ANNUAL REPORT 2014
Index 3 At a Glance 6 Letter to Shareholders 9 Corporate Governance 39 Compensation Report 49 Financial Statements 2014 50 Financial performance and results of operations (IFRS) 54 Consolidated financial statements and notes (IFRS) 104 116 117 Statutory financial statements and notes Glossary Legal Disclaimer
Cytos Biotechnology Ltd At a Glance 4
Cytos Biotechnology Ltd is a Swiss public biopharmaceutical company domiciled in Schlieren (Zürich), Switzerland and is listed according to the Main Standard on the SIX Swiss Exchange Ltd under the symbol CYTN. Contact addresses Stock exchange information Listing SIX Swiss Exchange Registered shares SIX:CYTN; Swiss Security No.: 1 102 521 Convertible Bond due in 2015 SIX:CYT07; Swiss Security No.: 2 906 073 Cytos Biotechnology Ltd Wagistrasse 25 8952 Schlieren (Zurich) Switzerland Phone +41 44 733 47 47 Fax +41 44 733 47 40 Email: info@cytos.com Media relations Christian Itin, PhD Chairman & Chief Executive Officer Phone +41 44 733 47 70 Fax +41 44 733 47 07 Email: christian.itin@cytos.com Share register Aktienregister Cytos Biotechnology Ltd c/o Nimbus AG Investor relations Postfach Harry Welten, MBA 8866 Ziegelbrücke Chief Financial Officer Switzerland Phone +41 44 733 46 46 Phone +41 55 617 37 20 Fax +41 44 733 47 04 Fax +41 55 617 37 38 Email: harry.welten@cytos.com Email: cytos@nimbus.ch Cytos on the internet www.cytos.com Annual and quarterly reports on the website www.cytos.com Investor Relations Reports & Presentations 5
Letter to Shareholders 6
Dear Shareholder We have lived through a challenging 2014 which was marked by the negative outcome of the P2b clinical study with CYT003 in April 2014 and the necessary restructuring of the company in the wake of it. The fundamental issue the company was dealing with was the high level of debt from the 2007 bond and the additional debt that the company had to accept in the 2012 refinancing. While the immediate actions were focused on minimizing cash out flow and preservation of the key assets of the company, the later part of the year and in particular this year have been directed at addressing the debt of the company and creating upside from the company s asset base. With that look back let us update you on the substantial progress made since the beginning of 2015. On January 6, 2015, an exclusive license agreement was executed with OnCore Biopharma, Inc. (now merged with Tekmira, a public listed company on Nasdaq) granting access to Cytos clinically validated virus like particle platform for the use in the treatment and prevention of hepatitis B viral infections. Cytos also granted an option to OnCore Bio pharma for the treatment of further viral diseases other than influenza. The agreement will become effective with the achievement of certain closing conditions, including a successful debt restructuring of Cytos. For the first product in each of six possible product categories in the field of Hepatitis B that may be developed under the agreement, Cytos may receive up to USD 67 million in development milestones, or a maximum of USD 402 million if one product in each product category is developed. In addition, Cytos is eligible to receive commercial milestone payments of up to USD 120 million upon achievement of certain sales levels, and up to double digit royalties on net sales from any successfully developed product. In our continued effort to eliminate Cytos debt burden, we have achieved key steps to date. First, the bondholders meeting held in January 2015 approved the conversion of their bonds into shares with an 84% majority of all bond holders voting in favor of the conversion. The second step required was an approval by the Higher Court of the Canton of Zurich which was obtained in March 2015. The appeal period with the Supreme Court will end by the end of April 2015 and unless an appeal is filed the application becomes final and binding soon thereafter. In March 2015, the shareholders have also approved the capital needed to create the shares used for the exchange of the bonds. As a consequence, the bonds can be exchanged into shares in the first half of May 2015 if no appeal is filed. With this conversion, about half of the overall debt will be eliminated. With regards to the second half of the debt: the non subordinated portion of CHF 14.2 million was repaid at maturity in February, 2015. Further, CHF 2 million of the claims of the