Company Number: 12107859
Amryt Pharma plc
Annual Report and Accounts
for the year ended December 31, 2021
Amryt Pharma plc
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Annual Report and Accounts
for the year ended December 31, 2021
Contents
Page
Strategic Report
2
Board of Directors
16
Corporate Governance
20
Directors’ Remuneration Report – Annual Statement
26
Directors’ Remuneration Report
28
Directors’ Report
35
Financial Statements
Independent Auditor’s Report
38
Consolidated Statement of Comprehensive Income/(Loss)
51
Consolidated Statement of Financial Position
52
Consolidated Statement of Changes Cash Flows
53
Consolidated Statement of Changes in Equity
54
Company Statement of Financial Position
55
Company Statement of Cash Flows
56
Company Statement of Changes in Equity
57
Notes to the Financial Statements
58
Company Information
105
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Introduction
We are pleased to present the annual report and financial statements of Amryt Pharma plc for the year ended
December 31, 2021. As used herein, references to “we”, “us”, “Amryt” or the “Group” in this annual report shall
mean Amryt Pharma plc and its world-wide subsidiaries, collectively. References to the “Company” in this annual
report shall mean Amryt Pharma plc. The Group has also filed with the U.S. Securities and Exchange Commission
(the “SEC”) its Annual Report on Form 20-F for the year ended December 31, 2021, which contains additional
disclosures regarding some of the matters discussed in this report.
Amryt Pharma plc (‘‘Company’’) is a company incorporated in England and Wales. The Company’s American
Depositary Shares (“ADSs”) have been listed on the NASDAQ Global Select Market (“NASDAQ”) since July 8, 2020
(ticker: AMYT), and, up until January 11, 2022, its shares were also quoted on the Alternative Investment Market
(“AIM”), a sub-market of the London Stock Exchange (ticker: AMYT). The Company announced the cancellation
of its admission to AIM on November 22, 2021, and following the AIM delisting on January 11, 2022, the
Company’s ADSs will remain listed and will only be tradeable on NASDAQ. The Company’s last day of trading on
AIM was January 10, 2022.
We were incorporated under the Companies Act 2006 (“Companies Act”) on July 17, 2019, as a private company
limited by shares under the name Amryt Pharma Holdings Limited, with company number 12107859. We were
re-registered as a public limited company on September 13, 2019, under the name Amryt Pharma Holdings
Limited. On September 24, 2019, Amryt Pharma Holdings plc became the new parent company of Amryt Pharma
plc pursuant to a scheme of arrangement between Amryt Pharma plc and its shareholders under Part 26 of the
Companies Act. Amryt Pharma Holdings Limited changed its name to Amryt Pharma plc.
On August 5, 2021, Amryt completed the acquisition of Chiasma, Inc. and, in conjunction with the completion,
Amryt allotted and issued a total of 127,733,680 ordinary shares as consideration for the acquisition. Following
the completion, shareholdings in Chiasma were rounded in being converted to Amryt shares using the exchange
ratio of 0.396. Roundings in converting Chiasma shareholdings to Amryt shares were finalized in August 2021
and resulted in an additional 7,015 ordinary shares being allotted and issued by Amryt as consideration for the
acquisition. In total, these ordinary shares were issued to the former Chiasma Shareholders in the form of
25,548,139 ADSs at US$10.19 per share, to acquire Chiasma for a value of US$260,336,000. On August 5, 2021,
the Group repaid US$116,629,000 of Chiasma long term debt.
Through the acquisition of Chiasma, Inc, we acquired our third commercial product, Mycapssa® (octreotide
capsules) which is approved in the US for long-term maintenance therapy in acromegaly patients who have
responded to and tolerated treatment with octreotide or lanreotide. Mycapssa® is the first and only oral
somatostatin analog approved by the Food and Drug Administration (“FDA”). Mycapssa® has also been
submitted to the European Medicines Agency (“EMA”) and is not yet approved in Europe. We believe that
following the acquisition the combined company will be a global leader in rare and orphan diseases with three
on-market commercial products, a global commercial and operational footprint and a significant development
pipeline of therapies with the financial flexibility to execute its growth plans.
The consolidated accounts comprise the financial statements for the Group for the 12 months ended December
31, 2021, and 2020. The 2021 financial statements incorporate the results of Chiasma, Inc. from the date of
acquisition, August 5, 2021, to December 31, 2021.
The functional currency of the Group and Company is US dollars.
Our Business
Amryt is a global commercial-stage biopharmaceutical company focused on acquiring, developing and
commercializing novel treatments for rare diseases. Amryt comprises a strong and growing portfolio of
commercial and development assets. Amryt’s commercial business comprises three orphan disease products –
metreleptin (Myalept®/ Myalepta®); oral octreotide (Mycapssa®); and lomitapide (Juxtapid®/ Lojuxta®).
We have a proven track record of obtaining rare disease assets, either through acquisition or in-license, and we
intend to continue building our portfolio of rare disease programs with the goal of delivering effective
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treatments to patients in need. For more information on Amryt, including products, please visit
www.amrytpharma.com.
Our Products and Development Pipeline
Commercial Assets
Metreleptin
Metreleptin is a recombinant analog of human leptin. It is marketed as Myalept® in the US as an adjunct to diet
as a replacement therapy to treat the complications of leptin deficiency in patients with congenital or acquired
generalized lipodystrophy (“GL”). It is marketed as Myalepta® in the EU as an adjunct to diet as a replacement
therapy to treat the complications of leptin deficiency in adults and children two years of age and above with
congenital or acquired GL. Myalepta® is also approved in the EU for adults and children 12 years of age and
above with familial or acquired partial lipodystrophy (“PL”) for whom standard treatments have failed to achieve
adequate metabolic control with congenital or acquired GL and also congenital or acquired PL. Leptin, which is
deficient in patients with GL, is the key hormone responsible for regulating appetite and also has an important
regulatory effect on energy expenditure. Leptin is a naturally occurring hormone derived from fat cells and an
important regulator of energy, fat and glucose metabolism, reproductive capacity and other physiological
functions. The predominant cause of metabolic complications in GL is excess triglyceride accumulation in the
liver and skeletal muscle due to the inability to store triglycerides in fat cells. As a result of the deficiency of
leptin associated with GL, patients experience significant fatigue as well as hyperphagia, or unregulated appetite.
The loss of fat tissue caused by this disease often leads to severe metabolic abnormalities that contribute to
increased morbidity and mortality.
Lomitapide
Lomitapide, which is marketed as Juxtapid® in the US and as Lojuxta® in EMEA, is an oral, once-a-day treatment
for adult patients with Homozygous Familial Hypercholesterolaemia ("HoFH"), as an adjunct to a low-fat diet
and other lipid-lowering medicinal products, with or without low density lipoprotein (“LDL”) apheresis. HoFH is
a rare genetic disease, which impairs the body’s ability to remove LDL cholesterol, or “bad” cholesterol, typically
leading to abnormally high LDL cholesterol levels in the blood. HoFH patients are at a high risk of experiencing
life-threatening cardiovascular events at an early age as a result of extremely elevated cholesterol levels in the
blood and have a substantially reduced life expectancy relative to unaffected individuals. According to a 2013
European Health Journal article, the prevalence of HoFH is one person per million. However, according to a
2016 article published in Atherosclerosis, the number may be as high as 6.25 persons per million. Aggressive
treatment, including dietary modifications plus combination therapy with currently approved lipid lowering
drugs at maximum tolerated doses, often fails to reduce LDL cholesterol levels to their recommended targets in
these patients. Lomitapide is a small molecule microsomal triglyceride transfer protein (“MTP”) inhibitor with
the potential to provide significant reductions in LDL cholesterol levels in this high-risk patient population.
Mycapssa®
Mycapssa® (octreotide capsules) is a combination of octreotide acetate and excipients collectively called
Transient Permeability Enhancer (TPE®). TPE improves the oral bioavailability of poorly absorbed drugs such as
octreotide by increasing the permeability of the intestine. The mode of action of TPE is thought to involve a
transient opening of the tight junctions between epithelial cells lining the intestine.
Acromegaly is a rare disease most often caused by a benign pituitary tumor and characterized by an excess of
growth hormone and insulin-like growth factor-1 hormone. Treatment options include surgery, medication and
radiation or a combination of these. Mycapssa® (octreotide capsules) is approved in the US for long-term
maintenance therapy in acromegaly patients who have responded to and tolerated treatment with octreotide
or lanreotide. Mycapssa® is the first and only oral somatostatin analog approved by the FDA. Mycapssa® has
also been submitted to the EMA and is not yet approved in Europe.
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Development Pipeline
Oleogel S-10
Our lead development candidate, Oleogel-S10, is being developed as a potential topical treatment for the partial
thickness wounds of severe Epidermolysis Bullosa (“EB”), a rare and devastating genetic skin disease affecting
young children and adults for which there is currently no approved treatment. EB is a group of diseases of the
skin, mucous membranes and internal epithelial linings characterized by extreme skin fragility that blisters and
tears from minor friction or trauma. Patients with severe forms of EB, including Dystrophic EB (“DEB”) and
Junctional EB (“JEB”), suffer from severe and chronic blistering, ulceration, scarring, mutilating scarring of the
hands and feet, joint contractures, strictures of the esophagus and mucous membranes, a high risk of developing
aggressive squamous cell carcinomas, infections and risk of premature death. Market research indicates an
incidence among live births of one in 20,000, and, when accounting for life expectancy per EB sub-type, there
are an estimated 30 patients per million (total EB prevalence in the general population), of which approximately
31% are DEB and JEB patients.
In September 2020, Amryt announced positive results from its pivotal Phase 3 EASE trial in EB. EASE is the largest
Phase 3 trial ever conducted in EB.
The primary endpoint of the trial was achieved and demonstrated a statistically significant acceleration of target
wound healing by day 45 in patients treated with Oleogel-S10 versus control gel (p-value = 0.013) representing
a 44% increase in target wound closure with Oleogel-S10 versus the control gel.
The RDEB sub-group experienced a greater benefit when treated with Oleogel-S10 than the overall population
(nominal p-value = 0.008) representing a 72% increase in target wound closure with Oleogel-S10 vs the control
gel. Favorable trends were evident among secondary endpoints including change in procedural pain, total body
wound burden based on EB Disease Activity and Scarring Index (“EBDASI”) score and affected body surface area
percentage. Oleogel-S10 had an acceptable safety profile and was well tolerated when compared with control
gel.
Oleogel-S10 has been granted Pediatric Rare Disease Designation by the FDA in August 2018. If the New Drug
Application (“NDA”) is granted a priority review and subsequently results in an approval from the FDA, we are
eligible to apply for a Priority Review Voucher (“PRV”) that we can use, sell or transfer. When the NDA was
submitted to the FDA on March 30, 2021, Amryt requested priority review. In June 2021, Amryt received
confirmation from the FDA that its NDA for Oleogel-S10 had been accepted and granted priority review. On
February 28, 2022, we received a Complete Response Letter (“CRL”) from the FDA which asked Amryt to submit
additional confirmatory evidence of effectiveness for Oleogel-S10 in EB. Amryt intends to discuss with the FDA
the nature of the data required to address the Agency’s concerns. Having received a CRL from the FDA we may
no longer be eligible for a PRV and we intend to discuss and clarify this with the FDA.
A Marketing Authorization Application (“MAA”) for Oleogel-S10 for the treatment of Dystrophic and Junctional
EB was validated by EMA March 25, 2021, the assessment process by EMA was completed on April 22, 2022,
when the CHMP adopted a positive opinion. The positive opinion recommends the approval of Filsuvez® in the
EU for the treatment of partial thickness wounds associated with dystrophic and junctional EB in patients six
months and older. Based on this CHMP recommendation a decision by the EC is expected on the Filsuvez®
application within 67 days.
Additional Opportunity for Oleogel-S10
We are also supporting an investigator-led Phase 2 study of Oleogel-S10 for the treatment of severe radiation-
induced dermatitis. This trial commenced in Q4 2021.
AP103 for the treatment of DEB
In March 2018, we acquired the rights to a novel polymer-based topical gene therapy delivery platform for
potential use in the treatment of rare genetic diseases. The technology involves the use of highly branched poly
β-amino ester (“HPAE”) polymers as the topical delivery vehicle for gene therapy. Our first product candidate
utilizing this platform, AP103, is currently in preclinical development for the treatment of patients with DEB.
Patients with DEB have a defect in the COL7A1 gene resulting in the inability to produce collagen VII, which plays
an important role in anchoring the dermal and epidermal layers of the skin. AP103 is the combination of this
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polymer technology and the COL7A1 gene. If successful, we believe this could eliminate the requirement for
viruses as topical delivery vectors.
In preclinical studies in a human mouse xenograph model of EB, we observed that topical application of AP103
restored production of collagen VII. In separate preclinical studies, AP103 was observed to restore collagen VII
to levels exceeding those produced by healthy human keratinocytes (cells that regenerate the outer layer of the
skin). In addition, we did not observe evidence of cellular toxicity after repeated administration in these studies.
Our preclinical development of AP103 is ongoing. To support this critical milestone, significant effort has been
invested in 2021 to advance the manufacturing and characterization of the AP103 drug product and constituent
components. To date, the team have generated the initial qualified batches of the HPAE polymer and DNA
required to generate AP103. This advancement will facilitate the initiation of key aspects of the non-clinical
safety program in 2022, which need to be completed prior to launch of first in human (FIH) studies. We intend
to initiate clinical development of AP103 in 2023. In September 2020, the EMA’s Committee for Orphan
Medicinal Products (“COMP”) adopted a positive opinion for orphan designation for the use of AP103 in EB and
on December 23, 2020, the FDA granted orphan designation for AP103 in the treatment of DEB.
Mycapssa® for the Treatment of Neuroendocrine Tumors (“NET”)
Neuroendocrine tumors (NETs) are a heterogeneous group of cancer subtypes that arise in endocrine cells that
exist in different organ systems throughout the body. Most NETs (approximately 70%) occur in the
gastrointestinal (GI) tract or pancreas. Tumors arising from the GI tract are termed carcinoid tumors. NET may
also occur in the respiratory tract, central nervous system, thyroid, skin, breast, and urogenital system. Up to
20% of carcinoid tumors are estimated to have carcinoid syndrome (CS). CS are mainly associated with midgut
metastatic carcinoid tumors. Most commonly, CS presents with diarrhea and flushing episodes due to excessive
secretion of serotonin. Injectable SRLs, such as octreotide long-acting release, subcutaneous octreotide
immediate release, and lanreotide, are the first-line treatment for CS associated symptoms as they significantly
improve flushing episodes and diarrhea symptoms by inhibiting the secretion of serotonin among other
hormones and vasoactive substances.
Pharmacokinetic studies have been completed and the data supports the higher doses of Mycapssa® (octreotide
capsules) required in the planned Phase 3 study in patients with carcinoid symptoms due to NET.
The FDA has confirmed that a single positive Phase 3 study would be sufficient for approval consistent with the
505(b)(2) regulatory pathway previously agreed. Amryt is currently finalizing the study protocol with the FDA
and plans to initiate the Phase 3 study in Q4 2022.
Strategy & Principal Activities
Amryt Pharma plc provides management services to group companies which are charged on an arms’ length
basis based on costs incurred by the Company with an appropriate mark-up applied. See note 26 to the financial
statements for a complete list of direct and indirect subsidiaries. The Company employees eight Non-Executive
Directors. The Directors are charged with the responsibility of:
setting the overall Group strategy and providing leadership to implement the strategy and supervising
the management of the business;
the acquisition or disposal of material corporate entities or assets;
public announcements (including financial statements); approving or making significant changes in
accounting policy, the capital structure and dividend policy of Amryt;
Group remuneration policy; and
Board structure, composition and succession.
The Board delegates to management in the subsidiary companies, through the Executive Director, responsibility
for the overall performance of the Group, which is conducted principally through the setting of clear objectives
and monitoring of performance against those objectives.
During 2021, we continued to execute on our strategy to acquire, develop and commercialize novel treatments
for rare and orphan diseases. On August 5, 2021, Amryt completed the acquisition of Chiasma, Inc., through
which we acquired our third commercial product, Mycapssa® (octreotide capsules) which is approved in the US
for long-term maintenance therapy in acromegaly patients who have responded to and tolerated treatment
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with octreotide or lanreotide. Mycapssa® is the first and only oral somatostatin analog approved by the FDA.
Mycapssa® has also been submitted to the EMA and is not yet approved in Europe. The combined company will
be a global leader in rare and orphan diseases with three on-market commercial products, a global commercial
and operational footprint and a significant development pipeline of therapies with the financial flexibility to
execute its growth plans. Amryt has a global portfolio of commercial and development-stage rare disease assets,
including three high-value commercial assets and multiple development opportunities in complementary global
markets. We have a demonstrable track record of execution, integration, delivering synergies and driving
growth from acquired businesses and our global infrastructure is primed and ready to acquire more assets. We
believe we have the expertise and capacity to help acquired assets reach their full potential within the Amryt
framework. We are encouraged by our business development pipeline and we believe we will continue to find
and add complementary products to Amryt’s pipeline that will enable us to grow revenues, EBITDA and cash
generation into the future.
Our vision is to become a leading global rare disease company by acquiring, developing and commercializing
medicines that transform the lives of patients & their families around the world. To achieve this vision, we are
pursuing the following strategies:
Drive revenue growth for our existing commercial products. We intend to continue to focus on growing the
sales of lomitapide, metreleptin and Mycapssa® in the markets and indications we currently sell them. We
also intend to expand the market opportunity by seeking approval for the use of lomitapide to treat
pediatric HoFH, for the use of metreleptin to treat a PL indication in the US and expand the indication of
Mycapssa® beyond acromegaly into carcinoid syndrome associated with neuroendocrine tumors.
Complete regulatory filings with the FDA and EMA and commercialize our lead development candidate,
Oleogel-S10, for the treatment of severe EB. The pivotal EASE Phase 3 trial for Oleogel-S10 for the treatment
of cutaneous manifestations of severe EB, is now complete. The product does not currently have regulatory
approval to treat EB but has been submitted to the FDA for approval and in June 2021, Amryt received
confirmation from the FDA that its NDA for Oleogel-S10 had been accepted and granted priority review. On
February 28, 2022, Amryt announced that the FDA communicated that it had completed its review of the
NDA for Oleogel-S10 and has determined that the application cannot be approved in its present form. The
FDA has asked Amryt to submit additional confirmatory evidence of effectiveness for Oleogel-S10 in EB.
Amryt intends to discuss with the FDA the nature of the data required to address the Agency’s concerns. In
Europe, a Marketing Authorization Application (“MAA”) for Oleogel-S10 was accepted for assessment by
the EMA in March 2021. The positive opinion recommends the approval of Filsuvez® in the EU for the
treatment of partial thickness wounds associated with dystrophic and junctional EB in patients six months
and older. Based on this CHMP recommendation a decision by the EC is expected on the Filsuvez®
application within 67 days. If approved, we intend to commercialize Oleogel-S10 in the US and the EU and
evaluate go-to-market strategies for other key markets globally.
Leverage our global commercial, medical affairs, market access and patient advocacy infrastructure. We
intend to leverage this infrastructure and expertise to commercialize our development-stage pipeline,
including our lead development candidate, Oleogel-S10, if approved, and any rare disease assets we may
acquire or in-license in the future. We also intend to evaluate life-cycle opportunities for Oleogel-S10 in
other severe, orphan dermatology conditions where there is high unmet medical need to seek to maximize
its value over its period of exclusivity.
Continue to develop our gene therapy platform with an initial focus on AP103, the first product candidate
derived from the platform technology, for the treatment of DEB. AP103 is currently in preclinical
development for the treatment of DEB. We intend to initiate clinical development of AP103 in 2023.
Continue to evaluate opportunities to expand our rare disease product portfolio and pipeline. We believe
we are well positioned to continue to acquire or in-license rare disease assets that we believe we can
efficiently develop and commercialize through our global infrastructure.
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Financial Review
Revenues
The revenues for each of our significant products were as follows:
Year ended December 31,
2021
2020
Increase / (Decrease)
$’000
$’000
$’000
%
Metreleptin
141,242
106,872
34,370
32.2%
Lomitapide
73,867
74,750
(883)
(1.2%)
Mycapssa®
6,407
—
6,407
—
Other
1,027
985
42
4.3%
Total revenues
222,543
182,607
39,936
21.9%
Total product sales were $222.5 million for the year ended December 31, 2021, compared to $182.6 million for
the year ended December 31, 2020. The increase in revenues was due to increased sales of metreleptin as well
as our acquisition of Chiasma in August 2021. Sales of metreleptin lomitapide, and Mycapssa® comprise product
sales and royalties on sales, respectively, made by our licensees.
Metreleptin
We generated revenues from product sales of metreleptin of $141.1 million and royalties of $0.1 million from
Shionogi for the year ended December 31, 2021, compared to $106.8 million and $0.1 million for the year ended
December 31, 2020, respectively. The increase is driven by continued EMEA launch success, regular tender
orders in Brazil and US patient growth. 49.7% of product sales for metreleptin were in the United States, with
the remaining 50.3% in the European Union and other international markets.
Lomitapide
We generated revenues from product sales of lomitapide of $70.5 million and Recordati royalties of $3.4 million
for the year ended December 31, 2021, compared to $71.8 million and $3.0 million for the year ended December
31, 2020, respectively. The decrease is primarily due to the impact of competition in the US offsetting underlying
continued growth in Europe and other territories. 44.5% of product sales for lomitapide were in the United
States, with the remaining 55.5% in the European Union and other international markets.
Mycapssa®
We generated revenues from product sales of Mycapssa® of $6.4 million for the period from the date of the
acquisition of Chiasma on August 5, 2021, to December 31, 2021.
Other
Other revenues relate to sales from our in-house derma-cosmetic range of products, Imlan, and our early access
program for Oleogel-S10. Imlan is marketed solely in Germany as a treatment for sensitive, allergy-prone skin.
The increase in revenues in the year ended December 31, 2021, was mainly due to higher sales from our early
access program product, Oleogel-S10. We intend to market Oleogel-S10 under the brand name of Filsuvez if it
is approved for the treatment of EB.
Cost of Sales:
Year ended December 31,
2021
2020
Increase / (Decrease)
$’000
$’000
$’000
%
Cost of product sales
22,029
21,796
233
1.1%
Write-down of inventories
5,688
4,058
1,630
40.2%
Reversal of write-down of inventories
(932)
—
(932)
(100%)
Amortization of acquired intangibles
48,945
42,966
5,979
13.9%
Amortization of inventory fair value step-up
4,417
27,617
(23,199)
(84.0%)
Royalty expenses
25,973
22,592
3,381
15.0%
Total cost of sales
106,119
119,029
(12,910)
(10.8%)
Total cost of sales was $106.1 million for the year ended December 31, 2021, representing the cost, including
royalties, of selling metreleptin, lomitapide and Mycapssa®, the cost of delivery of goods sold to customers,
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including the costs associated with the services provided by the distributors to import and deliver the goods, the
non-cash intangible amortization, and the non-cash inventory fair value step-up expenses and write-down of
inventories to fair value less costs to sell recognized as an expense. Total cost of sales was $119.0 million for the
year ended December 31, 2020. The decrease is driven by a reduction in the non-cash inventory fair value step-
up expenses which reduced due to the full amortization of the Aegerion related inventory fair value step-up in
early 2021 and a lower amortization from the Chiasma related inventory fair value step-up from August 5, 2021.
This decrease is offset by additional costs related to the cost, including royalties, of selling metreleptin,
lomitapide and Mycapssa®, and non-cash intangible amortization.
The cost of product sales in the year ended December 31, 2021, increased by $0.9 million, and royalty expenses
increased by $3.4 million in 2021 compared to the year ended December 31, 2020. The acquisition of Mycapssa®
as well as increased costs for lomitapide for markets outside the EMEA and metreleptin for all markets largely
drove this increase in costs. Following the acquisition of Chiasma, we are now selling three commercial products
with two being sold on a global basis and one commercial product being solely sold in the United States. This
results in a higher cost of producing our commercial products, higher royalties on sales, and higher costs of
delivery of goods sold to customers, including the costs associated with the services provided by our distributors
to import and deliver the goods.
Amortization of acquired intangible assets was $48.9 million in 2021 compared to $43.0 million in 2020. This
relates to the amortization charge on the three commercial assets purchased as part of the Aegerion and
Chiasma acquisitions. The increase is driven by amortization related to the period from the date of the Chiasma
acquisition on August 5, 2021, to December 31, 2021.
The non-cash inventory fair value step-up expense was $4.4 million in 2021, compared to $27.6 million in 2020.
This relates to the difference between the estimated fair value and the book value of inventory acquired from
as part of the acquisitions of Aegerion and Chiasma which is being amortized over the estimated period that we
expect to sell this inventory. The decrease in the non-cash inventory fair value step-up expense is due to the
inventory step-up recognized as part of the Aegerion acquisition being fully amortized at the beginning of 2021
and the inventory fair value step-up from the Chiasma acquisition, which was lower than that from the Aegerion
acquisition, being amortized from August 5, 2021.
Research and Development Expenses
Research and development expenses consist primarily of costs related to clinical studies and outside services,
post-approval commitment studies, personnel expenses and other research and development costs. Study costs
and outside services costs relate primarily to services performed by clinical research organizations, materials
and supplies, and other third-party fees. Research and development expenses for the year ended December 31,
2021, were $37.7 million, representing 24.3% of our total operating expenses, compared to $27.6 million, or
25.1% of total operating expenses, for the year ended December 31, 2020. Research and development expenses
in both years were primarily driven by the clinical advancement of Oleogel-S10 as we continued our global EASE
study. Research expenses in 2021 comprised $15.9 million in employee compensation, $14.9 million of amounts
paid to clinical research organizations, and $6.9 million of other outsourced services. Research expenses in 2020
comprised $11.7 million in employee compensation, $11.3 million of amounts paid to clinical research
organizations, and $4.6 million of other outsourced services.
Selling, General and Administrative Expenses
Selling, general and administrative expenses were $92.0 million for the year ended December 31, 2021,
representing 59.3% of our total operating expenses, compared to $76.7 million for the year ended December
31, 2020, representing 69.7% of our total operating expenses. The increase in selling, general and administrative
expenses was primarily due to an increase in compensation-related expenses, primarily driven by higher
headcount following the acquisition of Chiasma, and an increase in other expenses related to the expansion and
support of our business.
Restructuring and Acquisition Costs
Restructuring and acquisition costs for the year ended December 31, 2021, were $16.9 million compared to $1.0
million for the year ended December 31, 2020. These costs primarily relate to professional fees associated with
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the acquisition of Chiasma, which was predominantly completed during 2021. The expenses also include
severance costs following the completion of the Chiasma acquisition.
Share-Based Payment Expenses
Non-cash share-based payment expenses for the year ended December 31, 2021, were $8.3 million, compared
to $4.7 million in the year ended December 31, 2020. We issue share options and restricted share units as an
incentive to senior management and employees. The fair value is measured at the grant date using the Black-
Scholes model and amortized over the period during which the awards vest.
Impairment charge
There was no impairment charge recorded for the years ended December 31, 2021, and December 31, 2020.
Non-Cash Change in Fair Value of Contingent Consideration
We compute the fair value of the contingent consideration arising from the acquisition of Birken AG (now Amryt
GmbH). The Amryt GmbH consideration relates to milestone payments of up to €35 million and royalty payments
that are payable to the previous owners of Amryt GmbH, which are triggered by regulatory approvals of Oleogel-
S10 for the treatment of EB from the FDA or the EMA, as well as future sales-driven milestones. The finance gain
for the year ended December 31, 2021, was $18.4 million compared to a charge of $27.8 million for the year
ended December 31, 2020. The gain in 2021 is driven by a change in the probabilities and a decrease in discount
rates used in calculating the fair value of the contingent consideration. The probability chance of success, based
on management’s expertise and experience for orphan drugs and taking into account the unique circumstances
applying to approval process of this product, was revised for the financial year ended December 31, 2021. The
probability chance of success was updated following the receipt of a CRL from the FDA which asked Amryt to
submit additional confirmatory evidence of effectiveness for Oleogel-S10 in EB, and following the positive
opinion adopted by the CHMP, recommending the approval of Filsuvez® in the EU for the treatment of partial
thickness wounds associated with dystrophic and junctional EB in patients six months and older. Based on this
CHMP recommendation a decision by the EC is expected on the Filsuvez® application within 67 days.
Additionally, the discount rate used in the calculation of the fair value of the contingent consideration was
decreased which was due to the significant risk reduction in the Group over the last 12 months following the
growth in commercial revenues, the positive top-line data on the Phase 3 EASE trial of Oleogel-S10, the positive
CHMP opinion recommending the approval of Filsuvez in the EU, the addition of a third commercial product in
Mycapssa, and the recent refinancing of our term debt facilities with a significant reduction in the interest rate.
Non-Cash Contingent Value Rights Finance Expense
We issued CVRs pursuant to which up to $85 million may become payable to Amryt shareholders and option
holders who were shareholders prior to completion of the Aegerion acquisition, if certain regulatory approval
and revenue milestones are met in relation to Oleogel-S10.
The $41.5 million non-cash CVR gain for the year ended December 31, 2021, represents the revised estimated
expected cash flows and the effective interest rate unwind on amortized cost between the carrying value of the
CVRs for the 12 months to the reporting date of December 31, 2021. The non-cash CVR loss for the year ended
December 31, 2020, was $12.0 million. The gain recognized in the 2021 Consolidated Statement of
Comprehensive Income/(Loss) is mainly driven by changes in the expected timing of milestones being met and
the related expected amount due as well as a change in the probability chance of success. Milestone payments
related to the regulatory approval from the FDA and EMA have been updated to reflect the expecting timing of
achieving regulatory approval and, in turn, the related amount due, which is based on a sliding scale on a linear
basis from December 31, 2021, to zero if approved before July 1, 2022. The probability chance of success was
updated based on management’s expertise and experience for orphan drugs and taking into account the unique
circumstances applying to approval process of this product, following the receipt of a CRL from the FDA, which
asked Amryt to submit additional confirmatory evidence of effectiveness for Oleogel-S10 in EB, and following
the positive opinion adopted by the CHMP, recommending the approval of Filsuvez® in the EU for the treatment
of partial thickness wounds associated with dystrophic and junctional EB in patients six months and older. Based
on this CHMP recommendation a decision by the EC is expected on the Filsuvez® application within 67 days.
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Annual Report and Accounts
for the year ended December 31, 2021
Net Finance Expense - Other
Other net finance expense was $27.9 million for the year ended December 31, 2021, compared to $19.6 million
for the year ended December 31, 2020. Other net finance expense mainly relates to interest on loans and foreign
exchange losses, which amounted to $23.2 million and $4.1 million, respectively, for the year ended December
31, 2021. Interest on loans was $22.0 million for the year ended December 31, 2020. The increase in 2021 is
mainly due to the compounding of interest on the Secured Credit Facility, where interest at 6.5% is added to the
principal loan balance outstanding at each quarter. In 2020 the foreign exchange gain amounted to $2.7 million
and in both years the foreign exchange gain/(loss) primarily relates to the translation of euro and sterling-
denominated net monetary amounts held by subsidiaries with a non-U.S. dollar functional currency.
Operating Loss and Total Comprehensive Loss
The operating loss before finance expense for the year ended December 31, 2021, amounted to $38.6 million
(2020: $46.5 million).
In addition to analyzing our operating results on an IFRS basis, management also reviews our results on an
‘‘Adjusted EBITDA’’ basis. Adjusted EBITDA is defined as net loss before income taxes, non-cash change in fair
value of contingent consideration, non-cash contingent value rights finance expense, net finance expense –
other, amortization expense of intangible assets, amortization of inventory fair value step-up, depreciation
expense, share-based payments, and impairment charges.
The following table reconciles adjusted EBITDA to total comprehensive loss for the period attributable to the
equity holders of the Company:
Year ended December 31,
2021
2020
$’000
$’000
Profit/(loss) for the year attributable to equity holders of the Company
1,000
(104,527)
Income taxes
(7,562)
(1,332)
Non-cash change in fair value of contingent consideration
(18,407)
27,827
Non-cash contingent value rights (gain)/loss
(41,525)
12,004
Net finance expense – other
27,906
19,569
Amortization of inventory fair value step-up
4,417
27,617
Amortization expense - other
49,091
43,168
Depreciation expense
1,652
1,297
Share-based payments
8,341
4,729
Adjusted EBITDA
24,913
30,352
Liquidity and Capital Resources
We had unrestricted cash and cash equivalents of $113.0 million and $118.6 million as at December 31, 2021,
and December 31, 2020, respectively. We have financed our operations primarily through sales of our
commercial products, sales of our ordinary shares and debt financing. We expect to incur significant expenses
for the foreseeable future as we continue commercializing our approved products and advancing the clinical
development of our product candidates. We expect that our R&D and SG&A costs will increase in connection
with conducting clinical trials for our product candidates and any new product candidates we acquire or develop
and due to the costs of seeking marketing approval for our product candidates in Europe, the United States and
other jurisdictions.
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Annual Report and Accounts
for the year ended December 31, 2021
Cash Flows
The table below provides selected cash flow information for the periods indicated:
Year ended December 31,
2021
2020
$’000
$’000
Net cash flow from operating activities
15,540
26,891
Net cash flow from / (used in) investing activities
106,402
(2,379)
Net cash flow (used in)/ from financing activities
(125,426)
26,028
Exchange differences and other movements
(2,282)
1,029
Net change in cash and cash equivalents
(5,766)
51,569
Net Cash Flow From Operating Activities
Net cash from operating activities was $15.5 million for the year ended December 31, 2021, compared to net
cash from operating activities of $26.9 million for the year ended December 31, 2020. The decrease of $11.4
million was primarily driven by the increased restructuring and acquisition costs related to the acquisition of
Chiasma along with the increased scale of our business and working capital fluctuations.
Net Cash Flow From / (Used in) Investing Activities
Net cash from investing activities was $106.4 million for the year ended December 31, 2021, and primarily
related to the Chiasma cash balance of $107.9 million, which we received in acquiring Chiasma.
Net cash used in investing activities was $2.4 million for the year ended December 31, 2020, and primarily
related to payments for property, plant and equipment and payments for intangible assets.
Net Cash Flow (Used in) / From Financing Activities
Net cash flow used in financing activities was $125.4 million for the year ended December 31, 2021. In
conjunction with the acquisition of Chiasma, we repaid US$116.6 million of debt that was outstanding on August
5, 2021. The remaining cash outflows mainly consisted of interest paid on our Secured Credit Facility of $5.8
million and on the Convertible Notes of $6.3 million.
Net cash flow from financing activities was $26.0 million for the year ended December 31, 2020. On December
8, 2020, we entered into a securities purchase agreement with several institutional accredited investors for the
private placement of 3,200,000 ADSs, at a purchase price of $12.50 per ADS, yielding gross proceeds of $40
million and net proceeds of $37.9 million. The private placement included new and existing investors including
Stonepine Capital, LP, Aquilo Capital Management, LLC, Amati Global Investors, Athyrium Capital Management,
LP and Highbridge Capital Management, among others. These cash inflows were partially offset by interest paid
on our Secured Credit Facility of $4.1 million and on the Convertible Notes of $6.4 million.
Debt Financing
The principal debt obligations related to our $81 million Secured Credit Facility and our Convertible Notes with
an aggregate principal amount of $125 million and the interest associated with these facilities. The Convertible
Notes bear interest at a rate of 5.0% per year, payable semi-annually in arrears on 1 April and 1 October of each
year, beginning on April 1, 2020. The Convertible Notes will mature on April 1, 2025, unless earlier repurchased
or converted. The Secured Credit Facility had a five-year term from date of draw down and matures in 2024.
Interest was payable at our option at the rate of 11% per annum paid in cash on a quarterly basis or at a rate of
6.5% paid in cash plus 6.5% paid in kind that would be paid when the principal was repaid, which rolls up and is
included in the principal balance outstanding, on a quarterly basis. On February 18, 2022, the Secured Credit
Facility was repaid in full, and the Group secured a $125 million Senior Credit Facility from funds managed by
the Ares of which US$105 million was drawn down to facilitate the prepayment of the existing Secured Credit
Facility. In repaying the Secured Credit Facility, Amryt incurred an exit fee of 5.00% of the outstanding principal
amount as at the prepayment date. The new Secured Credit Facility has a quarterly blended cash interest rate
of SOFR+5.87% (assuming the facility is fully drawn down), subject to a 0.90% SOFR floor.
