Affimed N.V.
Amsterdam, The Netherlands
Annual Report 2022
Affimed Annual Report 2022
Contents
Report by Affimed’s Management Board
Business and financial overview
Risk Management
Corporate Governance
Report by Affimed’s Supervisory Board
Consolidated Financial Statements
Company Financial Statements
Other information
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Affimed Annual Report 2022
Forward-Looking Statements
This Annual Report contains statements that constitute forward-looking statements. Many of the
forward-looking statements contained in this Annual Report can be identified by the use of forward-
looking words such as “anticipate,” “believe,” “could,” “expect,” “should,” “plan,” “intend,” “will,”
“estimate” and “potential,” among others.
Forward-looking statements appear in a number of places in this Annual Report and include, but are
not limited to, statements regarding our intent, belief or current expectations. Forward-looking
statements are based on our management’s beliefs and assumptions and on information currently
available to our management. Such statements are subject to risks and uncertainties, and actual
results may differ materially from those expressed or implied in the forward-looking statements due to
various factors, including, but not limited to, those identified under the section “Risk Management” in
this Annual Report.
Forward-looking statements speak only as of the date they are made, and we do not undertake any
obligation to update them in light of new information or future developments or to release publicly any
revisions to these statements in order to reflect later events or circumstances or to reflect the
occurrence of unanticipated events.
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Report by Affimed’s Management Board
Overview
We are a clinical-stage immuno-oncology company focused on discovering and developing highly
targeted cancer immunotherapies. Our product candidates represent an innovative approach to cancer
treatment that seeks to harness the body’s own immune defenses to fight tumor cells. The most potent
cells of the human defense arsenal are types of white blood cells called innate immune cells (Natural
Killer cells, or NK cells, and macrophages) and T cells. Leveraging our fit-for-purpose ROCK® platform,
we develop proprietary, next-generation bispecific and trispecific antibodies, so-called innate cell
engagers (ICE ®), which are designed to direct innate immune cells and establish a bridge to cancer
cells. Our innate cell engagers have the ability to bring innate immune cells into the proximity of tumor
cells and trigger an activation cascade that leads to the destruction of cancer cells. Due to their novel
tetravalent architecture with four binding domains, our innate cell engagers bind to their targets with high
affinity. Different dosing schemes are being explored to allow for improved exposure in heavily
pretreated patient populations. Based on their mechanism of action as well as the preclinical and clinical
data we have generated to date, we believe that our product candidates as monotherapy and / or in
combination, may ultimately improve response rates, clinical outcomes and survival in cancer patients,
and could eventually become a cornerstone of modern targeted oncology care. Building on our
leadership in the innate cell engager space, we are also developing novel antibody formats with the
potential to tailor innate cell-engaging therapy to different indications and settings.
Affimed was founded in 2000 based on technology developed by the group led by Professor Melvyn
Little at Deutsches Krebsforschungszentrum (DKFZ), the German Cancer Research Center, in
Heidelberg, Germany.
Focusing our efforts on antibodies that specifically bind to innate cells through CD16A, a key activating
receptor, we have built a clinical and preclinical pipeline of innate cell-engaging bispecific antibodies
designed to activate both innate and adaptive immunity. Compared to a variety of T cell-engaging
technologies, our innate cell engagers appear to have a better safety profile and have the potential to
achieve more potent and deeper immune responses potentially through enhancing crosstalk of innate
and adaptive immunity. The safety profiles of our molecules make them suitable for development as
combination therapies (e.g. with checkpoint inhibitors, or CPIs, adoptive NK cells or cytokines).
We are focusing our research and development efforts on three programs, for which we retain full global
commercial rights, AFM13, AFM24 and AFM28. Because our tetravalent bispecific antibodies can be
engineered to bind to different antigens that are known to be present on various cancer cells, our product
candidates could be developed for the treatment of different cancer indications. We intend to clinically
develop our product candidates to treat high medical need indications, including as a salvage therapy
for patients who have relapsed after treatment with standard therapies, or patients who are refractory to
these therapies, meaning they do not respond to treatment with standard therapies, whom we
collectively refer to as relapsed/refractory patients. These patients have limited life expectancy and few
therapeutic options. We believe this strategy will allow for a faster path to approval and will likely require
smaller clinical studies compared to indications with more therapeutic options and larger patient
populations. We believe such specialized market segments in oncology can be effectively targeted with
a small and dedicated marketing and sales team. We currently intend to establish a commercial sales
force in the United States and/or Europe to commercialize our product candidates when and if they are
approved.
We also see an opportunity in the clinical development of our innate cell engagers in combination with
other agents that harness the immune system to fight cancer cells, such as CPIs, adoptive NK cell
transfer and cytokines. Such combinations of cancer immunotherapies may ultimately prove beneficial
for larger patient populations in earlier stages of diseases, beyond the relapsed/refractory disease
setting.
Our main offices and laboratories are located at the Technology Park adjacent to the German Cancer
Research Center (DKFZ) in Heidelberg, where we employ 172 people (end of March 2023),
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approximately 70% of whom have an advanced academic degree. Including Affimed Inc. and AbCheck
(see description below) personnel, our total headcount is 228 (end of March 2023, 219 full-time
equivalents). We are led by experienced executives with a track record of successful product
development, approvals and launches, specifically in the area of biologics and biopharmaceuticals. Our
supervisory board is made up of highly experienced experts from the pharmaceutical and biotech
industries, including individuals with a background and expertise in hematological malignancies.
Business Overview
Our Strategy
Our goal is to develop new treatment options for patients in need by activating innate immunity (e.g. NK
cells and macrophages), the body’s first line of defense, to fight cancer. We are developing single agent
and combination therapies to treat a variety of cancers. Our novel proprietary antibody platform, ROCK®,
delivers several unique types of next-generation tetravalent antibody formats, including bispecific and
trispecific innate cell engagers. Based on the distinctive properties and mechanism of action of these
products, which have demonstrated preclinical and / or clinical activity, we believe that our product
candidates, alone or in combination, could eventually become a key element of improving clinical
outcomes in cancer patients. Key elements of our strategy to achieve this goal are to:
● Rapidly advance the development of our clinical stage product candidates using a three-pronged
development approach, including development (i) as monotherapy, (ii) in combination with adoptive
NK cells, and (iii) in combinations with immunotherapies such as checkpoint inhibitors;
● Establish R&D and commercialization capabilities in Europe and in the United States;
● Use our technology platforms and intellectual property portfolio to continue to build our cancer
immunotherapy pipeline;
● Maximize the value of our collaboration arrangements with Artiva, Genentech and Roivant, and
establish new collaborations;
●
Intensify our collaboration with academia; and
● Utilize AbCheck to generate and optimize antibodies.
Our Strengths
We believe we are a leader in developing innate immunity-based cancer immunotherapies due to
several factors:
● Our lead development candidate, AFM13, is a first-in-class innate cell engager for hematologic
cancer indications;
● Our development candidate, AFM24, is a first-in-class innate cell engager for EGFR expressing
solid tumor indications;
● Our development candidate, AFM28, is a first-in-class innate cell engager for AML;
● Our modular and versatile ROCK® platform, which we believe will enable future product
candidates and collaborations with pharmaceutical companies;
● We retain global commercial rights for AFM13, AFM24 and AFM28;
● Our experienced management team has a strong track record in the development and
commercialization of new medicines; and
● We have a strong technology base and solid patent portfolio in the field of targeted immuno-
oncology.
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Our Research and Development Pipeline
We are developing a pipeline of innate cell engagers for the treatment of cancer as shown below *:
*As of end of March 2023
Our most advanced candidate, AFM13, is a first-in-class ICE® designed for the treatment of certain
CD30-positive (CD30+) malignancies, including Hodgkin lymphoma and certain non-Hodgkin
lymphomas. AFM13 selectively binds to CD30, a clinically validated target, and CD16A, an integral
membrane glycoprotein receptor expressed on the surface of NK cells and macrophages, triggering a
signal cascade that leads to the destruction of CD30-positive tumor cells. In contrast to conventional
full-length antibodies, AFM13 does not bind to CD16B, which prevents binding to other cell types, e.g.,
neutrophils, and binds with equal affinity to CD16A polymorphisms at position 158. Furthermore, AFM13
binds CD16A with an approximately 1000-fold higher affinity than monoclonal antibodies thereby
significantly increasing potency and efficacy as preclinically demonstrated. AFM13 was investigated as
monotherapy in a phase 2 study (REDIRECT) in patients with relapsed/refractory peripheral T-cell
lymphoma (PTCL), and is being investigated in combination with adoptive NK cells in a Phase 1/2a
clinical study in collaboration with the MD Anderson Cancer Center in patients with CD30+ lymphomas.
Topline data from the REDIRECT study were reported in December 2022, and the Company expects to
present comprehensive data from the study at a scientific conference in 2023. In November 2022, we
announced a collaboration with Artiva Biotherapeutics with the goal of advancing the development of
the combination of AFM13 with Artiva’s AB-101 NK cell therapy into a potential registration enabling
study. An IND application for the combination of AFM13 with AB-101 was cleared by the FDA in the
second quarter of 2023 and we expect to initiate a clinical study during 2023.
Our second candidate, AFM24, is a tetravalent, bispecific epidermal growth factor receptor (EGFR) and
CD16A-binding innate cell engager. AFM24 is designed to address limitations, such as toxicities or
treatment resistance, associated with current therapeutic anti-EGFR monoclonal antibodies, while also
offering the potential for better efficacy and safety by using activation of innate immunity to target EGFR-
expressing solid tumors rather than inhibition of EGFR-mediated signal transduction. AFM24 is currently
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being investigated as monotherapy in a first-in-human phase 1/2a study, and in two combination clinical
studies investigating AFM24 with adoptive NK cells and a PD-L1 inhibitor.
Our third, wholly-owned ICE® molecule, AFM28, was developed from our ROCK® platform and is
designed to bind to CD123, an established target in myeloid malignancies. We chose CD123 as it is
almost universally expressed on leukemic blasts and leukemic stem cells in patients with AML, both at
diagnosis and at relapse, and independently of cytogenetic risk. AFM28 is being developed for the
treatment of patients with acute myeloid leukemia. We believe that AFM28 could be the key to novel
treatment approaches that can fulfill several unmet needs. We advanced AFM28 into preclinical studies
in 2020 and initiated recruitment for a first-in-human phase 1 study in the first quarter of 2023.
In August 2018, we entered into a research collaboration and license agreement with Genentech, a
member of the Roche Group, for the development and commercialization of a number of product
candidates based on our novel NK cell engager-based immuno-therapeutics to treat multiple cancers.
The agreement included a license to AFM26, a tetravalent, bispecific B cell maturation antigen (BCMA)-
and CD16A-binding ICE® from our fit-for-purpose ROCK® platform, for the treatment of multiple
myeloma. AFM26 is now known as RO7297089. RO7297089 employs a unique mechanism of action
through high affinity engagement of NK cells and has demonstrated in vitro efficacy against cells with
very low levels of BCMA expression. NK cell binding of RO7297089 is largely unaffected by IgG
competition. During 2020, Genentech initiated a phase 1 study for RO7297089. Treatment with
RO7297089 was well-tolerated at the dose levels tested, although infusion reactions necessitated long
infusion duration for the first dose. Activity has been observed to date with partial responses at doses
up to 1080 mg. There were no DLTs and a recommended phase 2 dose has not been identified.
Genentech has decided not to progress with clinical development of RO7297089. The decision to
discontinue the phase 1 study does not impact the development of other targets pursuant to the
collaboration agreement with Genentech. Affimed is continuing its work with Genentech and during 2022
handed over a number of additional product candidates for further investigation by Genentech.
AFVT-2101 (formerly AFM32), another ICE® candidate in preclinical development against folate receptor
alpha, is being investigated under a License and Strategic Collaboration with Roivant Sciences Ltd.
(“Roivant”), pursuant to which we granted Roivant a license to develop and commercialize AFVT-2101
and options to license additional novel ICE® molecules against other targets. Roivant has announced
its intention to submit an IND for AFVT-2101 in the first half of 2023.
We believe that our collaborations help to validate and more rapidly advance our discovery efforts,
technology platforms and product candidates. As part of our business development strategy, we aim to
enter into additional research collaborations in order to derive further value from our platform and more
fully leverage its potential.
Business impact of COVID-19
In response to the COVID-19 pandemic, we have implemented mitigation procedures to ensure the
safety of trial participants and healthcare professionals and that drug supply and other trial-related
materials are ready and available for patients enrolled in our clinical trials. We are closely monitoring
and adhering to relevant federal and local guidelines on COVID-19 to ensure the safety and health of
our global workforce and help limit the spread of COVID-19, while maintaining business continuity. We
will continue to work closely with clinical sites as well as respective competent authorities to ensure the
safety of trial participants and healthcare professionals, as well as the appropriate use of healthcare
resources during the COVID-19 pandemic, while preserving the conduct and data integrity of our clinical
studies. For example, in January 2022, we announced that we would no longer pursue the TMF cohort
in our phase 2 clinical trial evaluating AFM13 as monotherapy due to continuing challenges enrolling
patients as a result of the COVID-19 pandemic.
At this time, our contract manufacturers are operating without interruption, and there is sufficient material
for our ongoing clinical studies. We are continually assessing the potential impact of the COVID-19
pandemic on patient enrollment and site activation in our clinical studies, and we will update trial
timelines to the extent that changes arise as a result of the COVID-19 pandemic.
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Operating results
To date, we have financed our operations primarily through our public offerings of our common shares,
private placements of equity securities, the incurrence of loans including convertible loans and through
government grants and payments for collaborative research and development services. Through
December 31, 2022, we have raised an aggregate of €570.4 million (gross proceeds) through the
issuance of equity and incurrence of loans. To date, we have not generated any revenues from product
sales or royalties. Based on our current plans, we do not expect to generate product or royalty revenues
unless and until we or any collaboration partner obtain marketing approval for, and commercialize, any
of our product candidates.
We have generated losses since we began our drug development operations in 2000. For the year
ended December 31, 2022, we incurred a net loss of €86.0 million. As of December 31, 2022, we had
an accumulated deficit of €430.2 million.
We expect to continue incurring losses as we continue our preclinical and clinical development
programs, apply for marketing approval for our product candidates and, subject to obtaining regulatory
approval for our product candidates, build a marketing and sales team to commercialize our product
candidates. Our profitability is dependent upon the successful development, approval, and
commercialization of our product candidates and achieving a level of revenues adequate to support our
cost structure. We may never achieve profitability, and unless and until we do, we will continue to need
to raise additional cash. We intend to fund future operations through additional equity and debt
financings, and we may seek additional capital through arrangements with strategic partners or from
other sources.
Collaboration Agreements
We have entered into strategic collaborations for some of our therapeutic programs. As part of our
business development strategy, we aim to increase the number of our research collaborations in order
to derive further value from our platforms and more fully exploit their potential. Key terms of our current
material collaborations are summarized below.
Artiva
In November 2022, we announced a collaboration with Artiva Biotherapeutics with the goal of advancing
the development of the combination of AFM13 with Artiva’s AB-101 NK cell therapy into a potential
registration enabling study. Affimed shall be responsible for all costs associated with the development
of the combination therapy (including all clinical trial costs), except that Affimed and Artiva shall each
bear 50% of the costs and expenses incurred in connection with the performance of any confirmatory
clinical trial required by the FDA. Artiva shall be solely responsible for all costs incurred by Artiva for the
supply of AB-101 and certain other products used in the clinical trials. In addition, under Collaboration
Agreement, the parties have agreed to make payments to each other to achieve a proportion of
67%/33% (Affimed/Artiva) of revenues generated by both parties from commercial sales of each party’s
product as part of the combination therapy.
Roivant
On November 9, 2020, we announced that we entered into a license and strategic collaboration
agreement with a subsidiary of Roivant Sciences Ltd. (“Roivant”) to develop and commercialize novel
ICE® molecules, including AFM32, in oncology. Under the terms of the agreement, we received $60
million in upfront consideration, comprised of $40 million in cash and pre-paid R&D funding, and $20
million of newly issued shares in Roivant Sciences Ltd. We are eligible to receive up to an additional $2
billion in milestones over time upon achievement of specified development, regulatory and commercial
milestones, as well as tiered royalties on net sales.
We recognized revenues of €22.7 million in 2022.
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Genentech
On August 24, 2018 we entered into a research collaboration and license agreement with Genentech,
a member of the Roche Group, for the development and commercialization of certain product candidates
that contain novel NK cell engager-based immunotherapeutics to treat multiple cancers. Under the terms
of the agreement, in the fourth quarter of 2018 we received $96 million in initial upfront payments and
other funding and additional payments in 2019 for development milestones and a final target nomination.
We recognized revenues of €18.5 million in 2022.
Financial Operations Overview
Revenue
To date, our revenues have consisted principally of collaboration and service revenue.
Collaboration revenue. Collaboration revenue for year ended December 31, 2022 amounted to €41.2
million, with €18.5 million from the Genentech collaboration and €22.7 million from the Roivant
collaboration. Collaboration revenue for year ended December 31, 2021 amounted to €39.3 million, with
€21.6 million from the Genentech collaboration and €17.7 million from the Roivant collaboration.
Service revenue. Service revenue is primarily revenue from service contracts entered into by AbCheck,
our wholly owned, independently operated antibody screening platform. We recognized €0.2 million and
€1.1 million of third party service revenue in 2022 and 2021, respectively. Service revenue of AbCheck
is derived from third party contracts as well as from the utilization of the entity by Affimed. The increase
or decrease in the use of AbCheck’s service capabilities by Affimed has an impact on AbCheck’s ability
to generate third party revenues.
In the future, the timing of our revenue may vary significantly from the receipt of the related cash flows,
as the revenue from some upfront or initiation payments is deferred and recognized as revenue over
the estimated service period, while other revenue is earned when received, such as milestone payments
or service fees.
Our revenue has varied substantially, especially due to the impact of collaboration revenue received
from Genentech and Roivant. The amount of future revenue is dependent on the services performed
and milestones reached for our existing collaborations and on our ability to conclude new collaboration
arrangements and the terms we are able to negotiate with our partners. As our project work for both
Genentech and Roivant comes to a close, we expect that recognition of revenue related to the upfront
payments from such collaborations will significantly decrease in 2023. We remain eligible for milestones
under the collaboration, and the revenues associated with any such milestones will be recognized at the
time they are achieved.
Other Income
Other income for years 2021 and 2022 primarily relates to government grants for research and
development projects of €0.3 million in 2021 and €0.6 million in 2022 and research collaborations where
costs are shared equally between both parties of €1.1 million in 2021 and €0.9 million in 2022.
Research and Development Expenses
Research and development expenses consist principally of:
● salaries for research and development staff and related expenses, including benefits;
● costs for production of preclinical compounds and drug substances by contract manufacturers;
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●
fees and other costs paid to contract research organizations in connection with additional
preclinical testing and the performance of clinical trials;
● costs of related facilities, materials and equipment;
● costs associated with obtaining and maintaining patents and other intellectual property;
● amortization and depreciation of tangible and intangible fixed assets used to develop our product
candidates; and
● expenses for share-based payments.
Based on our current budget we expect that our total research and development expenses in 2023 will
increase as compared to 2022. Our research and development expenses primarily relate to the
following key programs:
AFM13. The following is a summary of completed and ongoing research and development activities
for AFM13:
●
In January 2023, the U.S. Food and Drug Administration (“FDA”) issued a written response to our
pre-investigational new drug (“IND”) meeting request for the AFM13 and Artiva Biotherapeutics, Inc.
AB-101 co-administered combination therapy in relapsed/refractory Hodgkin lymphoma and the
exploratory arm evaluating the combination in r/r CD30-positive peripheral T-cell lymphoma. Affimed
received clearance from FDA for an IND application during the second quarter of 2023, and expects
to initiate a clinical study in the third quarter of 2023.
●
In December 2022, we provided a data update from the ongoing phase 1/2 study of the Company’s
lead innate cell engager (ICE®) AFM13 precomplexed with cord blood-derived natural killer (cbNK)
cells in patients with CD30-positive relapsed or refractory (R/R) Hodgkin and Non-Hodgkin
lymphomas. Key observations as of the cutoff date include:
35 Hodgkin lymphoma and Non-Hodgkin lymphoma patients treated at the recommended phase 2
dose (RP2D) showed an objective response rate (ORR) of 94% and a complete response (CR) rate
of 71%. 63% of patients treated at the RP2D with at least 6 months follow-up after initial infusion
(n=24) remain in complete response for at least 6 months. The treatment continues to be well
tolerated in the larger patient population, with minimal side effects beyond the expected
myelosuppression from the preceding lymphodepleting chemotherapy. No instances of cytokine
release syndrome, immune effector cell-associated neurotoxicity syndrome, or graft versus host
disease were observed. There were 20 infusion-related reactions in 294 infusions (6.8%) of AFM13
alone and one infusion-related reaction in 99 infusions (1%) of the cbNK cells precomplexed with
AFM13. No dose-limiting toxicities were encountered.
●
In December 2022, we released topline data from our phase 2 REDIRECT study investigating
AFM13 monotherapy in patients with advanced-stage R/R Peripheral T Cell Lymphoma. Primary
efficacy measures include objective response rate of 32.4% and a CR rate of 10.2%. Key secondary
and exploratory outcome measures include safety, durability of response, progression free survival
(PFS) and overall survival (OS). The safety profile of AFM13 was well managed and consistent with
previously reported data of prior and ongoing clinical studies with AFM13. Median DoR was 2.3
months, median PFS was 3.5 months and median OS was 13.8 months. Based on the compelling
data seen in Hodgkin lymphoma for the combination of AFM13 with cord blood-derived NK cells in
the AFM13-104 study, we believe that the combination with AB-101 has a higher probability to
deliver increased anti-tumor activity and a more durable clinical benefit to address the unmet need
in this patient population. Accordingly, we do not intend to pursue an accelerated approval for
AFM13 monotherapy in PTCL and will focus investment on clinical development in the combination
of AFM13 with Artiva’s AB-101 NK cell product.
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●
In November 2022, we announced a new strategic partnership with Artiva Biotherapeutics (“Artiva”)
to jointly develop, manufacture, and commercialize a combination therapy of ICE® AFM13 and
Artiva’s cord blood-derived, cryopreserved off-the-shelf allogeneic NK cell product candidate, AB-
101. Under the terms of the agreement, Affimed and Artiva will pursue the development of the
AFM13/AB-101 combination treatment in the United States on a co-exclusive basis. Affimed will lead
regulatory activities through Phase 2 and any confirmatory studies. Affimed will be responsible for
funding clinical study costs through Phase 2, while Artiva will be responsible for the costs of
supplying AB-101 and IL-2 for such studies. The companies will share confirmatory study costs on
a 50/50 basis. Both companies will retain commercialization and distribution rights and book sales
for their respective products. Affimed will be responsible for promotional activities and expenses of
the combination therapy. Pursuant to the agreement, revenues from the combination will be shared,
with Affimed receiving 67% of the combination therapy revenue and Artiva receiving 33%.
● We anticipate that our research and development expenses in 2023 for AFM13 will increase
compared to those for 2022 due to the continuation of the existing clinical studies and the initiation
of a new clinical study, pre-clinical studies and the scale-up of the production of AFM13 for
commercial purposes.
AFM24. AFM24, a tetravalent, bispecific epidermal growth factor receptor, and CD16A-binding innate
cell engager. Affimed expects to report data from all three ongoing AFM24 studies at scientific
conferences in Q2/Q3 2023.
AFM24-101: Affimed continues to enroll patients in the expansion phase of the AFM24 monotherapy
study at the RP2D. The expansion cohorts include patients with renal cell carcinoma (clear cell), non-
small cell lung cancer (EGFR mutant) and colorectal cancer.
AFM24-102: Enrollment was completed in the 480 mg dose escalation cohort of the phase 1/2a
combination study of AFM24 with the anti-PD-L1 checkpoint inhibitor atezolizumab (Tecentriq®) in
patients with advanced epidermal growth factor receptor-expressing solid tumors. AFM24-102 includes
patients with non-small cell lung cancer (EGFR wildtype), gastric and gastroesophageal junction
adenocarcinoma and pancreatic/hepatocellular/biliary tract cancer. The treatments continue to show a
well managed safety profile. Dose escalation was completed during the first quarter of 2023 with a
weekly AFM24 dose of 480 mg confirmed as the recommended phase 2 dose. The phase 2 expansion
phase of the study was initiated in the first quarter of 2023.
Data from the first cohort (4 patients at 160 mg dose) of the phase 1 dose escalation study presented
at the annual meeting of the Society for Immunotherapy of Cancer (SITC) in November 2022 showed
that clinical activity was observed in two patients. A patient with gastric cancer and skin metastases who
had rapidly progressed following four prior lines of therapy, including a PD-1 inhibitor, achieved a partial
response. A second patient with pancreatic adenocarcinoma showed stable disease beyond four
months. Patients being enrolled in the study are required to have progressed or relapsed on standard
of care therapies.
AFM24-103: In the phase 1/2a combination study of AFM24 with SNK01, NKGen Biotech’s ex vivo
expanded and activated autologous NK cell therapy, enrollment was completed in the dose cohort of
480 mg AFM24 weekly, with no DLTs observed to date. AFM24-103 is focused on the treatment of
patients with non-small cell lung cancer (NSCLC, EGFR-wildtype), squamous cell carcinoma of the head
and neck, and colorectal cancer.
AFM28. AFM28 is designed to bind to CD123, an established target in myeloid malignancies. We chose
CD123 as it is almost universally expressed on leukemic blasts and leukemic stem cells in patients with
AML, both at diagnosis and at relapse, and independently of cytogenetic risk. AFM28 is being developed
for the treatment of patients with acute myeloid leukemia. In June 2022, we submitted an IND to the
FDA for AFM28. Following feedback from the FDA related to the design of the dose escalation study,
we made a strategic decision to voluntarily withdraw the IND and to focus early clinical development of
AFM28 in jurisdictions outside of the U.S. Clinical trial applications were cleared in Belgium, Denmark,
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France and Spain, and the Company initiated recruitment into a phase 1 clinical study in the first quarter
of 2023.
Other projects and infrastructure costs. Our other research and development expenses relate to our
Genentech, Roivant and Artiva collaborations, and early-stage development/discovery activities. We
have allocated a material amount of our resources to such discovery activities. The expenses mainly
consist of salaries, manufacturing costs for pre-clinical study material and pre-clinical studies. In
addition, we incur a significant amount of costs associated with our research and development that are
non-project specific, including intellectual property-related expenses, depreciation expenses and facility
costs. Because these are less dependent on individual ongoing programs, they are not allocated to
specific projects. We assume that other projects and infrastructure costs will decrease in 2023 due to
decreased early-stage development/discovery activities.
Since January 1, 2012, we have cumulatively spent €415.9 million on research and development. In the
years ended December 31, 2020, 2021 and 2022, we spent €50.0 million, €81.5 million and €98.8
million, respectively, on research and development; €19.1 million, €19.8 million and €15.1 million thereof
on AFM13; €.8.7 million, €20.0 million and €21.7 million thereof on AFM24 and €2.2 million, €6.5 million
and €9.3 million on AFM28. Our research and development expenses may vary substantially from period
to period based on the timing of our research and development activities, including due to timing of
initiation of clinical trials and enrollment of patients in clinical trials. Research and development expenses
are expected to increase as we advance and broaden the clinical development of AFM13, AFM24,
AFM28 and certain of our other product candidates and further advance the research and development
of our preclinical product candidates. The successful development of our product candidates is highly
uncertain. At this time we cannot reasonably estimate the nature, timing and estimated costs of the
efforts that will be necessary to complete the development of, or the period, if any, in which material net
cash inflows may commence from, any of our product candidates. This is due to numerous risks and
uncertainties associated with developing drugs, including the uncertainty of:
●
●
the scope, rate of progress, results and cost of our clinical trials, nonclinical testing, and other
related activities;
the cost of manufacturing clinical supplies and establishing commercial supplies of our product
candidates and any products that we may develop;
●
the number and characteristics of product candidates that we pursue;
●
the cost, timing, and outcomes of regulatory approvals;
●
the cost and timing of establishing sales, marketing, and distribution capabilities; and
●
the terms and timing of any collaborative, licensing, and other arrangements that we may
establish, including any milestone and royalty payments thereunder.
A change in the outcome of any of these variables with respect to the development of AFM13, AFM24,
AFM28 or any other product candidate that we may develop could mean a significant change in the
costs and timing associated with the development of such product candidate. For example, if the FDA
or other regulatory authority were to require us to conduct preclinical and clinical studies beyond those
which we currently anticipate will be required for the completion of clinical development, if we experience
significant delays in enrollment in any clinical trials or if we encounter difficulties in manufacturing our
clinical supplies, we could be required to expend significant additional financial resources and time on
the completion of the clinical development.
General and Administrative Expenses
Our general and administrative expenses consist principally of:
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● salaries for employees other than research and development staff, including benefits;
● business development expenses, including travel expenses;
● professional fees for auditors and other consulting expenses not related to research and
development activities;
● professional fees for lawyers not related to the protection and maintenance of our intellectual
property;
● cost of facilities, communication and office expenses;
●
IT expenses;
● amortization and depreciation of tangible and intangible fixed assets not related to research and
development activities; and
● expenses for share-based payments.
We expect that our general and administrative expenses in 2023 will be higher compared to the
expenses in 2022, and will further increase in the future as our business expands. These increases will
likely include costs of additional personnel, increase in infrastructure costs, additional legal fees, IT
expenses, managing directors’ and supervisory directors’ liability insurance premiums. In addition, we
may grant share-based compensation awards to key management personnel and other employees,
which may further contribute to an increase in general and administrative expenses in 2023.
Affimed Annual Report 2022
11
Results of Operations
The numbers below have been derived from our audited consolidated financial statements for the years
ended December 31, 2021 and 2022. The discussion below should be read along with these financial
statements, and it is qualified in its entirety by reference to them.
Comparison of the years ended December 31, 2021 and 2022
Year ended December
31,
Total Revenue
Other income - net
Research and development expenses
General and administrative expenses
Operating loss
Finance income/(costs)-net
Loss before tax
Income taxes
Loss for the period
Total comprehensive loss
Loss per common share in € per share
Revenue
2022
2021
(in € thousand)
40,366
1,310
(81,488)
(24,218)
(64,030)
6,509
(57,521)
(2)
(57,523)
(65,216)
(0.48)
41,353
1,417
(98,814)
(32,075)
(88,119)
2,117
(86,002)
(2)
(86,004)
(92,051)
(0.60)
Revenue increased from €40.4 million for the year ended December 31, 2021 to €41.4 million for the
year ended December 31, 2022. Revenue for the year ended December 31, 2022 largely consisted of
revenue from the Genentech and Roivant collaborations. The increase in revenue in 2022 as compared
to 2021 was primarily driven by an increase in revenues from the Roivant collaboration.
Research and development expenses
R&D Expenses by Project
Project
AFM13
AFM24
AFM28
Other projects and infrastructure costs
Share-based payment expense
Total
Year ended December
31,
2021
2022
(in € thousand)
Change
%
(24)%
9 %
44 %
44 %
76 %
21 %
15,130
21,687
9,290
42,356
10,351
98,814
19,800
19,957
6,451
29,388
5,892
81,488
Research and development expenses increased 21% from €81.5 million in the year ended December
31, 2021 to €98.8 million in the year ended December 31, 2022, due to higher expenses for AFM24,
AFM28, other projects and infrastructure and share-based payment expense. The variances in project
related expenses between the year ended December 31, 2021 and the corresponding period in 2022
are mainly due to the following projects:
AFM13. In the year ended December 31, 2022, expenses decreased 24% compared to the year ended
December 31, 2021 primarily due to a milestone payment included in 2021 which has not reoccurred in
2022.