loan note holders were eliminated by converting the same amount into 1 600 convertible bonds. As a result, subordinated residual claims of CHF 6 million remain outstanding. We are currently in discussions with the loan note holders regarding the settlement of theses residual claims. As soon as a final settlement agreement has been signed, we will inform you accordingly. Such an agreement would support the continued going concern of Cytos and in turn would allow Cytos to potentially acquire a privately held company with intact projects and/or commercial products using stock. Such a combined company would have an intact asset base and potential for value creation for shareholders. We would like to thank you, our creditors and our employees for your trust and support without which we would not have been able to advance thus far. Best regards Cytos Biotechnology Ltd. Christian Itin, PhD Chairman & Chief Executive Officer Harry Welten, MBA Chief Financial Officer 7
Corporate Governance 9
Cytos Biotechnology Ltd Corporate Governance The Articles of Association (the Articles ) of Cytos Biotechnology Ltd can be viewed at www.cytos.com under Investor Relations Corporate Governance. Link: http://www.cytos.com/corporate-governance/ The information published below conforms to the Corporate Governance Directive ( DCG ) of the SIX Swiss Exchange ( SIX ). The numbering of the subsections was made on the basis of the DCG. Group structure and shareholders (DCG 1) Group structure (DCG 1.1) With regard to its activities in biotechnology, the board of directors ( Board of Directors ) and the executive board ( Executive Board ) review the financial performance on an aggregate basis and manage the operations of Cytos Biotechnology Ltd (the Company ) as a single operating entity. Accordingly, the Company operates in one segment, which is the business of development and commercialization of products for human health care. Cytos Biotechnology Ltd, Schlieren, Switzerland, is listed according to the Main Standard on the SIX Swiss Exchange, Zurich, Switzerland. Security number 1 102 521 ISIN CH0011025217 Ticker symbol CYTN Market capitalization on December 31, 2014 CHF 7.02 million The Company is a corporation established under Swiss law with its registered office in Schlieren, Switzerland. As at December 31, 2014 the group consists of the parent company Cytos Biotechnology Ltd and two non-listed companies: Name Proteome Therapeutics GmbH, Singen, Germany BioSupport AG in Liquidation, Schlieren, Switzerland* Share capital (in thousands) Shareholding EUR 25 CHF 100 100% 33% * BioSupport AG will be liquidated in 2015 since its services are no longer required by Cytos. Preliminary excess cash of TCHF 80 has been paid to Cytos in 2014 and is accounted as accrued expenses. 10
Cytos Biotechnology Ltd Corporate Governance Significant shareholders (DCG 1.2) According to disclosure notifications filed with the Company to the SIX Swiss Exchange, each of the following shareholders held more than 3% of the share capital of the Company as of December 31, 2014: A group consisting of: venbio Global Strategic Fund L.P., Grand Cayman, Cayman Islands ultimately jointly controlled by: Corey Goodman, Marshall, CA, USA Paul Brooke, New York, NY, USA Robert Adelman, Hillsborough, CA, USA (Kurt von Emster, a former partner, and Paul Brooke also hold certain stock options on shares of Cytos Biotechnology Ltd) Amgen Investments Ltd., Hamilton, Bermuda ultimately controlled by: Amgen Inc., Wilmington, Delaware, USA (a publicly listed company and the ultimate parent company of the Amgen group of companies) Abingworth Bioventures V L.P., London, UK voting rights are exercised by Abingworth Bioventures V L.P. s investment manager: Abingworth LLP, London, UK (certain stock options on shares in the Company are held for the account of Abingworth LLP as the investment manager of Abingworth Bioventures V L.P., by Joseph Anderson, Surrey, UK) Abingworth Bioequities Master Fund Limited, Ugland House, Grand Cayman, Cayman Islands ultimately controlled by: Abingworth LLP, London, UK (together with Abingworth Bioventures V L.P., the Abingworth Funds ) Aisling Capital III, LP, New York, NY, USA ultimately controlled by: Aisling Capital Partners III, LLC, New York, NY, USA holds 0 voting shares (registered shares) with a current proportion of voting rights of 0%. holds 67.81% proportion of voting rights* based on financial instruments. HERCULIS Partners «Aries» Fund (IFM Independent Fund Management AG) Austrasse 9, 9490 Vaduz (Liechtenstein) holds 1 077 444 voting shares (registered shares) with a current proportion of voting rights of 3.53%. * The proportion of voting rights based on financial instruments is calculated pursuant to Art. 12 para. 2 of the Ordinance of the Swiss Financial Market Supervisory Authority on Stock Exchanges and Securities Trading [Verordnung der Eidgenössischen Finanzmarktaufsicht über die Börsen und den Effektenhandel (BEHV-FINMA)] on the basis of the entry in the commercial register. 11