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Annual Report and Accounts
for the year ended December 31, 2021
Key Performance Indicators
The key performance indicators for the Company are based on the overall performance of the Group.
Revenue growth is a key measure for the Group. We currently generate revenue, both product and royalty
revenues, from global sales of lomitapide, metreleptin and Mycapssa®. A key focus for us is to drive revenue
growth in the markets and indications that we currently sell them. We also intend to expand the market
opportunity for these products – seeking approval for the use of lomitapide to treat pediatric HoFH patients, for
the use of metreleptin to treat PL in the US, for Mycapssa® in Europe, and to expand the indication of Mycapssa®
beyond acromegaly into carcinoid syndrome associated with neuroendocrine tumors.
Adjusted EBITDA growth is an important financial performance indicator for the Group. The positive momentum
we experienced during 2019 has continued through 2020 and 2021. Most importantly, we have experienced
strong revenue growth and this strong revenue performance drove our eighth consecutive quarter of positive
EBITDA in Q4 2021 and generated full year operating cash flows before Chiasma deal costs of $29.8M.
Our ability to leverage our global commercial and medical infrastructure is a key performance indicator to ensure
we achieve significant synergies arising from acquisitions. This has been a key focus for the Group.
As we are currently in the pre-revenue stage for our lead development asset, Oleogel-S10, a core focus of our
business is on progression of this drug candidate through the clinic and regulatory approval into an approved
product for the treatment of EB. Following the positive date readout from our EASE trial, we are currently
progressing regulatory submissions for Oleogel-S10 with the relevant authorities in both the US and Europe and
preparing for launch, if approved. Oleogel-S10 is under review by the EMA and the FDA. On April 22, 2022, the
CHMP adopted a positive opinion, recommending the approval of Filsuvez® in the European Union (EU) for the
treatment of partial thickness wounds associated with dystrophic and junctional Epidermolysis Bullosa (EB) in
patients six months and older. Based on this CHMP recommendation a decision by the European Commission
(EC) is expected on the Filsuvez® application within 67 days of the recommendation. On February 28, 2022, we
received a CRL from the FDA which asked Amryt to submit additional confirmatory evidence of effectiveness for
Oleogel-S10 in EB. Amryt intends to discuss with the FDA the nature of the data required to address the agency’s
concerns.
Identifying, acquiring and developing new drug candidates to build shareholder value is key to our goal of
becoming a global leader in rare and orphan diseases. In 2018, the Group in-licensed our first gene therapy
candidate, AP103. This patented technology which Amryt in-licensed from University College Dublin (“UCD”)
involves the use of a novel gene therapy delivery mechanism using HPAE polymer technology. If successful, this
could eliminate the requirement for viruses as delivery vectors and therefore provides a potential competitive
advantage to Amryt. In 2019, the Group completed the acquisition of Aegerion which was a transformational
deal for Amryt. This acquisition diversified our portfolio comprising of two commercial rare disease products as
well as a development-stage pipeline focused on rare diseases. Subsequently, in August 2021, the Group
completed the acquisition of Chiasma through which the Group acquired a third commercial product,
Mycapssa®. We continue to evaluate opportunities to expand our rare disease portfolio and pipeline.
Risks and Uncertainties
The management of risk is a key responsibility of the Company and Board of Directors. The Board ensures that
all key risks are understood and appropriately managed considering the Group’s strategy and objective, and that
an effective risk management process, including appropriate internal controls, is in place to identify, quantify
and manage important risks.
Operational Risk Management
To effectively manage the operational risk, the Company regularly reviews progress in key activities as follows:
The Board of Directors meets regularly and reviews operational progress against Amryt’s strategy and
key objectives;
The senior management meets at least three times a month to review operational progress and, during
these meetings, they identify and discuss areas of risk. If appropriate, these risks will be communicated
to the Board for further discussion; and
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Annual Report and Accounts
for the year ended December 31, 2021
Commercial, clinical and other teams meet on a regular basis to review progress of all key projects. As
part of these discussions, any key issues identified will be elevated for discussion with the Senior
Management team and Board of Directors.
Principal Risk Factors
The Company is subject to risk factors relating to the business and operations of the Group in the healthcare
industry. The following summarizes the principal risks and uncertainties of the Company, however further risk
factors affecting the Group can be found in the Risk Factors section of our 20-F for the period ended December
31, 2021 at https://www.amrytpharma.com/investors/reports/:
Organizational Risk
The Company is dependent on the experience and skills of the Executive and Non-Executive Directors and senior
management to successfully execute its strategy. The loss of such key contributors would present a risk to the
business. The ability to continue to attract and retain employees with the appropriate expertise and skills cannot
be guaranteed.
Competition Risk
The biotechnology and pharmaceutical industries are very competitive. The Company’s competitors include
major multinational pharmaceutical companies, biotechnology companies and research institutions. Many of its
competitors have substantially greater financial, technical and other resources, such as larger research and
development staff. Amryt’s competitors may succeed in developing, acquiring or licensing drug product
candidates that are earlier to market, more effective or less costly than any product candidate which the Group
is currently developing or which it may develop and this may have a material adverse impact on the Group.
Funding Risk
Significant funds are required to continue the development of the Company’s product portfolio. There is also no
certainty that it will be possible to raise any additional funds at all or on acceptable terms. Debt financing, may
place restrictions on the financial operating activities of the Group and Company. If the Company is unable to
obtain additional financing as required, it may be required to reduce the scope of its operations.
Strategic Risk
Our future success will depend on our ability to implement our strategy to develop and expand our existing
portfolio of drugs to treat patients with rare diseases and to create a rare disease company with a diversified
offering of multiple development stage and commercial assets that can provide us with scale to support future
growth. Implementing our strategy requires substantial time and resources from our management team. Our
Board and management may not be able to successfully implement our strategy or other strategies to be
developed by management, and implementing these strategies may not sustain or improve, and could even
harm, our business, financial condition, results of operations and prospects.
Risk that we may not be successful in our efforts to build a pipeline of product candidates and develop additional
marketable products
We operate in the biopharmaceutical sector and have product candidates in various stages of clinical and
preclinical development. In addition, we may continue to explore other opportunities within the sector in order
to expand our present development pipeline. Industry experience indicates that there may be a very high
incidence of delay or failure to produce valuable scientific results in relation to our present development
pipeline. In addition, disruptions caused by the COVID-19 pandemic may increase the likelihood that we
encounter such difficulties or delays in initiating, enrolling, conducting or completing our planned and ongoing
clinical trials. We may not be successful in developing new products based on our scientific discoveries. We will
also face the risk that in developing new products we may spend substantial sums of money and the new
products developed may not effectively meet the perceived need or may not be successfully commercialized.
Our ability to develop new products relies on, among other things, the recruitment of sufficiently qualified
research and development partners with expertise in the biopharmaceutical sector. We may not be able to
develop relationships or recruit research partners of a sufficient caliber to satisfy the rate of growth and develop
our future pipeline.
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Strategic Report
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Annual Report and Accounts
for the year ended December 31, 2021
Section 172 Statement
From the perspective of the Directors, the matters for consideration under Section 172 of the Companies Act
(“s172”) have been considered to an appropriate extent by Amryt. Such consideration is included in the
statements set out below, noting the Directors’ duty under s172 to act in good faith to promote the success of
the Company for the benefit of its shareholders but having regard amongst other matters to the following:
•
the likely consequences of any decision in the long term;
•
the interests of the Company’s employees;
•
the need to foster the Company’s business relationships with customers and other stakeholders;
•
the impact of the Company’s operations on the community and the environment;
•
the desirability of the Company maintaining a reputation for high standards of business and conduct;
and
•
the need to act fairly as between members of the Company.
For Amryt, compliance is one of the cornerstone values and forms the basis of all decisions and activities. It is
the key to integrity in conducting business and as a global business. The Directors are committed to ensuring
that all business is carried out in full accordance with the law as well as internal rules and principles.
Environmental matters
We currently have both in-house and outsourced research, development, testing and manufacturing activities.
These activities are subject to various environmental, health and safety laws and regulations. If we or our
partners fail to comply with such laws and regulations, we could be subject to fines or other sanctions.
Energy and Carbon Reporting
Quantification and reporting methodology
This report was compiled by Management. The 2019 UK Government Environmental Reporting Guidelines and
the GHG Protocol Corporate Accounting and Reporting Standard (revised edition) were followed to ensure the
Streamlined Energy and Carbon Reporting (“SECR”) requirements were met.
The energy data was collated using existing reporting mechanisms. These methodologies provided continuous
record of electricity use. The energy data was converted to carbon emissions using the 2020 UK Government
GHG Conversion Factors for Company Reporting. The associated emissions are divided into the combustion of
fuels and the operation of facilities (scope 1), purchased electricity, heating and cooling (scope 2) and in-direct
emissions that occur as a consequence of company activities (scope 3). During the year ended December 31,
2021, the Group only had emissions relating to Scope 1 and Scope 2.
Estimations
The total consumption for energy supplies are as follows:
2021
2020
Consumption by the company (in KWH)
1,300,281
1,639,966
Emissions associated with the reported energy use (tCO2E)
368.48
441.38
Intensity Ratio
The chosen intensity ratio is the total gross emissions in metric tonnes CO2e (mandatory emissions) per
employee.
2021
2020
Tonnes of CO2e per employee
1.95
2.71
Energy Efficiency Action for the year ended December 31, 2021
Energy efficiency is an important issue for the Group and the following actions related to reducing energy use
were implemented with the current reporting period.
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Annual Report and Accounts
for the year ended December 31, 2021
The Group has three principal office locations – the Group HQ in Dublin, Ireland, the US HQ in Boston, USA and
a manufacturing facility in Niefern, Germany. Energy consumption in 2021 continued to be low as office locations
were temporarily closed in line with “work from home” guidance from Government authorities in Europe and
the US. The Group has implemented a hybrid model and intends to continue operate a hybrid model going
forward, reducing the number of employees in the office and therefore reducing energy consumption.
Additionally, during 2021 Amryt started a project to treat emissions coming from the extraction plant by
implementing an abatement system. This will be fully implemented during 2022.
Approval
This strategic report was approved by the Board on May 31, 2022.
Joe Wiley
Director
Amryt Pharma plc
Board of Directors
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Annual Report
for the year ended December 31, 2021
Board of Directors
Ray Stafford – Non-Executive Chairman
Skills, Competence and Experience
Mr. Stafford has been a director of Amryt since 2016. He has worked in the pharmaceutical industry for more
than 30 years. He has served as Chairman, Chief Executive Officer and majority shareholder of the Tosara Group
which owned, manufactured and marketed the successful international brand Sudocrem, and was ultimately
integrated into the U.S.-based, NYSE-listed company Forest Laboratories, Inc. in 1988. Mr. Stafford held
numerous senior positions within such corporations, including Chief Executive Officer of Forest UK and Ireland
as well as Chief Executive Officer of Forest Laboratories Europe since 1999. Mr. Stafford retired in 2014 following
the sale of Forest Laboratories, Inc. to Actavis Plc (now Allergan plc) in a $28 billion transaction where Mr.
Stafford was Executive Vice President of Global Marketing. Separately, Mr. Stafford also founded one of Ireland’s
current leading multi-channel sales, marketing and distribution service providers approved by the Irish
Medicines Board (now, The Health Products Regulatory Authority) to service the wholesale and retail trade.
Committee Membership
Audit Committee (Member)
Appointment Date
Appointed as Non-Executive Chairman on September 24, 2019
Dr. Joe Wiley – Chief Executive Officer
Skills, Competence and Experience
Joe Wiley founded Amryt and has served as Chief Executive Officer since 2015. He has over 20 years of
experience in the pharmaceutical, medical and venture capital industries. Prior to Amryt, Dr. Wiley opened and
led the European office of Sofinnova Ventures Inc. He was previously a medical director at Astellas Pharma
Limited. Prior to joining Astellas, he held investment roles at Spirit Capital SA, Inventages Venture Capital
Investment Inc. and Aberdeen Asset Managers Private Equity Limited. Dr. Wiley trained in general medicine at
Trinity College Dublin, specializing in neurology. He holds a Masters of Business Administration from INSEAD and
is also a Member of the Royal College of Physicians in Ireland.
Appointment Date
September 24, 2019
George P. Hampton Jr – Non-Executive Director
Skills, Competence and Experience
Mr. Hampton has been a director of Amryt since 2019. He joined Currax Pharmaceuticals in April of 2019 as Chief
Executive Officer and serves on its board of directors. Prior to joining Currax, Mr. Hampton served as executive
vice president, primary care business unit for Horizon Pharmaceuticals (HZNP), a public biopharmaceutical
company. In this role he was tasked with leading the company’s forward-looking strategy, as well as establishing
operational goals for the business. Previously, Mr. Hampton served as executive vice president, global orphan
business unit and international operations for Horizon Pharmaceuticals. He has more than 25 years of
experience as a successful executive in the pharmaceutical and biotechnology field on both a national and
international scale including specific expertise in rare disease (ACTIMMUNE, RAVICTI, PROCYSBI), autoimmune
(HUMIRA), primary care, orthopedic (CELEBREX), diabetes (BYETTA), anti-infectives and cardiovascular spaces.
This includes roles of increasing responsibility in sales, marketing and operations at G.D. Searle, Abbott (now
AbbVie), Amylin and Horizon Pharmaceuticals. Mr. Hampton earned his Bachelor of Science from Miami
University in Oxford, Ohio. He previously served on the board of IMAC (Nasdaq: IMAC) regeneration medical
centers.
Committee Membership
Remuneration Committee (Chairman)
Appointment Date
September 24, 2019
Amryt Pharma plc
Board of Directors
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Annual Report and Accounts
for the year ended December 31, 2021
Raj Kannan – Non-Executive Director
Skills, Competence and Experience
Mr. Kannan was appointed Chief Executive Officer of Chiasma, Inc. in June 2019. On August 6, 2021, Mr. Kannan
resigned as Chief Executive Officer of Chiasma and joined the board of Amryt as a Non-Executive Director. Mr.
Kannan is the CEO of Aerie Pharmaceuticals. He has over 25 years of experience leading and developing
companies. He has effectively led and grown organizations and supported multiple successful launches across
therapeutic areas in the U.S. and globally. Prior to joining Aerie, Mr. Kannan was Chief Executive Officer and
President of Chiasma, Inc., where he led the organization through the approval and the launch of the first oral
therapy in over a decade for patients with acromegaly and subsequently through the acquisition by Amryt
Pharma Plc. Before that, Mr. Kannan was Chief Commercial Officer at Kiniksa Pharmaceuticals, Ltd. (“Kiniksa”),
where he built the commercial operations, including sales, marketing, and business analytics functions. Prior to
Kiniksa, he served as the Global Head of the Neurology and Immunology business franchise at Merck KGaA,
where he was responsible for transforming the largest franchise into a growth franchise with $2 billion in annual
revenues through significant strategic shifts in investment to support new product introductions and through
recalibration of pipeline investments. Before that, Mr. Kannan spent 10 years at Boehringer Ingelheim
International GmbH in the U.S., Canada, and in Germany, including as Global Marketing Head of the
Cardiovascular Franchise, where he was responsible for more than $3.5 billion in annual revenues.
Appointment Date
August 5, 2021
Dr. Roni Mamluk – Non-Executive Director
Skills, Competence and Experience
Dr. Mamluk, Ph.D. joined the Board of Directors of Chiasma, Inc. in June 2017. On August 6, 2021, Dr. Mamluk
resigned as a non-executive director of Chiasma and joined the board of Amryt as a Non-Executive Director. Dr.
Mamluk currently serves as President and Chief Executive Officer of Ayala Pharmaceuticals, Inc., a clinical-stage
biopharmaceutical company dedicated to developing targeted cancer therapies for people living with genetically
defined cancers, and serves on its board of directors. She joined Chiasma in 2006 and led the creation of its TPE
technology and subsequently Mycapssa® development. Dr. Mamluk fulfilled multiple roles at Chiasma including
Chief Development Officer from March 2015 to March 2017, Chief Executive Officer from April 2013 to March
2015 and held various roles in the Company from 2006 to April 2013, including Chief Operating Officer and Vice
President, Research and Development. Prior to joining Chiasma, Dr. Mamluk led nonclinical research and
development at Adnexus Therapeutics, Inc. Dr. Mamluk received her B.A. and Ph.D. from the Hebrew University.
She completed her post-doctoral fellowship at Children’s Hospital/Harvard Medical School in the field of
angiogenesis.
Appointment Date
August 5, 2021
Amryt Pharma plc
Board of Directors
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Annual Report and Accounts
for the year ended December 31, 2021
Dr. Alain H. Munoz – Non-Executive Director
Skills, Competence and Experience
Dr. Munoz has been a Director of Amryt since 2019. He is an entrepreneur and independent management
consultant in the pharmaceutical and biotechnology industry and has over 30 years of experience in the industry
at the executive level. Dr. Munoz worked with the Fournier Group as Research and Development director and
thereafter as Senior Vice President of the Pharmaceutical Division. Prior to serving at Fournier, he served at
Sanofi Group, first as director in the cardiovascular and anti-thrombotic products department, and thereafter as
Vice President of international development. Dr. Munoz is qualified in cardiology and anesthesiology from the
University Hospital of Montpellier, France where he was head of the clinical cardiology department. He has been
a member of the Scientific Committee of the French drug agency and Chairman of the Board of Hybrigenics SA
and Novagali Pharma acquired by Santen Pharmaceuticals. He presently is an independent board member of
Auris Medical Holding AG (Nasdaq: EARS), Zealand Pharma A/S (Nasdaq: ZEAL) and Chairman of Acticor-biotech
(Euronext: ALACT.PA). Mr. Munoz received an undergraduate degree from International Institute for
Management Development, a doctorate from the University of Montpellier and a graduate degree from Centre
Hospitalier Universitaire Pitie-Salpetriere.
Committee Membership
Remuneration Committee (Member)
Appointment Date
September 24, 2019
Donald K. Stern – Non-Executive Director
Skills, Competence and Experience
Mr. Stern has been a Director of Amryt since 2019. He was previously a director of Novelion, Aegerion’s former
parent company, and was a member of Aegerion’s board of directors from September 2015 to October 2016.
Mr. Stern serves as Managing Director of Corporate Monitoring & Consulting Services at Affiliated Monitors,
Inc., a consulting firm providing independent integrity monitoring services and compliance services across a wide
range of regulated industries and professions. He is also Of Counsel to the Boston law firm of Yurko Partners,
P.C.. He has had a diverse and distinguished legal career, split between private practice and public service. Prior
to joining Affiliated Monitors, Inc., Mr. Stern was a partner at three major law firms: Cooley LLP, Bingham
McCutchen LLP and Hale & Dorr LLP (now Wilmer Cutler Pickering Hale and Dorr LLP). Mr. Stern also served as
the U.S. Attorney for the District of Massachusetts, the Chief Legal Counsel to Governor Michael S. Dukakis and
the Chief of the Government Bureau in the Massachusetts Attorney General’s office. Mr. Stern holds a Masters
in Laws from University of Pennsylvania Law School, a Juris Doctor degree from Georgetown University Law
Center and a Bachelor of Arts from Hobart College.
Committee Membership
Compliance Committee (Chair)
Audit Committee (Member)
Appointment Date
September 24, 2019
Amryt Pharma plc
Board of Directors
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Annual Report and Accounts
for the year ended December 31, 2021
Dr. Patrick V.J.J. Vink– Non-Executive Director
Skills, Competence and Experience
Dr. Vink has been a Director of Amryt since 2019. He has significant experience as a senior executive, having
worked in the pharmaceutical industry for more than 30 years. Dr. Vink serves as Chairman at BiognoSys AG, a
privately held proteomics company in Switzerland. Dr. Vink also serves as Chairman of venture capital-backed
NMD Pharma, a neurology biopharmaceutical company in Denmark and F2G Ltd, a rare fungal disease UK and
Austria based company. In addition, Dr. Vink is a board member at Santhera AG and Spero Therapeutics, Inc.
and in 2019 began working with Athyrium as a Senior Advisor. While serving in these capacities, Dr. Vink has
been involved in initial public listings and geographic expansions and has contributed to the achievement of
significant development and commercial milestones. Earlier in his career he held several leadership positions
across the industry, including Head of Global Biopharmaceuticals for the Sandoz division of the Novartis Group,
Vice President International Business for Biogen Inc., and Head of Worldwide Marketing, Cardiovascular and
Thrombosis at Sanofi-Synthelabo Ltd. Dr. Vink also served as a member of the Executive Committee of the
European Federation of Pharmaceutical Industries and Associations from 2013 to 2015. Dr. Vink graduated as a
medical doctor from the University of Leiden, Netherlands in 1988 and obtained his Masters of Business
Administration in 1992 at the University of Rochester.
Committee Membership
Compliance Committee (Member)
Appointment Date
September 24, 2019
Stephen T. Wills – Non-Executive Director
Skills, Competence and Experience
Mr. Wills became a Director of Amryt in 2019. He currently serves as the Chief Financial Officer (since 1997), and
Chief Operating Officer (since 2011) of Palatin Technologies, Inc. (NYSE: PTN), a biopharmaceutical company
developing targeted, receptor-specific peptide therapeutics for the treatment of diseases with significant unmet
medical need and commercial potential. Mr. Wills serves as Chief Financial Officer of Cactus Acquisition Corp
(Nasdaq: CCTS), a Special Purpose Acquisition Company (SPAC). Mr. Wills serves on the boards of directors of
MediWound Ltd. (Nasdaq: MDWD), a biopharmaceutical company focused on treatment in the fields of severe
burns, chronic and other hard to heal wounds, since April 2017, and as Chairman since January 2018, and of
Gamida Cell Ltd. (Nasdaq: GMDA), a leading cellular and immune therapeutics company, since March 2019 (audit
chair and compensation and finance committee member). Mr. Wills also has served on the board of trustees
and executive committee of The Hun School of Princeton, a college preparatory day and boarding school, since
2013, and its Chairman since June 2018. Mr. Wills served on the board of directors of Caliper Corporation, a
psychological assessment and talent development company, since March 2016, and as Chairman from
December 2016 to December 2019, when Caliper was acquired by PSI. Mr. Wills served as Executive Chairman
and Interim Principal Executive Officer of Derma Sciences, Inc., a provider of advanced wound care products,
from December 2015 to February 2017, when Derma Sciences was acquired by Integra Lifesciences (Nasdaq:
IART). Previously, Mr. Wills served on the board of directors of Derma Sciences as the lead director and chairman
of the audit committee from June 2000 to December 2015. Mr. Wills served as the Chief Financial Officer of
Derma Sciences from 1997 to 2000. Mr. Wills served as the President and Chief Operating Officer of Wills, Owens
& Baker, P.C., a public accounting firm, from 1991 to 2000. Mr. Wills, a certified public accountant, earned his
Bachelor of Science in accounting from West Chester University, and a Master of Science in taxation from Temple
University.
Committee Membership
Audit Committee (Chair)
Compliance Committee (Member)
Remuneration Committee (Member)
Appointment Date
September 24, 2019
Amryt Pharma plc
Corporate Governance
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P a g e | 20
Annual Report and Accounts
for the year ended December 31, 2021
Dear Shareholder,
I am pleased to present the Amryt Pharma plc Corporate Governance Report for the year ended December 31,
2021.
The Corporate Governance report contains details of Amryt’s governance structures and highlights areas of
focus for the Board and its Committees during the period. Your Board remains committed to high standards of
governance across Amryt, in line with our core values of excellence and integrity in all that we do.
This is my third year as Non-Executive Chairman of Amryt where my responsibilities include articulating my role
and demonstrating my responsibility for corporate governance and identifying any key governance related
matters that have occurred during the period under review.
I accept these responsibilities and aim to discharge them diligently.
Culture & Strategy
The Board sets the tone and shared values for the way in which Amryt operates. Our culture is underpinned by
a robust risk management framework consisting of policies, procedures and tasks, including a Code of Conduct
which defines business conduct standards for anyone working for, or on behalf of, Amryt. Given the importance
of culture to the success of our business model, the Board will continue to assess and monitor Amryt’s culture
to ensure that it is aligned with our strategy and values and is adequately embedded across Amryt’s global team.
I am committed to fostering a well governed and effective Board to support the delivery of Amryt’s strategic
priorities. The Board is very clear on its responsibility to ensure Amryt is capable of delivering on its strategic
objectives. We operate with due regard to the interests of all our stakeholders and are aware of the potential
impact of our decisions upon them. Having a clearly defined strategy, a robust governance structure and a
culture to guide our values and behaviors remains a priority for the Board and in the following pages we explain
our approach to governance and how we fulfil our responsibility to ensure that robust governance practices are
embedded in every aspect of our business.
Board Composition
On an ongoing basis, I seek to ensure we have the right balance of skills, knowledge and experience on the Board,
taking into account our business model, the specific sector in which we operate, the growth in scale of Amryt
and our geographic expansion.
Our CEO, Dr. Joe Wiley, is the only Executive Director on the Board. The biographies of all the Directors are
outlined in pages 16-19 of this annual report for the year ended December 31, 2021. The Board consists of nine
members and is weighted towards non-executive representation to ensure the appropriate level of independent
review, scrutiny and challenge of the management and the executive function.
I am confident that we have the appropriate balance of sector, financial and public market skills and experience
and the appropriate balance of personal qualities and capabilities to execute our duties as a board effectively. I
recognize the need for continuous improvement in order to best serve our stakeholders and intend to constantly
review the mix of skills and experience we possess in order to deliver the Company’s strategic goals.
Board Committees
The Board has three standing committees: an Audit Committee, a Remuneration Committee and a Compliance
Committee. You will find, on pages 23 to 24, individual reports giving details of their activities during the period.
ESG responsibility
The Board recognizes the importance of environmental, social and governance matters and aims to consider the
differing interests of Amryt’s stakeholders, including its investors, employees, suppliers and business partners,
when operating its business.
Amryt Pharma plc
Corporate Governance
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Annual Report and Accounts
for the year ended December 31, 2021
Stakeholder Engagement
In order to operate effectively companies must understand those resources and relationships that matter most
to their success. Amryt’s stakeholders include shareholders, employees, customers, healthcare providers,
clinicians, patients, suppliers and the community in which it operates. The Board will seek to ensure effective
engagement with all stakeholders.
The Board welcomes continuous, open and meaningful discussion with our shareholders and I welcome direct
contact and questions from shareholders either in writing or via our website.
Finally, I would like to thank my colleagues on the Board and all the Amryt team for their continued support,
commitment, challenge and passion for our business. I look forward to meeting shareholders at our 2021 Annual
General Meeting (“AGM”), which will be held on June 30, 2022.
Ray Stafford
Non-Executive Chairman
May 31, 2022
Amryt Pharma plc
Corporate Governance
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Annual Report and Accounts
for the year ended December 31, 2021
Chairman’s Corporate Governance Overview
The Board
The Board is responsible for the overall governance of Amryt. The Board comprises of one Executive Director
and eight Non-executive Directors, including the Chairman, as detailed on pages 16 – 19. The Board believe the
current split of Non-Executive and Executive Directors is appropriate for the requirements of Amryt. The
Company acknowledges that the Board is weighted towards independent Non-Executive representation. This is
to ensure that there is appropriate independent review, scrutiny, and challenge of the management of the
Company and the executive function.
The Board has determined that eight of its nine Directors, Raymond Stafford, Stephen Wills, Donald Stern,
George Hampton, Patrick Vink, Alain Munoz, Raj Kannan and Dr. Roni Mamluk do not have a relationship that
would interfere with the exercise of independent judgment in carrying out the responsibilities of Director and
that each of these Directors is “independent” as that term is defined under the rules of the Nasdaq.
As required under the Nasdaq listing standards, a majority of the members of a listed company’s board of
directors must qualify as “independent,” as affirmatively determined by the board of directors. Our Board of
Directors consults with counsel to ensure that the board’s determinations are consistent with relevant securities
and other laws and regulations regarding the definition of “independent,” including those set forth in the
applicable Nasdaq listing standards, as in effect from time to time. Consistent with these considerations, after
review of all relevant transactions or relationships between each director, or any of his or her family members,
and our company, our senior management and our independent registered public accounting firm, the board of
directors affirmatively determined that all of our current Directors are independent directors within the meaning
of the applicable Nasdaq listing standards, except that Dr. Joe Wiley, our Chief Executive Officer, is not
independent by virtue of his employment with our company. In addition, our Board of Directors has determined
that each member of the audit committee, compensation committee and compliance committee meets the
applicable Nasdaq and SEC rules and regulations regarding “independence” and that each member is free of any
relationship that would impair his or her individual exercise of independent judgment with regard to the
company.
As the business develops, the composition of the Board will remain under review to ensure that it remains
appropriate to the requirements of Amryt. As per the articles of the company one third of the directors of the
Company are put up for re-election on an annual basis. For so long as each of the Athyrium Parties or the
Highbridge Parties (or their respective affiliates) respectively hold at least 10% of our issued share capital, the
Athyrium Parties and the Highbridge Parties (as applicable) are each entitled to nominate a replacement of the
non-independent director (as applicable) selected by them on his or her resignation or retirement. Any such
director shall serve on the Board until our next annual general meeting, where such director’s appointment will
be subject to approval by an ordinary resolution of our shareholders. No director has been nominated by
Highbridge since the acquisition of Aegerion in September 2019.
The Board has a formal schedule of matters reserved for its consideration. It is responsible for:
setting the overall Group strategy and providing leadership to implement the strategy and supervising
the management of the business;
the acquisition or disposal of material corporate entities or assets;
public announcements (including statutory financial statements); approving or making significant
changes in accounting policy, the capital structure and dividend policy of the Company;
Group remuneration policy; and
Board structure, composition and succession.
The Board delegates to management in the subsidiary companies, through the Executive Director, the overall
responsibility for performance of Amryt, which is conducted principally through the setting of clear objectives
and monitoring of performance against those objectives. The Board is structured so that no one individual or
group dominates the decision-making process.
Amryt Pharma plc
Corporate Governance
Amryt Pharma plc
P a g e | 23
Annual Report and Accounts
for the year ended December 31, 2021
Board Responsibilities
To ensure that the Board operates efficiently and effectively, the Directors and Secretary have certain
responsibilities in line with their roles:
Non-Executive Chairman
Leads the Board and promotes a culture of open discussion between Executive and Non-Executive
Directors;
Sets the highest standards of corporate governance; and
Ensures effective communications with all our stakeholders.
Executive Director
Develop and execute Amryt’s strategy in line with the policies and objectives agreed by the Board;
Manage operational effectiveness and profitability of Amryt;
Promotes the purpose, vision and values of the organization, both internally and externally; and
Monitor compliance with Amryt’s legal, regulatory, corporate governance, social and ethical
responsibilities.
Non-Executive Directors
Contribute to the overall development of Amryt’s strategy;
Provide independent insight based on relevant experience; and
Monitor and challenge the business performance and the execution of strategy.
Company Secretary
Ensures correct Board procedures are followed;
Ensures Directors receive timely and clear information so that Directors are equipped for informed
decision making and open debate;
Advises the Board on policy, procedure and governance; and,
If necessary, coordinates access to independent professional advice for Directors.
Performance evaluation
The Board recognizes the need to regularly review the effectiveness of its performance as well as that of its
committees and individual Directors. The Board continues to monitor the skills and experience of each Director
as well as the overall performance of the Board.
Board Committees
The Company has an Audit Committee, Remuneration Committee and Compliance Committee with formally
delegated duties and responsibilities. The composition of these committees may change over time as the
composition of the Board changes.
Remuneration Committee: Chairman - George Hampton
Audit Committee: Chairman - Steven Wills
Compliance Committee: Chairman - Donald Stern
Given the significant number of Non-Executive Directors on the Board with only a single Executive Director, the
Board has not established a Nominations Committee. Instead, the whole Board considers matters of
nomination and succession. The Board follows a robust process for the appointment of new Board members to
identify the skills, experience, personal qualities and capabilities required for the next stage of the Company’s
development. The Board also monitors succession plans and possible internal candidates for future Board roles.
Remuneration Committee
The Remuneration Committee has responsibility for the determination of specific remuneration packages for
each of the Executive Directors, including pension rights and any compensation payments, and recommending
and monitoring the level and structure of remuneration for senior management, the implementation of the
employee share option plan and other performance related schemes. It meets at least twice a year.
The responsibilities of the remuneration committee covered in its terms of reference include the following:
determining and monitoring policy on and setting levels of remuneration, termination, performance related pay,
Amryt Pharma plc
Corporate Governance
Amryt Pharma plc
P a g e | 24
Annual Report and Accounts
for the year ended December 31, 2021
pension arrangements, reporting and disclosure, share incentive plans and appointing remuneration
consultants. The terms of reference also set out the reporting responsibilities and the authority of the committee
to carry out its responsibilities.
The Remuneration Committee comprises three members, who are all Non-Executive Directors: George
Hampton, Dr. Alain Munoz and Stephen Wills. The Remuneration Committee is chaired by George Hampton.
Policy on Executive Directors and Senior Management Remuneration
When determining the Board policy for remuneration, the Committee considers all factors which it deems
necessary including relevant legal and regulatory requirements and the provisions and recommendations of
relevant guidance. The objective of this policy is to help attract, retain and motivate the Executive and Senior
Management of Amryt without paying more than necessary. The remuneration policy bears in mind Amryt’s
appetite for risk and is aligned to Amryt’s long-term strategic goals. A significant proportion of remuneration is
structured to link rewards to corporate and individual performance and is designed to promote the long-term
success of Amryt.
Audit Committee
The audit committee of the Company has responsibility for, among other things, the monitoring of the financial
integrity of the financial statements of Amryt and the involvement of Amryt’s auditors in that process. It focuses
in particular on compliance with accounting policies and ensuring that an effective system of internal audit,
external audit and financial control is maintained, including considering the scope of the annual audit and the
extent of the non-audit work undertaken by external auditors and advising on the appointment of external
auditors. The audit committee will meet at least four times a year at the appropriate times in the financial
reporting and audit cycle.
The terms of reference of the audit committee cover such issues as membership and the frequency of meetings,
as mentioned above, together with requirements of any quorum for and the right to attend meetings. The
responsibilities of the audit committee covered in its terms of reference include the following: external audit,
financial reporting, internal controls and risk management. The terms of reference also set out the authority of
the committee to carry out its responsibilities.
The Audit Committee comprises of three members, who are all Non-Executive Directors: Stephen Wills, Donald
Stern and Ray Stafford. The Audit Committee is chaired by Stephen Wills.
Internal Controls and Financial Risk Management
The Directors are responsible for Amryt’s system of internal controls, the setting of appropriate policies on these
controls, and regular assurance that the system is functioning effectively and that it is effective in managing
business risk. Principal risk and uncertainties are discussed in the Strategic Report and financial risk management
objectives and policies are detailed in note 24 of the Notes to the Financial Statements.
The Audit Committee monitors Amryt’s internal control procedures, reviews the internal control process and
risk management procedures and reports its conclusions and recommendations to the Board.
Compliance Committee
Amryt established a Compliance Committee in 2019. This Committee has responsibility for overseeing Amryt’s
compliance with laws, regulations, internal procedures and industry standards that may cause significant
business, regulatory, or reputational damage to Amryt, as well as legal and business trends and public policy
issues. The primary function of the Compliance Committee is to oversee the development and implementation
of compliance and ethics policies and practices at Amryt. The Compliance Committee comprises three members,
Donald Stern, Patrick Vink and Stephen Wills, all of whom are Non-Executive Directors and the committee is
chaired by Donald Stern.
Employees
Amryt’s future success depends on the ability to recruit and retain key employees. Our employee base includes
key people in strategic areas including in commercial and medical affairs as we continue to grow our commercial
business as well as in clinical and regulatory as we move our development candidates forward.
Amryt Pharma plc
Corporate Governance
Amryt Pharma plc
P a g e | 25
Annual Report and Accounts
for the year ended December 31, 2021
To date, we have been fortunate to attract and retain highly experienced individuals in sales and marketing,
medical affairs, clinical development, clinical operations, regulatory, finance, legal, supply chain,
pharmacovigilance and quality assurance, supporting them with exceptional leadership at the executive and
Board level.
