure to exchange rates with
non-European countries.
Risks related to the Shares
The market price of the shares
might be affected by a variety
of factors outside management
control, such as the global
economic situation, the
competition, sector M&A and it is
difficult to mitigate the risk.
If equity research analysts do
not publish research reports on
Hyloris, or if they change their
recommendations regarding the
shares in an adverse way, the
market price of the shares may
fall, and the trading volume may
decline.
Future sell-off of substantial
amounts of shares, or the
perception that such sell-off may
occur, could adversely affect the
market value of the shares.
Controls, Supervision
and Correctives Actions
External Control
At the Company’s Shareholders’
Meeting held on June 14, 2022,
KPMG Réviseurs d’Entreprises
INTERNAL CONTROL AND
RISK MANAGEMENT SYSTEMS
Internal Mechanism
The Board of Directors, the Audit Committee
and the Executive Committee are responsible
for measuring business risks and the
effectiveness of the internal control and risk
management systems.
The Executive Committee has set-up internal
risk management and control systems within
the Company to assure the realisation of the
company objectives, the reliability of financial
information and reporting, the adherence
to applicable laws and regulations and the
monitoring and management of the internal
and external impact of the risks identified.
The Board of Directors has delegated an
active role to the Audit Committee to monitor
the design, implementation and execution of
these internal risk management and control
systems. The Audit Committee assists the
Board of Directors in respect of control issues
in general and acts as the interface between
the Board of Directors and the external
auditors of the Company.
No internal audit role has currently been
assigned due the size of the business.
Internal audit activities may be outsourced
from time to time whereby the Audit
Committee will determine frequency of these
audits and select topics to be addressed.
Risk Analysis
Key Risk Factors Related to the
Company’s Business
A potential investor should carefully consider
the following risk factors and all other
information contained in the annual report
before making an investment decision
regarding the Company’s shares. If any
of these risks would occur, the business,
financial condition or results of operations of
the Company would likely be materially and/
or adversely affected. In such case, the price
of the shares could decline, and an investor
could lose all or part of the investment.
These include but are not limited to:
Risks related to Hyloris’ business
activities and industry
Hyloris performance depends primarily on the
success of its product candidates, a majority of
which are in the early reformulation and clinical
development stage and have not yet received
regulatory approval.
Even if Hyloris, or its partners, receive
regulatory approval for any of its product
candidates, it may be unable to launch the
product successfully and the revenue that
Hyloris generates from sales of such product,
if any, may be limited. Even if Hyloris obtains
approval for any of its product candidates,
it will be subject to ongoing obligations and
continued regulatory review, which may
result in significant unforeseen additional
expense.
In addition, Hyloris depends on the
execution of its partners AltaThera and AFT
Pharmaceuticals for successful roll-out and
commercialisation of its first two commercial
products, Sotalol IV and Maxigesic
®
IV
respectively. Additionally, Hyloris’ product
candidates could be subject to labelling
and other marketing re- strictions and
withdrawal from the market and Hyloris
may be subject to penalties if it fails to
comply with regulatory requirements or if it
experiences unanticipated problems with its
product candidates.
Hyloris’ ability to successfully market its
product candidates will depend in part on
the level of reimbursement that healthcare
organisations, including government health
administration authorities, private health
coverage insurers and other healthcare
payors, provide for the cost of Hyloris’
products and related treatments.
Despite receiving regulatory approval for a
product candidate, competitors may receive
regulatory approval for a product that is
identical or substantially the same as one
of Hyloris’ product candidates, which may
prevent Hyloris from commercialising its
product candidates in accordance with
Hyloris
_
Annual Report 2022
p. 72
p. 73
MARKET ABUSE REGULATIONS
With a view to preventing market
abuse (insider dealing and market
manipulation), and pursuant to the
Market Abuse Regulation, the Board
has established a Dealing Code
which is available on the Hyloris
website. The Dealing Code describes
the declaration and conduct
obligations of directors and members
of the Executive Management with
respect to transactions in shares and
other financial instruments of the
Company. The Dealing Code sets
limits on carrying out transactions
in shares and other financial
instruments of the Company and
allows dealing by the directors
and the members of the Executive
Management only during certain
windows.
In its Governance Charter, the
Company established several
rules to prevent illegal use of
inside information by Directors,
shareholders, management members
and employees, or the appearance
of such use. An insider can be given
access to inside information within
the scope of the normal performance
of his duties. The insider has the strict
obligation to treat this information
confidentially and is not allowed
to trade financial instruments of
the Company to which this inside
information relates.
The Company keeps a list of all
persons (employees or persons
otherwise working for the Company)
having (had) access, on a regular
or occasional basis, to inside
information. The Company will
regularly update this list and transmit
it to the FSMA whenever the FSMA
requests the Company to do so.
CONFLICTS OF INTEREST AND RELATED PARTIES
Conﬂicts of Interest
There is a conflict of interest
when the administrator has a
direct or indirect financial interest
adverse to that of the Company.
In accordance with Article 7:96 of
the Belgian Code on Companies
and Associations, a Director of
a limited company which “has,
directly or indirectly, an interest of
an economic nature in a decision
or an operation under the Board
of Directors” is held to follow a
particular procedure. If members
of the Board, or of the Executive
Committee or their permanent
representatives are confronted
with possible conflicting interests
arising from a decision or
transaction of the Company, they
must inform the Chairman of the
Board thereof as soon as possible.
Conflicting interests include
conflicting proprietary interests,
functional or political interests or
interests involving family members
(up to the second degree). If
Article 7:96 of the Belgian Code
on Companies and Associations
is applicable, the Board member
involved must abstain from
participating in the deliberations
and in the voting regarding the
agenda items affected by such
conflict of interest.
The Company has adopted
additional functional conflict of
interest rules in relation to the
Directors and members of the
Executive Management with
respect to matters falling within
the competence of the Board or
the Executive Management. This
procedure is without prejudice to
procedures of Articles 7:96 and
7:97 CCA. More specifically, there
is a functional conflict of interest on
the part of a member of the Board
or of the Executive Management
when:
•
one of the close relatives of
the member concerned has a
personal financial interest that
is in conflict with a decision or
transaction that falls within the
authority of the Board or the
Executive Management; or
•
a company that does not belong
to the group and in which the
member or one of his/her close
relatives holds a Board or
Executive Management position,
has a financial interest that is
in conflict with a decision or a
transaction that falls within the
authority of the Board or the
Executive Management.
When such a functional conflict
of interest arises with respect
to a member of the Board, the
member concerned shall inform
his/her fellow Directors of this at
the beginning of the meeting of
the Board. They will then decide
whether the member concerned
can vote on the matter to which
the conflict of interest relates and
whether he/she can participate in
the discussion of this matter. The
minutes of the Board of Directors
shall describe how the procedure
was applied. No publicity will
be given to the application of
the procedure. When such a
functional conflict of interest arises
with respect to a member of the
Executive Management, the matter
is submitted to the Board.
Conflicts of Interest of
Directors and Members of
Executive Management
None of the Directors or the
members of the Executive
Management have a conflict of
BV/SRL has been appointed as statutory
auditor of the Company for a period of two
years. The mandate will expire at the end of
the general meeting called to approve the
accounts for the 2024 financial year. KPMG
Réviseurs d’Entreprises SRL has designated
Olivier Declercq, réviseur d’entreprises, as
permanent representative.
In 2022, a total amount of 115 K€ was paid
to the statutory auditor and its network. This
amount includes the following elements:
82 K€ for audit fees, 15 K€ for audit related
services legally assigned to the statutory
auditor and 18 K€ for tax services.
Internal Control
Supervision and monitoring of the operations
of the Company is done on a permanent basis
at all levels within the Company.
The Executive Committee develops a long-
term financial plan (5-year business plan)
incorporating the Company strategy. This
plan is monitored on a regular basis and
updated twice a year to keep it in line with the
strategy plans. The Executive Committee also
develops an annual budget which is approved
by the Board and which is closely monitored
during the year. Management reporting is
prepared monthly, which details the variances
between the actuals and the budget.
Internal control activities are performed by the
Finance Department related to accounting
and financial information and by all persons
in charge for all matters related to the
operational activities of the company. When
deviations are identified, there are reported
to the head of department. As of the date of
this report there is not yet a dedicated Internal
Audit Function, function is supported by the
Finance Department.
In order to properly manage identified risks,
the Company has set up the following
procedures and reporting processes:
•
a budgeting process has been installed with
a strong involvement of all departments of
the Company which provide a more accurate
forecast of the spending on a more granular
level;
•
the company has developed procedures
relating to various business processes
(procurement, payroll, IT, investments, cash
management);
•
the company has developed procedures in
the following cycles: expenditures, payroll, IT,
cash management and books closing and
reporting;
•
Tthe company has developed a monthly
reporting tool which allows a close
monitoring of the financial information. The
company has a monthly reporting of the
actual spending;
•
information systems have been developed to
assist the company and are constantly being
adjusted to meet new needs as they arise;
•
external financial reports are produced twice
a year (half year reports ended 30 June and
full year reports ended 31 December);
•
half-year and full-year reporting are
discussed by the audit committee and all
critical accounting issues and financial
uncertainties are reported and discussed.
The Executive Committee supervises
the implementation of internal controls
and risk management, considering the
recommendations of the Audit Committee.
The Executive Committee is also in charge
of proposing the Audit Committee corrective
actions when identified.
In 2022, the Company made the following
improvements in its internal processes:
•
a new enterprise resource ERP was
implemented;
•
the internal budgeting and forecasting
process was further improved;
•
improvements were made to the handling
of payroll transactions.
Hyloris
_
Annual Report 2022
p. 74
p. 75
SHARE CAPITAL, SHARES AND SHAREHOLDERS
History of Capital –
Capital Increase and
Issuance of Shares
Securities Issued by the
Company
On March 31, 2022, the share
capital was increased by a
contribution in cash further to
the completion of an accelerated
bookbuilding, in the amount of
€15,000,001 (including issue
premium) with issuance of
967,742 new ordinary shares. The
new shares were issued at a price
of €15.5 per share (including issue
premium).
On June 22, 2022, the share capital
was increased by contribution in
cash further following the exercise
of 1,200,000 transaction warrants,
in the amount of €2,831,640
(including issue premium) with
issuance of 1,200,000 shares. The
new shares were issued at a price
of €2,3597 per share (including
issue premium).
As of December 31, 2022, the
Company’s capital amounted
to €140,001.87 (excluding
issue premium) represented
by 28,000,374 ordinary shares
without nominal value.
The Company created four stock
option plans under which warrants
were granted to employees, directors,
consultants and shareholders of the
Company and its subsidiaries: the
transaction warrants in May 2017
and two ESOP Warrants plans in
December 2019, December 2020,
and June 2022.
History of Capital since
IPO
Authorised Capital
In accordance with the Articles
of Association, the Extraordinary
General Shareholders’ meeting of
the Company authorised the Board
of Directors to increase the share
capital of the Company, in one or
several times, and under certain
conditions set forth in extenso in
the articles of association.
On June 8, 2020, the General
Meeting of Shareholders decided,
in accordance with articles 604
juncto 607, para. 2, 2° of the
Belgian Company Code to give, for
a period of five years starting on
June 8, 2020, the authorisation to
the Board of Directors to increase
the capital of the Company with a
maximum amount of €117,758.84
(excluding issue premium). The
General Meeting of Shareholders
also decided to give this
authorisation to the Board in case
of reception by the Company of a
communication by the Financial
Services and Markets Authority
(FSMA) stating that the FSMA has
been informed of a public takeover
bid regarding the Company, for
all public take-over bids notified
to the Company three years after
June 8, 2020.
The Board has used its powers to
increase the share capital within
the framework of the authorised
capital (i) on November 27, 2020
by an amount of €2,000 (excluding
any issue premiums) following the
issuance of the 400,000 ESOP
2020 Warrants.
On March 31, 2022, the share
capital was increased by
contribution in cash, as the result
of an accelerated bookbuilding,
for a total amount of €15 mio
(including issue premium) with
issuance of 967,742 new shares.
The new shares were issued at a
price of €15.5 per share (including
issue premium).
The ESOP Warrant 2022 plan
was approved in June 2022,
increasing the authorised capital
by an amount of €710 (excluding
any issue premiums) following the
issuance of the 142,000 ESOP
2022 warrants.
Consequently, the Board is therefore
authorised to increase the share
capital of the Company within
the framework of the authorised
capital for a maximum amount of
€110,210.13 (as of 1 April 2023,
excluding issue premium).
Changes in Capital
At any given time, the
Shareholders’ Meeting can resolve
to increase or decrease the share
capital of the Company. Such
resolution must satisfy the quorum
and majority requirements that
apply to an amendment of the
articles of association.
Warrants Plans
Warrant Plans Issued
The Company created four warrant
plans under which warrants were
granted to employees, directors,
consultants and shareholders of the
Company and its subsidiaries: the
transaction warrants in May 2017
and the ESOP Warrants plans in
December 2019, November 2020
and June 2022.
Summary of the
Outstanding Warrant Plans
Transaction Warrants
On May 12, 2017, the Company
issued 300,000 warrants (before
stock split - the transaction
warrants). All transaction
warrants have been subscribed
for. The transaction warrants
were granted free of charge.
Initially all transaction warrants
were subscribed by Stijn Van
Rompay. Thereafter they have
been transferred at multiple
occasions to other persons such as
shareholders in the Company.
interest within the meaning of Article 7:96
CCA that has not been disclosed to the
Board of Directors. Where such a conflict of
interest has occurred, Hyloris has applied
(or ratified the application of) the statutory
conflicts of interest procedure of Article 7:96
CCA.
Below is an overview of the meetings of the
Board of Directors in which the conflict of
interest procedure has been applied.
Related Party Transactions
The Board of Directors must comply with
the procedure set out in Article 7:97, §3-4/1
CCA if it takes a decision or carries out a
transaction that relate to a related party within
the meaning of the International Accounting
Standard 24, as adopted by the European
Union (IAS 24), unless the exemptions of
Article 7:97, §1, section 4 apply whereby
all decisions or transactions to which the
procedure applies must first be subject to
the assessment of a Committee of three
Independent Directors, which, if it so chooses,
shall be assisted by one or more independent
experts of its choice. The Committee issues
a written and reasoned opinion to the Board
of Directors on the proposed decision or
transaction, in which it addresses at least the
elements set out in Article 7:97,§3, section 2
CCA.
After having taken note of the advice of the
Committee provided, and applying, where
necessary the conflict of interest procedure
set forth in Article 7:96 CCA, the Board of
Directors shall deliberate on the intended
decision or transaction. If a Director is involved
in the decision or operation, that director
may not participate in the deliberation
and voting. If all Directors are involved, the
decision or transaction is submitted to the
General Shareholders’ Meeting; if the General
Shareholders’ Meeting approves the decision
or transaction, the Board of Directors may
execute it. The Board of Directors confirms in
the minutes of the meeting that the procedure
described above has been complied with, and,
if necessary, justifies why it deviates from the
Committee’s opinion.
The statutory auditor assesses whether
there are no material inconsistencies in the
financial and accounting information included
in the minutes of the Board of Director and in
the committee’s opinion with respect to the
information available to it within the scope of
its mission. This opinion shall be attached to
the minutes of the Board of Directors.
The Company will publicly announce the
decisions or transaction in accordance with
Article 7:97,§4/1 CCA.
This procedure does not apply to customary
decisions and transactions at market
conditions or to decisions and transactions
the value of which is less than 1% of the net
assets of the Company on a consolidated
basis. In addition, decisions, and transactions
on the remuneration of the directors or the
members of the Executive Committee are
exempted as are acquisitions or transfers of
own shares, interim dividend payments and
capital increases under the authorised capital
without limitation or cancellation of the
preferential subscription right of the existing
shareholders.
Transactions with Related Parties
The Board of Directors of Hyloris has not
applied the procedure set forth in Articles
7:96 and 7:97 CCA, in 2022.
Transactions with Aﬃliates
Article 7:97 of the Belgian Code on
Companies and Associations provides for a
special procedure which must be followed
for transactions with the Company’s
affiliated companies or subsidiaries. Such
a procedure does not apply to decisions
or transactions that are entered into the
ordinary course of business at usual market
conditions or for decisions and transactions
whose value does not exceed one percent of
the Companies’ consolidated net assets.
The Board of Directors of Hyloris has not
applied the special procedure set forth
in Article 7:97 CCA for transactions with
the Company’s affiliated companies or
subsidiaries, in 2022.
Hyloris
_
Annual Report 2022
p. 76
p. 77
The terms and conditions of the
ESOP Warrants contain customary
good leaver and bad leaver pro-
visions in the event of termination
of the professional relationship
between the beneficiary and
Hyloris. The terms and conditions
of the ESOP Warrants also provide
that all ESOP Warrants (whether
or not vested) will become
exercisable during a special
exercise period to be organised by
the Board in the event of certain
liquidity events. These liquidity
17 Calculated as % of total number of voting rights at 31 December 2021 (28,000,374).
18 Acting through SVR Management BV.
19 Acting through Jacobsen Management BV.
20 Acting through Herault BV.
21 Acting through Finsys Management BV.
22
Calculated as % of total number of warrants accepted on December 31
st
2022 (634,625). 80.000 warrants were accepted in early 2023 - the
remainder has lapsed.
events include (i) a transfer of all
or substantially all Shares of the
Company; (ii) a merger, demerger
or other corporate restructuring
resulting in the share- holders
holding the majority of the voting
rights in the Company prior to
the transaction not holding the
majority of the voting rights in
the surviving entity after the
transaction; (iii) the launch of a
public takeover bid on the Shares;
and (iv) any action or transaction
with substantially the same
economic effect as determined by
the Board of Directors.
Shares and Share Options -
Warrants
The table below provides an
overview of the shares and ESOP
warrants held by the (former)
members of the Executive
Committee at the date of
December 31, 2022.
Shares
Name
Number
%
17
Mr. Stijn Van Rompay
18
7,676,400
27,42%
Mr. Thomas Jacobsen
19
3,657,505
13.06%
Mr. Koenraad Van der Elst
20
27,443
0.06%
Mr. Jean-Luc Vandebroek
21
3,000
0.01%
Mr. Dietmar Aichhorn
20,000
0.07%
ESOP warrants
Name
Number
%
22
Mr. Stijn Van Rompay
18
68,000
10.71%
Mr. Thomas Jacobsen
19
0
0%
Mr. Koenraad Van der Elst
20
50,000
7,88%
Mr. Jean-Luc Vandebroek
21
40,000
6.3%
Mr. Dietmar Aichhorn
40,000
6.3%
Consequences in Case of
a Public Take-Over Bid
The General Meeting of
Shareholders of June 8, 2020
decided to give the authorisation
to the Board to increase the
capital of the Company in case
of reception by the Company of a
communication by the Financial
Services and Markets Authority
(FSMA) stating that the FSMA has
been informed of a public takeover
bid regarding the Company, for all
public take-over bids notified to the
Company three years after June 8,
2020.
Pursuant to the resolution of the
General Shareholders’ Meeting of
June 8, 2020, the Board of Directors
of the Company is authorised
to acquire and accept in pledge
its own Shares without the total
number of own Shares, held or
accepted in pledge by the Company
exceeds 20% of the total number
of Shares, for a consideration
of at least €1 and at most 30%
above the arithmetic average of
the closing price of the Company’s
Share during the last thirty days of
stock exchange listing prior to the
decision of the Board of Directors
to acquire or accept in pledge. This
authorisation has been granted for
a renewable period of five years
as from the date of publication of
the minutes of the Extraordinary
General Shareholders’ Meeting
of June 8, 2020 in the Annexes
to the Belgian Official Gazette.
The Company must inform the
FSMA of any such contemplated
transactions.
In June 2022, the afore-mentioned transaction
warrants were exercised, resulting in the
issuance of 1,200,000 new ordinary shares
at a subscription price per share of €2.3597,
resulting in a capital increase of €2,831,640.
ESOP Warrants
On December 31, 2019, the Company
approved, in principle, the issue of 90,825
warrants in the context of an employee
stock ownership plan, subject to the ESOP
Warrants being offered to, and accepted
by, the beneficiaries thereof, who must be
employees, directors or consultants of the
Company and/or its subsidiaries. As a result
of the Share Split, each ESOP Warrant was
automatically “divided” into four. Following
the Share Split, 313,000 ESOP Warrants are
currently granted and outstanding.
On November 27, 2020, the Company
approved, in principle, the issue of 400,000
warrants in the context of a second
employee stock ownership plan, subject to
the ESOP Warrants being offered to, and
accepted by, the beneficiaries thereof, who
must be employees, directors or consultants
of the Company and/or its subsidiaries.
Under this plan, 186,500 ESOP Warrants
are currently granted and outstanding and
213,500 ESOP Warrants have lapsed.
On June 22, 2022, the Company approved,
in principle, the issue of 213.500 ESOP
Warrants in the context of a third employee
stock ownership plan. Under this plan,
142.000 ESOP Warrants are currently
granted and outstanding and 71.500 ESOP
Warrants have lapsed.
All ESOP Warrants have been granted free
of charge.
Each ESOP Warrant entitles its holder to
subscribe for one new Share at an exercise
price determined by the Board of Directors
in line with a report on the real value of the
underlying Share at the date of the offering
of the ESOP Warrants in accordance with
article 43, §4, 2° of the Belgian Stock Option
Act of March 26, 1999.
The exercise price determined for all ESOP
Warrants issued in 2019, taking into account
the Share Split, is equal to €5.3375 per ESOP
Warrant.
The exercise price for all ESOP Warrants
issued in 2020 and 2022 is equal (a) to the
average closing price of the Company’s
shares during the thirty (30) days preceding
the offer or (b) to the last closing price
preceding the day of the offer. It is possible
that, when the evolution of the share price
is such that such a discount is justified to
grant to the beneficiaries of the warrant
plan warrants with an exercise price similar
to the exercise price of the warrants that
others beneficiaries of the warrant plan
have acquired and in order to ensure
equality between the beneficiaries of the
warrant plan as much as possible, that the
exercise price of the Stock Option Warrants
will be equal to eighty-five percent (85
%) of the average closing price of the
Company’s shares during the thirty (30) days
preceding the offer or (b) at the last closing
price preceding the day of the offer (i.e. a
maximum discount of fifteen percent (15 %)).