Cytos Biotechnology Ltd Corporate Governance Information on disclosure notifications during the year under review, concerning the significant shareholders and the financial instruments in particular may be found on the SIX Exchange platform on the following page: http://www.six-exchange-regulation.com/publications/published_notifications/major_shareholders_en.html The Company has not entered into any agreement with any shareholder regarding the voting or holding of shares in the Company. To the knowledge of the Company, no shareholders are linked by any shareholder agreement. Cross-shareholdings (DCG 1.3) There are no cross-shareholdings. Capital structure as of December 31, 2014 (DCG 2) Excerpt from the Articles of Association of Cytos Biotechnology Ltd as of April 3, 2014 Capital (DCG 2.1) The share capital of Cytos Biotechnology Ltd is CHF 3,052,527.60, fully paid up and divided into 30,525,276 registered shares with a nominal value of CHF 0.10 each, according to the Commercial Register of the Canton of Zurich. Conditional capital (DCG 2.2) Article 4b: The share capital may be increased by the maximum amount of CHF 1,120,571.50 by issuing up to 11,205,715 fully paid up registered shares with a nominal value of CHF 0.10 each. The issue of registered shares by exercising conversion and/or Option rights and any other transfer of shares is subject to the transfer restrictions pursuant to Article 5 ofthe Articles of Association. Upon exercising the option rights granted to them, employees of the Company and its subsidiaries as well as members of the Board of Directors or the Scientific Advisory Board will receive a maximum of 273,273 of these registered shares. The issue price as well as the conditions for the allocation and exercise of the employee options was, or for new employee options will be specified by the Board of Directors in separate Rules. The Company s shareholders are not entitled to subscribe to such employee options, unless they fulfill the conditions of the Rules in their function as employees, members ofthe Board of Directors or the Scientific Advisory Board. Additional registered shares will be issued upon exercise of the 350,000 option rights that were given to an investor pursuant to the Option Agreement dated March 20, 2012 as compensation for its expenses in connection with the placement of the majority of the shares issued as part of the capital increase resoived for at the General Meeting dated April 20, 2012. The options have an exercise term of five years following entry of this provision of the Articies of Association in the commercial register and an exercise price (subject to any adjustments within the scope of antidilution protection pursuant to the Option Agreement) of CHF 2.244* (hereinafter referred to as the 2012 OPTIONS ). *Adjusted to CHF 2.13 following the application of the anti-dilution clause in connection with the 2013 financing. 12
Cytos Biotechnology Ltd Corporate Governance All of the rest of these registered shares not used or reserved for the Option rights of employees pursuant to paragraph 2 or for the Option rights of an investor under paragraph 3 will be issued upon exercise of: a) conversion rights granted to the bond creditors of the outstanding convertible bond (Swiss Security Number 2.906.073) (hereinafter referred to as the CONVERTIBLE BONDS ); as well as b) conversion rights that were granted to investors as part of the 9% convertible loan notes with a total amount of CHF 13,250,000 and with a maturity date on February 10, 2015 pursuant to the Convertible Loan Note Agreement dated March 20, 2012, and which provide for, among other things, a conversion during the conversion term, which starts upon entry of this provision of the Articles of Association in the commercial register and ends on January 30, 2015, at