At December 31, 2021, we have eight employees in the Company, all Non-Executive Directors. The Executive
Director is employed by a subsidiary company, Amryt Pharmaceuticals Inc. At December 31, 2021, the Group
had 288 full time employees, one Executive Director and eight Non-Executive Directors, spread across Ireland,
US and multiple locations in EMEA and LATAM.
Diversity and human rights
The Board recognizes its legal responsibility to ensure the well-being, safety and welfare of the Company’s
employees and maintain a safe and healthy working environment for them and for our visitors. Amryt is fully
committed to ensuring that there is no unfair discrimination and stresses the importance in the value that a
diverse workforce brings to the organization. Amryt aims not to discriminate because of age, disability, sex or
sexual orientation, race, religion or belief. This is captured in our Code of Conduct, which all employees are
encouraged to read on an annual basis. All employees also have access to a dedicated whistleblowing hotline.
Amryt continues to monitor policies to ensure that they promote a healthy corporate culture.
A breakdown of employees, excluding the CEO, by gender as at December 31, 2021 is as follows:
Position
Female
Male
Gender
Neutral
Total
Executive leadership/ Senior leadership
15
10
-
25
Employees
162
99
3
263
Total
177
109
3
289
A breakdown of the Director (CEO) and Non-Executive Directors by gender and disclosure on diverse
demographic backgrounds as at December 31, 2021 is as follows:
Position
Female
Male
Gender
Neutral
Total
Gender
Director and Non-Executive Directors
1
8
-
9
Demographic background
Underrepresented Individual in Home Country
Jurisdiction
-
1
-
1
The executive leadership/ senior leadership management consist of those in senior leadership roles with
responsibility for the strategic planning, direction and management of the day-to-day activities of the Group.
Risk Management & Treasury Policy
The Board considers risk assessment to be important in achieving its strategic objectives, with the Board
regularly reviewing its projects and activities in this regard. Amryt finances its operations through equity, debt
funding and holds its cash as a liquid resource to fund the obligations of the Group. Decisions regarding the
management of these assets are considered and approved by the Board.
Securities Trading
The Board has adopted a Share Dealing Code that applies to Directors, Senior Management and any Employee
who is in possession of “inside information”. All such persons are prohibited from trading in Amryt’s securities
if they are in possession of “inside information”. Subject to this condition and trading prohibitions applying to
certain periods, trading can occur provided the relevant individual has received the appropriate prescribed
clearance.
Amryt Pharma plc
Directors’ Remuneration Report
Amryt Pharma plc
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Annual Report and Accounts
for the year ended December 31, 2021
Directors’ Remuneration Report – annual statement
Dear Shareholders,
On behalf of the Remuneration Committee, I am pleased to present our Directors’ Remuneration Report for the
period ended December 31, 2021. We are required to prepare a Directors’ Remuneration Report following the
Company’s listing on the NASDAQ Global Market in 2020 and given our UK incorporation. The Directors’
Remuneration Report will be subject to an advisory vote at the forthcoming Annual General Meeting (“AGM”)
on June 30, 2022. The Directors Remuneration Report included in this Annual Report is outside the scope of the
audit report on page 38.
The current Directors’ Remuneration Policy was approved by shareholders at the general meeting on March 2,
2022. The Policy took formal effect from the date of approval and the policy will formally apply for three years
beginning on the date of approval unless a new policy is presented to shareholders in the interim. The full
shareholder approved Policy can be found in the Annual Report for the period ended December 31, 2020. The
Directors’ Remuneration Policy applies to the Executive Director and the Non-Executive Directors appointed to
the Board of Directors. Currently, our Chief Executive Officer, Joe Wiley, is the only Executive Director on the
Board. All other Board Directors are Non-Executive Directors. Following approval, all payments to Directors will
be consistent with the approved policy.
The Committee always seeks to ensure that the remuneration of our Executive Director reflects the underlying
performance of the business. When approving outcomes, we therefore considered performance against our
financial and strategic targets along with wider business and individual performance.
Remuneration Review for the period ended December 31, 2021
Our Executive Director is an employee of a subsidiary Company, Amryt Pharmaceuticals Inc. His remuneration
expenses are captured in the books of this subsidiary. The Executive Director received an increase in base salary
of 3% on January 1, 2020, and a further 3% to $731,490 on January 1, 2021.
Details of the fees paid to members of the Non-Executive Board are set out on page 28.
Annual Bonus Plan
The amount of annual bonus paid to the Executive Director is considered in the context of financial, strategic
and personal performance for each 12-month period covering January to December. The Committee
recommends to the Board the level of bonuses to be paid to the Executive Director and employees of the Amryt
Group, following a review of performance against bonus objectives covering each calendar year. An estimate for
bonus was accrued in the subsidiary accounts each month during 2020 and 2021. At the end of 2021 the Board
accepted the recommendation of the Committee, and such amounts were paid in early 2022.
Long Term Incentive Plan (LTIP)
The Committee want to ensure that all LTIP metrics and targets remain suitable and aligned with our growth
strategy and appropriately incentivize participants. The Committee has been working with its external
compensation consultant, Radford (part of Aon plc) over the course of the period to prepare an equity strategy
which is deemed suitable for the NASDAQ listed company. Radford has recommended participation rates for
Amryt based on market data and observed international practices. Radford, a highly reputable external third-
party advisor, was appointed by the Remuneration Committee to ensure that any advice received in terms of
remuneration was objective and independent.
Amryt Pharma plc
Directors’ Remuneration Report
Amryt Pharma plc
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Annual Report and Accounts
for the year ended December 31, 2021
Conclusion
The Committee remains committed to a responsible approach to Executive remuneration, as I trust this
Directors’ Remuneration Report demonstrates. We continue to believe that the Policy provides a remuneration
philosophy that encourages both Executive and Non-Executive Directors to serve in the best interests of the
Company and to support the delivery of value to shareholders in the future.
As always, I am happy to meet or speak with shareholders if there are any questions or feedback on our approach
to executive remuneration.
Yours sincerely,
George Hampton
Chair of the Remuneration Committee
Amryt Pharma plc
Directors’ Remuneration Report
Amryt Pharma plc
P a g e | 28
Annual Report and Accounts
for the year ended December 31, 2021
Remuneration Report
Directors’ remuneration
The Directors received the following remuneration for the year December 31, 2021:
Salary
/ Fees
Bonus
Employer
Pension
Equity
awards1
Other
Benefits
2021
Total
Fixed
remuneration
Variable
remuneration
$’000
$’000
$’000
$’000
$’000
$’000
$’000
$’000
Ray Stafford
88
—
—
84
—
172
88
84
Joe Wiley
747
728
71
1,759
174
3,479
818
2,661
George Hampton
65
—
—
84
—
149
65
84
Raj Kannan
20
—
—
395
—
415
20
395
Roni Mamluk
20
—
—
114
—
134
20
114
Alain Munoz
58
—
—
84
—
142
58
84
Donald Stern
80
—
—
84
—
164
80
84
Patrick Vink
60
—
—
84
—
144
60
84
Stephen Wills
88
—
—
84
—
172
88
84
TOTAL
1,226
728
71
2,772
174
4,971
1,297
3,674
The Directors received the following remuneration for the year December 31, 2020:
Salary
/ Fees
Bonus
Employer
Pension
Equity
awards1
Other
Benefits
2020
Total
Fixed
remuneration
Variable
remuneration
$’000
$’000
$’000
$’000
$’000
$’000
$’000
$’000
Ray Stafford
88
—
—
110
—
198
88
110
Joe Wiley
727
739
71
—
182
1,719
798
921
George Hampton
65
—
—
110
—
175
65
110
Alain Munoz
58
—
—
110
—
168
58
110
Donald Stern
80
—
—
110
—
190
80
110
Patrick Vink
60
—
—
110
—
170
60
110
Stephen Wills
88
—
—
110
—
198
88
110
TOTAL
1,166
739
71
660
182
2,818
1,652
1,581
Fixed remuneration consists of salary/ fees and employer pension. Variable remuneration consists of bonus, equity
awards and other benefits.
1The equity awards granted to the Executive Director and Non-Executive Directors in the period is the grant date fair value
as computed in accordance with IFRS 2 (Share Based Payments) using a Black-Scholes option pricing model.
Annual performance bonus
The Company has a bonus plan in place for the Executive Director and all employees. Bonus amounts are set as a percentage
of base salary based on performance-based measures against personal and Company-wide target objectives. Bonus
payments for the Executive Director are a percentage of base salary, based on performance-based measures against
Company-wide target objectives.
The annual performance bonus is based on performance against target in any calendar year. Specific details of the actual
Company-wide target objectives are considered commercially sensitive and therefore not disclosed in detail. However, the
principal factors leading to the payment of the stretch bonus included the following:
Revenue growth
EBITDA performance
Cash balance
Working Capital
Non financial metrics relating to research and development and commercial milestones
Long term incentive awards during the financial year
Directors may be granted long-term incentive awards at the discretion of the Remuneration Committee. In accordance with
the Remuneration Policy, the vesting of awards was set by the Remuneration Committee with the objective of aligning
long-term employee interests with those of shareholders and providing a competitive remuneration structure that attracts,
incentivizes and retains all employees in the key markets in which the Company operates.
During the year ended December 31, 2021, a total of 7,261,725 share options were granted to Directors of the Company.
Joseph Wiley was granted a total of 2,031,350 share options, a total of 220,000 share options were granted to each of Dr.
Roni Mamluk and Raj Kannan and a total of 110,000 share options were granted to each of Raymond T. Stafford, George P.
Amryt Pharma plc
Directors’ Remuneration Report
Amryt Pharma plc
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Annual Report and Accounts
for the year ended December 31, 2021
Hampton, Jr., Dr. Alain H. Munoz, Donald K. Stern, Dr. Patrick V.J.J. Vink and Stephen T. Wills. Additionally, a total of
1,160,380 and 2,969,995 stock options were issued by Amryt to replace Chiasma stock options held by Dr. Roni Mamluk
and Raj Kannan, respectively.
All awards granted under the Equity Incentive Plan are subject to a service condition and may be exercised at any time
between the relevant vesting date and the seventh anniversary of the date of grant. Awards which are not exercised by the
end of the seven-year anniversary from the grant date will lapse permanently. The exercise price of all options granted
during the period was the market value of the shares upon closing on the day before the grant. Neither the Executive
Director or any of the Non- Executive Directors exercised any options in the period and no awards lapsed during the period
to December 31, 2021.
Payments to past Directors
There were no payments made by the Company to past Directors during the period ended December 31, 2021.
Payments for loss of office
There were no payments made to Directors for loss of office during the period ended December 31, 2021.
Directors’ service contracts and letters of appointment
The dates of appointment of each of the Non-Executive Directors serving at December 31, 2021, are summarized in the
table below:
Non- Executive Director
Date of appointment
Ray Stafford1
September 24, 2019
George Hampton
September 24, 2019
Alain Munoz
September 24, 2019
Donald Stern
September 24, 2019
Patrick Vink
September 24, 2019
Stephen Wills
September 24, 2019
Raj Kannan
August 5, 2021
Rony Mamluk
August 5, 2021
1 Ray Stafford was appointed Non-Executive Chairman of Amryt Pharma plc (Company number: 12107859) on September
24, 2019. Prior to this date, Ray was a Non-Executive Director of Amryt Pharma Holdings Limited (Company numbers:
05316808 and previously named Amryt Pharma plc until September 24, 2019) since April 2016.
Statement of Directors’ shareholdings and share interests
The table below sets out, as at December 31, 2021, the beneficial interest in the Company’s shares of the Directors
(together with interests held by his or her connected persons). In addition, the table below also sets out the total number
of options held by Directors which are vested but not yet exercised and the total number of options held by Directors which
are unvested.
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Annual Report and Accounts
for the year ended December 31, 2021
Director
Beneficially
owned A
ordinary shares
Number of options
vested not yet
exercised1
Number of options unvested1
Executive
Joe Wiley
3,507,080
3,390,490
5,078,320
Non-Executive
Ray Stafford
1,913,601
55,000
275,000
George Hampton
—
55,000
275,000
Alain Munoz
—
55,000
275,000
Donald Stern
—
55,000
275,000
Patrick Vink
—
55,000
275,000
Stephen Wills
—
55,000
275,000
Raj Kannan
—
1,503,550
1,686,445
Roni Mamluk
—
1,160,380
220,000
1 Amryt shares trade as ADSs on NASDAQ, each ADS representing five Amryt ordinary shares. All equity incentives granted
are in the form of ordinary shares. Share option exercise prices are the exercise price per ordinary share. The ADS equivalent
exercise price will be the ordinary share exercise price multiplied by five and the number of ADSs will be the number of
ordinary shares divided by five.
The Company does not have a formal policy on Executive or Non-Executive Director shareholdings.
As at December 31, 2021, no unvested equity incentive awards are subject to performance conditions. The table below
shows the interests of the Directors in the Company’s share options as at December 31, 2021:
Director
Number
of options
granted1
Exercise
Price1
Grant Date
Expiry Date
Vesting period
Joe Wiley
343,521
£1.21
November 28, 2017
November 28, 2024
Three years from grant date3
Joe Wiley
316,039
£0.76
May 21, 2019
May 21, 2026
Three years from grant date3
Joe Wiley
5,777,900
£1.22
November 5, 2019
November 5, 2026
Three years from grant date3
Joe Wiley
2,031,350
$2.804
March 8, 2021
March 8, 2028
Three years from grant date3
Ray Stafford
220,000
US$2.25
July 9, 2020
July 9, 2027
Three years from grant date3
Ray Stafford
110,000
US$2.04
August 9, 2021
August 9, 2028
May 31, 2022
George Hampton
220,000
US$2.25
July 9, 2020
July 9, 2027
Three years from grant date3
George Hampton
110,000
US$2.04
August 9, 2021
August 9, 2028
May 31, 2022
Alain Munoz
220,000
US$2.25
July 9, 2020
July 9, 2027
Three years from grant date3
Alain Munoz
110,000
US$2.04
August 9, 2021
August 9, 2028
May 31, 2022
Donald Stern
220,000
US$2.25
July 9, 2020
July 9, 2027
Three years from grant date3
Donald Stern
110,000
US$2.04
August 9, 2021
August 9, 2028
May 31, 2022
Patrick Vink
220,000
US$2.25
July 9, 2020
July 9, 2027
Three years from grant date3
Patrick Vink
110,000
US$2.04
August 9, 2021
August 9, 2028
May 31, 2022
Stephen Wills
220,000
US$2.25
July 9, 2020
July 9, 2027
Three years from grant date3
Stephen Wills
110,000
US$2.04
August 9, 2021
August 9, 2028
May 31, 2022
Raj Kannan2
2,969,995
$2.30 -
$4.08
June 17, 2020 -
February 8, 2021
June 17, 2030 -
February 8, 2031
Various vesting periods2
Raj Kannan
220,000
US$2.04
August 9, 2021
August 9, 2028
Three years from grant date3
Roni Mamluk2
1,160,380
$0.68 -
$5.02
November 14, 2014
- June 10, 2020
November 14, 2024
- June 10, 2030
Various vesting periods2
Roni Mamluk
220,000
US$2.14
September 14, 2021
September 14, 2028
Three years from grant date3
1 Amryt shares trade as ADSs on NASDAQ, each ADS representing five Amryt ordinary shares. All equity incentives granted
are in the form of ordinary shares. Share option exercise prices are the exercise price per ordinary share. The ADS equivalent
exercise price will be the ordinary share exercise price multiplied by five and the number of ADSs will be the number of
ordinary shares divided by five.
2 When Amryt acquired Chiasma in August 2021, the Chiasma Stock Option and Incentive Plan transferred across to Amryt.
Each outstanding and unexercised Chiasma Stock Option or RSU, whether vested or not vested, ceased to represent a right
to acquire shares of Chiasma common stock and were converted into an option to purchase Amryt ADSs on the same terms
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Annual Report and Accounts
for the year ended December 31, 2021
and conditions as were applicable under such Chiasma Stock Option and Incentive Plan immediately prior to the acquisition.
On August 5, 2021, stock options were issued by Amryt to replace Chiasma stock options. 1,160,380 and 2,969,995 stock
options were issued by Amryt to replace Chiasma stock options held. Unvested share options at December 31, 2021, included
various grants that were granted pre-acquisition. In addition grants issued during 2021 included share options that vest
25% 12 months after the grant date with the remainder vesting ratably over 36 Months thereafer, and share options that
vest ratably over 16 quarters after the grant date.
3 Share options vest over 3 years with 25% vesting 12 months after the grant date, a further 25% vesting 24 months after
the grant date and the final 50% vesting 36 months after the grant date.
Under the terms of the Company’s Equity Incentive Plan, we have granted market value options to our Executive Director
and Non-Executive Directors. Market value options were granted to the Executive Director in 2017, 2019 and 2021. Market
value options were granted to the Non-Executive Directors in July 2020 and in August/September 2021. These options vest
over 3 years with 25% vesting 12 months after the grant date, a further 25% vesting 24 months after the grant date and
the final 50% vesting 36 months after the grant date. In addition market value options granted to certain Non-Executive
Directors in August vest over 12 months after the grant date. There are no performance conditions attached to these share
options. No options were exercised by the Executive Director or the Non-Executives Directors during the year December
31, 2021, or in the year ended December 31, 2020.
Performance graph
The graph below shows the Company’s performance, measured by total shareholder return, relative to the NASDAQ
Biotechnology Index. The NASDAQ Biotechnology Index has been selected for this comparison because the Company has
been trading on this exchange since July 8, 2020, and is therefore considered to be the most suitable comparator index.
AMYT: $96.00
NASDAQ
Biotechnology
Index: $107.88
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Annual Report and Accounts
for the year ended December 31, 2021
Executive Directors total remuneration history
The Executive Directors remuneration for 2021 and 2020 is set out below. This will eventually build up to cover a rolling
ten-year remuneration history.
2021
2020
$
$
Total Executive Director remuneration 1
3,479,000
1,719,000
Executive Director bonus (as a % of base salary)
99.45%
130%
Executive Director LTIP vesting (as a % of maximum available)2
100%
100%
1 Total remuneration above consists of base salary, bonus, employer pension contribution, other benefits and equity awards
granted in the period
2 As these options are not subject to performance conditions, the vesting percentage has been recorded at 100%
Percentage change of Executive Directors total remuneration
The table below shows the percentage change in remuneration of the Executive Director and the Group’s employees as a
whole as set out below between the year ended December 31, 2021, and the year ended December 31, 2020:
Executive
Director
Average
Employee
Base Salary
3%
7%
Annual Bonus
(1%)
1%
Taxable Benefits
(4%)
1%
Relative importance of spend on pay
The Remuneration Committee considers the Company’s total revenues relative to salary expenditure for all employees, to
be the most appropriate metric for assessing overall spend on pay due to the nature and stage of the Company’s business.
Dividend distribution and share buy-back comparators have not been included because the Company has no history of such
transactions. The table below illustrates the gross pay to all employees for 2021 and 2020 as compared to total operating
revenues and illustrates the year-on-year change.
2021
($’000)
2020
($’000)
% Change
Gross Pay to all employees
64,330
44,219
145.48%
Total Revenues
222,543
182,607
121.87%
Membership of the remuneration committee and its advisors
The Remuneration Committee comprises three members, who are all Non-Executive Directors: George Hampton, Dr. Alain
Munoz and Stephen Wills. The Remuneration Committee is chaired by George Hampton. The Executive Director and Head
of HR, as well as others, are invited to attend Remuneration Committee meetings as required to provide advice and
assistance.
During the period, the Committee was assisted in its work by Radford. Radford was appointed to provide advice in relation
to Directors’ remuneration policy and general remuneration matters. Fees paid to Radford in relation to advice provided
to the Committee during the period to December 31, 2021, were $220,000, charged on a time/cost basis. The Committee
is satisfied that the advice they received from Radford was objective and independent.
The Committee met six times during 2021 and addressed the following main topics relating to the Company:
-
Executive Compensation
-
Executive Long Term Incentive Plan
-
Equity Vehicle Mix
-
Executive Severance
-
Review of Peer Group
-
Change of Control Language in relation to the Share Option Plan
-
Salary increases for 2022
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Annual Report and Accounts
for the year ended December 31, 2021
Statement of Voting at a general meeting of the Company
The shareholder votes on the non-binding approval of the Directors’ Remuneration Report and the binding approval of the
Directors’ Remuneration Policy at the general meeting which took place on March 2, 2022, was as follows:
Resolution
Votes
for
%
for
Votes
against
%
against
Withheld
%
withheld
Total
Approval of the
Directors’
Remuneration Report
276,328,891
87.13%
40,826,619
12.87%
1,520
0.00%
317,157,030
Approval of the
Directors’
Remuneration Policy
276,320,011
87.12%
40,834,235
12.88%
1,599
0.00%
317,155,845
Statement of implementation of remuneration policy for the calendar year ended December 31, 2021
Annual salary
In January 2021, the Executive Director received a 3% increase in annual salary in-line with the other employees.
Bonus
In line with our Policy, the Executive Director will be eligible for an annual bonus of 65% of basic salary for achievement of
target level or 130% of basic salary for achievement of stretch goals for the 2022 calendar year. The bonus will be subject
to the achievement of short-term corporate objectives which have been set by the Committee with respect to the 12-
month performance period to December 2022. The short-term objectives cover key objectives that relate to the
achievement of the Amryt’s wider strategic goals including, for the calendar year 2022 measures relating to financial
milestones, clinical and corporate development. The amount of bonus payable is at the discretion of the Committee subject
to review of performance against the short-term corporate objectives at the end of the calendar year. The Committee has
chosen not to disclose, in advance, the detailed performance targets for the forthcoming year as these include matters
which the Committee considers commercially sensitive. Retrospective disclosure of the performance against the corporate
objectives will be made in next year’s Annual Report on Remuneration to the extent any such disclosure is considered not
to be commercially sensitive at that time.
Benefits and pension
The Executive Director will continue to be eligible to receive pension contributions from the Group to the value of 10% of
basic salary. No significant changes are expected to the provision of other benefits.
Long-term incentive plan
In line with the Policy, the Committee has issued market value options to the Executive Director during 2022.
During the 2022 period to date, equity incentive awards were granted to the Executive Director under the Equity Incentive
Plan. These equity incentive awards were market value options over Ordinary shares and the vesting period is three years;
25% of the award vesting 12 months after the grant date, 25% of the award after 24 months from the date of grant and the
balance of 50% of the award vesting 36 months after the date of grant. No performance conditions were attached to the
awards.
Director
Number of
options
granted1
Exercise
Price1
Grant Date
Expiry Date
Joe Wiley
3,401,100
$1.418
March 11, 2022
March 11, 2029
1 Amryt shares trade as ADSs on NASDAQ, each ADS representing five Amryt ordinary shares. All equity incentives granted
are in the form of ordinary shares. Share option exercise prices are the exercise price per ordinary share. The ADS equivalent
exercise price will be the ordinary share exercise price multiplied by five and the number of ADSs will be the number of
ordinary shares divided by five.
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Directors’ Remuneration Report
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Annual Report and Accounts
for the year ended December 31, 2021
During the 2022 period to date, under the terms of Amryt’s Equity Incentive Plan, performance share units (“PSUs”) to
purchase 347,700 ordinary shares granted to the Executive Director at the discretion of the Remuneration Committee.
Performance conditions determine how many of these performance stock units will vest and, if performance targets are
exceeded, additional performance stock units will be issued and vest in accordance with the terms of the relevant
performance stock units award. The PSUs vest based on the Total Shareholder Return (“TSR”) of Amryt’s NASDAQ traded
common stock relative to the TSRs of the constituents that comprise the NASDAQ Biotechnology Index (the Peer Group) as
of January 1, 2022. TSR for Amryt and each peer company will be measured over the period from January 1, 2022, to
December 31, 2024. The payout schedule can produce payout percentages ranging from 0% to 150%.
Non- Executive Directors’ fees
In the period from January 1, 2022, to date, the fees for Ray Stafford increased by $10,000 to $98,000. There were no other
increases in Non-Executive Directors fees from January 1, 2022, to date.
The following equity awards were granted to the Non-Executive Directors during 2022 to date:
Director
Number of
options
granted1
Exercise
Price1
Grant Date
Expiry Date
Ray Stafford
170,000
$1.61
May 15, 2022
May 15, 2029
George Hampton
170,000
$1.61
May 15, 2022
May 15, 2029
Alain Munoz
170,000
$1.61
May 15, 2022
May 15, 2029
Donald Stern
170,000
$1.61
May 15, 2022
May 15, 2029
Patrick Vink
170,000
$1.61
May 15, 2022
May 15, 2029
Stephen Wills
170,000
$1.61
May 15, 2022
May 15, 2029
Raj Kannan
170,000
$1.61
May 15, 2022
May 15, 2029
Roni Mamluk
170,000
$1.61
May 15, 2022
May 15, 2029
1 Amryt shares trade as ADSs on NASDAQ, each ADS representing five Amryt ordinary shares. All equity incentives granted
are in the form of ordinary shares. Share option exercise prices are the exercise price per ordinary share. The ADS equivalent
exercise price will be the ordinary share exercise price multiplied by five and the number of ADSs will be the number of
ordinary shares divided by five.
These equity incentive awards were market value options over Ordinary shares and the vesting period is the earlier of 12
months from the grant date or the AGM in 2023. No performance conditions were attached to the awards.
This Directors’ Remuneration Report has been approved by the Board and signed on behalf of the Board.
Joe Wiley
Director
May 31, 2022
Amryt Pharma plc
Directors’ Report
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Annual Report and Accounts
for the year ended December 31, 2021
Directors’ Report
The Directors of the Company present their report and the Financial Statements of the Company for the year ended
December 31, 2021.
Amryt Pharma plc was incorporated under the UK Companies Act 2006 on July 17, 2019 as a private company limited by
shares under the name Amryt Pharma Holdings Limited. Following a re-registration as a public company in September 2019
in connection with the scheme of arrangement under which we acquired Aegerion, we became the parent company of our
legacy businesses and changed our name to Amryt Pharma plc.
Directors
The Directors who served on the Board of Amryt Pharma plc during the period to the date of this report are as follows:
Ray Stafford (Non-Executive Chairman)
Dr. Joe A. Wiley (Chief Executive Officer)
George P. Hampton Jr. (Non-Executive Director)
Dr. Alain H. Munoz (Non-Executive Director)
Donald K. Stern (Non-Executive Director)
Dr. Patrick V.J.J. Vink (Non-Executive Director)
Stephen T. Wills (Non-Executive Director)
Raj Kannan (Non-Executive Director)
Dr. Roni Mamluk (Non-Executive Director)
Raj Kannan and Dr. Roni Mamluk were appointed to the Board on August 5, 2021.
Principal activities
The Strategic Report on pages 2 to 15 describes Amryt’s principal development activities, strategy and future
developments.
Amryt is a global commercial-stage biopharmaceutical company focused on acquiring, developing and commercializing
novel treatments for rare diseases.
Results and Dividends
The Company recorded a total profit for the year ended December 31, 2021, attributable to equity holders of the parent of
$1.0 million. The Directors do not recommend payment of a dividend.
Research and Development
For the year December 31, 2021, we spent $37.7 million (2020: $27.6 million) on research and development activity.
Research and development spend primarily reflects the underlying activity on clinical trials for our products as well as the
manufacturing of drug product together with the internal costs, including payroll directly attributable to these activities.
Further details of our product programs and research and development spend can be found within the Strategic Report.
Future Developments in the Business of the Company
Details of future developments can be found in the Strategic Report on pages 4 to 5 and form part of this report by cross-
reference.
Existence of branches of the Company outside of the United Kingdom
As at December 31, 2021, the Company had no branches outside the United Kingdom.
Share Capital Structure
The Company’s ordinary shares of £0.06 are listed on the NASDAQ (AMYT). At the date of this report, 320,884,822 ordinary
shares of £0.06 each were in issue. Details of share issues and changes to the capital structure during the year ended
December 31, 2021, are set out in note 17 of the Notes to the Financial Statements.
Qualifying Indemnity Provision
The Company has in place insurance protection, including a Directors and Officers liability policy, to cover the risk of loss
when management deems it appropriate and cost effective. However, in some cases risks cannot be effectively covered
by insurance and the cover in place may not be sufficient to cover the extent of potential liabilities.
Amryt Pharma plc
Directors’ Report
Amryt Pharma plc
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Annual Report and Accounts
for the year ended December 31, 2021
Financial Risk Management Objectives and Policies
Refer to Note 24 of the financial statements for further details on our financial risk management objectives and policies,
including information on exposure to price risk, credit risk, liquidity risk and cash flow risk.
Stakeholder Engagement
Our key stakeholders include our people, customers, suppliers and investors. We are committed to open and effective
engagement with all our stakeholders in order to understand their views and look for opportunities to improve. The Board
actively encourages direct engagement with its stakeholders to ensure that they consider the interests of these
stakeholders in the Board’s decision-making. This engagement with stakeholders give the Board an opportunity to share
the Company’s purpose, values and strategy.
Going Concern
The business activities of the Company are outlined on page 2 and the factors which may affect the Company’s future
development and performance are outlined on pages 3 – 6. The financial review on page 7 discusses the Company’s
financial and liquidity position and borrowing facilities. In addition, note 24 to the Consolidated Financial Statements
include the Group’s objectives, policies and processes for managing its capital; its financial risk management objectives;
details of its financial instruments and its exposure to credit, currency and liquidity risks.
After making appropriate enquires, the Directors consider that the Company and the Group has adequate resources to
continue in business for the foreseeable future. Accordingly, they continue to adopt the going concern basis in preparing
the Financial Statements.
Events after the Reporting Period
Events after the reporting period are set out in note 27 to the financial statements. Likely future developments in the
business are discussed in the Strategic Report section.
Auditors
The Board are recommending Grant Thornton for re-appointment as auditor of the Group. Grant Thornton have expressed
their willingness to accept this appointment and a resolution re-appointing them will be submitted to the forthcoming
AGM.
Disclosure of Information to the Auditors
All of the current Directors have taken all the steps that they ought to have taken to make themselves aware of any
information needed by the Company’s auditors for the purposes of their audit and to establish that the auditors are aware
of that information. The Directors are not aware of any relevant audit information of which the auditors are unaware.
Directors’ Responsibilities
The Directors are responsible for preparing the Directors' Report and the financial statements in accordance with applicable
law and regulations.
Company law requires the Directors to prepare financial statements for each financial year. For the financial year ended
December 31, 2021, we have chosen to prepare our Group and Company accounts in accordance with international
accounting standards in conformity with the requirements of the Companies Act 2006” (UK-adopted International
Accounting Standards ).
Under company law, the Directors must not approve the financial statements unless they are satisfied that they give a true
and fair view of the state of affairs of the group and company and of the profit or loss of the group and company for that
period.
Amryt Pharma plc
Directors’ Report
Amryt Pharma plc
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Annual Report and Accounts
for the year ended December 31, 2021
In preparing these financial statements, the Directors are required to:
select suitable accounting policies for the company financial statements and apply them consistently;
make judgments and accounting estimates that are reasonable and prudent;
state whether the financial statements have been prepared in accordance with applicable accounting standards,
identify those standards, and note the effect and the reasons for any material departure from those standards;
and
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company
will continue in business.
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the
company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable
them to ensure that the financial statements comply with the Companies Act 2006. The Directors are also responsible for
safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud
and other irregularities.
Website Publication
The Directors are responsible for ensuring the Annual Report and the financial statements are made available on a website.
Financial statements are published on Amryt's website in accordance with legislation in the UK governing the preparation
and dissemination of financial statements, which may vary from legislation in other jurisdictions. The maintenance and
integrity of Amryt's website is the responsibility of the Directors.
This report was approved by the Board on May 31, 2022, and signed on its behalf by:
Joe Wiley
Director
Independent auditor’s report to the members of Amryt
Pharma plc
Amryt Pharma plc
P a g e | 38
Annual Report and Accounts
for the year ended December 31, 2021
Opinion
We have audited the financial statements of Amryt Pharma plc (the ‘Company’) and its subsidiaries (together
the ‘Group’), which comprise the Consolidated statement of comprehensive income/(loss), the
Consolidated statement of financial position, the Consolidated statement of cash flows, the Consolidated
statement of changes in equity, the Company statement of financial position, the Company statement of
cash flows, the Company statement of changes in equity for the year ended 31 December 2021, and the
related notes to the financial statements, including the summary of significant accounting policies.
The financial reporting framework that has been applied in the preparation of the financial statements is
applicable law and UK-adopted International Accounting Standards (UK-adopted IAS).
In our opinion, Amryt Pharma plc’s financial statements:
give a true and fair view in accordance with UK-adopted IAS of the assets, liabilities and financial
position of the Group and Company as at 31 December 2021 and of the Group’s financial
performance and the Group and Company’s cash flows for the year then ended; and
have been properly prepared in accordance with the requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (‘ISAs UK’). Our
responsibilities under those standards are further described in the ‘Responsibilities of the auditor for the
audit of the financial statements’ section of our report. We are independent of the Group and Company in
accordance with the ethical requirements that are relevant to our audit of the financial statements in the
United Kingdom, namely FRC’s Ethical Standard and the ethical pronouncements established by Chartered
Accountants Ireland, applied as determined to be appropriate in the circumstances for the Group and
Company. We have fulfilled our other ethical responsibilities in accordance with these requirements. We
believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors’ use of going concern basis of
accounting in the preparation of the financial statements is appropriate. Our evaluation of the directors’
assessment of the Group and Company’s ability to continue as a going concern basis of accounting included:
Evaluating management’s future cash flow forecasts, the process by which they were prepared, and
assessed the calculations are mathematically accurate;
Challenging the underlying key assumptions incorporated into the Group and Company’s cash flow
forecasts;
Independent auditor’s report to the members of Amryt
Pharma plc (continued)
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P a g e | 39
Annual Report and Accounts
for the year ended December 31, 2021
Conclusions relating to going concern (continued)
Regarding revenue projections, challenging the estimates made by management by assessing
whether the estimates regarding sales forecasts and sales prices are in line with historical revenues
to date and current contracts in place;
Challenging the sensitivities and stress testing that management performed on the cash flow
forecasts; and
Assessing the adequacy of the disclosures with respect to the going concern assertion.
Based on the work we have performed, we have not identified any material uncertainties relating to events
or conditions that, individually or collectively, may cast significant doubt on the Group and Company’s
ability to continue as a going concern for a period of at least 12 months from the date when the financial
statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in
the relevant sections of this report.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our
audit of the financial statements of the current period and include the most significant assessed risks of
material misstatement (whether or not due to fraud) that we identified, including those which had the
greatest effect on: the overall audit strategy, the allocation of resources in the audit, and the directing of
efforts of the engagement team. These matters were addressed in the context of our audit of the financial
statements as a whole, and in forming our opinion thereon, and therefore we do not provide a separate
opinion on these matters.
Overall audit strategy
We designed our audit by determining materiality and assessing the risks of material misstatement in the
financial statements. In particular, we looked at where the directors made subjective judgements, for
example, in respect of significant accounting estimates that involved making assumptions and considering
future events. We also addressed the risk of management override of internal controls, including evaluating
whether there was any evidence of potential bias that could result in a risk of material misstatement due to
fraud.
Based on our considerations as set out below, our areas of focus included:
Accounting for the business combination transaction during the year, in particular the recognition
and subsequent measurement of the related goodwill and purchased intangible assets (Group)
Valuation of intangible assets including goodwill, other than those acquired as part of the current
year business combination (Group)
Valuation of Contingent Value Rights (CVRs) (Group and Company)
Valuation of contingent consideration (Group)
Revenue recognition (accuracy and completeness) – U.S. pharmaceutical rebate reserves (Group)
Independent auditor’s report to the members of Amryt
Pharma plc (continued)
Amryt Pharma plc
P a g e | 40
Annual Report and Accounts
for the year ended December 31, 2021
Key audit matters (continued)
How we tailored the audit scope
The Group is a global commercial-stage biopharmaceutical company focused on acquiring, developing and
commercialising innovative treatments to help improve the lives of patients with rare and orphan diseases.