The new Shares (if any) that will be
issued pursuant to the exercise of the
ESOP Warrants, will be ordinary shares
representing the capital, of the same class
as the then existing Shares, fully paid, with
voting rights and without nominal value.
They will have the same rights as the then
existing Shares and will be profit sharing as
from any distribution in respect of which the
relevant ex-dividend date falls after the date
of their issuance.
The ESOP Warrants shall only be acquired
in a final manner (“vested”) in cumulative
tranches over a period of four years as of
the starting date (deter- mined for each
beneficiary separately): i.e., a first tranche
of 25% vests on the first anniversary of the
starting date and subsequently 1/48
th
vests
each month. ESOP Warrants can only be
exercised by the relevant holder of such
ESOP Warrants, provided that they have
effectively vested, as of the beginning of
the fourth calendar year following the year
in which the Company granted the ESOP
Warrants to the holders thereof. As of that
time, the ESOP Warrants can be exercised
during the first fifteen days of each quarter.
However, the terms and conditions of the
ESOP Warrants provide that the ESOP
Warrants can or must also be exercised,
regardless of whether they have vested or
not, in several specified cases of accelerated
vesting set out in the issue and exercise
conditions.
Hyloris
_
Annual Report 2022
p. 78
p. 79
Major Shareholders
Other holders
44,33 %
Pieter Van Rompay
3,27 %
Nick Reunbrouck
5,75 %
Scorpiaux BV
6,17 %
Thomas Jacobsen
(Founder & CBDO)
13,06 %
Stijn Van Rompay
(Founder & CEO)
27,42 %
At December 31, 2022, there
are 28,000,374 ordinary shares
representing a total share capital
of the Company of €140,001.87
(excluding issue premium). There
are only ordinary shares, and there
are no special rights attached to any
of the ordinary shares, nor special
shareholder rights for any of the
shareholders of the Company. The
Company has issued a total of (i)
363,300 ESOP warrants (December
2019), (ii) 400,000 ESOP warrants
(November 2020) of which 263,800
warrants have lapsed, all such
warrants giving right to subscribe
to an equal number of shares, (iii)
142.000 ESOP Warrants (June
2022) of which 71.500 ESOP
Warrants have lapsed. All of the
afore mentioned warrants give right
to subscribe to an equal number of
shares.
Dividends and Dividend
Policy
Entitlement to Dividends
Pursuant to the Belgian Code of
Companies and Associations, the
shareholders can in principle decide
on the distribution of profits with a
simple majority vote at the occasion
of the Annual General Shareholders’
Meeting, based on the most
recent statutory audited financial
statements, prepared in accordance
with Belgian GAAP and based on
a (non-binding) proposal of the
Company’s Board of Directors. The
Company’s Articles of Association
also authorise the Board of Directors
to declare interim dividends without
shareholder approval. The right
to pay such interim dividends is,
however, subject to certain legal
restrictions.
The Company’s ability to distribute
dividends is subject to availability
of sufficient distributable profits as
defined under Belgian law based on
the Company’s stand-alone statutory
accounts prepared in accordance
with Belgian GAAP.
In particular, dividends can only be
distributed if following the declaration
and issuance of the dividends the
amount of the Company’s net assets
on the date of the closing of the last
financial year as follows from the
statutory non-consolidated financial
statements (i.e., summarised, the
amount of the assets as shown
in the balance sheet, decreased
with provisions and liabilities, all in
accordance with Belgian accounting
rules), and, save in exceptional
cases, to be mentioned and justified
in the notes to the annual accounts,
decreased with the non-amortised
costs of incorporation and extension
and the non-amortised costs for
research and development, does not
fall below the amount of the paid-
up capital (or, if higher, the issued
capital), increased with the amount
of non- distributable reserves (which
include, as the case may be, the
unamortised part of any revaluation
surpluses).
In addition, pursuant to Belgian
law and the Company’s Articles
of Association, the Company must
allocate an amount of 5% of its
Belgian GAAP annual net profit
(“bénéfices nets”/“nettowinst”) to
a legal reserve in its stand-alone
statutory accounts, until the legal
reserve amounts to 10% of the
Company’s share capital. The
Company’s legal reserve currently
does not meet this requirement.
Accordingly, 5% of its Belgian GAAP
annual net profit during future
years will need to be allocated to
the legal reserve, further limiting
the Company’s ability to pay out
dividends to its shareholders.
In accordance with Belgian law, the
right to collect dividends declared on
ordinary shares expires five years
after the date the Board of Directors
has declared the dividend payable,
whereupon the Company is no longer
under an obligation to pay such
dividends.
Dividend Policy
The Company has not declared or
paid dividends on its shares in the
past. Any declaration of dividends
will be based upon the Company’s
earnings, financial condition, capital
requirements and other factors
considered important by the Board
of Directors. Belgian law and the
Company’s Articles of Association do
not require the Company to declare
dividends.
Currently, the Board of Directors
of the Company expects to retain
all earnings, if any, generated by
the Company’s operations for the
development and growth of its
business and does not anticipate
paying any dividends to the
shareholders in the foreseeable
future.
In the future, the Company’s
dividend policy will be determined
and may change from time to time
by determination of the Company’s
Board of Directors.
The Board of Directors is furthermore
authorised, subject to and with effect as from
the completion of the Offering, to acquire
or accept in pledge own Shares where
such acquisition or acceptance in pledge
is necessary to prevent imminent serious
harm to the Company. This authorisation
has been granted for a renewable period of
three years as from the date of publication
of the minutes of the Extraordinary General
Shareholders’ Meeting of June 8, 2020 in the
Annexes to the Belgian Official Gazette.
The Company may transfer its own Shares
in accordance with the Belgian Code of
Companies and Associations and article 11
of its Articles of Association. Pursuant to
the resolution of the General Shareholders’
Meeting of June 8, 2020, the Board of
Directors of the Company is authorised
to transfer its own Shares to one or more
specific persons other than employees.
The authorisations referred to above also
apply to the Company, the direct subsidiaries
of the Company, insofar as necessary, the
indirect subsidiaries of the Company, and,
insofar as necessary, every third party acting
in its own name but on behalf of those
companies.
There are no agreements between
shareholders which are known by the
Company and may result in restrictions on
the transfer of securities and/or the exercise
of voting rights.
There are no holders of any shares with
special voting rights. Each shareholder is
entitled to one vote per share. Voting rights
may be suspended as provided in the
Company’s Articles of Association and the
applicable laws and articles.
The Company is not a party to agreements
which, upon a change of control of the
Company or following a takeover bid
can enter into force or, subject to certain
conditions can be amended, be ter- minated
by the other parties thereto or give the other
parties thereto (or beneficial holders with
respect to bonds) a right to an accelerated
repayment of out- standing debt obligations
of the Company under such agreements.
Shareholders
Belgian legislation (the Law of May 2, 2007
on the disclosure of major shareholdings
in Companies whose shares are admitted
to trading on a regulated market, and the
Royal Decree of February 14, 2008 on
the disclosure of major shareholdings)
imposes disclosure requirements on each
natural person or legal entity (including
registered business associations without
legal personality and trusts) that acquires or
transfers, directly or indirectly, (i) securities
with voting rights or (the right to exercise)
voting rights, (ii) securities granting the right
to acquire existing securities with voting
rights, or (iii) securities that are referenced
to existing securities with voting rights and
with economic effect similar to that of the
securities referred to in (ii), whether or not
they confer a right to a physical settlement,
if, as a result of such acquisition or transfer,
the total number of voting rights (deemed
to be) linked to securities referred to in (i)
through (iii)) directly or indirectly held by such
natural person or legal entity, acting alone or
in concert with others, reaches, rises above
or falls below a threshold of 5%, or a multiple
of 5%, of the total number of voting rights
attached to the securities of the Company.
A notification duty applies also if (a) the
voting rights (linked to securities) referred
to in (i) or (b) the voting rights deemed to be
linked to securities referred to in (ii) and (iii),
taken separately, reaches, rises above or
falls below the threshold.
The Company has introduced additional
disclosure thresholds of 3% and 7.5% in its
Articles of Association.
The graph below provides an overview of the
share- holders of Hyloris Pharmaceuticals
SA, taking into account the transparency
notifications received pursuant to the Law
of May 2, 2007 on the disclosure of large
shareholders (situation as per December 31,
2021).
Hyloris
_
Annual Report 2022
p. 80
p. 81
Today, our solid cash
position, lack of ﬁnancial
debt and growing royalty
income are already adding
crucial ingredients for the
future success of Hyloris.
Jean-Luc Vandebroek, CFO
Consolidated
Financial
Statements
STATEMENT OF THE
BOARD OF DIRECTORS
On April 26, 2023, we hereby conﬁrm that,
to the best of our knowledge:
•
the consolidated financial statements,
established in accordance with International
Financial Reporting Standards (“IFRS”) as
adopted by the European Union, give a
true and fair view of the equity, financial
position and financial performance of Hyloris
Pharmaceuticals SA and of the entities
included in the consolidation as a whole;
•
the annual report on the consolidated
financial statements includes a fair overview
of the development and the performance
of the business and the position of Hyloris
Pharmaceuticals SA and of the entities
included in the consolidation, together
with a description of the principal risks and
uncertainties to which they are exposed.
Signed by Stijn Van Rompay (CEO) and
Stefan Yee (Chairman)
on behalf of the Board of Directors.
CONSOLIDATED FINANCIAL STATEMENTS AS AT 31 DECEMBER 2022
......
82
Consolidated Statement of Financial Position
.................................................................
82
Consolidated Statement of Proﬁt and Loss and
Other Comprehensive Income
...........................................................................................................
83
Consolidated Statement of Changes in Equity
................................................................
84
Consolidated Statement of Cash Flows
.................................................................................
85
Notes to the consolidated ﬁnancial statements
...................................................................
86
ABBREVIATED STATUTORY FINANCIAL STATEMENTS
OF HYLORIS PHARMACEUTICALS SA
......................................................................................
120
Statutory notes
..............................................................................................................................................
122
Hyloris
_
Annual Report 2022
p. 82
p. 83
CONSOLIDATED FINANCIAL STATEMENTS
AS AT 31 DECEMBER 2022
Consolidated Statement of Financial Position
ASSETS
(in € thousand)
Note
31 December
2022
31 December
2021
Non-current assets
11,063
9,485
Intangible assets
7
3,607
2,944
Property, plant and equipment
176
122
Right-of-use assets
8
885
173
Equity accounted investees
9
3,948
4,079
Other investment, including derivatives
10
1,000
453
Trade and other receivables
11
1,447
1,714
Current assets
50,801
53,959
Trade and other receivables
11
5,127
2,321
Other investment, including derivatives
10
469
528
Prepayments
12
1,748
1,098
Cash and cash equivalents
13
43,457
50,012
TOTAL ASSETS
61,864
63,444
EQUITY AND LIABILITIES
(in € thousand)
Note
31 December
2022
31 December
2021
Equity
14
55,045
48,056
Share capital
140
129
Share premium
121,513
103,693
Retained earnings
(53,476)
(43,226)
Result of the period
(10,770)
(11,579)
Share based payment reserve
1,622
2,391
Cost of Capital
(4,460)
(3,827)
Other reserves
476
476
Liabilities
6,819
15,388
Non-current liabilities
1,047
409
Borrowings
15
747
109
Other ﬁnancial liabilities
15
300
300
Current liabilities
5,772
14,978
Current borrowings
15
138
65
Other current ﬁnancial liabilities
15
3,212
11,815
Trade and other liabilities
16
2,422
2,749
Current tax liabilities
23.1
349
TOTAL EQUITY AND LIABILITIES
61,864
63,444
The accompanying notes are an integral part of these consolidated financial statements.
Consolidated Statement of Proﬁt and Loss and Other Comprehensive Income
(in € thousand)
Note
2022
2021
Revenues
18
2,951
3,096
Cost of sales
19
(94)
(107)
Gross proﬁt
2,857
2,988
Research and development expenses
19
(10,151)
(5,056)
General and administrative expenses
19
(3,517)
(2,900)
Share of result of equity-accounted investees, net of tax
19
(130)
(191)
Other operating income
21
315
389
Other operating expenses
19
(12)
(5,770)
Operating proﬁt/(loss) (EBIT)
(10,638)
(10,541)
Financial income
22
466
32
Financial expenses
22
(594)
(773)
Proﬁt/(loss) before taxes
(10,766)
(11,282)
Income taxes
23
(4)
(297)
PROFIT/(LOSS) FOR THE PERIOD
(10,770)
(11,579)
Other comprehensive income
-
-
TOTAL COMPREHENSIVE INCOME OF THE PERIOD
(10,770)
(11,579)
Proﬁt/(loss) for the period attributable to the owners of the Company
(10,770)
(11,579)
Proﬁt/(loss) for the period attributable to the non-controlling interests
Total comprehensive income for the period attributable to the owners
of the Company
(10,770)
(11,579)
Total comprehensive income for the period attributable to the non-
controlling interests
Basic and diluted earnings/(loss) per share (in €)
24
(0.40)
(0.45)
The accompanying notes are an integral part of these consolidated financial statements.
Hyloris
_
Annual Report 2022
p. 84
p. 85
Consolidated Statement of Changes in Equity
Attributable to equity holders of the Company
Total
Equity
Share
capital
Share
premium
Other reserves
Retained
earnings
(in € thousand)
Share based
payment
reserve
Cost
Other
of Capital
reserves
Balance at 31 December 2020
129
103,693
1,814
(3,827)
476
(43,226)
59,059
Share-based payments
-
-
576
-
-
-
576
Total comprehensive income
-
-
-
-
(11,579)
(11,579)
Balance at 31 December 2021
129
103,693
2,391
(3,827)
476
(54,805)
48,056
Private Placement via an ABB
(note 14.2)
5
14,995
(634)
-
14,366
Exercise of warrants (note 14.3)
6
2,826
(1,329)
1,329
2,832
Share-based payments (note 14.3)
560
560
Total comprehensive income
(10,770)
(10,770)
Balance at 31 December 2022
140
121,513
1,622
(4,460)
476
(64,246)
55,045
The accompanying notes are an integral part of these Consolidated financial statements.
Consolidated Statement of Cash Flows
(in € thousand)
Note
2022
2021
CASH FLOW FROM OPERATING ACTIVITIES
Proﬁt/(loss) for the period
(10,770)
(11,579)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation, amortisation and impairments
19
196
137
Share-based payment expense
19
560
576
Derivatives ﬁnancial instruments
22
52
R&D Tax Credit
11 + 21
(315)
Interest expenses on shareholders loans
28
164
Loss on derecognition of shareholder loans
15
486
198
Equity transaction costs
29
Losses from Associates and joint ventures
9
130
191
Losses on disposal of PPE
16
Other non-cash adjustments
16
(1)
Changes in working capital:
Trade and other receivables
(2,261)
(2,068)
Other investment, including derivatives
4
(1,627)
Prepayments
12
(650)
856
Trade and other liabilities
(468)
Other current and non-current liabilities
2,063
Cash generated from operations
(12,812)
(11,253)
Interest paid
7
3
Taxes paid
22
(349)
Net cash generated from operating activities
(13,154)
(11,250)
CASH FLOW FROM INVESTING ACTIVITIES
Purchases of property, plant and equipment
(101)
(107)
Purchases of Intangible assets
7
(638)
(954)
Proceeds (from disposal) of intangible assets
219
Investments in equity accounted investees
9
(1,270)
Acquisition in other investments
10
(500)
(21)
Repayment received from other ﬁnancial assets
216
Payment of other ﬁnancial assets
(1,157)
Net cash provided by/(used in) investing activities
(1,239)
(3,075)
CASH FLOW FROM FINANCING ACTIVITIES
Reimbursements of borrowings and other ﬁnancial liabilities
15
(7,376)
Reimbursements of lease liabilities
(79)
Reimbursements of borrowings
(62)
Proceeds from Private Placement via ABB
14
14,337
Proceeds from Execution Transactions Warrants
14
2,832
Interests paid
15
(1,877)
Net cash provided by/(used in) ﬁnancing activities
7,838
(62)
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
(6,555)
(14,387)
CASH AND CASH EQUIVALENTS at beginning of the period
50,012
64,399
CASH AND CASH EQUIVALENTS at end of the period, calculated
43,457
50,012
The accompanying notes are an integral part of these consolidated financial statements.
Hyloris
_
Annual Report 2022
p. 86
p. 87
Notes to the consolidated ﬁnancial statements
1.
GENERAL INFORMATION
Hyloris Pharmaceuticals SA (the “Company” or
“Hyloris”) is a limited liability company governed by
Belgian law. The address of its registered office is
Boulevard Patience et Beaujonc N°3/1, 4000 Liège,
Belgium.
Hyloris is a specialty biopharma company identifying
and unlocking hidden potential in existing medications
for the benefit of patients and the healthcare system.
Hyloris applies its knowhow and technological
innovations to existing pharmaceuticals and has built
a broad proprietary product pipeline that has the
potential to offer significant advantages over currently
available alternatives.
Hyloris currently has two partnered, commercial-
stage products: Sotalol IV for the treatment of atrial
fibrillation, and Maxigesic
®
IV, a non-opioid analgesic
for the treatment of pain.
The Company’s development strategy primarily
focuses on the FDA’s 505(b)2 regulatory pathway,
which is specifically designed for pharmaceuticals for
which safety and efficacy of the molecule has already
been established. This pathway can reduce the clinical
burden required to bring a product to market, and
significantly shorten the development timelines and
reduce costs and risks.
Armed conflict between Russia and Ukraine
The geopolitical situation in Eastern Europe intensified
on 24 February 2022, with Russia’s invasion of
Ukraine. The war between the two countries continues
to evolve as military activity proceeds and additional
sanctions are imposed.
Although the Russia-Ukraine war is not expected to
cause disruption in the Groups’ operations, the Group
finalised prior February 2022 the clinical phase of a
clinical study for product candidate HY-004 at a CRO
located in Ukraine. The analysis and reporting of this
clinical study is organised outside the conflict area.
If the CRO experience disruptions to their business
due to the military conflict, the Group assesses these
disruptions shall not result in delays in the clinical
development activities. The impact on ongoing study
will remain limited. The Group continues to monitor the
situation and is taking measures to mitigate the impact
on her ability to conduct clinical development activities.
The consolidated financial statements were authorised
for issue by the Board of Directors on April 26, 2023.
Current economic climate
In 2022 the outlook of the worldwide economy has
several downside risks including higher general
inflation, increasing energy costs, tighter monetary
policy, financial stress and rising geopolitical tensions.
The company evaluated the impact of the current
economic climate and concluded that there is limited
impact on the business.
2.
SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES
2.1
BASIS OF PREPARATION
These consolidated financial statements of the Group
for the year ended December 31, 2022 have been
prepared in accordance with IFRS (“International
Financial Reporting Standards”) as adopted by the
European Union. These include all IFRS standards
and IFRIC interpretations issued and effective as at
December 31, 2022. No new standards, amendments
to standards or interpretations were early adopted.
These consolidated financial statements are presented
in euro, which is the Company’s functional currency.
All amounts in this document are represented in
thousands of euros (€ thousands), unless noted
otherwise. Due to rounding, numbers presented
throughout these Consolidated Financial Statements
may not add up precisely to the totals provided and
percentages may not precisely reflect the absolute
figures.
These financial statements are prepared on an accrual
basis and on the assumption that the entity is in
going concern and will continue in operation in the
foreseeable future (see also Note 3.1 below).
The preparation of financial statements in accordance
with IFRS requires the use of certain critical accounting
estimates. It also requires management to exercise
judgment in the process of applying the Group
accounting policies. The areas involving a higher
degree of judgment or complexity, or areas where
assumptions and estimates are significant to the
consolidated financial statements are disclosed in
Note 3.
Relevant IFRS accounting pronouncements adopted
as from 2022
A number of new standards, amendments to
standards and interpretations are not yet effective
for annual periods ending 31 December 2022, and
have not been applied in preparing these consolidated
financial statements:
•
Amendments to IFRS3 – Business Combinations
(effective January 1, 2022, and endorsed in EU):
These amendments update a reference in IFRS 3 to
the Conceptual Framework for Financial Reporting
without changing the accounting requirements for
business combinations.
•
Amendments to IAS 16 – Property, Plant and
Equipment (effective January 1, 2022, and endorsed
in EU): These amendments prohibit a company
from deducting from the cost of property, plant
and equipment amounts received from selling
items produced while the company is preparing
the asset for its intended use. Instead, a company
will recognise such sales proceeds and related
cost in profit or loss. The amendments also clarify
that testing whether an item of PPE is functioning
properly means assessing its technical and physical
performance rather than assessing its financial
performance.
•
Amendments to IAS 37 – Provisions, Contingent
Liabilities and Contingent Assets (effective January
1, 2022, and endorsed in EU): These amendments
specify which costs a company includes when
assessing whether a contract will be loss-making.
The amendments clarify that the ‘costs of fulfilling a
contract’ comprise both: the incremental costs; and
an allocation of other direct costs.
•
Annual Improvements to IFRS Standards
2018–2020 make minor amendments to IFRS
1 First-time Adoption of International Financial
Reporting Standards, IFRS 9 Financial Instruments,
IAS 41 Agriculture and the Illustrative Examples
accompanying IFRS 16 Leases.
The above mentioned IFRS pronouncements did not
have a significant impact on the consolidated financial
statements.
Relevant IFRS accounting pronouncements to be
adopted as from 2022 onwards
A number of new standards, amendments to
standards and interpretations are not yet effective
for annual periods ending 31 December 2022, and
have not been applied in preparing these consolidated
financial statements:
Amendments to IAS 1 Presentation of Financial
Statements and IFRS Practice Statement 2:
Disclosure of Accounting policies
, issued on
12 February 2021, include narrow-scope amendments
to improve accounting policy disclosures so that
they provide more useful information to investors
and other primary users of the financial statements.
The amendments to IAS 1 require companies to
disclose their material accounting policy information
rather than their significant accounting policies. The
amendments to IFRS Practice Statement 2 provide
guidance on how to apply the concept of materiality to
accounting policy disclosures.
The amendments are effective for annual periods
beginning on or after 1 January 2023 with early
application permitted. These amendments have been
endorsed by the EU.
