Interim Report January – September 2021

	FINANSIELLA RAPPORTER
Science for high quality biosimilars	Interim report January - September 2021

The marketing authorization application for Xlucane™ in Europe initiates the process for the upcoming launch

Financial summary third quarter 2021

• Revenue amounted to SEK 0.0m (0,0).
• Other operating income was SEK 3.5m (4.9).
• EBITDA was SEK -39.5m(-54.2).
• R&D costs amounted to SEK -36.5m(-50.5), representing 79 percent (84) of total operating costs.
• The loss for the period was SEK -45.5m(-57.7).
• Earnings per share amounted to SEK -1.83(-2.99).
• Cash and cash equivalents at the end of the period amounted to SEK 383.4m (123.8).

Financial summary first nine months 2021

• Revenue amounted to SEK 0.0m (0.0).
• Other operating income was SEK 11.1m (14.4).
• EBITDA was SEK -140.1m(-151.5).
• R&D costs amounted to SEK -131.7m(-139.7), representing 83% (83) of total operating costs.
• The loss for the period was SEK -155.9m(-163.0).
• Earnings per share amounted to SEK -6.75(-9.49).
• Cash and cash equivalents at the end of the period amounted to SEK 383.4m (123.8).

Numbers in parentheses refer to the corresponding period last year.

Significant events during the third quarter 2021

• In September, the company's partner STADA submitted a marketing authorization application for Xlucane™ to the European Medicines Agency (EMA), which was later validated by the agency.
• In July, a directed new issue of SEK 380m before estimated transaction costs was registered, which Xbrane announced and implemented at the end of June. After the issue, the total number of shares and votes in the company amounts to 25,039,906. The company's registered share capital amounts to around SEK 5,613,598.
• Xbrane Biopharma was officially certified as a Great Place to Work® by the Great Place to Work® institute.

Significant events after the end of the quarter

• In October, the company signed a cooperation agreement with AGC Biologics, with effective date September 30, 2021, for upscaling the established manufacturing process of Xcimzane ™ and manu­ facture the majority of commercial scale batches for the upcoming Phase 1 and Phase 3 studies, and also comparative quality studies (CAA) to demonstrate biosimilarity, required for the marketing authorization application.
• In October, Xbrane was granted six new patents by the Patent and Registration Office (PRV).
• In October, the Nomination Committee for the 2022 Annual General Meeting was established and announced.

More detailed information on the above events can be found on pages 8-9.

FINANCIAL SUMMARY

Financial summary for the Group

	2021	2020	2021	2020	2020
	Jul - Sep	Jul - Sep	Jan - Sep	Jan - Sep	Jan - Dec
Revenue (SEK 000)	-	-	-	-	-
Research and development expenses (SEK 000)	-36,472	-50,497	-131,729	-139,736	-197,284
R&D expenses as percentage of total costs	79	84	83	83	84
Operating profit/loss (SEK 000)	-42,703	-55,303	-148,442	-154,708	-217,436
EBITDA (SEK 000)	-39,497	-54,208	-140,117	-151,451	-213,066
Profit/loss for the period (SEK 000)	-45,470	-57,742	-155,905	-162,973	-226,026
Cash and cash equivalents (SEK 000)	383,435	123,768	383,435	123,768	243,139
Equity ratio (%)	66	43	66	43	56
Number of shares at the end of period	25,039,906	19,280,707	25,039,906	19,280,707	22,200,415
Number of shares at the end of period after dilution	25,039,906	19,280,707	25,039,906	19,280,707	22,200,415
Average number of shares	24,886,770	19,280,707	23,105,787	17,177,891	18,113,313
Average number of shares after dilution	24,886,770	19,280,707	23,105,787	17,177,891	18,113,313
Earnings per share before dilution (SEK)	-1,83	-2.99	-6,75	-9.49	-12.48
Earnings per share after dilution (SEK)	-1,83	-2.99	-6,75	-9.49	-12.48
Number of employees on balance sheet date	56	41	56	41	42

About the operations

Xbrane Biopharma AB develops biological drugs based on a patented platform technology that provides significantly lower production costs compared to competing systems. Xbrane's leading product Xlucane™ is a biosimilar candidate to the original drug Lucentis® aimed at the market for ophthalmic

1. Novartis Annual Report 2020 (Lucentis® and Beovu®)
2. Roche Annual Report 2020 (Lucentis®)
3. Regeneron Annual Report 2020 (Eylea®)

VEGFa-inhibitors which amounts to around SEK 106bn1,2,3. Marketing authorization for Xlucane™ is expected for the second half of 2022. Xbrane has a further two biosimilar candidates in the pipeline aimed at a market where sales of the original product are worth SEK 80bn.