The Company is incorporated in England and Wales and is listed on National Association of Securities
Dealers Automated Quotations (NASDAQ) Global Select Market under the symbol AMYT.
We tailored the scope of our audit taking into account the areas where the risk of misstatement was
considered material to the Group and Company, the nature and structure of the Group and Company’s
business and the industry in which they operate.
In establishing the overall approach to our audit, we assessed the risk of material misstatement at Group
and Company level, taking into account the nature, likelihood and potential magnitude of any misstatement.
As part of our risk assessment, we considered the control environment in place at Amryt Pharma plc.
In assessing the risk of material misstatement to the Group financial statements, and to ensure we had
adequate quantitative coverage of significant accounts in the financial statements, we selected 13
components out of the 36 reporting components of the Group. The 13 components cover entities across
Europe and the Americas, which represent the principal business units within the Group.
Of the 13 components selected, we performed an audit of the complete financial information for three
components (“full scope components”) which were selected based on their size or risk characteristics. For
the remaining ten components, we performed audit procedures on specific accounts within that component
that we considered had the potential for the greatest impact on the significant accounts in the financial
statements either because of the size of these accounts or their risk profile.
The components where we performed full or specific audit procedures approximately accounted for 99.6%
of the Group’s total assets, 99.5% of the total revenue and 100% of the total loss before taxes. We
performed an audit of the complete financial information of the Company.
Materiality and audit approach
The scope of our audit is influenced by our application of materiality. We set certain quantitative thresholds
for materiality. These, together with qualitative considerations, such as our understanding of the Group and
Company and their environment, the history of misstatements, the complexity of the Group and Company
and the reliability of the control environment, helped us to determine the scope of our audit and the nature,
timing and extent of our audit procedures and to evaluate the effect of misstatements, both individually and
on the financial statements as a whole.
Based on our professional judgement, we determined materiality for:
Group: 1.5% of total revenue for the year ended 31 December 2021. Revenue was chosen as
benchmark because revenue growth is the focus of the users of the financial statements and one of
the key financial metrics of the Group.
Company: 1% of total equity/net assets. The Company holds the Group’s investments and is not
in itself profit-oriented. The strength of the Company’s statement of financial position is the key
measure of financial health that is important to shareholders.
Independent auditor’s report to the members of Amryt
Pharma plc (continued)
Amryt Pharma plc
P a g e | 41
Annual Report and Accounts
for the year ended December 31, 2021
Key audit matters (continued)
Materiality and audit approach (continued)
We set performance materiality at a lower level than materiality to reduce the probability that, in aggregate,
uncorrected and undetected misstatements exceed the materiality for the financial statements. Performance
materiality was set at 65% for both the Group and Company materiality for the 2021 audit.
In determining performance materiality, we have considered our risk assessment, including our assessment
of the Group’s overall control environment. This is to reduce, to an appropriately low level, the probability
that the aggregate of uncorrected and undetected misstatements in the financial statements exceeds
materiality for the financial statements as a whole.
We agreed with the audit committee of the Board of Directors that we would report to them misstatements
identified during our audit above 5% of materiality, for the Group and Company, as well as misstatements
below that amount that, in our view, warranted reporting for qualitative reasons.
Significant matters identified
The risks of material misstatement that had the greatest effect on our audit, including the allocation of our
resources and effort, are set out below as significant matters together with an explanation of how we tailored
our audit to address these specific areas in order to provide an opinion on the financial statements as a
whole. This is not a complete list of all risks identified by our audit.
Description of significant matters
Our responses to significant matters
Key observations
communicated to the
Audit Committee
Accounting for the business
combination transaction during the
year, in particular the recognition and
subsequent measurement of the
related goodwill and purchased
intangible assets (Group)
On 5 August 2021, Amryt assumed
control of Chiasma Inc. (“Chiasma”)
for a total purchase consideration of
$260.3 million by allotting and issuing
a total of 127,740,695 new ordinary
shares to the former Chiasma
shareholders in the form of 25,548,139
Amryt ADSs. In addition, Chiasma
equity awards of $10.16 million were
also recognised as consideration
transferred upon the acquisition of
Chiasma. The assets acquired include
significant intangible asset valued at
date of acquisition of $215 million and
goodwill of $38.6 million was
recognised as a result of the business
combination.
We obtained an understanding on
management’s accounting process
relating to business combinations
and subsequent measurement and
performed test of design and
implementation of relevant
controls.
We reviewed the acquisition
related agreements to obtain an
understanding of the transaction
and key terms and determine
whether the acquisition transaction
was properly accounted for in
accordance with UK-adopted IAS.
We reviewed the purchase price
allocation (PPA), including the
related fair value adjustments and
resulting goodwill at acquisition
date. We involved our internal
valuation specialists in evaluating
the valuation methodologies and
key inputs used in identifying fair
We completed our
planned audit
procedures with no
exceptions.
Independent auditor’s report to the members of Amryt
Pharma plc (continued)
Amryt Pharma plc
P a g e | 42
Annual Report and Accounts
for the year ended December 31, 2021
Description of significant matters
Our responses to significant matters
Key observations
communicated to the
Audit Committee
We have determined the valuation of
these intangible assets to be a key audit
matter due to the size of the purchased
intangible assets, and also because the
valuation of the intangible assets and
goodwill involve significant judgment.
As a consequence, there is greater risk
of fraud or error due to management
override of controls.
The following significant judgments
and estimates used in the valuation
models and management’s year-end
impairment assessment could be
selected inappropriately resulting in
material misstatement:
-
Selection of appropriate discount
rates
-
Revenue growth and cash flow
forecasts
This matter is new in 2021 as the
acquisition occurred only in the
current year.
Refer to notes 6 and 12 of the
financial statements for further details.
value and related PPA adjustments.
Such inputs include discount rates,
revenue growth and cash flow
forecasts.
We assessed the competence,
independence and integrity of the
third party valuation experts used
by the Group.
We validated all significant
accounting entries relating to the
fair value impacts on assets
acquired and liabilities assumed
resulting from the PPA for
accuracy checks.
We reviewed the Group’s year-end
impairment assessment for this
cash generating unit. We evaluated
and challenged management’s
assumptions and judgements used
in the calculation of the future cash
flows, which include but are not
limited to revenue projections and
discount rates, including review of
any changes in assumptions from
the acquisition date to the year-end
date.
We performed integrity and
mathematical accuracy checks on
the forecasting model used to
estimate recoverable amounts. We
performed sensitivity analysis to
determine the reasonableness of
the input and output variables used
in the model.
We assessed the adequacy of the
Group’s financial statements
disclosures in respect of these
transactions and assessment was
made in accordance with
requirements of relevant
accounting standards.
Independent auditor’s report to the members of Amryt
Pharma plc (continued)
Amryt Pharma plc
P a g e | 43
Annual Report and Accounts
for the year ended December 31, 2021
Description of significant matters
Our responses to significant matters
Key observations
communicated to the
Audit Committee
Valuation of intangible assets
including goodwill, other than those
acquired as part of the current year
business combination (Group)
As at 31 December 2021, the Group’s
intangible assets and goodwill, other
than those acquired as part of the
current year business combination
described above, had a net book value
of $258.3 million and $18.1 million,
respectively. The intangible assets
include the net book value of in-
process research and development
(Oleogel-S10) acquired as part of
Amryt GmbH acquisition in 2016, and
acquired developed technology from
Aegerion acquisition in 2019, namely,
Metreletin and Lomitapide.
We have determined the valuation of
these intangible assets and goodwill to
be a key audit matter due to the size
of these purchased intangible assets,
and also because the impairment
assessment of these assets involve
significant management judgements
and estimates, which if selected
inappropriately could result in material
misstatement. As a consequence, there
is greater risk of fraud or error due to
management override of controls
Such judgments and estimates include:
-
Selection of appropriate
discount rates
-
Revenue growth and cash
flow forecasts
-
Probability of obtaining
regulatory approval (for
Oleogel-S10) in the future
Refer to note 12 of the financial
statements for further details.
We have obtained an
understanding on management’s
accounting process relating to the
valuation of intangible assets
including goodwill and performed
test of design and implementation
of relevant controls.
We reviewed the Group’s year-end
impairment assessment. We
evaluated and challenged
management’s assumptions and
judgements used in the calculation
of the future cash flows used in
estimating recoverable amounts of
assets, which include but are not
limited to revenue projections,
discount rates and probability of
obtaining regulatory approval in
the future. We also held
discussions with the Group’s
Global Operations and Analytics
team on revenue projections and
with the Chief Executive Officer
and Chief Medical Officer on the
status of relevant regulatory
approvals for Oleogel-S10.
We performed sensitivity analysis
to determine the reasonableness of
the input and output variables used
in the model.
We performed integrity and
mathematical accuracy checks on
the forecasting model used to
estimate recoverable amounts.
We assessed the adequacy of the
financial statements disclosures in
respect of these transactions and
the assessment was made in
accordance with requirements of
relevant accounting standards.
We completed our
planned audit
procedures with no
exceptions.
Independent auditor’s report to the members of Amryt
Pharma plc (continued)
Amryt Pharma plc
P a g e | 44
Annual Report and Accounts
for the year ended December 31, 2021
Description of significant matters
Our responses to significant matters
Key observations
communicated to the
Audit Committee
Valuation of Contingent Value Rights
(CVRs) (Group and Company)
On 23 September 2019 (prior to, but
in conjunction with, the acquisition of
Aegerion on 24 September 2019),
Amryt issued CVRs amounting to $85
million to existing shareholders and
option holders of Amryt. The CVRs
are payable on achieving certain
regulatory and revenue milestones. As
at 31 December 2021, the CVR
liability in the Consolidated and
Company Statement of Financial
Position was valued at $19.9 million.
The amortised cost of CVR liability
represents the present value of the re-
estimated future contractual cash
flows as at 31 December 2021.
The key assumptions include payment
amounts, expected timing of
achievement of the two milestones
(FDA approval and EMA approval)
related to Oleogel-S10, probabilities
of successful launch of Oleogel-S10,
revenue forecast related to Oleogel-
S10 and applicable discount rates.
The selection of valuation method
and assumptions used requires
significant judgement and estimates
from management. The existence of
significant estimation uncertainty
warrants significant audit attention.
Refer to note 2 (Valuation of
contingent value rights (“CVRs”)) and
note 6 of the financial statements for
further details.
We obtained an understanding of
management’s accounting process
relating to the valuation of CVRs
and performed test of design and
implementation of relevant
controls.
We assessed that the CVRs were
accounted for correctly and were
consistent with our understanding
from previous years and that the
valuation reflected the terms of the
CVR related agreements.
With the assistance from our
internal valuation specialists, we
evaluated and challenged the
judgments applied and
assumptions used by management
in determining the valuation of
CVRs at year-end, which included
but not limited to the selection of
appropriate valuation model,
estimates of cash flows, budgeted
revenue growth, discount rates and
probability factors. We also held
discussions with the Group’s
Global Operations and Analytics
team on revenue projections and
the Chief Executive Officer and
Chief Medical Officer on the status
of relevant regulatory approvals for
Oleogel-S10.
We performed integrity and
mathematical accuracy checks on
the model as well as performing
sensitivity analysis to determine the
reasonableness of the input and
output variables in the model.
We assessed the adequacy of the
financial statements disclosures in
respect of this transaction and the
assessment was made in
accordance with requirements of
We completed our
planned audit
procedures with no
exceptions.
Independent auditor’s report to the members of Amryt
Pharma plc (continued)
Amryt Pharma plc
P a g e | 45
Annual Report and Accounts
for the year ended December 31, 2021
Description of significant matters
Our responses to significant matters
Key observations
communicated to the
Audit Committee
relevant accounting standards.
Valuation of contingent consideration
(Group)
As a result of the acquisition of Amryt
AG and Som Therapeutics Corp. in
2016, the Group recognised a
contingent consideration liability. The
contingent consideration is recognised
at fair value and is based on the same
forecasting model used to assess the
recoverable amount of IPR&D
intangible assets. At 31 December
2021, the carrying amount of the
contingent consideration liability is
$61.2 million.
We considered the valuation of
contingent consideration liability as
key audit matter because of the
significant judgements and estimates
required by management in
determining its fair value at year-end
which involves forecasting and
discounting of future cash flows,
which are complex and are heavily
reliant on assumptions that could be
affected by future market or economic
developments. This is turn led to a
high degree of auditor judgement and
subjectivity and audit effort in
applying procedures for the related
assumptions.
The fair value determination of the
contingent consideration involve
forecasting and discounting of future
cash flows, which are complex and are
heavily reliant on assumptions which
could be affected by future market or
economic developments.
Refer to note 2 (Valuation of
contingent consideration), and note 12
of the financial statements for further
details.
We obtained an understanding of
management’s accounting process
relating to the valuation of
contingent consideration and
performed test of design and
implementation of relevant
controls.
We evaluated and challenged
management’s judgements and
assumptions used in the calculation
of the future cash flows, which
include but are not limited to
revenue projections, discount rates
and probability of clinical
development success. We also held
discussions with the Group’s Global
Operations and Analytics team on
revenue projections and with the
Chief Executive Officer and Chief
Medical Officer on the status of
relevant regulatory approvals for
Oleogel-S10.
We performed integrity and
mathematical accuracy checks on the
forecasting model used to estimate
the fair value amount.
We obtained and tested
management’s sensitivity analysis
around the key assumptions, to
ascertain that selected adverse
changes to key assumptions, both
individually and in aggregate, would
not cause the contingent
consideration to be materially
misstated.
We assessed the adequacy of the
financial statements disclosures in
respect of contingent consideration
and the assessment was made in
accordance with requirements of
relevant accounting standards.
We completed our
planned audit
procedures with no
exceptions.
Independent auditor’s report to the members of Amryt
Pharma plc (continued)
Amryt Pharma plc
P a g e | 46
Annual Report and Accounts
for the year ended December 31, 2021
Description of significant matters
Our responses to significant matters
Key observations
communicated to the
Audit Committee
Revenue recognition (accuracy and
completeness) – U.S. pharmaceutical
rebate reserves (Group)
As described in note 2 Revenue
recognition - variable consideration,
the Group recognises revenue when
the control of the goods or services
were transferred to the customer at an
amount that reflects the consideration
to which the Group expects to be
entitled in exchange for those goods.
Rebates are accounted for as variable
consideration and are recorded as a
reduction in sales. The yearend liability
for such rebates is recognised within
trade and other payables on the
Consolidated Statement of Financial
Position. The majority of the Group’s
rebates relate to sales of
pharmaceutical goods within the U.S.
(i.e. Medicaid programs).
The Group is required to pay rebates
on each unit of product sold to
customers covered by the relevant
program. During the year ended 31
December 2021, Medicaid rebate costs
deducted against sales amounted to
$41.7 million. An accrual of $21.6
million was recorded at the balance
sheet date in relation to payments due
to be paid.
We considered this as a key audit
matter because management applied
significant judgement, which involved
significant measurement uncertainty in
developing these reserves. Variable
consideration primarily includes
government rebates. Estimates of
variable consideration are made at
contract inception and historical
experience, market trends, and
industry data are considered when
assessing such estimates. Variable
We obtained an understanding of
management’s process and key
inputs for calculating revenue
rebates and performed test of
design and implementation of
relevant controls.
We reviewed the basis of the year-
end rebate accrual calculation and
recalculated the expected amount of
rebates by utilising third party
information and market conditions
in the U.S. We compared our
recalculation to management’s
estimate and assessed its
reasonableness.
We performed a review of the
historical trend of actual rebate
claims paid against the estimated year
end accruals to assess accuracy.
We selected samples to test rebate
claims processed, including
evaluating those claims for
consistency with the contractual and
mandated terms of the rebate
arrangements and traced payments
made to different U.S. government
states to the bank statements.
We assessed the adequacy of the
financial statements disclosures in
respect of revenue recognition and
rebate reserves. The assessment was
made in accordance with
requirements of relevant accounting
standards.
We completed our
planned audit
procedures with no
exceptions.
Independent auditor’s report to the members of Amryt
Pharma plc (continued)
Amryt Pharma plc
P a g e | 47
Annual Report and Accounts
for the year ended December 31, 2021
Description of significant matters
Our responses to significant matters
Key observations
communicated to the
Audit Committee
consideration is included in the
transaction price to the extent it is
probable that a significant reversal of
revenue will not occur. The Group
reassesses variable consideration at the
end of each reporting period as
additional information becomes
available with the variance recorded to
product sales revenue. This in turn led
to a high degree of auditor judgement
and subjectivity and audit effort in
applying procedures for the
assumptions related to contractual
terms with customers, historical
experience and projected market
conditions in the U.S. pharmaceutical
market.
Other information
Other information comprises information included in the annual report, other than the financial statements
and our auditor’s report thereon, such as Strategic report, Corporate governance report, Directors’
remuneration report and Directors’ report. The directors are responsible for the other information. Our
opinion on the financial statements does not cover the other information and, except to the extent otherwise
explicitly stated in our report, we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated. If we
identify such material inconsistencies in the financial statements, we are required to determine whether there
is a material misstatement in the financial statements or a material misstatement of the other information.
If, based on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
the information given in the Strategic Report and the Directors’ Report for the financial year for
which the financial statements are prepared is consistent with the financial statements; and
the Strategic Report and the Directors’ Report have been prepared in accordance with applicable
legal requirements.
Independent auditor’s report to the members of Amryt
Pharma plc (continued)
Amryt Pharma plc
P a g e | 48
Annual Report and Accounts
for the year ended December 31, 2021
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the Group and Company and its environment obtained
in the course of the audit, we have not identified any material misstatements in the Strategic Report and the
Directors’ Report. We have nothing to report in respect of the following matters where the Companies Act
2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept, or returns adequate for our audit have not been
received from branches not visited by us; or
the financial statements and the part of the Directors’ remuneration report to be audited are not
in agreement with the accounting records; or
certain disclosures of directors’ remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Responsibilities of management and those charged with governance for the financial
statements
As explained more fully in the Directors’ responsibilities section of the Directors’ report, management is
responsible for the preparation of the financial statements which give a true and fair view in accordance
with UK-adopted IAS, and for such internal control as directors determine necessary to enable the
preparation of financial statements are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, management is responsible for assessing the Group and Company’s
ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using
the going concern basis of accounting unless management either intends to liquidate the Group and
Company or to cease operations, or has no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Group and Company’s financial
reporting process.
Responsibilities of the auditor for the audit of the financial statements
The objectives of an auditor are to obtain reasonable assurance about whether the financial statements as a
whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report
that includes their opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists.
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.
A further description of an auditor’s responsibilities for the audit of the financial statements is located on
the Financial Reporting Council’s website at: www.frc.org.uk/auditorsresponsibilities. This description
forms part of our auditor’s report.
Independent auditor’s report to the members of Amryt
Pharma plc (continued)
Amryt Pharma plc
P a g e | 49
Annual Report and Accounts
for the year ended December 31, 2021
Explanation as to what extent the audit was considered capable of detecting irregularities, including
fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design
procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of
irregularities, including fraud. Owing to the inherent limitations of an audit, there is an unavoidable risk that
material misstatement in the financial statements may not be detected, even though the audit is properly
planned and performed in accordance with the ISAs (UK). The extent to which our procedures are capable
of detecting irregularities, including fraud is detailed below.
Based on our understanding of the Group and the Company’s industry, we identified that the principal risks
of non-compliance with laws and regulations related to NASDAQ stock exchange listing rules, data privacy
law, employment law, environmental regulations, health & safety, sales and marketing of pharmaceutical
products and other laws affecting the Group and the Company, and we considered the extent to which
non-compliance might have a material effect on the financial statements. We also considered those laws
and regulations that have a direct impact on the preparation of the financial statements such as the
Companies Act 2006 and UK tax legislation.
We evaluated management’s incentives and opportunities for fraudulent manipulation of the financial
statements (including the risk of override of controls), and determined that the principal risks were related
to posting inappropriate journal entries to manipulate financial performance and management bias through
judgements and assumptions in significant accounting estimates, in particular in relation to significant one-
off or unusual transactions. We apply professional scepticism through the audit to consider potential
deliberate omission or concealment of significant transactions, or incomplete/inaccurate disclosures in the
financial statements.
In response to these principal risks, our audit procedures included but were not limited to:
enquiries of board, risk and compliance and legal functions and Audit Committee on the policies
and procedures in place regarding compliance with laws and regulations, including consideration
of known or suspected instances of non-compliance and whether they have knowledge of any
actual, suspected or alleged fraud;
inspection of the Group and Company’s regulatory and legal correspondence and review of
minutes of board of directors’ meetings during the year to corroborate inquiries made;
gaining an understanding of the internal controls established to mitigate risk related to fraud;
discussion amongst the engagement team in relation to the identified laws and regulations and
regarding the risk of fraud, and remaining alert to any indications of non-compliance or
opportunities for fraudulent manipulation of financial statements throughout the audit;
identifying and testing journal entries to address the risk of inappropriate journals and management
override of controls;
designing audit procedures to incorporate unpredictability around the nature, timing or extent of
our testing;
challenging assumptions and judgements made by management in their significant accounting
estimates, including valuation of convertible notes, valuation of acquired assets, impairment
assessment of intangible assets and goodwill, valuation of contingent considerations and contingent
value rights, capitalisation of research and development (“R&D”) expenses, recognition of deferred
tax assets, revenue recognition – variable consideration, inventory obsolescence and impairment
review of investment in subsidiaries;
review of the financial statements disclosures to underlying supporting documentation and
inquiries of management;
Independent auditor’s report to the members of Amryt
Pharma plc (continued)
Amryt Pharma plc
P a g e | 50
Annual Report and Accounts
for the year ended December 31, 2021
Responsibilities of the auditor for the audit of the financial statements (continued)
Explanation as to what extent the audit was considered capable of detecting irregularities, including
fraud (continued)
assessing the appropriateness of the collective competence and capabilities of the engagement team
included consideration of the engagement team’s: (i) understanding of, and practical experience
with audit engagements of a similar nature and complexity through appropriate training and
participation (ii) knowledge of the industry in which the client operates (iii) understanding of the
legal and regulatory requirements specific to the Group and Company.
The primary responsibility for the prevention and detection of irregularities including fraud rests with those
charged with governance and management. As with any audit, there remains a risk of non-detection or
irregularities, as these may involve collusion, forgery, intentional omissions, misrepresentations or override
of internal controls.
The purpose of our audit work and to whom we owe our responsibilities
This report is made solely to the Company’s members, as a body, in accordance with chapter 3 of Part 16
of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Company’s
members those matters we are required to state to them in an auditor’s report and for no other purpose.
To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the
parent company and the Company’s members as a body, for our audit work, for this report, or for the
opinions we have formed.
Stephen Murray (Senior Statutory Auditor)
For and on behalf of
Grant Thornton
Chartered Accountants & Statutory Auditors
Dublin 2
Ireland
Date: May 31, 2022
Amryt Pharma plc
Consolidated Statement of Comprehensive Income/(Loss)
For the year ended December 31, 2021
Amryt Pharma plc
P a g e | 51
Annual Report and Accounts
for the year ended December 31, 2021
Year ended December 31,
Note
2021
2020
US$’000
US$’000
Revenue
3
222,543
182,607
Cost of sales
4
(106,119)
(119,029)
Gross profit
116,424
63,578
Research and development expenses
(37,729)
(27,618)
Selling, general and administrative expenses
(91,995)
(76,673)
Restructuring and acquisition costs
6
(16,947)
(1,017)
Share based payment expenses
5
(8,341)
(4,729)
Operating loss before finance expense
7
(38,588)
(46,459)
Non-cash change in fair value of contingent consideration
6
18,407
(27,827)
Non-cash contingent value rights gain / (loss)
6
41,525
(12,004)
Net finance expense - other
9
(27,906)
(19,569)
Loss on ordinary activities before taxation
(6,562)
(105,859)
Tax credit on loss on ordinary activities
10
7,562
1,332
Profit/(loss) for the year attributable to the equity holders of the Company
1,000
(104,527)
Exchange translation differences which may be reclassified through profit or loss
4,423
(2,164)
Total other comprehensive income/(loss)
4,423
(2,164)
Total comprehensive income/(loss) for the year attributable to the equity
holders of the Company
5,423
(106,691)
Earnings/(loss) per share
Basic earnings/(loss) per share attributable to ordinary equity holders of the
parent (US$)
11
0.00
(0.66)
Diluted earnings/(loss) per share attributable to ordinary equity holders of the
parent (US$)
11
0.00
(0.66)
The accompanying notes form an integral part of these consolidated financial statements.
Amryt Pharma plc
Consolidated Statement of Financial Position
As at December 31, 2021
Amryt Pharma plc
P a g e | 52
Annual Report and Accounts
for the year ended December 31, 2021
As at December 31,
Note
2021
2020
US$’000
US$’000
Assets
Non-current assets
Goodwill
12
56,688
19,131
Intangible assets
12
467,359
305,369
Property, plant and equipment
13
7,416
7,574
Other non-current assets
1,885
1,542
Total non-current assets
533,348
333,616
Current assets
Trade and other receivables
14
53,908
43,185
Inventories
15
115,769
40,992
Cash and cash equivalents, including restricted cash
16
113,032
118,798
Total current assets
282,709
202,975
Total assets
816,057
536,591
Equity and liabilities
Equity attributable to owners of the parent
Share capital
17
25,500
13,851
Share premium
17
318,153
51,408
Other reserves
17
246,303
236,488
Accumulated deficit
(233,295)
(235,605)
Total equity
356,661
66,142
Non-current liabilities
Contingent consideration and contingent value rights
6
81,113
148,323
Deferred tax liability
18
17,772
6,612
Long term loan
19
93,395
87,302
Convertible notes
20
105,788
101,086
Provisions and other liabilities
22
4,049
25,951
Total non-current liabilities
302,117
369,274
Current liabilities
Trade and other payables
21
149,734
90,236
Provisions and other liabilities
22
7,545
10,939
Total current liabilities
157,279
101,175
Total liabilities
459,396
470,449
Total equity and liabilities
816,057
536,591
The accompanying notes form an integral part of these consolidated financial statements.
The Financial Statements were approved and authorized for issue by the Directors on May 31, 2022. They are signed on
the Board’s behalf by:
Joe Wiley
Company Number:
Director
12107859
Amryt Pharma plc
Consolidated Statement of Cash Flows
For the year ended December 31, 2021
Amryt Pharma plc
P a g e | 53
Annual Report and Accounts
for the year ended December 31, 2021
Year ended December 31,
Note
2021
2020
US$’000
US$’000
Cash flows from operating activities
Profit/(loss) on ordinary activities after taxation
1,000
(104,527)
Net finance expense - other
9
27,906
19,569
Depreciation and amortization
12,13
50,744
44,465
Amortization of inventory fair value step-up
4,7
4,418
27,617
Loss on disposal of fixed assets
173
133
Share based payment expenses
5
8,341
4,729
Non-cash change in fair value of contingent consideration
6
(18,407)
27,827
Non-cash contingent value rights(gain)/loss
6
(41,525)
12,004
Deferred taxation credit
(9,268)
(535)
Movements in working capital and other adjustments:
Change in trade and other receivables
14
(3,543)
(7,685)
Change in trade and other payables
21
11,758
8,909
Change in provision and other liabilities
22
(3,292)
4,663
Change in inventories
15
(13,288)
(10,609)
Change in non-current assets
523
331
Net cash flow from operating activities
15,540
26,891
Cash flow from investing activities
Net cash received on acquisition of subsidiary
6
107,942
—
Payments for property, plant and equipment
13
(729)
(1,503)
Payments for intangible assets
12
(816)
(963)
Deposit interest received
5
87
Net cash flow from / (used in) investing activities
106,402
(2,379)
Cash flow from financing activities
Proceeds from issue of equity instruments, net of expenses
17
4,701
37,927
Repayment of long term debt
19
(116,629)
—
Interest paid
19
(12,283)
(10,780)
Payment of leases
(1,215)
(1,119)
Net cash flow (used in) / from financing activities
(125,426)
26,028
Exchange differences and other movements
(2,282)
1,029
Net change in cash and cash equivalents
(5,766)
51,569
Cash and cash equivalents at beginning of the year
118,798
67,229
Restricted cash at end of the year
16
261
223
Cash at bank available on demand at end of the year
16
112,771
118,575
Total cash and cash equivalents at end of the year
16
113,032
118,798
The accompanying notes form an integral part of these consolidated financial statements.
Amryt Pharma plc
Consolidated Statement of Changes in Equity
For the year ended December 31, 2021
Amryt Pharma plc
P a g e | 54
Annual Report and Accounts
for the year ended December 31, 2021
Share
capital
Share
premium
Warrant
reserve
Treasury
shares
Share
based
payment
reserve
Merger
reserve
Reverse
acquisition
reserve
Equity
component
of
convertible
notes
Other
distributable
reserves
Currency
translation
reserve
Accumulated
deficit
Total
Note
US$’000
US$’000
US$’000
US$’000
US$’000
US$’000
US$’000
US$’000
US$’000
US$’000
US$’000
US$’000
Balance at January 1, 2020
11,918
2,422
29,523
(7,534)
3,190
42,627
(73,914)
29,210
217,634
7,894
(131,137)
131,833
Loss for the year
—
—
—
—
—
—
—
—
—
—
(104,527)
(104,527)
Foreign exchange translation reserve
—
—
—
—
—
—
—
—
—
(2,164)
—
(2,164)
Total comprehensive loss
—
—
—
—
—
—
—
—
—
(2,164)
(104,527)
(106,691)
Transactions with owners
Issue of shares in exchange for warrants
17
630
14,131
(14,761)
—
—
—
—
—
—
—
—
—
Issue of shares in equity fund raise
17
1,303
38,697
—
—
—
—
—
—
—
—
—
40,000
Issue costs associated with equity fund raise
17
—
(3,848)
—
—
—
—
—
—
—
—
—
(3,848)
Issue of treasury shares for share options
exercised
17
—
6
—
113
—
—
—
—
—
—
—
119
Share based payment expense
5
—
—
—
—
4,729
—
—
—
—
—
—
4,729
Share based payment expense – Lapsed
—
—
—
—
(59)
—
—
—
—
—
59
—
Total transactions with owners
1,933
48,986
(14,761)
113
4,670
—
—
—
—
—
59
41,000
Balance at December 31, 2020
13,851
51,408
14,762
(7,421)
7,860
42,627
(73,914)
29,210
217,634
5,730
(235,605)
66,142
Balance at January 1, 2021
13,851
51,408
14,762
(7,421)
7,860
42,627
(73,914)
29,210
217,634
5,730
(235,605)
66,142
Profit for the year
—
—
—
—
—
—
—
—
—
—
1,000
1,000
Foreign exchange translation reserve
—
—
—
—
—
—
—
—
—
4,423
—
4,423
Total comprehensive loss
—
—
—
—
—
—
—
—
—
4,423
1,000
5,423
Transactions with owners
Issue of treasury shares in exchange for
warrants
17
23
99
—
439
—
—
—
—
—
—
—
561
Issue of treasury shares in exchange for share
options exercised
17
25
89
—
465
(191)
—
—
—
—
—
—
388
Issue of shares and treasury shares in
exchange for warrants
17
749
7,496
(14,762)
6,517
—
—
—
—
—
—
—
—
Issue of shares in consideration of Chiasma
acquisition
5,6
10,547
249,789
—
—
—
—
—
—
—
—
—
260,336
Share based payment reserve recognized on
Chiasma acquisition
17
—
—
—
—
10,157
—
—
—
—
—
—
10,157
Issue of shares for share options exercised and
vesting of RSUs
17
305
9,272
—
—
(4,264)
—
—
—
—
—
—
5,313
Share based payment expense
5
—
—
—
—
8,341
—
—
—
—
—
—
8,341
Share based payment – Lapsed
—
—
—
—
(1,310)
—
—
—
—
—
1,310
—
Total transactions with owners
11,649
266,745
(14,762)
7,421
12,733
—
—
—
—
—
1,310
285,096
Balance at December 31, 2021
25,500
318,153
—
—
20,593
42,627
(73,914)
29,210
217,634
10,153
(233,295)
356,661
The accompanying notes form an integral part of these consolidated financial statements.
Amryt Pharma plc
Company Statement of Financial Position
As at December 31, 2021
Amryt Pharma plc
P a g e | 55
Annual Report and Accounts
for the year ended December 31, 2021
Balance sheet
As at December 31,
Note
2021
2020
US$’000
US$’000
Assets
Non-current assets
Investment in subsidiaries
26
619,960
341,935
Total non-current assets
619,960
341,935
Current assets
Trade and other receivables
14
26,263
11,135
Cash and cash equivalents
16
12,004
38,364
Total current assets
38,267
49,499
Total assets
658,227
391,434
Equity and liabilities
Equity attributable to owners of the company
Share capital
17
25,500
13,851
Share premium
17
318,153
51,408
Other reserves
17
270,406
265,014
Retained earnings
21,983
(6,767)
Total equity
636,042
323,506
Current liabilities
Contingent value rights
6
19,892
49,355
Total non-current liabilities
19,892
49,355
Current liabilities
Trade and other payables
21
2,293
18,573
Total current liabilities
2,293
18,573
Total liabilities
22,185
67,928
Total equity and liabilities
658,227
391,434
The accompanying notes form an integral part of these financial statements.
The Company has taken advantage of the exemption permitted by Section 408 of the Companies Act 2006 not to present
an income statement for the year. The Company's profit for the financial year ended December 31, 2021, was
US$27,440,000 (2020: loss of US$5,535,000).
The Financial Statements were approved and authorized for issue by the Directors on May 31, 2022.
They are signed on the Board’s behalf by:
Joe Wiley
Company Number:
Director
12107859
Amryt Pharma plc
Company Statement of Cash Flows
For the year ended December 31, 2021
Amryt Pharma plc
P a g e | 56
Annual Report and Accounts
for the year ended December 31, 2021
Statement of Cash Flows
Year ended December 31,
Note
2021
2020
US$’000
US$’000
Cash flows from operating activities
Profit/(loss) on ordinary activities after taxation
27,440
(5,535)
Share based payment expenses
5
809
(245)
Non-cash contingent value rights gain
6
(29,463)
(58)
Movements in working capital and other adjustments:
Change in other receivables
14
(15,128)
(8,581)
Change in trade and other payables
21
(14,719)
14,856
Net cash flow (used in) / from operating activities
(31,061)
437
Cash flow from financing activities
Proceeds from issue of equity instruments, net of expenses
17
4,701
37,927
Net cash flow from financing activities
4,701
37,927
Net change in cash at bank and in hand
(26,360)
38,364
Cash at bank and in hand at beginning of the year
38,364
—
Restricted cash at end of the year
16
—
—
Cash at bank available on demand at end of the year
16
12,004
38,364
Total cash at bank and in hand at end of the year
16
12,004
38,364
The accompanying notes form an integral part of these financial statements.