Affimed Annual Report 2022
12
AFM24. In the year ended December 31, 2022, expenses increased 9% compared to the year ended
December 31, 2021, primarily due to the enrollment of patients in our ongoing phase 1/2a clinical trials
and manufacturing activities for clinical trial material required for the ongoing studies.
AFM28. In the year ended December 31, 2022, expenses increased 44% compared to the year ended
December 31, 2021, primarily due to additional expenses related to preclinical development preparation
of the filing of the IND application with the FDA and preparation of manufacturing activities.
Other projects and infrastructure costs. In the year ended December 31, 2022, expenses increased 44%
compared to the year ended December 31, 2021, primarily due to higher expenses incurred in relation
to our earlier stage programs, including our collaborations with Roivant, and discovery/early stage
development activities and infrastructure costs.
Share-based payment expenses. In the year ended December 31, 2022, expenses increased 76%
compared to the year ended December 31, 2021 due to an increase in headcount, as well as an increase
in the underlying fair value of newly issued share options.
General and administrative expenses
General and administrative expenses increased 32% from €24.2 million in the year ended December
31, 2021 to €32.1 million in the year ended December 31, 2022. In 2022, general and administrative
expenses were largely comprised of (i) personnel expenses of € 15.2 million (2021: €10.7 million), which
increased due to an increase in head count and share-based payment expense; (ii) legal, consulting
and audit costs of €8.3 million (2021: €8.1 million) and insurance expenses of €3.5 million (2021: €2.6
million), mainly comprising D&O insurance.
Finance income / (costs)-net
We recognized finance net income for the year ended December 31, 2022 of €2.1 million compared to
€6.5 million for the year ended December 31, 2021. The year ended December 31, 2022 was primarily
affected by foreign exchange gains of €3.4 million primarily related to cash and cash equivalents
denominated in U.S. dollars as a result of the strengthening of the U.S. dollar compared to the Euro
during 2022. The year ended December 31, 2021 was primarily affected by foreign exchange gains of
€7.6 million primarily related to assets denominated in U.S. dollars as a result of the weakening of the
U.S. dollar compared to the Euro during 2021.
Liquidity and Capital Resources
Since our inception, we have not generated any revenue from product sales and we have incurred
significant operating losses. For the years ended December 31, 2021 and 2022 we incurred net losses
of €57.5 million and €86.0 million, respectively. We have funded our operations to date with the proceeds
principally from the sales of our common shares and payments from collaboration partners.
Our cash and cash equivalents as of December 31, 2022 consist primarily of bank balances. We expect
to continue this investment philosophy, though we may in the future decide to invest our available
liquidity in other financial instruments. Based on our current operating and budget assumptions, we
believe that our existing liquidity will enable us to fund our operating expenses and capital expenditure
requirements into 2025.
As part of our contractual obligations, we are also bound by certain operating lease obligations.
Operating lease obligations consist of payments pursuant to non-cancellable operating lease
agreements relating to our lease of office and laboratory space. The majority of this space will expire in
2023 and the remaining space (less than 10%) in 2025. We signed a new lease contract for offices and
laboratories in 2021 and we are planning to move to a new facility in Mannheim, Germany, in
approximately mid-2023. The contractual lease term is ten years including a cancellation option after
Affimed Annual Report 2022
13
five years with an expected start mid-2023. The terms provide for renewal options. We also lease office
and laboratory space in the Czech Republic that is contracted until December 2025 with a period of
notice of three months.
In January 2021, we issued and sold 19,166,667 common shares and generated net proceeds after
underwriter discounts and commissions and other offering expenses of €88.7 million in the aggregate
pursuant to an underwritten offering of our common shares.
In November 2020, the Company implemented a $75 million ATM program. During 2021, we had issued
approximately 4.4 million shares from this program, generating approximately €24.4 million in net
proceeds.
In November 2021, we entered into a new $100 million ATM program and, as of December 31, 2022,
0.2 million common shares had been sold under the new ATM program, generating net proceeds of
€1.6 million.
In April 2022, we issued and sold 25,875,000 common shares and generated net proceeds after
underwriter discounts and commissions and other offering expenses of €89.8 million in the aggregate
pursuant to an underwritten offering of our shares.
Cash Flows
Comparison of the years ended December 31, 2021 and 2022
The table below summarizes our consolidated statement of cash flows for the years ended December
31, 2021 and 2022:
Net cash used in operating activities
Net cash (used)/generated from for investing activities
Net cash generated from financing activities
Net changes to cash and cash equivalents
Cash and cash equivalents at the beginning of the year
Exchange-rate related changes of cash and cash equivalents
Cash and cash equivalents at the end of the year
Year ended December
31,
2021
(in € thousand)
2022
(86,591)
(3,850)
133,581
43,140
146,854
7,636
197,630
(104,892)
5,605
88,557
(10,730)
197,630
3,386
190,286
Net cash used in operating activities amounted to €86.6 million in the year ended December 31, 2021
whereas net cash used in operating activities amounted to €104.9 million in the year ended December
31, 2022. The increase is due to higher cash expenditure for research and development as well as
general and administrative activities.
We used cash in investing activities of €3.9 million in the year ended December 31, 2021, compared to
cash of € 5.6 million generated in the year ended December 31, 2022. The investing activities in 2022
primarily relate to investments in laboratory equipment and leasehold improvements, and proceeds
generated from the sale of the Roivant shares. The investing activities in 2021 primarily related to
investments in intangible assets, laboratory equipment and leasehold improvements.
Net cash generated from financing activities in the year ended December 31, 2022 amounted to €88.6
million (2021: €133.6 million) and relate primarily to the net proceeds received from the public offering
in 2022 of €89.8 million.
Affimed Annual Report 2022
14
Material Cash Requirements
Our short-term and long-term material cash requirements consist of operational and capital
expenditures, some of which contain contractual obligations. Our primary uses of cash relate to clinical
trial costs, third-party research and development services, the cost of manufacturing clinical trial
material, manufacturing scale-up and validation costs, non-clinical development costs, personnel,
laboratory and related supplies, milestone payments pursuant to certain of our collaboration
agreements, legal, intellectual property and other regulatory expenses and general overhead costs.
Because our product candidates are in various stages of clinical and pre-clinical development and the
outcome of these efforts is uncertain, we cannot estimate the actual amounts necessary to successfully
complete the development and commercialization of our product candidates or whether, or when, we
may achieve profitability. In addition, our expenditures as reported in our financial statements may be
expected to be variable due to that uncertainty. The most significant contractual obligations are the
operating leases at our facilities in Heidelberg and our future facilities in Mannheim, Germany. Our future
minimum lease payments as of December 31, 2022 totaled €0.4 million related to short-term lease
liabilities, and €0.2 million related to long-term lease liabilities. In addition, we have entered into a new
lease agreement for new offices and laboratories expected to start mid-2023. Expected payments
include monthly rent of €141,000, a one-time payment of €1,170,000 for laboratory construction and a
security deposit of €503,000. See Note 23, Other commitments and contingencies, in the Notes to the
Financial Statements in this Annual Report on Form 20-F for additional information.
Based on our current operating and budget assumptions, we believe that our existing liquidity will enable
us to fund our operating expenses and capital expenditure requirements into 2025. We have based this
estimate on assumptions that may prove to be incorrect, and we could use our capital resources sooner
than we currently expect. Our future funding requirements will depend on many factors, including but
not limited to:
●
●
the scope, rate of progress, results and cost of our clinical trials, nonclinical testing, and other
related activities;
the cost of manufacturing clinical supplies, and establishing commercial supplies, of our product
candidates and any products that we may develop;
●
the number and characteristics of product candidates that we pursue;
●
the cost, timing, and outcomes of regulatory approvals;
●
the cost and timing of establishing sales, marketing, and distribution capabilities; and
●
the terms and timing of any collaboration, licensing, and other arrangements that we have or may
establish, including any required milestone and royalty payments thereunder.
To address our financing needs, we may raise additional capital through the sale of equity or convertible
debt securities. In such an event, the ownership interest of our shareholders will be diluted, and the
terms of any such securities may include liquidation or other preferences that adversely affect the rights
of holders of our common shares.
Cash and Funding Sources
Our cash and cash equivalents as of December 31, 2022 were €190.3 million. Funding sources
generally comprise proceeds from the issuance of equity instruments, loans, payments from
collaboration agreements and government grants.
Affimed Annual Report 2022
15
In May 2020, we implemented a $50 million at-the-market (ATM) program providing for the sale of shares
over time, which resulted in the sale of in total 12.5 million common shares and generated net proceeds
of €34.5 million in the aggregate. In November 2020, we entered into a new ATM program for an amount
not to exceed $ 75 million, and as of December 31, 2021 a further 12.3 million common shares were
sold, generating net proceeds of €58.9 million in the aggregate. In November 2021, we entered into a
new $100 million ATM program as of December 31, 2021 a further 0.2 million common shares were
sold, generating net proceeds of €1.6 million in the aggregate.
On January 8, 2021, we entered into a new loan agreement with SVB. The loan agreement provides us
with a senior secured term loan facility (the “2021 SVB Credit Facility”) for up to €25.0 million, of which
€10.0 million was available at closing and drawn in February 2021, and €15.0 million of which is available
in two additional tranches of €7.5 million each, subject to the satisfaction of certain milestones and
conditions. In December 2021, we drew on the first additional tranche of the loan, for net proceeds of
€7.4 million. The second additional tranche of €7.5 million expired undrawn at the end of 2022.
The interest rate on amounts borrowed under the 2021 SVB Credit Facility is calculated as the sum of
(i) the European Central Bank Base Rate plus (ii) an applicable margin of 5.5%, with European Central
Bank Base Rate deemed to equal zero percent if the European Central Bank Base Rate is less than
zero percent. The 2021 SVB Credit Facility matures in November 2025 with an interest-only period
through December 1, 2022, with amortized payments of principal and interest thereafter in equal monthly
installments. Borrowings under the 2021 SVB Credit Facility are secured by a pledge of 100% of our
shares in Affimed GmbH, all intercompany accounts receivables owed by our subsidiaries to us and a
security assignment of essentially all our bank accounts, inventory, trade receivables and payment
claims as specified in the loan agreement governing the facility.
On January 15, 2021, we closed the sale of 16,666,667 of our common shares at the public offering
price of $6.00 per share in an underwritten public offering. Concurrent with closing, the underwriters
exercised an option to purchase over-allotment shares and we sold an additional 2,500,000 shares at a
price of $6.00 per share. We received approximately €88.7 million in net proceeds from the offering,
after deducting underwriting discounts and commissions and other offering expenses.
On April 18, 2022, we closed the sale of 22,500,000 of our common shares at the public offering price
of $4.00 per share in an underwritten public offering. Concurrent with closing, the underwriters exercised
an option to purchase over-allotment shares and we sold an additional 3,375,000 shares at a price of
$4.00 per share. We received approximately €89.8 million in net proceeds from the offering, after
deducting underwriting discounts and commissions and other offering expenses.
Funding Requirements
We expect that we will require additional funding to complete the development of our product candidates
and to continue to advance the development of our other product candidates. In addition, we expect that
we will require additional capital to commercialize our product candidates, including AFM13, AFM24 and
AFM28. If we receive regulatory approval for AFM13, AFM24, AFM28 or other earlier programs, and if
we choose not to grant any licenses to partners, we expect to incur significant commercialization
expenses related to product manufacturing, sales, marketing and distribution, depending on where we
choose to commercialize. We also continue to incur substantial costs associated with operating as a
public company. Additional funds may not be available on a timely basis, on favorable terms, or at all,
and such funds, if raised, may not be sufficient to enable us to continue to implement our long-term
business strategy. If we are not able to raise capital when needed, we could be forced to delay, reduce
or eliminate our product development programs or commercialization efforts.
Based on our current operating and budget assumptions, we believe that our existing liquidity will enable
us to fund our operating expenses and capital expenditure requirements into 2025. We have based this
estimate on assumptions that may prove to be incorrect, and we could use our capital resources sooner
Affimed Annual Report 2022
16
than we currently expect. Our future funding requirements will depend on many factors, including but
not limited to:
●
●
the scope, rate of progress, results and cost of our clinical trials, nonclinical testing, and other
related activities;
the cost of manufacturing clinical supplies, and establishing commercial supplies, of our product
candidates and any products that we may develop;
●
the number and characteristics of product candidates that we pursue;
●
the cost, timing, and outcomes of regulatory approvals;
●
the cost and timing of establishing sales, marketing, and distribution capabilities; and
●
the terms and timing of any collaboration, licensing, and other arrangements that we have or may
establish, including any required milestone and royalty payments thereunder.
To address our financing needs, we may raise additional capital through the sale of equity or convertible
debt securities. In such an event, the ownership interest of our shareholders will be diluted, and the
terms of any such securities may include liquidation or other preferences that adversely affect the rights
of holders of our common shares.
For more information as to the risks associated with our future funding needs, see “Risk Management.”
Affimed Annual Report 2022 17
Risk Management
Our business is exposed to specific industry risks, as well as general business risks. Our financial
condition or results of operations could be materially and adversely affected if any of these risks
occurs, and as a result, the market price of our common shares could decline. This Annual Report
also contains forward-looking statements that involve risks and uncertainties. Our actual results could
differ materially and adversely from those anticipated in these forward-looking statements as a result
of certain factors.
Listed below is a summary of the risks perceived by management to be the most significant.
Strategic and Operational Risks
Any failure or delay in commencing or completing clinical trials for our products could severely harm
our business. To obtain the requisite regulatory approvals to market and sell any of our products, we
must demonstrate through extensive pre-clinical tests and clinical trials that the products are safe and
effective in humans. Pre-clinical tests and clinical trials are expensive, can take many years and have
an uncertain outcome. A failure of one or more of our pre-clinical programs on clinical trials could
occur at any stage of testing.
Positive or timely results from pre-clinical tests and early clinical trials do not ensure positive or timely
results in later stage clinical trials or product approval by the European Medicines Agency, or EMA,
the U.S. Food and Drug Administration, or FDA or any other regulatory authority. Products that show
positive preclinical or early clinical results often fail in later stage clinical trials.
Any delay in commencing or completing clinical trials for our product candidates would delay
commercialization of our products and severely harm our business and financial condition. It is also
possible that none of our product candidates will complete clinical trials in any of the markets in which
we intend to sell those product candidates. Accordingly, we would not receive the regulatory approvals
needed to market our product candidates.
The regulatory approval process is costly and lengthy and we may not be able to successfully obtain
all required regulatory approvals. The pre-clinical development, clinical trials, manufacturing,
marketing and labeling of pharmaceuticals and medical devices are all subject to extensive regulation
by governmental authorities and agencies in the European Union (“EU”), the US and other
jurisdictions.
We must obtain regulatory approval for products before marketing or selling any of them. The approval
process is typically lengthy and expensive, and approval is never certain.
Additional clinical trials may be required if clinical trial results are negative or inconclusive, which will
require us to incur additional costs and significant delays.
Our products will remain subject to ongoing regulatory review even if they receive marketing approval.
If we fail to comply with continuing regulations, we could lose these approvals and the sale of our
products could be suspended.
Even if we receive regulatory approval to market a particular product, the approval could be
conditional on us conducting additional costly post-approval studies or could limit the indicated uses
included in the labeling of our products. Moreover, the product may later cause adverse effects that
limit or prevent its widespread use, force us to withdraw it from the market or impede or delay our
ability to obtain regulatory approvals in additional countries. In addition, the manufacturer of our
products, and their facilities, will continue to be subject to regulatory review and periodic inspections to
ensure adherence to applicable regulations. After receiving marketing approval, the manufacturing,
Affimed Annual Report 2022 18
labeling, packaging, adverse event reporting, storage, advertising, promotion and the product will
remain subject to extensive regulatory requirements.
Our products may not gain market acceptance. Sales of medical products depend on physicians’
willingness to prescribe the treatment, which is likely to be based on a determination by these
physicians that the products are safe and effective from a therapeutic and cost perspective relative to
competing treatments. We cannot predict whether physicians will make this determination in respect of
our products.
Even if our products achieve market acceptance, the market may prove not to be large enough to
allow us to generate significant revenues.
Our ability to generate revenue from any products that we may develop will depend on reimbursement
and pricing policies and regulations.
Our ability to commercialize our products may depend, in part, on the extent to which reimbursement
for our products will be available from government and health administration authorities, private health
insurers, managed care programs and other third-party payers.
Significant uncertainty exists as to the reimbursement status of newly approved healthcare products.
In many countries, healthcare and pharmaceutical products are subject to a regime of reimbursement
by government health authorities, private health insurers or other organizations. There is increasing
pressure from these organizations to limit healthcare costs by restricting the availability and level of
reimbursement.
Risks related to COVID-19
The COVID-19 pandemic has, and continues to, adversely impact clinical and preclinical trials globally
and in different therapeutic areas. As a result, our clinical trials or preclinical studies, including our ability
to recruit and retain patients, principal investigators and site staff who, as healthcare providers, may
have heightened exposure to COVID-19, have been, and may continue to be, significantly impacted.
We have implemented mitigation procedures designed to enable us to address the various issues
caused by the COVID-19 pandemic, although there can be no assurance that these procedures will be
successful or that we can avoid a material and adverse disruption to our business. As the pandemic
continues, we may experience the prioritization of hospital resources toward the outbreak and further
restrictions on travel. Furthermore, some patients may be unwilling to enroll in our trials or be unable to
comply with clinical trial protocols if quarantines or travel restrictions impede patient movement or
interrupt healthcare services. For example, in January 2022, we announced that we would no longer
pursue the TMF cohort in our phase 2 clinical trial evaluating AFM13 as monotherapy due to the
continuing challenges to enroll patients with this indication as a result of the COVID-19 pandemic.
The COVID-19 pandemic may also negatively affect the operations of third-party contract research
organizations that we rely upon to carry out our clinical trials or the operations of our third-party
manufacturers, each of which could result in delays or disruptions in the supply of our product
candidates. The negative impact the COVID-19 pandemic has had and may continue to have on patient
enrollment and treatment, and the timing and execution of our clinical trials could cause costly delays to
our clinical trial activities, which could adversely affect our ability to obtain regulatory approval for and
to advance towards commercialization, increase operating expenses and have a material adverse effect
on our business and financial results.
In addition, the COVID-19 pandemic has resulted in significant governmental measures being
implemented to control the spread of the virus. Public health officials have recommended and mandated
precautions to mitigate the spread of COVID-19, including prohibitions on congregating, traveling across
borders, shelter-in-place orders and other similar measures. We have taken precautionary measures
intended to help minimize the risk of the virus to our employees, including temporarily requiring some or
all of our employees to work remotely, suspending all non-essential travel and discouraging employee
attendance at industry events and in-person work-related meetings. Such measures could negatively
Affimed Annual Report 2022 19
affect our business. For instance, temporarily requiring employees to work remotely may disrupt our
operations or create unforeseen issues related to the use of technology designed to allow for remote
communication and collaboration. The COVID-19 pandemic has also caused volatility in the global
financial markets and has threatened a slowdown in the global economy, which may negatively affect
our ability to raise additional capital on attractive terms or at all.
The COVID-19 pandemic is ongoing, in large part due to the prevalence of new variants of the SARS-
CoV-2 virus, and, accordingly, we may continue to experience ongoing disruptions that could severely
impact our business, preclinical studies and clinical trials. The full extent to which the COVID-19
pandemic may impact our business will depend on future developments, which are highly uncertain and
cannot be predicted at this time. As such, we cannot presently predict the scope and severity of any
potential business shutdowns or disruptions, the impacts on our business, financing or clinical trial
activities or on the healthcare system and the global economy as a whole.
Risks related to political events, war, terrorism, business interruptions and other geopolitical
events and uncertainties beyond our control
War, terrorism, geopolitical uncertainties, and other business interruptions could cause damage to or
disrupt our operations and those of our third-party suppliers, partners, and collaborators. In addition,
territorial invasions can lead to cybersecurity attacks located far outside of the conflict zone. Interruptions
to our operations could seriously harm our ability to timely proceed with any clinical programs, and could
imply incurring in significant expenditures as salaries and loan payments would usually continue.
Following Russia's invasion of Ukraine in February 2022, the U.S., several European Union nations,
and other countries have announced sanctions against Russia, and the North Atlantic Treaty
Organization (NATO) has deployed additional military forces to Eastern Europe. The invasion of Ukraine
and the retaliatory measures that have been taken, or could be taken in the future, by Russia, the U.S.,
NATO, and other countries have created global security concerns that could result in a regional conflict
and otherwise have a lasting impact on regional and global economies, any or all of which could disrupt
our supply chain, adversely affect our ability to conduct ongoing and future clinical trials of our product
candidates, and adversely affect our ability to commercialize our products (subject to regulatory
approval).
Risks Related to our Financial Position and need for Additional Capital
We have incurred significant losses since inception and anticipate that we will continue to incur losses
for the foreseeable future. We have no products approved for commercial sale, and to date we have
not generated any revenue or profit from product sales. No assurance can be given that we will
achieve profitability in the future. Furthermore, if our products fail in clinical trials or do not gain
regulatory approval, or if our products do not achieve market acceptance, we may never achieve
profitability.
We expect to need additional funding in the future, which may not be available to us on acceptable
terms, or at all, which could force us to delay or impair our ability to develop or commercialize our
products.
Our current available cash and cash equivalents may not be sufficient to finance our long term
research, development and commercialization programs. Therefore, additional funds will be required.
There can be no assurance that additional funds will be available on a timely basis, on favorable
terms, or at all, or that such funds, if raised, would be sufficient to enable us to continue to implement
our long term business strategy. If we are unable to raise such additional funds through collaboration
arrangements or equity or debt financing, we may need to delay, scale back or cease expenditures for
some of our longer term research, development and commercialization programs, or grant rights to
develop and market products that we would otherwise prefer to develop and market ourselves,
thereby reducing their ultimate value to us. Our inability to obtain additional funds necessary to
operate the business could materially and adversely affect the market price of our shares and all or
Affimed Annual Report 2022 20
part of an investment in our shares could be lost. In addition, to the extent we raise capital by issuing
additional shares, shareholders’ equity interests would be diluted.
Risks Related to Legal Compliance Matters
Our operations, including our research, development, testing and manufacturing activities, are subject
to numerous environmental, health and safety laws and regulations. If we fail to comply with such laws
and regulations, we could be subject to fines or other sanctions.
The third parties with whom we contract to manufacture our product candidates are also subject to
these and other environmental, health and safety laws and regulations. Liabilities they incur pursuant
to these laws and regulations could result in significant costs or in certain circumstances, an
interruption in operations, any of which could adversely impact our business and financial condition if
we are unable to find an alternate supplier in a timely manner.
Risks Related to Information Technology Systems or Infrastructure
In the ordinary course of business, we and our business partners store sensitive data, including
intellectual property and proprietary information related to our business and our business partners, on
our information technology systems. Despite the implementation of security measures, these systems
are vulnerable to damage from computer viruses, unauthorized access, cyber-attacks, natural
disasters, terrorism, war and telecommunication, electrical and other system failures due to employee
error, malfeasance or other disruptions. We could experience a business interruption, intentional theft
of confidential information or reputational damage, including damage to key customer and partner
relationships, from system failures, espionage attacks, malware, ransomware or other cyber-attacks.
Such cyber-security breaches may compromise our system infrastructure or lead to data leakage,
either internally or at our contractors or consultants. In particular, system failures or cyber-security
breaches could result in the loss of nonclinical or clinical trial data from completed, ongoing or planned
trials, which could cause delays in our regulatory approval efforts and significantly increase our costs
to recover or reproduce the data. The risk of a security breach or disruption, particularly through cyber-
attacks, has generally increased as the number, intensity and sophistication of attempted attacks and
intrusions from around the world have increased.
To the extent that any disruption or security breach were to result in a loss of, or damage to, our data
or applications, or inappropriate disclosure of confidential or proprietary information, including
protected health information or personal data of employees or former employees, we could be subject
to legal claims or proceedings, liability under laws and regulations governing the protection of health
and other personally identifiable information and related regulatory penalties. In any such event, our
business, results of operations, financial position and cash flows could be materially adversely
affected.
Risks Related to Our Common Shares
Our share price has been, and in the future may again be subject to substantial price volatility. In
addition, the stock market has recently experienced significant volatility, particularly with respect to
pharmaceutical, biotechnology and other life sciences company stocks. The volatility of
pharmaceutical, biotechnology and other life sciences company stocks often does not relate to the
operating performance of the companies represented by the stock.
Our common shares are currently listed on the Nasdaq and Nasdaq Listing Rule 5550(a)(2) requires
that listed securities maintain a minimum bid price of USD 1.00 per share (the ''Minimum Bid Price
Rule''). As previously reported, on April 4, 2023, the Company received a deficiency letter from the
Listing Qualifications Department of Nasdaq notifying the Company that, for the last 30 consecutive
business days, the bid price for its common shares had closed below the Minimum Bid Price Rule. The
Affimed Annual Report 2022 21
Company has been provided an initial period of 180 calendar days, or until 2 October 2023 (the
''Compliance Date''), to regain compliance with the Minimum Bid Price Rule. If, at any time during this
180-day period, the closing bid price for the Company’s common shares closes at USD 1.00 or more
per share for a minimum of 10 consecutive business days, the Nasdaq Listing Qualifications
Department (the ''Staff'') will provide written notification to the Company that it complies with the
Minimum Bid Price Rule and the common shares will continue to be eligible for listing on The Nasdaq
Global Select Market. In the event the Company fails to regain compliance with the Minimum Bid Price
Rule by the Compliance Date, the Company may consider applying to transfer its securities from The
Nasdaq Global Select Market to The Nasdaq Capital Market, provided that the Company meets the
applicable market value of publicly held shares required for continued listing and al other applicable
requirements for initial listing on The Nasdaq Capital Market (except for the bid price requirement).
Such transfer would provide the Company with an additional 180 calendar days, or until 1 April 2024,
to regain compliance.
Affimed has considered the potential harm to the Company and its shareholders if Nasdaq would
delist the Company’s common shares. Delisting could adversely affect the liquidity of the Company’s
common shares and for investors it would likely be less convenient to sell, or to obtain accurate
quotations in seeking to buy, the Company’s common shares after a delisting. Further, many investors
likely would not buy or sell the Company’s common shares due to difficulty in accessing over-the-
counter markets, policies preventing them from trading in securities not listed on a national exchange
or for other reasons.
The Company is considering adequate measures to regain compliance and to maintain the listing on
Nasdaq such as effecting a reverse stock split, for which authorization will be requested during the
annual shareholder meeting 2023.
Risk Management regarding Financial Instruments
Qualitative Disclosure about Market Risk
As a result of our operating and financing activities, we are exposed to market risks that may affect our
financial position and results of operations. Market risk is the potential to incur economic losses on risk
sensitive instruments arising from adverse changes in factors such as foreign exchange rate
fluctuations.
Our senior management is responsible for implementing and evaluating policies which govern our
funding, investments and any use of derivative financial instruments. Management monitors risk
exposure on an ongoing basis.
Credit risk
The Group’s financial assets comprise to a large extent cash and cash equivalents. In addition, financial
assets include shares and trade and other receivables. The total carrying amount of shares (€ nil, 2021:
€12.3 million), cash and cash equivalents (€190.3 million, 2021: €197.6 million) and trade and other
receivables (€2.7 million, 2021: €4.8 million) represents the maximum credit exposure of €193.0 million
(2021: €214.7 million).
The cash and cash equivalents are held with banks, which are rated AA3 to AA2 based on Standard &
Poor’s and Moody’s.
Interest rate risks
The Group’s interest rate risk arises from cash accounts.
Market interest rates on cash and cash equivalents as well as on term deposits were low, and in some
cases negative, resulting in net interest income of €401 thousand (2021: interest expense of €358
thousand). A shift in interest rates (increase or decrease) could potentially have a material impact on
the loss of the Group.
Affimed Annual Report 2022 22
Other price risks
The fair value of the shares in Amphivena depends on the estimated share price, however as the
shares are currently reflected at nil, no material exposure exists.
Foreign currency risk
Foreign exchange risk arises when future commercial transactions or recognized assets or liabilities are
denominated in a currency that is not the entity’s functional currency.
The Group’s entities are mainly exposed to Czech Koruna (CZK), US Dollars (USD) and British Pound
(GBP). The net exposure as of December 31, 2022 was €28.7 million (2021: €53.5 million) and mainly
relates to US Dollars.
In 2022, if the Euro had weakened/strengthened by 10% against the US dollar with all other variables
held constant, the loss would have been €3.3 million (2021: €5.5 million) higher/lower, mainly as a result
of foreign exchange gains/losses on remeasurement of US dollar-denominated financial assets. The
Group considers a shift in the exchange rates of 10% as a realistic scenario.
Loss is more sensitive to movement in exchange rates shifts in 2022 than in 2021 because of the
increased volume of US dollar-denominated transactions.
Liquidity risk
Liquidity risk is the risk that the Group will encounter difficulties in meeting the obligations associated
with its financial liabilities which are normally settled by delivering cash. The Group’s approach to
managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its
liabilities when due.
The Group continually monitors its risk of a shortage of funds using short and mid-term liquidity planning.
This takes account of the expected cash flows from all activities. The supervisory board undertakes
regular reviews of the budget.
In 2022, 2021 and 2020, Affimed raised significant funding that it estimates will enable the Group to fund
operating expenses and capital expenditure requirements into 2025.
In May 2020, the Company implemented an at-the-market (“ATM”) program providing for the sales over
time of up to $50 million of its common shares. The Company issued approximately 12.5 million common
shares under this ATM program, generating net proceeds of approximately €34.5 million.
In November 2020, the Company implemented a new ATM program providing for additional sales over
time of up to $75 million of common shares. As of December 31, 2021, the Company had issued
approximately 4.4 million (2020: 7.9 million) shares, generating approximately €24.4 million (2020: €34.5
million) in net proceeds.
On January 15, 2021 the Company issued 19,166,667 common shares at a price of $6.00 per share in
a public offering resulting in gross proceeds before deducting underwriting discounts and commissions
and estimated expenses of the offering of $115 million.
In January 2021, the Group entered into a loan agreement with Silicon Valley Bank for up to €25 million,
of which the Group has drawn €17.5 million in 2021.
In November 2021, Affimed filed a “shelf registration statement” with the SEC in order to offer and sell
securities to the public in multiple, future offerings with indeterminate amount.
In November 2021, the Company implemented a new ATM program providing for additional sales over
time of up to $100 million of its common shares. As of December 31, 2021, the Company had issued
approximately 0.2 million shares and generated approximately €1.6 million in net proceeds from this
new ATM program.
Affimed Annual Report 2022 23
On April 18, 2022, the Company closed its public offering of 22,500,000 common shares, at the public
offering price of $4.00 per share. The exercise of the underwriters’ option to purchase over-allotment
shares brought the total number of common shares sold by Affimed to 25,875,000. The public offering
generated net proceeds of €89.8 million ($97.0 million), after deducting €6.0 million ($6.5 million) in
underwriting commissions and other offering expenses.