Amendments to IAS 8 Accounting policies, Changes
in Accounting Estimates and Errors: Definition of
Accounting Estimates,
issued on 12 February 2021,
clarify how companies should distinguish changes
in accounting policies from changes in accounting
estimates. The distinction is important because
changes in accounting estimates are applied
prospectively only to future transactions and other
future events, but changes in accounting policies
are generally also applied retrospectively to past
transactions and other past events.
The amendments are effective for annual periods
beginning on or after 1 January 2023 with early
application permitted. These amendments have been
endorsed by the EU.
Amendments to IAS 12 Income Taxes: Deferred
Tax related to Assets and Liabilities arising from a
Single Transaction,
issued on 7 May 2021, clarifies
how companies should account for deferred tax on
transactions such as leases and decommissioning
obligations. IAS 12 Income Taxes specifies how a
company accounts for income tax, including deferred
tax, which represents tax payable or recoverable in
the future. In specified circumstances, companies
are exempt from recognizing deferred tax when
they recognise assets or liabilities for the first time.
Previously, there had been some uncertainty about
whether the exemption does not apply and that
companies are required to recognise deferred tax on
such transactions. The aim of the amendments is to
reduce diversity in the reporting on deferred tax on
leases and decommissioning obligations.
The amendments are effective for annual periods
beginning on or after 1 January 2023 with early
application permitted. These amendments have been
endorsed by the EU.
Hyloris
_
Annual Report 2022
p. 88
p. 89
Amendments to IAS 1 Presentation of Financial
Statements:
Classification of Liabilities as Current
or Non-current Date (issued on 23 January 2020);
Classification of Liabilities as Current or Non-current
- Deferral of Effective Date (issued on 15 July 2020);
and
Non-current Liabilities with Covenants (issued on
31 October 2022).
Amendments to IAS 1 Presentation of Financial
statements: Classification of Liabilities as Current
or Non-current
, issued on 23 January 2020, clarify
a criterion in IAS 1 for classifying a liability as non-
current: the requirement for an entity to have the
right to defer settlement of the liability for at least 12
months after the reporting period.
The amendments:
•
specify that an entity’s right to defer settlement must
exist at the end of the reporting period;
•
clarify that classification is unaffected by
management’s intentions or expectations about
whether the entity will exercise its right to defer
settlement;
•
clarify how lending conditions affect classification;
and
•
clarify requirements for classifying liabilities an
entity will or may settle by issuing its own equity
instruments.
On July 15, 2020, the IASB issued
Classification of
Liabilities as Current or Non-current — Deferral of
Effective Date (Amendment to IAS 1)
deferring the
effective date of the January 2020 amendments.
On October 31, 2022, the IASB issued
Non-current
liabilities with Covenants
, which amends IAS 1 and
specifies that covenants (i.e. conditions specified
in a loan arrangement) to be complied with after
the reporting date do not affect the classification
of debt as current or non-current at the reporting
date. Instead, the amendments require a company
to disclose information about these covenants in the
notes to the financial statements.
All of the amendments are effective for annual
reporting periods beginning on or after 1 January
2024, with early adoption permitted. The amendments
have not yet been endorsed by the EU.
Amendments to IFRS 16 Leases: Lease Liability in a
Sale and Leaseback
, issued on 22 September 2022,
introduce a new accounting model which will impact
how a seller-lessee accounts for variable lease
payments in a sale-and-leaseback transaction.
Under this new accounting model for variable
payments, a seller-lessee will:
•
include estimated variable lease payments when it
initially measures a lease liability arising from a sale-
and-leaseback transaction; and
•
after initial recognition, apply the general
requirements for subsequent accounting of the
lease liability such that it recognises no gain or loss
relating to the right of use it retains.
These amendments will not change the accounting for
leases other than those arising in a sale and leaseback
transaction.
The amendments apply retrospectively to such
transactions as of the implementation of IFRS 16
and for annual periods beginning on or after 1
January 2024 with early application permitted. These
amendments have not yet been endorsed by the EU.
The amendments are not expected to have a
material impact on the Group’s consolidated financial
statements.
Other new pronouncements issued by the IASB have
not been disclosed as the Company considers these as
not relevant to the business of the Group.
2.2
CONSOLIDATION
Subsidiaries
Subsidiaries are all entities over which the Group
has control. Control is established when the Group is
exposed, or has the rights, to variable returns from its
involvement with the subsidiary and has the ability
to affect those returns through its power over the
subsidiary. Subsidiaries are fully consolidated from the
date on which control is transferred to the Group. They
are de-consolidated from the date that control ceases.
Inter-company transactions, balances and unrealised
gains on transactions between group companies
are eliminated. Unrealised losses are also eliminated
but considered an impairment indicator of the asset
transferred.
Business combinations
The acquisition method of accounting is used to
account for the acquisition of businesses (meeting
the definition of a business in accordance with
IFRS 3 Business Combinations) by the Group. The
consideration transferred for the acquisition of a
business is the fair values of the assets transferred,
the liabilities incurred and the equity interests
issued by the Group. The consideration transferred
includes the fair value of any asset or liability
resulting from a contingent consideration agreement.
Acquisition-related costs are expensed as incurred,
except if related to the issue of debt or equity
securities. Identifiable assets acquired and liabilities
and contingent liabilities assumed in a business
combination are generally measured initially at their
fair values at acquisition date. On an acquisition-
by-acquisition basis, the Group recognises any non-
controlling interest in the acquiree at fair value or at
the non-controlling interest’s proportionate share of
the acquiree’s net assets.
The excess of the consideration transferred, the
amount of any non-controlling interest in the acquiree
and the acquisition date fair value of any previous
equity interest in the acquiree over the fair value of
the net identifiable assets acquired is recorded as
goodwill. If this is less than the fair value of the net
assets of the subsidiary in the case of a bargain
purchase, the difference is recognised directly in the
income statement.
Transactions under common control
For business combinations under common control
(also “Transactions under common control”), the Group
applies predecessor accounting.
The consideration for each acquisition is measured
at the aggregate of the fair values (at the date of
acquisition) of assets transferred and liabilities
incurred or assumed, and equity instruments issued
by the Group in exchange for control of the acquiree.
Acquisition-related costs are recognised in profit or
loss as incurred.
Where applicable, the consideration for the acquisition
includes any asset or liability resulting from a
contingent consideration arrangement, measured at its
acquisition-date fair value.
The acquiree’s identifiable assets, liabilities, and
contingent liabilities that meet the recognition criteria
conditions for recognition under IFRS are recognised
and measured at the carrying amounts as recognised
in the acquiree’s individual financial statements,
but adjusted for any deviations with the accounting
policies of the Group.
Any difference between the consideration transferred
and the net assets at the acquisition date is
recognised in retained earnings.
The Group elected the accounting policy choice to
re-present its comparatives and adjust its current
reporting period before the date of the transaction as
if the transaction had occurred before the start of the
earliest period presented. This restatement should not
extend to periods during which the entities were not
under common control.
Non-controlling interests
On an acquisition-by-acquisition basis, NCI are
measured initially at fair value or at their proportionate
share of the acquiree’s identifiable net assets at the
date of acquisition.
Changes in the Group’s interest in a subsidiary that
do not result in a loss of control are accounted for as
equity transactions.
Interests in equity-accounted investees
The Group’s interests in equity-accounted investees
comprise interests in associates and joint ventures.
Associates are those entities in which the Group has
significant influence, but not control or joint control,
over the financial operating policies. A joint venture is
an arrangement in which the Group has joint control,
whereby the Group has rights to the net assets of
the arrangement, rather than right to its assets and
obligations for its liabilities.
Interests in associates and the joint ventures are
accounted for using the equity method. They are
initially recognised at cost, transaction costs included.
Subsequent to initial recognition, the consolidated
financial statements include the Group’s share of
the profit or loss and other comprehensive income of
equity-accounted investees, until the date on which
significant influence or joint control ceases. The share
of profit or loss of associates and joint ventures
is presented withing operating profit because the
associates and joint ventures are integral vehicle
through which the group conducts its operations and
its strategy.
2.3
GOODWILL
Goodwill represents the excess of the consideration
transferred, the amount of any non-controlling interest
in the acquiree and the acquisition date fair value of
any previous equity interest in the acquiree over the
fair value of the net identifiable net assets acquired
Hyloris
_
Annual Report 2022
p. 90
p. 91
at the date of acquisition. Goodwill is tested annually
for impairment and carried at cost less accumulated
impairment losses. Impairment losses on goodwill
are not reversed. Gains and losses on the disposal of
a Cash Generating Unit (CGU) include the carrying
amount of goodwill relating to the entity disposed.
2.4
FOREIGN CURRENCIES
Items included in the financial statements of each of
the Group’s entities are measured using the currency of
the primary economic environment in which the entity
operates (‘the functional currency’). The consolidated
financial statements are presented in euro, which is
the Group’s presentation currency.
Foreign currency transactions are translated
into the functional currency using the exchange
rates prevailing at the dates of the transactions.
Foreign exchange gains and losses resulting from
the settlement of such transactions and from the
translation at year-end exchange rates of monetary
assets and liabilities denominated in foreign currencies
are recognised in the income statement.
The principal exchange rate that has been used is the
US dollar. The following table presents the exchange
rates used for the USD/EUR
1 EUR =
Closing rate
Average rate
December 31, 2021
1.1326
1.1196
December 31, 2022
1.0666
1.0530
2.5
INTANGIBLE ASSETS
Research and development
Internally-generated research and development
To assess whether an internally generated intangible
asset meets the criteria for recognition, the Company
classifies the internal generation of assets into a
research phase and a development phase.
No intangible asset arising from research is
recognised. Expenditure on research is recognised as
an expense when it is incurred.
An intangible asset arising from development
is recognised if, and only if, the Company can
demonstrate all of the following:
(I)
the technical feasibility of completing the intangible
asset so that it will be available for use or sale;
(II)
the intention to complete the intangible asset and
use or sell it;
(III)
the ability to use or sell the intangible asset;
(IV)
how the intangible asset will generate probable
future economic benefits;
(V)
the availability of adequate technical, financial and
other resources to complete the development and
to use or sell the intangible asset; and
(VI)
the ability to measure reliably the expenditure
attributable to the intangible asset during its
development.
With respect to the technical feasibility condition,
a strong evidence is achieved only when Phase III
(i.e. final stage before filing for marketing approval)
of the related development project is successfully
completed, i.e. when filing for marketing approval from
the relevant regulatory authorities. Consequently,
internally generated development expenses arising
before this point, mainly the cost of clinical trials,
are expensed as incurred within Research and
development expenses.
In some cases (i.e. for generic products), market
approval was obtained previously, but additional costs
are incurred in order to improve the process for an
active ingredient. To the extent that the above criteria
are considered as having been met, such expenses
are recognised as an asset in the balance sheet
within intangible assets as incurred. Similarly, some
clinical trials, for example those undertaken to obtain a
geographical extension for a molecule that has already
obtained marketing approval in a major market, may
in certain circumstances meet the above capitalization
criteria, in which case the related expenses are
recognised as an asset in the balance sheet within
intangible assets.
The cost of an internally-generated intangible asset
is the sum of the expenditure incurred from the date
when the intangible asset first meets the recognition
criteria. The cost of an internally-generated intangible
asset comprises all directly attributable costs
necessary to create, produce and prepare the asset
to be capable of operating in the manner intended by
management, including any fees to register legal rights
(patent costs) and borrowing costs.
After initial recognition, intangible assets are
measured at cost less accumulated amortisation
and any accumulated impairment losses. Intangible
assets are amortised on a straight-line basis over their
estimated useful life. Amortisation begins when the
asset is capable of operating in the manner intended
by management, i.e. available for commercialisation.
Separately acquired research and development
Payments for separately acquired research and
development are capitalised as intangible assets
provided that the following conditions are met:
(I)
the asset is identifiable, i.e. either separable (if it
can be sold, transferred, licensed) or it results from
contractual or legal rights;
(II)
it is probable that the expected future economic
benefits that are attributable to the asset will flow
to the Group;
(III)
the Group can control the resource; and
(IV)
the cost of the asset can be measured reliably.
The second condition for capitalization (the probability
that the expected future economic benefits from
the asset will flow to the entity) is considered to
be satisfied for separately acquired research and
development. The management of the company
assesses whether and to which amount milestone
payments are to be considered as related to the
purchase of an asset (capitalization) or related to
outsourced research and development. The latter will
be recognised as research and development expenses
when they occur.
If the separately acquired research and development
project meets the conditions for capitalization as
mentioned above, related upfront and milestone
payments to third parties are recognised as intangible
assets, and amortised on a straight-line basis over
their useful lives beginning when marketing approval
is obtained. However, any subsequent expenditure
on the relating projects is added to the carrying
amount of the intangible asset only if it meets the
recognition criteria for capitalizing development costs
(see above section Internally-generated research and
development).
Payments under research and development
arrangements relating to access to technology or to
databases and payments made to purchase generics
dossiers are also capitalised as the conditions
mentioned above are met upon acquisition, and
amortised on a straight-line basis over the useful
life of the intangible asset. Subsequent expenditure
incurred are only capitalised if the expenditure meets
the conditions mentioned above for capitalizing
development costs.
Subcontracting arrangements, payments for research
and development services, and continuous payments
under research and development collaborations which
are unrelated to the outcome of that collaboration, are
expensed over the service term except if as part of the
development phase of the underlying assets.
Non-refundable advance payments for goods and
services that will be used in future research and
development activities are expensed when the activity
has been performed or when the goods have been
received rather than when the payment is made.
Research and development expenses also include upfront
and milestone payments, to the amount these payments
are assessed to be outsourced research and development
and to the amount of the costs effectively occurred.
Other intangible assets acquired separately
An intangible asset is recognised on the statement of
financial position when the following conditions are
met:
(I)
the asset is identifiable, i.e. either separable (if it
can be sold, transferred, licensed) or it results from
contractual or legal rights;
(II)
it is probable that the expected future economic
benefits that are attributable to the asset will flow
to the Group;
(III)
the Group can control the resource; and
(IV)
the cost of the asset can be measured reliably.
Intangible assets (research and development costs
or other intangible assets as referred above) with
finite useful lives that are acquired separately are
measured at cost less accumulated amortisation
and accumulated impairment losses. The cost of a
separately acquired intangible asset comprises its
purchase price, including import duties and non-
refundable purchase taxes, after deducting trade
discounts and rebates. Any directly attributable cost of
preparing the asset for its intended use is also included
in the cost of the intangible asset.
Amortisation
After initial recognition, intangible assets are
measured at cost less accumulated amortisation
and any accumulated impairment losses. Intangible
assets are amortised on a straight-line basis over their
estimated useful life. Amortisation begins when the
asset is capable of operating in the manner intended
by management.
The estimated useful life and amortisation method are
reviewed at the end of each reporting period, with the
effect of any changes in estimate being accounted
for on a prospective basis. Intangible assets with
indefinite useful lives that are acquired separately are
carried at cost less accumulated impairment losses.
Intangible assets are amortised on a systematic basis
over their useful life, using the straight-line method,
and amortisation are presented as Cost of Sale in the
Hyloris
_
Annual Report 2022
p. 92
p. 93
Profit or Loss Statement. The applicable useful lives
are determined based on the period during which
the Company expects to receive benefits from the
underlying project. Key factors considered to determine
the useful life comprises the duration of the patent
protection and access of competitors to the market.
Derecognition
An intangible asset is derecognised on disposal,
or when no future economic benefits are expected
from use or disposal. Gains or losses arising from
derecognition of an intangible asset, measured as the
difference between the net disposal proceeds and the
carrying amount of the asset, are recognised in profit
or loss when the asset is derecognised.
2.6
PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment (“PPE”) are carried at
acquisition cost less any accumulated depreciation
and less any accumulated impairment loss. Acquisition
cost includes any directly attributable cost of bringing
the asset to working condition for its intended use.
Borrowing costs that are directly attributable to the
acquisition, construction and/or production of a qualifying
asset are capitalised as part of the cost of the asset.
Expenditures on repair and maintenance which serve
only to maintain, but not increase, the value of PPE are
charged to the income statement.
The depreciable amount is allocated on a systematic
basis over the useful life of the asset, using the
straight-line method. The depreciable amount is
the acquisition cost, less residual value, if any. The
applicable useful lives are:
•
Furniture and equipment: 10 years
•
IT equipment: 3 years
The useful life of the PPE is reviewed regularly.
Each time a significant upgrade is performed, such
upgrade extends the useful life of the machine. The
cost of the upgrade is added to the carrying amount
of the machine (only if it is probable that the future
economic benefits associated with the expenditure
will flow to the Group) and the new carrying amount
is depreciated prospectively over the remaining
estimated useful life of the machine.
2.7
LEASES
Leases are recognised as a right-of-use asset and
corresponding liability at the date of which the leased
asset is available for use by the Group.
Assets and liabilities arising from a lease are initially
measured on a present value basis. Lease liabilities
include the net present value of the following lease
payments:
•
fixed payments (less any lease incentives
receivable);
•
variable lease payments that are based on an index
or rate;
•
the exercise price of a purchase option if the group is
reasonably certain to exercise that option; and
•
payments of penalties for terminating the lease,
if the lease term reflects the group exercising that
option.
Lease payments to be made under reasonably
certain extension options are also included in the
measurement of the liability.
The lease payments are discounted using the interest
rate implicit in the lease, if that rate can be readily
determined, or the Group’s incremental borrowing rate,
i.e. the rate of interest that a lessee would have to
pay to borrow over a similar term, and with a similar
security, the funds necessary to obtain an asset of
a similar value to the right-of-use asset in a similar
economic environment.
The group is exposed to potential future increases in
variable lease payments based on an index or rate,
which are not included in the lease liability until they
take effect. When adjustments to lease payments
based on an index or rate take effect, the lease liability
is reassessed and adjusted against the right-of-use
asset.
Each lease payment is allocated between the liability
and finance charges so as to achieve a constant
rate on the remaining balance of the liability. Finance
expenses are recognised immediately in profit or
loss, unless they are directly attributable to qualifying
assets, in which case they are capitalised.
Right-of-use assets are measured at cost comprising
the following:
•
the amount of the initial measurement of lease
liability,
•
any lease payments made at or before the
commencement date less any lease incentives
received,
•
any initial direct costs, and
•
an estimate of the costs related to the dismantling
and removal of the underlying asset.
If it is reasonably certain that the Group will exercise
a purchase option, the asset shall be depreciated on
a straight-line basis over its useful life. In all other
circumstances the asset is depreciated on a straight-
line basis over the shorter of the useful life of the asset
or the lease term.
For short-term leases (lease term of 12 months or less)
or leases of low-value items (mainly IT equipment and
small office furniture) to which the Group applies the
recognition exemptions available in IFRS 16, lease
payments are recognised on a straight-line basis as an
expense over the lease term.
2.8
JOINT ARRANGEMENTS AND
ASSOCIATES
A joint venture is a joint arrangement whereby the
parties that have joint control of the arrangement
have rights to the net assets of the arrangement. Joint
control is the contractually agreed sharing of control of
an arrangement, which exists when decisions about
relevant activities require the unanimous consent of
the parties sharing control.
The results, assets and liabilities of joint ventures are
incorporated in the consolidated financial statements
using the equity method of accounting, except when
the investment is classified as held for sale (in which
case it is accounted for in accordance with IFRS 5
Non-current Assets Held for Sale).
Under the equity method, on initial recognition,
investments in joint ventures are recognised in
the consolidated statement of financial position at
cost, and the carrying amount is adjusted for post-
acquisition changes in the Group’s share of the net
assets of the joint venture, less any impairment of
the value of individual investments. Losses of a joint
venture in excess of the Group’s interest in that joint
venture (which includes any long-term interests that,
in substance, form part of the Group’s net investment
in the associate or joint venture) are recognised only
to the extent that the Group has incurred legal or
constructive obligations or made payments on behalf
of the joint venture.
Any excess of the cost of acquisition over the Group’s
share of the net fair value of the identifiable assets and
(contingent) liabilities of the associate or joint venture
recognised at the date of acquisition is goodwill. The
goodwill is included within the carrying amount of the
investment and is assessed for impairment as part of
that investment.
Where a Group entity transacts with a joint venture
of the Group, profits and losses are eliminated to
the extent of the Group’s interest in the relevant
associate or joint venture. Unrealised gains araising
from transactions with equity-accounted investees
are eliminated against the investment to the extent of
the Group’s interest in the investee. Unrealised losses
are eliminated in the same way as unrealised gains,
but only to the extent that there is no evidence of
impairment.
2.9
IMPAIRMENT OF NON-FINANCIAL
ASSETS
Intangible assets with indefinite useful lives and
intangible assets not yet available for use are not
subject to amortisation, but are tested annually for
impairment, and whenever events or changes in
circumstances indicate that the carrying amount may
not be recoverable. Other assets which are subject to
amortisation are reviewed for impairment whenever
events or changes in circumstances indicate that the
carrying amount may not be recoverable.
An impairment loss is recognised for the amount
by which the asset’s carrying amount exceeds its
recoverable amount. The recoverable amount is
the higher of an asset’s fair value less costs to sell
and value in use. To determine the value in use, the
forecasted future cash flows are discounted to their
present value using a pre-tax discount rate that
reflects current market assessments of the time value
of money and the risks specific to the asset.
When an impairment loss subsequently reverses,
the carrying amount of the asset is increased to the
revised estimate of its recoverable amount, but so that
the increased carrying amount does not exceed the
carrying amount that would have been determined
had no impairment loss been recognised for the asset
in prior years. A reversal of an impairment loss is
recognised immediately in profit or loss.
2.10
REVENUE RECOGNITION
Revenue includes royalty revenue, license revenue and
revenue from sale of goods, services or out-licensing
agreements of product candidates.
In accordance with IFRS 15 – Revenue from Contracts
with Customers, revenue from the rendering of
services is recognised when the Company transfers
control over the product to the customer; control of
an asset refers to the ability to direct the use of, and
obtain substantially all of the remaining benefits
from, that asset. For the vast majority of contracts,
revenue is recognised when the product is physically
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transferred, in accordance with the delivery and
acceptance terms agreed with the customer.