a conversion price (subject to any adjustments within the scope of anti-dilution protection pursuant to the Convertible Loan Note Agreement) of CHF 2.244* (hereinafter referred to as the CONVERTIBLE LOAN NOTES ). *Adjusted to CHF 2.13 following the application of the anti-dilution clause in connection with the 2013 financing. In addition, all of the rest of these registered shares not issued for the Option rights of employees pursuant to paragraph 2, the Option rights of an investor under paragraph 3, the CONVERTIBLE BONDS or the CONVERTIBLE LOAN NOTES under paragraph 4 may be used in conjunction with the exercise of the 2012 WARRANTS. The 2012 WARRANTS are warrants that are issued pursuant to the Warrant Agreement dated March 20, 2012 and that entitle each warrant holder to subscribe to a new registered share of the Company. These warrants may be exercised during an exercise term of four years following entry of this provision of the Articies of Association in the commercial register, and the exercise price (subject to any adjustments within the scope of anti-dilution protection pursuant to the Warrant Agreement) is CHF 2.244* per warrant. *Adjusted to CHF 2.13 following the application of the anti-dilution clause in connection with the 2013 financing. The Board of Directors shall determine the issue conditions for the CONVERTIBLE BONDS, CONVERTIBLE LOAN NOTES, 2012 WARRANTS and 2012 OPTIONS (provided that such is not already stipulated out in paragraphs 3 to 5 of the present Article 4b). The subscription rights of shareholders with regard to the shares that are issued in connection (i) with the exercise of the rights associated with the CONVERTIBLE BONDS or the CONVERTIBLE LOAN NOTES, or (ii) with the exercise of the 2012 OPTIONS or the 2012 WARRANTS, are excluded. The shareholders neither have a right to subscribe to the 2012 OPTIONS nor the 2012 WARRANTS. Furthermore, the preferential subscription right of existing shareholders is excluded for the CONVERTIBLE BONDS and the CONVERTIBLE LOAN NOTES. Article 4h: The Company s share capital shall be increased by an amount not exceeding CHF 153,563.70 through the issue of a maximum of 1,535,637 registered shares, to be fully paid in, with a nominal value of CHF 0.10 per share through (i) the voluntary or compulsory exercise of conversion rights and/or warrants granted or to be granted in connection with bonds or other financial market instruments or loans of the Company, or any of its group companies, that allow for conversion into shares of the Company (equity-related financial instruments) or (ii) the exercise of options granted to all shareholders (shareholder options). For equity related instruments the shareholders pre-emptive rights are excluded. Holders of such equity-related financial instruments are entitled to subscribe to the new shares. The Board of Directors fixes the conversion warrant conditions. Shareholder options must be allocated to all shareholders pro rata to their shareholding. The Board of Directors fixes the exercise conditions. 13
Cytos Biotechnology Ltd Corporate Governance The acquisition of shares through the exercise of conversion rights and/or warrants and/or shareholder options and any subsequent transfer of the shares are subject to the restrictions set out under Art. 5 of these Articies of Association. The Board of Directors is authorized to exclude shareholders preferential subscription rights in relation to equity-related financial instruments when such equity-related financial instruments are issued provided these instruments are being issued to finance or refinance the acquisition of companies, parts of companies, participations or new investment projects, and/or if the instruments are issued on the national or international capital markets (including private placements). If shareholders preferential subscription rights are restricted or excluded for such equity-related financial instruments: (i) these equity-related financial instruments must be issued at prevailing market conditions, (ii) the issue price of the new shares must be set at market conditions taking due account of the stock market price of the shares and/or comparable instruments priced by the market, and (iii) the conversion rights may be exercised for a maximum of 12 years and the warrants may be exercised for a maximum of 7 years from the relevant issue date. Article 4i: The share capital of the Company