2 XBRANE BIOPHARMA | INTERIM REPORT JANUARY - SEPTEMBER 2021

CEO's letter

Dear shareholders

During Q3, our work continued to become a leading global biosimilar developer. The most important milestones were that our partner STADA submitted and received an application for market authorization for Xlucane™ validated by the European Medicines Agency (EMA), we signed an agreement with the contract manufacturer AGC Biologics for upscaling and manufacturing Xcimzane™ and strengthened our IP portfolio.

Marketing authorization application for Xlucane™

The marketing authorization application for Xlucane™ was submitted by our partner STADA to the EMA in September and was validated shortly thereafter by the Agency. The approval process therefore formally began at the end of September and is expected, depending on the time needed to answer questions during the process, to take up to 12 months. The corresponding application to the US Food and Drug Administration (FDA) is expected to be submitted during Q4 2021, or Q1 2022 and the work prior to this is proceeding according to plan. We intend to announce when we submit the application and once FDA considers it complete to start the review.

Upscaling and commercial manufacturing of Xcimzane™ The development of XcimzaneTM is progressing according to plan. We have signed an agreement with the contract manufacturer AGC Biologics for upscaling and manufacturing of Xcimzane™ for future clinical studies. The plan is that we will be able to manufacture clinical batches on a commercial scale during the second half of 2022 and then be able to start clinical studies in 2023. We continue to assess that Xcimzane™ is the only biosimilar candidate of Cimzia® in development globally. Potentially a consequence of difficulties in achieving sufficiently high productivity to secure a commercially viable gross margin. We have succeeded in this thanks to our unique patented platform technology, which is very suitable for this product.

CEO'S LETTER

Strengthening the IP portfolio

We have recently further developed our platform technology and strengthened its IP protection. Xbrane now has eight approved patents and 14 patent applications were filed, one of which is expected to be approved in November 2021. Six new patents were approved during Q3. Two of these relate to DNA constructs for regulating protein production and were submitted together with CloneOpt AB. The remaining four are a broadening of our original platform technology, from the production of proteins in host cells of the E.coli form to mammalian cells. The patents protect new DNA sequences we have used as part of how we instruct the host cells to produce the protein of interest and resulted in a significant increase in the productivity of XdivaneTM. This is incredibly important to us as a large part of our future portfolio of biosimilars will be manufactured in mammalian cells.

Key milestones in the coming 12-month period Xbrane has many key milestones to deliver over the next

12-month period, mainly to:

• Apply for marketing authorization in the US for Xlucane™
• Sign agreements with additional partners for the sales and marketing of Xlucane™
• Upscale the production process for Xcimzane™ and prepare for the start of clinical trials
• Establish partners for the commercialization of Xcimzane™ in Europe and/or the US.
• Begin the development of another biosimilar candidate.

Finally, I would like to say a big thank you to our employees and shareholders who have made it possible for Xbrane to take these important steps in its development and also, in a relatively short time, broadened the base of our product portfolio. We are all very confident and enthusiastic about Xbrane's continued journey to fulfill the ambition of becoming a leading, global, biosimilar developer for the benefit of patients around the world.

Thank you for your continued support,

Martin Åmark, CEO

Solna, October 28, 2021

3 XBRANE BIOPHARMA | INTERIM REPORT JANUARY - SEPTEMBER 2021

PRODUCT CANDIDATE PORTFOLIO

Product candidate portfolio

XlucaneTM

Xlucane™ is a biosimilar candidate to ranibizumab (original drug Lucentis®), known as a VEGFa-inhibitor, and it is used to treat a number of serious eye diseases: wet age-related macular degeneration (AMD), diabetic macular edema (DME), diabetic retinopathy (DR) and retinal vein occlusion (RVO). The VEGFa inhibitors market saw sales of over SEK 106bn1,2,3 in 2020 and has grown by over 10% annually in recent years1,2,3, although a marginal decline was noted in 2020 due to COVID-19.