In addition, the Group has entered into a number of
contracts through which it “out-licenses” to customers
the IP it developed related to drugs that have not yet
received regulatory approval. Generally, under the
terms of the license, the licensee can further develop
the IP, and manufacture and/or sell the resulting
commercialised product. The Group typically receives
an upfront fee, milestone payments for specific clinical
or other development-based outcomes, and sales-
based milestones or royalties as consideration for
the license. Some arrangements also include ongoing
involvement by the Group, who may provide R&D and/
or manufacturing services relating to the licensed IP.
Licenses coupled with other services, such as R&D,
must be assessed to determine if the license is distinct
(that is, the customer must be able to benefit from
the IP on its own or together with other resources
that are readily available to the customer, and the
Group’s promise to transfer the IP must be separately
identifiable from other promises in the contract). If the
license is not distinct, then the license is combined
with other goods or services into a single performance
obligation. Revenue is then recognised as the Group
satisfies the combined performance obligation.
A license will either provide:
•
a right to access the entity’s intellectual property
throughout the license period, which results in
revenue that is recognised over time; or
•
a right to use the entity’s intellectual property as
it exists at the point in time in which the license is
granted, which results in revenue that is recognised
at a point in time.
For sales- or usage-based royalties that are
attributable to a license of IP, the amount is recognised
at the later of:
•
when the subsequent sale or usage occurs; and
•
the satisfaction or partial satisfaction of the
performance obligation to which some or all of the
sales- or usage-based royalty has been allocated.
2.11
FINANCIAL ASSETS
The Group classifies its financial assets in the following
categories: financial assets at fair value through profit
and loss (FVTPL) or through other comprehensive
income (FVOCI) and financial assets at amortised cost.
The classification depends on the entity’s business
model for managing the financial assets and the
contractual terms of the cash flows. Management
determines the classification of its financial assets at
initial recognition.
Financial assets are not reclassified subsequent to
their initial recognition unless the Group changes
its business model for managing financial assets, in
which case all affected financial assets are reclassified
on the first day of the first reporting period following
the change in the business model.
A financial asset is measured at amortised cost if
it meets both of the following conditions and is not
designated as at FVTPL (Fair Value Trough Profit and
Loss Statement):
•
It is held within a business model whose objective is
to hold assets to collect contractual cash flow; and
•
Its contractual terms give rise on specified dates to
cash flows that are solely payments of principal and
interest on the principal amount outstanding.
On initial recognition of an equity investment that is
not held for trading, the Group may irrevocably elect to
present subsequent changes in the investment’s fair
value in OCI. This election is made on an investment-
by-investment basis.
All financial assets not classified as measured at
amortised costs or FVOCI as described above are
measured at FVTPL. On initial recognition, the Group
may irrevocably designate a financial asset that
otherwise meets the requirement to be measured at
amortised cost as FVTPL if doing so eliminates or
significantly reduces an accounting mismatch that
would otherwise arise.
In assessing whether the contractual cash flows are
solely payments of principal and interest, the Group
considers the contractual terms of the instrument.
This includes assessing whether the financial asset
contains a contractual term that could change the
timing or amount of contractual cash flows such
that is would not meet this condition. In making this
assessment, the Group considers:
•
contingent events that would change the amount or
timing of cash flows;
•
terms that may adjust the contractile coupon rate,
including variable-rate features;
•
prepayment and extension features; and
•
terms that limit the Group’s claim to cash flows from
specified assets (e.g. non-recourse features).
Trade receivables are initially recognised when they
are originated. All other financial assets are initially
recognised when the Group becomes a party to the
contractual provisions of the instrument.
At initial recognition, the group measures a financial
asset at its fair value plus, in the case of a financial
asset not at fair value through profit or loss,
transaction costs that are directly attributable to the
acquisition of the financial asset. Transaction costs of
financial assets carried at fair value through profit or
loss are expensed in profit or loss. A trade receivable
without a significant financing component is initially
measured at the transaction price.
Financial assets at FVTPL are subsequently measured
at fair value. Net gains and losses, including any
interest or dividend income, are recognised in profit or
loss.
Equity investments at FVOCI are subsequently
measured at fair value. Dividends are recognised
as income in profit or loss unless the dividend
clearly represents a recovery of part of the cost
of investments. Other net gains and losses are
recognised in OCI and are never reclassified to profit
or loss.
Financial assets at amortised cost are subsequently
measured at amortised cost using the effective
interest method, less any impairment if they are held
for collection of contractual cash flows where those
cash flows represent solely payments of principal and
interest.
The effective interest method is a method of
calculating the amortised cost of a debt instrument
and of allocating interest income over the relevant
period. The effective interest rate is the rate that
exactly discounts estimated future cash receipts
(including all fees and points paid or received that
form an integral part of the effective interest rate,
transaction costs and other premiums or discounts)
through the expected life of the debt instrument to the
net carrying amount on initial recognition.
The Group assesses on a forward-looking basis the
expected credit losses associated with its financial
assets carried at amortised cost. For trade receivables,
the group applies the simplified approach permitted by
IFRS 9 Financial Instruments, which requires expected
lifetime losses to be recognised from initial recognition
of the receivables.
The amount of the allowance is deducted from the
carrying amount of the asset and is recognised in the
income statement within ‘Cost of sales’.
The Group derecognises a financial asset only when
the contractual rights to the cash flows from the asset
expire, or when it transfers the financial asset and
substantially all the risks and rewards of ownership
of the asset to another entity. If the Group neither
transfers nor retains substantially all the risks and
rewards of ownership and continues to control the
transferred asset, the Group recognises its retained
interest in the asset and an associated liability for
amounts it may have to pay. If the Group retains
substantially all the risks and rewards of ownership
of a transferred financial asset, the Group continues
to recognise the financial asset and also recognises a
collateralised borrowing for the proceeds received.
On de-recognition of a financial asset in its entirety,
the difference between the asset’s carrying amount
and the sum of the consideration received and
receivable is recognised in profit or loss.
Financial assets and financial liabilities are offset and
the net amount presented in the statement of financial
position when, and only when, the Group currently has
a legally enforceable right to set off the amounts and it
intends either to settle them on a net basis or to realise
the asset and settle the liability simultaneously.
2.12
CASH AND CASH EQUIVALENTS
Cash and cash equivalents include cash in hand,
deposits held at call with banks, other short-term
highly liquid investments with original maturities of
three months or less. Bank overdrafts are shown
within borrowings in current liabilities on the statement
of financial position.
2.13
SHARE CAPITAL
Ordinary shares are classified as equity. Where any
Group company purchases the company’s equity
share capital (treasury shares), the consideration paid
is deducted from equity attributable to owners of the
company until the shares are cancelled or reissued.
Incremental costs directly attributable to the issue of
new shares are shown in equity as a deduction, net of
tax, from the proceeds.
Incremental costs directly attributable to the issue of
ordinary shares are recognised as a deduction from
equity. Income tax relating to transaction costs of an
equity transaction is accounted for in accordance with
IAS12.
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2.14
GOVERNMENT GRANTS
Government grants are assistance by government,
government agencies and similar bodies, whether
local, national or international, in the form of transfers
of resources to the Company in return for past or future
compliance with certain conditions.
The Company recognises a government grant only
when there is reasonable assurance that the Company
will comply with the conditions attached to the grant
and the grant will be received.
Government grants are recognised in profit or loss
on a systematic basis over the periods in which the
Company recognises as expenses the related costs
which the grants are intended to compensate. As a
result, grants relating to costs that are recognised as
intangible assets or property, plant and equipment
(grants related to assets or investment grants) are
deducted from the carrying amount of the related
assets and recognised in the profit or loss statement
consistently with the amortisation or depreciation
expense of the related assets.
Grants that intend to compensate costs are released
as income when the subsidised costs are incurred,
which is the case for grants relating to research and
development costs. The portion of grants not yet
released as income is presented as deferred income
in the statement of financial position, within the Other
current liabilities. In the statement of comprehensive
income, government grants are presented as other
operating income or financial income depending on the
nature of the costs that are compensated.
Government grants that become receivable as
compensation for expenses or losses already incurred
are recognised in profit or loss of the period in which
they become receivable.
Recoverable cash advances
With respect to recoverable cash advances (RCA
– “avances récupérables”), the RCA gives rise to a
financial liability in the scope of IFRS 9 – Financial
Instruments. This financial liability is initially
measured at fair value and any difference with the
cash to be received from the authorities is treated
as a government grant in accordance with IAS 20 –
Accounting for Government Grants and Disclosure
of Government Assistance. Subsequent to the initial
recognition, the financial liability is measured at
amortised cost using the effective interest method on
the basis of the estimated contractual cash flows with
changes in value due to a change in estimated cash
flows recognised in profit or loss, in accordance with
IFRS 9.
R&D Tax Credit
In Belgium, companies that invest in environmental
friendly research and developments activities can
benefit from increased investment incentives or a tax
credit.
Since 2020, the Group applies for the R&D tax credit
incentive set-up by the Federal government. When
capitalizing its R&D expenses under tax reporting
framework, the Group may either (i) get a reduction
of its taxable income (if any) corresponding to 13.5%
of the capitalised R&D expenses, or (ii) if no sufficient
taxable income is available, apply for the refund of
unutilised tax credits. The tax credit should be claimed
in the year in which the investment takes place.
Refund occurs five financial years after the tax credit
application filed by the Group.
R&D tax credit are treated as a government grant
under IAS 20 and booked into other operating income
if the R&D activities are expensed, or as a reduction
to intangible assets if the development activities are
capitalised and subsequently amortised together with
the underlying assets.
2.15
EMPLOYEE BENEFITS
Employee benefits are all forms of consideration given
in exchange for services provided by employees only.
Directors and other management personnel who are
under service agreements are presented separately in
the Notes.
Short-term employee beneﬁts
Short-term employee benefits are recorded as an
expense in the income statement in the period in
which the services have been rendered. Any unpaid
compensation is included in trade and other liabilities
in the statement of financial position.
2.16
SHARE-BASED PAYMENTS
A share-based payment is a transaction in which
the Company receives goods or services either as
consideration for its equity instruments or by incurring
liabilities for amounts based on the price of the
Company’s shares or other equity instruments of the
Company. The accounting for share-based payment
transactions depends on how the transaction will
be settled, that is, by the issuance of equity, cash, or
either equity or cash.
Equity-settled share-based payments to employees
and others providing similar services are measured
at the fair value of the equity instruments at the
grant date. The fair value determined at the grant
date of the equity-settled share-based payments is
expensed on a straight-line basis over the vesting
period, if any, based on the Company’s estimate of
equity instruments that will eventually vest, with a
corresponding increase in equity. At the end of each
reporting period, the Company revises its estimate of
the number of equity instruments expected to vest.
The impact of the revision of the original estimates,
if any, is recognised in profit or loss such that the
cumulative expense reflects the revised estimate,
with a corresponding adjustment to the equity-settled
share-based payment reserve.
2.17
PROVISIONS
Provisions are recognised when (I) the Group has a
present legal or constructive obligation as a result
of past events; (II) it is probable that an outflow of
resources will be required to settle the obligation; (III)
and the amount can be reliably estimated. Where
there are a number of similar obligations, the likelihood
that an outflow will be required in settlement is
determined by considering the class of obligations as
a whole.
Provisions are measured at the present value of the
expenditures expected to be required to settle the
obligation using a pre-tax rate that reflects current
market assessments of the time value of money and
the risks specific to the obligation. The increase in
the provision due to passage of time is recognised as
finance cost.
2.18
INCOME TAXES
Income tax expense represents the sum of the current
income tax and deferred tax.
Accounting for the current and deferred tax effects
of a transaction or other event is consistent with
the accounting for the transaction or event itself.
Therefore, income taxes are recognised in profit or
loss except to the extent that it relates to a business
combination, or items recognised directly in equity or
in OCI.
Current tax comprises the expected tax payable or
receivable on the taxable income or loss for the year
and any adjustment to the tax payable or receivable
in respect of previous years. The amount of current tax
payable or receivable is the best estimate of the tax
amount expected to be paid or received that reflects
uncertainty related to income taxes, if any.
The current income tax charge is calculated on
the basis of the tax laws enacted or substantively
enacted at the end of the reporting period in the
countries where the Group’s subsidiaries operate and
generate taxable income. In line with paragraph 46
of IAS 12 Income taxes, management periodically
evaluates positions taken in tax returns with respect
to situations in which applicable tax regulations are
subject to interpretation and establishes uncertainty
tax provisions within tax payable/receivable where
appropriate on the basis of amounts expected to be
paid to the tax authorities. This evaluation is made
for tax periods open for audit by the competent
authorities.
Deferred tax assets and liabilities are measured at
the tax rates that are expected to apply to the period
when the asset is realised or the liability is settled,
based on tax rates (and tax laws) that have been
enacted or substantively enacted by the end of the
reporting period.
Deferred tax is recognised on temporary differences
arising between the tax bases of assets and liabilities
and their carrying amounts in the consolidated
financial statements.
However, the deferred tax is not recognised for:
•
the initial recognition of goodwill (in case of taxable
temporary differences arising);
•
the initial recognition of an asset or liability in a
transaction other than a business combination
that at the time of the transaction affects neither
accounting nor taxable profit or loss; and
•
deferred tax is recognised on temporary differences
arising on investments in subsidiaries and
associates, except for deferred income tax liabilities
where the timing of the reversal of the temporary
difference is controlled by the Group and it is
probable that the temporary difference will not
reverse in the foreseeable future.
A deferred tax liability is recognised for all taxable
temporary differences, unless one of the above
exemptions would apply.
Deferred tax assets are recognised for deductible
temporary differences and unused tax losses and
tax credits to the extent that it is probable that
taxable profits will be available against which they
can be utilised. Future taxable profits are determined
based on the reversal of relevant taxable temporary
differences. If the amount of taxable temporary
differences is insufficient to recognise a deferred
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tax asset in full, then future taxable profits, adjusted
for reversals of existing temporary differences, are
considered, based on the business plans for individual
subsidiaries in the Group.
The carrying amount of deferred tax assets is
reviewed at the end of each reporting period and
reduced to the extent that it is no longer probable that
sufficient taxable profits will be available to allow all
or part of the asset to be recovered. Unrecognised
deferred tax assets are reassessed at each reporting
date and recognised to the extent that it has become
probable that future taxable profits will be available
against which they can be used.
Deferred taxes are calculated at the level of each
fiscal entity in the Group. The Group is able to offset
deferred tax assets and liabilities only if the deferred
tax balances relate to income taxes levied by the same
taxation authority and it intends either to settle on a
net basis, or to realise the asset and settle the liability
simultaneously.
2.19
FINANCIAL LIABILITIES
Financial liabilities (including borrowings and trade
and other payables) are classified as at amortised
cost.
All financial liabilities are initially recognised when
the Group becomes a party to the contractual
provisions of the instrument. Financial liabilities are
recognised initially at fair value, net of transaction
costs incurred. Borrowings are subsequently stated at
amortised cost; any difference between the proceeds
(net of transaction costs) and the redemption value
is recognised in the income statement over the
period of the borrowings using the effective interest
method. Borrowings are classified as current liabilities
unless the Group has an unconditional right to defer
settlement of the liability for at least 12 months after
the end of the reporting period.
The effective interest method is a method of
calculating the amortised cost of a financial liability
and of allocating interest expense over the relevant
period. The effective interest rate is the rate that
exactly discounts estimated future cash payments
(including all fees and points paid or received that
form an integral part of the effective interest rate,
transaction costs and other premiums or discounts)
through the expected life of the financial liability to the
net carrying amount on initial recognition.
Where the loan is from a shareholder acting in the
capacity of a shareholder, the difference between cash
received and fair value of the loan at initial recognition
is reflected in equity because the substance of
the favorable terms is typically a contribution by a
shareholder.
The Group derecognises a financial liability when its
contractual obligations are discharged or cancelled, or
expire. The Group also derecognises a financial liability
when its terms are modified and the cash flows of the
modified liability are substantially different, in which
case a new financial liability based on the modified
terms is recognised at fair value.
When a financial liability measured at amortised cost
is modified without this resulting in derecognition, a
gain or loss is recognised in profit or loss. The gain
or loss is calculated as the difference between the
original contractual cash flows and the modified cash
flows discounted at the original effective interest rate.
Compound ﬁnancial instruments
Compound financial instruments issued by the Group
comprise convertible bonds denominated in euro
that can be converted automatically to ordinary
shares. The liability component of compound financial
instruments is initially recognised at the fair value of
a similar liability that does have an equity conversion
option. The equity component is initially recognised at
the difference between the fair value of the compound
financial instruments as a whole and the fair value
of the liability component. Any directly attributable
transaction costs are allocated to the liability and
equity components in proportion to their initial carrying
amounts. Subsequent to initial recognition, the liability
component is measured at amortised cost using the
effective interest method. The change in fair value
of the derivative instruments is recognised in profit
or loss. Interest related to the financial liability is
recognised in profit or loss. On conversion at maturity,
the financial liability together with the embedded
derivatives are reclassified to equity and no gain or
loss is recognised in profit or loss.
2.20
OPERATING SEGMENTS
The chief operating decision maker (CODM) of the
Company is the Board of Directors. The CODM reviews
the operating results and operating plans, and makes
resource allocation decisions on a company-wide
basis; therefore, the Group operates as one segment.
According to IFRS 8, reportable operating segments
are identified based on the “management approach”.
This approach stipulates external segment reporting
based on the Group’s internal organizational and
management structure and on internal financial
reporting to the chief operating decision maker.
The financial information is organised and reported
to CODM under one management reporting covering
all activities of the Company. There is no specific
component in the financial information that would
as such represent a specific operating segment.
Information reported to the CODM is aggregated and
comprises all activities of the Company.
The Group’s activities are managed and operated in
one segment, pharmaceuticals. Strategic decision and
resources allocation are made at the Company level by
the CODM.
2.21
DERIVATIVE FINANCIAL INSTRUMENTS
The Group holds derivative financial instruments to
hedge its foreign currency. Derivatives are recognised
initially at fair value at the date a derivative contract is
entered into and are subsequently remeasured to their
fair value at each reporting date and changes therein
are generally recognised in profit or loss. A derivative
with a positive fair value is recognised as a financial
asset whereas a derivative with a negative fair value
is recognised as a financial liability. Derivatives are not
offset in the financial statements unless the Group has
both legal right and intention to offset. A derivative is
presented as a non-current asset (‘Other investments,
including derivatives) or a non-current liability (‘Other
financial liabilities’) if the remaining maturity of the
instrument is more than 12 months and it is not
expected to be realised or settled within 12 months.
Other derivatives are presented as current assets or
current liabilities.
2.22
CONCTRACTUAL COMMITMENTS
Hyloris has contractual commitments related to asset
purchase, licenses and development agreements. The
amounts are due upon reaching certain milestones
dependent on successful completion of development
stages of the different product candidates (including
FDA approval) or on meeting specified sales targets.
The Company disclosed as commitments the
maximum that would be paid if all milestones and
sales targets are achieved. The amounts are not risk-
adjusted or discounted.
2.23
STATEMENT OF CASH FLOWS
The cash flows of the Group are presented using the
indirect method. This method reconciles the movement
in cash for the reporting period by adjusting profit
or loss for the period for any non-cash items and
changes in working capital, and identifying investing
and financing cash flows for the reporting period.
3.
CRITICAL ACCOUNTING
ESTIMATES AND JUDGMENTS
In the application of the Group’s accounting policies,
which are described above, management is required
to make judgements, estimates and assumptions
about the carrying amounts of assets and liabilities
that are not readily apparent from other sources. The
estimates and associated assumptions are based
on historical experience and other factors that are
considered to be relevant. Actual results may differ
from these estimates. The followings are areas where
key assumptions concerning the future, and other key
sources of estimation uncertainty at the end of the
reporting period, have a significant risk of causing a
material adjustment to the carrying amounts of assets
and liabilities within the next financial year.
3.1
GOING CONCERN
The 2022 consolidated results of the Group present
a negative result, and the consolidated statement of
financial position includes a loss carried forward.
Management has prepared detailed budgets and cash
flow forecasts for the years 2023 and 2024. These
forecasts reflect the strategy of the Group and include
significant expenses and cash outflows in relation to
the development of the ongoing products candidates,
including four new product acquisitions per year. The
development of new product candidates does not
require a lot of cash in the first year.
With a cash position of the Group at the end of
December 2022 (i.e. €43,4 million) and the successfully
raised €15 million in gross proceeds end March 2022,
the Board of Directors is of the opinion that it has
an appropriate basis to conclude on the business
continuity over the next 12 months from the 2023
Shareholder’s meeting approving the 2022 statutory
accounts. The Board of Directors can decide to
postpone development of new product candidates and
has different options to manage the cash burn and
runaway of the cash including the acceleration of out-
license agreements.
3.2
SHARE-BASED PAYMENTS
In accordance with IFRS 2 – Share-based Payment,
the fair value of the warrants at grant date is
recognised as an expense in the consolidated
statement of comprehensive income over the vesting
period, the period of service. Subsequently, the fair
value is not re-measured.
Hyloris
_
Annual Report 2022
p. 100
p. 101
The fair value of each warrant granted during the year
is calculated using the Black-Scholes pricing model.
This pricing model requires the input of subjective
assumptions, which are detailed in Note 24.
3.3
EFFECTIVE INTEREST RATE OF
SHAREHOLDERS’ LOANS
The Group was granted several shareholders’ loans
as disclosed in Note 15.2. The shareholders’ loans
bear a fixed interest rate of 4%, which is considered
to be below market rates if the Group would finance
itself on the market in 2020. As such, based on
the principles of IFRS 9 Financial Instruments, the
Company remeasured the shareholders’ loans at fair
value (at the date the loan has been originated or at
transition date). Subsequently the loans are measured
at amortised cost based on the market-related rate.
As such the Group recognises the interest expense
it would need to pay if it would finance itself on the
market. The differential between the fair value of the
loans and the nominal amount is considered as a
capital contribution, which is recognised immediately
in equity, net of tax.
At 31 December 2022 the shareholder’s loans are
reimbursed. Refer to Note 15.2 for further details.
3.4
RECOGNITION OF DEFERRED TAX
ASSETS
Deferred tax assets are recognised only if
management assesses that these tax assets can be
offset against taxable income within a foreseeable
future.
This judgment is made on an ongoing basis and is
based on budgets and business plans for the coming
years, including planned commercial initiatives.
