Kiadis Pharma N : Interim Report For the six months ended June 30, 2020

Interim Report

For the six months ended June 30, 2020

Table of contents

INTERIM REPORT OF THE MANAGEMENT BOARD	2
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION	6
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE
INCOME	7
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY	8
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS	9
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL
STATEMENTS	10

FORWARD-LOOKING STATEMENTS

This Interim Report may include statements that are, or may be deemed to be, "forward- looking statements", including without limitation those regarding Kiadis' future performance and position. Such statements are based on current expectations, estimates and projections of Kiadis and information currently available to the Company. Kiadis cautions that by their nature, forward-looking statements involve a number of known and unknown risks, uncertainties and assumptions that are difficult to predict and that could cause actual results, performance, achievements or events to differ materially from those expressed, anticipated or implied by the forward-looking statements. Risks, uncertainties and assumptions include, but are not limited to, macro-economic, market and business trends and conditions, competition, legal claims, the Company's ability to protect intellectual property, changes in legislation or accountancy practices, the ability to implement the Company's strategy, and economic and/or political changes. Additional factors that could cause actual results, performance, achievements or events to differ materially from those described in the forward-looking statements can be found in the 'Risk management and internal control systems' chapter of the Annual Report 2019. The Company assumes no obligation to publicly update or revise forward-looking statements, except as may be required by law.

1

Interim Report of the Management Board

for the six months ended June 30, 2020

Operating highlights (including post-reporting period)

• As of June 30, 2020 Kiadis had €19.8 million in cash and cash equivalents. It received a €17.5 million upfront payment from Sanofi in July 2020. Anticipated cash and cash equivalents for the end of September 2020 is €25.9 million, effectively a cash burn of €11 million for the third quarter, which was focused on advancing the Company's NK- cell business.
• In the first half of 2020, Kiadis raised gross proceeds of €17 million through private placements of approximately 10.5 million shares with two parties, including LSP Advisory, the public investment arm of Life Sciences Partners, on behalf of the LSP Life Sciences Fund N.V. and several mandate clients1.
• In May, the U.S. Food and Drug Administration (FDA) approved the Investigational New Drug (IND) application Kiadis filed in April 2020 that supports the Phase 2 NK- REALM (haploidentical NK-cellsto prevent post-transplantRElapse in AML and MDS) study. This study will enroll 63 patients at leading transplant centers in the U.S. The study is designed to confirm earlier proof-of-concept data in 24 patients, which showed that adjunctive treatment with K-NK002 has the potential to substantially improve outcomes for patients in need of a HSCT.
• The U.S. FDA provided approval on the first-in-human clinical trial in patients with relapsed/refractory acute myeloid leukemia (R/R AML) with off-the-shelf Natural Killer ("NK") cells manufactured using Kiadis' FC21 mbIL21 feeder cells and proprietary universal donor platform. The Phase 1 investigator initiated trial, which will support the development K-NK003, has enrolled multiple patients since its start in June.
• In July, Kiadis signed an exclusive license agreement with Sanofi for its previously undisclosed K-NK004 preclinical program. The agreement covers Kiadis' proprietary CD38 knock out (CD38KO) K-NK therapeutic for combination with anti-CD38 monoclonal antibodies, including Sarclisa®, Sanofi's FDA approved therapy for patients with multiple myeloma, as well as exclusive rights to use Kiadis' K-NK platform for two undisclosed pre-clinical programs. Kiadis received a €17.5 million up front payment and will be entitled to receive up to €857.5 million upon Sanofi's achievement of preclinical, clinical, regulatory and commercial milestones. Kiadis will also receive up to low double-digit royalties based on commercial sales of approved products resulting from this agreement.
• Kiadis initiated a new infectious disease program, K-NK-ID101, in COVID- 19/respiratory infections. In support of this program, Kiadis is collaborating with five premier Dutch institutions to study different anti-viral mechanisms of Kiadis' K-NK cell therapy platform against SARS-CoV-2, the virus that caused the COVID-19 pandemic. The U.S. Food and Drug Administration (FDA) has approved Nationwide Children's Hospital's IND for a COVID-19 clinical trial with off-the-shelfK-NK cells using Kiadis' proprietary platforms. Additionally, Kiadis received a commitment for $9.5 million in funding from the U.S. Department of Defense (DoD) through the Advanced Regenerative Manufacturing Institute (ARMI) that will fund the K-NK-ID101COVID-19 program as costs are incurred.
• A plethora of data was presented at key medical meetings in 2020 related to Kiadis' K-

NK platform. These data further support that NK cells expanded with Kiadis' FC21 and PM21 technologies increase K-NK cell expansion, improve cytotoxicity, and show

• For related party transactions, please refer to note 24 of these condensed consolidated interim financial statements.

2

strong signs of antitumor and suspected antimicrobial activity, including in patients with complicated CNS disease and serious infections.

Financial highlights for the six months ended June 30, 2020 (including post reporting period)

(Amounts in EUR million, except per share data)	2020	2019	Change
Other income	0.1	-	0.1
Total operating expenses	(20.0)	(25.7)	5.7
Research and development	(13.7)	(16.2)	2.5
General and administrative	(6.3)	(9.5)	3.2
Operating result	(19.9)	(25.7)	5.8
Net financial result	1.1	(0.2)	1.3
Net result	(18.8)	(25.9)	7.1
Net operating cash flow	(21.2)	(21.4)	0.2
Cash position at end of period	19.8	29.5	9.7
Equity	27.6	34.3	(6.7)
Earnings per share before dilution (EUR)	(0.57)	(1.03)	0.46

Other income

• In 2020, the Company received a subsidy from the Dutch Government which supports the Company's research efforts in defined research and development projects. The Company recorded €0.1 million Other income in 2020.

Operating expenses

• Operating expenses decreased to €20.0 million in 2020 from €25.7 million in 2019, a decrease of €5.7 million.
• Research and Development expenses decreased to €13.7 million in 2020 from €16.2 million in 2019. Without the expenses for share-based compensation, Research and Development expenses decreased to €12.7 million in 2020 from €15.3 million in 2019, a decrease of €2.6 million. The decrease was caused by lower clinical expenses compared to 2019 which included the ATIR study, CR-AIR-009. In 2020, the expenses related to the development of the K-NK platform including the K-NK002 and K-NK003 programs as well as the preclinical programs evaluating solid tumors.
• General and Administrative expenses decreased to €6.3 million in 2020 from €9.5 million in 2019. Without the expenses for share-based compensation, General and Administrative expenses were €3.2 million lower at €5.4 million in 2020 compared to €8.6 million in 2019. In 2019, the General and Administrative expenses included market access preparations and the acquisition of CytoSen Therapeutics Inc.

3