Amryt Pharma plc
Company Statement of Changes in Equity
For the year ended December 31, 2021
Amryt Pharma plc
P a g e | 57
Annual Report and Accounts
for the year ended December 31, 2021
Changes in Equity
Share
capital
Share
premium
Warrant
reserve
Treasury
shares
Share
based
payment
reserve
Equity
component
of
convertible
notes
Other
distributable
reserves
Accumulated
deficit
Total
Note
US$’000
US$’000
US$’000
US$’000
US$’000
US$’000
US$’000
US$’000
US$’000
Balance at January 1, 2020
11,918
2,422
29,523
(7,534)
3,190
29,210
220,603
(1,231)
288,101
Loss for the year
—
—
—
—
—
—
—
(5,535)
(5,535)
Total comprehensive loss
—
—
—
—
—
—
—
(5,535)
(5,535)
Transactions with owners
Issue of shares in exchange for warrants
17
630
14,131
(14,761)
—
—
—
—
—
—
Issue of shares in equity fund raise
17
1,303
38,697
—
—
—
—
—
—
40,000
Issue costs associated with equity fund raise
17
—
(3,848)
—
—
—
—
—
—
(3,848)
Issue of treasury shares for share options
exercised
17
—
6
—
113
—
—
—
—
119
Share based payment
5
—
—
—
—
4,729
—
—
—
4,729
Share based payment – lapsed
—
—
—
—
(59)
—
—
(1)
(60)
Total transactions with owners
1,933
48,986
(14,761)
113
4,670
—
—
—
40,940
Balance at December 31, 2020
13,851
51,408
14,762
(7,421)
7,860
29,210
220,603
(6,767)
323,506
Balance at January 1, 2021
13,851
51,408
14,762
(7,421)
7,860
29,210
220,603
(6,767)
323,506
Profit for the year
—
—
—
—
—
—
—
27,440
27,440
Total comprehensive loss
—
—
—
—
—
—
—
27,440
27,440
Transactions with owners
Issue of treasury shares in exchange for
warrants
17
23
99
—
439
—
—
—
—
561
Issue of treasury shares in exchange for share
options exercised
17
25
89
—
465
(191)
—
—
—
388
Issue of shares and treasury shares in
exchange for warrants
17
749
7,496
(14,762)
6,517
—
—
—
—
—
Issue of shares in consideration of Chiasma
acquisition
17
10,547
249,789
—
—
—
—
—
—
260,336
Share based payment reserve recognized on
Chiasma acquisition
5,6
—
—
—
—
10,157
—
—
—
10,157
Issue of shares for share options exercised and
vesting of RSUs
5
305
9,272
—
—
(4,264)
—
—
—
5,313
Share based payment
5
—
—
—
—
8,341
—
—
—
8,341
Share based payment – Lapsed
—
—
—
—
(1,310)
—
—
1,310
—
Total transactions with owners
11,649
266,745
(14,762)
7,421
12,733
—
—
1,310
285,096
Balance at December 31, 2021
25,500
318,153
—
—
20,593
29,210
220,603
21,983
636,042
The accompanying notes form an integral part of these financial statements.
Amryt Pharma plc
Notes to the Financial Statements
For the year ended December 31, 2021
Amryt Pharma plc
P a g e | 58
Annual Report
for the year ended December 31, 2021
1. General information
Amryt is a global commercial-stage biopharmaceutical company focused on acquiring, developing and commercializing innovative
treatments to help improve the lives of patients with rare and orphan diseases. Amryt comprises a strong and growing portfolio
of commercial and development assets.
As used herein, references to “we,” “us,” “Amryt” or the “Group” in these financial statements shall mean Amryt Pharma plc and
its global subsidiaries, collectively. References to the “Company” in these financial statements shall mean Amryt Pharma plc.
Amryt Pharma plc is a company incorporated in England and Wales. The Company is listed on Nasdaq (ticker: AMYT). The Company
was also listed on the AIM market of the London Stock Exchange (ticker: AMYT) up until January 11, 2022, on which date the
Company completed the cancellation its admission to AIM. The cancellation was announced by the Company on November 22,
2021, and following the AIM delisting, the Company’s American Depository Shares (“ADSs”) will remain listed, and will only be
tradeable, on Nasdaq. The Company’s last day of trading on AIM was January 10, 2022.
Amryt acquired Chiasma, Inc. (“Chiasma”) in August 2021. The combined company will be a global leader in rare and orphan
diseases with three on-market commercial products, a global commercial and operational footprint and a significant development
pipeline of therapies with the financial flexibility to execute its growth plans. Amryt’s commercial business comprises three orphan
disease products – metreleptin (Myalept®/ Myalepta®); oral octreotide (Mycapssa®); and lomitapide (Juxtapid®/ Lojuxta®).
Amryt's lead development candidate, Oleogel-S10 is a potential treatment for the cutaneous manifestations of Junctional and
Dystrophic Epidermolysis Bullosa (EB), a rare and distressing genetic skin disorder affecting young children and adults for which
there is currently no approved treatment. Filsuvez® has been selected as the brand name for Oleogel-S10. The product does not
currently have regulatory approval to treat EB. On February 28, 2022, Amryt announced that the U.S. Food and Drug
Administration (“FDA”) communicated that it had completed its review of the NDA for Oleogel-S10 and has determined that the
application cannot be approved in its present form. The FDA has asked Amryt to submit additional confirmatory evidence of
effectiveness for Oleogel-S10 in EB. Amryt intends to discuss with the FDA the nature of the data required to address the Agency’s
concerns. The European Medicines Agency (“EMA”) review process for Oleogel-S10 in EB is ongoing and Amryt has responded to
outstanding questions. Given the rarity of the disease without any approved therapies, the EMA proposed that an Ad-Hoc Expert
Group, comprised of both EB clinical experts and patients with EB, be consulted to provide external and independent EB specific
advice. On April 22, 2022, the Committee for Medicinal Products for Human Use (“CHMP”) adopted a positive opinion,
recommending the approval of Filsuvez® in the EU for the treatment of partial thickness wounds associated with dystrophic and
junctional EB in patients six months and older. Based on this CHMP recommendation a decision by the European Commission
(“EC”) is expected on the Filsuvez® application within 67 days. The CHMP positive opinion is supported by Phase 3 data from the
EASE trial which was the largest ever global trial conducted in patients with EB, performed across 58 sites in 28 countries.
The financial statements were authorized for issue by the Company’s Board of Directors on May 31, 2022.
2. Accounting policies
Basis of preparation
(i)
Compliance with International Financial Reporting Standards ("IFRS")
The consolidated financial statements of the Company and its subsidiaries (“Group”) and the individual financial statements of
the Company have been prepared in accordance with IFRS and interpretations issued by the IFRS Interpretations Committee (“IFRS
IC”) applicable to companies reporting under IFRS. The financial statements comply with UK-adopted International Accounting
Standards and are for the years ended December 31, 2021 and December 31, 2020.
(ii)
Historical cost convention
The financial statements have been prepared on a historical cost basis, except for certain financial instruments that are measured
at fair values at the end of each reporting period, as explained in the accounting policies below.
Amryt Pharma plc
Notes to the Financial Statements Continued
For the year ended December 31, 2021
Amryt Pharma plc
P a g e | 59
Annual Report and Accounts
for the year ended December 31, 2021
(iii)
New and amended standards adopted by the Group and Company
In the current year, a number of amendments to IFRS and Interpretations issued that are effective for annual period beginning on
or after January 1, 2021, have been applied. These amendments and interpretations do not have significant impact on the
disclosures or the amounts reported in these financial statements.
COVID-19-Related Rent Concessions beyond June 30, 2021 (Amendment to IFRS 16)
Interest Rate Benchmark Reform – Phase 2 (Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS16)
(iv)
New standards and interpretations not yet adopted
There were a number of standards and interpretations which were in issue but were not effective at January 1, 2021, and have
not been adopted for these consolidated financial statements.
Amendments to IAS 1 Presentation of Financial Statements and IFRS Practice Statement 2: Disclosure of Accounting
policies effective January 1, 2023
Amendments to IAS 8 Accounting policies, Changes in Accounting Estimates and Errors: Definition of Accounting
Estimates effective January 1, 2023
Onerous contracts – cost of fulfilling a contract (Amendments to IAS 37), effective January 1, 2022
Property, Plant and Equipment: Proceeds before Intended Use (Amendments to IAS 16), effective January 1, 2022
Amendments to IFRS 3 Business Combinations, effective January 1, 2022
Annual Improvements to IFRS Standards 2018–2020, effective January 1, 2022
Classification of Liabilities as Current or Non-current (Amendments to IAS 1), effective January 1, 2023
IFRS 17 Insurance Contracts and amendments to IFRS 17 Insurance Contracts, effective January 1, 2023
These amendments are not expected to have significant impact on disclosures or amounts reported in the financial statements in
the period of initial application.
Basis of going concern
Having considered the Group and Company’s current financial position and cash flow projections, the Board of Directors believes
that the Group and Company will be able to continue in operational existence for at least the next 12 months from the date of
approval of these financial statements and that it is appropriate to continue to prepare the financial statements on a going concern
basis.
As part of their inquiries, the Board of Directors reviewed budgets, projected cash flows, and other relevant information for a
period not less than 12 months from the date of approval of the financial statements for the year ended December 31, 2021.
Key considerations in assessing the going concern assumption included, but were not limited to, the significant cash balance held
by the Company along with consistent positive operating cash flows, the continued growth in existing commercial produces, the
positive impact from the increase in revenues from commercial sales of product candidates and additional indications of
commercial products, if approved. The potential product candidates include Oleogel S-10, on which the CHMP adopted a positive
opinion on April 22, 2022, recommending the approval of Filsuvez® in the EU for the treatment of partial thickness wounds
associated with dystrophic and junctional EB in patients six months and older. Based on this CHMP recommendation a decision by
the European Commission (“EC”) is expected on the Filsuvez® application within 67 days. Additional indications include the
development for Mycapssa® in patients with carcinoid symptoms stemming from neuroendocrine tumors (“NET”) and label
expansion for metreleptin in the treatment of partial lipodystrophy metreleptin (“PL”) in the US, each of which represent
significant commercial opportunities.
Amryt Pharma plc
Notes to the Financial Statements Continued
For the year ended December 31, 2021
Amryt Pharma plc
P a g e | 60
Annual Report and Accounts
for the year ended December 31, 2021
Basis of consolidation
The financial statements comprise the financial statements of the Group for the years ended December 31, 2021, and 2020.
Subsidiaries are entities controlled by the Company. Where the Company has control over an investee, it is classified as a
subsidiary. The Company controls an investee if all three of the following elements are present: power over an investee, exposure
or rights to variable returns from its involvement with the investee and the ability to use its power to affect those variable returns.
Control is reassessed whenever facts and circumstances indicate that there may be a change in any of these elements of control.
Subsidiaries are fully consolidated from the date that control commences until the date that control ceases. Accounting policies
of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group. Intergroup
balances and any unrealized gains or losses, income or expenses arising from intergroup transactions are eliminated in preparing
the consolidated financial statements.
Presentation of balances
The financial statements are presented in U.S. dollars (“US$”), rounded to the nearest thousand, which is the functional currency
of the Company and presentation currency of the Group.
The following table discloses the major exchange rates of those currencies other than the functional currency of US$ that are
utilized by the Group:
Foreign currency units to 1 US$
€
£
ILS
NOK
DKK
Average period to December 31, 2021
0.8454
0.7271
3.2322
8.5975
6.2875
At December 31, 2021
0.8830
0.7413
3.1115
8.8074
6.5664
Foreign currency units to 1 US$
€
£
ILS
NOK
DKK
Average period to December 31, 2020
0.8777
0.7799
3.4351
9.4206
6.5432
At December 31, 2020
0.8141
0.7365
3.2148
8.5671
6.0570
(€ = Euro; £ = Pounds Sterling, ILS = Israeli Shekel, NOK = Norwegian Kroner, DKK = Danish Kroner)
Critical accounting judgements and key sources of estimation uncertainty
In preparing these financial statements in conformity with IFRS, management is required to make judgements, estimates and
assumptions that affect the application of policies and amounts reported in the financial statements and accompanying notes.
The estimates and associated assumptions are based on historical experience and various other factors that are believed to be
reasonable under the circumstances, the results of which form the basis of making the judgements about the carrying value of
assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in
the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods
if the revision affects both current and future periods.
The critical accounting policies which involve significant estimates, assumptions or judgements, the actual outcome of which could
have a material impact on the Group and Company’s results and financial position outlined below, are as follows:
Amryt Pharma plc
Notes to the Financial Statements Continued
For the year ended December 31, 2021
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for the year ended December 31, 2021
Valuation of convertible notes
In conjunction with the accounting for financial instruments, the Group recorded compound financial instruments related to the
convertible notes that were issued on September 24, 2019. In determining the classification of the convertible notes, the Group
assessed the fixed-for-fixed criteria and considered that this was met and the number of shares that can be converted by holders
of the notes is fixed. The compound financial instrument consists of a liability component and an equity component. The liability
component is valued using an estimated discounted cash flow calculation based on the future contractual cash flows in the
contract which are discounted at a rate of interest an identical financial instrument without a conversion feature would be subject
to. Factors that are considered in estimating the prevailing market rate of interest include or are not limited to:
loan term and maturity;
repayment profile during the loan term other than interest;
level of loan security; and
principal amount of the loan.
Refer to Note 20, Convertible notes, for further details.
Valuation of acquired assets
In conjunction with the accounting for business combinations, the Group recorded intangible assets such as in connection with
the Chiasma acquisition and with the Aegerion acquisition, primarily related to developed technology on the commercially
marketed products, and inventories which include raw material, work in progress ("WIP”) and finished goods. The identifiable
intangible assets and inventories are measured at their respective fair values as of the acquisition date. When significant
identifiable intangible assets and inventories are acquired, the Group determines the fair values of these assets as of the
acquisition date. The models used in valuing these intangible assets and inventories require the use of significant estimates and
assumptions including but not limited to:
Intangible assets
estimates of revenues and operating profits related to the products or product candidates;
the probability of success for unapproved product candidates considering their stages of development;
the time and resources needed to complete the development and approval of product candidates;
projecting regulatory approvals;
developing appropriate discount rates and probability rates by project; and
tax implications, including the forecasted effective tax rate.
Refer to Note 6, Business combinations and asset acquisitions, for further details.
Inventories
estimates of saleable inventory and non-saleable inventory, which was determined by a sales forecast and production
timeline; and
expected selling price and estimated costs of disposal.
Valuation of contingent value rights (“CVRs”)
The Company issued CVRs for payments to its shareholders based on the occurrence of two milestones related to Oleogel-S10, its
pipeline product. The CVRs have pre-determined payouts, based on the occurrence of future events. If the events do not occur,
the CVRs expire as worthless. The fair value of the CVRs is estimated based on the following key assumptions:
expected timing of achievement of the two milestones (FDA approval and EMA approval) related to Oleogel-S10;
probabilities of successful launch of Oleogel-S10;
revenue forecast related to Oleogel-S10.
The Company believes the carrying value of the CVRs is based upon reasonable estimates and assumptions given the facts and
circumstances as of the valuation date. A detailed discussion of the methodology applied and key input assumptions used by the
Company is provided in Note 6, Business combinations and asset acquisitions, to the financial statements.
Amryt Pharma plc
Notes to the Financial Statements Continued
For the year ended December 31, 2021
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for the year ended December 31, 2021
Impairment of intangible assets and goodwill
The impairment assessment for intangible assets requires management to make significant judgements and estimates to
determine the fair value of the assets. Management periodically evaluates and updates the estimates based on the conditions
which influence these variables. A detailed discussion of the impairment methodology applied and key assumptions used by the
Group in the context of long-lived assets is provided in Note 12, Intangible assets and goodwill, to the financial statements. The
assumptions and conditions for determining impairment of intangible assets reflect management’s best assumptions and
estimates, but these items involve inherent uncertainties described above, many of which are not under management’s control.
As a result, the accounting for such items could result in different estimates or amounts if management used different assumptions
or if different conditions occur in future accounting periods.
Goodwill represents the difference between the purchase price and the fair value of the identifiable tangible and intangible net
assets acquired in a business combination. Goodwill is not amortized, but instead is reviewed for impairment on an annual basis
or when an event becomes known that could trigger an impairment. To perform the annual impairment test of goodwill, the Group
has identified the Group cash generating units (“CGUs”). CGUs reflect the lowest level at which goodwill is monitored for internal
management purposes. At least once a year, the Group compares the recoverable amount of the Group’s CGUs to the CGU’s
carrying amount. The recoverable amount (value in use) of a CGU is determined using a discounted cash flow approach based
upon the cash flow expected to be generated by the CGU. In case that the value in use of the CGU is less than its carrying amount,
the difference is at first recorded as an impairment of the carrying amount of the goodwill. The assumptions utilized in the
impairment test are dependent on management’s estimates, in particular in relation to the forecasting of future cash flows, the
discount rates applied to those cash flows, the expected long-term growth rate of the applicable businesses and terminal values.
As a result, the accounting for such items could result in different estimates or amounts if management used different assumptions
or if different conditions occur in future accounting periods.
Valuation of contingent consideration
Contingent consideration arising as a result of business combinations is initially recognized at fair value using a probability adjusted
present value model. The fair value of the contingent consideration is updated at each reporting date. The key judgements and
estimates applied by management in the determination of the fair value of the contingent consideration relate to the
determination of an appropriate discount rate, the assessment of market size and opportunity and probability assessments based
on market data for the chance of success of the commercialization of an orphan drug. A detailed discussion of the methodology
applied and key input assumptions used by the Group is provided in Note 6, Business combinations and asset acquisitions, to the
financial statements. The fair value of the contingent consideration uses management’s best estimates and judgements and
sensitivities have been assessed by management by considering movements in the discount rate applied and movements in
revenue forecasts. The chance of success of product development is based on published orphan drug research data and statistics,
where available, and management’s expertise and experience for orphan drugs and taking into account the unique circumstances
applying to approval process of each product. See Note 24, Fair value measurement and financial risk management, for
quantification of these sensitivities.
Research and development (“R&D”) expenses
Development costs are capitalized as an intangible asset if all of the following criteria are met:
completing the asset is technically feasible so that the asset will be available for use or sale;
there is an intention to complete the asset and use or sell it;
there is an ability to use or sell the asset;
the asset will generate probable future economic benefits and demonstrate the existence of a market or the usefulness
of the asset if it is to be used internally;
adequate technical, financial and other resources are available to complete the development of the asset and to use or
sell it; and
there is an ability to measure reliably the expenditure attributable to the intangible asset.
In process R&D acquired as part of a business combination is capitalized at the date of acquisition. Research costs are expensed
when they are incurred.
Factors which impact our judgement to capitalize certain research and development expenditures include the degree of regulatory
approval for products and the results of any market research to determine the likely future commercial success of products being
developed. Management reviews these factors each year to determine whether previous estimates as to feasibility, viability and
recovery should be changed.
Amryt Pharma plc
Notes to the Financial Statements Continued
For the year ended December 31, 2021
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for the year ended December 31, 2021
The assessment whether development costs can be capitalized requires management to make significant judgements.
Management has reviewed the facts and circumstances of each project in relation to the above criteria and in management’s
opinion, the criteria prescribed for capitalizing development costs as assets have not yet been met by the Group in relation to
Oleogel-S10 or AP103. Accordingly, all of the Group’s costs related to research and development projects are recognized as
expenses in the Consolidated Statement of Comprehensive Income/(Loss) in the period in which they are incurred. Management
expects that the above criteria will be met on filing of a submission to the regulatory authority for final drug approval or potentially
in advance of that on the receipt of information that strongly indicates that the development will be successful.
Recognition of deferred tax assets
Deferred tax assets are determined using enacted tax rates for the effects of net operating losses and temporary differences
between the book and tax bases of assets and liabilities. In assessing the realizability of deferred tax assets, management considers
whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization
of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary
differences become deductible. While management considers the scheduled reversal of deferred tax liabilities, and projected
future taxable income in making this assessment, there can be no assurance that these deferred tax assets may be realizable. As
at December 31, 2021, the Group did not recognize a deferred tax asset in respect of unused tax losses as described in Note 10,
Tax credit on loss on ordinary activities.
Revenue recognition
Variable Consideration
Product sales revenues are recognized at the net sales price (“transaction price”) which includes estimated reserves for variable
consideration, upon the transfer of control of the Company’s products. Variable consideration primarily includes government
rebates. Estimates of variable consideration are made at contract inception and historical experience, market trends, and industry
data are considered when assessing such estimates. Variable consideration is included in the transaction price to the extent it is
probable that a significant reversal of revenue will not occur. The Company reassesses variable consideration at the end of each
reporting period as additional information becomes available with the variance recorded to product sales revenue.
Inventory obsolescence
Inventory realizability is evaluated on a case-by-case basis and adjustments are made to inventory provisions based on estimates
of expected losses. Inventory write-offs include inventory that is approaching its “expiry” date and for which no further re-
processing can be performed. Trends in demand are reviewed to determine whether there are any instances where the realizable
value of inventory is likely to be less than its carrying value. Refer to Note 15, Inventories, for further details.
Impairment of investments in subsidiaries
At each reporting date, the Company reviews the carrying amounts of its investment in subsidiaries. If any such indication exists,
the recoverable amount of the asset, being the higher of the asset’s fair value less costs to sell and value in use, is compared to
the asset’s carrying value. Any excess of the asset’s carrying value over its recoverable amount is expensed. The assessment
involves a number of estimates and assumptions such as discount rates and risks affecting the pharmaceutical industry and other
risks specific to the Company and subsidiaries. Refer to Note 26, Investments in subsidiaries, for further details.
Principal accounting policies
Principal accounting policies are summarized below. They have been consistently applied throughout the period covered by the
financial statements.
Revenue recognition
Revenue arises from the sale of metreleptin, lomitapide, Mycapssa® and Imlan. The Group sells directly to customers and also
uses third parties in the distribution of products to customers.
To determine whether to recognize revenue, the Group follows a five-step process, as required by IFRS 15:
identifying the contract with a customer;
identifying the performance obligations;
determining the transaction price;
allocating the transaction price to the performance obligations; and
recognizing revenue when/as performance obligation(s) are satisfied.
Amryt Pharma plc
Notes to the Financial Statements Continued
For the year ended December 31, 2021
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for the year ended December 31, 2021
Revenue from contracts with customers is recognized when control of the goods or services are transferred to the customer at an
amount that reflects the consideration to which the Group expects to be entitled to in exchange for those goods. The Group
recognizes contract liabilities for consideration received in respect of unsatisfied performance obligations and reports these
amounts as liabilities in the Consolidated Statement of Financial Position. Similarly, if the Group satisfies a performance obligation
before it receives the consideration, the Group recognizes either a contract asset or a receivable in its Consolidated Statement of
Financial Position, depending on whether something other than the passage of time is required before the consideration is due.
Revenue from sale of goods - Group
Imlan revenue is generally recognized at a point in time when control of the inventory is transferred, generally the date of
shipment, consistent with typical ex-works shipment terms.
Other revenue is generally recognized at a point in time when control of the inventory is transferred to the end customer, generally
on delivery of the goods.
Revenue from provision of services - Company
The Company provides management services to group subsidiaries, revenue is recognised at a point in time when the Company
satisfies performance obligations by providing services to group subsidiaries.
Principal versus agent considerations
The Group enters into certain contracts for the sale of its products. This includes agreements with third parties to provide logistics,
customer and commercial services, i.e. supply chain function and agreements with distributors. The Group determined that it has
control over the goods before they are transferred to the customers and has the ability to direct the use or obtain benefits, hence
the Group is the principal on the contracts due to the following factors:
the Group is primarily responsible for fulfilling the promise to provide the promised goods;
the Group bears the inventory risk before or after the goods have been ordered by the customer, during shipping or on
return;
the Group has the discretion in establishing the selling price of the goods to customers. The distributors’ consideration
in these contracts is either the margin fee or commission; and
the Group is exposed to the credit risk for the amounts receivable from the customers.
Where the above criteria are met, the Group recognizes revenue on a gross basis. The costs associated with the delivery of such
goods to customers i.e., the costs associated with the services provided by the distributors to import and deliver the goods are
recognized in the cost of sales.
Variable Consideration
Product sales revenues are recognized at the net sales price (“transaction price”) which includes estimated reserves for variable
consideration, upon the transfer of control of the Company’s products.
Financial instruments
Recognition and derecognition
Financial instruments are classified on initial recognition as financial assets, financial liabilities or equity instruments in accordance
with the substance of the contractual arrangement. Financial instruments are initially recognized when the Group or Company
becomes party to the contractual provisions of the instrument. Financial assets are de-recognized when the contractual rights to
the cash flows from the financial asset expire or when the contractual rights to those assets are transferred. Financial liabilities
are de-recognized when the obligation specified in the contract is discharged, cancelled or expired.
Classification and initial measurement of financial assets
Trade receivables are measured at the transaction price in accordance with IFRS 15. All financial assets are initially measured at
fair value adjusted for transaction costs, if any.
Amryt Pharma plc
Notes to the Financial Statements Continued
For the year ended December 31, 2021
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for the year ended December 31, 2021
Financial assets, other than those designated and effective as hedging instruments, are classified into the following categories:
amortized cost;
fair value through profit or loss (“FVTPL”); and
fair value through other comprehensive income (“FVOCI”).
The Group or Company did not have any financial assets categorized as FVTPL or FVOCI as at December 31, 2021 and 2020. The
classification is determined by both:
the Group and Company’s business model for managing the financial asset; and
the contractual cash flow characteristic of the financial asset.
Subsequent measurement of financial assets
Financial assets at amortized cost
Financial assets are measured at amortized cost if the assets meet the following conditions (and are not designated as FVTPL):
they are held within a business model whose objective is to hold the financial assets and collect its contractual cash flows;
and
the contractual terms of the financial assets give rise to cash flows that are solely payments of principal and interest on
the principal amount outstanding.
After initial recognition, these are measured at amortized cost using the effective interest method. Discounting is omitted where
the effect of discounting is immaterial. The Group and Company’s cash and cash equivalents and trade receivables fall into this
category of financial instruments.
Cash and cash equivalents
Cash comprises cash on hand and bank balances. Cash equivalents are short-term, highly liquid investments that are readily
convertible to known amounts of cash, which are subject to an insignificant risk of changes in value and have a maturity of three
months or less at the date of acquisition.
Restricted cash
Restricted cash comprises current cash and cash equivalents that are restricted as to withdrawal or usage. Cash held by the Group’s
distribution partner for Lojuxta on behalf of the Group is treated as restricted cash in the financial statements. The Group also has
restricted cash in relation to a deposits in relation to company credit card facilities, leases and importation bonds.
Trade and other receivables
Trade and other receivables represent the Group and Company’s right to an amount of consideration that is unconditional (i.e.
only the passage of time is required before payment of the consideration is due).
Impairment of financial assets
The Group and Company recognizes an allowance for expected credit losses (“ECLs”) for all debt instruments not held at FVTPL.
ECLs are based on the difference between the contractual cash flows due in accordance with the contract and all the cash flows
that the Group expects to receive, discounted at an approximation of the original effective interest rate. The expected cash flows
will include cash flows from the sale of collateral held or other credit enhancements that are integral to the contractual terms.
For trade and other receivables, the Group and Company applies a simplified approach in calculating ECLs. Therefore, the Group
and Company do not track changes in credit risk, but instead recognizes a loss allowance based on lifetime ECLs at each reporting
date when applicable. The Group and Company assesses ECL based on its historical credit loss experience, adjusted for forward-
looking factors specific to the debtors and the economic environment.
Financial liabilities
Financial liabilities are categorized as “fair value through profit or loss” or “other financial liabilities measured at amortized costs
using the effective interest method.”
Amryt Pharma plc
Notes to the Financial Statements Continued
For the year ended December 31, 2021
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for the year ended December 31, 2021
Trade and other payables
Trade and other payables are initially measured at their fair value and are subsequently measured at their amortized cost using
the effective interest rate method except for short-term payables when the recognition of interest would be immaterial.
Provisions
Provisions are recognized when the Group has a present legal or constructive obligation as a result of past events, it is probable
that an outflow of resources will be required to settle the obligation and the amount can be reliably estimated.
The amount recognized as a provision is the best estimate of the consideration required to settle the present obligation at the
reporting date, taking into account the risks and uncertainties surrounding the obligation. Where a provision is measured using
the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows (when the
effect of the time value of money is material).
When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, a
receivable is recognized as an asset if it is virtually certain that reimbursement will be received and the amount of the receivable
can be measured reliably.
Interest bearing loans and borrowings
Interest-bearing loans and borrowings are recognized initially at fair value less attributable transaction costs. Loans and
borrowings are subsequently carried at amortized cost using the effective interest method. Interest is charged to the Consolidated
Statement of Comprehensive Income/(Loss).
Convertible notes
Convertible notes are first assessed to determine classification as a financial liability or equity instrument for the financial
instrument as a whole and components thereof. The initial carrying amount of a compound financial instrument is allocated to its
equity and liability components.
The two components are evaluated first by measuring the fair value of the liability component. The fair value of the liability
component is assessed using a discounted cash flow calculation based on the future contractual cash flows in the contract which
are discounted at an estimated market prevailing rate of interest an identical financial instrument without a conversion feature
would be subject to. The equity component is measured by determining the residual of the fair value of the instrument less the
estimated fair value of the liability component.
The liability component is carried at amortized cost. Interest is calculated by applying the estimated prevailing market interest
rate at the time of issue. The equity component is recognized in equity and is not subsequently remeasured.
Contingent consideration
Contingent consideration arising as a result of business combinations is initially recognized at fair value using a probability adjusted
present value model. Key inputs in the model include the probability of a successful launch of Oleogel-S10 and the expected timing
of potential revenues. The fair value of the contingent consideration will be updated at each reporting date. Adjustments to
contingent consideration are recognized in the Consolidated Statement of Comprehensive Income/(Loss).
Offsetting financial instruments
Financial assets and financial liabilities are offset and the net amount is reported in the Consolidated and Company Statement of
Financial Position if there is a currently enforceable legal right to offset the recognized amounts and there is an intention to settle
on a net basis, or to realize the asset and settle the liability simultaneously.
Amryt Pharma plc
Notes to the Financial Statements Continued
For the year ended December 31, 2021
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for the year ended December 31, 2021
Inventories
Inventories, that are not acquired as part of a business combination, are valued at the lower of cost or net realizable value. Amryt
uses standard cost to value its inventory which is made up of raw materials, Work in progress (“WIP") and finished goods. It
accounts for the inventory using the first-in, first-out (“FIFO”) method. Standard costs take into account normal levels of materials
and supplies, labor, efficiency and capacity utilization with the Group’s vendors. WIP valuation is based on the stage of quality
checks successfully performed during the production process. An inventory valuation adjustment is made if the net realizable
value is lower than the book value. Net realizable value is determined as estimated selling prices less all costs of completion and
costs incurred in selling and distribution.
Inventories held by third-party supply chain partners are included in inventory totals when control has deemed to be transferred
to the Group under the contract terms of the distribution agreement. The cost to acquire the inventory held by the supply chain
partners is recognized as a liability of the Group.
Inventories acquired as part of a business acquisition is valued at fair value as at the acquisition date. Fair value is based on
estimates of saleable inventory and non-saleable inventory, which was determined by a sales forecast and production timeline
and expected selling price and estimated costs of disposal. The resulting step up in the valuation of saleable inventory on
acquisition is unwound over the period in which the saleable inventory is sold.
Leases
A lease is defined as a contract that conveys the right to use an underlying asset for a period of time in exchange for consideration.
A contract is or contains a lease if:
the underlying asset is identified in the contract; and
the customer has both the right to direct the identified asset’s use and to obtain substantially all the economic benefits
from that use.
Under IFRS 16, the Group is required to recognize a right-of-use asset representing its right to use the underlying asset and a lease
liability representing its obligation to make lease payments for almost all leases.
Lease liabilities
Lease liabilities are initially recognized at the present value of the following payments, when applicable:
fixed lease payments (including in-substance fixed payments), less any lease incentives receivable;
variable lease payments (linked to an index or interest rate);
expected payments under residual value guarantees;
the exercise price of purchase options, where exercise is reasonably certain;
lease payments in optional renewal periods, where exercise of extension options is reasonably certain; and
penalty payments for the termination of a lease, if the lease term reflects the exercise of the respective termination
option.
Lease payments are discounted using the implicit interest rate underlying the lease if this rate can be readily determined.
Otherwise, the incremental borrowing rate is used as the discount rate.
Lease liabilities are subsequently measured at amortized cost using the effective interest method. Furthermore, lease liabilities
may be remeasured due to lease modifications or reassessments of the lease. A lease modification is any change in lease terms
that was not part of the initial terms and conditions of the lease, including increases of the scope of the lease by adding the right
to use one or more underlying assets or extending the contractual lease term, decreases of the scope of the lease by removing
the right to use one or more underlying assets or shortening the contractual lease term or changes in the consideration.
Reassessments are changes in estimates or changes triggered by a clause that was part of the initial lease contract, including
changes in future lease payments arising from a change in an index or rate, change in the Group’s estimate of the amount expected
to be payable under residual value guarantees or change in the Group’s assessment of whether it will exercise purchase, extension
or termination options.
Amryt Pharma plc
Notes to the Financial Statements Continued
For the year ended December 31, 2021
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for the year ended December 31, 2021
Right-of-use assets
The Group recognizes right-of-use assets at the commencement date of the respective lease. Right-of-use assets are stated at cost
less accumulated depreciation. Upon initial recognition, cost comprises:
the initial lease liability amount;
initial direct costs incurred when entering into the lease;
(lease) payments before commencement date of the respective lease;
an estimate of costs to dismantle and remove the underlying asset; and
less any lease incentives received.
Right-of-use assets are depreciated over the shorter of the lease term or the useful life of the underlying asset using the straight-
line method. In addition, right-of-use assets are reduced by impairment losses, if any, and adjusted for certain remeasurements.
Foreign currency translation
Presentation currency
The Group translates foreign currency transactions into its presentational currency, US$, as described in “Presentation of
balances” above.
Functional currency
The Company’s functional currency is US$.
Transactions in currencies other than the functional currency of the Group entities are recorded at the exchange rates prevailing
at the dates of the related transactions. Foreign exchange gains and losses resulting from the settlement of such transactions, as
well as from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies, are
recognized in the Consolidated Statement of Comprehensive Income/(Loss). At each balance sheet date, monetary assets and
liabilities that are denominated in foreign currencies are translated to the respective functional currencies of the Group’s entities
at the rates prevailing on the relevant balance sheet date. Non-monetary items that are measured in terms of historical cost in a
foreign currency are translated using exchange rates at the dates of the initial transactions.
The financial statements of the Group’s foreign subsidiaries, where the local currency is the functional currency, are translated
using exchange rates in effect at the end of the year for assets and liabilities and average exchange rates during the year for results
of operations. The resulting foreign currency translation adjustment is recognized in other comprehensive income.
Property, plant and equipment
Property, plant and equipment is comprised of property and office equipment. Items of property, plant and equipment are stated
at cost less any accumulated depreciation and any impairment losses. It is not Group policy to revalue any items of property, plant
and equipmen.
Depreciation is charged to the Consolidated Statement of Comprehensive Income/(Loss) on a straight-line basis to write-off the
cost of the assets over their expected useful lives as follows:
Property, plant and machinery
5 to 15 years
Office equipment
3 to 10 years
Government grants
Grants are recognized when there is reasonable assurance that the Group will comply with the relevant conditions and the grant
will be received. Grants that compensate the Group for expenses incurred such as research and development, employment and
training are offset against the related expenditure in the Consolidated Statement of Comprehensive Income/(Loss) on a systematic
basis as the Group recognizes as expenses the costs that the grants are intended to compensate. Grants that compensate the
Group for the cost of an asset are deducted from the cost of the asset.
Amryt Pharma plc
Notes to the Financial Statements Continued
For the year ended December 31, 2021
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for the year ended December 31, 2021
Business combinations
Business combinations, including the Chiasma acquisition, are accounted for using the acquisition method. The cost of an
acquisition is measured as the aggregate of the consideration transferred, measured at acquisition date fair value and the amount
of any non-controlling interest in the acquiree. Fair values are attributed to the identifiable assets and liabilities unless the fair
value cannot be measured reliably, in which case the value is subsumed into goodwill. In the consolidated financial statements,
acquisition costs incurred are expensed and included in restructuring and acquisition costs.
To the extent that settlement of all or any part of the consideration for a business combination is deferred, the fair value of the
deferred component is determined through discounting the amounts payable to their present value at the date of the exchange.
The discount component is unwound as an interest charge in the Consolidated Statement of Comprehensive Income/(Loss) over
the life of the obligation. Any contingent consideration is recognized at fair value at the acquisition date and included in the cost
of the acquisition. The fair value of contingent consideration at acquisition date is arrived at through discounting the expected
payment (based on scenario modelling) to present value. In general, in order for contingent consideration to become payable,
pre-defined revenues and/or milestone dates must be exceeded. Subsequent changes to the fair value of the contingent
consideration will be recognized in profit or loss unless the contingent consideration is classified as equity, in which case it is not
remeasured and settlement is accounted for within equity.
When the initial accounting for a business combination is determined provisionally, any adjustments to the provisional values
allocated to the consideration, identifiable assets or liabilities (and contingent liabilities, if relevant) are made within the
measurement period, a period of no more than one year from the acquisition date.
The acquisition of pharmaceutical patents and licenses is effected through a non-operating corporate structure. As these
structures do not represent a business, it is considered that the transactions do not meet the definition of a business combination.