Since inception, the Company has reported losses,
and as a consequence, the Company has unused tax
losses. Management has therefore concluded that
deferred tax assets should not be recognised as of
31 December 2022 considering uncertainties regarding
future taxable profits relating to the commercialisation
of the development projects. Deferred tax assets are
reviewed at each reporting date and will be recognised
as from and to the extent that it is probable that taxable
profit will be available, against which the unused tax
losses, unused tax credits and deductible temporary
differences can be utilised.
4.
FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT
4.1
OVERVIEW OF FINANCIAL INSTRUMENTS
The table below summarises all financial instruments by category in accordance with IFRS 9:
Pleco: the valuation is based on last capital increase and decided by Pleco’s general assembly and is considered
as market value.
Vaneltix: Discounted cash flows: the valuation model considers the present value of expected payments,
discounted using a risk-adjusted rate.
FX forward contracts: Forward pricing: the fair value is determined using the spot FX exchange rates at the
reporting date and FX forward price in the contract.
(in € thousand)
IFRS 9 Category
Input
level
December
31, 2022
December
31, 2021
Other investment, including derivatives – Vaneltix (Note 10)
FVTPL
2
469
981
Other investment, including derivatives – Pleco (Note 10) (non
current)
FVOCI
2
1,000
Trade receivables (Note 11)
At amortised cost
5,615
3,266
Prepayments (Note 12)
At amortised cost
1,748
Cash and cash equivalents
At amortised cost
43,457
50,012
Total ﬁnancial assets *
52,289
54,259
Borrowings (Note 15.1)
At amortised cost
885
174
Other ﬁnancial liabilities (Note 15.2)
At amortised cost
3,512
12,115
Trade and other liabilities (Note 16)
2,422
2,749
Trade payables
At amortised cost
2,302
2,669
Derivative
FVTPL
1
52
Employee beneﬁt liabilities
At amortised cost
68
80
Total ﬁnancial liabilities
6,699
14,911
* Trade and Other receivables that are not financial assets (VAT / R&D tax credit receivables) are not included.
The Company considers that the carrying amounts
of financial assets and financial liabilities measured
at amortised cost in the consolidated financial
statements approximate their fair values.
4.2
FINANCIAL RISK FACTORS
The Group’s activities expose it to a variety of financial
risks: market risk (including currency risk and interest
rate risk), credit risk and liquidity risk. There have been
no changes in the risk management since last year-
end or in any risk management policies.
4.3
FOREIGN EXCHANGE RISK
The Company is currently exposed to foreign currency
risk, mainly relating to positions held in USD.
The exposure to exchange differences of the monetary
assets and monetary liabilities of the Group at the end
of the reporting period are as follows:
(in € thousand)
December
31, 2022
December
31, 2021
Assets
4,320
2,264
Liabilities
(1,078)
(3,987)
At December 31, 2022, if the EUR had strengthened/
weakened 1% against the USD with all other variables
held constant, the impact on the consolidated
statement of comprehensive income would have been
-32 k€ and -17 k€ respectively.
4.4
INTEREST RATE RISK
The Company is currently not exposed to significant
interest rate risk as the interest-bearing financial
liabilities and assets bear a fixed interest rate, which
are not subject to revision.
4.5
CREDIT RISK
Credit risk is the risk that one party to an agreement
will cause a financial loss to another party by failing
to discharge its obligation. Credit risk covers trade
and other receivables, cash and cash equivalents and
short-term deposits.
The Company believes that the credit risk is influenced
mainly by the individual characteristics of each
counterparty. Based on the ongoing credit evaluation
performed, impairment on financial assets is
considered as insignificant.
As such, no impairment is recognised for these
receivables. Cash and cash equivalent and short-term
deposits are invested with highly reputable banks and
financial institutions.
The maximum credit risk to which the Company is
theoretically exposed as at the balance sheet date is
the carrying amount of the financial assets.
4.6
LIQUIDITY RISK
The Company’s main sources of cash inflows are
currently obtained through capital increases.
The following table details the Company’s remaining
contractual maturity of its financial liabilities with
agreed repayment periods. The tables have been
drawn up based on the undiscounted cash flows of
financial liabilities based on the earliest date on which
the Company can be required to pay. The tables
include both interest and principal cash flows. In
Other financial liabilities the liability to Purna Female
Healthcare of € 3M (see note 9) is payable upon
achievement of development milestones, after the
read-out of the current clinical trial expected in H1
2023.
Hyloris
_
Annual Report 2022
p. 102
p. 103
31/12/2022
Within
one year
>1 and
<5 years
>5 and
<10 years
>10 years
Total
(In € thousand)
Borrowings
Lease liabilities
141
492
426
1,059
Other ﬁnancial liabilities
Loans from shareholders
-
-
Other ﬁnancial liabilities
3,212
300
3,512
Trade and other liabilities
2,422
2,422
Total
5,775
792
426
6,993
31/12/2021
Within one
year
>1 and <5
years
>5 and <10
years
>10 years
Total
(In € thousand)
Borrowings
Lease liabilities
67
111
178
Other ﬁnancial liabilities
Loans from shareholders
9,126
9,126
Other loans
3,200
300
3,500
Trade and other liabilities
2,749
2,749
Total
15,143
411
15,554
5.
OPERATING SEGMENTS
According to IFRS 8, reportable operating segments
are identified based on the “management approach”.
This approach stipulates external segment reporting
based on the Group’s internal organizational and
management structure and on internal financial
reporting to the chief operating decision maker.
The Group’s activities are managed and operated
in one segment, pharmaceuticals. There is no other
significant class of business, either individual or in
aggregate. As such, the chief operating decision maker
reviews the operating results and operating plans and
makes resource allocation decisions on a company
wide basis.
Total revenue represents an amount of €2,95 million.
The revenue related to products (royalties, milestones,
out-license revenues), represents €1,90 million and
revenue for services rendered is €1,05 million.
5.1
GEOGRAPHICAL INFORMATION
Revenue reported in the consolidated statement of
profit or loss and other comprehensive income and
non-current assets recorded in the consolidated
statement of financial position are located in Belgium,
country of domicile of the Company.
6.
LIST OF CONSOLIDATED COMPANIES AS AT DECEMBER 31, 2022
Company name
Company number
Location
% ﬁnancial
interest
Hyloris Pharmaceuticals SA
BE 0674.494.151
Blvd Patience et Beaujonc N°3/1, 4000 Liège
Parent
Hyloris Developments SA
BE 0542.737.368
Blvd Patience et Beaujonc N°3/1, 4000 Liège
99,99%
RTU Pharma SA
BE 0669.738.676
Blvd Patience et Beaujonc N°3/1, 4000 Liège
100,00%
Dermax SA
BE 0667.730.677
Blvd Patience et Beaujonc N°3/1, 4000 Liège
100,00%
Purna Female Healthcare BV
BE 0762.693.578
Scheldestraat 31, 2880 Bornem
20,00%*
* equity accounted investee see note 9.
The voting rights equal the percentage of financial interest held.
7.
INTANGIBLE ASSETS
(in € thousand)
Development
costs
Assets
Purchase
In
Licensing
Prepayments
Total
Year ended December 31, 2022
Opening carrying amount
1,090
729
1,125
2,944
Additions
660
119
779
R&D Tax Credit
(22)
(22)
Disposals
-
Amortisation expense
(50)
(44)
(94)
Impairment losses
Closing carrying amount
1,678
685
1,125
119
3,607
At December 31, 2022
Cost
2,208
4,247
1,148
119
7,722
Accumulated amortisation and impairment
(530)
(3,561)
(23)
(4,115)
Carrying amount
1,678
685
1,125
119
3,607
(in € thousand)
Development
costs
Assets
Purchase
In
Licencing
Total
Year ended December 31, 2021
Opening carrying amount
872
1,008
501
2,381
Additions
249
686
936
R&D Tax Credit
(31)
(17)
(40)
(88)
Disposals
(219)
(219)
Borrowing costs capitalised
0
Amortisation expense
(43)
(43)
Impairment losses
(23)
(23)
Closing carrying amount
1,090
729
1,125
2,944
At December 31, 2021
Cost
1,570
4,247
1,148
6,965
Accumulated amortisation and impairment
(480)
(3,518)
(23)
(4,022)
Carrying amount
1,090
729
1,125
2,944
Hyloris
_
Annual Report 2022
p. 104
p. 105
In 2022, the Company acquired intangible assets for
a total of €779 thousand, of which (i) €284 thousand
related to the development costs of product-candidate
Maxigesic
®
IV and (ii) €496 related to the development
costs of HY-016.
The intangible assets are not amortised until the
moment they are available for use as intended by
management, i.e. ready for commercialisation. The
company is amortizing since 2014 the development
costs of Sotalol IV, an asset for which regulatory
approval had been obtained. The development costs
of Sotalol IV have a remaining useful life of 2 years.
In 2022 the Company has started the amortisation
of the development costs of Maxigesic
®
IV for the
38 countries outside the United States of America
where market approval is obtained. Once the product
is available for use in the United States of America the
amortisation will start for that market as well.
The amortisation expenses are included in “Cost of
sales” in the consolidated statement of profit or loss
and other comprehensive income.
As long as the assets are not fully amortised, they
are tested for impairment losses on an annual basis
or more frequently if specific indicators require it. The
impairment test conducted is performed by product
and consists in measuring the recoverable amount.
The recoverable amount of the product is estimated
based on the forecasted future cash flows discounted
to their present value using a pre-tax discount rate
that reflects current market assessments of the time
value of money and the risks specific to the asset.
The time horizon used for the impairment testing
is based on the period during which the Company
expects to generate cash flows from the project, which
period does not exceed 10 years in the management
estimates.
The impairment losses are included in the Research
and Development expenses in the consolidated
statement of profit or loss and other comprehensive
income.
Based on the impairment tests conducted at year-end,
the recoverable amount of the different products was
estimated to be higher than their carrying amount and
no impairment was required. The main assumptions
used are the discount rate and the probability of
success. As defined in Note 2.9, the discount rate
reflecting current market assessments of the time
value of money and the risks specific to the asset, and
which was used for the impairment test, is estimated
at 11.26% (was 10.98% in 2021).
The main variables that lead to a discount rate of
11.26% are:
•
a risk free rate of 3.18% corresponding to the 10-
year OLO rate as of December 31, 2022 (2.98% last
year);
•
a beta factor of 1.24 (1.02 last year);
•
a market risk rate of 2.07% (5.05% last year);
decrease compared with 2021 is due to the positive
evolution of the company’s risk profile following the
commercialisation of 2 products, the advancement
of the product portfolio and the limitation of the
negative impacts related to COVID on our sector;
•
a Company specific risk premium of 6.60% (no
change compared to last year);
•
a cost of debt before tax of 6% (no change
compared to 2021).
Probability of success (PoS) rate varies from 100%
for the commercial products of the Company to 60%
for the less developed products of the Company (no
change with 2021).
We tested the sensitivity analysis of the impairment
tests by increasing the discount rate by 4%, leading
the discount rate to 15.26%. We cumulatively
decreased the probability of success up to 40%,
leading the PoS to 60% and 20% respectively for the
commercial products and product in developments.
None of these assumptions resulted to an impairment
loss.
No intangible assets have been pledged in the context
of financial liabilities.
8.
RIGHT-OF-USE ASSETS
(in € thousand)
Land and
buildings
Vehicles and
equipment
Total
Year ended December 31, 2022
Opening carrying amount
102
71
173
Additions
825
32
857
Depreciation expense
(44)
(27)
(71)
Disposals
(75)
-
(75)
Closing carrying amount
809
76
885
At December 31, 2022
Cost
825
184
1,251
Accumulated depreciation and impairment
(16)
(109)
(366)
Carrying amount
809
76
885
Year ended December 31, 2021
Opening carrying amount
145
7
152
Additions
83
83
Depreciation expense
(43)
(19)
(62)
Disposals
-
(29)
(29)
Closing carrying amount
102
71
173
At December 31, 2021
Cost
242
152
394
Accumulated depreciation and impairment
(140)
(81)
(221)
Carrying amount
102
71
173
The depreciation expenses are all presented as
“General and administrative expenses”.
The Group leases its headquarter building and some
company cars. The contracts do not include any
purchase options. The lease term considered for the
building is nine years, while for the company cars the
lease term ranges between 4 and 5 years.
The Group has lease contracts that include termination
options. These options are negotiated by management
to provide flexibility in managing the leased assets and
align with the Group’s business needs.
The amounts recognised in profit or loss can be
summarised as follows:
(in € thousand)
2022
2021
Depreciation expense of right-
of-use assets
(71)
(62)
Interest expense on lease
liabilities
(10)
(5)
Expenses relating to low-value
leases
(2)
(2)
Total amount recognised in
proﬁt or loss
(83)
(69)
of which as:
General and administrative
expenses (Note 19)
(73)
(64)
Financial expenses (Note 22)
(10)
(5)
Hyloris
_
Annual Report 2022
p. 106
p. 107
9.
EQUITY ACCOUNTED INVESTEES
On 5 February 2021, the Group entered into a
partnership with Purna Female Healthcare (“PFH”),
a special purpose vehicle founded to develop and
commercialise Miconazole-Domiphen Bromide,
and which is accounted under the equity method of
accounting (Joint Venture). At the acquisition date, the
net assets of PFH were limited to the available cash in
the company, hence no fair value adjustment has been
identified. Hyloris committed an investment of €4,270
thousand, of which €1,270 thousand is already paid.
The unpaid balance of €3,000 thousand is recognised
against a current financial liability for €3,000 thousand
(see note 15.2).
Hyloris owns 20% of PFH (later payments will not result
in a higher percentage of ownership) and is eligible,
based on contractual variables driven by the profitability
of the company, to receive up to a maximum of 45%
of the net profits generated by PFH. Hence the future
economic interest of Hyloris in PFH will be changed and
will be driven by the profitability of the company.
(in € thousand)
December
31, 2022
December
31, 2021
Opening carrying value
4,078
Capital
Contribution
4,270
Proﬁt/loss of the period
(130)
(191)
Carrying amount at
December 31
3,948
4,079
The following table summarises the financial
information of PFH as included in its own financial
statements, adjusted for fair value and differences in
accounting policies, if needed. The negative results
of 2021 and 2022 are in line with the estimated R&D
costs for this specific project.
(in € thousand)
31-Dec-22
FIXED ASSETS
CURRENT ASSETS
4,495
Amounts receivable within one year
3,026
Cash at bank and in hand
1,469
TOTAL ASSETS
4,495
CAPITAL AND RESERVES
5,146
Capital
6,103
Accumulated proﬁts (losses)
(1,608)
PROVISIONS AND DEFERRED TAXES
CREDITORS
0,35
Amounts payable within one year
0,35
TOTAL LIABILITIES
4,495
(in € thousand)
2022
2021
Operating income
-
-
Operating charges
(651)
(957)
Services and other goods
(649)
(956)
Other operating charges (-)
(2)
(1)
Operating proﬁt (loss)
(651)
(957)
Proﬁt (Loss) for the period
before taxes (-)
(651)
(957)
Proﬁt (loss) for the period
available for appropriation
(651)
(957)
10.
OTHER INVESTMENT, INCLUDING
DERIVATIVES
The other investment, including derivatives can be
detailed as follows:
(in € thousand)
December
31, 2022
December
31, 2021
Shares Pleco Therapeutics BV
1,000
Automatically
Convertible loan
500
Optional
convertible loan
469
441
Other Financial Assets
40
Other Investment, including
derivatives
1,469
981
of which as:
Non-current
1,000
453
Current
469
528
Automatically converted loan into shares of Pleco
In 2021, the Group entered into a partnership with
Pleco Therapeutics to develop a Plecoid™ Agent, a
novel combination product of chelating agents for the
treatment of Acute Myeloid Leukaemia (AML) and
Small Cell Lung Cancer (SCLC). Under the terms of the
agreement, Hyloris provided via a €1,000 thousand
automatically non-interest bearing convertible loan
(whereof as of per 31 December 2021 €500 thousand
was paid to Pleco Therapeutics). On 1 June 2022,
Pleco Therapeutics issued new shares and conform
to the agreement, the loan has been converted into
shares. The Group received 7,944 preferred shared at
an issuing price of €126 per share (which result in a
4.67% ownership of the company Pleco Therapeutics).
See note 4.1 for the valuation.
Subject to feedback from the FDA on the feasibility
of the clinical development requirements, the Group
may commit to fund (not convertible into equity) up
to maximum € 7,700 thousand pre-defined R&D
activities through to submission for approval in AML,
plus initial exploratory development work in SCLC.
Pleco will fund all activities that are outside the
scope of the maximum €7,700 thousand funding
commitment from Hyloris. Hyloris will be eligible to
receive up to 65% of the net gross product margin
generated worldwide in AML and SCLC.
Optional convertible loan
On 13 December 2021, the Group entered into
a collaboration with Vaneltix Pharma, Inc. (a
related party of Hyloris) for the development and
commercialisation of Alenura
TM
as first-line drug
treatment for acute pain in interstitial cystitis /bladder
pain syndrome (IC/BPS). Under the terms of the
agreement, the Group granted a 6% interest bearing
loan of $500 thousand.
The Loan will be reimbursed at the earliest of i)
31 December 2023 or ii) sale of equity or other equity-
linked instruments by the Borrower to unaffiliated third
parties for financing purposes for an amount of at
least USD $5 million (the “Capital Increase”). In case
Capital Increase on or prior to the reimbursement of
the Loan in full, Hyloris shall have the option to convert
the entire principal amount of the loan and all interest
accrued into shares. Also under the terms of the
agreement, the Group will provide staged investments
of in total maximum $ 6,700 thousand for Phase 2,
manufacturing and regulatory related activities (see
note 28.1).
Management identified Vaneltix Pharma, Inc as a
related party of Hyloris (see note 28.1).
11.
TRADE RECEIVABLES AND OTHER
RECEIVABLES
(in € thousand)
December
31, 2022
December
31, 2021
Trade receivables
4,527
2,621
API
625
-
Alter Pharma
395
645
R&D Tax Credits
811
474
Other amounts receivable
216
295
Total trade and other
receivables
6,574
4,035
of which as:
Current
5,127
2,321
Non Current
1,447
1,714
An impairment analysis of trade receivables is done
on an individual level, and there are no individual
significant impairments.
The carrying amount of the Group’s trade receivables
(gross) is mainly denominated in EUR, primarily
resulting from out-licensing revenues and service
revenues in EUR.
During the year, the payment terms for the receivables
have neither deteriorated nor been renegotiated.
The maximum credit risk exposure at the end of the
reporting period is the carrying value of each caption
of receivables mentioned above. The Group does not
hold any collateral as security.
Other amounts receivable mainly includes recoverable
VAT and interests on deposits.
API
A loan to API of €656 thousand is granted by Hyloris
to API, carrying a 0.1% interest per year. This loan is
presented as non-current. As soon as the royalties
(or other payments) of 3 product candidates, or any
other product parties may develop together in the
future, exceed $200 thousand in a calendar year
then the amount exceeding $200 thousand will be
used to repay the loan. Hyloris can then withhold this
amount from royalty payments. The loan has been
measured at FVTPL using an interest market rate and
appropriate credit risk resulting in the initial recognition
of a loss of k€ 31 recognised as financial expenses.
R&D Tax Credits
The Group applies for R&D tax credit incentives set-up
by the Federal government and obtained reasonable
assurance in the current reporting period that the
Group will comply with the conditions attached to
the grant and that the grant will be received. The
Group recognised R&D tax credits for a total of €337
thousand in Other Operating Income (see note 21) and
Intangible assets (see note 7).
Receivable from Alter Pharma Group
The balance sheet as at 31 December 2022 held a
current receivable from the Alter Pharma Group for
€ 395 thousand, relating to the termination of the
development projects conducted by Alter Pharma and
its subsidiaries in 2021.
Hyloris
_
Annual Report 2022
p. 108
p. 109
12.
PREPAYMENTS
Pre-paid R&D expenses relate to payments made
by the Group for research and development projects
conducted by third parties and will be recorded
in profit and loss when incurred. Pre-paid R&D
expenses of €1,108 thousand in 2022 related to the
development agreement with Vaneltix (a related
party of Hyloris) to run the clinical development of the
Alenura
TM
product candidate (see note 27) is the main
driver of the increase compared to 31 December 2021.
13.
CASH AND CASH EQUIVALENTS
The net cash position as presented in the consolidated
statement of cash flows is as follows:
(in € thousand)
December
31, 2022
December
31, 2021
Cash at bank
13,457
30,012
Short-term
deposit
30,000
20,000
Total cash
and cash equivalents
43,457
50,012
The term of two deposits are from 1 September 2020
to 1 September 2023 and the terms of the two other
deposits are from 13 December 2022 to 13 June 2023,
and from 13 December 2022 to 13 September 23. It is
classified as short term deposit as available for use by
the group within a 32 days’ notice period.
14.
EQUITY
14.1
OVERVIEW
(in € thousand)
December
31, 2022
December
31, 2021
Share capital
140
129
Share premium
121,513
103,693
Retained earnings
(64.246)
(54.805)
Other reserves
(2,362)
(960)
Total Equity attributable
to owners of the parent
55,045
48,057
14.2
CAPITAL MANAGEMENT
The Group manages its capital to maintain a strong
level of capital in order to sustain development of the
business and confidence of creditors while optimizing
return on capital for shareholders. This ensures that
entities in the Group will be able to continue as going
concerns while maximizing the return to stakeholders
through the optimization of its debt and equity
balance. Also refer to Note 3.1 for further details on
going concern.
The Group is not subject to any externally imposed
capital requirements except those provided for by
law. The Group’s management reviews the capital
structure of the Group on a regular basis. As part of
this review, management considers the cost of capital
and the risks associated with each financing options.
The Group’s objectives, policies and processes for
managing capital have remained unchanged over the
past few years.
Costs associated to equity transactions such as
investment bank, legal and audit fees are expensed
when incurred and recorded as General and
Administrative expenses. Only the one-time costs
related to the issuance of new shares are capitalised
in the equity as costs of capital.
On 31 March 2022, the Company has successfully
raised an amount of €15,000 thousand in gross
proceeds, from new and existing, local and
international investors, through an equity offering
by means of a private placement via an accelerated
bookbuild offering of 967,742 new shares (being
approximately 3.7% of the Group’s outstanding shares
(pre-transaction) at an issue price of EUR 15.50 per
share (the “Offering”), representing a discount of 1.6%
to the 30-day VWAP.