increases in the nominal value of up to CHF 252,128.60 by issuance of up to CHF 2,521,286 fully paid-in registered Shares with a nominal value of CHF 0.10 per share, subject to the exercise of options granted by the Company to employees of the Company or its subsidiaries, persons of a comparable position and Board members. The pre-emptive rights of the shareholders shall be excluded. The conditions of the grant of the options, as the amount of the issue of the shares, the time of the entitlement for dividends as well as the kind of contribution, shall be determined by the Board of Directors in the form of special rules (Stock Option Plans). The further transfer of the registered Shares acquired by the exercise of the conversion or options rights under this article shall be subject to the restrictions of Article 5 of these Articles of Association. Authorized capital (DCG 2.2) Article 4c: The Board of Directors is authorized to increase the share capital at any time until June 27, 2015 by an amount not exceeding CHF 1,120,571.50 by issuing up to 11,205,715 fully paid up registered shares with a nominal value of CHF 0.10 each. Increases by way of an underwriting by a bank, a bank consortium or a third party subject to an exclusion of the pre-emptive rights or any preferential subscription rights according to paragraph 3 of the present Article 4c, a subsequent offer to the shareholders and increases in partial amounts are allowed. In each case, the issue price, the date for entitlement to dividends and the type of contribution shall be determined by the Board of Directors, provided that nothing to the contrary is stipulated in the present Article 4c. The newly issued registered shares shall be subject to the transfer restrictions foreseen in article 5 of the Articies of Association. 14
Cytos Biotechnology Ltd Corporate Governance The Board of Directors is authorized to issue shares according to Paragraph 1 of the present Article 4c as (i) base values of 12,700,532 2012 WARRANTS (as defined in Article 4b Paragraph 5), whereby the Board of Directors determines the issue conditions of the 2012 WARRANTS (provided that they are not already stipulated in Article 4b Paragraph 5), or (ii) to use said shares in a maximum amount of CHF 60,000.00 for employees, members of the Board of Directors and consultants of the Company and its subsidiaries who have exercised the Option rights granted to them, whereby the issue amount and the conditions für allocating and exercising the employee options by the Board of Directors are stipulated in separate Rules. The subscription rights of shareholders with regard to the shares that are issued in connection with the exercise of the rights associated with the 2012 WARRANTS or the employee options are excluded. The shareholders do not have a right to subscribe to the 2012 WARRANTS. Article 4g: The Board of Directors is authorized, at any time until December 30, 2015, to increase the share capital by a maximum of CHF 405,692.30 through the issuance of a maximum of 4,056,923 registered shares, to be fully paid up, with a nominal value of CHF 0.10 per share. Increases by underwriting as well as partial increases are permissible. The issue price, the time of dividend entitlement, and the type of contribution will be determined by the Board of Directors. Upon acquisition, the new shares will be subject to the transfer restrictions pursuant to Art. 5 of the Articles of Association. The Board of Directors is authorized to exclude shareholders pre-emptive rights if the new registered shares are used for (a) the allocation of shares to existing shareholders in case the subscription of shares in a rights offering exceed the number of shares available; (b) the acquisition of companies, segments of companies or participations through an exchange of shares; (c) for financing/refinancing the acquisition of companies, segments of companies or participations, or (d) investment plans and/or instruments that are issued on the national or international capital markets or for raising capital in a fast and flexible manner (including private placements) and that could probably not be achieved without the exclusion of the legal pre-emptive rights of shareholders. If commitments to service convertible bonds or loans or bonds with warrants are assumed in connection with company take-overs or investment plans, the Board of Directors is authorized, for the purpose of fulfilling delivery commitments under such bonds, to issue new shares excluding the pre-emptive rights of shareholders. Registered shares for which pre-emptive rights have been granted but not exercised, are to be used in the best interests of the Company or sold on the market at market conditions. The full text of the Articles of Association is available on the Company s website under the following link: http://www.cytos.com/corporate-governance/ Changes in capital (DCG 2.3) For further information on the changes in the capital structure in 2014, please see note 17 of the detailed consolidated financial statements. 15