In April 2019, Xbrane initiated the pivotal phase III study Xplore, a randomized, double-blind multicenter study evaluating the efficacy, safety, pharmacokinetics and immunogenicity of Xlucane™ in patients with wAMD compared to Lucentis®. The primary endpoint in the study is a change in BCVA (Best Corrected Visual Acuity) at week eight. wAMD patients were randomized (1: 1) and receive monthly injections of Xlucane™ into the eye, or the reference product Lucentis® for one year. The study, which is being conducted in 15 countries at around 140 clinics, was fully recruited with 583 patients in November 2020, despite the ongoing COVID-19 pandemic. Xlucane ™ showed positive phase III top-line data from a completed interim readout in June and in September the partner STADA submitted a marketing authorization application to the EMA, which was later validated by the authority. This means that the EMA has now started the review process for approval, which is expected to take up to a year.

Xbrane will also, in agreement with the FDA, submit a marketing authorization application for Xlucane ™ in the US.

Both applications will later be supplemented with full data from the study during the registration process.

Xbrane has a collaboration agreement with STADA GmbH for the development, sales and marketing of Xlucane™ in Europe and a number of markets in the Middle East and Asia-Pacific region. Last year, Xbrane and STADA signed an agreement with Bausch + Lomb, which will commercialize ­Xlucane™ in North America.

XcimzaneTM

XcimzaneTM is a biosimilar candidate to certolizumab pegol (original drug Cimzia®), a so-calledTNF-inhibitor particularly used in the treatment of rheumatoid arthritis, psoriasis and Crohn's disease. The TNF-inhibitor market saw sales of about SEK 240bn4 in 2018 and Cimzia® saw sales of SEK 19bn5 in 2020.The patent protection of Cimzia® is expected to expire in 2024 in the US and 2025 in Europe. XcimzaneTM is undergoing pre-clinical development and a cost-effective production process has been established. As the next step in manufacturing and upscaling, an agreement has been signed with AGC Biologics for the manufacture of XcimzaneTM for future clinical studies.

XdivaneTM

XdivaneTM is a biosimilar candidate to nivolumab (original drug Opdivo®), a PD1-inhibitor for the treatment of different types of cancer with a turnover of around SEK 64bn in 20206. Opdivo® is expected to lose its patent protection between 2026 and 2031, depending on the country. XdivaneTM is at the pre-clinical development stage, with a focus on developing a cost-effective production process and demonstrating a biochemical similarity to the original drug. Then, upscaling with a production partner will follow, after which the product can be taken into clinical trials.

XoncaneTM

XoncaneTM is a biosimilar candidate to pegaspargase (original drug Oncaspar®), used in the treatment of acute lymphocytic leukemia. In 2018, sales of Oncaspar® were around SEK 2bn7. XoncaneTM is now undergoing pre-clinical development.

Spherotide

Xbrane has agreed on a non-binding letter of intent with New FaDem regarding the divestment of the subsidiary Primm Pharma. The purchase price will amount to EUR 14.0 m and must be paid upon signing and at various development and sales milestones. The usual due diligence and negotiations are continuing.

Product	Original drug	Primary indication	Estimated sales	Patent expiry	Development phase
			of originator drug	of original drug
XlucaneTM	Ranibizumab	Wet age-related macular	SEK 32bn1,2	2022 (Europe)	Phase III
	(Lucentis®)	degeneration, diabetes-related		2020 (USA)
		eye damage and retinal vein
		occlusion.
XcimzaneTM	Certolizumab	Rheumatoid arthritis,	SEK 19bn5	2024 (USA)	Pre-clinical phase
	pegol (Cimzia®)	axial spondylarthrosis, psoriatic		20259 (Europe)
		arthritis, psoriasis and Crohn's
		disease.
XdivaneTM	Nivolumab	Melanoma, lung cancer, kidney	SEK 64bn6	2026-2031	Pre-clinical phase
	(Opdivo®)	cell cancer, head and neck		depending on
		cancer and bladder and urinary		country
		tract cancer.
XoncaneTM	Pegaspargase	Acute lymphocytic leukemia.	SEK 2bn7	Expired	Pre-clinical phase
	(Oncaspar®)
Spherotide	Triptorelin	Prostate cancer, breast cancer,	SEK 4bn8	Expired	Pre-clinical phase
	(Decapeptyl®)	endometriosis and fibroids.