On 20 June 2022 Hyloris increased Capital and
Share Premium with respectively €6 thousand and
€2,826 thousand through the issuance of 1.200.000
new shares resulting from outstanding Transaction
Warrants exercised.
The Group will use the net proceeds of the Offering
primarily to fund the development of new products
and accelerate in-house R&D activities.
Equity transactions
(in € thousand)
Gross proceeds
Equity transaction costs
Expensed in P&L
Net proceeds
Accelerated Bookbuilding
15,000
(634)
(29)
14,337
Execution transaction warrants
2,832
(14)
2,818
Total
17,832
(634)
(43)
17,155
14.3
SHARE CAPITAL AND SHARE PREMIUM
Share Capital
As per 31 December 2022, the share capital of the
Group amounts to € 140,001.87 represented by
28,000,374 shares, without nominal value, each
representing 1/28,000,374th of the share capital of
the Group. The share capital of the Group is fully and
unconditionally subscribed for and is fully paid up.
All shares rank equally with regard to the Group’s
residual assets. Holders of these shares are entitled
to dividends as declared from time to time and are
entitled to one vote per share at general meetings of
the Group.
On June 8, 2020, the General Assembly issued an
authorised capital of €117,758.84. The Board is
allowed to use the authorised capital for a period of
5 years. As per December 31, 2022, the remaining
authorised capital amounted to €110,920.13.
The following capital transactions have taken place since January 1, 2017:
Date
Transaction
Increase of share
capital (incl. share
premium) (€)
Number
of Securities
issued
Issue price / share
(rounded, incl.
share premium) (€)
Number of
Shares after the
transaction
7 June 2012
Incorporation
50,000
10,000 Shares
5.00
10,000
31 March 2017
Capital increase
11,500
2,300 Shares
5.00
12,300
12 May 2017
Share split
-
-
3,075,000
31 May 2018
Capital increase
2,750,000
248,711 Shares
11.06
3,323,711
31 May 2018
Capital increase
3,000,000
271,322 Shares
11.06
3,595,033
31 December
2019
Capital increase
18,259,783
1
855,409 Shares
21.35
4,450,442
8 June 2020
Share split
-
Share split (1 to 4)
-
17,801,768
30 June 2020
IPO on Euronext
61,821,500
5,750,000 shares
10.75
23,551,768
30 June 2020
Conversion of
convertible bonds
15,358,025
2,040,864 shares
10.75
25,592,632
31 July 31 2020
Over allotment
option
2,580,000
240,000 shares
10.75
25,832,632
31 March 2022
Accelerated
bookbuild
15,000,000
967,742 shares
15.50
26,800,374
22 June 2022
Transaction
warrants exercised
2,832,000
1,200,000 shares
2.36
28,000,374
1
Accounting wise, the share issue of December 2019 was accounted for as from the date of establishment of common control in Dermax
Hyloris
_
Annual Report 2022
p. 110
p. 111
Share premium
As per 31 December 2022, the share premium of the
Group amounts to € 121,513 thousand.
Other reserves
(in € thousand)
December
31, 2022
December
31, 2021
Share based
payment
1,622
2,391
Cost of Capital
(4,460)
(3,827)
Other
476
476
Total Other
reserves
(2,362)
(960)
The movement of the other reserves over the period
can be explained by:
•
the increase of €560 thousand resulting from the
share based payment expenses associated with the
ESOP warrants (see note 25);
•
the decrease of €1.329 thousand for the transfer to
retained earnings of historical share base payment
costs linked to the transaction warrants exercised
during the year; and
•
the decrease of €634 thousand from the Cost of
Capital related to the Accelerated Bookbuild (see
note 14.2).
15.
BORROWINGS AND OTHER
FINANCIAL LIABILITIES
15.1
BORROWINGS
(in € thousand)
December
31, 2022
December
31, 2021
Lease liabilities
885
174
Total borrowings
885
174
of which as:
Non-current
borrowings
747
109
Current borrowings
138
65
For more details on the leases, we refer to Note 8 on
“Right-of-use assets”.
The weighted average incremental borrowing rate
used for the measurement of the lease liabilities is
3.95%. The Group is not subject to financial covenants.
The underlying leased assets act as pledge in the
context of the lease liabilities.
15.2
OTHER FINANCIAL LIABILITIES
The other financial liabilities can be detailed as follows:
(in € thousand)
December
31, 2022
December
31, 2021
Loans from
shareholders
0
8,615
Other ﬁnancial
liabilities
3,512
3,500
Other ﬁnancial
liabilities
3,512
12,115
of which as:
Non-current other
ﬁnancial liabilities
300
300
Current other
ﬁnancial liabilities
3,212
11,815
Loans from shareholders
In 2022, the Group successfully renegotiated its
Shareholders loans. The changes in the terms of the
loan agreements qualified for substantial modifications
of the terms resulting in the derecognition of the
carrying value of former loans replaced by the carrying
value of the loans under the new terms. The loans
from shareholders, were unsecured, bear as from 1
January 2022 a fixed nominal interest rate of 0.75%
(4% previously) and were payable the earlier of
31 December 2022 or, if and when, the Group will
generate a positive EBIT.
At 31 December 2022 all Shareholders loans including
the accumulated interests were reimbursed.
Decrease of the Loans from Shareholders can be
explained by (i) the reimbursement of the principal
amount of one Shareholder, (ii) payment of incurred
interest (€ 1,877 thousand), partly compensated
by (iii) the FX impact on the conversion of the loans
denominated in USD into EUR (€ 256 thousand), and
(iv) the loss resulting from the derecognition of the
former carrying value of the loan (€ 226 thousand).
Other ﬁnancial Liabilities
In 2022, the Group has with the Alter Pharma Group
related license agreements a non-current other
financial liability of €300 thousand and a current
financial liability of each €200 thousand.
Committed to milestone related investments
(contributions to the equity) in Purna Female
Healthcare (see note 9) the Group has a current other
financial liability of €3 million.
15.3
LIQUIDITY AND CASH FLOW RECONCILIATION
The maturity table of the borrowings and the other
financial liabilities is presented in Note 4.6 on the
liquidity risk.
The following tables reconcile the movements of
the financial liabilities to the cash flows arising from
financing activities:
Non-cash movements
31/12/2022 (in € thousand)
Opening carrying
amount
Cash ﬂows
Acquisition
Modiﬁcation
Termination
Re-classes
Accrued
interests and
exchange
differences
Closing carrying
amount
Non-current ﬁnancial liabilities
Lease liabilities
109
-
747
(18)
(91)
-
747
Other ﬁnancial liabilities
300
300
Current ﬁnancial liabilities
-
Lease liabilities
65
(79)
102
(44)
91
134
Other ﬁnancial liabilities
11,815
(9,253)
0
482
-
168
3,212
Total liabilities from ﬁnancing activities
12,290 (9,332)
848
482
(62)
-
168
4,394
Presented in the statement of cash ﬂows
as follows:
ﬁnancing activities
(9,253)
Reimbursement of borrowings
(79)
Non-cash movements
31/12/2021 (in € thousand)
Opening carrying
amount
Cash ﬂows
Acquisition
Modiﬁcation
Termination
Re-classes
Accrued
interests and
exchange
differences
Closing carrying
amount
Non-current ﬁnancial liabilities
Lease liabilities
106
-
83
(80)
-
109
Other ﬁnancial liabilities
7,885
300
(7,885)
300
Current ﬁnancial liabilities
0
Lease liabilities
46
(64)
80
3
65
Other ﬁnancial liabilities
409
(409)
3,200
7,885
730
11,815
Total liabilities from ﬁnancing activities
8,447
(473)
3,583
0
-
-
733
12,290
Presented in the statement of cash ﬂows
as follows:
Financing activities
(409)
Reimbursement of borrowings
(64)
Hyloris
_
Annual Report 2022
p. 112
p. 113
16.
TRADE AND OTHER LIABILITIES
(in € thousand)
December
31, 2022
December
31, 2021
Trade payables
2,302
2,622
Employee beneﬁt
liabilities
68
80
Other payables
52
47
Trade and other
liabilities - Current
2,422
2,749
The trade payables relate mainly to the R&D activities.
Other payables consist of the fair value of a Foreign
Exchange spot contract.
In 2022, the Group actively mitigated its foreign
exchange risk (USD exposure) utilizing forward foreign
exchange contracts for a total nominal value of $11,270
million, whereof as per end of December $1 million is still
outstanding. As a result and as per 31 December 2022,
a derivative with a negative fair value is recognised as a
current financial asset for € 52 thousand. (See note 22 for
the realised gain of FX forward contracts)
The fair value of trade payables approximates their
carrying amount.
Liquidity and currency risk are detailed in Note 4.
17.
DEFERRED TAXES
Deferred tax assets and liabilities are offset when
there is a legally enforceable right to offset and when
the deferred taxes relate to the same fiscal authority.
The deferred tax assets and liabilities are attributable
to the following items:
in € thousand
31-Dec-22
31-Dec-21
Deferred tax
asset
Deferred tax
liability
Deferred tax
asset
Deferred tax
liability
Intangible assets
852
854
Financial liabilities
(57)
Trade and other liabilities
25
Associates and joint ventures
81
48
Tax losses
10,465
7,951
Total deferred tax assets & liabilities
11,422
8,854
(57)
Net deferred tax assets not recognised
(11,422)
(8,787)
Offsetting
(57)
57
Total deferred tax assets & liabilities
The deferred tax liability on the financial liabilities in
2021 relates to the initial recognition of the loans from
shareholders at fair value.
Deferred tax assets have not been recognised in
respect of the following items, because it is not
probable that future taxable profits are available
against which the Group can use the benefits of
therefrom:
(in € thousand)
December
31, 2022
December
31, 2021
Deductible temporary
differences
3,830
3,002
Tax losses
41,858
31,805
Total
45,688
34,806
The deductible temporary differences disclosed above
would reverse over a period ranging between 5 to 10
years.
The tax losses carried forward, however, are available
indefinitely.
18.
REVENUE
The revenues can be detailed as follows:
(in € thousand)
December
31, 2022
December
31, 2021
Sales-based royalties,
milestone payments and
out-licensing agreement
1,900
2,120
Services rendered
1,052
975
Revenues
2,952
3,095
Currently, the Group generates only limited sales-
based royalties as its main projects are in the
development pipeline and are not yet commercialised.
The continuously increasing sales-based royalties
is income mainly from the Group’s commercialised
products, Sotalol IV and new in 2022: Maxigesic
®
IV.
Revenue from a sales-based royalties is recognised
when the subsequent sale occurs. Revenue from
sales milestone is recognised when the performance
obligation has been met (i.e. sales threshold reached).
Income from Milestone payments in 2022 is driven
by the product Tranexamic whereas in 2021 it was
coming from out-licensing Maxigesic
®
IV by the
Group’s partner AFT Pharmaceuticals, including
income from the landmark US Licensing Agreement.
Revenue for milestone payment in exchange for a
license of intellectual property is only recognised when
the performance obligation to which some or all of the
milestones payments has been allocated has been
satisfied.
Income from out-licensing is mainly related to a
transaction with Qliniq.
In order to optimise the product pipeline the Group
out-licensed a product candidate HY-038 in line
with its long term strategy. Out-licensing agreement
qualified for a ‘right to use’ the license and revenue
is recognised at the point in time that the license is
granted.
Income from Services rendered in 2022 primary
consist of strategic advices incurred by the Group to
support a co-developer. Revenue for services rendered
are recognised when the services is rendered.
19.
EXPENSES BY NATURE
Expenses by nature represent an alternative disclosure
for amounts included in the consolidated statement
of comprehensive income. They are classified under
“Cost of sales”, “Research and development expenses”,
“General and administrative expenses” and “Other
operating expenses” in respect of the years ended
December 31:
(In € thousand)
2022
2021
Out-sourced R&D
(7,163)
(3,333)
Employee beneﬁt expenses
(Note 20)
(2,576)
(1,659)
Management consultancy
fees
(1,091)
(907)
Board related expenses
(178)
(189)
R&D consultancy fees
(420)
Share based payments
(560)
(576)
Legal & paralegal fees
(645)
(218)
Audit and related
consultancy fees
(91)
(172)
Hiring fees
(84)
(103)
Ofﬁce equipment, rent
and utilities
(337)
(292)
Renegotiation and
unwinding Alter Pharma
-
(5,770)
Other expenses
(433)
(478)
Amortisation expense of
intangible assets (Note 7)
(94)
(43)
Impairment losses on
intangible assets (Note 7)
(23)
Depreciation expense on
PPE and Right of Use
(102)
(71)
Total operating expenses
(13,774)
(13,833)
of which as:
Cost of sales
(94)
(107)
Research and
development
expense
(10,151)
(5,056)
General and
administrative
expenses
(3,517)
(2,900)
Other operating expenses
(12)
(5,770)
In accordance with IAS 38, we do not capitalise our
research and development expenses until we file for
marketing authorization for the applicable product
candidate. Research and development expenditures
incurred during the period were accounted for as
operating expenses.
Hyloris
_
Annual Report 2022
p. 114
p. 115
Total R&D expenditure can be detailed as follows:
(in € thousand)
December
31, 2022
December
31, 2021
Research and
Development expenses
(10,151)
(5,033)
Impairment of assets
(23)
Total R&D costs
(10,151)
(5,056)
The Groups’ research and development expenses
increased by 102%, from €5,033 thousand in 2021
to €10,151 thousand in 2022. The increase was
principally driven by the progresses made in the
development of our existing product candidates and
the related additional out-sourced R&D expenses and
the enlargement of the R&D team.
In 2022, the Group capitalised development costs for a
total of € 661 thousand (was €284 thousand in 2021).
(See note 7)
Hyloris’ General and administrative expenses
increased by 21% (or €617 thousand), from
€2,900 thousand in 2021 to €3,517 thousand
in 2022. The increase was mainly driven by
additional communication and legal/HR costs. The
company remains focused on strong cost and cash
management.
20.
EMPLOYEE BENEFIT EXPENSES
In € thousand
December
31, 2022
December
31, 2021
Wages and salaries
(2,142)
(1,494)
Social security costs
(146)
(105)
Deﬁned contribution costs
(20)
(14)
Other employee
Beneﬁt expenses
(258)
(45)
Total employee
Beneﬁt expense
(2,567)
(1,659)
in full-time
equivalents
Average number of
total employees
23.6
13.8
21.
OTHER OPERATING INCOME
(in € thousand)
December
31, 2022
December
31, 2021
Grants income related
to tax credit
315
387
Other income
0
2
Other Operating
Income
315
389
The Group applies for R&D tax credit incentives
set-up by the Federal government and obtained
reasonable assurance in the current reporting period
that the Company will comply with the conditions
attached to the grant and the grant will be received.
The Group recognised R&D tax credits for a total of
€337 thousand, of which €315 thousand as other
operating income, and €22 thousand deduction from
the carrying amount of the related assets, which are
recognised in the profit or loss statement in line with
the amortisation or depreciation expense of the related
assets.
22.
FINANCIAL RESULT
The various items comprising the net finance cost are
as follows:
(in € thousand)
December
31, 2022
December
31, 2021
Realised gain on FX
forward contracts
525
-
Interest income on current
assets
67
32
Exchange differences
(126)
-
Financial income
466
32
Interest expense on lease
liabilities
(11)
(5)
Interest expense on other
ﬁnancial liabilities
(164)
(478)
Other Interest expense
(44)
(73)
Total interest expenses
(219)
(557)
Loss related to substantial
modiﬁcation of the
shareholders loan - note 15
(226)
-
FV adjustment on FX
forward instruments
(52)
Bank fees
(38)
(26)
Exchange differences
0
(190)
Other
(59)
-
Total ﬁnancial expenses
(594)
(773)
23.
INCOME TAX EXPENSE
23.1
AMOUNTS RECOGNISED TO PROFIT
AND LOSS
The income tax (charged)/credited to the income
statement during the year is as follows:
(in € thousand)
December
31, 2022
December
31, 2021
Current Tax (expense)/
income
(4)
(297)
Financial income
(4)
(297)
In 2021, The Group recognised an additional Tax
Expenses of €297 thousand related to a request for
payment of Taxes related to taxable income realised
in 2017, when the Company was still located in Grand
Duchy of Luxembourg. Although the company filed
timely her Tax Return related to income year 2016, the
company did not receive any Tax Assessments prior to
the request for payment. Management protested to the
relevant Authorities and decided to adopt a cautious
approach and recognised the Tax Expense in 2021.
Payment has been done to the Authorities in 2022.
23.2
RECONCILIATION OF EFFECTIVE TAX
The income tax expense can be reconciled as follows:
(in € thousand)
2022
2021
Loss before income tax
(10,766)
(11,282)
Income tax expense
calculated at domestic tax
rates (25%)
2,691
2,821
Tax effect of
Share of Loss of equity-
accounted investees
reported, net of tax
(33)
(48)
Tax incentives (R&D Tax
Credit)
(12)
(97)
Changes in estimates
related to prior years
(4)
(297)
Effect of unused tax losses
not recognised as deferred
tax assets
(2,646)
(2,869)
Total tax Expenses
(4)
(297)
24.
EARNINGS PER SHARE
Basic earnings per share amounts are calculated by
dividing net profit for the year attributable to ordinary
equity holders of the parent by the weighted average
number of ordinary shares outstanding during the year.
Diluted earnings per share amounts are calculated by
dividing the net profit attributable to ordinary equity
holders of the parent (after adjusting for the effects of
all dilutive potential ordinary shares) by the weighted
average number of ordinary shares outstanding
during the year plus the weighted average number of
ordinary shares that would be issued on conversion of
all the dilutive potential ordinary shares into ordinary
shares. No effects of dilution affect the net profit
attributable to ordinary equity holders of the Group.
The table below reflects the income and share data
used in the basic and diluted earnings per share
computations:
(in € thousand)
December
31, 2022
December
31, 2021
Basic earnings
Proﬁt (Loss) from
continuing operations
attributable to owners of
the parent
(10,770)
(11,579)
Diluted earnings
Dilution effect of
share-based payments
Proﬁt from continuing
operations attributable to
owners of the parent, after
dilution effect
(10,770)
(11,579)
Earning per share based on the existing number of
ordinary shares
Number of shares
December
31, 2022
December
31, 2021
Weighted average
number of ordinary shares
outstanding during the
period
27,198,925
25,832,632
Basic earnings per share
(0.40)
(0.45)
Diluted earnings per share
(0.40)
(0.45)
As the Company is suffering operating losses, the
stock options have an anti-dilutive effect. As such,
there is no difference between basic and diluted
earnings per ordinary share. There are no other
instruments that could potentially dilute earnings per
share in the future.
25.
SHARE-BASED PAYMENTS
The Company has a stock option scheme for
the employees, consultants and directors of the
Company and its subsidiaries for rendered services.
In accordance with the terms of the plan, as approved
by shareholders, employees may be granted options
Hyloris
_
Annual Report 2022
p. 116
p. 117
to purchase ordinary shares at an exercise price as
mentioned below per ordinary share.
Each employee share option converts into one ordinary
share of the Company on exercise. No amounts are
paid or payable by the recipient on receipt of the
option. The options carry neither rights to dividends
nor voting rights. Options may be exercised at any
time from the date of vesting to the date of their expiry.
The following share-based payment arrangements
were in existence during the current and prior periods:
Expiry Date
Exercise Price
per warrant (€)
Fair value at
grant date (€)
Warrants per 31
December 2022
Warrants per 31
December 2021
PLAN 2017
Warrants
14 June 2022
2.36
1.11
-
1,200,000
PLAN 2019
Warrants
31 December 2024
5.34
2.47
306,125
313,000
PLAN 2020
Warrants
27 November 2031
9.88
4.44
69,500
69,500
Warrants
27 November 2031
12.04
5.68
55,000
55,000
Warrants
27 November 2031
13.92
6.20
60,000
60,000
Warrants
27 November 2031
16.64
7.39
2,000
2,000
PLAN 2022
Warrants
30 June 2029
15.2
6.08
142,000
The 2017 plan was fully vested immediately as no
vesting conditions were required. The 1,200,000
Transaction warrants were exercised on 22 June 2022
(note 14).
On 31 December 2019, the Company issued a plan of
363,300 warrants in the context of an employee stock
ownership plan (ESOP warrants). The 2019 plan is
subject to conditions so that it will vest gradually over
the next four years (25% after 1 year, and 1/48 for
every additional month). The Company offered in total
353,000 warrants.
On 27 November 2020, the Company issued a plan
of 400,000 warrants. The 2020 plan is subject to
services conditions so that it will vest gradually over
the next four years (25% after 1 year, and 1/48 for
every additional month). As at 31 December 2022,
191,500 warrants were offered to new employees
of which 186,500 warrants were accepted. The
remaining warrants of the 2020 plan were cancelled
and replaced by a new plan (2022 plan).
On 22 June 2022, the Group issued a new plan of
213,500 warrants. The 2022 plan is subject to services
conditions so that it will vest gradually over the next
four years (25% after 1 year, and 1/48 for every
additional month). As of the date of this annual report
142,000 warrants were accepted by new employees.
The fair value of the warrants has been determined
based on the Black Scholes model. For the plans
issued in 2017 and 2019, the expected volatility is
based on the historical share price volatility over the
past 5 years of listed peer companies. For the new
plan issued on 27 November 2020, the expected
volatility is based on the historical share price volatility
since listing of the Company and bench marked with
listed peer companies.
Below is an overview of all the parameters used in this model:
PLAN 2017
PLAN 2019
PLAN 2020
PLAN 2022
Average Share price (€)
2.36
5.34
11.73
14.84
Average Exercise Price (€)
2.36
5.34
11.89
15.2
Expected volatility of the shares (%)
55%
55%
40%
35%
Expected dividends yield (%)
0%
0%
0%
0%
Risk free interest rate (%)
0.60%
0.10%
0.00%
2.66%
The following reconciles the options outstanding at the beginning and end of the year:
Average
Exercise Price (€)
Numbers of
Warrants
Closing balance at 31 December 2018
2.36
1,200,000
Warrants accepted in December 2019
5.34
118
Closing balance at 31 December 2019
2.63
1,318,000
Warrants accepted in 2020
5.34
235,000
Warrants lapsed in 2020
5.34
20,000
Closing balance at 31 December 2020
3.01
1,533,000
Warrants accepted in 2021
11.89
186,500
Warrants lapsed in 2021
5.34
20,000
Closing balance at 31 December 2021
3.68
1,699,500
Warrants accepted in 2022
15.2
142,000
Warrants lapsed in 2022
5.34
6,875
Warrants exercised in 2022
2.36
1,200,000
Closing balance at 31 December 2022
8.74
634,625
26.