Cytos Biotechnology Ltd Corporate Governance Description of changes in capital that have taken place within the last three financial years: Consolidated Statement of Change in Shareholders Equity1 in TCHF (except for share information) December 31, 2011 Adjustment IAS 19, revised Number Share Additional of shares capital paid-in capital 5,270,056 527 211,938 Other2 Total (224,145) (554) (11,680) (554) Total comprehensive loss (9,044) (9,044) Convertible Bond/-loan notes: equity component 4,260 4,260 Partial repurchase of convertible bonds (127) (127) Convertible Bond/-loan notes: deferred tax (932) (932) Convertible Bond/-loan notes: costs (127) (127) Issuance of share capital 14,900,232 1,490 26,682 28,172 Share capital issuance costs (1,190) (1,190) Treasury shares 2,241,143 224 (224) Share-based compensation 869 869 December 31, 2012 restated 22,411,431 2,241 238,299 (230,893) 9,647 Total comprehensive loss (30,943) (30,943) Convertible Bond/-loan notes: equity component 711 711 Issuance of share capital 8,113,845 812 23,530 24,342 Issuance of share capital from Treasury shares 80,975 8 256 264 Use of Treasury shares (80,975) (8) 8 Share capital issuance costs (1,100) (1,100) Share-based compensation 1,309 1,309 Reclassification 134 (134) December 31, 2013 30,525,276 3,053 262,428 (261,251) 4,230 Total comprehensive loss (34,388) (34,388) Issuance of share capital from Treasury shares 55,520 6 184 190 Use of Treasury shares (55,520) (6) 6 Share based compensation 3,748 3,748 December 31, 2014 30,525,276 3,053 266,360 (295,633) (26,220) 1) For further details see Consolidated Statements of Change in Shareholders Equity and Note 17, Shareholders equity, to the consolidated financial statements. 2) Including: legal reserves, Treasury shares, accumulated deficit, cumulative translation adjustment, equity component of the convertible bonds outstanding and cumulative pension adjustments. 16
Cytos Biotechnology Ltd Corporate Governance Shares and participation certificates (DCG 2.4) The Company has only one class of shares, i.e. registered shares with a nominal value of CHF 0.10 each. Each share is fully paid up and carries one vote and equal dividend rights with no privileges. The Company has no outstanding participation certificates. The Company s shares are not certified. Shareholders are not entitled to request printing and delivery of share certificates; however, any shareholder may at any time request the Company to issue a confirmation of its shareholding. Profit-sharing certificates (DCG 2.5) The Company has not issued any profit-sharing certificates. Limitations on transferability and nominee registrations (DCG 2.6) If buyers of registered shares explicitly declare in the request for registration that they have bought the registered shares in their own name and for their own account, they shall be registered in the share register as shareholders with voting rights. Article 5 of the Articles furthermore provides that shareholders may register their shares in the name of a nominee ( Nominee ) and may exercise their voting rights by giving instructions to the Nominee to vote on their behalf. However, a Nominee holding more than 3% of the Company s share capital may be registered as a Nominee for shareholders with voting rights only if the Nominee discloses the identity of those ultimate beneficial owners of shares claiming 0.5% or more of the Company s share capital. To remove or amend the above mentioned limitations on transferability and nominee registrations, the approval of (i) at least two-thirds of the votes represented and (ii) the majority of the represented share capital at the respective shareholders meeting would be required. Convertible bonds and options (DCG 2.7) In February 2007, the Company issued 2.875% p.a. convertible