The Group expects that further funding will be required to complete the development of the existing
product candidates.
Further, funding will also be required to commercialize the products if regulatory approval is received.
The contractual maturities of Borrowings are as follows:
€ thousands
Payments within one year
Payments between one and five years
2022
5,930
12,752
18,682
2021
580
18,682
19,262
Affimed Annual Report 2022
Corporate Governance Report
I.
GENERAL
24
Affimed N.V. is a public limited liability company (the "Company," "Affimed," or "we") with
corporate seat in Amsterdam, the Netherlands, governed by Dutch law, and with registered office
in Heidelberg, Germany. Affimed started as a private company with limited liability and was
converted to a Dutch public limited liability company in connection with a corporate reorganization
that occurred prior to the consummation of the initial public offering of common shares of Affimed,
which began trading on the Nasdaq Global Market on September 12, 2014 under the symbol
"AFMD."
The Dutch Corporate Governance Code
We are subject to various corporate governance requirements and best practices codes, the most
relevant being those in the Netherlands and the United States. As a Dutch company, the Company
is subject to the Dutch Corporate Governance Code ("DCGC" or the "Code") and is required to
disclose in its statutory annual report filed in the Netherlands (“Annual Report”), whether it
complies with the provisions of the DCGC. The DCGC contains principles and best practice
provisions for managing boards, supervisory boards, shareholders and general meetings of
shareholders, financial reporting, auditors, disclosure, compliance and enforcement standards. If
the Company does not comply with the provisions of the DCGC (for example, because of a
conflicting Nasdaq requirement or otherwise), the Company must list the reasons for any deviation
from the DCGC in its Annual Report.
In the present Annual Report, we address our overall corporate governance structure and state to
what extent we apply the provisions of the DCGC. The Company's deviation from certain practices
of the DCGC is due to the Company being listed in the United States with most of Affimed's
investors being outside of the Netherlands, as well as due to the international business focus of the
Company. As a company listed on Nasdaq, the Company also complies with Nasdaq's corporate
governance listing standards (except for instances where we follow our Dutch home country
corporate governance practices, including the Code, in lieu of certain Nasdaq corporate
governance requirements as explained below) and the rules and regulations promulgated by the
SEC. Nasdaq investors are often more familiar with Nasdaq's rules than with the DCGC.
The full text of the DCGC can be found at the website of the Monitoring Commission Corporate
Governance Code (www.mccg.nl). Further information about the Company’s corporate governance
practices is available at our website (www.affimed.com/corporate-governance).
The Monitoring Committee Corporate Governance has published an amended version of the Code
on 20 December 2022, which for reporting purposes applies to the Company for the financial year
starting on 1 January 2023.
II.
MANAGING DIRECTORS AND SUPERVISORY DIRECTORS
The following table lists the current members of our management board:
Name
Adi Hoess
Wolfgang Fischer
Andreas Harstrick
Arndt Schottelius
Angus Smith
Denise Mueller
Age
Position
61
59
61
57
40
54
Chief Executive Officer
Chief Operating Officer
Chief Medical Officer
Chief Scientific Officer
Chief Financial Officer
Chief Business Officer
Affimed Annual Report 2022
25
The following is a brief summary of the business experience of the members of our management
board.
Adi Hoess, Chief Executive Officer. Dr. Hoess joined us in October 2010 as Chief Commercial
Officer and since September 2011 has served as our Chief Executive Officer. He has more than 20
years of professional experience with an extensive background in general management, business
development, product commercialization, fund raising and M&A. Prior to joining us, Dr. Hoess was
Chief Commercial Officer at Jerini AG and Chief Executive Officer of Jenowis AG. At Jerini AG he was
responsible for business development, marketing and sales and the market introduction of Firazyr. He
also played a major role in the sale of Jerini to Shire plc. Dr. Hoess began his professional career in
1993 at MorphoSys. Dr. Hoess received his Ph.D. in chemistry and biochemistry from the University of
Munich in 1991 and an M.D. from the Technical University of Munich in 1997.
Wolfgang Fischer, Chief Operating Officer. Dr. Fischer joined us in 2017 from Sandoz
Biopharmaceuticals (Novartis Group). He has 20 years of experience in research and drug
development with a focus on oncology, immunology and pharmacology. At Sandoz he managed the
development and registration of Sandoz’ biosimilar pipeline assets since 2012 and served as Global
Head of Program and Project Management since 2014. Prior to joining Sandoz, he held various
positions of increasing responsibility within the Novartis Group since 2003, including Medical Director
Oncology for Novartis Pharma Switzerland AG as well as Regional Medical Director Hematology
(Emerging Growth Markets), where he was responsible for the Hematology Medical Affairs program
and supported the launch of several products in various countries. Dr. Fischer holds a Ph.D. in Cancer
Research from the Swiss Federal Institute of Technology (ETH), Zurich, Switzerland. Thereafter, he
completed postdoctoral fellowships at the Swiss Institute of Experimental Cancer Research,
Lausanne, Switzerland and at the Scripps Research Institute, Department of Immunology, La Jolla,
CA, USA, followed by a state doctorate (Habilitation) in Pharmacology and Toxicology at the Medical
School of the University of Würzburg in Germany in 2003.
Andreas Harstrick, M.D., Chief Medical Officer. Dr. Harstrick agreed to serve as our Chief Medical
Officer, starting in March 2020. He brings 30 years of extensive experience in cancer drug
development, including the successful designing of clinical trials leading to approval of antibody drugs
(Erbitux®; Cyramza®) and in-depth experience in setting-up and managing clinical oncology teams.
Dr. Harstrick was Chief Medical Officer at Molecular Partners AG from 2015 to 2019, where he
oversaw clinical activities, including expansion of the clinical team, and was a member of the
Management Board. Between 2012 and 2014, Dr. Harstrick was Senior Vice President Medical
Sciences at ImClone Systems, a wholly-owned subsidiary of Eli Lilly and Company, where he was
also a member of the Lilly Oncology Program Review Board and the Lilly Oncology Business Unit
Development Committee. Prior to joining ImClone in 2008, Dr. Harstrick was Senior Vice President
Global Clinical Development Unit Oncology at Merck Serono until 2008. Dr. Harstrick is an oncologist
by training. He spent his medical career at the University Hospital and Cancer Center Hannover,
Germany; the Roswell Park Cancer Institute, Buffalo NY; as well as the West German Cancer Center,
Essen, Germany. He earned his MD at Medical School Hannover, Germany, and in 1999 he became
Associate Professor for Internal Medicine, University of Essen, Germany.
Arndt Schottelius, M.D. Ph.D., Chief Scientific Officer. Dr. Schottelius joined Affimed as Chief
Scientific Officer in April 2020. He brings over 20 years of deep drug discovery and development
experience in cancer and immunology with a strong track record in building therapeutic antibody
pipelines and advancing drugs through development. Most recently, Dr. Schottelius was Executive
Vice President and Head of Research & Development at Kymab Group Limited, where he was
responsible for expanding the therapeutic antibody portfolio. Dr. Schottelius previously served as Chief
Development Officer at MorphoSys AG, developing the portfolio of proprietary therapeutic antibody
programs in cancer and immunology. He was instrumental in in-licensing tafasitamab (MOR208) and
drove strategic direction and development of the MOR208 program into multiple phase 2 trials, which
were the basis for a fast-to-market registration path. Prior to his role at MorphoSys, Dr.Schottelius was
a Director and Medical Director, Immunology Development at Genentech Inc., where he directed early
and late-stage development programs of therapeutic antibodies. Before joining Genentech, Dr.
Schottelius held science and management positions in immunology research at Schering AG and
Berlex Biosciences. Dr. Schottelius is a Non-Executive Board Member of the Board of Directors of
Gubra ApS. Dr. Schottelius holds a PhD and MD degree from the Albert Ludwigs University of
Freiburg and is a lecturer at Ludwig Maximilian University of Munich with a habilitation in Experimental
Affimed Annual Report 2022
26
Internal Medicine. He practiced medicine as a resident physician in gastroenterology at the Charité-
Universitätsmedizin in Berlin, Germany, and completed a postdoctoral fellowship at the Lineberger
Cancer Center, University of North Carolina at Chapel Hill.
Angus Smith, Chief Financial Officer and Co-President Affimed Inc. Mr. Smith joined Affimed in
July 2020 as Chief Financial Officer. Previously, he was Chief Financial Officer at Rockwell Medical,
Inc., a biopharmaceutical company developing and commercializing anemia therapies. He has broad
biopharmaceutical industry experience including financial strategy, capital markets, business
development and operations. Prior to Rockwell, Mr. Smith served as Senior Vice President, Chief
Business Officer and Principal Financial Officer at Pernix Therapeutics, a specialty pharmaceutical
company focused on the acquisition, development and commercialization of prescription drugs. Mr.
Smith began his career in healthcare investment banking, having most recently served as Director in
the Healthcare Investment Banking Group at Cantor Fitzgerald in New York, NY. During his nearly
decade-long investment banking tenure, he focused on strategic and financial advice for life science
and healthcare companies. He has worked on a substantial number of transactions across the
healthcare sector with an aggregate transaction value of more than $15 billion. Mr. Smith holds a
Bachelor of Arts in Mathematical Economics from Colgate University in Hamilton, NY.
Denise Mueller, Chief Business Officer and Co-President Affimed Inc. Ms. Mueller joined us in
2016 following a 17-year career at Wyeth and Pfizer Inc. She has held leadership roles in U.S. and
global marketing including launch of new products and line extensions in-line and globally. Ms.
Mueller has also held the position of Disease Area Lead for multiple therapeutic areas where she
was responsible for disease area strategy, indication strategy for multiple assets, early commercial
development and market shaping. In addition to broad and extensive commercial experience, Ms.
Mueller led and managed two of Pfizer’s largest alliances and was the business development lead
for Pfizer’s rare disease business unit. Prior to joining pharmaceuticals, Ms. Mueller worked in
hospital management running Emergency Medicine, Critical Care, in-house Pediatrics and
hospitalist programs. Ms. Mueller holds a B.A. in Mathematics from Virginia Polytechnic and State
University.
The following table lists the supervisory directors currently in office. Thomas Hecht is the chairman of
our supervisory board. The term of each of our supervisory directors will end on the date of the annual
general meeting of shareholders in the year indicated below.
Name
Gender
Nationality
Age
Initial/reappointment
Term
Thomas Hecht
Bernhard Ehmer
Ulrich Grau
Annalisa Jenkins
M
M
M
F
M
Mathieu Simon
Harry Welten
M
Uta Kemmerich-Keil F
German
German
German/US
British
French/US
Swiss
German
72
68
74
57
67
57
56
August 4, 2020
June 22, 2022
June 15, 2021
August 4, 2020
June 15, 2021
August 4, 2020
June 15, 2021
2023
2025
2024
2023
2024
2023
2024
The following is a brief summary of the business experience of the Company's supervisory
directors.
Thomas Hecht, Chairman. Dr. Hecht has been the chairman of our supervisory board since 2014,
and previously had been the chairman of the supervisory board of our German operating
subsidiary since 2007. He is head of Hecht Healthcare Consulting in Küssnacht, Switzerland, a
biopharmaceutical consulting company founded in 2002. Dr. Hecht also serves as Chairman of
Aelix Therapeutics and of the Board of Orion Biotechnology and as Member of the Board of
Directors of BioInvent, Sweden. Previously, Dr. Hecht served as a director of Humabs BioMed AG
until August 2017 and he served as chairman of the board of directors of Cell Medica Ltd. Until the
beginning of June 2020, he served as chairman of the board of directors of Vaximm AG, until
Affimed Annual Report 2022
27
March 2015, he served as chairman of the supervisory council of SuppreMol GmbH and until June
2016, of Delenex AG. Dr. Hecht was previously Vice President Marketing at Amgen Europe. A
seasoned manager and industry professional, he held various positions of increasing responsibility
in clinical development, medical affairs and marketing at Amgen between 1989 and 2002. Prior to
joining the biopharmaceutical industry, he was certified in internal medicine and served as Co-
Head of the Program for Bone Marrow Transplantation at the University of Freiburg, Germany.
Bernhard R.M. Ehmer, Director. Dr. Ehmer has been a member of our supervisory board since
2016. In May 2022, he was elected the chair of the board of directors and a member of the audit
committee of Biotest AG, where he had served as chairman of the board of management until April
2019. Furthermore, he has been on the Board of Directors at Achilles Therapeutics since May
2022. He also served as chairman of the board of directors at Symphogen A/S, Denmark until June
2020. Prior to this, he worked for the Imclone Group, a wholly owned subsidiary of Eli Lilly, as
president of Imclone Systems Corporation in the United States and as managing director in
Germany. In 2007/2008 he was CEO of Fresenius Biotech, Germany and before this, Dr. Ehmer
headed the Business Area Oncology of Merck KGaA, Darmstadt and served as head of Global
Clinical Operations at Merck. Between 1986 and 1998 he held various functions at Boehringer
Mannheim in Germany, Italy and Singapore. Dr. Ehmer holds a degree in medicine and worked in
the Department of Internal Medicine at the Academic Teaching Hospital of the University of
Heidelberg.
Ulrich M. Grau, Director. Dr. Grau has been a member of our supervisory board since July 2015.
Prior to that, he served as an advisor to the management board of our German operating
subsidiary beginning in May 2013. He has over 30 years of experience in the biotechnology and
pharmaceutical industries including in general management, business development, corporate
strategy and the development of new products and technologies. Dr. Grau was Chief Operating
Officer at Micromet from 2011 to 2012. Between 2006 and 2010, Dr. Grau was a founder,
President and CEO of Lux Biosciences, Inc., a clinical stage ophthalmic company. Previously, Dr.
Grau served as President of Research and Development at BASF Pharma/ Knoll where he directed
a global R&D organization with a development pipeline which included Humira. The majority of his
career was at Aventis Pharma (now Sanofi), where he last held the position of Senior Vice
President of global late stage development. Sanofi’s product Lantus for the treatment of type 2 and
type 1 diabetes is based on his inventions made during his early years as a scientist with Hoechst
AG. Dr. Grau received his Ph.D. in chemistry and biochemistry from the University of Stuttgart and
spent three years as a post-doctoral fellow at Purdue University in the field of protein
crystallography.
Annalisa Jenkins, Director. Dr. Jenkins has been a member of Affimed’s supervisory board since
August 2020. She is a life sciences thought leader with over 25 years of biopharmaceutical industry
experience. She has consistently mentored leadership teams advancing programs from basic
research through clinical development, regulatory approval, and healthcare systems globally.
Earlier in her career, Dr. Jenkins was a medical officer in the British Royal Navy during the Gulf
Conflict, achieving the rank of Surgeon Lieutenant Commander. She also held senior leadership
roles at Merck Serono and Bristol Myers-Squibb over a period of 15 years. Dr. Jenkins previously
served as President and CEO of Dimension Therapeutics, a leading gene therapy company she
took public on the NASDAQ and subsequently sold to Ultragenyx. Following her relocation back to
the United Kingdom, she served in numerous roles spanning the public, private and charitable
sectors, including Cancer Research Horizons Ltd, Genomics England, The King's Fund, and British
Heart Foundation and Chair of You Belong, a leading mental health care charity. She is also a
board member of several growing public and private companies, including Oncimmune, AVROBIO,
COMPASS Pathways and Mereo Biopharma. Dr. Jenkins serves on a number of advisory boards
and frequently speaks on leadership with purpose, social entrepreneurship, diversity and
innovation. Dr Jenkins graduated with a degree in medicine from St. Bartholomew’s Hospital in the
University of London and received her Fellowship from the Royal College of Physicians London.
She trained in cardiovascular medicine and was a research fellow at Imperial College.
Mathieu Simon, Director. Dr. Simon has been a member of Affimed’s supervisory board since
2018. Dr. Simon is a senior strategic advisor at Mediobanca Group, Milan, Madrid, Paris, in the
healthcare sector. He is chairman of the board at Idorsia Pharmaceuticals, as well as chairman of
Affimed Annual Report 2022
28
AILEEN’s Pharma in Milan (Italy). Dr. Simon serves also as independent board member at
Lysogene (France) and VAXIMA AG (Switzerland). Dr. Simon has served as Cellectis’ Executive
Vice-President since 2012 and as Chief Operating Officer since 2013. Dr. Simon also served as
Chief Executive Officer of a former subsidiary of Cellectis. He has been instrumental to the
development of Cellectis and its CAR Allogenic T-Cell platform. He also served as Chief Executive
Officer of Ectycell in 2012. He served as Chairman of the Board of Celleartis AB until 2014 before
its acquisition by Takara Bio. Prior to joining Cellectis, Dr. Simon was Managing Director, Head of
Global Pharma at Pierre Fabre SA, the third largest French Pharma Company. Beginning in 1994,
he served at Wyeth Pharmaceuticals in both general management roles (President Managing
Director of Wyeth SPA) and senior corporate role in Philadelphia, United States (SVP / Head of
International Marketing and Medical Affairs).
Harry Welten, Director. Mr. Welten has been a member of our supervisory board since August
2020. He serves as chairman and member of the board of directors of several biotechnology
companies in Switzerland, Germany and the USA. Previously, Mr. Welten served as a director of
Kuros Biosciences A.G. until June 2018 and DMS Imaging SA (formerly ASIT Biotech SA) until
May 2020. Over the last 20 years, Mr. Welten served as Chief Financial Officer of both public as
well as venture capital financed biotech companies. Mr. Welten has served in senior roles at UBS
in Switzerland and New York for the first 15 years of his career. Mr. Welten has degrees in
Banking, Finance and Economics as well as an MBA (honours) from Columbia University, NY,
USA.
Uta Kemmerich-Keil, Director. Mrs. Kemmerich-Keil has been as a member of Affimed’s
supervisory board since June 2021 and has over 20 years of executive experience in tthe
pharmaceutical and chemical industry. Most recently she headed up the personal healthcare
international business of P&G and has over 19 years of experience from Merck KGaA, where she
served, inter alia, as Chief Executive Officer of the global OTC- and global Allergy business, EVP
Finance, Investor Relations and M&A. Mrs. Kemmerich-Keil is a board member of several public
and privately held companies like Schott AG, Klosterfrau Zürich AG and Röchling S.E. She is a
board member and member of the Audit Committee of Karo Healthcare AB, Biotest AG and
Beiersdorf AG. In Biotest AG she leads the audit committee. She holds a M.Sc. (Economics) and a
M.A (Roman Philology) from Freiburg University and a Licence from Nouvelle Sorbonne, Paris.
III.
BOARD PRACTICES
Governance structure
Affimed N.V. is a public limited liability company under Dutch law with a two-tier board structure.
Our management board (raad van bestuur) has ultimate responsibility for the overall management
of Affimed. The management board is supervised and advised by a supervisory board (raad van
commissarissen). The management board and the supervisory board are accountable to Affimed’s
shareholders.
Management board
The management board manages our general affairs and ensures that we can effectively
implement our strategy and achieve our objectives.
At least once per year the management board informs the supervisory board in writing of the main
lines of the Company's strategic policy, the general and financial risks and the management and
control system. The management board provides the supervisory board with any other information
as the supervisory board requires in performing its duties.
We have a strong centralized management board led by Adi Hoess, our Chief Executive Officer,
who has a strong track record in the development and commercialization of new medicines. Our
management team has extensive experience in the biopharmaceutical industry, and key members
Affimed Annual Report 2022
29
of our team have played an important role in the development and commercialization of approved
drugs.
For a more detailed description of the responsibilities of the management board, please refer to the
corporate governance section of our website at www.affimed.com.
Composition of the management board
The number of managing directors is determined by the supervisory board. Currently the
management board consists of six directors.
The size and composition of our management board and the combined experience and expertise of
its members should reflect the best fit for Affimed’s profile and strategy. This aim for the best fit, in
combination with the availability of qualifying candidates, has resulted in Affimed having a
management board in which five members are male and one member is female. In order to
increase gender diversity of the management board we pay close attention to gender diversity in
the process of recruiting and appointing new management board candidates.
Appointment, suspension and dismissal
Managing directors are appointed by the general meeting of shareholders upon a binding
nomination of the supervisory board. The general meeting of shareholders can suspend or dismiss
a management board member by an absolute majority of votes cast, upon a proposal made by the
supervisory board. If another party makes the proposal, a two-thirds majority of the votes cast,
representing more than half of the issued share capital, is required. If this qualified majority is not
achieved, a second general meeting as referred to in article 2:120 section 3 of the Dutch Civil
Code may not be convened.
Supervisory board
Our supervisory board supervises the policies of the management board including the strategy and
long term value-creation for the company and the general course of affairs of the Company's
business. The supervisory board gives advice to the management board and is guided by the
Company's interests and its business when performing its duties. The management board provides
such information to the supervisory board as is required to perform its duties. Currently, the
supervisory board consists of seven supervisory directors.
The composition of the supervisory board has not changed in 2022. At the annual general meeting
of shareholders on June 22, 2022, Dr. Ehmer was reappointed as supervisory board member.
The Company's articles of association provide for a term of appointment of supervisory directors of
up to four years. Furthermore, the Company's articles of association state that a supervisory
director may be reappointed, but that any supervisory director may be a supervisory director for no
longer than twelve years. Under the DCGC a supervisory director may be appointed for a term of
four years and may then be reappointed for another four-year period. The supervisory director may
then subsequently be reappointed for a period of two years, which may be extended by at most two
years. The Company's supervisory directors are appointed for overlapping terms.
The supervisory board meets as often as any supervisory director deems necessary. In a meeting
of the supervisory board, each supervisory director has a right to cast one vote. All resolutions by
the supervisory board are adopted by an absolute majority of the votes cast. In the event the votes
are equally divided, the chairman has the decisive vote. A supervisory director may grant another
supervisory director a written proxy to represent him or her at the meeting.
The Company's supervisory board can pass resolutions outside of meetings, provided that the
resolution is adopted in writing and all supervisory directors have consented to adopting the
resolution outside of a meeting.
Affimed Annual Report 2022
30
The Company's supervisory directors do not have a retirement age requirement under the
Company's articles of association.
Composition of the supervisory board
The composition of the supervisory board, including its members’ combined experience and
expertise, independence, and diversity of age and gender, should reflect the best fit for Affimed’s
profile and strategy. This aim for the best fit, in combination with the availability of qualified
candidates, has resulted in Affimed currently having a supervisory board in which five members are
male and two members are female. In order to increase gender diversity of the supervisory board
we pay close attention to gender diversity in the process of recruiting and appointing new
supervisory board candidates, as is demonstrated by the nomination by the supervisory board of
Dr. Constanze Ulmer-Eilfort as new supervisory board member at the upcoming annual general
meeting of shareholders.
Appointment, suspension and dismissal
Supervisory directors are appointed by the general meeting of shareholders upon a binding
nomination of the supervisory board for a term of up to four years. The general meeting of
shareholders can suspend or dismiss a supervisory board member by an absolute majority of votes
cast, upon a proposal made by the supervisory board. If another party makes the proposal, a two-
thirds majority of the votes cast, representing more than half of the issued share capital, is
required. If this qualified majority is not achieved, a second general meeting as referred to in article
2:120 section 3 of the Dutch Civil Code may not be convened.
Diversity policy
In line with best practice provision 2.1.5 of the Code, the supervisory board has adopted a diversity
policy for the composition of the supervisory board, the management board and key leadership
positions (the "Diversity Policy"). The Diversity Policy contains specific diversity objectives to
improve the diversity within the supervisory board and the management board. The Company aims
to have a minimum of one-third women and a minimum of one-third men on the supervisory board.
However, when nominating a candidate for appointment, the qualifications of the candidate, as well
as the requirements for the position to be filled, shall prevail.
In order to increase gender diversity, we pay close attention to gender diversity in the process of
recruiting and appointing new supervisory board or management board candidates. This is
demonstrated by the nomination by the supervisory board of Dr. Constanze Ulmer-Eilfort as a
supervisory director at the upcoming annual general meeting.
Conflicts of interest
Each member of the management board is required to immediately report any potential conflict of
interest to the chairman of the supervisory board and to the other members of the management
board and provide them with all relevant information. Each member of the supervisory board is
required to immediately report any potential conflict of interest to the chairman of the supervisory
board and provide him or her with all relevant information. The chairman determines whether there
is a conflict of interest. If a member of the supervisory board or a member of the management
board has a conflict of interest with the Company, the member may not participate in the
discussions and/or decision-making process on subjects or transactions relating to the conflict of
interest. The chairman of the supervisory board will arrange for such transactions to be disclosed
in the Annual Report.
In accordance with best practice provision 2.7.5 of the DCGC, Affimed reports that no transactions
between the Company and legal or natural persons who hold at least 10% of the shares in the
Company occurred in 2022.
Supervisory Board Committees
Affimed Annual Report 2022
31
Although the supervisory board retains ultimate responsibility, the supervisory board has delegated
certain of its tasks to its committees.
In March 2022, the Supervisory Board restructured some of its committees whereby the
compensation committee and the nomination and corporate governance committee were combined
into one committee (compensation, nomination and corporate governance committee). In addition,
a new committee (strategic committee) was formed. A description of the committees is set out
hereafter under ''Committee activities during 2022''.
Committee activities during 2022
Audit committee
The audit committee, which consists of Uta Kemmerich-Keil (Chair), Harry Welten and Bernhard
Ehmer, assists the board in overseeing our accounting and financial reporting processes and the
audits of our financial statements. Our supervisory board has determined that all members of the
audit committee satisfy the “independence” requirements set forth in Rule 10A-3 under the
Exchange Act. The supervisory board has determined that Uta Kemmerich-Keil and Harry Welten
qualify as “audit committee financial experts,” as such term is defined in the rules of the SEC.
The audit committee is responsible for the selection of the registered public accounting firm that
should serve as our independent auditor, and our supervisory board is responsible for
recommending the appointment of the independent auditor to the general meeting of shareholders.
In addition, the audit committee is responsible for the compensation, retention and oversight of the
independent auditor appointed by the general meeting of shareholders; pre-approving the audit
services and non-audit services to be provided by our independent auditor before the auditor is
engaged to render such services; evaluating the independent auditor's qualifications, performance
and independence, and presenting its conclusions to the full supervisory board on at least an
annual basis and reviewing and discussing with the management board and the independent
auditor our annual audited financial statements and quarterly financial statements prior to the filing
of the respective annual and quarterly reports, among other things.
The audit committee meets as often as one or more members of the audit committee deem
necessary, but in any event at least four times per year. The audit committee meets at least once
per year with our independent auditor, without our management board being present. The audit
committee held nine meetings by conference call in 2022 and no in-person meetings.
Research and Development Committee
The research and development committee, which consists of Annalisa Jenkins (Chair), Ulrich Grau
and Mathieu Simon, assists our supervisory board in aligning the R&D strategy of the Company
with the overall Company strategy, to evaluate critical junctures of research and development
activities and assess the competitive landscape and the impact on the Company's strategy and
business.
The research and development committee held four meetings by conference call in 2022 and one
in-person meeting.
Compensation, nomination and corporate governance committee
The compensation, nomination and corporate governance committee, which consists of Ulrich
Grau (Chairperson), Bernhard Ehmer, Thomas Hecht and Mathieu Simon, assists the Supervisory
Board inter alia in determining compensation for the managing directors of the Company. Under
SEC and Nasdaq rules, there are heightened independence standards for members of the
compensation committee, including a prohibition against the receipt of any compensation from us
other than standard supervisory director fees.
The committee recommends to the Supervisory Board for determination the compensation of each
of our managing directors. Furthermore, the compensation, nomination & and corporate
Affimed Annual Report 2022
32
governance committee assists the Supervisory Board in identifying, reviewing and approving
corporate goals and objectives relevant to management board compensation; analyzing the
possible outcomes of the variable remuneration components and how they may affect the
remuneration of the managing directors; evaluating each managing director’s performance in light
of such goals and objectives and determining each managing director’s compensation based on
such evaluation and determining any long-term incentive component of each managing director’s
compensation in line with the remuneration policy and reviewing our management board
compensation and benefits policies generally, among other things.
The compensation, nomination and corporate governance committee also assists our Supervisory
Board in identifying individuals qualified to become members of our Supervisory Board consistent
with criteria established by our supervisory board and in developing our corporate governance
principles. In addition, the Supervisory Board delegated the oversight of the Company’s
Compliance Management System, including Cybersecurity and Information Security System, and
the monitoring of the development and implementation of the Company's ESG strategy to the
compensation, nomination and corporate governance committee.
The compensation, nomination and corporate governance committee held one meeting by
conference call in 2022 and six in-person meetings. Before combining the compensation committee
and the nomination and corporate governance committee in March 2022, the compensation
committee held four meetings (conference call) and the nomination and corporate governance
committee held two meetings (conference call).
Strategic committee
The strategic committee, which consists of Thomas Hecht (Chairperson), Harry Welten, Mathieu
Simon and Annalisa Jenkins, assists our Supervisory Board in discharging its supervisory,
monitoring and advisory duties with respect to the development and implementation of the
Company’s overall strategy and the risks inherent to its business activities, as well as with respect
to strategic initiatives identified by the Company from time to time.
The strategic committee held five meetings by conference call in 2022 and no in-person meeting.
IV.
COMPENSATION OF MEMBERS OF THE MANAGEMENT BOARD AND SUPERVISORY
BOARD
Affimed's remuneration policy aims to attract, motivate and retain the best-qualified workforce. The
objectives and structure of the remuneration policy for the management board is regularly reviewed
and/or evaluated by the supervisory board. The current remuneration policy for the management
board and supervisory board was adopted and approved by the general meeting of shareholders
on 17 September 2014, prior to the consummation of our initial public offering (the ''IPO''). The
remuneration policies were last amended by the general meeting of shareholders on 22 June 2022.
The description of the compensation of managing directors and supervisory directors in the
following sections is based on the management and supervisory board remuneration policies which
are currently in effect and, for the avoidance of doubt, does not reflect any amendments to the
supervisory board remuneration policy as are proposed to the general meeting at the upcoming
annual general meeting of shareholders.
Compensation of managing directors and supervisory directors
Dutch law provides that we must establish a policy in respect of the remuneration of our managing
directors and supervisory directors. With respect to remuneration in the form of plans for shares or
rights to shares (such as the Equity Incentive Plan 2014 mentioned below) the policy for managing
directors must set out the maximum number of shares or rights to shares to be granted as well as
the criteria for grants and for amending existing grants. The remuneration policy for the managing
Affimed Annual Report 2022
33
directors provides the supervisory board with a framework within which the supervisory board
determines the remuneration of the managing directors.
Our remuneration policy for our managing directors provides the supervisory board with the
authority to enter into management services agreements with managing directors that provide for
compensation consisting of base compensation, performance-related variable compensation, long-
term equity incentive compensation (as detailed in the terms of the Equity Incentive Plan 2014
described below), pension and other benefits and severance pay and benefits. The remuneration
policy for the managing directors provides that the annual cash bonus payable to managing
directors may not exceed 100% of the annual base gross salary and will be based upon the
achievement of set financial and operating goals for the period. Subject to this limitation, the
supervisory board may decide, based on a proposal of the compensation, nomination and corporate
governance committee which is justified by the financial results and performance of the Company, to
increase the cash bonus payable to an individual managing director for any given year in case of
exceptional achievements of that managing director, provided, that such increased bonus should not
result in a significant discrepancy between the size of the bonus and the respective results and
performance of the Company. In addition, the remuneration policy for managing directors allows for
termination payments, which shall be in line with relevant market practices, and shall not exceed
100% of the managing director’s annual base salary, increased with the average variable
compensation (the "STI Variable Compensation") over the last full three years, or if the term of
office of the managing director is shorter than three years, the average received STI Variable
Compensation over the shorter period. For a dismissal within six months after a change of control
over the Company, the severance compensation shall not exceed 200% of the managing director’s
annual base salary, increased with the STI Variable Compensation over the last full three years, or
if the term of office of the managing director is shorter than three years, the average received STI
Variable Compensation over the shorter period.