CONTINGENCIES
At closing 2022, the Group is involved in a litigation
with Alta Thera regarding the IP of product
Sotalol. With respect to the complaint filed by
AltaThera Pharmaceutials LLC against Academic
Pharmaceuticals Inc, Dr. Somberg and Hyloris
Pharmaceuticals, for (e.g.) alleged misappropriation
of Alta Thera’s trade secrets and confidential
information and breach of contract, Hyloris is fully
confident about the outcome of this litigation. Hyloris
has filed the necessary counterclaims and also
started an arbitration procedure against AltaThera
Pharmaceutials LLC. for breach of contract.
27.
COMMITMENTS AND CONTINGENT LIABILITIES
Hyloris has contractual commitments related to asset
purchase, licenses and development agreements. The
amounts are due upon reaching certain milestones
dependent on successful completion of development
stages of the different product candidates (including
FDA approval) or on meeting specified sales targets.
The Company disclosed as commitments the maximum
that would be paid if all milestones and sales targets
are achieved. The amounts are not risk-adjusted or
discounted.
As at 31 December 2022, Hyloris has contractual
commitments and contingent liabilities for a maximum
amount of €33,027 thousand on related to asset
purchase, licenses and development agreements
recorded under intangible assets.
The accounting treatment of the contractual commitments
and contingent liabilities will vary per nature of triggering
event. Development milestones up until commercialization
will be expensed or capitalised. Sales related
commitments such as royalties, profit sharing and sales
milestones will be expensed when incurred.
The following table details the total maximum
contractual commitments (milestone payments only)
at 31 December 2022 per product candidates if such
products are successfully marketed (in € thousand):
Product
Candidate
In $
thousand
In €
thousand
Converted
in € (in €
thousand)
HY-004
Tranexamic
Acid MR
225
211
HY-029
300
300
Atomoxetine
oral liquid
150
141
Metolazone IV
1,650
1,547
Dofetilide IV
350
328
HY-073
28,457
26,680
HY-074
175
164
Alenura
TM
(note 28.1)
3,900
3,656
TOTAL
34,907
300
33,027
Hyloris
_
Annual Report 2022
p. 118
p. 119
As of December 31, 2022, out of the total value of
€33,027 thousand, €28,579 thousand should be
considered as contingent liabilities as they are not
triggered by a performance obligation from the
counterparty,but triggered by (future) sales milestones.
Contingent liabilities attached to profit split and
royalties which percentage varies based on achieved
profit and/or sales are not considered in the above
table as no maximum amount can be determined.
28.
RELATED PARTY TRANSACTIONS
The reference shareholder is current CEO Stijn Van
Rompay.
As part of the business, the Company has entered into
several transactions with related parties. Balances and
transactions between the Company and its subsidiaries,
which are related parties of the Company, have been
eliminated on consolidation and are not disclosed in this
note. Details of transactions between the Group and
other related parties are disclosed below.
The related parties presented below are identified as:
•
Vaneltix Inc and its affiliates, in which non-executive
an independent member of the Board of directors,
Carolyn Myers her partner, Dr. Dan Vickery is CEO
and shareholder;
•
the shareholders; Mr Stijn Van Rompay, an executive
member of the board of the Company, CEO and
reference shareholder of the Company; GRNR Invest
BVBA, an entity controlled by Thomas Jacobsen, an
Executive member of the board of the Company;
•
the Executive Management Team;
•
the Board of Directors (Non-Executive Directors).
28.1
TRANSACTIONS WITH VANELTIX, INC.
In 2021 the Group entered into a strategic
collaboration with Vaneltix Pharma Inc. for the
development and commercialisation of Alenura
TM
as
first-line drug treatment for acute pain in interstitial
cystitis /bladder pain syndrome (IC/BPS).
Under the terms of the agreement, Vaneltix
will be responsible for the further development,
manufacturing, regulatory affairs and
commercialisation of Alenura
TM
in collaboration
with Hyloris. In return, Hyloris will provide staged
investments of in total maximum $6,700 thousand
for Phase 2, manufacturing and regulatory related
activities related activities and a 6% interest bearing
(potential convertible) loan of $500 thousand (see
note 10). Hyloris will be eligible to receive a tiered
and incremental percentage of the product margin
generated by Vaneltix.
The table below provides an overview as per
31 December 2022:
Transactions for the period
(in € thousand)
Financial
Position
Proﬁt Loss
Commitments
Other
investments
(see note 10)
494
Prepayments
1,108
Research and
Development
expenses
(1,422)
Interest income
25
Commitments
and Contingent
Liabilities
(see note 27)
3,656
Total
1,602
(1,398)
3,656
28.2
TRANSACTIONS
WITH THE SHAREHOLDERS
Shareholder loans
On 30 June 2022, the Group successfully renegotiated
the Shareholder loans. The changes in the terms of the
loan agreements qualified for substantial modifications
of the terms resulting in the derecognition of the
carrying value of former loans replaced by the
carrying value of the loans under the new terms (see
Note 15.2).
The below table provides an overview of the loans
outstanding per December 31, 2021 (nominal
accounts, excluding accrued interest). No loans were
outstanding per December 31, 2022 as these were
reimbursed before year-end. The financial interest of
the year amounts to € 168 thousand.
(in € thousand)
31-Dec-22
31-Dec-21
Stijn Van Rompay
0
4,428
GRNR Invest BVBA (an
entity controlled by Thomas
Jacobsen)
0
1,089
Pieter Van Rompay
0
940
Stijn and Ellen Van
Rompay-Delimon
0
436
Total
0
6,894
Capital Increase dated 22 June 2022
On 22 June 2022 Hyloris increased her Capital and
accompanied her Share Premium with respectively
€6 thousand and €2,826 thousand via the exercise
of 1,200,000 outstanding Transactions Warrants.
The table below represent the exercised warrants of
related parties:
Related Party
Number of
Transactions
warrants exercised
Exercise
Price
in €
Stijn Van Rompay
852,096
2.36
Thomas Jacobsen
163,512
2.36
Total
1,015,608
2.36
28.3
TRANSACTIONS WITH THE EXECUTIVE MANAGEMENT TEAM
Executive management team personnel includes
those persons having authority and responsibility for
planning, directing and controlling the activities of
the Group. As of 31 December 2022, members of the
Executive Management Team are:
•
SVR Management BVBA, an entity controlled
by Stijn Van Rompay, an executive member of
the board of the Company, CEO and reference
shareholder of the Company;
•
Jacobsen Management BV, an entity controlled
by Thomas Jacobsen, an executive member of the
board of the Company and CBDO;
•
Finsys Management BV, an entity controlled by
Jean-Luc Vandebroek, Chief Financial Officer;
•
Dr Dietmar Aichhorn, Chief Operating Officer;
•
Herault BV, an entity controlled by Koenraad
Vanderelst, Chief Legal Officer.
The table below presents the compensation of all
members of Executive Management Team by type of
compensation (including members of the EMT that left
the Company during 2021, ie Mr Ed Maloney (former
CBDO) who left the company in February 2021):
(in € thousand)
December
31, 2022
December
31, 2021
ST compensation
(incl. management fees)
1,045
891
Post-employment
beneﬁts
-
-
Share-based payments
154
274
Total
1,199
1,165
At 31 December 2022, there were outstanding trade
payables related to transactions with the Executive
Management Team:
(in € thousand)
December
31, 2022
December
31, 2021
Management fees
160
197
Total
160
197
As of 31 December 2022, members of the Executive Management Team owned the following securities of the
Company:
Shares
Warrants
Number (#)
Pct. (%)
Number (#)
Pct. (%)
Mr. Stijn Van Rompay
7,676,400
27.42
68,000
10.71
Mr. Thomas Jacobsen
3,657,505
13.06
-
0
Mr. Jean-Luc Vandebroek
3,000
0.01
40,000
7.88
Mr. Dietmar Aichhorn
20,000
0.07
40,000
6.3
Mr. Koenraad Vanderelst
27,443
0.10
50,000
6.3
TOTAL
11,374,348
40.66
198,000
31.19
Total outstanding shares and warrants existing as of 31 December 2022 are respectively 28,000,374 and
634,625.
Hyloris
_
Annual Report 2022
p. 120
p. 121
28.4
TRANSACTIONS WITH THE BOARD
OF DIRECTORS (NON-EXECUTIVE
DIRECTORS)
As of 31 December 2022, non-executive members of
the Board of directors are:
•
Stefan Yee, Chairman
•
Leon Van Rompay
•
Marc Foidart
•
Carolyn Myers
•
James Gale
•
Chris Buyse
The table below presents the compensation of all non-
executive members of Board of directors by type of
compensation:
(in € thousand)
December
31, 2022
December
31, 2021
Board fees
110
110
Share-based payments
30
58
Total
140
168
At 31 December 2021, there were outstanding
trade payables related to transactions with the non-
executive members of the Board of directors:
(in € thousand)
December
31, 2022
December
31, 2021
Board fees
0
40
Total
0
40
As of 31 December 2022, non-executive members of
the Board of directors owned the following securities
of the Company:
Shares
Warrants
Number (#)
Pct. (%)
Number (#)
Pct. (%)
Stefan Yee
-
-
100,000
15.76%
Leon Van
Rompay
-
-
-
Marc Foidart
-
-
-
Carolyn Myers
-
-
-
James Gale
-
-
-
Chris Buysse
-
-
-
Total
-
-
100,000
15.76%
29.
EVENTS AFTER THE END OF THE
REPORTING PERIOD
None.
30.
AUDIT FEES
During 2022, the statutory auditor provided services
for the group Hyloris which fees were as follows:
(in € thousand)
December
31, 2022
Audit services
82
Audit related services – legal engagements
15
Tax Services
18
Total
115
ABBREVIATED STATUTORY FINANCIAL STATEMENTS
OF HYLORIS PHARMACEUTICALS SA
The following information is extracted from the separate
standalone annual accounts of Hyloris Pharmaceuticals
SA (“the Company”) and is included as required by article
3:17 of the Belgian Company and Association Code.
The statutory auditor’s report is unqualified and
certifies that the standalone annual accounts of Hyloris
Pharmaceuticals SA prepared in accordance with the
financial reporting framework applicable in Belgium
for the year ended December 31, 2022 give a true
and fair view of the Company’s equity and financial
position as at December 31, 2022 and of its financial
performance for the year then ended in accordance with
the financial reporting framework applicable in Belgium.
The standalone financial statements, together with the
annual report of the Board of Directors to the general
meeting of shareholders as well as the auditors’ report,
will be filed with the National Bank of Belgium within the
legal deadline.
These documents are also available on request,
addressed to:
Hyloris Pharmaceuticals SA
Boulevard Patience et Beaujonc, N°3/1, 4000 Liège,
Belgium
Statement of Financial Position
(in €)
2022
2021
ASSETS
FIXED ASSETS
76,374,779
57,264,376
Intangible ﬁxed assets
112,655
86,861
Tangible ﬁxed assets
Financial ﬁxed assets
76,262,124
57,177,515
Afﬁliated companies - Participations
73.161.002
44,944,782
Afﬁliated companies - Receivables
2,101,122
12,232,733
Investment
1,000,000
-
CURRENT ASSETS
41.456,011
48,534,248
Receivables over one year
656,291
1,681,613
Trade receivables
845,000
Others amounts receivable
656,291
836,613
Amounts receivable within one year
3,893,442
3,378,508
Trade receivables
2,958,075
2,432,586
Others amounts receivables
935,367
945,922
VIII. Cash Investment
30,000,000
20,000,000
IX. Cash at bank and in hand
4,589,023
21,689,562
X. Deferred charges and accrued income
2,317,255
1,784,565
TOTAL ASSETS
117,830,790
105,798,624
CAPITAL AND RESERVES
106,320,976
89,392,780
Capital
140,002
129,163
Share Premium
121,513,447
103,692,645
Reserves
5,000
5,000
Accumulated proﬁts (losses)
(15,337,473)
(14,434,028)
PROVISIONS AND DEFERRED TAXES
CREDITORS
11,509,814
16,405,844
Amounts payable after more than one year
300,000
300,000
Other ﬁnancial loans
Other debts
300,000
300,000
IX. Amounts payable within one year
11,153,196
14,611,123
Current portion of amounts payable after one year
-
7,119,852
Other ﬁnancial loans
6,633,479
724,821
Suppliers
1,291,575
3,177,696
Taxes, remuneration and social charges
28,142
388,754
Other debts
3,200,000
3,200,000
X. Accrued charges and deferred income
56,618
1,494,721
TOTAL LIABILITIES
117,830,790
105,798,624
Hyloris
_
Annual Report 2022
p. 122
p. 123
Income Statement
(in €)
2022
2021
Operating income
1,249,949
3,151,939
Turnover
1,204,885
2,780,255
Other operating income
45,064
371,684
Operating charges
(3,750,126)
(10,765,549)
Services and other goods
(3,675,309)
(4,990,874)
Other operating charges (-)
(5,219)
(4,670)
Remunerations, social charges and pensions
69.598
-
Non-recurring operating expenses
-
(5,770,005)
Operating proﬁt (loss)
(2,500,177)
(7,613,610)
Financial income
1,928,732
545,677
Income from ﬁnancial ﬁxed assets
363,784
368,535
Other ﬁnancial income
1,564,948
177,142
Financial charges (-)
(315,341)
(310,665)
Interest on ﬁnancial debts
(286,159)
(285,846)
Other ﬁnancial charges
(29,182)
(24,819)
Proﬁt (Loss) for the period before taxes (-)
(886,786)
(7,378,598)
Income taxes (-)
(16,659)
(306,299)
Proﬁt (loss) for the period available for appropriation
(903,445)
(7,684,897)
Statutory notes
Statement of ﬁnancial ﬁxed assets
(in €)
2022
2021
Afﬁliated companies - Participations
Acquisition value at the end of the preceding period
44,944,782
-
Movements during the period
Acquisitions, included produced ﬁxed assets
28,216,220
5,770,000
Acquisition value at the end of the period
73,161,002
44,944,782
Depreciation and amounts written down at end of the preceding period
Movements during the period
Recorded
Depreciation and amounts written down at end of the period
Net book value at the end of the period
73,161,002
44,944,782
Afﬁliated companies - Receivables
Net book value at the end of preceding period
12,232,733
Movements during the period
Additions
19,328,396
3,349,045
Reimbursement
(29,460,007)
(12,877,359)
Net book value at the end of the period
2,101,122
12,232,733
Company
Participation held
Data extracted from the last available annual accounts
Nature
Direct
By
subsidiaries
Annual
Accounts at
Currency
Code
Capital
Net Proﬁt or
Loss
Number
%
%
Hyloris
Developments SA
12/31/2022
EUR
19,922,424
-9,643,601
Boulevard Patience
et Beaujonc 3
4000 Liège
Belgium
542,737,368
Shares
74,066
99.99%
0%
RTU Pharma SA
12/31/2022
EUR
(1,569,387)
(148,510)
Boulevard Patience
et Beaujonc 3
4000 Liège
Belgium
669,738,676
Shares
62,000
100 %
0%
Dermax SA
12/31/2022
EUR
3,048,235
276,823
Boulevard Patience
et Beaujonc 3
4000 Liège
Belgium
667,730,677
Shares
65,875
100%
0%
Purna Female
Healthcare BV
12/31/2022
EUR
4,494,812
(651,101)
Schaldestraat 31
2880 Bornem
Belgium
762,693,578
Shares
840
20%
0%
Deferred Charges and accrued income
(in €)
2022
Deferred Charges and accrued income
Interest earned on receivables from related
companies
1,946,679
Income and expenses of exceptional size or impact
(in €)
2022
2021
Non-recurring income
Non-recurring expenses
-
5,770,005
Other non-recurring expenses
(Renegotiation and
unwinding Alter Pharma)
-
5,770,005
Other non-recurring expenses
(Cost of Capital transactions)
Statement of Amounts Payable
(in €)
2022
Analysis by current position of amounts
initially payable after more than one year,
maturing in 1 year
Other debts (Shareholder loans)
-
Analysis by current position of amounts
initially payable after more than one year,
maturing in max 5 years
Other debts
300,000
Tax, wage and social amounts payable
Taxes payable
8,309
Other salary and social debts
19,833
Accrued charges and deferred income
Accrued FX forward contracts
51,832
Accrued bonuses
4,390
Hyloris
_
Annual Report 2022
p. 124
p. 125
Auditor’s
report
Statutory auditor’s report to the general meeting of
Hyloris
Pharmaceuticals SA
on the consolidated financial statements as of
and for the year ended
31 December 2022
In the context of the statutory audit of the consolidated financial statements of
Hyloris Pharmaceuticals SA (“the Company”) and its subsidiaries (jointly “the
Group”), we provide you with our statutory auditor’s report. This includes our
report on the consolidated financial statements for the year ended 31 December
2022, as well as other legal and regulatory requirements. Our report is one and
indivisible.
We were appointed as statutory auditor by the general meeting of 14 June 2022,
in accordance with the proposal of the board of directors issued on the
recommendation of the audit committee. Our mandate will expire on the date of
the general meeting deliberating on the annual accounts for the year ended 31
December 2024. We have performed the statutory audit of the consolidated
financial statements of the Group for 4 consecutive financial years.
Report on the consolidated financial statements
Unqualified opinion
We have audited the consolidated financial statements of the Group as of and
for the year ended 31 December 2022, prepared in accordance with IFRS
Standards as issued by the International Accounting Standards Board and as
adopted by the European Union, and with the legal and regulatory requirements
applicable in Belgium. These consolidated financial statements comprise the
consolidated statement of financial position as at 31 December 2022, the
consolidated statements of profit or loss and other comprehensive income,
changes in equity and cash flows for the year then ended and notes, comprising
a summary of significant accounting policies and other explanatory information.
The total of the consolidated statement of financial position amounts to EUR
61.864.000 and the consolidated statement of profit or loss and other
comprehensive income shows a loss for the year of EUR 10.770.000.
In our opinion, the consolidated financial statements give a true and fair view of
the Group’s equity and financial position as at 31 December 2022 and of its
consolidated financial performance and its consolidated cash flows for the year
then ended in accordance with IFRS Standards as issued by the International
Accounting Standards Board and as adopted by the European Union, and with
the legal and regulatory requirements applicable in Belgium.
Hyloris
_
Annual Report 2022
p. 126
p. 127
Statutory auditor’s report to the general meeting of
Hyloris Pharmaceuticals SA on the
consolidated financial statements as of and for the year ended 31 December 2022
Basis for our unqualified opinion
We conducted our audit in accordance with International Standards on Auditing
(“ISAs”) as adopted in Belgium. In addition, we have applied the ISAs as issued
by the IAASB and applicable for the current accounting year while these have
not been adopted in Belgium yet. Our responsibilities under those standards are
further described in the “Statutory auditors’ responsibility for the audit of the
consolidated financial statements” section of our report. We have complied with
the ethical requirements that are relevant to our audit of the consolidated
financial statements in Belgium, including the independence requirements.
We have obtained from the board of directors and the Company’s officials the
explanations and information necessary for performing our audit.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our opinion.
Key audit matter
Key audit matters are those matters that, in our professional judgement, were of
most significance in our audit of the consolidated financial statements of the
current period. These matters were addressed in the context of our audit of the
consolidated financial statements as a whole, and in forming our opinion
thereon, and we do not provide a separate opinion on these matters.
Impairment of intangible assets
We refer to note 7 of the consolidated financial statements.
•
Description
The Group has recognized individual intangible assets (EUR 3.607.000)
relating to development costs, asset purchases and in-licensing as at
31 December 2022. These intangible assets represent products candidates
that are not yet available for use. In accordance with IAS 36
Impairment of
Assets
, an impairment testing is required annually for intangible assets not
yet available for use. As a result, the Group assesses whether individual
intangible assets shall be impaired or not. Each individual intangible asset
generates cash inflows that are largely independent of those from other
assets. An impairment loss is recognized to the extent that the carrying
amount of an individual intangible asset exceeds its recoverable amount,
which is its value-in-use.
We have identified that the impairment of intangible assets was a key audit
matter due to the level of judgement required by Management in developing
a model to determine the value-in-use of each and every product candidate,
as well as for the potential significant impact of impairment losses on the
consolidated financial statements.
Statutory auditor’s report to the general meeting of
Hyloris Pharmaceuticals SA on the
consolidated financial statements as of and for the year ended 31 December 2022
•
Our audit procedures
We performed the following procedures:
-
We evaluated the process by which management’s business plan per
product candidate was prepared;
-
We inspected relevant internal information such as board of directors’
minutes and project status minutes prepared by Management and
external parties engaged in the development phases of the product
candidates;
-
We obtained the annual impairment test and analyzed the consistency of
the underlying data used in the impairment test with data from the
business plan approved by the board of directors;
-
We evaluated the appropriateness of Management’s assessment for the
determination of the value-in-use per product candidate, including the
assumptions used in the discounted cash flow model and the
mathematical accuracy of this model;
-
We assessed whether any matters arising after the end of the reporting
period were relevant to the impairment testing and management’s
measurement of the value-in-use supporting the carrying value of these
intangible assets; and
-
We assessed the appropriateness of the disclosures in respect of
impairment testing, which are included in note 7 of the consolidated
financial statements.
Board of directors’ responsibilities for the preparation of the consolidated
financial statements
The board of directors is responsible for the preparation of these consolidated
financial statements that give a true and fair view in accordance with IFRS
Standards as issued by the International Accounting Standards Board and as
adopted by the European Union, and with the legal and regulatory requirements
applicable in Belgium, and for such internal control as board of directors
determines, is necessary to enable the preparation of consolidated financial
statements that are free from material misstatement, whether due to fraud or
error.