bonds ( Convertible Bond ) with a nominal value of CHF 70 million. The Convertible Bond was initially due for repayment on February 20, 2012. However, following a resolution of the bondholders on November 10, 2011, which became legally binding on March 13, 2012, half of the then outstanding nominal value was repaid at par. The repayment for the remaining half as well as the payment of any interest since February 21, 2011 has been deferred to February 20, 2015 with a repayment at 150% of par. Also, the coupon has been increased from 2.875% p.a. to 5.75% p.a. Furthermore, the conversion price has been reduced to CHF 7.71. In connection with the rights offering in November 2013, the conversion price has been further reduced to CHF 7.32 per share due to the anti-dilution clause, representing a conversion ratio of 341.5301 registered shares of the Company per Convertible Bond of CHF 2,500. CHF 179,883.90 representing 1,798,839 shares of the Company s conditional and authorized capital can serve as underlying shares for the extended outstanding convertible bonds during the extended maturity. The Convertible Bond is listed on the SIX Swiss Exchange under the symbol CYT07 (see Note 14 Convertible Bond and Convertible loan notes, to the consolidated financial statements). On January 26, 2015, the bondholder meeting resolved to convert the outstanding bond into 77 490 000 registered shares. Such resolution has been confirmed by the Superior Court Zurich on March 6, 2015 and is expected to become legally binding for all bond holders in May 2015. 17
Cytos Biotechnology Ltd Corporate Governance Overview of outstanding options1 on December 31, 2014, options granted to the Board of Directors (BoD) are marked accordingly (each option entitles the option holder to purchase one share): Year of grant Number of options outstanding Exercise price (CHF) Exercise period (years) 2010 76,880 14.05 5 2 2010 8,289 BoD 14.05 5 2010 12,000 12.30 5 2011 72,912 12.53 5 2011 140,0002 3.41 21 2 2012 565,1802 2.57 6 2012 100,000 BoD 2.57 6 2012 960,0002 2.54 6 2012 350,0004 2.24 5 2013 522,300 3.63 6 2013 70,000 BoD 3.63 6 2013 200,000 3.84 6 2013 380,000 3.85 6 2013 240,000 4.09 6 2013 60,000 4.04 6 20133 1,464,1502 3.49 6 20133 20,000 BoD 3.05 6 2014 2,040,0002 0.25 4 Total 7,281,711 1) For further details please see Note 24, Share options, to the consolidated financial statements. 2) Options allocated to employees: options of individuals acting simultaneously as members of the Board of Directors and of the Executive Board are subsumed under options allocated to employees. 3) The option plan SOP 2014 was approved and granted by the Board of Directors in 2013. 4) Options were granted to venbio Global Strategic Fund L.P. as part of the financing. The total 7,281,711 outstanding options represent CHF 728,171.10 nominal capital. 18
Cytos Biotechnology Ltd Corporate Governance Board of Directors (DCG 3) Members of the Board of Directors (DCG 3.1) Nomination & Name Corporate Year of First Elected Compensation Governance Audit Position, nationality birth elected until Committee Committee Committee Christian Itin, PhD 1964 2012 2015 Chairman & CEO, Switzerland John Berriman, MBA 1948 2012 2015 Vice Chairman, UK Joseph Anderson, PhD 1959 2012 2015 Member, UK Kurt von Emster, CFA 1967 2012 2015 Member, USA Former Members of the Board of Directors Arthur M. Krieg, MD* Vice Chairman, USA Paul Brooke* Member, USA Yamo Deniz, MD* Member, Sweden, USA 1957 2012 2015 1945 2012 2014 1964 2013 2014 * stepped down as board members effective Mai 31, 2014 Chairman Member Christian Itin Christian Itin, PhD, serves as of November 2012 as Cytos Chief Executive Officer and Chairman of the Board of Directors. Before joining Cytos, Dr. Itin was President and Chief Executive Officer of Micromet Inc., a former NASDAQ-listed biopharmaceutical company, with its headquarters in Rockville, MD, USA, and an R&D center in Munich, Germany, which was acquired in March 2012 by Amgen, Inc. for USD 1.16 billion. He spent 13 years with Micromet in a number of senior management roles, becoming CEO in 2004. Before joining Micromet in 1999, Dr. Itin co-founded Zyomyx, Inc., a protein chip company based in Hayward, CA, USA. He received a Diploma in biology and a PhD in cell biology from Basel University, Switzerland. In addition, he also performed post-doctoral research at the Biocenter of Basel University and at Stanford University School of Medicine, CA, USA. Dr. Itin serves as Chairman of Autolus Ltd. (London, UK) and as non-executive director of Kymab Ltd (Cambridge, UK) and Zyngenia Inc. (Gaithersburg, MD, USA). Christian Itin is a Swiss citizen and resident of Germany. 19