The remuneration policy for the supervisory board established the compensation for our
supervisory directors. This policy provides for payments and initial and annual equity awards. This
is permissible under Dutch law, but constitutes a deviation from best practice provisions 3.3.2 of
the DCGC.
The remuneration policy for our supervisory directors provides that each supervisory director is
entitled to an annual retainer of €20,000, provided that the chair of the supervisory board is entitled
to an annual retainer of €75,000. In addition, the chairs of the committees established by the
supervisory board are each entitled to annual retainers of €15,000. Supervisory directors will also
be paid €3,000 for each supervisory board meeting attended in person and €1,500 for each
virtual/telephonic supervisory board meeting, provided the virtual/telephonic meeting exceeds 30
minutes. The members of each committee will be paid €1,500 for each committee meeting
attended in person and €750 for each virtual/telephonic committee meeting, provided the
virtual/telephonic meeting exceeds 30 minutes.
The Company is granting each newly elected member of the supervisory board an initial award of
stock options to purchase 60,000 common shares of the Company (the “Initial Board Member
Award”). The Initial Board Member Award will be made on the date of the general meeting of the
Company in which the member was initially elected to the supervisory board If such date falls
within a so-called 'closed period' according to Affimed's Insider Trading Policy, the granting date
shall be amended for such occasion to be the 15th day after the closed period has ended. Initial
awards vest over a period of three years, with 1/3 of the stock options vesting on the first
anniversary of the grant date, and the remainder vesting in equal instalments at the end of each
three-month period following the first anniversary of the date of grant.
In addition, the remuneration policy, provides that the Company will annually grant the supervisory
board chair options to purchase 45,000 common shares of the Company, and each other
supervisory director stock options to purchase 30,000 common shares of the Company (each such
award referred to as an “Annual Award”). The grant date for the Annual Awards shall be
determined by the supervisory board and must (i) be in the first quarter of the financial year and (ii)
compliant with the Company´s Insider Trading Policy. Annual Awards will be made to supervisory
board members under the condition that they will remain in office after the annual general meeting
of that year. If, in any given year, a supervisory board member will no longer be in office after the
Affimed Annual Report 2022
34
annual general meeting, he or she will not receive an Annual Award for that year. These Annual
Awards will vest in four quarterly instalments and will be fully vested on the first anniversary of the
grant date. Initial awards and annual awards will be granted automatically on the respective dates
and as determined by the supervisory board of the company in accordance with the policy, based
on the approval by the shareholders of this remuneration policy and without any further decisions
or approvals by the supervisory board of the company. Supervisory directors are also entitled to be
reimbursed for their reasonable expenses incurred in attending meetings of the supervisory board
and its committees.
The aggregate cash compensation including benefits in kind, accrued or paid to our managing
directors and supervisory directors with respect to the year ended December 31, 2022, for services
in all capacities was approximately €3.7 million and €0.4 million respectively. As of December 31,
2022, we have no amounts set aside or accrued to provide pension, retirement or similar benefits
to our managing directors and supervisory directors. In 2022, awards for approximately 3.1 million
stock options were granted to management and members of the supervisory board. Further details
on the managing directors and/or supervisory directors individual remuneration are outlined in Note
41 to the Company only financial statements and Note 28 to the consolidated financial statements,
as well as in the explanatory notes to the agenda of the upcoming annual general meeting of
shareholders.
In accordance with Dutch law, we are not required to disclose information regarding third party
compensation of our directors or director nominees. As a result, our practice varies from the third-
party compensation disclosure requirements of Nasdaq Listing Rule 5250(b)(3).
Long-term incentive plans
Equity Incentive Plan 2014
In conjunction with the closing of our IPO, we established the Affimed N.V. Equity Incentive Plan
2014 (the “2014 Plan”) with the purpose of advancing the interests of our shareholders by
enhancing our ability to attract, retain and motivate individuals who are expected to make important
contributions to us. The maximum number of shares available for issuance under the 2014 Plan
equals 7% of the total outstanding common shares on September 17, 2014, or approximately 1.7
million common shares. On January 1 of any calendar year thereafter (including January 1, 2023),
an additional 5% of the total outstanding common shares on that date becomes available for
issuance under the 2014 Plan. As of January 1, 2023, we had approximately 19.4 million common
shares available for issuance, and approximately 18.1 million common shares subject to issuance
under outstanding awards. The absolute number of shares available for issuance under the 2014
Plan will increase automatically upon the issuance of additional shares by the Company. The
option exercise price for options under the 2014 Plan is the fair market value of a share as defined
in the 2014 Plan on the relevant grant date. We are following home country rules relating to the re-
pricing of stock options. Under applicable Dutch law, re-pricing is permissible, provided this falls
within the framework set by the remuneration policy for the management board and the 2014 Plan.
Plan administration. The 2014 Plan is administered by our compensation committee. Approval of
the compensation committee is required for all grants of awards under the 2014 Plan. The
compensation committee may delegate to the managing directors the authority to grant equity
awards under the 2014 Plan to our employees.
Eligibility. Managing directors, supervisory directors and other employees and consultants of the
Company are eligible for awards under the 2014 Plan.
Awards. Awards include options and restricted stock units.
Vesting period. Subject to any additional vesting conditions that may be specified in an individual
grant agreement, and the accelerated vesting conditions below, the plan provides for three year
vesting of stock options. One-third of the stock options granted to participants in connection with
the start of their employment vest on the first anniversary of the grant date, with the remainder
vesting in equal tranches at the end of each 3-month period thereafter. Stock options granted to
other participants vest in equal tranches at the end of each 3-month period after the grant date
Affimed Annual Report 2022
35
over the course of the vesting period. The compensation committee will establish a vesting
schedule for awards granted to supervisory directors as well as for any awards in the form of
restricted stock units.
Accelerated vesting. Unless otherwise specified in an individual grant agreement, the 2014 Plan
provides that upon a change of control of the Company (as defined in the 2014 Plan) all then
outstanding equity awards will vest and become immediately exercisable. It also provides that upon
a participant’s termination of service due to (i) retirement (or after reaching the statutory retirement
age), (ii) permanent disability rendering the relevant participant incapable of continuing
employment or (iii) death, all outstanding equity awards that would have vested during a 12 month
period following such termination of service will vest and become immediately exercisable.
Otherwise at termination all unvested awards will be forfeited. If a participant experiences a
termination of service without “cause” or for “good reason” (in each case, as defined in the 2014
Plan) within six months prior to a change of control, the Company will make a cash payment
equivalent to the economic value that the participant would have realized in connection with the
change of control upon the exercise and sale of the equity awards that such participant forfeited
upon his or her termination of service. In connection with a change of control and subject to the
approval of the supervisory board, the management board may amend the exercise provisions of
the 2014 Plan.
Carve Out Agreements
Our pre-IPO shareholders have entered into agreements with certain managing directors and
certain of our supervisory directors and consultants that grant the beneficiaries the right to receive
common shares of the company. In 2019, these agreements were transferred from the pre-IPO
shareholders to an independent trust company (the “Trust GmbH”). The agreements were satisfied
or will be satisfied in the future through a transfer to the beneficiaries of in the aggregate 7.78% of
the common shares now owned by the Trust GmbH, or the respective market value thereof in cash
to the beneficiaries.
Managing director services agreements
Our managing directors have entered into management services agreements with us or our
subsidiary, Affimed Inc, as amended from time to time. New management services agreements of
Adi Hoess and Wolfgang Fischer became effective upon their reappointment as managing
directors by the general meeting of shareholders on 4 August 2020. The management
services agreements of Arndt Schottelius and Andreas Harstrick became effective upon their
appointment as managing directors by the general meeting of shareholders on 4 August 2020.
The management services agreements of Angus Smith and Denise Mueller became effective
on 13 July 2020 and 7 January 2021 respectively. Subject to and with effect from their re-
appointment as members of the management board at the upcoming annual general meeting
of shareholders of the company, the management services agreements of Adi Hoess,
Wolfgang Fischer, Arndt Schottelius, Andreas Harstrick and Angus Smith will be amended.
The management services agreements of Adi Hoess, Wolfgang Fischer, Arndt Schottelius and
Andreas Harstrick are for an indefinite period of time. In addition, the management services
agreements of Adi Hoess, Wolfgang Fischer, Arndt Schottelius and Andreas Harstrick provide for a
termination notice period of not less than six months, both for us and for the managing director.
The management services agreements of Angus Smith and Denise Mueller are for an indefinite
period of time and provide for a termination notice period of 45 days, both for us and for Angus
Smith and Denise Mueller respectively. In the event of an urgent cause, the management services
agreements may be terminated with immediate effect. The amended management services
agreements of Adi Hoess, Wolfgang Fischer, Arndt Schottelius, Andreas Harstrick and Angus
Smith, once in effect, provide that the supervisory board has to notify the respective managing
director not less than three months prior to the expiration of its term of office of its decision whether
or not to propose to the general meeting of shareholders the re-appointment as a managing
director.
Affimed Annual Report 2022
36
Each management services agreement provides for payment of severance upon pre-defined
circumstances such as a termination by us without urgent cause or the existence of certain events
posing the managing director to terminate the management services agreement for urgent cause
(including, but not limited to, a reduction of the managing director's salary) for which the severance
is 100% (Adi Hoess) and 50% (Wolfgang Fischer, Arndt Schottelius and Andreas Harstrick) of the
managing director's gross annual salary increased with the average STI Variable Compensation
over the last full three years, or if the term of office of the managing director is shorter than three
years, the average received STI Variable Compensation over the shorter period. The severance for
Angus Smith and Denise Mueller is 75% of the managing director's gross annual salary and
variable compensation.
The management services agreements provide for a lump-sum payment following a change of
control, subject to certain conditions. In the event of termination of the management services
agreements following a change of control, the aforementioned severance is increased to 185%
(Adi Hoess) and to 150% (Wolfgang Fischer, Arndt Schottelius and Andreas Harstrick) of the
managing director's gross annual salary increased with the average STI Variable Compensation
over the last full three years, or if the term of office of the managing director is shorter than three
years, the average received STI Variable Compensation over the shorter period. The severance for
Angus Smith and Denise Mueller is increased to 125% of the managing director's gross annual
salary and variable compensation.
'The management services agreements of Adi Hoess, Wolfgang Fischer, Arndt Schottelius and Andreas
Harstrick contain post-termination restrictive covenants, including a post-termination non-competition
covenant, which lasts until twelve months after the management services agreement has ended, and a
non-solicitation covenant, which lasts until two years after the management services agreement has
ended. The post-termination non-competition and non-solicitation covenant included in the management
services agreements of Angus Smith and Denise Mueller each lasts until 6 months after the
management services agreement has ended.
Insurance and Indemnification
Our managing directors and supervisory directors have the benefit of indemnification provisions in
our articles of association. These provisions give managing directors and supervisory directors the
right, to the fullest extent permitted by law, to recover from us amounts, including but not limited to
litigation expenses, and any damages they are ordered to pay, in relation to acts or omissions in
the performance of their duties. However, there is generally no entitlement to indemnification for
acts or omissions that amount to willful (opzettelijk), intentionally reckless (bewust roekeloos) or
seriously culpable (ernstig verwijtbaar) conduct. In addition, upon consummation of our IPO, we
entered into agreements with our managing directors and supervisory directors to indemnify them
against expenses and liabilities to the fullest extent permitted by law. These agreements also
provide, subject to certain exceptions, for indemnification for related expenses including, among
others, attorneys’ fees, judgments, penalties, fines and settlement amounts incurred by any of
these individuals in any action or proceeding. In addition to such indemnification, we provide our
managing directors and supervisory directors with directors’ and officers’ liability insurance.
Insofar as indemnification of liabilities arising under the U.S. Securities Act of 1933 (the
“Securities Act”) may be permitted to supervisory directors, managing directors or persons
controlling us pursuant to the foregoing provisions, we have been informed that, in the opinion of
the SEC, such indemnification is against public policy as expressed in the Securities Act and is
therefore unenforceable.
V.
Related party transactions
The following is a description of related party transactions occurred in 2021 and 2022 with any of
our members of our supervisory board or management board and the holders of more than 5% of
our common shares.
Affimed Annual Report 2022
Indemnification Agreements
37
We have entered into indemnification agreements with our managing directors and supervisory
directors. The indemnification agreements and our articles of association require us to indemnify
our managing directors and supervisory directors to the fullest extent permitted by law.
Agreement with supervisory director
Prior to his appointment as supervisory director of the Company, Harry Welten has provided
consultancy services to us. The consulting agreement was terminated in 2020; no related
payments were received in 2021 and 2022.
VI.
RISK MANAGEMENT AND CONTROL SYSTEMS
Risk Management: general methods
Affimed’s management board has implemented an Enterprise Risk Management System (ERM),
which is designed with the objective to:
increase Shareholder Value through well informed and thoughtful weighing of risks against
opportunities;
guide the employees in accurate management of risks, while realizing and fully exploiting
the opportunities;
address the applicable regulatory requirements; and
ensure alignment across the entire Affimed organization on risk attitude, risk appetite and
risk materiality.
The ERM Policy covers:
identification, assessment and treatment of risks by the Risk Owners, according to the
evaluation criteria and treatment strategies as defined by the ERM Policy;
risk consolidation and aggregation across the Affimed organization;
continuous monitoring of identified risks and their defined treatments by the Risk Owners;
and
reporting of risks, including ad-hoc risk reporting, to the Risk Committee, the management
board and supervisory board.
Implementation effectiveness
The effectiveness of risk management is implemented by the three-lines-of-defence model: 1st
line: Business – management board owns, implements and operates business controls to ensure
compliance with laws, regulations and policies (including supervisory controls). 2nd line:
Compliance, Risk Management and Internal Control System functions, which identify exposed
areas and manage mitigation activities; perform monitoring to gain assurance that compliance
controls operate effectively; and report upon such activities as well as significant findings to the
management board and to the supervisory board, which present the 3rd defence lines together with
external auditors as additional control functions.
A description of the key risk factors and the risk management approach, as well as the sensitivity
of the Company's results to external factors and variables are described in more detail in "Risk
Management."
Affimed Annual Report 2022
Information security risks
38
We are establishing a comprehensive Information Security Management System (ISMS) in
accordance with the VdS 10000 guideline. The key objective of our ISMS is to ensure:
availability of data;
confidentiality of data; and
integrity of data.
In March 2023, the Company’s ISMS was audited and re-certified in accordance with the VdS
10000 guideline without any identified deviations or findings. The sector-neutral VdS guidelines
10000 are a catalogue of measures for a management system that is specially tailored to small and
medium companies. VdS 10000 is based on good practice from BSI Grundschutz and ISO/IEC
27001.
Our ISMS consists of multiple elements ensuring security from a variety of perspectives and
regulations. We are planning further improvements to our ISMS by establishing additional elements
such as performance monitoring, supplier relationships and continual improvement processes. The
Company is implementing a plan to reach this status utilizing both internal and external expertise,
and implementation of the plan began in early 2020. In 2022, we entered the next level by investing
into security and breach monitoring and establishing data classification.
The Company has entered into a cybersecurity risk insurance policy, though to date the Company
has not experienced any security breaches.
Internal Control System: general methods
Affimed’s management board is responsible for establishing and maintaining adequate internal
control over financial reporting, as such term is defined in Rule 13a-15(f) of the Exchange Act.
The main elements of our internal control and risk management system in relation to the financial
reporting process comprise the following:
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framework for Internal Control System: Integrated Framework (2013) by the COSO;
scoping of key business processes according to SOX Sec. 404a and continuing monitoring
status of SOX Sec. 302 process due to the listing of Affimed’s shares on Nasdaq;
clear assignment of responsibilities;
segregation of duties and four eyes principle;
appropriate Enterprise Resource Planning system including authorisation concepts and
approval workflows;
use of checklists when preparing quarterly and annual financial statements;
use of guidelines and work procedures;
ITGC considerations;
risk and control assessment (testing of control design and effectiveness);
evaluation of testing results, remediation action;
continuing monitoring status of SOX Sec. 302 process; and
reporting the conclusions about the adequacy and effectiveness of internal controls incl.
any significant deficiency or material weakness over financial reporting to the audit
committee on a regular basis.
Further, a Disclosure Committee is in place, which advises the various officers and departments
involved, including the CEO and the CFO, on the timely review, publication and filing of periodic
and current (financial) reports. In addition to the certification by the CEO and the CFO under U.S.
law, each individual member of the supervisory board and management board must under Dutch
law, sign the consolidated and the company-only financial statements being disclosed and
submitted to the general meeting of shareholders for adoption.
Affimed Annual Report 2022
Monitoring of effectiveness
39
Our management board, after evaluating the effectiveness of our disclosure controls and
procedures (as defined in Rule 13a-15(e) under the Exchange Act) as of December 31, 2022, have
concluded that based on the evaluation of these controls and procedures required by Rule 13a-
15(b) of the Exchange Act, our disclosure controls and procedures were effective and the risk
management and control systems worked properly in 2022. We conclude that these systems
provide a reasonable assurance that the financial report does not contain any errors of material
importance. Based on that evaluation, our management concluded that our internal control over
financial reporting was effective as of December 31, 2022.
Our independent registered public accounting firm is required to attest the effectiveness of our
internal controls over financial reporting pursuant to Section 404. In the opinion of our independent
registered public accounting firm, the Company maintained, in all material respects, effective
internal control over financial reporting as of December 31, 2022, based on criteria established in
Internal Control – Integrated Framework (2013) issued by COSO.
VII.
STATEMENT BY THE MANAGEMENT BOARD
The management board states in accordance with best practice provision 1.4.3 of the DCGC as in
effect for the financial year 2022 that the management report provides sufficient insights into any
failings in the effectiveness of the internal risk management and control systems. The implemented
systems provide reasonable assurance that the financial reporting does not contain any material
inaccuracies.
Based on the current state of affairs, it is justified that the financial reporting is prepared on a going
concern basis; material risks and uncertainties that are relevant to the expectation of the
company’s continuity for the period of twelve months after the preparation of the report are
disclosed.
It should be noted that these systems cannot provide absolute assurance that internal risk
management and control systems can prevent or detect all inaccuracies or errors.
VIII.
CODE OF CONDUCT
The management board has implemented a Code of Conduct and a Code of Conduct for Business
Partners to ensure that we conduct our business activities in accordance with the highest ethical,
legal and professional standards and that we only interact with business partners who comply with
the same standards. Our Code of Conduct covers a broad range of matters including the handling
of conflicts of interest, compliance issues and other corporate policies such as insider trading and
equal opportunity and non-discrimination standards. Our Code of Conduct applies to all of our
supervisory directors, managing directors and employees of the Company and its subsidiaries.
Affimed has also established suitable processes and devoted sufficient personnel resources for the
enforcement of both Codes and the entire Compliance Management System, subject to the
supervision of the CEO and the compensation, nomination and corporate governance committee of
the supervisory board, and the Company supports its supervisory directors, managing directors
and employees to maintain a culture of accountability and to facilitate compliance with both Codes.
We have published our Code of Conduct and the Code of Conduct for Business Partners on our
website:
https://www.affimed.com/investors/corporate-governance/
Affimed Annual Report 2022
40
IX.
SHARES AND SHAREHOLDERS’ RIGHTS
General meeting of shareholders
Affimed shareholders exercise their rights through annual and extraordinary general meetings of
shareholders. We are required to convene an annual general meeting of shareholders in the
Netherlands each year, no later than six months after the end of the Company’s financial year.
Additional extraordinary general meetings of shareholders may be convened at any time by the
supervisory board and the management board. Pursuant to Dutch law, one or more shareholders,
who jointly represent at least 10% of the issued capital may, on their application, be authorized by
a Dutch district court to convene a general meeting of shareholders.
The agenda for the annual general meeting of shareholders must contain certain matters as
specified in our articles of association and under Dutch law, including the adoption of our annual
financial statements. Shareholders are entitled to propose items for the agenda of the general
meeting of shareholders provided that they hold at least 3% of the issued share capital. Proposals
for agenda items for the general meeting of shareholders must be submitted at least 60 days prior
to the date of the meeting. The general meeting of shareholders is also entitled to vote on
important decisions regarding Affimed’s identity or character, including major acquisitions and
divestments.
In accordance with our articles of association, for each general meeting of shareholders, the
management board may determine that a record date will be applied in order to establish which
shareholders are entitled to attend and vote at the general meeting of shareholders. Such record
date shall be the 28th day prior to the day of the general meeting. The record date and the manner
in which shareholders can register and exercise their rights will be set out in the notice of the
meeting.
We encourage participation in Affimed’s general meetings of shareholders. All shareholders and
others entitled to attend general meetings of shareholders are authorized to attend the general
meeting of shareholders, to address the meeting and, in so far as they have such right, to vote.
Voting rights
In accordance with Dutch law and our articles of association, each issued common share confers
the right to cast one vote at the general meeting of shareholders. Each holder of shares may cast
as many votes as it holds shares. Shareholders may vote by proxy. No votes may be cast at a
general meeting of shareholders on shares held by us or our subsidiaries or on shares for which
we or our subsidiaries hold depositary receipts.
Nonetheless, the holders of a right of use and enjoyment (vruchtgebruik) and the holders of a right
of pledge in respect of shares held by us or our subsidiaries in our share capital are not excluded
from the right to vote on such shares, if the right of use and enjoyment (vruchtgebruik) or the right
of pledge was granted prior to the time such shares were acquired by us or any of our subsidiaries.
Neither we nor any of our subsidiaries may cast votes in respect of a share on which we or such
subsidiary holds a right of use and enjoyment (vruchtgebruik) or a right of pledge. Shares which
are not entitled to voting rights pursuant to the preceding sentences will not be taken into account
for the purpose of determining the number of shareholders that vote and that are present or
represented, or the amount of the share capital that is provided or that is represented at a general
meeting of shareholders.
Decisions of the general meeting of shareholders are taken by an absolute majority of votes cast,
except where Dutch law or the articles of association provide for a qualified majority or unanimity.
In accordance with Dutch law and generally accepted business practices, our articles of
association do not provide quorum requirements generally applicable to general meetings of
Affimed Annual Report 2022
41
shareholders. To this extent, our practice varies from the requirement of Nasdaq Listing Rule
5620(c), which requires an issuer to provide in its bylaws for a generally applicable quorum, and
that such quorum may not be less than one-third of the outstanding voting stock.
Under our articles of association, our managing directors and supervisory directors are appointed
by the general meeting of shareholders upon a binding nomination by our supervisory board. The
general meeting of shareholders may overrule the binding nomination by a resolution adopted with
a two-thirds majority of the votes cast representing at least half of the issued share capital. If the
general meeting of shareholders overrules the binding nomination, the supervisory board shall
make a new binding nomination.
Issue of additional shares and pre-emptive rights
Shares may be issued following a resolution by the general meeting of shareholders on a proposal
of the management board made with the approval of the supervisory board. The general meeting of
shareholders may resolve to delegate this authority to the management board for a period of time
not exceeding five years.
At the general meeting of shareholders held at June 25, 2019, our management board was granted
the authority, with effect from that date, for a period of five years (i.e., until June 25, 2024) and
subject to the approval of the supervisory board, to resolve to issue common shares (either in the
form of stock dividends or otherwise) and/or grant rights to subscribe common shares in the share
capital of the Company, for a maximum of common shares that can be issued under the size of the
authorised share capital of the Company as per the date of adoption of such resolution.
Upon the issuance of new common shares, holders of Affimed’s common shares have a pre-
emptive right to subscribe to common shares in proportion to the total amount of their existing
holdings of Affimed’s common shares. According to the Company’s articles of association, this pre-
emptive right does not apply to any issuance of shares to Affimed employees.
The general meeting of shareholders may decide to restrict or exclude pre-emptive rights. The
general meeting of shareholders may also resolve to designate the management board as the
corporate body authorized to restrict or exclude pre-emptive rights for a period not exceeding five
years.
At the general meeting of shareholders held at June 25, 2019, with effect from that date, our
management board was granted the authority, for a period of five years (i.e., until June 25, 2024)
and subject to the approval of the supervisory board, to restrict or exclude the pre-emptive rights of
holders of common shares upon the issuance of common shares and/or upon the granting of rights
to subscribe for common shares.
Affimed Annual Report 2022
Repurchase by Affimed of its own shares
42
Affimed may only acquire fully paid shares in its capital for a consideration following authorization
by the general meeting of shareholders and subject to certain provisions of Dutch law and the
Company’s articles of association, if: (i) the Company’s shareholders’ equity less the payment
required to make the acquisition does not fall below the sum of paid-up and called-up capital and
any reserves required by Dutch law or its articles of association and (ii) the Company and its
subsidiaries would not thereafter hold shares or hold a pledge over shares with an aggregate par
value exceeding 50% of its then current issued share capital.
At the general meeting of shareholders held at 22 June 2022, our management board was granted
the authority, for a period of 18 months, with effect from the same date (i.e., until 22 December
2023) and subject to the approval of the supervisory board, to cause the repurchase of common
shares by us of up to 10% of our issued share capital, for a price per share not exceeding 110% of
the most recent closing price of a common share on any stock exchange where the common
shares are listed.
No authorization of the general meeting of shareholders is required if common shares are acquired
by us with the intention of transferring such common shares to our employees under an applicable
employee stock purchase plan.
Articles of Association
Our articles of association outline certain of the Company’s basic principles relating to corporate
governance and organization. The current text of the articles of association is available at the
Trade Register of the Dutch Chamber of Commerce and on our public website at
www.affimed.com.
A resolution to amend the articles of association may only be adopted by the general meeting at
the proposal of the management board with the prior approval of the supervisory board. A proposal
to amend the articles of association whereby any change would be made in the rights which vest in
the holders of shares of a specific class in their capacity as such, shall require the prior approval of
the meeting of holders of the shares of that specific class.
Independent Auditor
The general meeting of shareholders appoints the independent auditor. The audit committee was
closely involved in the evaluation of Affimed's independent auditor and has recommended to the
supervisory board the independent auditor to be proposed for (re)appointment by the general
meeting of shareholders. In addition, the audit committee evaluates and, where appropriate,
recommends the replacement of the independent auditors. On 22 June 2022, the general meeting
of shareholders appointed KPMG Accountants N.V. as independent auditor for the Company for
the financial year 2022.
Anti-Takeover Provisions
Dutch law permits us to adopt protective measures against takeovers and we have adopted several
provisions that may have the effect of making a takeover of Affimed more difficult or less attractive,
including:
the staggered four-year terms of our supervisory directors, as a result of which only
approximately one-fourth of our supervisory directors will be subject to election in any one
year;
a provision that our managing directors and supervisory directors may only be removed by
the general meeting of shareholders by a two-thirds majority of votes cast representing at
least 50% of our outstanding share capital if such removal is not proposed by our
supervisory board;
Affimed Annual Report 2022
43
requirements that certain matters, including an amendment of our articles of association,
may only be brought to our shareholders for a vote upon a proposal by our management
board that has been approved by our supervisory board; and
a statutory response period. Under Dutch law, the management board can invoke a
response period by which a shareholder is prevented from convening a general meeting
putting new items on the agenda. As per May 1, 2021, a bill took effect extending the
statutory response period from 180 to 250 days.
X.
COMPLIANCE WITH DUTCH CORPORATE GOVERNANCE CODE
As a Dutch company, the Company is subject to the DCGC and is required to disclose in this
Annual Report, filed in the Netherlands, whether the Company complies with the provisions of the
DCGC. If the Company does not comply with the provisions of the DCGC (for example, because of
a conflicting Nasdaq requirement or otherwise), the Company must list the reasons for any
deviation from the DCGC in this Annual Report. The Company's deviations from the DCGC as in
effect for the financial year 2022 are summarized below.
Remuneration
The Company has granted and intends to grant options and restricted stock units in the future to
members of its management board. These options provide for vesting conditions which allow
exercise of one third of the options after the first anniversary of the grant date, which qualifies
as a deviation from best practice provision 3.1.2 of the DCGC. Such vesting conditions are
market practice among companies listed at Nasdaq. The Company is in competition with other
companies in this field and intends to maintain an attractive compensation package for its
current and any future management board members.
The Company has granted and intends to grant options and restricted stock units in the future to
members of its supervisory board, which qualifies as a deviation from best practice provision
3.3.2 of the DCGC. Such remuneration is in accordance with the Nasdaq corporate governance
requirements and market practice among companies listed at Nasdaq. The Company is in
competition with other companies in this field and intends to maintain an attractive
compensation package for its current and any future supervisory board members. The number
of option rights granted to each supervisory board member is determined by the general
meeting of shareholders.
The compensation, nomination and corporate governance committee of the Supervisory Board
has not prepared a remuneration report, which qualifies as a deviation from best practice
provision 3.4.1 of the DCGC. Instead an overview of the implementation and planning of the
remuneration of managing and supervisory directors is described in more detail in the annual
report (20-F) filed with the Securities and Exchange Commission on March 23, 2023 (available
on our website: http://www.affimed.com/sec).
The severance payments for our managing directors as described above, may exceed 100% of
their annual fixed salary. This is a deviation from best practice provision 3.2.3 of the DCGC.
Board nominations and shareholder voting
Pursuant to our articles of association, the supervisory board will nominate one or more
candidates for each vacant seat on the management board or the supervisory board. A
resolution of the Company's general meeting of shareholders to appoint a member of the
management board or the supervisory board other than pursuant to a nomination by the
Company's supervisory board requires at least two-thirds of the votes cast representing more
than half of the Company's issued share capital, which qualifies as a deviation from best
practice provision 4.3.3 of the DCGC. Although a deviation from the provision 4.3.3 of the
DCGC, the supervisory board and the management board hold the view that these provisions
will enhance the continuity of Affimed’s management and policies.
Affimed Annual Report 2022
44
May 22, 2023
On behalf of the Management Board,
Dr. Adi Hoess, CEO,
Dr. Wolfgang Fischer, COO
Dr. Arndt Schottelius, CSO
Dr. Andreas Harstrick, CMO
Angus Smith, CFO
Denise Mueller, CBO
Affimed Annual Report 2022
45
Supervisory Board report
The Supervisory Board is an independent corporate body responsible for supervising and advising the
Management Board and overseeing the general course of affairs and the establishment and monitoring of
the strategy of the Company. The Supervisory Board is guided by the interests of the Company and will
also take into consideration the relevant interests of all the Company's stakeholders. We report on the
activities of the Supervisory Board in 2022.
The Company had a number of corporate updates in 2022 and the first months of 2023.
In April 2022, we closed the sale of 22,500,000 of our common shares at the public offering price of
$4.00 per share in an underwritten public offering. Concurrent with closing, the underwriters exercised an
option to purchase over-allotment shares and we sold an additional 3,375,000 shares at a price of $4.00
per share. We received approximately €89.8 million in net proceeds from the offering, after deducting
underwriting discounts and commissions and other offering expenses.