Accordingly, the transactions are accounted for as the acquisition of an asset. The net assets acquired are recognized at cost.
Intangible assets
Acquired intangible assets
Intangible assets primarily relate to developed technology on the Group’s commercially marketed products and IPR&D. Intangible
assets are recorded at fair value at the time of their acquisition and are stated in the Consolidated Statement of Financial Position,
net of accumulated amortization and impairments, if applicable.
In connection with the acquisition of Chiasma, the Group acquired developed technology related to Mycapssa®, which is amortized
over the remaining patent lives through February 2036.
In connection with the acquisition of Aegerion, the Group acquired developed technology on metreleptin and lomitapide, which
are amortized over the remaining patent lives through February 2026 and August 2027, respectively.
Intangible assets acquired in 2016 as part of the acquisitions of Amryt GmbH are currently not being amortized as the assets are
still under development.
Acquired intangible assets outside business combinations are stated at the lower of cost less provision for amortization and
impairment or the recoverable amount. Acquired intangible assets are amortized over their expected useful economic life on a
straight-line basis. In determining the useful economic life, each acquisition is reviewed separately and consideration is given to
the period over which the Group expects to derive economic benefit.
The useful life of other acquired intangible assets is as follows:
Software and hardware
3 to 10 years
Website development
5 to 10 years
Factors which impact our judgement to capitalize certain research and development expenditures include the degree of regulatory
approval for products and the results of any market research to determine the likely future commercial success of products being
developed. Management reviews these factors each year to determine whether previous estimates as to feasibility, viability and
recovery should be changed.
Amryt Pharma plc
Notes to the Financial Statements Continued
For the year ended December 31, 2021
Amryt Pharma plc
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Annual Report and Accounts
for the year ended December 31, 2021
Goodwill
Goodwill represents the difference between the purchase price and the fair value of the identifiable tangible and intangible net
assets acquired in a business combination. Goodwill is not amortized, but instead is reviewed for impairment on an annual basis
or when an event becomes known that could trigger an impairment.
Investments in subsidiaries
Investments in subsidiaries are stated at cost less impairment.
Impairment of non-financial assets
At each reporting date, the Group and Company reviews the carrying amounts of its non-financial assets to determine whether
there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount
of the asset is estimated in order to determine the extent of the impairment loss. Any impairment loss arising from the review is
charged to the Consolidated and Company Statement of Comprehensive Income/(Loss).
The Group assesses each asset or cash-generating unit annually to determine whether any indication of impairment exists. Where
an indicator of impairment exists, a formal estimate of the recoverable amount is made, which is considered to be the higher of
the carrying value and an assets recoverable amount (the greater of fair value less costs to sell and value in use). These assessments
require the use of estimates and assumptions such as discount rates, future capital requirements, general risks affecting the
pharmaceutical industry and other risks specific to the individual asset. Fair value is determined as the amount that would be
obtained from the sale of the asset in an arm’s length transaction between knowledgeable and willing parties. Value in use is
determined as the present value of estimated future cash flows arising from the continued use of the asset, using assumptions
that an independent market participant may take into account. Cash flows are discounted to their present value using a pre-tax
discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. Assets are
grouped into the smallest group that generates cash inflows which are independent of other assets.
Taxes
Tax comprises current and deferred tax. Current tax is the expected tax payable on the taxable income for the year, using tax rates
enacted or substantively enacted at the reporting date and taking into account any adjustments stemming from prior years.
Deferred tax assets or liabilities are recognized where the carrying value of an asset or liability in the Consolidated Statement of
Financial Position differs to its tax base and is accounted for using the statement of financial position liability method. Recognition
of deferred tax assets is restricted to those instances where it is probable that taxable profit will be available against which the
difference can be utilized.
In connection with business combinations, deferred tax balances are recognized if related to temporary differences and loss carry-
forwards at the acquisition date or if they arise as a result of the acquisition and are measured in accordance with IAS 12 Income
Taxes.
Share-based payments
The Company issues equity-settled awards as an incentive to certain senior management, employees and consultants. These
equity-settled awards include employee share options and restricted share units (“RSUs”).
In the consolidated financial statements, the fair value of equity-settled awards granted is recognized as an expense with a
corresponding credit to the share-based payment reserve. In the Company financial statements, the fair value of the equity-settled
awards granted by the Company is recognized as an expense, for those that relate to awards granted to employees of the
Company, and as an investment in subsidiary, for those awards granted that relate to employees of the Company’s subsidiaries.
The fair value is measured at grant date and spread over the period during which the awards vest.
For equity-settled share-based payment transactions, the goods or services received and the corresponding increase in equity are
measured directly at the fair value of the goods or services received, unless that fair value cannot be estimated reliably. If it is not
possible to estimate reliably the fair value of the goods or services received, the fair value of the equity instruments granted as
calculated using the Black-Scholes model is used as a proxy. Share-based compensation for RSUs awarded to employees and
directors is calculated based on the market value of the Company's shares on the date of award of the RSUs and the value of
Amryt Pharma plc
Notes to the Financial Statements Continued
For the year ended December 31, 2021
Amryt Pharma plc
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Annual Report and Accounts
for the year ended December 31, 2021
awards expected to vest is recognized as an expense over the requisite service periods. Forfeitures are estimated on the date of
grant and revised if actual or expected forfeiture activity differs materially from original estimates.
The Company may issue warrants to key consultants, advisers and suppliers in payment or part payment for services or supplies
provided to the Group and Company. The fair value of warrants granted is recognized as an expense. The corresponding credits
are charged to the share-based payment reserve. The fair value is measured at grant date and spread over the period during which
the warrants vest. The fair value is measured using the Black-Scholes model if the fair value of the services received cannot be
measured reliably.
The estimate of the fair value of services received is measured based on the Black-Scholes model using input assumptions,
including weighted average share price, expected volatility, weighted average expected life and expected yield. The expected life
of the options is based on historical data and is not necessarily indicative of exercise patterns that may occur. The expected
volatility is based on the historical volatility. The Group has considered how future experience may affect historical volatility.
Employee Benefits
Defined contribution plans
The Group operates defined contribution schemes in various locations where employees are based. Contributions to the defined
contribution schemes are recognized in the Consolidated Statement of Comprehensive Income/(Loss) in the period in which the
related services are received from the employee. Under these schemes, the Group has no obligation, either legal or constructive,
to pay further contributions in the event that the fund does not hold sufficient assets to meet its benefit commitments.
Earnings/Loss per share
Basic earnings per share
Basic earnings per share is calculated by dividing:
the profit attributable to owners of the company, excluding any costs of servicing equity other than ordinary shares
by the weighted average number of ordinary shares outstanding during the financial year, adjusted for bonus elements
in ordinary shares issued during the year and excluding treasury shares.
Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account:
the after-income tax effect of interest and other financing costs associated with dilutive potential ordinary shares, and
the weighted average number of additional ordinary shares that would have been outstanding assuming the conversion
of all dilutive potential ordinary shares.
Amryt Pharma plc
Notes to the Financial Statements Continued
For the year ended December 31, 2021
Amryt Pharma plc
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Annual Report and Accounts
for the year ended December 31, 2021
3. Segment information
The Group is a global, commercial-stage biopharmaceutical company dedicated to commercializing and developing novel
therapeutics to treat patients suffering from serious and life-threatening rare diseases.
The Group currently operates as one business segment, pharmaceuticals, and is focused on the development and
commercialization of three commercial products and a number of development products. The Group derives its revenues primarily
from one source, being the pharmaceutical sector with high unmet medical need.
The Group’s Chief Executive Officer, Joseph Wiley, is currently the Company’s chief operating decision maker (“CODM”). The
Group does not operate any separate lines of business or separate business entities with respect to its products. Accordingly, the
Group does not accumulate discrete financial information with respect to separate service lines and does not have separate
reportable segments.
The following table summarizes total revenues from external customers by product and by geographic region, based on the
location of the customer. Revenues represent the revenue from the Group for the full year. The current year revenues include
Mycapssa® revenue following the acquisition of Chiasma on August 5, 2021. The 2019-year revenues include revenue from
Aegerion, with acquired products and additional regions, from September 24, 2019.
December 31, 2021
U.S.
EMEA
Other
Total
US$’000
US$’000
US$’000
US$’000
Metreleptin
70,216
51,769
19,257
141,242
Lomitapide
32,901
28,601
12,365
73,867
Mycapssa®
6,407
—
—
6,407
Other
—
766
261
1,027
Total revenue
109,524
81,136
31,883
222,543
December 31, 2020
U.S.
EMEA
Other
Total
US$’000
US$’000
US$’000
US$’000
Metreleptin
60,568
32,494
13,810
106,872
Lomitapide
37,317
26,144
11,289
74,750
Mycapssa®
—
—
—
—
Other
—
763
222
985
Total revenue
97,885
59,401
25,321
182,607
Major Customers
For the year ended December 31, 2021, one customer accounted for 46% of the Group’s net revenues (2020: 54%) and accounted
for 36% of the Group’s December 31, 2021, accounts receivable balance (2020: 42%).
Amryt Pharma plc
Notes to the Financial Statements Continued
For the year ended December 31, 2021
Amryt Pharma plc
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Annual Report and Accounts
for the year ended December 31, 2021
4. Cost of sales
December 31,
2021
2020
US$’000
US$’000
Cost of product sales
22,029
21,796
Write-down of inventories (see Note 15)
5,688
4,058
Reversal of write-down of inventories (see Note 15)
(932)
—
Amortization of acquired intangibles (see Note 12)
48,944
42,966
Amortization of inventory fair value step-up (see Note 15)
4,417
27,617
Royalty expenses
25,973
22,592
Total cost of sales
106,119
119,029
As a result of the acquisition of Chiasma and Aegerion in August 2021 and September 2019, respectively, the Group acquired
certain inventory, which were measured at fair value on the acquisition date. Refer to Note 2, Accounting policies, for further
discussion on the key assumptions utilized to estimate the fair value. Refer to Note 15, Inventories, for further discussion on the
write-down of inventories. The difference between the estimated fair value and the book value of the acquired inventory was
amortized, using the straight-line method, over the estimated period that the Group intends to sell this inventory.
5. Share based payments
Share-based Compensation Plans
Amryt’s Equity Incentive Plan
Amryt’s Equity Incentive Plan was adopted by a special resolution on September 23, 2019. Prior to such date, we granted options
under a prior employee share option plan, which had the same terms and conditions as the Equity Incentive Plan. On September
24, 2019, all options held under our prior share option plan were rolled over into options to subscribe for our ordinary shares with
the key terms including strike price, vesting and the expiration date of such rolled over options remaining the same as they were
on the issue date of the options under the prior share option plan. The Equity Incentive Plan was approved for amendment by the
Board on May 18, 2020, and August 3, 2021. The purpose of the Plan is to provide for the granting of Equity Incentives to Directors
and Employees of, and Consultants to, the Company or any Associated Company.
On July 10, 2019, the shareholders of the Company approved a resolution to give authority to the Company to undertake a
consolidation of the existing ordinary shares in the capital of the Company under which every six existing ordinary shares were
consolidated into one ordinary share. In the table below, for presentational purposes, the number of share options under the
Amryt’s Equity Incentive Plan outstanding at January 1, 2019 and the share options granted and lapsing during the year ended
December 31, 2019 have been restated to reflect the 2019 6-for-1 share consolidation.
Chiasma Equity Incentive Plan
When Amryt acquired Chiasma in August 2021, the Chiasma Stock Option and Incentive Plan transferred across to Amryt. Each
outstanding and unexercised Chiasma Stock Option or RSU, whether vested or not vested, ceased to represent a right to acquire
shares of Chiasma common stock and were converted into an option to purchase Amryt ADSs on the same terms and conditions
as were applicable under such Chiasma Stock Option and Incentive Plan immediately prior to the acquisition.
No new stock option or RSUs will be granted under the Chiasma stock option and incentive plan.
Terms and Conditions of New Grants and Grants Under the Chiasma Equity Incentive Plan
The terms and conditions of new grants are as follows, whereby all options are settled by physical delivery of shares:
Vesting conditions
The employee share options vest following a period of service by the officer or employee. The required period of service is
determined by the Remuneration Committee at the date of grant of the options (usually the date of approval by the Remuneration
Committee). There are no market conditions associated with the share option vesting periods.
Amryt Pharma plc
Notes to the Financial Statements Continued
For the year ended December 31, 2021
Amryt Pharma plc
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Annual Report and Accounts
for the year ended December 31, 2021
Contractual life
The term of an option is determined by the Remuneration Committee provided that the term may not exceed a period of seven
to ten years from the date of grant. All options will terminate 90 days after termination of the option holder’s employment, service
or consultancy with the Group except where a longer period is approved by the Board of Directors. Under certain circumstances
involving a change in control of the Group, some options will automatically accelerate and become exercisable in full as of a date
specified by the Board of Directors.
The number and weighted average exercise price (in Sterling pence) of share options per ordinary share granted under Amryt’s
Equity Incentive Plan and the Chiasma stock option and incentive plan is as follows:
Amryt Equity
Incentive Plan
Chiasma Stock Option and
Incentive Plan
Units
Weighted
average
exercise price
(Sterling pence)
Units
Weighted
average
exercise price
(Sterling pence)
Balance at January 1, 2020
14,481,720
116.00p
—
—
Granted
4,432,000
144.76p
—
—
Lapsed
(87,119)
113.42p
—
—
Exercised
(72,953)
120.72p
—
—
Outstanding at December 31, 2020
18,753,648
122.79p
—
—
Exercisable at December 31, 2020
5,866,152
114.24p
—
—
Balance at January 1, 2021
18,753,648
122.79p
—
—
Granted
11,337,459
190.88p
—
—
Transferred to Amryt on acquisition
—
—
18,139,060
189.07p
Forfeited
(1,288,165)
174.97p
(4,098,425)
226.22p
Exercised
(300,000)
93.00p
(3,320,515)
116.35p
Outstanding at December 31, 2021
28,502,942
147.83p
10,720,120
197.40p
Exercisable at December 31, 2021
9,347,338
118.87p
8,005,390
192.35p
The fair value of the Amryt equity award is estimated at the date of grant using the Black-Scholes pricing model, taking into account
the terms and conditions attached to the grant. The fair value of the Chiasma equity awards transferred to Amryt on acquisition
were measured in accordance with IFRS 2. The portion of the value of the equity transferred to Amryt attributable to pre-
combination service is included in the consideration at the date of acquisition. The portion of the equity awards transferred to
Amryt attributable to post combination service is estimated at the date of transfer using Black Scholes pricing model, taking into
account the terms and conditions attached to the grant.
The following are the inputs to the model for the equity instruments granted during the year:
December 31,
2021
Options Inputs
December 31,
2020
Options Inputs
Days to Expiration
2,555
2,555
Volatility
32% - 49%
33% - 37%
Risk free interest rate
0.77% - 1.33%
0.39% - 0.46%
Share price at grant per ordinary share
146.87 - 201.2p
123.5p – 178.9p
Share price at grant per ADS
29.37 - 40.2p
24.7p – 35.78p
In the year ended December 31, 2021, a total of 11,337,459 share options over ordinary shares exercisable at a weighted average
price of £1.91 were granted. The fair value of share options granted in the year ended December 31, 2021, was
£21,641,094/US$29,818,000.
The share options outstanding under the Amryt 2021 Equity Incentive Plan as at December 31, 2021 have a weighted remaining
contractual life of 5.42 years with exercise prices ranging from £0.76 to £2.012 per ordinary share.
Amryt Pharma plc
Notes to the Financial Statements Continued
For the year ended December 31, 2021
Amryt Pharma plc
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Annual Report and Accounts
for the year ended December 31, 2021
The share options outstanding under the Chiasma Share Option and Incentive Plan transferred across to Amryt on acquisition. As
at December 31, 2021 they have a weighted remaining contractual life of 4.35 years with exercise prices ranging from £0.54 to
£7.41 per ordinary share. No new share options will be granted under the Chiasma Stock Option and Incentive Plan.
In the year ended December 31, 2020, a total of 4,432,000 share options exercisable at a weighted average price of £1.4476 were
granted. The fair value of share options granted in the year ended December 31, 2020, was £6,416,000/US$8,230,000. In 2019, a
total of 11,330,641 share options exercisable at a weighted average price of £1.17 were granted. The fair value of share options
granted in 2019 were £13,258,000/US$16,919,000.
The share options outstanding as at December 31, 2020, have a weighted remaining contractual life of 5.45 years with exercise
prices ranging from £0.76 to £1.79.
Restricted Share Units
Under the terms of Amryt’s Equity Incentive Plan, restricted share units (“RSUs”) to purchase 1,568,755 ordinary shares were
outstanding at December 31, 2021. Under the terms of this plan, RSUs are granted to officers, consultants and employees of the
Group at the discretion of the Remuneration Committee. For the year ended December 31, 2021, a total of 625,205 RSUs were
granted to employees of the Company. For the year ended December 31, 2020, a total of 1,556,960 RSUs were granted to
employees of the Company. The fair value of the RSUs is based on the share price at the date of grant, with the expense spread
over the vesting period. The fair value of RSUs granted in the year ended December 31, 2021, was US$1,636,000. At December 31,
2021, the total RSUs granted to date have a weighted remaining contractual life of 1.9 years.
Under the terms of Chiasma’s Stock Option and Incentive Plan transferred to Amryt on acquisition, restricted share units (“RSUs”)
to purchase 106,560 ordinary shares were outstanding at December 31, 2021. At December 31, 2021, the total RSUs granted to
date have a weighted remaining contractual life of 1.9 years. No new RSUs will be granted under the Chiasma Stock Option and
Incentive Plan.
The following table summarizes the RSU activity per ordinary share for the year:
Amryt Equity
Incentive Plan
Chiasma Stock Option and
Incentive Plan
Units
Weighted
average fair
value (US$)
Units
Weighted
average fair
value (US$)
Balance at January 1, 2020
—
—
—
—
Granted
1,556,960
$2.34
—
—
Lapsed
(7,050)
$2.32
—
—
Exercised
—
—
—
—
Outstanding at December 31, 2020
1,549,910
$2.34
—
—
Balance at January 1, 2021
1,549,910
$2.34
—
—
Granted
625,205
$2.62
—
—
Transferred to Amryt on acquisition
—
—
202,145
$2.75
Lapsed
(243,505)
$2.35
(56,405)
$2.75
Vested
(362,855)
$2.34
(39,180)
$2.75
Outstanding at December 31, 2021
1,568,755
$2.44
106,560
$2.75
Warrants
There are no outstanding warrants at December 31, 2021 (December 31, 2020: 9,312,062). In August 2021, an Amryt institutional
investor exercised subscription rights relating to 8,966,520 zero cost warrants. These warrants were issued in September 2019 as
part of the Company’s acquisition of Aegerion. Certain institutional investors elected to receive warrants to subscribe for new
ordinary shares of £0.06 each in Amryt (“Ordinary Shares”), in place of the same number of Ordinary Shares, as consideration for
the Company’s acquisition of Aegerion and their equity investments in the Company in September 2019. Each warrant entitled
the holder to subscribe for one Ordinary Share for no additional consideration.
Separate warrants consisting of 345,542 as at December 31, 2020, which were issued in connection with the admission to the AIM
in 2016, are no longer outstanding; 283,389 warrants were exercised in March 2021 and 62,153 warrants lapsed in April 2021.
The 2016 Warrants outstanding as at December 31, 2020 have a weighted remaining contractual life of 0.3 years with an exercise
price of £1.44.
Amryt Pharma plc
Notes to the Financial Statements Continued
For the year ended December 31, 2021
Amryt Pharma plc
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Annual Report and Accounts
for the year ended December 31, 2021
The number and weighted average exercise price (in Sterling pence) of warrants per ordinary share is as follows:
Warrants
Units
Weighted average
exercise price
(Sterling pence)
Balance at January 1, 2020
17,541,815
0.03p
Granted
—
—
Lapsed
—
—
Exercised
(8,229,753)
—
Outstanding at December 31, 2020
9,312,062
0.05p
Exercisable at December 31, 2020
9,312,062
0.05p
Balance at January 1, 2021
9,312,062
0.05p
Granted
—
—
Lapsed
(62,153)
1.44p
Exercised
(9,249,909)
0.05p
Outstanding at December 31, 2021
—
0.00p
The Company grants rights to its shares under the share-based payment arrangements with directors of the Company and
employees of the Group. For the share options of the directors of the Company the share-based payment is recognized in equity
with a corresponding expense recognized in the Company Statement of Comprehensive loss. For the share options and RSUs of
employees that are not employed by the Company, the Company recognizes the share-based payment in equity with a
corresponding increase in the investment in subsidiary in the Company Statement of Financial Position.
The value of share options and RSU’s charged to the Consolidated Statement of Comprehensive Income/(Loss) during the year are
detailed below:
December 31,
2021
2020
US$’000
US$’000
Share option expense
6,531
4,134
RSU expense
1,810
595
Total share option expense
8,341
4,729
Amryt Pharma plc
Notes to the Financial Statements Continued
For the year ended December 31, 2021
Amryt Pharma plc
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Annual Report and Accounts
for the year ended December 31, 2021
6. Business combinations and asset acquisitions
Acquisition of Chiasma
On May 5, 2021, Amryt announced that it had signed a definitive agreement to acquire Chiasma, Inc. (Nasdaq: CHMA) in an all-
stock combination. Under the terms of the transaction, each share of Chiasma common stock issued and outstanding prior to the
consummation of the transaction was exchanged for 0.396 Amryt American Depositary Shares (“ADSs”), each representing five
Amryt ordinary shares.
On August 5, 2021, Amryt completed the acquisition of Chiasma, Inc. and, in conjunction with the completion, Amryt allotted and
issued a total of 127,733,680 ordinary shares as consideration for the acquisition. Following the completion, shareholdings in
Chiasma were rounded in being converted to Amryt shares using the exchange ratio of 0.396. Roundings in converting Chiasma
shareholdings to Amryt shares were finalized in August 2021 and resulted in an additional 7,015 ordinary shares being allotted
and issued by Amryt as consideration for the acquisition. In total, these ordinary shares were issued to the former Chiasma
Shareholders in the form of 25,548,139 ADSs at US$10.19 per share, to acquire Chiasma for a value of US$260,336,000.
On August 5, 2021, Chiasma had outstanding equity awards that were held by Chiasma employees. The fair value of these awards
transferred to Amryt on acquisition were measured in accordance with IFRS 2. The portion of the value of the equity transferred
to Amryt attributable to pre-combination service is included in the consideration at the date of acquisition and this amounted to
US$10,157,000.
On August 5, 2021, the Group repaid US$116,629,000 of Chiasma long term debt.
The combined company will be a global leader in rare and orphan diseases with three on-market commercial products, a global
commercial and operational footprint and a significant development pipeline of therapies with the financial flexibility to execute
its growth plans.
The table below reflects the fair value of the identifiable net assets acquired in respect of the acquisition completed during the
period. Any amendments to fair values will be made within the twelve-month period from the date of acquisition, as permitted
by IFRS 3: Business Combinations.
The acquired goodwill is attributable principally to the profit generating potential of the businesses, the assembled workforce and
benefits arising from embedded infrastructure, that are expected to be achieved from integrating the acquired businesses into
the Group’s existing business. No amount of goodwill is expected to be deductible for tax purposes.
In the post-acquisition period to December 31, 2021, the business acquired during the current year contributed revenue of
US$6,407,000 and a trading loss of US$22,602,000 including restructuring and acquisition costs, to the Group’s results. The full
year unaudited revenue and trading loss for the Group had the acquisitions taken place at the start of the year, would have been
US$228,554,000 and US$82,532,000, respectively.
The gross contractual value of trade and other receivables as at the dates of acquisition amounted to US$7,180,000, which
approximated the fair value of these accounts as the amount not expected to be collected was insignificant.
The Group incurred acquisition and restructuring related costs of US$16,947,000 for the year ended December 31, 2021, relating
to external legal fees, advisory fees, due diligence costs and severance costs related to the acquisition of Chiasma. These costs
have been included in operating costs in the Consolidated Statement of Comprehensive Income/(Loss).
Amryt Pharma plc
Notes to the Financial Statements Continued
For the year ended December 31, 2021
Amryt Pharma plc
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Annual Report and Accounts
for the year ended December 31, 2021
Recognized Fair Values as at August 5, 2021
US$’000
Assets
Non-current assets
Intangible Assets
215,000
Property, plant and equipment
950
Other non-current assets
866
Total non-current assets
216,816
Current assets
Trade and other receivables
7,180
Inventories
65,907
Cash and cash equivalents, including restricted cash
107,942
Total current assets
181,029
Total assets
397,845
Non-current liabilities
Deferred tax liability
21,478
Total non-current liabilities
21,478
Current liabilities
Trade and other payable
144,482
Total current liabilities
144,482
Total liabilities
165,960
Total identifiable net assets at fair value
231,885
Goodwill arising on acquisition
38,608
Consideration
270,493
Consideration
Issue of fully paid up ordinary shares
260,336
Chiasma equity awards recognized as consideration
transferred upon the acquisition of Chiasma
10,157
Total consideration
270,493
Any amendments to these fair values within the twelve-month timeframe from the date of acquisition will be disclosed in the
2022 consolidated financial statements, as stipulated by IFRS 3.
Acquisition of Aegerion Pharmaceuticals
On May 20, 2019, Amryt entered into a Restructuring Support Agreement (as subsequently amended on June 12, 2019) and Plan
Funding Agreement pursuant to which, among other matters, Amryt agreed to the acquisition of Aegerion Pharmaceuticals, Inc.
(‘‘Aegerion’’, subsequently renamed as Amryt Pharmaceuticals Inc.), a former wholly-owned subsidiary of Novelion Therapeutics
Inc. (‘‘Novelion’’). On May 20, 2019, Aegerion and its U.S. subsidiary, Aegerion Pharmaceuticals Holdings, Inc., filed voluntary
petitions under Chapter 11 of Title 11 of the U.S. Code in the Bankruptcy Court. On September 24, 2019, Amryt completed the
acquisition of Aegerion. Amryt acquired Aegerion upon its emergence from bankruptcy in an exchange for ordinary shares and
zero cost warrants in Amryt. Amryt issued 85,092,423 effective shares at US$1.793 per share, which is made up of 77,027,423
ordinary shares and 8,065,000 zero cost warrants, to acquire Aegerion for a value of US$152,615,000.
As part of the acquisition of Aegerion, it was agreed, for certain Aegerion creditors who wished to restrict their percentage share
interest in Amryt’s issued share capital, to issue to the relevant Aegerion creditor, as an alternative to Amryt’s ordinary shares, an
equivalent number of new zero cost warrants to subscribe for Amryt’s ordinary shares to be constituted on the terms of the zero
cost warrant. As at December 31, 2021, no zero cost warrants were remaining.
Amryt Pharma plc
Notes to the Financial Statements Continued
For the year ended December 31, 2021
Amryt Pharma plc
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for the year ended December 31, 2021
During the year ended December 31, 2021, the Group incurred no additional acquisition and restructuring related costs relating
to external legal fees, advisory fees, due diligence costs and severance costs related to the acquisition of Aegerion (2020:
US$1,017,000).
Contingent Value Rights
Related to the Aegerion acquisition, Amryt issued Contingent Value Rights (“CVRs”) pursuant to which up to US$85,000,000 may
become payable to Amryt’s shareholders and optionholders, who were on the register prior to the completion of the acquisition
on September 20, 2019, if certain approval and revenue milestones are met in relation Oleogel-S10, Amryt’s lead product
candidate. If any such milestone is achieved, Amryt may elect to pay the holders of CVRs by the issue of Amryt shares or loan
notes. If Amryt elects to issue Loan Notes to holders of CVRs, it will settle such loan notes in cash 120 days after their issue. If none
of the milestones are achieved, scheme shareholders and optionholders will not receive any additional consideration under the
terms of the CVRs. In these circumstances, the value of each CVR would be zero.
The terms of the CVRs are as follows:
The total CVR payable is up to US$85,000,000
This is divided into three milestones which are related to the success of Oleogel-S10 (the Group’s lead development asset)
FDA approval
o
US$35,000,000 upon FDA approval
o
100% of the amount due if approval is obtained before December 31, 2021, with a sliding scale on a linear basis
to zero if before July 1, 2022
EMA approval
o
US$15,000,000 upon EMA approval
o
100% of the amount due if approval is obtained before December 31, 2021, with a sliding scale on a linear basis
to zero if before July 1, 2022
Revenue targets
o
US$35,000,000 upon Oleogel-S10 revenues exceeding US$75,000,000 in any 12-month period prior to June 30,
2024
Payment can at the Board’s discretion be in the form of either:
o
120-day loan notes (effectively cash), or
o
Shares valued using the 30 day / 45-day VWAP.
The CVRs were contingent on the successful completion of the acquisition of Aegerion. The CVRs have been classified as a financial
liability in the Consolidated Statement of Financial Position. Given that CVRs were issued to legacy Amryt shareholders in their
capacity as owners of the identified acquirer as opposed to the seller in the transaction, management concluded that the most
appropriate classification would be to recognize the CVR as a distribution on consolidation instead of goodwill.
Measurement of CVRs
As at December 31, 2021, the carrying value in the Consolidated financial statements of the CVRs was US$19,892,000 (December
31, 2020: US$61,417,000). In the Company financial statements, the carrying value of the CVRs as at December 31, 2020, was
US$49,355,000. The difference in the carrying value as at December 31, 2020, in the Company financial statements compared to
the Consolidated financial statements is due to the timing of approval of financial statements and driven by additional information
available on the conditions as at the reporting date. Separate to the previously issued audited consolidated financial statements
for the year December 31, 2020, for the Company and its subsidiaries, Company only accounts were prepared for statutory filings
for the period ended December 31, 2020.
The value of the potential payout was calculated using the probability-weighted expected returns method. Using this method, the
potential payment amounts were multiplied by the probability of achievement and discounted to present value. The probability
adjusted present values took into account published orphan drug research data and statistics which were adjusted by
management to reflect the specific circumstances applicable to the type of product acquired in the Amryt GmbH transaction. The
probability chance of success, based on management’s expertise and experience for orphan drugs and taking into account the
unique circumstances applying to approval process of this product, was estimated at 60% for the FDA approval (2020: 89%) and
100% for the EMA approval (2020: 89%) in the year ended December 31, 2021. This estimate reflects the current facts and
circumstances as of the date of issuance of the Consolidated Financial Statements. The probability chance of success was updated
in 2021 following the receipt of a CRL from the FDA, which asked Amryt to submit additional confirmatory evidence of
effectiveness for Oleogel-S10 in EB, and following positive opinion adopted by the CHMP, recommending the approval of Filsuvez®
in the EU for the treatment of partial thickness wounds associated with dystrophic and junctional EB in patients six months and
older. Based on this CHMP recommendation a decision by the EC is expected on the Filsuvez® application within 67 days. The
CHMP positive opinion is supported by Phase 3 data from the EASE trial which was the largest ever global trial conducted in
Amryt Pharma plc
Notes to the Financial Statements Continued
For the year ended December 31, 2021
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Annual Report and Accounts
for the year ended December 31, 2021
patients with EB, performed across 58 sites in 28 countries. Discount rates of 10% and 16.5%, as applicable, were used in the
calculation of the present value of the estimated contractual cash flows for the year ended December 31, 2021, based on the
applicable rates determined on the acquisition date. Management was required to make certain estimates and assumptions in
relation to revenue forecasts, timing of revenues and probability of achievement of commercialization of Oleogel-S10. However,
management notes that, due to issues outside their control (i.e. regulatory requirements and the commercial success of the
product), the timing of when such revenue targets may occur may change. Such changes may have a material impact on the
assessment of the expected cash flows of the CVRs.
Amryt reviews the expected cash flows on a regular basis as the discount on initial recognition is being unwound as financing
expenses in the Consolidated Statement of Comprehensive Income/(Loss) over the life of the obligation. It is reviewed on a
quarterly basis and the appropriate finance charge or gain is booked in the Consolidated Statement of Comprehensive
Income/(Loss) on a quarterly basis. The Group received positive topline data from the phase 3 EASE trial of Oleogel-S10 in
September 2020. The product does not currently have regulatory approval to treat EB but has been submitted to the FDA for
approval and in June 2021, Amryt received confirmation from the FDA that its NDA for Oleogel-S10 had been accepted and granted
priority review. On February 28, 2022, Amryt announced that the FDA communicated that it had completed its review of the NDA
for Oleogel-S10 and has determined that the application cannot be approved in its present form. The FDA has asked Amryt to
submit additional confirmatory evidence of effectiveness for Oleogel-S10 in EB. Amryt intends to discuss with the FDA the nature
of the data required to address the Agency’s concerns. In Europe, a MAA for Oleogel-S10 was accepted for assessment by the EMA
in March 2021. The positive opinion recommends the approval of Filsuvez® in the EU for the treatment of partial thickness wounds
associated with dystrophic and junctional EB in patients six months and older. Based on this CHMP recommendation a decision by
the EC is expected on the Filsuvez® application within 67 days.
The total non-cash gain recognized in the Consolidated Statement of Comprehensive Income/(Loss) for the year ended December
31, 2021, is US$41,525,000 (2020: US$12,004,000 charge).
Acquisition of Amryt GmbH (previously “Birken”)
Amryt DAC signed a conditional share purchase agreement to acquire Amryt GmbH on October 16, 2015 (“Amryt GmbH SPA”).
The Amryt GmbH SPA was completed on April 18, 2016, with Amryt DAC acquiring the entire issued share capital of Amryt GmbH.
The consideration included contingent consideration comprising milestone payments and sales royalties as follows:
Milestone payments of:
o
€10,000,000 on receipt of marketing approval by the EMA or FDA of a pharmaceutical product containing Betulin
as its API for the treatment of EB;
o
€10,000,000 once net ex-factory sales/net revenue of Oleogel-S10 first exceed €50,000,000 in any calendar
year;
o
€15,000,000 once net ex-factory sales/ net revenue of Oleogel-S10 first exceed €100,000,000 in any calendar
year;
Royalties of 9% on sales of Oleogel-S10 products for 10 years from first commercial sale.
Fair Value Measurement of Contingent Consideration
As at December 31, 2021, the fair value of the contingent consideration was estimated to be US$61,221,000 (December 31, 2020:
US$86,906,000). The fair value of the contingent consideration included milestone payments determined using probability
adjusted present values and probability weighted revenue forecasts (see Note 24, Fair value measurement and financial risk
management, for fair value hierarchy applied and impact of key unobservable impact data). The probability adjusted present
values took into account published orphan drug research data and statistics which were adjusted by management to reflect the
specific circumstances applicable to the type of product acquired in the Amryt GmbH transaction. The probability chance of
success, based on management’s expertise and experience for orphan drugs and taking into account the unique circumstances
applying to approval process of the product, was estimated at 60% for the FDA approval (2020: 89%) and 100% for the EMA
approval (2020: 89%) in the year ended December 31, 2021. This estimate reflects the current facts and circumstances as of the
date of issuance of the Consolidated Financial Statements. The probability chance of success was updated in 2021 following the
receipt of a CRL from the FDA, which asked Amryt to submit additional confirmatory evidence of effectiveness for Oleogel-S10 in
EB, and following the positive opinion adopted by the CHMP, recommending the approval of Filsuvez® in the EU for the treatment
of partial thickness wounds associated with dystrophic and junctional EB in patients six months and older. Based on this CHMP
recommendation a decision by the EC is expected on the Filsuvez® application within 67 days. The CHMP positive opinion is
supported by Phase 3 data from the EASE trial which was the largest ever global trial conducted in patients with EB, performed
across 58 sites in 28 countries. A discount rate of 7.9% was used in the calculation of the fair value of the contingent consideration
Amryt Pharma plc
Notes to the Financial Statements Continued
For the year ended December 31, 2021
Amryt Pharma plc
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Annual Report and Accounts
for the year ended December 31, 2021
for the year ended December 31, 2021 (December 31, 2020: 14.4%). The decrease in the discount rate is mainly driven by the
change in Group over the last 12 months where the Group has significantly de-risked with growth in commercial revenues, the
acquisition of new commercial assets in 2021, refinancing of long term debt which reduced the Group’s cost of debt significantly
and extended the repayment of long term debt, the positive developments on product candidates and significant cash balances
held during the year.
