Formycon : Half-Year-Report 2021

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Half-Year Report 2021

Index

A B C D

To Our Shareholders

Page 2

Unified Interim

Management Report

Page 8

Formycon Group

Consolidated Interim Financial Statements

Page 56

Formycon AG

Interim Financial Statements

Page 84

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TO OUR SHAREHOLDERS

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A	Letter to Shareholders

Formycon AG Half-Year Report 2021

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TO OUR SHAREHOLDERS

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Dr. Carsten

Brockmeyer

CEO

Dear Shareholders,

Through the development of our biosimilar drugs, we are making an important contribution to providing patients around the world with better access to high-quality, affordable biopharmaceuticals. In this way, we are helping not only to relieve the cost burden on healthcare systems but also to make the global pharmaceuticals market more competitive and better oriented to the needs of patients. With 2020 sales revenue of EUR 1.8 billion in Germany and USD 15.7 billion globally, biosimilars have already firmly established themselves as an indispensable part of the world's pharmaceutical supply. According to industry experts, the pandemic will make biosimilars even more important globally because the budgets of national healthcare systems, which were already under strain in pre-crisis times, will have to cope with considerable additional financial burdens resulting from the treatment of serious acute COVID-19 sickness along with "long COVID" patients. This new cost burden comes on top of the cost drivers of health systems that existed before the pandemic, such as aging world populations and global demands for higher healthcare standards. The combination of these forces should provide the biosimilar market with above-average growth potential well into the future.

The first half of 2021 was a particularly pivotal period for Formycon. With the submission of our application for the regulatory approval of our FYB201 candidate biosimilar to Lucentis®1 (ranibizumab) to the European Medicines Agency and shortly thereafter to the U.S. Food and Drug Administration, we have now paved the way for our first biosimilar product to come to market, which should confirm our market-

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Dr. Nicolas		Dr. Stefan
Combé		Glombitza
CFO		COO

leading position as a developer of ophthalmic biosimilars. Once approval is obtained, we are highly confident in a successful global market launch thanks to our choice of commercialization partners: Coherus BioSciences, Inc. for the United States and Teva Pharmaceutical Industries Ltd., the world's largest generics company, for the markets of Europe, Canada, Israel and New Zealand. With this anticipated inaugural product launch, Formycon is rapidly approaching the next phase in our company's development, which will in turn open up new growth opportunities.

We take great pride in our extraordinary team of highly qualified and deeply committed scientists from some 21 different countries, who are applying their expertise and working relentlessly not only on our biosimilar development projects but also on the creation of a novel COVID-19 biopharmaceutical, thereby making a contribution to overcoming this pandemic.

There is no doubt that 2021 will, like the past year, be dominated by the ongoing coro- navirus pandemic. Although vaccinations were already becoming available in some countries for the most vulnerable, the beginning of this year also saw the emergency of the new and particularly contagious "delta" (B.1.617.2) variant. General sentiment remains tense as it becomes more and more clear that SARS-CoV-2 will remain a long-term or even permanent threat to public health - and thus sentiment will likely remain unsettled for long to come. In view of the diminishing effectiveness over time of vaccines and antibodies along with the increasing number of SARS-CoV-2 variants

1 Lucentis® is a registered trademark of Genentech Inc.

Formycon AG Half-Year Report 2021

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TO OUR SHAREHOLDERS

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and certain other factors, the original strategic goal of achieving herd immunity seems increasingly unlikely. For this reason, it is becoming increasingly important that we can battle this global plague with an efficient, effective combination of vaccines to prevent and drugs to treat serious COVID-19 sickness. This pandemic has clearly shown us how important modern medical science is to our society. The quality and effectiveness of pharmaceutical and biotechnology companies, particularly right here in Germany, have been put squarely in the limelight, and the prospects for one of the key and central industries of our modern era are bright indeed. We have also learned the importance of strong and well-functioning healthcare systems, which must be further improved and optimized with discipline and commitment.

In the case of our FYB207 development project, we are working hand in hand with our academic partners at the Technical University of Munich, Prof. Dr. Ulrike Protzer, Chair of Virology, and Prof. Dr. Johannes Buchner, Chair of Biotechnology, to develop an efficient antiviral SARS-CoV-2blocker based on a long-actingACE2-immunoglobulin fusion protein. The latest preclinical studies of FYB207a demonstrate that Formycon's ACE2 fusion protein forms a strong bond to the SARS-CoV-2 virus's spike protein particularly in the case of the delta variant (B.1.617.2) and thus can thus offer undiminished antiviral activity even with the newer and rapidly spreading SARS-CoV-2 variants of concern. Our urgent priority now is to complete further preclinical testing so that we may choose the most promising of our drug candidates for clinical development.

With FYB207, our goal from the outset has been to develop a novel drug tailored to SARS-CoV-2 and other SARS-CoV variants which can potentially be used against all coronaviruses that use ACE2 as an entry point to infect cells.

We are acutely aware of the challenges and hardships resulting from the pandemic which our entire staff have so effectively embraced and overcome. We would therefore like to take this opportunity to once again thank the entire Formycon team for their personal commitment, their collective determination, and their perseverance in pursuing our shared goals. From the start of this pandemic, the safety of our staff has been our priority, which is why we quickly and proactively put our action plan into place to protect our staff from infection while at the same time ensuring our operational continuity.

In addition to employee-oriented working time models, we have been able offer our entire workforce the convenience of in house COVID-19 vaccinations by our company doctor. In addition, we equipped our entire staff with the necessary protective equipment at a very early stage of the crisis and established a comprehensive COVID-19self-testing concept.

We would like to express our sincere gratitude to our employees, to our business partners for the successful collaborations and to you, our valued shareholders, for the continued confidence you have placed in our efforts.

Stay healthy.

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Formycon Management

August 2021

Dr. Carsten Brockmeyer

Dr. Nicolas Combé

Dr. Stefan Glombitza

Formycon AG Half-Year Report 2021