At the annual general meeting of shareholders of the Company held on June 22, 2022 (“2022 AGM”), our
shareholders approved all agenda items, including the reappointment of Dr. Bernhard Ehmer as member
of the Supervisory Board, and the amendment of the remuneration policies of the Supervisory Board and
the Management Board.
In June 2022, we submitted an IND to the U.S. Food and Drug Administration (“FDA”) for AFM28.
Following feedback from the FDA related to the design of the dose escalation study, we made a strategic
decision to voluntarily withdraw the IND and to focus early clinical development of AFM28 in jurisdictions
outside of the U.S. Clinical trial applications were cleared in Belgium, Denmark, France and Spain, and
the Company initiated recruitment into a phase 1 clinical study in the first quarter of 2023.
In November 2022, we announced a new strategic partnership with Artiva to jointly develop, manufacture,
and commercialize a combination therapy of ICE® AFM13 and Artiva’s cord blood-derived, cryopreserved
off-the-shelf allogeneic NK cell product candidate, AB-101. Under the terms of the agreement, Affimed
and Artiva will pursue the development of the AFM13/AB-101 combination treatment in the United States
on a co-exclusive basis. Affimed will lead regulatory activities through Phase 2 and any confirmatory
studies. Affimed will be responsible for funding clinical study costs through Phase 2, while Artiva will be
responsible for the costs of supplying AB-101 and IL-2 for such studies. Both companies will retain
commercialization and distribution rights and book sales for their respective products. Affimed will be
responsible for promotional activities and expenses of the combination therapy. Pursuant to the
agreement, revenues from the combination will be shared, with Affimed receiving 67% of the combination
therapy revenue and Artiva receiving 33%.
In November 2022, we announced data updates from two phase 1/2a trials with AFM24 in patients with
solid tumors at the 37th Annual Meeting of the Society for Immunotherapy of Cancer (SITC). Abstracts for
the data presentations at the SITC meeting were published on November 7, 2022. The full updated clinical
data sets were presented in two poster presentations at the SITC meeting on November 10 and
November 11, 2022.
In December 2022, we released topline data from our phase 2 REDIRECT study investigating AFM13
monotherapy in patients with advanced-stage R/R Peripheral T Cell Lymphoma. Primary efficacy
measures include objective response rate of 32.4% and a CR rate of 10.2%. Key secondary and
Affimed Annual Report 2022
46
exploratory outcome measures include safety, durability of response, progression free survival (PFS) and
overall survival (OS). The safety profile of AFM13 was well managed and consistent with previously
reported data of prior and ongoing clinical studies with AFM13. Median DoR was 2.3 months, median PFS
was 3.5 months and median OS was 13.8 months. Based on the compelling data seen in Hodgkin
lymphoma for the combination of AFM13 with cord blood-derived NK cells in the AFM13-104 study, we
believe that the combination with AB-101 has a higher probability to deliver increased anti-tumor activity
and a more durable clinical benefit to address the unmet need in this patient population. Accordingly, we
do not intend to pursue an accelerated approval for AFM13 monotherapy in PTCL and will focus
investment on clinical development in the combination of AFM13 with Artiva’s AB-101 NK cell product.
In December 2022, we provided a data update from the ongoing phase 1/2 study of the Company’s lead
innate cell engager (ICE®) AFM13 precomplexed with cord blood-derived natural killer (cbNK) cells in
patients with CD30-positive relapsed or refractory (R/R) Hodgkin and Non-Hodgkin lymphomas. Key
observations as of the cutoff date include:
•
31 Hodgkin lymphoma patients treated at the recommended phase 2 dose (RP2D) showed an
objective response rate (ORR) of 97% and a complete response (CR) rate of 77%. Three of four
NHL patients treated at the recommended dose achieved an objective response, including one
CR. 63% of patients treated at the RP2D with at least 6 months follow-up after initial infusion
(n=24) remain in complete response for at least 6 months. The treatment continues to be well
tolerated in the larger patient population, with minimal side effects beyond the expected
myelosuppression from the preceding lymphodepleting chemotherapy. No instances of cytokine
release syndrome, immune effector cell-associated neurotoxicity syndrome, or graft versus host
disease were observed. There were 20 infusion-related reactions in 294 infusions (6.8%) of
AFM13 alone and one infusion-related reaction in 99 infusions (1%) of the cbNK cells
precomplexed with AFM13. No dose-limiting toxicities were encountered.
In January 2023, the FDA issued a written response to our pre-investigational new drug (“IND”) meeting
request for the AFM13 and Artiva AB-101 co-administered combination therapy in relapsed/refractory
Hodgkin lymphoma and the exploratory arm evaluating the combination in r/r CD30-positive peripheral T-
cell lymphoma. Based on the written response, Affimed remains on track to submit an IND in the first half
of 2023 and, subject to FDA clearance of the IND, to initiate a clinical study during 2023.
In March 2023, we announced that the first patient was dosed in a phase 1 multicenter, open label, first-in-
human dose escalation study of the innate cell engager (ICE®) AFM28 monotherapy in patients with
CD123-positive relapsed/refractory (r/r) acute myeloid leukemia (AML). AFM28 efficiently directs natural
killer (NK) cells to CD123-positive leukemic cells in our preclinical models, including blasts and leukemic
stem and progenitor cells, inducing their depletion in samples of patients with AML and myelodysplastic
syndrome (MDS).
In April 2023, we received a written notice (the “Notice”) from the Listing Qualifications Department of The
Nasdaq Stock Market LLC (“Nasdaq”) indicating that, for the last thirty consecutive business days, the bid
price for the Company’s common shares had closed below the minimum $1.00 per share requirement for
continued listing on the Nasdaq under Nasdaq Listing Rule 5550(a)(2) (the “Minimum Bid Price Rule”). In
accordance with Nasdaq Listing Rule 5810(c)(3)(A), the Company has been provided an initial period of
180 calendar days, or until October 2, 2023, to regain compliance. If the Company fails to regain
compliance with the Minimum Bid Price Rule during this period, the Company may consider applying to
transfer its securities from The Nasdaq Global Select Market to The Nasdaq Capital Market, provided that
the Company meets the applicable market value of publicly held shares required for continued listing and
all other applicable requirements for initial listing on The Nasdaq Capital Market (except for the bid price
Affimed Annual Report 2022
47
requirement). Such transfer would provide the Company with an additional 180 calendar days, or until
April 1, 2024, to regain compliance. There can be no assurance that the Company would be eligible for
the additional 180 calendar day compliance period, if applicable, or that the Nasdaq staff would grant the
Company’s request for continued listing. The Notice has no immediate effect on the listing or trading of the
Company’s common shares. The Company intends to monitor the bid price of its common shares and
consider available options to regain compliance with the Minimum Bid Price Rule.
In April 2023, we announced the final results from our phase 2 REDIRECT study investigating our innate
cell engager (ICE®) AFM13 monotherapy in patients with heavily pretreated advanced-stage r/r PTCL.
The results are being presented at the American Association for Cancer Research (AACR) Annual
Meeting by Dr. Won Seog Kim, Professor of Hematology-Oncology at Samsung Medical Center in Seoul
and a principal investigator for the study, and establishes that AFM13 monotherapy showed efficacy in the
treatment of relapsed/refractory peripheral T cell lymphoma (r/r PTCL) patients with a differentiated safety
profile. As stated above, primary efficacy measures include an ORR of 32.4% and a CR rate of 10.2%.
Key secondary and exploratory outcome measures include safety, durability of response, progression free
survival and overall survival. Median DoR was 2.3 months, median PFS was 3.5 months and median OS
was 13.8 months. PFS and OS were comparable with currently approved therapies for r/r PTCL. Of all
PTCL subsets, patients with AITL exhibited the highest ORR (53.3%) and CR (26.7%) with DoR not
meaningfully different across the various subsets. The safety profile of AFM13 was well managed and
consistent with previously reported data of prior and ongoing clinical studies with AFM13. Most common
TEAEs were IRR (25%), neutropenia (10.2%) and pyrexia (8.3%). No AFM13-related fatal toxicities were
observed.
In April 2023 the Supervisory Board approved our first Sustainability Report, which was compiled in
reference with the GRI Standards and published on our website
(www.affimed.com/investors/sustainability-affimed/).
In response to the COVID-19 pandemic, we have implemented mitigation procedures to ensure the safety
of trial participants and healthcare professionals and that drug supply and other trial-related materials are
ready and available for patients enrolled in our clinical trials. We are closely monitoring and adhering to
relevant federal and local guidelines on COVID-19 to ensure the safety and health of our global workforce
and help limit the spread of COVID-19, while maintaining business continuity. We will continue to work
closely with clinical sites as well as respective competent authorities to ensure the safety of trial
participants and healthcare professionals, as well as the appropriate use of healthcare resources during
the COVID-19 pandemic, while preserving the conduct and data integrity of our clinical studies.
Composition
The Supervisory Board determines the number of its members, provided that pursuant to our articles of
association, the Supervisory Board shall always consist of at least three members. Bernhard Ehmer was
re-appointed at the 2022 AGM. The Supervisory Board profile was last amended in 2020 and the
Supervisory Board is of the opinion that its composition is currently in accordance with such profile and
the Supervisory Board has sufficient experience and expertise in various fields to fulfil its statutory
obligations as Supervisory Board members of the Company. However, to diversify the group Supervisory
Board members and to further strengthen the legal and ESG experience in the Supervisory Board, the
Supervisory Board deems it advisable to further expand the number of its members. The following table
lists the members of the Supervisory Board. See chapter II. “Managing Directors and Supervisory
Directors” of the Corporate Governance Report of the Management Board for detailed biographies
including details on their profession, principal positions and other positions. Thomas Hecht is the chairman
Affimed Annual Report 2022
48
of the Supervisory Board. The term of each member will terminate on the date of the annual general
meeting of shareholders in the year indicated below.
Initial/re-appointment Term
Name
August 4, 2020
Thomas Hecht
2023
June 22, 2022
Bernhard Ehmer
2025
June 15, 2021
Ulrich Grau
2024
June 15, 2021
Mathieu Simon
2024
2023
August 4, 2020
Harry Welten
2023
Annalisa Jenkins
August 4, 2020
2024
Uta Kemmerich-Keil June 15, 2021
Age Gender
72
68
74
67
57
57
56
M
M
M
M
M
F
F
Nationality
German
German
German/US
French/US
Swiss
British/US
German
Meeting and activities
The Supervisory Board held four in-person meetings and two meetings by conference call in 2022. The
Management Board attended these meetings. During these meetings, key areas of discussion were the
progress of the various projects, the main risks of the business, the financial situation, business
development activities and the implementation and monitoring of the business strategy.
In addition, the Supervisory Board discussed the Company’s internal control system with the audit
committee and the external independent auditor. The Supervisory Board, on the advice of the audit
committee, also discussed the result of the assessment of the structure and operation of the internal risk
management and control systems as well as significant changes thereto including the need for an internal
audit function. Based on the results of the review of the audit committee the Supervisory Board currently
does not see a need for an internal audit function.
The Supervisory Board reviewed the Company's annual financial statements, including non-financial
information. The report of the external auditor to the annual financial statements is included in the annual
accounts. The Supervisory Board agrees to the contents of the annual accounts and will recommend the
adoption thereof by the annual general meeting of shareholders.
All Supervisory Board members made adequate time available to give sufficient attention to matters
concerning Affimed. Each of the members was able to frequently attend Supervisory Board meetings.
Affimed Annual Report 2022
49
Attendance at the Supervisory Board meetings during 2022 was as follows:
Meeting
Thomas
Hecht
Bernhard
Ehmer
Ulrich
Grau
Mathieu
Simon
Harry
Welten
Annalisa
Jenkins
Supervisory Board 6/6
6/6
6/6
6/6
6/6
6/6
Audit Committee
9/9
4/4
4/4
9/9
4/4
Uta
Kemmerich-
Keil
5/6
8/9
Compensation
committee*
Nomination and
corporate
governance
committee*
Compensation,
nomination and
corporate
governance
committee
Research and
development
committee
2/2
1/2
2/2
1/2
1/2
7/7
4/7
7/7
7/7
4/5
5/5
5/5
Strategic
committee
5/5
5/5
5/5
5/5
*During 2022, the Compensation committee and the Nomination and corporate governance committee
were combined into the Compensation, nomination and corporate governance committee.
The Supervisory Board also held several non-formal Supervisory Board meetings which are attended by
the Management Board. In addition, the members of the Supervisory Board have regular contact with the
members of the Management Board outside of the scheduled meetings of the Supervisory Board. These
informal consultations ensure that the Supervisory Board remains well-informed about the Company’s
operations.
The Supervisory Board is responsible for the quality of its own performance and it discusses, once a year
on its own, without the members of the Management Board both its own performance and that of the
individual members. As in the previous years, in 2022 the Supervisory Board and the Supervisory Board
committees conducted an evaluation through a self-assessment and was positive about the performance
Affimed Annual Report 2022
50
and the collaboration with the Management Board. Further, the Supervisory Board was satisfied with the
performance of the Supervisory Board and determined that it works well together, with all members fully
contributing to discussions.
The Supervisory Board has also reviewed the performance of the Management Board, including the
achievement level of the corporate objectives, as a whole and each Management Board member for the
year 2022. The conclusions from this review have been discussed with the Management Board as well as
the individual Management Board members and were considered in the Management Board
compensation.
During the financial year 2022 no conflict of interest of a Supervisory Board member was reported. We
refer to the chapter Conflict of Interest in the corporate governance report of the annual report for further
information.
Committees of the Supervisory Board
During 2022, the Supervisory Board had four permanent committees to which certain tasks are assigned.
The committees report back on their activities to the Supervisory Board on a regular basis. The
composition of each committee is detailed in the following table (as of December 31, 2022).
Name
Audit committee
Research and
development
committee
Thomas Hecht
Bernhard Ehmer
Ulrich Grau
Mathieu Simon
Harry Welten
Annalisa Jenkins
Uta Kemmerich-Keil
member
member
chair
member
member
chair
Compensation,
nomination and
corporate
governance
committee
member
member
chair
member
Strategic committee
chair
member
member
member
In March 2022, the Supervisory Board restructured some of its committees whereby the compensation
committee and the nomination and corporate governance committee were combined into one committee
(compensation, nomination and corporate governance committee). In addition, a new committee (strategic
committee) was formed.
Committee activities during 2022
Audit committee
The audit committee assists the Supervisory Board in overseeing Affimed’s accounting and financial
reporting processes and the audits of the financial statements. The audit committee meets at least four
times per year and during the regular meetings at least once a year with our external independent auditor,
Affimed Annual Report 2022
51
without the Management Board being present. In 2022, the audit committee’s main areas of focus were
review of quarterly financial statements, the Company’s system of internal controls over financial reporting
and the compliance with the relevant rules and regulations (SOX), risk management, auditing approach
and auditing timelines of quarterly and annual financial statements, discussion of the financing situation
and the cash management. At least once a year the committee is informed about risks for the Company
and mitigating and preventive measures.
The financial statements of the Company for 2022 as presented by the Management Board have been
audited by KPMG as independent external auditors. KPMG attended the audit committee meeting in
which the annual accounts and the auditor’s report were discussed. The Management Board and the audit
committee report to the Supervisory Board annually on their dealings with the external auditor, including
the auditor’s independence. The Supervisory Board takes these reports into account when deciding on the
nomination for the appointment of an external auditor that is submitted to the general meeting of
shareholders.
The audit committee held nine meetings by conference call and no in-person meetings in 2022.
Research and development committee
The research and development committee assists the Supervisory Board in aligning the R&D strategy of
the Company with the overall Company strategy, to evaluate critical junctures of research and
development activities and assess the competitive landscape and the impact on the Company's strategy
and business.
The research and development committee held four meetings by conference call and one in-person
meeting in 2022.
Compensation, nomination and corporate governance committee
The compensation, nomination and corporate governance committee assists the Supervisory Board inter
alia in determining compensation for the managing directors of the Company. Under SEC and Nasdaq
rules, there are heightened independence standards for members of the compensation committee,
including a prohibition against the receipt of any compensation from us other than standard supervisory
director fees.
The committee recommends to the Supervisory Board for determination the compensation of each of our
managing directors. Furthermore, the compensation, nomination and corporate governance committee
assists the Supervisory Board in identifying, reviewing and approving corporate goals and objectives
relevant to management board compensation; analysing the possible outcomes of the variable
remuneration components and how they may affect the remuneration of the managing directors;
evaluating each managing director’s performance in light of such goals and objectives and determining
each managing director’s compensation based on such evaluation and determining any long-term
incentive component of each managing director’s compensation in line with the remuneration policy and
reviewing our management board compensation and benefits policies generally, among other things.
The compensation, nomination and corporate governance committee also assists our Supervisory Board
in identifying individuals qualified to become members of our Supervisory Board consistent with criteria
established by our Supervisory Board and in developing our corporate governance principles. In addition,
the Supervisory Board delegated the oversight of the Company’s Compliance Management System,
Affimed Annual Report 2022
52
including Cybersecurity and Information Security System, and the monitoring of the development and
implementation of the Company’s ESG strategy to the compensation, nomination and corporate
governance committee.
The compensation, nomination and corporate governance committee held one meeting by conference call
and six in-person meetings in 2022. Before combining the compensation committee and the nomination
and corporate governance committee, the compensation committee held four meetings (by conference
call) and the nomination and corporate governance committee held two meetings (by conference call).
Strategic committee
The strategic committee assists our Supervisory Board in discharging its supervisory, monitoring and
advisory duties with respect to the development and implementation of the Company’s overall strategy
and the risks inherent to its business activities, as well as with respect to strategic initiatives identified by
the Company from time to time.
The strategic committee held five meetings by conference call and no in-person meeting in 2022.
Remuneration of the Supervisory Board
The compensation of Supervisory Board members consists of a fixed annual fee in cash and an additional
meeting fee for any Supervisory Board meeting or committee meeting. Members of the Supervisory Board
are entitled to annual grants under our share-based compensation plans. Remuneration is subject to an
annual review by the Supervisory Board.
The remuneration of members of the Supervisory Board complies with almost all aspects of the provision
of the Dutch Corporate Governance Code. The exceptions are where it conforms more closely to
customary practice in the biotechnology industry worldwide, in particular in the United States. These
exceptions and further details on the remuneration of the Supervisory Board are disclosed in the
Corporate Governance section in the management report.
An overview of the implementation and planning of the remuneration of supervisory and managing
directors and in addition the remuneration policy is given in more detail in section “Item 6. Directors,
Senior Management and Employees – Compensation” in the annual report (20-F) filed with the Securities
and Exchange Commission on March 23, 2023 (available on our website https://www.affimed.com). In
addition, a detailed discussion of the remuneration of supervisory and managing directors will be included
in our explanatory notes to the agenda of our 2023 annual general meeting.
Independence of the Supervisory Board
The Supervisory Board is a separate corporate body that is independent of the Management Board of the
Company. Members of the Supervisory Board can neither be a member of the Management Board nor an
employee of Affimed. During the financial year 2022, all except one of our members of the Supervisory
Board were independent in accordance with the Dutch Corporate Governance Code. Pursuant to the
Dutch Corporate Governance Code, Harry Welten is considered non-independent due to his former
relationship with Affimed as consultant prior to his appointment as member of the Supervisory Board in
2020. All members of the Supervisory Board are considered independent pursuant to the Nasdaq listing
rules.
Affimed Annual Report 2022
53
Appreciation
The Supervisory Board is of the opinion that during the year 2022, its composition, mix and depth of
available expertise, working processes, level and frequency of engagement in all critical Company
activities, and access to all necessary and relevant information and the Company’s management and staff
were satisfactory and enabled it to carry out its duties towards all the Company’s stakeholders.
The members of the Supervisory Board would like to express their gratitude and appreciation to the
Management Board and employees of Affimed for their efforts and performance in 2022. In particular, the
Supervisory Board would very much like to thank our shareholders for their continued support.
May 22, 2023
On behalf of the Supervisory Board,
Dr. Thomas Hecht,
Chairman of the Supervisory Board
Affimed Annual Report 2022
54
Consolidated Financial Statements
Consolidated statements of comprehensive loss
Consolidated statements of financial position
Consolidated statements of cash flows
Consolidated statements of changes in equity
Notes to the consolidated financial statements
Affimed Annual Report 2022 55
Affimed N.V.
Consolidated statements of comprehensive loss
(in € thousand)
Revenue
Other income - net
Research and development expenses
General and administrative expenses
Operating loss
Finance income / (costs) - net
Loss before tax
Income taxes
Loss for the period
Note
2022
2021
2020
9
10
11
12
14
15
41,353
1,417
(98,814)
(32,075)
40,366
1,310
(81,488)
(24,218)
(88,119)
(64,030)
2,117
6,509
28,360
626
(49,989)
(13,715)
(34,718)
(6,647)
(86,002)
(57,521)
(41,365)
(2)
(2)
(1)
(86,004)
(57,523)
(41,366)
Other comprehensive loss
Items that will not be reclassified to profit or loss
Equity investments at fair value OCI - net change in
fair value
Other comprehensive loss
Total comprehensive loss
18
(6,047)
(7,693)
(6,047)
(7,693)
(242)
(242)
(92,051)
(65,216)
(41,608)
Basic and diluted loss per share in € per share
(undiluted = diluted)
(0.60)
(0.48)
(0.50)
Weighted number of common shares outstanding
142,362,294
119,502,384
83,471,559
The Notes are an integral part of these consolidated financial statements.
Affimed Annual Report 2022 56
Affimed N.V.
Consolidated statements of financial position
(in € thousand)
Note
December 31, 2022
December 31, 2021
ASSETS
Non-current assets
Intangible assets
Leasehold improvements and equipment
Long-term financial assets
Right-of-use assets
Current assets
Cash and cash equivalents
Trade and other receivables
Inventories
Other assets and prepaid expenses
TOTAL ASSETS
EQUITY AND LIABILITIES
Equity
Issued capital
Capital reserves
Fair value reserves
Accumulated deficit
Total equity
Non-current liabilities
Borrowings
Contract liabilities
Lease liabilities
Total non-current liabilities
Current liabilities
Trade and other payables
Borrowings
Lease liabilities
Contract liabilities
Total current liabilities
16
17
18
26
19
20
21
22
24
9
26
25
24
26
9
TOTAL EQUITY AND LIABILITIES
The Notes are an integral part of these consolidated financial statements.
58
3,823
0
561
4,442
190,286
2,697
628
2,459
196,070
200,512
1,493
582,843
(1,231)
(430,190)
152,915
11,687
1,083
176
12,946
19,077
5,930
396
9,248
34,651
200,512
1,607
3,814
12,348
972
18,741
197,630
4,809
421
3,534
206,394
225,135
1,234
474,087
(5,973)
(333,397)
135,951
17,060
7,209
368
24,637
18,860
580
683
44,424
64,547
225,135
Affimed Annual Report 2022 57
Affimed N.V.
Consolidated statements of cash flows
(in € thousand)
Cash flow from operating activities
Loss for the period
Adjustments for the period:
- Income taxes
- Depreciation and amortization
- Net gain from disposal of leasehold improvements and
equipment
- Share-based payments
- Finance income / (costs) - net
Change in trade and other receivables
Change in inventories
Change in other assets and prepaid expenses
Change in trade, other payables, provisions and contract
liabilities
Interest received
Paid interest
Paid income tax
Note
2022
2021
2020
(86,004)
(57,523)
(41,366)
23
14
2
2,899
0
19,110
(2,117)
(66,110)
2,113
(207)
1,075
(41,088)
2
1,334
0
1
1,115
34
11,820
3,381
(6,509) 6,647
(30,188)
(50,876)
(2,369)
(1,065)
(175)
(2,274)
(29,990)
50
(1,260)
12,848
(104,177)
564
(1,277)
(2)
(85,684)
0
(905)
(19,615)
294
(78)
(2) (1)
Net cash used in operating activities
(104,892)
(86,591)
(19,400)
Cash flow from investing activities
Purchase of intangible assets
Purchase of leasehold improvements and equipment
Cash received from the sale of financial assets
Cash paid for investments in financial assets
Cash received from maturity of financial assets
Net cash generated / (used) for investing activities
(37)
(659)
6,301
0
0
5,605
(1,654)
(2,196)
0
0
0
(3,850)
(9)
(431)
0
(8,101)
16,547
8,006
Cash flow from financing activities
Proceeds from issue of common shares, including exercise of
share based payment awards
Transaction costs related to issue of common shares
Proceeds from borrowings
Transaction costs related to borrowings
Repayment of lease liabilities
Repayment of borrowings
Cash flow from financing activities
22
95,907
124,460
74,195
22
24
26
24
(6,037)
0
0
(733)
(580)
88,557
(7,412)
17,500
(311)
(564)
(92)
133,581
(2,294)
0
0
(521)
(2,128)
69,252
Exchange rate related changes of cash and cash
equivalents
Net changes to cash and cash equivalents
3,386
7,636
(6,238)
(10,730)
43,140
57,858
Cash and cash equivalents at the beginning of the period
Cash and cash equivalents at the end of the period
197,630
190,286
146,854 95,234
197,630 146,854
The Notes are an integral part of these consolidated financial statements.
Affimed Annual Report 2022 58
Affimed N.V.
Consolidated statements of changes in equity
(in € thousand)
Note
Issued
capital
Capital
reserves
Fair
value
reserves
Accumulated
deficit
Total equity
Balance as of January 1, 2020
Issue of common shares
Exercise of share-based payment awards
Equity-settled share-based payment awards
Loss for the period
Other comprehensive loss
Balance as of December 31, 2020
Balance as of January 1, 2021
Issue of common shares
Exercise of share-based payment awards
Equity-settled share-based payment awards
Loss for the period
Other comprehensive loss
762
205
16
983
983
240
11
270,451
1,962
(234,508)
38,667
68,341
2,991
3,381
(41,366)
(242)
68,546
3,007
3,381
(41,366)
(242)
345,164
1,720
(275,874)
71,993
345,164
1,720
(275,874)
71,993
114,197
2,906
11,820
(57,523)
(7,693)
114,437
2,917
11,820
(57,523)
(7,693)
Balance as of December 31, 2021
1,234
474,087
(5,973)
(333,397)
135,951
Balance as of January 1, 2022
1,234
474,087
(5,973)
(333,397)
135,951
Issue of common shares
Exercise of share-based payment awards
Equity-settled share-based payment awards
Transfer of cumulative loss on sale of
financial assets
Loss for the period
Other comprehensive loss
22
23
23
18
259
0
89,545
101
19,110
10,789
(10,789)
(86,004)
(6,047)
89,804
101
19,110
0
(86,004)
(6,047)
Balance as of December 31, 2022
1,493
582,843
(1,231)
(430,190)
152,915
The Notes are an integral part of these consolidated financial statements.
Affimed Annual Report 2022 59
Affimed N.V.
Notes to the consolidated financial statements
1.
Reporting entity
Affimed N.V. is a Dutch company with limited liability (naamloze vennootschap) and has its corporate seat
in Amsterdam, the Netherlands, registered with the trade register of the Chamber of Commerce
(handelsregister van de Kamer van Koophandel) under number 60673389.
The consolidated financial statements are comprised of Affimed N.V., and its controlled (and wholly owned)
subsidiaries Affimed GmbH, Heidelberg, Germany, AbCheck s.r.o., Plzen, Czech Republic and
Affimed Inc., Delaware, USA (collectively “Affimed”, the “Company” or the “Group”).
Affimed is a clinical-stage biopharmaceutical company focused on discovering and developing highly
targeted cancer immunotherapies. The Group’s product candidates are developed in the field of immuno-
oncology, which represents an innovative approach to cancer treatment that seeks to harness the body’s
own immune defenses to fight tumor cells. Affimed has its own research and development programs,
strategic collaborations and service contracts, where the Group is performing research services for third
parties.
2.
Local exemption rules applied by subsidiaries of the Group
Affimed GmbH, Heidelberg, Germany, makes use of the exemption clause, available under § 264 (3) HGB
in 2022. The consolidated financial statements of Affimed N.V. as of and for the year ended December 31,
2022 will be filed in Germany as a supplement to the financial statements of Affimed GmbH, in order to
meet the requirements of the exemption clause available under § 264 (3) HGB in 2022.
3.
Financial reporting period
These financial statements cover the year 2022, which ended at the balance sheet date of December 31,
2022.
4. Going concern
The financial statements of the Company have been prepared on the basis of the going concern
assumption.
5.
Application of Section 402, Book 2 of the Dutch Civil Code
The financial information of the Company is included in the consolidated financial statements. For this
reason, in accordance with Section 402, Book 2 of the Dutch Civil Code, the separate statement of profit
and loss of the Company exclusively states the share of the result of participating interests after tax and
the other income and expenses after tax.
For an appropriate interpretation of these statutory financial statements, the consolidated financial
statements of the Company should be read in conjunction with the Company financial statements, as
included under pages 85-98.
Affimed Annual Report 2022 60
6.
Basis of preparation – consolidated financial statements
Statement of compliance
The consolidated financial statements of the Company are part of the statutory financial statements of the
Company. The consolidated financial statements have been prepared in accordance with International
Financial Reporting Standards as issued by the International Accounting Standards Board as adopted in
the European Union (EU-IFRS).
The consolidated financial statements were authorized for issuance by the Company’s Management Board
on May 22, 2023.
Basis of measurement
The consolidated financial statements have been prepared on the historical cost basis except for financial
instruments measured at fair value (see note 18) and monetary assets and liabilities denominated in
foreign currencies which are remeasured at period-end exchange rates. The Group did not opt for a
valuation of liabilities at fair value through profit or loss. All amounts included in the consolidated financial
statements are reported in thousands of euros (€ thousand) except where otherwise stated.
Consolidation
The Group controls an entity when it has power over the investee, is exposed to, or has rights to, variable
returns from its involvement with the entity and has the ability to affect those returns through its power over
the entity. A subsidiary is consolidated from the date on which control is obtained by the Group. It is de-
consolidated from the date control ceases.
Intercompany transactions, balances and unrealized gains/losses on transactions between group
companies are eliminated.
Functional and presentation currency
The consolidated financial statements are presented in euro. The functional currency of the Group’s
subsidiaries is also the euro. All financial information presented in euro unless otherwise noted has been
rounded to the nearest thousand (abbreviated €) or million (abbreviated € million).
Presentation of consolidated statements of comprehensive loss
As a clinical-stage biopharmaceutical company with a primary focus on research and development
activities, cost of sales and gross profit are not considered meaningful measures for Affimed and therefore
are not presented. See note 7 for the Group’s accounting policies related to revenue recognition and
research and development expenses.
Foreign currency transactions
Transactions denominated in currencies other than the euro are translated at exchange rates at the date
of the transaction. Monetary assets and liabilities denominated in currencies other than the euro are
translated at the exchange rate at the date of the consolidated statement of financial position.
Affimed Annual Report 2022 61
The foreign currency gain or loss on monetary items is the difference between amortized cost in the
functional currency at the beginning of the period, adjusted for effective interest and payments during the
period, and the amortized cost in foreign currency translated at the exchange rate at the end of the
reporting period.
Foreign currency gains or losses that relate to borrowings, cash and cash equivalents and financial assets,
except for financial instruments at fair value through other comprehensive income are presented in the
statement of comprehensive loss within ‘Finance income / (costs) - net’. All other foreign exchange gains
and losses are presented in the statement of comprehensive loss within ‘Other income – net’.