Cytos Biotechnology Ltd Corporate Governance John Berriman John Berriman, MBA, has been a member of the Board of Directors since May 2012 and was elected as its Vice Chairman in May 2012. He is the Chairman of the board of AIM-listed ReNeuron Group plc and Autifony Therapeutics Ltd; and a non-executive director of Autolus Ltd. He is a past Chairman of Heptares Therapeutics Ltd (sold to Sosei in February 2015) and Algeta ASA (sold to Bayer AG in 2014 and previously listed on the Oslo stock exchange). He was a member of the Board of Directors of NASDAQ-listed Micromet Inc. until its sale to Amgen in 2012. Previously he was a Director of Abingworth Management Ltd, an international investment group dedicated exclusively to the life sciences and healthcare sectors, where he was involved in founding, financing and serving as a director of several biotechnology companies in Europe and the USA, many of which obtained listings on public stock exchanges. Before that, Mr. Berriman spent 14 years with Celltech Group plc and was an executive director on its Board when it listed on the London Stock Exchange in 1994. He has a degree in chemical engineering from the University of Cambridge, UK, and a Masters degree from the London Business School. He is a British citizen and a resident of the UK. Joseph Anderson Joseph Anderson, PhD, has been a member of the Board of Directors since May 2012. He is a Partner at Abingworth LLP, an international investment group dedicated to the life sciences and healthcare sectors. He leads private investments in public companies in the US and Europe. Dr. Anderson has more than 25 years experience as a portfolio manager and analyst in the pharmaceutical and bioscience sectors and he has founded and managed two healthcare funds, has been a Special Adviser to the UK Government and published more than 50 papers on research management. Before joining Abingworth in 2004, Dr. Anderson was Head of Global Healthcare Equities at First State Investments in London, part of the Commonwealth Bank of Australia. Prior to this, he was a pharmaceuticals analyst at Dresdner Kleinwort Benson, an investment bank. From 1990 to 1998, Dr. Anderson established and was Head of the Strategy Unit at The Wellcome Trust, one of the world s largest medical foundations. He has been a Non-executive Director of Algeta ASA (acquired by Bayer), Amarin Corp. (NASDAQ) and Epigenomics AG (Frankfurt). He is also a Director of Abingworth BioEquities Master Fund Limited, an offshore investment fund. Dr. Anderson has a BSc (First Class Hons.) and a PhD in Biochemistry. He is a British citizen and resident of the UK. Kurt von Emster Kurt von Emster, CFA has been a member of the Board of Directors since May 2012. He is a Partner at Abingworth LLP, an international investment group dedicated to the life sciences and healthcare sectors. He has been an institutional biotechnology and health care analyst and portfolio manager for over 25 years. Mr. von Emster s investment career started in 1989 at Franklin Templeton where he founded and managed several health and biotechnology funds in the 1990s, each achieving a 5-star Morningstar ranking. In 2001, Mr. von Emster became a General Partner at MPM Capital, a leading biotechnology private equity firm, and launched the MPM BioEquities Fund, a cross over public and private biotechnology hedge fund. He was the portfolio manager of this fund from inception in 2001 until his departure in 2009. In 2009, he co-founded venbio, a strategic life science investment firm and departed in January 2015. He is a member of the Board of Directors of Crispr Therapeutics and CymaBay Therapeutics Inc., a former member of the Board of Aurinia Pharmaceuticals, Somaxon Pharmaceuticals Inc. and Facet Biotech Corporation and a former Board observer of Acceleron Pharma. Mr. von Emster holds a BA from the University of California, Santa Barbara, and is a certified financial analyst. He is a US citizen and resident of the USA. Christian Itin is as CEO Member of the Executive Board. No other Board member is or has been member of the executive management or has a material business relationship with the Company. 20