Amryt reviews the expected cash flows on a regular basis as the discount on initial recognition is being unwound as financing
expense/gain in the Consolidated Statement of Comprehensive Income/(Loss) over the life of the obligation. It is reviewed on a
quarterly basis and the appropriate finance charge or gain is booked in the Consolidated Statement of Comprehensive
Income/(Loss) on a quarterly basis. The Group received positive topline data from the phase 3 EASE trial of Oleogel-S10 in
September 2020. The product does not currently have regulatory approval to treat EB but has been submitted to the FDA for
approval and in June 2021, Amryt received confirmation from the FDA that its NDA for Oleogel-S10 had been accepted and granted
priority review. On February 28, 2022, Amryt announced that the FDA communicated that it had completed its review of the NDA
for Oleogel-S10 and has determined that the application cannot be approved in its present form. The FDA has asked Amryt to
submit additional confirmatory evidence of effectiveness for Oleogel-S10 in EB. Amryt intends to discuss with the FDA the nature
of the data required to address the Agency’s concerns. In Europe, a MAA for Oleogel-S10 was accepted for assessment by the EMA
in March 2021. The positive opinion recommends the approval of Filsuvez® in the EU for the treatment of partial thickness wounds
associated with dystrophic and junctional EB in patients six months and older. Based on this CHMP recommendation a decision by
the EC is expected on the Filsuvez® application within 67 days.
The total non-cash finance gain recognized in the Consolidated Statement of Comprehensive Income/(Loss) for the year ended
December 31, 2021, is US$18,407,000 (2020: US$27,827,000 charge).
7. Operating loss for the year
Operating loss for the year is stated after charging/(crediting):
December 31,
2021
2020
US$’000
US$’000
Audit fees payable to the Group’s auditor and their
associates
893
814
Audit-related fees payable to the Group’s auditor and
their associates
92
44
Changes in inventory expensed (excluding fair value
step-up)
26,783
25,854
Amortization of inventory fair value step-up
4,417
27,617
Research and development expenses
37,729
27,618
Grant income
(1,007)
(103)
Share based payments
8,341
4,729
Pension costs
1,763
1,284
Depreciation of property, plant and equipment
1,653
1,297
Amortization of intangible assets
49,091
43,168
Operating lease rentals
189
623
Foreign exchange loss/(gain)
4,141
(2,699)
Amryt Pharma plc
Notes to the Financial Statements Continued
For the year ended December 31, 2021
Amryt Pharma plc
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Annual Report and Accounts
for the year ended December 31, 2021
8. Employees
Including the directors, the Group and Company’s average number of employees during the year was 241 (2020: 174) and seven
(2020: six), respectively. Further details on remuneration of the Group’s directors and Company’s employees are included in the
Directors’ Remuneration Report on page 28.
The directors consider the workforce as a whole and therefore the average number of employees by different categories is not
considered relevant the Group or Company.
Aggregate remuneration comprised:
December 31,
2021
2020
US$’000
US$’000
Wages and salaries
46,983
32,688
Social security costs
4,225
3,431
Pension costs - employees
1,643
1,213
Directors' remuneration
3,138
2,158
Shared based payments
8,341
4,729
Total employee costs
64,330
44,219
Aggregate remuneration attributable to the highest-paid director amounted to US$3,479,000 (2020: US$1,719,000). The
directors of the Company held the following share options over shares of Amryt Pharma plc at December 31, 2021:
December 31, 2021
Director
Number
Exercise price
Expiration Date
Joseph Wiley
2,031,350
$2.804
March 7, 2028
Joseph Wiley
6,437,460
£0.76p - £121.50p
November 28, 2024
- November 4, 2026
Raj Kannan
3,189,995
$2.04 - $4.08
August 8, 2028 –
February 8, 2031
Dr. Roni Mamluk
1,380,380
$0.68 - $5.02
November 14, 2024
– June 10, 2030
Raymond T. Stafford
330,000
$2.04 - $2.25
July 9, 2027 -
August 8, 2028
George P. Hampton, Jr.
330,000
$2.04 - $2.25
July 9, 2027 -
August 8, 2028
Dr. Alain H. Munoz
330,000
$2.04 - $2.25
July 9, 2027 -
August 8, 2028
Donald K. Stern
330,000
$2.04 - $2.25
July 9, 2027 -
August 8, 2028
Dr. Patrick V.J.J. Vink
330,000
$2.04 - $2.25
July 9, 2027 -
August 8, 2028
Stephen T. Wills
330,000
$2.04 - $2.25
July 9, 2027 -
August 8, 2028
December 31, 2020
Director
Number
Exercise price
Expiration Date
Joseph Wiley
6,437,460
£0.76p - £121.50p
November 28, 2024
- November 4, 2026
Raymond T. Stafford
220,000
$2.25
July 9, 2027
George P. Hampton, Jr.
220,000
$2.25
July 9, 2027
Dr. Alain H. Munoz
220,000
$2.25
July 9, 2027
Donald K. Stern
220,000
$2.25
July 9, 2027
Dr. Patrick V.J.J. Vink
220,000
$2.25
July 9, 2027
Stephen T. Wills
220,000
$2.25
July 9, 2027
Amryt Pharma plc
Notes to the Financial Statements Continued
For the year ended December 31, 2021
Amryt Pharma plc
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Annual Report and Accounts
for the year ended December 31, 2021
During the year ended December 31, 2021, a total of 7,261,725 share options were granted to directors of the Company.
Joseph Wiley was granted a total of 2,031,350 share options, a total of 220,000 share options were granted to each of Dr.
Roni Mamluk and Raj Kannan and a total of 110,000 share options were granted to each of Raymond T. Stafford, George P.
Hampton, Jr., Dr. Alain H. Munoz, Donald K. Stern, Dr. Patrick V.J.J. Vink and Stephen T. Wills. Additionally, a total of
1,160,380 and 2,969,995 stock options were issued by Amryt to replace Chiasma stock options held by Dr. Roni Mamluk
and Raj Kannan, respectively.
During the year ended December 31, 2020, a total of 1,320,000 share options were granted to directors of the Company. A total
of 220,000 share options were granted to each Raymond T. Stafford, George P. Hampton, Jr., Dr. Alain H. Munoz, Donald K. Stern,
Dr. Patrick V.J.J. Vink and Stephen T. Wills.
Further information on the compensation of key management personnel is included in Note 23, Related party transactions, of
these financial statements.
9. Net finance expense – other
December 31,
2021
2020
US$’000
US$’000
Interest on loans
22,902
22,003
Interest on lease liabilities
558
335
Charges and fees paid
310
17
Interest received
(5)
(87)
Foreign exchange loss/(gain)
4,141
(2,699)
Total
27,906
19,569
10. Tax credit on loss on ordinary activities
A corporation tax credit of US$7,562,000 arises in the year ended December 31, 2021 (2020: credit of US$1,332,000). A
reconciliation of the expected tax benefit computed by applying the tax rate applicable in the primary jurisdiction, the
Republic of Ireland, to the loss before tax to the actual tax credit is as follows:
December 31,
2021
2020
US$’000
US$’000
Loss before tax
(6,562)
(105,859)
Tax credit at Irish corporation tax rate of 12.5%
(820)
(13,232)
Effect of:
Movement in unrecognized deferred tax assets
(4,418)
3,624
Permanent differences
(1,949)
11,260
Differences in overseas taxation rates
(375)
(2,984)
Total tax credit on loss on ordinary activities
(7,562)
(1,332)
At December 31, 2021, the Group had unutilized net operating losses in the following jurisdictions as follows:
December 31,
2021
2020
US$’000
US$’000
Ireland
119,854
108,677
United States
182,875
35,043
Germany
26,427
28,288
United Kingdom
3,034
42,893
Total
332,169
214,901
The deferred tax asset on tax losses of US$62,395,001 (2020: US$38,244,000), which was calculated at corporation tax rates
ranging from 12.5% to 32%, has not been recognized due to the uncertainty of the recovery. Tax losses in Ireland, Germany and
the UK can be carried forward indefinitely.
Amryt Pharma plc
Notes to the Financial Statements Continued
For the year ended December 31, 2021
Amryt Pharma plc
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Annual Report and Accounts
for the year ended December 31, 2021
Due to historical changes in ownership of the U.S. business, the U.S. tax losses carried forward are restricted in how they can be
used against future profits of the Group. U.S. losses related to tax periods prior to 2018 can be carried forward for 20 years while
losses from 2018 onwards can be carried forward indefinitely. The increase in U.S. tax losses relates primarily to the acquisition of
Chiasma. Inc. during the period.
All current and deferred tax related charges are recognized in the Consolidated Statement of Comprehensive Income/(Loss).
11. Earnings/(loss) per share - basic and diluted
The weighted average number of shares in the earnings/(loss) per share (“EPS/LPS”) calculation, reflects the weighted average
total actual shares of Amryt Pharma plc in issue at December 31, 2021.
Issued share capital – ordinary shares of £0.06 each
Number of
shares
Weighted
average shares
December 31, 2021
319,814,747
235,852,023
December 31, 2020
178,801,593
158,591,356
The calculation of loss per share is based on the following:
December 31,
2021
2020
Profit/(loss) after tax attributable to equity holders of the Company
(US$’000)
1,000
(104,527)
Weighted average number of ordinary shares in issue
235,852,023
158,591,356
Fully diluted average number of ordinary shares in issue
246,981,405
158,591,356
Basic earnings/(loss) per share (US$)
0.00
(0.66)
Diluted earnings/(loss) per share (US$)
0.00
(0.66)
Where a loss has occurred, basic and diluted LPS are the same because the outstanding share options and warrants are anti-
dilutive. Accordingly, diluted LPS equals the basic LPS. The share options, RSUs and warrants outstanding as at December 31, 2021,
totaled 40,898,377 (December 31, 2020: 29,615,620) and are potentially dilutive.
Amryt Pharma plc
Notes to the Financial Statements Continued
For the year ended December 31, 2021
Amryt Pharma plc
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Annual Report and Accounts
for the year ended December 31, 2021
12. Intangible assets and goodwill
The following table summarizes the Group’s intangible assets and goodwill:
Developed
technology –
metreleptin
Developed
technology –
lomitapide
Developed
technology –
Mycapssa®
In
process
R&D
Other
intangible
assets
Total
intangible
assets
Goodwill
US$’000
US$’000
US$’000
US$’000
US$’000
US$’000
US$’000
Cost
At January 1, 2020
176,000
123,000
—
54,261
701
353,962
19,131
Additions
—
—
—
—
372
372
—
Acquired assets
—
—
—
591
—
591
—
Disposals
—
—
—
—
(246)
(246)
—
Foreign exchange movement
—
—
—
5,276
39
5,315
—
At December 31, 2020
176,000
123,000
—
60,128
866
359,994
19,131
Additions
—
—
—
—
847
847
—
Acquired assets
—
—
215,000
—
—
215,000
38,608
Other movements
—
—
—
—
—
—
(1,051)
Foreign exchange movement
—
—
—
(4,691)
(61)
(4,752)
—
At December 31, 2021
176,000
123,000
215,000
55,437
1,652
571,089
56,688
Accumulated amortization
At January 1, 2020
7,314
4,143
—
—
178
11,635
—
Amortization charge
27,429
15,537
—
—
202
43,168
—
Accumulated amortization on
disposals
—
—
—
—
(246)
(246)
—
Foreign exchange movement
—
—
—
—
68
68
—
At December 31, 2020
34,743
19,680
—
—
202
54,625
—
Amortization charge
27,428
15,537
5,979
—
147
49,091
—
Foreign exchange movement
—
—
—
—
14
14
—
At December 31, 2021
62,171
35,217
5,979
—
363
103,730
—
Net book value
At December 31, 2020
141,257
103,320
—
60,128
664
305,369
19,131
At December 31, 2021
113,829
87,783
209,021
55,437
1,289
467,359
56,688
Developed technology on commercially marketed products
In connection with the acquisition of Aegerion in September 2019, the Group acquired developed technology, metreleptin and
lomitapide. These intangible assets are amortized over their estimated useful lives and the remaining useful lives for metreleptin
and lomitapide are approximately 4.2 and 5.7 years, respectively, as of December 31, 2021 (December 31, 2020: 5.2 and 6.7 years,
respectively).
In connection with the acquisition of Chiasma in August 2021, the Group acquired developed technology, Mycapssa®. This
intangible asset is amortized over its estimated useful life and the remaining useful life is approximately 14.2 years as of December
31, 2021.
Metreleptin
Lomitapide
Mycapssa®
Years Ending December 31,
US$’000
US$’000
US$’000
2022
27,429
15,537
14,828
2023
27,429
15,537
14,828
2024
27,429
15,537
14,828
2025
27,429
15,537
14,828
2026
4,113
15,537
14,828
Thereafter
—
10,098
134,881
113,829
87,783
209,021
Amryt Pharma plc
Notes to the Financial Statements Continued
For the year ended December 31, 2021
Amryt Pharma plc
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Annual Report and Accounts
for the year ended December 31, 2021
In-process R&D
As a result of the acquisition of Amryt GmbH, in 2016, the Group recognized in-process R&D costs of €48,453,000/US$54,852,000
which is related to the Group’s lead development asset, Oleogel-S10.
The remaining in-process R&D is a result of the acquisition of Cala Medical Limited in October 2020.
Goodwill
During 2019, the Group completed the acquisition of Aegerion which resulted in the recognition of goodwill that has a carrying
value of US$18,080,000. On August 5, 2021, the Group completed the acquisition of Chiasma, which resulted in aggregate goodwill
of US$38,608,000.
Impairment
The Group reviews the carrying amount of intangible assets on an annual basis or when there is a triggering event that may be an
indication of possible impairment. The Group conducts an impairment review by determining recoverable amounts from value in
use calculations. The recoverable amount of the asset is estimated in order to determine the extent of the impairment loss.
Impairment indications include events causing significant changes in any of the underlying assumptions used in the income
approach utilized in valuing intangible assets. The key assumptions are the probability of success; the discount factor; the timing
of future revenue flows; market penetration and peak sales assumptions; and expenditures required to complete development.
These cash flows are projected forward using projected revenue for each asset up until the end of their relevant patents and cost
growth to determine the basis for an annuity-based terminal values. The terminal values are used in the value in use calculation.
The value in use represents the present value of the future cash flows, including the terminal value, discounted at a rate that is
considered appropriate for the Group’s size and structure.
The key assumptions employed in arriving at the estimates of future cash flows are subjective and include projected EBITDA, an
orphan drug market-based probability chance of success, net cash flows, discount rates and the duration of the discounted cash
flow model. The assumptions and estimates used were derived from a combination of internal and external factors based on
historical experience. The pre-tax discount rate used in 2021 and 2020 was 7.9% and 14.4%, respectively.
The value-in-use calculation is subject to significant estimation, uncertainty and accounting judgements and key sensitivities arise
in the following areas:
In the event that there was a variation of 10% in the assumed level of future growth in revenues, which would, in
management’s view, represent a reasonably likely range of outcomes, this variation would not result in an impairment
loss at December 31, 2021.
In the event there was a 4% increase in the discount rate used in the value in use model which would in management’s
view represent a reasonably likely range of outcomes, this variation would not result in an impairment loss at December
31, 2021.
Goodwill and intangible assets not in use are subject to impairment testing on an annual basis. The recoverable amount of the
Group’s CGUs are determined based on a value-in-use computation. The Group’s value-in-use calculations included the cash flow
projections based on the 2022 budget which has been approved by the Board of Directors and the Group’s strategic plan for a
further three years using projected revenue growth rates of between 20% and 46% and cost growth rates of between 2% and
59%. At the end of the forecasted patent exclusivity period, the terminal value, based on a long-term growth rates of between -
10% and -30%, was used in the value-in-use calculations. The value-in-use represents the present value of the future cash flows,
including the terminal value, discounted at a rate appropriate to the Group. The key assumptions employed in arriving at the
estimates of future cash flows are subjective and include projected EBITDA, net cash flows, discount rates and the duration of the
discounted cash flow model. The Group have used a discount rate of 7.9% (2020: 14.4%) which we believe is a realistic estimate
for the Group as well as the Group’s risk profile.
The 2021 annual impairment testing process resulted in no impairment for the year ended December 31, 2021 (2020: nil).
Amryt Pharma plc
Notes to the Financial Statements Continued
For the year ended December 31, 2021
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for the year ended December 31, 2021
13. Property, plant and equipment
Property
Plant and
Machinery
Office
Equipment
Right-of-use
assets
Total
US$’000
US$’000
US$’000
US$’000
US$’000
Cost
At January 1, 2020
383
1,432
547
2,000
4,362
Additions
38
527
938
4,420
5,923
Disposals
—
—
(372)
(378)
(750)
Foreign exchange movement
38
93
165
140
436
At December 31, 2020
459
2,052
1,278
6,182
9,971
Additions
—
250
479
429
1,158
Acquired assets
—
—
302
648
950
Disposals
—
—
(397)
—
(397)
Foreign exchange movement
(37)
(100)
(33)
(389)
(559)
At December 31, 2021
422
2,202
1,629
6,870
11,123
Accumulated amortization
At January 1, 2020
353
404
187
382
1,326
Depreciation charge
15
134
209
939
1,297
Depreciation charge on disposals
—
—
(239)
(129)
(368)
Foreign exchange movement
35
37
11
59
142
At December 31, 2020
403
575
168
1,251
2,397
Depreciation charge
9
151
580
912
1,652
Depreciation charge on disposals
—
—
(224)
—
(224)
Foreign exchange movement
(33)
(33)
(9)
(43)
(118)
At December 31, 2021
379
693
515
2,120
3,707
Net book value
At December 31, 2020
56
1,477
1,110
4,931
7,574
At December 31, 2021
43
1,509
1,114
4,750
7,416
14. Trade and other receivables
Group
Company
December 31,
December 31,
2021
2020
2021
2020
US$’000
US$’000
US$’000
US$’000
Trade receivables
34,263
33,057
—
—
Accrued income and other debtors
12,201
8,423
3,104
2,289
VAT recoverable
7,444
1,705
133
75
Intercompany receivables
—
—
23,026
8,771
Trade and other receivables
53,908
43,185
26,263
11,135
Trade receivables at December 31, 2021 includes US$258,000 (2020: US$1,186,000) which is due greater than 120 days. No
impairment is considered necessary.
Intercompany receivables mainly relate to recharges of expenses incurred by the Company in providing management services to
the wider Group. These intercompany receivables are interest free basis and repayable on demand. During the year ended
December 31, 2021, no impairment charge was recognized (2020: nil).
Amryt Pharma plc
Notes to the Financial Statements Continued
For the year ended December 31, 2021
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for the year ended December 31, 2021
15. Inventories
December 31,
2021
2020
US$’000
US$’000
Raw materials
36,850
25,462
Work in progress
12,986
3,903
Finished goods
65,933
11,627
Inventories
115,769
40,992
In 2021, a total of US$26,783,000 (2020: US$25,854,000) of inventories was included in the consolidated statement of
comprehensive income/(loss) as an expense (excluding the fair value step-up).
The increase in inventories for the year ended December 31, 2021, reflected the fair value of inventory acquired as part of the
acquisition of Chiasma on August 5, 2021. The fair value of the acquired inventory amounted to US$65,907,000. Inventory on hand
at the date of acquisition was valued at the expected selling price less the sum of remaining costs of disposal, cost to complete
and a reasonable profit margin for the selling effort of the acquiring entity. The costs to complete were calculated based on costs
incurred on recently completed finished goods. The costs to dispose include sales and marketing expenses required to sell the
product to the customer in addition to certain general and administrative expenses expected to be incurred by Amryt. This resulted
in a non-cash step up at the valuation of inventory at August 5, 2021, of US$44,794,000. The non-cash step up in inventory is being
unwound to the Consolidated Statement of Comprehensive Income/(Loss) over the period in which this saleable inventory is sold.
At December 31, 2021, US$41,581,000 of this non-cash inventory step up is included in finished goods inventory.
As part of the Aegerion acquisition a non cash step up in valuing inventory was also recognized on acquisition and the carrying
value included in finished goods inventory as at December 31, 2021, was nil (US$1,204,000).
During the year ended December 31, 2021, a provision of US$5,688,000 (2020: US$4,058,000) was recognized in the Consolidated
Statement of Comprehensive Income/(Loss) relating to review of inventory to net realizable value. During the year ended
December 31, 2021, US$932,000 (2020: nil) of write-down reversals were recognized due to updated demand forecasts.
16. Cash and cash equivalents
Group
Company
December 31,
December 31,
2021
2020
2021
2020
US$’000
US$’000
US$’000
US$’000
Cash at bank available on demand
112,771
118,575
12,004
38,364
Restricted cash
261
223
—
—
Total cash and cash equivalents
113,032
118,798
12,004
38,364
Cash and cash equivalents include cash at bank available on demand and restricted cash.
At December 31, 2021, there was US$261,000 restricted cash (December 31, 2020: US$223,000). The restricted cash balance as
at December 31, 2021, consists of a deposit on a company credit card facility for an amount of US$126,000 (December 31, 2020:
US$150,000), a lease deposit for US$85,000 (December 31, 2020: nil) and a letter of credit related to US customs which was put
in place for an amount of US$50,000 (December 31, 2020: nil). The restricted cash balance as at December 31, 2020, included
US$73,000 held by a third-party distributor that was received in January 2021. There was no cash in transit held by a third-party
distributor as at December 31, 2021.
Amryt Pharma plc
Notes to the Financial Statements Continued
For the year ended December 31, 2021
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for the year ended December 31, 2021
17. Share capital and reserves
Details of the number of issued ordinary shares with a nominal value of Sterling 6 pence (2020: 6 pence) each are in the table
below.
Ordinary shares
Treasury shares
Total
2021
2020
2021
2020
2021
2020
At 1 January
178,801,593
154,498,887
4,791,703
4,864,656
183,593,296
159,363,543
Issue of treasury shares in exchange
for warrants
283,389
—
(283,389)
—
—
—
Issue of shares in exchange for
warrants
4,758,206
8,229,753
—
—
4,758,206
8,229,753
Issue of shares in equity fund raises
—
16,000,000
—
—
—
16,000,000
Issue of treasury shares in exchange
for warrants
4,208,314
—
(4,208,314)
—
—
—
Issue of treasury shares for share
options exercised
300,000
72,953
(300,000)
(72,953)
—
—
Issue of shares in consideration of
Chiasma acquisition
127,740,695
—
—
—
127,740,695
—
Issue of shares for share options
exercised and RSUs vesting
3,722,550
—
—
—
3,722,550
—
At December 31
319,814,747
178,801,593
—
4,791,703
319,814,747
183,593,296
The components of equity are detailed in the Consolidated and Company Statement of Changes in Equity and described in more
detail below.
As at December 31, 2021 there were 319,814,747 ordinary shares issued with no treasury shares held (December 31, 2020:
183,593,296 of which 4,791,703 were treasury shares).
In December 2020, the Company issued 16,000,000 ordinary shares in the form of ADSs, as part of a US$40,000,000 private
placement equity raise to existing and new shareholders. The Company issued 4,000,000 and 4,229,753 ordinary shares on July
15, 2020, and September 22, 2020, respectively, in exchange for certain warrants.
On March 11, 2021, the Company issued 300,000 ordinary shares from treasury shares following the exercise of share options. On
March 11, 2021, the Company issued 283,389 ordinary shares from treasury shares in exchange for certain warrants. On August
5, 2021, the Company issued 127,740,695 ordinary shares, in the form of ADSs, as consideration for the acquisition of Chiasma.
On August 5, 2021, the Company issued 8,966,520 ordinary shares with 4,208,314 being issued from treasury shares in exchange
for warrants. During the year ended December 31, 2021, there were 3,342,680 shares issued following the exercise of share
options and 379,870 shares issued following RSUs vesting.
Share Capital
Share capital represents the cumulative par value arising upon issue of ordinary shares of Sterling 6 pence each.
The ordinary shares have the right to receive notice of, attend and vote at general meetings and participate in the profits of the
Company.
Share Premium
Share premium represents the consideration that has been received in excess of the nominal value on issue of share capital net
of issue costs and transfers to distributable reserves.
Warrant reserve
The warrant reserve represents zero cost warrants issued as part of the equity raise on September 24, 2019, net of issue costs
apportioned to warrants issued and additional warrants issued to certain shareholders on November 14, 2019. Each warrant
entitles the holder to subscribe for one ordinary share at zero cost. The Company issued 4,000,000 and 4,229,753 ordinary shares
on July 15, 2020, and September 22, 2020, respectively, in exchange for certain warrants. The remaining warrants were exchanged
on August 5, 2021, and the Company issued 8,966,520 ordinary shares, 4,208,314 of which were issued from treasury shares.
There were no remaining warrants outstanding as at December 31, 2021.
Amryt Pharma plc
Notes to the Financial Statements Continued
For the year ended December 31, 2021
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for the year ended December 31, 2021
Treasury Shares
In October 2020, the Company issued 72,953 ordinary shares from treasury shares following the exercise of share options. In
March 2021, the Company issued a total of 583,389 ordinary shares from treasury shares, 300,000 ordinary shares relating to the
exercise of share options and 283,389 ordinary shares following the exchange of certain warrants. In August 2021, the company
issued 4,208,314 ordinary shares from treasury shares in conjunction with the exchange of warrants. There were no treasury
shares held as at December 31, 2021.
Share based payment reserve
Share based payment reserve relates to the charge for share based payments in accordance with IFRS 2. In March 2021, the
Company issued 283,389 ordinary shares in exchange for certain warrants. In April 2021, 62,153 warrants lapsed. During the year
ended December 31, 2021, the Company issued 3,722,550 ordinary shares in relation to the exercise of share options and RSUs.
As part of the acquisition of Chiasma, the Company replaced share awards that were existing at the time of the acquisition. This
resulted in the recognition of a share-based payment reserve of US$10,157,000 on acquisition.
Merger reserve
The merger reserve was created on the acquisition of Amryt DAC by Amryt Pharma plc in April 2016. Ordinary shares in Amryt
Pharma plc were issued to acquire the entire issued share capital of Amryt DAC. Under section 612 of the UK Companies Act 2006,
the premium on these shares has been included in a merger reserve.
Reverse acquisition reserve
The reverse acquisition reserve arose during the period ended December 31, 2016, in respect of the reverse acquisition of Amryt
Pharma plc by Amryt DAC. Since the shareholders of Amryt DAC became the majority shareholders of the enlarged Group, the
acquisition is accounted for as though there is a continuation of Amryt DAC’s financial statements. The reverse acquisition reserve
is created to maintain the equity structure of Amryt Pharma plc in compliance with UK company law.
Equity component of convertible notes
The equity component of convertible notes represents the equity component of the US$125,000,000 convertible debt and is
measured by determining the residual of the fair value of the instrument less the estimated fair value of the liability component.
The equity component is recognized in equity and is not subsequently remeasured.
Other distributable reserves
Other distributable reserves comprise the following:
Distribution of the share premium amount on November 6, 2019, of US$268,505,000. By special resolution of the
Company duly passed on September 23, 2019, in accordance with section 283 of the UK Companies Act 2006, it was
resolved that the entire amount outstanding to the credit of the share premium account and capital redemption
reserve of the Company be cancelled. The reduction in capital, amounting to US$268,505,000, representing the
entire amount of share premium at that time, was approved by the High Court of Justice of England and Wales on
November 5, 2019.
A deemed distribution of US$47,902,000 arising from the issuance of CVRs in September 2019.
A deemed distribution of US$2,969,000 arising from the scheme of arrangement in September 2019 whereby Amryt
Pharma plc, which was incorporated in July 2019, became a 100% shareholder of Amryt Pharma Holdings Limited
(formerly named Amryt Pharma plc) (the “Acquisition of subsidiary without a change of control”).
Currency translation reserve
The currency translation reserve arises on the retranslation of non-U.S. dollar denominated foreign subsidiaries.
Accumulated deficit
Accumulated deficit represents losses accumulated in previous periods and the current year.
Amryt Pharma plc
Notes to the Financial Statements Continued
For the year ended December 31, 2021
Amryt Pharma plc
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for the year ended December 31, 2021
18. Deferred tax liability
Total
US$’000
At January 1, 2020
7,147
Net movement during the year
(535)
At December 31, 2020
6,612
Net movement during the year
11,160
At December 31, 2021
17,772
A deferred tax liability arose in 2016 on the acquisition of Amryt GmbH. An intangible asset was recognized in relation to in process
R&D. As the intangible asset only arises on consolidation and there may not be tax deductions available on sale, its tax base is nil.
When the intangible asset is amortized or impaired the tax difference will be reduced and the movement in the deferred tax
liability will be recognized in profit or loss. The in-process R&D is currently not being amortized. As this is a euro denominated
liability, there are FX movements on the deferred tax liability each year. During the year ended December 31, 2021, there was an
increase in this deferred tax liability of US$246,000.
A deferred tax liability was recognized in 2019 in connection with the acquisition of Aegerion Pharmaceuticals, Inc. and in 2021 in
connection with the acquisition of Chiasma, Inc. (see Note 6, Business combinations and asset acquisitions). The intangible assets
have been recognized at their fair value. As the transactions did not result in the intangible assets being re-based to fair value
from a tax perspective this results in a deferred tax liability being recognized on acquisition. These intangibles are being amortized
and the resulting reduction in the deferred tax liability will be recognized in profit or loss. The acquisition of Chiasma, Inc. during
the year ended December 31, 2021, has increased the group’s deferred tax liability by US$10,912,000.
19. Long term loan
December 31,
2021
2020
US$’000
US$’000
Long term loan principal
93,988
88,037
Unamortized debt issuance costs
(593)
(735)
Long term loan
93,395
87,302
As part of the acquisition of Aegerion on September 24, 2019, Aegerion entered into a new U.S. dollar denominated
US$81,021,000 secured term loan debt facility (‘‘Term Loan’’) with various lenders. The Term Loan was made up of a
US$54,469,000 loan that was in place prior to the acquisition, which was refinanced as part of the acquisition, and a US$26,552,000
additional loan that was drawn down on September 24, 2019. The Term Loan had a five-year term from the date of the draw
down, September 24, 2019, and a maturity date of September 24, 2024. Under the Term Loan, interest was payable at the option
of the Group at the rate of 11% per annum paid in cash on a quarterly basis or at a rate of 6.5% paid in cash plus 6.5% paid in kind,
which rolls up and is included in the principal balance outstanding, on a quarterly basis. Unpaid accrued interest of US$1,536,000
as at December 31, 2021 is recognized in current liabilities within trade and other payables (December 31, 2020: $1,439,000). The
Term Loan agreement includes an option to prepay the loan in whole or in part at any time subject to payment of an exit fee,
which depending on the stage of the loan term, ranges from 5.00% to 0.00% of the principal then outstanding on the Term Loan.
On February 18, 2022, the Term Loan was repaid in full and the Group secured a $125,000,000 senior credit facility of which
US$105,000,000 was drawn down to facilitate the prepayment of the existing Term Loan. See further details on the $125,000,000
senior credit facility entered into by Amryt in Note 27, Events after the reporting period.
In connection with the Term Loan, the Group incurred approximately US$870,000 of debt issuance costs, which primarily consisted
of underwriting, legal and other professional fees. These costs are amortized over the expected life of the loan using the effective
interest method.
The Term Loan was guaranteed by Amryt and certain subsidiaries of the Group. In connection with the loan agreement, fixed and
floating charges have been placed on property and undertakings of Amryt and certain subsidiaries of the Group.
The Term Loan agreement included affirmative and negative covenants, including prohibitions on the incurrence of additional
indebtedness, granting of liens, certain asset dispositions, investments, and restricted payments, in each case, subject to certain
exceptions set forth in the Loan Agreement. The Term Loan agreement also includes customary events of default for a transaction
Amryt Pharma plc
Notes to the Financial Statements Continued
For the year ended December 31, 2021
Amryt Pharma plc
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Annual Report and Accounts
for the year ended December 31, 2021
of this type and includes (i) a cross-default to the occurrence of any event of default under material indebtedness of Amryt and
certain subsidiaries of the Group and Amryt, including the convertible notes, and (ii) Amryt or any of its subsidiaries being subject
to bankruptcy or other insolvency proceedings. Upon the occurrence of an event of default, the lenders may declare all of the
outstanding Term Loan and other obligations under the Term Loan agreement to be immediately due and payable and exercise
all rights and remedies available to the lenders under the Term Loan agreement and related documentation. There were no events
of default or breaches of the covenants occurring for the year ended December 31, 2021 (December 31, 2020: no events).
Total
US$’000
Changes in long term loans from financing activities:
At January 1, 2021
88,741
Cash-flows
Acquired loans and borrowings
116,629
Repayment of loans and borrowings
(116,629)
Liability related
Paid in kind interest
5,947
Amortization of debt costs
146
Change in accrued interest
97
At December 31, 2021
94,931
20. Convertible notes
Total
US$’000
At January 1, 2020
96,856
Accreted interest
4,230
At December 31, 2020
101,086
Accreted interest
4,702
At December 31, 2021
105,788
As part of the Aegerion acquisition, Aegerion issued convertible notes with an aggregate principal amount of US$125,000,000 to
Aegerion creditors.
The convertible notes are senior unsecured obligations and bear interest at a rate of 5.0% per year, payable semi-annually in
arrears on April 1 and October 1 of each year, beginning on April 1, 2020. The convertible notes will mature on April 1, 2025, unless
earlier repurchased or converted.
The convertible notes are convertible into Amryt’s ordinary shares at a conversion rate of 386.75 ordinary shares per US$1,000
principal amount of the convertible notes. If the holders elect to convert the convertible notes, Amryt can settle the conversion
of the convertible notes through payment or delivery of cash, common shares, or a combination of cash and common shares, at
its discretion. As a result of the conversion feature in the convertible notes, the convertible notes were assessed to have both a
debt and an equity component. The two components were assessed separately and classified as a financial liability and equity
instrument. The financial liability component was measured at fair value based on the discounted cash flows expected over the
expected term of the notes using a discount rate based on a market interest rate that a similar debt instrument without a
conversion feature would be subject to. Refer to Note 17, Share capital and reserves, for further details on the equity component
of the convertible notes.
From September 24, 2019, until the close of business on the second scheduled trading day immediately preceding the maturity
date, holders may convert all or any portion of their convertible notes, in multiples of US$1,000 principal amount, at the option
of the holder.
The indenture does not contain any financial covenants or restrict the Group’s ability to repurchase securities, pay dividends or
make restricted payments in the event of a transaction that substantially increases the Group’s level of indebtedness in certain
circumstances.
The indenture contains customary terms and covenants and events of default. If an event of default (other than certain events of
bankruptcy, insolvency or reorganization involving Aegerion, Amryt and certain subsidiaries of the Group) occurs and is continuing,
the trustee by notice to Amryt, or the holders of at least 25% in principal amount of the outstanding convertible notes by written
Amryt Pharma plc
Notes to the Financial Statements Continued
For the year ended December 31, 2021
Amryt Pharma plc
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for the year ended December 31, 2021
notice to Amryt and the trustee, may declare 100% of the principal of and accrued and unpaid interest, if any, on all of the
convertible notes to be due and payable. Upon such a declaration of acceleration, such principal and accrued and unpaid interest,
if any, will be due and payable immediately. Upon the occurrence of certain events of bankruptcy, insolvency or reorganization
involving Amryt, 100% of the principal and accrued and unpaid interest, if any, on the convertible notes will become due and
payable automatically. Notwithstanding the foregoing, the indenture provides that, upon Amryt’s election, and for up to 180 days,
the sole remedy for an event of default relating to certain failures by Amryt to comply with certain reporting covenants in the
indenture consists exclusively of the right to receive additional interest on the convertible notes. There have been no events of
default or breaches of the covenants occurring for the year ended December 31, 2021 (2020: no events).