7.
Significant accounting policies
The accounting policies set out below have been applied consistently to all periods presented in these
consolidated financial statements.
Revenue recognition
The Group generates revenues from the provision of research and development services to third parties
based on both Group and third party owned intellectual property. Such services are performed on a “best
efforts” basis without a guarantee of technological or commercial success. For some research programs,
Affimed entered into collaborations with other companies that provide the Group with funding or other
resources such as access to technologies. From time to time, the Group also licenses its intellectual
property to third parties who use it to develop product candidates.
Collaboration and license agreements are evaluated to determine whether they involve multiple promises
that represent separate performance obligations typically including research programs, platform licenses
or intellectual property licenses.
The total consideration is allocated to separate performance obligations based on relative stand-alone
selling prices. Usually sales prices for research and development activities and licenses are not directly
observable. Therefore, we use estimation techniques, such as an expected cost plus margin approach, to
determine stand-alone selling prices for such services and licenses. Margins are estimated based on
market trends within the pharmaceutical industry. For licenses of intangible assets where little or no
incremental costs are incurred in providing such licenses, a residual approach is used.
Performance obligations from research programs are satisfied over time because the work performed by
the Group either enhances a license that the customer already controls or because the work does not
result in an asset with an alternative use for the Group due to contractual restrictions.
Therefore, revenue for such performance obligations is recognized according to the stage of completion
measured by reference to costs incurred in relation to anticipated total costs of the research program.
Revenue from platform licenses or intellectual property licenses granted are recognized at a point in time
if their nature is a right to use the licensed intellectual property as it exists at the point in time at which the
license is granted. This is usually the case when there is no significant continuing involvement by the
Group. In these cases, revenue is recognized when control of the license is transferred. Control is
considered to be transferred when the customer received all necessary documents and information to
begin to use and benefit from the license.
Affimed Annual Report 2022 62
Revenue from platform licenses or intellectual property licenses granted are recognized over time if their
nature is to access the licensed intellectual property as it exists throughout the license period. This might
be the case when there is significant continuing development to address the content of the platform by the
Group. In these cases, revenue is recognized on a straight-line basis until the use of the license by the
customer ends.
Payments received from customers commonly include non-refundable upfront payments that are initially
recognized as a contract liability, and subsequently recognized as revenue as the related performance
obligation is fulfilled. The Group concluded that non-refundable upfront payments do not include financing
components because the advance payments arise for reasons other than the provision of financing.
In addition, payment terms may also include payments to be received from customers at a later point in
time upon the achievement of certain milestones.
Milestone payments are contingent upon the achievement of contractually stipulated targets. The
achievement of these targets or milestones depends largely on meeting specific requirements laid out in
the respective agreement. Therefore, individual performance obligations are generally determined based
on contractually agreed milestones and related payments. Reaching a milestone will result in a cumulative
catch up of revenue for the performance to date.
The Group distinguishes between development and registration milestones and sales-based milestones.
Whereas development and registration milestone payments are generally recognized when reaching the
defined milestones, revenues for sales-based milestones are recognized upon achievement of
contractually stipulated underlying revenues.
Research and development
Costs incurred related to research activities are expensed in the period when they are incurred. Costs
incurred on development projects are recognized as intangible assets beginning on the date it can be
established that it is probable that future economic benefits attributable to the asset will flow to the Group
considering its technological and commercial feasibility. Given the current stage of the development of the
Group’s candidates and technologies, as well as uncertainties regarding successful regulatory approval,
no development expenditures have been capitalized in any of the periods presented in these consolidated
financial statements. Intellectual property-related costs for patents are part of the expenditure for the
research and development projects. Therefore, registration costs for patents are recognized as expensed
when incurred as long as the research and development project concerned does not meet the criteria for
capitalization.
The Group entered into certain collaborations with shared cost arrangements in respect of specific
projects. Costs related to these projects are shared equally between the parties and the recoveries
received by the Group are recognized as other income.
Employee benefits
(i) Short-term employee benefits
Short-term employee benefit obligations are measured on an undiscounted basis and are expensed as
the related service is provided.
Affimed Annual Report 2022 63
A liability is recognized for the amount expected to be paid under a short-term cash bonus, if (a) the Group
has a present legal or constructive obligation to pay this amount as a result of past service provided by
the employee, and (b) the obligation can be estimated reliably.
(ii) Share-based payment transactions
The Group’s share-based payment awards outstanding as of December 31, 2022 and 2021, are classified
as equity-settled share-based plans. The fair value of share-based equity-settled awards granted to
employees is measured at grant date and compensation cost is recognized over the vesting period with a
corresponding increase in equity. Share-based payment awards with non-employees are measured and
recognized when services are received. Fair value of stock options with service conditions is estimated
using the Black-Scholes-Merton formula. The formula determines the value of an option based on input
parameters like the value of the underlying instrument, the exercise price, the expected volatility of share
price returns, dividends, the risk-free interest rate, the expected forfeiture rate and the time to maturity of
the option. The fair value of stock options with market conditions is determined by using a Monte Carlo
Simulation incorporating the hurdle (or barrier) that needs to be reached as an additional input parameter.
The number of stock options expected to vest is estimated at each measurement date.
(iii) Termination benefits
Termination benefits are expensed when the Group can no longer withdraw the offer of those benefits. If
benefits are not expected to be settled wholly within 12 months of the reporting date, then they are
discounted.
Government grants
The Group receives certain government grants that support its research effort in specific projects. These
grants are generally provided in the form of reimbursement of approved costs incurred as defined in the
respective grants. Income in respect of grants also includes contributions towards the costs of research
and development. Income is recognized when costs under each grant are incurred in accordance with the
terms and conditions of the grant and the collectability of the receivable is reasonably assured.
Government grants relating to costs are deferred and recognized in the income statement over the period
necessary to match them with the costs they are intended to compensate. When the cash in relation to
recognized government grants is not yet received, the amount is included as a receivable on the statement
of financial position.
The Group recognizes income from government grants under ‘Other income - net’ in the consolidated
statement of comprehensive loss.
Leases
Affimed recognizes a right-of-use asset and a lease liability at the lease commencement date. The right-
of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted
for any lease payments made at or before the commencement date, plus any initial direct costs incurred.
Subsequently,
the
commencement date to the end of the lease term. In addition, the right-of-use asset is periodically reduced
by impairment losses, if any, and adjusted for certain re-measurements of the lease liability.
the straight-line method
the right-of-use asset
is depreciated using
from
Affimed Annual Report 2022 64
The lease liability is initially measured at the present value of the lease payments that are not paid at the
commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily
determined, Affimed’s incremental borrowing rate. Generally, Affimed uses its incremental borrowing rate
as the discount rate.
The Group determines the incremental borrowing rate by obtaining interest rates from various external
financing sources and makes certain adjustments to reflect the terms of the lease and the type of the asset
leased.
The lease liability is subsequently measured at amortized cost using the effective interest method. It is re-
measured when there is a change in future lease payments arising from a change in an index or rate, a
change in the estimate of the amount expected to be payable under a residual value guarantee, or as
appropriate, changes in the assessment of whether a purchase or extension option is reasonably certain
to be exercised or a termination option is reasonably certain not to be exercised.
Affimed has elected not to recognize right-of-use assets and lease liabilities for some short-term leases
(leases with less than 12 months of lease term) and right-of-use assets and liabilities for leases of low
value assets. Lease payments associated with these leases are recognized as an expense on a straight-
line basis over the lease term.
Finance income and finance costs
Finance income comprises interest income from interest bearing bank deposits. Interest income is
recognized as it accrues using the effective interest method.
Finance costs comprise primarily interest expense on borrowings.
Financial instruments
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability
or equity instrument of another entity.
(i) Non-derivative financial assets
The Group’s non-derivative financial assets include shares, trade and other receivables, other assets and
cash and cash equivalents.
Receivables are non-derivative financial assets with fixed or determinable payments that are not quoted
in an active market. Those debt instruments are held to collect solely payments of principal and interest.
They are included in current assets and are subsequently carried at amortized cost.
Cash and cash equivalents comprise cash balances and call deposits with original maturities of
three months or less.
The Group holds preferred shares in Amphivena Therapeutics Inc (“Amphivena”), USA, and previously
held common shares in Roivant Sciences Ltd. (“Roivant”) USA (see note 18). The Group has elected to
present changes in fair value of these investments through other comprehensive income.
Affimed Annual Report 2022 65
(ii) Non-derivative financial liabilities
The Group’s classes of financial liabilities are borrowings and trade and other payables. The Group initially
recognizes non-derivative financial liabilities on the date that they are originated and measures them at
amortized cost using the effective interest rate method. The Group derecognizes a financial liability when
its contractual obligations are discharged, cancelled or expire.
(iii) Compound financial instruments
The Group entered into a loan agreement pursuant to which it issued warrants to purchase common shares
of the Group at the option of the respective holder. The number of shares to be issued does not vary with
changes in their fair value.
The liability component of the loan was recognized initially at the fair value of a similar liability without a
warrant. The equity component was recognized initially at the difference between the fair value of the
compound financial instrument as a whole and the fair value of the liability component. Subsequent to
initial recognition, the liability component was measured at amortized cost using the effective interest
method. The equity component was not re-measured subsequent to initial recognition.
Impairment
(i)
Trade and other receivables
Trade and other receivables at amortized cost are subject to the expected credit loss model according to
IFRS 9. The Group’s exposure to credit risk is influenced mainly by the individual characteristics of each
customer. However, management also considers the factors that may influence the credit risk of its
customer base, including the default risk associated with the industry and country in which customers
operate.
Affimed determines the counterparties’ lifetime expected credit losses that result from all possible default
events over the expected life of a financial instrument based on an estimated rating and corresponding
probability of default rates according to the Bloomberg database.
In addition, trade and other receivables are assessed at each reporting date to determine whether there
is objective evidence that they are impaired. Trade or other receivables are impaired if objective evidence
indicates that a loss event has occurred after the initial recognition of the receivable, and such loss event
had a negative effect on the estimated future cash flows of that receivable that can be estimated reliably.
Loss events include indications that a debtor is experiencing significant financial difficulty, default or
delinquency in interest or principal payments, the probability that they will enter bankruptcy or other
financial reorganization.
All receivables are assessed for specific impairment. Losses are recognized in profit or loss and reflected
in an allowance account against receivables. When a subsequent event causes the amount of impairment
loss to decrease, the decrease in impairment loss is reversed through profit or loss. No impairments or
reversals of impairments were recognized in 2022, 2021 or 2020.
(ii)
Intangible assets and leasehold improvements and equipment
Affimed Annual Report 2022 66
Intangible assets that are acquired by the Group and have finite useful lives are measured at cost less
accumulated amortization and any accumulated impairment losses. Items of property, plant and equipment
are measured at cost, which includes capitalized borrowing costs, less accumulated depreciation and any
accumulated impairment losses.
Amortization and depreciation is calculated using the straight-line method over the estimated useful lives,
and is recognized in profit or loss. Depreciation and amortization methods and useful lives are reviewed
at each reporting date and adjusted if appropriate. The estimated useful lives of property, plant and
equipment for current and comparative periods are as follows:
–
–
–
5 - 10 years
3 - 6 years
over the term of the lease
Laboratory equipment
Office and IT equipment
Leasehold improvements
Assets that are subject to depreciation or amortization are reviewed for impairment whenever events or
changes in circumstances indicate the carrying amount may not be recoverable. An impairment loss is
recognized as the amount by which an asset’s carrying amount exceeds its recoverable amount. The
recoverable amount is the higher of an asset’s fair value less costs of disposal and value in use. Non-
financial assets that were previously impaired are reviewed for possible reversal of the impairment at each
reporting date.
Income taxes
Income taxes comprise current and deferred tax. Current and deferred taxes are recognized in profit or
loss except to the extent that it relates to items recognized directly in equity or in other comprehensive
loss.
Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax
rates enacted or substantively enacted at the reporting date, and adjustments to taxes payable in respect
of previous years.
Deferred tax is recognized in respect of temporary differences between the carrying amounts of assets
and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is
not recognized for temporary differences associated with assets and liabilities if the transaction which led
to their initial recognition is a transaction that is not a business combination and that affects neither
accounting nor taxable profit or loss.
Deferred tax is measured at tax rates that are expected to be applied to temporary differences when they
reverse, based on the laws that have been enacted or substantively enacted by the reporting date.
Deferred tax assets and liabilities are presented net if there is a legally enforceable right to offset.
A deferred tax asset is recognized for unused tax losses, tax credits and deductible temporary differences,
to the extent that it is probable that future taxable profits will be available against which they can be utilized.
Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer
probable that the related tax benefit will be realized.
Affimed Annual Report 2022 67
Fair Value Measurement
All assets and liabilities for which fair value is recognized in the consolidated financial statements are
classified in accordance with the following fair value hierarchy, based on the lowest level input parameter
that is significant on the whole for fair value measurement:
Level 1 – Prices for identical assets or liabilities quoted in active markets (non-adjusted);
Level 2 – Measurement procedures, in which the lowest level input parameter significant on the
whole for fair value measurement is directly or indirectly observable for on the market and which
are not included in Level 1; and
Level 3 – Measurement procedures, in which the lowest level input parameter significant on the
whole for fair value measurement is not directly or indirectly observable for on the market.
The carrying amount of all trade and other receivables, other assets and prepaid expenses, cash and cash
equivalents, trade and other payables and loans is a reasonable approximation of the fair value and
therefore information about the fair values of those financial instruments has not been disclosed. The
measurement of the fair value of preferred and common shares in other companies held by the group is
based on level 1 and level 3 inputs (see note 18). The Group recognises transfers between levels of the
fair value hierarchy as at the date at which the change has occurred.
Loss per share
Loss per common share is calculated by dividing the loss for the period by the weighted average number
of common shares outstanding during the period.
As of December 31, 2022, the Group has granted 18,200,984 options and warrants in connection with
share-based payment programs (see note 23) and a loan agreement, which could potentially have a
dilutive effect but were excluded from the diluted weighted average number of ordinary shares calculation
because their effect would have been anti-dilutive due to the net loss generated by the Group.
Critical judgments and accounting estimates
The preparation of the consolidated financial statements in conformity with IFRS requires management to
make judgments, estimates and assumptions that affect the application of accounting policies and the
reported amounts of assets, liabilities, income and expenses. Actual results may differ from these
estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting
estimates are recognized in the period in which the estimates are revised and in any future periods
affected.
In preparing these financial statements, the critical judgments made by management in applying the
Group’s accounting policies resulted in the following accounting estimates:
(i)
Share-based payments
The fair value of stock options with service conditions issued by Affimed N.V. is estimated using the Black-
Scholes-Merton formula. The formula determines the value of an option based on input parameters like
the value of the underlying instrument, the exercise price, the expected volatility of share price returns,
Affimed Annual Report 2022 68
dividends, the risk-free interest rate and the time to maturity of the option. The fair value of stock options
with market conditions is determined by using a Monte Carlo Simulation incorporating the hurdle (or
barrier) that needs to be reached as an additional input parameter. The fair value of share-based equity-
settled compensation plans is measured at grant date and compensation cost is recognized over the
vesting period with a corresponding increase in equity. The number of stock options expected to vest is
estimated at each measurement date.
(ii) Revenue recognition
The Group’s contracts with the majority of our customers contain multiple performance obligations.
Judgment is required in determining whether a good or service is considered a separate performance
obligation. If standalone selling prices are not directly observable, the Group allocates the transaction price
to the performance obligations by reference to the expected cost plus a margin. In doing so, observable
input data such as internal project plans and margins are used.
The Group has entered into research service agreements, collaboration and license agreements with
customers for which non-refundable upfront payments are received for research funding purposes,
technology access fees and/or milestone payments. Generally, the Group has continuing performance
obligations and therefore upfront payments are initially recognized as a contract liability, and the related
revenues are subsequently recognized as the related performance obligation is fulfilled. In this context,
the determination of the stage of completion requires judgement, in particular with respect to the
anticipated total costs of research programs. Technology access fees are generally initially recognized as
a contract liability and subsequently recognized over the expected term of the agreement on a straight-
line basis.
The determination of whether a performance obligation is satisfied at a point in time versus over time might
also require judgment.
New standards and interpretations not yet adopted
The following new standards and amendments to standards are effective for annual periods beginning
after December 31, 2022 and have not been applied in preparing these consolidated financial statements.
Standard/interpretation
Amendments to IAS 1 Presentation of Financial Statements:
Classification of Liabilities as Current or Non-current
Amendments to IAS 1 Presentation of Financial Statements
and IFRS Practice Statement 2: Disclosure of Accounting policies
Amendments to IAS 8 Accounting policies, Changes in Accounting
Estimates and Errors: Definition of Accounting Estimates
Amendments to IAS 12 Income Taxes: Deferred Tax
related to Assets and Liabilities arising from a Single Transaction
Effective Date 1
January 1, 2024
January 1, 2023
January 1, 2023
January 1, 2023
Amendments to IFRS 16 Leases: Lease Liability in a Sale and Leaseback
January 1, 2024
1 Shall apply for periods beginning on or after the date shown in the effective date column,
Affimed Annual Report 2022 69
The amended standards are not expected to have a significant effect on the consolidated financial
statements of the Group.
8.
Segment reporting
(i)
Information about reportable segment
The Group is active in the discovery, pre-clinical and clinical development of antibodies based on its core
technology. The activities are either conducted as own project development or for third party companies.
Management of resources and reporting to the chief operating decision maker, being the Management
Board, is based on the Group as a whole.
(ii) Geographic information
The geographic information below analyses the Group’s revenue and non-current assets by country. In
presenting the following information, segment revenue has been based on the geographic location of the
customers and segment assets were based on the geographic location of the assets.
Discovery activities and research services are conducted in both the Heidelberg and Plzen premises. Pre-
clinical and clinical activities are conducted and coordinated from Heidelberg.
Revenue:
Germany
Europe
USA
Non-current assets as of December 31:
Germany
Czech Republic
USA
(iii) Major Customers
2022
2021
2020
152
0
41,201
41,353
742
0
39,624
40,366
194
2
28,164
28,360
2022
2021
2020
3,435
1,007
0
4,442
4,896
1,306
12,539
18,741
3,796
914
20,216
24,926
In 2022 and 2021, revenue with Genentech and Roivant each exceeded 10% of total revenue. In 2020,
the Group’s revenue with Genentech exceeded 10% of total revenues.
9.
Revenue
Collaboration with Genentech
In August 2018, Affimed entered into a strategic collaboration agreement with Genentech Inc.
(Genentech), headquartered in San Francisco, USA. Under the terms of the agreement Affimed is
providing services related to the development of novel NK cell engager-based immunotherapeutics to treat
multiple cancers. The Genentech agreement became effective at the beginning of October 2018. Under
the terms of the agreement, Affimed received $96.0 million (€83.2 million) in an initial upfront payment and
committed funding on October 31, 2018.
Affimed Annual Report 2022 70
The Group recognized €18.5 million as revenue in 2022 (2021: €21.6 million, 2020: €26.2 million). As at
December 31, 2022, the Group held contract liabilities of €1.7 million (December 31, 2021: €20.2 million,
December 31, 2020: €41.9 million), which will be recognized as revenue in subsequent periods.
Under the terms of the agreement, Affimed is eligible to receive up to an additional $5.0 billion over time,
including payments upon achievement of specified development, regulatory and commercial milestones.
Affimed is also eligible to receive royalties on any potential sales.
Collaboration with Roivant
On November 9, 2020 Affimed and Affivant Sciences GmbH (formerly Pharmavant 6 GmbH), a subsidiary
of Roivant Sciences Ltd (Roivant), announced a strategic collaboration agreement which grants Roivant a
license to the preclinical molecule AFM32. Under the terms of the agreement, Affimed received $60 million
in upfront consideration, comprised of $40 million in cash and pre-funded research and development
funding, and $20 million worth of common shares in Roivant. Affimed is eligible to receive additional
proceeds in the form of option fees contingent on the commencement of additional programs contemplated
under the agreement. The Group is eligible to receive up to an additional $2 billion in milestones payments
upon achievement of specified development, regulatory and commercial milestones, as well as tiered
royalties on net sales. The common shares held have been sold, refer note 18.
For the year ended December 31, 2022 the group has recognized €22.7 million (2021: €17.7 million, 2020:
€1.4 million) as revenue. As of December 31, 2022, the Group held contract liabilities of €8.6 million
(December 31, 2021: €31.3 million, December 31, 2020: €49.0 million), which will be recognized as
revenue in subsequent periods as services are provided.
Research service agreements
The Group has entered into certain research service agreements. These research service agreements
provide for non-refundable upfront technology access research funding and milestone payments. The
Group recognized revenue of €0.2 million, €1.1 million and €0.6 million during the years ended
December 31, 2022, 2021 and 2020 respectively.
Contract balances
The following table provides information about receivables and contract liabilities from contracts with
customers.
Receivables
Contract liabilities
December 31, 2022 December 31, 2021
150
51,633
0
10,331
An amount of €41,302 that was recognized in contract liabilities at the beginning of the period was
recognized as revenue during the period ended December 31, 2022 (2021: €39,512; 2020: €17,457).
The remaining performance obligations at December 31, 2022 are approximately €10.3 million and are
expected to be largely recognized as revenue over the next 12 months (2022: €9.2 million; 2021: €44.4
million), with a smaller portion being realized thereafter (2022: €1.1 million; 2021: €7.2 million).
Affimed Annual Report 2022 71
Disaggregation of revenue
Major service lines:
Collaboration revenue
Service revenue
Timing on revenue recognition:
Point in time
Over time
10. Other income and expenses - net
2022
2021
2020
41,198
155
41,353
0
41,353
41,353
39,301
1,065
40,366
490
39,876
40,366
27,755
605
28,360
9,180
19,180
28,360
Other income and expenses, net, mainly comprises foreign exchange losses of €99 in 2022 (2021: gains
of €125, 2020: gain of €129); income from government grants for research and development projects of
€563 in 2022, €344 in 2021, and €348 in 2020 and from research collaborations where costs are shared
equally between both parties of €898 (2021: €1,072, 2020: €0).
11. Research and development expenses
The following table shows the different types of expenses allocated to research and development costs
for the years ended December 31:
Third-party services
Personnel expenses
Legal, consulting and patent expenses
Cost of materials
Amortization and depreciation
Other expenses
2022
2021
2020
61,943
29,023
1,177
2,138
2,639
1,894
98,814
54,810
20,532
1,301
2,152
1,057
1,636
81,488
29,324
13,638
2,380
1,730
834
2,083
49,989
Amortization and depreciation includes an impairment of €1.5 million in respect of a technology licence
(see note 16).
Personnel expenses increased 41% compared to the year ended December 31, 2021 due to an increase
in headcount, as well as an increase in the underlying fair value of newly issued share options.
12. General and administrative expenses
The following table shows the different types of expenses allocated to general and administrative costs for
the years ended December 31:
Personnel expenses
Legal, consulting and audit expenses
Insurance expenses
Other expenses
2022
2021
2020
15,249
8,299
3,493
5,034
32,075
10,713
8,134
2,613
2,758
24,218
6,319
5,601
904
891
13,715
Affimed Annual Report 2022 72
Personnel expenses increased 42% due to an increase in headcount and share-based payment expenses.
13. Employee benefits
The following table shows the items of employee benefits for the years ended December 31:
Wages and salaries
Social security costs
2022
2021
2020
23,370
3,098
26,468
17,882
2,332
20,214
15,081
1,847
16,928
The employer’s contributions to pension insurance plans of €1,322 (2021: €1,030, 2020: €795) are
classified as payments under a defined contribution plan, and are recognized as an expense.
As of December 31, 2022, Affimed employed 219 (2021: 176, 2020: 142) full time equivalent employees,
including those of our subsidiaries.
14. Finance income and finance costs
The following table shows the items of finance income and costs for the years ended December 31:
Interest SVB Loan Agreement (see note 24)
Foreign exchange differences
Interest on certificates of deposit with maturities of
more than three months
Other finance income/finance costs - net
2022
2021
2020
(1,630)
3,386
0
361
2,117
(712)
7,636
0
(415)
6,509
(95)
(6,693)
186
(45)
(6,647)
15.
Income taxes
The Group did not incur any material income tax in the periods presented. As of December 31, 2022,
deferred tax assets from differences resulting from intangible assets (€238; 2021: €207), trade and other
receivables (€102; 2021: €1,194), borrowings (€26; 2021: €44), lease liabilities (€150; 2021: €206), trade
and other payables (€31; 2021: €31), long-term financial assets (€0; 2021: €1,149) and contract liabilities
(€0; 2021: €47) have not been recognized as deferred tax assets as no sufficient future taxable profits or
offsetting deferred tax liabilities are available. As of December 31, 2022 deferred tax liabilities from
temporary differences result mainly from leasehold improvements and equipment and right-of-use assets
(€204; 2021: €276), other assets (€0; 2021: €1,054), long-term financial assets (€266; 2021: €0), contract
liabilities (€291; 2021: €0) and borrowings (€86; 2021: €93). Deferred tax liabilities are not recognized as
there is an excess of deferred tax assets over deferred tax liabilities.
A reconciliation between actual income taxes and the expected tax benefit from the loss before tax
multiplied by the Group's applicable tax rate is presented below for the years ended December 31:
2022
2021
2020
Loss before tax
(86,002)
(57,521)
(41,365)
Income tax benefit at tax rate of 29.825 %
25,650
17,156
12,337
Affimed Annual Report 2022 73
Adjustments of deferred tax assets
Adjustments for local tax rates
Non-deductible expenses
Other
Income taxes
(25,022)
23
(755)
102
(2)
(15,850)
(62)
(1,434)
188
(2)
(11,196)
(41)
(803)
(298)
(1)
In Germany, Affimed has tax losses carried forward of €372.0 million (2021: €288.6 million) for corporate
income tax purposes and of €371.0 million (2021: €287.7 million) for trade tax purposes that are available
indefinitely for offsetting against future taxable profits of that entity. Restrictions on the utilization of tax
losses in case of a change of control of ownership in Affimed were mitigated by the enactment of the
Economic Growth Acceleration Act (Wachstumsbeschleunigungsgesetz 2009). According to the
provisions of this act unused tax losses of a corporation as of the date of a qualified change in ownership
are preserved to the extent they are compensated by an excess of the fair value of equity for tax purposes
above its carrying amount of the Group. The maximum amount of tax losses at risk of being lost due to
ownership changes is approximately €59 million. Deferred tax assets have not been recognized in respect
of any losses carried forward as no sufficient taxable profits of Affimed are expected.
Tax losses carried forward of Abcheck s.r.o. amount to €20 as of December 31, 2022 (2021: €20).
16.
Intangible assets
Cost as of January 1, 2022
Additions
Cost as of December 31, 2022
Licences Software
293
37
330
2,034
0
2,034
Accumulated amortisation/impairment as of January 1, 2022
Amortisation charge for the year
Impairment incurred during the year
Accumulated amortisation/impairment as of December 31,
2022
Carrying value as of December 31, 2022
470
87
1,476
2,033
1
250
23
0
273
57
Cost as of January 1, 2021
Additions
Cost as of December 31, 2021
Accumulated amortisation as of January 1, 2021
Amortisation charge for the year
Accumulated amortisation as of December 31, 2021
Carrying value as of December 31, 2021
Licences Software
290
3
293
2,032
2
2,034
382
88
470
1,564
222
28
250
43
Total
2,327
37
2,364
720
110
1,476
2,306
58
Total
2,322
5
2,327
604
116
720
1,607
In December 2020, Affimed entered into a patent and technology license agreement (the “MD Anderson
License”) providing the Group with an exclusive development and commercialization license. The Group
recognized the non-refundable license fee of $2 million (€1.6 million) as an intangible asset and was
amortising the acquisition cost, on a straight line basis, over an estimated useful life of 19 years. In 2022,
Affimed Annual Report 2022 74
however, Affimed decided that further development of its ICE® molecules would utilize alternative
technologies that would not require the MD Anderson License, as evidenced by Affimed’s agreement with
Artiva to develop AFM13 in combination with AB-101. Accordingly, Affimed determined that it was unlikely
that the MD Anderson License would be used going forward, and therefore an impairment indicator was
identified by management resulting in impairment of the remaining net book value of the license (€1.5
million) to nil.
17. Leasehold improvement and equipment
Laboratory
and office
equipment
Total
Cost as of January 1, 2022
Additions
Cost as of December 31, 2022
Leasehold
improvements
74
0
74
Accumulated depreciation as of January 1, 2022
Depreciation charge for the year
Accumulated depreciation as of December 31, 2022
Carrying value as of December 31, 2022
54
2
56
18
7,321
658
7,979
3,527
647
4,174
3,805
Cost as of January 1, 2021
Additions
Cost as of December 31, 2021
Leasehold
improvements
74
-
74
Laboratory
and office
equipment
5,125
2,196
7,321
Accumulated depreciation as of January 1, 2021
Depreciation charge for the year
Accumulated depreciation as of December 31, 2021
Carrying value as of December 31, 2021
47
7
54
20
2,926
601
3,527
3,794
18. Long-term financial assets
The Group holds preferred shares in Amphivena, which are currently recognized at their fair value of nil.
The impairment of the asset was recognized in 2021 based on the decision made by the board of
Amphivena to wind down the company. Based on current information, we continue to estimate that the fair
value remains at nil (December 31, 2021: nil).
As of December 31, 2021, the long-term financial assets included the Group’s investment in Roivant at its
fair value of €12.3 million. As at December 31, 2021 the fair value of the shares in Roivant was based on
its quoted market price.
In June 2022, a strategic decision was taken to dispose of this investment. These shares were sold at a
weighted average selling price of €4.54 ($4.59) resulting in gross proceeds of €6.3 million ($6.4 million).
7,395
658
8,053
3,581
649
4,230
3,823
Total
5,199
2,196
7,395
2,973
608
3,581
3,814
Affimed Annual Report 2022 75
The cumulated loss on sale of these shares of €10.8 million, original acquisition price of shares having
been €17.1 million, was reclassified within equity from the fair value reserve to the accumulated deficit.
19. Cash and cash equivalents
Bank balances
Call deposits
Call deposits all have original maturities of 3 months or less.
20. Trade and other receivables
December 31,
2022
2021
190,286
0
190,286
129,972
67,658
197,630
The trade receivables as of December 31, 2022 and 2021, of €0 and €150, respectively, are all due in the
short-term, do not bear interest and are not impaired. Other receivables are all due within the short-term
and mainly comprise value-added tax receivables of €1,505 (2021: €2,737).
21. Other assets and prepaid expenses
Other assets and prepaid expenses as of December 31, 2022 of €2.5 million (2021: €3.5 million) are short-
term in nature, do not bear interest and are not impaired. The other assets and prepaid expenses mainly
comprise a prepayment of €1.1 million (2021: €2.9 million) for the reservation of manufacturing capacity,
€0 (2021: €0.3 million) as prepayment for manufacturing activities and €0.5 million (2021: €0) prepayment
for assets secured for the new premises.
22. Equity
As of December 31, 2022, the share capital of €1,493 (2021: €1,234) is composed of 149,339,335 (2021:
123,419,772 ) common shares with a par value of €0.01.
In November 2021, the Company implemented a new ATM program providing for sales over time of up to
$100 million of its common shares. As of December 31, 2021, the Company had issued approximately 0.2
million common shares from this new ATM program and generated approximately €1.6 million in net
proceeds.