1)	Novartis Annual report 2020	5)	UCB Annual report 2020
2)	Roche Annual report 2020	6)	BMS Annual report 2020
3)	Regeneron Annual report 2020	7)	Evaluate Pharma 2018
4)	Research and markets Global Tumor Necrosis Factor (TNF)	8)	IQVIA 2018
	Inhibitors Market 2018-2026: A $181.13 Billion Market Opportunity by 2026	9)	Includes six months patent extension due to pediatric indication

4 XBRANE BIOPHARMA | INTERIM REPORT JANUARY - SEPTEMBER 2021

PATENT PROTECTION

Patent protection

An expanding patent portfolio provides

­possibilities for entering strategic partnerships and strengthens the Xbrane brand

Xbrane has a team of innovative scientists within biochemistry, molecular biology, fermentation, protein-purification, and analytics as well as professionals with extensive experience from the pharmaceutical industry in regulatory affairs, clinical affairs, manufacturing and supply chains. Since Xbrane is an innovative drug development company, which invests heavily in R&D, Xbrane's goal is to file strategically important patent applications to protect its core technologies and products.

Growing patent portfolio

Xbrane's expanding patent portfolio will provide opportunities which will facilitate the implementation of Xbrane's business strategies. Such opportunities include licensing and various types of strategic business partnerships, or alliances in commercializing Xbrane's biosimilars and biosimilar production platforms.

It is important to note that Xbrane seeks to file patent applications protecting a broad spectrum of technologies covering everything from core protein production or purification technologies to novel formulations of biosimilars.

Although Xbrane's primary regions of patent focus are Europe and the USA, patent applications may also be filed in Canada, China, South Korea, India, Japan and Australia, if Xbrane's products and methods have a market in these jurisdictions. Moreover, Xbrane will make use of international patent applications to have further strategic options of creating patent protection in a large number of countries.

Xbrane's LEMO™ technology platform is patent protected in Europe and the USA until 2029. In 2020 and 2021, these two patents which had been filed in 2009 were complemented with a total of twenty-one pending patent applications "harvested" from five different development programs. Ten of these patent applications were filed in 2020 and four of them were filed in 2021, each followed-up with an international patent application which provides provisional protection in 153 countries. The Swedish Intellectual Property Office (PRV) granted six patents in October 2021. Moreover, the same patent office has notified the intention of granting a further patent in November 2021.

Strengthen Xbrane's brand

Two of the above-mentioned patents granted relate to DNA constructs for regulation protein production and were co-filed with CloneOpt AB. Four of the above-mentioned patents granted resulted from the development of XdivaneTM and form the foundation for the emerging high-yield expression platform in mammalian cells upon which Xbrane will base much of its upcoming development of biosimilar candidates. The patent applications protect certain novel sequences in the gene construct introduced in the host cells, instructing them to express the target protein. These novel sequences have resulted in a significant yield increase and can be applied for future biosimilar candidates expressed in mammalian cells. The rest of the patent applications relate primarily to DNA constructs, host cells and/or methods of producing XlucaneTM and XcimzaneTM. The patent applications for the protection of XlucaneTM have been co-filed with STADA.

The expanding patent portfolio will strengthen Xbrane's brand, provide protection for our own and our investors' products, and enable more out-licensing of IP in the future.

Number of patents and patent applications:

25
			23
20
15
10		12
5
0	2
2009-2019	2020	2021

5 XBRANE BIOPHARMA | INTERIM REPORT JANUARY - SEPTEMBER 2021