21. Trade and other payables
Group
Company
December 31,
December 31,
2021
2020
2021
2020
US$’000
US$’000
US$’000
US$’000
Trade payables
41,057
23,595
511
528
Accrued expenses
107,194
65,705
1,263
3,108
Social security costs and other taxes
1,483
936
—
—
Intercompany payables
—
—
519
14,937
Trade and other payables
149,734
90,236
2,293
18,573
The Group has a liability, included in accrued expenses above, for revenue rebates due on Myalepta sales in a country in the EMEA
region from agreeing a reimbursement price with the government authorities resulting in a one-off payment related to sales up
to the date of approval, which occurred in March 2021. The Group has recognized a liability of US$21,348,000 as at December 31,
2021. At December 31, 2020, the liability was included in provisions as the underlying agreement was not finalized and it was
recognized as a non-current liability for an amount of US$21,382,000 as payment was agreed to be made in July 2022. Other
accruals for the Group mainly consist of costs related to government revenue rebates due within one year, convertible note
interest, term loan interest, royalty expenses, restructuring costs, clinical and R&D activities. The accruals for the Company mainly
relate to equity raising costs and fees on investor relations, audit, tax and other professional services. Intercompany payables
relate to advances from subsidiaries to fund operations of the Company due to be settled on a regular basis.
22. Provisions and other liabilities
December 31,
2021
2020
US$’000
US$’000
Non-current liabilities
Provisions and other liabilities
—
21,382
Leases due greater than 1 year
4,049
4,569
4,049
25,951
Current liabilities
Provisions and other liabilities
6,000
9,976
Leases due less than 1 year
1,545
963
7,545
10,939
Total provisions and other liabilities
11,594
36,890
Refer to Note 25, Commitments and contingencies for further details on provisions.
The Group leases various offices, equipment, vehicles and a production facility. Refer to Note 7, Operating loss for the year, for
the lease expense on leases not recognized as a lease liability (short term leases, leases with an expected term of 12 months or
less, or for leases of low value assets) and Note 24, Fair value measurement and financial risk management, for further details on
lease commitments.
Amryt Pharma plc
Notes to the Financial Statements Continued
For the year ended December 31, 2021
Amryt Pharma plc
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Annual Report and Accounts
for the year ended December 31, 2021
2021
2020
US$’000
US$’000
Changes in lease liabilities from financing activities:
At January 1
5,532
1,624
Adoption of IFRS 16
—
—
Cash-flows
Payment of leases
(1,215)
(1,119)
Non-cash
Acquired lease assets
—
—
New leases
1,077
4,420
Interest expense
558
335
Foreign exchange movement
(358)
272
At December 31
5,594
5,532
23. Related party transactions
Compensation of key management personnel of the Group
In 2021, the key management personnel of the Group consisted of the executive director Joe Wiley, Chief Executive Officer, non-
executive directors, and the Chief Financial Officer and Chief Operating Officer, Rory Nealon.
Compensation for the years ended December 31, 2021, and December 31, 2020, of these personnel is detailed below:
December 31,
2021
2020
US$’000
US$’000
Short-term employee benefits
1,912
1,848
Performance related bonus
1,106
1,122
Post-employment benefits
120
119
Share-based compensation benefits
3,713
3,079
Total compensation
6,851
6,168
Shares purchased by directors of the Company
The following ordinary shares were purchased by directors of the Company.
Director
Number
Date
Joseph Wiley
16,000
March 2022
George P. Hampton, Jr.
100,000
March 2022
Stephen T. Wills
37,500
March 2022
Dr. Alain H. Munoz
22,500
March 2022
Dr. Patrick V.J.J. Vink
25,000
March 2022
Raymond T. Stafford
50,000
March 2022
Raymond T. Stafford
250,000
November 2021
Raymond T. Stafford
300,100
March 2021
Agreements with principal shareholders
Long term loan
On September 24, 2019, the Group entered into a long term loan. Proceeds from the long term loan were used to refinance
Aegerion’s existing secured bridge loan in the principal amount of approximately US$50,000,000 (in principal) held by certain
funds managed by Athyrium Capital Management, LP and Highbridge Capital Management, LLC, respectively. Further information
on the terms of the long term loan is included in Note 19, Long term loan, of these financial statements.
Amryt Pharma plc
Notes to the Financial Statements Continued
For the year ended December 31, 2021
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for the year ended December 31, 2021
Convertible notes
On September 24, 2019, the Company issued US$125,000,000 aggregate principal amount of convertible notes due 2025 to certain
creditors of Aegerion. The convertible notes bear interest at a rate of 5% per annum, payable in cash semi-annually. The
convertible notes will mature approximately five and a half years after issuance, unless earlier repurchased, redeemed or
converted. Further information on the terms of the convertible notes is included in Note 20, Convertible notes, of these financial
statements.
Zero Cost Warrants
The Company agreed, for certain Aegerion creditors who wished to restrict their percentage share interest in Amryt’s issued share
capital, to issue to the relevant Aegerion creditor, as an alternative to Amryt ordinary shares, an equivalent number of new zero
cost warrants to subscribe for Amryt ordinary shares to be constituted on the terms of the zero cost warrant. The relevant Aegerion
creditors are entitled at any time to exercise the zero cost warrants, at which point in time the Company would issue to that
Aegerion creditor the relevant number of fully paid ordinary shares in return for the exercise of the zero cost warrants.
On September 24, 2019, certain of Aegerion’s creditors elected to receive 8,065,000 zero cost warrants to subscribe for Amryt
ordinary shares as consideration for the acquisition. Separately 5,911,722 warrants were issued to investors in connection with
the US$60,000,000 equity raise.
On November 14, 2019, the Company repurchased a combined 4,864,656 ordinary shares from Highbridge Tactical Master Fund
L.P., Highbridge SCF Special Situations SPV, L.P. and Nineteen77 Global Multi Strategy Alpha Master Limited. In exchange for the
ordinary shares, these institutions were issued an equivalent number of zero cost warrants. Each warrant entitles the holder to
subscribe for one ordinary share at zero cost. On December 19, 2019, Highbridge MSF International Ltd exercised 1,645,105 zero
cost warrants in exchange for 1,645,105 ordinary shares.
In July 2020, Highbridge Tactical Master Fund L.P. exercised 4,000,000 zero cost warrants in exchange for 4,000,000 ordinary
shares. In September 2020, Nineteen77 Global Multi Strategy Alpha Master Limited exercised 4,229,753 zero cost warrants in
exchange for 4,229,753 ordinary shares.
The remaining warrants were exchanged on August 5, 2021, and the Company issued 8,966,520 ordinary shares, 4,208,314 of
which were issued from treasury shares. There were no remaining warrants outstanding as at December 31, 2021.
Amryt Pharma plc
Notes to the Financial Statements Continued
For the year ended December 31, 2021
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24. Fair value measurement and financial risk management
Categories of financial instruments
Group
Company
December 31,
December 31,
2021
2020
2021
2020
US$’000
US$’000
US$’000
US$’000
Financial assets (all at amortized cost):
Cash and cash equivalents
113,032
118,798
12,004
38,364
Trade receivables
34,263
33,057
—
—
Intercompany receivables
—
—
23,026
8,771
Total financial assets
147,295
151,855
35,030
47,135
Financial liabilities:
At amortized cost
Trade payables and accrued expenses
148,251
89,300
1,774
3,636
Intercompany payables
—
—
519
14,937
Lease liabilities
5,594
5,532
—
—
Other liabilities
—
25,358
—
—
Convertible notes
105,788
101,086
—
—
Long term loan
93,395
87,302
—
—
Contingent value rights
19,892
61,417
19,892
49,355
At fair value
Contingent consideration
61,221
86,906
—
—
Total financial liabilities
434,141
456,901
22,185
67,928
Net
(286,846)
(305,046)
12,845
(20,793)
Financial instruments evaluated at fair value can be classified according to the following valuation hierarchy, which reflects the
extent to which the fair value is observable:
Level 1: fair value evaluations using prices listed on active markets (not adjusted) of identical assets or liabilities.
Level 2: fair value evaluations using input data for the asset or liability that are either directly observable (as prices) or
indirectly observable (derived from prices), but which do not constitute listed prices pursuant to Level 1.
Level 3: fair value evaluations using input data for the asset or liability that are not based on observable market data
(unobservable input data).
The contingent consideration has been valued using Level 3. The contingent consideration comprises:
Contingent consideration relating to the acquisition of Amryt GmbH (see Note 6, Business combinations and asset
acquisitions) that was measured at US$61,221,000 as at December 31, 2021 (December 31, 2020: US$86,906,000). The
fair value comprises royalty payments which was determined using probability weighted revenue forecasts and the fair
value of the milestones payments which was determined using probability adjusted present values. It also included a
revision to the discount rate used, and revenue and costs forecasts have been amended to reflect management’s current
expectations.
Impact of key unobservable input data
An increase of 10% in estimated revenue forecasts would result in an increase to the fair value of US$3,746,000. A
decrease would have the opposite effect.
A 5% increase in the discount factor used would result in a decrease to the fair value of US$9,740,000. A decrease of 5%
would result in an increase to the fair value of US$12,923,000.
A six-month delay in the launch date for Oleogel-S10 would result in a decrease to the fair value of US$5,421,000.
A 20% decrease in the probability of success used would result in a decrease to the fair value of US$17,491,000. An
increase of 20% in the probability of success with the FDA approval would result in a decrease to the fair value of
US$13,120,000.
There were no transfers between Level 1, Level 2 and Level 3 during the years ended December 31, 2021, and 2020.
Policies and Objectives
Amryt Pharma plc
Notes to the Financial Statements Continued
For the year ended December 31, 2021
Amryt Pharma plc
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for the year ended December 31, 2021
The Group and Company’s operations expose it to some financial risks arising from its use of financial instruments, the most
significant ones being liquidity, market risk and credit risk. The Board of Directors is responsible for the Group and Company’s risk
management policies and whilst retaining responsibility for them it has delegated the authority for designing and operating
processes that ensure the effective implementation of the objectives and policies to the Group and Company’s finance function.
The main policies for managing these risks are as follows:
Liquidity risk
The Group and Company is not subject to any externally imposed capital requirement. Accordingly, the Group and Company’s
objectives are to safeguard the ability to continue as a going concern in order to provide returns for shareholders and benefits to
other stakeholders and to maintain an optimal capital structure to reduce the cost of capital. Working capital forecasts are
prepared to ensure the Group and Company has sufficient funds to complete contracted work commitments.
The following table shows the maturity profile of financial liabilities of the Group:
December 31, 2021
Carrying
amount
Contractual
cash flows
6 months
or less
6 months -
12 months
1-2
years
2-5
years
> 5 years
Total
US$’000
US$’000
US$’000
US$’000
US$’000
US$’000
US$’000
US$’000
Trade payables and accrued
expenses
149,734
149,734
149,734
—
—
—
—
149,734
Lease liabilities
5,594
7,882
757
757
885
2,556
2,927
7,882
Long term loan
93,395
130,776
3,097
3,252
6,778
117,649
—
130,776
Convertible notes
105,788
146,875
3,125
3,125
6,250
134,375
—
146,875
Contingent consideration
and contingent value rights*
81,113
80,355
17,043
—
—
63,312
—
80,355
435,624
515,622
173,756
7,134
13,913
317,892
2,927
515,622
* Contingent consideration contractual cash flows do not include royalty payments due to be paid by Amryt, which are
dependent on sales of Oleogel-S10 products. The carrying amount of contingent consideration is recorded at fair value,
which incorporates the estimated royalty payments on sales of Oleogel-S10 products.
December 31, 2020
Carrying
amount
Contractual
cash flows
6 months
or less
6 months -
12 months
1-2
years
2-5
years
> 5 years
Total
US$’000
US$’000
US$’000
US$’000
US$’000
US$’000
US$’000
US$’000
Trade payables and accrued
expenses
89,300
89,300
89,300
—
—
—
—
89,300
Lease liabilities
5,532
8,820
525
525
1,096
2,676
3,998
8,820
Other liabilities
25,358
25,375
3,993
—
21,382
—
—
25,375
Long term loan
87,302
136,723
2,901
3,046
6,349
124,427
—
136,723
Convertible notes
101,086
153,125
3,125
3,125
6,250
140,625
—
153,125
Contingent consideration
and contingent value rights*
148,323
127,991
—
62,283
—
65,708
—
127,991
456,901
541,334
99,844
68,979
35,077
333,436
3,998
541,334
* Contingent consideration contractual cash flows do not include royalty payments due to be paid by Amryt, which are
dependent on sales of Oleogel-S10 products. The carrying amount of contingent consideration is recorded at fair value, which
incorporates the estimated royalty payments on sales of Oleogel-S10 products.
The following table shows the maturity profile of financial liabilities of the Company:
December 31, 2021
Carrying
amount
Contractual
cash flows
6 months
or less
6 months -
12 months
1-2
years
2-5
years
> 5 years
Total
US$’000
US$’000
US$’000
US$’000
US$’000
US$’000
US$’000
US$’000
Trade payables and accrued
expenses
1,774
1,774
1,774
—
—
—
—
1,774
Intercompany payables
519
519
519
—
—
—
—
519
Contingent value rights
19,892
40,718
5,718
—
—
35,000
—
40,718
22,185
43,011
8,011
—
—
35,000
—
43,011
Amryt Pharma plc
Notes to the Financial Statements Continued
For the year ended December 31, 2021
Amryt Pharma plc
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for the year ended December 31, 2021
December 31, 2020
Carrying
amount
Contractual
cash flows
6 months
or less
6 months -
12 months
1-2
years
2-5
years
> 5 years
Total
US$’000
US$’000
US$’000
US$’000
US$’000
US$’000
US$’000
US$’000
Trade payables and accrued
expenses
3,636
3,636
3,636
—
—
—
—
3,636
Intercompany payables
14,937
14,937
14,937
—
—
—
—
14,937
Contingent value rights
49,355
70,833
—
35,833
—
35,000
—
70,833
67,928
89,406
18,573
35,833
—
35,000
—
89,406
Capital management
The Group and Company considers its capital to be its ordinary share capital, share premium, other reserves and accumulated
deficit. The Group and Company manages its capital to ensure that entities within the Group will be able to continue individually
as going concerns, while maximizing the return to shareholders through the optimization of debt and equity balances. The Group
and Company manages its capital structure and makes adjustments to it, in the light of changes in economic conditions. To
maintain or adjust its capital structure, the Group and Company may adjust or issue new shares or raise debt. On a regular basis,
management receives financial and operational performance reports that enable continuous management of assets, liabilities and
liquidity. No changes were made in the objectives, policies or processes during the years ended December 31, 2021, and December
31, 2020.
Market risk
Market risk arises from the use of interest-bearing financial instruments and represents the risk that future cash flows of a financial
instrument will fluctuate as a result of changes in interest rates. It is the Group’s policy to ensure that significant contracts are
entered into in its functional currency whenever possible and to maintain the majority of cash balances in the functional currency
of the Company. The Group considers this policy minimizes any unnecessary foreign exchange exposure. In order to monitor the
continuing effectiveness of this policy, the Board of Directors reviews the currency profile of cash balances and managements
accounts.
It is the Group’s policy to enter into long term borrowings at fixed rates of interest where possible to reduce the Group’s exposure
to cash flow interest rate risk. During the years ended December 31, 2021, and December 31, 2020, the long term borrowings of
the Group were subject to fixed rates of interest.
During the year 2021, the Group earned interest on its interest-bearing financial assets at rates between 0% and 1%. The effect of
a 1% change in interest rates obtainable during the year on cash and on short-term deposits would be to increase or decrease the
Group loss before tax by US$578,000 (2020: US$174,000).
In addition to cash balances maintained in US$, the Group had balances in £ and € amongst others at year-end. A theoretical 10%
adverse movement in the year end €:US$ exchange rate would lead to an increase in the Group loss before tax by US$4,005,000
with a corresponding reduction in the Group loss before tax with a 10% favorable movement. A theoretical 10% adverse
movement in £:US$ exchange rates would lead to an increase in the Group loss before tax by US$114,000 with a corresponding
reduction in the Group loss before tax with a 10% favorable movement.
Credit risk
The Group and Company has no significant concentrations of credit risk. Exposure to credit risk is monitored on an ongoing basis.
If necessary, the Group maintains specific provisions for potential credit losses. As at December 31, 2021, there has been no
requirement for such provisions. The Group maintains cash and cash equivalents with various financial institutions. The Group
performs regular and detailed evaluations of these financial institutions to assess their relative credit standing. The carrying
amount reported in the balance sheet for cash and cash equivalents approximate their fair value. Credit risk is the risk that the
counterparty will default on its contractual obligations resulting in financial loss. Credit risk arises from cash and cash equivalents
and from exposure via deposits with the Group’s bankers. For cash and cash equivalents, the Group only uses recognized banks
with high credit ratings.
Amryt Pharma plc
Notes to the Financial Statements Continued
For the year ended December 31, 2021
Amryt Pharma plc
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Annual Report and Accounts
for the year ended December 31, 2021
Credit risk related to customers is managed through risk assessment procedures, through assessment of credit quality, taking into
account the financial position of the customer, past experience and other factors. The compliance with credit terms is monitored
on a regular basis by management. Credit terms may vary from one month to several months depending on the region and
customer. The major customers contribute to 36% of the total trade receivables of the group outstanding as at December 31,
2021 (2020: 42%).
For trade receivables, the Group applies a simplified approach in calculating ECLs. Therefore, the Group does not track changes in
credit risk, but instead recognizes a loss allowance based on lifetime ECLs at each reporting date. The Group assesses ECL based
on its historical credit loss experience, adjusted for forward-looking factors specific to the debtors and the economic environment.
25. Commitments and contingencies
Contingent consideration and contingent value rights
See Note 6, Business combinations and asset acquisitions, in relation to contingent consideration and contingent value rights as a
result of the acquisition of Amryt GmbH and Aegerion.
License Agreements
In connection with metreleptin, the Group has license agreements for the exclusive license and patents for the use of metreleptin
to develop, manufacture and commercialize a preparation containing metreleptin. Under the license agreements the Group is
required to make royalty payments on net sales on a country-by-country basis. During the year ended December 31, 2021,
following the Aegerion acquisition on September 24, 2019, the Group recorded aggregate royalty expenses to third parties of
US$23,905,000 (2020: US$20,492,000).
The Group holds a license agreement for the exclusive, worldwide license of certain know-how and a range of patent rights
applicable to lomitapide. The Group is obligated to use commercially reasonable efforts to develop, commercialize, market and
sell at least one product covered by the licensed patent right, such as lomitapide. Additionally, the Group is required to make
royalty payments on net sales of products. During the year ended December 31, 2021, following the Aegerion acquisition on
September 24, 2019, the Group recorded aggregate royalty expenses to third parties of US$1,992,000 (2020: US$2,026,000).
As part of consideration for the acquisition of Amryt GmbH, royalty payments payable to the sellers are as follows: (a) 9% of (i)
net ex-factory sales, and (ii) net revenues in either case relating to Oleogel-S10; and (b) 6% of: (i) net ex-factory sales; and (ii) net
revenues relating to other betulin products, with the relevant royalty periods essentially being ten years from first commercial
sale of the relevant product (other than in respect of Imlan).
The Group entered into a license agreement for the exclusive, worldwide license to the patent rights for a novel polymer-based
topical gene therapy delivery platform for potential use in the treatment of rare genetic diseases. The first product candidate
utilizing this platform, AP103, is currently in preclinical development for the treatment of recessive dystrophic EB, a subset of
severe EB. Under the license agreement Amryt is required to pay milestone payments and, upon the sale of product, royalty
payments on net sales of products.
The Group entered into a license agreement for the non-exclusive, worldwide license to the patent rights for the design and
development of gene coded therapy vectors and methods for making such vectors, in order for Amryt to develop and
commercialize its genetic encoded therapies relating to AP103. Under this agreement Amryt is required to make milestone
payments and royalty payments on net sales of products.
The Group is party to a license agreement for the exclusive license of certain know-how and a range of patent rights in order for
Amryt to develop and commercialize its genetic encoded therapies relating to AP104. Under this agreement Amryt is required to
make royalty payments on net sales of products.
Amryt Pharma plc
Notes to the Financial Statements Continued
For the year ended December 31, 2021
Amryt Pharma plc
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Annual Report and Accounts
for the year ended December 31, 2021
Legal matters
Prior to the acquisition of Aegerion by Amryt, Aegerion entered into settlement agreements with governmental entities including
the Department of Justice (‘‘DOJ’’) and the FDA in connection with Juxtapid investigations. The settlement agreements require
Aegerion to pay specified fines and engage in regulatory compliance efforts. Subsequent to the acquisition, Aegerion made
US$23,036,000 of settlement payments, including interest. The settlements have been paid in full with the last payment
completed in Q1 2021. As at December 31, 2021, there is no DOJ liability outstanding. The remaining liability outstanding as at
December 31, 2020, of US$3,976,000 was included in current provisions and other liabilities.
Other matters
The Group recognizes a liability for legal contingencies when it believes that it is both probable that a liability has been incurred
and that it can reasonably estimate the amount of the loss. The Group reviews these accruals and adjusts them to reflect ongoing
negotiations, settlements, rulings, advice of legal counsel and other relevant information. To the extent new information is
obtained and the Group’s views on the probable outcomes of claims, suits, assessments, investigations or legal proceedings
change, changes in the Group’s liability accrual would be recorded in the period in which such determination is made. At December
31, 2021, the Group had recognized liabilities of US$6,000,000 in relation to ongoing legal matters (2020: US$6,000,000). At
December 31, 2020, the Group also had recognized a non-current liability of US$21,382,000 for revenue rebates due on
metreleptin sales in a country in the EMEA region following on from agreeing a reimbursement price with the government
authorities. The reimbursement agreement, which was agreed in March 2021, results in a one-off revenue rebate payment on
sales up to the date of approval. The one-off payment is due to be paid to the authorities in July 2022 and this is included within
accrued expenses, see Note 21, Trade and other payables.
Lease commitments
The Group had no finance lease commitments in 2021 (2020: nil). See Note 24, Fair value measurement and financial risk
management for details on operating lease commitments.
26. Investment in subsidiaries
Total
US$’000
Cost
At date of incorporation
280,962
Additions
60,973
At December 31, 2020
341,935
Additions
278,025
At December 31, 2021
619,960
Impairment
At date of incorporation
—
Impairment charge
—
At December 31, 2020
—
Impairment charge
—
At December 31, 2021
—
Net book value
At December 31, 2020
341,935
At December 31, 2021
619,960
During the year ended December 31, 2021, the Company issued 127,740,695 ordinary shares in connection with the acquisition
of Chiasma. In total, these ordinary shares were issued to the former Chiasma Shareholders in the form of 25,548,139 ADSs at
US$10.19 per share, to acquire Chiasma for a value of US$260,336,000. In addition to this, at the date of acquisition Chiasma had
outstanding equity awards that were held by Chiasma employees. The fair value of these awards transferred to Amryt on
acquisition were measured in accordance with IFRS 2. The portion of the value of the equity transferred to Amryt attributable to
pre-combination service is included in the consideration at the date of acquisition and this amounted to US$10,157,000. The value
of the shares issued, and the value of equity transferred for equity awards are recognised in in investments in subsidiaries, see
Note 6, Business combinations and asset acquisitions, for more details. Additions also include the value of share options relating
Amryt Pharma plc
Notes to the Financial Statements Continued
For the year ended December 31, 2021
Amryt Pharma plc
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Annual Report and Accounts
for the year ended December 31, 2021
to employees of subsidiaries, the cost of which recognised in investments in subsidiaries, see Note 5, Share based payments, for
more details.
During the year ended December 31, 2020, the Company provided a capital contribution of US$56,059,000 to its immediate
subsidiary Amryt Pharma Holdings Limited. Additions also include the value of share options relating to employees of subsidiaries,
the cost of which recognised in investments in subsidiaries, see Note 5, Share based payments, for more details.
The carrying value of the investments are directly linked to the subsidiaries of Amryt Pharma Holdings Limited including the
portfolio owned by Amryt Pharmaceuticals Inc. and Amryt Pharmaceuticals DAC. The carrying value of these investments are held
at cost and will be reviewed at each reporting date for indicators of impairment. No impairment was identified by management
during the year (2020: nil).
List of subsidiary companies:
Subsidiary
Ownership
Activities
Company
number
Incorporation
2021 %
holding
2020 %
holding
Amryt Pharma Holdings Limited
Direct
Holding company
and management
services
5316808
UK
100
100
Amryt Pharmaceuticals
Designated Activity Company
Indirect
Product Sales and
management
services
566448
Ireland
100
100
Amryt Research Limited
Indirect
Pharmaceuticals
R&D
571411
Ireland
100
100
Amryt Endocrinology Limited
Indirect
Pharmaceuticals
R&D
572984
Ireland
100
100
Amryt Lipidology Limited
Indirect
Licensee for Lojuxta
593833
Ireland
100
100
Amryt Genetics Limited
Indirect
Pharmaceutical
R&D
622577
Ireland
100
100
Amryt Pharma (UK) Limited
Indirect
Management
services
10463152
UK
100
100
Amryt Pharma Italy SRL
Indirect
Management
services
2109476
Italy
100
100
Amryt Pharma Spain S.L.
Indirect
Management
services
B67130567
Spain
100
100
Amryt GmbH
Indirect
Product Sales and
Pharmaceuticals
R&D
HRB 711487
Germany
100
100
SomPharmaceuticals SA
Indirect
Pharmaceuticals
R&D and
management
services
CHE-
435.396.568
Switzerland
100
100
Cala Medical Limited
Indirect
Pharmaceuticals
R&D
598486
Ireland
100
100
Amryt Distribution Limited
Indirect
Dormant
667507
Ireland
100
100
Amryt Pharmaceuticals Inc.
Indirect
Product Sales
Management
services
3922075
USA
100
100
Amryt Endo, Inc. (formerly
Chiasma, Inc.)
Indirect
Product Sales
Management
services
3380352
USA
100
-
Chiasma Securities Corp
Indirect
Holding company
001194998
USA
100
-
Chiasma (Israel) Limited
Indirect
Management
services
513104026
Israel
100
-
Aegerion International Limited
Indirect
Holding company
52048
Bermuda
100
100
Aegerion Pharmaceuticals
Holdings, Inc.
Indirect
Holding company
5213687
USA
100
100
Aegerion Argentina S.R.L.
Indirect
Management
services
901-709682-
0
Argentina
100
100
Amryt Pharma plc
Notes to the Financial Statements Continued
For the year ended December 31, 2021
Amryt Pharma plc
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Annual Report and Accounts
for the year ended December 31, 2021
Aegerion Pharmaceuticals
(Canada) Limited
Indirect
Management
services
85134 5132
RT0001
Canada
100
100
Amryt Colombia S.A.S.
Indirect
Management
services
R048196625
Colombia
100
100
Amryt Brasil Comercio E
Importacao De Medicamentos
LTDA (formerly Aegerion Brasil
Comercio E Importacao De
Medicamentos LTDA)
Indirect
Management
services
3522602510-
1
Brazil
100
100
Aegerion Pharmaceuticals
Limited
Indirect
Management
services
46134
Bermuda
100
100
Aegerion Pharmaceuticals
Limited
Indirect
Management
services
8114919
UK
100
100
Amryt Pharmaceuticals SAS
Indirect
Management
services
534 195
59900012
France
100
100
Aegerion Pharmaceuticals Srl
Indirect
Management
services
1166250
Italy
100
100
Amryt Pharma GmbH
Indirect
Management
services
HRB 95895
Germany
100
100
Amryt Turkey İlaç Ticaret Limited
Şirketi (formerly Aegerion İlaç
Ticaret Limited Şirketi)
Indirect
Management
services
907292
Turkey
100
100
Aegerion Pharmaceuticals SARL
Indirect
Management
services
CHE-
497.494.599
Switzerland
100
100
Aegerion Pharmaceuticals B.V.
Indirect
Management
services
69859647
Netherlands
100
100
Aegerion Pharmaceuticals Spain,
S.L.
Indirect
Management
services
B88019161
Spain
100
100
List of registered offices:
Company
Registered Office Address
Amryt Pharma Holdings Limited
C/O Corporation Service Company (Uk) Limited, 5 Churchill
Place, 10th Floor, London, United Kingdom, E14 5HU
Amryt Pharmaceuticals Designated Activity Company
45 Mespil road, Dublin 4
Amryt Research Limited
45 Mespil road, Dublin 4
Amryt Endocrinology Limited
45 Mespil road, Dublin 4
Amryt Lipidology Limited
45 Mespil road, Dublin 4
Amryt Genetics Limited
45 Mespil road, Dublin 4
Amryt Pharma (UK) Limited
C/O Corporation Service Company (Uk) Limited, 5 Churchill
Place, 10th Floor, London, United Kingdom, E14 5HU
Amryt Pharma Italy SRL
Milano (MI)-Via Dell'Annunciata 23/4
Amryt Pharma Spain S.L.
Barcelona, calle Diputacio, number 260
Amryt GmbH
Streiflingsweg 11, 75223 Niefern-Öschelbronn
SomPharmaceuticals SA
Bahnofstrasse 21, 6300 Zug
Cala Medical Limited
45 Mespil road, Dublin 4
Amryt Distribution Limited
45 Mespil road, Dublin 4
Amryt Pharmaceuticals Inc.
2711 Centerville Road, Suite 400, City of Wilmington, County
of New Castle, Delaware 19808
Amryt Endo, Inc. (formerly Chiasma, Inc.)
1209 Orange Street, Wilmington, New Castle County,
Delaware 19801
Chiasma Securities Corp
155 Federal Street, Suite 700, Boston, MA 02110
Chiasma (Israel) Limited
5 Golda Meir Street, Nes Ziona 7403649 Israel
Aegerion International Limited
Clarendon House, 2 Church Street, Hamilton, HM11
Aegerion Pharmaceuticals Holdings, Inc.
2711 Centerville Road, Suite 400, City of Wilmington, County
of New Castle, Delaware 19808
Aegerion Argentina S.R.L.
Avda. Camacua 421, Suite 102, Olivos, Vicente Lopez, 1636
Amryt Pharma plc
Notes to the Financial Statements Continued
For the year ended December 31, 2021
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Aegerion Pharmaceuticals (Canada) Limited
5300 Commerce Court West, 199 Bay Street, Toronto, ON
M5L 1B9
Amryt Colombia S.A.S.
CR 12 89 33 P 5, Bogota DC, Bogota 110111
Amryt Brasil Comercio E Importacao De Medicamentos LTDA
(formerly Aegerion Brasil Comercio E Importacao De
Medicamentos LTDA)
Rua Joseefina, 200-Guarulhos City, Sao Paulo
Aegerion Pharmaceuticals Limited
Clarendon House, 2 Church Street, Hamilton, HM11
Aegerion Pharmaceuticals Limited
C/O Corporation Service Company (Uk) Limited, 5 Churchill
Place, 10th Floor, London, United Kingdom, E14 5HU
Amryt Pharmaceuticals SAS
235, Avenue Le Jour se Leve, Boulogne-Billancourt, 92 100
Aegerion Pharmaceuticals Srl
Viale Abruzzi n. 94, Milano, 20131
Amryt Pharma GmbH
Streiflingsweg 4, 75223 NiefernÖschelbronn, Germany.
Amryt Turkey İlaç Ticaret Limited Şirketi (formerly Aegerion
İlaç Ticaret Limited Şirketi)
Orjin Maslak, Eski Buyukdere Caddesi No: 27 K:11, Maslak,
Istanbul, 34485
Aegerion Pharmaceuticals SARL
Rue de Pontets 6, Lavigny, Switzerland 1175
Aegerion Pharmaceuticals B.V.
Atrium Building, 8th Floor, Strawinskylaan 3127, 8e
verdieping, Amsterdam
Aegerion Pharmaceuticals Spain, S.L.
Calle Josep Coroleu, 83 2-2, Vilanova I la Geltru, Barcelona
08800
27. Events after the reporting period
Development Pipeline
On February 28, 2022, Amryt received a Complete Response Letter from the (FDA) regarding its (NDA) for Oleogel-S10, for the
treatment of the cutaneous manifestations of EB, a rare, genetic skin disease characterized by extremely fragile skin that blisters
and tears from minor friction or trauma for which there are no approved treatment options.
The FDA communicated that it had completed its review of the application and has determined that the application cannot be
approved in its present form. The FDA has asked Amryt to submit additional confirmatory evidence of effectiveness for Oleogel-
S10 in EB. Amryt intends to discuss with the FDA the nature of the data required to address the Agency’s concerns.
On March 8, 2022, Amryt announced the completion of a successful pharmacokinetic (PK) study for Mycapssa® (oral octreotide).
The data supports a planned Phase 3 study of Mycapssa® in the treatment of patients with carcinoid symptoms due to
Neuroendocrine Tumors (NET).
On April 22, 2022, the CHMP has adopted a positive opinion, recommending the approval of Filsuvez® in the EU for the treatment
of partial thickness wounds associated with dystrophic and junctional EB in patients six months and older. Based on this CHMP
recommendation a decision by the EC is expected on the Filsuvez® application within 67 days. The CHMP positive opinion is
supported by Phase 3 data from the EASE trial which was the largest ever global trial conducted in patients with EB, performed
across 58 sites in 28 countries.
Debt refinancing
On February 22, 2022, Amryt announced that it secured US$125,000,000 of senior credit facilities from funds managed by the
Credit Group of Ares Management Corporation (“Ares”). Amryt used a portion of the proceeds to refinance its previous secured
term debt facility, which had an outstanding balance of US$93,988,000 as at February 22, 2022, an interest rate of 13.00% and a
maturity date of September 2024. The new facilities will generate significant annual interest cost savings as well as provide for
important strategic flexibility as Amryt looks to continue to grow its global rare disease presence.
Key features of the new facilities include:
Total new facilities of $125 million, consisting of:
o
$85 million Term Loan Facility with interest rate of Secured Overnight Financing Rate (“SOFR”)+6.75%, subject
to a 0.90% SOFR floor
o
$40 million Revolving Credit Facility with $20 million drawn at close and interest rate of SOFR+4.00%, subject to
a 0.90% SOFR floor
o
Quarterly blended cash interest rate of SOFR+5.87% (assuming fully drawn), subject to a 0.90% SOFR floor,
substantially lower than Amryt’s previous secured term debt facility at 13.00% interest
Requires interest-only payments until facility matures in February 2027
Amryt Pharma plc
Notes to the Financial Statements Continued
For the year ended December 31, 2021
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There are no warrants or any equity conversion features associated with the new facilities
The proceeds will be used to refinance existing debt, for general corporate and product development purposes; and
potentially for shareholder approved share repurchase programs.
Charges were taken over certain assets of the company and its material entities as guarantee and collateral for the provision of
the debt.
EMA Contingent Value Rights Payment
Following the CHMP positive opinion for Filsuvez® on April 22, 2022, the EMA CVR issued to those Amryt shareholders and option
holders who held Amryt shares or options prior to the acquisition of Aegerion Pharmaceuticals, Inc. (“CVR Holders”) will now
become payable.
The total amount payable to CVR Holders will be approximately US$5,700,000. Each CVR Holder will be issued with one loan note
of US$0.0995 for each CVR they hold (each a “Loan Note”). The certificates for the Loan Notes will be held by the Company’s
Registrar, Link Group (“Link”), in electronic form on behalf of each CVR Holder.
The Loan Notes will be redeemed in full on September 14, 2022 (the “Payment Date”) in accordance with the terms and conditions
of the CVR Deed Poll and the Deed Poll constituting the Loan Notes (the form of which was appended to the CVR Deed Poll), which
was executed by the Company on May 3, 2022. The total amount due to each CVR Holder will be paid by cheque on the Payment
Date.
Amryt Pharma plc
Company Information
Amryt Pharma plc
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Annual Report
for the year ended December 31, 2021
Registered Office
Dept 920A
196 High Road
Wood Green
London N22 8HH
United Kingdom
Company Number
12107859
Directors
Ray Stafford (Non-Executive Chairman)
Dr. Joe A. Wiley (Chief Executive Officer)
George P. Hampton Jr. (Non-Executive Director)
Dr. Alain H. Munoz (Non-Executive Director)
Donald K. Stern (Non-Executive Director)
Dr. Patrick V.J.J. Vink (Non-Executive Director)
Stephen T. Wills (Non-Executive Director)
Raj Kannan (Non-Executive Director) (appointed on August 5, 2021)
Dr. Roni Mamluk (Non-Executive Director) (appointed on August 5, 2021)
Company Secretary
Rory Nealon
Auditors
Grant Thornton
13-18 City Quay
Dublin 2
Ireland
Company Website
www.amrytpharma.com