On January 15, 2021, the Group issued 19,166,667 common shares at a price of $6.00 per share in a
public offering, resulting in net proceeds of approximately €88.7 million, incurring €6.1 million
in underwriting commissions, legal and consulting expenses which were deducted from equity.
In April 2021, Silicon Valley Bank exercised all of its warrants which were issued in the course of a loan
agreement entered into 2016 and repaid by the Company in 2020. Accordingly, the Group issued 173,482
common shares in 2021.
On April 18, 2022, the Company closed its public offering of 22,500,000 common shares, at the public
offering price of $4.00 per share. The exercise of the underwriters’ option to purchase over-allotment
shares brought the total number of common shares sold by Affimed to 25,875,000. The public offering
Affimed Annual Report 2022 76
generated net proceeds of €89.8 million ($97.0 million), after deducting €6.0 million ($6.5 million) in
underwriting commissions and other offering expenses.
In connection with common share issuances in 2022 an amount of €6.0 million of direct and incremental
transaction cost was deducted from equity; shown net of proceeds in the statement of changes in equity.
As of December 31, 2022, authorized share capital of the company amounts to €3,120 (2020: €3,120) and
311,950,000 (2021: 311,950,000) common shares, each with a nominal value of €0.01 per share.
The net loss for the current year is included in the accumulated deficit (refer note 37).
23. Share-based payments
In 2014, an equity-settled share-based payment program was established by Affimed N.V. (ESOP 2014).
Under this program, the Company granted awards to certain members of the Management Board, certain
members of the Company’s Supervisory Board, non-employee consultants and employees.
Share-based payments with service conditions
The majority of the awards vest in installments over three years and can be exercised up to 10 years after
the grant date. In 2022 and 2021, the Group granted 4,915,600 and 4,131,076 awards, respectively, to
employees, members of the Management Board and members of the Supervisory Board. Fair value of the
awards at grant date in 2022 amounts to €14.1 million ($15.7 million).
During 2022, 277,427 ESOP 2014 awards were cancelled or forfeited due to termination of employment
or termination of consulting agreements with non-employees (2021: 385,355), and 43,440 options were
exercised at a weighted average exercise price of $2.52 (2021: 1,114,061 options were exercised at a
weighted average exercise price of $2.19).
As of December 31, 2022, 15,269,734 ESOP 2014 awards were outstanding (December 31, 2021:
10,675,001), 8,510,863 awards (December 31, 2021: 5,422,591) were vested. The options outstanding at
December 31, 2022 had an exercise price in the range of $1.30 to $13.47 (2021: $1.30 to $13.47), a
weighted average remaining contractual life of 7.4 years (2021: 7.7 years) and a weighted average
exercise price of $4.91 (2021: $5.21). In 2022 and 2021, the Group estimated an annual forfeiture rate of
4.0% for unvested options.
Share-based payments with market condition
During 2022, the Company issued 2,825,000 options with market-based performance conditions to
members of the Management Board and employees. Each grant consists of three tranches, whereby one-
third of the total grant will vest when the volume-weighted average share price over the preceding thirty
trading days reaches $12.00, $15.00, and $18.00, respectively. Except with respect to a change of control,
these options shall not vest before the first anniversary of the grant date. Fair value of the awards at grant
date as of December 31, 2022 amounts to €2.9 million ($3.2 million) and the contractual lifetime of the
options is two years. Any unvested awards on the date that is two years following the grant date will lapse.
Affimed Annual Report 2022 77
Share-based payment expense
In 2022, an expense of €19,110 was recognized affecting research and development expenses (€10,351)
and general and administrative expenses (€8,759). In 2021, an expense of €11,820 was recognized
affecting research and development expenses (€5,892) and general and administrative expenses
(€5,928). In 2020, an expense of €3,381 was recognized affecting research and development expenses
(€1,524) and general and administrative expenses (€1,857).
Fair value measurement
The fair value of options was determined using the Black-Scholes-Merton valuation model. The significant
inputs into the valuation model of share based payment grants with service conditions are as follows
(weighted average):
Fair value at grant date
Share price at grant date
Exercise price
Expected volatility
Expected life
Expected dividends
Risk-free interest rate
2022
2021
$3.19
$4.29
$4.29
90%
5.9
0.0
2.32%
$6.18
$8.18
$8.18
95%
5.9
0.0
1.14%
The fair value of stock options with market conditions is determined by using a Monte Carlo Simulation
incorporating the hurdle (or barrier) that needs to be reached as an additional input parameter. The
significant inputs into the valuation model are as follows (weighted average):
Fair value at grant date
Share price at grant date
Exercise price
Expected volatility
Expected life
Expected dividends
Risk-free interest rate
2022
$1.13
$4.58
$4.58
70%
2.00
0.00
2.41%
Expected volatility is estimated based on the observed daily share price returns of Affimed measured over
a historic period equal to the expected life of the awards.
The risk-free interest rates are based on the yield to maturity of U.S. Treasury strips (as best available
indication for risk-free rates), for a term equal to the expected life, as measured as of the grant date.
24. Borrowings
Silicon Valley Bank
In January 2021, the Group entered into a new loan agreement with Silicon Valley Bank German Branch
(now: Silicon Valley Bridge Bank N.A. Germany Branch) which provides Affimed with up to €25 million in
Affimed Annual Report 2022 78
term loans in three tranches: €10 million available at closing, an additional €7.5 million upon the
achievement of certain conditions, including milestones related to Affimed’s pipeline and market
capitalization, and a third tranche of €7.5 million upon the achievement of certain additional conditions
related to Affimed’s pipeline and liquidity. The first tranche of €10 million was drawn in February 2021 and
the second tranche of €7.5 million in December 2021. Pursuant to the terms of the agreement, the loan
bears interest at the greater of the European Central Bank Base Rate and 0%, plus 5.5%. Affimed is
entitled to make interest only payments through December 1, 2022. The loan will mature at the end of
November 2025. As of December 31, 2022, the fair value of the liability did not differ significantly
from its carrying amount (€17.5 million).
The loan is secured by a pledge of 100% of the Group’s ownership interest in Affimed GmbH, all
intercompany claims owed to Affimed N.V. by its subsidiaries, and collateral agreements for all bank
accounts, inventory, trade receivables and other receivables of Affimed N.V. and Affimed GmbH
recognized in the consolidated financial statements with the following book values:
Book value as of
December 31, 2022
Consolidated
financial
statements
58
3,823
628
2,697
190,286
197,492
thereof
assets
pledged
58
3,002
556
2,090
188,465
194,171
Intangible assets*
Leasehold improvements and equipment
Inventories
Trade and other receivables
Cash and cash equivalents
Total
* Assignment is subject to the occurrence of a defined trigger event.
UniCredit Leasing CZ
In April 2019, the Group entered into a loan agreement with UniCredit Leasing CZ for €562. After an initial
instalment of €127 in the second quarter of 2019, repayment is effected in monthly instalments of €8. In
May 2020, an interest-only-period for 6 months was agreed, extending repayment for 6 months until May
2024. As of December 31, 2022, an amount of €136 (December 31, 2021: €231) was outstanding, of which
€96 (December 31, 2021: €94) was classified as current liabilities. As of December 31, 2022 and 2021,
the fair value of the liability did not differ significantly from its carrying amount.
Reconciliation to cash flows from financing
Movements of liabilities reconcile to cash flows arising from financing activities as follows:
Balance as of January 1
Changes from financing cash flows
Proceeds from borrowings
Repayment of borrowings
Other Changes
Changes in capitalized borrowing costs, net
2022
2021
17,640
323
0
(580)
17,060
17,500
(92)
17,408
557
(91)
Affimed Annual Report 2022 79
Balance as of December 31
17,617
17,640
25. Trade and other payables
Trade and other payables comprise trade payables of €16,731 (2021: €17,085). Other payables mainly
comprise payroll and employee related liabilities for withholding taxes and social security contributions of
€2,203 (2021: €1,294) and payables due to employees for unused holidays and other accruals. Other
payables are normally settled within 30 days.
26. Leases
Affimed presents right-of-use assets for offices, laboratories and vehicles leased in a separate line item
from the line item “Leasehold improvements and equipment” that presents other assets of the same nature
that Affimed owns. The agreements for the existing premises have an average non-cancellable term of
between one and four years with renewal options included in some contracts. For equipment leased with
contract terms that are short term and/or leases of low-value items the Group has elected not to recognize
right-of-use assets and lease liabilities for these leases.
The carrying amounts of right-of-use assets reconcile as follows:
Balance as of January 1, 2022
Depreciation charge for the year
Additions to right-of-use assets
Balance as of December 31, 2022
Carrying amount
Buildings
942
(650)
254
546
Cars
21
(9)
0
12
Office
equipment
9
(6)
0
3
Total
972
(665)
254
561
Carrying amount
Balance as of January 1, 2021
Depreciation charge for the year
Additions to right-of-use assets
Balance as of December 31, 2021
Buildings
923
(595)
614
942
Cars
2
(8)
27
21
Office
equipment
15
(6)
0
9
Total
940
(609)
641
972
Cash outflow related to leases are as follows:
Repayment of lease liabilities
Interest on lease liabilities
Short-term lease payments
Cash outflow from leasing
2022
2021
733
31
23
787
564
46
23
633
Future contractually agreed undiscounted lease payments are as follows:
Payments within one year
2022
2021
631
708
Affimed Annual Report 2022 80
Payments between one and five years
180
811
379
1,087
Movements of lease liabilities reconcile to cash flows arising from financing activities as follows:
Balance as of January 1
Changes from financing cash flows
Repayment of lease liabilities
Other Changes
New lease contracts
Balance as of December 31
27. Other commitments and contingencies
Commitments
2022
2021
1,051
974
(733)
(733)
254
254
572
(564)
(564)
641
641
1,051
The Group plans to move to new facilities in 2023 and has entered into a lease contract for offices and
laboratories with handover taking place approximately mid-2023. Expected payments include monthly rent
of €141, an anticipated one-time payment of €1,170 for laboratory construction and a security deposit of
€503. The contractual lease term is ten years including a cancellation option after 5 years with an expected
start mid-2023. The terms provide for renewal options.
Contingencies
Affimed has entered into various license agreements that contingently trigger payments upon achievement
of certain milestones and royalty payments upon commercialization of a product in the future.
28. Related parties
Transactions with key management personnel
The compensation of managing directors comprised of the following:
Short-term employee benefits
Share-based payments
2022
2021
2020
3,662
6,732
10,394
3,633
5,235
8,868
2,936
1,848
4,784
Remuneration of Affimed’s managing directors comprises fixed and variable components and share-based
payment awards. In addition, the managing directors receive supplementary benefits such as fringe
benefits and allowances. In the case of an early termination, the managing directors receive a severance.
Affimed Annual Report 2022 81
The supervisory board directors of Affimed N.V. received compensation for their services on the
supervisory board of €431 (2021: €392; 2020: €364). In 2022, the Group recognized expenses for share-
based payments for supervisory board members of €1,370 (2021: €847, 2020: €293).
The following table provides the total amounts of outstanding balances for supervisory board
compensation and expense reimbursement related to managing directors:
Adi Hoess
Wolfgang Fischer
Arndt Schottelius
Thomas Hecht
Mathieu Simon
Ferdinand Verdonck 1
Ulrich Grau
Bernhard Ehmer
Harry Welten
Annalisa Jenkins
Uta Kemmerich-Keil
Outstanding balances
December 31,
2022
1
2
3
21
10
-
26
17
8
11
18
December 31,
2021
5
-
-
19
8
(1)
16
20
10
9
19
1 left the Supervisory Board in June 2021.
29. Financial risk management
(i)
Financial risk management objectives and policies
The Group’s principal financial instruments comprise cash and cash equivalents, certificates of deposit at
commercial banks and investor loans presented in borrowings. The main purpose of these financial
instruments is to raise funds for the Group's operations. The Group has various other financial assets and
liabilities such as trade and other receivables and trade and other payables, which arise directly from its
operations.
The Group holds investments in financial fixed assets which were obtained through collaboration
agreements with external parties and do not relate to investing activities in order to generate financial
income.
The main risks arising from the Group's financial instruments are credit risk, interest rate risk, liquidity risk
and foreign currency risk. The measures taken by management to manage each of these risks are
summarized below.
(ii) Credit risk
The Group’s financial assets comprise to a large extent cash and cash equivalents. In addition, financial
assets include shares and trade and other receivables. The total carrying amount of shares (€ nil, 2021:
€12.3 million), cash and cash equivalents (€190.3 million, 2021: € 197.6 million) and trade and other
receivables (€2.7 million, 2021: €4.8 million) represents the maximum credit exposure of €193.0 million
(2021: €214.7 million).
Affimed Annual Report 2022 82
The cash and cash equivalents are held with banks, which are rated AA3 to AA2 based on Standard &
Poor’s and Moody’s. Refer note 30.
(iii)
Interest rate risk
The Group’s interest rate risk arises from cash accounts.
Market interest rates on cash and cash equivalents as well as on term deposits were low, and in some
cases negative, resulting in net interest income of €401 (2021: interest expense of €358). A shift in interest
rates (increase or decrease) could potentially have a material impact on the loss of the Group.
(iv) Other price risks
The fair value of the shares in Amphivena depends on the estimated share price, however as the shares
are currently reflected at nil, no material exposure exists.
(v) Foreign currency risk
Foreign exchange risk arises when future commercial transactions or recognized assets or liabilities are
denominated in a currency that is not the entity’s functional currency.
The Group’s entities are mainly exposed to Czech Koruna (CZK), US Dollars (USD) and British Pound
(GBP). The net exposure as of December 31, 2022 was €28,694 (2021: €53,487) and mainly relates to
US Dollars.
In 2022, if the Euro had weakened/strengthened by 10% against the US dollar with all other variables held
constant, the loss would have been €3,270 (2021: €5,482) higher/lower, mainly as a result of foreign
exchange gains/losses on remeasurement of US dollar-denominated financial assets. The Group
considers a shift in the exchange rates of 10% as a realistic scenario.
Loss is more sensitive to movement in exchange rates shifts in 2022 than in 2021 because of the increased
volume of US dollar-denominated transactions.
The following significant exchange rates have been applied during the year:
CZK - Average Rate
CZK - Spot rate
USD - Average Rate
USD - Spot rate
GBP - Average Rate
GBP - Spot rate
2022
2021
2020
CZK or USD
or GBP/EUR
0.04071
0.04147
CZK or USD or
GBP/EUR
0.03900
0.04023
CZK or USD or
GBP/EUR
0.03780
0.03811
0.94967
0.93756
1.17266
1.12748
0.84552
0.88292
1.16333
1.19008
0.87550
0.81493
1.12397
1.11231
Affimed Annual Report 2022 83
(vi) Liquidity risk
Liquidity risk is the risk that the Group will encounter difficulties in meeting the obligations associated with
its financial liabilities which are normally settled by delivering cash. The Group’s approach to managing
liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when
due.
The Group continually monitors its risk of a shortage of funds using short and mid-term liquidity planning.
This takes account of the expected cash flows from all activities. The supervisory board undertakes regular
reviews of the budget.
In 2022, 2021 and 2020, Affimed raised significant funding that it estimates will enable the Group to fund
operating expenses and capital expenditure requirements into 2025.
In May 2020, the Company implemented an at-the-market (“ATM”) program providing for the sales over
time of up to $50 million of its common shares. The Company issued approximately 12.5 million common
shares under this ATM program, generating net proceeds of approximately €34.5 million.
In November 2020, the Company implemented a new ATM program providing for additional sales over
time of up to $75 million of common shares. As of December 31, 2021, the Company had issued
approximately 4.4 million (2020: 7.9 million) shares, generating approximately €24.4 million (2020: €34.5
million) in net proceeds.
On January 15, 2021 the Company issued 19,166,667 common shares at a price of $6.00 per share in a
public offering resulting in gross proceeds before deducting underwriting discounts and commissions and
estimated expenses of the offering of $115 million.
In January 2021, the Group entered into a loan agreement with Silicon Valley Bank for up to €25 million,
of which the Group has drawn €17.5 million in 2021.
In November 2021, Affimed filed a “shelf registration statement” with the SEC in order to offer and sell
securities to the public in multiple, future offerings with indeterminate amount.
In November 2021, the Company implemented a new ATM program providing for additional sales over
time of up to $100 million of its common shares. As of December 31, 2021, the Company had issued
approximately 0.2 million shares and generated approximately €1.6 million in net proceeds from this new
ATM program.
On April 18, 2022, the Company closed its public offering of 22,500,000 common shares, at the public
offering price of $4.00 per share. The exercise of the underwriters’ option to purchase over-allotment
shares brought the total number of common shares sold by Affimed to 25,875,000. The public offering
generated net proceeds of €89.8 million ($97.0 million), after deducting €6.0 million ($6.5 million) in
underwriting commissions and other offering expenses.
The Group expects that further funding will be required to complete the development of the existing product
candidates. Further, funding will also be required to commercialize the products if regulatory approval is
received.
Affimed Annual Report 2022 84
The contractual maturities of Borrowings are as follows:
Payments within one year
Payments between one and five years
(vii)
Capital management
2022
2021
5,930
12,752
18,682
580
18,682
19,262
The primary objective of the Group’s capital management is to ensure that it maintains its liquidity in order
to finance its operating activities and meet its liabilities when due.
The Group manages its capital structure primarily through equity.
30. Subsequent events
Cash, Cash Equivalents, and Borrowings with Silicon Valley Bank
As at, and subsequent to December 31, 2022, the Company had cash and cash equivalents that were
deposited with Silicon Valley Bank Santa Clara, California (“SVB US”) and Silicon Valley Bank UK Limited
(“SVB UK”). On March 10, 2023, SVB US was closed by the California Department of Financial Protection
and Innovation, which appointed the Federal Deposit Insurance Corporation (“FDIC”) as receiver. On
March 13, 2023, FDIC transferred all deposits and substantially all assets of SVB US, to a newly created,
full-service FDIC-operated ‘bridge bank’ (“Silicon Valley Bridge Bank”) in an action designed to protect all
depositors of SVB US. On March 13, 2023, the Bank of England, in consultation with the Prudential
Regulation Authority, HM Treasury and the Financial Conduct Authority, has taken the decision to sell SVB
UK to HSBC UK Bank Plc. Meanwhile, the Company continues to have full access to the cash and cash
equivalents held on deposit at Silicon Valley Bridge Bank and SVB UK. Furthermore, as described in Note
24, the Company has a loan agreement with Silicon Valley Bridge Bank N.A. Germany Branch. On March
20, 2023, Silicon Valley Bridge Bank was granted permission to conduct the lending business through
Silicon Valley Bridge Bank N.A. Germany Branch. Overall, the Company expects that the foregoing will
not have an impact on the Company’s business activities.
Reorganization
In April 2023, Affimed conducted a reorganization of its operations to focus on the Company’s three clinical
stage development programs. As a result of the reorganization, the Group reduced its full-time equivalent
headcount by approximately 25%. The Group has not yet completed the evaluation of the financial impact
of the reorganization and the allocation to the remaining periods in 2023, but expects the one-time cash
expenditure for termination payments to be offset by cost savings during 2023.
Affimed Annual Report 2022 85
Company Financial Statements
Company balance sheet of Affimed N.V.
Company profit and loss account of Affimed N.V.
Notes to the Company financial statements of Affimed N.V.
Affimed Annual Report 2022 86
Company balance sheet as at December 31, 2022
(in € thousand)
(before appropriation of result of the year)
Assets
Non current assets
Financial fixed assets
Total non current assets
Current assets
Receivables from subsidiaries
Other receivables
Cash and cash equivalents
Total current assets
December 31,
December 31,
Note
2022
2021
33
34
35
36
123,046
123,046
351
1,080
34,640
36,071
106,640
106,640
406
351
34,704
35,461
Total assets
159,117
142,101
Equity and liabilities
Shareholders’ equity
Issued capital
Share premium
Other reserves
Revaluation reserve
Unappropriated loss
Total equity
Current liabilities
Payables to subsidiaries
Other current payables
Total current liabilities
Total liabilities
1,493
442,374
(192,928)
(1,231)
(96,793)
152,915
4,648
1,554
6,202
6,202
37
34
38
1,234
352,728
(154,515)
(5,973)
(57,523)
135,951
4,751
1,399
6,150
6,150
Total equity and liabilities
159,117
142,101
The Notes are an integral part of these company financial statements.
Affimed Annual Report 2022 87
Company profit and loss account for the year ended December 31, 2022
(in € thousand)
(before appropriation of result of the year)
For the year ended
December 31,
2022
For the year ended
December 31,
2021
Note
Share in results from participating
interests after taxation
Other result after taxation
33
39
(61,377)
(24,627)
(44,789)
(12,734)
Net result
(86,004)
(57,523)
The Notes are an integral part of these company financial statements.
Affimed Annual Report 2022 88
Notes to the Company financial statements for the year ended 31 December 2022
31. General information
Affimed N.V. (in the following ‘Affimed N.V.’ or the ‘Company’) has its corporate seat in Amsterdam, the
Netherlands, registered with the trade register of the Chamber of Commerce (handelsregister van de
Kamer van Koophandel) under number 60673389. The Company was founded as Affimed Therapeutics
B.V. in 2014.
Affimed N.V. is a clinical-stage biopharmaceutical company focused on discovering and developing highly
targeted cancer immunotherapies. The Company’s product candidates are developed in the field of
immuno-oncology, which represents an innovative approach to cancer treatment that seeks to harness the
body’s own immune defenses to fight tumor cells. Affimed N.V. has its own research and development
programs, strategic collaborations and service contracts, where the Company is performing research
services for third parties.
These Company financial statements and the consolidated financial statements together constitute the
statutory financial statements of Affimed N.V. The financial information of the Company is included in the
Company’s consolidated financial statements, as presented on pages 52 to 81.
32. Basis of preparation
The Company financial statements of Affimed N.V. have been prepared on the basis that the Company
will be able to continue as a going concern. Affimed believes that the existing cash and cash equivalents
generated from the proceeds of the public offering in April 2022 will enable the Company to fund its
operating expenses and capital expenditure requirements into 2025.
These Company financial statements have been prepared in accordance with Title 9, Book 2 of the
Netherlands Civil Code. For setting the principles for the recognition and measurement of assets and
liabilities and determination of results for its Company financial statements, the Company makes use of
the option provided in section 2:362(8) of the Netherlands Civil Code. This means that the principles for
the recognition and measurement of assets and liabilities and determination of the result (hereinafter
referred to as principles for recognition and measurement) of the Company financial statements are the
same as those applied for the consolidated EU-IFRS financial statements. These principles also include
the classification and presentation of financial instruments, being equity instruments or financial liabilities.
In case no other principles are mentioned, refer to the accounting principles as described in the
consolidated financial statements. For an appropriate interpretation of these statutory financial statements,
the Company financial statements should be read in conjunction with the consolidated financial
statements.
Information on the use of financial instruments and on related risks for the Group is provided in the notes
to the consolidated financial statements of the Group.
All amounts in the company financial statements are reported in thousands of euros (€ thousand) except
where otherwise stated.
Affimed Annual Report 2022 89
Participating interests in Group companies
Group companies are all entities in which the Company has directly or indirectly control. The Company
controls an entity when it is exposed, or has rights, to variable returns from its involvement with the Group
company and has the ability to affect those returns through its power over the Group company. Group
companies are recognised from the date on which control is obtained by the Company and derecognised
from the date that control by the Company over the Group company ceases. Participating interests in
Group companies are accounted for in the Company financial statements according to the equity method,
with the principles for the recognition and measurement of assets and liabilities and determination of
results as set out in the notes to the consolidated financial statements.
Participating interests with a negative net asset value are valued at nil. This measurement also covers any
receivables provided to the participating interests that are, in substance, an extension of the net
investment. In particular, this relates to loans for which settlement is neither planned nor likely to occur in
the foreseeable future. A share in the profits of the participating interest in subsequent years will only be
recognised if and to the extent that the cumulative unrecognised share of loss has been absorbed. If the
Company fully or partially guarantees the debts of the relevant participating interest, or if it has the
constructive obligation to enable the participating interest to pay its debts (for its share therein), then a
provision is recognised accordingly to the amount of the estimated payments by the Company on behalf
of the participating interest.
Result of participating interests
The share in the result of participating interests consists of the share of the Company in the result of these
participating interests. Results on transactions involving the transfer of assets and liabilities between the
Company and its participating interests and mutually between participating interests themselves, are
eliminated to the extent that they can be considered as not realised.
The Company makes use of the option to eliminate intragroup expected credit losses against the book
value of loans and receivables from the Company to participating interests, instead of elimination against
the equity value of the participating interests.
The financial information of the Company is included in the consolidated financial statements. For this
reason, in accordance with Section 402, Book 2 Netherlands Civil Code, the profit and loss account of the
Company exclusively states the share in the result of participating interests after taxation and the other
result after taxation.
Changes in value in participating interest
The change in value is regarded as a revaluation of the asset in the participating interest to which the
provisions of Article 2:390 of the DCC on the revaluation reserve apply. This approach follows from the
view that a participating interest measured according to the equity method is regarded as a combination
of assets and liabilities and not as an indivisible asset. A revaluation of the asset in the participating interest
is regarded as if it were a revaluation of an asset of the legal entity itself.
33. Financial fixed assets
Financial fixed assets solely relate to the investment of the Company in its fully owned subsidiary Affimed
GmbH with statutory seat in Heidelberg, Germany.
Affimed Annual Report 2022 90
Movements in the net asset value of Affimed GmbH during the year were as follows:
In € thousand
Net asset value as at January 1, 2022
Capital contributions
Effect of change in fair value of Amphivena and Roivant shares held by Affimed GmbH
Share in result of Affimed GmbH, net of tax
Net asset value as at December 31, 2022
Affimed GmbH
106,640
83,830
(6,047)
(61,377)
123,046
During the year, the Company contributed capital of €83.8 million to Affimed GmbH, these funds being
generated from the proceeds of the public offering and ATM program (see note 37).
Affimed GmbH holds preferred shares in Amphivena and previously held common shares in Roivant
Sciences Ltd which are/were both recognized at fair value through other comprehensive income, resulting
in a decrease of the net asset value of Affimed GmbH of € 6,047 during the year (see note 18).
34. Receivables from/payables to subsidiaries
These receivables and payables relate to Affimed Inc and Affimed GmbH and do not bear interest.
35. Other receivables
These receivables relate primarily to VAT refunds.
36. Cash and cash equivalents
Cash and cash equivalents comprise cash balances and call deposits with original maturities of
three months or less.
37. Equity
As of December 31, 2022, the share capital of €1,493 (2021: €1,234) is composed of 149,339,335 (2021:
123,419,772) common shares with a par value of €0.01. All issued shares are fully paid. Besides the
minimum amount of share capital to be held under Dutch law, there are no distribution restrictions
applicable to the equity of the Company.
As the structure of the equity components for the Company financial statements is largely based on legal
aspects, the presentation of the movement in shareholder’s equity is different from the presentation in the
consolidated financial statements.
Affimed Annual Report 2022 91
The movement in shareholder’s equity is as follows:
In € thousand
Issued
capital
Share
premium
Other
reserves
Revalu-
ation
reserve
Unappro-
priated
loss
Total
equity
January 1, 2021
983
235,625 (114,046)
1,720
(52,289)
71,993
Issue of common shares
Share issuance costs
Exercise of share-based payments awards
Allocation of unappropriated losses
Net result
Other comprehensive loss
Share-based payments
240
121,304
-
11
-
-
-
-
(7,107)
2,906
-
-
-
-
-
-
-
-
-
-
(52,289)
-
-
-
11,820
-
(7,693)
-
-
121,544
-
-
52,289
(57,523)
-
-
(7,107)
2,917
-
(57,523)
(7,693)
11,820
December 31, 2021
1,234
352,728 (154,515)
(5,973)
(57,523)
135,951
January 1, 2022
1,234
352,728 (154,515)
(5,973)
(57,523)
135,951
Issue of common shares
Share issuance costs
Exercise of share-based payments awards
Allocation of unappropriated losses
Transfer of cumulative loss on sale of financial assets
Net result
Other comprehensive loss
Share-based payments
259
-
-
-
-
-
-
-
95,547
(6,002)
101
-
-
-
-
-
-
-
-
(57,523)
-
-
-
19,110
-
-
-
-
10,789
-
(6,047)
-
-
-
-
57,523
(10,789)
(86,004)
-
-
95,807
(6,002)
101
-
-
(86,004)
(6,047)
19,110
December 31, 2022
1,493
442,374 (192,928)
(1,231)
(96,793)
152,915
Issued capital and share premium
In November 2021, the Company implemented a new ATM program providing for sales over time of up to
$100 million of its common shares. As of December 31, 2021, the Company had issued approximately 0.2
million common shares from this new ATM program and generated approximately €1.6 million in net
proceeds.
On January 15, 2021, the Group issued 19,166,667 common shares at a price of $6.00 per share in a
public offering, resulting in net proceeds of approximately €88.7 million, incurring €6.1 million in
underwriting commissions, legal and consulting expenses which were deducted from equity.
In April 2021, Silicon Valley Bank exercised all of its warrants which were issued in the course of a loan
agreement entered into 2016 and repaid by the Company in 2020. Accordingly, the Group issued 173,482
common shares in 2021.
On April 18, 2022, the Company closed its public offering of 22,500,000 common shares, at the public
offering price of $4.00 per share. The exercise of the underwriters’ option to purchase over-allotment
shares brought the total number of common shares sold by Affimed to 25,875,000. The public offering
Affimed Annual Report 2022 92
generated net proceeds of €89.8 million ($97.0 million), after deducting €6.0 million ($6.5 million) in
underwriting commissions and other offering expenses.
In connection with common share issuances in 2022 an amount of €6.0 million of direct and incremental
transaction cost was deducted from equity; shown net of proceeds in the statement of changes in equity.
As of December 31, 2022, authorized share capital of the company amounts to €3,120 (2021: €3,120) and
311,950,000 (2021: 311,950,000) common shares, each with a nominal value of €0.01 per share.
Other reserves
The Company has adopted a share-based compensation plan (ESOP 2014), pursuant to which the
Company’s directors, selected employees and consultants are granted the right to acquire common shares
of the Company (note 18 of the consolidated financial statements). The share-based payment expenses
are recorded in the profit and loss account. The ESOP 2014 plan is equity-settled. In case of an equity-
settled plan, there is no obligation to transfer economic benefits, therefore the credit entry should be
recognized as an increase in equity. The Company uses “Other reserves” as the equity classification.
Revaluation reserves
Changes in the revaluation reserve relate to changes in fair value in indirect investments of the Company,
i.e. investments held by Affimed GmbH. Affimed GmbH holds preferred shares in Amphivena and
previously held common shares in Roivant, both these investments are recognized at their fair value
through other comprehensive income. The initial recognition as of January 1, 2018 amounted to €7.3
million for Amphivena. The initial recognition as of November 3, 2020 amounted to €17.1 million for Roivant
Ltd. As of December 31, 2021, the accumulated changes in fair value amounted to a decrease of €7.3
million in Amphivena and a decrease of €10.8 million in Roivant. On sale of the shares in Roivant, the
associated accumulated losses were transferred from this reserve to unappropriated loss. The Company
uses “Revaluation reserves” as the equity classification.