In preparing the consolidated financial statements, the board of directors is
responsible for assessing the Group’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 the board of directors either intends to
liquidate the Group or to cease operations, or has no realistic alternative but to
do so.
Hyloris
_
Annual Report 2022
p. 128
p. 129
Statutory auditor’s report to the general meeting of
Hyloris Pharmaceuticals SA on the
consolidated financial statements as of and for the year ended 31 December 2022
Statutory auditor’s responsibilities for the audit of the consolidated
financial statements
Our objectives are to obtain reasonable assurance as to whether the
consolidated 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. Reasonable assurance is a high level of assurance but is
not a guarantee that an audit conducted in accordance with ISAs will always
detect a material misstatement when it exists. Misstatements can arise from
fraud or error and are considered material if, individually or in the aggregate,
they could reasonably be expected to influence the economic decisions of the
users taken on the basis of these consolidated financial statements.
When performing our audit, we comply with the legal, regulatory and
professional requirements applicable to audits of the consolidated financial
statements in Belgium. The scope of the statutory audit of the consolidated
financial statements does not extend to providing assurance on the future
viability of the Group nor on the efficiency or effectivity of how the board of
directors has conducted or will conduct the business of the Group. Our
responsibilities regarding the going concern basis of accounting applied by the
board of directors are described below.
As part of an audit in accordance with ISAs, we exercise professional judgement
and maintain professional skepticism throughout the audit. We also perform the
following procedures:
•
Identify and assess the risks of material misstatement of the consolidated
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. 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, misrepresentations, or the override of internal control;
•
Obtain an understanding of internal controls 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
internal control;
•
Evaluate the appropriateness of accounting policies used and the
reasonableness of accounting estimates and related disclosures made by
board of directors;
•
Conclude on the appropriateness of board of directors’ 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 ability to continue as a going concern.
Statutory auditor’s report to the general meeting of
Hyloris Pharmaceuticals SA on the
consolidated financial statements as of and for the year ended 31 December 2022
If we conclude that a material uncertainty exists, we are required to draw
attention in our auditors’ report to the related disclosures in the consolidated
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 auditors’ report. However, future events or conditions may cause
the Group to cease to continue as a going concern;
•
Evaluate the overall presentation, structure and content of the consolidated
financial statements, including the disclosures, and whether the consolidated
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 consolidated financial statements. We are responsible for
the direction, supervision and performance of the group audit. We remain
solely responsible for our audit opinion.
We communicate with the audit committee 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.
We also provide the audit committee 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.
For the matters communicated with the audit committee, we determine those
matters that were of most significance in the audit of the consolidated 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.
Other legal and regulatory requirements
Responsibilities of the Board of directors
The board of directors is responsible for the preparation and the content of the
board of directors’ annual report on the consolidated financial statements and
the other information included in the annual report.
Statutory auditor’s responsibilities
In the context of our engagement and in accordance with the Belgian standard
which is complementary to the International Standards on Auditing as applicable
in Belgium, our responsibility is to verify, in all material respects, the board of
directors’ annual report on the consolidated financial statements and the other
information included in the annual report, and to report on these matters.
Hyloris
_
Annual Report 2022
p. 130
p. 131
Statutory auditor’s report to the general meeting of
Hyloris Pharmaceuticals SA on the
consolidated financial statements as of and for the year ended 31 December 2022
Aspects concerning the board of directors’ annual report on the
consolidated financial statements and other information included in the
annual report
Based on specific work performed on the
board of directors’ annual report on the
consolidated financial statements
, we are of the opinion that this report is
consistent with the consolidated financial statements for the same period and
has been prepared in accordance with article 3:32 of the Companies’
and
Associations’
Code.
In the context of our audit of the consolidated financial statements, we are also
responsible for considering, in particular based on the knowledge gained
throughout the audit, whether the
board of directors’ annual report on the
consolidated financial statements
and other information included in the annual
report:
•
Business overview;
•
Key figures; and
•
Corporate Governance.
contain material misstatements, or information that is incorrectly stated or
misleading. In the context of the procedures carried out, we did not identify any
material misstatements that we have to report to you.
Information about the independence
Our audit firm and our network have not performed any engagement which is
incompatible with the statutory audit of the consolidated accounts and our audit
firm remained independent of the Group during the term of our mandate.
The fees for the additional engagements which are compatible with the statutory
audit referred to in article 3:65 of the Companies’ and Associations’ Code were
correctly stated and disclosed in the notes to the consolidated financial
statements.
European Single Electronic Format (ESEF)
In
accordance
with the draft standard on the audit of compliance of the Financial
Statements with the European Single Electronic Format (hereafter “ESEF”), we
have audited as well whether the ESEF-format is in accordance with the
regulatory technical standards as laid down in the EU Delegated Regulation nr.
2019/815 of 17 December 2018 (hereafter “Delegated Regulation”).
The Board of Directors is responsible for the preparation, in accordance with the
ESEF requirements, of the consolidated financial statements in the form of an
electronic file in ESEF format (hereafter “digital consolidated financial
statements”) included in the annual financial report.
Statutory auditor’s report to the general meeting of
Hyloris Pharmaceuticals SA on the
consolidated financial statements as of and for the year ended 31 December 2022
It is our responsibility to obtain sufficient and appropriate information to conclude
whether the format and the tagging of
the
digital consolidated financial
statements comply, in all material respects, with the ESEF requirements under
the Delegated Regulation.
At the date of this report, we have not yet received the annual financial report
and the digital consolidated financial statements prepared by the Board of
Directors. We have reminded the Board of Directors of their legal responsibility
to provide the documents to the statutory auditor and the shareholders within the
deadlines stipulated in the Belgian Companies’ and Associations’ Code. As a
result, we were unable to conclude
whether the format and the tagging of the
digital consolidated financial statements comply, in all material respects, with the
ESEF requirements under the Delegated Regulation.
Other aspect
This report is consistent with our additional report to the audit committee on the
basis of Article 11 of Regulation (EU) No 537/2014.
Zaventem, 28 April 2023
KPMG Bedrijfsrevisoren
- Réviseurs d’Entreprises
Statutory
Auditor
represented by
Olivier Declercq
Bedrijfsrevisor / Réviseur d’Entreprises
KPMG Bedrijfsrevisoren - KPMG Réviseurs d'Entreprises, a Belgian BV/SRL and
a member firm of the KPMG global organization of independent member firms
affiliated with KPMG International Limited, a private English company limited by
guarantee. All rights reserved.
Document Classification: KPMG Public
Zetel - Siège:
Luchthaven Brussel Nationaal 1K
B-1930 Zaventem
KPMG Bedrijfsrevisoren - KPMG
Réviseurs d'Entreprises BV/SRL
Ondernemingsnummer / Numéro
d’entreprise 0419.122.548
BTW - TVA BE 0419.122.548
RPR Brussel - RPM Bruxelles
IBAN : BE 95 0018 4771 0358
BIC : GEBABEBB
Hyloris
_
Annual Report 2022
p. 132
p. 133
Statutory auditor’s report to the general meeting of shareholders in
accordance with article 4 of the EU Transparency Directive,
regarding the compliance of the consolidated financial statements
in the form of an electronic file of
Hyloris Pharmaceuticals NV as of
December 31, 2022 with the ESEF (European Single Electronic
Format) requirements as per the Delegated Regulation (EU)
201
8/815
Engagement
In accordance with article 4 of the EU Transparency Directive, the statutory
auditor is required to report whether the format of and the tagging of information
in the consolidated financial statements in the form of an electronic file (hereafter
“digital consolidated financial statements”) is in compliance with the ESEF
requirements and the ESEF technical standards (ESEF Regulatory Technical
Standard, “RTS”) as laid down in the European Delegated Regulation nr.
2019/815 of 17 December 2018 (hereafter “Delegated Regulation”) applicable
to the digital consolidated financial statements as per December 31, 2022.
Board of directors’ responsibilities
The board of directors is responsible for preparing the digital consolidated
financial statements included in the annual financial report in accordance with
the ESEF requirements and taxonomy applicable to the digital consolidated
financial statements as per December 31, 2022.
This responsibility includes the selection and application of the most appropriate
methods to prepare the digital consolidated financial statements. Moreover, the
responsibility of the board of directors also includes the design, implementation
and maintenance of systems and processes, that are relevant to prepare the
digital consolidated financial statements that are free of material misstatement
whether due to fraud or error. The board of directors needs to ensure that the
digital consolidated financial statements are consistent with the consolidated
financial statements presented in human-readable format.
Responsibilities of the statutory auditor
Based on our work performed, it is our responsibility to conclude whether the
XBRL tagging of information in the digital consolidated financial statements of
Hyloris Pharmaceuticals SA (“the Company”) as per December 31, 2022 are, in
all material respects, prepared in compliance with the ESEF requirements.
We conducted our procedures in accordance with International Standard on
Assurance Engagements (ISAE) 3000 (Revised), “Assurance Engagements
Other than Audits or Reviews of Historical Financial Information”. This standard
prescribes that we comply with the ethical requirements and that we plan and
perform our procedures to obtain reasonable assurance that nothing has been
brought to our attention that leads us to conclude that the digital consolidated
Statutory auditor’s report to the general meeting of shareholders in accordance with article 4 of
the EU Transparency Directive, regarding the compliance of the consolidated financial
statements in
the form of an electronic file of Hyloris Pharmaceuticals SA as of December 31,
2022 with the ESEF (European Single Electronic Format) requirements as per the Delegated
Regulation (EU) 2019/815
financial statements have not been prepared in all material respects in
accordance with the ESEF requirements applied by the Company.
The procedures selected depend on our judgment, including the assessment of
the risks of material misstatements in the digital consolidated financial
statements and in the declarations of the board of directors. The set of
procedures performed by us included amongst others the following procedures:
•
Verifying whether the digital consolidated financial statements in XHTML
format were prepared in accordance with article 3 of the Delegated
Regulation;
•
Obtaining an understanding of the Company’s processes for preparing and
tagging of its digital consolidated financial statements and of the internal
control measures relevant to this engagement, 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 internal control, that are
designed to provide reasonable assurance whether the XBRL tagging of the
digital consolidated financial statements comply, in all material respects, with
the ESEF technical requirements;
•
Reconciling the tagged data with the audited consolidated financial
statements of the Company as per December 31, 2022;
•
Evaluating the completeness and fairness of the Issuer’s applied tagging of
the digital consolidated financial statements;
•
Evaluating the appropriateness of the Company’s use of iXBRL elements
selected from the ESEF taxonomy and the evaluating the establishment of
the extension taxonomy.
Our independence and internal quality control
We have complied with the independence and other ethical requirements of the
Belgian legislation and regulations in force in Belgium that are applicable in the
context of this engagement. These are based on the fundamental principles of
integrity, objectivity, professional competence and due care, confidentiality and
professional behavior.
Our firm applies International Standard on Quality Control Management (ISQM)
1 which requires the firm to design, implement and operate a and accordingly
maintains a comprehensive system of quality control management including
documented policies or procedures regarding compliance with ethical
requirements, professional standards and applicable legal and regulatory
requirements.
Hyloris
_
Annual Report 2022
p. 134
p. 135
Statutory auditor’s report to the general meeting of shareholders in accordance with article 4 of
the EU Transparency Directive, regarding the compliance of the consolidated financial
statements in
the form of an electronic file of Hyloris Pharmaceuticals SA as of December 31,
2022 with the ESEF (European Single Electronic Format) requirements as per the Delegated
Regulation (EU) 2019/815
Conclusion
In our opinion, based on our work performed, the XBRL tagging of information
in the digital consolidated financial statements of the Company as per December
31, 2022 are, in all material respects, prepared in compliance with the ESEF
requirements and taxonomy (especially the applicable dispositions as laid down
in the ESEF technical standards).
In this report we do not express an audit opinion, review conclusion or any other
assurance conclusion on the consolidated financial statements as such. Our
audit opinion relating to the consolidated financial statements is set out in our
statutory auditor’s report dated April 28, 2023.
Other matter
The consolidated financial statements of Hyloris Pharmaceuticals SA and its
subsidiaries (together ‘the Group) have been prepared by the board of directors
of the Issuer on April 26, 2023, and a statutory audit has been performed.
The consolidated financial statements of the Company have been prepared by
the Board of Directors of the Company on April 26, 2023 and have been subject
to a statutory audit. Our statutory auditor’s report (signed on April 28, 2023)
includes an unqualified opinion on the true and fair view of the Group’s equity
and financial position as at December 31, 2022 and of its consolidated financial
performance and its consolidated cash flows for the year then ended prepared
in accordance with IFRS Standards as issued by the International Accounting
Standards Board and adopted by the European Union, and with the legal and
regulatory requirements applicable in Belgium.
Liège, May 22, 2023
KPMG Bedrijfsrevisoren
- Réviseurs d’Entreprises
Statutory Auditor
represented by
Olivier Declercq
Bedrijfsrevisor / Réviseur d’Entreprises
Hyloris
_
Annual Report 2022
p. 136
p. 137
Glossary &
other infos
Glossary
...............................................................................................................................................................
138
Financial calendar
......................................................................................................................................
140
Contact
..................................................................................................................................................................
140
Disclaimer and other information
..................................................................................................
141
Hyloris
_
Annual Report 2022
p. 138
p. 139
GLOSSARY OF TERMS
Active pharmaceutical ingredient (API)
A substance used in a ﬁnished pharmaceutical
Atherosclerosis
The build-up of fats, cholesterol and other substances in and on the artery walls.
This build-up is called plaque, which can cause the arteries to narrow, blocking
blood ﬂow
Atrial Fibrillation (AF)
An abnormal heart rhythm (arrhythmia) characterised by the rapid and irregular
beating of the atrial chambers of the heart. It often begins as short periods of
abnormal beating, which become longer or continuous over time
Attention Deﬁcit Hyperactivity Disorder
(ADHD)
One of the most common neurodevelopmental disorders of childhood. It is usually
ﬁrst diagnosed in childhood and often lasts into adulthood.
Children with ADHD may have trouble paying attention, controlling impulsive
behaviours (may act without thinking about what the result will be), or be overly
active
Bioavailability
Assessment of the amount of product candidate that reaches the body’s systemic
circulation after administration
Cardiovascular (CV)
A class of diseases that involves the heart or blood vessels
Chemistry, Manufacturing and Controls
(CMC)
To appropriately manufacture a pharmaceutical or biologic, speciﬁc manufacturing
processes, product characteristics, and product testing must be deﬁned in order to
ensure that the product is safe, effective and consistent between batches. These
activities are known as CMC
Dose-range ﬁnding study
Phase 2 clinical study exploring the balance between efﬁcacy and safety among
various doses of treatment in patients. Results are used to determine doses for later
studies
Food and Drug Administration (FDA)
The agency responsible for protecting and promoting public health and in charge of
American market approval of new medications
FSMA
The Belgian market authority: Financial Services and Markets Authority, Or Autoriteit
voor Financiele Diensten en Markten; Autorité des Services et Marchés Financiers
Full-Time Equivalent (FTE)
A way to measure an employee’s involvement in a project. For example, an FTE of
1.0 means that the equivalent work of one full-time worker was used on the project
HY-004
Previously known as HY-REF-004, a liquid formulation of an established product for
use following a speciﬁc dental procedure, to address a non- disclosed acute issue or
possible procedural related complications
HY-016
Previously known as HY-EMP-016, a high barrier generic of an off-patent reference
product currently sold in the U.S. without generic competition
HY-029
Previously known as HY-REF-029, a liquid formulation of an existing antiviral
drug that is currently only available in oral solid form to treat a non-disclosed viral
infection
HY-038
Previously known as HY-REF-038, a preﬁlled syringe of a commonly used product to
treat a speciﬁc, non-disclosed deﬁciency
HY-073 and HY-074
Previously known as HY-CVS-073, HY-CVS-074, IV formulations of oral antiplatelet
drugs, offering faster onset of action in patients suffering from coronary heart
disease
HY-075
Previously known as HY-CVS-075, a liquid formulation of a commonly used drug for
the treatment of coronary heart disease requiring frequent dose adjustments
Initial Public Offering (IPO)
Refers to the process of offering shares of a private corporation to the public in a
new stock issuance. A public share issuance allows a company to raise capital
from public investors. The transition from a private to a public company can be an
important time for private investors to fully realise gains from their investment as it
typically includes share premiums for current private investors. Meanwhile, it also
allows public investors to participate in the offering.
Intellectual Property (IP)
Creations of the mind that have commercial value and are protected or protectable,
including by patents, trademarks or copyrights
Intramuscular (IM)
A technique used to deliver a medication deep into the muscles. This allows the
medication or vaccine to be absorbed into the bloodstream quickly
Intravenous (IV)
Some medications must be given by an IV injection or infusion, meaning these
medications are administered directly into the veins using a needle or tube
Key Opinion Leader (KOL)
An inﬂuential physician or researcher who is held in high esteem by their colleagues
Investigational New Drug (IND)
A drug that is ready for clinical trials in humans. When a drug reaches this point,
the drug developer submits an application to get the consent of the Food and Drug
Administration (FDA) to begin these trials
In vivo
Animal models of disease
Net Present Value (NPV)
A tool of capital budgeting to analyse the proﬁtability of a project or investment. It is
calculated by taking the difference between the present value of cash inﬂows and
present value of cash outﬂows over a certain period
New Chemical Entity (NCE)
A compound, without any precedent among the regulated and approved drug
products
Pharmacokinetics (PK)
The study of drug absorption, distribution, metabolism, and excretion. A
fundamental concept in pharmacokinetics is drug clearance, i.e., elimination of drugs
from the body, analogous to the concept of creatinine clearance
Phase 1 studies
First stage of clinical testing of an investigational drug designed to assess the safety
and tolerability, pharmacokinetics of a drug, usually in a small number of healthy
human volunteers
Phase 2 studies
Second stage of clinical testing of a investigational drug, usually performed in <
several hundreds patients in order to determine efﬁcacy, tolerability and drug dose
Phase 3 studies
Large clinical studies, usually conducted in hundred (and in some indications,
thousand) patients to gain a deﬁnitive understanding of the efﬁcacy and tolerability
of the drug candidate – serves as a basis for approval
Pivotal studies
Registrational clinical studies
QT interval
A measurement made on an electrocardiogram used to assess some of the
electrical properties of the heart. It is calculated as the time from the start of the Q
wave to the end of the T wave, and approximates to the time taken from when the
cardiac ventricles start to contract to when they ﬁnish relaxing. An abnormally long
or abnormally short QT interval is associated with an increased risk of developing
abnormal heart rhythms and sudden cardiac death
Ready-to use (RTU)
Pre-diluted medicines for intravenous use, known as "ready to use" preparations,
help to reduce the amount of errors associated with the preparation and
administration of medicines
Reference listed pharmaceutical drug
(RLD)
An approved drug product to which new generic versions are compared to show
that they are bioequivalent
Return on Investment (ROI)
A performance measure used to evaluate the efﬁciency or proﬁtability of an
investment or compare the efﬁciency of a number of different investments. ROI tries
to directly measure the amount of return on a particular investment, relative to the
investment’s cost
Torsade de Pointes
An uncommon and distinctive form of polymorphic ventricular tachycardia (VT)
characterised by a gradual change in the amplitude and twisting of the QRS
complexes around the isoelectric line. Torsade de pointes, often referred to as
torsade, is associated with a prolonged QT interval, which may be congenital or
acquired. Torsade usually terminates spontaneously but frequently recurs and may
degenerate into ventricular ﬁbrillation
Visual Analog Scale Pain (VAS) Score
a validated, subjective measure for acute and chronic pain. Scores are recorded by
making a handwritten mark on a 10-cm line that represents a continuum between
“no pain” and “worst pain”
FINANCIAL CALENDAR
June 13, 2023
General Assembly
September 7
st
, 2023
Half-year results 2023
CONTACT
Hyloris Pharmaceuticals SA
Boulevard Patience et Beaujonc N°3/1
4000 Liège, Belgium
Stijn Van Rompay
CEO Hyloris
Jean-Luc Vandebroek
CFO Hyloris
Sven Watthy
Investor Relations
manager
: +32 (0)4 346 02 07
: investorrelations@hyloris.com
DISCLAIMER AND OTHER INFORMATION
This report contains all information
required by Belgian law.
Hyloris Pharmaceuticals SA is a
limited liability company organised
under the laws of Belgium and has
its registered office at
Boulevard Patience et Beaujonc
N°3/1, 4000 Liège.
Throughout this report, the term
“Hyloris Pharmaceuticals” refers
solely to the non-consolidated
Belgian company and references
to “we,” “our,” “the group” or
“Hyloris”.
The Company has prepared its
Annual Report in English and
provided a French translation of
the Annual Report, in accordance
with Belgian laws. Hyloris is
responsible for the translation and
con- formity between the French
and English versions. In case of
inconsistency between the French
and the English versions, the
English version shall prevail.
This report, including the statutory
financial state- ments of Hyloris
Pharmaceuticals SA, is available
on the Company’s website,
www.hyloris.com.
Forward-Looking
Statements
Certain statements in this annual
report are “for- ward-looking
statements.” These forward-
looking statements can be
identified using forward-look-
ing terminology, including the
words “believes”, “estimates,”
“anticipates”, “expects”, “intends”,
“may”, “will”, “plans”, “continue”,
“ongoing”, “potential”, “predict”,
“project”, “target”, “seek” or
“should”, and include statements
the Company makes concerning
the intended results of its strategy.
These statements relate to
future events or the Company’s
future financial performance and
involve known and unknown
risks, uncertainties, and other
factors, many of which are
beyond the Company’s control,
that may cause the actual results,
levels of activity, performance or
achievements of the Company
or its industry to be materially
different from those expressed
or implied by any forward-look-
ing statements. The Company
undertakes no obli- gation to
publicly update or revise forward-
looking statements, except as
may be required by law. You
should not place undue reliance
on forward-looking statements.
Certain monetary amounts and
other figures included in this
annual report have been subject to
rounding adjustments. Accordingly,
any discrepancies in any tables
between the totals and the sums
of amounts listed are due to
rounding.
Hyloris
_
Annual Report 2022
p. 142
p. 143
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Hyloris Pharmaceuticals SA
Boulevard Patience
et Beaujonc N°3/1
4000 Liège, Belgium
https://hyloris.com/
CREATED BY
GRAND OUEST