Unappropriated result
The result after tax for 2022 is included in the unappropriated result. The company can only make
payments to the shareholders and other parties entitled to the distributable profit in so far as the
shareholders’ equity exceeds the paid-up and called-up part of the capital plus the legal reserves and
statutory reserves under the articles of association to be maintained.
Based on the adoption of the 2021 financial statements at the Annual General Meeting on June 22, 2022,
the accumulated losses for the year 2021 were transferred to the other reserves. It is expected that the
Annual General Meeting 2023 will also adopt the transfer of the accumulated losses for 2022 to other
reserves.
Reconciliation of shareholder’s equity and net result per the consolidated financial statements
with shareholder’s equity and net result per the Company financial statements
For the year ended December 31, 2022 and 2021 there is no difference between the net result and equity
per the consolidated financial statements and the net result and equity per the Company financial
statements.
Affimed Annual Report 2022 93
38. Other current payables
In € thousand
Trade payables
Social security and wage tax
Other liabilities
Total
All current payables are short-term.
39. Other result after taxation
In € thousand
Other income (service fee)
General and administrative expenses
Other gains
Net operating result
Financial income
Financial expense
Net financial result
Result before taxation
Taxation
Result after taxation
December
31, 2022
December
31, 2021
1,248
288
18
1,554
957
418
24
1,399
2022
3,303
(29,887)
1
(26,583)
1,976
(20)
1,956
(24,627)
-
(24,627)
2021
2,912
(20,687)
1
(17,774)
5,069
(29)
5,040
(12,734)
-
(12,734)
The Company has entered into a service agreement with Affimed GmbH. The service fee includes the
reimbursement of the net service expenses and a mark-up rate (at arms-length) on these net service
expenses.
40. Employee benefits and number of employees
The average number of employees of Affimed N.V. during 2022 was approximately four employees and
consisted of managing directors only. The managing director’s total compensation (including those
managing directors which are employed at the US subsidiary, Affimed Inc.) is shown in note 41.
41. Related-party transactions
Director’s remuneration 2022
Managing Directors
(in € thousand)
Periodically paid compensation
Bonuses
Total cash compensation
2014 Plan share-based payment expense
Total share-based payment expense
Adi Hoess
523
241
764
1,836
1,836
Wolfgang
Fischer
451
145
596
1,000
1,000
Andreas
Harstrick
374
120
494
938
938
Denise
Mueller 2
436
144
580
918
918
Arndt
Schottelius
453
146
599
958
958
Angus
Smith 2
Total
478
151
629
1,082
1,082
2,715
947
3,662
6,732
6,732
Affimed Annual Report 2022 94
Supervisory directors
(in € thousand)
Periodically paid compensation
Total cash compensation
2014 Plan share-based payment expense1
Total share-based payment expense
Thomas
Hecht
Bernhard
Ehmer
Ulrich
Grau
Annalisa
Jenkins
Mathieu
Simon
Harry
Welten
Uta
Kemmerich
-Keil
Total
115
115
247
247
52
52
58
58
53
53
50
50
49
49
54
54
431
431
164
164
192
164
192
247
1,370
164
164
192
164
192
247
1,370
1 Expense related to the issuance of options under the 2014 Plan. Details of options granted are summarized in the table below.
2 includes maximum contractual allowable allowances
Director’s remuneration 2021
Managing Directors
(in € thousand)
Periodically paid compensation
Bonuses
Total cash compensation
2014 Plan share-based payment expense1
Total share-based payment expense
1,540
1,540
Adi
Hoess
Wolfgang
Fischer
Andreas
Harstrick
Denise
Mueller 2
Arndt
Schottelius
Angus
Smith 2
Total
521
262
783
443
174
617
810
810
368
144
512
620
620
376
162
538
589
589
445
174
619
677
677
393
171
564
999
999
2,546
1,087
3,633
5,235
5,235
Supervisory directors
(in € thousand)
Periodically paid compensation
Total cash compensation
2014 Plan share-based payment expense1
Total share-based payment
expense
Thomas
Hecht
Bernhard
Ehmer
Ulrich
Grau
Annalisa
Jenkins
Mathieu
Simon
Harry
Welten
Ferdinand
Verdonck 3
Uta
Kemm
erich-
Keil
Total
101
101
161
161
57
57
46
46
43
43
39
39
49
49
105
105
161
106
161
105
105
161
106
161
22
22
3
3
35
35
392
392
45
847
45
847
1 Expense related to the issuance of options under the 2014 Plan. Details of options granted are summarized in the table below.
2 includes maximum contractual allowable allowances
3 left the Supervisory Board in June 2021
For further details and other information with regard to related-party transactions as well as Management
and Supervisory Director’s compensation reference is made to note 23 of the consolidated financial
statements.
Stock options granted under the Equity Incentive Plan 2014
Awards granted in 2022
Managing directors – share options with service conditions
Beneficiary
Adi Hoess
Wolfgang Fischer
Andreas Harstrick
Denise Mueller
Arndt Schottelius
Angus Smith
Total
Grant date
March 18, 2022
March 18, 2022
March 18, 2022
March 18, 2022
March 18, 2022
March 18, 2022
Number of options Strike price USD Expiration date
4.46 March 18, 2032
4.46 March 18, 2032
4.46 March 18, 2032
4.46 March 18, 2032
4.46 March 18, 2032
4.46 March 18, 2032
400,000
220,000
220,000
220,000
220,000
220,000
1,500,000
Affimed Annual Report 2022 95
These options vest in instalments over three years and can be exercised up to 10 years after the grant
date.
Managing directors – share options with market conditions
Beneficiary
Adi Hoess
Wolfgang Fischer
Andreas Harstrick
Denise Mueller
Arndt Schottelius
Angus Smith
Total
Grant date
March 30, 2022
March 30, 2022
March 30, 2022
March 30, 2022
March 30, 2022
March 30, 2022
Number of options Strike price USD Expiration date
4.45 March 30, 2024
4.45 March 30, 2024
4.45 March 30, 2024
4.45 March 30, 2024
4.45 March 30, 2024
4.45 March 30, 2024
325,000
200,000
200,000
200,000
200,000
200,000
1,325,000
These options consist of three tranches, one-third of the total grant will vest when the volume-weighted
average share price over the preceding thirty trading days reaches $12.00, $15.00, and $18.00,
respectively. Except with respect to a change of control, these options shall not vest before the first
anniversary of the grant date. The contractual lifetime of the options is two years. Any unvested awards
on the date that is two years following the grant date will lapse.
Supervisory directors
Beneficiary
Thomas Hecht ..........
Bernhard Ehmer .......
Ulrich M. Grau ..........
Annalisa Jenkins ......
Mathieu Simon .........
Harry Welten ............
Uta Kemmerich-Keil .
Total .........................
Awards granted in 2021
Managing directors
Beneficiary
Adi Hoess .................
Wolfgang Fischer ......
Andreas Harstrick .....
Denise Mueller..........
Arndt Schottelius .......
Angus Smith .............
Total .........................
Supervisory directors
Beneficiary
Thomas Hecht ..........
Bernhard Ehmer .......
Ulrich M. Grau ...........
Annalisa Jenkins .......
Mathieu Simon ..........
Harry Welten .............
Uta Kemmerich-Keil ..
Total .........................
Grant date
March 18, 2022
March 18, 2022
March 18, 2022
March 18, 2022
March 18, 2022
March 18, 2022
March 18, 2022
Number of options Strike price USD Expiration date
45,000 4.46 March 18, 2032
30,000 4.46 March 18, 2032
30,000 4.46 March 18, 2032
30,000 4.46 March 18, 2032
30,000 4.46 March 18, 2032
30,000 4.46 March 18, 2032
30,000 4.46 March 18, 2032
225,000
Grant
date
March 23, 2021
March 23, 2021
March 23, 2021
March 23, 2021
March 23, 2021
March 23, 2021
Number of
options
370,000
195,000
195,000
195,000
195,000
195,000
1,345,000
Strike price
USD
8.48
8.48
8.48
8.48
8.48
8.48
Expiration date
March 23, 2031
March 23, 2031
March 23, 2031
March 23, 2031
March 23, 2031
March 23, 2031
Grant
date
Number of
options
March 23, 2021
March 23, 2021
March 23, 2021
March 23, 2021
March 23, 2021
March 23, 2021
September 24, 2021
45,000
30,000
30,000
30,000
30,000
30,000
60,000
255,000
Strike price
USD
8.48
8.48
8.48
8.48
8.48
8.48
6.59
Expiration date
March 23, 2031
March 23, 2031
March 23, 2031
March 23, 2031
March 23, 2031
March 23, 2031
September 24, 2031
Affimed Annual Report 2022 96
For further disclosures related to the stock options we refer to note 23 of the consolidated financial
statements. The Company aims to meet its obligations by virtue of the granted option rights by issuing
new shares (no purchase of treasury shares).
42. Audit fees
With reference to Section 2:382a(1) and (2) of the Netherlands Civil Code, the following fees for the
financial year have been charged by KPMG Accountants N.V. to the Company, its subsidiaries and other
consolidated entities.
(in € thousand)
Audit of the financial statements
Other audit engagements
Tax-related advisory services
Other non-audit services
(in € thousand)
Audit of the financial statements
Other audit engagements
Tax-related advisory services
Other non-audit services
43. Financial instruments
For the year December 31, 2022
KPMG
Accountants
N.V.
Other
KPMG
network
Total
KPMG
68
-
-
-
68
435
-
16
-
451
503
-
16
-
519
For the year December 31, 2021
KPMG
Accountants
N.V.
Other
KPMG
network
Total
KPMG
60
-
-
-
60
438
26
5
-
469
498
26
5
-
529
The Group has exposure to the following risks from its use of financial instruments:
Credit risk,
Liquidity risk, and
Market risk.
In the notes to the consolidated financial statements information is included about the Group’s exposure
to each of the above risks, the Group’s objectives, policies and processes for measuring and managing
risk, and the Group’s management of capital. These risks, objectives, policies and processes for
measuring and managing risk, and the management of capital apply also to the separate financial
statements of Affimed N.V.
44. Subsequent events
Cash, Cash Equivalents, and Borrowings with Silicon Valley Bank
As at, and subsequent to December 31, 2022, the Company had cash and cash equivalents that were
deposited with Silicon Valley Bank Santa Clara, California (“SVB US”) and Silicon Valley Bank UK Limited
(“SVB UK”). On March 10, 2023, SVB US was closed by the California Department of Financial Protection
and Innovation, which appointed the Federal Deposit Insurance Corporation (“FDIC”) as receiver. On
March 13, 2023, FDIC transferred all deposits and substantially all assets of SVB US, to a newly created,
Affimed Annual Report 2022 97
full-service FDIC-operated ‘bridge bank’ (“Silicon Valley Bridge Bank”) in an action designed to protect all
depositors of SVB US. On March 13, 2023, the Bank of England, in consultation with the Prudential
Regulation Authority, HM Treasury and the Financial Conduct Authority, has taken the decision to sell SVB
UK to HSBC UK Bank Plc. Meanwhile, the Company continues to have full access to the cash and cash
equivalents held on deposit at Silicon Valley Bridge Bank and SVB UK. Furthermore, as described in Note
24, the Company has a loan agreement with SVB US Germany Branch. On March 20, 2023, Silicon Valley
Bridge Bank was granted permission to conduct the lending business previously operated by SVB US
Germany Branch through its German branch, SVB Germany. Overall, the Company expects that the
foregoing will not have an impact on the Company’s business activities.
Reorganization
In April 2023, Affimed conducted a reorganization of the operations of its subsidiaries to focus on the
Company’s three clinical stage development programs. As a result of the reorganization, Affimed group
reduced its full-time equivalent headcount by approximately 25%. Affimed group has not yet completed
the evaluation of the financial impact of the reorganization and the allocation to the remaining periods in
2023, but expects the one-time cash expenditure for termination payments to be offset by cost savings
during 2023.
Affimed Annual Report 2022 98
Signing of the financial statements
May 22, 2023
Originally signed by:
Management Board:
Dr. Adi Hoess, CEO
Dr. Wolfgang Fischer, COO
Dr. Andreas Harstrick, CMO
Denise Mueller, CBO
Dr. Arndt Schottelius, CSO
Angus Smith, CFO
Supervisory Board:
Dr. Thomas Hecht, Chairman
Dr. Bernhard Ehmer
Dr. Ulrich Grau
Dr. Annalisa Jenkins
Dr. Mathieu Simon
Harry Welten
Uta Kemmerich-Keil
Affimed Annual Report 2022
99
Other information
Provisions in the Articles of Association governing the appropriation of profit
The company’s Articles of Association provide under chapter 10 provisions about the appropriation
of profit, the full text is as follows:
Chapter 10
Profit and loss. Distributions on shares.
Article 10.1.
10.1.1. The management board will keep a share premium reserve and profit reserve
to which the shareholders are entitled.
10.1.2. The company may make distributions on shares only to the extent that its
shareholders' equity exceeds the sum of the paid-up and called-up part of the
capital and the reserves which must be maintained by law.
10.1.3. Distributions of profit, meaning the net earnings after taxes shown by the
adopted annual accounts, shall be made after the adoption of the annual
accounts from which it appears that they are permitted, entirely without
prejudice to any of the other provisions of the articles of association.
10.1.4. The management board may resolve, with the approval of the supervisory
board, to reserve the profits or part of the profits.
10.1.5. The profit remaining after application of article 10.1.4 shall be at the disposal of
the general meeting. The general meeting may resolve to carry it to the
reserves or to distribute it among the shareholders.
10.1.6. On a proposal of the management board - which proposal must be approved by
the supervisory board -, the general meeting may resolve to distribute to the
shareholders a dividend in the form of shares in the capital of the company
instead of a cash payment.
10.1.7. Subject to the other provisions of this article 10.1 the general meeting may, on
a proposal made by the management board which proposal is approved by the
supervisory board, resolve to make distributions to the shareholders to the
debit of one or several reserves which the company is not prohibited from
distributing by virtue of the law.
10.1.8. No dividends on shares shall be paid to the company on shares which the
company itself holds in its own capital or the depositary receipts issued for
which are held by the company, unless such shares are encumbered with a
right of use and enjoyment or pledge.
10.1.9. The management board is authorised to determine how a deficit appearing from
the annual accounts will be accounted for.
Interim distributions.
Article 10.2.
10.2.1. The management board may resolve with the approval of the supervisory
board, to make interim distributions to the shareholders if an interim statement
of assets and liabilities shows that the requirement of article 10.1.2 has been
met.
10.2.2. The interim statement of assets and liabilities shall relate to the condition of the
assets and liabilities on a date no earlier than the first day of the third month
preceding the month in which the resolution to distribute is published. It shall be
Affimed Annual Report 2022
100
prepared on the basis of generally acceptable valuation methods. The amounts
to be reserved under the law and the articles of association shall be included in
the statement of assets and liabilities. It shall be signed by the managing
directors and supervisory directors. If one or more of their signatures are
missing, this absence and the reason for this absence shall be stated.
10.2.3. Any proposal for distribution of a dividend on shares and any resolution to
distribute an interim dividend on shares shall immediately be published by the
management board in accordance with the applicable stock exchange
regulations at the company's request. The notification shall specify the date
when and the place where the dividend shall be payable or - in the case of a
proposal for distribution of dividend - is expected to be made payable.
10.2.4. Dividends shall be payable no later than thirty (30) days after the date when
they were declared, unless the body declaring the dividend determines a
different date.
10.2.5. Dividends which have not been claimed upon the expiry of five (5) years and
one (1) day after the date when they became payable shall be forfeited to the
company and shall be carried to the reserves.
10.2.6. The management board may determine that distributions on shares shall be
made payable either in euro or in another currency.
Branch offices
Affimed N.V. operates through the following branch offices (direct or indirect wholly owned
subsidiaries):
- Affimed GmbH, Germany
- Affimed Inc., USA
- AbCheck s.r.o., Czech Republic
Other participation
- Amphivena Therapeutics Inc., USA (participation below 5%)
Independent auditor’s report
The independent auditor’s report is set forth on the following pages.
Independent auditor's report
To: the General Meeting of Shareholders and the Supervisory Board of Affimed N.V
Report on the audit of the financial statements 2022 included in the annual report
Our opinion
In our opinion:
•
•
the accompanying consolidated financial statements give a true and fair view of the financial
position of Affimed N.V. as at 31 December 2022 and of its result and its cash flows for the
year 2022 then ended, in accordance with International Financial Reporting Standards as
adopted by the European Union (EU-IFRS) and with Part 9 of Book 2 of the Dutch Civil
Code.
the accompanying company financial statements give a true and fair view of the financial
position of Affimed N.V. as at 31 December 2022 and of its result for the year 2022 then
ended in accordance with Part 9 of Book 2 of the Dutch Civil Code.
What we have audited
We have audited the financial statements 2022 of Affimed N.V. based in Amsterdam. The
financial statements include the consolidated financial statements and the company financial
statements.
The consolidated financial statements comprise:
1
2
3
the consolidated statement of financial position as at 31 December 2022;
the following consolidated statements for the year 2022: the statement of comprehensive
loss, the statement of cash flows and the statement of changes in equity; and
the notes comprising a summary of the significant accounting policies and other explanatory
information.
The company financial statements comprise:
1
2
3
the company balance sheet as 31 December 2022;
the company profit and loss account for for the year 2022; and
the notes comprising a summary of the accounting policies and other explanatory
information.
KPMG Accountants N.V., a Dutch limited liability company registered with the trade register in the Netherlands under number 33263683, is a member firm of the global organization of
independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee.
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Basis for our opinion
We conducted our audit in accordance with Dutch law, including the Dutch Standards on
Auditing. Our responsibilities under those standards are further described in the ‘Our
responsibilities for the audit of the financial statements’ section of our report.
We are independent of Affimed N.V. in accordance with the ‘Verordening inzake de
onafhankelijkheid van accountants bij assurance-opdrachten’ (ViO, Code of Ethics for
Professional Accountants, a regulation with respect to independence) and other relevant
independence regulations in the Netherlands. Furthermore, we have complied with the
‘Verordening gedrags- en beroepsregels accountants’ (VGBA, Dutch Code of Ethics).
We designed our audit procedures in the context of our audit of the financial statements as a
whole and in forming our opinion thereon. The information in respect of going concern, fraud and
non-compliance with laws and regulations and the key audit matters was addressed in this
context, and we do not provide a separate opinion or conclusion on these matters.
We believe the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
Information in support of our opinion
Summary
Materiality
• Materiality of EUR 800 thousand
• 0,4% of total assets
Group audit
• Audit coverage of 99% of total assets
• Audit coverage of 98% of revenue
Fraud/Noclar and Going concern
• Fraud & Non-compliance with laws and regulations (Noclar): management override of controls and revenue
recognition.
• Going concern: no significant going concern risks identified
Key audit matters
• Revenue recognition of the collaboration agreement with Genentech Inc. and Roivant Sciences Ltd.
Opinion
Unqualified
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Materiality
Based on our professional judgment we determined the materiality for the financial statements
as a whole at EUR 800 thousand (2021: EUR 677 thousand). The materiality is determined with
reference to the total assets (0,4%).
We consider the total assets as the most appropriate benchmark because Affimed N.V.
(or hereafter: the Company) is currently in its research and development phase and this is
predominantly focussed on asset development/capital expenditure. We have also taken into
account misstatements and/or possible misstatements that in our opinion are material for the
users of the financial statements for qualitative reasons.
We agreed with the Board of Directors and the Supervisory Board that misstatements identified
during our audit in excess of EUR 40 thousand would be reported to them, as well as smaller
misstatements that in our view must be reported on qualitative grounds.
Scope of the group audit
Affimed N.V. is at the head of a group of components. The financial information of this group is
included in the financial statements of Affimed N.V.
Our group audit mainly focused on significant components that are (i) of individual financial
significance to the group, or (ii) that, due to their specific nature or circumstances, are likely to
include significant risks of material misstatement of the financial statements.
We have:
• performed audit procedures ourselves at group level in respect of the company financial
statements;
• made use of the work of KPMG Germany for the audit of the components that are significant
to the group. We have sent detailed instructions to KPMG Germany, covering significant
areas including the relevant risk of material misstatement and set out the information
required to be reported to the group audit team. In order to be sufficiently involved in the
several component auditor’s phases, we had communication with KPMG Germany to our
satisfaction through instructions, exchange of mails, virtual (conference calls) and presential
meetings (conference calls) and also performed both a remote file review as a file review at
client side.
By performing the procedures mentioned above at group components, together with additional
procedures at group level, we have been able to obtain sufficient and appropriate audit evidence
about the group’s financial information to provide an opinion about the financial statements.
Audit response to the risk of fraud and non-compliance with laws and regulations
In the chapter ‘Risk Management’ and ‘risk management and control systems’ of the Report by
Affimed’s Management Board, the Board of Directors describes its procedures in respect of the
risk of fraud and non-compliance with laws and regulations and the Supervisory Board reflects
on this.
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As part of our audit we have gained insights into the Company and its business environment,
and assessed the design and implementation and, where considered appropriate, tested the
operating effectiveness of the Company’s risk management in relation to fraud and non-
compliance. Our procedures included, among other things, assessing the Company’s code of
conduct and its procedures to investigate indications of possible fraud and non-compliance.
Furthermore, we performed relevant inquiries with the finance employees, legal department,
management and those charged with governance. As part of our audit procedures, we:
• assessed other positions held by the management board;
• evaluated correspondence with supervisory authorities and regulators as well as legal
confirmation letters.
In addition, we performed procedures to obtain an understanding of the legal and regulatory
frameworks that are applicable to the Company and identified the following areas as those most
likely to have a material effect on the financial statements:
healthcare legislation (including various drug approval processes).
•
We evaluated the fraud and non-compliance risk factors to consider whether those factors
indicate a risk of material misstatement in the financial statements.
Based on the above and on the auditing standards, we identified the following fraud risks that are
relevant to our audit, and responded as follows:
Management override of controls (a presumed risk)
Risk:
• Management is in a unique position to manipulate accounting records and prepare fraudulent
financial statements by overriding controls (on the progress of collaboration agreements with
Genentech Inc. and Roivant Sciences Ltd.) that otherwise appear to be operating effectively.
Responses:
• We evaluated the design and the implementation and tested the operating effectiveness of
internal controls that mitigate fraud and non-compliance risks, such as processes related to
journal entries.
• We performed a data analysis of high-risk journal entries and evaluated key estimates and
judgments for bias by the Company’s management, including retrospective reviews of prior
years’ estimates (relating the progress of the collaboration agreement with Genentech Inc.
and Roivant Sciences Ltd.). Where we identified instances of unexpected journal entries or
other risks through our data analytics, we performed additional audit procedures to address
each identified risk, including testing of transactions back to source information.
• We incorporated elements of unpredictability in our audit. We performed additional
procedures in the area of payroll.
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Revenue recognition (a presumed risk)
Risk:
• Given the high level of management judgment in the determination of measuring the
progress on the performance obligation satisfied over time in relation to revenue recognition
of the collaboration agreements with Genentech Inc. and Roivant Sciences Ltd., a significant
risk of fraud is identified as described in the key audit matters below.
Responses:
• We refer for a detailed description of our responses to the key audit matter below.
Our evaluation of procedures performed related to fraud and non-compliance with laws and
regulations did not result in an additional key audit matter.
We communicated our risk assessment, audit responses and results to management and the
Supervisory Board, on which we have not identified any findings nor internal control deficiencies
relating risk of fraud and non-compliance.
Our audit procedures did not reveal indications and/or reasonable suspicion of fraud and non-
compliance that are considered material for our audit.
Audit response to going concern
The Board of Directors has performed its going concern assessment and has not identified any
significant going concern risks. Our main procedures to assess the Board of Directors’
assessments were:
• we considered whether the Board of Directors’ assessment of the going concern risks
includes all relevant information of which we are aware as a result of our audit;
• we analyzed the Company’s financial and liquidity position as at year-end and compared it to
the previous financial year as well as expected research and development cash outflows in
terms of indicators that could identify significant going concern risks;
• we considered whether the developments in the Company’s share price indicate a significant
going concern risk.
The outcome of our risk assessment procedures did not give reason to perform additional audit
procedures on the Board of Directors’ going concern assessment.
Our key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance
in our audit of the financial statements. We have communicated the key audit matters to the
Board of Directors and the Supervisory Board. The key audit matters are not a comprehensive
reflection of all matters discussed.
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Revenue recognition of collaboration agreement with Genentech Inc. and Roivant
Sciences Ltd.
Description
There is a risk due to fraud and error that collaboration agreements with Genentech Inc.
(hereafter: Genentech) and Roivant Sciences Ltd. (hereafter: Roivant), as disclosed in note 9
‘Revenue’, were not accounted for properly which could lead to inappropriate financial
reporting.
According to the existing collaboration agreements of Affimed N.V., accounting for both the
Genentech as Roivant collaboration agreements involves amounts that are material to the
Company’s financial statements, will require the appropriate technical expertise and the
application of significant judgment and estimates by management.
Furthermore, there is a general presumption in auditing standards that a material misstatement
due to fraudulent financial reporting relating to revenue recognition may result from an
overstatement of revenues through, for example, premature revenue recognition.
We identified a significant risk of fraud and error that revenues from Genentech and Roivant
collaboration agreements may be overstated. The risk of fraud results from the pressure that
management may have to achieve performance targets at the reporting period-end. The risk of
fraud relates to manipulation of the timing of revenue recognition, the method and the measure
of progress used to recognize revenues for each identified performance obligation. The risk of
fraud relates to the significant estimate on measuring the progress of a performance obligation
satisfied over time, this entails the risk that incurred costs that do not contribute to the progress
in satisfying the performance obligations are improperly included in measuring the progress.
The employee costs to complete the exclusive targets is a key estimation that give rise to a
significant risk on inappropriate revenue recognition in order to overstate the percentage of
completion calculation.
Our response
We have performed the following audit procedures:
• Perform walkthrough of the process relating the recognition of revenues from the
Genentech and Roivant agreements.
•
Identify and test relevant controls over the appropriateness of revenue recognition from the
Genentech and Roivant agreements.
• Determination of when performance obligations have been satisfied and the timing of
revenue recognition, including analysis of related journal-entries.
• Obtaining external confirmation from Genentech and Roivant regarding the stage of
progress of the targets (e.g. budget, timelines and (discussed) updates on the progress of
the targets) in order to determine if the performance obligations is fully satisfied and that
we can agree with the recognized revenue in the reporting period associated with this
performance obligation; determination the accuracy of the remaining contract liabilities; and
• Assessing the disclosures in the consolidated financial statements in respect of the
revenue recognition principles with reference to the requirements of the prevailing
accounting standards.
Our observation
The results of our procedures were satisfactory.
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Report on the other information included in the annual report
In addition to the financial statements and our auditor’s report thereon, the annual report
contains other information.
Based on the following procedures performed, we conclude that the other information:
•
is consistent with the financial statements and does not contain material misstatements; and
• contains the information as required by Part 9 of Book 2 of the Dutch Civil Code for the
Report by Affimed’s Management Board and other information.
We have read the other information. Based on our knowledge and understanding obtained
through our audit of the financial statements or otherwise, we have considered whether the other
information contains material misstatements.
By performing these procedures, we comply with the requirements of Part 9 of Book 2 of the
Dutch Civil Code and the Dutch Standard 720. The scope of the procedures performed is less
than the scope of those performed in our audit of the financial statements.
The Board of Directors is responsible for the preparation of the other information, including the
information as required by Part 9 of Book 2 of the Dutch Civil Code.
Report on other legal and regulatory requirements
Engagement
We were engaged by the General Meeting of Shareholders as auditor of Affimed N.V. on
22 June 2022, as of the audit for the year 2022 and have operated as statutory auditor ever
since the financial year 2014.
Description of responsibilities regarding the financial statements
Responsibilities of the Board of Directors and the Supervisory Board for the
financial statements
The Board of Directors is responsible for the preparation and fair presentation of the financial
statements in accordance with EU-IFRS and Part 9 of Book 2 of the Dutch Civil Code.
Furthermore, the Board of Directors is responsible for such internal control as the Board of
Directors determines is necessary to enable the preparation of the financial statements that are
free from material misstatement, whether due to fraud or error. In that respect the Board of
Directors, under supervision of the Supervisory Board, is responsible for the prevention and
detection of fraud and non-compliance with laws and regulations, including determining
measures to resolve the consequences of it and to prevent recurrence.
As part of the preparation of the financial statements, the Board of Directors is responsible for
assessing the Company’s ability to continue as a going concern.
Based on the financial reporting frameworks mentioned, the Board of Directors should prepare
the financial statements using the going concern basis of accounting unless the Board of
Directors either intends to liquidate the Company or to cease operations, or has no realistic
alternative but to do so. The Board of Directors should disclose events and circumstances that
may cast significant doubt on the Company’s ability to continue as a going concern in the
financial statements.
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The Supervisory Board is responsible for overseeing the Company’s financial reporting process.
Our responsibilities for the audit of the financial statements
Our objective is to plan and perform the audit engagement in a manner that allows us to obtain
sufficient and appropriate audit evidence for our opinion.
Our audit has been performed with a high, but not absolute, level of assurance, which means we
may not detect all material errors and fraud during our audit.
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 users
taken on the basis of these financial statements. The materiality affects the nature, timing and
extent of our audit procedures and the evaluation of the effect of identified misstatements on our
opinion.
A further description of our responsibilities for the audit of the financial statements is included in
appendix of this auditor’s report. This description forms part of our auditor’s report.
Zwolle, 22 May 2023
KPMG Accountants N.V.
J.J. van den Berg RA
Appendix:
Description of our responsibilities for the audit of the financial statements
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Appendix
Description of our responsibilities for the audit of the financial statements
• We have exercised professional judgement and have maintained professional scepticism
throughout the audit, in accordance with Dutch Standards on Auditing, ethical requirements
and independence requirements. Our audit included among others:
•
identifying and assessing the risks of material misstatement of the financial statements,
whether due to fraud or error, designing and performing audit procedures responsive to those
risks, and obtaining 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
the risk resulting from error, as fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control;
• obtaining an understanding of internal control 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 Company’s internal control;
• evaluating the appropriateness of accounting policies used and the reasonableness of
accounting estimates and related disclosures made by Board of Directors;
• concluding on the appropriateness of Board of Director’s 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 Company’s ability to
continue as a going concern. If we conclude that a material uncertainty exists, we are
required to draw attention in our auditor’s report to the related disclosures in the 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 auditor’s report. However, future
events or conditions may cause the Company to cease to continue as a going concern;
• evaluating the overall presentation, structure and content of the financial statements,
including the disclosures; and
• evaluating whether the financial statements represent the underlying transactions and events
in a manner that achieves fair presentation.
• We are solely responsible for the opinion and therefore responsible to obtain sufficient
appropriate audit evidence regarding the financial information of the entities or business
activities within the group to express an opinion on the financial statements. In this respect
we are also responsible for directing, supervising and performing the group audit.
We communicate with the Supervisory Board regarding, among other matters, the planned
scope and timing of the audit and significant audit findings, including any significant findings in
internal control that we identify during our audit.
We provide the Supervisory Board 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.
From the matters communicated with the Supervisory Board, we determine the key audit
matters: those matters that were of most significance in the audit of the financial statements. We
describe these matters in our auditor’s report unless law or regulation precludes public
disclosure about the matter or when, in extremely rare circumstances, not communicating the
matter is in the public interest.
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